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ligated to pay the debtors in foreign currencies and there was no possibility to float a prolonged loan forGermany. Also the rising price from 1914 to 1918 attracted a influx of foreign investments, mainly from theUnitedState. The main part of the nation has been destroyed such as liquid and raw material so economy recovery entails importation. The volume of German exports has fallen by 14 percent in 1931 when compared with that in 1928 and an additional 31percent in the next year. Funds injection was not limited in industry. It is ubiquitous from the federal government, commune to regulatory bodies to facilitate themselves ,even for luxury consumption. Despite the banks lend as the short-term loan , it became frozen and the long-time foreign indebtedness increased year by year. What's more , the various assortments of debts from the banks, individuals and the commercial organizations made it worse.

To some extent , the pervasive inflation jolts the national mark and the best solution is to borrow money from other countries. But the point is that it is sounder to say that inflation renders more foreign indebtedness than reparation. 

3.1.2.4 The Bank Crisis

Banks, as the core of the economy and the main measure of economy status, forecast the looming crisis. Bank crisis means the cash conversion from deposit and the large-scale withdrawal at the same time because the customers think banks are, or might become insolvent. As is known, the deposit-currency ratio is typically considered as confidence index on the grounds that the higher the ratio is, the more willing to deposit money to bank.( Bernanke, 1995). In 1931, the biggest German bank , Darmst?dter und Nationalbank (Isabel Schnabel,2002) closed in the wake of the insecurity strengthened by the rapid foreign withdrawals and time deposit and demand deposit falling , which sparked a prolonged confidence loss in other bank system and more withdrawals happened. So did the Reichsbank . Reichsbank , as the focal bank ofGermany, produced a very sustainable currency ,namely Goldmark. Mark was devalued by the war expense along with the inflationary pressure. What’s more , the fiasco in the war with a large amount of reparation threw in the wallow of social unrest. According to Dawes Plan, one of the key reforms was the establishment of independent German National imperial government institutions. August 30, 1924, the German National Bank started to issue the German mark as the German currency until 1948. However, Reichsbank was closed in 1945 with the defeat of Nazi Germany

All of these led to a widespread faith-losing in capitalism and officials took into account lifting the business model from banks in case of ever-worse financial deadlock.

3.1.2.5 Gold Standard

In the World War I, German abandoned the gold standard and adopts the inflationary policy because most money was spent on war, not in productivity, which caused more demands than needs. However, countries desired to return to the same gold standard as the pre-war price especially forGermanybecause his reparation toFrancecould be paid off by good exportation and gold attainment. Also the return made it easier for countries to sell nominal bonds and attain more seignorage. But there were not enough gold available to meet the whole world money needs. Thus, convertible exchange reserve本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。