Wikipedia
en.wikipedia.org › wiki › MEFO
MEFO - Wikipedia
August 10, 2026 - When the MEFO notes fell due in 1938, the government discovered a serious cash shortage. To resolve the problem, the Nazi regime employed "highly dubious methods" where "banks were forced to buy government bonds to be used to repay these bills, and the government took money from savings accounts ...
Wikipedia
en.wikipedia.org › wiki › Mefo_bill
Mefo bill - Wikipedia
April 11, 2026 - By 1938, there were 12 billion ... billion in 2021, of standard government bonds. This enabled the German government to increase war production while delaying the economic problems associated with draining government funds. The Nazi government's continued use of debt funding ...
TIL in 1933 the Nazis set up a fake company called MEFO to borrow money for Germany's rearmament. But when the loans were about to come due in 1939, they ended up having to raid insurance companies and the savings accounts of citizens to pay the debt.
That's one part of the Nazi regime that's often overlooked. They were pretty much broke by 1939. More on reddit.com
131
3143
April 28, 2026ELI5: How did MEFO bills work?
Mefo Bills were was for the Nazi's to spend money secretly. Under the Nazis Germany wanted to spend a bunch of money to re-arm and recover from the Great Depression. However when the government borrows a bunch of money it causes inflation, which they did not want. They also were restricted in what they could do to re-arm because of the Treaty of Versailles, which ended World War I. There is something that exists as a financial instrument called a bill of exchange, which is basically a letter from one person or entity telling a second person or entity to pay a third person or entity. Basically it's someone saying "if you give me $100 today I'll give you a letter telling the bank to pay you $110 next year." So the Nazis set up a company called Metallurgische Forschungsgesellschaft, shortened to MEFO. Mefo did not make a product or provide a service, it only existed on paper. MEFO issued "Mefo bills," which were basically bonds, but they didn't hit the government's balance sheet. This allowed the Nazis to borrow, and spend, a bunch more money than they claimed they were borrowing and spending. This artificially made their economy look like it was doing much better than it was. For example in 1938 there were around 12 billion Reichsmarks of Mefo bills, when the GDP was around 100 billion Reichsmarks. That's 12% of the GDP as "secret" debt that was hidden. That's the equivalent of if the USA had secretly borrowed $4 trillion and hid it from everyone. Additionally because there wasn't necessarily a paper trail tracing back to the government it allowed them to hide what they were spending money on, specifically rebuilding their military in violation of the Treaty of Versailles. TL;DR: Mefo Bills were government bonds that never hit the Nazi government's balance sheet, allowing the Nazis to borrow and spend money secretly. More on reddit.com
14
46
June 15, 2026Were the MEFO Bills of Nazi Germany any different from bonds?
Contemporary politics and culture wars are off-topic, both in posts and comments. This is just a friendly reminder that r/askhistory is for questions and discussion of events in history prior to 01/01/2000. The reminder is automatically placed on all new posts in this sub. For contemporary issues, please use one of the many other subs on Reddit where such discussions are welcome. If you see any interjection of modern politics or culture wars in this sub, please use the report button so the mod team can investigate. Thank you. See rules for more information. I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns. More on reddit.com
9
12
October 20, 2025How did the MEFO Bills help Nazi Germany out of their depression and what were the consequences?
NOTE: Top-level comments by non-approved users must be manually approved by a mod before they appear. This is part of our policy to maintain a high quality of content and minimize misinformation. Approval can take 24-48 hours depending on the time zone and the availability of the moderators. If your comment does not appear after this time, it is possible that it did not meet our quality standards. Please refer to the subreddit rules in the sidebar and our answer guidelines if you are in doubt. Please do not message us about missing comments in general. If you have a concern about a specific comment that is still not approved after 48 hours, then feel free to message the moderators for clarification. Consider Clicking Here for RemindMeBot as it takes time for quality answers to be written. Want to read answers while you wait? Consider our weekly roundup or look for the approved answer flair. I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns. More on reddit.com
3
1
November 13, 2024Historum
historum.com › home › forums › history themes › history blogs
MEFO Bills: Or how the Nazis created a Ponzi scheme to rearm Germany | History Forum
October 29, 2024 - The government created MEFO bonds to pay industrialists for industrial products, and the industrialists accepted the MEFO bonds as payment. ... Enter Hjalmar Schacht. Schacht was president of the Reichsbank when the Nazis came to power and one of the guys in on the Nazi plans to rebuild the ...
