Higgenbotham's Dark Age Hovel

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When Money Dies by Adam Fergusson

The new danger was that when the peasants finally refused to deliver produce to the towns, the towns would go and fetch it. It had happened in Austria during the blockade. It had happened in the Ruhr and the Rhineland under the provocation of French militarism and enforced idleness. Now there were reports from Saxony - unoccupied Germany - that bands of several hundred townspeople at a time had taken to riding out into the countryside on bicycles to confiscate what they needed.

Anna Eisenmenger’s diary included a first-hand account of the plunder of Linz and its neighbourhood in Austria - the place which Hitler regarded as his home town. She transcribed a letter from her daughter who had been staying there for a few weeks with cousins who ran a small farm with eight cows, two horses, twelve pigs and the usual poultry:

I had driven with Uncle and Aunt to church at Linz. The nearer we approached the more crowded became the usually deserted high road. All kinds of odd-looking individuals met us. One man wearing three hats, one set on top of the other, and at least two coats, excited our amusement ... We met people drawing carts piled high with tinned foods of every description ... A man and a woman were seated in a ditch by the side of the road and, without the least embarrassment, were changing their very ragged garments for quite new ones. ‘Hurry up,’ the woman shouted to us, ‘or there’!l be nothing left!’ We did not understand this remark until we passed the first plundered shops.

Peaceful Linz looked as if it had been visited by an earthquake. Furniture smashed beyond recognition littered the pavements. But not only provision shops, inns, cafés, and drapers’ shops had been looted. Jewellers and watchmakers, too, had been unable to defend their wares. We saw that the inn at which Uncle and Aunt usually stopped after Mass was completely devastated. The old innkeeper caught sight of us and hurried up, almost in tears. He could not open his inn because all the furniture had been smashed and all the provisions stolen; and he strongly advised my uncle to drive home, since the ringleaders of the mob were inciting their followers to ransack the neighbourhood ...

My uncle urged on the horse ... In the lane which winds to my uncle’s farm ... we noticed a troop of about 80 or 100 men and and women. They were bawling and singing and driving in their midst a cart harnessed with a brown horse. Uncle exclaimed: ‘They’re driving away Hansl and our cart!’ Without another word he leapt to the ground, but could only advance slowly with his stiff leg across the field towards the road where he meant to intercept the troop.

A lorry load of gendarmes turned up at that moment. A few shots were fired, and the mob dispersed into the hills, the horse and cart left behind.

In the cart I saw three slaughtered pigs. In addition, some pieces of slaughtered cows and pigs and a few dead hens were lying in an untidy heap. ‘My God, my God,’ wailed my aunt. ‘What will things be like at home?’ ... Two gendarmes accompanied us in order to ascertain the damage. ‘If only they didn’t always destroy everything,’ said one of them. ‘As for their being hungry, that’s not surprising.’ We were prepared for the worst. The gates of the farmyard were wide open. There was not a sign of the servant girls. A pig seriously injured but still living was lying in its own blood in the yard. The other pigs had run out into the road. The cow-shed was drenched in blood. One cow had been slaughtered where it stood and the meat torn from its bones. The monsters had slit up the udder of the finest milch cow, so that she had to be put out of her misery immediately. In the granary the store of grain and fodder were in a state of wild confusion ... a rag soaked with petrol was still smouldering to show what these beasts had intended. In the kitchen-living room of which my aunt was so proud not a thing had been left whole. Uncle estimates the damage at 100,000 peace kronen, and no insurance company will pay him any compensation for his loss.

The towns were starving. The countryside had had a bumper harvest, but there it remained because of the farmers’ steadfast refusal to take paper for it at any price. Something had to be done to shift it. On September 18 were published the plans for the new Boden Credit Bank, later to be known as the Rentenbank, a bank of issue backed not by gold (it was too late for that) but by mortgages on both agricultural land and industry. It was fundamentally an expedient to induce the farmers to co-operate in feeding the nation: and the Bodenmark was by way of a solid form of Kontomark - the units of account worth ten cents each which the Reichsbank was now using to express the real values of current accounts: at last the old fiction of Mark gleich Mark had been formally abandoned.

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October 1922, however, was the nadir for shareholders. From then on not
only did money find its way back into shares, but people who could obtain
cheap credit, or were unable to send their money abroad, began to realise the
advantages of buying up their own country’s industrial and other assets at a
fraction of their true value. Although in real terms the stock market began to
go up, the mark’s purchasing power continued to go down.

‘By the end of the year,’ said Erna von Pustau,
my allowance and all the money I earned were not worth one cup of coffee.
You could go to the baker in the morning and buy two rolls for 20 marks; but
go there in the afternoon and the same two rolls were 25 marks. The baker
didn’t know how it happened … His customers didn’t know … It had
somehow to do with the dollar, somehow to do with the stock exchange - and

As the old virtues of thrift, honesty and hard work lost their appeal,
everybody was out to get rich quickly, especially as speculation in currency
or shares could palpably yield far greater rewards than labour. While the
anonymous, mindless Republic in the shape of the Reichsbank was prepared
to be the dupe of borrowers, no industrialist, businessman or merchant would
have wished to let the opportunities for enrichment slip by while others were
making hay.

For the less astute, it was incentive enough, and arguably
morally defensible, to play the markets and take every advantage of the
unworkable fiscal system merely to maintain one’s financial and social
position.

As that position slid away, patriotism, social obligations and morals slid
away with it. The ethic cracked. Willingness to break the rules reflected the
common attitude. Not to be able to hold on to what one had, or what one had
saved, little as it worried those who had nothing, was a very real basis of the
human despair from which jealousy, fear and outrage were not far removed.
The air of corruption in business, politics, and the public service, then, was
general. The share capital abuses that became common as more and more
shares were concentrated in the hands of profiteers were no more than an
example, although a serious one, of the moral deterioration caused by
inflation - they largely disappeared when stable money was restored.

In an article in the New York World written in the summer of 1923, Stresemann
rather defensively suggested that ‘our whole business life has acquired the
character of dishonesty and corruption because the value of the mark in June
does not happen to be the same as the value in July’. More privately he
admitted that the substance and the shadow of improbity were the same.

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In November, a year after the Armistice, Frau Eisenmenger wrote that her
position was alarmingly worse, the financial situation beyond her
understanding. The krone, at 25 Swiss centimes the previous Christmas, was
now quoted at one-twelfth of a centime. Her shares, however, were going up.
Gambling on the stock exchange had become the fashion - the only way to
avoid losing all one’s money and perhaps to add to it. Many new bankers
were giving people advice, the flight from the krone governing all
transactions. ‘Meanwhile,’ Frau Eisenmenger wrote,

the large numbers of unemployed, their passions fermented by the
Communists, are seething with discontent … a mob has attempted to set the
Parliament building on fire. Mounted policemen were torn from their horses,
which were slaughtered in the Ringstrasse and the warm bleeding flesh
dragged away by the crowd … the rioters clamoured for bread and work …
Side by side with unprecedented want among the bulk of the population,
there is a striking display of luxury among those who are benefitting from the
inflation. New nightclubs are being opened. These clubs have the further
effect of greatly intensifying the class hatred of the proletariate against the
bourgeoisie.