Deutsche Mark

TheDeutsche Mark(German:[ˈdɔʏtʃəˈmaʁk]; "Germanmark"), abbreviated "DM" or "D-Mark" ([ˈdeːˌmaʁk]), was the officialcurrencyofWest Germanyfrom 1948 until 1990 and later the unifiedGermanyfrom 1990 until the adoption of theeuroin 2002. In English, it was typically called the "Deutschmark" (/ˈdɔɪtʃmɑːrk/DOYTCH-mark). One Deutsche Mark was divided into 100pfennigs.
It was first issued underAllied occupationin 1948 to replace theReichsmarkand served as the Federal Republic of Germany's official currency from its founding the following year. On 31 December 1998, theCouncil of the European Unionfixed the irrevocable exchange rate, effective 1 January 1999, for German mark to euros as DM 1.95583 = €1.In 1999, the Deutsche Mark was replaced by the euro; itscoinsandbanknotesremained in circulation, defined in terms of euros, until the introduction of euro notes and coins on 1 January 2002. The Deutsche Mark ceased to belegal tenderimmediately upon the introduction of the euro—in contrast to the othereurozonestates, where the euro and legacy currency circulated side by side for up to two months. Mark coins and banknotes continued to be accepted as valid forms of payment in Germany until 1 March 2002.
TheDeutsche Bundesbankhas guaranteed that all German marks in cash form may be changed into euros indefinitely, and one may do so in person at any branch of the Bundesbank in Germany. Banknotes and coins can even be sent to the Bundesbank by mail.In 2012, it was estimated that as many as 13.2 billion marks were in circulation, with one poll from 2011 showing a narrow majority of Germans favouring the currency's restoration (although only a minority believed this would bring any economic benefit).Polls in the early 2020s indicated only a minority of Germans supported reintroduction of the Deutsche Mark.
A mark had been the currency of Germany since itsoriginal unificationin 1871. Before that time, the differentGerman statesissued a variety of different currencies, the most common being theNorth German thalerand theSouth German gulden. By 1857, both currencies were linked to theVereinsthaler, a silver coin containing16+2⁄3gramsof pure silver. Although theGerman gold markwas based on gold rather than silver (at 2.79 marks per gram of fine gold), a fixed exchange rate between the Vereinsthaler and the mark of 3 marks = 1 Vereinsthaler was used for the conversion.
The first mark, known as theGoldmark, was introduced in 1873. With the outbreak ofWorld War I, the mark was taken off the gold standard. The currency thus became known as thePapiermark, especially as highinflation, thenhyperinflationoccurred and the currency became exclusively made up of paper money. ThePapiermarkwas replaced by theRentenmark(RM) from 15 November 1923, and theReichsmark(ℛ︁ℳ︁) in 1924.
During the first two years of occupation the occupying powers of France, United Kingdom, United States, and the Soviet Union were not able to successfully negotiate a possible currency reform in Germany. Due to the strains between the Allies each zone was governed independently as regards monetary matters. The US occupation policy was governed by the directiveJCS 1067(in effect until July 1947), which forbade the US military governor "to take any steps to strengthen German financial structure".As a consequence a separate monetary reform in the U.S. zone was not possible.Each of the Allies printed itsown occupation currency.
The Deutsche Mark was officially introduced on Sunday 20 June 1948 byLudwig Erhard. Large amounts were exchanged for 10 ℛ︁ℳ︁ to 65pf. In addition, each person received a per capita allowance of DM 60 in two parts, the first being DM 40 and the second DM 20.
A few weeks later Erhard, acting against orders, issued an edict abolishing many economic controls which had been originally implemented by the Nazis, and which the Allies had not removed. He did this, as he often confessed, on Sunday because the offices of the American, British, and French occupation authorities were closed that day. He was sure that if he had done it when they were open, they would have countermanded the order.
The introduction of the new currency was intended to protect western Germany from a second wave ofhyperinflationand to stop the rampant barter andblack markettrade (where cigarettes were used as currency). Although the new currency was initially only distributed in the three western occupation zones outside Berlin, the move angered theSovietauthorities, who regarded it as a threat. The Soviets promptly cut off all road, rail and canal links between the three western zones andWest Berlin, starting theBerlin Blockade. In response, the U.S. and Britain launched an airlift of food and coal and distributed the new currency in West Berlin as well.
