. . . Congress's paper dollar fell from an exchange rate of one for each silver dollar to one thousand for each silver dollar Congress’s paper dollar fell from an exchange rate of one for each silver dollar to one thousand for each silver dollar. The Weimar hyperinflation was a million times worse, and occurred in a much shorter time span. The statistics presented show that the peak of the inflation was from early 1922 through November 1923, a little over a year. The last three months appear to have been the most intense.

Professor Graham’s conclusion is that market theories were

fundamentally sound and the policy of laissez-faire to which they point is valid still.… The mills of in...

. . . Congress's paper dollar fell from an exchange rate of one for each silver dollar to one thousand for each silver dollar Congress’s paper dollar fell from an exchange rate of one for each silver dollar to one thousand for each silver dollar. The Weimar hyperinflation was a million times worse, and occurred in a much shorter time span. The statistics presented show that the peak of the inflation was from early 1922 through November 1923, a little over a year. The last three months appear to have been the most intense.

Professor Graham’s conclusion is that market theories were

fundamentally sound and the policy of laissez-faire to which they point is valid still.… The mills of international finance grind slowly but their capacity is great.…The one condition is that the hoppers be not unduly loaded in [an] effort to get the whole grist from a single grinding. So much for the economics of the question. What politics has in store is, however, an inscrutable mystery. It can only be said that such financial difficulties as may occur will almost certainly arise from political rather than economic sources.

The experience from which he distills this understanding was grounded in the events of that time. The Weimar Central Bankers actually contended that their extraordinary printing of marks did not cause the extraordinary increase in prices. Indeed, prices actually tended, until the last couple months of the inflation, to surge a bit ahead of the printing presses in anticipation. Toward the end of the insanity, prices couldn’t keep up because no one could rationally anticipate in such circumstances.

“Such financial difficulties as may occur will almost certainly arise from political rather than economic sources.”
– Frank D. Graham


Exchange, Prices and Production in Hyper-Inflation: Germany, 1920 – 1923, by Frank D. Graham (Princeton University Press, 1930).Download PDF


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