These changes seemed to have resolved some of the problems left over from the First World War. Germany was no longer seen as an enemy. As a result, it helped to get the economic support they needed. Indeed most of iron and steel in Europe was produced in the Ruhr Valley. The republic seemed stabilized and the relationships with France and the United Kingdom became better, Billions of dollars were invested in Germany from abroad, much of it from the United States. Everything was done to prevent Germany to drive into the arms of the Soviet Union. Having this view, the French troops withdrew from the Ruhr on the basis of the Dawe’s Plan. This political amelioration was the result of the republican leader Stresemann. He led the Weimar Republic with a strong hand. He called off passive resistance, attracted industrialists who found wages cheap and land owners whose mortgages were made easier to pay.
Some enormous fortunes were forged out of this period. France finally agreed to help German payments by accepting a proportion in raw materials and industrial produce from the Germans. Besides, the public and political opinion in France inclined more toward conciliation than towards confrontation. Of course the Dawe’s Plan introduced by the Americans did play a huge part in the building up of Germany and the stabilization of its people. The Dawe’s plan, which was co-operative for five years, separated the large amounts the Germans would have to pay into only 50 million a year. Payments were guaranteed by two mortgages, one on Germany’s railways the other on certain German industries, supplemented by deductions from certain German taxes.
An American General Reparations Agent, Parker Gilhat had been installed in Germany to supervise payments. The amounts to be paid by Germany were substantially reduced, but it was outweighed in the French view. By the facts that much of its point was reconstruction was hearing completing, and that the plan once more invaded its wartime allies in the collection of reparations. Thus France accepted the Dawe’s Plan. Besides the economical stabilization Stresemann approached the French and British allies by a voluntary German guarantee of his western borders for France and Belgium. This meant that Germany freely gave up its claims to Alsace and Lorraine and to Eupen and Malmedy. For Germany, it meant that France would no longer be able to use the weapon of invasion. These factors made the German proposals also highly acceptable to Britain. There were shortcomings in Stresemann’s proposals. Would Germany acknowledge its eastern frontiers? Would Germany acknowledge the peace treaty completely?
Besides all of this, Britain and France had new governments. These new governments did not want war; they did not hate the Germans as much as the former governments did. Therefore the relations could improve drastically. The French were now led by Briand and the British by MacDonald. There two wise men wanted to improve their relations with Germany. They did not want to cripple Germany so then they could not pay reparations. The Briand signed a pact with the Americans, The Kellogg-Briand Pact, which later got signed by 62 countries. This pact renounced war, and stated that problems should be solved diplomatically.
So the Locarno Pact agreed by Germany, France, Britain, Italy and Belgium (October 1925) apart from guaranteeing the current western borders of Germany, recognized France’s treaty commitments to Poland and Czechoslovakia. These golden years of reparation with the allies receiving payments in cash and in materials would last for ever as the Germans could repay their war debts in return to the USA. In many respects, Germany put all its eggs in the American basket and if something happened there, a political and financial collapse would kill Germany.
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