Akademik

   a program for the settlement of German reparations.* On the basis of a 30 November 1923 recommendation from the Reparation Commis-sion, two Experts Committees were formed in early 1924 to examine payment procedures instituted in May 1921 under the London Schedule of Payments. Working against a backdrop of fiscal crisis in France and Germany, these com-mittees, the chief of which was led by the American banker Charles G. Dawes, drafted a new plan in April 1924 for the Reparation Commission. It was an economic and political compromise between divergent opinions. On the one side stood France, fighting to secure a durable and large settlement; on the other stood Britain, struggling to liquidate the economic and political aftermath of World War I. The plan was approved at the London Conference* of July-August 1924.

   The Dawes Plan provided for a loan to Germany of 800 million marks, an initial payment moratorium, and the resumption of payments according to a scale that began in 1925 with an annuity of 1 billion marks and climbed to 2.5 billion marks by 1928-1929. Thereafter the annuity was to be adjusted upward on the basis of an index that measured German prosperity. Half of each payment would come from the German budget, while the remainder would be collected from interest on bonds issued on the assets of German railroads and industry. As unanimity was difficult to achieve, the plan specified neither the term of payment nor the total reparations required, but it guaranteed annuities by placing a lien on Germany's railway system. Since the Allies demanded authority to administer railway finances, Germany was obliged to surrender sovereignty over its rail-roads. Upon adoption of the plan, the German government deposited bonds valued at 16 billion marks with the Reparation Commission; 11 billion repre-sented a lien on the national railroad and 5 billion a mortgage on German industry.

   A notable corollary to the Dawes deliberations was the reemergence of the United States as a limited participant in European affairs. The State Department, hoping to settle the reparations issue, envisioned the plan as a first step toward the creation of a stable climate receptive to private investment; moreover, if Dawes succeeded, the European Allies could be induced to meet their war debts to the United States.

   REFERENCES:Bergmann, History ofReparations; James, German Slump; Kent, Spoils of War; McNeil, American Money; Maier, Recasting Bourgeois Europe; Schuker, End ofFrench Predominance.