Hyperinflation Gone Mad: When German Children Made Kites From Money

National Numismatic Collection, National Museum of American History, via Wikimedia Commons // Public Domain
National Numismatic Collection, National Museum of American History, via Wikimedia Commons // Public Domain

Early in 1922, the German Papiermark—the currency of the Weimar Republic—was valued at around 200 Marks to the U.S. dollar. By November 1923, that figure had risen to 4,200,000,000,000. Put another way, if you had just U.S. $1 to your name, in 1920s Germany you would have been a multi-trillionaire.

How did such an absurd exchange rate come about? Precisely what set the wheels of hyperinflation and devaluation in motion in post-war Germany is debatable, but arguably the entire process began almost a decade earlier, at the dawn of the First World War.

With its efforts to secure victory in Europe in full swing, the German government opted to suspend the Mark’s gold standard—the relationship between the value of currency and the price of gold—and fund its on-going and ever-enlarging military operations by borrowing. It was an immense risk, solely reliant on one thing to succeed: Germany had to win the war.

Victory in the war, Germany presumed, would solve everything. The annexation of other European nations and their economies and assets, as well as the costly war reparations paid by the soon-to-be-defeated Allies, would together offset all the economic consequences of such a risky strategy. But unfortunately for Germany, the plan backfired. They lost the war, and by 1918, the Mark had already almost halved in value and Germany had accrued colossal international debts.

Not only that, but being on the losing side of the war meant that the costly punitive reparations the German government had intended to profit from were now being imposed on them. This only served to worsen things throughout the early 1920s, and when the government began to buy foreign currency at any price just to meet its financial obligations, the value of the Mark collapsed ever further. Inflation soon spiraled into hyperinflation—eventually peaking at a rate of 3,250,000 percent per month—and Germany quickly fell behind on its repayments.

In response, France and Belgium took control of the country’s industrial heartland, the Ruhr, in 1923, but that only served to add fuel to the fire.

The German government called on workers in the Ruhr to put down tools and resist the occupation, promising that while doing so they would continue to receive a wage from the state. The strikes, protests and campaign of passive resistance that followed all but ground industry in the Ruhr to a halt, crippling the German economy even further, while the occupation sparked a new international crisis.

For some, the occupation of the Ruhr was considered controversial and a punitive step too far. Tensions grew between the French (who had their own post-war economic problems) and the British (some of whom grew sympathetic to Germany’s position, and saw the French response as a new imperialist threat). Finally, with growing pressure from the United States, an interim agreement was drawn up by future Vice President Charles G. Dawes that lowered and staggered Germany’s reparation payments. The Ruhr occupation was brought to an end, briefly kick-starting the German economy, and for his work on the crisis Dawes was the co-recipient of the 1925 Nobel Peace Prize (the other winner was Sir Austen Chamberlain). But in the long term, the Dawes Plan failed—and even by the time it was implemented the damage to the German economy had already been done.

To combat the French occupation, the Reichsbank was being forced to churn out ever more banknotes just to function on a daily basis. Printing presses were commandeered by the state for no reason other than to print ever greater quantities of cash. In May 1923, there were 8.6 billion Marks in circulation in the country; by November there were 400 quintillion. In response, the value of the Papiermark spiraled out of control.

As the numbers on German bank notes soared to 50 trillion, daily life for the German people became increasingly absurd.

A man using money as wallpaper.
Bundesarchiv, Bild / Pahl, Georg via Wikimedia Commons // CC-BY-SA 3.0 DE

Paper currency was by now next to worthless. Employees collected their wages in wheelbarrows and suitcases more valuable than the money inside them. Banknotes were used as wallpaper and kindling to light stoves. Children played with bundles of cash in the street, cut up piles of Marks to make confetti and paper chains, and even crafted kites out of money. Shopkeepers shunned currency altogether and switched to bartering to maintain the value of their goods and services. Astonishingly, the price of one egg in 1923 would have bought you 500 billion eggs just five years earlier.

Waiters in cafés and restaurants were now reportedly mounting tables to announce price changes to their menus every 30 minutes; by the summer of 1923, patrons might sit down to a meal in a German restaurant only to find they couldn’t afford it half an hour later. One famous anecdote involves a gentleman who drank two cups of coffee, priced at 5000 Marks each, at a coffee house in Hamburg, only to be presented with a bill for 14,000 Marks. When he queried the cost with his waiter, he was told that he should have ordered the two drinks at the same time—the price had nearly doubled in the time it had taken him to drink one cup.

