German Inflation 1919-1923

Prices rose to absurd sums: at the end of the period of hyper-inflation, in the fall of 1923, a loaf of bread cost many billions and to send a single postcard from Munich to Prague required stamps worth 36 billion marks

Inflation is the devaluation of a national currency due to a rise in the prices of commodities on the national market, often resulting from the rising price of imports. Mild inflation exists in every modern free economy, and is not considered a worrisome phenomenon, as long as it remains at a low rate. However, if, for political or economic reasons, inflation deviates from tolerable levels to the extent that it has a severe negative impact on the standard of living of many citizens, the phenomenon takes on the attributes of a socio-economic disaster, that also spurs a political disaster when the nation begins to seek individuals on whom to assign responsibility for the economic collapse.

The greatest inflation in the history of Germany occurred mainly from 1919-1923, but in fact it had already started in 1914, with the outbreak of WWI. When the war began, the German governments increased the money supply in order to cover the soaring costs, initially of the war itself, and afterwards, of the heavy reparations that the Allies had imposed on Germany in the Treaty of Versailles. One means of increasing the supply of money was the issue of war bonds purchased by many citizens. At the same time, it was decided to cut the linkage between the German mark and the price of gold, a connection that existed at the time in most advanced nations. The result was an expanding gap between the value of gold-based currency (the gold mark, which was actually in use until the end of the days of the German Empire) and paper currency, which could be printed in almost unlimited quantities. Flooding the market with printed money rapidly lowered its value, so that the prices rose disproportionately, while the real wage of salaried workers fell sharply. At the same time, loans and debts lost their value by the same proportion. This was precisely the goal of the German government after the end of the war: to lessen the burden of the reparations and to demonstrate the weakness of the German economy to the allies.

This situation took its toll on the daily life of most citizens. The rise in prices that the consumer was required to pay was not matched by a rise in wages. Since wages rose more gradually, it was more difficult to keep up with the high prices. On payday, employees hurried to reach the stores before the exchange rate of the mark vis-à-vis the dollar which was usually even lower than it had been a few days earlier. Prices rose to absurd sums: at the end of the period of hyper-inflation, in the fall of 1923, a loaf of bread cost many billions and to send a single postcard from Munich to Prague required stamps worth 36 billion marks (see photo). In such a situation, the central bank ceased investing in the design of bills and in their printed elements since it was not worthwhile to produce counterfeit bills, all of the graphic markings that were meant to serve as obstacles to counterfeiting, and some bills were even only one-sided. Often, a denomination – higher than the specified original bills – was overlaid onto existing bills that had not yet entered the money cycle. There are photographs depicting children who had cut out kites from galley sheets of bills that had become obsolete.

In November 1923, the inflation reached a peak: one dollar was worth 4,200 billion German marks. It was clear to all that this trend could not go on. Eventually, a change of government in Germany brought an end to the inflation, after it had achieved one of its main goals: reduction of the debts that were burdening the German coffers. From November 15, 1923, the currency was replaced: instead of the worthless Papiermark, the Central Bank of Germany presented the new mark (Rentermark). In the international arena, the German government reached an understanding with the Allies in the framework of the Dawes Plan, according to which German reparations were adjusted to the country’s economic ability. Following this, the German economy recuperated over the coming years, but millions of citizens lost their capital, which had been deposited in savings plans.

Our display item shows a 50 million mark bill, part of the Means of Payment and Banknotes Collection of the Archives Department of the National Library. This bill was issued in July 1923, just a few months before the inflation peaked. Based on this bill’s physical condition we can conclude that it was heavily used. Originally, the reverse side of the bill was left blank, but in our sample, an informal nationalist, anti-Semitic printing was scrawled on. As in many moments of crisis throughout history, the period of inflation was a time to cast blame for the eradication of private wealth: the anti-Semites were convinced that the “rich Jews” bore all of the responsibility.

Translation of the rhymed lines:

Like the fungus
and the lichens
on the oak’s trunk
The Jew thrives
on mankind’s trunk
Where Jews live in comfort
The majority remains
in poverty’s grip

The Templers in the Land of Israel and Their Place in Local Society

In the late 1850s, this group, under the leadership of Christoph Hoffman, began exploring the possibility of living according to their spiritual-religious ideal not merely inside Germany, but in close proximity to the location of the Jewish Temple: in Jerusalem

Stefan Litt | 18.02.17

Germany Germany the Jews and Israel Weimar Republic רפובליקת ויימר

The Fast Family Hotel near the Jaffa Gate in Jerusalem, early 20th century

In the mid-19th century, a number of Protestant families in southwest Germany decided to establish a religious group that was distinct from Lutheran Protestantism. They viewed themselves as “bricks” that made up the ideational temple of communal life based on the principles of Christianity. For the Templers, Jesus was not defined as the son of God, but as a religious teacher and an example and manifestation of the honest life.

