German mark (1871)
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The German mark (German: Goldmark [ˈɡɔltmaʁk] ⓘ; sign: ℳ︁) was the currency of the German Empire, which spanned from 1871 to 1918. The mark was paired with the minor unit of the pfennig (₰); 100 pfennigs were equivalent to 1 mark. The mark was on the gold standard from 1871 to 1914, but like most nations during World War I, the German Empire removed the gold backing in August 1914, and gold[1] coins ceased to circulate.
| Mark (German) | |
|---|---|
German 20 mark banknote from 1914 | |
| Unit | |
| Plural | Mark |
| Symbol | ℳ︁ |
| Denominations | |
| Subunit | |
| 1⁄100 | Pfennig |
| Plural | |
| Pfennig | Pfennig |
| Symbol | |
| Pfennig | ₰ |
| Banknotes | 5, 10, 20, 50, 100, 1000 Mark |
| Coins | 1, 2, 5, 10, 20, 25 Pfennig 1⁄2, 1, 2, 3, 5, 10, 20 Mark |
| Demographics | |
| User(s) | German Empire • German colonial empire |
| Issuance | |
| Central bank | Reichsbank |
| This infobox shows the latest status before this currency was rendered obsolete. | |
After the fall of the Empire due to the November Revolution of 1918, the mark was succeeded by the Weimar Republic's mark, derisively referred to as the Papiermark (lit. 'Paper mark') due to hyperinflation in the Weimar Republic from 1918 to 1923.
History edit
The introduction of the German mark in 1873 was the culmination of decades-long efforts to unify the various currencies used by the German Confederation.[2] The Zollverein unified in 1838 the Prussian and South German currencies at a fixed rate of 1 Prussian thaler = 1+3⁄4 South German gulden = 16.704 g fine silver. A larger currency convention in 1857 replaced the Prussian thaler with the Vereinsthaler of 16+2⁄3 g fine silver, equivalent to 1 North German thaler, 1+1⁄2 Austro-Hungarian florins, or 1+3⁄4 South German gulden.
Unification to this system proceeded further due to German Unification in 1871 as well as monetary conventions from 1865 to 1870 expressing a desire to move to the gold standard.[2] For this system a new unit mark was proposed equal to a drittelthaler or 1⁄3 Vereinsthaler, also equal to 1⁄2 the Austrian gulden, but decimally divided into 100 pfennig instead of the existing 120 pfennig. Combined with a gold-silver ratio of 15.5, the new mark of 5+5⁄9 g fine silver was therefore equivalent to 100⁄279 g fine gold. With 5 billion gold francs (equivalent to 4.05 billion gold marks) secured from France at the end of the Franco-Prussian War, the new currency was launched in 1873 in the form of gold 10-mark and 20-mark coins as well as limited legal-tender silver marks and copper pfennigs. The German Empire's conversion to the gold standard led to the same being adopted in the rest of Europe and North America, as well as the change in standard in the Latin Monetary Union from bimetallism to solely gold.
Despite the Vereinsthaler being a silver standard currency, it remained unlimited legal tender for 3 gold marks until it was demonetized in 1908. The South German gulden of 4⁄7 Vereinsthaler was converted to 1+5⁄7 or 1.71 gold marks. The gold-based Bremen thaler was converted directly to the mark at a rate of 1 Thaler gold = 3+9⁄28 or 3.32 marks. The Hamburg mark courant or currency was converted at 1 mark = 1.2 Imperial marks, and the Hamburg mark banco of the Bank of Hamburg was converted at 1 mark banco = 1.5 Imperial marks.
From 1 January 1876 onwards, the mark and vereinsthaler became the only legal tenders. Before 1914, the mark was on a gold standard with 2790 marks equal to 1 kilogram of pure gold (1 mark = 358 mg). The term Goldmark was created later to retrospectively distinguish it from the Papiermark (paper mark) which suffered a serious loss of value through hyperinflation following World War I during hyperinflation in the Weimar Republic. For comparison, from 1900 to 1933, the United States adhered to a gold standard as well with the gold dollar containing 1.50463 grams (23.22 grains) fine gold; it was therefore worth 4.198 gold marks. The monetary hegemon of the time when the gold mark was in use, however, was the pound sterling, with the sovereign (£1) being valued at 20.43 gold marks.
World War I reparations owed by Germany were stated in gold reserves in 1921, 1929 and 1931; this was the victorious Allies' response to their fear that vanquished Germany might try to pay off the obligation in paper currency.[citation needed] The actual amount of reparations that Germany was obliged to pay out was not the 132 billion marks cited in the London Schedule of 1921 but rather the 50 billion marks stipulated in the A and B Bonds. The actual total payout from 1920 to 1931 (when payments were suspended indefinitely) was 20 billion German gold marks, worth about US$5 billion or £1 billion. Most of that money came from loans from New York bankers.[3]
Following the Nazi seizure of power in 1933, payments of reparations were officially abandoned. West Germany after World War II did not resume payment of reparations as such, but did resume the payment of debt that Germany had acquired in the inter-war period to finance its reparation payments, paying off the principal on those debts by 1980. The interest on those debts was paid off on 3 October 2010, the 20th anniversary of German reunification.[4]
Coins edit
Coins of denominations between 1 pfennig and 1 mark were issued in standard designs for the whole empire, whilst those above 1 mark were issued by the individual states, using a standard design for the reverses (the Reichsadler, the eagle insignia of the German Empire) with a design specific to the state on the obverse, generally a portrait of the monarch of the kingdom or duchy (and not that of the emperor); while the free cities of Bremen, Hamburg, and Lübeck each used the city's coat of arms. Occasionally commemorative coins were minted, in which cases the obverse and (much more rarely) the reverse designs might depart from the usual pictorial standards. Many of the smaller states issued coins in very small numbers. Also, in general all states' coinage became very limited after the First World War began. Well-preserved examples of such low-mintage coins can be rare and valuable. The Principality of Lippe was the only state not to issue any gold coins in this period.
