Definitions

Deutsche Mark

Deutsche Mark

[doi-chuh, doich]

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Kosovo (1999-2001) | ERM_since = 13 March 1979 | ERM_fixed_rate_since = 31 December 1998 | euro_replace_non_cash = 1 January 1999 | euro_replace_cash = 1 January 2002 | ERM_fixed_rate = 1.95583 DM | pegged_by = Bosnia and Herzegovina convertible mark, Bulgarian lev at par | subunit_ratio_1 = 1/100 | subunit_name_1 = Pfennig | symbol = DM | symbol_subunit_1 = Pf. | plural = Mark | plural_subunit_1 = Pfennig | used_coins = 1, 2, 5, 10, 50 Pfennig, 1, 2, 5 DM | frequently_used_banknotes = 10 DM, 20 DM, 50 DM, 100 DM, 200 DM | rarely_used_banknotes = 5 DM, 500 DM, 1000 DM | issuing_authority = Deutsche Bundesbank | issuing_authority_website = www.bundesbank.de | obsolete_notice = Y }}

The Deutsche Mark (DEM, DM) or German mark was the official currency of West Germany and, from 1990 until the adoption of the euro, all of unified Germany. It was first issued under Allied occupation in 1948 replacing the Reichsmark, and served as the Federal Republic of Germany's official currency from its founding the following year until 1999, when the Mark was replaced by the euro; its coins and banknotes remained in circulation, defined in terms of euros, until the introduction of euro notes and coins in early 2002. The Deutsche Mark ceased to be legal tender immediately upon the introduction of the euro—in contrast to the other eurozone nations, where the euro and legacy currency circulated side by side for up to two months. However, DM coins and banknotes continued to be accepted as valid forms of payment in Germany until 28 February 2002.

The Deutsche Bundesbank has guaranteed that all DM in cash form may be changed into euros indefinitely, and one may do so at any branch of the Bundesbank and banks worldwide. From time to time, some merchants hold promotions where Deutsche Marks are accepted as payment.

On 31 December 1998, the European Central Bank (ECB) fixed the irrevocable exchange rate, effective 1 January 1999, for DM to euro as DM 1.95583 = one euro.

One Deutsche Mark was divided into 100 Pfennig.

History

Before 1871

A Mark had been the currency of Germany since its original unification in 1871. Before that time, the different German states issued a variety of different currencies, though most were linked to the Vereinsthaler, a silver coin containing 16 2/3 grams of pure silver. Although the Mark was based on gold rather than silver, a fixed exchange rate between the Vereinsthaler and the Mark of 3 Mark = 1 Vereinsthaler was used for the conversion.

1873–1948

The first Mark, known as the Goldmark, was introduced in 1873. With the outbreak of the First World War, the Mark was taken off the gold standard. The currency thus became known as the Papiermark, especially as high inflation, then the 1920s German inflation occurred and the currency became exclusively made up of paper money. The Papiermark was replaced by the Rentenmark in late 1923 and the Reichsmark (RM) in 1924.

Currency reform of June 1948

The Deutsche Mark was introduced on 21 June 1948 by the Western Allies (the USA, the United Kingdom and France). The old Reichsmark and Rentenmark were exchanged for the new currency at a rate of 1 DM = 1 RM for the essential currency such as wages, payment of rents etc, and 1 DM = 10 RM for the remainder in private non banks credit balance, with half frozen. Large amounts were exchanged for 10RM to 65 pfennigs. In addition, each person received a per capita allowance of 60 DM in two parts, the first being 40 DM and the second 20 DM.

The introduction of the new currency was intended to protect western Germany from a second wave of hyperinflation and to stop the rampant barter and black market trade (where American cigarettes acted as currency). The move angered the Soviet authorities, who regarded it as a threat. When the Deutsche Mark was introduced in West Berlin, the Soviets promptly cut off all road, rail and canal links between the three western zones and West Berlin. This led to the Berlin Blockade.

