Young Plan
1929–1932
A New Reparations Settlement
The Young Plan sought a more durable settlement of German reparations than the Dawes Plan. An international committee chaired by American industrialist Owen D. Young prepared its report in 1929. It proposed reducing the total burden, spreading payments over many decades, and ending foreign supervision of German finances. An additional international loan was intended to assist the transition. [1]
Governments negotiated the settlement at conferences in The Hague. The agreement signed on January 20, 1930 accepted the experts’ report and replaced the previous reparations obligations, while preserving obligations connected with the 1924 external loan. The New Plan entered into force on May 17, 1930, retroactively effective from September 1, 1929. These dates distinguish the proposal from its implementation. [2] [3]
A Bank for International Payments
The agreement abolished the Office for Reparation Payments and transferred necessary functions to the Bank for International Settlements. Established in 1930, the BIS received and distributed German annuities, acted as trustee for the associated international loans, and offered a forum for cooperation among central banks. It was an institution through which payments could be administered with less direct foreign supervision of Germany. [2] [4]
The financial settlement still connected several obligations. European governments expected German receipts to help meet their own wartime debts. The United States reserved its rights under existing agreements, including priority for certain claims; a separate German-American agreement in June 1930 reconciled those interests with the new schedule. The Young Plan consequently did not amount to an American cancellation of Allied war debts. [3]
Depression and the End of Payments
The Great Depression undermined the arrangement. The German banking crisis and worsening international financial conditions led to the Hoover moratorium in 1931, suspending debt and reparations payments for a year. At Lausanne in July 1932, governments negotiated a further settlement intended to end reparations after a much smaller final obligation. [4] [1]
The Lausanne agreement did not become effective as its authors intended: creditor governments linked implementation to a satisfactory settlement of their debts to the United States. In practice, regular German reparations did not resume. The BIS survived the collapse of its original reparations function and continued as a forum for central bank cooperation. [3] [4]
Sources
- The Dawes Plan, the Young Plan, German Reparations, and Inter-allied War Debts
The Young Plan; Depression and Lausanne
- Agreement regarding the Complete and Final Settlement of the Question of Reparations from Germany, The Hague, January 20, 1930
Articles I–VI and final provisions
- Part VIII: Reparation
pp. 394–395 and 404–408: Young Plan entry into force, U.S. reservations, Lausanne settlement
- BIS History: Overview
Foundation and crisis in the 1930s
Related Reading
Cite This Article
Young Plan. Chanceries Diplopedia. Record 042a88e7a19bbdb704d5. https://chanceries.org/research/history/young-plan/