The Time of the Black Market,
1945 - 1948

Development of Prices on the Black Market

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In the final months of Nazi Germany’s wartime economy there was an enormous increase in the amount of money being circulated (70 billion Reichsmark [RM] in April 1945 compared to 8.7 billion RM in June 1939). Many consumers dissolved their financial resources as a precaution in view of the uncertain situation and outcome of the war. .. Quelle: Als Bremen amerikanisch war.
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Most business had scarcely any goods left to buy, and in any case there were few opportunities to spend money legally.  Even entertainment venues and cinemas were long closed. The consequence was high inflation. Money steadily lost value.
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Quelle: Die Schwarzmarktzeit, Bild 57.
Cigarettes change ownership
.. The depreciation of monetary value led to people favoring direct exchange of goods, a practice that became increasingly popular. Even the comparative-value function of money was replaced by commodities. Here the usual standard was cigarettes which became a general measure of real worth, so that one finally spoke about a “cigarette currency.”  The cigarette currency had the advantage of being relatively inflation-resistant because it literally dissolved into smoke. 
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Tobacco products were also popular because of the supposed hunger-suppressive effects of the nicotine they contained.  Continuous demand was insured because about 60 percent of postwar Germans were smokers.  Cigarettes were especially suitable as an alternative currency since they were durable, could be brought in small quantities for trafficking and not were bound by national borders.  Each cigarette cost an average 5 to 10 RM but occasionally, however, a single cigarette could fetch as much as 20 RM.  “Ami-Zigaretten” (American cigarettes) dominated the markets with name brands such as Lucky Strike, Chesterfield and Camel. .. Quelle: Als Bremen amerikanisch war.
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Black Market in Essen,
February 1947
.. There were no uniform Black Market prices.  Values differed from city to city and from zone to zone (that is, American, British, French or Soviet occupation zones). Regional differences could be considerable.  Among other things, a particular area’s income level helped to determine values. Higher prices occurred wherever the population had more income to pay for goods. Moreover, prices were always contingent upon the rate of shortages, which naturally tended to be greater in denser populated areas.  As a result, a price differential developed that peaked in major cities, with millions of inhabitants, like Berlin and Hamburg, and then dropped progressively through lesser cities to the towns. Rural inhabitants acquired a special dislike for the excessive Black Market prices and preferred the barter economy whenever possible.
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As a rough approximation of value, economic research shows that Black Market prices in the larger consumer centers of August 1939 roughly doubled every year to the end of 1944. By the beginning of 1945, there were cases of prices for particularly desirable goods rising almost a hundredfold, compared to prewar levels. For example, price escalation soared in the last months of the war to the point where a pound of coffee occasionally cost over 2,000 RM.

At war’s end, rumors persisted about a forthcoming delivery of plentiful supplies that would cause a drastic slide in prices. Thus, the price for a pound of coffee in the early summer of 1945 sank to 400 RM.  However, already by late summer there was a renewed surge in prices because of both drastic ration reductions and consumer fears about upcoming winter conditions.

.. Quelle: Haus der Geschichte, Bonn EB-Nr.: 1992/01/015
Poster requesting the denunciation of Black Market and Profiteering, Dresden, 1948
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Prices fluctuated between 1946 and 1948, when they finally fell below 1944 levels as the occupation authorities managed to check the “press of emergency”. This led to stabilization of monetary circulation. 
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Each precious brand was traded carefully.
.. After the war, an abundance of new goods could be found among Black Market offerings.  Nearly the entire spectrum of commercial and industrial products ended up on the Black Market because of the complete collapse of industry and legitimate business in the aftermath of German defeat. One had to pay as much as ten or twenty times what something was worth in prewar prices.  Between 1940 and 1948, however, the prices for food, coffee, alcoholic drinks and cigarettes always dominated over the prices of regular commercial products and wages.  Yet a chicken, which eggs were sold on the Black Market of a large city, “earned” twice as much as a miner could hope to make.
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Since wages were usually insufficient to pay the swindle-high Black Market prices, one had to gradually use up personal possessions in trade. These included money, principal and home treasures. A 1948 jingle in the “Muenchener Merkur” (Munich Mercury) appropriately describes the predicament: 

“One ate the jewelry as butter make do, 
One now wears a Meissner cup as a shoe,
So evolves the owner, who surely is blue,
On the basis of changing it all again to…”

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Quelle: Die Schwarzmarktzeit, Bild 55
“Fitting Room” on the Black Market. Light bulbs, fruit and a bicycle tire in a suitcase, ready for trading.
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Black Market Prices in October, 1946
Product Amount Price
1938
Location RM
Butter 1kg 3,21 Hamburg
Baden-Baden
250
200-250
Meat 1kg 1,76 Baden-Baden
Wangen (Wuertt.)
120
20
Ground Coffee 1kg 6,40 Baden-Baden
Hamburg
Wagen (Wuertt.)
450-650
300
100
Sugar 1kg 0,84 Stuttgart
Hamburg
250
180
Bread 1kg 0,32 Brit. Zone
Berlin
Baden-Baden
60
40
20
American Cigarettes Pack (20) - Berlin
Hamburg
Rheinland
Lindau
200
120
100
50
Ladies' Shoes Pair (1) - Berlin
US-Zone
Pirmasens
600
300
80
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(Source: "Der Schwarzmarkt 1945-1948. Vom Ueberleben nach dem Kriege" 
by Willi A. Boelcke, Braunschweig 1986, page.106.) 
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(Many thanks to Shelby L. Stanton for English translation)
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