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I have been a collector of various things throughout my life. One of my passions is money, so I recently got hold of 7 billion 10 million Deutsche mark.
Added: 2006-03-01 14:06:41 - Modified: 2006-09-23 23:21:36 - Level: Beginner
The notes are given out by Bayerische Staatsbank, the Reichsbank and Die Sachsische Bank.
The Reichsbank was the central bank of Germany from 1876 until 1948. It was founded on 1 January 1876 (shortly after the establishment of the German Empire in 1871) and ceded to exist in 1948.
The history of the Reichsbank was volatile. Until the Great War it produced a very stable currency Mark. The expenses of the war caused inflationary pressure and the Mark started to decrease in value. This culminated in the German hyperinflation of 1922/1923. The Mark became the Paper Mark (Papiermark). Economic reforms and the issue of a new provisional currency - the Rentenmark stabilised the monetary development. In 1924 the Reichsbank started to issue the Reichsmark, which it managed until 1948.
You can read more about the Reichbank at Wikipedia
The Bayerische Staatsbank was founded in 1780 by the Prussian Count Karl Alexander as Hochfürstlich-Brandenburg-Anspach-Bayreuthische Hofbanco in Ansbach. The bank supported the transfer of money from England (who pays for supporting troops being given to her for the war against Northern America) and regional economic development. In 1792 the bank becomes the Königlich Preußische Banco under the lead of Carl August Freiherr von Hardenberg, who will later become Prussian State Chancellor. We develops the bank into a proper commercial operation. After the battle of Austerlitz in 1805 Napoleon forces Prussia to give up territory to Bavaria. Amongst it is the area in which the Königlich Preußische Banco operates. It becomes the Königlich Baierische Banco in 1806 and is now Bavarian.
Read more about the Bayerische Staatsbank and other german central banks in bavarian history at germannotes.com
Similar to the Bavarian Banks the tradition of a federal Germany gave reason for the development of a banking system in Saxony. It was driven by the necessities of business and the need for monetary supply. Here we will have a look at two banks from Saxony.
The Sächsische Bank zu Dresden (Saxon Bank of Dresden) was founded in 1865. On 18. July 1865 the King Johann of Saxony permitted the establishment of a central Saxon bank in Dresden. This bank had been lobbied for by the local business people. The bank was created for a period of 25 years. Its capital base was 5 Million Taler, which was split up in 25,000 stocks. On 1. November 1865 the bank opened its doors in Dresden after enough shareholder had paid up their share. The bank was allowed to issue its own banknotes. In 1866 it started to give out bills with denominations of 10, 20, 50, 100 and 500 Taler. Already within 1866 bills worth 6 Million Taler had been issued.
Read the rest of the story at germannotes.com
The Great War and the following negotiations pressured the government to spend more money, which it didn't have. The government decided to start printing more money although the Gold and Dollar reserves dwindled. Although initially some aluminium coins were minted (200 and 500 Mark) they were worthless when delivered. Soon only paper money was issued. The Papier Mark (Paper Mark) was created.
In 1922 the government could not agree on a new economic policy that would meet the reparation claims. The value of the Mark against the Dollar was decreasing continuously. On 1. January 1923 the exchange rate for 1 Dollar was 9000 Mark.
When Germany could not pay the reparation in 1923, troops from France and Belgium occupied the main industrial area in the West of Germany - the Ruhrgebiet. Without its main source of economic contribution the inflation in Germany was unstoppable. 1 Dollar cost about 100,000 Mark on 1. June 1923. Only two months later in August 1923 the exchange rate was 4.62 Million Mark for 1 Dollar.
At this time the central bank (Reichsbank) employed about 30,000 workers and used 1783 printing presses in 133 different printing houses. Still they could not produce the amount of money needed. Cities, regional authorities, banks and even firms were allowed to produce their own money - the Inflation Notgeld.
Read the full story about inflation at germannotes.com
You can click the thumbnails to get the full size images
The notes are as following