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Reichsmark
2 ℛ︁ℳ︁—coin depicting Paul von Hindenburg
Unit
PluralReichsmark
Symbolℛ︁ℳ︁‎
Denominations
Subunit
 1⁄100Reichspfennig
Plural
 ReichspfennigReichspfennig
Banknotes5 ℛ︁ℳ︁, 10 ℛ︁ℳ︁, 20 ℛ︁ℳ︁ 50 ℛ︁ℳ︁, 100 ℛ︁ℳ︁, 1,000 ℛ︁ℳ︁
Coins1 ℛ︁₰, 2 ℛ︁₰, 5 ℛ︁₰, 10 ℛ︁₰, 50 ℛ︁₰, 1 ℛ︁ℳ︁, 2 ℛ︁ℳ︁, 3 ℛ︁ℳ︁, 5 ℛ︁ℳ︁
Demographics
Date of introduction1924
ReplacedGerman Rentenmark
Date of withdrawal
Replaced by
User(s)
Issuance
Central bankReichsbank
Valuation
Pegged byBelgian franc, Bohemian and Moravian koruna, Bulgarian lev, Danish krone, French franc, Italian lira, Luxembourg franc, Dutch gulden, Norwegian krone, Polish złoty, Serbian dinar, Slovak koruna (1939–1945), Ukrainian karbovanets in World War II as similar rates
This infobox shows the latest status before this currency was rendered obsolete.

The Reichsmark (German: [ˈʁaɪçsˌmaʁk] ⓘ; sign: ℛ︁ℳ︁; abbreviation: RM) was the currency of Germany from 1924 until the fall of Nazi Germany in 1945, and in the American, British and French occupied zones of Germany, until 20 June 1948. The Reichsmark was then replaced by the Deutsche Mark, to become the currency of West Germany and then all of Germany after the 1990 reunification. The Reichsmark was used in the Soviet occupation zone of Germany until 23 June 1948, where it was replaced by the East German mark. The Reichsmark was subdivided into 100 Reichspfennig (Rpf or ℛ︁₰).[1] The Mark is an ancient Germanic weight measure, traditionally a half pound, later used for several coins; Reich (realm in English) comes from the official name for the German state from 1871 to 1945, Deutsches Reich.

History

[edit]

The Reichsmark was introduced in 1924 as a permanent replacement for the Papiermark. This was necessary due to the 1920s German inflation which had reached its peak in 1923. The exchange rate between the old Papiermark and the Reichsmark was 1 ℛ︁ℳ︁ = 1012 ℳ︁ (one trillion in American English and French, one billion in German and other European languages and British English of the time; see long and short scale). To stabilize the economy and to smooth the transition, the Papiermark was not directly replaced by the Reichsmark, but by the Rentenmark, an interim currency backed by the Deutsche Rentenbank, owning industrial and agricultural real estate assets. The Reichsmark was put on the gold standard at the rate previously used by the German mark, with the U.S. dollar worth 4.20 ℛ︁ℳ︁.[2]

Expansion outside the Reichsmark

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Main articles: Öffa bills and Mefo bills

During this period a number of shell companies were created and authorized to issue bonds outside the Reichsmark in order to finance state projects.[3] Nominally exchangeable at a 1:1 rate for Reichsmarks but then discounted by the Reichsbank this created secret monetary expansion without formally renouncing the gold standard of the Reichsmark.[4]

World War II

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With the annexation of the Federal State of Austria by Germany in 1938, the Reichsmark replaced the Austrian schilling. During the Second World War, Germany established fixed exchange rates between the Reichsmark and the currencies of the occupied and allied countries, often set so as to give economic benefits to German soldiers and civilian contractors, who were paid their wages in local currency. The rates were as follows:

Currency Date set Value per 10 ℛ︁ℳ︁
Belgian franc May 1940 Fr 100
July 1940 Fr 125
Bohemia and Moravia crown April 1939 K 100
Bulgarian lev 1940 Lev 333.33
Danish crown DKr 10
French franc May 1940 Fr 200
Italian lira 1943 Lit 100
Luxembourg franc May 1940 Fr 40
July 1940 Fr 100
Dutch guilder 10 May 1940 ƒ6.66
17 July 1940 ƒ7.57
Norwegian crown 1940 NKr 13.33
? NKr 17.50
Polish złoty 1939 zł 20
Sterling (Channel Islands) 1940 £0 17s 4+1⁄2d
Croatian kuna April 1941 Kn 200
Slovak crown 1939 Sk 100
1 October 1940 Sk 116.20
Finnish mark 1941 FMk 197.44

Post-war

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After the Second World War, the Reichsmark continued to circulate in Germany, but with new banknotes (Allied Occupation Marks) printed in the US and in the Soviet Zone, as well as with coins (without swastikas). Inflation in the final months of the war had reduced the value of the Reichsmark from 2.50 ℛ︁ℳ︁ = $1US to 10 ℛ︁ℳ︁ = $1US and a barter economy emerged due to the rapid depreciation.

After V-E Day, the Reichsmark's value decreased to 200 per dollar. While for German civilians one Allied Occupation Mark was equivalent to one Reichsmark, soldiers selling things civilians wanted on the black market could receive Reichsmarks, exchange them for Allied Occupation Marks, then exchange Allied Occupation Marks at ten per dollar. A carton of American cigarettes the post exchange sold to soldiers for $0.50 was worth 150 marks or $15 to German civilians; matches were the change.[5]

The Currency Reform of 1948 replaced the Reichsmark with the Deutsche Mark at a rate of 10:1 (1:1 for cash and current accounts) in June 1948 in the Trizone[6] and later in the same year by the East German mark in the Soviet Occupation Zone (colloquially also "Ostmark", since 1968 officially "Mark der DDR"). The reform under the direction of Ludwig Erhard is considered the beginning of the West German economic recovery; however, the secret plan to introduce the Deutsche Mark in the Trizone was formulated by economist Edward A. Tenenbaum of the US military government, and was executed abruptly on 21 June 1948. Three days later, the new currency also replaced the Reichsmark in the three Western sectors of Berlin. In November 1945, the Reichsmark was superseded by the Second Austrian schilling in Austria. In 1947, the Saar mark, later replaced with the Saar franc, was introduced in the Saar.[7]

Coins

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4 Reichsmark coins without (1936) and with (1938) the Nazi swastika
Prewar bronze Reichspfennig (obverse)
Wartime zinc Reichspfennig (obverse)
Aluminium 50 ℛ︁₰ coin (obverse)

Denominations

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In 1924, coins were introduced in denominations of 1 ℛ︁₰, 2 ℛ︁₰, 5 ℛ︁₰, 10 ℛ︁₰, and 50 ℛ︁₰, and 1 ℳ︁ and 3 ℳ︁.[8]