The crisis finally abated in the winter of 1923, when the German government introduced a new currency, the Rentenmark, backed up by the mortgage value of agricultural and commercial land. Valued at the old rate of 4.2 to the dollar, one Rentenmark was ultimately equivalent to 1,000,000,000,000 of the Weimar’s Papiermarks, and returned the Mark to the same exchange rate it had been at before the war. The “Miracle of the Rentenmark,” as it was hailed, brought to an end one of the most extraordinary periods of hyperinflation in history.

5 Facts About Edgar Allan Poe on His 210th Birthday

You’ve read Edgar Allan Poe’s terrifying stories. You can quote "The Raven." But how well do you know the writer’s quirky sense of humor and code-cracking abilities? Let’s take a look at a few  things you might not know about the acclaimed author, who was born 210 years ago today.

1. He was the original balloon boy.

You probably remember 2009’s infamous “Balloon Boy” hoax. Turns out the Heene family that perpetrated that fraud weren’t even being entirely original in their attempt at attention-grabbing. They were actually cribbing from Poe.

In 1844 Poe cooked up a similar aviation hoax in the pages of the New York Sun. The horror master cranked out a phony news item describing how a Mr. Monck Mason had flown a balloon flying machine called Victoria from England to Sullivan’s Island, South Carolina in just 75 hours. According to Poe’s story, the balloon had also hauled seven passengers across the ocean.

No balloonist had ever crossed the Atlantic before, so this story quickly became a huge deal. Complete transatlantic travel in just three days? How exciting! Readers actually queued up outside the Sun’s headquarters to get their mitts on a copy of the day’s historic paper.

Poe’s report on the balloon was chock full of technical details. He devoted a whole paragraph to explaining how the balloon was filled with coal gas rather than “the more expensive and inconvenient hydrogen.” He listed the balloon’s equipment, which included “cordage, barometers, telescopes, barrels containing provision for a fortnight, water-casks, cloaks, carpet-bags, and various other indispensable matters, including a coffee-warmer, contrived for warming coffee by means of slack-lime, so as to dispense altogether with fire, if it should be judged prudent to do so.” He also included hundreds of words of excerpts from the passengers’ journals.

The only catch to Poe’s story was that it was entirely fictitious. The Sun’s editors quickly wised up to Poe’s hoax, and two days later they posted an understated retraction that noted, “We are inclined to believe that the intelligence is erroneous.”

2. He dabbled in cryptography.

If you’ve read Poe’s story “The Gold-Bug,” you probably know that he had a working knowledge of cryptography. But you might not know that Poe was actually a pretty darn good cryptographer in his own right.

Poe’s first notable code-cracking began in 1839. He sent out a call for readers of his Philadelphia newspaper to send him encoded messages that he could decipher. Poe would then puzzle over the secret messages for hours. He published the results of his work in a wildly popular recurring feature. Poe also liked to toss his own codes out there to keep readers busy. Some of the codes were so difficult that Poe professed utter amazement when even a single reader would crack them.

Poe was so confident in his abilities as a cryptographer that he approached the Tyler administration in 1841 with an offer to work as a government code cracker. He modestly promised, “Nothing intelligible can be written which, with time, I cannot decipher.” Apparently there weren’t any openings for him, though.

3. The "Allan" came later.

It would sound odd to just say “Edgar Poe,” but the famous “Allan” wasn’t originally part of the writer’s name. Poe was born in Boston on January 19, 1809 to professional actors, but his early childhood was fairly rotten. When Poe was just two years old, his father abandoned the family—leaving the toddler's mother, Elizabeth, to raise Edgar and his two siblings. Not long after that, Elizabeth died of tuberculosis.

Poe actually had a little luck at that point. John and Frances Allan, a well-to-do Richmond family, took the boy in and provided for his education. Although the Allans never formally adopted Poe, he added their surname to his own name.

Like a lot of Poe’s fiction, his story with the Allans didn't have a particularly happy ending. Poe and John Allan grew increasingly distant during the boy’s teenage years, and after Poe left for the University of Virginia, he and Allan became estranged. (Apparently the root of these problems involved Poe’s tendency to gamble away whatever money Allan sent him to subsidize his studies.)

