A Berlin newspaper on rising inflation (1921)

Rising inflation was a persistent problem in the first years of the Weimar Republic. On August 13th 1921, the Berlin newspaper Vossische Zeiting attributed this problem to governments issuing bonds, bills and other forms of currency, without withdrawing it in the form of taxation:

“Our military defeat was due to the fact that for every 1,000 men we had in the trenches, double that number of deserters and embusques [men avoiding war service] remained at home. These deserters were activated less by military than economic motives.

The rise in prices was mainly responsible for the poverty of the families of the enlisted men… The first to suffer had to be those who did not share in the general increase in paper revenue, the soldiers who did not participate in the increase in wages, trading profits and war industries… They realised that their situation and that of their families would be hopeless after the war. Hence the dull, often dismal attitude of soldiers on furlough on the front during the latter years of the war.

It must be admitted generally now that the cause of the depreciation of our currency and of the purchasing power of the mark was neither the commercial balance during the war, nor the estimate of our military situation abroad, but in the exploitation of our currency for the purpose of obtaining money for the Treasury. That is to say, in a fictitious increase of our total income.

In as much as the country issued millions in the form of extraordinary levies, war loans, Treasury bills and so on, without withdrawing from circulation corresponding amounts in the shape of taxes, it created new paper income and wealth incessantly, while the real national wealth was steadily being diminished by the war.”