Wordpress
fixingtheeconomists.wordpress.com › 2013 › 12 › 11 › hjalmar-schacht-mefo-bills-and-the-restoration-of-the-german-economy-1933-1939
Hjalmar Schacht, Mefo Bills and the Restoration of the German Economy 1933-1939 | Fixing the Economists
December 11, 2013 - These contractors would then take the bills to a private German bank which would then gladly turn over cash to the holder because they knew that they could then hand the Mefo bill to the Reichsbank which would in turn convert it into cash using their money-issuing powers. The resulting spending resulted in the German economic boom that took place under Hitler. Here is a nice graph from Erwin Mahe that compares the growth and inflation in Nazi Germany to that in the Netherlands in those dark years:
Grey Dynamics
greydynamics.com › hem › insights › the economics of war: mefo bills
The Economics of War: MEFO Bills
November 18, 2025 - This unreported debt allowed the government to conceal its massive expenditures on rearmament from other governments and domestic audiences. As a result, this hidden debt hid the dire finances with which the Nazi regime built the German economy ...
Reddit
reddit.com › r/todayilearned › til in 1933 the nazis set up a fake company called mefo to borrow money for germany's rearmament. but when the loans were about to come due in 1939, they ended up having to raid insurance companies and the savings accounts of citizens to pay the debt.
r/todayilearned on Reddit: TIL in 1933 the Nazis set up a fake company called MEFO to borrow money for Germany's rearmament. But when the loans were about to come due in 1939, they ended up having to raid insurance companies and the savings accounts of citizens to pay the debt.
April 28, 2026 - Amount of bills issued each month was made to match the metal trade volume to avoid rising further suspicion. In the end you had billions of reichsmarks worth of bills circulating the market, which were backed by the reichsbank. In practice the program is similar to keynesian deficit spending policies, but instead of government bonds they used MEFO bills. The nazis not only managed to spend billions without creating inflation, but they also managed to hide it from outside eyes and get around treaty restrictions.
Quora
quora.com › How-did-the-Nazis-make-MEFO-bills-work-1
How did the Nazis make MEFO bills work? - Quora
Answer (1 of 2): The company's "Mefo bills" served as bills of exchange, convertible into Reichsmark upon demand. MEFO had no actual existence or operations and was solely a balance sheet entity. The bills were mainly issued as payment to armaments manufacturers.
Grokipedia
grokipedia.com › mefo bills
Mefo bills — Grokipedia
January 17, 2026 - Mefo bills, formally known as Metallurgische Forschungsgesellschaft (MEFO) promissory notes, constituted a clandestine deficit-financing mechanism devised by Hjalmar Schacht in 1934 to fund Nazi Germany's rearmament while evading Reichsbank ...
Substack
innovationobserver.substack.com › innovation observer › mefo bills, inflation, and cryptocurrencies
MEFO Bills, Inflation, and Cryptocurrencies
February 10, 2023 - As such, these bills acted as a means of exchange between the German government and armaments contractors, but they neither raised suspicion from the British and French governments, as they were issued through a corporate entity, nor did they cause inflation since the conversion to Reichsmarks, an act which would increase the money supply, because bondholders would prefer to save the notes and collect the interest rate rather than convert them to cash. About half of the MEFO bills were converted to Reichsmarks, a conversion which could theoretically cause inflation even if the full effects wer
Reddit
reddit.com › r/explainlikeimfive › eli5: how did mefo bills work?
r/explainlikeimfive on Reddit: ELI5: How did MEFO bills work?
June 15, 2026 - TL;DR: Mefo Bills were government bonds that never hit the Nazi government's balance sheet, allowing the Nazis to borrow and spend money secretly.
Reddit
reddit.com › r/askhistory › were the mefo bills of nazi germany any different from bonds?
r/AskHistory on Reddit: Were the MEFO Bills of Nazi Germany any different from bonds?
October 20, 2025 -
My understanding of the start of the Nazi's rule (~1936) Hitler wanted to start industrialization/militarization. The two constraining factors were that Germany was in a lot of debt from WW1 so their currency was weak and they could only borrow so much. At the same time they had restrictions on what they could spend/make because of the versatile treaty. The MEFO bills were made to privately distribute IOU's to factories to get them started before they had the capital to do so. I've seen people online praise the MEFO Bills as the 'economic genius' that provided the 'miracle' German recovery. But to me, this sounds like a secretly given government bond that was paid back by pillaging, it doesn't seem that this was a particularly clever or novel idea. Is there something I'm missing?