In the late 1850s, this group, under the leadership of Christoph Hoffman, began exploring the possibility of living according to their spiritual-religious ideal not merely inside Germany, but in close proximity to the location of the Jewish Temple: in Jerusalem. They chose this path since as Christians they viewed themselves as “the new people of Israel.” In 1868 the group’s first settlers reached the shores of Eretz Israel. They purchased lands in the Haifa area and established their first place of residence, which exists physically to this day (the “German Colony” of Haifa). Over the years, additional settlers arrived and established a number of communities in Jaffa (1869), nearby Sarona (1871), Jerusalem (1873), and later, in Wilhelma (1902, today: Bnei Atarot), as well as at Bethlehem of Galilee (1906). Together with these localities, religious and educational institutions sprung up, as well as businesses of various types. In 1878, some 850 people were living in Templer communities, by 1884 the Templer residents in Eretz Israel numbered 1300, and on the eve of WWI, this number climbed to approximately 2,000 people, which was the peak of their history in Palestine.

A travel catalogue of the travel agency which was part of the Sudanese train and ship company, 1929. The agency had an office in Jerusalem, managed by the Fast family, near the Jaffa Gate.

The Templers worked in agriculture (cultivation of citrus and grapes), established small factories (the iron and tool-making industries), ran a press house, established hotels, published a newspaper (Warte des Tempels – The Temple Guard) and also had a bank, which participated in the Transfer Agreement beginning in 1933. Constructing proper roads between the various localities was extremely significant for the existence of the Templer enterprise. The presence and activity of German Templers in Eretz Israel were therefore of utmost importance for its economic, agricultural and industrial development, many years prior to the impact brought to bear by Zionism. In many realms it was Templers who initiated basic activities that were important to Israel’s development.

Until the end of WWI, when the British forces conquered Palestine, the residents of the Templer communities were deported from the southern localities to a camp near Cairo, Egypt. Some of them were deported from there to Germany, while others continued living in this camp until 1920, and afterwards were permitted to return to their homes. During the Mandate Period, good relations developed between Templers and the Mandate authorities, and between them and the local population, both Jewish and Arab.

One of the proofs of the commercial ties between Jews and Templers in Eretz Israel is the document displayed here, a letter of recommendation from the Director of the Templer Bank, Christoph Hoffman, for the Jewish industrialist Shaul Levi. Hoffman wrote his recommendation from the perspective of his position as director of what was at the time an important bank in Eretz Israel. In the letter, he confirms that for 25 years he has known Levi to be an honest, respectable and solid businessman. Shaul Levi operated a business in the iron industry, with branches in Jaffa and Jerusalem. Hoffman’s recommendation leads us to assume that Shaul Levi managed his business funds through the German Bank in Eretz Israel, which earned a reputation as a dependable, stable institution.

A letter of recommendation by the General Manager of the Templer Bank, Christoph Hoffmann, to the industrialist Shaul Levy, 1926

As is well known, not all of the Germans in the Templer communities were interested in continuing as loyal citizens of Eretz Israel during the British Mandate. Some of them established a branch of the Nazi party, and a significant number of the German settlers joined it. Of course, this move was not warmly received by the Jews of Eretz Israel. The British Authorities, on their part, were not overly concerned, until the outbreak of WWII. From September 1939 the Templers were considered as “hostile citizens” due to the German citizenship that most of them held – and also due to the political views of some of them. As a result, Templer families were concentrated into a number of their localities, and a few were even deported to Australia. The last left in 1948, with the establishment of the state. Today, many of the buildings that the German Templers erected are still standing. In certain cases, the Templer communities became prestigious neighborhoods as in Haifa and Jerusalem. Of late, the case of Sarona in Tel Aviv has become prominent; the area was recently turned into a gentrified Tel Aviv neighborhood and transformed into a locus of leisure and entertainment.

