Rudolf E. Havenstein
|Died||20 November 1923 (aged 66)|
Havenstein was born in Meseritz (Międzyrzecz), Province of Posen. He came from a family of government officials and studied law in Heidelberg and Berlin. After graduation in 1876, Havenstein worked in the Prussian Justice service until 1887 when he began his career as a judge. In 1890 he moved to the Prussian Ministry of Finance. From 1900 to 1908, Havenstein was President of the Prussian State Bank. From 1908 to 1923, he was president of the Reichsbank and his signature appears on German Reichsbank notes from 1908 to 1923.
Havenstein played an important part in the Hyperinflationary process in Germany since he subscribed to the widespread belief then present in Germany that the inflation was caused by the fall in the external value of the mark against foreign currencies and that the role of the Reichsbank was to print sufficient money to sustain the higher price levels. Of course, the more money that was printed the higher the price level became, so the Reichsbank then printed even more money and so on. In other words, rather than following the Quantity Theory of Money in ascribing inflation to the excessive printing of money, Havenstein believed that money had to be printed to feed the rising demand for money within the German economy as prices were driven up by the fall in the exchange rate. It was Havenstein's death in November 1923 that helped to bring this policy to an end and with it the Hyperinflation.
He died in Berlin and is buried in St. Anne's Cemetery in Berlin-Dahlem.
- Adam Fergusson, When Money Dies: The Nightmare of Hyperinflation in Weimar Germany, Kimbler, 1975, republished 2010 by PublicAffairs, New York, ISBN 978-1-58648-994-6, Chapter 11 "Havenstein"
- Ahamed, Liaquat, Lords of Finance: The Bankers Who Broke the World, Penguin Books, 2009. ISBN 978-1-59420-182-0
- Bresciani-Turroni, The Economics of Inflation, pages 63, 156, 180, John Dickens Co Ltd, Northampton, 1931. The Economics of Inflation: A Study of Currency Depreciation in Post-War Germany
- Max Shapiro, The Penniless Billionaires, pages 213-214, New York Times Books, 1980, ISBN 0-8129-0923-2