The Weimar Republic: From Recovery to Collapse
As we have seen, the German government recognised late in 1923 that the key to liberation of the Ruhr and to economic recovery was stabilisation of the mark. Once this had been achieved, the way was clear for the adoption of the Dawes Plan. The Rentenmark, successfully established in the autumn of 1923 in place of the worthless paper mark at the rate of one to a billion, was itself superseded in the following year by a new Reichsmark. The Rentenmark was based on land and industrial assets, the new Reichsmark on gold. The Dawes Agreement, signed in August 1924, put reparations on a fresh, if temporary footing which removed many of its objectionable features. The new settlement was negotiated, not imposed. Annual payments were to be in German currency, thus eliminating the danger that they would cause a new devaluation of the mark. A special fund, drawn from taxation and from other sources, was earmarked for the annuities, which ceased for the time being to be a bone of contention between the German political parties. To supervise these arrangements an American agent, Parker Gilbert, was appointed, with a general power of control over the Reichsbank and German railways. There was no question of any future default leading to sanctions by the creditors in the style of the French seizure of the Ruhr.
KeywordsForeign Policy Foreign Minister German Economy Peace Treaty Foreign Loan
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