When Hyperinflation Drove Germans To Use Money As Kindling
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1922-1923
Hyperinflation in GermanyWhen money was literally worth less than dirt
by Alex Q. Arbuckle(opens in a new tab)
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1923
Children use bundles of banknotes as building blocks.
Image: Three Lions/Getty Images
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.
The out-of-control inflation began somewhat mildly during World War I, as the German government printed unbacked currency and borrowed money to finance military expenditures. The strategy was to eventually pay off the debts by seizing resource-rich territories and imposing reparations on the vanquished Allies.
But then Germany lost the war and ended up with massive debts and reparations to the Allies to be paid under the Treaty of Versailles.
Inflation crept up slowly at first, before accelerating rapidly in late 1922. The exchange rate ballooned from 2,000 marks per dollar to 20,000 to a million and beyond in just a few months, riding on a growing wave of economic panic and mistrust.
1923
A 50 million mark bill.
Image: Bettmann/Getty Images
As the government commissioned 130 printing companies to churn out piles of increasingly worthless currency, Germans struggled to survive in increasingly absurd conditions.
Waiters had to climb on top of tables to announce new menu prices every half hour.
Workers brought wheelbarrows, sacks and suitcases to work to collect their wages. According to one story, a distracted worker found that his suitcase was stolen, with his wages dumped out and left behind.
Many chose to avoid currency altogether, placing their faith in tangible assets to barter goods.
1923
A Berlin banker counts stacks of bundled marks.
Image: Buyenlarge/Getty Images
c. 1922
Children play with virtually worthless marks.
Image: Albert Harlingue/Roger Viollet/Getty Images
c. 1922
A shop owner advertises "selling and repairing in exchange for food," one of many Germans turning to a barter economy amid hyperinflation.
Image: Three Lions/Getty Images
c. 1923
Boys use worthless banknotes for arts and crafts.
Image: FPG/Getty Images
1922
Boys fly a kite made of banknotes.
Image: Keystone/Getty Images
1922
A shopkeeper stuffs excess cash into a tea chest next to his register.
Image: Hulton Archive/Getty Images
1923
A display of extremely high food prices during hyperinflation.
Image: Albert Harlingue/Roger Viollet/Getty Images
1923
Worthless banknotes are collected to be burned.
Image: ullstein bild/ullstein bild via Getty Images
1923
Children stand next to a tower of 100,000 marks, equal in value to one US dollar.
Image: Bettmann/Getty Images
c. 1923
A woman uses banknotes to light her stove.
Image: Bettmann/Getty Images
1923
"The King of Inflation," a man clad in worthless coins.
Image: Universal History Archive/UIG via Getty Images
July 1923
A man uses one-mark notes as wallpaper, a more affordable option than even the cheapest rolls of wallpaper.
Image: Hulton Archive/Getty Images
The price of a loaf of bread went from 250 marks in January 1923 to 200 trillion in November — when Adolf Hitler and the Nazi Party attempted the Beer Hall Putsch, a failed government takeover.
The fever of hyperinflation finally broke in late 1923 when the government began issuing the new rentenmark, a currency backed by mortgages on agricultural and industrial land, which was introduced with the old exchange rate of one US dollar to 4.2 rentenmarks. The new currency's foundation was shaky at best, but years of terrifying instability left the German people desperate enough to trust it.
Though the crisis had ended, the trauma inflicted on the German people was lasting and aided the rise of embittered radicalism in the following years.
1923
A one billion mark note.
Image: Riehn/ullstein bild via Getty Images
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Alex Q. Arbuckle
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