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70-639: The Rentenmark ( German: [ˈʁɛntn̩ˌmaʁk] ; RM ) was a currency issued on 15 November 1923 to stop the hyperinflation of 1922 and 1923 in Weimar Germany , after the previously used Papiermark had become almost worthless. It was subdivided into 100 Rentenpfennig and was replaced in 1924 by the Reichsmark . After the Occupation of the Ruhr in early 1923 by French and Belgian troops, referred to as

140-472: A vicious cycle . The government and the banks had two unacceptable alternatives. If they stopped inflation, there would be immediate bankruptcies, unemployment, strikes, hunger, violence, collapse of civil order, insurrection and possibly even revolution. If they continued the inflation, they would default on their foreign debt. However, attempting to avoid both unemployment and insolvency ultimately failed when Germany had both. The hyperinflation episode in

210-495: A Reichsmark. Made entirely of zinc , the 10 ℛ︁₰ is an emergency issue type, similar to the zinc 1 ℛ︁₰ and 5 ℛ︁₰ , and the aluminium 50 ℛ︁₰ coins from the same period. Nazi Germany had a number of mints. Each mint location had its own identifiable letter. It is therefore possible to identify exactly which mint produced what coin by noting the mint mark on the coin. Not all mints were authorized to produce coins every year. The mints were also only authorized to produce

280-647: A failed attempt by the Reichskanzler Heinrich Brüning to reduce prices through use of 4 ℛ︁₰ pieces instead of 5 ℛ︁₰ coins. Known as the Brüningtaler or Armer Heinrich ('poor Heinrich'), they were demonetized the following year. See Brüningtaler (in German) . The quality of the Reichsmark coins decreased more and more towards the end of World War II and misprints happened more frequently. Since

350-514: A number of shell companies were created and authorized to issue bonds outside the Reichsmark in order to finance state projects. Nominally exchangeable at a 1:1 rate for Reichsmarks but then discounted by the Reichsbank this created secret monetary expansion without formally renouncing the gold standard of the Reichsmark. With the annexation of the Federal State of Austria by Germany in 1938,

420-495: A plan that substituted gold for rye and led to the issuance of the Rentenmark ("mortgage mark"), backed by bonds indexed to the market price of gold. The gold bonds were indexed at the rate of 2,790 gold marks per kilogram of gold, the same as the pre-war gold marks . Rentenmarks were not redeemable in gold but only indexed to the gold bonds. The plan was adopted in monetary reform decrees on 13–15 October 1923. A new bank,

490-757: A principle, "a mark is worth a mark", which had been recognized, the nominal value principle. The law was challenged in the Supreme Court of the German Reich ( Reichsgericht ), but its 5th Senate ruled, on 4 November 1925, that the law was constitutional, even according to the Bill of Rights and Duties of Germans (Articles 109, 134, 152 and 153 of the Constitution). The case set a precedent for judicial review in German jurisprudence. Historians and economists differ over

560-566: A result, inflation spiked and the Papiermark went into freefall on the currency market. Foreign currency reserves at the Reichsbank dwindled. As hyperinflation took hold, the cabinet of Cuno resigned in August 1923 and was replaced by the cabinet of Gustav Stresemann . After Stresemann reshuffled his cabinet in early October, Hans Luther became Minister of Finance. Working with Hjalmar Schacht at

630-450: A resumption of effective taxation in a still-devastated economy triggered a wave of corporate bankruptcies . One of the important issues of the stabilization of a hyperinflation is the revaluation . The term normally refers to the raising of the exchange rate of one national currency against other currencies. As well, it can mean revalorization , the restoration of the value of a currency depreciated by inflation. The German government had

700-445: A return of hyperinflation and, after 1930, Germany protested that reparations payments were deflationary . Inflation also enabled the German government to pay off its substantial domestic debts, particularly war debts, in devalued marks. One point on which historians tend to agree is that the printing of cash by the German government to make payments to striking workers in the Ruhr, who were refusing to make reparations deliveries to

770-404: A set number of coins with some mints allocated a greater production than others. Some of the coins with particular mint marks are therefore scarcer than others. With the silver 2 ℛ︁ℳ︁ and 5 ℛ︁ℳ︁ coins, the mint mark is found under the date on the left side of the coin. On the smaller denomination Reichspfennig coins, the mint mark is found on the bottom center of

