The Reichsmark was the currency used in Germany from 1924 to 1948, playing a significant role in the economic landscape of the Weimar Republic, Nazi Germany, and post-war Germany. Its history is marked by hyperinflation, economic reforms, the impact of World War II, and its eventual replacement by the Deutsche Mark.

In the article below, World History Edu explores the origin, development, and eventual replacement of the Reichsmark, examining its various uses, denominations, and the unique circumstances surrounding its introduction and its legacy.

Introduction of the Reichsmark (1924)

The Reichsmark was introduced on 15 November 1924, during the Weimar Republic, as a response to the extreme hyperinflation that had crippled the economy of the German Empire in the early 1920s. The previous currency, the Papiermark, had become virtually worthless, with prices rising uncontrollably due to the economic instability following Germany’s defeat in World War I, the Treaty of Versailles, and the burdens of war reparations. By late 1923, one U.S. dollar was worth over a trillion Papiermarks, symbolizing the economic chaos.

The Reichsmark was introduced as a permanent replacement for the Papiermark and was initially pegged to the gold standard to stabilize the economy. The Rentenmark was first issued in 1923 as an interim solution, backed by real estate assets, but the Reichsmark became the official currency after the stabilization measures. The introduction of the Reichsmark was a pivotal move towards economic recovery and a more secure currency, where one Reichsmark was equivalent to 1012 Papiermarks.

Economic Expansion and World War II

After Adolf Hitler came to power in 1933, the Reichsmark became a symbol of the Nazi regime. Under Hitler’s leadership, Germany moved towards a more autarkic economy, heavily focused on military expansion, infrastructure projects, and rearmament. The Nazi government engaged in covert monetary policies to finance these activities, often through mechanisms like “Mefo bills” and “Öffa bills,” which were bonds issued outside the formal currency system to avoid direct inflationary pressures while still expanding the money supply.

In 1938, the Reichsmark replaced the Austrian schilling following the annexation of Austria (the Anschluss), and the currency was extended to Austria, a process known as “currency unification.” Throughout World War II, Germany set fixed exchange rates between the Reichsmark and the currencies of occupied territories. These exchange rates often favored the Reichsmark, with wages for German soldiers and contractors paid in local currency, ensuring Germany received economic benefits from its occupied regions.

Exchange rates in occupied territories varied, with rates set between the Reichsmark and currencies such as the Belgian franc, French franc, Polish złoty, and Dutch guilder. For example, in 1940, the exchange rate between the Belgian franc and the Reichsmark was set at 100 Belgian francs for 10 Reichsmarks, and the French franc was set at 200 francs per 10 Reichsmarks.

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Impact of the War and Inflation

As World War II progressed, Germany’s economy became increasingly strained, and the Reichsmark depreciated. By the end of the war, inflation had drastically eroded its value. For instance, the value of the Reichsmark dropped from 2.5 ℛ︁ℳ︁ per U.S. dollar to 10 ℛ︁ℳ︁ per U.S. dollar, signaling severe inflation and economic collapse. By the final stages of the war, bartering became widespread as the Reichsmark became increasingly less useful in day-to-day transactions.

Allied Occupation and Currency Replacement

In the aftermath of World War II, Germany was divided into four occupation zones: American, British, French, and Soviet. The Reichsmark continued to circulate in these zones, but it was increasingly unstable due to inflation. In the American, British, and French zones, the currency was replaced by the Deutsche Mark on June 20, 1948, through a currency reform orchestrated by the Western Allies, primarily under the direction of Ludwig Erhard, the future Chancellor of West Germany. The Deutsche Mark was initially introduced at a conversion rate of 10 Reichsmarks to 1 Deutsche Mark, and this reform is often considered the beginning of the West German economic miracle, which saw rapid industrial recovery in the 1950s and 1960s.

The introduction of the Deutsche Mark was crucial in stabilizing the economy of West Germany and restoring confidence in the monetary system. At the same time, the Reichsmark was replaced in the Soviet zone by the East German mark (often referred to as the “Ostmark”), which later became the official currency of the German Democratic Republic (East Germany).

The Legacy of the Reichsmark

While the Reichsmark ceased to be the official currency of Germany after 1948, its legacy continued to influence the German economy in both the East and West. In the Soviet zone, the East German mark served as a reminder of the Reichsmark’s role in the German economic system, while the Deutsche Mark became the symbol of West Germany’s economic resurgence.

