Der Fuehrer - Hitler's Rise to Power (1944) - Heiden

OTHER PEOPLE'S MONEY 671Conference was beginning its work, the United States, under the newleadership of Franklin D. Roosevelt, followed the example of England;the Gold Repeal Joint Resolution of June 5, 1933, took the Americancurrency off the gold standard. The dollar began to slip and was laterofficially devaluated. It was Germany, where so much wealth had beendestroyed, which now clung desperately to her currency, stabilized onlya few years before. For the sake of the currency, if for no other reason,said Schacht, Germany could no longer pay her debts to foreigncountries who no longer purchased her goods.Schacht insisted that the cessation of payments was a hard blow tohim, and this may be believed; he knew the importance of internationalcredit, and he would surely have been overjoyed if foreign finance hadvoluntarily declared a moratorium. But certainly the rule of financecapital was crumbling, and anyone who did not want to crash with it hadto help in its fall. For this he found ingenious methods. First, all intereston foreign loans was reduced from 5 per cent to a maximum of 4 percent; even of this amount only half could be paid to foreign creditors;the other half of the interest, as well as all sums destined foramortization, had to remain in Germany; not in possession of the debtorhimself, but in a 'conversion bank' to which the individual debtor madepayments. The conversion bank then tendered the foreign creditor apaper called 'scrip' which for practical purposes he could spend only inGermany; moreover, the scrip was subject to an immediate discount of40 per cent. These measures were put in the form of a law, proclaimedon June 3, 1933; on July 1, they became valid. The foreign creditors hadto submit.It was a masterpiece of official bankruptcy; a systematic robbery offoreign finance; a brilliant victory of the new state over money. Thelimited utility of the scrip, the constant danger that Schacht might oneday devaluate it to the vanishing point, made this paper a doubtful asseton the international stock exchanges. In time other sorts of paperappeared, all based on the conception that foreigners possessing wealth— claims, shares in businesses, bank deposits — should be preventedfrom disposing of it freely; special victims of similar regulations werethe German Jews, who were also pre-