Hyperinflation probably happened because the Weimar government printed banknotes to pay reparations and - after the 1923 French invasion - the Ruhr strikers.   Because these banknotes were not matched by Germany's production, their value fell.   Prices spiralled out of control and people with savings and fixed incomes lost everything.

        Anger at foreigners, and at the rich profiteers who made their fortunes from the hyperinflation, added to the support of extreme political parties such as the fascists and the communists.



HistoryLearning - basic overview of 1923

Joel's Coins - showing pictures of actual money

Video & commentary


Harder sites:

Robert Schenk

The Economist


Here is a really clear explanation by a modern historian about why the hyperinflation happened:


Source A

The word `inflation' describes a situation in which prices are rising and the value of money is falling. It is commonly said that inflation is caused by too much money chasing too few goods. Inflation occurs, in other words, when the supply of goods fails to keep up with demand. Inflation is not easy to stop once it has got started. An inflationary spiral tends to set in. Rising prices produce a demand for higher wages: higher wages mean that goods cost more to produce: prices have to go up again to pay for the wage increases.

        Germany began to suffer serious inflation during the war. The German government did not pay for the war by taxing people more heavily. Instead it paid its bills by printing banknotes. Soon there was too much money chasing too few goods. An inflationary spiral had started.

       Things got worse at the end of the war. A huge amount in reparations was demanded from Germany. The sum to be paid was fixed at £6,600,000 in 1921. Many foreigners thought that Germany would be unable to pay. They began to lose confidence in Germany's currency. Foreign banks and businesses expected increasingly large amounts of German money in exchange for their own currency. It became very expensive for Germany to buy food and raw materials from other countries. This led to a further increase in prices in Germany.

       Late in 1922 Germany failed to pay an instalment of reparations on time. France replied in January 1923: French troops occupied Germany's main industrial region, the Ruhr. The French were determined to make Germany pay every penny she owed. They wanted to keep Germany weak. A weak Germany meant that France was safe from the threat of attack.

        The German government ordered a policy of passive resistance in the Ruhr. Workers were told to do nothing which helped the invaders in any way. What this meant in practice was a general strike. The cost of the government's policy was frightening. All the workers on strike had to be given financial support. The government paid its way by printing more and more banknotes. Germany was soon awash with paper money. The result was hyperinflation.

Alan White and Eric Hadley, Germany 1918-1949 (1990)


It was cheaper to light the fire with paper money than with newspaper.


This table shows what happened to the price of bread in Berlin (prices in marks):



December 1918



December 1921



December 1922



January 1923



March 1923



June 1923



July 1923



August 1923



September 1923



October 1923



November 1923



and this is what happened to the price of some other goods:





Summer 1923

November 1923


1 egg





1 kg butter





1 kg beef





Pair shoes






There are many descriptions of what it was like to live through these times:


Bartering became more and more widespread . . . A haircut cost a couple of eggs . . . A student I knew . . . had sold his gallery ticket . . . at the State Opera for one dollar to an American; he could live on that money quite well for a whole week. The most dramatic changes in Berlin's outward ap­pearance were the masses of beggars in the streets . . . The hard core of the street markets were the petty black-marketeers ... In the summer of that inflation year nay grandmother found herself unable to cope. So she asked one of her sons to sell her house. He did so for I don't know how many thousands of millions of marks, The old woman decided to keep the money under her mattress and buy food with it as the need arose - with the result that nothing was left except a pile of worthless paper when she died a few months later.

       As soon as the factory gates opened and the workers streamed out, pay packets (often in old cigar boxes) in their hands, a kind of relay race began: the wives grabbed the money, rushed to the nearest shops, and bought food before prices went up again. Salaries always lagged behind, the employees on monthly pay were worse off than workers on weekly. People living on fixed incomes sank into deeper and deeper poverty.

       A familiar sight in the streets were handcarts and laundry baskets full of paper money, being pushed or carried to or from the banks. It sometimes happened that thieves stole the baskets but tipped out the money and left it on the spot. There was dry joke that spread through Germany: papering one's WC with banknotes. Some people made kites for their kids out  them.

Egon Larsen, a German journalist, remembering in 1976


At eleven in the morning a siren sounded. Everybody gathered in the factory yard where a five-ton lorry was drawn up, loaded 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 caught one you made a dash for the nearest shop and bought anything that was going....

       You very often bought things you did not need. But with those things you could start to barter. You went round and exchanged a pair of shoes for a shirt, or a pair of socks for a sack of potatoes; some cutlery or crockery, for instance, for tea or coffee or butter. And this process was repeated until you eventually ended up with the thing you actually wanted.

Willy Derkow, who was a student at the time, remembering in 1975.


