The company's "mefo bills" served as bills of exchange, convertible into Reichsmark upon demand. Hjalmar Schacht formed the limited liability company Metallurgische Forschungsgesellschaft, m. And a large, visible government deficit would have attracted attention.
However, because of the limit it was unable to do so. The government would normally borrow extra funds on the money market by offering a higher interest rate. First, rearmament was illegal under the terms of the Treaty of Versailles, and secondly there was a legal interest rate limit of 4.
The German government needed to spend a large amount of money to fund its massive re-armament effort. They were a fundamental part of the re-inflation of Germany's economy under Finance Minister Hjalmar Schacht.
And how did they work? In simple please, I've been learning about these in class but I don't really get them! An example might help.
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