The Coming of the Third Reich, page 15
A law unto itself for most of the time, the army did its best during the 1920s to circumvent the restrictions placed upon it by the Treaty of Versailles. Making common cause behind the scenes with another diminished and resentful Great Power, the Soviet Union, the army leadership arranged for clandestine training sessions in Russia for officers anxious to learn how to use tanks and aeroplanes, and willing to engage in experiments with poison gas.46 Secret arrangements were made to train auxiliary troops, in an attempt to get round the limit of 100,000 imposed by the Treaty on the army’s strength, and the army was constantly eyeing the paramilitaries as a potential military reserve.47 These subterfuges and others, including training with make-believe tanks, made clear that the army had no intention of abiding by the terms of the 1919 Peace Settlement and would break free from it as soon as circumstances allowed. Far from being led exclusively by dyed-in-the-wool Prussian conservatives, these clandestine circumventions of the Treaty were organized above all by modern-minded technicians, impatient with the constraints of democratic politics and international agreements.48 The disloyalty of the army, and the repeated intrigues of its leading officers against civilian governments, boded ill for the Republic’s continued viability in a real crisis.49
If Germany’s first democracy could not expect much support from its military servants, then neither could it hope for much support from its civil servants, whom it likewise inherited from the old German Reich. The civil service was of huge importance because it covered a very wide area of society and included not just officials working in the central administration of the Reich but also all those state employees who had secured the tenure, status and emoluments originally designed for senior administrators. They included officials working for the federated states, for state enterprises like the railways and the postal service, and for state institutions such as universities and schools, so that university professors and high-school teachers fell into this category as well. The numbers of civil servants in this broad sense were enormous. Below this relatively exalted level there were millions more state servants living off salaries or wages paid by state institutions. The German state railway was by far the largest single employer in the Weimar Republic, for instance, with 700,000 people working for it at the end of the 1920s; it was followed by the postal service with 380,000. If family members, dependants and pensioners are added on, about 3 million people relied for their support on the railways alone.50 Altogether, by the end of the 1920s there were 1.6 million civil servants in Germany, about half of whom worked for the state proper, the other half for public utilities such as the railways. With such a large number of state employees, it was clear that the state employment sector was politically extremely diverse, with hundreds of thousands of employees belonging to socialist trade unions, liberal political parties or pressure-groups of widely varying political orientation. A million civil servants belonged to the liberal German Civil Servants’ League in 1919, though 60,000 split off to form a more right-wing group in 1921 and another 350,000 seceded to form a trade union the following year. Civil servants were in no sense, therefore, uniformly hostile to the Republic at the outset, despite their training and socialization in the years of the Wilhelmine Reich.51
As the leading figure in the transitional revolutionary administration, Friedrich Ebert appealed on 9 November 1918 for all civil servants and state employees to continue working in order to avoid anarchy.52 The overwhelming majority stayed on. Civil servants’ career structure and duties were unchanged. The Weimar constitution made them irremovable. However it might have appeared in theory, in practice this step made it virtually impossible to dismiss civil servants, given the extreme difficulty of proving in law that they had violated their oath of allegiance. 53 As an institution that derived from the authoritarian and bureaucratic states of the late eighteenth and early nineteenth centuries, long before the advent of parliaments and political parties, the higher civil service in particular had long been accustomed to regard itself as the true ruling caste, above all in Prussia. Up to 1918, for instance, all government ministers had been civil servants, appointed by the monarch, not by the Reichstag or the legislative assemblies of the federated states. In some Reich ministries, where there was a rapid turnover of ministers under the Republic, the top civil servant could wield enormous power, as with Curt Joel in the Ministry of Justice, who served virtually throughout the Republic, while no fewer than seventeen Justice Ministers came and went, before he finally became Minister himself in 1930. For such men, administrative continuity was the supreme dictate of duty, overriding all political considerations. Whatever they might have thought privately of the Kapp putschists in March 1920, senior civil servants in Berlin, including financial officials, thus carried on with their work in defiance of the putschists’ orders for them to stand down.54
