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 42

by Taylor, Frederick


  6 Price, Dispatches from the Weimar Republic, p. 72.

  7 LeMo Kollektives Gedächtnis, Erinnerungen von Walter Koch (* 1870) aus Dresden, Gesandter von Sachsen in Berlin (DHM-Bestand), online at http://www.dhm.de/lemo/forum/kollektives_gedaechtnis/weimar.html.

  8 Winkler, Weimar 1918-1933, p. 127, for the Brandenburg Gate incident.

  9 Ibid., p. 135.

  10 Vossische Zeitung, 8 April 1920 (morning edition), p. 1: ‘Blutiger Zwischenfall in Frankfurt a.M. Marokkanische Maschinengewehre gegen Ansammlungen’.

  11 Report of Müller’s speech in Vossische Zeitung (morning edition), 13 April 1920, p. 2.

  12 Koch, Der deutsche Bürgerkrieg, p. 197.

  13 See Hosfeld and Pölking, Wir Deutschen: 1918 bis 1929, p. 79f. Also Joachim C. Fest, Hitler, p. 133.

  14 Quoted in Ian Kershaw, Hitler 1889-1936: Hubris, London, 2001, p. 154. Mayr later abandoned the far-right movement in favour of the Social Democrats. He found refuge in France after 1933, was captured there by the Gestapo in 1940 and murdered in Buchenwald shortly before the end of the Second World War.

  Chapter 12: The Rally

  1 Kessler, Diaries of a Cosmopolitan, p. 128f.

  2 Figures available online as above from: Vossische Zeitung (evening edition), 8 March 1920, p. 6; and ibid. (evening edition), 11 March 1920, p. 6.

  3 The Times, 13 March 1920, p. 16: ‘Exchange Rallying’.

  4 The Times, 16 March 1920, p. 23.

  5 Mark/dollar rates in all these cases, unless otherwise stated, from the Berliner Devisen list in Finanz- und Handelsblatt der Vossische Zeitung (evening edition) of the days concerned.

  6 Article of 7 November 1919 printed in Price, Dispatches from the Weimar Republic, p. 49.

  7 ‘Germany To-Day: Food and Money Problems’ (by a Special Correspondent), Observer, 4 April 1920, p. 7. For this and the above remarks.

  8 See Carl-Ludwig Holtfrerich, The German Inflation 1914-1923: Causes and Effects in International Perspective, Berlin and New York, 1986, p. 208.

  9 See Ferguson, The Pity of War, p. 127.

  10 See Strachan, The First World War, p. 975.

  11 John Maynard Keynes, The Economic Consequences of the Peace, London, 1988, p. 285.

  12 Gomes, German Reparations, p. 5.

  13 Ibid., p. 21.

  14 Ibid., p. 6.

  15 See William C. McNeil, American Money and the Weimar Republic: Economics and Politics on the Eve of the Great Depression, New York, 1986, p. 40f.

  16 See Feldman, The Great Disorder, p. 211f. As Professor Feldman points out, the title of ‘Great Depression’ was not held for long before being awarded ten years later to another, far more fearsome, slump.

  17 Holtfrerich, The German Inflation 1914-1923, p. 209.

  Chapter 13: Goldilocks and the Mark

  1 Feldman, The Great Disorder, p. 218.

  2 Ibid.

  3 Ibid., p. 219.

  4 For Rathenau’s remarks, see Holtfrerich, The German Inflation 1914-1923, p. 210f.

  5 For a summary of this entire extraordinarily complex issue, see Gomes, German Reparations, pp. 65-71.

  6 Feldman, The Great Disorder, p. 349.

  7 Gomes, German Reparations, pp. 65-71.

  8 Ibid., p. 69.

  9 Becker-Arnsberg, 6 May 1921, quoted in Feldman, The Great Disorder, p. 339.

  10 See Feldman, The Great Disorder, p. 346f.

  11 See Winkler, Weimar 1918-1933, p. 117f.

  12 See Robert Leicht, ‘Patriot in der Gefahr’, in Die Zeit, as above.

  13 Hosfeld and Pölking, Wir Deutschen: 1918 bis 1929, p. 89.

  14 See Robert Leicht, ‘Patriot in der Gefahr’, in Die Zeit, as above. Both men were tried for Erzberger’s murder after the Second World War and sentenced to long jail sentences, although these were later reduced to parole. Tillesen was said to have become haunted by his role in the killing with time and to have expressed genuine remorse.

