Tonight we turn to another allied occupation note issued in Germany in the aftermath of the collapse of the Nazi regime, this time the 50 pfennig or 1/2 mark note:As with the one reichsmark note we looked at here, the reverse of the note has an elaborate ‘M’ logo rendered in brown ink:The control of exchange rates and currency was tightly regulated by the allied authorities in an attempt to prevent inflation in Europe and to prevent allied soldiers from committing fraud by receiving their pay in one currency, then converting it into another at a favourable rate on the black market before paying it back into their accounts for a substantial profit.
Soldiers were paid part of their wage in local currency, such as military issue marks, in order that they can spend this on things they wish to purchase locally. If the soldier was to take the surplus and purchase a savings deposit or a government savings bond this is legal as the money has been given to him in lieu of sterling and is legally his. If however he were to use his marks to purchase items at the NAAFI, then sell these to the German civilian population for a profit before paying the reichsmarks he received from the transaction back into his saving account to claim later in pounds sterling then he has committed an act of fraud.
This abuse of local currencies was even more obvious in the Middle East where American troops could buy a gold sovereign in Cairo for $20, the sell the same coin Naples for 6000 lire which would then be exchanged back into dollars for $60. The armies of all the allied nations tried to stamp out this currency abuse as it fuelled inflation as well as supporting the criminal and black markets in occupied Europe, however these sort of loose practices were hard to spot and most soldiers did not see that they were doing anything wrong by taking advantage of this loophole. Even today the actual extent of this currency abuse is unclear as its impact on the fragile economies of the continent.