The Downfall of Money: Germany's Hyperinflation and the Destruction of the Middle Class

by Frederick Taylor

An economic horror The complete meltdown of a major modern country's financial system, and its disastrous effects on every aspect of society. A hundred years ago, many theorists believed-just as they did at the beginning of our twenty-first century-that the world had reached a state of economic perfection, a never before seen human interdependence that would lead to universal growth and prosperity. Then, as now, the German mark was one of the most trusted currencies in the world. Yet the early years of the Weimar Republic in Germany witnessed the most calamitous meltdown of a developed economy in modern times. The Downfall of Money will tell anew the dramatic story of the hyperinflation that saw the mark-worth 4.2 to the dollar in 1914-plunge until it traded at over 4 trillion to 1 by the autumn of 1923. The story of the Weimar Republic's financial crisis clearly resonates today, when the world is again anxious about what money is, what it means, and how we can judge if its value is true. It is a trajectory of events uncomfortably relevant for our own uncertain world. Frederick Taylor-one of the leading historians of Germany writing today- explores the causes of the crisis and what the collapse meant to ordinary people and traces its connection to the dark decades that followed. Drawing on a wide range of sources and accessibly presenting vast amounts of research, The Downfall of Money is a timely and chilling exploration of a haunting episode in history.

Genres: History, Economics, Germany, Nonfiction, Politics, Finance, World War II

471 pages, Kindle Edition

First published September 1, 2013

About the author

Frederick Taylor is a British novelist and historian specialising in modern German history.

He was educated at Aylesbury Grammar School and read History and Modern Languages at Oxford University. He did postgraduate work at Sussex University on the rise of the extreme right in Germany in the early twentieth century. Before embarking on the series of historical monographs for which he is best known, he translated The Goebbels Diaries 1939–1941 into English and wrote novels set in Germany.

Reviews

[Paul Bryant · Rating 3 out of 5]

I went to the railroad, laid my head on the line
Waited for the express to come and satisfy my mind

Can’t remember the blues song I heard the other day with those arresting lines. A lot of people in Germany in the 1920s would have understood the sentiments. Things were rough. (Memo : don’t lose a world war. Them victorious nations are going to make life difficult. They going to put your ass in the mincer.)

The famous anecdote about German inflation is that a Berlin woman went shopping and had to carry her paper money with her in a basket, she needed that much just for an ordinary shop. She put the basket down for a moment and when she looked round someone had stolen the basket and left the money.



(German kids playing with money, 1922)

Fortunately this book isn’t any kind of hardcore economic analysis of hyperinflation (I struggle to understand what they mean by the gold standard and being on it or off it and what all). Instead it’s a pacey history of Germany between 1918 and 1924 which is a cloudy period for me. It was a wild ride. You couldn’t tell what was the floor and what was the ceiling. There were always-falling-apart governments, top politicians assassinated and local revolutions (500 dead here, 200 dead there – people got used to carrying on with their restaurant meals while bullets were flying round the town hall).

THE IMPORTANCE OF BEING ERNEST

Young Ernest Hemingway, ace reporter for the Toronto Star in 1922, explained that for 90 cents of Canadian money you could buy 10 French francs which would then convert to 670 German marks

That 90 cents lasted Mrs Hemingway and me for a day of heavy spending in Kehl. And at the end of the day we had 120 marks left.

Anyone with foreign currency could live like a millionaire in Germany. But there were many other absurdities. The government subsidized all theatres and the opera and kept the prices of tickets stable. So you could go out to see great opera and plays but you couldn’t afford a potato. (“I am hungry anyhow, so why not be a little hungrier and go to the opera!”) If you didn’t have a farmer for a relative you were f- I should say you had real problems. In this period 2 million Germans emigrated back to the countryside from the cities.



PAYING FOR A COLLEGE EDUCATION, GERMAN STYLE 1922

I went to Holland and found a job at the Queen Anna coalmines in the province of Limburg. We worked far down, at the bottom of the mine, hacking away with pickaxes. It was tremendously hot, usually 100 degrees or so, and full of dust, but at the end of the spring vacation I had saved 50 guilders, which was about 25 dollars. Then I figured out how to beat inflation. I used the guilders as security for a short-term bank loan [back in Germany], and then I’d repay the bank loan with the deflated marks and take out another loan. I paid for a whole semester at Heidelberg that way, and at the end I still had the same fifty guilders.

