The Dawes Plan as a way of economic resuscitation of Germany in the mid-1920s

After the defeat of the German Empire in the First World War of 1914-1918 was signed the Treaty of Versailles.By its terms, Germany had to pay reparations to countries of the Entente.The size and duration of compensation is not exactly regulated by the peace treaty.2-3, Germany was faced with economic difficulties.In 1924, for the restoration of the balance of payments of the German economy it developed the Dawes Plan.

Franco-German confrontation in the Ruhr

One of the countries that rely repair, was France.When Germany after the beginning of a serious economic crisis, the problems began with the payment of reparations, President Poincare decided to enter the French troops in the Ruhr area.As you know, the Ruhr - this is the most resource-rich region of Germany.There are different grades of mined coal, which at the time was widely used in industry, and on the railroad.The invasion of France on the German territory had several problems:

  • ensure a constant supply of reparation payments to France;
  • access to the German natural resources for French industrialists;
  • weakening of the influence of England and the United States in European politics.

German resistance lasted 8 months.In the fall of 1923, the German government ended funding for the fight against French expansion.France tried to subdue Germany itself, which is not included in the plans of other world leaders.

The commission of experts to study the financial situation of the German

In November 1923, the international community has set up a commission, which later developed the Dawes Plan.The activities of the commission attended professional economists from Europe, as well as individual experts from the United States.In the structure of the body was created two committees.The first worked on the restoration of the German currency.The scope of the second division consisted of search queries a possible return to the country of capital derived abroad.This money could head to the resuscitation of the economy, because only successful economic development in Germany could provide reparations.

development and adoption of the strategy of the Entente

January 14, 1924 in London, opened a meeting of the committee of experts.He headed the expert community American lawyer Charles Dawes.Prior to the committee a group of experienced financiers spent several days in Germany in order to study the real picture of the level of the economy.On the basis of the data obtained it has been developed a report which was made public at a meeting in London.

If we talk about the Dawes Plan In short, he solved the problem of restoring the solvency of the German economy for the payment of reparations.Structurally, the report was divided into three parts.At first the idea was that the repair - it is only the external debt of Germany's Western partners, not a way of punishment for the hardships that have survived the Allied countries during World War II.

Dawes Plan provided for the granting of credit for German economic recovery in the amount of 800 million marks.The main difference between this credit from the current programs of cooperation among borrowers with the IMF was that Germany passed a special tax commissioners the ability to control revenues.In addition, the company created a special that aired in the management of the railway system in Germany for 40 years.In fact, control of strategic object passed into private hands.Control of the money the government also lost because the right to print currency received a specially crafted bank that was under the control of the Allies.Dawes Plan also established the introduction of large taxes from the population.The main sources of the formation of the reparations fund had revenues of private companies and the state budget.

Effects of allies

adoption of the Dawes Plan had both positive and negative implications for European countries.It was possible to achieve:

  • stabilize the economic situation in Germany;
  • resume reparation payments.

negative point:

  • impoverishment of the population;
  • introduction of burdensome taxes for the population led to a rise in the level of protest moods in society;
  • coming to power in 1933, the Nazi Party and Adolf Hitler.