The Wages of Destruction: The Making and Breaking of the Nazi Economy

by Adam Tooze

government’s aggressive communiqué, fear spread throughout the world’s financial markets that Bruening was about to announce a unilateral moratorium, both on reparations and on Germany’s obligations to its private creditors. Over the next week the Reichsbank’s reserves fell from 2.6 billion to 1.9 billion Reichsmarks. Despite a shocking rise in interest rates, the reserves plunged inexorably towards the minimum level required to provide ‘gold-exchange backing’ for the currency. By the time the trouble at the DANAT and Dresdner banks hit the headlines on 17 June, the Reichsbank was already facing a full-blown currency crisis. Indeed, so severe was Germany’s international financial situation that on 20 June President Herbert Hoover was forced into a dramatic and unprecedented intervention.