Hyper - Postal History Sunday

Welcome again to Postal History Sunday on the GFF Postal History blog!

For those who may be unfamiliar with Postal History Sunday or the GFF Postal History blog, I thought I'd give a brief re-introduction this week.  The GFF Postal History blog started as a place where I could work on various postal history projects and perhaps, eventually, share them with others.  With the event of Postal History Sunday on our farm blog, it made sense to cross post them here.

Postal History Sunday became a regular weekly post in August of 2020.  The idea was that PHS would provide me with an opportunity to share something I enjoy with people who may have interest - whether it is merely a passing interest or you already enjoy postal history.  My goal is to allow persons who don't have expertise in these topics a chance to see why I find these pieces of paper so interesting.  At the same time, I hope to be able to provide some tidbits of information to other postal historians that may be of interest to them.  The hobby has a wide range of sub-topics and there is always something new to learn.

If I do it right, a wide range of people should find these posts enjoyable.  If all else fails, I typically find that I learn something new - and that makes me happy.

Now, pack those troubles and worries away for a time and let's see what we have in store for us this week.

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This week, we're going to take a look at an area of postal history that fascinates many people, but is not in my area of expertise.  Of course, that does not mean I can't find my way around the subject - but it does mean that I will miss subtle differences that a person who concentrates on this area will see.  If you are that person, feel free to feed me more information if you think I am missing something.

The period of time after World War I was difficult for Germany after the signing of the Treaty of Versailles in 1919.  The treaty caused Germany to forfeit their overseas colonies as well as contested areas Europe.  Limits were placed on their military and Germany was forced to pay 132 billion gold marks in reparations to compensate for civilian losses due to the war.  The amounts that were actually paid and the timeline for that payment are another story that you can find if you are interested.

The aftermath of the war in Germany set the stage for something called hyper-inflation which was, in part, fueled by the unrestrained printing of paper money and government debt.  Of course, the situation was much more complex than that and if you would like to read a fairly easy to follow piece that explains hyper-inflation in Germany better than I will - please check it out on the PBS site.   

To give you an idea of the type of inflation were are talking about "prices that had doubled from 1914 to 1919 doubled again during just five months in 1922."  Prices continued to increase rapidly throughout the rest of 1922 and throughout 1923.  As 1923 progressed, people looked at the first five months of 1922 wistfully because merely doubling prices seemed pretty tame by October of 1923.

And here is where postal history intersects with fiscal history.  By collecting old letters from Germany in 1922 and 1923 you can get a real lesson in what hyper-inflation looks like.

A Domestic Letter in 1920

I'm going to start with a simple letter sent in November of 1920.  The cost of sending a letter that weighed no more than 20 grams to another destination within Germany's border was 40 pfennig (100 pfennig = 1 mark - not unlike our cents and dollar in the US).  This rate was effective from May 6, 1920 until March 31, 1921.  Prior to World War I, the postage rate had been 10 pfennig, so we can already see that the simple act of mailing a letter was already four times more expensive.

I suppose at this point, people might already have been a little bit disgruntled by the higher postage rates, which accurately mirrored prices of other items, such as milk, bread, paper and other common items.  

This rate would increase to 60 pfennig on April 1, 1921.  Certainly annoying, but it would be nothing like the next jump in the postage rate.

The January 1, 1922 Increase

Just like every business in Germany at the time, their postal service was finding that their expenses were rapidly increasing and their employees were demanding greater pay so they could stay ahead of the cost of living trends.

The cost of a single letter, that weighed no more than 20 grams, was pushed to 2 marks (200 pfennig).  The letter below was mailed on April 12 of 1922 and shows a 2 mark postage stamp.

Let me put this in perspective. Here are the letter rates in the United States during the first part of the 1900s.  This table was first shown on this Postal History Sunday blog.

 Letter Mail Rates in the United States

Effective Date	Rate	Per
July 1, 1863	3 cents	half ounce
October 1, 1883	2 cents	half ounce
July 1, 1885	2 cents	ounce
November 2, 1917	3 cents	ounce
July 1, 1919	2 cents	ounce
July 6, 1932	3 cents	ounce

The postage rates in the United States went up one penny to help pay for the war effort, but it was then reduced after the conclusion of the conflict.  The rate did not increase to three cents again until 1932.  Our current price in 2021 to mail a letter is 55 cents.

