When Bread Cost Billions: The Weimar Hyperinflation Crisis
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In 1923, a cup of coffee in Berlin could double in price before you finished drinking it. Children played with stacks of money like building blocks, and workers carried wages home in wheelbarrows- often being paid twice a day as prices rose so fast their wages were essentially worthless by lunchtime. This was a phenomenon called hyperinflation, the rapid and extreme rise in prices with a relative collapse in currency value. And for post-WWI Germany, war, debt and poor decisions by the Weimar Government destroyed the German ‘mark’ (the official currency at the time) and democracy itself.
Imagine this: it’s 1914, and the Germans were certain they were going to win the war. They abandon the gold standard of payments and instead fund WWI by borrowing and printing money. Unfortunately for them, they lost the war and were forced to sign the Treaty of Versailles in 1919; massive reparations (financial compensation) were demanded, with payments only accepted in gold or foreign currency, which they had stopped using. With Germany already weakened, these conditions made inflation rise, and the economy became fragile.
Come 1923, Germany had missed the reparations payment, arguing that the first payment took all they could afford and that they were unable to pay for this one. France and Belgium, however, believed they could pay, but were choosing not to. In response, they both sent troops to Germany’s main industrial area, the Ruhr Valley. They seized industrial goods as reparations payments, still believing Germany could pay the second instalment. They occupied important aspects of Germany’s industries, such as steel works, coal mines, steel works and factories, and even the railways.
As retaliation, the government then ordered the workers to put up a form of ‘passive resistance’ against the foreign troops. This involved refusing to work and cooperate with them, and in exchange, they were still paid their wages. However, this meant that whilst the workers were on strike, fewer industrial goods were being produced, weakening the economy further. The problem was exacerbated by the government still having to pay wages, which they funded by printing more money. However, all this proved to be disastrous as, despite the workers’ efforts, the French and Belgians responded firmly, shooting at those who refused to cooperate and expelling the others. Around 150,000 people were expelled from the Ruhr region, with approximately 132 killed.
In a desperate attempt to rein in the chaos, printing presses ran nonstop, producing millions, billions, then trillions of marks to increase the monetary circulation. This significant and rapid increase in the supply of money decreased its value (due to the demand and supply forces running a market, when a good/service is high in supply compared to demand, prices drop. Vice versa occurs when it is in low supply, check out ‘Why can’t we just print more money?’ for more on inflation.) In January of 1923, bread cost approximately 250 marks; by November? It cost almost 200,000 million marks. A drastic increase. One USD was 4 marks pre-war, surging to a trillion marks by late 1923. Money became cheaper than wallpaper and people were not happy.
The general public’s response to this was as you’d expect. As necessities like bread and meat became unaffordable for most urban workers, riots and looting spread. Crowds would go as far as to storm bakeries, steal livestock, or even raid farmer markets. Farmers often had to defend their property against angry townspeople desperate for food. As they were relatively insulated from hyperinflation because they could always trade their goods for higher prices. Many stopped accepting the devalued mark altogether, choosing to hoard food until they could barter it for tangible items or foreign currency- worsening shortages.
Shopkeepers faced an impossible situation: they’d sell an item at 10,000 marks in the morning, but by the time they tried to replenish their stock in the afternoon, the wholesaler was demanding 50,000 marks. Many shops either shut down entirely or operated more like barter centres. Goods — not money — became the currency of survival. So barter networks flourished. Doctors may have been paid with firewood or potatoes, with teachers accepting eggs, coal or even butter instead of wages. Cigarettes became a de facto “currency” because they held stable value and were easily exchangeable. This informal economy was often the only way ordinary people survived.
Ultimately, hyperinflation destroyed social trust: farmers didn’t trust city dwellers to pay them, shopkeepers didn’t trust suppliers, and everyone tried to unload marks as quickly as possible. People rushed to spend their wages within hours of receiving them, sometimes buying useless goods like buckets or firewood simply because they would at least hold value longer than paper money. Social order eventually collapsed, leading to uprisings, general strikes and even political violence- with extremist parties (such as a certain Austrian painter attempting a coup with his posse) gaining traction.
However, all was not lost. Gustav Stresemann became Chancellor in August 1923 and took measures that looked at the long-term impacts rather than the tunnel vision the Weimar government seemed to have. His actions included:
Ending passive resistance, allowing the industry to resume.
Introducing the Rentenmark - a new, limited currency backed by land, not purely the market conditions.
Cutting government spending, sacking over 700,000 workers.
Restarting reparations, which gained international sympathy.
By 1924, France left the Ruhr under the new payment plan, the Dawes Plan, renegotiated reparations. This led to inflation stabilising as Germany regained control of their main industries- allowing confidence to return.
Nonetheless, the damage was done. The hyperinflation and period of immense struggle of the people destroyed trust in the government, radicalising a generation. This allowed the same Austrian painter to rise, providing him with a fertile ground of people dissatisfied with the government, showing a classic case of how war debt, bad policy, and a loss of confidence can spiral into disaster.
A loaf of bread cost billions, but the real price of the Weimar Hyperinflation Crisis was democracy itself. A reminder that inflation isn’t just numbers, it’s about trust, survival, and politics.