Metallurgical Research Society – Wikipedia

The Metallurgical Research Society M.B.H (“Company for research in the metallurgical field”, Me.fo.) is the name of a fictitious company of the third Reich, created by decree on May 5, 1933, and fully operational from the following July 15. Non -existent in reality, it was conceived by the Nazi Germany regime to finance the German economic recovery and the rearmament of the nation, around, with a fact, with an accounting artifice, the limits and impositions that the 1919 Versailles Treaty had inflicted on the German nation exit defeated by the First World War ^[first] . This financing system was based on a scheme conceived in 1934 by the Minister of the Nazi Treasury Hjalmar Schacht (similar to the previous one, founded on good Öffa , conceived in 1932 by one of the last governments of Weimar) ^[2] , in which the issue of special obligations on behalf of the previously mentioned ghost company, the so -called ” Mefo change “(” MEFO titles “): Thanks to the issue of these bills, as a state government bonds, the treasure could rake liquidity to be used to encourage the recovery and economic development of Germany as well as the production of armaments to satisfy its rearm plans ^[3] .

I ” MEFO titles “They were bills issued by this phantom state company, therefore guaranteed by the state and bidders of 4%, which can be recessed after a prestige, which had the purpose of practically permanently permanently the payments contracted by the State with private industries. The project He already started in the summer of 1933, after the Nazi party became the only one admitted in Germany (14 July 1933), when the then German Finance Minister was Hjalmar Schacht (already known for having managed to eradicate hyperinflation in 1924 ) ^[4] . Germany had, in addition, to find a means of payment that would not leave track in the accounting books and in the state budget, so as not to suspect the winning powers of the First World War ^[5] .

The so -called “Öffa bonds”, conceived immediately before the ascent to the power of the Nazis, in July 1932, but also emitted by the Nazi government copiously constituted the previous one to which Schacht was inspired for the creation of the ghost broadcaster society and for the Employment of the Me.fo Bunds., And, from the analysis of the Nazi parallel accounting accounting, it appears that in 1934 an amount of ÖFFA bonds had been issued slightly higher than half the total future of mefo bonds. ^[6]

The construction of the company screen of facade [ change | Modifica Wikitesto ]

Schacht devised the creation of a “facade” state company that had a provisional character due to temporal duration, although the stratagem worked so well that Hitler, January 20, 1939, promised him sine the , exhausting Schacht himself, who assumed the positions of Minister of Economy, Minister of Finance and Plenipotentiary of the war economy on himself, and defined himself contrary to a forced extension of the duration of the experiment ^[7] . At the time of its birth, in 1933, the company had a share capital of 1 million Reichsmark. It did not resort to loans of state or public banks, nor to loans on international markets and could not even drain money from taxation, in order not to further depress the people’s savings capacity, which the regime wanted – on the other hand – to direct towards the resumption of internal consumption. In practice, the only shareholder of the company was the National Bank itself, the Reichsbank, state -state months earlier ^[8] . The amount of money “lent” to the company by the Central Bank was gradually encouraged with the passing of the years ^[9] :

• 1934 2.14 billion MRI
• 1935 2.72 billion RM
• 1936 4.45 billion RM
• 1937 2.69 billion of MRI (until March 31, 1938, when Schacht resigned as a minister)
• 1938 11.9 billion MRI
• 1939 11.4 billion MRI
• 1940 10.8 billion MRI
• 1941 10.1 billion MRI
• 1942 9.5 billion RM
• 1943 8.8 billion MRI
• 1944 8.1 billion MRI

The Nazi regime thus managed to evade both the limit of 100 million Reichsmark and the winning powers of the Great War had imposed as a total figure of financing to the German central bank, with the aim of preventing German rearmament, both the value of the interest lawyer equal to 4.5%. The money obtained with this accounting artifice allowed the total industrial reconstruction of the nation, the resumption of the internal market and the exponential expenditure for the rearmament, avoiding resorting to other sources of funding that would have immediately aroused suspicions of violation of the peace treaties ^[ten] .

