In 1914 Germany suspended the gold standard and funded World War I by borrowing, expecting to annex territory and make the losers pay as it had after the Franco-Prussian War. France, by contrast, introduced an income tax. Germany lost, carrying 156 billion marks of domestic debt in 1918, while the mark slid from 4.2 to 7.9 to the dollar. The May 1921 London Schedule of Payments set reparations at 132 billion gold marks, though only about 50 billion in A and B bonds was expected to be paid. From August 1921 the Reichsbank under Rudolf Havenstein bought foreign currency with newly printed marks at almost any price.

Historians cite chancellery records suggesting leaders delayed tax reform to show reparations were impossible, while inflation erased the state’s own war debt. When Germany missed a coal delivery in early 1923, France and Belgium occupied the Ruhr, and the government printed money to pay striking workers. In November 1923 Hans Luther and Hjalmar Schacht introduced the Rentenmark, backed by mortgages on German land, removed 12 zeros and barred the central bank from discounting treasury bills. The 1925 revaluation law restored private mortgages at 25% and war bonds at 2.5%.

• Bread in Berlin rose from 160 marks to 200 billion marks in less than a year.
• Workers were paid twice a day, and families collected cash at factory gates at lunchtime to spend at once.
• Cigarettes became a widely accepted medium of exchange.
• Karl Helfferich’s rye-backed Roggenmark was rejected because crop prices were too volatile.
• Revaluation lawsuits pushed the German Supreme Court to establish judicial review.