German Notgeld – Necessity To Collectible

Germany, 1914: The first World War, the war to end all wars begins. The German, Austro-Hungarian Empire and the Ottoman Empire joined to create one side against the UK, France and a bunch of other countries. Without a lot of mineral resources, Germany needed all the copper, nickel, steel and silver it could find. The government found a ready supply in its low denomination coins. While Germany used paper for its Reichsmarks, it used coins for the pfennigs. In place of the coins, Germany issued low value paper money- typically 10, 25 and 50 pfennigs. But they also passed a law making these ‘paper coins’ bank loans; what we might call war bonds AND required all businesses to accept these IOU’s. So began the first German Notgeld or “Emergency Money”.

German Notgelds Over Time

The early German notgeld was little more than printed paper backed by the German government land, etc. but not by the bank or gold. Early in the war, there were some 50p coins but metal became more and more precious to the war effort, so in 1916 or 1917 even those disappeared. The paper pfennigs which were issued by the bank in 1914 were printed with “Darlehenskassenschein” which means “a state loan note”. While not truly notgeld, they were emergency notes not backed by the bank in the same way the Reichsmarks were backed. But this was not enough.

As the German money became less and less valuable during the war, the Central Bank could not keep up with demand. Local communities filled the gap by creating their own notes. To differentiate it from real money (geld), they called it notgeld. Each community began using these notes and used them to create fun and interesting art, propaganda and messages. 

In 1918, Germany lost the war and its money (and state loans) became worthless. The treaty of Versailles burdened Germany with an unbearable debt for the war damage which crippled the economy. Notgeld not only continued to be used, it became the most currency through 1923 when the Central Bank took back control of the currency. From 1919 to 1923, the Weimar Republic government did issue Papiermark but the federal government crises made these less welcomed. Local communities trusted their local currency more than they trusted their national bank and government.