The Downfall of Money: Germany’s Hyperinflation and the Destruction of the Middle Class

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The Downfall of Money: Germany’s Hyperinflation and the Destruction of the Middle Class Page 40

by Taylor, Frederick


  Thanks are due especially to the London Library, another of the world’s great literary resources. I have used its extensive electronic library, and also its book borrowing facilities, to their utmost. The staff, ever patient and helpful, have ensured that any book ordered online one day usually arrived at my door, three hundred miles from London, no more than forty-eight hours later.

  Among all the books I read for this project, it would be criminal not mention those written, over a period of many years, by the late Professor Gerald Feldman of UC Berkeley. I was already acquainted, from my postgraduate days in the 1970s, with his ground-breaking book, Army, Industry and Labour in Germany, 1914–1918, but like anyone attempting to write sensibly about the early Weimar years, I have leaned heavily on his huge master work, The Great Disorder, as well as his biography of Hugo Stinnes and his many articles. I could not but express my profound thanks for and debt to this fine historian’s lifetime achievement.

  Once again, Bill Swainson, my editor at Bloomsbury in London, has facilitated this project from the outset with his usual quiet determination, aided by Peter Ginna and the team at Bloomsbury in New York. At Siedler-Verlag in Germany, Tobias Winstel and Karen Guddas have also provided sterling support. And to Jane Turnbull, my agent, who is, as always, there for the troughs as well as the peaks, my most heartfelt gratitude.

  The motivation for this book came in good part from Brian Perman, who has also read and commented on the writing as it has gone forward. Since I embarked on the project, a European credit crisis has become a European money crisis, with the whole question of currency viability at its heart and Germany, with its historical anxieties on this score, ever more involved in (and blamed for) the problems of the euro. Brian always thought this might be so, and so far he has been proved right.

  My brother-in-law and sister-in-law, Ed and Peggy Kavounas, have made finishing this book immeasurably easier through their generosity and hospitality. Lastly, my thanks to my wife, Alice, who put up with my working absences, and a hard writing winter, without a single complaint. This book is, as ever, for her.

  Image Section

  Pre-war idyll: Unter den Linden, Berlin 1910

  War! German soldiers leave for the front, 1914

  Paying for the apocalypse: advertisement for German War Bonds, 1917

  Revolutionary soldiers at the Brandenburg Gate, November 1918

  Reichsbank President Rudolf Havenstein, chief enabler of the wartime inflation

  Hugo Stinnes, richest man in post-war Germany and ‘King of the Inflation’

  Crime scene photograph of the site of Rathenau’s murder, June 1922

  Foreign Minister Walther Rathenau in the open-topped car in which he was assassinated hours after a midnight meeting with Stinnes

  The Ruhr invasion: a French soldier guards a coal shipment in Germany’s occupied industrial heartland, 1923

  Reichswehr troops arrest a Communist paramilitary in Saxony, October 1923

  Chancellor Cuno (left), November 1922 to August 1923, with President Ebert

  A disabled war veteran begs in post-war Berlin

  Destitute middle-class Germans selling their possessions at public auction

  A food queue outside a high-class grocer’s shop in Berlin during the hyperinflation

  The Munich Putsch. Heinrich Himmler, later architect of the Holocaust and Reichsführer-SS (centre with flag) mans a barricade. To his left is Max Scheubner-Richter, killed at Hitler’s side just hours later

  Young Hitler, early 1920s

  Collection of the day’s wages from the Reichsbank for a small business (15 employees), late 1923

  Worthless money finds use, as wallpaper and as a children’s amusement

  Old paper marks destroyed after the currency reform, early 1924

  Bibliography

  Secondary Works

  Asmuss, Burkhard, Republik Ohne Chance? Akzeptanz und Legitimation der Weimarer Republik in der deutschen Tagespresse zwischen 1918 und 1923 (Beitrage Zur Kommunikationsgeschichte, Bd. 3), Berlin, 1994.

  Balderston, Theo, Economics and Politics in the Weimar Republic (New Studies in Economic and Social History), Cambridge, 2002.

  Becker, Winfried (ed.), Frederic von Rosenberg: Korrespondenzen und Akten des deutschen Diplomaten und Außenministers 1913-1937, Munich, 2011.

  Bessel, Richard, Germany After the First World War, Oxford, 1993.

  Boemeke, Manfred F., Gerald D. Feldman and Elisabeth Glaser (eds), The Treaty of Versailles: A Re-Assessment after 75 Years, Washington, DC, and Cambridge, 1998.

  Bresciani-Turroni, Constantino, The Economics of Inflation: A Study of Currency Depreciation in Post-War Germany, 1914-1923, New York, 2006.

  Cohen, Deborah, The War Come Home: Disabled Veterans in Britain and Germany, 1914-1939, Berkeley, CA, 2001.

