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What was the Dawes Plan (1924)?​

  • An international plan to help Germany recover after World War I.
  • Proposed by American banker Charles Dawes.
  • Aimed to ease Germany’s reparation payments and stabilize the economy.
  • The USA loaned Germany 800 million gold marks (around $200 million USD at the time).
  • France agreed to leave the Ruhr.
  • Reparations were made more manageable (starting low and increasing over time as the economy recovered).​
Germany welcomed the Dawes Plan. How far do you agree? Explain your answer (10)
3 Ways Germany Welcomed the Dawes Plan

  1. Helped Economic Recovery
    • The U.S. loaned 800 million gold marks to Germany.
    • This money was used to rebuild factories, railways, and housing, boosting jobs and production.
    • It marked the beginning of the “Golden Years” (1924–1929), a period of growth and stability.
  2. Ended Hyperinflation and Stabilized Currency
    • A new, stable currency — the Rentenmark — was introduced alongside the plan.
    • Prices stopped rising wildly, and people regained trust in the economy.
    • Everyday life became more normal after years of chaos.
  3. Improved International Relations - ending a diplomatic crisis
    • France and Belgium agreed to leave the Ruhr, easing tensions.
    • Germany was seen as more cooperative, which led to better relations with other countries.
    • It even helped Germany join the League of Nations in 1926.

3 Ways Germany Criticised or Opposed the Dawes Plan 

  1. Still Had to Pay Reparations
    • The Dawes Plan did not cancel reparations — it just spread them out.
    • Many Germans felt the Treaty of Versailles was still unfair and this plan accepted it.
  2. Over-Dependence on American Loans
    • Germany’s recovery depended on money from the USA.
    • This made Germany vulnerable — when the U.S. economy crashed in 1929 (Wall Street Crash), the loans stopped and Germany’s economy collapsed again.
  3. Nationalist Criticism
    • Right-wing and nationalist parties (like the Nazis) said the plan made Germany look weak and controlled by foreigners.
    • They hated foreign influence over German finances and saw it as another humiliation.