I vividly remember pay days at that time. I used to have to accompany the manager to the bank in an open six-seater Benz which we filled to the brim with bundles and bundles of million and milliard mark notes. We then drove back through the narrow streets quite unmolested. And when they got their wages, the workmen did not even bother to count the number of notes in each bundle.

A worker in a transport firm in Berlin  


My father began to pay wages largely in goods, mostly foodstuffs. My mother stacked these in the flat where we lived. Livestock, such as chickens, was kept in the bathroom and on the balcony. Flour, fats etc. were bought in bulk as soon as money became available. My mother had to parcel all this food out in rough proportion to the employee's entitlement. Come pay-day the workforce assembled in. the flat in groups for their handouts.

A man whose father owned a small business  



Some of the experiences are almost amusing:


One fine day I dropped into a cafe to have a coffee. As I went in 1 noticed the price was 5000 marks - just about what I had in my pocket. I sat down, read my paper, drank my coffee, and spent altogether about one hour in the cafe, and then asked for the bill. The waiter duly presented me with a bill for 8000 marks. 'Why 8000 marks?' I asked. The mark had dropped in the meantime, I was told. So I gave the waiter all the money I had, and he was generous enough to leave it at that.

The memories of a German writer  


We were out playing football and one of my firends said: 'I'm going to the shop to buy a couple of bread rolls.'   he had a 500,000 mark note...   But he only came back with one, because a roll now cost 400,000 marks.

The memories of a Karl Nagerl, who was a school boy in 1923  


Two women were carrying a laundry basket filled to the brim with banknotes. Seeing a crowd standing round a shop window, they put down the basket, for a moment to see if there was anything they could buy. When they turned round a few moments later, they found the money there untouched. But the basket was gone.

The memories of a German writer  


It was in many ways a cheerful time for the young. When I grew up we were taught to save money and not throw it away. But in the worst days of the inflation this principle was turned upside down. We knew that to hold on to money was the worst thing we could do. So this allowed us, with a good conscience, to spend whatever we had available.

A currency dealer  



But for many people - especially those on a fixed income, hyperinflation was a disaster:


As soon as I received my salary I rushed out to buy what I needed. My daily salary was just enough to buy one loaf of bread and a small piece of cheese .... A friend of mine, a vicar, came to Berlin to buy some shoes with his month's wages for his baby. By the time he arrived, he only had enough to buy a cup of coffee.

A German woman writing about the effects of hyperinflation.


My father had sold his business during the war, together with all the real-estate property he owned, and retired from business. He was, by middle-class standards, a rich man, and intended to live on the income from his investments. These were mainly life-insurance policies, fixed­value securities and a mortgage on a large agricultural estate, whose yield of 15,000 marks per annum would have provided a very good income. All this depreciated, of course, to zero - my father only managed to keep his head above water by resuming work. "

 A writer remembering the effects of the inflation on his father 


Countless children, even the youngest, never get a drop of milk and come to school without a warm breakfast ... The children frequently come to school without a shirt or warm clothing or they are prevented from attending school by a lack of proper clothing. Deprivation gradually stifles any sense of cleanliness and morality and leaves room only for thoughts of the struggle against the hunger and cold.

Report by the Mayor of Berlin, 1923


A friend of mine was in charge of the office that had to deal with the giving out of ... pensions ...in the district around Frankfurt.... One case which came her way was the widow of a policeman who had died early, leaving four children. She had been awarded three months of her husband's salary (as a pension). My friend worked out the sum with great care ...and sent the papers on as required to Wiesbaden. There they were checked, rubber stamped and sent back to Frankfurt. By the time all this was done, and the money finally paid to the widow, the amount she received would only have paid for three boxes of matches.

A German woman who ran a Christian relief centre for the poor


Billion mark notes were quickly handed on as though they burned one's fingers, for tomorrow one would no longer pay in notes but in bundles of notes... One afternoon I  rang Aunt Louise's bell. The door was opened merely a 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. l don't understand any more'.

E Dobert, Convert to Freedom (1941)



But, importantly, not everybody suffered.   A secondary historian sums up the situation:


The impact of hyperinflation within Germany was uneven. Some profited from it. Adroit speculators like the tycoon Hugo Stinnes made fortunes, and industrialists and landowners who owed money were able to pay off their debts in devalued currency. Others were able to escape the worst - those, for example, whose wealth took the form of property or those with goods or skills which could be readily bartered. Initially the working class suffered comparatively little because trade unions ensured that wages kept pace with rising prices, but as 1923 wore on their position deteriorated. The principal losers in 1923, though, were those with cash savings, many but not all of whom were in the middle class (the Mittelstand). Middle-class savers experienced the trauma of seeing the value of their savings completely wiped out.