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840-884: A single payment of 1 billion gold marks was paid (roughly 1.4% of Germany's nominal 1925 GNP) , until the agreement of the Dawes plan in late 1924, only relatively small cash payments were made by Germany, though partial in-kind payments continued. For example, of the 300 million gold marks due under a variable annuity in November 1921, only 13 million was paid, and of the roughly 3 billion gold marks total due under payments in 1922, only 435 million were paid in cash. Germany's leadership claimed that, with its gold depleted, inflation resulted during 1921–23 due to attempts to buy foreign currency with German currency in an effort to make cash payments as reparations. This would be equivalent to selling German currency in exchange for payment in foreign currency, but

910-476: A third of their conversion value in Rentenmarks. On 30 August 1924, a monetary law permitted the exchange of a 1-trillion paper mark note to a new Reichsmark , worth the same as a Rentenmark. By 1924 one dollar was equivalent to 4.2 Rentenmark. Eventually, some debts were reinstated to compensate creditors partially for the catastrophic reduction in the value of debts that had been quoted in paper marks before

980-437: Is a technical term for mortgage in German) to the tune of 3.2 billion Goldmarks , based on the 1913 wealth charge called Wehrbeitrag which had helped fund the German war effort from 1914 to 1918. Notes worth RM 3.2 billion were issued. The Rentenmark was introduced at a rate of one Rentenmark to equal one trillion (10) old marks, with an exchange rate of one United States dollar to equal 4.2 Rentenmarks. The Act creating

1050-653: The Great Depression , seeing the two separate events as one big economic crisis that encompassed both rapidly rising prices and mass unemployment. The hyperinflated, worthless marks became widely collected abroad. The Los Angeles Times estimated in 1924 that more of the decommissioned notes were spread about the US than existed in Germany. Firms responded to the crisis by focusing on those elements of their information systems they identified as essential to continuing operations. In

1120-536: The Reichstag decided unanimously to fund the war entirely by borrowing . The government believed that it would be able to pay off the debt by winning the war and imposing war reparations on the defeated Allies. This was to be done by annexing resource-rich industrial territory in the west and east and imposing cash payments to Germany, similar to the French indemnity that followed German victory over France in 1870. However,

1190-482: The Rentenbank , was set up by Hans Luther when he became Finance Minister. After 12 November 1923, when Hjalmar Schacht became currency commissioner, Germany's central bank (the Reichsbank ) was not allowed to discount any further government Treasury bills , which meant the corresponding issue of paper marks also ceased. The discounting of commercial trade bills was allowed and the amount of Rentenmarks expanded, but

1260-635: The Ruhrkampf , the German government of Wilhelm Cuno reacted by announcing a policy of passive resistance. This caused the regional economy of the Ruhr, the industrial heartland of Germany, to almost stop. The occupation authorities reacted to strikes and sabotage with arrests and deportations. Those displaced and left without income by the Ruhrkampf and their families fell back on public income support. Tax revenues plunged as economic activity slowed. The government covered its need for funds mainly by printing money. As

1330-750: The Trizone and later in the same year by the East German mark in the Soviet Occupation Zone (colloquially also "Ostmark", since 1968 officially " Mark der DDR "). The 1948 currency reform under the direction of Ludwig Erhard is considered the beginning of the West German economic recovery ; however, the secret plan to introduce the Deutsche Mark in the Trizone was formulated by economist Edward A. Tenenbaum of

1400-905: The U.S. Treasury Department authorized the air transfer of these to the USSR. Using a printing plant in occupied Leipzig , the Soviet authorities printed large runs of occupation marks to fill Soviet coffers with dollars causing inflation and financial instability. An investigation by the United States Congress (Occupation Currency Transactions Hearings before the Committee on Appropriations, Armed Services and Banking and Currency, U.S. Senate , 1947) found that about $ 380,000,000 "more currency than there were appropriations for" had been circulated. In 1947 Rhineland-Palatinate issued 5₰ and 10₰ notes with Geldschein on them. Coins and banknotes for circulation in

