The initial purpose for writing this essay was to disabuse many scholars in the United States of the idea that the monetary reform in Western Germany on June 20, 1948, was the work of Ludwig Erhard, at that time chairman of the Sonderstelle Geld und Kredit (Special Unit on Money and Credit) and director of the Economic Administration of the bizonal Wirtschaftsrat (economic council) appointed by the British and American occupation powers. That attribution is mistaken, called by many German analysts a “myth” or a “legend” (Sauermann 1979, 316). Christoph Buchheim has recently asserted that everything contained in the ultimate reform laws was included in a paper that Erhard wrote late in 1943 and early in 1944 (Buchheim 1993, 84), but we believe this stretches matters. Erhard himself is reported to have said, in response to claims that German experts had produced the reform, that “practically all suggestions made by German experts . . . have been rejected . . . by inexperienced and technically unqualified personnel.” This goes too far in the other direction.

Erhard’s role in June 1948 was in removing price controls and rationing, not in one fell swoop and completely, as sometimes alleged, and even he warned against such precipitous action in a speech to the Bizonal Economic Council on May 10, 1948 (Erhard 1963, 36). But legends have power in history; what was originally Allied monetary reform became, within a few years, German monetary reform (Wandel 1979, 321).