The introduction of the Deutsche Mark was a pivotal moment in the post-war period, but the Reichsmark remains a significant symbol of Germany’s troubled interwar and war years. The Reichsmark is remembered for its connection to Nazi Germany and its use as a tool of economic policy during the regime’s expansionist years.

Coins and Banknotes of the Reichsmark

Coinage

The Reichsmark was subdivided into 100 Reichspfennig (ℛ︁₰), and its coinage went through various phases during its history. Initially, in 1924, coins were introduced in denominations of 1 ℛ︁₰, 2 ℛ︁₰, 5 ℛ︁₰, 10 ℛ︁₰, 50 ℛ︁₰, 1 ℳ, and 3 ℳ. The 1ℛ︁₰, 2ℛ︁₰, and 5ℛ︁₰ coins were often made of bronze, while higher denominations were struck in silver or other metals.

As the war progressed, the quality of coinage deteriorated. Due to material shortages, wartime coins were made from zinc and aluminum, with coins like the 1 ℛ︁₰, 5 ℛ︁₰, and 10 ℛ︁₰ struck in low-value metals. The 10 ℛ︁₰ coin, for example, was minted in zinc between 1940 and 1945 and featured designs including the Reichsadler (Imperial Eagle) with a swastika.

The Reichspfennig coin underwent several design changes during the war, including the introduction of emergency 4 ℛ︁₰ coins in 1932, which were intended to reduce the demand for the 5 ℛ︁₰ coin. These were colloquially known as the “Brüningtaler” and were demonetized after only a short period.

Banknotes

Reichsmark banknotes were issued in a variety of denominations over the years. The first issue of Reichsmark banknotes, released in 1924, included denominations of 10 ℛ︁ℳ, 20 ℛ︁ℳ, 50 ℛ︁ℳ, 100 ℛ︁ℳ, and 1,000 ℛ︁ℳ. Subsequent issues in 1929, 1933, and 1936 commemorated notable figures in German history, including Albrecht Thaer, Werner von Siemens, and Justus von Liebig. These banknotes often featured intricate designs related to agriculture, industry, and science.

During the war, banknotes were also issued for the territories under German occupation, with denominations ranging from 50 ℛ︁₰ to 50 ℛ︁ℳ. Special currency was also printed for use by the Wehrmacht (German armed forces) and for the German populace under Nazi control.

The Occupation of Germany and Special Currency

Following the occupation of Germany in 1945, both the Allies and the Soviets introduced their own military currencies to replace the Reichsmark in their respective zones. The United States issued occupation notes, while the Soviet Union printed large amounts of currency in the Soviet-occupied zones, contributing to inflation in the post-war period.

Additionally, special issues of Reichsmark currency were produced for use in concentration camps and prisoner-of-war (POW) camps. These tokens were not legal tender in Germany but served as a form of currency within the camps themselves.

Frequently Asked Questions

Why was the Reichsmark introduced?

Introduced in 1924, it replaced the hyperinflated Papiermark after the economic crisis of 1923. Initially, the Rentenmark served as an interim currency before transitioning to the Reichsmark.

What exchange rate was established when the Reichsmark replaced the Papiermark?

The exchange rate was 1 Reichsmark = 1 trillion (10¹²) Papiermark, reflecting the extreme inflation of the 1920s.

How did the Reichsmark handle international exchange during World War II?

Fixed exchange rates were set for occupied and allied countries, often benefiting German soldiers and contractors. For example, 10 ℛℳ equaled 200 French francs or 333.33 Bulgarian lev.

What happened to the Reichsmark after World War II?

The Reichsmark continued in use until the Deutsche Mark replaced it in the Western zones and the East German mark in the Soviet zone during 1948 currency reforms.

How was the Reichsmark affected by inflation during and after the war?

Inflation devalued the Reichsmark significantly, with the exchange rate shifting from 2.50 ℛℳ = $1 US before the war to 10 ℛℳ = $1 US by the end.

What materials were used in Reichsmark coins?

Pre-war coins were made of bronze and aluminum-bronze, while wartime coins used cheaper materials like zinc due to resource shortages.

What was special about currency issued during the war for occupied territories and POW camps?

Special coins and notes were issued for occupied territories and concentration or POW camps, often not legal tender in Germany itself, including holed zinc coins and ghetto tokens.