The break-up of Germany seemed very near in October 1923. Separatist movements continued to be supported by the French, while the official abandonment of passive resistance left the only opposition to the occupation to come from the trade unions. These, with their demands for an eight-hour day, were fought by the German industrialists, who combined with the French for their own interests to shut down works and factories. The payment of reparations stopped; the Stresemann government signified its willingness to pay to the Reparation Commission but declared that to do so was financially impossible. Periodicals like The Nation printed letters to the editor describing the pitiful living conditions in Germany under inflation and carried the advertisements of relief organisations soliciting contributions.

The British government with the backing of the Imperial Conference and the promise of American co-operation proposed yet another enquiry into Germany's capacity to pay. This was impeded by Poincaré insisting on impossible conditions, but finally in December 1923 an agreement was reached to set up a twofold investigation under the auspices of the Reparation Commission, with the active participation of the United States. Two committees of experts were appointed to enquire into the possibilities of (1) the restoration of Germany's financial stability, and (2) the expropriation of German capital exported abroad. These came to be known respectively, by the names of their chairmen, as the Dawes Committee, after the American general Charles Gates Dawes, and the McKenna Committee, after Reginald McKenna. […]