A short lived German coin aimed at deflation

Post WWI Germany

After World War One, Germany was severely punished by the terms of the Treaty of Versailles. The newly formed Weimar Republic faced much opposition from both right- and left-wing groups. From 1918 to 1933, reparations payments, hyperinflation and the Great Depression caused much economic hardship for the German people.

War Guilt Clause 231 stated that ‘Germany accepts the responsibility of Germany and her allies for causing all the loss and damage (in the War).’ This caused anger in Germany as they felt it was unfair to hold them solely responsible for causing the war. Many nationalists believed the government had sold Germany out to its enemies by ending the war too early. Germany had to pay for all of the damage caused in the war. This figure was decided to be £6.6 billion in 1921, and was finally paid off in 2010. As well as this, there were limits placed on the size and capability of Germany’s armed forces. Germany also lost 13% of its land and 10% of its population, including industrial coal and iron producing areas, exacerbating its economic problems.

The Weimar Republic

The Weimar Republic was the new system of democratic government established in Germany following the collapse of the Second Reich at the end of WWI. The first elections for the new Republic were held on the 19 January 1919. They used a voting system called Proportional Representation. The Social Democratic Party won 38% of the vote and 163 seats, the Catholic Centre Party won 20% of the vote and 91 seats and the Democratic Party won 19% of the vote and 75 seats. The rest of the seats were divided up between the smaller parties. The three main parties formed a coalition, which had the task of drawing up a new constitution.

As Berlin was still in the grips of revolution, the market town of Weimar was chosen as the meeting place. This venue gave the new nation the name the ‘Weimar Republic’. Instead of a monarch, there was a president elected every seven years. The president’s power was limited by the Reichstag. However, in the state of an emergency, Article 48 of the new constitution gave the president ultimate authority to rule by decree. There were two parliamentary houses in the Republic, the Reichstag and the Reichsrat. The chancellor was the leader of the Reichstag. The chancellor held similar position to the British Prime Minister, and was appointed by the President. Typically, the chancellor would be the leader of the largest party, although this was not always the case.

Popular culture has a fascination with nostalgia for the 1920s. Shows such as “Babylon Berlin” portray some beauty of the music, art and literature of the period, as well as the drama and tension. The 1920s were a turbulent time in Germany particularly. Reparation expenses caused unsustainable inflation and resentment. Taking the full blame for WWI led to a rise in nationalism. And, if anything was starting to improve by the end of the decade, the Great Depression ensured continuing economic turmoil. The impact of the Great Depression was particularly severe in Germany, which had enjoyed five years of artificial prosperity, propped up by American loans and goodwill. Unemployment hit millions of Germans, as companies shut down or downsized. Others lost their savings as banks folded. The dire conditions of the early 1930s led many German voters to abandon mainstream political parties and look to more radical alternatives, such as Adolf Hitler and the Nazi Party.

Towards WWII

At the start of WWI, a 25 year old Adolf Hitler eagerly joined the German army. As a courier, he conveyed messages from the leadership to the front. The work was dangerous, but much less so than that of the soldiers at the front. In December 1914, Hitler received the Iron Cross for his bravery. In 1918, news of the German surrender plunged him into a deep crisis. In the aftermath of the war, he became radicalised and went into politics.

In 1919 Hitler joined a small political party in Munich, known as the German Workers’ Party. Before long he was its leader.

He changed the party name to the National Socialist German Workers’ Party (NSDAP). This became known as the Nazi party.

The Nazi party’s policies were deliberately vague so they might appeal to as many people as possible. People of both right and moderate-left wing politics joined because they agreed with at least one of their policies:

• Abolish the “unfair punishment” of the Treaty of Versailles
• Better pensions and increased employment
• Opposition to communism
• Belief in the supremacy of the German race
• Promise to re-militarise Germany
• Hatred of Jews as a scapegoat for all of Germany’s problems

The Nazis formed a huge propaganda machine with a presence in many cities and towns. They used simple slogans to introduce their ideas and to make them appeal to the ordinary people of Germany. When social unrest increased after benefits were cut in 1930, Hitler got support from Industrialists, helping finance the 1932-3 elections and ensuring the communists were defeated.