The neutrality of civil servants on this occasion owed a good deal to their characteristically punctilious insistence on the duties imposed by their oath of allegiance. Later on, in 1922, the government introduced a new law designed to bind civil servants even more closely to the Republic and impose disciplinary sanctions on those who consorted with its enemies. But this measure was relatively toothless. Only in Prussia was there a serious effort, led by Carl Severing and Albert Grzesinski, successive Social Democratic Ministers of the Interior, to replace old Imperial administrators, above all in the provinces, with Social Democrats and others loyal to the Republic.55 Nevertheless, even the Prussian efforts at creating a civil service loyal to the principles of democracy as well as imbued with a sense of duty in serving the government of the day proved insufficient in the end. Because Severing and Grzesinski thought that the parties should be represented in the higher civil service roughly in proportion to their place in the Prussian coalition cabinets, this meant that a good number of important posts were held by men from parties such as the Centre Party, the People’s Party and to a degree the State Party, whose allegiance to the Republic was rapidly becoming more tenuous from the end of the 1920s onwards. In the rest of Germany, including the level of the Reich civil service, even this degree of reform was barely even attempted, let alone achieved, and the civil service was far more conservative, even in parts downright hostile to the Republic.56
The problem, however, was not so much that the higher civil service was actively helping to undermine Weimar; rather, it was that the Republic did too little to ensure that civil servants at whatever level were actively committed to the democratic political order and would resist any attempt to overthrow it. And those civil servants who were actively hostile to the Republic - probably a minority, considered overall—were able to survive with relative impunity. Thus, for instance, one senior Prussian civil servant, born in 1885, and a member of the Nationalist Party after 1918, founded a variety of fringe groups for civil servants and others, aiming explicitly to combat ‘the Reichstag, the red headquarters’, to frustrate the policies of the ‘treasonous and godless Social Democrats’, to oppose the ‘imperialist world power’ of the Catholic Church and finally to fight against ‘all Jews’. His antisemitism, fairly latent before 1918, became explicit after the Revolution. Thereafter, he later recalled, ‘whenever a Jew was carrying on impertinently on the elevated [railway] or on the train and would not accept my scolding without further impertinence, I threatened to throw him off the moving train ... if he did not shut up immediately’. On one occasion he threatened ‘Marxist’ workers with a gun. His was an obviously extreme example of a civil servant opposed to the Republic. Yet he was not dismissed, only disciplined twice and denied promotion, despite being tried on one occasion for disturbing the peace. ‘I always’, he wrote, ‘took it to be a weakness of my political enemies in the civil service that they let me get off so easily every time.’ The worst that happened to him under the Republic was a blockage of his career prospects.57
There can be little doubt that, even in the Republican bastion of Prussia, the vast majority of civil servants had little genuine loyalty to the constitution to which they had sworn their allegiance. Should the Republic be threatened with destruction, very few of them indeed would even think of coming to its aid. Devotion to duty kept them working when the state was challenged, as in the Kapp putsch of 1920, but it would also keep them working when the state was overthrown. Here was another central institution whose loyalty was to an abstract concept of the Reich rather than to the concrete principles of democracy. In this as in other respects, Weimar was weak in political legitimacy from the start.58 It was beset by insurmountable problems of political violence, assassination and irreconcilable conflicts about its right to exist. It was unloved and undefended by its servants in the army and bureaucracy. It was blamed by many for the national humiliation of the Treaty of Versailles. And it also had to face enormous economic problems, beginning with the massive monetary inflation that made life so difficult for so many in the years when it was trying to establish itself.
