Reichsbank
 |
- For a detailed discussion of the English translation of Reich, see Reich.
The Reichsbank was the central bank of Germany from 1876 until 1945. It was founded on 1 January 1876 (shortly after the establishment of the German Empire in 1871). The Reichsbank was a privately owned central bank of Prussia, under close control by the Reich government[1]. Its first president was Hermann von Dechend. Before unification in 1871, Germany had 31 central banks – the Notenbanken (note banks). Each of the independent states issued their own money. In 1870, a law was passed that forbade the formation of further central banks. In 1874, a draft banking law was introduced in the Reichstag (the German parliament). After several changes and compromises, the law was passed in 1875. Despite the creation of the Reichsbank, however, four of the Notenbanken – Baden, Bavaria, Saxony and Württemberg – continued to exist until 1914.
The history of the Reichsbank was volatile. Until World War I it produced a very stable currency called the Goldmark. The expenses of the war caused inflationary pressure and the mark started to decrease in value. The defeat of imperial Germany in 1918, the economic burden caused by the payment of reparations to the Allies, and the social unrest in the early years culminated in the German hyperinflation of 1922–23. The mark, formerly backed by gold, evolved into the Papiermark (paper mark), backed by nothing.
Economic reforms, such as the issue of a new provisional currency – the Rentenmark – and the 1924 Dawes Plan, stabilised German monetary development and thus the economic outlook of the Weimar Republic. One of the key reforms caused by the Dawes Plan was the establishment of the Reichsbank as an institution independent of the Reich government. On 30 August 1924, the Reichsbank began issuing the Reichsmark, which served as the German currency until 1948.
The seizure and consolidation of power by the Nazis during the years of the Third Reich also greatly affected the Reichsbank. A 1937 law reestablished the Reich government's control of the Reichsbank, and in 1939, the Reichsbank was renamed as the Deutsche Reichsbank and placed under the direct control of Adolf Hitler, with Walther Funk as the last president of the Reichsbank, from 1939 to 1945[2]. The defeat of Nazi Germany in May 1945 also resulted in the dissolution of the Reichsbank, along with other Reich ministries and institutions.
The Allied occupation authorities (in the West – Great Britain, France and the United States; in the East – the Soviet Union) became responsible for German monetary policy in the immediate postwar years. In this role, the Allies continued to issue Reichsmarks (and Allied military marks) as the German banking system was gradually restored. In 1948, the Reichsmark ceased to exist owing to the introduction of the Deutsche Mark in the West and the East German mark in the East. In West Germany, monetary policy was taken over by the Bank deutscher Länder (Bank of the German States) and later by the Deutsche Bundesbank. In East Germany, this role was assumed by the Deutsche Notenbank (later renamed as the Staatsbank der DDR (State Bank of the German Democratic Republic)).
Reichsbank presidents
- 1876 – 1890 Hermann von Dechend
- 1890 – 1908 Richard Koch
- 1908 – 1923 Rudolf E. A. Havenstein
- 1923 – 1930 Hjalmar Schacht
- 1930 – 1933 Hans Luther
- 1933 – 1939 Hjalmar Schacht
- 1939 – 1945 Walther Funk
For history of German central banks after 1945 see: Deutsche Bundesbank
References
- ^ Money and Banking
- ^ Shrier, William L. The Rise and Fall of the Third Reich. Greenwich: Fawcett Publications, 1959. 360.