Finance:German gold mark
| Mark (in German) | |
|---|---|
 German 20 mark banknote from 1914 | |
| Code | (numeric: ) |
| Unit | |
| Plural | Mark |
| Symbol | ℳ |
| 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, 50 Pfennig 1, 2, 3, 5, 10, 20 Mark |
| Demographics | |
| User(s) |  German EmpireGerman colonial empire |
| Issuance | |
| Central bank | Reichsbank |
Goldmark (
pronunciation (help·info), officially just Mark, sign: ℳ) was the gold standard-based currency of the German Empire from 1873 to 1914. Papiermark was the Mark after the gold standard was given up in August 1914, and gold and silver coins ceased to circulate.
History
Before unification in 1870, the different German states issued a variety of different currencies. Most were linked to the Vereinsthaler, a silver coin containing 16 2⁄3 grams of pure silver. In moving from a silver-standard currency to a gold-standard currency, the designers of the mark sought to (i) establish a simple relation to the Vereinsthaler and (ii) to approximate the value of the Mark Courant, the currency used by the Hanseatic cities of Hamburg and Lübeck which equaled 1⁄3 of a Vereinsthaler. Thus, the ratio of three marks per Vereinsthaler defined the gold content of the mark. At this ratio, Vereinsthalern were legal tender up to 1908.
Southern Germany had used the Gulden as the standard unit of account, which was worth 4⁄7 of a Vereinsthaler and, hence, became worth 1.71 (1 5⁄7) marks in the new currency. Bremen had used a gold-based Thaler which was converted directly to the mark at a rate of 1 gold Thaler = 3.32 (3 9⁄28) marks. Hamburg had used its own mark prior to 1873. This was replaced by the gold mark at a rate of 1 Hamburg mark = 1.2 gold mark.
From 1 January 1876 onwards, the mark became the only legal tender. The name Goldmark was created later to distinguish it from the Papiermark (paper mark) which suffered a serious loss of value through hyperinflation following World War I (see Hyperinflation in the Weimar Republic). The gold mark was on a gold standard with 2790 marks equal to 1 kilogram of pure gold (1 mark = 358 mg). From 1900 to 1933, the United States adhered to a gold standard as well, with the value of the dollar being fixed at a price of approximately 1⁄20 troy ounce (0.055 oz; 1.6 g) of gold (one troy ounce of gold was actually valued at US$20.67). The gold mark therefore had a value of approximately US$0.25. The monetary hegemon of the time when the gold mark was in use, however, was the pound sterling, with £1 being valued at 20.43 gold marks.
World War I reparations owed by Germany were stated in gold marks 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 marks.[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 GB£1 billion. Most of that money came from loans from New York bankers.[1]
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.[2]
Coins
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
- 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
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
Gold coins were minted in .900 fineness to a standard of 2790 mark = 1 kilogram of gold. 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)
Banknotes
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
In Unicode, the Mark sign is U+2133 ℳ SCRIPT CAPITAL M. The Pfennig is U+20B0 ₰ GERMAN PENNY SIGN.
Notes
- ↑ Marks, Sally (September 1978). "The Myths of Reparations". Central European History 11 (3): 231–55. doi:10.1017/s0008938900018707.
- ↑ "Germany to Settle WWI Debt After 92 Years". 2010-09-29. https://abcnews.go.com/International/germany-makes-final-reparation-payments-world-war/story?id=11755920.
References
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