Currency reforms in Germany

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Currency reforms have occurred several times in the course of Germany's history .

Currency reform from 1871 to 1876

This currency reform was about standardizing the different currencies in the individual member states in Germany . The traditional currency units were thaler , guilder , cruiser and groschen . With this currency reform, the decimal system was also used. Bavaria was the last country to switch to the new currency in 1876.

The currency reform in 1924

The change from the "Mark" (M) to the " Rentenmark " (RM) in November 1923 at an exchange rate of 1,000,000,000,000 M: 1 RM (1 trillion marks to 1 Rentenmark) ended the German inflation from 1914 to 1923 , which was triggered by the financing of the First World War through war bonds and the reparation payments after the First World War and which put the young Weimar Republic under heavy economic and political pressure. It was the most noticeable and, in the short term, most successful German currency reform. The actual reform is the Coin Act of August 30, 1924 , which established the “ Reichsmark ” (also abbreviated as “RM”, 1 Rentenmark to 1 Reichsmark) as the official currency and a gold core currency as its backbone.

Form 1948

This currency reform came to an end in the following July with the abolition of the (paper) mark. As a result, the exchange rate to the US dollar was back at the 1914 level.

The 1948 currency reform in the western zones

Even after the end of the war, the RM (Reichsmark and Rentenmark) initially remained the only valid means of payment in Germany. The issue of occupation money increased the amount of money, while the supply of goods was low as a result of the war due to restrictions in agricultural production, destroyed production facilities and the hoarding of goods in anticipation of a currency reform. The RM largely lost its functions as a means of payment and a store of value in favor of food stamps , barter and substitute currencies . In February 1948, the United States and Great Britain proposed to the Allied Control Council to introduce a new currency for the whole of Germany instead of the RM. Even after a working committee was set up, no agreement could be reached with the Soviet side. On the one hand, it had no interest in an economic revival in the western zones, on the other hand, there was no agreement on the politically important question of who and how the new currency should be controlled. Both sides therefore finally initiated their own currency reform in their occupation zones and Berlin sectors. First, after secret preparations, the Western Powers in the Trizone introduced the D-Mark of the Bank Deutscher Lander in the Western Zone on June 20, 1948 , and in 1953 old balances at West Berlin credit institutions were also converted into D-Mark.

The 1948 currency reform in the Soviet occupation zone

In a hall of the German Economic Commission in Berlin, Leipziger Strasse, coupons are stuck to the previous Reichsmark notes in order to obtain valid means of payment for citizens in the Soviet sector of Berlin (June 1948)

In the Soviet Occupation Zone (SBZ) there was a need for currency reform for the same reasons as in the western zones. It was therefore discussed politically and in the media in the Soviet Zone at the latest from 1947 and prepared independently of the western zones. In mid-June 1948, however, the preparations in the Soviet Zone were not yet completed. In contrast to the Trizone, neither the necessary legal norms had been drawn up nor, for example, new notes and coins produced.

