Exactly 150 years ago Germany embarked on the path to the mark as national currency with a law on the issue of imperial gold coins. Unlike the European Monetary Union, the Political Union preceded the Monetary Union. With its gold standard, however, Germany renounced full monetary sovereignty in monetary policy, because the most important goal of policy at the time was to secure the value of the German currency in the world monetary system, which was then based on gold. The gold standard, which gave Germany a slight deflation for some time, but not a bad inflation, came to an end in World War I, when the states gave up the gold peg of their currency in order to finance government expenditure with the printing press.A few years after the end of the First World War, the life of the mark created in 1871 ended in the hyperinflation of 1923.
Gerald Braunberger
Editor.
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The road to the mark as the nucleus of the German monetary union was rocky and complicated;
the restless and unsteady life of the Mark reflects the history of Germany, which has been marked by several ruptures.
At the beginning of the German monetary union there was the desire to achieve an adjustment of the currency relations in the country, which were characterized by sheer chaos, with the establishment of the German Empire in 1871. Ludwig Bamberger, politician, banker and one of the fathers of the new currency, described a payment made by a small town in Rhineland-Hesse in 1869 as a frightening example of the untenable situation: / 3-, 1 / 6-, 1/12-Thalern, 5-Francs, 2-Francs, 1-Francs; Then comes the gold: pistols, double and single Friedrichsd́'or, ½-souvereigns, Russian imperials, dollars, Napoleons, Dutch Wilhelms'd́or, Austrian and Württemberg ducats, Hessian 10 guilders and finally a piece of Danish gold. "
"The first single currency in Germany"
At that time, money mainly consisted of coins, the diversity of which was explained by the parallel use of gold and silver, the tendency towards small states and the influx of foreign money from cross-border trade. The situation in the middle of the century seemed confusing not only in Germany, but also in Switzerland, as a contemporary observer noted: “Around 1850, there was an unbelievably confused mess in what was then the Swiss Confederation. No fewer than 319 types of different coins came to light when they were later exchanged, and the somewhat malicious slogan of the neighboring countries at the time that everything in Switzerland counts as a coin was to a certain extent justified. There were Zurich talers, gulden, bucks, shillings, Bießli, Angster, Bernese doublones,Ducats and Graubündner Blutzger. "
In the decades before the founding of the German Empire there had been attempts to cut aisles in the almost impenetrable thicket. In 1871 the guilder currency dominated the north, while the thaler played an important role in the south. But there were not only very different coins. At the time of the unification of the empire, 33 private central banks had the right to issue banknotes that could be redeemed in silver. "The mark currency of the German Reich was the first single currency in Germany, which represented the end of 800 years of currency particularism", writes the Münster economist Theresia Theurl. However, it was almost four decades before the monetary union was completed; It was not completed until 1909. And then it only took five yearsbefore the outbreak of the First World War ushered in the gradual breakdown of the first common German currency.