Information sheet 1
1923 - The “Not So Golden Years”
Recap
By 1923 the Weimar Republic was facing a series of crises.
The Treaty of Versailles (1919) stated that the German government had to pay reparations (compensation for the damage caused during the First World War). The reparations bill was set at £6,600 million. The Weimar Republic found it extremely difficult to keep up with payments to the Allies as Germany was experiencing inflation and the value of the mark was declining rapidly. As the Republic could not keep up with reparation payments to the Allies, French and Belgian troops marched into and occupied a heavily industrialised part of Germany - the Ruhr - in January 1923. They seized raw materials, such as coal, as payment.
The Weimar Republic could do little to stop the occupation of the Ruhr as Germany was a defeated power that was struggling to bring stability and maintain order amongst its own citizens. To add to these problems the German army had been drastically reduced after the First World War and the occupation of the Ruhr was seen by the Allies as being legal under the terms of the Treaty of Versailles, which the Weimar Government had agreed to and signed in 1919.
German workers in the Ruhr responded to the occupation in the only way that they thought possible: by following a policy of passive resistance. They refused to work for, or communicate with, the French and Belgian occupiers. This caused further problems for the Weimar Government as they now lost the raw materials and goods that the Ruhr usually produced. The government felt that the only way that they could pay for passive resistance and the lack of goods being produced was to print more money to cover costs.
The printing of more money did not help the situation, however. Inflation had been occurring in Germany for many years, but now the situation spiralled out of control. By printing money that it should not have had, the government caused the value of money to fall drastically and the price of goods to rise at an alarming rate. This is called hyperinflation. As a result of hyperinflation, money became virtually worthless as 1923 progressed. Many people lost their life savings and pensions. At the height of the crisis the cost of goods was going up weekly, then hourly, then by the minute. More money was printed to enable people to meet the rising costs, but this only made the situation worse and the value of money fell even further.
The middle classes were worst affected by the crisis as savings and businesses were destroyed. The poorer classes were badly affected too, but they had less to lose. Wages and unemployment benefit actually rose as hyperinflation took hold, although the amounts never quite matched the inflation rates. Some people even found that debts had been wiped out and that they could barter for goods that they needed. The rich were also generally less affected than the middle classes as they had investments abroad, owned land and had valuables that provided at least some form of security.
In September the Chancellor of Germany, Gustav Stresemann, made a decision to ask the workers in the Ruhr to call off passive resistance. This angered many Germans who believed that he had given in to the Allies and betrayed the German people. The policy did however help to improve the economic situation within Germany, together with the introduction of a temporary currency, the Rentenmark. Worthless banknotes were recalled and destroyed, helping to control the amount of currency in circulation. This in turn reduced inflation and helped to stabilise the economy. In 1924 a new, permanent currency was introduced – the Reichsmark.
On 9 November 1923, when hyperinflation was at its height, Adolf Hitler’s Nazi Party attempted to stage a revolution in Munich. They hoped that the dissatisfaction with the Government’s handling of economic crisis would aid their cause. In order to gain initial support Hitler and 600 Stormtroopers marched to a Beer Hall in Bavaria where Gustav Kahr, head of the Bavarian government, was addressing a group of businessmen. Kahr headed a right wing government and Hitler was sure that he would support his attempted revolution. Kahr did not seem to be persuaded by Hitler’s argument for revolution however, and upon leaving the Beer Hall he, or his followers, alerted the authorities. The police and army in Bavaria were ordered to stop Hitler entering Munich, which they did. Sixteen Nazis were killed and Hitler was arrested and sent to prison.
The attempted takeover (Putsch) by Hitler illustrates the hatred that some extremist parties held for the Weimar Government and its policies. And, although the putsch was stopped it illustrates the Weimar Republic’s potential weaknesses at this time.
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