The quantity of MEFO titles in circulation was kept secret, officially in order not to generate suspicions or panic in the subscribers, which would have caused a sudden appeal of the latter to the refund, actually collapsing the entire credit building and precipitating, at the same time , the central bank in insolvency, but above all in order to prevent a Franco – Belgian Belgian military invasion ^[11] . The issue of the titles, at the beginning, was foreseen for a single semester, with the faculty of an extension of a quarter or a quarter. In reality, it was already expected in 1933 to procrastinated its emission to infinity ^[twelfth] . The self-powered circle on which the artifice was based provided that ^[13] :

1. The industrialists (producers of consumer goods, of weapons, and so on) received committees from the government for the production of goods and/or services;
2. The amount of the saleswoman was expressed yes in Reichsmark, but invoiced by the industrialists themselves in MEFO titles, since these were in all respects of the commercial exchanges that can only be marketable on the national territory;
3. The MEFO securities were convertible in the national currency (the Reichsmark) on request, but were also the financial budget items, an annual report, which were rewarded in current currency by the waged workers in the purchase of consumer goods and services;
4. The MEFO titles issued by industrialists were accepted by the Ghost State Society and “turned” to the German banks (public and private), which accumulated them;
5. The banks had to – at the end of the five years from the date of issue – present the MEFO titles at the Central Bank to serve and extinct them;
6. The MEFO securities allowed the government to issue “government bonds” parallel to finance government expenses, creating a much wider state budget deficit than what normally happens, so much so that in 1939 12 million mefo were in circulation against 19 millions of ordinary public debt securities.

Although full of raw materials, Germany was not completely self -sufficient to supply its production industry, and the incvertibility of the Reichsmark made the supply of rubber and oil in the first place problematic. In order not to dilapidate the already small golden reservations or to commit them to procure themselves as currency with a strong convertible (mainly dollars and pounds), Schacht resorted to a kind of barter, in order to be released from the dependence of the system of international changes and values ​​bags (especially in London and of New York): in practice, the suppliers were mainly Spain, the Soviet Union and Turkey, which, in exchange for their raw materials, received treasure vouchers that can be spent only on the German market to buy finished products manufactured in Germany ^[14] . It should be noted that the Soviet Union and Germany were linked by numerous commercial clauses, also secret, contained in the Treaty of Rapallo (1922), and during the same years the Soviet Union had started the heavy industrialization wanted by Stalin in forced stages. Turkey, a nation of the longtime friend of Germany, and ally cobelliggering during the Great War, was supplied with roads and railways by the German industries in the period between 1880 and 1910. In the case of Spain, however, a double company was established For ghost actions starting from 1936, with Germany’s intervention in the Spanish civil war. The Rowak (German Purchase Company) purchased German military supplies to resell them to the twin Hisma (Hispano-Maroccin of transport company). The latter welded orders by bartering extractive rights and Spanish raw materials of which Germany was in need.

The amount of mefo bonds in circulation was a state secret and the use limited to the payment of military supplies. From 1933 to 1939, the GDP growth rate in Germany remained between 6% and 11%, with an inflation between 0% and 4%. The issue of good mefo was proportional to the quantity of goods produced by the German economy (at the Nuremberg trial, Schacht stated that “it was not gold who supported the treasure vouchers, but the hard work of the German workers”) so that the quantity of good mefo and the amount of goods were always in balance ^[15] . According to the figures communicated by the Nazi regime, 33 billion dollars-golds of 1919 loomed on Germany to be re-founded for war repairs by 1988, a figure considered priceless for its own enormousness. In addition, in January 1933, when Hitler went up to power, the unemployed were over 6 million; In January 1934 they had almost halved and amounted to 2.5 million in June; In 1936 they fell further to 1.6 million, while in 1938 there were no more than 400,000. In 1939, on the eve of the war, there were no longer unemployed. In the meantime, the results of the American “New Deal” were far less spectacular ^[16] . The investment created the work for the unemployed, so that the work produced income and savings, thanks to which the short -term debt previously created could also be financed for the interests, and to some extent reimbursed. In this way, Reichsbank supported the issue of large quantities of non -accounting public debt, but the accounting artifice was like a “sword of damocles” ready to fall from one instant to the other on the head of the German people, because Reichsbank provided The funds necessary for investments, but the Me.fo. Bunds were not only a pseudo – capital, but also, according to Schacht himself “a non -covered white check, harmless until circulating hand in hand, in the hope that someone will not bring it to the income”. In practice, what Schacht wanted to say was that the state investment based on the Me.fo Bunds put the unemployed back to work and allowed Hitler and the high hierarchies of the armed forces to re -enter the nation for forced stages, but the concrete and tangible risk It was represented by the prediction that industrialists could serve (selling discount) these obligations at commercial banks because these were bonds guaranteed by the state, and, therefore, accepted by Reichsbank for the feedback (commercial banks, which came into possession of the securities of Indyspines, in turn, could find them at the Reichsbank). The investment supported by the Me.FO. Bunds had put the unemployed back to work in the massive and accelerated production of armaments, but at the cost of a future continental war that could be said to be certain, as well as a possible inflation catastrophe always lurking on civil society.

