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The West German central bank and the construction of an international monetary system during the 1950s1

Published online by Cambridge University Press:  12 September 2008

Monika Dickhaus
Monika Dickhaus
Affiliation:
Universität Bielefeld
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Financial History Review , Volume 5 , Issue 2 , October 1998 , pp. 159 - 178
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Copyright © European Association for Banking and Financial History 1998

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References

2 Acheson and Chant have investigated the Bank of Canada and its information policy, concluding that creating myths is an inherent part of the art of central banking: see Acheson, K. and Chant, J. F., ‘Mythology and central banking’, Kyklos, 26 (1973).Google Scholar

3 The Bundesbank archives contain mainly postwar material. For a short description, see Lindenlaub, D., ‘Historisches Archiv der Deutschen Bundesbank’, Der Archivar, 40 (1987).Google Scholar

4 Contemporaries as well as historians agree on the importance of the German central bank during the 1950s. See, for example, Wallich, H. C., Triebkräfte des deutschen Wiederaufstiegs (Frankfurt-am-Main, 1955) P. 102fGoogle Scholar; and Abelshauser, W., Wirtschaftsgeschichte der Bundesrepublik Deutschland (Frankfurt-am-Main, 1983), p. 63.Google Scholar

5 Usually this material is used in passing or to elucidate rather short episodes and specific questions: see, for example, Hardach, G., Der Marshall-Plan. Auslandshilfe und Wiederaufbau in Westdeutschland 1948–1952 (Munich, 1994)Google Scholar; Buchheim, C., Die Wiedereingliederung Westdeutschlands in die Weltwirtschaft 1945–1958 (Munich, 1990)Google Scholar; Hentschel, V., ‘Die Entstehung des Bundesbank-Gesetzes 1949–1957’, Bankhistorisches Archiv, 14 (1988), pp. 3f., 79f.Google Scholar; and idem, ‘Die Europäische Zahlungsunion und die deutschen Devisenkrisen 1950/51’, Vierteljahrshefte für Zeitgeschichte, 37 (1989), pp. 715f.Google Scholar

6 This draws mainly on my doctoral research: see Dickhaus, M., Die Bundesbank im westeuropäischen Wiederaufbau. Die internationale Währungspolitik der Bundesrepublik Deutschland 1948 bis 1958 (Munich, 1996).CrossRefGoogle Scholar Another recent work which uses extensively the archival sources is Berger, H., Konjunkturpolitik im Wirtschaftswunder. Handlungsspielräume und Verhaltensmuster von Bundesbank und Regierung in den 1950er Jahren (Tübingen, 1997).Google Scholar

7 By 1955 The Economist was calling the Bank deutscher Länder the most stern guardian of monetary stability: see ‘Germany's Boom’ (13 08. 1955), pp. 523f.Google Scholar In 1958 the German central bank had accumulated foreign exchange reserves of Dm26b.: see Deutsche Bundesbank, Geschäftsbericht für das Jahr 1958, p. 121.Google Scholar

8 The expression ‘occupied ally’ is borrowed from Rupieper, H.-J., Der besetzte Verbündete. Die amerikanische Deutschlandpolitik 1949–1955 (Opladen, 1991).Google Scholar

9 The major works in this respect are: Milward, A. S., The Reconstruction of Western Europe 1945–1951 (London, 1987)Google Scholar; idem, The European Rescue of the Nation State (London, 1992)Google Scholar; and Kaplan, J. J. and Schleiminger, G., The European Payments Union. Financial Diplomacy in the 1950s (Oxford, 1989).Google Scholar

10 There is a considerable debate over Erhard in German politics and opinions are highly divided, yet his importance is hardly denied. A recent contribution is Hentschel, V., Ludwig Erhard. Ein Politikerleben (Munich, 1996).Google Scholar

11 A recent example is Giersch, H., Paqué, K.-H. and Schmieding, H., The Fading Miracle. Four Decades of Market Economy in Germany (Cambridge, 1992).CrossRefGoogle Scholar

