The East German mark (M) was officially valued by the East German government at parity with the West German mark (DM). However, because it was not readily convertible and because the GDR’s export market was restricted, it was practically worthless outside East Germany. On the black market the exchange rate was about 5 to 10 M for 1 DM, depending on how eager the exchange partner was to acquire “hard currency.” In the 1970s and 1980s, one could easily visit foreign currency exchange offices in West Berlin or Vienna and purchase East German banknotes at the rate of approximately 8 M (East) for 1 DM (West). However, the GDR forbade the import or export of GDR currency into or out of the GDR, in order to support their artificially high exchange rates for persons with hard currency, such as Western tourists. Penalties for violating this law ranged from confiscation of smuggled currency to imprisonment. The East German mark could not be spent in Intershops to acquire Western or luxury consumer goods; only hard currencies such as West German marks and US dollars were accepted. The only legal ways for East Germans to acquire hard currency were as gifts from relatives living in the West or from wages earned for work in Western countries.
In the summer of 1975, before travelling to East Berlin to begin work on a project that would become the three-volume book, DDR-Literatur im Tauwetter(GDR Literature During the Thaw), I purchased several hundred East German marks at the Creditanstalt bank in Vienna. The exchange rate for this transaction was approximately 8 M for 1 DM. Using a custom-made money belt, I carried a good number of one hundred mark bills into East Germany on my person. Once in East Berlin, I left them with an East German friend I visited frequently for safe keeping. If I needed money, I would stop by my friend’s apartment and withdraw some bills from the envelope marked “ZIPSER”. Hence, I did not have to exchange a significant amount of dollars or DM at an unfavorable rate. I only had to exchange the minimum required amount of 20 DM per day each time I entered the GDR. When I returned to East Berlin as an IREX scholar in the fall of 1977, I did the same thing. The additional money enabled me frequently to invite persons to dine with me as my guests at really good restaurants where I could pay with East German marks. Since I disliked (and still dislike) dining by myself, the extra cash made my stays in the GDR much more pleasant and interesting socially.
In retrospect, violating the GDR currency law was a reckless thing for me to do. From my two trips to that country in 1969 and 1973, I knew only too well that one should always play by their rules to avoid getting into trouble. But I took a chance and, as with the tape-recorded interviews with East German writers that I smuggled into West Berlin, I was fortunate not to get caught.