  • Prewar bronze 1 ℛ︁₰ (reverse). Made of pure bronze
    Prewar bronze 1 ℛ︁₰ (reverse). Made of pure bronze
  • Prewar 5 ℛ︁₰ (reverse). Made of aluminium-bronze
    Prewar 5 ℛ︁₰ (reverse). Made of aluminium-bronze
  • Prewar 10 ℛ︁₰ (reverse). Struck in the same aluminium-bronze as the 5 ℛ︁₰.
    Prewar 10 ℛ︁₰ (reverse). Struck in the same aluminium-bronze as the 5 ℛ︁₰.
  • Prewar 10 ℛ︁₰ (obverse)
    Prewar 10 ℛ︁₰ (obverse)
  • Wartime zinc 1 Reichspfennig (reverse)
    Wartime zinc 1 Reichspfennig (reverse)
  • Wartime zinc 5 Reichspfennig (reverse)
    Wartime zinc 5 Reichspfennig (reverse)
  • Wartime zinc 10 Reichspfennig (reverse)
    Wartime zinc 10 Reichspfennig (reverse)
  • Aluminum 50 Reichspfennig coin (reverse)
    Aluminum 50 Reichspfennig coin (reverse)

4 Reichspfennig

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4 Reichspfennig coins were issued in 1932 as part of a failed attempt by the Reichskanzler Heinrich Brüning to reduce prices through use of 4 ℛ︁₰ pieces instead of 5 ℛ︁₰ coins. Known as the Brüningtaler or Armer Heinrich ('poor Heinrich'), they were demonetized the following year. See Brüningtaler (in German). The quality of the Reichsmark coins decreased more and more towards the end of World War II and misprints happened more frequently.[9][10] Since the 4 ℛ︁₰ coin was only slightly larger than the 1 ℳ︁ coin and the imperial eagle looked similar, an attempt was made to pass it off as a 1-reichsmark coin by silvering the 4 ℛ︁₰ coin.[11]

10 Reichspfennig

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10 Reichspfennig
Nazi Germany
Value10 Reichspfennig
Mass3.52 g
Diameter21 mm
Thickness1.5 mm
EdgePlain
Composition100% Zn
Years of minting1940–1945
Obverse
DesignReichsadler with swastika.
Lettering:
Deutsches Reich 1940
Reverse
DesignDenomination and two oak leaves. Mintmark below the denomination and between leaves.
Lettering:
10 Reichspfennig J

The zinc 10 Reichspfennig coin was minted by Nazi Germany between 1940 and 1945 during World War II, replacing the aluminium-bronze version, which had a distinct golden colour. It is worth 1⁄10 or .10 of a Reichsmark. Made entirely of zinc, the 10 ℛ︁₰ is an emergency issue type, similar to the zinc 1 ℛ︁₰ and 5 ℛ︁₰, and the aluminium 50 ℛ︁₰ coins from the same period.

Mint marks

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Nazi Germany had a number of mints. Each mint location had its own identifiable letter. It is therefore possible to identify exactly which mint produced what coin by noting the mint mark on the coin. Not all mints were authorized to produce coins every year. The mints were also only authorized to produce a set number of coins with some mints allocated a greater production than others. Some of the coins with particular mint marks are therefore scarcer than others. With the silver 2 ℛ︁ℳ︁ and 5 ℛ︁ℳ︁ coins, the mint mark is found under the date on the left side of the coin. On the smaller denomination Reichspfennig coins, the mint mark is found on the bottom center of the coin.[12]

Mint mark Mint location Notes References
A State Mint Berlin, Germany Capital of Germany [12]
B Austrian Mint Vienna, Austria Capital of Austria
D Bavarian Central Mint Munich, Germany Capital of Bavaria
E Muldenhütten Mint [de] near Dresden, Germany Capital of Saxony
F State Mint [de] Stuttgart, Germany Capital of Württemberg
G State Mint [de] Karlsruhe, Germany Capital of Baden
J Mint of Hamburg, Germany

Mintage

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Prewar 10 Reichspfennig (1938A, obverse)
Prewar 10 Reichspfennig (1938A, reverse)
1940
Year Mintage Notes
1940 A 212,948,000
1940 B 76,274,000
1940 D 45,434,000
1940 E 34,350,000
1940 F 27,603,000
1940 G 27,308,000
1940 J 41,678,000
1941
Year Mintage Notes
1941 A 240,284,000
1941 B 70,747,000
1941 D 77,560,000
1941 E 36,548,000
1941 F 42,834,000
1941 G 28,765,000
1941 J 30,525,000
1942
Year Mintage Notes
1942 A 184,545,000
1942 B 16,329,000
1942 D 40,852,000
1942 E 18,334,000
1942 F 32,690,000
1942 G 20,295,000
1942 J 29,957,000
1943
Year Mintage Notes
1943 A 157,357,000
1943 B 11,940,000
1943 D 17,304,000
1943 E 10,445,000
1943 F 24,804,000
1943 G 3,618,000 Rare
1943 J 1,821,000
1944
Year Mintage Notes
1944 A 84,164,000
1944 B 40,781,000
1944 D 30,369,000
1944 E 29,963,000
1944 F 19,639,000
1944 G 13,023,000
1945[13]
Year Mintage Notes
1945 A 7,112,000 Rare
1945 E 4,897,000 Rare

Banknotes

[edit]

Occupation Reichsmark

[edit]
2 Reichsmark of the occupied territories

Coins and banknotes for circulation in the occupied territories during the war were issued by the Reichskreditkassen. Holed, zinc coins in 5 ℛ︁₰ and 10 ℛ︁₰ denominations were struck in 1940 and 1941. Banknotes were issued between 1939 and 1945 in denominations of 50 ℛ︁₰, 1 ℛ︁ℳ︁, 2 ℛ︁ℳ︁, 5 ℛ︁ℳ︁, 20 ℛ︁ℳ︁, and 50 ℛ︁ℳ︁. These served as legal tender alongside the currency of the occupied countries.

The coins were originally planned in great numbers of 100 million and 250 million each of the 5 ℛ︁₰ and 10 ℛ︁₰ coins respectively. The first embossing order, which was issued in April 1940, was about 40 million × 5 ℛ︁₰ and 100 million × 10 ℛ︁₰. The total amount was divided between each of the seven German mints after the embossing key of 1939. The contract was stopped in August 1940 as the Wehrmacht, which had requested the coins for Belgium and France, had no more need of it. When the embossing stopped, only Berlin ("A") and Munich ("D") produced significant quantities, but they still came to only a small extent of original production plans. The majority were melted down due to the limited supply of metal and thus, most mint marks are now quite rare (except for 1940 5 A and D, and 1940 10 A).

  • Currency of the occupied countries (1940 10 J)
    Currency of the occupied countries (1940 10 J)
  • Currency of the occupied countries (1940 5 B)
    Currency of the occupied countries (1940 5 B)
  • 50 ℛ︁₰, 1938–1945
    50 ℛ︁₰, 1938–1945
  • 1 ℛ︁ℳ︁, 1938–1945
    1 ℛ︁ℳ︁, 1938–1945
  • 2 ℛ︁ℳ︁, 1938–1945
    2 ℛ︁ℳ︁, 1938–1945
  • 5 ℛ︁ℳ︁, 1938–1945
    5 ℛ︁ℳ︁, 1938–1945
  • 20 ℛ︁ℳ︁, 1938–1945
    20 ℛ︁ℳ︁, 1938–1945
  • 50 ℛ︁ℳ︁, 1938–1945
    50 ℛ︁ℳ︁, 1938–1945
Prisoner of war camp issue of Lagergeld [de]

Concentration camp and POW Reichsmark currency

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Various special issues of Reichsmark currency were issued for use in concentration and prisoner of war (POW) camps (Stalag). None were legal tender in Germany itself. From 1942 to 1943 tokens were struck for use within the Łódź Ghetto.[14][citation needed]

Military Reichsmark currency

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Main article: AM-Mark
Both sides of a "5 Mark" banknote, issued as "Allied Military Currency" for use within the Allied forces in Germany

Special issues of Reichsmark currency were issued for use by the Wehrmacht from 1942 to 1944. The first issue was denominated in 1 ℛ︁₰, 5 ℛ︁₰, 10 ℛ︁₰, and 50 ℛ︁₰ and 1 ℛ︁ℳ︁, but was valued at 1 military Reichspfennig = 10 civilian Reichspfennig. This series was printed on only one side. The second issue notes of 1 ℛ︁ℳ︁, 5 ℛ︁ℳ︁, 10 ℛ︁ℳ︁, and 50 ℛ︁ℳ︁ were equal in value to the ordinary German Reichsmark and were printed on both sides.

