Dawes Plan, 1924

What was the Dawes Plan?

The Dawes Plan was an agreement between the USA and Weimar Germany which helped to solve Germany's problems in paying reparations.

When was the Dawes Plan signed?

The Dawes Plan was negotiated in April 1924 and signed in October 1924.

Who created the Dawes Plan?

The Dawes Plan was created by American banker, Charles G Dawes, along with Gustav Stresemann.

Why was the Dawes Plan created?

The Dawes Plan was created to solve Germany's problems in paying reparations following the 1923 hyperinflation crisis.

What was agreed in the Dawes Plan?

The Dawes Plan included 3 key terms:

• ❖ A temporary reduction in the annual reparations repayments to £50 million.
• ❖ US banks and businesses offered loans worth 800 million marks to German industries and businesses.
• ❖ The German State Bank, the Reichsbank, should be reorganised and supervised by the Allies.

What were the benefits of the Dawes Plan?

There were 3 main benefits of the Dawes Plan:

• ❖ American loans helped industrial output to double between 1923 and 1928. Employment, income tax and trade all increased as a result.
• ❖ The French and Belgians left the Ruhr as they were promised that they would receive reparations as result of the Dawes Plan.
• ❖ The Weimar Republic became politically stronger as the economy improved.

What were the criticisms of the Dawes Plan?

There were 2 key criticisms of the Dawes Plan:

• ❖ In the short-term, both the extreme left-wing and extreme right-wing political parties were angry Germany was still paying reparations imposed by the Treaty of Versailles.
• ❖ In the long term, because the Weimar economy was dependent on US loans, Germany could be economically damaged if these were suddenly recalled.