Abstract
Abstract In this article, I review the key research contributions written on the German financial crisis of 1931. After four decades, consent about the origins and course of the crisis has still not been reached, since a set of disentangled factors - reparations, short-term foreign bank debt, the design of the gold standard, and the behaviour of individual banks - all contributed to the crisis. It seems that the 1931 crisis was caused by the pressure of reparations in combination with substantial private foreign debt. Capital flight set in when the government announced it was unable to pay its reparations. The Reichsbank lost its reserves and was unable to act as lender of last resort when a bank failed shortly after the reparations crisis. As well as describing the literature, I also present some new insights from the archives. It seems that the Reichsbank thought the crisis to be over at the end of June 1931, that it was worried about the state of public finance, and that it was badly informed about the banks’ short-term foreign debt.
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