1470-757: The US military government , and was executed abruptly on 21 June 1948. Three days later, the new currency also replaced the Reichsmark in the three Western sectors of Berlin . In November 1945, the Reichsmark was superseded by the Second Austrian schilling in Austria. In 1947, the Saar mark , later replaced with the Saar franc , was introduced in the Saar . In 1924, coins were introduced in denominations of 1 ℛ︁₰ , 2 ℛ︁₰, 5 ℛ︁₰ , 10 ℛ︁₰, and 50 ℛ︁₰ , and 1 ℳ︁ and 3 ℳ︁. 4   Reichspfennig coins were issued in 1932 as part of

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1540-545: The Łódź Ghetto . Special issues of Reichsmark currency were issued for use by the Wehrmacht from 1942 to 1944. The first issue was denominated in 1 ℛ︁₰, 5 ℛ︁₰, 10 ℛ︁₰, and 50 ℛ︁₰ and 1 ℛ︁ℳ︁, but was valued at 1 military Reichspfennig = 10 civilian Reichspfennig. This series was printed on only one side. The second issue notes of 1 ℛ︁ℳ︁, 5 ℛ︁ℳ︁, 10 ℛ︁ℳ︁, and 50 ℛ︁ℳ︁ were equal in value to

1610-413: The 4 ℛ︁₰ coin was only slightly larger than the 1 ℳ︁ coin and the imperial eagle looked similar, an attempt was made to pass it off as a 1-reichsmark coin by silvering the 4 ℛ︁₰ coin. The zinc 10 Reichspfennig coin was minted by Nazi Germany between 1940 and 1945 during World War II, replacing the aluminium-bronze version, which had a distinct golden colour. It is worth 1 ⁄ 10 or .10 of

1680-512: The 5 Rpf, 10 Rpf, and 50 Rpf coins in aluminium-bronze. These coins had the same design features and motifs as coins of the Reichsmark from the Weimar and early Third Reich periods. The first issue of banknotes was dated 1 November 1923 and was in denominations of RM 1, RM 2, RM 5, RM 10, RM 50, RM 100, RM 500 and RM 1000. Later issues of notes were RM 10 and RM 50 (1925), RM 5 (1926), RM 50 (1934) and RM 1 and RM 2 (1937). Hyperinflation in

1750-481: The Allies, contributed to hyperinflation. The occupation of the Ruhr also caused German output to fall. Regardless of the reason for the declining value of the German currency, the decline caused prices of goods to rise rapidly, increasing the cost of operating the German government, which could not be financed by raising taxes because those taxes would be payable in the ever-falling German currency. The resulting deficit

1820-564: The Central Powers as a whole was fixed at 132 billion gold marks under the London Schedule of payments which set quarterly deadlines for payments. Of this, 50 billion gold marks was listed in A and B bonds payable under the quarterly deadlines in the schedule; the remaining sum, about 82 billion gold marks, was listed as C bonds that were somewhat hypothetical and not payable under the schedule but instead left to an undefined future date, with

1890-422: The German currency and, as well as escaping the need for budgetary reform, avoid paying reparations altogether, a claim supported by Reich Chancellery records showing that delaying the currency and budgetary reform that could have addressed hyperinflation was seen as advantageous. Whilst ruinous to the economy and politically destabilising, hyperinflation had advantageous aspects for the German government as, although

1960-501: The German currency continued to fall in the immediate aftermath of the war. By late 1919, the German government had signed the Treaty of Versailles , which included an agreement to pay substantial reparations to the Allied powers both in hard cash and in in-kind shipments of goods such as coal and timber. By then, 48 paper marks were required to buy a US dollar. In May 1921 the amount to be paid by

2030-635: The Germans being informed that they realistically would not have to pay them. The German currency was relatively stable at about 90 marks per dollar during the first half of 1921. Because the Western Front of the war had been mostly fought in France and Belgium , Germany came out of the war with most of its industrial infrastructure intact, leaving it in a better place economically than neighbouring France and Belgium. The first payment of one billion gold marks

2100-548: The May 1921 London Schedule of Payments agreed after the Versailles treaty . This inflation continued into the post-war period, particularly when in August 1921 the German central bank began buying hard cash with paper currency at any price, which they claimed was to pay reparations in hard cash, though little in the way of cash reparations payments were made until 1924. The currency stabilised in early 1922, but then hyperinflation took off:

