Young Plan

Young Plan program for settlement of German reparations debts after World War I. It was presented by the committee headed (1929-30) by Owen D. Young. After the Dawes Plan was put into operation (1924), it became apparent that Germany could not meet the huge annual payments, especially over an indefinite period of time. The Young Plan—which set the total reparations at $26,350,000,000 to be paid over a period of 58 1/2 years—was thus adopted by the Allied Powers in 1930 to supersede the Dawes Plan. Designed to substitute a definite settlement under which Germany would know the exact extent of German obligations and to reduce the payments appreciably, the Young Plan divided the annual payment, set at about $473 million, into two elements—an unconditional part (one third of the sum) and a postponable part (the remainder). The annuities were to be raised through a transportation tax and from the budget. No sooner had the plan gone into effect than Germany felt the full impact of economic depression, and a moratorium was called for the fiscal year 1931-32. When Adolf Hitler took over Germany, he defaulted on the unpaid reparations debt. After Germany's defeat in World War II, an international conference decided (1953) that Germany would pay the remaining debt only after the country was reunified. Nonetheless, West Germany paid off the principal by 1980; then in 1995, after reunification, the new German government announced it would resume payments of the interest.

Young Plan The programme for the settlement of German REPARATIONS payments after World War I. The plan was embodied in the recommendations of a committee that met in Paris (February 1929) under the chairmanship of a US financier, Owen D. Young, to revise the DAWES PLAN (1924). The total sum due from Germany was reduced by 75% to 121 billion Reichsmark, to be paid in 59 annual instalments. Foreign controls on Germany's economy were lifted. The first instalment was paid in 1930, but further payments lapsed until HITLER repudiated all reparations debts in 1933.