Reparation and War Debt Payments

November 17, 1930

Report Outline
The United States and the New Reparation Plan
Germany Under the New Reparation Plan
Postponable and Non-Postponable Annuities
The United States and the War Debts
Special Focus

The United States and the New Reparation Plan

The Young plan, after having been in force provisionally since September 1, 1929, when the fifth year under the Dawes plan came to a close, was formally declared by Germany and the creditor powers to be in full force and effect as a “complete and final settlement of the reparation problem” on May 17 of this year. The seven months from September 1, 1929, to March 31, 1930, were designated in the plan as a “transitional period,” a period for which special adjustments were made between the payments required under the Dawes plan and the Young plan. The first full annuity year under the new plan opened on April 1, the Bank for International Settlements was established in May, and the plan as envisioned by the experts has now been in complete operation for about eight months.

Aside from the increased stability in Europe promised by a “complete and final settlement of the reparation problem,” the most important aspect of the new plan from the standpoint of the United States was its linking of the payments required under the inter-allied debt settlements with the German annuities. In fixing the annuities there was added to the payments required by the creditor powers on reparation account the sums needed by these powers in each year to meet their net “out-payments” on war debts. The annuities were so regulated that the amounts due on reparation account would be paid in full in a period of 37 years. After 1966, the German annuities are to correspond exactly to the amount of the allied out-payments. The United States, although it is not a party to the Young plan, has a vital interest in the functioning of the plan as the ultimate recipient of that part of the German annuities which represent out-payments.

The United States and the New Reparation Plan

Under the agreements reached at the Hague conferences for placing the new reparation plan in effect, Germany is scheduled during the first 37 years, ending in 1966, to pay total annuities of $18,323,773,200. Of this total, $12,065,520,180, will be required to meet allied out-payments. During the 22 remaining years under the plan, ending in 1988, Germany's scheduled payments total $8,053,565,820, the exact amount of the out-payments of her creditors. The annuities over the full period, 1929–1988, total $26,377,340,000 and the war debt payments about $20,000,000,000. On this basis it has been said that the United States will receive over 75 per cent of the full amount to be paid by Germany, if all payments are made as scheduled.

ISSUE TRACKER for Related Reports
World War II Reparations
Jun. 22, 2001  Reparations Movement
Mar. 26, 1999  Holocaust Reparations
Jun. 02, 1945  Labor Reparations
Oct. 19, 1944  War Reparations
Aug. 15, 1931  Revision of the Treaty of Versailles
Nov. 17, 1930  Reparation and War Debt Payments
Nov. 15, 1928  War Debts and Reparations
Sep. 10, 1925  The Disposal of Alien Property
Apr. 08, 1924  Reparations Calendar
Oct. 31, 1923  The New Reparations Situation
International Law and Agreements
Regional Political Affairs: Europe