The Economics of Inflation: A Study of Currency Depreciation in Post-War Germany, 1914-1923

by Bresciani-Turroni,Constantino

• ISBN13: 9780415313926
• ISBN10: 0415313929
• eBook ISBN(s): 9781135033217
• Edition: 1st
• Format: Hardcover
• Copyright: 2003-09-25
• Publisher: Routledge

Summary

First published in 1937

Table of Contents

Foreword	5	(10)
List of Tables	15	(3)
Appendix of Tables	18	(1)
List of Diagrams	19	(2)
Preface to the English Edition	21	(2)
CHAPTER I Foreign Exchanges and Internal Price Movements in Germany, 1914 to 1923	23	(19)
An Outline of Events,	23	(2)
1914 to the Armistice,	25	(3)
From the Armistice till the Signing of the Treaty of Versailles,	28	(1)
From July 1919 to February 1920,	29	(1)
From February 1920 to the Acceptance of the Ultimatum of London,	30	(2)
From May 1921 to July 1922,	32	(1)
July 1922 to June 1923,	33	(2)
June 1923 to the Introduction of the Rentenmark,	35	(2)
Summary of Exchange Rates and Prices from 1914 to 1933	37	(5)
CHAPTER II The National Finances, the Inflation and the Depreciation of the Mark	42	(78)
PART ONE
The Helfferich Explanation of the Depreciation of the Mark,	42	(5)
The Conditions of the National Finances during the War,	47	(4)
Income and Expenditure of the Reich from 1919 to 1923,	51	(2)
The Causes of the Depreciation of the Mark in 1919,	53	(2)
The Depreciation of the Mark during the Financial Year 1920-21,	55	(2)
The Discussions concerning the Financial Reform and the Financial Compromise of March 1922,	57	(3)
The Conditions of the National Finances in 1921 and 1922.	60	(2)
The Conditions of the Reich Budget after the Occupation of the Ruhr,	62	(2)
The Influences of the Depreciation of the Mark on the Receipts of the Reich,	64	(4)
Influences of the Depreciation of the Mark on the Expenditure of the Reich,	68	(2)
The Errors and Weaknesses of German Financial Policy,	70	(5)
PART TWO
The Policy of the Reichsbank,	75	(4)
The Apparent Scarcity of the Circulating Medium,	79	(3)
The Increase in the Issues of Paper Money,	82	(1)
PART THREE
The Depreciation of the Mark and the Disequilibrium of the Balance of Trade,	83	(3)
The Balance of Payments after the End of the War,	86	(1)
Abnormal Conditions of the Foreign Exchange Market,	87	(6)
PART FOUR
Payments under the Treaty of Versailles,	93	(2)
The Influence of Reparation Payments on the Value of the Mark,	95	(5)
PART FIVE
The Influence of Speculation on the Value of the Mark,	100	(3)
The Influence of Certain Classes of German Industrialists on the Depreciation of the Mark,	103	(4)
APPENDIX TO CHAPTER II The Foreign Exchanges under Conditions of Inconvertible Paper Money	107	(13)
The Determination of Exchange Rates,	107	(5)
Influence of Non-Merchandise Transactions on Exchange Rates,	112	(2)
The Influence of Transport Costs,	114	(1)
Exchange Rates in the Case of Very Elastic Schedules of International Demand for Commodities,	115	(3)
Relations between Exchange Rates and Prices of Domestic Commodities,	118	(2)
CHAPTER III The Divergences between the Internal Value and the External Value of the Mark	120	(35)
Some Historical Examples,	120	(1)
The Various Measures of the Depreciation of a Paper Currency,	121	(3)
Some Opinions on the Relations between the Internal and External Values of the Mark,	124	(1)
Difficulties in ascertaining Exchange Rates and Internal Prices in Germany,	125	(3)
The War Period,	128	(3)
Relations between the External and Internal Values of the Mark after 1918,	131	(2)
The Sensitiveness of the Various Classes of Prices,	133	(3)
The Rapid Adaptation of Internal Prices to the Variations of the Exchange in the Last Phases of the Depreciation of the Mark,	136	(6)
Monetary Phenomena observed during the Last Phase of the Depreciation of the Mark,	142	(4)
APPENDIX TO CHAPTER III
On Certain Methodological Questions regarding the Calculation of the Depreciation of the Mark	146	(1)
Arithmetic and Harmonic Averages of the Value of the Gold Mark expressed in Paper Marks,	146	(5)
The Geometric Mean of the Daily Exchange Rates of the Gold Mark,	151	(4)
CHAPTER IV Relations between the Total Value and the Quantity of Paper Money in Circulation	155	(28)
