Dawes Plan - wikipedia Dawes Plan Not to be confused with Dawes Act. Paris Peace Conference League of Nations Covenant of the League of Nations Members Organisation Minority Treaties Little Treaty of Versailles Mandates Treaty of Versailles War guilt Reparations Role in the Weimar Republic 's hyperinflation Dawes Plan Young Plan Lausanne Conference Locarno Treaties Possible cause of World War II International Opium Convention Treaty of Saint - Germain - en - Laye Treaty of Saint - Germain - en - Laye Treaty of Neuilly - sur - Seine Treaty of Neuilly - sur - Seine Treaty of Trianon Treaty of Trianon Treaty of Sèvres Partitioning of the Ottoman Empire Conference of London ( 1920 ) San Remo conference Turkish National Movement Turkish War of Independence Treaty of Lausanne Others American Commission to Negotiate Peace Commission of Responsibilities The Inquiry Charles G. Dawes ( 1865 -- 1951 ) The Dawes Plan ( as proposed by the Dawes Committee, chaired by Charles G. Dawes ) was an attempt in 1924 to solve the World War I reparations problem that Germany had to pay, which had bedevilled international politics following World War I and the Treaty of Versailles. The occupation of the Ruhr industrial area by France and Belgium contributed to the hyperinflation crisis in Germany, partially because of its disabling effect on the German economy. The plan provided for an end to the Allied occupation, and a staggered payment plan for Germany 's payment of war reparations. Because the Plan resolved a serious international crisis, Dawes shared the Nobel Peace Prize in 1925 for his work. It was an interim measure and proved unworkable. The Young Plan was adopted in 1929 to replace it. Contents 1 Background : World War I Europe 1.1 The initial German debt default 1.2 The Barclay School Committee is established 2 Main points of the Dawes Plan 3 Results of the Dawes Plan 4 See also 5 References 6 Further reading 7 External links Background : World war I Europe The initial German debt default At the conclusion of World War I, the Allied and Associate Powers included in the Treaty of Versailles a plan for reparations to be paid by Germany. Germany was required to pay 20 billion gold marks, as an interim measure, while a final amount was decided upon. In 1921, the London Schedule of Payments established the German reparation figure at 132 billion gold marks ( separated into various classes, of which only 50 billion gold marks was required to be paid ). Meanwhile, the industrialists of Germany 's Ruhr Valley, who had lost their factories in Lorraine ( Germany had seized Lorraine in 1870 and it went back to France after WW1 ), demanded hundreds of millions of marks as compensation from the German government. Despite having large obligations under the Versailles Treaty, the German government paid the Ruhr Valley industrialists for their losses. This contributed significantly to the hyperinflation that followed. During the first five years after WW1, coal was scarce in Europe. French steelmakers depended heavily on imported German coal. But the Germans were trying to build up their own steel industry, having lost many of their steel plants in Lorraine to the French. As a means of protecting their own growing German steel industry, the German coal producers -- whose directors also sat on the boards of the German state railways and German steel companies -- began to charge exorbitantly high shipping rates on coal shipped over the border to France. In early 1923, Germany defaulted on its war reparations payments and German coal producers refused to ship any more coal across the border. In response to this, French and Belgian troops occupied the Ruhr River valley inside the borders of Germany in order to compel the German government to continue to ship coal and coke in the quantities demanded by the Versailles Treaty, which, contrary to German propaganda at the time ( which characterized the coal shipments as onerous ), was only 60 % of what Germany had been shipping into the same area before the war began. This occupation of the centre of the German coal and steel industries outraged the German people. They passively resisted the occupation, and the economy suffered, contributing further to the German hyperinflation. The barclay school committee is established The Dawes committee, presided by Charles G. Dawes ( April 8, 1924 ) To simultaneously defuse this situation and increase the chances of Germany resuming reparation payments, the Allied Reparations Commission asked Dawes to find a solution fast. The Dawes committee, which was urged into action by Britain and the United States, consisted of ten informal expert representatives, two each from Belgium ( Baron Maurice Houtart, Emile Francqui ), France ( Jean Parmentier, Edgard Allix ), Britain ( Sir Josiah C. Stamp, Sir Robert M. Kindersley ), Italy ( Alberto Pirelli, Federico Flora ), and the United States ( Dawes and Owen D. Young, who were appointed by Commerce Secretary Herbert Hoover ). It was entrusted with finding a solution for the collection of the German reparations debt, which was determined to be 132 billion gold marks, as well as declaring that America would provide loans to the Germans, in order that they could make reparations payments to the United States, Britain and France. Main points of the Dawes Plan In an agreement of August 1924, the main points of The Dawes Plan were : The Ruhr area was to be evacuated by