The 5 Mark note pictured, front and back, is Allied military currency ("AMC") printed at Forbes Lithograph Manufacturing Company in Boston for occupied Germany. There were different AMCs for each liberated area of Europe.[15]

See also

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References

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Further reading

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[edit]
Revisions and contributorsEdit on WikipediaRead on Wikipedia

Reichsmark

View on Grokipedia
from Grokipedia
The (ℛℳ) was the official from its introduction on 11 1924 until the currency reforms of 1948, succeeding the amid the crisis of the early 1920s and serving as through the , the Third Reich, and the initial postwar occupation period. Issued by the , it was subdivided into 100 Reichspfennig and circulated in coins of various metals—including bronze, aluminum-bronze, and later zinc and aluminum due to wartime shortages—and banknotes denominated from ½ to 100 ℛℳ, with higher values printed during economic pressures. Initially valued equivalently to the prewar Goldmark and notionally convertible to gold, the Reichsmark stabilized the economy post-hyperinflation but saw its gold peg abandoned in 1931 amid the , followed by managed devaluation and expansionary policies under the Nazi regime that prioritized rearmament and through mechanisms like concealed deficit financing. By , strict masked underlying from money issuance exceeding productive capacity, leading to a postwar black market and hoarding that rendered the currency ineffective for reconstruction. The 1948 reforms replaced it with the in the western occupation zones on 20 June at a conversion rate of 10:1 for most assets, while in the Soviet zone, it was supplanted by a distinct mark system shortly thereafter, marking the end of its role as unified German currency.

Origins and Introduction

Hyperinflation Crisis and Predecessor Currencies

The Goldmark, introduced in 1871 as the currency of the unified , operated on a where one mark corresponded to 1.5 grams of fine (or precisely 2790 milligrams), ensuring stability through convertibility and limiting monetary expansion. This system supported economic growth and international trade until disrupted it, with the suspending gold convertibility in 1914 to finance military expenditures via unbacked paper notes. During the war, the emerged as the fiat successor to the Goldmark, with the money supply expanding dramatically from ; by 1918, prices had risen over 100% cumulatively, eroding purchasing power as the printed currency without corresponding asset backing. In the Weimar Republic's early years (1919–1921), the persisted amid ongoing fiscal imbalances, including war debt servicing and reparations demands totaling 132 billion gold marks (equivalent to about $442 billion at contemporary exchange rates), which the government met partly by further monetary issuance rather than balanced budgets or asset sales. Inflation accelerated into by late 1921, driven primarily by unchecked money printing to cover budget deficits exceeding 50% of expenditures annually; the Reichsbank's note circulation surged from 114 billion marks in January 1922 to over 400 billion by July, outpacing any growth in goods production. The French-Belgian industrial region in January 1923, in response to delayed reparations payments, prompted passive resistance and production halts, widening deficits and necessitating even more issuance—monthly inflation rates hit 300% by July. By , the deteriorated to 4.2 trillion Papiermarks per U.S. , with daily price doublings rendering wheelbarrows of notes necessary for basic purchases like a loaf of costing 200 billion marks. This crisis, rooted in fiscal profligacy and monetary overexpansion rather than reparations alone (which, while burdensome, were not the sole driver as domestic spending imbalances predated them), devastated savings—real fell 20–30% from 1913 levels—and fueled social unrest, including strikes and political extremism, as middle-class wealth evaporated overnight. The Papiermark's collapse necessitated a temporary bridge , the , introduced on November 15, 1923, at a 1 trillion-to-1 conversion rate, backed notionally by mortgages on land and industrial assets to restore confidence before the Reichsmark's formal adoption.

Establishment of the Reichsmark in 1924

The Reichsmark was established on August 30, , through a that replaced the temporary as Germany's official currency, following the crisis of 1923. This transition occurred amid the implementation of the , which restructured German reparations payments and facilitated foreign loans to stabilize the economy, including the adoption of the new currency under partial foreign oversight. The Reichsmark was introduced at a 1:1 with the , which had successfully curbed by limiting issuance to 3.2 billion units backed by mortgages on land and industrial assets rather than government promises. A key component of the establishment was the reorganization of the via the Banking Law of August 1924, which granted it independence from direct control and mandated a minimum 40% backing for , with at least three-quarters of that cover in actual or equivalents. This requirement aimed to restore international confidence in the mark, distinguishing the Reichsmark from its hyperinflated predecessor, where old notes were exchanged at a rate of one trillion Papiermarks per Reichsmark. The reform effectively ended the emergency monetary measures, transitioning to a more conventional system that supported the Weimar Republic's efforts toward fiscal discipline and eventual return to the . The introduction of the Reichsmark marked the culmination of short-term stabilization efforts, with the currency's value initially pegged effectively to the Rentenmark's stability and later aligned with international exchange rates, such as approximately 4.2 Reichsmarks to one U.S. dollar. By providing a permanent , it facilitated economic recovery, though its success depended on ongoing budgetary controls and reparations adjustments rather than inherent monetary design alone.

Interwar Stability and Management (1924-1939)

Peg to Gold and Initial Reforms

The Reichsmark was established as Germany's official currency on August 30, 1924, via the Currency Law, replacing the temporary Rentenmark at a 1:1 parity and serving as a permanent antidote to the hyperinflation-ravaged Papiermark. This reform limited the initial issuance to 3.2 billion Reichsmarks in notes and coins, with coins entering circulation on October 11, 1924, to enforce scarcity and restore confidence. The new unit was subdivided into 100 Reichspfennigs, maintaining continuity with prior mark systems while introducing standardized denominations backed by the Reichsbank. To anchor stability, the Reichsmark was pegged to at the pre-World War I Goldmark parity, defining one Reichsmark as equivalent to 0.35842 grams of fine . The Law of the same date obligated the bank to redeem bars at a fixed rate of 1,392 Reichsmarks per 500 grams (one Pfund) of fine , effectively setting the to international values and aligning with the U.S. at approximately 4.20 Reichsmarks per . Initial coverage required at least 40% of note liabilities in or stable , with three-quarters of that in actual , prohibiting fiduciary issuance beyond covered limits to curb inflationary pressures. These reforms, overseen by Currency Commissioner , emphasized central bank independence, strict budget balancing, and reparations restructuring under the contemporaneous , which facilitated foreign loans to bolster reserves. By December 1924, the achieved convertibility, stabilizing exchange rates and halting the velocity-driven of , where prices had doubled every few days. This framework enabled Germany to rejoin the gold bloc, fostering interwar economic recovery until external shocks in the late .

