Hyperinflation Museum

Austria's Krone Hyperinflation, 1921 to 1922

Austria's krone hyperinflation ran from October 1921 to September 1922 and peaked in August 1922 at 129 percent inflation per month, a rate at which prices doubled roughly every 25.5 days (Hanke-Krus World Hyperinflation Table, Cato Institute). It was over in twelve months, and that speed is the whole story.

Shop Austrian banknotes Compare: Germany 1923

Last updated: July 2026

Why did the Austrian krone collapse after 1918?

The krone collapsed because a country that had shrunk by close to ninety percent kept paying the bills of an empire. Austria went from the center of a state of 625,000 square kilometers and 50 million people to a republic of roughly 80,000 square kilometers and 6.5 million people, and it financed the resulting deficits by selling treasury bills to its own central bank (Sargent, The Ends of Four Big Inflations, NBER, 1982).

The arithmetic was brutal and it was never hidden. New borders cut Vienna off from the farmland that had fed it. Imperial civil servants who were no longer welcome in the successor states came home to a payroll that could not carry them. Demobilization produced mass unemployment, and the government answered with food relief and unemployment payments while keeping the prices charged by state railways and monopolies deliberately low. On top of it all sat the Reparation Commission, holding what Sargent describes as a blanket mortgage against the assets and revenues of the Austrian state, in an amount nobody could yet name.

Between 1919 and 1922 the deficit was typically more than half of total government expenditure (Sargent, NBER, 1982). Gold cover on the note issue had fallen from 74.6 percent in 1914 to 0.9 percent at the end of the war (ECAEF, summary of the Austrian hyperinflation).

Source: Thomas J. Sargent, "The Ends of Four Big Inflations," NBER, 1982, table A1, citing Pasvolsky.

There was a paper trail along the way. Under the Treaty of Saint-Germain-en-Laye the republic had to overstamp the old Austro-Hungarian notes still circulating on its territory, and collectors know those notes today by the word printed across them: DEUTSCHÖSTERREICH. Stamping a national identity onto imperial paper did nothing to change what stood behind it. Joseph Schumpeter, appointed State Secretary for Finance in March 1919, was forced out seven months later, by which time the supply of new Austrian crowns had risen from 831.6 million to 12.1 billion (ECAEF). That figure tracks the new Austrian issue alone, not the total note circulation Sargent measures in the next section, so the two series do not share a baseline.

How fast did the krone actually fall?

Fast, and then not at all. Between January 1921 and August 1922 the Austrian retail price index rose by a factor of 110, and total note circulation multiplied by a factor of 288 between March 1919 and August 1922 (Sargent, NBER, 1982). Then in a single month the exchange rate simply stopped moving, and it stayed still for two full years.

The New York market quotation is the cleanest way to see it. One dollar bought 17.09 crowns in January 1919 and 77,300 by August 1922. In September the rate fell back to 74,210, in December to 70,925, and from July 1923 through the end of 1924 it sat at 70,760 month after month after month, an almost eerie flat line for a currency that had been in free fall (Sargent, NBER, 1982, table A4, citing Young).

Source: Thomas J. Sargent, "The Ends of Four Big Inflations," NBER, 1982, table A4, citing Young.

Domestic prices tell the same story one beat later. On a retail index of 52 commodities with January 1921 set at 100, the reading was 942 in December 1921 and 11,046 in August 1922. It spiked to 20,090 in September, then fell to 17,409 by December 1922 and drifted slowly upward for the next eighteen months, reaching 24,267 in June 1924 (Sargent, NBER, 1982, table A3). Against a longer baseline, the Austrian cost of living index stood at 100 in July 1914, 1,640 in November 1918, and 1,183,600 in January 1923 (ECAEF).

What the numbers do not show is what they felt like. The economist F. A. Hayek, a young man in Vienna at the time, recalled collecting wages late in the day in 500,000 crown notes and needing an empty suitcase to carry them home before prices moved again (ECAEF). That is a currency that had lost its purchasing power, not a country that had lost its economy. The factories, the farms, and the skills were all still there. Only the unit of account had failed.

