[Forum Game] - Crisis in the Reichstag

I must offer my concerns with the Vice-Chancellor's proposal to devalue the Mark. Our currency has been under considerable strain since the outbreak of the war against the French Republic. State spending has risen exponentially, while state revenue has only barely increased to match it. The demands of defence spending - and the borrowing necessary to ensure that they are met - have already left our finances precarious. A symptom of this is the decline of the Mark, which now trades weak against the United States dollar. I fear that if we encourage devaluation, governments and firms who hold reserves of the Mark may move to discard them in favour of more favourable currencies, further devaluating the Mark and precipitating a currency crisis. The Mark was removed from the gold standard at the beginning of the war. If it enters an inflationary cycle, it shall be most difficult to peg it back to our gold reserves, without the backing of which I fear it shall be placed in terminal danger.

As for the banking act, I do not see how this proposed institution would differ from the Reichsbank, which has been the central bank of the Empire since 1876 and charged with German fiscal and monetary policy since its inception.

- His Royal Highness, Prince August Wilhelm, Viceroy and Governor-General of Poland

I vote Yes to Electoral Reform and No on the Budget. The Spending cuts in most areas are drastic and too steep from previous levels. To make such drastic cuts will severely harm the economy. We need to rebuild our infrastructure and our economy. Since the Debt has been reduced because of the Reparations we can afford to borrow money to invest in Germany's future.

I vote yes to the electoral reform, and shall abstain from the Budget until the irregularities regarding the balance of the Treasury are addressed.

((It's is due to reparations and the budget was reduced during 1917. And either is correct.))

To the concerns of Herr von Wettin: The seingniorage made by the bill will be applied towards the tasks of reconstruction. And the Reichsbank would be composed of economists promoted solely by merit and would operate out side the confines of politics and other such oversight to produce a stable currency free from tampering.

To HRH, Prince August Willhelm: The mark was never removed from gold standard during the course of the war, hence that point is irrelevant. This is a method that does not damage the states finances as it merely changes the value of the mark and in fact improves it, as it makes the 9 billion RM reconstruction project possible. Furthermore, by having the Reichsmark loose value, German exports become more viable, as they cost less compared to those of other nations. Furthermore, the National Bank Act will ensure that such inflation will not occur by placing the currency solely in the hands of economists and politicians. The National Bank Act also through its clear stated goals of maintaining a stable currency and responding to economic necessities removes this risk. ((Read about the Bundesbank and why it was so admired...))

To Herr Heisenburg: The changes in spending only reflect the fact that our nations economic heartland is no longer under threat, hence the costs for providing these programs and services has returned to normal.

I vote yes on both the budget and the electoral reform bill.

OK, so they are economists, but who appoints them? The Kaiser? The Chancellor? The Finance Minister? The Reichstag? They cannot just magically get the post; some one must be in charge!

((Also, "the National Bank Act will ensure that such inflation will not occur by placing the currency solely in the hands of economists and politicians", by putting it solely in the hands of economists...))

((According to the Constitution, the Kaiser appoints most State Officials.))

I vote Yes to Electoral Reform and Yes on the Budget.

((The chair of the committee would be appointed by the Treasury Minister for up to two four-year terms, selected from a body of candidates currently on the board. Once he is appointed the only way the chair changes hands is the death of the Chairman, resignation, or as the result of negligence of his duties, which includes corruption. I meant politicians and political hacks, if you want a central banks that works extremely well, is immune politics, and basically prevents undesirable things from happening this is it. Trust me I'm an economist.))

The board of the National Bank would be composed of nine economists elected by their peers to a maximum of three four year terms, from this the Treasury Minister would select the board's chairman who would serve a maximum of two six year terms. Once elected or appointed the only way that an individual is removed from the board is All other positions in the National Bank would be merit based and applied for, or promoted from within the National Bank. This structure is designed to remove the potential for political favoritism and other such undesired outcomes from occurring.

I vote Yes to the Electoral Reform Act and thank the Vice-Chancellor for his most courteous amendment as one representative of Elsass-Lothringen to another.

I vote No to the proposed Budget.

I support the Vice-Chancellor's proposed legislation regarding the devaluation of the Reichsmark.

I also request that a portion of the reconstruction fund established for the rebuilding of Elsass-Lothringen go into incentives granted to displaced residents who return to Elsass-Lothringen and to German citizens of other regions who choose to settle on the Left Bank.

