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.

Tenenbaum and his family returned from Berlin to Washington DC in September 1948. In October, he started working for the European Recovery Administration (ECA). His friend Charles P. Kindleberger had been the head of the German desk within the State Department to which ECA was attached. But Kindleberger had just left to assume his professorship of economics at MIT. At ECA Tenenbaum was employed as “Assistant Chief (Finance) of the European Trade Policy Branch,” which was part of the Fiscal and Trade Policy Division, of which he finally became Director. He mainly worked on plans for the founding of the European Payments Union in 1950 and on European trade liberalization and market integration. For almost a year, 1950–51, he worked for the IMF on Multiple Currency Practices in the Exchange Restrictions Department. In May 1951, he went back to ECA, which a few months later merged into the MSA. Here he worked on Greek fiscal and currency problems as well as on plans for a currency reform, hopefully as successful in stopping inflation as the West German one. But Greece, in contrast to the German situation in 1948, had its own government and strong interest groups. Therefore, this one of Tenenbaum’s missions failed. This chapter contains reliable annual-income data for his jobs in Berlin and in Washington DC.

I explain my main reasons for embarking on my book project. As always in research development, it’s about questioning established contentions, myths, or assertions, in this case that Ludwig Erhard was the father of the West German currency reform. The economist Charles P. Kindleberger, an OSS colleague and friend of Tenenbaum, motivated me in the late 1990s to embark on my research project. As Kindleberger and I were also friends from my year at Harvard University in 1975–76 until his death in 2003, I felt a special obligation to take Tenenbaum’s life and his most successful currency reform as the most important turning point in German economic history into the focus of my research. Tenenbaum was Jewish. The stealing of his merit by Ludwig Erhard was – in my view – an expression of postwar German antisemitism. I also make my readers aware that I not only present my research results, but also the often-adventurous ways I obtained them.

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.

Here I concisely summarize Tenenbaum’s currency-reform activities in West Germany. I pick up the question what role the Reich Group Industry, managed by Ludwig Erhard’s brother-in-law, who in 1943 commissioned Ludwig Erhard’s study "War Financing and Debt Consolidation," had played in Erhard’s second turncoat behavior up to his unsolicited application for commissions by the US Occupation Power. I praise General Lucius D. Clay’s shrewdness in using Erhard with his free market rhetoric as a pawn in the struggle to keep socialism and communism in West Germany at bay. I advance a thesis why Erhard appropriated Tenenbaum’s merit. In the first two postwar decades, it seems to have been mentally impossible for the people of defeated Germany – still infected by Nazi antisemitism - to recognize and appreciate the fact that the basis of West Germany’s resurgence, the currency reform of 1948, was owed to Jewish masterminds. I conclude with a comparison of Tenenbaum’s and Erhard’s characters.

After his return to Washington DC from his MSA mission to Athens (April 1952 to June 1953), Tenenbaum, in 1953, founded the Edward A. Tenenbaum Company for financial consulting in Washington DC. In February 1954, he announced to the press the formation of a partnership named Continental-Allied Company, Inc. with his former immediate boss in OMGUS Berlin, General Lucius D. Clay’s Financial Adviser Jack Bennett. The company’s purpose was described: “it will accept commissions for international and United States investments, exports and imports, consultation and advice in financial, economic and trade matters, as well as public relations.” The company mainly produced reports on financial and economic problems of developing countries, either commissioned by their governments or by the World Bank. In 1969, Tenenbaum changed focus. Rather than in financial consulting, he became more interested in sharing with his wife a greenhouse business on their own large property in rural Herndon VA, where the family had lived since 1949. By 1956, four kids had been born. The youngest, Charlie, was struck by a car in March 1969 in Herndon VA and was immediately dead. A second tragedy hit the family when Edward Tenenbaum was killed in a car crash at the age of 53.