Alan White, The Weimar Republic (1997)



and one writer remembers a specific example of the rich getting richer:


A German landowner bought, on credit, a whole herd of valuable cattle. After a certain time he sold one cow from the herd. Because of the depreciation of the mark, the price he got for it was enough to pay off the whole cost of the herd

The memories of a German writer




Certain things about the inflation roused people to anger, and this anger led to outbreaks of violence:


At Cologne yesterday outbreaks of looting were a frequent occurrence in spite of the activity of all the available police. Many shops remain unopened and others are barricaded ... Many lorries were held up on their way to market and were looted of potatoes, meat and bread as well as of tobacco and boots.

   Evening Standard (a British newspaper) for 13 October 1923



For many, the memories of 1923 were to be one of the reasons they supported Adolf Hitler in the 1930s:


This financial disaster had profound effects on German society: the working classes were badly hit; wages failed to keep pace with inflation and trade union funds were wiped out. The middle classes and small capitalists lost their savings and many began to look towards the Nazis for improvement. On the other hand landowners and industrialists came out of the crisis well, because they still owned their material wealth - rich farming land, mines and factories. This strengthened the control of big business over the German economy. Some historians have even suggested that the inflation was deliberately engineered by wealthy industrialists with this aim in mind. However, this accusation is impossible to prove one way or the other, though the currency and the economy recovered remarkably quickly.

Norman Lowe, Mastering Modern World History (1982)


We were deceived, too. We used to say, "All of Germany is suffering from inflation." It was not true. There is no game in the whole world in which everyone loses. Someone has to be the winner. The winners in our inflation were big business men in the cities and the "Green Front", -from peasants to the Junkers, in the country. The great losers were the working class and above all the middle class, who had most to lose.

       How did big business win? Well, from the very beginning they figured their prices in gold value, selling their goods at gold value prices and paying their workers in inflated marks.

... . . You could go to the baker in the morning and buy two rolls for 20 marks; but go there in the afternoon, and the same rolls were 25 marks. The baker didn't know how it happened that the rolls were more expensive in the afternoon. His customers didn't know how it happened. It had somehow to do with the dollar, somehow to do with the stock exchange - and somehow, maybe to do with the Jews.

     Erna von Pustau remembering life in Hamburg at the time


When I was a student in Freiburg only some 30 miles from the Swiss border there was a regular influx of visitors from nearby Basle. They were quite ordinary people who came for a day's shopping and enjoyment. They filled the best cafes and restaurants, bought luxury goods. Most of us had very little money and could never afford to see the inside of all those glamorous places into which the foreigners crowded. Of course we were envious . . . Contempt for such visitors combined with envy to produce in most of us a great deal of anti-foreigner and nationalist feeling.

   Memories of William Guttman


On Friday afternoons in 1923, long lines of manual and white-collar workers waited outside the pay-widows of the big German factories, department stores, banks, offices ... staring impatiently at the electric wall clock, slowly advancing until at last they reached the window and received a bag full of paper notes. According to the figures inscribed on them, the paper notes amounted to seven hundred thousand, or five hundred million, or three hundred and eighty billion, or eight­een trillion marks - the figures rose from month to month, then from week to week, finally from day to day. With their bags the people moved quickly to the door, all in haste, the younger ones running. They dashed to the nearest food store, where a line had already formed. Again they moved slowly, oh, how slowly, forward. When you reached the store, a pound of sugar might have been obtainable for two millions; but, by the time you came to the counter, all you could get for two millions was half a pound, and the sales­woman said the dollar had just gone up again. With the millions or billions you bought sardines, sausages, sugar, perhaps even a little butter, but as a rule the cheaper margarine - always things that would keep for a week, until next pay-day, until the next stage in the fall of the mark....

       The printing presses of the government could no longer keep pace.... You could see mail-carriers on the streets with sacks on their backs or pushing baby carriages before them, loaded with paper money that would be devalued the next day. Life was madness, nightmare, desperation, chaos.... Communities printed their own money, based on goods, on a certain amount of potatoes, of rye, for instance. Shoe factories paid their workers in bonds for shoes which they could exchange at the bakery for bread or the meat market for meat.

       … suddenly, the mark lost its value. The war loan was worth nothing. Savings of a lifetime were worth nothing. . ..

       Money had lost its value - what, then, could have value? Of course, many were accustomed to having no money; but that even with money you had nothing.... First the Kaiser gone, then the silver coins with his likeness had gone and unknown faces, sometimes distorted to frightful grimaces by eccentric artists, stared at you from worth less paper notes.

Konrad Heiden






















During the hyperinflation, many towns issued their own emergency money, called 'notegeld'.   Many of these notes contained anti-Jewish images; this example is from Robnitz.