Since the 1930s, prices and wages had been controlled, but money had been plentiful. That meant that people had accumulated large paper assets, and that official prices and wages did not reflect reality, as the black market dominated the economy and more than half of all transactions were taking place unofficially. The reform replaced the old money with the new Deutsche Mark at the rate of one new per ten old. This wiped out 90% of government and private debt, as well as private savings. Prices were decontrolled, and labor unions agreed to accept a 15% wage increase, despite the 25% rise in prices. The result was the prices of German export products held steady, while profits and earnings from exports soared and were poured back into the economy. The currency reforms were simultaneous with the $1.4 billion inMarshall Planmoney coming in from the United States, which primarily was used for investment. In addition, the Marshall plan forced German companies, as well as those in all of Western Europe, to modernize their business practices, and take account of the wider market.
Marshall plan funding overcame bottlenecks in the surging economy caused by remaining controls (which were removed in 1949), and opened up a greatly expanded market for German exports. Overnight, consumer goods appeared in the stores, because they could be sold for higher prices.While the availability of consumer goods is seen as a giant success story by most historians of the present, the perception at the time was a different one: prices were so high that average people could not afford to shop, especially since prices were free-ranging but wages still fixed by law. Therefore, in the summer of 1948 a giant wave of strikes and demonstrations swept over West Germany, leading to an incident in Stuttgart where strikers were met by US tanks ("Stuttgarter Vorfälle"). Only after the wage-freeze was abandoned, Deutschmark and free-ranging prices were accepted by the population.
In theSoviet occupation zoneof Germany (later theGerman Democratic Republic), theEast German mark(also named "Deutsche Mark" from 1948 to 1964 and colloquially referred to as theOstmark—literallyEastmark) was introduced a few days afterwards in the form of Reichsmark and Rentenmark notes with adhesive stamps to stop the flooding in of Reichsmark and Rentenmark notes from the West. In July 1948, a completely new series of East German mark banknotes was issued.
Later in 1948, theBank deutscher Länder("Bank of the German States") assumed responsibility, followed in 1957 by theDeutsche Bundesbank. The Deutsche Mark earned a reputation as a strongstore of valueat times when other national currencies succumbed to periods ofinflation.It became a source of national pride and an anchor for the country's economic prosperity,particularly during the years of theWirtschaftswunderin the 1950s.
The population in theSaar Protectoraterejected in a referendum the proposal to turn it into a "European territory". Despite French pre-referendum claims that a "no" vote would mean that the Saar would remain a Frenchprotectorateit in fact resulted in the incorporation of the Saar into theFederal Republic of Germanyon 1 January 1957. The new Germanmember stateof theSaarlandmaintained its currency, theSaar franc, which was in a currency union at par with theFrench franc. On 9 July 1959 the Deutsche Mark replaced the Saar franc at a ratio of 100 francs = DM 0.8507.
The Deutsche Mark played an important role in thereunificationof Germany. It was introduced as the official currency ofEast Germanyin July 1990, replacing theEast German mark(Mark der DDR), in preparation for unification on 3 October 1990. East German marks were exchanged for Deutsche Marks at a rate of 1:1 for the first M 4,000 and 2:1 for larger amounts. Before reunification, each citizen of East Germany coming to West Germany was givenBegrüßungsgeld(welcome money), a per capita allowance of DM 100 in cash. The government of Germany and the Bundesbank were in major disagreement over the exchange rate between the East German mark and the German mark.
France and the United Kingdom were opposed to German reunification, and attempted to influence theSoviet Unionto stop it.However, in late 1989 France extracted German commitment to theMonetary Unionin return for support for German reunification.
The German mark had a reputation as one of the world's most stable currencies; this was based on the monetary policy of theBundesbank. The policy was "hard" in relation to the policies of certain other central banks in Europe. The "hard" and "soft" was in respect to the aims of inflation and political interference. This policy was the foundation of theEuropean Central Bank's present policytowards the euro. The German mark's stability was greatly apparent in 1993, when speculation on the French franc and other European currencies caused a change in theEuropean Exchange Rate Mechanism. However, it should be remembered that "hard" is relative only if it is compared to other currencies, as in its 53-year history, the purchasing power of the German mark was reduced by over 70%.
The first Deutsche Mark coins were issued by theBank deutscher Länderin 1948 and 1949. From 1950, the inscriptionBundesrepublik Deutschland(Federal Republic of Germany) appeared on the coins. These coins were issued in denominations of 1pf, 2pf, 5pf, 10pf, and 50pf. The 1pf and 2pf coins were struck in bronze clad steel (although during some years the 2pf was issued in solid bronze) while 5pf and 10pf were brass clad steel and the 50-pfennig was incupronickel. In 1950, cupronickel DM1 coins were released, while a cupronickel DM2 and a .625 silver DM5 were released in 1951. Cupronickel replaced silver in the DM5 in 1975. The DM2 and DM5 coins have often been used for commemorative themes, though typically only the generic design for the DM5 is intended for circulation. Commemorative silver DM10 coins have also been issued which have periodically found their way into circulation. Unlike other European countries, Germany retained the use of the smallest coins (1pf and 2pf) until adoption of the euro.
