CHAPTER FIVE
The German Hyperinflation, 1922-1923

In the autumn of 1923, Lott Hendlich, a German widow in her fifties, returned to her native Frankfurt after an absence of more than four years in Switzerland. In 1919 she had gone to spend a few pleasant weeks in a Swiss village where her relatives lived. But almost immediately, Frau Hendlich broke her hip in a fall. During her long convalescence her chronic cough became worse, and the doctor attending her advised her that she was suffering from advanced tuberculosis. The months and years of her illness dragged on interminably even though her relatives were genuinely solicitous (they insisted on defraying all her expenses, including the fees of her doctor). At last, in September 1923, she was "cured" and considered well enough to return home. Her much longed-for homecoming soon became a nightmare.

In the stack of accumulated mail she found three letters from her bank; they delineated her ruin. The first–written in mid-1920 by a minor bank officer who had befriended her–advised her "to invest most of the funds in your rather substantial bank account" (amounting to over 600,000 marks, or the equivalent of more than $70,000 at the exchange rate prevailing in 1919). "It is my judgment," the writer continued, "that the purchasing power of the mark will decline, and I suggest you try to guard against this through some suitable investment which we can discuss when you come into the bank."

The next letter, dated in September 1922, and signed by another officer said, "It is no longer profitable for us to service such a small account as yours. Will you kindly withdraw your funds at the earliest opportunity?"

The third letter, dated several weeks before her return from Switzerland, announced, "Not having heard from you since our last communication, we have closed out your account. Since we no longer have on hand any small-denomination bank notes, we herein enclose a note for one million marks."

With gathering panic Frau Hendlich looked at the envelope that had contained the letter and the million-mark note. She noticed that affixed to it there was a canceled postage stamp of one million marks. Her bank account–which four years before seemed large enough to provide her with a serene existence to the end of her days–had been utterly consumed by inflation and could no longer pay for an ordinary postage stamp.