The title of this essay should really be entitled, “A look at the Hyperinflation period in Germany and its postal history”. It is a vast subject with much to interest the serious philatelist.


There is not a lot of information to be found in English and the best reference is the detailed section of the Michel Deutschland-Spezial Katalog 1849-1945. Although this is in German, armed with a good German-English dictionary, one can wade through the plethora of information, with some success.

An understanding of the economic background to this extraordinary period is necessary to fully understand what led to the issuing of stamps with such unheard-of denominations.

German Hyperinflation cover

During the World War I there had been inflation in Germany. By the early 1920s, as people lost confidence, prices began jumping much faster than the government could generate new money. Thus the total circulating currency fell drastically when measured in terms of its true value. One economist stated that, “In proportion to the need, less money circulates in Germany now than before the war. This statement may cause surprise but it is correct. The circulation is now 15-20 times that of pre-war days, whilst prices have risen 40-50 times.” In fact, the total currency when calculated in gold value fell from 7428 million marks in January 1920 to a mere 168 million by July 1923. (see fig 1. for table).

figure 1. Wholesale Price Index

July 1914 – 1.0
Jan 1919 – 2.6
July 1919 – 3.4
Jan 1920 – 12.6
Jan 1921 – 14.4
July 1921 – 14.3
Jan 1922 - 36.7
July 1922 - 100.6
Jan 1923 - 2,785.0
July 1923 - 194,000.0
Nov 1923 – 726,000,000,000.0

Despite the proliferating billions of trillions of marks, the average citizen found it harder and harder to get enough money for necessities. Banks, short of money, could not honour checks. Businessmen were strapped for money to buy materials and meet payrolls. The government faced the same problem. It appeared that there was not too much money around, but rather much too little. The clamour for more money grew on all sides. It seemed that any halt to the printing presses would bring business to a standstill and throw millions of workers out on the street. The government itself would be unable to carry on. Riding a tiger, it dared not dismount. On October 25, 1923, the Reichsbank noted that it had that day printed 120,000 trillion marks. Unfortunately, the day’s demand had been for one million trillion. However, it announced that it was expanding production and the daily issue would soon be 500,000 trillion!

German Hyperinflation cover

Once people lose confidence in a currency, they try to get rid of it. As Lord Keynes pointed out, this makes circulation speed up enormously, and hence prices rise faster than the government can print new money. Marshall, studying this process, concluded that, “The total value of an ‘ inconvertible paper currency cannot be increased by increasing its quantity; any increase in quantity which seems likely to be repeated will lower the value of each unit more than in proportion to the increase.”

There is an interesting quotation from Dr. Milton Friedman’s work, Dollars and Deficits. He notes that after the Russian revolution, the Bolsheviks introduced a new currency. They printed huge amounts of it and soon it became almost worthless. At the same time some of the older Tsarist currency still circulated and maintained its value in terms of goods. It appreciated enormously in terms of the new money. Why? This money was not redeemable. Nobody expected the Tsarist government to return. Why did this currency hold up? “Because,” says Friedman, “there was nobody to print any more of it.”

German Hyperinflation cover

In November 1923, a currency reform was undertaken. A new bank, the Rentenbank, was created to issue a new currency—the Rentenmark. This money was exchangeable for bonds supposedly backed up by land and industrial plant A total of 2.4 billion Rentenmarks was created, and each Rentenmark was valued at one trillion old paper marks. From that moment on the depreciation stopped—the Rentenmarks held their value; even the old paper marks held stable. Inflation ceased.

Throughout this article are some examples of hyperinflationary covers of 1923. Some of these are quite rare, given their often-short period of usage.

Related Video

Hitler’s Rise to Power

Weimar Germany – Revolution and Counterrevolution