The Rise of the Third Reich

On the outskirts of Berlin, the Tempelhof Airport under construction welcomed an unprecedented aircraft with a corrugated aluminum shell and three 450-horsepower BMW 101 radial piston air-cooled engines. The wide fuselage has 16 seats inside. And the wood grain decoration looks very luxurious.

This aircraft is the latest product launched by the Junkers Aircraft Manufacturing Company in the summer of 1923, numbered Junkers J.23.

Because it is equipped with the BMW 101 engine developed by BMW according to Hirschmann's requirements (at this time and space, the patent for the radial piston air-cooled engine belongs to BMW), this aircraft not only has strong horsepower and can exceed 220 kilometers per hour The maximum level flight speed, and also has excellent economy - the radial air-cooled engine has a simple structure, reliable performance and long service life, so the cost of use is very low.

Among the passenger aircraft of the same era, I am afraid that only the Fokker F5 passenger aircraft (a twin-engine 12-seater) produced by the FK-BF Joint Company can compete with this Junkers J.23. Therefore, Junkers Aircraft Manufacturing Company and FK-BF Joint Company have naturally become the two heroes in the international civil aircraft market. Even when the German economy was almost paralyzed due to hyperinflation and the Ruhr issue, these two aircraft manufacturing companies still occupied four-fifths of the European civil aircraft market.

The plane stopped steadily at the end of a newly built runway. The cabin door was lowered and turned into a ramp leading to the ground. Dr. Schacht, the new German Finance Minister, emerged from the cabin first, and then the person who stepped off the plane was a middle-aged man in his forties, with a bald head, a big nose, thick lips, a mustache, and very bright eyes. . Hersman, who was standing at the bottom of the gangway to greet visitors, had already seen this man's photo and heard of his name earlier.

He is the British economist John Maynard Keynes. In this time and space, he will replace the American banker Dawes as the chairman of the international expert committee to save the German economy and currency. Since Britain and Italy withdrew from the Allied Reparations Commission at the same time, Belgium would follow suit later. Therefore, the Allied Powers Reparations Commission controlled by France has existed in name only. The newly established "International Expert Committee" actually partially replaced the functions of the Allied Powers Reparations Commission and was also responsible for studying the German reparations issue.

In response to the international expert committee composed of experts from seven countries including the United Kingdom, the United States, Belgium, Italy, Japan, Greece, and Portugal, the newly elected President Hindenburg (Ludendorff became Vice President) and Prime Minister Stresemann decided to establish an German Expert Committee. Hersmann, who had just been promoted to colonel, entered this expert committee as a representative of the German Defense Forces.

Although not an economist, nor an official responsible for economic and monetary policy. But Hirschmann is the real soul of this German expert committee. The "principle of repayment in kind" that the German expert committee is going to recommend is based on Hirschmann's proposal.

The so-called "principle of repayment in kind" means that Germany will no longer repay reparations with gold, silver and foreign exchange, which Germany does not and cannot produce - the possibility of using loans to pay reparations is completely blocked. Even in theory, this method of capital circulation that bypasses the real economy is tempting and quenching thirst. Germany borrowed dollars or pounds at very high interest rates, most of which were not put into production but immediately handed over to the victorious nation. In the long run, Germany's crisis is amplified, not reduced.

So Hessmann insisted on repaying it in kind. Even if it were all repaid in coal, it would be more beneficial than paying the borrowed pounds and dollars! Because to fulfill its in-kind repayment obligations, Germany must increase corresponding production capacity - if it wants to repay its debt with coal, Germany must invest heavily in coal mines; if it wants to repay it with industrial products such as aircraft, ships, and automobiles, then Germany must invest in increasing its industrial production capacity .

And these production capacities built to repay reparations are also Germany's war potential!

Of course, repaying debt entirely with coal is not the most beneficial solution for Germany. It will only create the world's number one coal mining capability. And Hersman also wants production capacity for planes, cars and ships. Especially aircraft factories and automobile factories are very easy to convert for military use.

However, after several contacts, Britain has always been suspicious of Germany's request to export large quantities of aircraft and cars with the help of reparations.

So Hessmann abandoned the "OEM Plan" and proposed that German car manufacturers and aircraft manufacturers produce products for their British, French, Belgian and Italian counterparts, while opening up the technology to them. According to this plan, Germany's annual A certain number of aircraft and cars will be produced and handed over to Britain, France and Belgium, and then Britain, France and Belgium will sell them to domestic manufacturers at low prices and sell them under the brands of these manufacturers.

And it doesn’t have to be sold in Britain and France, it can also be dumped in the United States! Britain, France and Italy all owe a lot of debt to the United States - a total of 10.34 billion US dollars, and it is still impossible to pay it with gold. To repay in dollars, the United States must accept the dumping of European goods to a certain extent.

Otherwise, where can European countries find dollars? You can’t use it yourself, so if you ask Americans to borrow US dollars, sooner or later there will be a big problem, and it will be a very fatal problem!