12 For the Anglo-American arguments on the future German central bank system, see Horstmann, T., Die Alliierten und die deutschen Groβbanken. Bankenpolitik nach dem Zweiten Weltkrieg in Westdeutschland (Bonn, 1991), pp. 134f.Google Scholar

13 Jasper Rootham, of the Bank of England, described the situation in 1950 as: ‘In practice, the President of the Board of Management (Vocke) does all the work and takes all the decisions, while the President of the Board of Directors (Bernard) does not cut so much ice’, in Bank of England, Archives London [hereafter BoE]: Overseas Division [hereafter OV], 34/92, Rootham, , Note, 5 04. 1950.Google Scholar

14 On the role of the Bank of England and the Allied Banking Commission, see Dickhaus, M., ‘Fostering “The Bank that Rules Europe”: the Bank of England, the Allied Banking Commission and the Bank deutscher Länder, 1948–51’, Contemporary European History, 7, 2 (1998), pp. 161–79.CrossRefGoogle Scholar

15 See Allgemeine Genehmigung no. 8 der amerikanischen und britischen Militärregierung zum Gesetz no. 53, 20 Jul. 1948, quoted in Kühne, R., Die Regelungen für den Auβenwirtschaftsverkehr unter der Geltung der besatzungsrechtlichen Devisenbewirtschaftsgesetze, Mai 1945 bis August 1961 (Frankfurt-am-Main, 1984), p. 29.Google Scholar

16 For a considered view of central bank independence which does not narrow (in)dependence to purely legal institutional relations, see Caesar, R., ‘Central banks and governments: issues, traditions, lessons’, Financial History Review, 2 (1995).CrossRefGoogle Scholar For the German case in particular, see Holtfrerich, C.-L., ‘Relations between monetary authorities and governmental institutions. The case of Germany from the 19th century to the present’, in Toniolo, G. (ed.), Central Banks' Independence in Historical Perspective (Berlin, 1988).Google Scholar

17 For the respective negotiations, including some documentary evidence, see Horsefield, J. Keith et al. , The International Monetary Fund 1945–1965. Twenty Years of International Monetary Cooperation (Washington, DC, 1969).Google Scholar See also Bordo, M. D. and Eichengreen, B. (eds), A Retrospective on the Bretton Woods System. Lessons for International Monetary Reform (Chicago, 1993)CrossRefGoogle Scholar; and James, H., International Monetary Cooperation since Bretton Woods (Oxford, 1996).Google Scholar

18 On the Marshall Plan, see Wexler, I., The Marshall Plan Revisited. The Economic Recovery Program in Economic Perspective (Westport, Conn., 1987)Google Scholar; and Hogan, M. J., The Marshall Plan. America, Britain and the Reconstruction of Western Europe (Cambridge, 1987).CrossRefGoogle Scholar

19 For OEEC, see Griffiths, R. T. (ed.), Explorations in OEEC History (Paris, 1997)Google Scholar; and Bührer, W., Westdeutschland in der OEEC: Eingliederung, Krise, Bewährung 1947–1961 (Munich, 1997).CrossRefGoogle Scholar

20 The price index rose from 154.8 (Jun. 1948) to 189.9 (Dec. 1948): see Bank deutscher Länder, Monatsbericht Januar 1949, p. 52.Google Scholar

21 See Bank deutscher Länder, Geschäftsbericht für die Jahre 1948 und 1949, pp. 34f.Google Scholar

22 Deutsche Bundesbank, Archives [hereafter BBK]: B 330/3, VWL/Stat, Zur geld- und kreditpolitischen Gesamtlage, 19 Jul. 1948.

