Young Plan
The Young Plan was a 1929 attempt to settle issues surrounding the World War I reparations obligations that Germany owed under the terms of Treaty of Versailles. Developed to replace the 1924 Dawes Plan, the Young Plan was negotiated in Paris from February to June 1929 by a committee of international financial experts under the leadership of American businessman and economist Owen D. Young. Representatives of the affected governments then finalised and approved the plan at The Hague conference of 1929/30. Reparations were set at 36 billion Reichsmarks payable through 1988. Including interest, the total came to 112 billion Reichsmarks. The average annual payment was approximately two billion Reichsmarks (US$473 million in 1929). The plan came into effect on 17 May 1930, retroactive to 1 September 1929.
For the constitutional reform proposal named after Hong Kong Governor Mark Young, see Young Plan (Hong Kong).
In a parallel agreement, France agreed to withdraw its troops from the occupied Rhineland in 1930, five years earlier than called for in the Treaty of Versailles.
Due to the effects of the Great Depression, the Young Plan was suspended by the Hoover Moratorium in June 1931 and payments reduced by 90% at the Lausanne Conference in July 1932. The National Socialist government under Adolf Hitler made no payments after it came to power in 1933.
Reactions[edit]
France[edit]
The Young Plan was mostly welcomed in France.[17] The left-wing and liberal press judged it positively; only on the political right was criticism levelled that the plan and its accompanying withdrawal from the Rhineland affected both the financial and military security of the French Republic.
Subsequent events[edit]
The Wall Street Crash of October 1929 had occurred between the initial agreement and the adoption of the Young Plan. With the severe world-wide economic downturn that heralded the Great Depression, United States President Herbert Hoover won support for a one-year moratorium on reparations payments from 15 nations by July 1931.[25] A final effort to resolve the reparations issue was made at the Lausanne Conference of 1932. It essentially ended Germany's reparations payments.[26]
It is estimated that Germany's total reparations payments up to 1931 came to about 36.1 billion marks.[27]
After Germany's defeat in World War II, an international conference (London Agreement on German External Debts, 1953) decided that Germany would pay the remaining debt only after the country was reunified. West Germany nevertheless paid off the principal by 1980; then in 1995, after reunification, the new German government announced it would resume payments of the interest, including on the Young bonds. Germany was due to pay off the interest to the United States in 2010,[28] and to other countries in 2020.[29] In 2010, Time magazine reported that Germany made "final reparations-related payment for the Great War on Oct. 3, nearly 92 years after the country's defeat by the Allies".[30]