  15 Quoted in Winkler, Weimar 1918-1933, p. 161.

  16 Article of 12 September 1921 in Der Kunstwart, reproduced in Troeltsch, Die Fehlgeburt einer Republik, p. 218.

  Chapter 14: Boom

  1 For estimated US unemployment see Christina Romer, ‘Spurious Volatility in Historical Unemployment Data’, in Journal of Political Economy, vol. 94, no. 1 (Feb. 1986), p. 31.

  2 See Winkler, Weimar 1918-1933, p. 143.

  3 ‘German Trade Boom and the Sinking mark’ (from our Berlin Correspondent), in Manchester Guardian, 11 October 1921, p. 7.

  4 Quoted in Niall Ferguson, ‘The Balance of Payments Question’, in Boemeke, Feldman and Glaser (eds), The Treaty of Versailles: A Re-Assessment after 75 Years, Washington, DC, and Cambridge, 1998, p. 406.

  5 See Feldman, The Great Disorder, p. 284.

  6 Niall Ferguson, ‘Keynes and the German Inflation’, The English Historical Review, vol. 110, no. 436 (Apr. 1995), p. 378.

  7 Quoted in Feldman, The Great Disorder, p. 393.

  8 Pörtner, Alltag in der Weimarer Republik, p. 32.

  9 See Feldman, The Great Disorder, pp. 568ff.

  10 Quoted in ibid., p. 288.

  11 For the business card see ibid., p. 284.

  12 Ferguson, ‘Keynes and the German Inflation’, p. 379.

  13 Feldman, The Great Disorder, p. 257.

  14 Ibid., p. 598.

  15 See McNeil, American Money and the Weimar Republic, p. 47. And for the debate over government control of capital exports.

  16 See the discussion of the contemporary and more recent estimates, including Carl-Ludwig Holtfrerich’s, in Stephen A. Schuker, ‘American “Reparations” to Germany’, in Gerald D. Feldman (ed.), Die Nachwirkungen der Inflation auf die deutsche Geschichte, 1924-1933, Munich, 1985, p. 367.

  17 Ferguson, ‘Keynes and the German Inflation’, p. 379f.

  18 Quoted in Feldman, The Great Disorder, p. 598.

  19 Editorial in Vossische Zeitung, ‘Der Kampf ums Leben’, Sunday, 1 January 1922, p. 1f.

  Chapter 15: No More Heroes

  1 See Gomes, German Reparations, 1919-1932, p. 106f.

  2 ‘Germany’s Hopes from Genoa: A Remarkable Survey by Dr. Rathenau’, in Manchester Guardian, 17 April 1922, p. 5. And for the following.

  3 Gomes, German Reparations, 1919-1932, p. 107.

  4 Winkler, Weimar 1918-1933, p. 169.

  5 Both quotes ibid., p.171. Hirsch’s remarked in German that the treaty meant sacrificing: ‘. . . für die russische Taube auf dem Dach der fette Reparationsspatz in der Hand’.

  6 See table ‘The Correlation Between the Dollar Exchange Rate of the Mark and Political News in 1922’, in Feldman, The Great Disorder, p. 505.

  7 ‘Der Dollar 318½’, in Finanz- und Handelsblatt der Vossischen Zeitung, Monday 12 June 1922 (evening edition), online as above.

  8 Quoted in Friedrich, Before the Deluge, p. 105.

  9 Quoted in Winkler, Weimar 1918-1933, p. 173.

  10 Song quoted (in German) in Volker Ulrich, Fünf Schüsse auf Bismarck: Historische Reportagen, p. 154. Free English translation by the author.

  11 For an account of the attack see ‘Fehlgeschlagenes Attentat auf Scheidemann’, in Vossische Zeitung, 6 June 1922 (morning edition), p. 1. For a further explanation of the effects of the poison see ‘Der Anschlag auf Scheidemann: Das Echo der Presse’, in Vossische Zeitung, 7 June 1922 (morning edition), p. 3.

