Oeffa bills

The OEFFA change or job-creation bills were created in 1932 an instrument of the national government to free banking borrowing for public works and later for job-creation measures. Following the same pattern, the Mefo bills were designed later.

1932 OEFFA exchange created by the Brüning cabinet II, in agreement with the President of the Reichsbank Hans Luther. The bills were issued by the German Society was founded on August 1, 1930 for Public Works AG and rediscounted of the Reichsbank. The German Society for Public Works AG led with this money through public works. It was a front company without sufficient capital. However, the change from the Reichsbank were discounted. Thus, the Reichsbank funded the government construction projects. In the wake of the global economic crisis, this covert creation of money by boosting the economy served. The German Society for Public Works AG brought a total OEFFA change of 1.26 billion dollars in circulation. The duration of the exchange was between 3 months and 5 years.

Economically, this meant an expansion of the money supply. Inflation has not been in this economic phase ( deflation ) is possible, but fears ( in conservative circles in general) and so far agreed Hans Luther ( President of the Reichsbank ), only a small volume.

The Schleicher cabinet decided to extend the OEFFA change. They were now out on the OEFFA to other (mostly public ) credit institutions ( eg 1 billion marks to the German traffic credit bank) are drawn. Hans Luther, the opponents of this form of money creation was, was replaced on March 16, 1933 by Hjalmar Schacht. Thus the way was clear for an expansion of this form of fundraising. With the Mefo Jump from 1934, the model of OEFFA exchange has been used on a large scale.