The quantitative performance of the German economy in the postwar years may be measured against three different yardsticks. They are the volume of production of the last prewar year, the first postwar year, and, finally, the first year following monetary stabilization. The first standard of reference, of course, is one of high economic activity reached prior to the conflict; the second, one of very low activity reflecting the disruption of the economy at the end of the war; and the third, an intermediate position reached at the end of the readjustment period.
Emerging from World War II, the economic area of what was to be the Federal Republic undoubtedly faced a far more severe setback of industrial production compared with the last prewar year, than was the case for the Weimar Republic at the end of World War I. The over-all industrial production index for 1946 was 29% of 1938, that for 1919, 42% of 1913.1 (See Table I.) In comparison with the setback in the performance of German industry that occurred at the end of the first war, that at the end of the second was even more severe than these figures show. For industrial production declined during War I, especially in 1914 and 1915, while it rose during War II. In 1917/18, German industrial production was about one-fourth lower than it had____________________