Note 16 — Chapter II · PUBLIC FINANCE AND CHANGES IN THE VALUE OF MONEY

It is necessary to admit that Dr. Cuno’s failure to control incompetence at the Treasury and at the Reichsbank was bound to bring this about. During this catastrophic period those responsible for the financial policy of Germany did not do a single wise thing, or show the least appreciation of what was happening. The profits of note-printing were not even monopolised by the Government, and Herr Havenstein continued to allow the German banks to share in them, by discounting their bills at the Reichsbank at a rate of discount far below the rate of depreciation. Only at the end of August 1923 did the Reichsbank begin to require that borrowers should make good on repayment a percentage of the loss due to the depreciation of the borrowed marks (as reckoned by the dollar exchange) during the currency of the loan.