Question

Write a short note about Dawes plan introduced by USA for Germany

Answer 1

Dear Student,

a. Germany was financially crippled after the first World War, little could Weimer Republic do to recover its economy, Germany under the reparation clause had to part with much of its gold reserves and later decided to print and issue more currency to pay for war damage and to exchange it.
b. Occupation of Rhur by the French forces to claim coal created further resentment.
c. Germans in order to deal with the crisis, recklessly printed more currency, they flooded the market with German mark that is increased its supply in the market therefore its value decreased.
d. Once the value of the currency decreases, it implies you pay more to buy goods. The prices of all commodities will go up leading to inflation.
e. Later America by virtue of Dawes plan tried to ease financial burden of the Germans.
f. According to this plan that was formulated by a committee headed by Charles.g Dawes it the Allies were to end their occupation of Rhur area.
g. The plan provided for the evacuation of Rhur area by the French troops.
h. Also reparation would start with 1 billion and then increasing annually.
i. Further, it also provided that excise duty, transportation and customs taxes would be used as sources to pay the reparation.
j. Also Germany could raise funds through bonds issued by Wall street in USA.
k. The plan resulted in the inflow of money in Germany and brought about growth of its industries.


Regards