After the fall of the Berlin Wall on November 9th, 1989, East Germans could at last move around freely following decades of travel restrictions. At the same time, the West German D-Mark immediately became the unofficial means of payment in post-war East Germany as well. Suddenly, the usual Cold War exchange rate jumped from 1:4 to 1:20.
A quite reasonable official rate was fixed at 1:5, compared to 1:8 on the black market, when on January 2nd, 1990 East Germans were allowed for the first time ever to open “Valutakonten” (foreign currency accounts) at any branch of their state bank.
Still becoming more and more impatient afterwards, they demanded the adoption of the D-Mark on their territory. During demonstrations going on for weeks, many hinted at the possibility of emigrating to the West if a strong currency wasn’t introduced soon in the East. It’s understandable that the average citizen there was fed up with “aluminum chips”, as the very light coins were called. Every German wanted to have money that was really worth something!
To meet such urgent demands, on July 1st, 1990 the economic, currency and social union between the mildly capitalist Federal Republic Germany (FRG) and the communist German Democratic Republic (GDR) became a reality. Considerable logistical effort had been necessary, so that at the end of June 1990 dozens of well-protected monetary transporters could supply banks in East Germany with coins and bills from the West.
West German Chancellor Helmut Kohl (1930-2017), East German Premier Lothar de Maizière (born 1940) as well as the two Ministers of Finance Theo Waigel (born 1939) and Walter Romberg (1928-2014) had created the conditions on May 18th, 1990 by signing the pertinent treaty.
The GDR adopted huge parts of the FRG’s economic and legal system and the D-Mark became the sole legal tender. Wages, salaries, pensions, rents and other “recurrent payments” were converted 1:1. However, the regulations for cash and bank deposits were more differentiated. Children under the age of 14 could exchange up to 2,000 GDR-Mark at a rate of 1:1 and persons aged 15 to 59 up to 4,000. Everybody above that age was allowed 6,000. Higher amounts would be exchanged at a rate of 2:1.
For several months low value GDR coinage (up to 50 Pfennig) continued to circulate in the former GDR as legal tender, because the (West) German Central Bank just couldn’t deliver enough small coins quickly enough to replace them immediately.
Around 4,500 tons of East German coins were melted down at the Rackwitz metal works in Saxony during the second half of 1990. Almost all the paper money, 3,000 tons with a volume of 4,500 cubic meters, was placed into storage in 1990/91 in two 300-meter long sandstone caverns near Halberstadt in Saxony-Anhalt.
In July 2001, it was discovered that two young city residents had gained access through an unsecured opening, stealing numerous banknotes. They were later sentenced to four months in prison and three years of probation. Between April and June 2002, around 300 remaining currency containers were burned in a nearby incinerator along with household waste.
It was a deserved ending that matched the inglorious end of the regime that had put it into circulation. On October 3rd, 1990 what was left of Germany after World War II finally reunified and the GDR consigned to the dustbin of history.
P.D.: July 1st, 1990 was a Sunday, but most shops opened due to expected good business.