BLOG #11, SERIES #9
WEDNESDAYS WITH DR. JOE
SHOULD WE BE AFRAID OF INFLATION?
March 14, 2018
As I have been sifting through tens of thousands of magazine pages in search of strong nonfiction integrity stories, I stumbled on Philip H. Ward’s article titled “The German Inflation Stamps” in the October 1936 issue of St. Nicholas magazine. And it reminded me of one of the most horrific stories of the Twentieth century. Horrific, not because of financial reasons, but rather because of what followed in its wake.
Because post-World War I inflation was so out of control, at its worst, it would take a wheelbarrow heaped full of German money to purchase a loaf of bread. It got so bad that the desperate Germans would have elected the Devil himself if he’d promise to save them from mass starvation. Well, they didn’t elect the Devil, but they did elect the human Devil-incarnate, Adolf Hitler!
Read on to see how bad conditions were at the height of Germanic inflation.
One of the most interesting issues of stamps ever to appear were the well-known inflation stamps of Germany issued in 1922-23. The German mark worth originally around 25c, at the height of inflation took about fifty billion marks to mail a letter to the United States. Get out your pencil and paper and you will find that on the pre-inflation basis this would represent $12,500,000,000.
In accordance with the Universal Postal Union regulations the stamp for international mail should be blue. This enables the foreign mail clerk to see if proper postage has been paid irrespective of whether he knows the currency of the foreign country or not.
For many years the 20 pf. Blue paid the international postage and had a face value of 5c or 25c to the mark. By 1920 it took 30 pf. An increase of 50% so that the mark was worth about 17c. In 1921 the 1.20 mark was used, hence, the mark had depreciated to 4c. By 1922 it took 2,000 marks for a foreign letter and by the next year the mark changed so rapidly that one had to call at the Post Office to find out how many marks were required to post a letter. As a result, many stamps were surcharged with new values for the changes were so rapid that it was impossible to make new plates in time. It will, therefore, be understood why Germany had stamps in denominations of 1, 2, 4, 5, 10, 20, 30, 50, 100, 200, 500 million marks and 1, 2,m 5, 10, 20, 50 billion marks. In other words, a set of German stamps of the 1923 period based on the original value of the mark would pay the world war debt in full with interest. Would it not seem odd if our own United States had to put a $12,500,000,000 stamp on a letter to mail it to Germany? Unchecked inflation could do it.
We illustrate eight of the German inflation stamps with a face value of 39,700,800,000 marks, worth just a few cents at the time of issue.