The introduction of the D-Mark of the Bank of German Lands in the western occupation zones threatened to infiltrate large amounts of RM into the Soviet occupation zone (SBZ), which could have triggered a strong overhang and thus galloping inflation . For this reason, the Soviet Military Administration in Germany (SMAD) initially had all pedestrian, passenger train and car traffic between the western zones and Berlin stopped and goods traffic also strictly controlled on the waterways. Smugglers are said to have been discovered who carried several 100,000 Reichsmarks with them. In the first five days, around 90 million Reichsmarks are said to have seeped into the Soviet zone. In addition, on June 22, 1948 , the Supreme Chief of the SMAD and Commander-in-Chief of the Group of the Soviet Armed Forces in Germany, Marshal Sokolowski, handed over the order to the incumbent mayor of Greater Berlin Louise Schroeder and her deputy Ferdinand Friedensburg to take over the entire city after a dated June 21 , 1948 June 1948 , the list of measures drawn up by the German Economic Commission to also implement a currency reform. Shortly before midnight of the same day, the negotiations that had been going on for months in a subcommittee of the Allied Control Council to introduce a jointly controlled currency in Germany finally failed due to a Soviet veto . On the same night, the currency reform ordered by SMAD was published on Berliner Rundfunk . Since, unlike in the Trizone, new banknotes for the Deutsche Mark of the German Central Bank ( Ostmark ) were not yet available, the previous RM notes were provided with small value stickers the size of half a postage stamp as an emergency solution ("adhesive" or "wallpaper mark") and from June 23, 1948 in the Soviet Zone and in all of Berlin in circulation. Initially, 70 marks per person were exchanged at a ratio of 1 RM: 1 German marks (from the German Central Bank). Newly printed banknotes of the Deutsche Mark (the German Central Bank) were not put into circulation until July 24, 1948. RM coins below one mark remained in circulation longer, but were only a tenth of their value. This led to the curiosity that the 50-pfennig pieces denominated in RM, which had become invalid in the West, were collected by those familiar with the situation and sent to relatives in the Soviet Zone, where they were worth at least five pfennigs in German marks (the German central bank) were. The western city commanders declared the Soviet instruction to introduce the Ostmark in their sectors to be ineffective, but it was accepted as a means of payment there and also used officially. In return, however, the western commanders issued DM notes from the Bank of German States in their sectors from June 24, 1948. In view of Berlin's special status, they were distinguished from those in the western zones with a "B" stamp or a corresponding perforation.

  • Reich currency

  • from June 20, 1948 west zone

  • from June 23, 1948 east zone

  • from June 24, 1948
    Berlin blockade

  • from July 24, 1948 east zone

This meant that two currencies recognized as means of payment were now in circulation in West Berlin. In East Berlin and the Soviet Zone and later the GDR, however, possession of DM by the Bank of German States and later by the Bundesbank was forbidden until 1974. In Berlin, however, a kind of inner-city currency trading on the black market developed . To dry it out, the Western Allies allowed exchange offices, which began operations on August 2, 1948. The first exchange rates were based on 1 West Mark = 2.20 East Mark and later changed to a range of four to seven East Marks.

The 1957 currency exchange in the German Democratic Republic

On October 13, 1957, cash was exchanged in the GDR (old notes 1: 1 for new notes). Only a maximum of 300 DM (GDR) of the cash could be exchanged directly on that day. Any remaining cash had to be paid in at the same time and was credited to the German Central Bank and could later be withdrawn. Balances at banks, savings banks, etc. the like remained unaffected. 267.5 million DM were withdrawn from circulation mainly because they had been removed from the country contrary to GDR laws and could not be brought back to the GDR or East Berlin at short notice on October 13, 1957, a Sunday. Also, many GDR citizens who had kept cash at home or had hidden it did not deposit all cash at the exchange points on that day, because they feared being asked about the origin of the cash; especially if the cash assets far exceeded the income. This money was then lost for the citizens, because later it could only be deposited and credited to the German Central Bank in exceptional cases (e.g. when staying abroad or in hospital). There were no price increases associated with this currency exchange campaign. A certain excess of purchasing power could of course also be reduced; approx. 15 DM of the German Central Bank per inhabitant. The government of the GDR also got an overview of lost cash. Later there were less spectacular currency exchanges from Deutscher Mark (DM) of the German Central Bank to Mark of the German Central Bank (MDN) and even later from MDN to Mark of the GDR (M).

Introduction of the D-Mark in the GDR in 1990

The Treaty on Monetary Union was signed on May 18, 1990 and came into force on July 1, 1990.

Different conversion rates

As part of the introduction of the Deutsche Mark in the GDR on July 1, 1990 in the run-up to reunification on October 3, 1990, different types of money were exchanged at different rates (1: 1, 2: 1). Wages, salaries, pensions, rents and other "recurring payments" were converted 1: 1. The rules for cash and bank balances were more complicated: children under the age of 14 could exchange up to 2,000 GDR marks at a ratio of 1: 1, 15- to 59-year-olds up to 4,000 GDR marks, and those older than 6,000 GDR marks. Amounts beyond this, including larger financial assets, were converted at a ratio of 2: 1; Loans and other liabilities have been converted in sentence 2: 1. According to Hans Tietmeier, the then chief negotiator of the Deutsche Bundesbank, the average conversion rate was 1.8: 1.

