Otoño 2012 League of Nations
The Dawes Plan
United Nations Model
Universidad Iberoamericana
2012
Historical
Security
Council
1
Otoño 2012 Index
Introduction, Background - 3
Charles Gates Dawes - 4
The Dawes Plan - 4
Conclusion - 5
Guide Questions – 6
References - 7
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Otoño 2012 The Dawes Plan
Introduction.
The Dawes Plan of 1924 was formulated to take Weimar (Germany) out of
hyperinflation and to return Weimar’s economy to some form of stability. The
Dawes Plan got its name as the man who headed the committee was a United
States (US) citizen: Charles Dawes. The plan lowered the annual amount of
reparations (Established in the Versailles Treaty) to be paid by Germany to France
and Britain, and loaned Germany a sizable amount of money so that it could pay
on time.
The delegates will have to discuss the topic not as the United Nations (UN), but as
the League of Nations from 1923, an international organization created after World
War I. Its objective was to reestablish the peace and the international relationships.
Background
The Treaty of Versailles had imposed huge reparation payments on Weimar
Germany to pay for the damage caused by World War I. It soon became clear that
Weimar Germany was simply incapable of paying out the installments required by
Versailles. This ended in 1923 with French and Belgian troops occupying the Ruhr,
Germany’s most productive industrial area. The workers there went on strike which
simply exacerbated Weimar Germany’s economic standing. By 1924, the country
was in dire financial straits.
This left the victorious powers with a major problem. Did they let Weimar Germany
economically implode on itself?
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Otoño 2012 It was believed that if Germany was reduced to total impoverishment it might just
provoke a German revolution that would put a communist government in place.
While Russia was in every sense on the periphery of Europe, Weimar Germany
was at the very heart of Europe. So while many citizens of France, Belgium and
the United Kingdom (UK) would have applied a policy of real punishment – letting
Weimar Germany fall into rack and ruin – this was not a view shared by many
politicians. Hence the desire to do what was possible to support Germany – even if
World War I had been over for just six years.
Charles Gates Dawes
(August 27, 1865 – April 23, 1951) He was a United States banker and politician
who was the 30th Vice President of the United States (1925–29). For his work on
the Dawes Plan for World War I reparations he was a co-winner of the Nobel
Peace Prize in 1925. Dawes served in the First World War, was the Comptroller of
the Currency, the first director of the Bureau of the Budget, and, in later life, the
Ambassador to the United Kingdom.
The Dawes Plan
The five nations on the Dawes Committee were the Unites States (US), UK, Italy,
Belgium and France. Each sent two experts in finance in order to restructure
Weimar’s economy mainly because Weimar could not hope to pay off its reparation
payments during the 1923-1924 period. The Dawes Committee wanted to find a
way to boost Germany’s economy, so that in the future years Weimar could start to
make full payments.
The main points of the Dawes Plan were simple in their effort to save Weimar
Germany’s economy:
The first major decision was that the Ruhr was to be returned to the full control of
the Germans. French and Belgian troops would pull out of the region as soon as
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Otoño 2012 possible. The whole industrial zone had been wracked by passive resistance,
which had led to Germany’s most important economic zone to stop production and
therefore to job creation and economic movement. By removing French and
Belgian troops from the Ruhr, the Dawes Plan had at a stroke removed the most
troublesome issue in the area.
Secondly, the reparation payments were restructured to make them more “German
friendly”. In the first year of repayment after the Dawes Plan, the maximum amount
to be paid was 1 billion marks. During this time, it was hoped and expected that
Germany’s economy would rise up. Therefore it was decided that further payments
after the first year would be 2.5 billion marks.
The third decision from the Dawes Plan was the restructuring of Weimar’s national
bank, the Reichsbank, which would be supervised by the Allies. While this may
have been interpreted as direct interference by outside powers, it was not an issue
and the Weimar government accepted the terms of the Dawes Plan in September
1924.
Separate to the Dawes Plan, but vital in reinvigorating Weimar’s economy, the
United States agreed to loan Weimar Germany large sums of money that would be
invested into their economy.
Conclusion
The delegates of the League of Nations will have to take actions to discuss the
Dawes Plan. To find out if it’s realistic, possible and just. They will have to decide if
they think they should help Weimar from bankruptcy, and why. Or if they should let
it pay for the damage it did by itself.
The agreements will have to secure the survival of the Weimar state and avoid
further conflict between nations, especially the ones directly involved in the conflict
since World War I (Example: Poland, France, Great Britain, Belgium)
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Otoño 2012 Guide Questions:
What were the consequences that Germany had to pay after Word War I (WWI)
and whom/what established them?
How are Charles Dawes and WWI related?
What was the main purpose of the Dawes Plan?
What was the modus operando of the Dawes Plan?
What was the problem with the Ruhr during the Dawes Plan?
What was the US involvement in Weimar’s economical resurfacing?
References:
Unknown.
The Interwar Years (1919-1938) .
2012.
18 Oct. 2012
<http://www.sparknotes.com/history/european/interwaryears/terms.html>.
History Learning Site. The Dawes Plan of 1924. Feb. 2012. 30 Sept. 2012
<http://www.historylearningsite.co.uk/dawes_plan_1924.htm>.
Unknown. The Nobel Peace Prize 1925 Sir Austen Chamberlain, Charles
G.
Dawes.
17
Jan.
2009.
27
Sept.
2012
<http://www.nobelprize.org/nobel_prizes/peace/laureates/1925/dawes-bio.html>.
Nigel Graves.
International Relations 1919 - 1939.
.
13 Oct. 2012
<http://nigelgraves.co.uk/history/intrel.htm>.
John D'Clare.
What were ‘reparations’, and what changes were made to
the Treaty of Versailles over this issue in the period 1919–1932?. . 13 Oct. 2012
<http://www.johndclare.net/ea7.htm>.
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Barry Eichengreen.
The
Foreign Lending, 1920- 1955.
of Chicago Press, 1989.
Otoño 2012 U.S. Capital Market and
Chicago, USA: University
U.S. Senate. Charles G. Dawes, 30th Vice President (1925-1929). 2010.
27
Sept.
2012
<http://www.senate.gov/artandhistory/history/common/generic/vp_charles_dawes.h
tm>.
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