German inflation 1914 to 1923

Banknote von 1923
note of 1923
stamp of the end of the time of inflation, see stamp
service mark, has still another value of 100 thousand realm Marks
of service mark, has now a value of 400 thousand realm Marks

the hyperinflation of the yearly 1923 in the Weimar Republic hastheir prehistory and their causes in the kind of the financing of the First World War and its consequences. This becomes clear to it that the Marks with the end of the war already 1918 more than half of their value (more exact: their purchasing power in the interior and external relationship) had lost.

Table of contents


the government main header with the beginning of the First World War to 4. August 1914 the legal payment of issued notes obligation of the realm bank in coins and/or.Gold on (see Goldmark). Nobody could require more of the banks that it the equivalent of its notes in coins must be disbursed. In addition the national possibilities for the debt admission and the Vermehrung of the money supply with the fractional coins and notes became by the abolition of the gold anchor(= legal third covering of the realm notes by gold) expanded. The plan had developed actually already before beginning of war secretly and became from the so-called. „national enthusiasm “carried for against-financing this money geldvermehrung through “war loans” there the marching-up and the supply of enormous armies of very large money supplies required. At the same time those should Purchasing power of the population for the military need taxed away and/or. are shut down, in order to be able to work against during the war-conditioned goods shortage which can be foreseen inland the black market formation by shortage of money with the citizens. In order to come at additional money and gold, several war loans and the “action gold became gave Ifor iron " presented. Differently than in England and France, where the war was financed by wealth taxes, these war loans should be replaced after „the victory peace “with „the war booty “ in the form of reparations then again.

The conservative financial politician Karl Helfferich admitted itself plainly and publicly in August 1915 in a meeting of the realm daily for plundering the war opponents:

My gentlemen, how the things lie, thus provisionally only the way remains to shift the final regulation of the war costs by the means of the credit on the future on the peace treaty and uppeacetime. And I would like to again stress also today: If God lends us the victory and thus the possibility of arranging the peace after our needs and after our vitally necessarynesses then and we want to be allowed to do the question of cost beside all different one also not forgotten;“(lively agreement) „that are guilty we of the future of our people.“(„very truely! “- Calls) „the whole future living standard of our people must, as far as it is at all possible, from which tremendous burden releases remain and are relieved, the war lets which increase.“(further „very truely! “- Calls)„The Anstifter of this war earned the lead of the billions;“(„very correctly! “- Calls) „it may drag it by the decades, not we.“(„very well! “- Failed calls

) this, the longer the war lasted, the more thoroughly. The German Reich lost the war, had thus even reparationspay. This strengthened the inflation again. Because also the reparations were paid over printing additional paper money: The reparations in foreign currencies or in Goldmark were to be paid; the state procured itself the means necessary for it however over (uncontrolled) the Vermehrung of the own paper money.With in such a way provoked ruin of the own currency the German Reich wanted to also demonstrate that the reparation payment obligations were altogether covered after the Versailler contract.

The money geldvermehrung over the Druckerpresse happened during the war financing-technically seen in the form of treasury bonds so mentioned, throughthe design of war loans by the population to be afterwards financed, should not they had to be not pure Vermehrung of money characters. Here a table in addition, from which ever smaller covering comes out:

War loans and treasury bonds (in million Marks)
war loan nominal amount of the design pending treasury bonds balance
I. September 1914 4,460 2,632 +1,832
II. March 1915 9,060 7,209 +1,851
III. September 1915 12,101 9,691 +2,410
IV. March 1916 10,712 10,388 +324
V. September 1916 10,652 12,766 -2,114
VI. March 1917 13,122 14,855 -1,733
VII. September 1917 12,626 27,204 -14,578
VIII. March 1918 15.001 38.971 -23,970
IX. September 1918 10,443 49,414 -38,971