An Economic Sophism,	155	(3)
The Fall of the Total Value of the Paper Money in Circulation in an Advanced Phase of Inflation. Explanation given by Keynes and Marshall,	158	(2)
Relations between the Quantity of Paper Money, Prices, and the Foreign Exchange Rates in an Advanced Phase of Monetary Depreciation,	160	(6)
Variations in the Velocity of Circulation of the German Mark, 1914-22,	166
The Total Real Value of Marks in Circulation in 1922 and 1923,	113	(62)
Bortkiewicz's Views on the Causes of the Increase of the Velocity of the Circulation of the Paper Mark,	175	(1)
Objections to the Bortkiewicz Theory,	176	(7)
CHAPTER V The Influences of the Depreciation of the Mark on Economic Activity	183	(41)
The Opinions of the Classical Economists about the Effects of the Monetary Inflation on Production,	183	(3)
"Forced Saving" imposed on Some Classes by the Inflation, as the Source of the New Resources,	186	(2)
Relations between the Depreciation of the Mark and Unemployment,	188	(2)
Economic Activity in Germany from October 1921 to the Summer of 1922,	190	(2)
Certain Statistics of Production in Germany in the Years 1920-23,	192	(1)
Disturbance in the Direction of Economic Activity,	193	(4)
The Production of Instrumental Goods,	197	(4)
The Expansion of Germany's Productive Equipment during the Inflation,	201	(2)
The Formation of the Great Post-War Industrial Groups,	203	(4)
The Influences of the Monetary Inflation on Industrial Concentration,	207	(5)
The Situation of the Private Credit Banks during the Inflation,	212	(2)
The Influence of the Inflation on Economic Production in an Advanced Phase of the Depreciation of the Mark,	214	(1)
The Increase of Unproductive Work,	215	(2)
The Decline in the Intensity of Labour,	217	(2)
The Suspension of the Natural Selection of Firms,	219	(1)
The Difficulties of National Production,	220	(1)
The Economic Crisis caused by the Inflation in 1923,	220	(4)
CHAPTER VI The Depreciation of the Mark and Germany's Foreign Trade	224	(29)
Differences of Opinion between Economists about the Influence of the Paper Inflation on the Balance of Trade,	224	(1)
Relations between Inflation and the Balance of Trade in Various Phases of the Depreciation of the Mark,	225	(2)
Influences of the Depreciation of the Mark on the Volume of Exports,	227	(3)
Influences of the Depreciation of the Mark on the Volume of Imports,	230	(2)
Influences of the Depreciation o£ the Mark on the Composition of the Export and Import Totals,	232	(2)
The Supposed "Invasion" by German Goods,	234	(2)
Causes which limited the Expansion of German Exports during the Depreciation of the Mark,	236	(2)
Influences of the Depreciation of the Mark on Invisible Exports,	238	(2)
Relations between Exports and Production during the Monetary Depreciation,	240	(2)
Errors in German Statistics of the Aggregate Value of Exports,	242	(2)
The Influence of the Depreciation of the Mark on Prices of Exported Goods,	244	(2)
Certain Statistics of Export Prices,	246	(3)
Comparisons between Prices in the World Market, in the German Market, and Prices of Goods Exported from Germany,	249	(2)
The Ratio of Interchange between German and Foreign Goods,	251	(2)
CHAPTER VII The Course of Prices of Industrial Shares during the Paper Inflation	253	(33)
Methodological Observations,	253	(2)
The Curse of Share Prices in 9x9,	255	(3)
The Close Connection between Share Prices and the Dollar Rate in 1920 and 1921,	258	(5)
The Fall in the Prices of Industrial Shares in 1922,	263	(7)
The Increase in the Price of Shares Towards the End of 1922 and during 1923,	270	(4)
The Question of the "Gold Balance Sheets,"	274	(3)
Principal Results of the New "Gold Balance Sheets,"	277	(5)
The Capital of the Principal German Industrial Groups in 1924,	282	(2)
Conclusion,	284	(2)
CHAPTER VIII Social Influences of the Inflation	286	(48)
PART ONE
War Profits,	286	(2)
The Post-Armistice Social Revolution,	288	(2)
The Origin of the Great Private Fortunes amassed during the Inflation,	290	(5)
Speculation on the Bourse during the Inflation,	295	(1)
The Great "Inflation Profiteers,"	296	(2)
Unfavourable Effects of the War and the Inflation on Certain Classes of Great Wealth,	298	(2)
