The Nazis and the Gold Standard

[Nolan]

I've heard that they actually restored the German gold standard. Any truth to this? I smelled a myth at first.

[Red Commissar]

Germany had been using the gold standard until 1914 when it began to print money freely and eventually got a crisis in 1922-23 over reparations. Hjalmar Schacht was appointed currency commissioner and created a temporary currency, the Rentenmark, which was valued against the US dollar. In order to create value, the German government mortgaged land and industrial property.

The Retenmark served to end inflation and bridged into the new currency, the Reichsmark, which was pegged to gold. This was introduced in 1924. The main change that occurred with the Reichmark was in the banking crash that happened in the early 1930s (I believe 1931), which saw many countries abandoning the gold standard as gold deposits were withdrawn from the banks and as such reducing the amount of gold held by countries. The German Reichmark halted redemption of its currency for gold, but was still pegged to the value of gold. However this also meant that the convertibility of the Reichsmark to foreign currencies was harder to achieve.

Schacht resigned from the government in 1930 out of protest over continuing reparations. When the Nazi's assumed control they brought back Hjalmar Schacht but did no major change to the currency aside from expanding the monetary supply to fund their large public works program. AFAIK they did not return to a pure gold standard but kept the Reichsmark with the same functioning of being pegged to gold but not redeemable for gold. I believe they may have also found a way to allow the Reichsmark to be convertible on the foreign markets again, but nothing to the effect of a restoration of a gold standard that Germany had in its Imperial years.