Two effects of the Dawes Plan on Germany

Question 1

First effect

Answer 1

1) Significant economic recovery

• USA loaned Germany 800 million gold marks - boost to German industry
• Reparations lowered to 1,000 million marks for the first 5 years.
• After this they would be increased to 2500 million marks
• Germany received 25 billion marks in loans

Question 2

Second effect

Answer 2

2. Germany’s control of different issues changed

• Germany regained control of the Ruhr in August 1925
• Germany’s economy now relied heavily on other countries loans (25 billion marks), leaving them susceptible to other countries’ economic problems
• for example, the WSC(wall street crash) in 1929, which caused the Great Depression as the USA recalled all of their loans