Reichsbank

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The Reichsbank was the central bank of Germany from 1876 until 1948. It was founded on 1 January 1876 (shortly after the establishment of the German Empire in 1871) and ceased to exist in 1948.

The Reichsbank was founded by the take over of the central bank of Prussia. Its first president was Hermann von Dechend.

Before the unification in 1871 Germany had 31 central banks – the Notenbanken (note banks). Each of the independent states issued their own money. In 1870 a law was passed that forbid the formation of further central banks. In 1874 a banking law was put in front of the Reichstag (the German parliament). After several changes and compromises the law was passed in 1875. Four of the Notenbanken continued to exist until 1914.

The history of the Reichsbank was volatile. Until World War I it produced a very stable currency Goldmark. The expenses of the war caused inflationary pressure and the mark started to decrease in value. This culminated in the German hyperinflation of 1922–23. The mark became the Papiermark (paper mark). Economic reforms and the issue of a new provisional currency – the Rentenmark stabilised the monetary development. In 1924 the Reichsbank started to issue the Reichsmark, which it managed until 1948. In this year both the Reichsmark and the Reichsbank ceased to exist. At the end of the Second World War hoards of gold of the Reichsbank had been stored in the Bavarian castle Neuschwanstein. In the last days of the war, they were carried off to an unknown place. According to unproven rumours, they were plunged in a lake, e.g. in the Alat Lake of southern Germany. Furthermore, between May 1945 and March 1947 the Reichsbank was plundered of approximately £2.5 billion through various robberies masterminded by rogue members of the SS. Though these robberies were spaced out and not masterminded by a single source, the Guinness Book of Records currently lists the robbing of the Reichsbank as the largest robbery in history. In West Germany the monetary policy was taken over by the state banks (Landesbanken) and later by the Deutsche Bundesbank. In East Germany the state banks were succeeded by the Staatsbank der DDR (State bank of the GDR).