Role in Weimar Recovery and Dawes Plan

The Reichsmark was introduced on August 30, 1924, as the official currency of the , succeeding the temporary that had halted in late 1923, with an initial exchange rate fixed at 4.2 Reichsmarks per U.S. dollar and backed by gold reserves to ensure convertibility. This stabilization was integral to the , enacted in August 1924, which restructured Germany's payments into a staggered schedule starting at 1 billion gold marks annually and rising to 2.5 billion by 1928, while mandating the independence of the from government control to foster monetary discipline. Under , appointed Reichsbank president in , the plan facilitated an international loan of 800 million marks (equivalent to approximately 200 million U.S. dollars) primarily from American investors, which injected capital to back the new and support budget balancing, thereby restoring confidence in German finances and enabling the Reichsmark to circulate as a stable . The loan proceeds, disbursed rapidly, covered immediate reparations and domestic needs, preventing further depreciation and allowing the Reichsmark to achieve parity with pre-war marks, which underpinned export competitiveness and industrial revival. This monetary framework contributed to Weimar's economic recovery from to , marked by industrial production rising 40% above levels, unemployment falling from 20% to under 2%, and foreign inflows exceeding 10 billion Reichsmarks, as the stable Reichsmark reduced import costs and attracted capital for like the expansion of electrical grids and . However, reliance on short-term foreign loans created vulnerabilities, as the fixed reparations tied to economic performance indexes introduced cyclical risks, though initially the Reichsmark's stability masked underlying fiscal strains from ongoing deficits. The Dawes Plan's oversight by an international reparations agent further enforced fiscal restraint, indirectly bolstering the Reichsmark's credibility against speculative pressures.

Nazi Accession and Schacht's Monetary Policies

Following Adolf Hitler's appointment as on January 30, 1933, faced severe economic distress with approximately 6 million unemployed, representing about 30% of the workforce. To restore confidence among industrialists and financiers, the regime reappointed , who had previously stabilized the currency after the 1923 hyperinflation, as President of the on March 17, 1933. Schacht, who had supported the Nazi rise through contacts with business leaders, advocated controlled to fund and rearmament while preserving Reichsmark stability via existing exchange controls established in 1931. Schacht's initial monetary measures included authorizing 1 billion Reichsmarks in credit for projects on June 1, 1933, such as the network, which employed up to 80,000 workers by mid-decade. In 1934, he devised the system, issued through a shell company (Metallurgische Forschungsgesellschaft), allowing arms contractors to receive deferred-payment bills guaranteed by the state and discountable at the at 4% interest. This mechanism financed rearmament off the official budget, expanding to 12 billion Reichsmarks by 1938, and stimulated sectors like (209% output growth), automobiles (117%), and (83%) without immediate inflationary pressure, as new money issuance was linked to increased production and goods supply. Appointed Minister of Economics in August 1934, Schacht unveiled the "New Plan" on September 27, 1934, imposing stringent foreign exchange controls to prioritize imports of raw materials essential for and rearmament. The plan replaced open-market foreign trade with bilateral clearing agreements and state allocation of scarce valuta, restricting non-essential imports and channeling exports to secure needed goods, thereby conserving Germany's limited and foreign reserves. These measures reduced trade deficits and supported domestic employment by directing resources inward, though they strained and limited Reichsmark . By 1938, Schacht's policies had reduced to near zero, with the maintaining internal through price caps, wage controls, and suppressed consumption via directed investment. However, escalating rearmament demands led to tensions; Schacht resigned as Economics Minister in 1937 and was dismissed from the presidency on January 19, 1939, citing risks of monetary instability from unchecked deficits. His framework deferred but did not eliminate underlying inflationary risks, which materialized post-1939.

Economic Role under Nazi Regime

Rearmament Financing through Mefo Bills

In 1934, , as President of the and Minister of Economics, devised the to facilitate covert rearmament financing amid legal restrictions on military spending imposed by the and domestic budget laws. The , a nominal shell company established with nominal capital of 1 million and backed by major arms firms including , , , and Gutehoffnungshütte, issued promissory notes—known as —to arms manufacturers fulfilling government orders. These bills, initially with a six-month maturity but renewable up to five years, were guaranteed by the Reich government and accepted by the for discounting into at a 4% annual , effectively circumventing prohibitions on direct financing of deficits. The mechanism operated as follows: Upon delivery of armaments, the directed payment via drafts on , which manufacturers could present to any bank for cash conversion, with the obligated to redeem them on demand regardless of volume or maturity. This created a shadow expansion, as the 's absorbed the bills—reaching permanent funding rather than short-term rotation as Schacht intended—while keeping expenditures hidden from public budgets and parliamentary oversight. Schacht later acknowledged as a "subterfuge" enabling the to extend to the beyond legal norms, with transactions confined to armament to avoid broader inflationary spillovers. By disguising fiscal deficits, the system supported rapid buildup, funding approximately 50% of weapons purchases from 1934 to 1936. From July 1934 to April , totaling 12 billion Reichsmarks were issued, equivalent to about 20% of Germany's GDP by and representing the bulk of off-budget rearmament outlays. This monetary expansion bolstered the Reichsmark's role in channeling funds to industry without immediate balance-of-payments strain, as bills were rolled over and discounted domestically, though it sowed seeds for later inflationary pressures suppressed by . The scheme's scale dwarfed initial projections—Schacht had envisioned circulation limited to 1 billion Reichsmarks—but enabled the Wehrmacht's growth from 100,000 to over 1 million troops by , with associated equipment production. By early 1938, accumulating bills strained reserves, prompting their conversion into long-term government bonds starting April 1, after which issuance ceased; Schacht resigned in January 1939 partly over unsustainable deficits exceeding 30 billion including obligations. While effective for short-term mobilization, the policy relied on and accommodation, illustrating causal linkages between concealed monetary creation and fiscal overextension in pursuit of autarkic rearmament goals.

Autarky, Trade Balances, and Deficit Controls

The Nazi regime pursued , or economic self-sufficiency, as a core policy to minimize reliance on foreign imports, particularly in preparation for rearmament and potential conflict, with Hjalmar Schacht's "New Plan" of September 1934 centralizing state control over foreign and exchange. Under the New Plan, imports were restricted to essential raw materials for armaments and foodstuffs, while exports were directed to generate only the foreign exchange needed to cover these imports, enforced through mandatory licensing and a shift toward bilateral arrangements rather than multilateral . This framework imposed totalitarian oversight on Devisen (foreign exchange) and commodities, effectively placing much of Germany's external commerce on a clearing basis where partner countries accumulated Reichsmark credits that were often not fully redeemable in . Trade balances under these controls showed mixed outcomes, with official figures reporting a surplus of 124.2 million in 1936, bolstered by invisible exports like and remittances totaling around 300 million marks, yet underlying structural deficits persisted due to rearmament-driven import demands outpacing export capacity. By 1938, faced a deficit of 432.4 million Reichsmarks with the alone, reflecting broader challenges in securing foreign exchange amid autarkic restrictions that limited access to global markets. Overall, from onward, the accumulated a favorable balance estimated at 5.23 billion Reichsmarks in nominal terms compared to prices, but this masked accumulating unpaid clearing debts with trading partners, as exports were prioritized for strategic goods over consumer items that might have balanced accounts more sustainably. Deficit controls were maintained through rigorous foreign exchange rationing inherited from 1931 and intensified under the New Plan, including decrees requiring advance import permits to prevent unpaid foreign exporters and limiting debt service to 50% in convertible currency initially. These measures preserved Reichsmark stability domestically by curbing convertible outflows, with and reserves halving in 1934 alone due to prior export financing needs, prompting further import curbs. Hermann Göring's Four-Year Plan from 1936 reinforced by subsidizing synthetic production to substitute imports, yet it exacerbated deficits by accelerating industrial demands without corresponding growth, leading Schacht to warn of an impending and resign as Economics Minister in 1937.

