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[[File:Bundesarchiv_Bild_102-00260,_Owen_D._Young.jpg|thumbnail|left|300px|Owen D. Young, Chairman of the Young Plan]]__NOTOC__
Disillusionment with World War I, international commitments that could lead to another war, and economic uncertainty discouraged ambitious U.S. involvement in global affairs during the interwar period. The United States, however, did not retreat into complete isolation. The necessities of commercial growth dictated continued government support for overseas private investment. That, in turn, drove the United States to further engage with Latin America and the rebuilding of Europe in the 1920s. The United States also played important roles in both international negotiations to set arms limitations and create pacts that aimed at securing a lasting peace. By the mid-1920s, however, a general feeling of economic uncertainty reinforced isolationist tendencies and encouraged new legislation that placed severe limits on immigration to the United States, particularly from Asia. During the 1930s, the rise of fascism as a threat to international peace sparked concern in the United States, but the Great Depression curtailed U.S. willingness to act. In this environment, keeping the nation out of the brewing tension in Europe and Asia became an important foreign policy goal. ==How did the United States try to resolve the years following debt crises created by World War I?==Following the First World War, debt repayment issues and reparations troubled relations between the Allies and the now defeated Germany. The U.S.-sponsored Dawes and Young Plans offered a possible solution to these challenges.
At the end of the First World War, the victorious European powers demanded that Germany compensate them for the four-year conflict's devastation. They held Germany and its allies responsible. Unable to agree upon the amount that Germany should pay at the Paris Peace Conference in 1919, the United States, the United Kingdom, France, and the other Allies established a Reparation Commission to settle the question.
Economic policymaking in Berlin would be reorganized under foreign supervision, and a new currency, the Reichsmark, was adopted. France and Belgium would evacuate the Ruhr, and foreign banks would loan the German government $200 million to encourage economic stabilization. U.S. financier J. P. Morgan floated the loan on the U.S. market, which was quickly oversubscribed. Over the next four years, U.S. banks continued to lend Germany enough money to meet its reparation payments to France and the United Kingdom.
These countries, in turn, used their reparation payments from Germany to service their war debts to the United States. In 1925, Dawes was a co-recipient of the Nobel Peace Prize in recognition of to recognize his plan’s contribution to resolving the crisis over reparations.
==Why did the United States create the Young Plan to help Germany pay its debt?==
In the autumn of 1928, another committee of experts was formed to devise a final settlement of the German reparations problem. In 1929, the committee, under the chairmanship of Owen D. Young, the head of General Electric and a member of the Dawes Committee, proposed a plan that reduced the total amount of reparations demanded of Germany to 121 billion gold marks, almost $29 billion, payable over 58 years.
Another loan would be floated in foreign markets, this one totaling $300 million. Foreign supervision of German finances would cease, and the last of the occupying troops would leave German soil. The Young Plan also called for establishing a Bank for International Settlements, designed to facilitate the payment of reparations.
The advent of the Great Depression doomed the Young Plan from the start. Loans from U.S. banks had helped prop up the German economy until 1928; when these loans dried up, Germany’s economy floundered. In 1931, as the world sunk ever deeper into depression, a one-year moratorium on all debt and reparation payments was declared at the behest of President Herbert Hoover; an effort to renew the moratorium the following year failed.
* Republished from [https://history.state.gov/| Office of the Historian, United States Department of State]
* ArticleArticles: [https://history.state.gov/milestones/1921-1936/dawes| The Dawes Plan, the Young Plan, German Reparations, and Inter-allied War Debts]and [https://history.state.gov/milestones/1921-1936/foreword| 1921–1936: Interwar Diplomacy]
[[Category:US State Department]] [[Category:Wikis]][[Category:United States History]] [[Category:20th Century History]] [[Category:Diplomatic History]]
