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Economy
The DM has arrived!
Currency reform! The deutschmark is introduced on 20 June 1948, and the 
black market closes down - no more foraging in the countryside. Every German receives 40 DM at the launch.
"Cows are suddenly producing milk again. Potatoes are growing again." Money seems to work magic in the summer of 1948. From one day to the next, shop windows are filled with wares.
However, while the long-awaited consumer goods are finally being stacked up on the shelves, the public mood remains negative. People curse the high prices, the hoarding and the black-marketeers. Sceptical about the launch of the "social market economy", Cologne's carnivalists sing: "How are we supposed to pay? Who's got the readies? Who's got the dosh?"
The new money (DM) is more or less in line with the US dollar. Conversion from the reichsmark (RM) robs many small savers of their reserves overnight. Saving deposits are reduced to just 10% of the original nominal value. And half the deposit is frozen for a fixed period, after which 70% of that nominal sum is again taken away on the release date!
Industry does a lot better, since productive capital treated much more favourably. Shares retain their nominal value and, by factoring in the tax benefits granted under the subsequent DM Company Accounts Act, we find that the corporations can effectively convert their currency holdings at an extremely preferential rate: not at RM 10 to DM 1, like the man in the street, but RM 10 to DM 8.40!
Walter Kamps
