Chapter 5: Consequences of a Monetary System: German Monetary Reform, 1948 - the Birth of the DM and of a New Central Bank System and their Political and Economic Implications
5. Consequences of a monetary system: German monetary reform, 1948 – the birth of the DM and of a new central bank system and their political and economic implications Karl Häuser PRELIMINARY REMARKS – INTRODUCTION Germany’s monetary history is a rather disorderly one. Within three quarters of a century it had to undergo three fundamental changes of its monetary system and the next one – hopefully the last one – happened two years ago, the change into the Euro-system. Germany, arising as a political unit in 1871 did not have a common national currency until the last quarter of the nineteenth century when it replaced seven diﬀerent currencies of more than a dozen sovereign states by a single newly created currency, i.e. the mark. In eﬀect, that procedure, the monetary uniﬁcation of the German Reich, reminds us in some way of the establishing the European monetary uniﬁcation of today, leaving aside the diﬀerent historical circumstances. The new national currency, the mark, a gold-based money, worked very well up to World War I when it was suspended from gold and increasingly inﬂated in such a way that it ended in late 1923 due to hyperinﬂation. By means of currency reform the mark was replaced by a new currency, the Reichsmark (RM), which has survived a quarter of a century only when under the Hitler regime another World War was ﬁnanced again in an inﬂationary way. This inﬂation together with its currency was abandoned and replaced...
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