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WB.05A, Wolkiger Beobachter, Nr. 5a

  • Illustrations
  • Summary
  • Translation
  • My Collection
(Image/s source:
English Title/Description
Cloudy Observer, No. 5a
Conflict Language/s
World War II German
Production Agency Year Pages Size
E.H./S.O.1 1939 4 13.5 cm x 21.5 cm
Printer/s Date of First Print-run
Total Number of Leaflets Printed Total Number of Leaflets Pulped
First Dissemination by Aircraft Last Dissemination by Aircraft Total No. Dropped by Aircraft
Not Disseminated Not Disseminated

Supplement No. 2


Why has Göring been given fresh powers to interfere with the people's savings?

Why does the Schwarze Korps hint that part of the people's salaries and wages will henceforth be paid in coupons or promissory notes?

Why are people still made to pay their subscriptions for the people's car, when in wartime there can be little, if any chance that the car will be delivered?

Why are party speakers always warning the people who, in many parts of the Reich buy all the goods they can lay hands on?

Why have people in Austria taken to raising their savings from the savings banks?

Why is barter an increasing practice in the Reich?

Why does Funk repeat with such insistence that there will he no inflation?

Why unless it is that many people fear inflation? And why should people fear inflation unless inflation in some form or another already exists?


A Resolution and its History

Hermann Rauschning, former President of the Danzig Senate, relates in his hook "Hitler Speaks" that Hitler once told him:

"I shall never give my consent to devaluation or inflation any more than I shall ever permit ration cards."

"Germany lost the world war because of the unbelievable lack of understanding of the German Government for the feeling of the masses, the small investors and the housewives. But I will not allow the same mistake to be made again. I would sooner abolish money altogether, and instead of ration cards, introduce communal care of the whole nation. If the worst came to the worst I could justify such measures to the masses. I could explain them as the new war Socialism, and proclaim it as a tremendous social advance. The people could believe that."

Hitler's resolution not to permit ration cards has gone by the board. Why should his resolution not to consent to inflation not go by the board too?

His alternative to inflation is to abolish money, just as the Schwarze Korps threatens to do with its talk of wage coupons. And is that a "social advance"?


Whither the Mark this time?
Or Inflation in the Police State

Midway in the first winter of war Field-Marshal Göring has been endowed with economic power - power over the individual's freedom to buy, sell and save - such as no single person has ever before exercised in history.

Why was this power necessary?

Because never before has a great country entered a major war in so parlous an economic state as the Third Reich.

When National-Socialism came to power in 1933 Germany was economically exhausted - exhausted by the inflation of the years of the Great War and after, and by the world economic crisis which set-in in 1929. Her past savings were in part dissipated, her stock of capital was being eaten up, her current resources were largely lying waste.

The German economy needed to be coaxed slowly back to health and National-Socialism could only place upon it fresh and onerous burdens. To the war-minded National-Socialist elite a prosperous economy meant a war economy, and straightaway German labour and German industry were made to work for war.

Starved for a Toy

Yet armaments are sterile things: to the country which produces them they bring no return; from year to year they make it rather poorer and poorer. They are an expensive toy, to build which Germany set to starve herself.

For, with a shrunken supply of past savings, Germany could only manufacture arms by cutting down her present consumption. Impost after impost was placed by the State on the German people, in order that the people might have less to spend on butter and itself more to spend on guns.

But that was not enough for the National-Socialist State. Tax receipts did not suffice to meet State debts to the armament firms. The State had somehow to concoct artificial savings. And it did it by churning out bank and promissory notes behind which lay no ability to pay and which were only so many scraps of paper.

Reichsbank notes and Rentenbank notes, State short-term debts and State long-term debts, Treasury bills and other bills - all started increasing by leaps and bounds. And lest the increase in these known means of payment should become too apparent, the National-Socialist State set to invent new means of payment. Steuergutscheine, Arbeitbeschaffungswechsel and what not were spawned on the German financial market.

