Dawes plan

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The plan's namesake, later American Vice President Charles G. Dawes , photo from 1931
The expert report of April 9, 1924

The Dawes Plan of August 16, 1924 regulated Germany's reparation payments to the victorious powers of the First World War . These should be based on the economic performance of the Weimar Republic . At the same time, an international bond was issued, on the basis of which loans could be granted to the German economy.

Emergence

The Reparations Commission decided on November 30, 1923 to convene a committee of experts chaired by the American financial expert Charles Gates Dawes . The drafting of the contract began on January 14th and was presented on April 9th. The treaty was signed in London on August 16, 1924 ( London Conference ) and entered into force on September 1, 1924. It became possible after the end of German inflation and made it possible to stabilize the Weimar Republic by adjusting the annual reparation payments to economic strength .

The Dawes Plan was made possible primarily through pressure from America and the politics of Gustav Stresemann and allowed the German economy to recover. This meant that Germany was able to pay the reparations for the time being; the victorious powers in turn were able to repay their war loans to the USA . The Dawes Plan was one of Germany's first foreign policy successes after World War I and marked the return of the US to Europe in terms of foreign policy.

content

The Dawes Report introduces the following words: “We approached our business as business people eager to achieve positive results… The guarantees we are proposing are economic, not political.” So the Dawes Plan is trying to get out to turn a political problem into an economic one.

The Dawes Plan provided for Germany to pay an installment of one billion gold marks in 1924 . By 1928 the payments were to increase to 2.5 billion marks and stay there. Thanks to transfer protection , the risk of problems with obtaining foreign currency was passed on to the recipient. In order to minimize the risk of currency devaluation against the creditor currencies, a new Reichsbank law was included in the Dawes Plan. Essential points of the now valid Reichsbank Act (RbG 1924) were:

  • RbG § 1: Reichsbank independent of the Reichsregierung (independence from the Reichsregierung already existed to a certain extent before, given from the Autonomy Act of May 26, 1922)
  • RbG § 14: Formation of a 14-member general council (1 British , 1 French , 1 Italian , 1 Belgian , 1 American , 1 Dutch , 1 Swiss and seven German)
  • RbG § 25: Limitation of central bank loans to the Reich budget ("business loans")
  • RbG § 27: Monitoring of the gold cover by a foreign commissioner
  • RbG § 28: 40% gold coverage (max. 10% in gold-convertible currencies)
  • RBG Section 29, Paragraph 3: Lower limit of the minimum discount rate of 5% ( refinancing rate or “base rate”) in the event of a deficit (below 40%) of the German Reichsmark

55% of the reparations should be paid in cash, the rest in kind. The general agent for reparations payments, Parker Gilbert, was entrusted with the organization of payments, foreign currency purchases, interventions and transfers .

An international loan of 800 million Reichsmarks was to serve as basic cover for the Reichsbank (an additional 200 million had to be raised by the bank). Furthermore, around 21 billion marks in loans from foreign banks and export companies, mainly from the USA, flowed to Germany until 1929 . In addition, the policy of securing “productive pledges” for reparation payments should no longer exist, so the occupation of the Ruhr should end.

The sources for the reparations were duties and taxes, which had to be paid directly, and interest and repayment on bonds amounting to 16 billion gold marks, which were burdened the industry. In order to secure the payments, the Reichsbank and Deutsche Reichsbahn were converted into stock corporations and placed under international control.

The total amount of reparation payments, which on May 5, 1921, had been fixed at the London Conference at 132 billion gold marks, payable in 57 years, was not reduced, since this figure was also of symbolic significance, especially for France. However, since France was in a financial crisis at the beginning of 1924 and had to be supported by a loan from JP Morgan , they were largely willing to compromise on the other points. A general agent for reparations payments has been appointed; this should ensure that the payments did not endanger the stability of the new German currency .

Problems

But problems were already foreseeable:

  • No end of reparation payments was set.
  • The Reichsbank and the Deutsche Reichsbahn were placed under international control. The political right criticized the plan for these sovereignty restrictions .
  • It was already foreseeable that Germany would not be able to pay the 2.5 billion Reichsmarks per year.
  • The loans brought Germany Although an economic boom, but resulted in a heavy reliance on the temporarily provided foreign exchange of US creditors whose impending deductions in the Great Depression realized in 1929 and ultimately the German banking crisis partly caused.
  • Continued high unemployment.

Under pressure from the industry and farms and for the termination of the occupation of the Ruhr voted on August 29 at the vote in parliament and MPs from the right-conservative-monarchist DNVP for the Dawes Plan, so that the necessary two-thirds majority was achieved.

