THE YOUNG PLAN

Done by: Aloysius Oh (1)Adrian Fong (7)Justin Lim (11)

Aloysius Poh (18)Yong Zhu Cheng (28)

WHAT’S THAT?

THE YOUNG PLAN

Scheme for settlement of German reparation debts after WWI.

Presented by investigation Committee headed by Owen D. Young , J. P. Morgan, Jr and Thomas W. Latmon.Adopted to supersede ‘The Dawes Plan’, as Germany could not meet the huge annual payments (especially over an indefinite period of time).

CAUSES?

DAWES PLAN (1924) WAS UNSUCCESSFUL

Germany was able to meet its obligations for a number of years, largely due to the infusion of capital from the United States.

However, Germany could not meet the huge annual payments soon after.

Other countries abstained from helping out due to ‘The Great Depression’.

HENCE

To substitute a definite

settlement under which Germany would know the exact extent of

German obligations and to reduce the

payments appreciably.

PURPOSE:

CLAUSES

CLAUSES

2) The annual payments to average $487,600,000, and of this $165,900,000 to be paid unconditionally, with payment of the rest conditioned on German capacity

to pay without impairing the value of the mark—a protection which the Fatherland already enjoys under

the so-called "transfer clause" of the Dawes Plan.

1) Germany to pay 18 billion dollars over 37 years.

3) Bonds to be issued against the unconditional portion of Germany's pledge to pay, and sold to the world

public, the proceeds to go at once into the treasuries of the creditor Powers.

CLAUSES

4) The bond transaction to be carried on through an international bank of settlement (all details of which had already been agreed

upon by the Second Dawes Committee).

DR. HJALMAR SCHACT’S CONDITIONSPRESIDENT OF REICHSBANK

1) That all profits from the international bank must go toward extinguishing the German debt.

2) That if the sum expected to be derived from profits and interest thereon does not materialize, it shall be deducted from what Germany owes.

THE LIBERTY LAW

Although the Young Plan had effectively reduced Germany’s obligations, it was opposed by parts of the political spectrum in Germany.

A coalition was formed of various conservative groups under the leadership of Alfred Hugenberg, head of German National People’s Party (one of the coalition members being:

THEY WANTED TO ENACT:The Liberty Law

Renounce all reparations and

make it a criminal

offence for any German official to cooperate in their collection

Renounce German

acknowledgement of “war

guilt” and the occupation of

German territory which

were also terms of the

Versailles Treaty

(THE LIBERTY LAW) IF:

10% eligible voters signed petition in its

favour, Reichstag (seat for German

Parliament) would put matter to vote

Reichstag voted against the law , the proposal would be put to national referendum

50% of people voted in

its favour, proposal would become a law

RESULTS

The proposal was successfully put before Reichstag (put forth on

16/10/1928.

The Reichstag voted the bill down by 318-82.

The statute only had 13.8% of the overall votes in its favour on

the 22/12/1928.

FAIL

While the Liberty law was not enacted in 1929, the campaign for it was a major factor in bringing Hitler and the Nazis into the political mainstream. Hitler denounced Hugenberg and claimed that the loss was the result of Hugenberg’s poor leadership. The Nazis subsequently rose to power.

TIMELINE1928-29: 1928: The Dawes plan had failed. The Liberty Law proposal was being put forth. The Committee, which had been appointed by the Allied Reparation Committee, met in the first half of the year, submitting the first report on June 7. The plan was finalised on August 31 after the Hague Conference. It also was decided that the Liberty Law proposal would be rejected because a larger percentage of people voted against it.

1930: At the Second Hague Conference, the plan was formally adopted.

1931: Unemployment soared to 33.7% in Germany. U.S. President Herbert Hoover issued a public statement that proposed a one-year moratorium of the payments. The Plan managed to assemble support for the moratorium from 15 nations. However, the adoption of the moratorium did little to slow economic decline in Europe.

TIMELINE

1932: Unemployment in Germany became

40%.

1932: Lausanne Conference. Representatives from Great Britain, France, Italy, Belgium, Germany and Japan gathered to come to an agreement. By that time it was clear that the deepening depression had made it impossible for Germany to resume its reparations payments.

1933: Almost 2/3 of world trade

vanished due to the Wall Street Crash.