23 See BBK: B 330/2012, Vocke to Erhard, 17 Jan. 1950; and B 330/19, Zentralbankrat, 26/7 Oct. 1949.

24 See BBK: B 330/8698, Verhandlungen über die Errichtung eines europäischen Clearing-Systems, 19 Jul. 1948. For the precise working of the 1st and the 2nd Intra-European Payments Agreements, see Möller, H., ‘Das innereuropäische Verrechnungs- und Zahlungsabkommen’, Europa-Archiv, 4 (1949).Google Scholar

25 See BBK: B 330/3462, Auslandsabteilung, Erläuterung zur Kompensation, 5 Oct. 1949. For the Verwaltung für Wirtschaft, see Abelshauser, W., ‘Der Kleine Marshallplan. Handelsintegration durch innereuropäische Wirtschaftshilfe 1948–1950’, in Berding, H. (ed.), Wirtschaftliche und politische Integration in Europa im 19. und 20. Jahrhundert (Göttingen, 1984).Google Scholar

26 BBK: B 330/3373, Möller/Albrecht, Erste vorläufige Stellungnahme, 21 Dec. 1949. For the ECA proposal, see European Communities, Archives: OEEC-Deposit, Travers Papers, 298, PS/AAP(49)10(Draft), ECA, Proposal for the Establishment of a European Monetary Authority, 5 Jan. 1949. For a detailed account of the negotiations, an overview of the outcome and the precise working of the Union, see Kaplan, and Schleimimger, , European Payments Union, pp. 28f.Google Scholar

27 See BBK: B 330/3373, Wrede, Stellungnahme zur europäischen Clearing-Union, 5 Jan. 1950.

28 See ibid., Siefkes, Notiz für Herrn Dr Wrede, 4 Jan. 1950.

29 See BBK: B 330/3478, Referat Marshallplan, Sitzung des ERP-Arbeitsstabes am 21/2 Feb. 1950.

30 For this crisis see: Ludwig-Erhard-Stiftung, , Die Korea-Krise als ordnungspolitische Herausforderung der deutschen Wirtschaftspolitik. Texte und Dokumente (Stuttgart, 1986)Google Scholar; Geiger, T. and Ross, D. M., ‘Banks, institutional constraints and the limits of central banking: monetary policy in Britain and West Germany, 1950–52’, Business History, 33 (1991)CrossRefGoogle Scholar; Berger, H. and Ritschl, A., ‘Die Rekonstruktion der Arbeitsteilung in Europa. Eine neue Sicht des Marshallplanes in Deutschland’, Vierteljahrshefte für Zeitgeschichte, 43 (1995)Google Scholar; and Hentschel, , ‘Europäische Zahlungsunion’.Google Scholar

31 To be precise, it was not the official recommendation by the experts but the informal urgent advice of Jacobsson, who privately called on the central bank before starting his investigations.

32 Indeed, the German case was later often seen as a valuable lesson which led to the revival of credit policy: see Jacobsson, P., ‘Die Wiederbenutzung der monetären Ausgleichskräfte’, Zeitschrift für das gesamte Kreditwesen, 5 (1952).Google Scholar In the same vein, K. Bernard [President of the Zentralbankrat], on the 3. Kreditpolitische Tagung, see ‘Im Schatten der Devisenzwangswirtschaft’, Frankfurter Allgemeine Zeitung (30 04. 1953), p. 13Google Scholar; and – in retrospect – Emminger, O., D-Mark, Dollar, Währungskrisen. Erinnerungen eines ehemaligen Bnndesbankpräsidenten (Stuttgart, 1986), pp. 63f.Google Scholar

33 At the time Jacobsson considered that Vocke, ‘an honest banker’, preferred deliberalisation while being rather sceptical regarding an additional credit. This judgement needs some critical reappraisal since, when he was facing Jacobsson, Vocke had to assume such a position. Indeed, internal documents clearly disclose that Vocke wanted to maintain liberalisation and strove for a special EPU credit. See Jacobsson, to Auboin, 25 10. 1950Google Scholar, quoted in Jacobsson, E. E., A Life for Sound Money. Per Jacobsson. His Biography (Oxford, 1986), p. 238Google Scholar; and BBK: B 330/3377, Vocke to Erhard, 24 Oct. 1950.