  12 Friedrich, Before the Deluge, p. 104.

  13 Gomes, German Reparations, 1919-1932, p. 109.

  14 Feldman, The Great Disorder, p. 441.

  15 Ibid., p. 446.

  16 Ibid., p. 445.

  17 For the quote and the comment on its significance see ibid., p. 439. See also Gerald D. Feldman, Hugo Stinnes: Biographie eines Industriellen 1870-1924, Munich, 1998, p. 757.

  18 For this evening and the conversations at Ambassador Houghton’s house, including those mentioned in the following paragraph, see Edgar D’Abernon, An Ambassador of Peace: Lord D’Abernon’s Diary, vol. II, The Years of Crisis June 1922-Decemb
er 1923, London, 1929, 28 June 1922, p. 47f. The British ambassador’s description of that evening is based on an account given to him by Houghton and also, regarding the supposed unity of mind between Stinnes and Rathenau, by Stinnes himself. Curiously, D’Abernon gives the wrong date, 28 June, as the day of Rathenau’s assassination.

  19 For an immediate account see ‘Der Reichsminister Rathenau Ermordet’, in Vossische Zeitung, 24 June 1922 (evening edition), p.1. The building worker’s account is in ‘Der Bericht eines Augenzeugen’, in Vossische Zeitung, 25 June 1922 (Sunday), p. 6.

  20 Kessler, Diaries of a Cosmopolitan, p. 185.

  21 Price, Dispatches from the Weimar Republic, p. 126.

  22 Figures in Peter Lempert in Forum, 24 June 2012, ‘Die Ermordung Walther Rathenaus’, online at http://www.magazin-forum.de/die-ermordung-walther-rathenaus.

  23 Pörtner, Alltag in der Weimarer Republik, p. 301.

  24 Haffner, Geschichte eines Deutschen, p. 53.

  25 Friedrich, Before the Deluge, pp. 115-17.

  26 See the memoirs of Walther Rathenau’s niece, Ursula von Mangoldt, Auf der Schwelle Zwischen Gestern und Morgen: Erlebnisse and Begegnungen, Weilheim/Oberbayern, 1963, p. 43.

  Chapter 16: Fear

  1 Feldman, The Great Disorder, p. 446.

  2 Winkler, Weimar 1918-1933, p. 181.

  3 Feldman, The Great Disorder, p. 450.

  4 Ibid.

  5 Ibid., p. 451.

  6 See Winkler, Weimar 1918-1933, p. 181f.

  7 Feldman, The Great Disorder, p. 451.

  Chapter 17: Losers

  1 Andrew MacDonald, ‘The Geddes Committee and the Formulation of Public Expenditure Policy’, in The Historical Journal, vol. 32, no. 3 (Sept. 1989), p. 649.

  2 Dan P. Silverman, Reconstructing Europe after the Great War, Cambridge, MA, and London, 1982, p. 143f. And for the following.

  3 Haffner, Geschichte eines Deutschen, p. 58.

  4 ‘Hermann Zander geb. 1897 erzählt’, at the website Kollektives Gedächtnis, http://www.kollektives-gedaechtnis.de, as above. And for the following quotation.

  5 Haffner, Geschichte eines Deutschen, p. 59.

  6 Wehler, Deutsche Gesellschaftsgeschichte, Bd. 4, p. 294. He estimates the strength of the Bildungsbürgertum in the strictest sense at some 135,00, and by adding family members arrives at a figure of between 540,000 and 680,00, or some 0.8 per cent of the population for this class as a whole.

  7 See Holtfrerich, The German Inflation 1914-1923, p. 268.

  8 For student incomes see Merith Niehuss, ‘Lebensweise und Familie in der Inflation’, in Carl-Ludwig Holtfrerich, Gerhard A. Ritter and Peter-Christian Witt (eds), Die Anpassung an die Inflation, Berlin, 1986, p. 259f.

  9 Friedrich, Before the Deluge, p. 122.

  10 Wehler, Deutsche Gesellschaftsgeschichte, Bd. 4, p. 298.

  11 Haffner, Geschichte eines Deutschen, p. 60f.

  12 Wehler, Deutsche Gesellschaftsgeschichte, Bd. 4, p. 298.

  13 Niehuss, ‘Lebensweise und Familie in der Inflation’, in Die Anpassung an die Inflation, p. 245.

  14 Pörtner, Alltag in der Weimarer Republik, p. 170.

  15 Quotation from essay ‘Die intimen Seiten der deutschen Lage’, 4 March 1922, in Troeltsch, Die Fehlgeburt einer Republik, p. 255f.

