On the 15th October 1923, the Rentenmark was introduced in Weimar Germany in an attempt to stop the hyperinflation crisis that had crippled the economy. Gustav Stresemann’s finance minister, Hans Luther, introduced the new currency to replace the crisis-hit Papiermark in a plan devised jointly with Hjalmar Schacht at the Reichsbank who went on to be Minister of Economics in the early years of Hitler’s rule.
The French and Belgian Occupation of the Ruhr that began on the 11th January 1923 had been met with a policy of passive resistance by the German government. Although this succeeded in frustrating the occupying powers who sought to extract reparations payments in the form of natural resources, it also brought the economy in the Ruhr to a shuddering halt.
Since the strike had been called for by the government, the strikers and their families were eligible to receive income support. However, with falling tax revenues as a result of the lack of trade the government struggled to keep up with payments. In response they began printing money even though there was no product to base it on. The so-called Papiermark went into freefall as hyperinflation took hold, and the cabinet resigned in favour of a new one formed under Stresemann.
The new currency was backed by real estate – land that was used by businesses and agriculture – and was introduced at the rate of one Rentenmark to one trillion Papiermarks. With the currency now tied to something with physical value, hyperinflation was stopped in its tracks. The more commonly known Reichsmark was introduced the following year at the same value.