My class was watching "Goodbye Lenin" and there is a scene where the characters attempt to exchange their old Ostmarks for Deutschmarks, yet they are two days late so they are unable.
My teacher then says that even if they had been on time, the cash would have still not been accepted, as banks in East Germany had stopped accepting cash for quite some time. She doesn't remember the reasoning behind it (or even how true it may be).
Did this refusal to take cash happen in socialist Germany? What was the reason behind it?
EDIT: Made the mistake of calling East Germany communist.
Did this refusal to take cash happen in communist Germany?
The GDR was not communist.
What was the reason behind it?
Simple Organization.
Only book money was exchanged, every one having Mark der DDR had to deposit them on their account until 01.07.1990. They were then converted into Deutsche Mark according to fixed rates.
Changing coins and note was never intended, as this was to complex and required some transition period, as seen with the Euro.
As far as I know there were restrictions on cash deposits, but I am not sure when it started (probably around spring 1990?). It's all related to exchange rates. Early 1990 East German banks started to exchange East Mark to West Mark on an official rate of 5 to 1. However on the streets you would get a rate of 8 to 1, personally I even heard of rates of up to 15 to 1. Additionally on the date of the currency union on july 1 1990, savings accounts of east Germans would be converted of a rate of 1 to 1 up to a certain amount (6000 Mark for pensioners, 4000 for adults, 2000 for children up to 14 years). This created a lucrative opportunity - people would get their savings in west marks, exchange it on the black market and then deposit it in the accounts of poorer friends/family. Effectively this means that 400 West Mark would buy you a savings account of 6000 West Mark by july 1990. Some made a killing this way. That's one of the reasons why many of the GDR nomenclatura got pretty rich in the unification process.
It was an insane policy, but politically probably inevitable.
(minor nitpick: East Germany was socialist, not communist)