  16 See Deborah Cohen, The War Come Home: Disabled Veterans in Britain and Germany, 1914-1939, Berkeley, CA, 2001, p. 7.

  17 See Gerald D. Feldman, ‘The Fate of the Social Insurance System in the German Inflation, 1914 to 1923’, in Die Anpassung an die Inflation, pp. 437ff.

  18 Feldman, The Great Disorder, p. 563.

  19 Notes to Price, Dispatches from the Weimar Republic, p. 129.

  20 Ibid. article., p.130.

  21 See Steven B. Webb, ‘Fiscal News and Inflationary Expectations in Germany After World War I’, in Journal of Economic History, vol. 46, no. 3 (Sept. 1986), p. 786.

  22 Niehuss, ‘Lebensweise und Familie in der Inflation’, in Die Anpassung an die Inflation, p. 252.

  23 Friedrich, Before the Deluge, p.126.

  24 Ibid., p. 253f.

  25 Ibid., p. 256f.

  26 Pörtner, Alltag in der Weimarer Republik, p. 341.

  27 Ibid., p. 254f.

  28 ‘The New Berlin Crisis. Oscillations of the Mark’, in Manchester Guardian,26 March 1922, p. 8.

  Chapter 18: Kicking Germany When She’s Down

  1 ‘Valuta und Fondsmarkt: Der Dollar 6300’, in Vossische Zeitung, 22 November 1922 (Saturday edition), p. 9.

  2 ‘Dr. Cuno To Be Chancellor: At Work on New Cabinet’, in The Times, 17 November 1922, p. 9.

  3 Kessler, Diaries of a Cosmopolitan, p. 197.

  4 See Gomes, German Reparations, 1919-1932, p. 110.

  5 Figures in Hosfeld and Pölking, Wir Deutschen: 1918 bis 1929, p. 106.

  6 See Conan Fischer, The Ruhr Crisis, 1923-1924, Oxford, 2003, p. 40.

  7 Feldman, The Great Disorder, p. 631f.

  8 Fischer, The Ruhr Crisis, p. 35.

  9 Account of Keynes’s visit, with quote from his address, in Niall Ferguson, Paper and Iron: Hamburg Business and German Politics in the Era of Inflation, 1897-1927, Cambridge, 1995, p. 358f.

  10 See the telegram containing these details sent by Foreign Minister Rosenberg to the German ambassador in Paris for his information, 12 January 1922, in Winfried Becker (ed.), Frederic von Rosenberg: Korrespondenzen und Akten des deutschen Diplomaten und Außenministers 1913-1937, Munich, 2011, p. 227.

  11 Feldman, The Great Disorder, p. 635.

  12 Fischer, The Ruhr Crisis, p. 86.

  13 Ibid., p. 39.

  14 Price, Dispatches from the Weimar Republic, p. 151.

  15 See Koch, der Deutsche Bürgerkrieg, p. 334.

  16 Price, Dispatches from the Weimar Republic, p. 159.

  17 Pörtner, Alltag in der Weimarer Republik, p. 188.

  18 See the article at the local railway website, http://www.eisenbahn-in-dalheim.de/historie.htm.

  19 Gomes, German Reparations, 1919-1932, p. 120.

  20 Fischer, The Ruhr Crisis, p. 208f.

  21 Winkler, Weimar 1918-1933, p. 194. Krupp was released after seven months when the Berlin government finally abandoned passive resistance in the Ruhr.

  22 Ibid.

  23 Ibid. Also Fischer, The Ruhr Crisis, p. 169.

  24 Koch, Der deutsche Bürgerkrieg, p. 339.

  Chapter 19: Führer

  1 Winkler, Weimar 1918-1933, p. 81.

  2 See Winkler, Der Lange Weg Nach Westen, p. 436.

  3 Koch, Der deutsche Bürgerkrieg, p. 334f.

  4 Kershaw, Hitler 1889-1936: Hubris, p. 192.

  5 ‘“An Army of Revenge”. Munich Fascist Threats’, in The Times, 15 January 1923, p. 10.

