After the
Occupation of the Ruhr in early 1923 by French and Belgian troops, referred to as the
Ruhrkampf, the
German government of
Wilhelm Cuno reacted by announcing a policy of passive resistance. This caused the regional economy of the Ruhr, the industrial heartland of Germany, to almost stop. The occupation authorities reacted to strikes and sabotage with arrests and deportations. Those displaced and left without income by the
Ruhrkampf and their families fell back on public income support. Tax revenues plunged as economic activity slowed. The government covered its need for funds mainly by printing money. As a result, inflation spiked and the
Papiermark went into freefall on the currency market. Foreign currency reserves at the
Reichsbank dwindled. The newly created
Rentenmark was introduced alongside the old
Papiermark on 15 November. Because of the economic crisis in Germany after the
First World War, there was no gold available to back the currency. Luther thus used Helfferich's idea of a currency backed by real goods. The new currency was backed by the land used for agriculture and business. This was
mortgaged (
Rente is a technical term for mortgage in German, but
Rentner means
pensioner) to the tune of 3.2 billion
Goldmarks, based on the 1913 wealth charge called
Wehrbeitrag which had helped fund the German war effort from 1914 to 1918. Notes worth RM 3.2 billion were issued. The conversion rate was set by Schacht on November 20 to a rate of one Rentenmark to equal one trillion (1012) old marks, coinciding with an exchange rate of one
United States dollar to equal 4.2 Rentenmarks, recalling the pre-war exchange rate of gold Marks to the U.S. Dollar. Von Havenstein, the head of the Reichsbank, died suddenly on November 20 and Schacht was appointed in his place one month later. The
Rentenbank continued to exist after 1924 and the notes and coins continued to circulate. The last Rentenmark notes were valid until 1948. ==Coins==