What 1924 Agreement Reduced German Reparations And Provided U.s. Loans To Germany

The Dawes plan led French troops to leave the Ruhr. It generated a large inflow of capital into German industry, which continued to grow and develop. The capital available to the German industry today transferred the costs of the German war reparations of the German government and industry to the American bond investors. The Dawes plan was also the beginning of relations between German industry and AMERICAN investment banks. At the end of the First World War, the Allies and associated powers included a reparations plan to be paid by Germany; 20 billion gold marks were paid, while the final figure was set. In 1921, in London, the amount of German repair was set at 132 billion gold marks (divided into different classes, of which only 50 billion gold marks had to be paid). The German Ruhr industrialists, who had lost factories in Lorraine, who returned to France after the war, demanded hundreds of millions of marks from the German government. Despite its obligations under the Versailles contract, the German government paid the industrialists in the Ruhr Valley, which contributed greatly to the hyperinflation that followed. [1] For the first five years after the war, coal was scarce in Europe and France was looking for coal exports from Germany for its steel industry. The Germans needed coal for heating and domestic steel production, after losing the steel mills in Lorraine on behalf of the French. [2] Repairs subsequently resumed and the French occupation of the Ruhr region ended. These measures contributed to the improvement of the German economy due to the prosperity of German industry with credit support and job creation.

Tax revenues also increased as employment increased. No one would have imagined it would take 92 years. It took Germany so long to repay the reparations of the First World War, thanks to a financial collapse, a new world war and an ongoing debate on how and even whether Germany should pay its debts. Soon after, Adolf Hitler was elected. In 1933, he cancelled all payments. “Hitler was obliged not only not to pay, but to overturn the whole contract,” historian Felix Schulz told BBC show Olivia Lang. His refusal was seen as an act of patriotism and courage in a nation that regarded reparations as a form of humiliation. Germany did not make any payments during Hitler`s reign. Soon, West Germany, supported by the help of the Marshall Plan and the release of most of its repair burden, was The fastest growing economy in Europe.