“Conditions have taken a catastrophic turn here,” wrote Berlin resident Betty Scholem in an October 15, 1923, letter to her son. “This letter cost 15 million” marks to send, she added, and “it will be 30 million beginning the day after tomorrow.” She and her husband estimated their expenses in the billions as the monthly rate of inflation approached 30,000 percent.

Scholem and her fellow Germans struggled to understand what was happening to them and why. Amid the chaos, they came to doubt the ability of the state and society to survive. “It seems inevitable that we will lose the Rhine and the Ruhr,” Scholem predicted, “that Bavaria will break away, and that Germany will once again fall apart into minuscule petty states.” Revolution seemed likely, too—less than five years after the last one.

Soldiers defending a railroad station in Berlin during the German Revolution of 1918 to 1919
Soldiers defending a railroad station in Berlin during the German Revolution of 1918 to 1919 Public domain via Wikimedia Commons

The present form of government, a democratic republic, was new to Germany, which was historically a land of kings and emperors. These monarchs had been driven out in 1918 and supplanted by a constitution signed in 1919 at Weimar, the city that lent the government its name, the Weimar Republic. Immediately, however, the new regime struggled against the dismal legacy of the old, which had saddled Germany with the consequences of defeat in World War I: territorial losses, financial ruin and the burden of reparations.

To make matters worse, the defeat in battle soon sparked revolutions and counterrevolutions at home that reflected a lack of trust in Germany’s first republic. Now came a financial crisis, just a few years into the experiment. The worst inflation in history to date, its shock waves reverberated down to 1933, when the republic’s enemies handed Adolf Hitler the chancellorship and introduced a Nazi dictatorship with wide popular support.

Germans had had little experience of inflation before World War I. But as that conflict produced shortages of food, fuel, clothing and other supplies, prices began to rise. The German Empire’s fiscal policy exacerbated the situation. Rather than raise taxes to pay its bills, the state took out loans, sold bonds and printed more marks, whose value halved over the course of the war. Inflation would have been even higher had the government not instituted price controls.

Those controls disappeared when the government collapsed in defeat in November 1918. Prices shot up accordingly, but the new democratic state continued the fiscal policy of the old authoritarian one. To fund the transition to a peacetime economy and welfare programs for ex-soldiers and impoverished civilians, the authorities continued to print money. In 1921 and 1922, policymakers even purposefully fanned inflation to show the former Allies that Germany was too weak to pay the reparations it owed.

Political cartoon showing Johannes Gutenberg and his printing press, which now prints money instead of Bibles
Political cartoon showing Johannes Gutenberg and his printing press, which now prints money instead of Bibles Public domain via Wikimedia Commons

As Germany fell further and further behind in payments, France and Belgium decided to act. Early in 1923, their armies invaded the Ruhr Valley, a coal-rich industrial region of Germany, to extract resources as payment. Right away, the German government refused to cooperate. Authorities let the rail system shut down and the electricity go out. Coal production ceased in the middle of winter.

Necessary for heat, transportation, industrial production and cooking, coal was crucial to the German economy and Germans’ basic survival. The scarcity of coal helped drive up prices, increasing the demand for currency. In response, the government took the last measures available to it and fired up the printing presses. Banknotes were issued into the maelstrom in ever higher denominations, with some Germans loading wagons full of paper marks to pay for groceries. At the same time, as confidence in the Weimar Republic decreased, the value of the mark against the U.S. dollar plummeted.

In January 1923, a dollar cost 17,000 marks. Just three months later, in April, that figure reached 24,000. The numbers skyrocketed each month, reaching 353,000 in July, 4.6 million in August, 98.9 million in September, 25.3 billion in October and 2.2 trillion in November. The sorry climax arrived in December, when the exchange rate topped out at 4.2 trillion marks to the dollar.

Victor Klemperer, a German scholar and faithful diarist, saw his country “collapsing in an eerie, step-by-step manner. … How long will we still have something to eat? Where will we next have to tighten our belts?” Meat would soon reach 3 billion marks per pound. Butter was twice that sum. A pound of potatoes and a glass of beer, staples of the German diet, came in at 50 million and 150 million marks, respectively. It was best just to forget about grains, their importation having all but ceased. A pound of rye bread cost more than 100 billion marks by November 1923.

