The Downfall of Money: Germanys Hyperinflation and the Destruction of the Middle Class
Page 16
From school we made our way to Unter den Linden, roused by a deep sense that this was where you had to be when ‘patriotic events’ were afoot, and also in the hope of seeing or experiencing something there. But there was nothing to see and nothing to experience. A few soldiers were standing in a bored fashion around pointlessly high-mounted machine guns. No one came to attack them. In fact everything had a kind of Sunday feeling, contemplative and peaceful. That was down to the general strike . . .
On 18 March, Morgan Philips Price of the Manchester Guardian wrote succinctly: ‘We are living now in Berlin without light, gas or water. The new Government is caught like a rat in a trap.’6
It was not an entirely peaceful struggle. There were some armed clashes between supporters of the Republic and the Kapp rebels. Walter Koch, the Saxon state government’s representative in Berlin, reported frequent flare-ups in the government quarter, where he had his offices and his home.
There was shooting pretty much day and night around our building, so that we quickly moved our furniture out of the line of fire. It was a frequent occurrence during the day that the call sounded from the Potsdamer Platz: ‘Clear the street!’ It was amusing to see how the numerous passers-by would crowd into the building entrances like mice. Wicked automatic fire raked the Budapester Strasse. Once the rattle of the machine guns ceased, the people would gradually risk emerging from the buildings, and ten minutes later the traffic would be flowing as if nothing had happened.7
All the same, by 15 March the rebels had already begun covert talks with the handful of cabinet members who had stayed behind after the rest of the government left town. There was already talk of ‘compromise’. The ministers in Berlin, worried that the general strike, peaceful or not, might get out of hand, and eager to restore peace and normality to the capital, understandably gave more ground than the ministers observing from the safety of the provinces were, equally understandably, prepared to countenance. It was obvious that the putsch had failed in its main object. Moreover, with the unions and the (in many cases armed) supporters of the far left now mobilised in defence of the Republic, any concessions to the anti-democratic right - which had, after all, committed an indisputable act of high treason - could only count as the crassest provocation.
On 17 March, Kapp fled Berlin and, using a false passport, found his way to Sweden. Lüttwitz took refuge in Hungary, where a right-wing monarchist government had replaced the Soviet-style regime of the immediate post-war period. Other leaders of the putsch also made themselves scarce, like Kapp, often using false passports.
As for the Erhardt Brigade, its men may have seemed peaceful to Sebastian Haffner that afternoon on Unter den Linden at the height of the general strike, but when they left Berlin once more, on 18 March, there was nothing mild about them. As they passed in full order back through the Brandenburg Gate, the brigade band playing ‘Deutschland über Alles’, insulting comments were shouted from among the onlookers thronging the adjacent Pariser Platz. The Freikorps promptly opened fire directly into the crowd, killing twelve civilians and wounding thirty more. The fatal division within German society – expressed in the tendency of many Germans to treat as less than human fellow countrymen of whose politics they disapproved – was widening alarmingly.8
Even worse were the events that followed. This time it was not the right but the left that rose up. The call to a general strike in Berlin had been raised elsewhere in Germany, including in the industrial areas of Saxony and the Ruhr. But when the putsch was over, the strikers – and in some areas the armed worker militias that had been formed to support them – refused to return to what passed for normality. The far left, criticising the weakness of the Social Democratic–Liberal–Centre Party coalition government in allowing the Freikorps and the military to get so far out of control, and using the crisis as an opportunity to put forward revolutionary demands, escalated the situation into one of near-insurrection. Especially in the Saxon city of Leipzig, and in the Ruhr industrial area, the clashes between Reichswehr and Freikorps forces supporting the government, were willingly – some would say eagerly – turned into full-scale battles that would last days and in some cases weeks.
The fighting between the leftist militants of the so-called ‘Red Army of the Ruhr’ and the Freikorps/Reichswehr forces in the first half of April 1920 was ferocious. It cost the lives of more than 1,000 workers (mostly, it is thought, shot after being taken prisoner) and of 208 members of the Reichswehr, with another 123 posted missing. Major military operations continued through April and into the month of May and resulted in the complete defeat of the workers’ insurrection.9
The problem was that, technically speaking, the area in which the fighting was taking place was supposed to be a ‘demilitarised zone’, where the Reichswehr was not supposed to operate. In response to the Berlin government’s use of Reichswehr troops against the Ruhr uprising, the French ordered their army to occupy the city of Frankfurt on Main and several other important neighbouring towns, including Offenbach and Darmstadt. The force included French colonial troops, which caused special outrage. On the first day of the occupation in Frankfurt there was an incident where Moroccan troops, surrounded by a crowd of protesters, lost sight of their officer and fired into the crowd, killing and injuring several civilians.10 The acting Chancellor, Hermann Müller, told an outraged National Assembly: ‘In Frankfurt on Main, French militarism has advanced as if into an enemy country. There are Senegalese at Frankfurt University and at the house where Goethe was born . . .’11
If the Kapp–Lüttwitz putsch, though a failure, had achieved one thing, it had been to reveal the extremes which German nationalists were capable of less than a year and a half after the revolution. It was also, as the subsequent fighting in the Ruhr showed, the spark that fired a civil war within the union and working-class movement, sealing the divisions that would make a government by a unified left in Germany impossible and thereby condemn the country to weak, divided governments for the rest of the Weimar era.
