Page 154 - The Making of the German Post-war Economy

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1948 – ASPIRATION AND

APPREHENSION

Was bewegt uns heut’ enorm?
Tag und Nacht?! – Währungsreform!
Kommt sie heute, kommt sie morgen?
Jeder macht sich seine Sorgen.
Manchem Mann ist davor bange,
Manchem währt es viel zu lange.
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(Nürnberger Nachrichten, 1948)

At the turn of the year 1947/1948, the people’s hopes and expectations
associated with monetary reform in post-war West Germany increasingly
were tempered by scepticism and apprehension: the unilateral declaration
of a currency reform for the three western zones would both openly
breach the Potsdam Agreement by which the Allies had agreed to treat
Germany as a unitary economy and end the negotiations on a pan-
German currency reform based on the Colm-Dodge-Goldsmith Plan
which in turn would inevitably lead to a forceful response by the Soviet
authorities and eventually to the division of Germany. In addition to the
political consequences, however, the Germans mainly worried about the
economic and financial repercussions. Indeed, there was general
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agreement that some kind of reform was needed simply to jolt the
economy back to life; however, there existed neither the experience nor a
manual for such an extensive monetary reform. No other country at that
time had suffered such damage and had to integrate so many impecunious
refugees and expellees; as many as 16.5 million Germans were driven from
their homes. Due to these unparalleled circumstances, more and more
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people publicly expressed doubts about the success of a reorganisation of
the finances and the currency. Such a far-reaching reform required a
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sensitive approach indeed in order to avoid either inflation or deflation,