What Bad Financial Policy can Bring: Weimer Germany in the 1920's
As governments go, the Weimer Republic was relatively successful. Despite the burdens of economic depression, war reparations due from the Treaty of Versailles, and social upheaval bordering on anarchy, this fledgling government survived. The Weimer Republic managed to govern a diverse country of 50 million people for nearly 13 years. It was able to establish a democracy in a country that had no experience with such government and little tradition of representative government. However, the Weimer Republic is not remembered for its accomplishments but for what it was not able to do. Weimer is often remembered for its inability to stop the rise of National Socialism, to prevent the tyranny of Hitler and the consequent rise of the Third Reich.
Politically, the Weimer Republic started off on rocky terms. The early 1920s witnessed several communist revolts in Bremen (1919), Leipzig (1921), and Hamburg (1923). In 1919, a revolt in southern Germany led to the brief secession of Bavaria, under the wayward flag of the Bavarian Soviet Republic. However the mreer sign of pressure from Berlin brought the rebellious provinces back into line. But these early revolutions were only the start of the Weimer Republic's problems. The repercussions of the First World War had shattered German economics. Inflation rates skyrocketed reaching an unimaginable 4 trillion marks to a dollar.
Weimar was also burdened by £6,600 million in war reparations due to the British and French. However, the mere payment of this debt was not what harmed the German economy, but it was the way in which they were paid. In the early twenties yearly payments of War reparations amounted only to 2%-4% of the German GNP. Nevertheless the only way Weimer thought the debts could be paid was by simply printing more money, the same method that the Kaiser had used to finance the First World War. When the Weimer government printed money, there was simply no backing behind the bills. Germany's economic structure had been crippled under the provisions of Versailles: she had lost 13% of her pre-war territory, 10% of her population, 75% of her iron ore, 68% of her zinc ore, 26% of her coal resources, also textile industries, communications system, and railroads built in Alsace-Lorraine and Upper Silesia, and all of her overseas colonies. These losses were far too expansive for the Mark to be adequately backed. Weimar may have been able to climb back into fiscal solvency but the worldwide economic crisis of 1929 hurt German economy again, practically ruining the middle class and sending unemployment towards 30%.
Economics and politics were potent toxins for Weimer, but neither factor totally explains the collapse of the government and the rise of the Nazis. Traditionally, Germany has been a nation of proud and patriotic warriors. This characteristic goes back hundreds of years and ranges before the formation of a unified German state. The glory of the old Prussian military mold - discipline, competence, tenacity, and patriotism - remained alive in the hearts and minds of many Germans, especially the German general staff. Even after the armistice in 1918, the German Army retreated with pride and order. After the war millions of veterans returned home, having retreated but never having surrendered. Moreover, for all practical purpose these men had succeeded in their service and oath; they had defended Germany. With the small exception of French gains in Alsace, the German army had not let a single Anglo-French troop onto German soil. Concurrently, on the Eastern Front the German army had succeeded with the defeat of the Czar's forces and a signed peace. These factors weighed heavily on the Weimer Republic and gave rise to the "stab in the back theory." Weimer also had to deal with another repercussion of World War I, the Treaty of Versailles. Versailles slapped Germany with the entire blame of the war, for a "supreme offence against international morality and the sanctity of treaties." Under these circumstances the Weimer Republic had lost two of its most potent national qualities.
Weimer Germany was prevented from having U-boats, an Air Force, and a standing Army of over 100,000. Considering that Germany mobilized 13,250,000 men during the First World War and suffered 2 million deaths, a 100,000-man army was extrodinarily small. But what does this matter? Germany was of course not at war during the tenure of the Weimer Republic. The effect comes from the character of the German people. Germany and its princely predecessors had long maintained a strong standing Army. Germany had always been known for its military prowess. The list of German military prestige is endless, starting with Tutenburg Wald and the utter annihilation of three of Augustus's crack legions. The tradition continued through the Goths, Visigoths, Frederick the Great, and Helmoth Von Molke. By 1918 this warrior tradition had imprinted itself onto the hearts and minds of many Germans.
Versailles tried to break this convention but these feelings of Teutonic militarism remained pervasive. Weimer had the colossal problem of millions of discharged veterans and warriors. Worse still, these veterans were often unemployed. The provisions of Versailles allowed for only a few of these men to have a career in the military. The result was the appearance of numerous paramilitary organizations, most notably the Nazis. Many intelligent and strong men flocked to these banners. In other times these people might have joined the army and put their efforts toward the government and the protection of the state. But as it stood, they were offered little option in regard for the application of their military prowess. These men were capable and dedicated, but most importantly they were purposeful, solid as a wall. They applied their gifts toward their gangs instead of the government. In this manner the Weimer lost one of its most potential useful assets, and in some cases the veterans were working against the government.
But this dissolution of military manpower is merely half of the puzzle, and clearly the Nazis were not a national force simply because of this waste. If a strong military tradition is the sword of German character, a prideful and patriotic people is the hilt. In this pride and patriotism, Weimer lost another of its most latent useful assets. The accepting of guilt in the cause of World War I wounded this patriotism greatly. This emotional gash was compounded by both Weimer and the Nazis telling the German people that Versailles had been unfair. In Germany, a saying on the subject was, "Never forget it, always think about it, never talk about it." The problem here is evident: the people knew that the treaty was unfair, but they could not get a discourse going, and the wound festered. Moreover, the Government said it was wrong and yet did nothing, the Nazis did.
When the worldwide financial crisis of 1929 hit. the Weimer was completely unprepared. Unemployment soared and unrest grew. But the Nazis found a bully pulpit, and it was not economic. Their rallying cry was to bring back what once was: to bring back order, to throw off Versailles, and, most important, to restore pride and patriotism. Weimer had no defense against this saber rattling. They could not rely on the national characteristics that were German hallmarks. Meanwhile, the Nazis could: they had shown themselves as a militarized party but more notably as a prideful and patriotic one. Their talk of a "greater Germany" captured the young and old alike. Unable to mount a strong defense, the Weimer resorted to a dead man's recourse: they embraced the horror. In this capitulation they hoped to manipulate Hitler and to survive, but this submission only hastened the rise of the Nazis. Once the jackboots had the power, they never gave it back, and they used it to solidify control. Riding on a tidal wave of popular patriotism, the Nazis acted quickly, restoring faith in the government by ignoring Versailles and then openly throwing it away. They set Germany on a clear, determined course, but a journey that would ultimately lead to utter destruction.
 From the Treaty of Versailles.
 Voices From The Third Reich, Johannes Steinhoff, Peter Pechel, and Dennis Showalter, p. xxvii.
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