The Role of the USA

During the 1920’s, the USA gained new markets and the necessities of war had encouraged it to increase manufacturing production and efficiency.

• It could also benefit from the repayment of war debts from its former European allies.

• The USA’s financial resources helped solve the problem of German reparations.

• The USA lent loans to Germany, also known as the Dawes plan, which lead to an improvement in relations between France and Germany.

Dawes Plan

• In order to address the problem of German reparations, a conference was held in London in 1924, organized by the German chancellor Gustav Stresemann.

• It was clear that French policy had changed as they were much more willing to compromise with Germany, which paved the way for future tension-reducing negotiations.

• In this conference, it was agreed that Germany only was allowed to pay the reparations that it could reasonably afford.

• The German national bank, the Reichsbank was supervised by countries attending the conference (Britain, France, Italy and Belgium).

• Germany received a large foreign loan from the USA so that Germany would be in a better position to meet its reparation requirements.