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After reading about the harsh fallout from World War I and the Treaty of Versailles, you would be forgiven for thinking that the 1920s were a dark time for Weimar Germany. The reparations of the Treaty were devastating and climaxed in the hyperinflation of 1923. However, after the Dawes Plan (1924), the "Golden Age" for Weimar Germany arrived.
Hyperinflation
This refers to steep and alarming increases in prices. This means that the real value of the money becomes far less.
With the country on its knees, something had to be done, but why was Germany in such a perilous position?
Allies
A term for the group of countries fighting against Germany and the Central Powers in World War I. They included Russia, France, Japan, British Empire, the United States and Belgium.
The post World War I treaty devised by the Allies forced crippling concessions upon Germany. They lost all their power FAST in the following ways:
Financial: war reparations payments (money to pay for the damage caused) totalling £6,600 billion. The Allied Reparations Commission were responsible for calculating the damage done to civilians and property of the Allies.
Acceptance of blame: Germany had to accept total responsibility for World War I.
Security: disarmament meant only 100,000 men were allowed in the German army. Limits on navy warships.
Territory: loss of German colonies, demilitarisation and occupation of the Rhineland by France for 15 years. This led to the Allied Occupation of the Ruhr (1923) (their industrial heartland) after failed reparation payments, paralysing the German economy further.
The Occupation of the Ruhr occurred in 1923. French and Belgian troops entered the Ruhr and destabilised German industry because Germany was not meeting the reparations payments. The passive resistance of the workers in the region contributed to the collapse of the German economy and the hyperinflation of the same year.
Children create a tower with worthless mark in 1923, Wikimedia Commons
The political uncertainty after the last Kaiser meant that until the Dawes Plan in 1924, Germany was a hotbed for extremist activity. Defeat and the resulting humiliation from the Treaty of Versailles left many Germans resorting to quick-fix ideas. Both sides of the political spectrum felt the shortcomings of their government and fury at their treatment at Versailles.
Weimar: German government from 1919-33.
Social Democratic Party: The dominant political party after World War I. It favoured democracy and political discussion over extremism.
Kaiser: The previous title that a leader of Germany held, characterised by individual will over a political discussion.
Chancellor: The leader of the country, who needed to pass laws through the Reichstag (government) unless it was an emergency.
Extremist: To refer to a group of people at one end or the other of the political spectrum,
Left-wing: Political ideology focussed on equality and rights of the worker. Example party: German Communist Party.
Right-wing: Political ideology that often favours nationalism and private ownership. Example party: the Nazi party.
Left-wing parties such as the German Communist Party believed that the new constitution did not benefit ordinary workers. They regularly disrupted the German economy with strikes.
Right-wing parties such as the Freikorps (which was made up of high-ranking military figures from World War I) and the Nazi party signalled their intent to seize power through protests. The most audacious attempt came in the form of the Munich Beer Hall Putsch in 1923, where the Nazis tried to seize control of the Bavarian government.
In 1923 the Nazi party organised a failed coup known as the Munich Beer Hall Putsch. They attempted to seize power in Bavaria but were foiled because they did not receive the support they expected from the police and the army. It was a failure in the short term and Hitler went to jail.
The Allied Reparations Commission calculated the damages of World War I as an astonishingly large amount, equating to trillions in today's money. This figure was unrealistic, and in 1923, as hyperinflation and the Occupation of the Ruhr unfolded, British, Italian and United States members of the Committee met to assess the situation with a more rational eye. They sought out the expertise of US banker Charles Dawes who proposed a plan to make the reparations more manageable. In addition, the German National Bank (Reichsbank) would accept United States loans to galvanise the economy. The US had emerged from World War I as a leading economic force, and their involvement was principally due to their desire for a peaceful Europe and economic growth.
By far the most important contribution (of the Dawes Plan) is that it furnished to Europe and to the world a breathing spell, time in which to face its problems and see them through."
- Ernest M Patterson1
The German politician who played the largest role in the implementation of the Dawes Plan was Gustav Stresemann. He was prominent in the Social Democratic Party and became the Chancellor of Weimar Germany in 1923. As Chancellor, he stopped resistance to the Occupation of the Ruhr and introduced a more stable "gold" mark, replacing the worthless paper one, to combat hyperinflation and save the German economy.
Gustav Stresemann, Wikimedia Commons
Stresemann's early success faltered when he lost the backing of his party after just three months. They perceived his reaction to the Munich Beer Hall Putsch in 1923 as too soft. He had a greater and longer-lasting tenure as Foreign Minister where under his stewardship Germany accepted the Dawe's Plan in 1924. Stresemann's politics were pragmatic. He was adamant that pride should be put to one side to steer his country through the crisis and pay its reparations.
After the Dawes Plan, Weimar Germany was once more a player on the international stage. Stresemann's greatest achievement was their entrance to the League of Nations in 1926. For this, he won a Nobel Peace Prize. In 1929, when the shortcomings of the Dawe's Plan were becoming clear, he negotiated another economic treaty, the Young Plan. He died soon after from a heart attack and would never be able to see its results.
The Dawes Plan moderated the effects of the Treaty of Versailles. It proposed:
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Did you know?
The years of the Dawes 
Fritz Lang's film Metropolis (1927), Wikimedia CommonsPlan coincided with a "Golden Age" for the Weimar Republic where Berlin was the cultural metronome.
The Dawes Plan was an effective political tool and achieved much of what it set out to. Critical issues such as reparations, the Ruhr and hyperinflation were all tackled. It was also important for bringing Weimar Germany back to the negotiating table as an equal in the League of Nations. Symbolically, this was huge in the quest to maintain peace.
Ultimately, however, whilst it satisfied everyone's need to take a breath, it did not go far enough. The reparations payment total was still huge, and the German economy was heavily dependent on the United States. The Dawes Plan was temporary and only somewhat successful in the short term, but it failed to have a lasting impact. The creation of the Young Plan in 1929 to further address the issue of reparations confirms this. The Young Plan seemed like it addressed the flaws of the Dawes Plan. Unfortunately, no one predicted that the biggest economic crisis the world has ever seen would strike in the same year.
The Dawes Plan was an economic solution designed by the Allies to help Germany.
It allowed Germany to pay back the war reparations from the Treaty of Versailles and kickstart its failing economy.
The main objective of the Dawes Plan was to let Germany meet their war reparations from the Treaty of Versailles.
The Dawes Plan led to the golden years of the Weimar republic. The economy grew, Germany joined the League of Nations in 1926 and was able to meet its reparations.
The Dawes Plan failed because it was heavily reliant on the US loans and the reparations payment total was still huge. This led to the creation of the Young Plan
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