The Dawes Plan

In 1924, the Dawes Plan was made in order to arrange Germany's payments from World War I.  After World War I, Germany had to pay reparations to the Allies from the Treaty of Versailles.  It was a great amount of money that they had to pay, but by the Dawes Plan and the Young Plan, it brought it down.  Charles Dawes created a report which was presented to Germany and the Allies. The plan was to reorganize the Reichsbank and to give Germany a loan of money.  This helped the German economy and it gave them support to produce more in the future. Annually, the reparations were reduced until they were gone. This all became a system of loaning money to each other. As the United States loaned money to Germany to pay off their debt to the Allies, the Allies then payed the U.S.  This shows how the world was at a tough time in the economy where most of these countries were in debt.