Base metal coins edit
- 1 pfennig (copper: 1873–1916, aluminium: 1916–1918)
- 2 pfennig (copper: 1873–1916)
- 5 pfennig (cupro-nickel: 1873–1915, iron: 1915–1922)
- 10 pfennig (cupro-nickel: 1873–1916, iron and zinc: 1915–1922)
- 20 pfennig (cupro-nickel, 1887–1892)
- 25 pfennig (nickel, 1909–1912)
Silver coins edit
Subsidiary silver coins were minted in .900 fineness to a standard of 5 grams silver per mark. Production of 2 and 5 mark coins ceased in 1915 while 1-mark coins continued to be issued until 1916. A few 3 mark coins were minted until 1918, and 1⁄2 mark coins continued to be issued in silver until 1919.
- 20 pfennig, 1.1111 g (1 g silver), only until 1878
- 1⁄2 mark or 50 pfennig, 2.7778 g (2.5 g silver)
- 1 mark, 5.5555 g (5 g silver)
- 2 mark, 11.1111 g (10 g silver)
- 3 mark, 16.6667 g (15 g silver), from 1908 onwards
- 5 mark, 27.7778 g (25 g silver)
These silver coins are token or subsidiary currency for the gold mark and are therefore legal tender only up to 20 marks. However, all silver 3-mark Vereinsthalers issued before 1871 enjoyed unlimited legal tender status even after the switch-over to the gold standard. This ended with the demonetization of the Vereinsthaler in 1908 and the introduction of the new subsidiary 3-mark coins.
The 5-mark coin, however, was significantly closer in value to older thalers (and other such crown-sized coins).
Gold coins edit
Gold coins were minted in .900 fineness to a standard of 2,790 mark = 1 kilogram of gold (a mark was therefore about 0.3584 g of gold; a troy ounce of gold was worth 86.78 ℳ︁). Gold coin production ceased in 1915. 5-mark gold coins were minted only in 1877 and 1878.
- 5 mark, 1.9912 g (1.7921 g gold)
- 10 mark, 3.9825 g (3.5842 g gold)
- 20 mark, 7.965 g (7.1685 g gold)
Gold marks are a popular choice for Latin Currency Union coin collectors. The 20 mark is the most seen and offers a variety of different types that were mass-produced and therefore can be purchased at a low premium above each coin’s melt value. However, some designs are extremely elusive given that they were struck in very low mintages. The rarest type features Adolph Friedrich V with just 1,160 pieces issued by the Berlin Mint.[5]
Banknotes edit
Banknotes were issued by the Imperial Treasury (known as "Reichskassenschein") and the Reichsbank, as well as by the banks of some of the states. Imperial Treasury notes were issued in denominations of 5, 10, 20 and 50 Mark, whilst Reichsbank notes were produced in denominations of 20, 50, 100 and 1000 Mark. The notes issued after 1914 are referred to as Papiermark.
Currency signs edit
In Unicode, the Mark sign is U+2133 ℳ SCRIPT CAPITAL M. The Pfennig is U+20B0 ₰ GERMAN PENNY SIGN.
Notes edit
- ^ <Krause>
- ^ a b Shaw, William Arthur (1896). The History of Currency, 1252-1894: Being an Account of the Gold and Silver Moneys and Monetary Standards of Europe and America, Together with an Examination of the Effects of Currency and Exchange Phenonmena on Commercial and National Progress and Well-being. Putnam.
- ^ Marks, Sally (September 1978). "The Myths of Reparations". Central European History. 11 (3): 231–255. doi:10.1017/s0008938900018707. JSTOR 4545835. S2CID 144072556.
- ^ "Germany to Settle WWI Debt After 92 Years". ABC News. 2010-09-29. Retrieved 2016-02-16.
- ^ "Rare gold German 20 Marks". Auronum, (n.d)
References edit
- Krause, Chester L.; Clifford Mishler (1991). Standard Catalog of World Coins: 1801–1991 (18th ed.). Krause Publications. ISBN 0873411501.
- Pick, Albert (1994). Standard Catalog of World Paper Money: General Issues. Colin R. Bruce II and Neil Shafer (editors) (7th ed.). Krause Publications. ISBN 0-87341-207-9.
| Preceded by: Vereinsthaler Location: many German states Reason: German unification Ratio: 1 Mark = 1⁄3 Vereinsthaler | Currency of Germany 1871 – 1914 | Succeeded by: German Papiermark Ratio: at par |
| Preceded by: South German Gulden Location: southern Germany incl. Bavaria, Baden, Württemberg, Frankfurt and Hohenzollern Reason: German unification Ratio: 1 Mark = 7⁄12 Gulden | ||
| Preceded by: Bremen Thaler Location: Bremen Reason: German unification Ratio: 1 Mark = 28⁄93 Thaler, or 3 9⁄28 Mark = 1 Thaler | ||
| Preceded by: Hamburg Mark Location: Hamburg Reason: German unification Ratio: 1 new Mark = 5⁄6 Hamburg Mark | ||
| Preceded by: French franc Location: Alsace-Lorraine Reason: German unification Ratio: 0.81 Mark = 1 French Franc |