THE GREAT INFLATION
I
Even the most diehard reactionary might eventually have learned to tolerate the Republic if it had provided a reasonable level of economic stability and a decent, solid income for its citizens. But from the start it was beset by economic failures of a dimension unprecedented in German history. As soon as the First World War had begun, the Reich government had started to borrow money to pay for it. From 1916 onwards, expenditure had far exceeded the revenue that the government had been able to raise from loans or indeed from any other source. Naturally enough, it had expected to recoup its losses by annexing rich industrial areas to the west and east, by forcing the defeated nations to pay large financial reparations, and by imposing a new German-dominated economic order on a conquered Europe.59 But these expectations were dashed. In the event, it was Germany that was the defeated nation and Germany that had to foot the bill. This made things far worse than before. The government had been printing money without the economic resources to back it. Before the war, the dollar had been worth just over 4 paper marks on the exchange in Berlin. By December 1918 it took nearly twice as many marks to buy a US dollar. The rate continued to decline to just over 12 marks to the dollar in April 1919 and 47 by the end of the year.60
Successive governments of the Weimar Republic were caught in a political trap that was at least partly of their own making. The need to export government revenue to other countries in the form of reparations payments meant an additional drain on resources at a time when wartime debts still had to be paid and Germany’s economic resources and domestic market had shrunk. Heavily populated industrial areas in Lorraine and Silesia had been removed under the terms of the Treaty. Industrial production was only 42 per cent in 1919 of what it had been in 1913, and the country was producing less than half the grain it had produced before the war. Massive expenditure was required to fund the adjustment to a peacetime economy, and to provide welfare measures for ex-soldiers seeking jobs, or unable to find them because of war disability. Yet if any government sought to bridge the gap by raising taxes by any more than a small amount, it would immediately be accused by its enemies on the nationalist right of imposing taxes in order to meet Allied reparations bills. It seemed politically more astute to most governments to tell foreign powers instead that Germany’s currency problems would only be solved by the abolition of reparations, or at least by rescheduling them to what would be a more acceptable level. The energy and aggressiveness with which various German governments pursued this dangerous policy varied, and during 1920 and 1921 the slide of the mark against the dollar was arrested more than once. Still, by November 1921 Germans who wanted to buy a US dollar had to pay 263 marks for it, and by July 1922 the cost had almost doubled again, to 493 marks.61
Inflation on this scale had different effects on different players in the economic game. The ability to borrow money to purchase goods, equipment, industrial plant and the like, and pay it back when it was worth a fraction of its original value, helped stimulate industrial recovery after the war. In the period up to the middle of 1922, economic growth rates in Germany were high, and unemployment low. Without this background of virtually full employment, a general strike, such as the one which frustrated the Kapp putsch in March 1920, would have been far more difficult to mount. Real taxation rates were also low enough to stimulate demand. The German economy managed the transition to a peacetime basis more effectively than some European economies where inflation was less marked.62
But the recovery was built on sand. For, despite a few temporary respites in the process, the inflation proved to be unstoppable. It took over 1,000 marks to buy a US dollar in August 1922, 3,000 in October, and 7,000 in December. The process of monetary depreciation was taking on a life of its own. The political consequences were catastrophic. The German government could not make the required reparations payments any longer, since they had to be tendered in gold, whose price on the international market it could no longer afford to meet. Moreover, by the end of 1922 it had fallen seriously behind in its deliveries of coal to the French, another part of the reparations programme. So French and Belgian troops occupied Germany’s leading industrial district, the Ruhr, in January 1923 in order to seize the missing coal and force the Germans to fulfil their obligations under the Treaty. The government in Berlin almost immediately proclaimed a policy of passive resistance and non-cooperation with the French in order to deny the occupiers facilities to garner the fruits of Ruhr industrial production for themselves. The struggle was only called off towards the end of September. Passive resistance made the economic situation worse. Anyone who wanted to buy a dollar in January 1923 had to pay over 17,000 marks for it; in April 24,000; in July 353,000. This was hyperinflation on a truly staggering scale, and the dollar rate in marks for the rest of the year is best expressed in numbers that soon became longer than anything found even in a telephone directory: 4,621,000 in August; 98,860,000 in September; 25,260,000,000 in October; 2,193,600,000,000 in November ; 4,200,000,000,000 in December.63 Newspapers soon began informing their readers about the nomenclature of big numbers, which varied confusingly from one country to another. The French, one columnist noted, called a million million a trillion, while ‘for us on the other hand, a trillion is equal to a million billion (1,000,000,000,000,000,000), and we must only hope to God that we don’t get into these or even higher numerical values with our everyday currency, merely because of the overcrowding of the lunatic asylums that it would cause.’64
