Posts Tagged ‘Deutsche Mark’

From Thaler to Euro

Monday, March 6th, 2017

The Thaler was a silver coin used throughout Europe for almost four hundred years. It served as currency in Germany between the 16th and the 19th centuries. The Thaler was first minted in 1519 from locally mined silver in Joachimsthal in the Kingdom of Bohemia, which was part of the Holy Roman Empire at that time. Today, the town of Joachimsthal lies within the borders of the Czech Republic. The word “Thaler” is an abbreviation of “Joachimsthaler,” the term by which the coin was originally known. In 1902, the German spelling of Thaler was changed to Taler in conformance with a spelling reform. Dollar is an Anglicised form of Thaler.

History of the Thaler (Taler)

The Thaler or Taler could be rather gigantic in weight and size. Some of the coins weighed in excess of a full pound of silver; some reached a diameter of more than 5 inches. Similar coins began to also be minted in neighbouring valleys with silver deposits. Each valley named its coins after the valley (thal) it came from. Many silver coins came into existence with different names. To make it easier, the silver coins began to be known as “Thaler” in the German and “Tolar” in the Czech language.

These early Thaler or Taler served the Holy Roman Empire as a standard by which to value various European region’s currencies. The Thaler (or Reichsthaler) was the currency of Prussia until 1754 when the Conventionsthaler was introduced. From 1857 to 1871, the Vereinsthaler served as standard currency in most German states. In addition, there were many other Thaler variations in use.

From Thaler (Taler) to Deutsche Mark

Following German unification in 1871, http://www.walled-in-berlin.com/j-elke-ertle/Otto-von-Bismarck-visionary-or-villain/ Germany adopted the German gold mark, officially known as the Mark as its currency. In 1914, the link between the Mark and gold was abandoned. In late 1923, during the time of the Weimar Republic of Germany, hyperinflation made the paper Mark virtually worthless, and it was replaced by the interim Rentenmark (1,000,000,000,000 paper Mark for one Rentenmark) and by the Reichsmark in 1924.

Toward the end of World War II, the Allied occupation forces printed occupation marks or military marks to be accepted at par with the Rentenmark and the Reichsmark. Banknotes worth 15 to 18 billion military marks were issued for purchases by the occupying forces in Germany and to pay soldiers’ wages. In June 1948, military marks were demonetised as part of the West and East German currency reforms.

On 21 June 1948, the Deutsche Mark (colloquially called “Westmark”) was introduced in the western zones of occupation in Germany (West Germany. And on 23 June 1948, a different Deutsche Mark (colloquially called “Ostmark”) was introduced in Soviet-occupied Germany. The Westmark replaced the Ostmark when Germany was reunified in 1990.

From Deutsche Mark to Euro

In 1999, the Euro replaced the Deutsche Mark (Westmark), http://www.walled-in-berlin.com/j-elke-ertle/history-of-the-euro/ initially only as an electronic currency. Then, in 2002, Euro notes and coins replaced the Deutsche Mark entirely. Although not every Eurozone member state has its own mint to produce euro coins, Germany mints its own. All euro coins are legal tender throughout the Eurozone, and all designs feature the 12 stars of the EU and the year of imprint.

But who is the father of the euro sign? Two different camps claim paternity. More at http://www.walled-in-berlin.com/j-elke-ertle/paternity-for-euro-sign-disputed/

1 Euro coin, featuring the 12 stars of the EU, Photo © J. Elke Ertle, 2017. www.walled-in-berlin.com

1 Euro coin, featuring the 12 stars of the EU, Photo © J. Elke Ertle, 2017. www.walled-in-berlin.com

For a sneak peek at the first 20+ pages of my memoir, “Walled-In: A West Berlin Girl’s Journey to Freedom,” click “Download a free excerpt” on the home page of http://www.walled-in-berlin.com

 

 

Berlin Blockade and the Cold War

Monday, April 25th, 2016

Until the Berlin Blockade began in 1948, the United States had no intention of occupying West Berlin beyond the establishment of a new West German government in 1949. But the subsequent Berlin Blockade and ensuing Cold War kept the U.S. in West Berlin until 1994.

An important omission in the Potsdam Agreement

In the summer of 1945, in the aftermath of World War II, the three victorious powers (the United States, Great Britain and the Soviet Union) signed the Potsdam Agreement. This document laid down the legal framework for the occupation of Germany and re-affirmed rules previously hammered out at the Yalta Conference. Specifically, the Potsdam Agreement addressed the terms of the military occupation, division, territorial changes, reparations and reconstruction of Germany. Accordingly, Germany was divided into three zones. Berlin, the capital, was also divided into three sectors, despite the fact that the city was located 100 miles inside Soviet occupation territory. Three air corridors from West Germany to West Berlin had been negotiated in the Potsdam Agreement, but rail, road and water access were never discussed. This omission was to be the basis for endless frustration.