Currency reform in the Soviet occupation zone

In the Soviet occupation zone of Germany (later the German Democratic Republic), the East German Mark (also named "Deutsche Mark" from 1948-1964) was introduced a few days afterwards in the form of Reichsmark and Rentenmark notes with adhesive stamps to stop the flooding in of Reichsmark and Rentenmark notes from the West. In July 1948, a completely new series of East German Mark banknotes were issued.

Bank deutscher Länder and the Deutsche Bundesbank

Later in 1948, the Bank deutscher Länder assumed responsibility, followed in 1957 by the Deutsche Bundesbank. The DM earned a reputation as a strong store of value at times when other national currencies succumbed to periods of inflation. It became a source of national pride and an anchor for the country's economic prosperity, particularly during the years of the Wirtschaftswunder in the 1950s. In the 1990s, opinion polls showed a majority of Germans opposed to the adoption of the euro; polls today show a significant number would prefer to return to the Mark.

The DM's role in German reunification

The Deutsche Mark played an important role in the reunification of Germany. It was introduced as the official currency of East Germany in July 1990, replacing the East German Mark (Mark der DDR), in preparation for unification on 3 October 1990. East German marks were exchanged for DM at a rate of 1:1 for the first 4000 Marks and 2:1 for larger amounts.

Stability of the DM

The DM had a reputation as one of the world's most stable currencies; this was based on the monetary policy of the Bundesbank. The policy was "hard" in relation to the policies of certain other central banks in Europe. The "hard" and "soft" was in respect to the aims of inflation and political interference. This policy is the foundation of the European Central Bank's present policy towards the euro.

Coins

The first DM coins were issued by the Bank deutscher Länder in 1948 and 1949. From 1950, the inscription Bundesrepublik Deutschland (Federal Republic of Germany) appeared on the coins.
Denomination Dates issued Composition Obverse Reverse
1 Pfennig 1948–2001 1948–1949: Bronze plated steel
1950–2001: Copper plated steel
Oak sprig Denomination between rye stalks
2 Pfennig 1950–2001 1950–1968: Bronze
1968–2001: Bronze plated steel
Oak sprig Denomination between rye stalks
5 Pfennig 1949–2001 Brass plated steel Oak sprig Denomination between rye stalks
10 Pfennig 1949–2001 Brass plated steel Oak sprig Denomination between rye stalks
50 Pfennig 1949–2001 Cupro-nickel Woman planting an oak seedling Denomination
1 DM 1950–2001 Cupro-nickel German eagle Denomination between oak leaves
2 DM 1951, 1957–2001 Cupro-nickel German eagle 1951: Denomination between rye stalks and grapes
1957–1971: Max Planck
1969–1987: Konrad Adenauer
1970–1987: Theodor Heuss
1979–2001: Kurt Schumacher
1988–2001: Ludwig Erhard
1990–1994: Franz Josef Strauß
1994–2001: Willy Brandt
5 DM 1951–2001 1951–1974: Silver
1975–2001: Cupro-nickel
German eagle Denomination

There were a considerable number of commemorative silver 5 and 10 DM coins, which actually had the status of legal tender but were rarely seen outside of collectors' circles.

On 27 December 2000, the German government enacted a law authorizing the Bundesbank to issue, in 2001, a special .999 pure gold 1 DM coin commemorating the end of the DM. The coin had the exact design and dimensions of the circulating cupro-nickel 1 DM coin, with the exception of the inscription on the reverse, which read "Deutsche Bundesbank" (instead of "Bundesrepublik Deutschland"), as the Bundesbank was the issuing authority in this case. A total of one million gold DM coins were minted (200,000 at each of the five mints) and were sold beginning in mid-2001 through German coin dealers on behalf of the Bundesbank. The issue price varied by dealer but averaged approximately $165 in U.S. dollars.