UNEXPECTED BENEFITS FOR SOME

A German woman recalled the period like this:

The inflation wiped out the savings of the entire middle class, but those are just words. You have to realise what that meant. There was not a single girl in the entire German middle class who could get married without her father paying a dowry. When the money became worthless, it destroyed the whole system for getting married, so it destroyed the whole idea of remaining chaste until marriage. What happened from the inflation was that the girls learned that virginity didn’t matter anymore. The women were liberated.

KIND OF A BIG FAT CLICHÉ


This book delivers up a great mass of information in a breezy style, very readable, but I was not really convinced that Mr Taylor had explained to me exactly why the prices of everything kept on rocketing upwards during the really crazy period of 1921-23. I was left with this – when the (non-Marxist) left were in power they created full employment by paying a lot of people to do nothing (sometimes quite literally), and they imposed lots of pro-worker regulations like eight-hour days. They paid for all this with fake credit and by printing money. When the right took over they scrapped all that, introduced a new currency, and inflation came to a juddering halt, but unemployment spiralled upwards. It’s an old story which happened in a modest way right here in Britain in the 1970s (under Labour) and the 1980s (under Mrs Thatcher). So there you go, socialists rule with their hearts, capitalists with their heads. I've been told that all my life.

[Drew · Rating 4 out of 5]

One of the first things that struck me about this book was how well-written it was. Going in, I didn't really have any idea what Frederick Taylor wrote like, so that was a nice surprise.

WWI and post-WWI is a time period that I don't know much about, I learned a lot about the era just from reading this book. The first chapter or so is dedicated to summarizing WWI and Germany's rationale for their economic policies, which I thought was a nice way to start. It then enters into how the reparations were decided upon and the outrage of the German populace after they were made aware. It was made very clear why they were looking for someone to blame and the kindling for the future Nazi regime gradually becomes apparent. Knowing how things end, I found those aspects to be chilling.

Taylor focuses on the human aspect of the crisis from the high-level politicians down to the common people, with a focus on the middle class. Those hoping for detailed economic analysis will be disappointed, but those interested in the general history and how people were affected will be satisfied. I enjoyed reading this book a lot and recommend it to anyone looking for a general history of post-WWI Germany.

I received this book for free as part of the Goodreads First Reads contests.

[Geevee · Rating 3 out of 5]

Review to follow.

[Frank Stein · Rating 3 out of 5]

A sharp, well-written book that has almost nothing to do with its nominal subject.

The book is really about the political situation of Germany from the end of the World War to the end of the hyperinflation in 1924. Taylor describes in vivid detail the Sparaticist uprising in Berlin in November 1919, the rise of the Social Democratic Party and President Ebert as the country's new ruling center-left regime, the interminable reparations debates, and the assassinations of Finance Minister Matthias Erberger and Foreign Minister Walther Rathenau, among countless others.

Of course, the monetary situation was affected by this political chaos. The fact that German justice was "blind in the right eye," allowing right-wing paramilitaries to literally get away with murder, fundamentally compromised people's faith in the government and its currency. Rathenau's murder especially led to a sharp drop in the mark's exchange rate.

Yet Taylor's lack of attention to the actual mechanics of the hyperinflation is probably for the best. Early on he confuses specie for bullion, seems baffled by subjects like bank reserves and convertibility, and generally evinces an ignorance of monetary matters. Still, in the last hundred pages. Taylor's descriptions of daily life under the collapse of money are illuminating. Campaigns of urban workers into the countryside to forage food and foist worthless marks on farmers; time spent calculating the dozens of zeros on a simple purchase of cheese; foreigners with exchange living in vast mansions while Germans could never afford to leave the country; rushing from salary disbursements to buy food, transport, and clothing for a full month. The final strikes of the government's printing press workers, first for higher wages due to the inflation, later for job security after rampant printing was halted, only highlighted the chaos. The single statistic that the debt of 150 million marks that burdened Germany after the war carried a value of about 15 cents (pfennings) by the end of the inflation shows how profoundly it changed the lives of those affected by it.

If one wants just a good history of five crucial years in German history, without worrying too much about the economic and monetary factors behind it, this book will do well.

[Emmanuel Gustin · Rating 4 out of 5]

This book is an interesting contrast with Liaquat Ahamed's "Lords of Finance", which tackles the subject of the Great Depression and the role of the bankers in triggering it. Frederick Taylor's account of the earlier but connected hyperinflation crisis in Germany makes the briefest mention of the bankers and focuses on the politicians and the ordinary people. His message is that the events of 1923 and the years before it were not just a consequence of printing too much money, but inextricably linked with an extremely difficult complex political situation both internally in Germany and in its relations with the victors of WWI, a troubled economy that desperately needed to rebuild its export markets, and the accumulated debts of the war.