foreign troops Reparation payments would begin at one billion marks the first year, increasing annually to two and a half billion marks after five years The Reichsbank would be re-organized under Allied supervision The sources for the reparation money would include transportation, excise, and customs taxes Germany would be loaned about $200 million, primarily through Wall Street bond issues in the United States The bond issues were overseen by consortium of American investment banks, led by J.P. Morgan & Co. under the supervision of the US State Department. Germany benefitted enormously both from the influx of foreign capital. The Dawes Plan went into effect in September 1924. Dawes and Sir Austen Chamberlain shared the Nobel Peace Prize. The economy of Germany began to rebound during the mid-1920s and the country continued with the payment of reparations -- now funded by the large scale influx of American capital. However, the Dawes Plan was considered by the Germans as a temporary measure and they expected a revised solution in the future. In 1928, German Foreign Minister Gustav Stresemann called for a final plan to be established, and the Young Plan was enacted in 1929. Results of the Dawes Plan The Dawes Plan resulted in French troops leaving the Ruhr Valley. It provided a large capital influx to German industry, which continued to rebuild and expand. The capital now available to German industry functionally transferred the burdens of German 's war reparations from German government and industry to American bond investors. The Dawes Plan was also the beginning of the ties between German industry and American investment banks. The Ruhr occupation resulted in a victory for the German steel industry and the German re-armament program. By reducing the supplies of coal to France, which was dependent on German coal, German industrialists managed to hobble France 's steel industry, while getting their own rebuilt. By 1926, the German steel industry was dominant in Europe and this dominance only increased in the years leading to WWII. See also United Nations portal World War I Triple Entente World War II Industrial plans for Germany Morgenthau Plan, 1945 -- 47 Marshall Plan, 1948 -- 51 Agreement on German External Debts, debt agreement, 1953 References Jump up ^ Lee, Joo Hyung. `` WHKMLA : The French Occupation of the Rhineland, 1918 -- 1930 ''. Retrieved 27 September 2013. Jump up ^ Martin, James Stewart. `` All Honorable Men '', p 30. Jump up ^ Martin, James Stewart. `` All Honorable Men '', p. 31. Jump up ^ Martin, James Stewart. `` All Honorable Men '', p. 32. Jump up ^ Noakes, Jeremy. Documents on Nazism, 1919 -- 1945, p. 53 Jump up ^ Rostow, Eugene V. Breakfast for Bonaparte U.S. national security interests from the Heights of Abraham to the nuclear age. Washington, D.C : National Defense UP, 1993. Jump up ^ Modern World History Text Book, Ben Walsh ( OCR Exam Board ) Jump up ^ Martin, James Stewart. `` All Honorable Men '', p. 46. Further reading Gilbert, Felix ( 1970 ). The End of the European Era : 1890 to the present. New York : Norton. ISBN 0 - 393 - 05413 - 6. McKercher, B.J.C. ( 1990 ). Anglo - American Relations in the 1920s : The Struggle for Supremacy. Edmonton : University of Alberta Press. ISBN 0 - 88864 - 224 - 5. Schuker, Stephen A. ( 1976 ). The End of French Predominance in Europe : The Financial Crisis of 1924 and the Adoption of the Dawes Plan. Chapel Hill : University of North Carolina Press. ISBN 0 - 8078 - 1253 - 6. External links Media related to Dawes Plan at Wikimedia Commons The Dawes Plan detailed at The Columbia Encyclopedia, Sixth Edition The Dawes Plan ( very briefly ) at Encyclopædia Britannica State Department, Office of the Historian Paris Peace Conference, 1919 League of Nations Covenant of the League of Nations Members Organisation Minority Treaties Little Treaty of Versailles Mandates Treaty of Versailles War guilt Reparations Role in the Weimar Republic 's hyperinflation Dawes Plan Young Plan Lausanne Conference Locarno Stresa Front Possible cause of the Second World War International Opium Convention Subsequent treaties Treaty of Saint - Germain - en - Laye Treaty of Neuilly - sur - Seine Treaty of Trianon Treaty of Sèvres Partition of the Ottoman Empire Conference of London ( 1920 ) San Remo conference Turkish National Movement Turkish War of Independence Treaty of Lausanne Other American Commission to Negotiate Peace Commission of Responsibilities The Inquiry Related A Peace Conference at the Quai d'Orsay The Signing of Peace in the Hall of Mirrors To the Unknown British Soldier in France Retrieved from `` https://en.wikipedia.org/w/index.php?title=Dawes_Plan&oldid=825355265 '' Categories : Aftermath of World War I in Germany Economic history of France Economic history of Belgium French Third Republic 1924 in Belgium History of the foreign relations of the United States History of the United States ( 1918 -- 45 ) Reparations 1924 in economics Talk Contents About Wikipedia Azərbaycanca Български Català Čeština Deutsch Eesti Español Esperanto Français 한국어 Հայերեն Bahasa Indonesia Italiano עברית Lietuvių Nederlands 日本 語 Norsk Polski Português Română Русский Suomi Svenska ไทย Türkçe Українська 中文 Edit links This page was last edited on 12 February 2018, at 22 : 45. 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Question: how did the dawes plan benefit the united states
Answer: America would provide loans to the Germans