simultaneous decreased the quantity of the food (food, clothing, heating materials etc.) for consumption inland for the citizen with the duration of the war. It came to various domestic goods bottlenecks, which forced to spare and substitutes, e.g.Coffee replacement or Brennnesselfasern in place of cotton etc. In addition substantial quantities with high order were used for the maintenance of the army. For the consumption to available funds decreased in certain population circles however despite design of the war loans not equally. The prices rose. During of theWar came it then parallel to draw for request already mentioned the X.Kriegsanleihe which was allegedly also still the absolutely safest investment of funds, to the most diverse local requests of the citizens e.g. Copper articles, tin plate etc. to deliver at the collecting points. That became then later logical in the 2.Weltkriegamong other things by the “winter assistance” revives. Parallel to freiwilligen raw material delivery appeals to the population it came particularly starting from 1916 in the country and with small firms by national tariff and revenue officers to radical food and raw material seizing, which were partly still judicially pursued, since stocks had to be indicated correctly!

In order to avoid unrests, the wages of the small workers and employees of the price history adapted, although with clear delay. And in order not to apply the wealthy ones, the taxes were not raised appropriately. Nevertheless only a small circle got general depletion conditionally by particularly realms,by goods scarceness and price increase not to feel. (See also: The germ of the inflation was put social

and restaurant economics in the First World War ) thereby. In November 1918 the debts of the realm with approximately 150 billion Marks exceeded the national income of the yearly 1919 of estimated 142Billion Marks. Because the war was lost, the German Reich could not push the war loads away on other states.

To the overview of the purge of the value of the German currency a table:

Respective increasing tenfold of the dollar rate since war outbreak
1 Goldmark = paper Mark (nominal) date dollar rate in Marks Period
1 July 1914 4.20 k. W.
10 January 1920 41.98 5 1/2 year
100 3. July 1922 420.00 2 1/2 year
1,000 21. October 1922 4,430, 00 ,108 days
10,000 31. January 1923 49,000, 00 ,101 days
100,000 24. July 1923 414,000, 00 ,174 days
1.000.000 8.August 1923 4.860.000, 00 13 days
10.000.000 7. September 1923 53.000.000, 00 30 days
100.000.000 3. October 1923 440.000.000, 00 26 days 11. October 1923, 00 8 days 22. October 1923, 00 11 days 3. November 1923 420.000.000.000, 00 11 days,000 20. November 1923,000, 00 17 days

the German revolution 1918 to 1920

with the November revolution and in their further process the capitalistic system before the danger of its separation stood by a socialist. None of the parties (except the KPD and a set of left groups of fragments) wantedthis. In the reason as proceeded as in the war one continued to learn. With social unrests the wages and social assistance were increased, were not expropriated or were not away-steered the wealthy one their still substantial money and other fortune not in favor of the new democratic community and its finances. The politiciansthe government parties played on time.

With the obligations of the Versailler of contract to pay remunerations (reparations) in winner powers ( in particular France) those believed to have found politically a good Buhmann for the further monetary depreciation to responsible persons. In January 1920 the Mark had oppositethe US Dollar only a tenth of their conversion value of August 1914.

the years 1921/22

also the other states war-involved had to suffer from the consequences of the world war. In the years 1921 and 1922 it came to a world-wide economic situation break-down. ThoseGerman national economy could recover in this time. The cancelled wages and incomes worked like Lohndumping. The German economic growth was stronger than in the national economies of the winners.

At the same time further embittered about the height of the reparations and the modalities of its payment one argued. The realm government stated,it cannot return to a stable currency, because growth was then restrained. The consequences would be higher unemployment and sinking wages with the result that it could come again to social unrests with the possibility of the system change.

With substantial losses for their own investments of fundsin the German Reich winner powers from fear of the bolshevism took part in this play. Then however Rathenaus broke all dams roll ago in June 1922 with the murder. The stations based on the US Dollar make this clear: at the 3. July 1922 had the Mark still another Hunderstelthe value from August 1914, at the 3. October 1922 only more a thousandth.

the year 1923

because the realm government able was not to pay the reparations in appropriate height or indemnifications in the form of for example coal to bring, it cameto Ruhr occupation. The German government among realm chancellors Wilhelm Cuno proclaimed „the Ruhr fight “. In order to hold the strikers with mood, them appropriate financial assistance were disbursed - in a Mark, which cancelled itself ever more rapidly. With it the months of the hyperinflation began,still the generations of Germans as example of the frights of an inflation pursued. Ever faster the devaluation increased tenfold in relation to the US Dollar until finally in November 1923 the course for 1 US Dollar 4.2 trillion Marks corresponded.

