August 24, 1946 – Circular #11

Circular Letter #11

Bachstelzenweg 11, Dahlem, Berlin, Germany.
24 August 1946

Dear Friends:

Another dismal, rainy Sunday – it seems as though we had had more than our share of these lately – and I haven’t poked my head outside all day. John resolutely went to eleven o’clock mass this morning and is now taking a nap, a very sensible thing to do in this sort of weather, after a two hour bull session with me on cameras and other things photographic. It reminded me of the similar sessions Mel Scheidt and I used to have at Ashton under similar circumstances, although our subject then was boats. Now I have just about time to get this letter written before dinner. The rain started early last evening, just as I was getting ready to go to a big party which the Vadneys threw – and with great success – to introduce Edith to American Berlin society. You would have been amused to have seen me in the bath room while dressing, shaving with one hand and twirling the rotor in my developing tank at the same time – a roll of films which I had shot during the afternoon with my new camera and was anxious to see before I left.

Things have been quiet since I last wrote with some entertainment but most of the evenings spent at home in John’s congenial company. I had one formal dinner party here for eight with more joining the group after dinner. It was in honor of Peg Sarle and Edith Vadney. Right now the Sarles are on the Denmark tour for a couple of weeks. The weather stays quite cool and, generally, pleasant. Truly Berlin summers are prima, as the Germans say. Yesterday I had an interesting and profitable experience in which you might be interested, but which should have an explanatory preface. I hope it doesn’t bore you.

The reestablishment of the completely broken down national economy which we have here in Germany creates many problems completely foreign to a soundly developed economy such as exists in the States. Until one is faced with the conditions which have to be corrected he cannot fully understand this, nor, when he meets them, can be unerringly pull the correct answers out of the ambient atmosphere. And, because the situation here is so fantastic and the yardstick of values is so cockeyed it is impossible to always come up with the correct answer the first time. The only recourse is trial and error for often no precedent exists which can be used as a pattern. Such a situation exists here in the exchange of commodities.

In America you have a black market, but the situation which it creates and the underlying causes are quite different from that which exists here. Also it requires a different solution. True, there are certain similarities, particularly the hoarding phase, but in America it supplements the legitimate market. One can avoid it completely and still get what he needs and generally what he wants. Here it is the sole medium for securing a great number of articles, luxury items, if you will, insofar as the Americans are concerned, but for the Germans it is often close to a matter of life and death for it practically monopolizes the distribution of the basic necessities of life, – food, clothing, soap, and such items, without which they cannot exist.

The natural result is that inflation reaches an exaggerated level. If you add two or three cyphers on to the normal cost price of a commodity and you can readily see that money has little value. Many of the Germans have plenty of money, both Reichsmarks and Allied marks, but if they attempt to use it to purchase their necessities it would soon become exhausted. Even worse off are those who are not so well established financially – and there are plenty of those. So the principle of barter has become the favored method of handling such transactions. Certain items are used for this purpose, but the commonly accepted and most acceptable and desired is cigarettes – preferably American. No one seems to know what becomes of these cigarettes ultimately, whether they are smoked (and that makes pretty expensive smoking), or whether they just wear out and are lost or are remade into other cigarettes or used for pipe tobacco. Some seem to think that the ultimate consumers are the Russians.

And here, a word of explanation may help. Allied marks of uniform design were adopted by the four allies when they came into Germany. England has recently discarded the mark and is now using a form of scrip with the English monetary values as their base, and there is some thought being given by the Americans to adopting the same ruse for beating the black market, not only in commodities but also in money. England, France and the U.S. have printed comparatively little of this “mickey mouse” money but not so the Russians. They had not paid their soldiers for several years, so, when the opportunity came after the invasion, they put the printing presses to work in a big way and turned out tons of the stuff. Practically all of the marks we now have in our pockets is of Russian manufacture, distinguishable only because there is a minus sign before the serial number. The good fighting men were paid eventually in Allied marks, but it cannot be turned into Russian rubles nor can it be spent anywhere but here in Germany. So, with their pockets lined with vast sums of this circumscribed medium of exchange, the Russians proceeded to spend it like drunken sailors, the only alternatives being to throw it away or take it home for wall paper or fuel. They will buy anything and seem to be willing to pay any sort of a price for it, which is one of the basic causes of the inflation. The good old law of supply and demand took hold and the most desirable articles,- cameras, binoculars, watches, and the like, disappeared from the legitimate market entirely and commended the most amazing prices on the black market.

And in the black market money was scorned, cigarettes were and are the medium of exchange. The American G.I. was quick to take advantage of this situation for he had more cigarettes than did anyone else. To-day the British ration is about 140 cigarettes a week – seven cartons, and the French and Russian ration is somewhat less, while we get 12 packs, or 240 cigarettes. But the G.I. game was quickly nipped in the bud, at least legitimately, for it was early ruled that P.X. cigarettes, the kind with the tax free stamp on it, were not to be so traded. There have been a number of cases where Americans have been apprehended in their little game of trading these outlawed fags and very severe penalties have resulted. But the authorities had no control over blue stamp (tax paid) cigarettes which were shipped over to the folks here from the States. Practically everyone, from generals down, have used this method to some degree at least for getting articles which were especially desired, and, while the authorities frowned on the practice, there seemed to be nothing they could do about it. They talked severely about the Trading with the Enemy Act, but that poor act had been interpreted so liberally in some ways that not even the authorities knew just where they could draw the line. And besides, they have not dared to test whether the act, intended for application while hostilities were in progress could be applied a year after the war was over.

