Because he needed to go by train on official business, the state bank of Germany paid his ticket from Berlin to Dresda. In the summer of 1923, one of the American travelers gave us a story that he lived. ![]() Also the high prices and the low value of the paper money meant that for a large sum of money, meant to purchase an expensive product, needed a large quantity of notes and usually a transport mean. If a piece of bread is 1 million today and 2 millions by Saturday, people tried to negotiate the salary every hour. People went on continuous strike asking to be paid more and more. Savings made in a lifetime became worthless in just one night. This meant that the prices doubled every 3,7 days. ![]() In November, the inflation was so high that the billion appeared (1000 milliard) and on the 24th of November, the highest note was 100 billion (100.000.000.000.000), with a market value of only 5 $. A ten milliard (10.000.000.000) mark appeared in September. Soon, by July, the million notes were common on the market and new nominal values appeared. In just 10 months, Germany suffered the worst inflation in history. The 1923 was far beyond everything expected. In 1922, the biggest note was 100000 marks and in February 1923 the million mark note was introduced. In 1914, the highest note was 1000 mark and was equal to 235 $ (in saving terms, the 3 month salary of a well paid worker). The population lost confidence in this new paper money and soon in 1920 the inflation rose. The defeat of Germany in 1918 and the problem of mass war compensation let to the abandoning of the gold mark (based on the gold coin of 20 marks) and the adoption of a paper mark, guarantied by the state. In Germany, in 1914, before the First World War, a German mark was a silver coin, and with 4 mark you were able to buy 1 US$. ![]() In this situation, dramatic changes happened in the past. When that institution, the state itself or the state bank, isn’t able to guaranty the face value, the paper money will act as a market product and will have a fluctuant value. When a banknote was the symbol of money, the thing was basically the same but with one major difference: the value itself wasn’t the metal but the amount that was inscribed on it and the institution that guaranties that amount. A pound was a gold coin and you knew that this was its value, of 7, 9 g. Until the beginning of the 20th century money had a base from the metal in which the coins were made.
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