Achievements in Employment and Industrial Output

The Nazi regime's monetary and fiscal policies, leveraging the Reichsmark as the stable medium of exchange, facilitated a sharp decline in unemployment from approximately 6 million individuals (around 30% of the workforce) in early 1933 to under 300,000 by 1938, achieving what was officially termed full employment. This reduction was primarily driven by deficit-financed public works projects, such as the Autobahn construction program initiated in 1933, and rearmament expenditures, which absorbed labor into infrastructure and arms manufacturing. Hjalmar Schacht's innovations, including the 1934 introduction of Mefo bills—promissory notes issued by a shell company and redeemable in Reichsmarks by the Reichsbank—enabled off-budget financing of these initiatives, expanding the money supply indirectly to stimulate demand without overt violation of balanced-budget norms or the gold standard remnants. Industrial output expanded concurrently, with overall production indices rising by roughly 70% between 1933 and 1939, particularly in heavy industries tied to rearmament such as , chemicals, and machinery. Over one million jobs were created in 1933 alone through initial work-creation schemes, escalating to three to four million additional positions in 1934 and 1935 via combined public investment and military buildup, which prioritized autarkic production of synthetic fuels, rubber, and armaments. The Reichsmark's controlled issuance supported this growth by maintaining nominal wage stability and directing credit toward priority sectors, though stagnated due to longer hours and . These outcomes reflected causal effects of demand stimulus on idle capacity and labor, contrasting with the deflationary stagnation of the preceding years, albeit at the cost of accumulating hidden inflationary pressures deferred through wage and price freezes.

Wartime Developments (1939-1945)

Inflation Suppression via Price Controls and Rationing

To combat inflationary pressures arising from wartime deficit spending and resource shortages, the Nazi regime intensified pre-existing price and wage controls established in 1936, enforcing a comprehensive freeze on official prices for consumer goods, rents, and wages throughout the war. These measures, overseen by the Reich Price Commissioner under the Four-Year Plan, prohibited price increases beyond 1936 levels and imposed severe penalties for violations, including fines and imprisonment, to maintain the purchasing power of the Reichsmark on paper. Wage controls similarly capped earnings to prevent cost-push inflation, with adjustments limited to productivity-linked bonuses approved by labor fronts. Official consumer price indices remained largely stable, rising only modestly by about 10-15% cumulatively from 1939 to 1945, in contrast to the monetary expansion that increased the money supply by over 50% through central bank financing of deficits. Rationing complemented these controls, beginning with the issuance of food ration cards on August 27, 1939, just days before the , and extending to clothing, footwear, textiles, coal, soap, and other essentials by October 1939. The system distributed coupons via registered shops, allocating fixed quotas—such as 250 grams of meat, 300 grams of bread, and 100 grams of fat per person weekly in 1939—which progressively declined as Allied blockades and agricultural disruptions mounted; by 1944-1945, average civilian caloric intake fell to around 1,600-1,800 per day, with meat rations halved and fats reduced by 40%. Enforcement relied on a network of local rationing offices and police, prioritizing workers in armaments industries while discriminating against and other targeted groups through reduced or denied allocations. This framework suppressed by limiting access to goods, channeling excess liquidity into war bonds or savings rather than market transactions. Despite apparent success in averting —unlike the era—these policies distorted and fostered extensive black markets, where goods like , , and commanded prices up to 100 times official levels by 1943, reflecting true scarcity and suppressed monetary overhang. Scholarly analyses indicate that price alone reduced working-class household welfare by approximately 7% of disposable income through substitution toward lower-quality ersatz products and nutritional deficiencies, exacerbating and declining birth rates. While controls postponed inflationary collapse during the war, they masked underlying imbalances from rearmament and occupation financing, culminating in the Reichsmark's upon Allied dismantling of the system in 1945-1948.

Special Issues for Camps, POWs, and Occupied Territories

Special denominations of Reichsmark currency, known as Reichskreditkassenscheine, were issued by the Reichskreditkassen starting on May 3, 1940, primarily for German armed forces in occupied Western European territories including France, Belgium, and the Netherlands. These notes, printed in values from 50 Reichspfennig to 10 Reichsmarks, circulated alongside local currencies but lacked equivalent reserves, enabling the financing of occupation costs without drawing on Germany's limited foreign exchange or gold supplies. By design, they facilitated military expenditures and economic exploitation, with overprinted series (e.g., "J" for Jersey, "B" for Belgium) adapting to specific regions, though their inflationary pressure contributed to postwar repudiation by Allied authorities. In prisoner-of-war camps (Kriegsgefangenenlager), non-transferable Reichsmark-denominated was distributed to Allied and other POWs from onward for internal purchases such as food and at camp canteens. Issued in seven denominations—1, 10, and 50 Reichspfennig, plus 1, 2, 5, and 10 Reichsmarks—these notes were strictly confined to camp use, preventing their circulation in the broader economy and mitigating escape risks via hoarded cash. Prisoners received them as nominal pay for labor or allowances, redeemable for genuine Reichsmarks only upon release, with the system enforced across approximately 1,000 such facilities holding millions by 1945. Concentration camps employed analogous but more restrictive scrip systems, with Reichsmark-valued notes issued in places like Buchenwald for inmate "wages" tied to forced labor, such as 0.50 or 1 Reichsmark denominations. Unlike POW currency, this offered minimal practical utility, as camp commissaries stocked few goods and redemptions were illusory, functioning instead to simulate a while extracting value without real compensation. Authorization for such issues required German oversight, and their use extended to select ghettos, though many operated on non-Reichsmark local variants; overall, these mechanisms reinforced isolation and exploitation without integrating into the Reich's monetary base.

Onset of Currency Devaluation and Collapse

Despite rigorous and implemented since 1939, underlying monetary pressures intensified from 1943 onward as war expenditures outpaced fiscal capacity, with the money supply expanding from 56.4 billion Reichsmarks in 1938 to at least 300 billion by May 1945 to deficits without corresponding increases in production. This liquidity overhang eroded the currency's real value, as suppressed official masked growing distortions in and . Allied campaigns escalated in 1944, targeting transportation and plants, which crippled industrial output and distribution networks, exacerbating shortages of food, , and consumer goods despite nominal wage and price freezes. By late 1944, prices for essentials began surging uncontrollably, with reports indicating that items like and potatoes commanded premiums hundreds of times above official rates in urban areas, signaling the breakdown of enforced stability as evasion of controls became widespread amid territorial losses and forced labor disruptions. The Reichsmark's effective thus devalued sharply in informal exchanges, fostering economies and foreign currency hoarding, while official exchange rates against neutral currencies like the reflected creeping depreciation from manipulated pre-war parity. In the war's final months of , as front lines collapsed and administrative control fragmented, unchecked printing of notes by the accelerated to cover military disbursements and occupation costs, flooding the economy with unbacked amid near-total halt in . This culminated in a rapid loss of confidence, with the Reichsmark functioning primarily as for rations rather than a , presaging its outright worthlessness upon surrender on May 8, , when hyperinflationary dynamics fully manifested in the absence of coercive mechanisms. The wartime facade of monetary stability thus unraveled causally from overreliance on deficit and suppression of market signals, rendering the currency vulnerable to exogenous shocks like bombing and endogenous failures in autarkic planning.

