The Dawes Plan (1924)

The Dawes Plan of 1924 (devised by a banker from the United States called Charles G. Dawes) was an agreement between the Allies and Germany. The basic idea behind the plan was to make it easier for Germany to pay reparations and had two key parts.

1. Reparations were reduced in the short term to 50 million pounds per year
2. The United States gave loans of $25 billion to Germany to help rebuild its industrial capacity (which would make it easier for Germany to generate the tax revenues needed to meet reparations)

As a result, reparations payments resumed, and the French occupation of the Ruhr ended. These measures helped to improve the German economy as German industry thrived with the support of the loans and employment increased. Tax revenues also increased as employment grew.