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» Economics » Realm finances (term) » Topics begins with M » Mefo change

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The Mefo change is one 1934 financing instrument sketched by Hjalmar pit for the Vorfinanzierung of expenditures for realm (defence expenditure). For secrecy reasons the Mefo changes were called special changes. Only for a long time after the expenditure stop they became known as Mefo changes.

Of Mefo changes the metallurgical research association Ltd. was more referred, for whose debts the realm took over the directly liable endorsement. Drew the capital stock for the metallurgical research association in May 1933 four large considerable German enterprises, i.e. Siemens, Krupp and Rheinmetall at a value of a million realm Mark. The Mefo GmbH had been conceived from the outset as dummy firm; it did not have further function and/or business purpose.

All enterprises, which implemented tasks on behalf of the state, issued now the Mefo changes. The realm bank explained itself ready to receive and exchange in cash these changes at any time. The running time of the changes amounted to at the beginning of six months and was again and again extended, so that the changes were finally five years in the circulation. The problem was however that with the expenditure of the Mefo changes a galloping cash bargeldvermehrung had to begin, if all suppliers would redeem the changes with the realm bank. Pit however built before and equipped the changes with an annual interest of 4%. It happened, what it intended. The changes became related among the suppliers as popular currency, whatever brought in addition still another interest yield.

The Mefo changes were nothing else as a loan of the realm bank to the realm. This path of the financing was taken in such a way, since the realm banking law did not permit larger loan amounts, which went beyond 400 million RM.

Altogether 31 became from 1934 to. March of 1938 Mefo changes at a value of twelve billion realm Mark spent. They financed approx. 45% of the defence expenditure accumulated up to then (to end of 1939 were approx. 20%). However eight billion of the market were taken up by these twelve billion RM. They were thus not redeemed with the realm bank. Pit intention of preventing a noticeable inflation came up thus.

Starting from April 1938 the Mefo changes were replaced by short term realm treasury bonds. The Mefo changes coming to the redemption could be exchanged again into other short term changes. In the time of 31. March 1938 to 31. March 1939 exploded the expenditure of these short term treasury bonds. Thus in only one year 4.2 billion RM were spent of it.

Pit was it, which forbade the expenditure of new Mefo changes and thus and was set off short time made itself unpopular with Hitler later than realm bank president.

Spent Mefo changes since 1934 (after pit):

  • 1934 2.14 billion RM
  • 1935 2.72 billion RM
  • 1936 4.45 billion RM
  • 1937 2.69 billion RM (to 31. March 1938)

90% the Mefo change were in the possession of the business banks. Only 10% still were in the commercial economy. In detail still were in the circulation:

  • 1938 11.9 billion RM
  • 1939 11.4 billion RM
  • 1940 10.8 billion RM
  • 1941 10.1 billion RM
  • 1942 9.5 billion RM
  • 1943 8.8 billion RM
  • 1944 8.1 billion RM

The principal reason, why the banks were interested much in the possession of the Mefo changes, is because of the legal regulations of the document of identification relating to the balance of the special changes. They could be booked under the balance post "commercial bill". Thus the Mefo changes could become "hidden" also before foreign shareholders. The secrecy remained thus protected.

With the expenditure stop for Mefo changes the expenditure of the single bills of exchange in such a way specified of the gold discount bank began at 1937 to 1945. They had practically the same function and equipment as the Mefo changes.


  • Pit, Hjalmar: 76 years of my life. Bath Kindler and Schiermeyer, 1953.
  • Statistic manual of Germany, 1949.
  • Stucken, Rudolf: German money and credit policy 1914-1953. Mohr, 1953.

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