His sketch of the political landscape puts thing in perspective. In the 1920s, at several times Germany was on the brink of descending in total chaos, with threatened coups from the far right and far left, an unruly military, terrorist assasinations, areas of the country under foreign occupation, and the violence of political militias. It is remarkable enough that amidst financial ruin and the seemingly ineffective government of the Weimar Republic, the majority of people rejected the option of dictatorship, several times. It is even more remarkable that what is chiefly remembered from the period is the traumatic experience of hyperinflation: At first sight, not even the worst thing that happened.

Taylor tells the story of how people managed to survive and even prosper and become rich in a condition of rapid inflation of the currency, which warped all normal economic practice. (Among the winners were the printers, for whom the voracious demand for bills in ever higher denominations meant full employment!) For many people, inflation was something they could adapt to and even profit from, at least until everything spiralled out of control in 1923, the Mark became valueless, and many people had to resort to barter, while a few thrived because of their access to foreign currency. Taylor higlights the consequences for the structure of German society and the future of its politics, as the educated middle class saw their savings wiped out and their social standing eroded.

What this book does not really provide, is insight in the mechanisms that triggered the crisis. The author describes what happened, but only superficially touches on the why. He suggests that there were turning points at which the worst could have been averted (if Rathenau had not been murdered, for example) but chooses to leave deeper questions unanswered. As a result his attempt to draw lessons from history, in the concluding chapter, does not convince.

[Ben · Rating 3 out of 5]

Much dryer than I was hoping for. Frederick Taylor paints a clear picture of how hyper-inflation in post WWI Germany happened but didn't quite dig deep into why it happened as much as I was hoping for. Still, the story of the financial collapse of Weimar Germany is an interesting story which got me through the length of this read. Interesting stuff, but this book misses the mark on telling this story in a gripping or novel way.

[Edward · Rating 3 out of 5]

Before righteous tea party types get too excited about drawing satisfyingly gloomy parallels between Germany of 100 years ago and today, it’s good to remember the lessons from history are always tricky ones. True, Germany had huge war debts to pay to the British and the French, just as the United States is deeply in debt today. But the German debt had been caused by World War I, and Germany tried to work its way out of debt through inflated money, hardly the case in 2013 America. Then the creditors were insistent on a depleted Germany rigidly paying what it owed without any recognition of its exhausted resources or any possible debt renegotiation. Today that’s hardly the case with the United States and its creditor, China.

But there are some similarities. After the war, social and political priorities in Germany took place over economics, meaning that most of all, people needed jobs, no matter that they were being paid in deflated currency. Actually, the workers managed to keep up with the inflation – as the value of money decreased they were just paid more. It was the middle-class professionals who suffered the most, those on fixed incomes who had invested in supposedly “safe” war bonds to finance the war and now found their returns non-existent and their standard of living disastrously damaged. The rich, as is always the case, suffered relatively little; they had access to foreign currency and could ride out the financial storm. Today in the United States, there is talk of reforming entitlement programs in the interests of economically cutting the national debt, but these are “social” programs, popular with people, none of whom want to see their particular entitlement allotment reduced, just as in Germany workers refused to make sacrifices.

Taylor goes into extensive detail, most of it covering the wildly inflationary period in the Weimar Republic from l920 to l923 when the absurdity of trillions of marks being worth few dollars came to an end and the currency was revalued. It was hard to keep track of the principal players who kept getting shuffled around, or simply disappeared, through resignation or death, in a few cases violent death.

The great conflict during this period was between the Communists on the left, and right wing factions, the fledgling Nazis among them. The moderates who tried to keep the Weimar Republic afloat were attacked from both sides, but interestingly, many of the more educated professional and middle-class people, ones who had lost everything, in their bitterness and anger, supported the right wingers, and would become Nazi supporters.

Taylor makes some trenchant comments about Europe in 2013. The trauma of the aftermath of WW I, and the conditions that led to the rise of Hitler and WW II, still collectively haunt Germany. It is currently the richest and most populous country in Europe, and it is the “Shylock” of the region, refusing to forgive the careless profligacy of countries like Spain, Greece, Portugal, and Ireland, just as a hundred years ago Germany was not forgiven its financial problems by American, British, and French bankers. Germany learned its lesson the hard way, and there’s little sympathy for the financial straitjackets these countries find themselves in after their prosperity bubble burst.