At its height, the hyperinflation seemed terrifying. Money lost its meaning almost completely. Printing presses were unable to keep up with the need to produce banknotes of ever more astronomical denominations, and municipalities began to print their own emergency money, using one side of the paper only. Employees collected their wages in shopping baskets or wheelbarrows, so numerous were the banknotes needed to make up their pay packets; and immediately rushed to the shops to buy supplies before the continuing plunge in the value of money put them out of reach. The school student Raimund Pretzel later remembered how at the end of every month his father, a senior civil servant, would collect his salary, rush off to buy a season ticket for the railway so that he could get to work for the next month, send off cheques for regular outgoings, take the entire family for a haircut, then hand over what was left to his wife, who would go with the children to the local wholesale market and buy heaps of non-perishable foodstuffs off which they had to live until the next pay-packet came in. For the rest of the month the family had no money at all. Letters had to be mailed with the latest denomination banknotes stapled to the envelope, since postage stamps of the right value could not be printed fast enough to keep pace with the price rise. The German correspondent of the British Daily Mail reported on 29 July 1923: ‘In the shops the prices are typewritten and posted hourly. For instance, a gramophone at 10 a.m. was 5,000,000 marks but at 3 p.m. it was 12,000,000 marks. A copy of the Daily Mail purchased on the street yesterday cost 35,000 marks but today it cost 60,000 marks.’65
The most dramatic and serious effects were on the price of food. A woman sitting down in a café might order a cup of coffee for 5,000 marks and be asked to give the waiter 8,000 for it when she got up to pay an hour later. A kilo of rye bread, that staple of the German daily diet, cost 163 marks on 3 January 1923, more than ten times that amount in July, 9 million marks on I October, 78 billion marks on 5 November and 233 billion marks a fortnight later, on 19 November.66 At the height of the hyperinflation, over 90 per cent of the expenditure of an average family went on food.67 Families on fixed incomes started selling their possessions so that they could have something to eat. Shops began hoarding food in anticipation of immediate price rises.68 Unable to afford the most basic necessities, crowds began to riot and to loot food shops. Gunfights broke out between gangs of miners, who sallied forth into the countryside to strip the fields bare, and the farmers who were trying to protect their crops and were at the same time unwilling to sell them for worthless banknotes. The collapse of the mark made it difficult if not impossible to import supplies from abroad. The threat of starvation, particularly in the area occupied by the French, where passive resistance was crippling the transport networks, was very real.69 Malnutrition caused an immediate rise in deaths from tuberculosis.70
Not untypical was the experience of the academic Victor Klemperer, whose diaries offer a personal insight into the larger sweep of German history in this period. Living very much from hand to mouth on temporary teaching contracts, Klemperer, a war veteran, was pleased to receive a small additional war gratuity in February 1920, but, as he complained, ‘what was earlier a small income is now just a tip’.71 Over the following months, Klemperer’s diary was increasingly filled with financial calculations as inflation gathered pace. Already in March 1920 he was encountering ‘foragers, little people with rucksacks’ on the train outside Munich.72 As time went on, Klemperer paid increasingly fantastic bills ’with a kind of dull fatalism‘.73 In 1920 he at last gained a permanent appointment at Dresden Technical University. But it did not bring financial security. Each month he received an increasingly astronomical salary with back payments to make up for inflation since the last payment. Despite receiving nearly a million marks’ salary at the end of May 1923, he was still unable to pay his gas and tax bills. Everyone he knew was working out how to make money speculating on the Stock Exchange. Even Klemperer had a try, but his first gain, 230,000 marks, paled into insignificance in comparison with that of his colleague Professor Förster, ‘one of the worst antisemites, Teutonic agitators and patriots in the university’, who was said to be making half a million marks a day playing the markets.74
