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15th October 1923: Rentenmark, Weimar Germany, hyperinflation crisis - HiPo > .23-8-21 A Democracy Without Democrats: Weimar Republic Explained - Used > .
The French and Belgian occupation of the Ruhr that began on 11 January 1923 had been met with a policy of passive resistance by the German government. Although this succeeded in frustrating the occupying powers who sought to extract reparations payments in the form of natural resources, it also brought the economy in the Ruhr to a shuddering halt.
As the strike had been called for by the government, the strikers and their families were eligible to receive income support. However, falling tax revenues due to the lack of trade meant that the government struggled to keep up with payments. In response they began printing money despite there being no product to base it on. The Papiermark went into freefall as hyperinflation took hold, and the cabinet resigned in favour of a new one formed under Gustav Stresemann.
Stresemann’s finance minister, Hans Luther, introduced the Rentenmark to replace the crisis-hit Papiermark in a plan devised jointly with Hjalmar Schacht at the Reichsbank. Schacht later went on to be the Minister of Economics in the early years of Hitler’s rule.
The new currency was backed by land that was used by businesses and agriculture, and was introduced at the rate of one Rentenmark to one trillion Papiermarks. With the currency now tied to something with physical value, hyperinflation was stopped in its tracks. The more commonly known Reichsmark was introduced the following year at the same value.
As the strike had been called for by the government, the strikers and their families were eligible to receive income support. However, falling tax revenues due to the lack of trade meant that the government struggled to keep up with payments. In response they began printing money despite there being no product to base it on. The Papiermark went into freefall as hyperinflation took hold, and the cabinet resigned in favour of a new one formed under Gustav Stresemann.
Stresemann’s finance minister, Hans Luther, introduced the Rentenmark to replace the crisis-hit Papiermark in a plan devised jointly with Hjalmar Schacht at the Reichsbank. Schacht later went on to be the Minister of Economics in the early years of Hitler’s rule.
The new currency was backed by land that was used by businesses and agriculture, and was introduced at the rate of one Rentenmark to one trillion Papiermarks. With the currency now tied to something with physical value, hyperinflation was stopped in its tracks. The more commonly known Reichsmark was introduced the following year at the same value.
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