[Sajith Kumar · Rating 3 out of 5]

War bestows on its participants more than what they ask for. Especially so in the case of the initiators of the Armageddon. Nowhere is the maxim more worthy of application than post-first world war Germany and its finances that doomed a generation of its people to immense hardships and loss of self esteem. Germany lost the war and was burdened with reparations to be paid to the victors. At the same time, the country’s ages-old monarchy crumbled and weak administrations having fickle roots on leftism alternated at the federal level. Money was demanded from all quarters and the government opted for the easy way – printing money whenever it is necessary without any valuable reserve to shore up the currency. Hyperinflation raged in the country, along with incalculable suffering for the middle class who depended on fixed income. The mark, which ruled at 4.2 to a dollar before the war, tumbled to a level of 4.2 trillion by December 1923. This book gives the history of Germany after the war, its travails facing the economic meltdown and how it came out of it, miraculously it may seem. The author, Frederick Taylor is a fellow of the Royal Historical Society and is a prominent author of three acclaimed books of narrative history, Dresden, The Berlin Wall and Exorcising Hitler.

The book provides a decent explanation of why Germany entered the world war riding on unmatched economic growth since German unification and victory over France in 1871. The society was behind the government in its war effort. Burdened with the costs of war, Germany abandoned the gold standard and the ‘mark’ – its currency – lost any foundation on solid ground. War bonds were issued to the public at 5% interest rate, repayable after the war. Patriots subscribed to the scheme in huge numbers, trusting the government with their life savings. The regime also persuaded its citizens to surrender their gold to the exchequer on the condition of remunerating them after the war. This loan gold enabled the authorities to bring out ‘bureau notes’, which soon acquired the status of currency notes. State authorities could purchase war bonds using these instruments and the positive feedback boded ill for the economy in the long term. The war dragged on and on incessantly at great cost in terms of men and material. German navy soon lost its edge, which resulted in a total naval blockade of the country by the British. After fighting 4 years, Germany signed the armistice in November 1918. The long suffering people took to the streets, the king abdicated and fled to Holland. Germany was inaugurated as a republic. In a bitterly fought civil war, the social democrats attained power.

Germany found itself in a daunting situation. The victorious allies were baying for reparations, not just for damage inflicted on economies under German occupation, but also for the war costs of British, France and Belgium. Burdened with unstable socialist governments and a weak mark, the country was not in a position to pay reparations. The victors were no better too. They owed a large sum to America as the war debt which the creditor wanted them to repay, who had no other option than to tighten the screw on Germany. The country slipped more and more into inflation, when the stage reached that prices increased more than 50% month on month, the term ‘hyper inflation’ described the ground realities. But still, Germany had Europe’s second largest economy and unemployment was all time low. Then why did Germany fall into the trap and Britain didn’t, even though both were teetering on the edge when armistice was signed? Here, we see the power of democracy established well on the ground. Britain embarked on austerity measures, even risking public resentment, to tide over the crisis. This was not an option in Germany. Militant labour was threatening to run over the country. Unpopular ministers and administrators were being assassinated, not just being deposed. The government was not sure, whether the Reichswehr (army) would stand by them in the face of harsh measures. The Weimar Republic was afraid of the citizens; it tried to appease them by increasing wages to adjust for inflation and paid them in paper marks not backed by gold. Paper notes were printed by the billions and it soon reached a stage when the currency was not even worth the paper on which it was printed. A tipping point was the assassination of Walther Rathenau, the foreign minister who was dealing earnestly with the Allies to negotiate a settlement, at the hands of a Rightist militant. The world lost all confidence in Germany. This was complicated by the occupation of Ruhr by France which was incensed at the non-payment of reparations.

German trauma at the huge depreciation of their currency was intense. During the months of September – October 1923, when the paper mark reached its lowest, a single note of denomination 100 trillion was introduced, which was the largest denomination printed ever. Most of the notes were printed only on one side for ease and to save ink. Unemployment soured in 1923, causing further resentment and aiding the propaganda of Hitler’s far right party. People bought up provisions as soon as they had currency and tried to live off a week or month on the stock. Prostitution and auctioning of family heirlooms flourished. A heartrending story of an aged literary figure reflects true conditions in Berlin. He had a pre-war investment of 1,00,000 marks which was enough for a comfortable old age. But the hyperinflation wiped out the value of the investment, when even food items were quoted in the millions. The man bought a tram ticket with the money and traveled the full day to his heart’s content. Then he locked in to his apartment and died of starvation.