Top answer 1 of 5
12
They were different than bonds in one key way: the government continually extended the maturation period, so that in practice they were never converted to real currency. So it was basically a scam by which the government got private investors to give the government money for rearmament, but ran through a fake company (which was another way they were different from real bonds) to hide that it was being used for rearmament (which was illegal under the Treaty of Versailles). They're only genius if you think it's cool and okay for the government to trick its citizens into funding illegal rearmament. If the government was ever forced to pay it back, it would have been a catastrophe - because it was essentially the same as printing money, which would have been hugely inflationary.
2 of 5
6
The two constraining factors were that Germany was in a lot of debt from WW1 Which they refused to pay, so that was moot. But to me, this sounds like a secretly given government bond that was paid back by pillaging, it doesn't seem that this was a particularly clever or novel idea. Is there something I'm missing? Not even pillage, just fraud and embezzlement and, eventually, outright theft.
HandWiki
handwiki.org › wiki › Finance:Mefo_bills
Finance:Mefo bills - HandWiki
April 6, 2026 - As Germany was rearming against the terms of the Treaty of Versailles, the Nazi government needed a form of financing that did not leave a paper trail and allowed them to spend past the treaty terms on military rearmament.[2] Importantly, Adolf Hitler had recently come to power, and he demanded of Hjalmar Schacht that any solution had to avoid inflation.[3] It is assumed that billions of Mefo bills were issued throughout the regime's time in power, though the records are not precise.[4]
Gettysburg College
cupola.gettysburg.edu › cgi › viewcontent.cgi pdf
Volume 16 Article 5 2017 The Nazi Fiscal Cliff: Unsustainable Financial
14 “Affidavit I of Emil Puhl,” November 7, 1945, 3, EC-437, In Nazi Conspiracy · and Aggression. United States Government Printing Office, 1946.; Klein, Germany’s Economic Preparations for War, 5. ... Institution). But this company was a dummy corporation, cobbled · together by Schacht and German heads of industry with a · capitalization of only 250,000 Reichsmarks (RM).16 The MeFo · corporation would fund rearmament projects by issuing these bills
Reddit
reddit.com › r/askeconomics › how did the mefo bills help nazi germany out of their depression and what were the consequences?
r/AskEconomics on Reddit: How did the MEFO Bills help Nazi Germany out of their depression and what were the consequences?
November 13, 2024 -
I just wondered down a little rabbit hole and read a little bit on MEFO Bills and how they were a large part in helping Germany get out of the economic depression of the 1920s and 30s while also rearming the country under the treaty of Versailles.
I don't have any background in economics so my main question is how did this work and why was it used? What were the negative consequences of using something like this? I read that they were able to print money but avoid inflation.
I apologize if this ain't the right sub for this but I was interested in learning a little bit more.
Quora
quora.com › Nazi-Germany-famously-used-MEFO-bills-in-order-to-rearm-in-the-1930s-How-exactly-did-they-work
Nazi Germany famously used MEFO bills in order to rearm in the 1930s. How exactly did they work? - Quora
Answer (1 of 2): The scheme was developed by Hjalmar Schacht, the President of the Reichsbank and one of the right-wing industrialists and businessmen who had funded the Nazi Party's rise to power. Hitler made him his Minister of Economics in 1934. Schacht, on the left, at a Reichsbank meeting i...
Grokipedia
grokipedia.com › mefo
MEFO — Grokipedia
January 17, 2026 - The MEFO bills (German: Mefo-Wechsel) were six-month promissory notes issued through the Metallurgische Forschungsgesellschaft m.b.H. (MEFO), a dummy corporation established by the Nazi German government in 1934 as a mechanism to finance rearmament ...
Toxigon
toxigon.com › home › history › mefo bills of nazi germany: a deep dive into their mysteries
Mefo Bills of Nazi Germany: A Deep Dive into Their Myst - Toxigon
January 21, 2025 - Mefo bills, short for Metallurgische Forschungsgesellschaft (Metallurgical Research Corporation), were a type of promissory note issued by the Nazi government. They were used to finance the massive rearmament program that Germany undertook in ...
Reddit
reddit.com › r/askhistorians › how did the german mefo bill system work, and how did it go undetected that the hitler was re-arming the country for war?
r/AskHistorians on Reddit: How did the German MEFO Bill system work, and how did it go undetected that the Hitler was re-arming the country for war?
