Notgeld

File:50-Pfennig-Notgeld.jpg

A 50 Pfennig Notgeld banknote from 1922 issued by the town of Kunzendorf, Upper Silesia, Germany (after 1945 Kończyce, Poland)

Notgeld (German for "emergency money" or "necessity money") was special money issued primarily in Germany and Austria to deal with economic crisis situations such as a shortage of small change or hyperinflation. It was not issued by the central bank (Reichsbank) but by various other institutions, e.g. town savings banks, municipalities, private and state-owned firms. It was therefore not legal tender, but rather a mutually-accepted means of payment in a particular locale or site.

Notgeld was mainly issued in the form of (paper) banknotes. Sometimes other forms were used, as well: coins, leather, silk, linen, stamps, aluminium foil, coal, and porcelain; there are also reports of elemental sulfur being used, as well as all sorts of re-used paper and carton material (e.g. playing cards). These pieces made from playing cards are extremely rare and are known as "Spielkarten", the German word for "playing card".

Notgeld during the Great War

A 1/2 Million Mark Notgeld coin from 1923 issued by the city of Hamburg, Germany

The first large issue of Notgeld started at the outbreak of World War I. Due to inflation - caused by the cost of the war - the value of the material that a coin was minted from was higher than the value of its denomination. Many institutions started to hoard coins. Additionally, the metals used to mint coins were needed for the production of war supplies. This caused a massive shortage of metal for coinage, which was remedied by issuing banknotes in small denominations.

As these banknotes were very colorful, they soon became a target for collectors. As the issuing bodies realized this demand, they continued to issue these notes beyond their economic necessity up till 1922. Quite often the validity period of the note had already expired when the notgeld was issued. The sets that were issued in 1920 and predominantly in 1921 were usually extremely colourful and depicted many things, such as local buildings, local scenes and local folklore/tales. These sets (that were not actually issued to go into circulation) were known as "Serienscheine" (serial paper money).

Notgeld during the German hyperinflation

In 1922 inflation started to get out of control in Germany, leading to the German hyperinflation. Until 1923, the value of the mark deteriorated faster and faster and new money in higher denominations was issued constantly. The central bank could not cope with the logistics of providing the necessary supply of money, and Notgeld (Papiermark) was issued again - this time in denominations of thousands, millions and billions of Marks. Because the Mark became so unstable, Notgeld was also issued in the form of commodities or other currencies: wheat, rye, sugar, coal, wood, natural gas, electricity, gold, or US dollars. These pieces were known as 'Wertbeständige' or notes of 'fixed value'.

There were also notgeld coins that were made of compressed coal dust. These are became quite rare, as most of them were eventually burned as fuel.

External links