5. Dawes Plan:

The Dawes Plan was an American cooperation with the European nations upon the matters of German reparation. Due to the Treaty of Versailles, Germany had taken the blame for starting WWI and was forced to pay for the costs. Unable to pay these unimaginable amounts, France and Belgium took control of the Ruhr region. US, with a sense of justice developed the Dawes plan, in which one, loaned money to Germany and reorganized their reparation payments, two, set up financial reforms and new taxes in aid of Germany's economic crisis and three, evacuated the Ruhr area of Allied troops. With this, German economy rejuvenated and the Dawes plan proved successful. That is until the Stock Market Crash of 1929; USA met an economic crisis and ended her aid to Germany. With the end of the Dawes plan, a new plan for reforming process was to be made.

In the name of internationalism, US intervened in Europe to deal with Germany’s reparation problems.

Economic security:
Due to the reparations, German economy de-escalated, efforts to regain economic security included super-inflation which proved to be a failure. Also when the Great Depression hit USA in 1929, United States cut off all foreign aid (loans) and retreated into an economically recovery state.

National security:
As a result of the Great Depression, USA restricted itself from foreign ties and worried about nativism and isolationism. 

Upon the end of World War I, the Treaty of Versailles forced Germany to pay crushing reparations to the other European powers. In 1923, unable to pay these unimaginable amounts, France and Belgium took control of the Ruhr region. Germany’s economy deescalated due to massive inflation and growing unemployment. Although the United States of America held no relationship with the Treaty of Versailles, the deepening economic crisis in Germany and the actions of France induced the US to attempt to create some peace in the utter chaos. As USA was experiencing the roaring twenties in which the economy was in escalation in every aspect, the US decided to help. In 1924, an international committee was formed with two representatives each from Britain, France, Italy, Belgium, and the United States. The Dawes Plan aimed to assist Germany’s failing economy and promote national security with the balance of powers.

The American delegates, financier Charles G. Dawes and financier Owen D. Young led the plan and with the cooperation of the many members, the Dawes Plan proved successful. German currency was stabilized and inflation was no longer a problem. Yet because the successes of the Dawes plan were primarily due to the infusions of the United States, when the Stock Market crashed in 1929, American economy deescalated rapidly. The United States of America worried of its national security, decided to promote nativism and isolationism. Cutting off all foreign ties, including the international loans, the United States of America abandoned Germany.

Beside this, the Dawes Plan ignored the original reparation plans set by the Treaty of Versailles, creating tension between the predominant powers.  Due to the United States’ intervention upon the matter of Germany’s reparations, tensions increased between USA and the European powers. In addition to this Adolf Hitler and Alfred Hugenberg of Germany disliked the Dawes Plan to begin with, as it did not reduce the total amount of reparations. Furthermore the idea that German economy would be under foreign control disgusted them.

Copyright ©2009 by Ben Pi, Tony Fu, Amere Huang, Jeff Fong, Edwin Li, Irena Liu SS 20IB