German coins bear a mint mark, indicating where the coin was minted. D indicates Munich, F Stuttgart, G Karlsruhe and J Hamburg. Coins minted during WW2 include the mint marks A (Berlin) and B (Vienna). The mint mark A was also used for DM coins minted in Berlin beginning in 1990 following the reunification of Germany. These mint marks have been continued on the German Euro coins.

Colloquial expression

In colloquial German the 10 Pfennig coin was sometimes called a Groschen. Likewhise, Sechser (sixer) could refer to a coin of 5 Pfennig. Both colloquialisms refer to several pre-1871 currencies of the previously independent Länder (notably Prussia), where a Groschen was subdivided into 12 Pfennnigs, hence half a Groschen into 6. After 1871, 12 Pfennigs of old currency would be converted into 10 Pfennig of the Mark, hence 10 Pfennig coins inherited the "Groschen" name and 5 Pfennig coins inherited the "Sechser" name. Both usages are only regional and may not be understood in areas where a Groschen coin did not exist pre-1871. Especially the usage of "Sechser" is less widely spread.

Banknotes

There were four series of DM banknotes:

  • The first was issued in 1948 by the Allied military. There were denominations of ½, 1, 2, 5, 10, 20, 50 and 100 DM, with two designs of 20 and 50 DM notes.
  • The second series was introduced in 1948 by the Bank deutscher Länder, an institution of the western occupation government. The designs were similar to the US Dollar and French franc, as the job of designing and printing the different denominations was shared between the Bank of France and the American Bank Note Company. There were denominations of 5 and 10 Pfennig, 5, 10, 20, 50 and 100 DM.
  • The third series was introduced in 1960 by the Bundesbank, depicting neutral symbols and famous paintings and buildings. There were 5, 10, 20, 50, 100, 500 and 1000 DM denominations.
  • The fourth was introduced in 1990 by the Bundesbank to counter advances in forgery technology. The notes depicted German artists and scientists together with symbols and tools of their trade. This series added a 200 DM denomination, to decrease the use of 100 DM banknotes, which made up 54% of all circulating banknotes, and to fill the gap between the 100 DM and 500 DM denomination. Nevertheless the 200 DM denomination was rather rare.

In the latter two series, the 5 DM denomination was rarely seen, as were the ones with a value greater than 100 DM.

Banknotes of the fourth series (1990–2002)

The design of German banknotes remained unchanged during the 1960s, '70s and '80s. During this period, forgery technology made significant advances so, in the late 1980s, the Bundesbank decided to issue a new series of Deutsche Mark banknotes. The colours for each denomination remained unchanged from the previous series but the designs underwent significant changes and a 200 DM denomination was introduced. Famous national artists and scientists were chosen to be portrayed on the new banknotes. Male and female artists were chosen in equal numbers. The buildings in the background of the notes' obverses had a close relationship to the person displayed (e.g., place of birth, place of death, place of work), as well as the second background picture (Lyra and the musician Schumann). The reverses of the notes refer to the work of the person on the obverse.

The new security features were: a windowed security-thread (with the notes denomination in microprinting), watermark, micro-printing, intaglio-printing (viewing-angle dependent visibility as well as a braille representation of the notes denomination), colour-shifting ink (on the 500 and 1000 DM denominations), a see-through register and UV-visible security features.

First to be issued were the 100 and 200 DM denominations on 1 October 1990 (although the banknote shows "Frankfurt am Main, 2. Januar 1989"). The next denomination was 10 DM on 16 April 1991, followed by 50 DM in autumn the same year. Next was the 20 DM note on 20 March 1992 (printed on 2 August 1991). The reason for this gradual introduction was, that public should become familiar with one single denomination, before introducing a new one. The change was finished with the introduction of the 5, 500, and 1000 DM denominations on 27 October 1992. The latter three denominations were rarely seen in circulation and were introduced in one step. With the advance of forgery technology, the Bundesbank decided to introduce additional security features on the most important denominations (50, 100, and 200 DM) as of 1996. These were a hologram foil in the center of the note's obverse, a matted printing on the note's right obverse, showing its denomination (like on the reverse of the new €5, €10, and €20 banknotes), and the EURion constellation on the note's reverse. Furthermore, the colors were changed a bit to pastel to hamper counterfeiting.