2170-845: The Reichsbank and the fiscal policy of Finance Minister Hans Luther brought the period of hyperinflation in Germany to an end. The Reichsmark became the new legal tender on 30 August 1924, equal in value to the Rentenmark. This marked a return to a gold-backed currency in connection with the implementation of the Dawes Plan . The Rentenbank continued to exist after 1924 and the notes and coins continued to circulate. The last Rentenmark notes were valid until 1948. Coins were issued dated 1923, 1924 and 1925 in denominations of 1 Rpf, 2 Rpf, 5 Rpf, 10 Rpf and 50 Rpf. Only small numbers of Rentenpfennig coins were produced in 1925. A few 1 Rpf coins were struck dated 1929. The 1 Rpf and 2 Rpf were minted in bronze , with

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2240-409: The Reichsbank, Luther quickly came up with a stabilization plan for the currency which combined elements of a monetary reform by economist Karl Helfferich with ideas of Luther's predecessor in office Rudolf Hilferding . With the help of the emergency law ( Ermächtigungsgesetz ) of 13 October 1923 which gave the government the power to issue decrees on financial and economic matters, the new Rentenbank

2310-616: The Reichsmark replaced the Austrian schilling . During the Second World War , Germany established fixed exchange rates between the Reichsmark and the currencies of the occupied and allied countries , often set so as to give economic benefits to German soldiers and civilian contractors, who were paid their wages in local currency. The rates were as follows: After the Second World War , the Reichsmark continued to circulate in Germany, but with new banknotes ( Allied Occupation Marks ) printed in

2380-452: The Reichsmark, and the blocking of the national bank from printing further paper currency. By 1924 the currency had stabilised and German reparations payments began again under the Dawes Plan . As the catastrophic fall in the value of the mark had effectively wiped out debts owed, some debts (e.g. mortgages) were revalued so that the lenders could recoup some of their money. Hyperinflation caused considerable internal political instability in

2450-554: The Rentenmark backed the currency by means of twice yearly payments on property, due in April and October, payable for five years. Although the Rentenmark was not initially legal tender , it was accepted by the population and its value was relatively stable. The Act prohibited the recently privatised Reichsbank from continuing to discount bills and the inflation of the Papiermark immediately stopped. The monetary policy spearheaded by Schacht at

2520-576: The US and in the Soviet Zone , as well as with coins (without swastikas ). Inflation in the final months of the war had reduced the value of the Reichsmark from 2.50 ℛ︁ℳ︁ = $ 1US to 10 ℛ︁ℳ︁ = $ 1US and a barter economy had emerged due to the rapid depreciation. The Reichsmark was replaced by the Deutsche Mark at a rate of 10:1 (1:1 for cash and current accounts) in June 1948 in

2590-754: The Weimar Republic Hyperinflation affected the German Papiermark , the currency of the Weimar Republic , between 1921 and 1923, primarily in 1923. The German currency had seen significant inflation during the First World War due to the way in which the German government funded its war effort through borrowing, with debts of 156 billion marks by 1918. This national debt was substantially increased by 50 billion marks of reparations payable in cash and in-kind (e.g., with coal and timber) under

2660-508: The Weimar Republic in the early 1920s was not the first or even the most severe instance of inflation in history. However, it has been the subject of the most scholarly economic analysis and debate. The hyperinflation drew significant interest, as many of the dramatic and unusual economic behaviors now associated with hyperinflation were first documented systematically: exponential increases in prices and interest rates, redenomination of

2730-458: The beginning the focus was on adjusting sales and procurement arrangements, modifications to financial reporting, and the use of more nonmonetary information in internal reporting. With the continuous acceleration of inflation, human resources were redeployed to the most critical corporate functions, in particular those involved in the remuneration of labor. There is evidence that some parts of corporate accounting systems fell into disrepair, but there

2800-422: The causes of the German hyperinflation, particularly on the subject of whether it was caused by reparations payments. The Treaty of Versailles had imposed an undefined debt on Germany, which the London Schedule of Payments agreed in May 1921 had determined to be essentially 50 billion marks in A and B bonds payable partly in-kind with goods like coal and timber, and partly in gold and hard-cash. From June 1921, when