  Dresdner Geschichtsverein e.V., Dresden: Die Geschichte der Stadt von den Anfängen bis zur Gegenwart, Dresden, 2002.

  Englund, Peter, The Beauty and the Sorrow: An Intimate History of the First World War, London, 2011.

  Feldman, Gerald D. (ed.), Die Nachwirkungen der Inflation auf die deutsche Geschichte, 1924-1933 (Schriften des Historischen Kollegs Band 6: Kolloquien), Munich, 1985.

  — Army, Industry and Labour in Germany 1914-1918, Providence, RI, and Oxford, 1992.

  — The Great Disorder: Politics, Economics and Society in the German Inflation 1914-1924, New York and Oxford, 1996 (pbk).

  — Hugo Stinnes: Biographie eines Industriellen 1870-1924, Munich, 1998.

  Feldman, Gerald D., Carl-Ludwig Holtfrerich, Gerhard A. Ritter and Peter-Christian Witt (eds), Die Anpassung an die Inflation/The Adaptation to Inflation (Veröffentlichungen der Historischen Kommission zu Berlin Band 67), Berlin, 1986.

  Ferguson, Niall, Paper and Iron: Hamburg Business and German Politics in the Era of Inflation, 1897-1927, Cambridge, 1995.

  — The Pity of War 1914-1918, London, 1999 (pbk).

  Fergusson, Adam, When Money Dies, London, 2010 (pbk).

  Ferris, Paul, The House of Northcliffe: Biography of an Empire, London, 1971.

  Fest, Joachim C., Hitler, London, 1982.

  Fischer, Conan, The Ruhr Crisis, 1923-1924, Oxford, 2003.

  Fischer, Fritz, Germany’s Aims in the First World War, trans. Hajo Holborn, with an introduction by James Joll, New York, 1967.

  Friedrich, Otto, Before the Deluge: A Portrait of Berlin in the Twenties, New York, 1995 (pbk).

  Gilbert, Martin, First World War, London, 1995 (pbk).

  Gomes, Leonard, German Reparations, 1919-1932: A Historical Survey, Basingstoke and New York, 2010.

  Haffner, Sebastian, Die deutsche Revolution 1918/19: Wie war es wirklich?, Munich, 1979.

  Hagenlücke, Heinz, Deutsche Vaterlandspartei: Die nationalen Rechte am Ende des Kaiserreiches, Düsseldorf, 1997.

  Hardach, Karl, The Political Economy of Germany in the Twentieth Century, Ewing, NJ, 1981.

  Henning, F.-W., Das Industrialisierte Deutschland 1914 bis 1976, Paderborn, 1978 (pbk).

  Holborn, Hajo, Deutsche Geschichte in der Neuzeit: Das Zeitalter des Imperialismus (1871-1945), Bd. 3, Munich, 1971.

  Holtfrerich, Carl-Ludwig, The German Inflation 1914-1923: Causes and Effects in International Perspective, Berlin and New York, 1986.

  Hosfeld, Rolf, and Hermann Pölking, Wir Deutschen: 1918 bis 1929, Vom Kriegsende bis zu den goldenen Zwanzigern, Munich and Zürich, 2009.

  Jelavich, Peter, Berlin Cabaret, Cambridge, MA, 1996.

  Kershaw, Ian, Hitler 1889-1936: Hubris, London, 2001 (pbk).

  Keynes, John Maynard, The Economic Consequences of the Peace, London, 1988 (pbk).

  Koch, H. W., Der deutsche Bürgerkrieg: Eine Geschichte der deutschen und österreichischen Freikorps 1918-1923, Berlin and Frankfurt-on-Main, 1978.

  Koch, Thilo, Die Goldenen Zwanziger Jahre, Frankfurt-on-Main, 1970.

  Kunz, Andreas, Civil Servants and the Politics of Inflation in Germany, 1914-1924, Berlin and New York, 1986.

  MacMillan, Mar
garet, Peacemakers: Six Months that Changed the World, London, 2002 (pbk).

  McNeil, William C., American Money and the Weimar Republic: Economics and Politics on the Eve of the Great Depression, New York, 1986.

  McPhail, Helen, The Long Silence: Civilian Life under the German Occupation of Northern France, 1914-1918, London, 2000.

  Marsh, David, The Euro: The Politics of the New Global Currency, New Haven, CT, and London, 2009.

  Neitzel, Sönke, Weltkrieg und Revolution, 1914-1918/19, Berlin, 2008.

  Roessler, Konrad, Die Finanzpolitik des Deutschen Reiches im Ersten Weltkrieg, Berlin, 1967,

  Shirer, William L., The Rise and Fall of the Third Reich, London, 1973 (pbk).

  Silverman, Dan P., Reconstructing Europe After the Great War, Cambridge, MA, and London, 1982.