The solution to the currency issue came rather fast. Germany understood in 1923 that a polity strongly influenced by socialists and communists would always stop shy of anti-populist, strong fiscal measures to stabilize the currency. A temporary dictatorship was proclaimed in October 1923 and the regime moved decisively in. A new currency, Rentenmark, was introduced with the pre-war exchange rate. This currency was issued in regulated quantities and the old currency was stopped in circulation. The economy was gradually tamed. The reparations were paid in part by ambitious American loan plans till the country plunged into the Second World War. It was divided into the East and the West. Formal reparation payments were stopped till Germany was reunified again; the thinking at that time was it to be a very remote possibility. But in 1990, Germany was united again. It issued bonds with 20-year tenure for the repayment, and in 2010, fully paid up its due of the First World War!

Taylor’s narrative is intense and faithfully reports the ground reality, but lacks attractiveness. The aloofness of a bank statement pervades the book. You get a lot of information, but the cheery asides which adds value to a historical exposition is sorely lacking. The few plates on post-war Germany are good, but they are very few in number. Some of them are irrelevant, too.

Taylor brings out comparison with modern day’s poor nations in Europe, like Greece, to draw conclusions on the policies that need to be addressed by the debtor to move forward. It provides informative reading, as does the quoted warning of John Maynard Keynes that inflation is a device for the regime to rob its people. Governments anywhere may feel tempted to create inflation to wipe off its internal debt. The worst case happened in post-war Germany. The total amount collected in war bonds was 154 billion marks from its citizens, but at the height of hyperinflation, its value stood at just 15.4 pfennigs!

The book is recommended.

[George · Rating 5 out of 5]

We . . . ended up in a thoroughly respectable bourgeois apartment. The walls were hung with portraits of the male family members in officers’ uniforms, and there was a picture of a sunset. We were handed champagne, that is: Lemonade with a little alcohol in it. Then the two daughters of the house entered, in an unclothed state, and began to dance. The mother looked hopefully at the foreign guest: Perhaps her daughters would please them and would pay well, in dollars, of course. ‘And this is what we call life,’ the mother sighed. ‘Actual its purley and simply the end of the world.’

It is little gems like this in the book that made it such and interesting read, giving you a great insight into what it was like on a personal level for the people to live or should I say survive during a hyperinflation. The book is mainly about the political situation of Weimar republic, with a sprinkling of personal tales like the one above, making everything feel that much more real. If you are only interested in the economics and monetary policy of the time, this is not the book for you, however this book tells you how the hyperinflation destroys people’s lives as well as their family and loved ones with individual tales and stories. It also tells you the politics of the time, which was complicit in letting the printing presses run wild, and thus must take a large share of the weight of responsibility for the destruction the hyperinflation caused.

Anyone interested in the Weimar hyperinflation I would recommend these 3 books, which I think complement each other nicely.

The Downfall of Money by Frederick Taylor
Giving you a political view of what was happening and a personal view of the devastation the hyperinflation cased to the people.

When Money Dies by Adam Fergusson
Giving you the economic and monetary policy of the country with all the figures to go with it.
When Money Dies: The Nightmare Of The Weimar Hyper Inflation

Lords of Finance by Liaquat Ahamed
Giving you a overview of what was happening on the international stage of the world of finance following the central banks of the four largest economies Germany, France, Britain and the United States.
Lords of Finance: 1929, The Great Depression, and the Bankers Who Broke the World

[Marks54 · Rating 4 out of 5]

This is a book about the German hyperinflation of 1922-1923. Well ... it is actually about the German inflation of 1914-1923. Lots of people who read about European history know of the German inflation, which was a catastrophe for the German people and which is still recalled today in debates on EU monetary policy. Far fewer know about it in detail, with the result that debates about inflation get very confusing at times. It is just not clear that an uptick of the CPI to 10% will lead inexorably to the destruction of savings, the limiting of economic activity, and the onset of dictatorship and war. What the book does is to chronicle the history of German through WWI and the first four years of the Weimar Republic, while mapping political and social developments onto changes in the value of money and exchange rates. This sounds simple enough but the result is a very interesting book.