Dawes Loan

Dawes bond, 7% gold bond for $ 1,000 from 1924

The German External Loan 1924 (Dawes Loan) served after the currency reform as original equipment of the Reichsbank, and had a volume of 800 million marks, divided into several currency tranches. The coupon was seven percent and the original term was 25 years until 1949. After Hitler came to power , interest payments ceased. Due to the London debt agreement of 1953, the bond had to be serviced again with new terms. The remaining term was in accordance with the years 1933 to 1949 that were no longer served for a further 16 years from 1953 to 1969, although the coupon was reduced. The backward interest from 1933 to 1944 was converted into a so-called foundation bond and paid off by 1972. Due to the negotiating skills of Hermann Josef Abs, the interest from 1945 to 1952 only had to be paid back with the reunification of Germany, evidenced by vouchers . These warrants were temporarily sold like historical securities (although still valid) at the lowest possible prices, since a reunification seemed unlikely. However, they revived on October 3, 1990, so that Germany again issued a foundation bond ( WPKN 117010) with a three percent coupon, a volume of 200 million DM and a term of 20 years, into which the warrants could be converted. In October 2010 the Federal Office for Central Services and Unresolved Property Issues made the last payments. The few bonds for which the owners at the time did not accept the exchange offer from 1953 are still subject to the original gold clause, which enabled repayment in gold. Therefore, there are isolated cases against the Federal Republic in the USA . The fate of the Dawes bond is shared by that of the Young bond .

See also

literature

  • The Expert Opinions - The Dawes and Mc.Kenna Reports. Wording revised from the original text. Frankfurt a. M. 1924.
  • Helmuth KG Rönnefarth, Heinrich Euler: Conferences and contracts. Contract Ploetz. Handbook of Historically Significant Meetings and Agreements. Part II. Volume 4: Latest Times, 1914–1959. 2nd expanded and changed edition. Ploetz Verlag, Würzburg 1959, pp. 80-82.
  • Albrecht Ritschl : Germany's crisis and economic situation 1924-1934. Domestic economy, foreign debt and reparation problem between the Dawes plan and transfer ban (also: Munich, Univ., Habil.-Schr., 1998). In: Yearbook for Economic History. Supplement 2, Akademie Verlag, Berlin 2002, ISBN 3-05-003650-8 .

Web links

Commons : Dawes Plan  - collection of images, videos and audio files

Individual evidence

  1. ^ Aachen Congress - Hussar case by Schlochauer, Hans J. / Krüger, Herbert / Mosler, Hermann / Scheuner, Ulrich, Aachen Congress - Hussar case [1]
  2. ↑ Federal Agency for Civic Education: German Stories. Dawes plan : "When converting the annual rates into the currencies of the recipient countries, the actual payments could be lower if Germany had too little foreign currency due to a negative trade balance (" transfer protection ")."
  3. ^ Helmut Coing: Dawes Plan. In: Dictionary of International Law. Aachen congress to the Hussar case. Volume 1. (Ed. Hans-Jürgen Schlochauer) Berlin 1960. S. 316. ( online )
  4. ↑ See Reichsgesetzblatt (August 30, 1924), Part II, pp. 235 ff (see also online archive of the Oesterreichische Nationalbibliothek ).
  5. ^ Rudolf P. Geisler: Central Bank Constitution and Central Bank Development in the USA and West Germany. Berlin 1953. p. 80. ( online )
  6. ^ Gerhard Schulz: Germany on the eve of the great crisis. Berlin 1987. p. 99. ( online )
  7. ^ Karl-Heinrich Hansmeyer: From the fiscal to the state economic component. In: Changes in the monetary policy instruments of the Deutsche Bundesbank (Eds. Werner Ehrlicher, Diethard B. Simmert), Berlin 1988, ( online on Google.Books ) p. 147 f.
  8. ↑ Federal Archives, files of the Reich Chancellery: The von Papen cabinet - Ministerial meeting on August 19, 1932 - Off the agenda: Discount reduction by the Reichsbank
  9. ↑ Bank for International Settlements (BIS), May 8, 1933: 3rd Annual Report (PDF), p. 29.
  10. ^ Hans Gestrich: The Young Plan. Leipzig 1930. p. 122:
    “The following provision is very important: If the committee is of the opinion that the bank's discount rate is not in proportion to the need to make significant transfers, it should inform the President of the Reichsbank. In extreme cases, the Transfer Committee could even demand a discount policy from the Reichsbank that depresses the price level and activates the trade balance . In reality, it hardly ever needed to. It was enough that the agent ruthlessly bought foreign exchange to force the Reichsbank to intervene in the foreign exchange market using its gold and foreign exchange holdings. This alone would have forced the Reichsbank to sharply raise discounts and restrict credit . "
  11. ↑ Liaquat Ahamed: The Lords of Money . Munich 2010, p. 228 ff.
  12. ↑ Focus online, October 1, 2010: Germany is paying its last war debts