This sort of “economic miracle” however presented itself full of numerous large defects that would inevitably reveal themselves in the long term, as characterized by fragile fundamentals that would not have allowed an eternal duration ^[17] . The “economic miracle” was held on a precise end, that is, to encourage a future war of conquest, to grab Germany, the funds with which to cover the talented shortage that had financed the industrial recovery ^[18] . Furthermore, only some completely exceptional circumstances had allowed this recovery ^[19] . In this case, albeit national industrial production, from 1932 to 1937, it grew by 102% while national income doubled, the factors should also be considered which only in an dictatorial regime such as Nazi Germany could operate:

• The Nazi “economic miracle” created an almost total economic autarchy of the Reich.
• Much of the massive increase in industrial production was not aimed at consumption assets and exportable assets, but the production of armaments and ammunition, so much so that, in 1938 it absorbed 25% of the total annual, and the state was the only one Buyer and user of this industrial production, which only in the slightest part was exported to friendly, allies, satellite countries.
• The arsenals could not be filled forever, and this condition brings or the war, or the export of large -scale weapons.
• Everything has repercussions on state finances, with an unprecedented public debt of the public agent, quadrupled between 1933 and 1939.
• The financing system for the manufacturers was that of the continuous issuance of public debt securities that were automatically renewed, but which could have been collected upon expiry, precipitating the state in the abyss of hyperinflation.
• Only the protectionism and incvertibility of the national currency managed to maintain stable prices within Germany in the short – medium term.
• The “economic miracle” was possible only because the free market was practically abolished. The total dictatorship that Hitler created in a very short time did not concern only the company but also the economy, proof is the nationalization of the German central bank (the Reichsbank, 30 August 1934), the creation of a unique union (“German labor front “, May 4, 1933) where the workers were addressed directly by the State to the type of work assigned, regardless of their will and with total preclusion of the freedom of option, the incvertibility of the Reichsmark, and the incompleteness of the Me.Fo Bunds outside Germany.
• In addition, many jobs freed themselves since, in the conception of the world of work under Nazism, women should have dealt exclusively to breed offspring and take care of the domestic economy, just as foreign workers were not allowed and, above all, not to Pure Aryan breed, based on the Hitlerian racial conception without any scientific foundation.
• Not only the armaments industries employed workers directly to absorb labor. Other logistics activities, easily reconverted to war purposes, also intervened to drastically drop unemployment. Between 1933 and 1936 it was building, thanks to the large projects on public works, including the construction of the motorway network, to employ more (more 209%), followed by the car industry (+ 117%), much which, in 1937 Volkswagen and metallurgy was founded (+83%). To this are the increase in development of the railway network and tailoring (for example, Hugo Boss resources from the bankruptcy of 1930 thanks to the Nazi orders for the production of uniforms).
• Finally, other factors should also be considered. The German productive relaunch was the result of Schacht’s accounting artifice, but also of the powerful possession program of industrial profits, so much so that, in the period 1932 – 1938, they passed from 172 million to over five billion of Reichsmark. It should also be said that the industries were induced to use the Me.FO. Bund from the freezing of workers’ wages, from the illegality of the strikes (and of the tight), from the threat of nationalization of the industries themselves. And in addition, part of the Me.Fo. Bund came “covered” thanks to the assets seized from the German Jewish community.

All this highlights the fragile basis on which the Nazi industrial recovery was very well and at the end of this absolutely unnatural development could only be a war that would have seen Germany in the role of attacker ^[20] . Moreover, Hitler did not have the slightest intention of creating a stable and orderly economy – and this placed it in contrast with Schacht – as the purpose of the economy was, in its perspective, that of preparing a future war, which it represented the true and last objective of his policy of militarization of the economy itself, and of the state in general ^[21] . But it must also be said that the Me.fo. Bund were good, guaranteed by the state, issued by the Reichsbank (the German central bank) that were used to pay the war industries only usable in a non -democratic country, as was the then Nazi Germany: the novelty was that these vouchers did not appear In the financial statements or companies, nor banks and not even in those of Reichsbank. Moreover, they were not even present in the German state budget. Finally, it should be noted, as admitted by Schacht in person to the Nuremberg trial that saw him accused of having contributed to the trigger of an aggression war that resulted in world conflict, that the major German industrial groups were happy to accumulate me titles .Fo. in view of lavish earnings from the war that Hitler was planning ^[22] .