Ludwig Erhard was a severely injured WW I veteran. I present data on his vita. Erhard’s education ended with a doctorate at the University of Frankfurt/Main with Franz Oppenheimer, the “liberal socialist,” in 1925. After some unsuccessful years in his father’s textile business at his hometown Fürth, he was employed by the Institute for Economic Observation of German Manufactured Goods in 1929 in Nuremberg. In 1943, Erhard founded his own Institute for Industrial Research. I provide evidence that he had twice shown political turncoat behavior: from a liberal in the European sense during the Weimar Republic to Nazi economic-policy doctrines until German military defeat in 1943 became a foregone conclusion, and thereafter to the American conception of market instead of government-controlled economic conditions. I discuss Erhard’s qualifications for public office as well as the strengths and weaknesses of Erhard’s character.

I start with the international political setting after VE-day and the disagreements, also over reparations, that the four Allied Powers ran into after the Potsdam Agreement of August 1945. This stipulated that Germany should be treated as a single economic unit by the Allied Control Council. The Council of Foreign Ministers was established to prepare a peace treaty with Germany. It failed despite its several conferences 1945 to December 1947. For US Military Governor in Berlin, General Lucius D. Clay, Gerhard Colm and Raymond Goldsmith, Jewish economists who had emigrated from Germany 1933/34 to the US, had produced a currency-reform plan already in May 1946. Clay tabled it in the Allied Control Council in September 1946, where it got stuck. These developments progressively increased the danger of a partition of Germany. A separate currency reform would automatically entail political partition. I pinpoint the day the dice were cast in Washington DC 1. on giving up on a currency reform with the Soviets: 11 March 1948, and 2. on printing Deutschmarks in the USA: 13 October 1947. I then deal with Tenenbaum’s leading roles among all Western currency experts and in the top-secret meeting with eleven West German financial experts at Rothwesten. Lastly, I analyze the reform of 20 June 1948, C-day, itself, its consequences, and assessments.