Category Archives: democracy

by Joel | 30 April 2024 · 5:41 pm

Austrian-German Banking Crisis, 1931

From The Weimar Years: Rise and Fall 1918–1933, by Frank McDonough (Bloomsbury, 2023), Kindle pp. 575-576:

The bungled fiasco of the German–Austrian Customs Union led directly to the Austrian banking crisis. On 13 May, the Creditanstalt, the largest and most respected Austrian bank, suddenly declared bankruptcy, sending shock-waves through world financial markets. Jittery creditors everywhere withdrew funds. The bank’s initial losses amounted to 828 million Austrian schillings. During May, Austria’s foreign-currency reserves fell by 850 million schillings. Otto Ender, the Austrian Chancellor, was forced to put together a government-backed financial rescue plan by buying up 100 million schillings’ worth of Creditanstalt stock. Support in this rescue package was given by the powerful Rothschild banking family of Austria, and on 16 June the Bank of England provided a sizeable loan to the Austrian government to assist with the plan.

The Austrian banking crisis had a domino effect, with the panic-selling of the stock of German banks soon following. In early June, the Reichsbank announced it had suffered the withdrawal of 1 billion Reichsmarks since the Creditanstalt collapse, with foreign deposits falling by 25 per cent. The German government was now having great difficulty in raising foreign loans to service its huge public-spending deficit, and the Reichsmark was falling on currency markets. On 5 June, Brüning issued the Second Emergency Decree for the Protection of the Economy and Finances, which brought in reductions in welfare benefits, wage cuts for all public-sector employees, plus a ‘crisis’ tax, levied on better-paid white-collar workers, and increases in sales taxes on sugar and imported oil. The one concession to organised labour was a promise of 200 million Reichsmarks for the funding of public works. This new decree was accompanied by a blunt declaration from Brüning that ‘the limit of privations which we can impose on the German people had been reached’, and he further warned that Germany could not make the reparations payments due in 1931 under the Young Plan.

On 7 June, Heinrich Brüning, accompanied by Julius Curtius, the German Foreign Minister, met with Ramsay MacDonald, at Chequers, the British Prime Minister’s picturesque country retreat. The purpose of the visit was for a ‘mutual exchange of views’. Also present was Montagu Norman, the Governor of the Bank of England, who expressed dissatisfaction with Brüning’s announcement of his intention to suspend reparations payments. In response, Brüning explained his declaration was really a warning of what would happen if the issue of Germany’s payments for 1931 was not urgently addressed. The friendly meeting only yielded the release of a joint statement, which laid stress on ‘the difficulties of the existing position in Germany and the need for alleviation’.

The US President, Herbert Hoover, was following European economic affairs closely, and he fully appreciated the impact the financial collapse of German banks would have on American creditors. The magnanimous proposal by Hoover of a payments moratorium was initially opposed by the French government, Germany’s principal reparations creditor, but was finally accepted, on 6 July, with the condition that the German government spent the one-year saving on reparations for domestic rather than military purposes. The Hoover Moratorium really marked the beginning of the end of German reparations payments, which were never resumed.

Leave a comment

Filed under Austria, Britain, democracy, economics, France, Germany, nationalism, U.S., war

by Joel | 28 April 2024 · 1:12 pm

Weimar Elections of 1930

From The Weimar Years: Rise and Fall 1918–1933, by Frank McDonough (Bloomsbury, 2023), Kindle pp. 552-554:

Given the horrors that followed, it now seems impossible to understand why German people of their own free will could vote in such large numbers for a party pledged to destroy democracy. In Dresden, Victor Klemperer, an academic at Dresden University, wrote in his diary: ‘107 National Socialists. What a humiliation! How close are we to civil war!’ In contrast, the Nobel Prize-winning physicist Albert Einstein told the Jewish Telegraphic Agency there was no reason for despair over Hitler’s strong showing in the national elections because ‘it was only a symptom, not necessarily of anti-Jewish hatred, but was caused by unemployment and economic misery within the ranks of misguided youth’.

