In 1924 an international committee of financial experts headed by American banker Charles G. Dawes met to re-examine reparations. Under the terms of the resulting Dawes Plan (1924), Germany’s yearly reparations were reduced and linked to the level of German economic prosperity. Germany would also receive large loans from the United States to promote German recovery, as well as to pay reparations to France and Britain, thus enabling those countries to repay the large sums they owed the United States. This circular flow of international payments was complicated and risky, but it worked for a while, facilitating a worldwide economic recovery in the late 1920s.

This economic settlement was matched by a political settlement. In 1925 European leaders met in Locarno, Switzerland. Germany and France solemnly pledged to accept their common border, and both Britain and Italy agreed to fight either France or Germany if one invaded the other. Stresemann also agreed to settle boundary disputes with Poland and Czechoslovakia by peaceful means, and France promised those countries military aid if Germany attacked them.

Other developments also strengthened hopes for international peace. In 1926 Germany joined the League of Nations, and in 1928 fifteen countries signed the Kellogg-Briand Pact. The signing nations “condemned and renounced war as an instrument of national policy.”