Black market and the cigarette currency
암시장과 담배 화폐 경제
This term describes the postwar German economic situation in which the Reichsmark lost confidence and practical exchange value amid monetary overhang, shortages, and rationing, while cigarettes became a de facto means of payment on the black market and in barter. Cigarettes were scarce, portable, and divisible, making them useful as a unit of comparison and medium of exchange until the 1948 currency reform in the western occupation zones replaced this practice with the Deutsche Mark.
In depth
In postwar Germany, official prices and rationing concealed the gap between nominal prices and actual exchange values. In October 1946, one cigarette was valued at roughly 2.5 to 10 Reichsmarks depending on the place of exchange, with prices in Berlin higher than in southern Germany because of supply conditions. The monetisation of cigarettes was not simply a matter of tobacco consumption: it was an institution of the informal market formed when the state currency could no longer reliably perform the functions of exchange and value storage. The 20 June 1948 currency reform in the western occupation zones, together with the relaxation of price controls, reduced the Reichsmark overhang and gave sellers an incentive to return goods to the open market. The sudden filling of shop windows after the reform therefore reflected not only rising production but also the release of goods previously held in the black market.
Sources
- de.wikipedia.org (supports the definition of cigarette currency, its postwar German use, black-market exchange, and replacement by the 1948 currency reforms)
- Wikipedia (EN) (supports the pre-reform collapse of Reichsmark purchasing power, barter and cigarette currency in Berlin, and the sudden return of goods to shops after reform)
- bundesbank.de (supports the monetary overhang, loss of confidence in the Reichsmark, black-market barter with cigarettes, and the 20 June 1948 reform)