In Germany the first banknotes were issued in 1705 in the town of Cologne. It was the time, when in
Friedrich Wilhelm I became King of Prussia (1713). By fighting several wars he extended the Prussian
influence within the German territories and beyond. But he also initiated many reforms to modernise his country.
Prussia became beside Saxony, Bavaria and Austria a leading power in the German Empire.
The roots of the German Empire reach back to the Roman Empire. From the 10th century on
historians speak of the German Empire, which has its roots in the empire of Charlemagne (768-814).
Germany a nation made of many countries
Until 1871, however, the German Empire was a loose collection of states with a changing degree of
independence. Some of these states were very small and some were large and powerful. Different
religions, political alliances and territorial claims caused many wars between the states belonging
to the Empire.
In these days various currencies were used in the German regions.
In Southern Germany people used different forms of Taler, Gulden and Kreuzer, while in Northern Germany
the Prussian Taler dominated. Although the currencies had similar names, there were seven different
main currencies and several smaller regional currencies in use.
In the early 19th century Napoleon had conquered the German states. After his defeat the German states
founded a union at the Vienna congress in 1814. This loosely union was called "Deutscher Bund" -
the German Confederation. It consisted of 35 states and 4 free towns. These members were independent
entities, though. Many of them issued their own money. The two mightiest players in the
alliance were Prussia
and Austria. In
1866 a war between these two states
ended the confederation.
Prussia won this war. It formed a new alliance - the North German confederation ("Norddeutscher Bund"),
which it dominated. Otto von Bismarck (1815 - 1898) was the
Prime Minister of Prussia at that time. He
used his diplomatic talent to negotiate bilateral agreements with several South German states.
Bismarck brought the former enemies together, because they all feared the French power.
Baden, Bavaria and
Wurttemberg were the main states from Southern Germany that were now associated with the North German
confederation.
The unification of 1871 forms the German Empire
Bismarck's diplomacy isolated the French Empire, which ended in France's declaration of war against
Germany. Prussia led the Northern German troops together with those from the three Southern states to
fight France together in 1870/71.
After the victory over France a new unified German state was
announced - the German Reich ("Deutsches Reich"). Germany became a single state for the first time
after several hundreds of years. The King of Prussia Wilhelm II was crowned as the German Emperor -
a title that had been abolished by Napoleon in 1806.
After the unification in 1871 a new currency was issued for the German Reich - the Mark
(Reichskassenschein). Many of the old currencies, however, remained in circulation and use. Some
Taler were valid until 1907 and were used beside the new Mark. Bavaria kept their Heller as part of
the new currency system (1 Heller = 0.5 Pfennig, 100 Pfennig = 1 Mark). The Bavarian government
thought that the Heller should be kept, because it feared that the people would not accept a price
increase for beer as steep as a whole Pfennig.
Initially only banknotes in denominations of 100 and 1000 Mark were issued. Since the yearly average wage at the end of
the 19th century in Germany was around 1000 Mark - these bills were merely used between bank, firms and the very rich.
The normal use of money was restricted to coins. These banknotes are extremely rare and valuable.
Banknotes issued from 1904 on are much more common. Most of these bills were given out until the early 1920s, at which
time the became obsolete due to the devaluation of the Inflation.
The Reichsbank in Berlin took over the monetary control
in Germany after 1871. It ensured the supply and stability of the Mark. Additionally some of the
Central Banks of the formerly independent German states
(Privatnotenbank) contiued to issue banknotes
denominated in Mark. The Bank of Saxony (Sächsischen Bank zu Dresden) continued to do so
until 31. December 1935. All other private Notenbanks lost this privilege earlier.
The German Reich had a parliament and a Prime Minister. The head of the state, though, was the Emperor.
The politics of the years 1890 (Bismarck's retirement) till 1918 were dominated by the
Emperor Wilhelm II (1859 - 1941). Germany
started to expand its colonial interests. To support the activities
overseas, the German fleet was built up rapidly. The powerful position of the Emperor lasted until the
end of World War 1. In 1918 revolutionary movements across
Germany forced the Emperor to abdicate. This marked the final end of the German Empire.
The German currency - the Mark - was pegged to Gold and became a very stable currency. It was
also used in the newly acquired German colonies. Those issued there own variations of the Mark.
A new chapter started for Germany and its money with the beginning of
World War 1.
People related to the German Empire
Please have a look at some sample banknotes from the imperial period .
|