Now they have come up with an amazing solution, a trial and error answer, but one which at least tacitly has put the official stamp of approval on blue stamp trading. In both Frankfurt and Berlin they have opened Barter Markets, run by the Military Government authorities, where Americans and Germans can get together and exchange commodities. Inasmuch as P.X. sales cannot be used for exchange the only thing the Americans have and the Germans want is cigarettes. It is said that the Barter Market is the brilliant idea of Mrs. Clay, wife of the Deputy Military Governor, but it is also said that General Clay is way up in the air about it for it knocks into a cocked hat everything he has been doing for the past year to stamp out the practice. Be that as it may, it is my private opinion that one of three things will soon happen. The Barter Market will be ruled out, the ground rules will be drastically changed or else the market will become so glutted with cigarettes that trade will languish. But to-day the Barter Market is one of the most popular topics of discussion in American Berlin. Yesterday I tucked eleven packs of blue stamp cigarettes into my musette bag and, after lunch made a trip to that contraversial center.

The market occupies several adjacent, humble dwellings on a side street a few blocks from OMGUS headquarters and, as you approach the spot you are struck by the activity which radiates around it.. A steady stream of Germans fills the sidewalks, each with rucksack on back or with a suitcase or bundle clutched in his or her hand. As you near the center of operations the street is choked with them, held in long queues by military police, civilian guards or German police. (The civilian guards, by the way, are Germans and DPs, mainly Poles, who work under American authorities. They are armed with American carbines and have authority only over the Germans). The crowds are patiently waiting to get the cherished articles they have brought appraised for sale at the market. Everything which is brought is carefully examined and only those articles which have real value and are in the best of condition are accepted. It is pitiful to see those whose belongings have been rejected, sorrowfully plodding away with them, denied the opportunity to acquire those treasured cigarettes which would have enabled them to buy food or clothing. When an article is accepted a value is given it in barter units and it is placed on display. A unit is considered worth 50 pfennigs (5 cents). Similarly, when an American brings his or her medium of exchange it is appraised and a slip is given to him noting the credit he has in the market. The economies of the situation have resulted in a barter value for the cigarettes of 9 ½ barter units per pack, or 95 units per carton, seemingly high but only the smallest fraction of what the same commodity brings in the black market, and the Germans are willing to have absurdly small values placed on their commodities because they appraise the cigarettes at black market values, for that is where they will use them. There they command 1200 to 1600 marks ($120 to $160) a carton. At first blush it seems as though it makes little or no difference whether two or three zeroes are added to be value of cigarettes, because the commodities for which they are traded are marked up similarly. Actually, however, it makes a lot of difference, for it enormously depreciates the value of the money which some of the people have carried over into this period. Hence, these people are stowing their money away and selling commodities, their household possessions and treasured belongings for cigarettes at trading values. And only those who know the Germans can understand what a wrench that must be for they rate their homes and their Lares and Penates very highly. It must tear their hearts to part with these things – as it would any of us in America if we were in a similar position. But the aftermath of war is as cruel in its way as is war itself and the Germans are learning a lesson which they will not soon forget.

Most of the articles on display at the Barter Market can be classified within a very few categories, – cameras, binoculars, some selected articles of clothing, a few table ornaments and gee-gaws, and such, but most of them are table china and glassware – and mostly beautiful stuff at that. A 125 piece set of lovely Dresden, Bavarian or KPM dinner china may be valued at 500 to 900 barter points, equivalent to 5 to 10 cartons of cigarettes. Beautiful crystal or cut glass, stemware or dishes, can be bought for a song – provided the song is backed up by a few cigarettes. My eleven packs gave me a credit of 104 barter points, and I came away with 18 exquisite stem classes, – 6 liqueur, 6 cocktail and 6 wine, an excellent tripod for my camera and a dozen horn handled fruit knives and forks – of rustproof steel. And I still had 15 barter units left for future use. The whole situation is so fantastic that it can’t be rationalized – nor understood by one who hadn’t seen it. The thing is all wrong, it is difficult for one brought up in a sane economy to justify it, but the fact remains that it gives the German the chance he wants to turn treasured but unnecessary commodities into food and clothing – and it gives the American what he needs or wants. In my case the big need is glassware and china for the billet, for the kindly Russians, of whom forty were at one time billeted in this house, destroyed nearly everything breakable that was lying around loose. If I can bring my perishable purchases home I shall, but if it does not seem feasible, – well, they only cost me a few packs of cigarettes.

Monday evening, 26 August

John and I had a most interesting and delightful time last evening. We attended an informal home concert at the home of a charming German lady about six doors down Bachstelzenweg. The house, half of a semi-detached job, is small but fourteen of us sat around the living room – in the light of half a dozen candles, while an excellent string trio played chamber music in the dining room, which had been stripped of its central table, – Schubert, Mozart, and other loved German composers – but no Mendelsohn, for it seems that, as a Jew, he was banned during the Nazi regime and the Germans have not picked up his works since that time. The fourteen consisted of Mrs. Hoch, our hostess, her perfectly lovely daughter of 18 or 20 and her younger son, another German woman, two Viennese ladies, both adopted British and one the widow of a Briton, a British Major and leftenant, and the rest of us American civilians, male and female. One of the Viennese, lovely in looks and manner, asked me my name (the introductions were a bit casual) and volunteered the information that I reminded her so much of a Mr. Holmes, whom she had known at the University of Vienna. She was completely amazed when I told her I was also a Holmes – but no relation. In addition to the trio one of the Americans, Charlie Sargent, gave some excellent renditions on the piano, light refreshments were served, and we tore ourselves away shortly after midnight. I enjoyed the group enormously and want to see more of all of them. Mrs. Hoch’s husband was killed in the war. I believe meetings like that can do so much to promote understanding.

I could ramble on indefinitely, but think this is probably enough of a dose for one sitting. Best regards to you all. I’m enjoying the letters I get from some of you enormously.

Immer dein,

Dad –