A 1% Reserve

The German Government which conducted war against Britain twenty-five years ago began manufacturing money to meet its armament needs only in the war's later stages; the National-Socialist Government began the artificial manufacture of money even before war began. Since 1933 the total quantity of means of payment in Germany has increased by anything from 100% to 300%. At the same time the gold backing of the means of payment has steadily decreased. The gold and foreign exchange reserves of the Reichsbank today amount to no more than 1% of the Reichsbank's note issue, as against 45% in 1929.

The world outside Germany realised what was happening, realised that the mark was gradually becoming worthless, as it had once become worthless before, and day by day marked it down in terms of other currencies. Only a nominal rate of exchange bearing no relation to reality, still gave it a semblance of maintained value.

In Germany itself too, people became suspicious of the new means of payment; accepted the Steuergutschein, for example, with reluctance; and forced on it, shortly before the outbreak of war, a depreciation of between 20 and 40%.

The Watch on Shopkeepers

In any other but a police state, in, for instance, the Germany of the last war, the increased quantity of money together with the suspicion of its worthlessness which the quantity aroused, would have led to a rapid rise of prices. In National-Socialist Germany the price rise has been gradual, because policed. The myriad functionaries of the National-Socialist Party have had the task - a prosaic task in­deed for revolutionaries - of seeing to it that shopkeepers simply do not screw up their prices.

In many cases National-Socialist supervision has been evaded and black markets in various commodities have sprung up throughout the Reich. In these markets National-Socialist inflation has had its effect in sharply raised prices. But in the policed markets the effect has remained concealed.

For in the policed markets, while prices have remained more or less stable, the quality of the goods has decreased. The German people are today paying the same price or a somewhat higher price for whale oil paste masquerading as butter as they paid a few years ago for fresh dairy butter. In the last war Germans hoarded goods because, while more or less the same in quality, they were rising in price. In the present war Germans are hoarding goods because, while more or less the same in price, they are steadily worsening in quality.

Now, as twenty-five years ago, Germany is experiencing the substance of inflation - the quantity of money has been increased to meet the Government's war needs. The effect of the inflation is different - the inflation is reflected in the quality of goods rather than in prices. But the moral - to hoard goods - is the same, and the German people is acting upon it.

The Matchwood Barrier

To history National-Socialism will be known as the revolution which interpreted its revolutionary task as policing. Its solution for all problems - social, economic and political - has been the police.

It has yet to learn that in the long run the police can neither change nor prevent anything. It can conceal things; it can for a time make them appear somewhat different from what they are; but it cannot alter them.

Today, despite the police, the underlying reality of inflation is present in Germany. And it is a lesson of history that, when realities become apparent, the police, like a matchwood barrier, is swept away.



To carry out its preparations for war the National-Socialist Government has for the last three years been increasing the quantity of notes in circulation and the quantity of Government debts i.e. - has been sowing the seeds of inflation - just as the German Government did in the Great War.



Millions of Reichsmarks


At the end of the year liabilities on Reichsbank notes were



On the 30th November



Other liabilities due on demand



Increased to



Owing on Rentenbank notes at end of June



End of October
The latter notes were created in 1924 as a separate stable currency,



In 1929 over 45% in gold or devisen was held against
these notes and demand liabilities.



Only 1%.



The medium and long-term debt was



In January



The Floating Debt in the same period rose from



to (in August)
Contrary to the practice of all other Great Powers, the German Government has issued no Budget since 1933, so that it is not known how heavy is the borrowing against:-

(a) Armament and Public Work bills.

(b) Special notes to Contractors.

© The new Tax Certificates which enable the Government to cash in advance taxes not yet due



Since the beginning of 1933 the security holdings of the Reichsbank, Commercial Banks, Life Insurance Offices, other Companies and Social Insurance in Government and/or Local Government securities have risen from






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