In 1914 the political situation in Europe escalated. The Sarajevo murder, in which Serbian terrorists
assassinated the Austrian archduke Franz Ferdinand, triggered the
Great War. Germany and Austria
facedRussia, England and France.
The German war strategy followed the
Schlieffen Plan, which assumed a
defeat of France in a surprise attack (accepting the violation of the neutrality of Belgium) and
thereafter the ability for the German troops to focus all forces on the Russian front.
The German attack in the West
The attack on France started in August 1914 but came to an earlie hold already in September.
The battle at the river Marne stopped the German forces and the long
battle in the trenches
started. On a frontline of about 700 km length
the troops of the enemies stuck in their trenches and no significant territorial gains could be made
by either side.
The attacks from both sides became ever more brutal.
Chemical weapons were used
(from 1915) and the Germans declared the
Total War at sea using submarines (in 1915 but abolished soon
due to fear of American intervention and started again from 1917). Fatalities amongst American
citizens finally brought the USA into the war against Germany and Austria (1917).
Coins were fatalities of the war
Once World War I had started
in 1914 the German government struggled to cover the cost of the war.
The pegging of the Mark to Gold could not be sustained. The government started to circulate more money
to buy weapons and supplies for the war. The country's debt was increasing fast.
Coins made up 56% of
the circulated money in 1913. In 1918 it was a mere 0.5%. Coins were started to be minted in less
valuable metals like Iron instead of Gold and Silver, but also metals needed for the war production -
like copper and nickel - were replaced.
In 1917 the first Pfennig minted in aluminium was introduced.
Additionally many municipalities and companies issued
Notgeld - emergency paper money in small denominations to replace coins. The
value of the Mark deteriorated heavily during the course of the war, driven by the inflationary money
supply.
Crisis in the German home land
Initially the German people were very enthusiastic about the war. Many volunteers joined the forces.
After the initial success turned into a stalemate, the war also took its economic toll. The living
conditions in Germany deteriorated rapidly.
From 1915 the food was rationed. In 1916 the harvest
brought in only 50% of the normal production of potatoes. A famine followed in the winter of 1916/17.
A large black market for foodstuff evolved. The social difference between the poor and the rich
widened drastically. During the Great War about 750,000 people starved to death in Germany.
Germany occupied several countries (e.g. Poland and Romania) during the war. Within these
occupied territories separate banknotes were given out.
From 1914 on the German state founded the Darlehnskassen, which were specialised institutes to issue
loans against goods rather than Gold. This allowed the government to raise more debt and circulate
even more money.
New ways for the currency and the end of the War
Although the Darlehnskassenschein
(notes issued by these institutions) were no real
banknotes, they were used as such in the daily lives of the people and businesses. The issue of
additional money further undermined the value of the Mark.
Following some revolutionary movements in Germany, in which the people stood up against the continuos
war, a ceasefire was agreed in October 1918.
The agreement came after all efforts of the German side failed to
further a success in the war.
The economic situation did not allow for a continuation of the war
either. The conditions to end the war were devastating for Germany. They included the loss of one
seventh of the pre-war territory, the abandonment of heavy weapons, restrictions of the size of the
army and huge payments of reparation (269 billion Gold Mark).
Please have a look at some sample banknotes from World War 1.
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