Already a subscriber? Log in
The years of war saw the mark lose three-quarters of its purchasing power. The years of peace saw the process speed up, as the borrowing continued, and at first it had its friends. ‘I am not afraid of inflation,’ said Walther Rathenau, tycoon and minister, later murdered by two proto-Nazis. ‘People are wrong when they say that printing money is bringing us to ruin. We ought to print money a bit faster, and start construction works.’ He has his followers today.
Soon enough, money was being printed so fast that prices were rising by 50 per cent month on month. Beyond that point it fails in its function as a store of value or a medium of exchange, and becomes the losing card in a game of Slippery Ann. The player who is dealt this card needs to hand it on as fast as possible and exchange it for something else — anything else.
The results were grotesque. Bank balances melted away, and so did mortgages. A judge was paid his monthly salary and hurried out to spend it, coming back, to his family’s fury, with a collar-stud — all he could find. The only price to come down, says Taylor, was that of virginity. Nice girls would save up to be married, putting money aside for a dowry. Then inflation wolfed their savings and they saw no more reason to wait.
Inflation wolfed everyone’s savings. The well-meaning citizens who had bought war bonds found that these were now effectively worthless. The dividend warrants might still be made out but would not be sufficient to pay for the postage. What was needed was a currency with something behind it, just as in the happy days before 1914, when the mark — and the pound, for that matter — were backed by gold.
With the wave of a wand, it arrived — a new kind of mark, supposedly backed, not by gold, but at least by assets such as farmland. This was, of course, a confidence trick, but confidence was what it needed. Soon enough a trillion of the old marks could be swapped for one of the new marks, which took over. Hjalmar Schacht, the wizard who brought the trick off, took care not to print too many of the new ones.
Because you read about book review
Also by Christopher Fildes
Latest
Comments
Join the debate for just $5 for 3 months
Be part of the conversation with other Spectator readers by getting your first three months for $5.
UNLOCK ACCESS Just $5 for 3 monthsAlready a subscriber? Log in