The weights and dimensions of the coins can be found in an FAQ of theBundesbank.Unlike other countries (such as Australia) there was no attempt or proposal suggested for the withdrawal of the 1pf and 2pf coins. Both coins were still in circulation in 2001 and supermarkets in particular still marked prices to the nearest pfennig. This penchant for accuracy continues with the euro (whileFinlandor theNetherlandsfor example, price to the nearest 5 cents) with the 1-cent coin still encountered in Germany.
There were a considerable number ofcommemorative silver DM 5 and DM 10 coins, which actually had the status oflegal tenderbut were rarely seen outside of collectors' circles.
On 27 December 2000, the German government enacted a law authorizing theBundesbankto issue, in 2001, a special .999 pure gold DM 1 coin commemorating the end of the German mark. The coin had the exact design and dimensions of the circulating cupro-nickel DM 1 coin, with the exception of the inscription on the reverse, which readDeutsche Bundesbank(instead ofBundesrepublik Deutschland), as theBundesbankwas the issuing authority in this case. A total of one million gold DM 1 coins were minted (200,000 at each of the five mints) and were sold beginning in mid-2001 through German coin dealers on behalf of theBundesbank. The issue price varied by the dealer but averaged approximately US$165.
German coins bear a mint mark, indicating where the coin was minted. D indicates Munich, F Stuttgart, G Karlsruhe and J Hamburg. Coins minted during theSecond World Warinclude the mint marks A (Berlin) and B (Vienna). The mint mark A was also used for German mark coins minted in Berlin beginning in 1990 following the reunification of Germany. These mint marks have been continued on theGerman euro coins.
Between 1 July 1990 (thecurrency union with East Germany) and 1 July 1991, East German coins in denominations up to 50pfennigs continued to circulate as Deutsche Mark coins at their face value, owing to a temporary shortage of small coins. These coins were legal tender only in the territory of the former East Germany.
In colloquial German the 10pf coin was sometimes called agroschen(compare:groat). Likewise,sechser('sixer') could refer to a coin of 5pf. Both colloquialisms refer to several pre-1871 currencies of the previously independentstates(notablyPrussia), where agroschenwas subdivided into 12pfennigs, hence half agroscheninto 6. After 1871, 12 oldpfennigs would be converted into 10pf of the mark, hence 10pf coins inherited thegroschenname and 5pf coins inherited thesechsername. Both usages are only regional and may not be understood in areas where agroschencoin did not exist before 1871. In particular, the usage ofsechseris less widespread. In northern Germany the DM 5 coin used to be also called aHeiermann, whereas inBavariathe DM 2 coin was calledZwickland this expression is now used for the €2 coin in the region.
There were four series of German mark banknotes:
The notes with a value greater than DM 200 were rarely seen. A reserve series (BBk II) was commissioned on 1 July 1960, consisting of DM 10, DM 20, DM 50 and DM 100 banknotes. 670 million BBk II banknotes in value of 25 billion marks were printed. The notes were printed between 1963 and 1974 in fear if the Eastern Bloc would start systematically counterfeiting the BBk I series of banknotes to cripple the economy, then they would quickly be replaced by emergency notes. Another reserve series for West Berlin (BBk IIa) was commissioned on 1 July 1963, consisting of DM 5, DM 10, DM 20, DM 50 and DM 100 banknotes. 115 million West Berlin banknotes were printed, total value 4 billion marks. 15 billion marks worth of the banknotes were held in Bundesbank's custom-builtunderground bunkerinCocheminRheinland-Pfalz, the rest was stored in Bundesbank's vault inFrankfurt.
In 1957, withBank deutscher Länderand the states' central banks merging to form the Bundesbank, new banknotes were being designed, as "Bank deutscher Länder" on the previous series was no longer correct. The previous series' notes had been made out of less durable paper and had a rather short life. While previously damaged notes could be replaced from reserve stocks, this stock was also coming to an end, necessitating a reprint.
Typical security features at the time were guilloches, a multi-level head watermark and a security thread. Note numbers that fluoresced under UV light and green, yellow, and blue. 27 fluorescent fibers embedded in the paper appeared on most banknotes; however, some specimens without these features were in circulation. Starting in 1976, banknotes were equipped with machine-readable feature - a colorless inorganic oxide mixture applied to the security thread. Banknotes featuring that were designated BBk Ia within the Bundesbank. All banknotes of the third series bore the penalty for counterfeiting and forgery on the upper right corner of the reverse, fromGerman penal codesection 146: "Wer Banknoten nachmacht oder verfälscht, oder nachgemachte oder verfälschte sich verschafft und in Verkehr bringt, wird mit Zuchthaus/Freiheitsstrafe nicht unter zwei Jahren bestraft." ("Who falsifies or counterfeits banknotes, or procures falsified or counterfeit banknotes and releases them into circulation, is liable to imprisonment for at least two years".
