Evening star., 1949-03-21
Western Powers Ban
Russian Currency in
Their Berlin Zones
BY the Assoeiotsd Press

,oy NV ~ssSSto'vS
BERLIN, Mar. 2l.-The West
ern powers have outlawed the
Russian east mark in their sectors
of Berlin, splitting the city's
economy completely.
The new Allied order yesterday,
declaring the Russian currency no
longer would be accepted as legal
tender, had been expected for
some time.
1t means that Western Berlin
now has one currency-the west
MARYLAND Eastern Berlin has
another-the Soviet east mark.
The west mark has been worth
about four times as much as the
east mark.
The Russians earlier made it a
crime to possess west marks in
their area. The United States.
Britain and France did not go
that far. They just said the
eastern currency no longer need
be accepted in their part of the
city.
Retaliation Feared.
Although the order is effective
Immediately. the east mark will
still be good in Western sectors
for rationed foods this month and
will be accepted in April for rent
and taxes.
There were reports the Russians
would retaliate promptly against
the latest Western move in the
currency battle.
The east mark tumbled to rate
of to 10 for one west mark to-
day, as Western Berliners rushed
to dump their remaining holdings
of east marks. That was the
black market figure. But even in
legal exchange Offices, the east
mark dropped to So for one.
The chief Russian reaction 80
far was a charge in the Russian
controlled press this morning that
the action by the Western powers
was a fraud against the popula-
ton. Big headlines in the Com
munist press predicted mass bank
ruptcies in Western Berlin.
Major Issue in Blockade.
The only concrete Russian re-
action was an effort by the Soviet
controlled German police to pre-
vent Western Berliners from en-
tering the Russian sectors ration
free stores on buying sprees with
surplus east marks.
The currency question has been
one of the main issues in the
Soviet blockade of Berlin. Several
international discussions, both in
side and outside of the United
Nations, have failed to solve it.
A U. N. committee reported re-
Gently it had failed to reach a
solution.
The United States, Britain and
France put in a new currency In
their zones of Germany, but not
in Berlin, on June l8, 1948. Four
days later Russia issued new
money for her zone of Germany
and all of Berlin. The day after
this Soviet step the Western
powers introduced their new west
mark into their sectors of Berlin.
They permitted the east mark to
circulate, but the Russians barred
the west mark from the Soviet
sector.
The Western Allies said putting
Western Berlin, on a ,west-mark
only basis was long overdue" be-
cause grave economic and social
injustices have resulted from the
dual currency arrangement.
Was Temporary Plan.
Their announcement said it
was hoped at the time the west
mark was introduced in Berlin
that it would be a temporary ar
rangement prior to agreement on
single currency under four
power control. But since. it add
ed, there has been no such agree
ment, the city administration has
split and the blockade has con-
tinued.
Chaotic conditions have result
ed, the Western powers said, AZ
fecting real wages, supply OF cur
rency in circulation and business
dealings.
The Western city government is
expected to profit by the change.
Up to now it had to accept east
marks in tax payments and pay
part of its salaries and other ex-
penses in west marks.
The currency changeover may
leave some Western Berliners
holding a lot of east marks since
each person can trade in only Is
east marks for Western currency.
But they can, if they wish, use
their east marks on shopping trips
In the Soviet sector and in Soviet
occupied areas surrounding Ber-
lin. Such purchases would have
to be smuggled by the Russian
blockade.
Brig. Gen. Frank L. Howley,
American commandant in Berlin,
said he foresaw no Russian retail
alton as a result of the new cur
rency move. Others here were not
so confident.
What bigger counter-measures
could the Soviets possibly take"
Gen. Howley said. than the bru-
tai blockade with which they at
tempted to starve West Berlin?
Meanwhile, the Russians an
nounced they had begun big
new repatriation" of German
prisoners of war. The United
States and Britain charged last
week that the Soviets had failed
to keep promises to return all Ger