THE MONETARY CRISIS ) 
or evade the appalling difficulties of such monetary in- 
stability. The principle applied to wages was ultimately 
extended to all kinds of indebtedness, the sum due being 
subject to an automatic increase proportional to the de- 
crease in purchasing power. At first an attempt was made 
to reduce indebtedness to terms, not of money, but of 
some commodity in current use, which for any given sum 
would have a fairly constant exchange value in relation to 
all other commodities; thus, for instance, loans were 
issued in Germany equivalent to a certain quantity of rye, 
coal,! potash and even kilowatts. 
Then, owing to the accelerating depreciation, an experi- 
ment was made with a system of ‘accounts of constant 
value,” under which a deposit in paper marks was assigned 
a certain gold value at the time when it was made, and the 
right was conferred of withdrawing whatever sum in 
paper money was equivalent to the same gold value at a 
later date; but borrowers were also obliged to repay at 
maturity the amounts of their loans plus a supplement 
representing the currency depreciation which had occurred 
since they borrowed.? Thereby changes in the value of 
paper money cease to have any effect except to alter the 
number of monetary instruments, the standard of value 
remaining unchanged. It is obvious, however, that if a 
private bank is to accept deposits on such terms, it must 
be in a position actually to convert a deposit into stable 
foreign currencies in order to avoid loss in obtaining 
! For instance, a new company, the Grosse-Kraftwerk of Mannheim, 
Wiig share certificates of 10,000, 5000, 2000, 1000 and 500 kilograms of 
coal. 
2 A good example is the Deutsche Festmarkbank, opened at Berlin in 
March 1923, which was to issue loans in these “fixed” marks on behalf of 
certain companies. 
After June 12th, when the Federal Government had accepted the 
principle of wages of constant value, the Economic Council admitted in a 
declaration of July 12th that it was no longer possible to oppose the 
general introduction of accounts in terms of gold, and that the Reichsbank 
itself should open such accounts. The same method ought, of course, to be 
applied to taxes, and this was done in Germany, in particular by a law of 
August 11th, 1923, and later in another form by opening revenue accounts 
of constant value (ordinance of August 25th, 1923). 
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