This rate increase would be like jumping our 55 cent rate for one ounce to two dollars tomorrow.  While I know few people send much mail anymore, you can still imagine how this would be received.

Rapid Increases Followed

People who specifically collect and study German mail from this period have a lot to look for and plenty to enjoy.  From January, 1920 to December of 1923, there are twenty-four changes in the domestic letter rate, with the shortest rate period lasted just SIX days.   

The letter below required 75,000 marks to pay for a domestic letter that weighed no more than 20 grams and this rate was effective from September 1 until September 19, 1923.  Nineteen days until the rate was increased again... to 250,000 marks.

The exceptionally short rate periods found the postal service unable to respond with new postage stamp designs for each change.  So, to cover the demand for stamps, they started overprinting existing postage stamps with values reflecting the new postage rates.  

The letter above actually has a 1000 mark stamp that was overprinted with the new 75,000 mark value.  And, of course, with all of the changes, there are likely many examples of incorrect postage that was accepted.  In fact, in August of 1923, the German post offices allowed for cash payment without requiring the use of postage stamps simply because it was difficult to get the stamps to every post office in the country quick enough.

Be a "Millionaire" to Mail a Letter

The rate from October 1 to October 9 of 1923 was actually 2 MILLION marks for a letter weighing no more than 20 grams.  The letter shown below was mailed on October 8.

One of the things we need to remember about all of this is that "two million marks" did not represent the same value that "two million marks" once held.  In late 1923, you could have trainloads of German paper money and it would actually have very little value.  People who were able to had moved towards acquiring physical property that would retain some value.  The PBS essay mentions that many families purchased pianos, even though no one in the family played them - just so they would have something of value for their money.

I was curious if there was a good summary as to who was able to handle hyper-inflation in Germany and who might have struggled.  There is an excellent summary of the most commonly accepted stages of hyperinflation in Germany in this BBC article.  Of interest to me is the following from that page on June 12, 2021.

"Hyperinflation winners:

• Borrowers, such as businessmen, landowners and those with mortgages, found they were able to pay back their loans easily with worthless money.
• People on wages were relatively safe, because they renegotiated their wages every day. However, even their wages eventually failed to keep up with prices.
• Farmers coped well, since their products remained in demand and they received more money for them as prices spiraled.

Hyperinflation losers:

• People on fixed incomes, like students, pensioners or the sick, found their incomes did not keep up with prices.
• People with savings and those who had lent money, for example to the government, were the most badly hit as their money became worthless."

As a farmer, I might suggest that farmers may have coped well because they were in a population that is often more willing to accept barter agreements.  But, I am not an economist, so we'll not go there!

Back to "Normal"

In December of 1923, Germany issued a new currency and allowed for an exchange rate of 1 trillion marks for a SINGLE new "Renten-Mark."   The postage rate was reset at 10 pfennig (in the new currency) and the hyperinflation period was over.

But, before this blog is over, I thought I would share one more.

A favorite item in my own collection has an Iowa connection.  This letter was mailed on April 23, 1923 to Muscatine at the cost of 300 marks.  This rate was effective from March until the end of June.  I would not be horribly surprised to learn that this may have been yet another German businessperson investing in the US dollar and abandoning the German mark. 

And... there you are!  A journey to Germany in the early 1920s - all without leaving your seat (unless you like to read and walk at the same time?).

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Thank you for joining me for this week's Postal History Sunday!  I am always happy to receive questions, suggestions and corrections if you have them.  If there is something you would like to me talk about in a future PHS, please let me know and I'll see if I can find the time and brainspace to make it happen.

Have a great remainder of the weekend and a wonderful week to come!

Want to Learn More?

The small booklet by Gerhard Binder titled The Postal Rates in Germany from 1906 to 1923: The High Inflation 1923 is a wonderful resource that helped me to get the basic knowledge I needed for German postal history at that time.  

If you enjoy postal history and want to see what a person might do if this was a topic they wanted to focus on, you can look at Extraordinary Frankings from the German Inflation: 1919-1923 by Charles L Williams.