  6 ‘Militarism in Bavaria. Fascist Movement Spreading’, in The Times, 22 May 1923, p. 11.

  7 ‘Aggressive Bavarian Nationalists. Demonstration in Force’, in The Times, 11 June 1923, p. 11.

  8 Text of interview reproduced in Truman Smith and Robert Hessen, Berlin Alert: The Memoirs and Reports of Truman Smith, Stanford, CA, 1984, p. 61.

  9 Quoted in William L. Shirer, The Rise and Fall of the Third Reich, London, 1973, p. 62.

  Chapter 20: ‘It Is Too Much’

  1 See Ernest Hemingway, ‘The German Inflation’, in Toronto Star, 19 September 1922, reproduced in William White (ed.), Dateline Toronto: The Complete Toronto Star Dispatches, 1920-1924, New York, 1985, pp. 266-9. And for the following quotes.

  2 See the article by Hemingway reproduced as part of ‘The Hemingway Papers’ at http://ehto.thestar.com/marks/a-canadian-with-1000-a-year-can-live-very-comfortably-and-enjoyably-in-paris.

  3 Quoted in Friedrich, Before the Deluge, p. 125.

  4 ‘Anti-Foreign Movement in Germany. Speculation in Houses’, in Observer, 26 November 1922, p. 8.

  5 ‘That Cheap Holiday in Germany. Berlin Planning a Tax for Foreigners’, in Manchester Guardian, 2 May 1922, p. 10.

  6 ‘Fleecing the Foreigner. Germans Ready for the Tourist
’, in The Times, 20 May 1922, p. 9.

  7 Paul Ferris, The House of Northcliffe: Biography of an Empire, London, 1971, p. 265.

  8 Rates as in Finanz- und Handelsblatt der Vossischen Zeitung, 1 March 1923 (evening edition), p. 4.

  9 ‘Paper Money. The Foreigner in Germany’, in Manchester Guardian, 1 March 1923, p. 4. And for the quote immediately below.

  10 See Feldman, The Great Disorder, p. 534f.

  11 ‘Der Schauspielerstreik (Gespräch zwischen Theaterdirektor, Schauspieler und Kritiker)’, in Die Weltbühne, XVIII. Jahrgang, Nr 49, 7 December 1922, pp. 601-5.

  12 See Feldman, The Great Disorder, p. 536.

  13 Ibid., p. 537.

  14 Kurt Wolff, ‘Brief an Eulenberg’, in Die Weltbühne, XX. Jahrgang, Nr 5,31 January 1924, p. 136.

  15 Wehler, Deutsche Gesellschaftsgeschichte, Bd. 4, p. 331.

  16 Feldman, The Great Disorder, p. 707.

  17 Ibid., p. 574.

  18 See Wehler, Deutsche Gesellschaftsgeschichte, Bd. 4, p. 331f.

  19 See ‘Auszüge aus dem Tagebuch des Konrektors und Kantors August Heinrich von der Ohe aus den Jahren 1922/1923’ at the website Kollektives Gedächtnis, http://www.kollektives-gedaechtnis.de/texte/weimar/ohe/inflation1923.htm.

  20 See the website of the Kleingartenverband München at http://www.kleingartenverband-muenchen.de/fileadmin/Downloads/Chronik%20des%20%20Verbandes.pdf.

  21 Figures on garden clubs and egg production in Niehuss, ‘Lebensweise und Familie in der Inflation’, in Die Anpassung an die Inflation, p. 252f.

  22 Pörtner, Alltag in der Weimarer Republik, p. 404 (Erich Mende). See also ibid., p. 420 (Wilhelm Krelle): ‘We did not need to go hungry. My father often travelled on a Sunday to Rietzel, where my grandfather’s farm was, and then returned with a rucksack full of food.’

  23 Wehler, Deutsche Gesellschaftsgeschichte, Bd. 4, p. 277. The process of urbanisation resumed during the ‘golden’ era between 1924 and 1929, only to undergo another reversal during the Great Depression. As the economy recovered after 1933, the exodus to the cities picked up once again, and, despite all the Nazi propaganda about ‘blood and soil’, increased during the Hitler dictatorship at a far faster rate than at any time since the beginning of the century.

 

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