Dawes Plan

Dawes Plan presented in 1924 by the committee headed (1923-24) by Charles G. Dawes to the Reparations Commission of the Allied nations. It was accepted the same year by Germany and the Allies. The Dawes committee consisted of ten representatives, two each from Belgium, France, Great Britain, Italy, and the United States; it was entrusted with finding a solution for the collection of the German reparations debt, set at almost 20 billion marks. Germany had been lagging in payment of this obligation, and the Dawes Plan provided that the Ruhr area be evacuated by Allied occupation troops, that reparation payment should begin at 1 billion marks for the first year and should rise over a period of four years to 2.5 billion marks per year, that the German Reichsbank be reorganized under Allied supervision, and that the sources for the reparation money should include transportation, excise, and custom taxes. The plan went into effect in Sept., 1924. Although German business picked up and reparations payments were made promptly, it became obvious that Germany could not long continue those huge annual payments. As a result, the Young Plan was substituted in 1929.

Dawes Plan (1924) Measure devised by a committee chaired by Charles Dawes to collect and distribute German reparations after World War I. It established a schedule of payments and arranged for a loan of 800 million marks by US banks to stabilize the German currency.