What did the League of Nations do in October 1922?

On 4 October 1922 Austria signed the Geneva Protocols, three linked declarations that traded sovereignty over Austrian fiscal policy for a 650 million gold crown international loan and a promise of continued independence (Protocol for the reconstruction of Austria, 1922; Sargent, NBER, 1982). The remarkable part is that the crown began recovering before anyone read the terms.

The first protocol was a joint declaration by Great Britain, France, Italy, Czechoslovakia, and Austria reaffirming Austrian political independence and sovereignty, with Spain acceding on 3 November 1922. The second set the conditions of the loan. The third, signed by Austria alone, was the one that mattered internally: Austria promised to establish a new independent central bank, to stop running large deficits, and to bind itself not to finance deficits with advances of notes from that bank. It also accepted a commissioner-general appointed by the League Council, a post filled by Alfred Zimmermann of the Netherlands, whose supervision ran until 30 July 1926 (ECAEF).

Execution was immediate. Legislation of 14 November 1922 created the Austrian National Bank to replace the Austrian section of the old Austro-Hungarian Bank, and it opened for business on 1 January 1923, explicitly forbidden from lending to the government except against an equal amount of gold and foreign assets (Sargent, NBER, 1982). On the spending side, Austria committed to gradually discharging a total of 100,000 state employees, raised the prices charged by state enterprises, and built better tax and customs collection. Within two years the government had balanced the budget. Sargent's table A5, which reports the Austrian accounts in schillings even for the years before the schilling existed, shows a surplus on current items of 90.6 million in 1924 and 167.1 million in 1925 (Sargent, NBER, 1982, table A5, citing Pasvolsky).

Here is the detail historians keep returning to. The economist Pasvolsky, quoted by Sargent, noted that the exchange rate stopped soaring on 25 August 1922, nearly two weeks before Chancellor Ignaz Seipel formally laid the Austrian question before the League Council, with the internal price level following three weeks later. The printing presses were still running. The ministries were still spending. The crisis was checked anyway, because the market had decided the presses were about to stop.

Why did Austria stabilize a full year before Germany?

Austria stabilized first because it accepted binding outside supervision first. Its hyperinflation ended in September 1922, one month after Germany's had begun, and the difference in outcomes is stark: Austria's peak was 129 percent a month, Germany's was 29,500 percent a month (Hanke-Krus World Hyperinflation Table, Cato Institute).

Sargent's argument, the standard reading of these events, is that a hyperinflation ends when the fiscal regime changes in a way the public believes, not when the money supply is squeezed. The proof in Austria is almost perverse: from August 1922, when the exchange rate stabilized, to December 1924, the circulating notes of the Austrian central bank increased more than sixfold, and prices stayed broadly stable anyway. Before the protocols, central bank liabilities were backed mainly by government treasury bills, which carried no commitment to future taxation. After the protocols, they were backed by gold, foreign assets, commercial paper, and ultimately by a government that had visibly agreed to collect taxes.

Germany had no equivalent settlement available in 1922. Reparations were unresolved, the Ruhr occupation was still ahead, and no external body was in a position to underwrite a credible commitment. German inflation therefore ran another fifteen months and reached a peak that doubled prices every 3.70 days rather than every 25.5. Read the full German arc on our page for the German mark hyperinflation of 1923, and see where both episodes land in every hyperinflation ranked. Hungary is instructive too, because it got two turns: a milder crown hyperinflation from March 1923 to February 1924, then the pengo collapse of 1945 and 1946, the most severe episode in the Hanke-Krus World Hyperinflation Table (Cato Institute).

Source: Hanke-Krus World Hyperinflation Table, Cato Institute.

Which banknotes did the krone crisis leave behind?

Austria's paper record runs in three acts: overstamped imperial notes from 1919, a republican series dated 1920, and the 1922 series that climbed from 1 krone to 500,000 kronen inside a single year. The 500,000 kronen note of 1922 is the highest denomination the Austrian krone reached in circulation, and a 1,000,000 kronen note was planned but never released (Wikipedia, Austro-Hungarian krone and Austrian krone).