2870-421: The choice of a revaluation law to finish the hyperinflation quickly or of allowing sprawling and the political and violent disturbances on the streets. The government argued in detail that the interests of creditors and debtors had to be fair and balanced. Neither the living standard price index nor the share price index was judged as relevant. The calculation of the conversion relation was considerably judged to

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2940-1142: The coin. The first Reichsmark banknotes were introduced by the Reichsbank and state banks such as those of Bavaria , Saxony and Baden . The first Reichsbank issue of 1924 came in denominations of 10 ℛ︁ℳ︁, 20 ℛ︁ℳ︁, 50 ℛ︁ℳ︁, 100 ℛ︁ℳ︁, and 1,000 ℛ︁ℳ︁. This was followed by a second issue in the same denominations, dated between 1929 and 1936. The second issue commemorated persons who made contributions to German agriculture, industry, economy, science, and architecture: 10 ℛ︁ℳ︁ issued in 1929 commemorated agronomist Albrecht Thaer ; 20 ℛ︁ℳ︁ issued in 1929 commemorated engineer, inventor, and industrialist Werner von Siemens ; 50 ℛ︁ℳ︁ issued in 1933 commemorated Prussian politician and banker David Hansemann ; 100 ℛ︁ℳ︁ issued in 1935 commemorated chemist and "father of fertilizer industry" Justus von Liebig ; 1,000 ℛ︁ℳ︁ issued in 1936 commemorated Prussian architect Karl Friedrich Schinkel . A newer version of 20 ℛ︁ℳ︁ note

3010-436: The country. Historians and economists are divided on the causes of this hyperinflation, particularly the extent to which it was caused by reparations payments. To pay for the large costs of the First World War , Germany suspended the gold standard (the convertibility of its currency to gold) when the war broke out in 1914. Unlike France , which imposed its first income tax to pay for the war, German Emperor Wilhelm II and

3080-455: The currency , consumer flight from cash to hard assets and the rapid expansion of industries that produced those assets. Since the hyperinflation, German monetary policy has retained a central concern with the maintenance of a sound currency, a concern that had an effect on the European sovereign debt crisis . According to one study, many Germans conflate hyperinflation in the Weimar Republic with

3150-400: The currency of the occupied countries. The coins were originally planned in great numbers of 100 million and 250 million each of the 5 ℛ︁₰ and 10 ℛ︁₰ coins respectively. The first embossing order, which was issued in April 1940, was about 40 million × 5 ℛ︁₰ and 100 million × 10 ℛ︁₰. The total amount was divided between each of the seven German mints after the embossing key of 1939. The contract

3220-405: The dollar index as well as to the wholesale price index . In principle, the German government followed the line of market-oriented reasoning that the dollar index and the wholesale price index would roughly indicate the true price level in general over the period of high inflation and hyperinflation. In addition, the revaluation was bound on the exchange rate mark and United States dollar to obtain

3290-512: The exchange rate of the mark against the US dollar steadily devalued from 4.2 to 7.9 marks per dollar between 1914 and 1918, a preliminary warning of the extreme postwar inflation. This strategy failed as Germany lost the war, which left the new Weimar Republic saddled with massive war debts that it could not afford: the national debt stood at 156 billion marks in 1918. The debt problem was exacerbated by printing money without any economic resources to back it. John Maynard Keynes characterised

3360-405: The exchange value of the mark fell from 320 marks per dollar in mid 1922 to 7,400 marks per US dollar by December 1922. This hyperinflation continued into 1923, and by November 1923, one US dollar was worth 4,210,500,000,000 marks. Various measures were introduced by German authorities to address this, including a new currency called the Rentenmark , backed by mortgage bonds, later itself replaced by

3430-528: The hyperinflation even further. A loaf of bread in Berlin that cost around 160 marks at the end of 1922 cost 200,000,000,000 or 200 billion (2×10 ) marks by late 1923. By November 1923, one US dollar was worth 4,210,500,000,000 or 4.2 trillion (4.2105×10 ) German marks. German monetary economics was at that time heavily influenced by Chartalism and the German Historical School , which conditioned

