Strange story of East German currency Ostmark: How the notes were buried only to be sold as collectible items later…

An oldish post by lulzmoney (HT: JP Koning) but highly relevant as Governments are at a war on cash.

Post Berlin Wall, the currency in East Germany was Eastern Mark or Ostmark. I am leaving the earlier history of its starting etc to the reader and moving straight to 1989 when the wall fell. What then happened to Ostmark is straight out of movies:

The Berlin Wall fell on 9 November 1989, and it was clear that East Germany was doomed and that the two Germanys would reunite. In the interim, the East German economy was imploding and West Germany saw an urgent need to prop it up. On 1 July 1990, the two Germanys entered into currency union. Ostmarks were exchanged at banks for West German Marks 1:1 up to 4,000 and 2:1 or 3:1 in higher quantities.

East Germany reunified with West Germany and ceased to exist on 3 October 1990. For a while in 1990, old Ostmarks continued in use in the former country as the German Bundesbank could not physically produce money fast enough.

The now-worthless physical money was judged to be the “property” of Staatsbank der DDR, the national central bank of East Germany. As Staatsbank was now a national bank without a nation, it was merged into KfW Bankengruppe, which duly assumed custody of the old Ostmarks.

Despite being only a small percentage compared to paper currency, Ostmark coins were judged more pressing as they had intrinsic scrap value. Beginning in the summer of 1990, Ostmark coins were collected from banks and melted into scrap by Rackwitz Metallwerke. The scrapping yielded 4,500 tons of aluminum and brass.

The paper money was a different matter, as it was bulky and hard to store. The paper had no intrinsic value as it would have severely depressed the price of recycled paper in Europe, and in any case would have stressed the abilities of paper recyclers to process it in a timely manner. KfW completed the collection of the worthless banknotes in early 1991. In the interim, the money was jammed into the disused Reichsbank building in Berlin, site of the nazi regime’s central bank during WWII. The final total was staggering.

There were about 620,000,000 individual worthless banknotes totaling 100 billion Ostmark to be disposed of. Using standard railroad boxcars, by weight they would have needed a train three hundred cars long. In terms of space, the volume was almost incomprehensible: 158,917 ft³.

The early 1990s was when the whole global warming squawking was starting, and to avoid debates about air pollution, it was decided to bury the money. The site chosen was an underground sandstone cavern near Halberstadt, a twin set of caves had been prepared there by the now-defunct East German military as wartime ammunition bunkers.

About 130 truck convoys moved the Ostmarks from Berlin to the burial site in 1991. The money was dumped into the caves which were then closed off with concrete. This should have been the end of the Ostmark story, as the Germans predicted that within several decades, humidity in the sealed-off caves would rot the money into dust.

The bizarre ending

This was not yet the end, however. Around the turn of the millennium, numismatists around the world noticed 200 and 500 Ostmark banknotes popping up at coin collecting shows. The barely-issued 200 Ostmark notes should have been very rare, and the 500 Ostmark notes were ultra-rare in that only a tiny handful were known to legally exist. Like any other niche community, high-end numismatists know by word of mouth who has what, and they notified the German government. Then, the never-issued military Ostmarks started appearing along with more 500s, and it was clear that something was going on.

In July 2001, police in Germany arrested two men for theft of the buried Ostmarks. In a story so unbelievable it bordered on fiction, the pair had burrowed like old-time miners into the underground sandstone caves, and were retrieving the most collectable banknotes for sale to collectors abroad. The exact total of what was taken is still unknown, but by that time there were many hundreds of the 200s and 500s floating around worldwide.

KfW Bankengruppe, still the legal owner of the Ostmarks, decided to end the headache once and for all. In a very expensive and difficult operation, the caves were re-opened and all of the money hauled back out. As a curious sidenote, over the time of a decade almost none of it had rotted and much of it was still in crisp, new condition.

From April to May 2002, the retrieved money was hauled by truck to a garbage incinerator in Buschhaus, Germany, where it was burned alongside household trash.

🙂

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