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The 1923 Hyperinflation In Germany


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#1 Kate72

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Posted 17 September 2005 - 02:08 PM

In class, we're learning about the 1923 Hyperinflation in Germany. We learnt that money became useless in Germany and my teacher told us some example of what people done with notes eg wallpapered them to the wall or burned them. My teacher was interested in what other things people done with money that she hadn't heard about and i was wondering if anyone had any really bizarre examples of what people done. If you do have any, or have any useful links, please reply and note them down.

P.S This isn't coursework, just an out of curiosity question.

Thanks, Kate

#2 Mr Field

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Posted 17 September 2005 - 03:07 PM

In quite a few textbooks there are images of students playing with the money - using wads of notes as building blocks.

Basically the money became completely worthless - you needed a wheelbarrow full to pay for a loaf of bread.

#3 Mrs Faithorn

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Posted 17 September 2005 - 07:09 PM

In addition to Mr Field's examples, I have seen a photo of children playing with a kite where what would normally be made of fabric and the 'tail' were made from banknotes. Clearly, if children were allowed to play with paper money then it can have had no value to their parents anymore.

Edited to add some pictures and links:

Posted Image Picture of a woman burning money in her stove.
This image is on a very detailed page about the hyperinflation of 1923. More suitable for A Level really but good if you are seriously interested.

Posted Image Image of children using wads of bank notes as building blocks.

Posted Image
another picture (better than the one above) of a woman feeding her tiled stove with banknotes.

There are some useful anecdotes** on this page about hyperinflation in 1923 where there is also what I think is a picture of a man papering a wall with bank notes.

**

The price increases began to be dizzying. Menus in cafes could not be revised quickly enough. A student at Freiburg University ordered a cup of coffee at a cafe. The price on the menu was 5,000 Marks. He had two cups. When the bill came, it was for 14,000 Marks. "If you want to save money," he was told, "and you want two cups of coffee, you should order them both at the same time."

and

A factory worker described payday, which was every day at 11:00 a.m.: "At 11:00 in the morning a siren sounded, and everybody gathered in the factory forecourt, where a five-ton lorry was drawn up loaded brimful with paper money. The chief cashier and his assistants climbed up on top. They read out names and just threw out bundles of notes. As soon as you had caught one you made a dash for the nearest shop and bought just anything that was going." Teachers, paid at 10:00 a.m., brought their money to the playground, where relatives took the bundles and hurried off with them.


That should all provide you with something to impress your teacher! ;)

Edited by Mrs Faithorn, 17 September 2005 - 08:10 PM.


#4 Miss Buxton

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Posted 17 September 2005 - 09:41 PM

more stories about Hyperinflation:

‘One afternoon I rang my Aunt Louise’s door.  She is a pensioner.  The door was opened a mere crack.  From the dark came an odd broken voice: “I’ve used 60 billion marks worth of gas.  My milk bill is 1 million.  But all I have left is 2000 marks.  I don’t understand anymore.” ’E Dobrt  writing about the effects of inflation



‘As soon as I got my dad’s pay I went shopping.  I had just enough for a loaf of bread and a small piece of cheese.  A friend of mine went to buy his baby a pair of shoes.  He took a month’s pay.  By the time he reached Berlin all he could afford was a cup of coffee.’A German woman writing about the effects of inflation



Daily Express (24th February, 1923)
A Berlin couple who were about to celebrate their golden wedding anniversary received an official letter advising them that the mayor, in accordance with Prussian custom, would call and present them with a donation of money. Next morning the mayor, accompanied by several officials in robes, arrived at the old couple's house, and carefully gave them 1,000,000,000,000 marks which was worth one halfpenny in British money.



#5 Kate72

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Posted 22 September 2005 - 04:11 PM

Thank you very much, this will helps me loads.

#6 David Jackson

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Posted 22 September 2005 - 08:08 PM

Not sure if this is in one of the links, but i read about a man being mugged on the street while carrying his wheelbarrow full of money home....but the money was left and the wheelbarrow taken...

#7 Kate72

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Posted 23 September 2005 - 04:17 PM

Thanks everyone. Lots of strange stories when you look at them. Quite interesting really. This topic has really made me see money is just bits of paper which if they didn't have any significance to us, would be useless :o
Thanks again, Kate.

#8 Mrs Faithorn

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Posted 23 September 2005 - 05:38 PM

. This topic has really made me see money is just bits of paper which if they didn't have any significance to us, would be useless :o

An astute observation, Kate.

I have sometimes started work on Hyperinflation in 1923 off by screwing up (real) banknotes and silently chucking them in the wastebin. You should see the pupils' faces! It does tend then to bring home the point you made quite graphically.

#9 Mr Moorhouse

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Posted 24 September 2005 - 09:27 AM

I can't find the exact figures here (at home) but I got my class to work out exactly how quickly the money was losing its value at that period of time.

Using the exchange rate as an index we looked at the devaluation of the reichsmark in a 5 day period (I think it was the immediate aftermath of the French occupation of the Ruhr, but could be wrong). There's one period in that block of time where the currency goes from 10,000RM to the US$ to 500,000RM to the US$ in something daft like 48 hours.

A helpful maths teacher showed them how to work out how rapidly the currency devalued. We then gave them some 'reichsmarks' and told them how much lunch cost. The task, a mission impossible, was to get to the canteen in time to spend it. When they got there we recalculated the value of the currency and found that in the time they'd moved from my room to the canteen (other side of school) the value of the reichsmark had changed so much that they couldn't afford to buy anything... even between the lot of them!

