The Dawes Plan,1924
- France pays back war loans to the U.S.A. and imports US goods to help rebuild France
- USA lends money to Germany which is spent on building up the German economy
- Germany uses increased tax revenues to pay reparations to France
Summary
Due to the hyperinflation the Dawes Plan was essentially a successful attempt in restoring and to then balance Germany’s economy. This was achieved through multiple factors: France repaying debts, USA lending money, as well as Germany increasing taxes. As Germany did not have the funds the Treaty of Versailles demanded, the country was facing disaster. However, as France paid off debts to the U.S. while simultaneously importing American goods the U.S. was able to lend Germany the amount needed to jumpstart their economy.