With the Chancellor's permission, I will soon submit two pieces of legislation related to my portfolio as Minister of War.

((Given that the Reichsbank has been around since 1876 according to Wikipedia, maybe the National Bank Act should be rewritten as central banking reform rather than a central banking establishment?))

((Additional what??? and fair enough on the renaming, on legislation I have a few bills that the have been reviewed by the Chancellor and the head of NL))

I vote Yes to the Electoral Reform act this will ensure that elections are fair and that cities are not under represented in the Elections.

As for the budget I'm concerned that Military spending is only being decreased slowly but that in understandable since we are still at war in the Balkans.

I vote Yes to the Budget.

Devaluing the Mark may ease the burden of reconstruction, but it shall also reduce the revenue gained from war reparations - which are paid in Marks - and enable the French to recover swiftly from the economic liability imposed upon them by the Treaty of Bern. Moreover, increasing the desire for German imports only works if such imports are readily available. Yet the German Nation is still in a war economy; defence spending dwarfs the production of consumer and industrial goods. We cannot prematurely shift the economy to a civilian footing when our factories are still predominantly churning out tanks instead of cars. Furthermore, a weaker Mark shall make imports more expensive, almost certainly undermining the working classes who spend the chief quantity of their income on food and other basic goods and services. Such a strain would inevitably foster discontent amongst the masses. Only once the war is truly complete, and the war economy dismantled, can we begin such radical monetary manoeuvres.

Also, I still do not see how this proposed "Bundesbank" would differ from the central banking structure already in place since the reign of Wilhelm the Great. The Reichsbank is already charged with the control of the monetary supply of the German Nation. It is a private institution controlled by private managers. The National Banking Act would simply seek to duplicate the Reichsbank, without even dissolving or divesting power from the original. Such a dual system is irregular and dubious, and either we must retain the Reichsbank or simply restyle it as the Bundesbank.

- His Royal Highness, Prince August Wilhelm, Viceroy and Governor-General of Poland

I vote Yes to the reforms. But, I must vote No to the budget, because I think the cuts to certain areas especially consumer goods is too drastic.

Yes to the reforms, no to the budget.

((I have degrees in Economics... Trust me, I already accounted for these things.))

HRH Prince August Wilhelm clearly lacks an education economics. As the negative affects would be minor, but the positive effects huge. As the current economy has shifted back towards a peace time stance. Furthermore, the expenditures on consumer and industrial goods make up the vast majority of the economy. Furthermore, I find it odd that he mentions cars which are a good very few Germans can afford. True some factories were retooled, but many have returned to the production of normal goods, hence the argument is invalid. A war economy is also not needed for some far off war that is primarily the concern of our allies. The incipient price rise would be minor, but given our economies export focus, more competitiveness would expand our economy buoying all.

On the Reichsbank/Bundesbank, sure but the new structure is far better at removing the influence of those that should not hold it. The name does not matter but its governance does.


Furthermore, the reduction in consumer goods subsidies reflects less need for price supports and a reduction in military expenditures for items not covered under the military section of the budget, ie. uniforms, tents, and other such items.

Then it is depressing that only someone supposedly devoid of an education in economics can see the dangers in meddling with the money supply at this present time. We cannot fund the reconstruction simply by printing money. Not without placing immense inflationary pressure on the Mark. But that is a matter for the Reichstag to decide. I should warn the Vice-Chancellor, however, that the market is notoriously dismissive of economic degrees.

How, exactly, shall this Bundesbank be more free from political influence than the Reichsbank? In the end, it is the Treasury Minister who assigns the chairman of the bank. No one has accused the incumbent chairman of the Reichsbank, the honourable Herr Rudolf Havenstein, of being a political lackey. I simply cannot see why this new institution is necessary or warranted, when it fulfils the exact same role and remit as an existing institution. It would be akin to abolishing the Office of Chancellor and replacing it with the Office of Prime Minister, with identical powers and prerogatives.

- His Royal Highness, Prince August Wilhelm, Viceroy and Governor-General of Poland

OOC: I think the debate over the Bundesbank/Reichsbank historical issues should be taken OOC instead of being fought over IC, since it's silly to think that the Vice-Chancellor of the German Empire would suggest a second parallel national bank or replacing the existing national bank with a new one instead of offering a reform proposal. It's more likely that KeldoniaSkylar just made an OOC error in his proposal and he should be allowed to amend it.