1989 Series
Image Value € equiv. Dimensions Main Colour Description Date of
Obverse Reverse Obverse Reverse Watermark first printing issue withdrawal lapse
5 DM 2.56 122 × 62 mm Yellowish-green Bettina von Arnim, Wiepersdorf estate and buildings of historic Berlin Brandenburg Gate As portrait 1 August 1991 27 October 1992 31 December 2001 Indefinite
10 DM 5.11 130 × 65 mm Blue-violet Carl Friedrich Gauss, Gaussian distribution, historic buildings of Göttingen Sextant, a small map showing the triangulation of the Kingdom of Hanover performed by Gauss 2 January 1989 16 April 1991
20 DM 10.23 138 × 68 mm Blueish-green Annette von Droste-Hülshoff, buildings of the city of Meersburg A quill pen and a beech-tree, referring to her work Die Judenbuche 1 August 1991 20 March 1992
50 DM 25.56 146 × 71 mm Yellowish-brown Balthasar Neumann, buildings of Old-Würzburg, an architect's ruler Partial view of the stairway in the Würzburg Residence, the ground plan of a famous chapel, Kreuzkapelle, in Kitzingen 2 January 1989 30 September 1991
100 DM 51.13 154 × 74 mm Dark blue Clara Schumann, buildings of historic Leipzig and a lyre Grand piano, the Hoch Conservatory 1 October 1990
200 DM 102.26 162 × 77 mm Orange Paul Ehrlich, buildings of historic Frankfurt, the formula of Arsphenamine Microscope, the Rod of Asclepius surrounded by simplified cell structures
500 DM 255.65 170 × 80 mm Red-violet Anna Maria Sibylla Merian, an insect, buildings of ancient Nuremberg Dandelion, inchworm, butterfly 1 August 1991 27 October 1992
1000 DM 511.29 178 × 83 mm Dark-brown Wilhelm and Jakob Grimm, buildings of historic Kassel The 'German dictionary' (Deutsches Wörterbuch), the Royal library in Berlin
Hologram variant
50 DM 25.56 As previous 2 January 1996 2 February 1998 31 December 2001 Indefinite
100 DM 51.13 1 August 1997
200 DM 102.26

Spelling and pronunciation

The German name of the currency is Deutsche Mark (fem.) ; its plural form in standard German was the same as the singular. In German, the adjective "deutsche" (adjective for "German" in feminine singular nominative form) is capitalized due to its part in a proper name, while the noun "Mark", like all German nouns, is always capitalized. The English loanword "Deutschmark" had a slightly different spelling (possibly due to the silent e in English) and a plural form. In Germany, the currency's name was often abbreviated as D-Mark (fem.) or sometimes Mark (fem.) ˈdeːmaʁk with the latter term also often used in English. Like Deutsche Mark, D-Mark and Mark have no plural form, the singular being used to refer to any amount of money (e.g. eine (one) Mark and dreißig (thirty) Mark). Sometimes, a plural form of Mark, Märker ˈmɛʁkɐ was used as either as diminutive form or to refer to a (physically present or small) number of D-Mark coins or bills (e.g. Gib mir mal ein paar Märker (Just give me a few Mark (-bills or -coins)) and Die lieben Märker wieder (The lovely money again (with an ironic undertone)).

The subdivision unit is spelled Pfennig (masc.) ˈpfɛnɪç , which (unlike Mark) does have a commonly used plural form: Pfennige ˈpfɛnɪgə, but the singular could also be used instead with no difference in meaning. (e.g.: ein (one) Pfennig, dreißig (thirty) Pfennige or dreißig (thirty) Pfennig). The official form is singular.

The mark as a major international reserve currency

Before the switch to the euro, the mark was considered a major international reserve currency, second only to the US dollar.

See also

References

External links

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