Quite scary really.

#10 Kate72

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Posted 25 September 2005 - 12:56 PM

I wish my teacher let us do that. Sound like a fun way of learning. Thank You everyone for all the great links and examples.

#11 celticfc88

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Posted 07 December 2005 - 03:41 PM

in my class we got told about a story when lots of people were out on the street and 2 people went to look at something in a shop window. They had a basket full of money with them but had placed it down. When they came back the money was still there but the basket had been taken, because it was worth more than the money!

#12 Smile

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Posted 10 December 2005 - 01:10 PM

Wow, I never knew about this (you learn something new everyday! :D ). Did it just happen in 1923, how long did it last? How was it sorted out? It must have been REALLY strange to live at that time. What happened afterwards?
Sorry about all the questions, I hope I dont appear rude but i'm rather interested!!

#13 Mrs Faithorn

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Posted 10 December 2005 - 07:10 PM

Wow, I never knew about this (you learn something new everyday! :D ).

Indeed you do! And carry on doing so for the rest of your life - as long as you remain inquisitive and open-minded. Learning is a life long thing,

Did it just happen in 1923,


If you are referring to Germany, yes it just lasted during 1923. Other countries have experienced massive rates of inflation too (eg. in Zimbabwe in recent years), but none as bad as the hyperinflation in Germany in 1923 as far as I know.

how long did it last?

It lasted for about 9/10 months; from January until September/October. Germany was already suffering from inflation in the years after the end of the First World War, but the whole problem escalated in 1923 when the French and Belgian armies marched into Germany in January that year in order to sieze products like coal and other industrial goods. They did this because the German government was saying they were unable to pay the money they had promised to pay those two countries each year as compensation for all the damage Germany armies had caused during WWI.

The German government then told workers to refuse to mine coal etc but had to pay their wokers' wages. In order to do that they just printed more and more paper money and over the next 9 or 10 months the value of that money just fell and fell until eventually (as seen in the stories and pictures earlier in the thread) it became totally worthless. Just as an example of this, the money that would have bought a nice house at the beginning of 1923 would just about buy a box of matches 9 months later!

How was it sorted out?

It was sorted out by the new German Prime Minister, called Gustav Stresemann. He made everyone hand in the 'old' money which was all destroyed and then issued a new currency called the Rentenmark. He managed to convince people that this new currency did have a real value by linking it to the value of land.

Not everyone destroyed all their valueless notes though and someone I used to teach with (whose grandparents were German) still had several of those 'old' German notes. It was really interesting to see these since they were just overstamped with higher and higher values (which the government did as the hyperinflation got worse instead of printing yet more new notes)

It must have been REALLY strange to live at that time. What happened afterwards?


After that, things got a lot better in Germany. The new German government made a 'deal' with the Americans (the Dawes Plan) and were lent a great deal of money over the next 5 years in order to help German industry get back on its feet and so that the Germans could actually pay the compensation owed to France and Belgium (and then their armies left Germany). Germany actually became quite prosperous for the next 5 years, but there were still people whose lives had been ruined by the hyperinflation of 1923 (especially those whose life savings had been made worthless) and many of these were the sort of people who eventually supported Hitler and the Nazi Party in the early 1930s.

Sorry about all the questions, I hope I dont appear rude but i'm rather interested!!


You're not rude at all. Just naturally inquisitive. That's fine!

I've answered at some length just because you are interested - and because you are clearly not learning about this topic at school yourself (yet?)

I hope the explanation is clear enough? As you can imagine it's really rather a complicated topic and I have only provided a 'summary'. ;)

Edited by Mrs Faithorn, 11 December 2005 - 02:20 PM.


#14 Smile

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Posted 11 December 2005 - 05:53 PM

Sorry, i accidentally pressed enter :blush:
... Natzi party had supporters...the people who had no money and needed some to survive in the world. So they joined the party to get the money. Mmm, and because the economy had just collapsed the Natzi's were seen as people who were 'sorting in out' and stoping it from happening again.

#15 Mrs Faithorn

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Posted 11 December 2005 - 06:40 PM

Sorry, i accidentally pressed enter :blush:
... Natzi party had supporters...the people who had no money and needed some to survive in the world. So they joined the party to get the money. Mmm, and because the economy had just collapsed the Natzi's were seen as people who were 'sorting in out' and stoping it from happening again.


Well .... what you say here is not wrong, but it's a gross over simplification of what happened and of the reasons for the increasing support the Nazis gained in the years from 1930 - 1933 (when they came to power). In the 5/6 years following the hyperinflation of 1923 the Nazis actually gained very little support.

The collapse of the economy you refer to was primarily following the American Wall Street Crash of 1929 - when the Americans were no longer willing or able to lend the Germans large sums of money any more.

A great many students get muddled up between the impact of hyperinflation of 1923 and the impact of the Wall Street Crash on Germany in the early 1930s.

Can I suggest that if you want to pursue all this further that you either ask your teacher to lend you a GCSE textbook covering the Rise of the Nazi Party or that you do a little research yourself.

These links would help you with that:
http://www.historyle...o.uk/weimar.htm
http://johndclare.net/Weimar1.htm


NB. It's NAZI, not Natzi. ;)

Edited by Mrs Faithorn, 11 December 2005 - 06:42 PM.





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