The Study Notes on German History from 1918-1929

The Ruhr Crisis and Hyperinflation: 1918 – 1923

  • Causes of the Crisis

    • German government was bankrupt due to extensive depletion of gold reserves spent during World War I.

    • Treaty of Versailles enforced reparations that were unsustainable, as Germany was deprived of resource-rich territories such as the coalfields in Silesia.

    • By 1923, Germany was unable to meet reparations obligations.

  • Events Leading to the Crisis

    • In retaliation for Germany's failure to repay reparations, French and Belgian forces occupied the Ruhr region with 750,000 troops.

    • The occupation involved confiscation of raw materials, manufactured goods, and industrial machinery.

    • The German government encouraged passive resistance among workers, leading to widespread strikes.

    • The Ruhr was critical as it produced 80% of Germany's coal and iron, crippling the industrial output.

  • Consequences of the Crisis

    • The occupation led to an escalation in Germany’s debts and unemployment, alongside a severe shortage of goods, triggering inflation.

    • The government responded by printing money to cover debts, utilizing over 300 paper mills and 2000 printing shops in 1923.

    • This action intensified inflation, spiraling into hyperinflation, where the cost of bread rose from 1 mark in 1919 to 100,000 marks in 1923.

    • Economic improvement began only when Gustav Stresemann took office in September 1923, who subsequently canceled the old currency and issued the Rentenmark in November, stabilizing the economy.

  • Benefits and Costs

    • Benefits: Farmers benefited from rising food prices, and some companies could pay off debts as the value of these loans diminished.

    • Costs: The hyperinflation devastated savings; only those with fixed-income savings, policies, and pensions faced the greatest losses. Those affected predominantly comprised the middle class.

    • Currency became almost worthless compared to foreign currencies; imports declined significantly, leading to food shortages.

    • People resorted to barter systems and had to carry large quantities of money for basic purchases due to skyrocketing prices.

Sparticist Uprising and Kapp Putsch: 1918-1923

  • Causes of Political Unrest

    • Right-wing parties were resentful towards the 'November Criminals' and the Weimar government, campaigning for the restoration of the Kaiser and stronger army.

    • Left-wing parties, notably the Communists (KPD), aspired for a socialist revolution, advocating for a government led by Soviet councils and the elimination of traditional social structures.

    • The Weimar Government’s unpopularity stemmed from public discontent regarding its perceived failures: signing the Treaty of Versailles, unemployment, and inflation.

    • A proliferation of private armies among political parties heightened political violence, evidenced by 376 political murders between 1919-22, mainly targeting leftists and moderate politicians.

  • Spartacist Uprising

    • On January 6, 1919, approximately 100,000 communists staged protests in Berlin, seizing control of various strategic buildings.

    • Led by the Spartacist League, including prominent figures Karl Liebknecht and Rosa Luxemburg, they aimed for a revolutionary takeover.

    • The government, under Chancellor Ebert and Defense Minister Noske, mobilized the Freikorps (250,000 demobilized soldiers) to suppress the uprising.

    • Thousands of communists were arrested or killed; the immediate threat was neutralized with the murder of Liebknecht and Luxemburg on January 15.

  • Kapp Putsch

    • Occurred in March 1920, orchestrated by Freikorps and military affiliates of Dr. Wolfgang Kapp, aiming to dismantle the Weimar Republic and restore the Kaiser.

    • On March 12, Kapp’s forces seized the government district in Berlin.

    • Ebert's government, unable to maintain order, fled to Dresden and called for a general strike, resulting in up to 12 million workers refusing to cooperate.

    • Essential services such as gas, electricity, and transport in Berlin came to a halt, compelling Kapp to flee to Sweden after recognizing his inability to govern.

  • Consequences

    • The inability of the government to assert authority weakened its legitimacy, causing a decline in popularity reflected in the June 1920 elections, where the SPD's seats were reduced by more than half.

    • The uprisings showcased government vulnerability, emboldening extremist factions and instigating further unrest, contributing to events like the Munich Putsch in 1923.

The Stresemann Era: 1924-1929

  • Overview of Economic Policies

    • The Rentenmark (October 1923):

    • Introduced as a temporary currency to counter hyperinflation introduced during the Ruhr Crisis.

    • Assured public confidence as its value was backed by government promises to exchange for shares in land or industry.

    • In August 1924, it was succeeded by the more permanent Reichsmark alongside the establishment of the Reichsbank to govern currency.

    • The introduction of the new currency restored confidence amongst the public, leading to increased banking deposits from 900 million marks in early 1924 to 4.9 billion marks by the end of 1926.

  • The Dawes Plan (April 1924):

    • Aimed to resolve the crisis surrounding reparations that spiraled into chaos during the Ruhr occupation.

    • Agreed terms:

    1. Reduce annual reparations to a manageable level.

    2. The USA provided $800 million in loans to stimulate the German economy.

    3. The withdrawal of Allied troops from the Ruhr following the resumption of reparations.

    • Short-Term Benefits:

    • Triggered economic recovery and increased investment.

    • Coal production rose from 275 million tons in 1924 to 350 million tons in 1929.

    • Doubling of manufactured goods sales (1923-1929) and decrease in unemployment to its lowest in a decade by 1928.

    • Long-Term Issues:

    • Created dependency on American loans and economy, leaving Germany vulnerable during the 1929 Great Depression.

  • The Locarno Pact (October 1925):

    • Germany’s need for improved international relations led to the signing of the Locarno agreements with Britain, France, Italy, and Belgium.

    • Agreed to respect new borders established by the Treaty of Versailles in exchange for the withdrawal of Allied troops from the Rhineland and discussion about joining the League of Nations.

    • Boosted Germany’s standing as an equal in international relations, fostering confidence and foreign investments.

  • Joining the League of Nations (1926):

    • Following the Locarno Pact, Germany secured acceptance into the League of Nations and gained a position on its Council, which symbolized renewed trust and cooperation from the Allies.

  • Kellogg-Briand Pact (August 1928):

    • Signed by Germany, among 65 nations, to reject war as a policy instrument.

    • Indicated Germany’s intent on being a peaceful nation, garnering respect in international forums, and facilitated further economic agreements such as the Young Plan.

  • The Young Plan (August 1929):

    • Designed to adjust reparations, reducing total payments from £6.6 billion to £2 billion with a 59-year repayment plan.

    • Aimed at buttressing the Weimar Republic through lessened financial burdens from reparations, but faced criticism from extremists like Adolf Hitler who argued against passing debt onto future generations.

Creation of the Nazi Party: 1919-1923

  • Background

    • Adolf Hitler served in WWI and was awarded the Iron Cross. Post-war, he became involved in political surveillance for the army, particularly the German Workers' Party (DAP), founded by Anton Drexler on January 9, 1919.

    • Hitler joined the DAP in September 1919, sharing their grievances against Jews, Weimar politicians, and communists for the nation's woes.

  • Evolution of the Party

    • Became Drexler’s right-hand man by 1920; revealed the DAP’s 25-Point Programme advocating for:

    1. Abrogating the Treaty of Versailles.

    2. Expansion of German borders (lebensraum).

    3. Revocation of Jewish citizenship.

    • Membership surged to approximately 1,100 by June 1920, and a name change to the National Socialist German Workers' Party (NSDAP or Nazi Party) was suggested by Hitler in August 1920.

    • The party adopted the swastika and held its first significant newspaper publication, after amassing 180,000 marks for the Volkischer Beobachter.

    • Key figures associated: Ernst Rohm (SA commander), Hermann Goering (Air Force hero), Rudolf Hess (deputy), and Julius Streicher (founder of