Exhibition - Bread for a Million

3.11.2016 - 3.1.2017

The exhibition Bread for a Million focuses on the period of financial collapse of the young Weimar Republic, when the value of the German mark evaporated during the worst hyperinflation that humanity had ever experienced up to that point. In the post-war period, a number of countries were affected by various forms of social unrest and revolutions, the causes of which lay in economic and monetary problems. International political circumstances, combined with faulty monetary policy, meant that Germany was most severely affected by these negative phenomena.

The initial inflation originated during World War I and was a consequence of financing war expenditures through increased issuance of uncovered banknotes instead of raising tax revenues. Even after the war, the German government, along with the Reichsbank, continued a policy of high government spending, which was used to restore the post-war economy and calm the tense social situation in the country. These expenditures were still financed by increased issuance of uncovered banknotes, for which the Reichsbank purchased government bonds (so-called debt monetization). The blame lay not only with the government, which tried to attribute this policy to the payment of reparations, but also with the faulty analysis of the situation by German economists and monetary policy experts. The inevitable consequence of this policy was a decline in the value of the mark accompanied by an ever-accelerating rise in prices, leading to a complete loss of trust among the population in the monetary system. This culminated in a hyperinflationary collapse of the financial system, such as humanity had never known before. Hyperinflation led, among other things, to severe transfers of wealth between different groups of the population, which resulted in socio-political radicalization.

Inflation peaked in the autumn months of 1923. At that time, the Reichsbank employed about 7,500 people who printed banknotes on printing presses 24 hours a day. In addition to the state printing house, another 133 printing houses were engaged in the "mass production" of banknotes. Authorized banknotes issued by the Reichsbank had a nominal value of more than 400 trillion (400,000,000,000,000,000,000) marks in October 1923. In addition, unauthorized banknotes with a nominal value of 400 - 500 trillion marks were circulating in the country. However, there was still a chronic shortage of banknotes. The price index increased more than 1.3 trillion times from 1913 to November 1923. At the peak of inflation, the price level doubled every 49 hours. Hyperinflation is one of the most destructive processes that can affect an economy. In Germany, it caused an unprecedented economic, social, and moral catastrophe, with its impacts comparable only to the devastation left by the Great Depression. The German crisis of the early 1920s is among the events that had a fundamental influence on the shaping of 20th-century history.

Hyperinflationary disintegration also affected other states in Central and Eastern Europe. The Czechoslovak Republic avoided inflationary disintegration thanks to the anti-inflationary, or rather deflationary, policy of A. Rašín, even though it was forced to take over half of the pre-war state debt of Austria-Hungary and was even compelled to pay its allies half of the war reparations demanded from Austria-Hungary as a so-called "contribution for liberation." At the peace conference in 1919, the possibility of confiscating the Škoda Works in Plzeň as a form of reparations was even discussed.