The 1919 overstamps are the most historically loaded pieces. These are Austro-Hungarian Bank notes from the imperial era, still carrying Habsburg-era design work, with DEUTSCHÖSTERREICH applied across the face to mark them as the money of the new republic. Holding one is holding the exact moment an empire's currency was relabeled as a small country's currency.

The 1922 series is where the crisis becomes visible in the design itself. The lower values are compact and conventional. The high denominations are large, ornate, and printed in a hurry, and they are the ones collectors chase.

Pick numbers shown only where independently confirmed. Blank cells indicate a catalog reference we could not verify across two sources. Denomination list confirmed against Wikipedia, Austrian krone. See our Pick numbers catalog guide for how this numbering works.

Austria also struck coins in denominations of 100, 200, and 1,000 kronen to ease the handover to the schilling. And it is worth noticing what Austria never printed. There is no Austrian trillion. Germany reached a 100 trillion mark note and Hungary reached a 100 quintillion pengo, both of which appear in our roundup of the highest denomination banknotes ever issued. Austria stopped at half a million. That restraint is the numismatic signature of a hyperinflation that was cut short.

The schilling replaced the krone on 1 March 1925

The Schilling Act of 20 December 1924 defined one schilling as 10,000 paper kronen, and the new currency entered circulation on 1 March 1925, divided into 100 groschen. It arrived more than two years after the crown had already stopped falling, which is precisely why economists treat it as bookkeeping rather than as the cure.

Sargent puts it plainly: the stabilization of the Austrian crown was not achieved by a currency reform, and the introduction of the schilling was surely an incidental measure. The hard work had been done in the autumn of 1922 by a signed fiscal commitment and a central bank charter. The 1925 redenomination simply removed four zeroes from a price system that had already stopped moving, and gave the republic a name for its money that owed nothing to the empire. The schilling went on to earn the nickname Alpendollar, the Alpine dollar, for the reputation it built over the following decades.

Compare that with Hungary, where the forint replaced the pengo in August 1946 at a conversion so extreme it has no useful analogue, a story we tell in pengo to forint, 1946. Both countries redenominated. Only one of them did it from a position of calm.

What should collectors look for in Austrian krone notes?

Look for the high denominations of the 1922 series in genuinely crisp condition, and look for the 1919 DEUTSCHÖSTERREICH overstamps with a clean, fully struck overprint. Because the episode was short and the withdrawal was orderly, the survival picture for Austrian krone paper is friendlier than for currencies that were simply abandoned.

Condition drives everything here. Low denominations from 1922 turn up regularly in uncirculated condition and make an approachable entry point. The 100,000 and 500,000 kronen notes are the ones worth being patient about: check the corners, the margins, and whether the note has been pressed. Our banknote grading guide walks through the vocabulary, and graded versus raw banknotes covers when a third party holder earns its premium.

On the overstamps, examine the overprint itself. A weak, smudged, or partially struck DEUTSCHÖSTERREICH marking is a condition issue, not a variety, and it matters to how the note grades. Novelty replicas of famous hyperinflation notes circulate freely online, so buy from sellers who describe the note precisely and stand behind it. See spotting counterfeit banknotes and how to store banknotes, since archival sleeves and stable humidity do more for long term condition than anything else you control.

If you are building a Central European crisis set, Austria is the hinge piece. It sits between the imperial money that preceded it and the German and Hungarian collapses that followed, and it is the one case where you can point at a single month and say the government chose to stop. Prices vary with inventory and condition, so check current availability in Austrian banknotes and in our curated hyperinflation sets.

Frequently asked questions

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Keep going: read the fuller Austrian note listing in our Austria banknotes reference, compare the outcome with the German hyperinflation of 1923, and see where Austria sits among every hyperinflation ranked. New to the field? Start with how to collect world banknotes and the banknote glossary, then browse current Austrian banknotes and graded banknotes.