“What is it that happens in an inflation? The unit of money suddenly loses its identity. The crowd it is part of starts growing and, the larger it becomes, the smaller becomes the worth of each unit. The millions one always wanted are suddenly there in one’s hand, but they are no longer millions in fact, but only in name.” Elias Canetti Crowds and Power
On September 21, 1923 German government – the leaders of the Weimar Republic – issued first one-billion banknotes in Berlin. Overnight people turned billionaires and yet at the same time, just like in Canetti’s quote, they lost everything.
With German hyperinflation already in full swing, the number of noughts following the actual price became almost immaterial. All of a sudden a tram ticket in Berlin cost three million Marks – a small slip of paper allowing you to take public transport on a one-way trip was worth as much as complete life-savings of some of Berlin’s pensioners.
Not surprisingly, exorbitant (and completely unpredictable) food prices were the most acute problem. They had the most direct impact upon people’s lives and occasionally even decided about life or death as such. The number of suicides – including what is known as “extended suicides”, where parents took their children with them to spare them suffering – exploded as well.
The despair is hard to conceive of – the despair and blank horror which were quite vividly described by Leonhard Frank in his 1963 book Links wo das Herz ist (“Left Where The Heart Is”):
Back then every day the Mark tumbled deeper and deeper into the abyss (…) The savings books of millions of little people, who for years saved penny to penny to live on in their old days – these savings books became nothing but paper. The devastating misery pushed thousands of these robbed, hopeless, old people into suicide.
And still the tidal wave of price-hikes seemed to take no end. By June 1923 one egg cost 800 Marks (a year earlier it was 0.22 Mark so the price went up by a mind-boggling number of percent!) but come November it further skyrocketed to 320,000,000,000 Marks per piece.
Just to give you a perspective: before the First World War people spent 2.6 Marks on one kilo of butter (the average price in Berlin). More or less a decade later, in November 1923, you were confronted with numbers which required a firm grasp of maths to deal with in the first place: the price of the same kilo of butter reached 5.6 trillion Marks.
November of 1923 was the month when German currency effectively hit the rock bottom – according to experts the old Mark lost 99% of its purchasing power. Since the Weimar Republic had no gold reserves to speak of (the Kaiser and the First World War literally bled Germany of most of its assets), the government of Gustav Stresemann – who took over from his predecessor, Wilhelm Cuno, in August the same year – chose to bind the new currency they planned to introduce as the saving measure to the value of real goods. To land property to be exact. Hence the new currency’s name: Rentenmark means as much as “Mortgage Mark” (Rente being a German term for “mortgage/rent” and the reason why a person living off property leasing is sometimes still referred to as a Rentier).
On November 15, 1923 this new currency, Rentenmark, made its debut. The exchange rate between it and the old Mark was 1:1,000,000,000,000 (1012) – one to a trillion. But by the next morning Berliners and the rest of Germany woke up to the Weimar Republic whose currency was suddenly worth something again: within 24 hours the price of one dollar went down from 4,210,500,000,000 Mark to 4.20 Rentenmark.
The charade saved not only German economy but also the state as well as – dramatic as it might sound – people’s lives. When a year later the new legal tender (Rentenmark was introduced as a currency but not the legal tender of the Republic) and the Reichsmark, replaced the stand-in money, all seemed to have slowly calmed down. However, although unlike upon its arrival, the misery did not vanish overnight, life began to become more bearable.
Until only several years later, on October 29, 1929 the New York Stock Exchange came crashing down, pulling the rest of the world with it into an ever bigger abyss.
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