  Strachan, Hew, The First World War, vol. 1, ‘To Arms’, Oxford, 2003.

  — The First World War: A New Illustrated History, London, 2006 (pbk).

  Ulrich, Volker, Fünf Schüsse auf Bismarck: Historische Reportagen, Munich, 2002.

  Wehler, Hans-Ulrich, Deutsche Gesellschaftsgeschichte, Bd. 4: Vom Beginn des Ersten Weltkriegs bis zur Gründung der beiden deutschen Staaten 1914-1949, Munich, 2003.

  Weitz, Eric D., Weimar Germany: Promise and Tragedy, Princeton, NJ, and Oxford, 2009 (pbk).

  Winkler, Heinrich August, Weimar 1918-1933, Munich, 1993.

  — Der Lange Weg Nach Westen, Erster Band: Deutsche Geschichte vom Ende des Alten Reiches bis zum Untergang der Weimarer Republik, Munich, 2002.

  Woitas, Monika, and Annette Hartmann (eds), Strawinskys, ‘Motor Drive’, Munich, 2009.

  Diaries, Autobiographical Writings and Contemporary Memoirs

  D’Abernon, Edgar Vincent, An Ambassador of Peace: Lord D’Abernon’s Diary,vol. II, The Years of Crisis June 1922-December 1923, London, 1929.

  Engelbrecht, Ernst, and Leo Heller, Die Kinder der Nacht: Bilder aus dem Verbrecherleben, Berlin-Neu-Finkenkrug, 1925.

  Grosz, George, trans. Arnold J. Pomerans, A Small Yes and a Big No!, London and New York, 1982.

  Gumbel, Emil Julius, Vier Jahre politischer Mord (1922), available online at http://www.deutsche-revolution.de/revolution-1918-102.html.

  Haffner, Sebastian, Geschichte eines Deutschen: Die Erinnerungen 1914-1933, Stuttgart and Munich, 2000.

  Hofmiller, Josef, ‘Revolutionstagebuch’, in Josef Hofmillers Schriften, Bd. 2, available through the Bayerische Staatsbibliothek digital collection at http://daten.digitale-sammlungen.de/~db/0001/bsb00016411/images/index.html?id=00016411&fip=193.174.98.30&no=&seite=226.

  Kessler, Charles (trans. and ed.), Diaries of a Cosmopolitan: Count Harry Kessler 1918-1937, London, 1971.

  Lloyd George, David, The Truth about the Peace Treaties, vol. 1, London, 1938.

  Pörtner, Rudolf (ed.), Alltag in der Weimarer Republik: Kindheit und Jugend in unruhiger Zeit, Munich, 1993 (pbk).

  Price, Morgan Philips, Dispatches from the Weimar Republic: Versailles and German Fascism (ed. Tania Rose), London and Sterling, VA, 1999.

  Scheidemann, Philipp, Memoiren eines Sozialdemokraten, Bd. 2, Hamburg, 2010 (reprint from Severus-Verlag).

  Smith, Truman, and Robert Hessen, Berlin Alert: The Memoirs and Reports of Truman Smith, Stanford, CA, 1984.

  Troeltsch, Ernst, Die Fehlgeburt einer Republik: Spektator in Berlin 1918 bis 1922 (Zusammengestellt und mit einem Nachwort versehen von Johann Hinrich Claussen), Frankfurt-on-Main, 1994.

  Von Mangoldt, Ursula, Auf der Schwelle Zwischen Gestern und Morgen: Erlebnisse and Begegnungen, Weilheim/Oberbayern, 1963.

  White, William (ed.), Dateline Toronto: The Complete Toronto Star Dispatches, 1920-1924, New York, 1985.

  Parliamentary Records

  Verhandlungen der verfassungsgebenden Deutschen Nationalversammlung (Proceedings of the Constitutuent German National Assembly, 1919-1920) and Verhandlungen des Deutschen Reichstages (Proceedings of the German Reichstag, to 1918 and after June 1920), both available at http://www.reichstagsprotokolle.de

  Contemporary Newspapers and Periodicals

  Die Weltbühne, searchable facsimiles of all issues available online at the Internet Archive, http://archive.org/search.php?query=die%20weltb%C3%BChne%20AND%20collection%3Aopensource

  ProQuest Historical Newspapers, Archive of the Manchester Guardian and the Observer, accessed via the London Library website (subscription service).

  Sunday Times Digital Archive 1822-2006, accessed via the London Library website (subscription service).

  The Living Age, available online at http://www.unz.org/Pub/LivingAge

  Times Digital Archive 1785-1985, accessed via the London Library website (subscription service).

