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Information bulletin
No. 145 (October 5, 1948)

Impact of currency reform,   pp. [18]-21 PDF (2.7 MB)

Page [18]

NO EVENT since the capitulation
of the German armies has had
such an impact upon every sector of
German life as did the currency re-
form of June 20 in western Ger-
many. Overnight the financial and
commercial life of tens of millions of
persons was transformed. The found-
ation, upon which normal ways of
life could be reestablished, had been
By the end of July, it became
evident that the first phase of cur-
rency reform had been successful. The
new money brought out of hiding a
relatively large and well-assorted
supply of goods. Wages and salaries
again acquired genuine purchasing
power. Job efficiency rose and there
were indications of increased output
in almost all fields of manufacturing.
Encouraging as the gains have been
there remained a number of basic
problems to be solved. Included
among them were the equalization of
burdens, which was to be settled be-
fore the end of 1948, and, in the field
of manufacturing proper, the need of
reducing manufacturing costs.
Prior to currency reform production
efficiency was generally low through-
out the mining and manufacturing in-
dustries. Roughly, during the second
quarter of 1948 it required perhaps
one and one-half to two workers to
produce, in the entire field of industry,
what one worker had turned out
in 1936.
MANY FACTORS contributed to
this great decline in productiv-
ity. Due to the heavy losses in the
most productive age groups, the male
working population was overaged.
The young workers were inadequately
trained due to the war-caused inter-
ruption of apprentice schooling. Less
food and poorer food had made work-
ers less able to do heavy physical
labor and less willing to work hard.
Machinery becoming obsolete, and
equipment inadequately maintained
and repaired had reduced manufactur-
ing efficiency, as had the reduced rate
of operations in many fields of in-
dustry. Above all, the fact that cash-
wages, up to currency reform, bought
little aside from rationed essentials,
deprived the working population as
well as the entrepreneur of the in.
centive to exertion required in a free
enterprise money economy.
The achievement of the planned
standard of living for thebizonalpop.
ulation and of the expert targets
established under the European Re-
covery Program depended to a sig-
nificant extent upon improved labor
productivity and manufacturing effi.
The inevitability of currency reform
had long been known to the German
population. For months it was the
principal topic of discussion in the
press and in private circles alike, and
its coming was awaited with resigna-
tion and foreboding. Business activity
throughout the western zones began
to fall off during the last days of May
and almost ceased in June.
Enterprises held back in expectation
of better terms for business after the
currency reform. Political, financial
Berliners queue up in front of bank in the US Sector to receive 40 new Deutsche
marks each for 60 old mark
(115 A-rv Sianal Corti

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