The Dawes Plan Essay

Given that Germany signed the War Guilt Clause, they were ordered to pay thirty-three billion dollars. Other countries who fought beside Germany, such as Austria, Hungary, and Turkey paid reparations, but not as much as Germany. At first, the Germans tried to make good on their payments by printing out Deutsche Mark, German currency at the time, but that only lead to economic downfall. Because of the economic crisis, Germany stopped paying reparations. As a result, French and Belgian troops invaded Ruhr, Germany, which furthered incensed the Germans. To resolve Germany’s financial issues, the Dawes Plan was created. This plan removed French and Belgian soldiers from Ruhr territory, reduced the amount of money Germany owed to the allied countries,

Under the plan, “Germany had to pay a third of the sum required each year as part of a mandatory agreement – about $157 million. However, the other two-thirds only had to be paid if Germany could afford to do so in a manner that would not harm her economic development.” The plan itself was lenient and it allowed Germany to set-up a realistic payment plan. Due to several external social and political factors, the Young Plan failed. Because of the Wall Street Crash, the United States of America had to withdraw the money previously promised within the agreement. Also, after Hitler took over Germany, the Germans stopped paying their war reparations. It took ninety-two years for the Germans to pay off everything. Reflecting on the ninety-two years, the Young Plan and the Dawes plan did more harm than good. Both plans created a cycle of debt. The United States of America loaned money to Germany, for Germany to pay the Allied powers. France, Britain, Italy, and Russia, used the war reparation money to reimburse the money they borrowed from the United States during the war. Ultimately, when the Wall Street Crash struck, it left the whole international community in a financial crisis. No country had the money to come to the aide of another