33 Mich. L. Rev. 171 (1934-1935)
Effects of Inflation on Private Contracts: Germany, 1914-1924

handle is hein.journals/mlr33 and id is 193 raw text is: INFLATION

GERMANY, 1914-1924
John P. Dawson*
'THE German experience with inflation is unique not only in the
I magnitude of the ultimate disaster but in the wealth and variety
of the record which it left behind. From that experience we may still
learn much. The problems presented at successive stages of the Ger-
man inflation differ in degree but not in kind from those which appear
in any major shift in the general level of prices. The devices, legal
and economic, for restoring an equilibrium thus destroyed must be
essentially the same in any great country organized, as Germany was,
for specialized, large-scale production. From a study of the German
inflation we can expect to ascertain the point at which economic disloca-
tion will lead to intolerable injustice and force courts of law to inter-
vene. And by the success or failure of the methods used by German
courts to meet unforeseen changes in money values we may measure
our faith in legal safeguards against the hazards of uncontrolled
The currency of the German Empire was placed on a gold basis by
an act of December 4, I 871, shortly after the formation of the federal
government. This was merely the first move toward the broader objec-
tive of supplanting the existing gold and silver currencies of the Ger-
man states with a unified national currency. On July 9, 1873, more
elaborate provisions were made for smaller denominations of the Im-
perial currency and for the elimination of competing systems of coin-
age.' To the metallic base was later added a total of 24o million marks
of Treasury notes, redeemable at the Treasury in silver or gold and
circulating freely within the Reich, but not possessing the legal tender
quality.2 Far more important for the subsequent history of Germany
* Associate Professor of Law, University of Michigan. A.B., J.D., Michigan;
D.Phil., Oxford.-Ed.
MONEY 156-164 (1927).
2Eis-rER, VON DER MARK zuR REtCHSMARK 6-7 (1928). The issue of Treasury

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