Berlin

A series of political crises beginning with the murder of Foreign Minister Walther Rathenau on June 24, 1922, helped propel the inflation into overdrive. Ra-thenau was killed by right-wing assassins as he drove to work along Berlin’s Konigstrasse (the death spot is now marked with a plaque, one of many such memorials in the haunted city). To accomplish their mission, the killers pulled up alongside the minister’s open car and sprayed him with automatic pistol fire, then tossed in a grenade for good measure. This was Rathenau’s reward for being a Jew who had tried to help his nation cope with the demands of the Versailles Treaty and the evils of inflation. Berliners turned out in their thousands to view his body as it lay in state in the Reichstag (a building he had hated), but they should also have mourned the mark. On the eve of the assassination the German currency had stood at 331 to the dollar; by the end of July 1922 it had dropped to 670. In December 1922, following rumors that the French planned to occupy the Ruhr Valley to punish Germany for defaulting on reparations payments, the mark ballooned to 7368.

Walther Rathenau in 1921, a year before his assassination

The rumors about the French turned out to be true. On January 11, 1923, French and Belgian troops marched into the Ruhr in order to force the Germans to make coal deliveries stipulated in the reparations agreement. This action ignited a storm of patriotic protest across Germany. Berlin was engulfed in anti-French demonstrations; Pariser Platz had to be closed off to prevent attacks on the French embassy.

The German government responded by instituting “passive resistance,” encouraging coal companies and railways to shut down and then compensating owners and striking workers with money from the national treasury. Now the mark went into free fall. In early February it hit 42,000 to the dollar, in July 160,000, in August 3,000,000. To meet the demand for paper currency more than 2,000 presses worked around the clock churning out bills in ever higher denominations. In September 1923 the Reichsbank issued a 50 million mark note; in October it came out with 1, 5, and 10 billion mark bills; on November 2 a 100 trillion note. The Berlin newspaper publisher Hermann Ullstein, whose presses were requisitioned for the printing, hired elderly women to put newly printed billion-mark bills in neat packages for vigilant Reichsbank officials. “They had to keep an eye on every single billion,” he noted. “Officials are so funny sometimes.” But why in fact worry about the odd billion when, in late November 1923, one American dollar was worth a mind-boggling 4,210,500,000,000 German marks?

Money being transported to a Berlin bank during the Great Inflation, 1923

As the mark sprouted zeros, so did the prices for basic necessities. In Berlin a streetcar ride cost 3,000 marks on July 16, 1923; 6,000 marks on July 30; 10,000 on August 6; 50,000 on August 14; and 100,000 on August 20. The price for natural gas shot up from 1,200 marks a cubic meter on July 1, 1923, to 250,000 marks on August 30. In late November, at the height of the Great Disorder, a glass of beer fetched 150 billion marks, a loaf of bread 80 billion, and a pickle 4 billion. Prostitutes were demanding 6 billion marks and a cigarette for the “mistress-slave perversion.” At these prices, it made sense to use lower-denomination bills for functions other than trade. Berliners lit their cigars with thousand-mark bills and wiped their bottoms with millions—“filthy lucre” indeed. The dadaists Kurt Schwitters and Lÿszló Mo-holy-Nagy used billion-mark notes to make collages of the national symbol, the eagle, which they turned into a vulture.

With the collapse of the mark, many business people insisted upon being paid in goods or services rather than currency. The “most modern city in Europe” was reverting to history’s oldest system of trade—barter. Of course, since many daily transactions still had to be conducted in cash, people tried to get rid of their currency as quickly as possible, before it lost further value. They rushed from pay counter to store or bar, often transporting their load of bills in backpacks or even wheelbarrows. By contrast, when it came to settling obligations like taxes, mortgages, and rents, which did not keep pace with inflation, they tried to delay paying for as long as possible. The result was that, for the first time, housing in Berlin became relatively cheap. That was the good news. The bad news was that housing was also more shabby and in shorter supply than ever because builders and landlords had no incentive to put up new structures or to repair the old ones.