GERMANY: Schacht Solution

Tempting terms had to be offered investors in 1924 to get enough money to refinance the Reichsbank or State Bank of Germany. Shareholders were promised a fat minimum return of 8%, plus one half of all excess profits, the other half going to the German Treasury.

As Germany has rolled from lean to prosperous years, this state of affairs has come to be known in Socialist Berlin as "The Reichsbank Problem"—the problem being how to cut down the original Capitalist investor's paunchy profits, and how to give the...

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