The charter of the Wilhelma-Sarona German Vine Growers Association, 1920

The charter of the Templer Society, 1935

The German Film “Dreyfus” and its Screening in Israel

What was special about this film that made its way from the studios in Berlin to the movie theaters in Eretz Israel?

Stefan Litt | 17.02.17

Germany the Jews and Israel Weimar Republic

In February 1931, advertisements were posted in Israel for a new film – one of the first sound films – that was being played in movie theaters. The poster, in shades of red and blue on a white background, suggested that the film had something to do with France. The name of the film left no room for doubt: “Dreyfus.” The poster of the Ein Dor movie theater in Haifa advertised the film in four languages: Hebrew (which takes up approximately two thirds of the poster), German, Arabic and English. This multi-lingual venue was an expression of the multi-cultural reality of Mandatory Palestine at the beginning of the 1930s. Since the film was a product of the Weimar Republic, and since during that time the Nazis had not yet risen to power in Germany, the free use of German on the poster was still not problematic – on the contrary; a point of persuasion for seeing the film apparently included its language. As the poster stated: “100% in German.”

Poster of the Ein Dor Cinema in Haifa for the movie “Dreyfus,” 1931

What was special about this film that made its way from the studios in Berlin to the movie theaters in Eretz Israel? First of all, since the Dreyfus Affair, slightly more than three decades had passed, and it is reasonable to assume that at the time, there were still people who remembered this important incident in Jewish history, which so decisively affected the Zionist movement after Theodor Herzl reported on it for a Viennese newspaper, before he began writing his famous Zionist works. Moreover, the very topic turned the movie into a work that spoke directly to the Jewish audiences. The film’s production in 1930 also was a response to the anti-Semitic atmosphere in Germany, which quickly became dire. In addition, a look at those involved in the film’s production – from the author of the script, to the director and most of the main actors – reveals that most were of Jewish extraction. These circumstances apparently made the movie an excellent candidate for screening in Eretz Israeli movie theaters and granted the Dreyfus Affair the status of a “great national tragedy” as stated in the colorful poster presented here.

Poster for the movie “Dreyfus” after the second purchase of the film by the Ein Dor Cinema in Haifa, 1931

Who, then, were the key figures surrounding this German-Jewish film produced towards the end of the Weimar Republic? The producer and director was the Richard Oswald (1880-1963), a Vienna native who had been living and working in Berlin since 1912. In Berlin, Oswald went on to establish a film production company that produced dozens of films, among them films that were unconventional for the period. For example, after consulting with the famous sex researcher Magnus Hirschfeld, Oswald produced films dealing with topics such as homosexuality, abortions, prostitution and sexually transmitted disease. His emigration from Germany in 1933 following the Nazi rise to power significantly reduced his opportunities for producing additional films. Most of the main actors in the movie “Dreyfus” came from the famous acting school of Max Reinhardt, director of the “German Theater” in Berlin: Fritz Kortner (Dreyfus), Grete Mosheim (Dreyfus’ wife), and Oscar Homolka (Maj. Esterhazy) – all were of Jewish origins. Following their emigration to the United States, some of them secured a place in the American film industry (for example, Oscar Homolka, who acted in Hollywood with Marlene Dietrich, John Wayne, Ronald Reagan and Marilyn Monroe). Others returned to Germany after WWII, such as Fritz Kortner and Grete Mosheim. Acting alongside them in the film was also Heinrich George, one of the well known actors in Weimar Germany, who began his career as a supporter of the political left in Germany, and after 1933 compromised with the Nazis, enabling him to continue his career under their government.

As far as is known, the movie “Dreyfus” was successful in Eretz Israel. There is an interesting incident that is related to the movie “Dreyfus” and its screening in the Ein Dor Cinema (the Hebrew word used for cinema at the time was reinoa, as opposed to the modern kolnoa) in Haifa. Shortly after the first regular screenings, the film reels were stolen and the cinema owners were forced to acquire a new copy. After the second copy was obtained, they re-advertised the film – which they would certainly not have done had the film not been a success in the first round.

Two posters of the Ein Dor Cinema in Haifa advertising the film can be found in the National Library collections, but during the inquiry that preceded the writing of this text, it emerged that the library also owns a single copy of the original script in German. This rare copy reached the library after WWII together with thousands of Jewish books as part of the book rescue operation that became known as “Treasures of the Diaspora”, saving precious library materials to Jewish institutions including the National Library. Other copies of the movie still survive in various film archives around the world.

