The Dawes Plan

As the Treaty of Versailles ended World War I between Germany and the Allied Powers, many countries demanded that they be paid reparation payments by Germany for the damages that had been inflicted upon their citizens and land. As a result of rampant hyperinflation, Germany could not make the payments, so the five countries of the United States of America, the United Kingdom, Italy, Belgium, and France came together and created the Dawes Plan to solve the problem. Along with reinforcing the economy of Germany after World War I so that Germany could pay the reparations to the Allies, the Dawes Plan of 1924 was necessary to return the the Ruhr to the full control of Germany and to prevent communism from spreading in Europe. The Dawes Committee

They decided to reduce reparations the first year, and in the pursuing years the amount would increase as Germany’s economy increased (“The Dawes Plan, the Young Plan, German Reparations, and Inter-allied War Debts”). The first year Germany would pay 1,000,000,000 gold marks, and in the pursuing years they would pay 2,500,000,000 gold marks until the debt was fully repaid (“The Dawes Plan of 1924”). Also, several countries that represented the Dawes Committee loaned $200,000,000 to the German government in an attempt to boost the overall economy of the country (“The Dawes Plan, the Young Plan, German Reparations, and Inter-allied War Debts”).

The Dawes Committee helped the German government adopt a new currency in this time known as the Reichsmark which was named after the national bank, the Reichsbank. This new currency and also economic policy making would be supervised by the countries on the Dawes Committee in order to teach the leaders of the country how to make important decisions about the country’s finances (“The Dawes Plan, the Young Plan, German Reparations, and Inter-allied War Debts”). With these plans, the Dawes Committee planned to stabilize the economy of Germany for the many years that Germany would be paying reparations to the

The French and Belgian troops were met by a peaceful, government-supported strike by the workers in the region (“The Dawes Plan, the Young Plan, German Reparations, and Inter-allied War Debts”). When the workers stopped working in the region, the area was no longer producing the money that it should have been producing, and the German economy began to lose even more money (“The Dawes Plan of 1924”). The last objective of the Dawes Plan was to prevent the spread of communism from the Soviet Union to Germany and throughout the rest of Europe. If the German government collapsed, a German revolution could put a communist government in place. It was inevitable that the Soviet Union would influence and bend other governments to its will (“The Dawes Plan of 1924”). Since the Soviet Union was the world’s only communist country at this time, they had many enemies, and they needed protection. One of the Soviet Union’s main objectives during this time was to weaken other European democracies by promoting internal disruption within the governments of Europe. This would make the world safer for the world’s only communist country (Greenville