Title: 1923 - Hyperinflation in Weimar Republic

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About: Out-of-control inflation rendered money basically worthless, impoverishing millions of citizens and threatening to cripple the German economy.

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In 1914, the exchange rate of the German mark to the American dollar was about 4.2 to one. Nine years later, it was 4.2 trillion to one. Thanks to the Treaty of Versailles, Germany’s ability to produce revenue-generating coal and iron ore decreased. As war debts and reparations drained its coffers, the German government was unable to pay its debts.

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As war debts and reparations drained its coffers, the German government was unable to pay its debts. The French and Belgians didn't believe Germany’s claim that it couldn’t afford to pay, and troops occupied Germany’s main industrial area, the Ruhr, determined to get their reparation payments. The Weimar government ordered German workers to passively resist the occupation and go on strike, shutting down the coal mines and iron factories. As a result, Germany’s economy quickly tanked.

 

In response, the Weimar government decided to simply print more money. The effort backfired, however, and further devalued the German Mark. With rising cost of goods and a dramatic increase in the money supply, inflation increased at an astounding level, and many citizens saw any savings they had evaporate.  

 

People struggled to survive in increasingly absurd conditions, with workers bringing wheelbarrows, sacks and suitcases to work to collect their wages or to pay for goods.  The government had to print million-mark notes, then billion-mark notes. Shopkeepers couldn’t replenish their stock fast enough to keep up with prices, farmers refused to sell their produce for worthless money, food riots broke out, and townspeople marched into the countryside to loot the farms. An underground bartering economy was established to help people meet their basic needs. 

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The formation of a new reserve bank and a new currency - the Rentenmark,  indexed to the value of gold – helped solve hyperinflation, as the German public embraced the new currency, allowing prices and wages to gradually normalise.

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Decade: 1920s

Year: 1923

Region: Europe

Country: Germany

Society: Economic

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Type: Historical Event

Impact: 3

Artist: Stas Svetolv

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Group: Genesis

Number: 23/100

Price: 0.3 ETH

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