Fifty Years of the Deutsche Mark – a Currency and its Consequences

Abstract

Fifty years - it almost seems that this span of time is something of a magic number for German currencies. Fifty years was the age reached by the first German common currency: the Mark, which was created in 1873 after the German Reich was founded and perished amid the chaos of hyperinflation in 1923. Twenty-five years - that is, exactly half the magic number 50 -lay between the currency change of 1923 and the currency reform of 1948 which overcame the inflationary legacy bequeathed by Hitler’s war financing. Finally, 1998 is the 50th anniversary of the Deutsche Mark, and this will be its last birthday as an independent currency. But could the end of these three eras of German currency history have been more different? Surely not! In 1923 the currency that was abandoned was already ruined. Not only the currency but also the Reichsbank itself was compromised. Its conception and understanding of monetary policy were negated by reality. At the same time, the inflation of 1923 left a terrible legacy for the future fate of our country. In 1948 the inflationary ruins of the Hitler regime had to be cleared away and the foundations laid for a new beginning.