34 BBK: B 330/39, Zentralbankrat, 14/15 Feb. 1951.

35 Erhard, L., Deutschlands Rückkehr zum Weltmarkt (Düsseldorf, 1954), pp. 103f.Google Scholar

36 On British discussions, see Newton, S., Operation ROBOT and the Political Economy of Sterling Convertiblity 1951–1952, European University Institute, Working Paper 86/256 (Florence, 1986)Google Scholar; and Fforde, J., The Bank of England and Public Policy 1941–1958 (Cambridge, 1992), pp. 426f.Google Scholar

37 Bundesarchiv Koblenz [henceforth BAK]: B 102/6428, Elson, Niederschrift über die Ressortbesprechung am 1, 2 Jul. 1952.

38 BAK: B 146/480, Vocke to Blücher, 11 Nov. 1952. It must be borne in mind that, at this point, rumours of an autonomous British declaration of convertibility were spreading. In the situation, Vocke wanted to silence all discussions.

39 See Dickhaus, , Bundesbank, pp. 125f.Google Scholar

40 See Bank deutscher Länder, Statistisches Handbuch der Bank deutscher Länder 1948–1954 (Frankfurt-am-Main, 1955), pp. 256f.Google Scholar

41 The bank disliked above all the idea of maintaining quantitative restrictions and introducing flexible exchange rates.

42 See, for example, BBK: B 330/57, Zentralbankrat, 11 Jan. 1952; and BoE: OV 34/38, Macdonald, to Rootham, , 4 02. 1952.Google Scholar

43 See, for example, BBK: B 330/2021, Vocke to Erhard, 24 Oct. 1953. See also Dickhaus, , Bundesbank, pp. 146f.Google Scholar

44 See BBK: Emminger Papers, Konvertibilität/Abbau der Devisenzwangswirtschaft II 1953; anon [probably Emminger], Konvertierbarkeit der Währungen von Deutschland her gesehen, no date [probably summer 1953].

45 See BBK: B 330/1313, Emminger, Gutachten über die Weiterentwicklung der EZU von Mr Harrod, 12 Aug. 1952; B 330/2012, Vocke to Erhard, 19 03. 1953Google Scholar; B 330/2056, Direktorium, 15 May 1953; and B 330/3379, Vocke, Zur Frage der Konvertibilität. See also Dickhaus, , Bundesbank, pp. 143 f.Google Scholar

46 See BAK: B 136/7864, Kabinettsausschuß, 2 Jul. 1954 and BBK: B 330/2012, Vocke to Erhard, 23 Feb. 1954.Google Scholar

47 For the Brazil case, see BBK: B 330/59f., Zentralbankratsitzungen. For the EPU, see BBK: Emminger Papers, Konvertiblität/Abbau der Devisenbewirtsehaftung 1953Google Scholar; and Emminger, Zum Thema Konvertibilität, 8 Apr. 1954.

48 See ibid., Dollarlücke, Emminger, Dollarproblem, 1 Dec. 1952.

49 Public Record Office, Kew, London [hereafter PRO]: Foreign Office [hereafter FO], 371/111199, UK Delegation, note of a discussion with the German delegation, 21 Apr. 1954; and BoE: OV 47/17, Cobbold, EPU repayment, Basle Conversations, 8–10 May 1954.Google Scholar

50 See BBK: B 330/77, Zentralbankrat, 28 Apr. 1954.

51 For details see EPU, Fourth Annual Report (1953/1954), pp. 95f.Google Scholar

52 The differing opinions within the bank were exposed at the Zentralbankrat's meeting on 16 Jan. 1954: see BBK: B 330/78, Zentralbankrat, 16 Jun. 1954.

53 For Erhard, see PRO: FO 371/111199, Mason to Foreign Office, 27 Apr. 1954. For Adenauer, see BBK: B 330/78, Zentralbankrat, 16. May. 1954. In summer 1954 the ratification of the European Defence Community encountered considerable difficulties in France and, therefore, Adenauer spoke of the complete failure of the ‘rapprochement français-allemande’.

