In 1923 a huge iceberg drifted into the Baltic sea and ran aground off
the German port of Lübeck. The strength of the polar easterlies that
year caused a number of bergs to drift unusually far south on the
Spitsbergen current. Sea ice was seen in Bergen and parts of northern
Scotland. Some German scientists postulated that the heat from factory
smoke may have caused abnormally high break up of the arctic ice pack. The burghers of Lübeck declared the iceberg to be a free trade area
under the name “Eisbergfreistadt” (Iceberg Free State). It was hoped
that the iceberg might become an offshore banking haven. Notgeld were
issued as marks but tied to financial futures and currency arbitrage.
Some municipalities such as Bremen and Lübeck attempted to tie their own
notgeld to Eisbergfreistadt’s by overprinting and stamping their own
banknotes, but this “Eisberggeld” fared no better than the mark during
the height of hyperinflation.
Despite the failure of Eisbergfreistadt to take hold as a viable
financial institution, it did nonetheless capture the public imagination
of the time. Many people traveled to Lübeck to view the berg – it was
even possible to travel to the iceberg by zeppelin. Many souvenirs were
created, including playing cards, serving sets, songs, etc. It was
painted by a number of prominent artists, but most significantly became
a major source of fascination to the utopian movement known as the
Founded by the artist and architect Bruno Taut, the Crystal Chain was a
correspondence formed between the leading proponents of expressionist
architecture in Germany, including Walter Gropius and Wenzel Hablik. The
group was fascinated with the architectural possibilities inherent in
crystalline structures and glass. When the giant iceberg washed ashore,
the group seized upon it, designing utopian cities made of ice and
issuing manifestos on behalf of its imaginary socialist government in
absentia. Ironically, many of the group’s drawings were used on notgeld,
Hablik in particular contributing some fine designs.
To celebrate the founding of the Eisbergfreistadt bank, a large masked
ball was held on the iceberg in the autumn of 1923. Many attendees came
dressed as polar animals and explorers, although a contingent led by
Wenzel Hablik arrived dressed as pigs and rats. Unfortunately, the
combined weight of the revelers caused the berg to split into two
pieces. One of these eventually collapsed and melted, causing
considerable damage to Lübeck’s industrial zone; the other drifted back
out into the Baltic, where it was swept back to the arctic by the
Norwegian current. Those unfortunate enough to be stranded on the latter
were the subject of numerous search and rescue missions. Hablik was
among them, and was eventually rescued near the arctic circle.
In retrospect, the iceberg seems merely the precursor to the greater
apocalypse to befall the town of Lübeck: in 1942 it became the first
German city to be attacked by the Royal Air Force - the resulting
firestorm almost completely obliterated the old town. After the war’s
end, the historic district was rebuilt and declared an UNESCO World
Heritage Site in 1987. As such, the history of Lübeck seems particularly
relevant to our contemporary anxieties, and we ignore its lessons at our
appeared during the World War 1 as a response to small change shortages.
Due to the war effort’s ever growing need for metal, new coins could not
be minted and the value of those coins that were left in circulation
exceeded their denomination, causing institutions to hoard them.
This massive shortage
forced local municipalities to produce large quantities of small
denomination banknotes for local merchants and businesses. These
“notgeld” (literally “emergency money”) were not legal tender, but
rather a mutually accepted form of payment. In addition to paper,
notgeld was also printed on silk, leather, linen, foil, porcelain,
playing cards, and even coal.
to their bright colours and unusual designs, notgeld proved to be
popular as collector’s items and so continued to be produced even after
the war’s end – like stamps, they often traded at higher than face value
and so proved a good business for the towns producing them.
In 1922, the value of the mark started to deteriorate due to inflation
caused by Germany’s reparations to the victorious countries after the
war’s end. The central bank was forced to constantly reissue banknotes
in ever rising denominations – first hundreds, then thousands, then
hundreds of thousands, and finally millions and even billions. With the
central bank unable to physically issue enough money, notgeld were again
produced in enormous quantities. Most were issued as marks, but some
were tied to commodities or other currencies, such as the US dollar.
During the height of hyperinflation, notgeld became essentially
worthless as money and so came to be used for other purposes, such as
fuel, wallpaper, and fabric.
Von Eisbergfreistadt for more