In his 1927 report released in December, Gilbert declared that the time had come for Germany to take control over her own economic destiny “on her own responsibility without foreign supervision and without transfer protection.” Germany should be told once and for all exactly how much she owed and for how long. Moreover, the transfer protection clause embodied in the Dawes Plan, while useful in 1924 for restarting foreign lending, was now creating its own perverse incentives—what we now refer to as moral hazard.
