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The Dawes Plan

Page history last edited by Mr. Hengsterman 10 years, 8 months ago

The Dawes Plan 

In late 1923, with the European powers stalemated over German reparations, the Reparation Commission struck a committee to review the situation. Headed by Chicago banker Charles G. Dawes, the committee presented its proposal in April 1924.


Under the Dawes Plan, Germany's annual reparation payments would be reduced, increasing over time as its economy improved; the full amount to be paid, however, was left undetermined. Economic policy making in Berlin would be reorganized under foreign supervision and a new currency, the Reichsmark, adopted. France and Belgium would evacuate the Ruhr and foreign banks would loan the German government $200 million to help encourage economic stabilization.



American financier J. P. Morgan floated the loan on the U.S. market, which was quickly oversubscribed. Over the next four years, U.S. banks continued to lend Germany enough money to enable it to meet its reparation payments to countries such as France and the United Kingdom. These countries, in turn, used their reparation payments from Germany to service their war debts to the United States.





Germany finally pays off WWI debt


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