This is not a book about economics. It is more about political economy, but even that is a stretch. It is a history of how the abstract world of money and banking fits into the all too concrete world of war, politics, and social disruption. It is a very clear presentation of what happens when a modern industrial society with a sophisticated money economy copes when its money suddenly becomes worthless. The book outlines who won, who lost, and how the memory of the chaotic situation influenced Germany for decades, long past the Nazis and WWII. The story also shows the interplay of government action, chance, and chaos. It is clear that the German government at various steps adopted policies that, however well intentioned, contributed to the inflation. Add to this the issue of war reparations and the Versailles Treaty that was hated in Germany, and it is not hard to see how the mix of circumstances necessary for hyperinflation could be3 put into place. Anyone interested in thinking hard about the effects of inflation on a society should read this book. It is tempting to think that events in 1922-1923 are not of contemporary interest, but as the author points out, recent events regarding the world economic crises and the future of the Euro have shown that they are of considerable interest.

[Mike Cheng · Rating 2 out of 5]

In less than 10 years (approximately from 1915 to 1924) the German papiermark (went from being valued at around 4 : 1 US dollar to 4.2 trillion: 1 US dollar. This book summarizes the economic, socioeconomic, and political events during the Weimar Republic that caused the hyperinflation, and eventual rise of Adolf Hitler. The tl;dr / oversimplification of what happened: (i) to fund World War I Germany decided to borrow rather than tax its citizens, while also going off the gold standard; (ii) Germany assumed that it would win the war and that it would recoup its war spending by forcing the defeated foes to pay reparations; (iii) the opposite happened - Germany’s defeat ultimately resulted in it being on the hook for reparations, which had to be paid in either gold or foreign currency; (iv) after Germany’s gold supply was depleted, it printed more marks to purchase foreign currency to pay those reparations; and (v) any natural correction of inflation was intentionally (and shortsightedly) resisted in order to artificially maintain full employment.

[Andrew Davis · Rating 4 out of 5]

A well paced story of Germany's struggle to pay off her Versaille obligations during the Weimar Republic days. The author reminds us that at that time some other countries in Europe sufferred from hyperinflation as well, however only there, when combined with a struggle between extreme-left and right, it resulted in the right-wing nationalistic forces taking over and the total catastrophy to follow in a few more years.

The author highlights the insistance of the American bankers on their allies France and Britain to pay back their war loans, which the allies wanted to get through Versaile reparations. The German war loans had been sourced from the outside but also from its middle classes who had purchased the government war bonds. The subsequent hyper-inflation impoverished the middle class when the value of their savings disappeared and made them hate their democratic government.

[John Greanias · Rating 5 out of 5]

I was a teenage millionaire! That was 55 years ago. Quite an accomplishment! I still have the proof. It is a single paper currency in the denomination of 1,000,000 German marks. OK, I knew at the time that I could not spend it to purchase anything of value. However, I never fully understood the operative political and economic factors that made a million marks worthless. This book provides all the answers, and makes you think about the U.S. Treasury now printing dollars at historic levels.

[Machiel Reyneke · Rating 3 out of 5]

I struggled with this book. The content is rich and it does provide a very interesting perspective of 1920s Germany, but I was personally more interested in the specifics of the hyperinflation and mechanics surrounding it than all the political details included in the book.

Worth a read if you are interested in the era.

[Dominic Mozel · Rating 2 out of 5]

I found this to be very boring. It could be that I did not expect so much background history. It seemed to lack the discussion of hyperinflation and how that specifically affected people.

[Shan P S · Rating 5 out of 5]

This is a good book to learn about German hyperinflation during the interim period between the two world wars. It is easy to read, even though the topics are very serious, tragic and complex. The author has clearly conducted a lot of research, and distilled his effort to make the text concise and easy to understand. The book shows how chaotic Germany (and the whole of Europe) was during the end of the first World War. The suffering of the German people throughout this period is captured with sensitive detail. A good historical account. The final chapter, where the author puts the current (2013) European Union credit crisis in context of the trauma of hyperinflation and economic crisis of the past century was very relevant, and shows how history plays a role in the present too.

[Macka · Rating 3 out of 5]

I expected more, not from the book itself but from runaway inflation.
This book covers the time period between two well known and what I would say are almost over documentation periods, WW1 and the German build up into WW2. It does an excellent job filling in this gap.
Ive recently been watching the NG series 'Preppers' and there are many preparing for 'hyper inflation' or 'death of the US dollar', but all things considered I was surprised by how well the population handled it.
Perhaps it was the unity felt after the war period and the lack of major divisions.

