Rudolf Emil Albert Havenstein (10 March 1857 – 20 November 1923) was a German lawyer and president of the

Reichsbank The ''Reichsbank'' (; ) was the central bank of the German Empire from 1876 until the end of Nazi Germany in 1945. Background The monetary institutions in Germany had been unsuited for its economic development for several decades before unifica ...

(German central bank) during the

hyperinflation In economics, hyperinflation is a very high and typically accelerating inflation. It quickly erodes the real versus nominal value (economics), real value of the local currency, as the prices of all goods increase. This causes people to minimiz ...

of 1921–1923. Havenstein was born in Meseritz (Międzyrzecz),

Province of Posen The Province of Posen (; ) was a Provinces of Prussia, province of the Kingdom of Prussia from 1848 to 1920, occupying most of the historical Greater Poland. The province was established following the Greater Poland Uprising (1848), Poznań Uprisi ...

. He came from a family of government officials and studied law in

Heidelberg Heidelberg (; ; ) is the List of cities in Baden-Württemberg by population, fifth-largest city in the States of Germany, German state of Baden-Württemberg, and with a population of about 163,000, of which roughly a quarter consists of studen ...

and

Berlin Berlin ( ; ) is the Capital of Germany, capital and largest city of Germany, by both area and List of cities in Germany by population, population. With 3.7 million inhabitants, it has the List of cities in the European Union by population withi ...

. After graduation in 1876, Havenstein worked in the Prussian Justice service until 1887 when he began his career as a judge. In 1890 he moved to the Prussian Ministry of Finance. From 1900 to 1908, Havenstein was President of the Prussian State Bank. From 1908 to 1923, he was president of the

and his signature appears on German Reichsbank notes from 1908 to 1923. Havenstein played an important part in the hyperinflationary process in Germany since he subscribed to the widespread belief then present in Germany that the inflation was caused by the fall in the external value of the mark against foreign currencies and that the role of the Reichsbank was to print sufficient money to sustain the higher price levels. The more money that was printed the higher the price level became, so the Reichsbank then printed even more money and so on. In other words, rather than following the

Quantity Theory of Money The quantity theory of money (often abbreviated QTM) is a hypothesis within monetary economics which states that the general price level of goods and services is directly proportional to the amount of money in circulation (i.e., the money supply) ...

in ascribing inflation to the excessive printing of money, Havenstein believed that money had to be printed to feed the rising demand for money within the German economy as prices were driven up by the fall in the exchange rate. It was Havenstein's death in November 1923 that helped to bring this policy to an end and, with it, the hyperinflation. Havenstein was involved in the introduction of

war bond War bonds (sometimes referred to as victory bonds, particularly in propaganda) are Security (finance)#Debt, debt securities issued by a government to finance military operations and other expenditure in times of war without raising taxes to an un ...

s at the beginning of the

First World War World War I or the First World War (28 July 1914 – 11 November 1918), also known as the Great War, was a World war, global conflict between two coalitions: the Allies of World War I, Allies (or Entente) and the Central Powers. Fighting to ...

. He died in Berlin and is buried in St. Anne's Cemetery in Berlin-Dahlem.

References

* Adam Fergusson, ''When Money Dies: The Nightmare of Hyperinflation in Weimar Germany'', Kimbler, 1975, republished 2010 by PublicAffairs, New York, , Chapter 11 "Havenstein" * Ahamed, Liaquat, ''Lords of Finance: The Bankers Who Broke the World,''

Penguin Books Penguin Books Limited is a Germany, German-owned English publishing, publishing house. It was co-founded in 1935 by Allen Lane with his brothers Richard and John, as a line of the publishers the Bodley Head, only becoming a separate company the ...

, 2009. * Bresciani-Turroni, ''The Economics of Inflation'', pages 63, 156, 180, John Dickens Co Ltd, Northampton, 1931
The Economics of Inflation: A Study of Currency Depreciation in Post-War Germany
* Max Shapiro, ''The Penniless Billionaires'', pages 213-214, New York Times Books, 1980,

External links

* {{DEFAULTSORT:Havenstein, Rudolf 1857 births 1923 deaths People from Międzyrzecz German bankers 19th-century German judges Central bankers Members of the Prussian House of Lords People from the Province of Posen Heidelberg University alumni Humboldt University of Berlin alumni People from the Weimar Republic

See also

References

External links