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Notgeld - Emergency Money

Notgeld first appeared during the World War 1 as a response to small change shortages. Due to the war effort's ever growing need for metal, new coins could not be minted and the value of those coins that were left in circulation exceeded their denomination, causing institutions to hoard them. This massive shortage forced local municipalities to produce large quantities of small denomination banknotes for local merchants and businesses. These 'notgeld' (literally 'emergency money') were not legal tender but rather a mutually accepted form of payment. In addition to paper, notgeld was also printed on silk, leather, linen, foil, porcelain, playing cards, and even coal. Due to their bright colors and unusual designs, notgeld proved to be popular as collector's items and so continued to be produced even after the war's end like stamps, they often traded at higher than face value and so proved a good business for the towns producing them.

In 1922, the value of the mark started to deteriorate due to inflation caused by Germany's reparations to the victorious countries after the war's end. The central bank was forced to constantly reissue banknotes in ever rising denominations first hundreds, then thousands, then hundreds of thousands, and finally millions and even billions. With the central bank unable to physically issue enough money, notgeld were again produced in enormous quantities. Most were issued as marks, but some were tied to commodities or other currencies, such as the US dollar. During the height of hyperinflation, notgeld became essentially worthless as money and so came to be used for other purposes, such as fuel, wallpaper, and fabric.