RUSSIANS MAY POSTPONE CURRENCY REFORM

Gisborne Herald, Volume LXXV, Issue 22669, 21 June 1948, Page 5

RUSSIANS MAY POSTPONE CURRENCY REFORM

(10.30 a.m.) LONDON. June 20. Marshal Sokolovsky is understood to have accepted the advice of the German Economic Council in the Soviet zone to postpone currency reform in east Germany until the political position in Berlin has been clarified. . The German People’s Council, which is the executive body of the Com-munist-led People's Congress and is regarded as the “shadow” Government for a possible east German -State, denounced the currency reform and called it the “rape of Germany.” Russian troops, with fixed bayonets, cordoned off several printing plants in the Soviet sector and also cordoned off the streets surrounding the offices of the Taegliche Rundschau, the official Soviet German-language newspaper, and refused to allow anyone to approach the building. The British-controlled German news agency said the Taegliche Rundschau plant was printing special stamps to affix to reichmarks in the Soviet zone. Unofficial reports from the Soviet zone said that the district finance officers were stamping reichmarks with a special sign to make them the only legal currency in the eastern zone. This would counteract the chances of the zone being flooded with old worthless reichmarks from the West. Currency Smugglers Arrested The Russian licensed news agency reported that German and Russian frontier police had arrested more than 5000 currency smugglers since the announcement of currency reform in Western Germany. The payment of 60 new Deutsche marks which each western German received in two instalments under the currency reform is designed to tide hint over the interim period pending the final conversion. The Moscow radio, commenting on the currency reform, said that mass dismissals have already taken place in large Hamburg undertakings, black market prices have risen sharply and a food crisis has been created in the Rhur because the bakeries and foodshops aie withholding the distribution of foodstuffs. The Times correspondent in Berlin says the chief importance of the measures that Marshal Sokolovsky has announced is that they are specifically applied not merely to the Russian sector but to Greater Berlin. Marshal Sokolovsky’s claim that Greater Berlin is within the Russian zone raises a serious problem and seems to challenge the continuance of the four-Power administration of the capital. Although the average German Is ready to welcome the introduction of new currency because it means that the mark will now buy something, German officials are less enthusiastic and say that the reform has not fulfilled many German desires.

The chief financial adviser in the American zone, Mr. Jack Bennett, said he thought the currency conversion would cause temporary pockets of unemployment in the western zones for the first six months. The new currency’s best backing would be the productive capacity of the factories, mines and workers.

Immediate prospects for the western Germans are:

1. The average wage-earner feels he has little to lose. He has 60 marks with the prospect that this and future earnings would be worth more than before. 2. The middle-class is likely to lose a substantial part of their savings. 3. The millionaire class is likely to lose all, particularly if their profits came during the war. 4. Black marketeers with only enough money in circulation to pay for rationed goods at regular prices will have a tough time.

It is believed that there are between 60,000,000 and 80,000,00 old marks In the four zones of Germany of which two-thirds is in the western zones. In Berlin, the Russians announced that they would not attend a special meeting of the Allied Kommandatura tomorrow to discuss the currency reform and the effects on Berlin.

“Division of Germany Made Final” While the German economic chiefs in the Soviet zone were at Marshal Sokolovsky’s headquarters, apparently to hear Russia’s “protective measures,” the Leipzig (Russian zone) radio commentator declared that the Western Powers and their German henchmen had made the division of Germany final. June 18, 1948, was a black day in German history. Separate currency reform was a stab into the heart of the nation. The Russians in a Note announcing they would not attend the Allied Kommandatura meeting, “categorically condemned unilateral action on currency reform which violated the Potsdam agreements and the agreement on the control mechanism in Germany.”

SCHEME FOR GERMANY RATIFIED BY FRANCE (9 a.m.) PARIS, June 20. The French Government has ratified the London six-Power proposals on Germany and has notified the British and American Governments.