The coins from 1 pfennig to 50 pfennig were still considered legal tender for a transitional period, which led to the fact that in the weeks before monetary union, especially the 50 pfennig pieces were hoarded by the people, as they were also after 1 July could still be used. On the other hand, even the retail trade was sometimes reluctant to accept the 1-M and 2-M coins in the last days of June, as they had to be counted, rolled and paid into a current account by the reference date on the weekend, as they then became worthless.

Payment to current account on the key date

Only bank balances were exchanged on the reference date, so all cash had to be paid into a current account within a certain period of time. DDR-Mark cash lost its value on July 1, 1990. On Monday, July 2nd, D-Mark cash could be withdrawn from the account at the counter and the few existing ATMs.

If you didn't have an account yet, you had to create an account and deposit your GDR cash. In the run-up to the Hardenbergplatz, the forecourt of the Berlin Zoologischer Garten train station , DM was exchanged officially in the exchange office and unofficially in front of the exchange office at a rate higher than 1: 1 for GDR marks. The cash amounts in GDR marks that remained in cash on the account due to the investment limit were invested in GDR refrigerators and similar GDR products before the currency changeover.

Provision of DM banknotes

440 million DM banknotes valued at 27.5 billion DM and weighing 460 tons in 22,000 packing bags were transported to the GDR. A packing bag contained 20 packages of 1,000 banknotes each. The banknotes were distributed to the bank branches from interim storage facilities. Partly, prisoner transports of the People's Police were used for this due to a lack of armored vehicles. After July 1st, former employees of the GDR state bank were trained in deposit and withdrawal transactions.

Gradual withdrawal of the penny coins

GDR pfennig coins with a value of 1 to 50 pfennigs retained the value of the corresponding DM pfennigs for a year. They were gradually replaced. The GDR pennies were melted down.

Introduction of the euro in 1999/2002

The introduction of the euro in twelve states of the European Union , the so-called euro zone , was not a currency reform, but only a currency conversion, as all amounts of money existing up to the end of 1998 were converted directly into euros using the official euro exchange rate without losing value to win. Since then, the currencies of the euro countries have been firmly pegged to the euro, they are just other units of account of the euro.

The euro has been considered book money since 1999 ; it was introduced as cash on January 1, 2002 . Since the introduction of cash, all of the old currencies of the euro countries have lost their legal tender status. Practice shows, however, that various countries, such as Poland, the Czech Republic, Hungary, etc. still use their own currency to this day and sometimes only allow settlements in the national currency. Banknotes and coins have been withdrawn and in some countries ( free of charge in Germany at the Deutsche Bundesbank ) they can still be exchanged for euros for an unlimited period. Cashless monetary values ​​were automatically converted to euros by January 1, 2002 at the latest.

A reform of the monetary system only took place insofar as the national central banks lost their independence and instead the European Central Bank (ECB) took on the role of central bank. The Deutsche Mark thus lost its role as the European reserve currency .

The German mark was exchanged at the rate of 1 € = 1.95583 DM.

gallery

  • Currency reform 1948, information in Leipzig

  • Information from the City of Leipzig on the 1948 currency reform

See also

Movies

  • Our moments. The night when the D-Mark came. Germany 2019. In: RBB , June 30, 2020, 8:15 pm - 9:45 pm. (Night on July 1, 1990).

