MONEY PANIC GRIPS SOVIETZONE GERMANY

Gisborne Herald, Volume LXXVII, Issue 23207, 20 March 1950, Page 5

MONEY PANIC GRIPS SOVIETZONE GERMANY

BERLIN, March 17.

The greatest money panic since the war today gripped Germany’s soviet zone, sending the East mark plummeting to the lowest level yet.

Holders of millions of East marks, fearing a sudden currency . reform, swamped the licensed exchanges in West Berlin with offers. The exchanges had Posted the rate of 7.0 East marks for one West mark but huge lots of East marks were put on the market as cheaply as 8.75. Private bankers reported they were flooded with calls from franctic East German companies to help unload East mark reserves.

The East Mark since January 1 has declined nearly 50 per cent in relation to the West mark, but a real nosedive started a few days ago with rumours of currency reform. As reports came of Russia’s establishment of a gold-based rouble and the prospective creation of a rouble bloc among the satellites the., present East mark seemed ever more questionable.

Both East and West marks were first issued in the middle of 1948 when the occupation Powers split the German surrency and withdrew the old Reichs mark.

The East German Bank of Issue tonight discounted all rumours of impending currency reform as “completely unfounded” in a statement distributed by the Soviet-licensed news agency.

The bank declared "categorically” that no monetary reform will be made.