Strangest of all, it was as if these multiple terrible things were happening in compartments, separated from each other. The Reich was big, and traditionally localised in its interests and loyalties. Even while epoch-making, often bloody events were occurring in the country’s cities and industrial centres, provincial Germany on the whole went its near-oblivious way. A chronicler of the ‘German Civil War’ wrote :
. . . it was precisely this diversity that stood in the way of any conscious unified effort on the part of either revolution or counter-revolutionary groups. A revolution in Berlin did not necessarily give rise to similarly directed consequences all over Germany, and a success for the counter-revolution in another part of Germany did not inevitably mean that it would find similar success elsewhere. This diversity in the cultural and social structure of the German state goes some of the way to explaining why the most explosive consequence of the Kapp putsch, the workers’ uprising on the Ruhr in March and April 1920, not only ended in failure, but also why it impinged on the consciousness of most Germans outside the area immediately affected little more than a host of other everyday events.12
All this was true, but there were some things in Germany that still held together, no matter which part of the country one was in, or which political tendency held sway there. The most important of these was, despite everything, the German military, rapidly developing, in these hazardous post-war conditions, into a self-reliant state within a state. In early 1920, no two cities could have been further apart politically than socialist-liberal-ruled Berlin and reactionary Munich, where, since the violent suppression of the Soviet Bavarian Republic in the late spring of 1919, the nationalist right dominated. But Reichswehr in Berlin spoke to Reichswehr in Munich, and vice versa.
So it was that on 16 March 1920, when the coup was still in progress, a military aircraft from Munich landed at Tempelhof in Berlin, a landing strip attached to what had been the Prussian army’s old training area and parade ground. Two men, one in his fifties
and one just thirty years old, climbed out and demanded to be led to the headquarters of the Kapp–Lüttwitz rebels. Carrying an introduction from a Reichswehr intelligence officer in Munich by the name of Captain Karl Mayr, they were to inform the insurrectionist ‘government’ of events in Bavaria and while doing so sound out the Berlin situation. Unfortunately, their mission proved in vain. The Kapp rebellion was, it turned out, teetering on the brink of failure. They never met the ‘Chancellor’, who was already preparing to make himself scarce. The men flew back to Munich with little to show for their trouble, except perhaps a lesson in how not to carry out a successful coup d’état.
The elder visitor went by the name of Dietrich Eckart, a nationalist writer, poet and gadfly on the Munich literary scene. The younger was a protégé of Mayr and, according to the officer’s account to his Berlin co-conspirators, ‘a good German man, if also something of a wanton anti-Semite’.13
Captain Mayr’s favourite was not yet quite thirty-one years old and, though already very active in far-right politics, until his formal demobilisation on 1 April 1920 would still hold the rank of corporal in the army. His name was Adolf Hitler.
Captain Mayr kept in touch with Wolfgang Kapp, despite the abject failure of the first fully-fledged nationalist attempt to overthrow the Republic. He wrote six months later to his political friend, now exiled in Sweden:
The national workers’ party must provide the basis for the strong assault-force (Stoßtrupp) that we are hoping for. The programme is still somewhat clumsy and also, perhaps, incomplete. We’ll have to supplement it. Only one thing is certain: that under this banner we’ve already won a good number of supporters. Since July of last year I’ve been looking . . . to strengthen the movement . . . I’ve set up very capable young people. A Herr Hitler, for instance, has become a motive force, a popular speaker of the first rank. In the Munich branch we have over 2,000 members, compared with under 100 in summer 1919.14
12
The Rally
For now, despite the far-left uprisings in the Ruhr and elsewhere that followed the Kapp–Lüttwitz fiasco, the return of the legitimate government to Berlin restored something of the feeling of progress that had been cautiously present before 13 March.
The trade unions, having saved the government, now demanded political changes as their price. They kept the strike going for a day or two just to make their point absolutely clear, and the changes came.
Bauer, the colourless trade unionist, who had proved a weak chancellor, resigned after 219 days in office, continuing a pattern of short-lived administrations that would prove the rule in the first German democracy. Gustav Noske lost his post as Reichswehr Minister, having clearly not lived up to his promise of keeping the army on the government’s side. The rangy former basket weaver from the Prussian heartland of Brandenburg had trusted the generals and his trust had been betrayed.
