How many groschen are in 100 billion

The monetary union 1871 - introduction of the gold mark

"Among the numerous laws that the central authority first passed the North German Confederation, then the new German Reich, there is hardly one that would affect the welfare and woe of the people as a whole and of all individuals in the people more deeply than those with the 4th Coin reform initiated in December 1871 ", wrote the renowned economist Wilhelm Roscher in 1872 in his" Considerations on the currency question of the German coin reform ". Like Roscher, all German economic and financial experts saw the restructuring of the coinage system as one of the most important prerequisites for the positive economic development of the newly founded German Empire and for the promotion of its domestic and foreign trade.

Until 1871 it had not been possible to unify the various currency units in the German Confederation and the North German Confederation. The regional currencies had been reduced to seven coin systems through the conclusion of contracts, but conversion problems continued to complicate the cross-border movement of goods, raw materials and financial transactions within the German world and with other countries. With the gold currency introduced on December 4, 1871 in addition to the existing currencies as a 100 pfennig mark, there was a uniform legal tender throughout the empire. By the end of 1873, the mints in the empire minted gold 10 and 20 mark pieces with a total value of around one billion marks; the total amount of metal money at that time was the equivalent of around 2.7 billion marks. The gold content of the 10 and 20 mark coins was 0.3584 g fine gold per mark. Most of the precious metal came from the French reparations of the Franco-German War in the amount of 5 billion francs.

The country coins according to the old coin system remained in circulation for the time being, but except for commemorative and token coins they were no longer allowed to be minted. The existing seven coin systems with 119 different types of coins such as thaler, guilder, cruiser, groschen, grote or schilling were initially set in a fixed exchange ratio to gold marks. With the Coin Act signed by Kaiser Wilhelm I on July 9, 1873, the national currencies were finally abolished and the corresponding national coins were gradually withdrawn. By this time France had already made the bulk of its reparations payments. As a result, the money supply in the empire rose considerably, which kept interest rates low. This increased the flow of capital and fueled the economy, the economic prosperity turned - until the stock market crash in 1873 - into an overheated economic boom and founder frenzy.

The economic crisis that began in 1874 did not damage the reputation of the new mark due to the deflationary development with falling wholesale prices and interest rates. On the part of the state, the monetary agreement was achieved not least because in Germany attention was paid to largely stable financial management and a comparatively solid budget. This was all the more important because, in the words of Chancellor Otto von Bismarck, the German Reich was a "boarder of the individual states" in financial policy terms. The Reich was initially denied access to direct taxes; these were levied exclusively in the federal states. According to the size of the population, fixed sums flowed from the individual states to the empire, whose income and expenditure were largely balanced by the turn of the century. The interest burden for bonds was relatively low for the Reich and the federal states. The Reich's debt rose continuously, from 16 million marks in 1876 to 2.5 billion marks in 1900, but this year the total amount of debt to gross domestic product was only 7.7 percent.

If one compares the situation at that time with the introduction of the euro in 1999, the differences lie precisely in the area of ​​the debt limit and the lack of sanctions if it is exceeded. According to the rules of the Maastricht Treaty, agreed in 1992, the member states of the euro are allowed to account for up to 60 percent of the gross domestic product in national debt. In 2010 the liabilities of the Federal Republic of Germany were around 80 percent, and in 2015 around 70 percent.