Public exchange bill

from Wikipedia, the free encyclopedia

The public transport change or change of job creation , named after the German Society for Public Works AG ( Public Works ), was a financial instrument created by the Reich government in 1932 to obtain credit for state building projects and later for job creation measures . The Mefo bills were later designed according to the same pattern .

In 1932 the public exchange bills of exchange were created by the Brüning II cabinet in agreement with the President of the Reichsbank, Hans Luther . With these bills, the public authorities financed public sector contracts. This company, founded on August 1, 1930, was a front company without sufficient equity. Companies that public contracts ran for job creation, attracted change the Öffa. The Reichsbank rediscounted the bills of exchange. Public transport brought bills of exchange totaling 1.26 billion Reichsmarks into circulation. The duration of the bills was between 3 months and 5 years. Depending on their duration, the bills should be paid in later financial years.

This form of money creation , which corresponded to an expansion of the money supply , made it possible to cover up public debt because it did not appear in households. The global economic crisis made balancing the budget very important. During this crisis, deficit national budgets led to a devaluation of the currency and unfavorable conditions on the international financial markets.

A temporary increase in inflation was not the order of the day in this economic phase ( deflation ), but it was feared, and therefore Hans Luther only agreed to a small volume. The Papen cabinet also made limited use of this financial instrument.

The Schleicher cabinet decided to expand the public exchange. In addition to the public transport system, they could now also be drawn from other public credit institutions (e.g. 1 billion marks on the Deutsche Verkehrskreditbank ). Reichsbank President Hans Luther was an opponent of this form of money creation and was replaced on March 16, 1933. With the help of the Mefo change of his successor Hjalmar Schacht , this pre-financing procedure was used extensively by the Hitler government from 1934 onwards.

literature