However, Germany`s inability to meet this debt rendered the Dawes plan unenforceable and the plan could not be implemented satisfactorily. The fall of Wall Street proved that U.S. banks could not continue to lend money to Germany (which also had an impact on the reparations that the Germans paid to Britain and France). The United States caused the collapse of world trade: the United States could no longer receive payments from its former European allies. Faced with this unfavourable situation, the Dawes plan was soon replaced by the Youth Plan. The impossibility of facing the debt, combined with the great crisis and the degrading conditions of the Treaty of Versaille, plunged Germany into misery and despair, thus affecting the birth of self-sufficiency and Nazism, which set the stage for the rise of Adolf Hitler. In December 1923, the British, French and Germans agreed to appoint a commission chaired by Charles G. Dawes, the first director of the U.S. budget office.
The Commission had to look at ways to balance the German budget by stabilizing the currency and establishing a new and viable level of annual reparations. The experts began their work in January 1924 and the Dawes plan was submitted to the repair commission in April of the same year. The German economy began to recover in the mid-1920s, and the country continued to pay for reparations that were financed by the massive influx of American capital. However, the Dawes plan was seen by the Germans as a temporary measure and expected a revised solution in the future. In 1928, german Foreign Minister Gustav Stresemann called for a final plan, and the young plan came into force in 1929. The Young Plan, which replaced the Dawes Plan, was an economic plan for German war reparations after World War I. The new plan partly relieved the German economy by the war reparations. It has also stimulated foreign investment in Germany and helped German industrialists re-enter global markets with industrial products. In an August 1924 agreement, the main points of the Dawes plan were: [1.] Jacques Kayser, Ruhr or Dawes plan? : History of Repairs …, A. Delpeuch, 1925. The plan was based on 1. German payments in tranches; 2.
the restructuring of the Reichsbank; 3) the change of currency by the creation of a national currency that would have replaced the current currency. The 1924 Dawes Plan (designed by a U.S. banker named Charles G. Dawes) was an agreement between the Allies and Germany.