A 500 million mark banknote
A 500 million mark banknote Public domain via Wikimedia Commons

So fast was the inflation that pay became worthless within days. As Berlin journalist Friedrich Kroner put it, “the spanking brand-new bank note, still moist from the printers, paid out today as a weekly wage, shrinks in value on the way to the grocer’s shop.” His advice was to “buy, buy, buy.”

The future journalist and historian Raimund Pretzel (better known by the pen name Sebastian Haffner) was still a boy in 1923. He described the scene at home every payday. His father would rush to purchase a monthly transit pass, then pick up his family for haircuts. Whatever money remained he gave to his wife, who bought dry and canned foodstuffs to last until the next payday, when the frenzy would start again.

Mothers faced serious difficulties during the hyperinflation crisis. As historian Julia Sneeringer writes in Winning Women’s Votes: Propaganda and Politics in Weimar Germany, “Their domestic work of procuring food and clothing became a frantic race against hourly devaluation.”

These women fascinated Kroner, who observed their “glances, their hastily donned kitchen dresses, their careworn, patient faces.” To him, the long lines of shoppers signaled poverty and want: “The city, the big stone city, will be shopped empty again.” Police oversaw the crush of consumers who filled the market squares and surrounding streets every weekend.

Tensions built. Eventually, crowds resorted to looting and rioting. “Looting is happening even in small towns, and some of the damages … [are] off the charts,” says Molly Loberg, a historian at California Polytechnic State University. In one prolonged, notorious instance of the breakdown of order, police arrested 571 people for looting shops in Berlin between November 3 and 7.

Aftermath of a riot in Hamburg in 1923
Aftermath of a riot in Hamburg in 1923 Library of Congress Prints and Photographs Division

The greatest impact of the hyperinflation of 1923 may be the hardest to measure: how it turned Germans against each other, breeding the mistrust and animosity that made Nazism seem like such a good idea to so many people. Rising prices brought “hate, desperation and need,” Kroner noted as he observed long lines of customers waiting to buy food. As the butter ran out, the crowd’s patience broke: “And then comes the umbrella handle … crashing through the glass cover on the cream cheese. And the cop standing watch outside pulls a sobbing woman from the store. And there is an uproar. And charges are filed.”

An economy of theft was replacing the market economy. In port cities such as Hamburg, groups of people met ships at the docks and simply took goods—flour, sugar, coffee and bacon among the most prized. They assaulted anyone who got in their way. Convictions for theft spiked, but the police couldn’t be everywhere at once. Things got so bad in September 1923 that the government declared Germany to be in a “state of siege” and subject to measures just short of martial law.

The chaos even spread to the countryside, where gangs of heavily armed men and teenagers stormed barns for livestock and raided fields for produce. Gunfights ensued. These farmyard melees mapped onto a mounting conflict between producers and consumers as prices rose and shortages deepened. Producers simply couldn’t afford to accept the amounts that consumers were able to pay.

The issue split the electorate and did lasting damage, says Martin H. Geyer, a historian at the Ludwig Maximilian University of Munich. Farmers, he adds, felt “estranged” from the established political parties and joined “agrarian radical movements” that destabilized the republic for the rest of its short life.

Back in the cities, starvation loomed by fall 1923. Other scourges had already arrived. Tuberculosis deaths were increasing as an indirect result of malnutrition, and children now weighed less and grew less, statisticians soon discovered.

A woman in Berlin burns devalued marks instead of fuel
A woman in Berlin burns devalued marks instead of fuel. Library of Congress Prints and Photographs Division
A man using marks as wallpaper
A man uses marks as wallpaper. Public domain via Wikimedia Commons

Cities themselves began to look and sound different, says Loberg. Shops restricted their hours and covered their windows with iron shades. Desperate people with goods to barter took to the streets as hawkers and shouted for attention. Out-of-work singers and violinists performed on the sidewalks for donations. Organ grinders cranked the same tunes ad nauseam and stopped only when paid to do so.

For many, the stress became insupportable. In his diary, Klemperer complained of “money matters” that “frazzle one’s nerves.” Kroner complained of it pounding “daily on the nerves: the insanity of numbers, the uncertain future.”