  Vossische Zeitung, searchable facsimiles of all issues available online at http://zefys.staatsbibliothek-berlin.de/list/title/zdb/25338766/1919/

  Articles and Essays

  Balderston, T., ‘War Finance and Inflation in Britain and Germany, 1914-1918’, in The Economic History Review, New Series, vol. 42, no. 2 (May 1989).

  Connolly, Kate, ‘Germans greet Cyprus Deal with a mixture of relief and fear’, in Observer, 31 March 2013.

  Downes, Alexander B., ‘Desperate Times, Desperate Measures: The Causes of Civilian Victimization in War’, in International Security, vol. 30, no. 4 (Spring 2006).

  Ferguson, Niall, ‘Keynes and the German Inflation’, The English Historical Review, vol. 110, no. 436 (April 1995).

  Jung, Alexander, ‘Nationales Trauma’, in Spiegel-Geschichte 4/2009 (also available online in English as ‘Millions, Billions, Trillions: Germany in the Era of Hyperinflation’, in Spiegel-Online [English language edition], 14 August 2009).

  Leicht, Robert, ‘Patriot in der Gefahr’, in Die Zeit, 18 August 2011, Nr 3.

  Lempert, Peter, ‘Die Ermordung Walther Rathenaus’, in Forum, 24 June 2012.

  Lentin, Antony, ‘Treaty of Versailles: Was Germany Guilty?’, in History Today, vol. 62, issue 1, 2012.

  McCrum, Robert, ‘French Economic Policy at the Paris Peace Conference, 1919’, in The Historical Journal, vol. 21, no. 3 (September 1978).

  MacDonald, Andrew, ‘The Geddes Committee and the Formulation of Public Expenditure Policy’, in The Historical Journal, vol. 32, no. 3 (September 1989).

  Mettke, Jörg-R., ‘Das Grosse Schmieren’, in Korruption in Deutschland (III): Geld und Politik in der Weimarer Republik, series in Der Spiegel, Nr 49/1984, 3 December 1984.

  Romer, Christina, ‘Spurious Volatility in Historical Unemployment Data’, in Journal of Political Economy, vol. 94, no. 1 (February 1986).

  Tobin, Elizabeth H., ‘War and the Working Class: The Case of Düsseldorf 1914-1918’, in Central European History, vol. 18, no. 3/4 (September-December 1985).

  Trachtenberg, Marc, ‘Versailles after Sixty Years’, in Journal of Contemporary History, vol. 17, no. 3 (July 1982).

  Webb, Steven B., ‘Fiscal News and Inflationary Expectations in Germany After World War I’, in Journal of Economic History, vol. 46, no. 3 (September 1986).

  Other online sources

  www.kurkuhl.de/de/novrev (material for Kiel November Revolution).

  www.dhm.de/lemo/forum/kollektives_gedaechtnis/weimar.html (website of German Historical Museum, Berlin).

  www.deutsche-revolution.de/revolution-1918 (German Revolution website).

  www.kollektives-gedaechtnis.de (website for local historical material based around Hamburg).

  www.deutsche-biographie.de (online version of Deutsche Biographie and Neue Deutsche Biographie).

  ehto.thestar.com (Toronto Star website with reprints of historical articles by Ernest Hemingway).

  www.dra.de/rundfunkgeschichte/75jahreradio (website of the German Radio Archive/Deutsches Rundfunkarchiv).

  www.spiegel.de (website and archive of Der Spiegel magazine).

  www.eisenbahn-in-dalheim.de/historie.htm. (Dalheim local railway society website).

  Notes

  Chapter 1: Finding the Money for the End of the World

  1 See Hew St
rachan, The First World War: A New Illustrated History, vol. 1: ‘To Arms’, Oxford, 2003, p. 833f.

  2 Gerald D. Feldman, The Great Disorder: Politics, Economics and Society in the German Inflation 1914-1924, New York and Oxford, 1996, p. 32.

  3 See Leonard Gomes, German Reparations, 1919-1932: A Historical Survey, Basingstoke and New York, 2010, p. 10f. And also Niall Ferguson, The Pity of War 1914-1918, London, 1999, p. 250f.

  4 See Helen McPhail, The Long Silence: Civilian Life under the German Occupation of Northern France, 1914-1918, London, 2000, p. 36n.

  5 Feldman, The Great Disorder, p. 34.

  6 Ibid., p. 5f for the details and for the protests.

  Chapter 2: Loser Pays All

  1 Quoted in Ferguson, The Pity of War, p. 252.

  2 For the declaration and its consequences see Alexander B. Downes, ‘Desperate Times, Desperate Measures: The Causes of Civilian Victimization in War’, in International Security, vol. 30, no. 4 (Spring 2006), pp. 185-8. He argues that the blockade was not actually caused by the German U-boat declaration, but that the latter provided a justification in the face of neutral opinion, which at that time included the USA, for the British and their allies to do something they had already been planning for some time.

 

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