Thread: Hitler's Greenbacks

Thought I'd post this up. I found it interesting even though I've read much about it in the past. This was just a quick easy read.

When Hitler came to power, the country was completely, hopelessly broke. The Treaty of Versailles had imposed crushing reparations payments on the German people, who were expected to reimburse the costs of the war for all participants — costs totaling three times the value of all the property in the country.. People were living in hovels and starving. Nothing quite like it had ever happened before - the total destruction of the national currency, wiping out people's savings, their businesses, and the economy generally. Making matters worse, at the end of the decade global depression hit. Germany had no choice but to succumb to debt slavery to international lenders.
Or so it seemed. Hitler and the National Socialists, who came to power in 1933, thwarted the international banking cartel by issuing their own money. In this they took their cue from Abraham Lincoln, who funded the American Civil War with government-issued paper money called "Greenbacks." Hitler began his national credit program by devising a plan of public works. Projects earmarked for funding included flood control, repair of public buildings and private residences, and construction of new buildings, roads, bridges, canals, and port facilities. The projected cost of the various programs was fixed at one billion units of the national currency.
One billion non-inflationary bills of exchange, called Labor Treasury Certificates, were then issued against this cost. Millions of people were put to work on these projects, and the workers were paid with the Treasury Certificates. This government-issued money wasn't backed by gold, but it was backed by something of real value. It was essentially a receipt for labor and materials delivered to the government. Hitler said, "for every mark that was issued we required the equivalent of a mark's worth of work done or goods produced." The workers then spent the Certificates on other goods and services, creating more jobs for more people.
Within two years, the unemployment problem had been solved and the country was back on its feet. It had a solid, stable currency, no debt, and no inflation, at a time when millions of people in the United States and other Western countries were still out of work and living on welfare. Germany even managed to restore foreign trade, although it was denied foreign credit and was faced with an economic boycott abroad. It did this by using a barter system: equipment and commodities were exchanged directly with other countries, circumventing the international banks. This system of direct exchange occurred without debt and without trade deficits.
Germany's economic experiment, like Lincoln's, was short-lived; but it left some lasting monuments to its success, including the famous Autobahn, the world's first extensive superhighway. Hjalmar Schacht, who was then head of the German central bank, is quoted in a bit of wit that sums up the German version of the "Greenback" miracle.
An American banker had commented, "Dr. Schacht, you should come to America. We've lots of money and that's real banking." Schacht replied, "You should come to Berlin. We don't have money. That's real banking."
In Billions for the Bankers, Debts for the People (1984), Sheldon Emry commented: Germany issued debt-free and interest-free money from 1935 and on, accounting for its startling rise from the depression to a world power in 5 years. Germany financed its entire government and war operation from 1935 to 1945 without gold and without debt, and it took the whole Capitalist and Communist world to destroy the German power over Europe and bring Europe back under the heel of the Bankers. Such history of money does not even appear in the textbooks of public (government) schools today.
According to Schacht, then, not only did the government not cause the Weimar hyperinflation, but it was the government that got it under control. The Reichsbank was put under strict government regulation, and prompt corrective measures were taken to eliminate foreign speculation, by eliminating easy access to loans of bank-created money. Hitler then got the country back on its feet with his Treasury Certificates issued Greenback-style by the government.
At the time of the Twelfth century, merry old England, the people had a surplus of woolen clothing. Food and all necessities of life-------------And then bankers came in.

A very interesting read, and perhaps good lessons could be learned from it. The only thing that messed things up (IMHO) is the association of certain practices common in banking with people of a certain religion, and this snowballing into the final solution with rail cars going all over Europe with people who in many cases, would not come back and the need, I guess for vengeance or some such, marching into Czechoslovakia, Austria, Poland, etc...
A good idea at its core,(the economic solutions, not the other stuff) but the need for a scapegoat was IMHO carried too far and helped fuel the rage against a nation that too many still remembered as being on the "other side" during the previous world war.
Also it's a good example of why brutal treaties such as the one ending WWI are not a good idea. Eventually, unless the enemy nation is completely annihilated, it will again have to be a functioning part of the world. Better it is an ally or at least neutral, than have reason to hate those who defeated it for another generation.
John P.

oh, this is SO utterly, hopelessly and completely Godwinned.

Originally Posted by jockeys

oh, this is SO utterly, hopelessly and completely Godwinned.

Ya think? Still, might be fun.

John P.

The only wrinkle here is in Germany when the gov't said jump you said how high? Otherwise there was plenty of room for graves in the hinterland.

Originally Posted by denmason

At the time of the Twelfth century, merry old England, the people had a surplus of woolen clothing. Food and all necessities of life-------------And then bankers came in.

I'd still rather be a miserable banker in the 21st century Germany, thank a happy peasant with a surplus of woolen clothing in 12th century England.
Let me know if you need some woolen underwear for the cold winter months.

I see we can't get away from the German "crimes". Anyways, I thought this was a good idea and it did seem to work very well. I think it worked better than what our money is back by at this time.

I really don't understand how this is relevant. From what I understand the solution of the fiscal crisis in Germany was to set up a currency backed up by a confidence in the government, who promised that there will be no inflation in that currency. I don't really know what the problems at the time were, but somehow I don't think these are the same problems.
The US government already controls the US currency. Are you suggesting that they should freeze the amount of available currency?
Again, I somehow fail to see the parallels between the economy in Hitler's Germany and today's world. And just doing something just because at some point of time at some place it may have been helpful seems rather silly...

Perhaps some more clarification could help a more productive discussion.

Not completely true.
The dollar is backed very strongly by the saudis who accept only dollars for oil. If it weren't for that, the dollar would collapse, instead of limping along.

In the end, currency is backed by trust and nothing else.
When a couple of years ago there was a civil war in one of the Afican countries (I forgot the name) its currency plunged within 2 days to near worthless.

Originally Posted by gugi

The US government already controls the US currency. Are you suggesting that they should freeze the amount of available currency?
Again, I somehow fail to see the parallels between the economy in Hitler's Germany and today's world. And just doing something just because at some point of time at some place it may have been helpful seems rather silly...

Perhaps some more clarification could help a more productive discussion.

The US government does not control the US currency. The Federal Reserve does. The "Federal Reserve" is not a government agency believe it or not. It's like Federal Express... it's just a name. Pretty tricky eh? Fools many people. The Federal Reserve took control of printing our money back in 1913 and is owned and run by bankers, who in turn run our government through the control of our currency.