PART TWO
German Statistics of Working-class Wages,	300	(2)
The Calculation of the Real Wages during a Time of Rapid Monetary Depreciation,	302	(1)
The Effects on Wages of the Political Upheaval of November 1918,	303	(2)
The Influence of the Inflation until the Summer of 1922. The Fall in Real Wages and Increase of Employment,	305	(3)
Real Wages and Unemployment in the Last Phases of the Depreciation of the Mark,	308	(3)
The Variability of Workers' Incomes during the Inflation,	311	(2)
The Tendency to Equality of Wages of Different Classes of Workers,	313	(1)
PART THREE
The Position of Owners of Marketable Securities,	314	(1)
The Losses suffered by Small Shareholders,	315	(2)
The Holders of the Fixed Interest Securities and Mortgage Bonds,	317	(3)
The Question of the "Revaluation" of Old Credits expressed in Paper Marks,	320	(2)
The Decree of February 4th, 1924, and the Law of July 26th, 1925, on "Revaluation,"	322	(1)
Special Taxes on Inflation Profits,	323	(1)
The Revaluation of Government Securities,	324	(2)
The Incomes of Government Employees and of the Professions during the Inflation,	326	(2)
The Poverty of Certain Social Classes during the Inflation,	328	(2)
Some Political, Demographic, and Moral Consequences of the Inflation,	330	(4)
CHAPTER IX The Monetary Reform of November 1923	334	(25)
Characteristics of the Monetary Reform,	334	(1)
The Position in Germany at the Time of the Monetary Reform,	335	(2)
Some Explanation of the "Miracle" of the Rentenmark,	337	(4)
The Substitution for Legal Tender Currency of Other Means of Payment, during the Last Phase of the Inflation,	341	(4)
Circumstances which favoured the Success of the German Monetary Reform,	345	(4)
Monetary and Banking Policy during 1924,	349	(4)
The New German Currency: the Reichsmark,	353	(2)
Financial Policy in 1924,	355	(4)
CHAPTER X The Stabilization Crisis	359	(39)
The Scarcity of Working Capital immediately after the Monetary Inflation,	359	(4)
The "Conversion of Circulating Capital into Fixed Capital" during the Inflation,	363	(2)
The Causes of the Shortage of Capital,	365	(4)
The Post-Stabilization Fall in the Demand for Instrumental Goods,	369	(1)
The Movement of the Working Classes towards Industries producing Goods for Direct Consumption,	370	(2)
The Crisis in the Great Industrial Groups formed during the Inflation,	372	(2)
The Progress of Horizontal Concentration after the Monetary Stabilization,	374	(2)
The Situation of Industries producing Consumption Goods,	376	(7)
Changes within the Consumption Trades, The Reaction of Entrepreneurs to the Shortage of Capital,	383	(2)
The Reconstitution of Working-Capital by Foreign Loans,	385	(3)
The "Rationalization" of German Industry,	388	(3)
The Monetary Stabilization as a Prerequisite of Economic Reconstruction,	391	(2)
The Influence of the Monetary Stabilization on the Situation of Ordinary Credit Banks,	393	(1)
Wages after the Monetary Stabilization,	394	(4)
CHAPTER XI Conclusion	398	(39)
Appendix	405	(32)
German Economic Conditions from the End of the Inflation until 1931,	405	(1)
The Different Phases of the Stabilization Crisis,	405	(1)
The Economic Revival of 1926 and its Causes,	406	(3)
The Influence of the English Coal Strike of 1926,	409	(1)
The Transformation of the Productive Equipment of German Industry,	410	(2)
The Expansion of Bank Credit and of the Monetary Circulation,	412	(3)
"Forced Saving" during the Expansion,	415	(2)
Economic Activity during 1927-28,	417	(3)
The Check to Economic Expansion,	420	(2)
Causes of the Depression. Two Theories: "Crisis of Returns" or "Shortage of Capital" ?	422	(2)
The Connection between Unemployment and the Ratio between Nominal Wages and Sale Prices,	424	(3)
Other Factors in the Depression: The Reparations Problem, the Government Financial Position, and the Internal Political Situation,	427	(2)
The Variations in the Supply of Capital. Internal Saving,	429	(2)
Mistakes made in the Investment of Capital,	431	(1)
The Banking Situation and the Restriction of Bank Credits,	432	(2)
The Banking Crisis of the Summer of 1931,	434	(2)
Conclusions,	436	(1)
Appendix of Tables	437	(22)
Index	459