Remember The Weimar Republic, And Worry


by Warren B. Causey

Most people aren’t aware that the Weimar Republic technically didn’t end until the fall of Hitler in 1945. What it is best remembered for, however, is hyperinflation and the rise of Hitler. In 1919 in Germany one loaf of bread cost 1 mark; by 1923, the same loaf of bread cost 100 billion marks. There are photos from that era showing German citizens burning marks to heat their homes because it was cheaper than trying to buy wood or coal.

For those who don’t remember, here is a brief history from Wikipedia: “Following World War I, the republic emerged from the German Revolution in November 1918. In 1919, anational assembly was convened in Weimar, where a new constitution for the German Reich was written, then adopted on 11 August of that same year. The ensuing period of liberal democracy lapsed by 1930, when Hindenburg assumed dictatorial emergency powers, leading to the ascent of the nascent Nazi Party and Adolf Hitler in 1933.”

 There were a couple of problems that caused that hyperinflation. The main one was that republic owed a massive debt stemming from reparations forced on Germany as a result of World War I. The last payment on those reparations, incidentally, wasn’t made until 2010. This debt and the government’s inability to make the required annual payments in “real” money, led to the printing of massive quantities of marks. At one point, the government was over-printing marks, turning one mark into 10,000 or more—at least on paper. The value of the Papiermark had declined from 4.2 per U.S. dollar at the outbreak of World War I to 1 million per dollar by August 1923. The problem, of course, was that the paper meant nothing.

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