The Dawes Plan
Given the position Germany had occupied in the prewar European economy, recovery depended to a considerable degree upon the return of more stable conditions there. After the calamities of the period from 1919 to 1923 this fact was more widely recognized. The key to recovery in Germany lay in the restoration of fiscal stability, and this question in turn was bound up with Germany’s reparation obligations. At the end of 1923 a committee of economic and financial experts, headed by the American banker Charles Dawes, was appointed by the Reparation Commission to investigate Germany’s financial situation and to make proposals for financial recovery and future reparation payments. The committee submitted its report on April 9, 1924, and the recommendations it contained, generally called the Dawes Plan, were accepted. The Dawes Plan did nothing to reduce the total reparation obligation, but by devising a system of annual payments that could be adjusted to Germany’s capacity to pay and by greatly reducing the problem of the transfer of these amounts to recipient countries it set the stage for the remarkable German economic recovery that followed. This document, taken from Part I of the lengthy Dawes Committee Report, contains the basic provisions of the Plan.
KeywordsGold Mark Annual Payment Paper Money Treaty Obligation Fiscal Stability
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