3500-449: The hyperinflation. A decree of 1925 reinstated some mortgages at 25% of face value in the new currency, effectively 25,000,000,000 times their value in the old paper marks, if they had been held for at least five years. Similarly, some government bonds were reinstated at 2.5% of face value, to be paid after reparations were paid. Mortgage debt was reinstated at much higher rates than government bonds were. The reinstatement of some debts and

3570-457: The inflationary policies of various wartime governments in his 1919 book The Economic Consequences of the Peace as follows: The inflationism of the currency systems of Europe has proceeded to extraordinary lengths. The various belligerent Governments, unable, or too timid or too short-sighted to secure from loans or taxes the resources they required, have printed notes for the balance. The value of

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3640-406: The issue was strictly controlled to conform to current commercial and government transactions. The Rentenbank refused credit to the government and to speculators who were not able to borrow Rentenmarks, because Rentenmarks were not legal tender. On 16 November 1923, the new Rentenmark was introduced to replace the worthless paper marks issued by the Reichsbank. Twelve zeros were cut from prices, and

3710-598: The mark falling to 7,400 marks per US dollar by December 1922. The cost-of-living index was 41 in June 1922 and 685 in December, a nearly 17-fold increase. After Germany failed for the thirty-fourth time in thirty-six months to pay an instalment of in-kind reparations of coal, in January 1923 French and Belgian troops occupied the Ruhr valley , Germany's main industrial region. 900 million gold marks of reparations were ultimately secured this way. The German government's response

3780-474: The occupied territories during the war were issued by the Reichskreditkassen . Holed, zinc coins in 5 ℛ︁₰ and 10 ℛ︁₰ denominations were struck in 1940 and 1941. Banknotes were issued between 1939 and 1945 in denominations of 50 ℛ︁₰, 1 ℛ︁ℳ︁, 2 ℛ︁ℳ︁, 5 ℛ︁ℳ︁, 20 ℛ︁ℳ︁, and 50 ℛ︁ℳ︁. These served as legal tender alongside

3850-404: The president of the Reichsbank, Rudolf Havenstein , began a strategy of buying foreign currency with marks at any price, without any regard for inflation, and it only increased the speed of the collapse in value of the mark. German officials claimed this was in order to make cash payments owed to the Allies using foreign currency. British and French experts stated that this was in an effort to ruin

3920-585: The prices quoted in the new currency remained stable. When the president of the Reichsbank, Rudolf Havenstein, died on 20 November 1923, Schacht was appointed to replace him. By 30 November 1923, there were 500,000,000 Rentenmarks in circulation, which increased to 1,000,000,000 by January 1, 1924, and to 1,800,000,000 Rentenmarks by July 1924. Meanwhile, the old paper Marks continued in circulation. The total paper marks increased to 1.2 sextillion (1,200,000,000,000,000,000,000) in July 1924 and continued to fall in value to

3990-422: The resulting increase in the supply of German marks on the market caused the German mark to fall rapidly in value. British and French experts claimed that the German leadership were purposefully stoking inflation as a way of avoiding paying reparations, as well as a way of avoiding budgetary reforms – a view later supported by analysis of Reich Chancellery record showing that tax reform and currency stabilisation

4060-584: The time; see long and short scale ). To stabilize the economy and to smooth the transition, the Papiermark was not directly replaced by the Reichsmark, but by the Rentenmark , an interim currency backed by the Deutsche Rentenbank , owning industrial and agricultural real estate assets. The Reichsmark was put on the gold standard at the rate previously used by the German mark , with the U.S. dollar worth 4.20 ℛ︁ℳ︁. During this period

4130-554: The value of the Goldmark . Finally, the Law on the Revaluation of Mortgages and other Claims of 16 July 1925 ( Gesetz über die Aufwertung von Hypotheken und anderen Ansprüchen or Aufwertungsgesetze ) included only the ratio of the paper mark to the gold mark for the period from 1 January 1918, to 30 November 1923, and the following days. The galloping inflation thus caused the end of

4200-456: The war reparations were not listed in paper currency, domestic debts owed from the war were listed, meaning that inflation greatly reduced this debt relative to revenues. In the first half of 1922, the mark stabilized at about 320 marks per dollar. International conferences were held. One, in June 1922, was organized by US investment banker J. P. Morgan, Jr. The meetings produced no workable solution, and inflation erupted into hyperinflation,