Physical Characteristics and Production

Coin Denominations, Designs, and Materials

The Reichsmark's coinage comprised denominations of 1, 2, 5, 10, and 50 Reichspfennigs for everyday transactions, alongside Reichsmark units including ½, 1, 2, 3, 5, 10, and 20 Reichsmarks, with the higher values often reserved for savings or commemorative purposes due to their content. Pre-war coins from 1933 to 1939 utilized traditional alloys: 1 and 2 Pfennigs in , 5 and 10 Pfennigs in aluminum-, 50 Pfennigs initially in , 1 Reichsmark in , 2 Reichsmarks in silver (containing 0.1607 ounces), and 5 Reichsmarks in silver (0.4016 ounces). Wartime shortages prompted substitutions starting in 1940, with 1, 2, 5, and 10 Pfennigs minted in , and 50 Pfennigs in aluminum to preserve strategic metals like and for use; silver coinage ceased by 1939. Designs emphasized regime symbolism, particularly from 1936 onward. Pfennig coins typically featured the (imperial eagle) clutching a on the obverse, with the reverse showing the denomination within an oak leaf wreath. The 50 Pfennigs of 1935 bore an eagle without the swastika. Reichsmark coins varied: the 2 and 5 Reichsmarks (1936–1939) displayed portraits of on the obverse paired with the eagle-and- motif, while earlier 5 Reichsmarks (1934–1935) depicted the Garrison Church.
DenominationPre-War Material (1933–1939)Wartime Material (1940–1945)Obverse DesignReverse Design
1–2 PfennigsEagle with Value in
5–10 PfennigsAluminium-Eagle with Value in
50 Pfennigs (to 1938)Eagle (1935, no )Value and date
1 ReichsmarkNot issuedEagle with Value in
2–5 ReichsmarksSilverNot issuedHindenburg portrait (1936–1939)Eagle with

Banknote Series, Security Features, and Issuers

The served as the primary issuer of Reichsmark banknotes from their introduction in 1924 until the currency's discontinuation in 1945. These notes were produced under the authority of the 's directorate, with printing handled by state facilities to ensure uniformity and control over circulation. The inaugural series, launched on August 30, 1924, following the stabilization after , comprised denominations of 10, 20, 50, 100, and 1,000 Reichsmark to restore confidence in paper currency. Subsequent emissions in the late , such as the January 22, 1929, issue, retained similar denominations but incorporated portraits of prominent Germans, including Albrecht Daniel Thaer on the 10 Reichsmark note and on the 20 Reichsmark. By the 1930s, updated series featured figures like on the 100 Reichsmark (June 24, 1935) and on the 1,000 Reichsmark (February 22, 1936), with some designs integrating Nazi symbols such as the . During , from 1939 onward, the introduced a wartime series including lower denominations of 1, 2, 5, 20, and 50 Reichsmark to facilitate everyday transactions amid resource constraints. Notable examples include the 20 Reichsmark of June 16, 1939, depicting an idealized German woman, and the 5 and 10 Reichsmark notes of 1942 portraying figures, reflecting regime in design choices. These later issues prioritized rapid production over elaborate artistry due to wartime demands. Security features on Reichsmark banknotes were relatively basic compared to modern standards, relying on watermarks corresponding to denominations or portraits, intricate guilloche patterns from , serial numbers, and official signatures to verify authenticity. Counterfeiting risks persisted, particularly as paper quality declined in later years from material shortages, though no advanced elements like embedded threads were employed.

Mint Facilities, Marks, and Mintage Data

Reichsmark coins were produced at state-controlled mint facilities across and annexed territories, with production centralized under the . The primary mints operated from the era into the Third , utilizing a system of letter s stamped small beneath the date on coin obverses to identify the originating facility. These marks facilitated attribution in numismatic records and . The standard mint marks and corresponding facilities included: A for the Berlin State Mint (Staatliche Münze Berlin), the largest and primary producer handling high-volume silver and base-metal issues; D for the Bavarian Main Mint in (Bayerisches Hauptmünzamt); F for the Stuttgart State Mint (Staatliche Münze Stuttgart); J for the Hamburg Mint (Hamburgische Münze); and G initially for until its closure in 1935, thereafter assigned to the Karlsruhe Mint (Staatliche Münzenamt Karlsruhe) from 1936 onward. Additional wartime and expansion facilities comprised E for the Muldenhütte Mint in , specialized in base-metal pfennigs from 1935 to economize on resources; and B for the Vienna Mint (Münze Österreich), integrated after the 1938 for increased capacity. Mintage data reflect shifting priorities from pre-war silver circulation coins to wartime base-metal substitutes amid metal shortages. Pre-1939 silver denominations (1, 2, and 5 RM) typically saw annual outputs of several million pieces per mint, with totals exceeding 10 million for popular types like the 1936 5 RM Hindenburg across marks A, D, F, G, and J. For example, the 1936 J () 5 RM totaled 640,000 pieces. and aluminum-bronze pfennigs (1, 5, 10, 50 Rp) from 1933–1939 had mintages ranging from 5–15 million per variety, as in 1937 1 Rp: D (14,060,000), E (10,700,000), F (11,058,000). Wartime pfennigs escalated production for circulation, with (A) alone striking over 200 million 1 Rp in 1940 and peaking at 558 million in 1942, while Muldenhütte (E) contributed smaller runs like 20.7 million 1 Rp in 1940. Silver coinage halted by 1939, redirecting resources to defense, resulting in lower mintages for commemoratives and no further standard silver issues.
DenominationYearMint MarkMintage
1 Reichspfennig ()1937D ()14,060,000
1 Reichspfennig ()1937E (Muldenhütte)10,700,000
1 Reichspfennig ()1937F ()11,058,000
5 Reichsmark (silver)1936J ()640,000
2 Reichsmark (silver)1939F ()3,180,000
Total Reichsmark coin production emphasized quantity over fineness during shortages, with base-metal pfennigs comprising the bulk post-1939 to sustain domestic economy amid rationing.