For anyone looking for either an insight into the between war period and what lead to WW2 or what happens during high inflation this is a valuable read.

[Richard Mancuso · Rating 5 out of 5]

This book does a magnificent job of providing an in depth history of one of the most famous hyperinflations. Not only does the author provide a rich background to the events leading up to, and the factors that fueled, the Weimar hyperinflation, but the text is interspersed with stories that show the human impact of the Weimar hyperinflation on different classes and groups within Germany. The narrative is engaging and the author does an excellent job in making links between the historic experience of the hyperinflation and the aversion later generations of Germans would have with lax monetary policy.

[Connie Pollock · Rating 4 out of 5]

A very readable account of the uncertainty of life in post war Germany. Government actions and international pressures that spawned the hyperinflation are explained in laymen’s terms. The book also includes a lot of anecdotal material from the diaries and letters of ordinary Germans about how they coped (or didn’t cope)with the chaotic economy of early 20’s.

[Mark Birmingham · Rating 4 out of 5]

Doesn't provide great detail or data about the role of the private banking system in the hyperinflation. It talks about the central bank but it'd been interesting to see estimates of loan growth relative to cash etc.

[Andy · Rating 5 out of 5]

A great recap of history and a cautionary tale

The discussion of the Weimar hyperinflation is a much more complex story that many realize. And it is a story that hopefully does not, yet in fact may, impact the global financial system again

[Sangkug Yi · Rating 4 out of 5]

Good description of Germany's Hyperinflation during early 1920's. Not much analysis or speculation. That can be a plus, actually.

[Daniel Farabaugh · Rating 4 out of 5]

While a very dry topic, this book does a good job illustrating the economic principles that led to the fall of the German economy.

[Myoungseok Jeong · Rating 4 out of 5]

Well balanced book including background of political, social impact.

[Joe Hosler · Rating 5 out of 5]

Enlightening and factual view of the power of government destroy he wealth of the middle class.

[Gaylord Dold · Rating 3 out of 5]

Taylor, Frederick. The Downfall of Money: Germany’s Hyperinflation and the
Destruction of the Middle Class, Bloomsbury Press, New York, 2013 (416pp. $30)

The story of Germany’s hyperinflation begins in the late summer of 1914 when her young men marched off to glorious war accompanied by the cheering of massed millions, throngs of newly-minted nationalists among which were socialists and Social Democrats who, before the outbreak of hostilities in Serbia, had maintained that workers were first and foremost brothers in the struggle for human rights against the world’s capitalists. This ideal, it was forecast, meant the end of war and the termination of class struggle and, at long last, peace for the cannon-fodder peoples.

It was known at the time that war was expensive. It had always been expensive. But, German politicians reasoned, the Reichmark was one of the world’s most powerful and stable currencies, Germany herself a prosperous and growing economy with a small social service sector, the world’s most advanced technological society, a healthy rail system and the Ruhr to provide energy and steel. With the war projected to last only a few months until ultimate German victory, the country could borrow from its own people and from a few international banks to finance the cause.

Four years later the happy nationalist throngs had become a starving horde, beset by food shortages, lack of coal to burn for heat, and assaulted by disease and civil disquiet including the threat of revolution. The German treasury was empty and the victorious Allies were demanding reparations that amounted to staggering sums, many times the GDP of Germany when it was prosperous and healthy.

Historian Frederick Taylor is one of the world’s leading authorities on German history, the author of three acclaimed narrative histories, Dresden, The Berlin Wall and most recently, Exorcising Hitler, editor and translator of The Goebbels Diaries:1939-1941, and a fellow of the Royal Historical Society. His latest book, The Downfall of Money, is a solid, deeply-researched, and lively investigation into the post-war breakdown of German civil society represented most basically by the hyperinflation which saw, in a number of stages, the German mark fall from 4.2 to the dollar before the war to a net 4 trillion to the dollar during the turgid autumn of 1923. And while much of the basic history of the Weimar period is well-known (perhaps the most brilliant book about Weimar is Otto Friedrich’s classic Before the Deluge: A Portrait of Berlin in the 1920’s) and represented by dozens of books in the literature, Taylor’s book deserves pride of place because of its advanced research techniques and a sharp focus on inflation from a political and social standpoint.

Try to grasp if you can the notion that Germans came to regard money as a terrorist tool employed against them by their own government. If you had any you were a fool or used it to paper your walls. For one thing, German politicians used inflation to defeat their international creditors, especially the French who had invaded the Ruhr and occupied its factories and coalfields in 1923. For another, the government employed it to avoid paying off its own citizens, who owned bonds. Little wonder that Germans came to despise money and questioned its meaning.

