Young Plan

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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 581/2 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.

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YOUNG PLAN. Named for its chief architect and promoter, American business executive Owen D. Young, the Young Plan attempted to depoliticize and establish the final terms of Germany's World War I reparations to the Allied Powers, namely France, Great Britain, Italy, and Belgium. Implemented in September 1930, the complex international agreement reduced the amount of Germany's annual payments and set the total indemnity near $25 billion (approximately $267 billion in 2001 dollars). Interest was to accrue annually at 5.5 percent with installments payable through 1988. The Young Plan ended France's occupation of the Rhineland, terminated Allied economic control over Germany, and created the Bank for International Settlements (BIS). The onset of the Great Depression and a banking crisis in Central Europe made implementation of the Young Plan impractical. The Allies and Germany abandoned the agreement in June 1932.


Leffler, Melvyn P. The Elusive Quest: America's Pursuit of European Stability and French Security, 1919–1933. Chapel Hill: University of North Carolina, 1979.

Jeffrey J.Matthews

See alsoWorld War I, U.S. Relief in ; World War I War Debts .