April 30, 2014 -
I learnt in this r/trueaskreddit post that MEFO bills were a method used to provide the government with more money. However the Wikipedia article doesn't go into much detail of the operation. It also let me to wonder how the rest of the world wasn't aware of this operation.
Reddit
reddit.com › r/askhistorians › how did wwii-era german mefo bills work?
r/AskHistorians on Reddit: How did WWII-era German MEFO bills work?
January 20, 2025 -
I've read several sources that make vague but sweeping statements about MEFO bills. It's widely acknowledged that MEFO bills were a mechanism for Germany to build up its war industry and skirt restrictions on arms production. So they sound like some kind of accounting trickery. But then some of these sources will make reference that the MEFO bills were also some kind of economic house of cards. They'll say things like, "But the MEFO bills would create an insatiable hunger that Germany could only stave off through constant expansion." Or something to the effect of "The need for constant expansion was a direct consequence of the MEFO bills, which always loomed for the Germany economy and which required an ever-increasing source of income." Sometimes they'll say something vague about economic collapse of Germany being inevitable, but success in conquering new territory was a way to stave off that collapse for as long as possible.
Were MEFO bills different from any other kind of war bond or government deficit spending? Why were they so dire? Why was the German economy always secretly on the brink of implosion?
What was the exact mechanism of the MEFO bills?
Top answer 1 of 2
7
While you are waiting for a complete answer, there are some other answers on related questions that might interest you. One comment by u/kieslowskifan about the stability of German currency in the prewar years, their rearmament & eventual economic issues as a result. It has insight into the MEFO bills, but you may be looking for a more complete answer. Another question asked about Hjalmar Schact, Reichsminister of Econmics / President of Reichsbank and a currency commissioner in the prewar years. He was heavily involved in the "miraculous" recovery of the German economy in the 1930s and their expansive rearmament. A comment by u/ParkSungJun gives some insight into how effective his policies actually were when you peel back the layers and see some of the short term & long term impacts of the policy decisions that were made. It also has some insight in the MEFO bills, but someone may be able to step in here to give a complete answer on their mechanism specifically. As you mention in your OP, you are right in acknowledging that the MEFO bills were an aspect of the underhanded efforts by German ministers to "boost" the economy and subvert Allied restrictions on rearming. I think statements that you've referenced linking MEFO bills and German expansion lack some of the nuance and oversimply larger issues faced by the German economy, as well as other compounding elements that influenced the German desire for expansion through conquest & other means. Statements proposing that Germany invaded Poland, France & the Low Countries, Denmark/Norway, USSR, etc. all for the purpose of maintaining their insatiable war economy discount other factors guiding military expansion. The concept of "lebensraum" (living space for the German people) was a very real proponent of Nazi ideology and was influential, particularly in their eastward expansion. Acquiring critical resources such as food, oil, iron ore, heavy water, bauxite/aluminum, tungsten among others. There is also a significant ideological element to their invasion of the Soviet Union - namely their belief in a Judeo-Bolshevik conspiracy, that the Soviet Union and communism were ran by Jews and had designs on destroying Western Civilization. It was a driving force behind the brutal nature of fighting on the Eastern Front in what was considered a "war of annihilation". I give this as a clarification that not all German war goals were solely influenced by MEFO bills and stabilizing the German economy, though the issue surrounding the German war economy was of serious importance throughout the war and its flaws would reap consequences in later years. Many compounding factors like Allied strategic bombing, lack of important resources, manpower issues and bureaucratic inefficiencies would exacerbate problems stemming from these prewar policies. It's a complicated web that, upon closer inspection, can reveal a lot of "do not do this if you are running a war economy". On a funny, non-historical - if you ever play HOI4 as Germany, DO NOT let your MEFO bills get to 100% of your consumer economy. Trust me, just don't. Unless you want to re-enact the historical path for the German economy where everything is a lie, bad things happen and you're set up for failure in the long run. Then absolutely, let it run rampant.
2 of 2
1
Welcome to r/AskHistorians . Please Read Our Rules before you comment in this community. Understand that rule breaking comments get removed . Please consider Clicking Here for RemindMeBot as it takes time for an answer to be written. Additionally, for weekly content summaries, Click Here to Subscribe to our Weekly Roundup . We thank you for your interest in this question, and your patience in waiting for an in-depth and comprehensive answer to show up. In addition to RemindMeBot, consider using our Browser Extension , or getting the Weekly Roundup . In the meantime our Bluesky , and Sunday Digest feature excellent content that has already been written! I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.