In 1924 Stresemann and Charles G. Dawes created the Dawes Plan. The Dawes Plan reduced annual reparation payments to an affordable amount. It was also agreed that American Banks would invest in German industry. This also improved the trust the allies had in Germany, as they were reassured that they would get their reparation payments.
In 1925 Stresemann signed the Locarno Pact. This was a treaty between Germany, Britain, France, Italy and Belgium. The Pact consisted of Germany agreeing to keep its border with France and Belgium if Allied troops left the Rhineland and France promised peace. This opened talks about Germany joining the League of Nations, as the Allied troops began to see Germany as a friend instead of an enemy.
In 1929 Stresemann signed the Young Plan. This reduced the total reparations debt to £2 billion. Also Germany was given a further 59 years to pay. This helped Germany’s debt problems, as they didn’t have the worry of not being able to afford the annual reparation payments.
Describe the key features of the Dawes plan (6 marks). In 1924 The Dawes Plan was created between Stresemann and Charles G. Dawes, an American Banker.
One feature of The Dawes Plan was that annual reparation payments that Germany had to pay were reduced to an affordable amount. This meant that there would be less chance of an incident, like the occupation of the Ruhr, would happen again; as the annual payments were much more realistic to Germany’s financial state.
Another feature of The Dawes Plan was that American banks would invest in German industry. This meant that Germany could rebuild their industry, therefore increasing employments, which lead to increased profits.
One bad feature of The Dawes Plan was that it relied heavily on American banks. This would prove to be a bad idea after the Wall Street Crash; as America called in all their foreign loans,