4. He had a nemesis.

Like a lot of writers, Poe had a rival. His was the poet, critic, and editor Rufus Griswold. Although Griswold had included Poe’s work in his 1842 anthology The Poets and Poetry of America, Poe held an extremely low opinion of Griswold’s intellect and literary integrity. Poe published an essay blasting Griswold’s selections for the anthology, and their rivalry began.

Things really heated up when Griswold succeeded Poe as the editor of Graham’s Magazine at a higher salary than Poe had been pulling in. Poe began publicly lambasting Griswold’s motivations; he even went so far as to claim that Griswold was something of a literary homer who puffed up New England poets.

Poe might have had a point about Griswold’s critical eye, but Griswold had the good fortune to outlive Poe. After Poe died, Griswold penned a mean-spirited obituary in which he stated that the writer’s death “will startle many, but few will be grieved by it” and generally portrayed Poe as an unhinged maniac.

Slamming a guy in his obituary is pretty low, but Griswold was just getting warmed up. He convinced Poe’s aunt, Maria Clemm, to make him Poe’s literary executor. Griswold then published a biography of Poe that made him out to be a drug-addled drunk, all while keeping the profits from a posthumous edition of Poe’s work.

5. His death was a mystery worth of his writing.

In 1849 Poe left New York for a visit to Richmond, but he never made it that far south. Instead, Poe turned up in front of a Baltimore bar deliriously raving and wearing clothes that didn’t fit. Passersby rushed Poe to the hospital, but he died a few days later without being able to explain what happened to him.

Poe’s rumored causes of death were “cerebral inflammation” and “congestion of the brain,” which were polite euphemisms for alcohol poisoning. Modern scholars don’t totally buy this explanation, though. The characterization of Poe as a raging drunk mostly comes from Griswold’s posthumous smear campaign, and his incoherent state of mind may have been the result of rabies or syphilis.

Some Poe fans subscribe to a more sinister theory about the writer’s death, though. They think he may have fallen victim to “cooping,” a sordid 19th century political practice. Gangs of political thugs would round up homeless or weak men and hold them captive in a safe place called a “coop” right before a major election. On election day—and there was an election in Baltimore on October 3, 1849, the day Poe was found—the gangs would then drug or beat the hostages before taking them around to vote at multiple polling places.

This story sounds like something straight out of Poe’s own writing, but it might actually be true. Poe’s crummy physical state and delirium would be consistent with a victim of cooping, and the ill-fitting clothes jibe with gangs’ practice of making their hostages change clothes so they could cast multiple votes. With no real evidence either way, though, Poe’s death remains one of literature’s most fascinating mysteries.

This post originally appeared in 2011.

The $13,000 Epiphany That Made Orville Redenbacher a National Popcorn King

iStock.com/NoDerog
iStock.com/NoDerog

Happy National Popcorn Day! While you’re no doubt celebrating with a bowl of freshly popped, liberally buttered popcorn, here’s something else to digest: Orville Redenbacher originally called his product Red-Bow.

In 1951, Redenbacher and his partner, a fellow Purdue grad named Charlie Bowman, purchased the George F. Chester and Son seed corn plant in Boone Township, Indiana. Though Redenbacher’s background was in agronomy and plant genetics, he had dabbled in popcorn, and was friendly with the Chester family.

Eventually, Carl Hartman was brought in to experiment. In 1969, when the trio had developed a seed they felt really confident in, they went to market. They dubbed the product “Red-Bow,” a nod to “Redenbacher” and “Bowman.”

The product was a hit regionally, but by 1970, Bowman and Redenbacher were ready for a national audience and hired a Chicago advertising agency to advise them on branding strategy. At their first meeting, Redenbacher talked about popcorn for three hours. “Come back next week and we’ll have something for you,” he was told afterward.

The following week, he turned to the agency and was told that “Orville Redenbacher’s” was the perfect name for the fledgling popcorn brand. “Golly, no,” he said. “Redenbacher is such a ... funny name.” That was the point, they told him, and they must have made a convincing case for it, because Orville Redenbacher is the brand we know today—and the man himself is still a well-known spokesman more than 20 years after his death.

Still, Redenbacher wasn’t sure that the $13,000 fee the agency had charged was money well spent. “I drove back to Indiana wryly thinking we had paid $13,000 for someone to come up with the same name my mother had come up with when I was born,” Redenbacher later wrote.

Hungry for more Redenbacher? Take a look at the inventor at work in the vintage commercial below.

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