Eine Frau feuert ihren Kachelofen mit Inflationsgeld
A woman fires her tiled stove with inflation money

the hyperinflationprovided for a collapse of the German economy. Unemployment rose, the wages fell in soil lots and the KPD received ever more inlet. The state-basic trade unions were in the meantime in such a way expenditure-bleed that they had to be financed by the government. When Gustav Stresemann realm chancellor became, he broke to 26. September the Ruhr fight off. Thereby the fear of a revolution was crucial. The statement of former realm chancellor Cuno, who can not furnish German Reich the reparations, became tacitly taken the money.

Now however the conditions were given to accomplish a stabilization the currency in favor of the large capital.Also winner powers demanded this stabilization as a condition of negotiations over the reparation payments, which led to the Dawes plan. With the currency reform November 1923 (introduction of the pension Mark, prevention of speculations) was terminated the inflation. Economical conditions could stabilize in the process of the yearly 1924- in their consequence also political conditions.

With the acceptance of the inflationary monetary depreciation the economic and social loads of the lost war could be pushed away on the mass that dependently persons employed and the pure owners of financial resources. Only 1928 reached real wages on the average again the levelthe yearly 1913 (after the numbers of the official statistics). A substantial part of the central layers - to arrange used their life without assistance of the state, enemies of the welfare state - appeared in poverty. Their financial reserves melted in the inflation up to miserable remaindersthere.

The inflation as important part of a totalsocial process of the early years of the Weimar Republic discredited the first German democracy in the eyes of many. Parts of the social center, which felt small and middle middle class, from the republic betrogen. Increasing parts of the workers were ablein this state (differently as 1920, than it to the cut Putsch with a general strike reacted) nothing defense value more to see, in particular than with the world economic crisis starting from 1929 their social situation again like 1923 became catastrophic.

The power delivery at Adolf Hitler is the result of onewhole row of the branch roses circumstances and developments of the empire and the Weimar Republic, to which the inflation of the first years belongs.Sebastian Haffner described the connections end of the thirties in such a way:

The year 1923 finished Germany - not particularly to the Nazi mash, butto each fantastic adventure. The psychological and power-politics roots of the Nazi mash are past more deeply,… But developed at that time what gives it today its insanity course: the cold madness, those raising unrestrained, blind determination to the impossible one, around at the end, only by the pure will power and Brillianzto stand over everything; that, right is, which not possibly gives us nutzt' and, the word it nicht'. Experiences of this kind obviously lie beyond the border its that peoples without mental damage can go through.

The inflation became currency technical in November 1923 by the separation that Paper Mark with introduction of the pension Marks and the realm Marks stopped.


  • Gerald D. Feldman: The Great these order. Politics, Economics, and Society into the German inflation, 1914-1924. New York/Oxford 1997
    the current standard work to the topic - very extensively, so far only on English.
  • Sebastian Haffner: History of a German. Memories 1914-1933. dtv, Munich 2002
    it is recommended expressly chapter 10 of this expenditure for paperback, to it is taken also the quotation over the year 1923.
  • Carl Ludwig Holtfrerich: The German inflation 1914-1923. Causes and consequences in international view.Berlin/New York 1980
    comprehensive representation with many data and facts, very economically.
  • Helmut Kerstingjohänner, the German inflation 1919-1923 - politics and economics, publishing house Peter Lang 2004, ISBN 3-631-51245-7
  • Claus Dieter Krohn: The large inflation in Germany 1918-1923. Cologne 1977
    Knappe, but sufficientlyreliable representation.
Commons: Hyperinflation - pictures, videos and/or audio files

  > German to English > (Machine translated into English)