Key facts
- Germany introduced the Rentenmark on October 15, 1923.
- Hyperinflation made the German mark virtually worthless.
- Germans resorted to barter for many economic transactions.
- Prices often doubled during the morning hours.
- The Rentenmark was introduced to curb hyperinflation.
On October 15, 1923, Germany introduced the Rentenmark in an effort to curb rampant hyperinflation that had rendered the German mark virtually worthless. The currency reform was a response to economic chaos that began during World War I and escalated in the post-war years.
By 1923, inflation had reached such extreme levels that Germans resorted to bartering for goods, as the mark rapidly lost its value. Stores frequently updated prices throughout the day, and wages earned were spent immediately to avoid further depreciation. Farmers withheld produce, and businesses took out loans to purchase assets that would appreciate overnight. The roots of this hyperinflation trace back to Germany's financing of World War I through credit and war bonds, leading to a significant increase in the money supply.
Following World War I, the newly formed republic faced immense financial challenges, including war bond debts and reparations payments to the Allies. Governmental revenues consistently fell short of outlays, exacerbating the debt accumulation.