Young Plan Agreement

[2.] Seydoux, J. (1932). From Versailles to the Young Plan. Repairs – Combined debts European reconstruction, Paris: Plon. The United Kingdom representatives on the committee felt that the conditions were too generous, but the committee presented the conditions in June 1929 and these were formally adopted in January 1930. Before the Wall Street crash and America`s return to isolationism, the United States had expressed a desire to develop Weimar Germany as an economic entity. Businessmen in America saw two advantages. First, Germany could become a valuable trading partner with the United States. Second, there was the constant fear that communism would spread from the USSR. Thus, if the German people could see the advantages of capitalism, they would adopt ideology and turn their backs on the “scourge of the East”. There was still a great deal of bitterness in the United Kingdom about the war – the great thiepval monument had begun in 1928 and was not yet finished by the time the Young Plan was signed.

The Menin Gate in Ypres was not completed until July 1927. Thus, the scars of the First World War were still very raw in the United Kingdom and, with an election that had taken place in 1929, no political party wanted to be considered “soft” vis-à-vis Germany. But the persuasiveness of the United States was strong – that`s why the plan was adopted. As I have already said, this transfer protection of the Dawes plan was never put into effect, because the representative of the catering service for repairs was able, because of the constant supply of foreign currency that was paid to Germany from the huge flow of foreign loans, to freely and without risk for German trade all the sums paid by Germany to the Reichsmark. By adopting the jung plan, Germany has renounced the protection afforded to it when needed by the Dawes plan. In principle, the German government must pay the full annual amount in monthly foreign currency payments. But a difference has been made. A portion of the pension, which amounts to 612 million German marks, must be paid unconditionally in all circumstances. Added to this is the service of the 7 per cent german foreign loan of 1924 — the so-called Dawes loan. For the remaining and most important part of the pension, the German government can claim a delay of up to two years.

In this case, the deferred payment in the Reichsmark must be made on the account of the Bank for International Settlements until the transfer is again possible; the amount can be used for in-kind benefits as part of a special agreement. At the end of a maximum period of two years, it is again mandatory to pay the deferred amount in foreign currency in full. In the event that the delay in transmission has already lasted one year, Germany has the right to defer payment to the Reichsmark by one year to the tune of 50% of the amount sensitive to a deferral. On the other hand, the Young plan leaves in peace the guarantee of the 7 per cent foreign loan of 1924 — the Dawes loan — because it is not a debt of reparation, but an agreement between the German government and private creditors. The principle that the decision should be left to an external court in the event of a dispute was largely established by the Dawes plan, whereas the creditor states had previously imposed severe sanctions against Germany on several occasions. In this regard, too, the Young Plan makes substantial progress in applying the principle of the court`s decision in a consistent manner. All contentious issues relating to the legal or practical application of the Youth Plan that may arise between the governments concerned and the International Bank will be definitively resolved. [1.] If, over time, it seems that the young plan cannot be implemented permanently, it is not due to a lack of goodwill from Germany, but rather to the fact that the burden of reparations it imposes on Germany is actually unbearable.

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