The Dawes-Plan, established in 1924, was an international economic strategy aimed at resolving the World War I reparations issues facing Germany. It was named after Charles Gates Dawes, an American banker and politician who was the then-Vice President of the United States, and who chaired the committee that developed the plan.
After World War I, Germany was required to pay reparations to the Allied powers as stipulated by the Treaty of Versailles. These reparations were seen as crippling by Germany, leading to economic instability and hyperinflation. The Dawes Committee was formed to find a solution to this economic impasse.
The Dawes-Plan was accepted by Germany in August 1924 and went into effect in September. It provided temporary relief from the immediate economic pressure:
The Dawes-Plan was seen as a short-term solution:
The Dawes-Plan was replaced by the Young-Plan in 1929, which further reduced the total reparations and extended the payment period. However, with the onset of the Great Depression, the economic framework established by both plans collapsed, leading to a halt in reparations payments in 1932.
The Dawes-Plan is often cited as an early example of international economic cooperation to manage debt and reparations. Its approach influenced subsequent international economic agreements and provided a framework for dealing with post-war economic recovery.