Around 163 Million Gold Marks Were Redeemed from German Banks and Stuffed under the Nation’s Collective Mattress

Despite attempts by the government-guided press to convince them of the solidity of the everyday currency, many Germans suddenly didn’t trust paper any more. They wanted the security of the gold that the currency was alleged to represent. In the first weeks of July, around 163 million gold marks were redeemed from German banks and stuffed under the nation’s collective mattress.

On Friday 31 July 1914, the doors of the Reichsbank were closed (private banks had already stopped exchanging currency for gold three days earlier) and they did not reopen until the following Tuesday — by which time there was no point in demanding gold for your paper money, because the bank would not give you any. On 4 August a raft of emergency currency and financial laws formally declared the convertibility on demand of paper money to gold suspended for the duration of the conflict. It was at this point, actually, that the term ‘gold mark’ came into usage, referring to the actual gold coin worth, by metal weight, either five, ten or twenty marks. There were also one-, two-, three- and five-mark coins struck from 900/1000 silver, and their convertibility was suspended as well. After all, until then all notes had been convertible, merely representing a gold value, so there were only ‘marks’.

—Frederick Taylor, The Downfall of Money: Germany’s Hyperinflation and the Destruction of the Middle Class (London: Bloomsbury Publishing, 2013), e-book.