Obverse

Like many other German coins of the time, the obverse of the 1932 4 Reichspfennig coin depicted the German Imperial Eagle. Known as the Reichsadler, one interesting aspect of this coin compared to others of the period, is the fact that the bird takes up the whole obverse, with no text around the edge. The only letter on this side is a mintmark below the eagle, which is one of:

A Berlin
D Munich
E Muldenhütten
F Stuttgart
G Karlsruhe
J Hamburg

In my case, the coin was minted in Berlin. This is the most common mint for these coins with over 27 million examples minted. Munich is the next most common with only 7 million examples. There were proof examples made at each mint, which are much less commonly found.

The Brüning thaler

Heinrich Brüning was the German Chancellor from 1930 to 1932. Dubbed the “Hunger Chancellor”, for his scorched-earth economics, use of emergency powers, and hostility to the unions. In the late 1920s / early 1930s, Germany had 7 standard circulating coins:

• 1 Reichspfennig
• 5 Reichspfennig
• 10 Reichspfennig
• 50 Reichspfennig
• 1 Reichsmark
• 2 Reichsmark
• 5 Reichsmark

The stated aim of Brüning’s government was to reduce wages and prices, which was to be achieved through far-reaching austerity measures. Brüning aimed for a 20% devaluation of the Reichsmark in order to generate an export surplus, which would bring more foreign currency into the Reich. The aim was to stimulate the savings behaviour of the population.

The introduction of the 4-pfennig coin was one means of achieving this. It was linked with the hope of making it easier for people to calculate in pennies. It was intended to guide the people into a dual digital payment system with 2 and 4 pfennigs instead of the decimal system of 5 and 10 pfennigs. The government hoped that consumers world prefer the dual payment system so that dealers would adjust their prices to the 4-pfennig piece.

However, the Reichsbank had difficulties trying to get the population to accept the new penny. Public institutions and banks did not order the 4-pfennig coin. Many of the 50 million pennies that were circulating were exchanged by the Reichsbank. People were afraid of losing their assets and refused to use the coin. In a final act of desperation, Brüning’s government even ordered that when the salaries of public employees were paid out, they would include two Reichsmarks worth of 4 pfennig pieces. That, too, did not have the desired effect. In a malicious aside aimed at Brüning’s politics, the chancellor’s forename was mockingly adopted for the pfennig coin: “Armer Heinrich” (“Poor Heinrich”). Other names included the “Brüning-Taler” (“Brüning-Dollar”), Brüning-Pfennig” and “Brüning-Sechser” (“Sechser” describes a 6-pfennig coin, an allusion to the unusual face value).

After its introduction on 1 February 1932, the 4-pfennig coin remained in circulation for less than two years. After taking power, the National Socialists withdrew the 4-pfennig coin from circulation in an emergency decree dated 18 March 1933.

Reverse

The reverse of the coin features the country name and year around the top “DEUTSCHES REICH 1932” (German Reich 1932). The value “4” took up the centre, with the denomination, “REICHSPFENNIG”, below.

Following the ill-fated introduction of the 4 Reichspfennig, until the introduction of the Euro, Germany had coins in denominations of 1, 2, 5, 10, 20 and 50 pfennigs, and 1, 2 and 5 Mark. The 4 Reichspfennig coin was the second-last circulating denomination value removed from circulation. Through the Weimar Republic period, Germany had also had a 3 Mark coin. Initially introduced in 1922 in Aluminium to mark the new constitution, there were 19 circulating commemorative designs issued throughout the 1920s and into the early 1930s, all in .500 silver. There was also a “standard” version, still in silver, issued from 1931 – 1933. No coin with a denomination of “3” or “4” has been issued by Germany since 1933, circulating or not.

What is your most interesting coin in a denomination no longer issued? Let us know below!