The crisis dragged much of the middle class into the working class, redistributing wealth and upending the social hierarchy. People on fixed incomes like pensions fared worst and had to sell their belongings for food. When they ran out of possessions, they went hungry in empty apartments. Many others lost their jobs as employers ran out of cash. Almost everyone lucky enough to work saw their real compensation dwindle.

At the apex of the social structure, things looked different, with titans of commerce and industry able to avail themselves of raw materials and cheap credits to grow their businesses at everyone else’s expense. In the daily papers, ordinary Germans read breathless accounts, only some of them true, about profiteers and smugglers making their fortunes amid the wreckage. Resentments seethed and exploded in ever more frequent riots, some targeting Jews. Klemperer, himself Jewish, worried for his safety.

In The Coming of the Third Reich, historian Richard J. Evans writes that the experience of hyperinflation left a lasting mark on Weimar culture in its preoccupation with “criminals, embezzlers, gamblers, manipulators, thieves and crooks of all kinds.” Bertolt Brecht and Kurt Weill’s 1928 operetta, The Threepenny Opera, recreated the hyperinflationary atmosphere of five years prior in its opening song, later translated into English as “Mack the Knife”: “And Schmul Meier is still missing / One more wealthy man removed / Mack the Knife has all his money / Yet his guilt cannot be proved.” Though contemporary stories exaggerated Germany’s moral decline in 1923, they reflected an almost universal cynicism born of deprivation and despair.

One Rentenmark, the replacement currency introduced on November 15, 1923
One Rentenmark, the replacement currency introduced on November 15, 1923 Drrcs15 via Wikimedia Commons under CC BY-SA 4.0

The last stages of hyperinflation brought the most misery, as the government cut costs by laying off much of its own workforce, slashing the salaries of the rest and ending welfare programs for some of Germany’s poorest citizens. The chancellor and his ministers, meanwhile, cast about in the dark for assistance from Germany’s former enemies in the West, especially the United States. American manufacturers and merchants still depended on German markets, after all, and they wanted to avoid the destruction of the German economy, the world’s second largest.

Finally, in fall 1923, a diplomatic breakthrough inspired the Americans and Germans to reevaluate the sums Germany owed in reparations. The German government had persuaded the French and Belgians to evacuate the Ruhr, still under occupation, in exchange for the promise that Germany would resume its reparations payments one way or another.

With foreign governments on its side and a series of reforms in place to shore up state finances, Germany buried the old mark on November 15 and replaced it with a temporary currency, the Rentenmark, which was soon replaced with a permanent one, the Reichsmark, and put on the gold standard. Germans could exchange their old marks for new ones at their earliest convenience.

But the damage was done. Most Germans had spent all their money or watched its value approach zero. Klemperer, for example, found that the period “of sudden monetary devaluation, the mad rush of having to shop,” now gave way to “destitution,” the inability to buy anything at all. “My shares have a value of scarcely 100 marks, my cash reserves at home about the same, and that’s all—my life insurance is utterly and completely lost. One hundred fifty paper millions are 0.015 pfennigs” (penny coins).

As Germans searched for someone to blame, they came up with competing scapegoats. But the Weimar Republic proved to be the favorite, never shaking its guilt by association with the hyperinflation crisis. Anti-republican, anti-democratic demagogues capitalized on this anger, staging demonstrations and revolts that anticipated the Nazi assumption of power in 1933.

Adolf Hitler (sixth from left) and the perpetrators of the Beer Hall Putsch during their trial on April 1, 1924
Adolf Hitler (sixth from left) and the perpetrators of the Beer Hall Putsch during their trial on April 1, 1924 Bundesarchiv, Bild 102-00344A / Heinrich Hoffmann via Wikimedia Commons under CC-BY-SA 3.0

The most fateful of these protests occurred at a beer hall in Munich on November 8 and 9, 1923, at the height of the hyperinflation. Army officers, other ultranationalists and a charismatic speaker named Adolf Hitler attempted a coup. It failed, and Hitler went to jail for long enough to complete the first volume of his bombastic manifesto, Mein Kampf. The trial gave him invaluable publicity, while the experience he gained from the putsch and subsequent prison time resulted in further refinement of his strategies and goals.

At the advent of the next crisis, the Great Depression, Hitler, his henchmen and his accomplices took advantage of public animosity toward the Weimar Republic to win a plurality of seats in the national parliament—and replace Germany’s first republic with the Third Reich.

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