4270-487: The way the hyperinflation was analysed. The hyperinflation crisis led prominent economists and politicians to seek a means to stabilize German currency. In August 1923, an economist, Karl Helfferich , proposed a plan to issue a new currency, the "Roggenmark" ("rye mark"), to be backed by mortgage bonds indexed to the market price of rye grain. The plan was rejected because of the greatly fluctuating price of rye in paper marks. Agriculture Minister Hans Luther proposed

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4340-567: Was also innovation. Reichsmark The Reichsmark was introduced in 1924 as a permanent replacement for the Papiermark . This was necessary due to the 1920s German inflation which had reached its peak in 1923. The exchange rate between the old Papiermark and the Reichsmark was 1 ℛ︁ℳ︁ = 10   ℳ︁ (one trillion in American English and French, one billion in German and other European languages and British English of

4410-446: Was delayed in 1922–23 in the hope of reductions in reparations. Particularly, Allied analysis of German statistics showed that printing of paper currency was being used to maintain tax rates much lower than in Allied countries, to fund relatively high levels of state expenditure, and that this effect was being worsened by unrestricted capital flight from Germany. Reparations payments continued more or less in full from 1924 to 1931 without

4480-422: Was established that same day, 15 October 1923. The newly created Rentenmark replaced the old Papiermark on 15 November. Because of the economic crisis in Germany after the First World War , there was no gold available to back the currency. Luther thus used Helfferich's idea of a currency backed by real goods. The new currency was backed by the land used for agriculture and business. This was mortgaged ( Rente

4550-409: Was financed by some combination of issuing bonds and simply creating more money: both increasing the supply of German mark-denominated financial assets on the market and so further reducing the currency's price. When the German people realized that their money was rapidly losing value, they tried to spend it quickly. That increased monetary velocity and caused an ever-faster increase in prices, creating

4620-868: Was introduced in 1939, using a design taken from an unissued Austrian S 100 banknote type. 5 ℛ︁ℳ︁ notes were issued in 1942. Throughout this period, the Rentenbank also issued banknotes denominated in Rentenmark, mostly in RM 1 and RM 2 denominations. In preparation for the occupation of Germany, the United States issued occupation banknotes dated 1944, printed by the Forbes Lithograph Printing Company of Boston. These were printed in similar colours with different sizes for groups of denominations. Notes were issued for 1 ⁄ 2  ℳ︁, 1 ℳ︁, 5 ℳ︁, 10 ℳ︁, 20 ℳ︁, 50 ℳ︁, 100 ℳ︁, and 1,000 ℳ︁. The issuer

4690-430: Was made when it came due in June 1921. At this point, customs posts in the west of Germany were occupied by Allied officials, so that the schedule of payments could be enforced. However, following the first payment the Allied officials were withdrawn from everywhere but Düsseldorf , and whilst some payments in kind continued, only small cash payments were subsequently made for the remainder of 1921–22. From August 1921,

4760-726: Was stopped in August 1940 as the Wehrmacht, which had requested the coins for Belgium and France, had no more need of it. When the embossing stopped, only Berlin ("A") and Munich ("D") produced significant quantities, but they still came to only a small extent of original production plans. The majority were melted down due to the limited supply of metal and thus, most mint marks are now quite rare (except for 1940 5 A and D, and 1940 10 A). Various special issues of Reichsmark currency were issued for use in concentration and prisoner of war (POW) camps ( Stalag ). None were legal tender in Germany itself. From 1942 to 1943 tokens were struck for use within

4830-637: Was the Alliierte Militärbehörde ('Allied military authorities') with In Umlauf gesetzt in Deutschland ('in legal circulation in Germany') printed on the obverse. These notes were convertible to US dollars at a rate of 10:1. Seeing an opportunity to procure foreign hard currency, the Soviet Union demanded copies of the engraving plates, ink, and associated equipment in early 1944, and on 14 April 1944 Henry Morgenthau and Harry Dexter White of

4900-480: Was to order a policy of passive resistance in the Ruhr, with workers being told to do nothing which helped the French and Belgians in any way. While this policy, in practice, amounted to a general strike to protest the occupation, the striking workers still had to be given financial support. The government paid these workers by printing more and more banknotes, with Germany soon being swamped with paper money, exacerbating

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