1931

The following passages are excerpts from Charles Kindleberger's book "The World in Depression."

The Creditanstalt

Just as in May 1873 and July 1914, with tension growing among Germany, France, and Britain, the crack, when it came, appeared in Austria.  In the early spring of 1931, a Dutch bank wrote a polite letter to the Creditanstalt in Vienna saying that it was obliged to raise the charge on its acceptance credits from 0.25 percent a month to 0.375 percent. It was a timorous letter, says Beyen, not a prescient one, and the bank was somewhat surprised when the Creditanstalt chose to pay off the loan rather than renew at the higher rate.  Three months later the Creditanstalt could have used the money.

The Austrian economy had been in disarray since the...


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