literature

  • Rolf Walter: Economic History - From Mercantilism to the Present. 3. revised Edition. Böhlau, Weimar 2000, ISBN 3-412-11100-7 .
  • Dieter Lindenlaub: The credibility of a new currency: The introduction of the mark in Germany 1871–1876 . In: Bank historical archive. 1/2002, magazine for banking history, published by the Scientific Advisory Board of the Institute for Bank History Research, Frankfurt am Main.
  • Rudolf Stucken: German Monetary and Credit Policy 1914–1963. 3. Edition. Mohr, Tübingen 1964, DNB 454942230 .
  • Frank Zschaler: The forgotten currency reform in the Soviet zone , in: Vierteljahrshefte für Zeitgeschichte , 45th year 1997, 2nd issue, ISSN 0042-5702 pdf 7.3 MB
  • Michael W. Wolff: The currency reform in Berlin: 1948/49 . Volume 77 of: Publications of the Historical Commission in Berlin at the Friedrich Meinecke Institute of the Free University of Berlin. Publications of the Section for the History of Berlin, Walter de Gruyter, new edition 1991, ISBN 978-3-1101-2305-0
  • Matthias Judt: GDR history in documents: resolutions, reports, internal materials and everyday testimonies . Christoph Links Verlag, 2013, ISBN 978-3-8628-4273-5

Individual evidence

  1. ↑ Helmut Rienecker: Money rules the world. Interesting exhibition on the 60th anniversary of the currency reform. In: Mainpost. June 24, 2008, p. 29.
  2. ^ Angela Stent: Russia and Germany Reborn: Unification, the Soviet Collapse, and the New Europe . Princeton University Press, 2000, ISBN 978-0-691-05040-9
  3. ↑ Philip Malcolm Waller Thody: Europe since 1945 Routledge, 2002, 336 pp., ISBN 9781134622962 , p. 27
  4. ^ A b Ann Tusa, John Tusa: "The Berlin Blockade". Coronet Books, 1989 edition, 557 pages, ISBN 0-340-50068-9
  5. ^ Matthias Judt: GDR history in documents: resolutions, reports, internal materials and everyday testimonies . Ch. Links Verlag, 2013, ISBN 978-3-8628-4273-5
  6. ^ Michael W. Wolff: The currency reform in Berlin: 1948/49 . Volume 77 of: Publications of the Historical Commission in Berlin at the Friedrich Meinecke Institute of the Free University of Berlin. Publications of the Section for the History of Berlin, Walter de Gruyter, new edition 1991, ISBN 978-3-1101-2305-0
  7. ^ Frank Zschaler: The forgotten currency reform in the SBZ , in: Vierteljahrshefte für Zeitgeschichte , 45th year 1997, 2nd issue, ISSN 0042-5702 pdf 7.3 MB
  8. ↑ Wolfgang Malanowski: 1945-1948: Schlamassel Berlin - currency reform and Soviet blockade 1948/49 , in: Der Spiegel special, issue 4/1995, pp. 132-138 pdf 7.1 MB
  9. ↑ Thomas Wieke: “The GDR Mark Memorial Book: Stories and anecdotes about the aluminum chip”. Bassermann Verlag, 2013, ISBN 9783641097295
  10. ^ H. Jörg Thieme: Central Bank and Currency of the GDR. In: Deutsche Bundesbank (Ed.): Fifty Years of the Deutsche Mark: Central Bank and Currency in Germany since 1948. CH Beck, Munich 1998, ISBN 3-406-43659-5 , pp. 609–654; here p. 623.
  11. ↑ The legend of the wrong exchange rate. In: Preussische Allgemeine Zeitung. October 2, 2010, p. 4.
  12. ↑ Our moments. The night when the D-Mark came. Germany 2019. In: RBB , June 30, 2020, 8:15 pm - 9:45 pm. (Night on July 1, 1990).
  13. ↑ Frank Stocker: 460 tons of new hope. In: Welt am Sonntag of June 21, 2015, p. 42.
  14. ↑ Interview by Frank Stocker with Andreas Marek: "We had to climb over stacks of money". In: Welt am Sonntag of June 21, 2015, p. 42.
  15. ↑ Interview by Frank Stocker with Andreas Marek: "We had to climb over stacks of money". In: Welt am Sonntag of June 21, 2015, p. 42.