Noske would tell Harry Kessler, when they met by chance three months later on a train journey, that ‘Lüttwitz had been represented to him as a deeply religious man who, having sworn an oath of loyalty, would keep it. His dismissal would moreover have upset the officer corps.’ Kessler continued, with his characteristic mix of humanitarian concern and crashing snobbery:
Noske is manifestly a perfectly sincere and dyed-in-the-wool militarist, whom the officer corps, with the help of his prejudices and their catchwords, has led by the nose . . . Though unemployed, he looks prosperous enough, travels first class, wears brand new yellow boots, and consumed during the journey large quantities of ham rolls and beer. Were there not so much innocent blood on his hands, he would be a slightly comic, almost likeable figure.1
The replacement for Bauer as Chancellor was the Foreign Minister, Hermann Müller, another Social Democrat, but of an altogether tougher and smarter sort. There was little for Müller to do, however, other than to hold the government together until new elections could be organised. It was certainly high time the German people were consulted afresh. The government’s critics on the right and left were correct in declaring that the National Assembly, elected to give Germany a constitution, had outlived its function and needed to be replaced by a proper parliament. Elections were eventually fixed for June 1920. The omens for the governing parties’ popularity with the voters were not good.
During the Kapp putsch, with a general strike paralysing Berlin, the exchanges and telegraph offices were closed and no official rates had been quoted for the mark. Not so in London and New York and the other world financial centres. Before the coup there had been signs of improvement in the mark/dollar rate. The German currency had firmed dramatically from 91.40 marks to the dollar on 7 March to 68.90 on 11 March.2 ‘Exchange Rallying’ read the headline in The Times of London, reporting on the New York markets’ performance on 11 March. The Times especially noted the German mark’s strong showing, 50 per cent up on the week, citing eager purchasing by American investors of German municipal debt at a million dollars-worth a day, improvements in the Reich’s balance of trade and rumours that the Allies might ease restrictions on Germany’s overseas borrowing.3 Then, on the same day as this enthusiastic report, came the Kapp putsch.
Three days into the crisis, The Times reported that the mark had suffered a precipitous fall from 267.5 marks per pound sterling the previous Wednesday (10 March) to a low of 370 on Tuesday, 16 March, before recovering slightly to close at 337.5. With the dollar running at approximately $3.65 to the pound, this gives a rough rate of 92.50 on the dollar reckoning, in other words a loss of around a third on its value of a few days earlier.4 The day before the Berlin exchanges were due to open again on Thursday, 25 March, after the putsch had been defeated and the general strike called off, the mark was reported to be trading at around 75 marks to the dollar. There it remained for the rest of the week. By the following Wednesday, preceding the Easter break, it was at 71. It then opened on 6 April at 66.90, before on 9 April reaching 57.60 – the sort of exchange rate not seen since early January. It remained at around 60 for the rest of the month.5
The mark seemed to be holding at a manageable value. Violent challenges from the reactionary right and the revolutionary left had been beaten off. There would soon be new elections and a new government. Employment and trade numbers alike were looking more positive.
None of this was happening before time. During the rapid inflation of the previous winter, Morgan Philips Price of the Manchester Guardian had written of the distress even of the employed German working class:
I have just received the following figures of the monthly budget of a Berlin tram driver who has a wife and a daughter of twelve. His monthly wage is 400 marks, which is equivalent in English money at present rates to £4. The weekly wage of a Berlin tram driver, in English money, is therefore £1 a week. Against this there are the following expenses monthly.
Marks
Rent
55
Taxes
20
School money
16
Fire and lighting
38
Washing
12
Travelling expenses
17
Clothing
25
Footwear
12
Pocket money, newspapers, odd repairs
25
Food
180
TOTAL
400
The 180 marks (36 shillings) for food has to last three persons for one month. The other day I went into the restaurant of the Adlon Hotel and found that a luncheon there costs 30 marks without wine. It is impossible to get through the day there without paying 60 marks for food alone. In other words, in a day in a fashionable Berlin restaurant one person spends on food as much as a member of a working-class family spends in a month . . . The food of the family whose budget I quote above consists on most days of black bread, potatoes and vegetables. Occasionally a pound of butter is bought at speculative prices [i.e. on the black market] for 28 marks a pound. That has to last for six weeks or
two months.6
In April 1920, after the Kapp putsch, a further report in the London Sunday newspaper the Observer described how the German lower middle classes were becoming ‘compulsory vegetarians’:
They taste no meat from the beginning of the year to the end. An egg is a rare luxury . . . To the Englishman travelling in Rhineland it does not seem particularly extravagant to pay 350 marks for a lunch for two people. But this amount represents a German workman’s wages for three weeks’ toil.7
Nor was such misery – it is hard not see these British reporters, however well intentioned, as what a later, more cynical age would call ‘misery tourists’ – confined to the working and lower middle classes. Quite grand members of Germany’s intellectual elite, if they were on a fixed salary, could find themselves subjected to a humiliating drop in their standard of living. The same correspondent added:
An English businessman, who found it imperatively necessary to travel from Berlin to Cologne during the recent general strike, had to pay 40,000 marks for the single journey, in addition to a guarantee to indemnify the garage proprietor in case of anything happening to the car. 40,000 marks! - and the yearly salary of the Director of one of the greatest museums in Germany is 30,000 marks, not allowing for heavy taxation. This Director, notwithstanding his keen desire to entertain an English visitor, who could in many ways be helpful to him, was unable to offer him a sandwich or a biscuit in his almost palatial home. There was practically no food in the house.