Modern monetary systems

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Monograph

Identifikator:: 1008917265

URN:: urn:nbn:de:zbw-retromon-19129

Document type:: Monograph

Author:: Flückiger, Otto http://d-nb.info/gnd/117736708

Title:: Die Schweiz

Edition:: Zweite Auflage

Place of publication:: Zürich

Publisher:: Druck und Verlag von Schultheß & Co.

Year of publication:: 1914

Scope:: 1 Online-Ressource (VI, 243 Seiten)

Digitisation:: 2017

Collection:: Economics Books

Usage license:: Get license information via the feedback formular.

Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Gewässer

Collection:: Economics Books

THE MONETARY CRISIS 63 German exchange should be attributed partly to a much more ““ physical ” and immediate cause, viz., a flight of capital which completely upset the Balance of Payments. At first this flight was no doubt deliberate, and in the main took the form of leaving on deposit abroad amounts in foreign currencies corresponding to a considerable pro- portion of exports, instead of throwing bills on to the exchange market. Thus, while foreign countries were showing their confidence in Germany and were counter- balancing the deficit on the German market by purchasing German exchange or even notes, certain exporters syste- matically left the proceeds of their sales in safety abroad with the certainty of credits in some sound currency, and in exchange left foreign speculators with unstable German currency. Thereupon a flight ensued which was the result of panic. For when a currency loses from day to day both its exchange value abroad and its purchasing power at home, it can no longer serve as an instrument for saving, and anyone wishing to save will look about for some stable foreign currency ; thus quite independently of the require- ments for foreign payments a progressive demand for foreign bills or even notes arises, which is bound entirely to overthrow the Balance of Payments. In this way the demand in Germany for foreign currencies by all classes of the public was necessarily a decisive factor in the down- fall of the mark, certainly far more so than German repara- tion settlements, even though the Government was not very skilful in its method of obtaining the foreign exchange for its first payments. It should also be pointed out that the German Govern- ment had not taken the necessary steps after the Armistice to balance the Budget, and had had recourse much more than was reasonable to new issues of paper money. The note issue, which stood at 32% milliards about the end of 1918, 7.e., 22-187 million notes issued by the Reichsbank, and 10-242 by the loan banks, reached 49% milliards at the end of December 1919, i.e., 35-698 millions for the Reichsbank and 13-781 for the loan banks, nearly 81 milliards, 7.e., 68-805 and 11:95 in each case, at the end

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