Post-War Dissolution and Legacy

Allied Occupation Policies and Currency Reform

Following Germany's unconditional surrender on May 8, 1945, the Allied Control Council oversaw the occupation of the country, divided into four zones administered by the United States, United Kingdom, France, and Soviet Union, with the Reichsmark retained as legal tender across all zones under stringent monetary controls to prevent inflation and facilitate reparations. Military governments froze most bank deposits, limited cash withdrawals to minimal amounts (e.g., 100-150 Reichsmarks per month initially in Western zones), and centralized control over the Reichsbank and provincial note-issuing banks to curb excess liquidity from wartime printing, which had expanded the money supply by over 50% from 1939 levels. These measures aimed to stabilize a barter-dominated economy plagued by shortages, where the Reichsmark's value eroded rapidly, with black-market exchange rates reaching 40:1 against the U.S. dollar by 1947. In the Western zones, Allied forces supplemented the Reichsmark with Allied Military Marks (AMM), a issued primarily for troop use and convertible to Reichsmarks at par, while prohibiting its circulation among civilians to avoid further ; this policy, enforced via Military Government Law No. 8 in the U.S. zone, maintained the Reichsmark for local transactions amid and inherited from the Nazi era. The Soviets in their zone similarly retained the Reichsmark but extracted reparations through direct asset seizures and inflated money issuance, exacerbating —estimated at 300-400 billion Reichsmarks by 1948—without equivalent exchange controls. Occupation authorities also authorized limited production of denazified coins, striking over 1.5 billion pfennigs in and aluminum between 1946 and 1948 without swastikas or eagle motifs, to replace worn wartime issues while preserving nominal denominations. By early 1948, persistent stagnation in the Trizone (U.S., , French zones) prompted the Western Allies to enact currency via three laws passed on June 18: the Currency Law establishing the as sole tender, the Issue Law empowering the Bank deutscher Länder, and the Conversion Law regulating Reichsmark exchanges. Effective June 20, 1948, individuals received 40 Deutsche Marks per adult and 20 per child at 1:1 from Reichsmarks, with an additional 20 per adult the next day, while excess holdings converted at 10:1, effectively nullifying about 90% of circulating Reichsmarks (totaling around 400 billion) to eliminate wartime overhang and black-market liquidity. Accompanying dismantled most , spurring immediate supply responses as producers shifted from to markets, though the Soviet rejection of the reform in their zone—viewing it as a unilateral Western move—triggered the starting June 24, 1948. This bifurcation underscored divergent occupation strategies, with Western policies prioritizing monetary reset for reconstruction over Soviet emphasis on reparative extraction.

Transition to Deutsche Mark in 1948

The currency reform in the western occupation zones of Germany, encompassing the American, British, and French sectors, was implemented on June 20, 1948, invalidating the Reichsmark as legal tender and introducing the Deutsche Mark (DM) divided into 100 pfennigs. The reform's core mechanism devalued the Reichsmark at a rate of 10:1 against the new currency for most conversions, drastically reducing the money supply from approximately 300 billion Reichsmarks in circulation to an equivalent of about 30 billion Deutsche Marks, which curbed the latent inflation stemming from wartime over-issuance. Initial allocations provided 40 DM per adult inhabitant and 20 DM per child to equalize starting liquidity and mitigate immediate hardship, with wages, salaries, rents, and pensions converted at a 1:1 parity for everyday transactions to maintain continuity in payments. Cash holdings of Reichsmarks could be exchanged for DM at the 10:1 rate until June 27, 1948, after which unexchanged notes lost value entirely, though bank deposits faced tiered treatment: 6.5% converted immediately at 1:1, 40% at 10:1, and the remainder blocked for gradual release at devalued rates to penalize hoarded wartime savings. This structured devaluation hit savers and those with large Reichsmark balances disproportionately, as the effective conversion rate for accumulated fell below 10:1 overall, reflecting the reform's intent to eliminate the monetary overhang that had rendered the Reichsmark a poor amid suppressed prices and . By the end of June 1948, roughly 4.4 billion DM were in circulation, enabling price liberalization and dismantling controls, which prompted suppressed production to surge as producers responded to genuine signals rather than artificial shortages. The transition eradicated economies and markets that had dominated exchange, with goods rapidly reappearing in shops once the sound restored incentives for supply; for instance, everyday items hoarded under Reichsmark uncertainty entered formal markets within weeks. Economic output in the Trizone began accelerating immediately, laying the foundation for sustained growth by aligning money's role with productive capacity rather than financing deficits through printing. In contrast, the Soviet zone's parallel issuance of a separate variant failed to achieve similar stabilization, highlighting the western reform's success in isolating integrity from political overreach. The reform's architects, including U.S. advisor Edward A. Tenenbaum, prioritized radical monetary contraction over to break the inflationary ingrained by the Reichsmark's , a causal chain where excessive had decoupled nominal values from real output since 1939. While critics noted short-term dislocations like wiped-out savings, empirical outcomes validated the approach: risks dissipated without resurgence, and trajectories diverged sharply from the eastern zones, underscoring the causal efficacy of sound money in reallocating resources via market prices. The Deutsche Mark's introduction thus marked not merely a technical swap but a foundational reset, enforcing fiscal discipline absent in the Reichsmark era's war-driven expansions.

Modern Collectibility and Numismatic Assessment

The Reichsmark's numismatic appeal stems from its diverse denominations, material shifts amid wartime constraints, and historical documentation of German economic policy from to 1945. Collectors prioritize coins and banknotes in superior preservation states, as graded by services such as NGC and PCGS, where Mint State (MS) or Proof (PR) designations significantly elevate value over circulated examples. Silver content in pre-war Reichsmark coins—typically 0.625 for 1, 2, and 5 Reichsmark pieces—provides intrinsic melt value, often around $10–15 per ounce equivalent as of 2023 silver spot prices, but numismatic premiums arise from low-mintage varieties and design specifics like the Hindenburg portrait or Potsdam Garrison Church motifs. Common circulated 1 Reichsmark silver coins from 1933–1938, with mintages exceeding 6 million for key dates like the 1933-A, trade for $5–20 in average condition, while MS-65 examples exceed $100 due to sharp strikes and minimal wear. The 5 Reichsmark Hindenburg issues (1934–1936), minted in quantities of 8–16 million depending on variety (with or without reverse), remain highly sought in uncirculated grades, fetching $50–200 for MS-63 specimens, with rarities like dated Church subtypes commanding auction realizations up to $500. Wartime nickel 1 Reichsmark (1939–1942) and zinc pfennigs (1940–1945) exhibit greater scarcity; the former, produced in limited runs under metal shortages, rarely appear in MS-65 or better, with values surpassing $300 for top grades, while zinc 1–10 coins in choice condition range $20–100, reflecting patterns and challenges. Banknotes, printed by the in series from 1 to 100 Reichsmark, derive value from paper quality retention, blocks, and signatures; common 10–50 Reichsmark notes from 1939–1945 in (F) condition sell for $10–50, but uncirculated (UNC) pieces or occupation variants (e.g., Reichskreditkassenscheine for POWs) reach $100–500 at . High-denomination 100 Reichsmark notes, issued sparingly post-1935, command $200+ in Very Fine (VF) or better due to lower survival rates from wartime destruction. Rarity indices from grading services underscore premiums for low-population mint marks (e.g., "A" vs. "F") and error varieties, with overall market trends showing 5–10% annual appreciation for certified types amid global collector demand, though base-metal pieces lag behind silver due to condition sensitivity. mitigates counterfeit risks, particularly for silver coins replicated in the post-war period, emphasizing slabbed holders from reputable third-party graders.