Quadripartite administration of Germany and Berlin

The Allies established the Allied Control Council http://walled-in-berlin.com/j-elke-ertle/allied-control-council-governs-germany/ to execute resolutions concerning Germany and the Allied Kommandatura http://walled-in-berlin.com/j-elke-ertle/allied-kommandatura-governs-berlin/ to implement resolutions concerning Berlin. When France joined the Allies as the fourth occupation power, its territories of Germany and Berlin were carved from the American and British occupation zones and sectors. The four Allies agreed to govern their respective zone and sector as they deemed fit, but unanimous agreement would be required in matters that concerned all of Germany or all of Berlin.

Events leading up to the Berlin Blockade

By 1948, the relationship between the four powers had gone sour. The three western powers wanted to help rebuilt Germany to stabilize the European continent, with the hope that it would prevent Communism from spreading. The Soviets preferred a weak Germany and an unstable continent, with the hope that it would provide fertile ground for the spread of Communism. It did not take long before the Soviets regretted having agreed to share the city of Berlin with the Western Allies. Now they wanted nothing more than for the three western powers to get out of West Berlin. Quadripartite control became unworkable. On 20 March 1948, the Allied Control Council met for the last time. On 16 June 1948, the Allied Kommandatura assembled for the last time. The Soviet delegation walked out for good.

After the Soviets had left the table, the three Western Allies made decisions concerning their occupation territories without Soviet input. On 21 June 1948, the Western Allies introduced a new currency in the western zones and sectors. They introduced the Deutsche Mark. The Soviets, who had not been consulted, objected vehemently. On 22 June 1948, the Soviets also introduced their own new currency in the eastern zone.

From Berlin Blockade to Berlin Airlift

On 24 June 1948, The Soviets blocked all rail, road and water connections between West Germany and West Berlin. They offered to lift the blockade only if the Western Allies agreed to withdraw the Deutsche Mark from West Berlin. The Western Allies refused. The Soviets stopped supplying agricultural goods to West Berlin and cut off the electricity generated in the Soviet zone and relied upon by the three western zones of Berlin. There was only enough food to last for 35 days and enough coal to last for 45 days.

With surface traffic between West Germany and West Berlin severed and in the absence of negotiated ground access rights to the city, the only remaining possibility was to try to supply West Berlin from the air. On June 26, 1948, American military commander Lucius D. Clay http://walled-in-berlin.com/j-elke-ertle/lucius-d-clay-berlins-defender-of-freedom/ had the first planes in the air. The Berlin Airlift began and the Cold War heated up. The Berlin Blockade lasted from 24 June 1948 to 12 May 1949.

 

For a sneak peek at the first 20+ pages of my memoir, “Walled-In: A West Berlin Girl’s Journey to Freedom,” click “Download a free excerpt” on the home page of http://www.walled-in-berlin.com

Lucius D. Clay – Berlin’s defender of freedom

Monday, April 18th, 2016

General Lucius D. Clay died in 1978. At his gravesite at West Point you’ll see a memorial. It was erected by the people of West Berlin and reads: Wir danken dem Bewahrer unserer Freiheit (We thank the defender of our freedom). Those words were spoken from the heart because General Clay literally saved West Berlin from starvation during the Berlin Blockade. I was only three years old when the blockade started in 1948, but I am keenly aware that I would not write about it today, had it not been for the actions of General Lucius D. Clay. Years later, when President John F. Kennedy dispatched Vice President Lyndon B. Johnson together with Lucius D. Clay to Berlin to shore up the spirits of Berliners during the Berlin Wall crisis, it was Clay whom we went to see. It was Clay whom we trusted.

General Lucius D. Clay and the Berlin Blockade

So how did the Berlin Blockade come about and what did General Lucius D. Clay do to earn the respect and the hearts of West Berlin’s population? Following World War II, Germany and the city of Berlin were divided into four sectors and occupied by British, French, American, and Soviet forces. On 23 June 1948, in an attempt to revive the German economy, the three western Allies issued a new currency, the Deutsche Mark. The Soviets vehemently opposed this action and in return blockaded all land and water access routes to West Berlin. With this move, they hoped to force the Western Allies take back the new currency and subsequently hand West Berlin to the Soviets. By blocking all deliveries of food and electricity they hoped to starve West Berliners into submitting to Soviet control.

At that time, Clay was military governor of the American section of occupied Germany. He decided to supply Berlin by air. Lucius D. Clay gave orders even before having received authorization from President Harry S. Truman. Within three days of the start of the Berlin Blockade, the Berlin Airlift started. It was an incredible logistical feat because never before had a population of 2 million been supplied from the air. But with the help of a man by the name of William H. Tunner, Clay fine-tuned the Airlift until planes landed every three minutes, twenty-four hours a day. Over the course of the next eleven months, General Clay directed some 277,800 flights, carrying 2.3 million tons of food and fuel to West Berlin. http://www.u-s-history.com/pages/h1793.html.

The Berlin Airlift lasted 324 days. When the Soviets realized that the Western Allies could supply West Berlin indefinitely, they threw in the towel. The Berlin Blockade ended on 12 May 1949. It was Clay’s decisiveness and tenacity that saved Berliners from starvation.

General Lucius D. Clay(1898 to 1978)

General Lucius D. Clay (1898 to 1978)

Who was this man, General Lucius D. Clay?