In any inflation, there are winners and losers. Germany’s creditors lost everything while those who owed money had their debt liquidated. Passive investors who owned stocks saw their investments rise in price, while desperate town-dwellers, government workers, middle class professional classes and factory hands mostly were ruined. Rich industrialists and robber barons made out nicely because they could buy foreign assets, borrow money and pay it back in deflated marks, and sell their steel and finished goods in foreign markets for dollars and pounds sterling.

Taylor’s new book is an in-depth look at a social and political world that has enormous consequence for governments today, including our own. For Germany, the downfall of money soon led, with the advent of the Depression, to the downfall of democracy after an attack from the far Right led by the little people who included, most prominently, Adolph Hitler.

[Liam · Rating 4 out of 5]

"'The trams and underground railways were running as usual, a sort of pledge that, so far as the immediate necessities of life were concerned, all was in order. On every face was written: Salaries are still being paid.'" (quoting Ernst Troeltsch on the revolution, 67)

"The government's policy now became known as 'fulfilment': that is, the German government formally accepted the treaty, even though doing so under duress, and would not show itself openly in breach of its provisions. But in its apparent compliance with the agreement, while attempting to 'fulfil' its terms, the German government would consistently aim to show the impossibility of doing so." (130)

"The rich industrialists bought and bought and got richer and richer, not so much in paper marks but in physical things. The flight into 'material assets' (Sachwerte) became, for a minority of the German nation, a way to solid riches among the growing financial chaos." (173)

"[I]n 1913, 15 per cent of Germany's wealth had its origins in investment income rather than wages and salaries. During the course of the inflation, this would be subject to drastic reduction, falling to a mere 3 per cent." (214)

"Because the amount of paper money now being used by the Reich in such huge six- and seven-figure denominations was still insufficient to meet all the public's needs, and in any case became all but valueless within days or even hours of coming into individuals' possession, states, municipalities, and even private companies had started printing their own promissory notes, based on whatever resources they controlled. These notes would be issued as currency, usually (but not always) valid only in a specific locality. Some indulged themselves in a little dark humour. One industrial firm printed a 500,000-mark note which was festooned with the larky motto: 'If a briquette of coal costs more than my face, feel free to stick me in the stove in its place.'" (289-90)

"With the establishment of a 1-trillion paper mark to one Rentenmark value, Germany's post-war domestic debt -- founded overwhelmingly on all those virtuous citizens who had bought war bonds in the hope of a small regular reward for their patriotism -- was reduced from 154 billion marks in November 1918 to exactly 15.4 pfennigs in November 1923." (328-9)

[Patrick Gilner · Rating 4 out of 5]

A surprisingly pedestrian accounting of the hyperinflation, but a pretty decent survey of the end of WWI, German Revolution and Civil War, and the early Weimar years. The coverage of the collapse of the middle class Bürgertum was largely limited to the Bildungsbürgertum and a select focus at the end of how inflation eroded middle class social and sexual values without the explicitly critical lens that this cohort, which became the core voting bloc to empower National Socialism, demonized Weimar liberation as part of the Nazi narrative that re-wrote history to serve it's own legend.

[Nicki · Rating 2 out of 5]

I received a free copy of this book through Goodreads First Reads.

I read one-third of this book. It was not what I was hoping for based on the title. I am interested in economics as it relates to socioeconomic classes and the individual life experience. Because "Destruction of the Middle Class" is in the title, I was hoping to learn more about what Germans were going through as their economy and currency plunged. However, this book gives more of an arm's-length political view of the German economy and in my opinion, requires a good chunk of German political background knowledge to get a full grasp of the information. If you are looking for a book that is more historical than sociological and more politically than economically-focused then you will rate this book more highly than I. The book is well-written and probably worth a full read to many, just not to me.

[Brian Goeselt · Rating 4 out of 5]

Both history, and a lesson. "Downfall" fills in lots of gaps in the story of Germany in the aftermath of the Great War. The story has been told before, but here the emphasis is on the intersection of class, politics and the very idea of money itself. Why did Germany choose to allow inflation to run amok while England, France and the United States all made good on war debts at the expense of workers? Throughout the years covered, 1918-1923, the specter of Hitler is always lurking in the background. You know how it ends, though perhaps you didn't know how it came about. Read, and think.