Economists like Keynes could see it at a glance. Large amounts of borrowing in dollars are causing European countries to lose the pricing power of their own currencies - once the United States withdraws their funds, European countries' currencies will plummet, their economies will be turbulent, and even their regimes will change. In this case, European countries will inevitably become increasingly dependent on the United States.

Therefore, borrowing new debts to repay old debts is simply slow suicide! Absorbing U.S. capital to repay debts will make European countries' economies dependent on U.S. dollar capital. Moreover, both methods of borrowing US dollars and absorbing US dollar capital will make the US dollar replace the British pound as the international reserve currency.

So when Keynes saw the specific plan proposed by the German Expert Committee, his eyes immediately lit up. This plan is the real solution to the $10.34 billion debt once and for all - sell German cars, airplanes and other items worth more than $10 billion to the United States!

If the Americans insist on free trade, then they will use dumping at low prices (compensation items have no cost to the UK). If the Americans raise trade barriers, then Britain can lead Europe to argue with the United States and let the Americans choose between debt relief and debt relief from Germany...

…

“We agree in principle with the ‘principle of repayment in kind’ and the ‘European foundry plan’.”

In a conference room at the Foreign Office on William Street, Hersman finally heard what he wanted to hear most these days!

Keynes finally nodded! He is the most authoritative economist in the UK. If he nods, the British government will definitely nod as well.

"But we can't guarantee that France will definitely support it." Keynes said this with a very relaxed expression - because France is "schizophrenic" and their right-wing government has fallen into crisis (the government crisis ranks third in France). The Republic is the most common), and soon it will be replaced by the talkative Virgin Mary of the Left.

"If France is willing to support us, we will solve the current crisis in the following ways," Keynes went on to state the British government's conditions. "First, we must supervise the German Central Bank and the Treasury. The Reichsbank must be removed from the government's jurisdiction. , to become an independent central bank, with 50% of its decision-makers to be foreign experts.

Second, Germany issued a new mark pegged to the pound, and the first reserves for the new mark were obtained by borrowing from the Bank of England—collateralized by a small amount of gold held by the Reichsbank. Gold worth £20 million was exchanged for a £50 million loan. Then use this 50 million pounds as a reserve to issue 1.0206 billion new marks. From then on, the issuance of new marks must also adopt this principle: how many pounds does the German Reichsbank have in the Bank of England before it can issue the corresponding number of marks!

Third, in order to allow Germany to resume industrial production, the British government will help Germany issue long-term bonds of up to 1 billion pounds guaranteed by tariffs, tobacco, alcohol, and sugar monopoly taxes, railway revenue, and industrial and commercial enterprise taxes.

Fourth, the total amount of Germany's reparations should eventually be less than 100 billion gold marks, and it should be denominated in pounds sterling, which is about 4.9 billion pounds. It must be repaid in kind, of which no less than 30% is coal and 70% is other industrial products. The specific repayment plan will be determined through consultation between Germany and Britain, France, Belgium, Italy and other countries.

Fifth, Germany began to pay compensation materials in 1926. In the first year of payment of compensation materials, materials worth 100 million pounds need to be delivered, which will increase year by year and increase to 200 million pounds in the fifth year..."

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Currency War is a bit long, but this section is actually a real war. Moreover, Rollo believes that the reason why Germany launched World War II and the reason why it lost World War II was actually because of the disastrous failure of the currency war. In addition, some views from later generations claimed that Germany was able to revive its industry by "borrowing" so many dollars from the United States. This is actually a statement to smear Sandezi and American imperialism. The U.S. imperialism lent money to Germany not to finance Germany's revival, but to seize Germany's right to issue currency. Germany had a very complete and leading industrial system at the time, and it could upgrade without resorting to U.S. loans. If Germany had the right to issue its own currency.

However, Germany lost the right to issue currency due to the crisis in the early 1920s, and the mark was forced to be pegged to the U.S. dollar and rely on U.S. loans to guarantee currency issuance. Later, the economic crisis that Germany encountered after 1927 and Hitler's rise to power were all caused by this. Because after losing the right to issue currency, the Bundesbank will be unable to stimulate the economy and defeat deflation by issuing additional currency. When dollars flow out of Germany, Germany can only face unbeatable deflation.

The inflation that Germany faced in the early 1920s and the deflation that it faced in the late 1920s can both be seen as currency wars. After losing two currency wars, Germany effectively lost most of the interwar period. Preparations for war were certainly very inadequate. Moreover, after obtaining the right to issue the world's currency, the United States has become invincible in the economic war with Germany. In the world war, the United States needed to import supplies from neutral countries, and all it took was some paper. Germany, on the other hand, needs to pay real money or equivalent industrial products.

Therefore, in order to change the outcome of World War II, the protagonist must start with the currency war during the interwar period, preserve and expand Germany's industrial advantages through "kind compensation", and then introduce the concepts of the European Community and a common currency to prepare the theory for the future discovery of the euro. and the basis of public opinion.

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