Currency reform

Source: goethe.de Germans standing in an endless queue to receive their „head money“

By 1945 the German Reich’s burden of debt resulting from the Second World War has grown to the unimaginable sum of ca. 380 billion Reich marks. The currency has also lost its exchange value. People are managing to get by through exchanging „goods for goods“, a practice which usually plays out on the „black markets“. That is the only place where extremely scarce foodstuffs and goods for daily use can be exchanged – frequently at very high prices. Therefore, implementing a currency reform is the indispensable precondition for economic recovery and any hope for a better future: On 20 June 1948 in the three Western zones, the Reich mark is replaced, as the national currency, by the German mark (DM). The „currency cut“ is carried out at the rate of ten to one. In addition, each resident of the „Western zones“ receives 60 DM „head money“ of which 40 DM are paid out immediately. To the considerable astonishment of West Germans the display areas of stores fill up overnight. Money has value again and, starting now, citizens must again struggle with a familiar old problem: money troubles.

Beginn of Berlin Blockade

Only a few days after the currency reform in the three Western occupation zones, the D-mark is also adopted in the American, British and French sectors of Berlin. Shortly thereafter, on 24 June 1948, the Soviets block free access to the city and demand the withdrawal of the Western powers from the former capital city of the Reich. The Berlin Blockade begins and immediately interrupts all transports of goods and persons to and from Berlin. Freedom for the people in the Western part of the city is at stake.

© LlGC/NLW The Berlin Blockade seen as Berlin Obstacle Race - a competition between Uncle Sam and the Soviet Union

The USA and Great Britain respond by establishing an air lift using transport planes, called „raisin bombers“ in the popular idiom, to supply West-Berlin with essential foodstuffs, raw materials and other supplies for daily needs. In approximately 200,000 sorties ca. 1.5 million tons of supply goods are transported into the beleaguered city. Berlin’s population withstands Soviet pressure for more than 11 months. Ultimately the Soviets will give in and end the blockade on 12 May 1949.