Economic Analysis and Debates

Causal Factors in Pre-War Stability

The Reichsmark achieved notable in the pre-war period from to 1939, with official consumer price indices registering minimal increases—typically under 1% annually—amid rapid economic recovery and rearmament expenditures that exceeded 20 billion Reichsmarks by 1939. This stability contrasted sharply with the of the early 1920s and the deflationary pressures of the , enabling by 1938 without immediate monetary collapse. However, this outcome stemmed not from orthodox but from coercive mechanisms that repressed underlying inflationary forces, deferring rather than eliminating them. A primary causal factor was the imposition of stringent wage and price controls shortly after the Nazi assumption of power in 1933. Wages were frozen at 1932 levels for most workers, with nominal increases limited to specific sectors and tied to productivity gains, while price ceilings were enforced across key commodities and industrial goods to curb demand-pull inflation from rising employment and government spending. The dissolution of independent trade unions in May 1933 and their replacement by the state-controlled German Labor Front further facilitated labor discipline, preventing wage spirals through strikes or collective bargaining. These controls, backed by penalties including fines and imprisonment, suppressed consumption and channeled resources toward capital investment and military buildup, maintaining monetary velocity low despite fiscal deficits averaging 12-15% of GDP annually. Financing innovations like provided another key mechanism for stability by masking the scale of . Introduced in 1934 under President , these metallurgical research company bills functioned as quasi-fictional acceptances, allowing arms manufacturers to receive payment from a guaranteed by the , with maturities repeatedly extended to avoid redemption in circulating Reichsmarks. By April 1938, outstanding totaled 12 billion Reichsmarks, equivalent to about 10% of GDP, funding rearmament without proportional or bond issuance that might have alarmed markets. This off-balance-sheet approach preserved the Reichsmark's nominal peg to ( abandoned but symbolically maintained) and avoided direct inflationary injection into the consumer economy. Foreign exchange restrictions and autarkic trade policies bolstered internal stability by conserving reserves and mitigating external shocks. The 1934 New Plan under Schacht imposed bilateral clearing agreements with trading partners, settling deficits in goods rather than convertible currency, which reduced pressure on the Reichsmark's overvalued —fixed at approximately 2.5 RM per U.S. dollar—and limited import-driven . Capital controls prohibited private hoarding of foreign assets, while synthetic production initiatives (e.g., ersatz materials) decreased reliance on imports, stabilizing supply chains despite global . These measures collectively insulated the domestic , though they fostered inefficiencies like networks that indirectly supported the currency's viability until wartime disruptions. Empirical data from the period indicate that, while black-market premiums emerged for rationed goods, official metrics reflected controlled equilibrium, underscoring the regime's success in prioritizing short-term monetary order over long-term .

Criticisms of Unsustainable War Financing

The Nazi regime's financing of rearmament and relied heavily on , initially concealed through mechanisms like issued from 1934 to 1938, which totaled 12 billion Reichsmarks and effectively offloaded military expenditures from the official budget onto the 's balance sheet. This approach, devised by , deferred fiscal reckoning but accumulated hidden liabilities equivalent to half of government debt by 1939, prompting Schacht's dismissal as president on January 19, 1939, after he protested the unchecked deficits risking currency devaluation and inflation. During the war, (cash and demand deposits) expanded approximately 500% from to , while gross national product fell by over 40%, creating a massive monetary overhang unsupported by productive output. Public debt reached about 400% of 1939 GNP by , financed partly through credit expansion and, increasingly, extraction from occupied territories, such as the forced 476 million Reichsmark "" from Greece's national bank in 1942. Critics, including contemporary observers like Soviet judge at the , characterized pre-war devices like as "a swindling venture on a national scale," arguing they masked an economy dependent on non-replicable plunder rather than sustainable growth. Inflation was suppressed through strict price and wage freezes imposed in 1939, alongside and systems, averting overt but fostering black markets and chronic shortages that eroded the Reichsmark's real value and domestic confidence. This regime of controls postponed adjustment but rendered the inherently unstable, as excess liquidity circulated without corresponding goods, culminating in the Reichsmark's effective worthlessness by and necessitating a 90-93.5% contraction via the 1948 currency reform. The financing model's causal flaw lay in prioritizing short-term over balanced budgets or export-led balance, leaving vulnerable to wartime attrition without endogenous recovery mechanisms.

Balanced View: Empirical Successes versus Normalized Critiques

The Reichsmark achieved notable empirical stability from 1933 to 1939, with unemployment plummeting from approximately 6 million (around 30% of the workforce) in early 1933 to under 1% by 1938, driven by programs like the Reinhardt Plan (allocating 1 billion Reichsmarks for infrastructure, including the ) and rearmament spending that boosted industrial output by roughly 100% over the period. Hjalmar Schacht's mechanisms, including (a form of deferred payment instrument that financed deficits off the official budget, reaching 12 billion Reichsmarks by 1938) and strict import/export controls under the 1934 New Plan, suppressed inflation effectively, maintaining price stability without the of the early ; consumer prices rose only modestly (about 10-15% cumulatively) despite rapid growth. These policies restored confidence in the post-Depression, with state levels remaining lower than in Britain or the by 1939, enabling and GDP expansion averaging 8-10% annually pre-war. Critiques of this era, however, highlight the unsustainability of the Reichsmark's framework, as growth relied heavily on —by 1936-1939, two-thirds of industrial investment (totaling 6.4 billion Reichsmarks) targeted armaments rather than civilian sectors, deferring inflationary pressures through wage-price freezes and rather than genuine productivity gains. Schacht himself resigned in 1937, warning that unchecked bill expansion and rearmament (exceeding 20 billion Reichsmarks annually by late 1930s) risked , a view vindicated by wartime money printing that ballooned the money supply by over 300% from 1939-1945 while controls fostered black markets and resource shortages. Post-1945, the currency's credibility collapsed, with Reichsmarks becoming worthless in economies until the 1948 reform, underscoring how war-oriented financing masked structural imbalances like foreign exchange deficits and reliance on eventual conquest spoils. A balanced assessment recognizes the Reichsmark's pre-war successes in empirical metrics—rapid recovery from Depression lows without immediate monetary collapse—as evidence of effective short-term stabilization techniques, yet normalized critiques rightly emphasize their causal unsustainability: policies prioritized and aggression over balanced growth, leading to inevitable wartime distortions and post-defeat repudiation, as deficit without corresponding output eroded long-term value despite initial appearances of robustness. Academic analyses, from archival fiscal data, confirm that while Schacht's innovations averted until 1936, the regime's ideological commitment to precluded enduring stability, distinguishing tactical efficacy from systemic fragility.

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  46. https://www.economics.ox.ac.uk/publication/1143653/hyrax
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  50. https://portal.ehri-project.eu/units/us-005578-irn521553-irn524873
  51. https://collections.ushmm.org/search/catalog/irn524871
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  58. https://www.quora.com/How-much-was-the-Reichsmark-worth-in-1945
  59. https://worldhistoryedu.com/history-of-the-reichsmark/
  60. https://www.quora.com/When-did-the-Reichsmark-collapse
  61. https://www.joelscoins.com/wwii.htm
  62. https://24carat.co.uk/nazicoins.html
  63. https://www.ebay.com/itm/144600743096
  64. https://www.ngccoin.com/price-guide/world/germany-third-reich-10-reichspfennig-km-92-1936-common-date-cuid-41431-duid-119489
  65. https://www.currencydb.net/currency/reichsmark/
  66. https://www.bundesbank.de/resource/blob/607868/195d1b540a2053d42fe9f2b735835115/mL/das-papiergeld-im-deutschen-reich-data.pdf
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