The Rentenmark (; RM) was a currency issued on 15 November 1923 to stop 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 1922 and 1923 in Weimar Germany, after the previously used Papiermark had become almost worthless. It was subdivided into 100 ''Rentenpfennig'' and was replaced in 1924 by the

Reichsmark The (; sign: ℛ︁ℳ︁; abbreviation: RM) was the currency of Germany from 1924 until the fall of Nazi Germany in 1945, and in the American, British and French occupied zones of Germany, until 20 June 1948. The Reichsmark was then replace ...

History

After the Occupation of the Ruhr in early 1923 by French and Belgian troops, referred to as the ''Ruhrkampf'', the German government of Wilhelm Cuno reacted by announcing a policy of passive resistance. This caused the regional economy of the Ruhr, the industrial heartland of Germany, to almost stop. The occupation authorities reacted to strikes and sabotage with arrests and deportations. Those displaced and left without income by the ''Ruhrkampf'' and their families fell back on public income support. Tax revenues plunged as economic activity slowed. The government covered its need for funds mainly by printing money. As a result, inflation spiked and the Papiermark went into freefall on the currency market. Foreign currency reserves at the Reichsbank dwindled. As

took hold, the cabinet of Cuno resigned in August 1923 and was replaced by the cabinet of

Gustav Stresemann Gustav Ernst Stresemann (; 10 May 1878 – 3 October 1929) was a German statesman during the Weimar Republic who served as Chancellor of Germany#First German Republic (Weimar Republic, 1919–1933), chancellor of Germany from August to November 1 ...

. After Stresemann reshuffled his cabinet in early October, Hans Luther became Minister of Finance. Working with

Hjalmar Schacht Horace Greeley Hjalmar Schacht (); 22 January 1877 – 3 June 1970) was a German economist, banker, politician, and co-founder of the German Democratic Party. He served as the Currency Commissioner and President of the Reichsbank during the ...

at the Reichsbank, Luther quickly came up with a stabilization plan for the currency which combined elements of a monetary reform by economist Karl Helfferich with ideas of Luther's predecessor in office Rudolf Hilferding. With the help of the emergency law (''Ermächtigungsgesetz'') of 13 October 1923 which gave the government the power to issue decrees on financial and economic matters, the new Rentenbank was established that same day, 15 October 1923. The newly created ''Rentenmark'' replaced the old ''Papiermark'' on 15 November. Because of the economic crisis in Germany after 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 ...

, there was no gold available to back the currency. Luther thus used Helfferich's idea of a currency backed by real goods. The new currency was backed by the land used for agriculture and business. This was

mortgage A mortgage loan or simply mortgage (), in civil law (legal system), civil law jurisdictions known also as a hypothec loan, is a loan used either by purchasers of real property to raise funds to buy real estate, or by existing property owners t ...

d (''Rente'' is a technical term for mortgage in German) to the tune of 3.2 billion Goldmarks, based on the 1913 wealth charge called ''Wehrbeitrag'' which had helped fund the German war effort from 1914 to 1918. Notes worth RM 3.2 billion were issued. The Rentenmark was introduced at a rate of one Rentenmark to equal one trillion (10¹²) old marks, with an exchange rate of one

United States dollar The United States dollar (Currency symbol, symbol: Dollar sign, $; ISO 4217, currency code: USD) is the official currency of the United States and International use of the U.S. dollar, several other countries. The Coinage Act of 1792 introdu ...

to equal 4.2 Rentenmarks. The Act creating the Rentenmark backed the currency by means of twice yearly payments on property, due in April and October, payable for five years. Although the Rentenmark was not initially

legal tender Legal tender is a form of money that Standard of deferred payment, courts of law are required to recognize as satisfactory payment in court for any monetary debt. Each jurisdiction determines what is legal tender, but essentially it is anything ...

, it was accepted by the population and its value was relatively stable. The Act prohibited the recently privatised Reichsbank from continuing to discount bills and the inflation of the Papiermark immediately stopped. The monetary policy spearheaded by Schacht at the Reichsbank and the fiscal policy of Finance Minister Hans Luther brought the period of hyperinflation in Germany to an end. The ''

'' became the new legal tender on 30 August 1924, equal in value to the Rentenmark. This marked a return to a gold-backed currency in connection with the implementation of the

Dawes Plan The Dawes Plan temporarily resolved the issue of the reparations that Germany owed to the Allies of World War I. Enacted in 1924, it ended the crisis in European diplomacy that occurred after French and Belgian troops occupied the Ruhr in re ...

. The Rentenbank continued to exist after 1924 and the notes and coins continued to circulate. The last Rentenmark notes were valid until 1948.

Coins

Coins were issued dated 1923, 1924 and 1925 in denominations of 1 Rpf, 2 Rpf, 5 Rpf, 10 Rpf and 50 Rpf. Only small numbers of Rentenpfennig coins were produced in 1925. A few 1 Rpf coins were struck dated 1929. The 1 Rpf and 2 Rpf were minted in

bronze Bronze is an alloy consisting primarily of copper, commonly with about 12–12.5% tin and often with the addition of other metals (including aluminium, manganese, nickel, or zinc) and sometimes non-metals (such as phosphorus) or metalloid ...

, with the 5 Rpf, 10 Rpf, and 50 Rpf coins in aluminium-bronze. These coins had the same design features and motifs as coins of the

from the

Weimar Weimar is a city in the state (Germany), German state of Thuringia, in Central Germany (cultural area), Central Germany between Erfurt to the west and Jena to the east, southwest of Leipzig, north of Nuremberg and west of Dresden. Together w ...

and early

Third Reich Nazi Germany, officially known as the German Reich and later the Greater German Reich, was the German state between 1933 and 1945, when Adolf Hitler and the Nazi Party controlled the country, transforming it into a totalitarian dictat ...

periods.

Banknotes

The first issue of banknotes was dated 1 November 1923 and was in denominations of RM 1, RM 2, RM 5, RM 10, RM 50, RM 100, RM 500 and RM 1000. Later issues of notes were RM 10 and RM 50 (1925), RM 5 (1926), RM 50 (1934) and RM 1 and RM 2 (1937).

References

* * * Act creating the Rentenban
Reichsgzetzblatt Teil I, 17 October 1923
* GermanNotes.com (2005). ''German Paper Money 1871–1999''
eBook from germannotes.com

External links

* {{Authority control 1923 establishments in Germany 1948 disestablishments in Germany Currencies of Germany Economy of the Weimar Republic Modern obsolete currencies

History

Coins

Banknotes

See also

References

External links