The third series banknotes entered circulation on 10 February 1961, with the DM 20 note. DM 100 and DM 50 followed next year, and DM 5 and DM 10 in 1963. High-denomination DM 1000 and DM 500 followed in 1964 and 1965, respectively.
The banknotes were printed exclusively in West Germany; inBundesdruckereiinWest Berlinand inGiesecke+DevrientinMunich. The third series banknotes ceased to be legal tender on 30 June 1995, when the fourth series notes had been in circulation for 3–5 years. There were a total of five issues of the third series, main differences being the dates, and signatures of the Presidents and Vice Presidents of Bundesbank:
The design of German banknotes remained unchanged during the 1960s, 1970s and 1980s. During this period, forgery technology made significant advances and so, in the late 1980s, the Bundesbank decided to issue a new series of Deutsche Mark banknotes. The colours for each denomination remained unchanged from the previous series but the designs underwent significant changes and a DM 200 denomination was introduced. Famous national artists and scientists were chosen to be portrayed on the new banknotes. Male and female artists were chosen in equal numbers. The buildings in the background of the notes' obverses had a close relationship to the person displayed (e.g., place of birth, place of death, place of work), as well as the second background picture (Lyra and the musician Schumann). The reverses of the notes refer to the work of the person on the obverse.
The new security features were: a windowed security thread (with the notes' denominations in microprinting), watermarks, microprinting,intaglio printing(viewing-angle dependent visibility as well as aBraillerepresentation of the notes denomination), colour-shifting ink (on the DM 500 and DM 1000 denominations), a see-through registration device and ultraviolet-visible security features.
First to be issued were the DM 100 and DM 200 denominations on 1 October 1990 (although the banknote shows "Frankfurt am Main, 2. Januar 1989"). The next denomination was DM 10 on 16 April 1991, followed by DM 50 on 30 September 1991.Next was the DM 20 note on 20 March 1992 (printed on 2 August 1991). The reason for this gradual introduction was, that public should become familiar with one single denomination, before introducing a new one. The change was finished with the introduction of the DM 5, DM 500, and DM 1000 denominations on 27 October 1992. The DM 500, and DM 1000 denominations were rarely seen in circulation due to value and all were introduced in one step. With the advance of forgery technology, the Bundesbank decided to introduce additional security features on the most important denominations (DM 50, DM 100 and DM 200) as of 1996. These were a hologram foil in the center of the note's obverse, a matted printing on the note's right obverse, showing its denomination (like on the reverse of the neweuro banknotes), and theEURion constellationon the note's reverse. Furthermore, the colours were changed slightly to hamper counterfeiting.
The German name of the currency isDeutsche Mark(fem.,German pronunciation:[ˈdɔʏtʃəˈmaʁk]); its plural form instandard Germanis the same as the singular. In German, the adjective "deutsche" (adjective for "German" infemininesingularnominativeform) is capitalized because it is part of a proper name, while the noun "Mark", like all German nouns, is always capitalized. The Englishloanword"Deutschmark" has a slightly different spelling and one syllable fewer (possibly due to the frequency ofsilent ein English, or due to English's lack of adjectival endings), and a plural form in-s.
In Germany and other German speaking countries, the currency's name was often abbreviated asD-Mark(fem.,[ˈdeːmaʁk]) or simplyMark(fem.) with the latter term also often used in English. LikeDeutsche Mark,D-MarkandMarkdo not take the plural in German when used with numbers (like all names of units), the singular being used to refer to any amount of money (e.g.eine (one) Markanddreißig (thirty) Mark). Sometimes, a very colloquial plural form ofMark,Märker[ˈmɛʁkɐ]was used either ashypocoristicform or to refer to a small number of D-Mark coins or bills, e.g.Gib mir mal ein paar Märker("Just give me a few marks") andDie lieben Märker wieder("The lovely money again", with anironicundertone).
The subdivision unit is spelledPfennig(masc.;[ˈpfɛnɪç]), which unlikeMarkdoes have a commonly used plural form:Pfennige([ˈpfɛnɪɡə]), but the singular could also be used instead with no difference in meaning. (e.g.:ein (one) Pfennig,dreißig (thirty) Pfennigeordreißig (thirty) Pfennig). The official form is singular.
Before the switch to the euro, the Deutsche Mark was the largest international reserve currency after theUnited States dollar.
The percental composition of currencies of official foreignexchange reservesfrom 1995 to 2022.