The cover of the original movie script for the film “Dreyfus,” 1930

The Aliyah of Central European Jews (the “Yekkim”) and the “German Immigrants’ Association News”

In the great frenzy that ensued, many Jews who lived on German territory understood that their lives and property were in imminent danger, and that they had to find alternatives to carry on living

Stefan Litt | 11.02.17

Germany Germany the Jews and Israel World War II מלחמת העולם השנייה

German Immigrants’ Association News

Until the Nazi rise to power, some half a million Jews lived in Germany, over 150,000 of them in Berlin alone. Most found their place in society-at-large and took part in economy, politics, science, and of course German culture, both as producers of culture (authors, journalists, musicians, artists, etc.) and consumers of culture of all types. The Zionist movement found it difficult to penetrate German-Jewish society, since most of it was well established; and Zionist groups in Germany never became mass movements.

The picture changed in 1933, when the Nazis rose to power. The blatant anti-Semitism and the unbridled Nazi aggression (across large segments of German society) made it clear to German Jews that their integration into the greater society was only a brief episode that was drawing to an end with the political change.

In the great frenzy that ensued, many Jews who lived on German territory understood that their lives and property were in imminent danger, and that they had to find alternatives to carry on living. Approximately one half of Germany’s Jewish population emigrated from Germany to other countries, most to the United States, but many also moved to Israel as part of what is known as “the fifth Aliyah.” It is estimated that some 60,000 German immigrants came to Eretz Israel as part of this wave of immigration, in addition to 30,000 from other German-speaking areas, primarily Austria and Czechoslovakia.

Their situation in Eretz Israel was also quite difficult: the new climate, the language unfamiliar to most of them, the reservations of many locals from German language and culture due to the Nazi acts, and the unsuitable professions of many (a great deal of them were active in the fields of science, the humanities and culture) – all posed severe problems for many of the “Yekkim”, as they were called then and to this day. Their habits, style of dress, precision in all that related to timeliness, and their idiosyncratic humor, attracted much derisive humor. Tragically, while in Germany they were always considered Jews, in Eretz Israel they were considered “Germans.”

The German immigrants in pre-State Israeli society were quite diverse: the majority played a role in the sciences, arts and culture, unsurprisingly, but among them were also industrialists and entrepreneurs (the founders of companies including “Asis”, “Strauss” and others), publishers (e.g. the Schocken family), architects, (Richard Kaufmann and others from the famous Bauhaus movement). In many cases, however, the Yekkim were forced to find their place in the new society in Israel like all of the other immigrants, in professions in which they weren’t trained, while living in crowded housing and facing the large and small cultural difficulties that awaited all of the immigrants in their everyday lives.

The Yekkim settled in a number of cities and other types of localities: around Tel Aviv and Jerusalem (many of them in the Rechavia neighborhood), but also in the city of Nahariya, in Kfar Shmaryahu near Herzliya, and in other locations. The Rechavia neighborhood of Jerusalem was planned by the architect Richard Kaufmann beginning in the 1920s. It was inhabited by distinguished academics, including many lecturers from The Hebrew University: Gershom Scholem, Shmuel Hugo Bergmann, Akiva Ernst Simon, the well-known architect Erich Mendelsohn (who lived in the neighborhood for a few years only, in the 1930s) as well as Zalman Schocken, the owner of a successful department store chain in Germany and a publishing house on his name, that exists to this day.

With the aliyah of the “Yekkim,” new newspapers and periodicals in German were established. For example, the newspaper Yediot Hadashot (that later assumed the name Hadashot Yisrael), and the periodical Yediot Hitachdut Olei Germania (Mitteilungsblatt der Hitachduth Olei Germania, known also, simply, as MB). This publication was founded in 1933 and exists to this day, and the initials still appear on the cover, but the name has changed to Yakinton (hyacinth). Beginning with the first edition, it featured texts both in German and in Hebrew, at first with German dominating, while today, with the proportions have reversed. For many years, firms and businesses advertised in Yediot, mainly those owned by German immigrants or relevant to the German immigrant community. It is interesting to note that during the publication’s first years, even the Templar Bank in Palestine saw fit to advertise its services in this periodical, even though the orientation of many Templars – German-Protestant settlers who had no relationship with Judaism – was pro-Nazi. Other companies, some known to this day, already advertised there, in German of course, such as the “Asis” company.