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Wednesday, 31 October, 2001, 10:23 GMT
Death of the Deutschmark
Central Bank chief Ernst Welteke displays the last print run of marks in January 2000
Marking history: The last print run in January 2000
Originally introduced by the allied forces (except for Russia) in the aftermath of World War II, the modern Deutschmark soon became the Germans' very own symbol of economic strength during the unstoppable postwar boom.

But the term mark, which will make its exit in 2002 with the introduction of the euro, can look back at more than 1000 years of turbulent history.

Its origins can be traced back to the 9th Century when it was a unit of weight used for gold and silver.

In 1873, soon after the creation of the German empire, the gold mark - which earlier in the century had been a common small coin of varying value - became standardised across the empire.

Hyperinflation

Mark timeline
9th Century: standard measure of gold or silver
Middle Ages: stamped silver lumps of varying size and quality
1873: standard gold mark for German empire
1924: birth of the Reichsmark
1948: Deutschmark introduced
1990: the currency of unified Germany
In 1923, after World War I, the German currency was temporarily named renten-mark (pension mark) before it became the Reichsmark in 1924.

This was the first time that the German currency suffered from raging hyperinflation. Notes were printed in denominations of 50 trillion and 100 trillion.

One billion paper marks became equivalent in value to one gold mark and many families lost their life savings overnight before some form of stability was restored.

The stock market crash of 1929 intensified the recession that was already under way in Germany.

Within three years nine million people - or two fifths of the working population - were unemployed.

Secret currency reform

Economic misery paved the way for Hitler to come to power, ushering in the Third Reich in 1933.

He maintained the Reichsmark as Germany's currency, adorning the coins with swastikas.

Plans to make it a common currency throughout occupied Europe remained unrealised.

A specialist checks for counterfeit notes in Dusseldorf
Ultraviolet is used to check for counterfeits
In the period after World War II, first the United States and the UK - and later France as well - agreed on economic unification of the the zones they occupied.

The plan was kept secret until the currency reform was announced on 20 June 1948.

The new currency, the Deutschmark, was printed in the US and made its way to Germany in huge boxes with the deliberately misleading label Bird Dog, closely watched by army soldiers.

On the first day everybody was allowed to exchange 40 Reichsmarks for Deutschmarks at the rate of 1:1.


Consumers seemed to go crazy about being able to in fact buy things with the Deutschmark

Historian Karl Heinz Willenborg
After that regular payments such as wages, rents and pensions continued to be paid at the same level as before but savings were converted into Deutschmarks at a rate of 10:1.

Unification

This favoured owners of houses or other goods, and those who had loans, but had a disastrous effect on those whose money had been held in banks.

Some of the banknotes were of better quality than others. The five-mark note in particular was popular with forgers and had to be replace almost immediately with a new note made in the UK - the first German banknote with a security strip.

It was only 1955 that the German Federal Printing Works took over production of the national currency.

One mark coin
By 1991 the mark was also the currency of the former East Germany
It was in this immediate postwar period that suddenly, after years of shortages and illegal trading, the shop displays were full again.

"Consumers seemed to go crazy about being able to in fact buy things with the Deutschmark", says German political scientist Karl Heinz Willenborg.

The deutschmark had set out on the road to success.

East Germany also adopted the name Deutschmark for its currency from 1949, and kept it until 1964, when it was changed to mark der notenbank (mark of the notebank), and to mark der DDR (mark of the German Democratic Republic) in 1968.

Only after the fall of the Berlin wall was the West German Deutschmark introduced to East Germany to become the currency for all Germans.

Although German monetary union caused many problems for the German economy, it is still the model for many Germans of the political imperative for further currency union.

Legacy Currencies
See also:

24 Aug 00 | Europe
Banks want Euro under armed guard
16 Jul 01 | Business
Germans 'unhappy over euro'
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