I don’t want your money, honey…

We recently spent some time with the economic historian and bank bill broker, Winfried Bogon, whom we had contacted to purchase notgeld or emergency money that was used in times of fiscal crisis such as hyperinflation.


A well known episode of hyperinflation occurred in Germany in the 1920s. When World War I began in 1914, Germany ceased to back its currency with gold reserves. As the conflict was expected to be short, the Empire funded its efforts by borrowing, rather than with savings or taxation, leading to a steady devaluing of the Deutschmark as the war drew out over four years. The end of the war saw the demise of the German Empire, which was succeeded by the Weimar Republic in 1919 that became responsible for paying the massive reparations demanded by the Allies under the Treaty of Versailles (1919). This debt was to be paid in gold-backed hard currency, not the rapidly depreciating ‘paper Marks’, as well as in commodities such as coal, iron, steel and wood.

One immediate measure taken to finance these payments was to print more Marks in order to buy foreign currency, which was in turn used to service the debt. As no other workable solution was found, this initial inflation soon spiralled into hyperinflation as more marks were released into circulation. Furthermore, annexed territory and the required reduction of the German army led to unemployment and volatile political conditions. When it became apparent that Germany would be unable to make the required payments, Allied forces occupied ports and industries in the Rhine, such as the industrial Ruhr region, to ensure the reparations were paid for in goods. As workers undertook strikes, more money was printed to pay for their means of passive resistance further excacerbating the fiscal crisis. The price of a loaf of bread illustrates these effects; in 1922 a loaf of bread cost 163 Marks. By September 1923, it cost 1 500 000 Marks and at the peak of hyperinflation in November 1923, a loaf of bread cost 200 000 000 000 Marks. Other anecdotes published in a US report in 1970 state:

By mid-1923 workers were being paid as often as three times a day. Their wives would meet them, take the money and rush to the shops to exchange it for goods. However, by this time, more and more often, shops were empty. Storekeepers could not obtain goods or could not do business fast enough to protect their cash receipts. Farmers refused to bring produce into the city in return for worthless paper. Food riots broke out. Parties of workers marched into the countryside to dig up vegetables and to loot the farms. Businesses started to close down and unemployment suddenly soared. The economy was collapsing.

Notgeld were issued during this period by townships, industries and utilities. Forms of emergency and community currency came into use across many parts of Europe and are still used today in some places. Valid for short periods of time, Notgeld were to be spent not saved, nevertheless according to Winfried, German Notgeld and a subset of bills known as Seriensheine were unique as they were often designed to be collectable. Featuring commissioned illustrations, etchings and employing sophisticated printing techniques, these bills present an ephemeral pictorial history of financial crisis. revealing the desires and opinions of communities during these times of distress.


Amongst Winfired’s collection were notes or coupons issued by merchants valid for basic supplies such as flour or sugar, prompting the money expert to recall times when pieces of coal were more valuable than coin as they had a greater use value. We had already heard from several beekeepers that in the DDR the state bought home-produced honey from citizens for a fixed price, suggesting that the local tradition of keeping bees was at one time an important alternative source of income. Such accounts piqued our interest to use honey in lieu of money.

The American money manager George J. W. Goodman, writing under the moniker Adam Smith, commented that when one US dollar became equivalent to one trillion Marks in 1923, the German currency stopped making sense. For some people, having to calculate such fantastic figures for everyday exchanges brought on a nervous affliction known as ‘Zero Stroke’, a condition which compelled sufferers to write endless rows of zeros or ciphers. Eventually a simple cure for these hyperinflationary maladies was found in 1923, when the Reichsbank issued a new note to replace the Mark. One Rentenmark was exchanged for one billion of the old currency, striking nine zeros from the latter and prompting the ‘miracle of the Rentenmark’. As the Republic was still rich with working mines, farms, factories and forests, the new currency was backed by property mortgages and factory bonds that effectively speculated on the future productivity of the state—a form of wishful thinking known as credit. Goodman notes that the word ‘credit’ derives from the Latin credere, ‘to believe’, to proffer that the German people must have desperately wanted to believe. Winfried concurred, and it seems we all agree; ‘money is a matter of belief’ that is fundamentally a system of trust.


Kosares, Michael J., 1970. ‘The Nightmare German Inflation.’ Scientific Market Analysis.

Smith, Adam, (Goodman, George J.W.), 1981.‘The German Inflation, 1923.’ In: Paper Money, pp. 57-62.

26. September 2014 by sumugan
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