World coins chat: German Democratic Republic

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Joined: 10-Feb-2013
Posts: 1677
The German Democratic Republic, better known as East Germany (English abbreviation: GDR, in German DDR), was a country in Central Europe that existed from 1949 until 1990, when it was reunited with West Germany. East Germany was part of the Eastern Bloc, and was at the forefront of the Cold War.

Flag of East Germany. The colors of the flag of the Weimar Republic (1918-1933) were reused with a socialist symbol added. It symbolised the cooperation between workers (hammer), engineers (compass) and peasants (rye).

Soviet Occupation Zone (1945-1949)
With Nazi Germany's defeat in 1945, the Soviet Union had occupied a vast amount of German territory including Berlin. At the Potsdam Conference it was agreed to partition Germany and Berlin itself into 4 occupation zones, and transfer the parts east of the Oder and Neisse rivers to Poland and the USSR.

German territorial changes after World War 2. East Prussia was partitioned into a Soviet and a Polish part, and East Pomerania and Silezia became Polish to compensate for territories ceded to the USSR. The remainder of Germany was partitioned into 4 occupation zones and the special UN territory of Saar. The Soviet occupation zone became the GDR in 1949.

Soon it became clear that the three Western Allies (The US, UK and France) had different plans for Germany than the USSR, and they failed to reach an agreement on a unified Germany. The West wanted to redevelop Germany's industrial potential, while the Soviet Union preferred a weakened neutral buffer state for its own protection.

The introduction the Deutschmark in the three western zones (including West Berlin) in 1948 was not discussed with the Soviets and this prompted them to quickly introduce a new currency for its own occupation zone to prevent the influx of now worthless Reichmarks. In an attempt to assimilate all of Berlin into their occupation zone the USSR imposed a blockade of all supplies to West Berlin. However, the result was unexpected. The Western Allies organised a large airlift programme and succeeded to keep on supplying West Berlin's population with all necessities.

The situation around the Berlin Blockade was the point of no return leading to a divided Germany. In 1949 both the Federal Republic of Germany (West) and the German Democratic Republic (East) were established. West Berlin became an enclave within East Germany, formally under Allied rule, but practically ruled as part of West Germany.

Socialist state (1949-1989)
During the first years the leadership of the GDR was primarily focused on weeding out domestic opposition, paying war repairs to the Soviet Union and rebuilding industries. The combination of economic hardship and restrictions in civil liberties led to mass protests in 1953 which were violently opposed by the authorities. These experiences laid the foundations of what became one of the most excessive surveillance states in history, with a significant part of the population recruited to act as an informant for the secret police.

A growing number of East Germans started to leave the country, which ennerved the authorities. As a result the Berlin Wall and a hermetically closed border with West Germany was built in 1961. The Berlin Wall was the most prominent symbol of the division of Germany and the Cold War.

Meanwhile East Germany became the most successful socialist economies in the world, as the combination of subsidised Soviet energy and German industry provided living standards better than in any other communist state. But on the flipside it was a more totalitarian state than its East European peers.

The fall of the Berlin Wall (1989) and German reunification (1990)
The East German economy started to stagnate in the 1970's. In order to maintain living standards to appease the populatiom the authorities started to take loans from West Germany. This process slowly started to weaken the government's grip on the country. In 1989 a growing number of protesters took the streets in several towns asking for reforms. Then Hungary took a step by declaring that it would not stop East Germans travelling to Austria. The East German government feared a mass exodus and surprisingly opened the border on 9 November 1989. That same night many Berliners celebrated the fall of the Berlin Wall.

After the 1989 events a transition government took over and negotiations were started for the reunification of Germany, which was realised on the 3rd of October 1990, which is still a national holiday in Germany.

The reunification process was not easy. Many East Germans lost their job as their factories were unable to compete and disappeared. But a massive infrastructure programme funded by the West German taxpayer has paid off in certain areas that are developing quite well almost 30 years after the end of communism.

Currency and coins
During the Allied occupation in the years after World War 2 the German Reichsmark was continued until 1948. Coins with Nazi symbols were withdrawn and small numbers of zinc coins with German eagle without swastika were put into circulation. These coins are quite rare.

In 1948 the Western Allies introduced the Deutschmark in their territory as part of a big currency overhaul. As the Soviets feared a flood of old German Reichsmark moving eastwards it quickly introduced its own version of the Deutsche Mark, to make it appear at par with the Western one. Coins of 1, 5, and 10 Pfennigs were introduced with mint marks A (Berlin) and E (Muldenhütten). Their design was slightly changed after the establishment of the German Democratic Republic in 1949, and brass coins of 50 Pfennig were added in 1950.

In 1956 and 1957 aluminium coins of 1 and 2 Mark were added. Their legend stated the denomination as 'Deutsche Mark' as if they were equal to West German Marks, but they were in no way convertible. Western tourists were forced to exchange their hard currency at par but on the black market the price of a Deutschmark increased gradually to 10 Ostmark, as the East German currency was often called. Ostmarks could only be used to buy price-controlled goods.

From 1958 the designs of all denominations were updated and remained the same until the reunification in 1990. All circulation coins were in aluminium except the newly added brass 20 Pfennigs that was introduced in 1969. This was not a coincidence. As aluminium coins were so light they often got stuck in telephone booths. A price for a phone call was 20 Pfennigs, and the heavier brass coin was a solution for the nuisances of aluminium coins.

From 1968 many commemorative coins of 5, 10 and 20 Marks were produced, mostly as a way to make a profit. Some were produced in such large numbers that they were often found in circulation. Especially the 20 Mark coins were quite profitable to produce. Any coin sold to western visitors would fetch the equivalent of 6 US Dollars at that time, roughly $25 in 2018 Dollars. Not bad for a mass produced disk made out of copper-nickel. These coins are currently sold for around 2 Euros each.

In 1990 the Deutschmark replaced the East German Mark. East German residents were allowed to convert all amounts up to 100,000 at par, which was a highly controversial move but it did compensate for the massive loss of jobs after the reunification.

Numismatist uk
Joined: 2-Jan-2018
Posts: 757
A very interesting and complex history of diplomatic relations told in the story of coins.
Coins are a great way to gauge what it was like in the olden days.
                                          Coin collector and Silver stacker
             'We make a living by what we get, we make a life by what we give.'
                                                     Sir Winston Churchill
Joined: 10-Feb-2013
Posts: 1677
After the excellent The Life of Others and the bit too farcical Goodbye Lenin I recently saw another movie about the GDR that was worth watching. Ballon (2018) tells the story of two families secretly building an air balloon to fly over the inner German border in 1979.

This movie really made me wonder what would have happened if the Stasi (GDR secret police) had all the modern technology available that we currently have. We should perhaps not underestimate the probability of such history repeating itself.

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