Born in 1898 in Georgia to U.S. Senator Alexander Stephens Clay and Sarah Francis, Lucius DuBignon Clay was the youngest of six children. He graduated from West Point in 1918, became a military engineer and held various civil and military engineering posts during the 1920s and 1930s. During that time, he earned the reputation of being a hard-charging, chain-smoking, tireless and decisive worker who could turn chaos into order.

From 1947 to 1949, Clay was commander in chief of the U.S. Force in Europe and the military governor of war-torn Germany’s American Zone. General Lucius D. Clay also directed “A Report on Germany,” which became one of the source documents for The Marshall Plan. After retiring as a four-star general in 1949, Clay went into the private sector and became a successful business executive. Over time, he served on 18 corporate boards and became the principal architect of our Interstate highway system.

 

For a sneak peek at the first 20+ pages of my memoir, Walled-In: A West Berlin Girl’s Journey to Freedom, click “Download a free excerpt” on the home page of http://www.walled-in-berlin.com

 

What happened to the East German Mark?

Thursday, January 29th, 2015

What happened to the East German Mark following German reunification? The obsolete coins were melted down. But the obsolete banknotes underwent a far more interesting death.

Life of the East German Mark

It all started in 1948. Three days after the Western Allies introduced the West German Deutsche Mark in the American, British and French sectors, the Soviets issued an East German version of the Deutsche Mark in their sector. Although the two currencies bore the same name – Deutsche Mark – they differed in appearance and value. Then, in 1964, the East German government changed the name of their currency to Mark der Deutschen Notenbank. In 1968, they changed that name again to Mark der DDR or simply “Mark.” It remained the East German currency until German reunification in 1990.

Mark der DDR - 1968 to 1989, photo by J. Elke Ertle © 2014

Mark der DDR – 1968 to 1989, Photo by J. Elke Ertle © 2914

The Mark following Reunification

Political unification also meant the end of the East German Mark. On 1 July 1990, the Mark was officially demonetized, and East Germany adopted the West German Deutsche Mark. East German citizens were allowed to convert up to 4,000 Mark into Deutsche Mark at a ratio of 1:1. A smaller amount applied to children and a larger one to pensioners. Savings in excess of 4,000 Mark, company debts and housing loans could be converted at a rate of 2:1. Funds acquired shortly before reunification were considered “speculative” and could only be converted at a rate of 3:1.

Destruction of the Mark

Following reunification, the obsolete East German currency became the property of the Kreditanstalt fuer Wiederaufbau – KfW – (Credit Institute for Reconstruction). About 4,500 tons of obsolete coins were recycled by selling a portion of them to the auto industry and melting down the rest. The obsolete banknotes, however, (about 620 million Mark) http://www.spiegel.de/einestages/vergessene-orte-a-946505.html were placed into storage in two sandstone caverns in the mountains near Halberstadt in Saxony-Anhalt. There they were left to rot. During the slow process of decomposition, however, two youths broke into the caves and made off with some of the money. Following the theft in 2001, the KfW opted to burn the remaining out-of-date East German paper currency. Thus in 2002, the last obsolete Marks were burned.

 

 

For a sneak peek at the first 20+ pages of my memoir, Walled-In: A West Berlin Girl’s Journey to Freedom, click “Download a free excerpt” on the home page of http://www.walled-in-berlin.com. Walled-In is a story of growing up in Berlin during the Cold War.

 

Deutsche Mark

Thursday, June 20th, 2013

On this day in history in 1948 – on June 20, a Sunday – Germans were issued a new currency: the Deutsche Mark. Their previous Reichsmark had become worthless. It no longer bought anything. In the absence of a viable hard currency, cigarettes had taken the place of money.

A few days preceding June 20, American, British, and French troops had quietly dispersed 23,000 wooden crates throughout the country. They were labeled, “Doorknobs.” In reality, these boxes contained Germany’s new bank notes, printed in the United States. To be exact, the crates contained 10,701,720,000 Deutsche Mark.

That Sunday, the places that had previously handed out ration stamps now issued 40 Deutsche Mark to every citizen. Another 20 Deutsche Mark were handed out one month later. Miraculously, the next morning, the previously empty shop-shelves were filling. Merchandise was becoming available for sale again at fixed prices. The cigarette economy was dying. It became apparent that factories and farmers had held back their finished goods and produce until they could be sold for hard currency.

Währungsreform

June 20, 1948,
currency reform in Germany
www.Kalendarblatt.de

Following the currency reform of 1948, Germany’s economy took off. Over the next decades it produced the “Wirtschaftswunder” (economic wonder). But it wasn’t only the three western Allies who were responsible for this economic wonder. A man by the name of Ludwig Erhard also deserves much of the credit. He convinced the Allies to declare all rationing systems invalid after the new Deutsche Mark was introduced. Erhard placed his trust in free market forces, and by the end of the 1960s the Deutsche Mark had become an anchor for the European economies.

 

For a sneak peek at the first 20+ pages of my memoir, Walled-In: A West Berlin Girl’s Journey to Freedom, click “Download a free excerpt” on the home page of http://www.walled-in-berlin.com. Walled-In is a story of growing up in Berlin during the Cold War.