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Germany's Failure Of The Dawes Plan For The Allies

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In the treaty of Versailles, the Allies wanted to draft a treaty that would not make Germany resent the other countries, as this situation would possibly lead to another war. Even though the Allies were trying to negotiate the terms in order not to stimulate acts of revenge in Germans, reparations payment exhausted the German economy and the people, and made it possible for the Nazi political party to seize the power.

In the peace talks and after the London Schedule of payments on April 27 1921, the Reparations Commission determined that Germany had to pay 132 billion gold marks in reparations equivalent to 100 000 tons of gold. A gold mark is an amount of gold that the currency could buy before the war. At that time even John Maynard Keynes, …show more content…

With the proposal of U.S. secretary of state Charles Evans Hughes, a commission was created to aid the financial situation in Germany. The Reparations Commission wanted U.S. representatives in the new commission, and therefore financial experts, such as Charles G. Dawes or Owen D. Young were suggested. On April 9. 1924, the Dawes plan was announced, which contained recommendation regarding Germany's financial situation. It recognized two serious problems. The Dawes plan addressed the two problems surrounding Germany, by reorganizing the Reichsbank, the German central bank, and to issue new monetary unit - the Reichsmark. According to the plan, the amount of Germany's reparations was determined to correspond to the financial health of Germany, and the plan ensured that it would not hurt the stability of the new monetary currency. However, Germany was only able to pay its reparations by borrowing more money from abroad. The Young plan adopted in 1930 therefore reduced the amount of reparations by further …show more content…

It was reported that shops changed their prices twice a day, because with the money that people could buy goods in the morning, they were not able to pay for the goods several hours later. Another example of the rapidly devaluating mark was that thieves were not stealing paper money, but rather the suitcases carrying the money, leaving the paper money on the floor. Even though people had a lot of banknotes and there was full employment, the economy was very poor with no goods available to buy, resulting in hunger and

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After the war, another way, England and France wanted to ensure Germany could never become a global superpower again was by crippling. They were economy by making them pay debt to the entire world for “ causing the war.” Article 232 and 233 of the Versailles treaty states Germany, “Will make compensation ($367 billion) for all damages done. the entire obligations within a period of thirty years from May 1, 1921” (Doc C). Having to pay such a large amount of money destroyed the German economy and was overall shameful to the

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Economic Reparations was another reason the Treaty of Versailles helped cause WWII as well. On the chart in document C it shows that Germany had 132 billion gold marks of reparation in 1921 (document C). This is a lot of money and if Germany pays this they would have no money. Germany paid little in the 1920s as they were salty on how much reparations there were and land they lost. I personally think that this is too harsh on them as it only made them even more mad thus helping cause

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Hyperinflation became so grave that it became more economically viable for German citizens to burn German Marks to fuel their furnaces instead of buying real fuel, as four trillion German marks were equivalent to one U.S. dollar (Doc. 6-7). These economic troubles did not stay contained in Germany, for Germany consistently defaulted on its payments to countries relying on German reparations to keep their economy afloat, resulting in many other large European countries falling into extreme debt (Doc. 6). The Treaty of Versailles had no plan to preserve the economy of Europe (Doc. 3), rather only a very flimsy idea to make Germany fix everything, showing once again that its impacts did far more harm than good on the overall economic and political stability of Europe. The Treaty of Versailles also had no plan to stabilize the newly created countries of Europe or make Germany and its allies “into good neighbors” (Doc. 3, 8), all of which led to extreme instability and unpredictability in Europe, as well as the German government itself, a mistake which paved the way for the rise of Hitler and the Nazi

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