I was just reading about how Germany sold a lot of war bonds to citizens and other entities during World War 1.

Given the dire economic situation of Germany after the war, what happened to the owners of these bonds? Did they mostly get reimbursed, or not?


1 Answer 1


Chickering suggests that bonds were seen as a patriotic sacrifice and they were nominally honoured but their value reduced by inflation:

A war bond with a face value of 1,000 marks when purchased in the summer of 1914 still carried a face value of 1,000 marks in the summer of 1918, when its value, adjusted to current prices, stood close to 300 marks.

They could do this because they issued bonds in their own currency to a largely domestic audience and transitioned off the gold standard to a fiat currency during the war, as explained in this article.

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    So, this means that they were worth much less after the war. But can we deduce from this that they were mostly paid? Isn't it possible that they were both worth less and not paid?
    – Fiksdal
    Commented Sep 13, 2016 at 23:45
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    @Fiksdal That is true. However, there would be no need to default when you can inflate the debt away. Indeed, during hyperinflation, the physical bond certificate may be worth more than the bond itself.
    – James
    Commented Sep 14, 2016 at 0:08

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