54 See BBK: B 330/2032, von der Lippe to Vocke, 1 Jul. 1954.

55 See BBK: B 330/78, Zentralbankrat, 16, 30 Jun. 1954; and B 330/3171, Emminger, Grundzüge der Vereinbarungen für die Verlängerung der EZU, 28 Jun. 1954.

56 It is true that the Zentralbankrat stated that the respective British announcement ‘overshadowed’ the annual IMF meeting. Yet a comparision of this with other evidence makes clear that this was only lip-service: see BBK: B 330/80, Zentralbankrat, 20 Oct. 1954; B 330/3380, Emminger, Vermerk, 29 Oct. 1954; B 330/1314, 6a/601, Entwurf einer Stellungnahme, 2 Nov. 1954; and Emminger Papers, Vorträge, Emminger, Auf dem Weg zur Konvertibilität, Aug. 1954.

57 Milward, A. S., ‘The European monetary agreement’, in Trausch, G. (ed.), Die Europäische Integration vom Schuman-Plan bis zu den Verträgen von Rom. Pläne und Initiativen, Enttäuschungen und Miβerfolge (Baden-Baden, 1993), p. 120.Google Scholar

58 BBK: B 330/1273, Emminger, Vermerk, 10 Mar. 1955.

59 See ibid., B 330/3314, Bank deutscher Länder, Vermerk betreffend Aufbau des Europäischen Fonds, 21 Apr. 1955; and B 330/1310 Emminger, Vermerk zu Beriecht des EZU-Direktoriums, 30 Apr. 1955.

60 See BBK: B 330/2020, Emminger to Vocke, 21 Jun. 1955; B 330/87, Zentralbankrat, 3 Aug. 1955; B 330/86, Zentralbankrat, 22/3 Jun. 1955. Indeed, EMA, introduced in 1959, proved to be of little importance.

61 See Kaplan, and Schleiminger, , European Payments Union, pp. 231f.Google Scholar

62 See BBK: B 330/1314, IV, Vermerk, 31 May 1957. See also Dickhaus, , Bundesbank, pp. 208f.Google Scholar

63 First, the bank assured the United Kindom that it would, without any doubt, participate in such a move. Second, it provided swap facilities to France in order to assure French participation. See ibid., pp. 239f.

64 As Emminger noted, the tone in EPU was quite unpleasant during this period, see BAK: B 102/25878, Steffe, Ergebnisbericht über die Sitzung der Ministerstellvertreter, 24 Jun. 1957; B 330/103, Emminger, Bericht über die Sitzung des Ministerstellvertreterausschusses am 17/18 Jun. 1957.

65 This can be seen on occasion of the 1957 French crisis: see Dickhaus, , Bundesbank, pp. 2O2f., 220f.Google Scholar; BBK: B 330/134, Zentralbankrat, 2 Oct. 1957; and BoE: OV 34/41, Tomkins, Report on a visit to Germany, 19 Oct. 1956: ‘Dr. Guth of the Bank deutscher Länder said … that at bottom having a big foreign surplus was not nearly so worrying as having a large deficit.’

66 See Emminger, , D-Mark, pp. 78f.Google Scholar; and BBK: B 330/2047, Tepe to Vocke, 21 May 1957.

67 See ibid., B 330/133, Zentralbankrat, 21/2 Aug. 1957; and Dickhaus, , Bundesbank, pp. 211f.Google Scholar

68 For details, see ibid., pp. 218f.

69 See, as an example, Könneker, W., ‘Vom Zentralbanksystem zur Deutschen Bundesbank’, Zeitschrift für das Gesamte Kreditwesen, 10 (1957), pp. 796f.Google Scholar

70 As an example, see Hentschel, ‘Europäische Zahlungsunion’.

71 As one recent example, see Caesar, , ‘Central banks’, p. 135.Google Scholar

72 See, for example, Emminger, , D-Mark, pp. 68f.Google Scholar

73 For an account of the bank facing a different framework of European cooperation – the European Economic Community – see Dickhaus, M., ‘Facing the Common Market: the German central bank and the establishment of the EEC, 1955–1958’, Journal of European Integration History, 2 (1996).Google Scholar