It seems 24 per cent of NSDAP voters were voting in an election for the first time, many of them young people and pensioners, 22 per cent of new NSDAP voters had previously voted for the DNVP, with 18 per cent moving from the middle-class liberal parties, and 14 per cent from the Social Democrats. In sum, the biggest movement of voters to the NSDAP came from the middle-class conservative and liberal parties, and the party received the least swing votes from the KPD and Zentrum. There was also a strong reluctance to vote NSDAP in the big cities with large working-class industrial workers.

The most impressive gains for the NSDAP were in Protestant rural areas, especially those of northern and eastern Germany stretching from Schleswig-Holstein to East Prussia. The party performed very well in large northern states such as Pomerania, Mecklenburg, Hanover, Brunswick and Oldenburg, and achieved comparable results in predominantly Protestant Franconia and Hesse-Nassau. Voting support in these areas came primarily from elements of the lower middle class: small shopkeepers, farmers, self-employed tradespeople such as builders, plumbers, electricians and joiners, but there was also an upswing of support from middle-class white-collar workers, lower civil servants, teachers and university students. It was these who would represent the party’s core voters during its rise to power, but the NSDAP was not simply a ‘middle-class protest party,’ as was once thought. It is now clear Hitler’s party was able to gain support from all sections of society in a way the other political parties could not.

It was not, as is often supposed, primarily economic misery that drove voters to the NSDAP. Hitler’s campaign had focused on the failure of the Weimar political system to solve Germany’s problems, and this issue seems to have struck a far stronger chord with voters than the state of the economy. There was a growing loss of confidence in the Weimar political system, which made the decision to vote for a party that was not tainted by involvement in that system much easier. An editorial in the Frankfurter Zeitung spoke of an ‘election of embitterment’ in which voters expressed deep disaffection with ‘the methods of governing or rather non-governing’ of parliamentary government.

Hitler’s dramatic election breakthrough had a devastating impact abroad. There was a large withdrawal of gold and foreign currency from the Reichsbank, and a sharp fall in German stocks on international markets. Even larger German banks were shaken by the wave of panic selling. Julius Curtius, the Foreign Minister, who was in Geneva while the League of Nations was in session, reported when he heard the results: ‘the mood was one of the greatest alarm’. The world now started taking much greater interest in Adolf Hitler.

Leave a comment

Filed under democracy, economics, education, Germany, labor, nationalism, religion

by Joel | 19 April 2024 · 6:02 am

Effects of the Arandora Star Sinking

From The Island of Extraordinary Captives: A Painter, a Poet, an Heiress, and a Spy in a World War II British Internment Camp, by Simon Parkin (Scribner, 2022), Kindle pp. 178-179:

THROUGHOUT THE WARM WEEKS OF July [1940], as Hutchinson’s internees appointed their leaders and cooks, drew up the schedule of lectures and entertainments, and learned to paint, a pile of suitcases sat in a corner of another internment camp in Devon, a few hundred miles away. Rescued from the wreck of the Arandora Star, these unclaimed effects were the somber luggage of the recently deceased. It was a smaller pile of belongings than those left at the doors to the Holocaust’s shower rooms, but still emblematic of injustice. As the swollen bodies of the dead began to wash onto Irish and Hebridean beaches, so fresh details about the tragedy continued to emerge, casting further doubt on the official version of events.

On July 30, in the House of Commons, the secretary of state for war, Anthony Eden was asked whether the government had known for sure that, as previously claimed, everyone aboard the Arandora Star had been a Nazi sympathizer. By now, Eden knew for certain that this had not been the case.

“Fifty-three [Germans and Austrians aboard] were or claimed to be refugees, but had nevertheless been placed in category A,” he conceded.

In Whitehall, the impersonal statistics were now clothed with the intimacies of story. Politicians learned that, among the dead, there was a German sailor who came to Britain as an anti-fascist, only to be interned with a “mélange” of Nazi sympathizers; there was a metalworker who, after spending four years imprisoned in Nazi camps, escaped to Britain, was interned, then killed in the sinking; there was the blind pensioner who had been separated from his wife for the first time in his life.

The admission that refugees of Nazi oppression had been aboard the ship caused widespread outrage and called into question the wider policy of mass internment, which had begun to seem less like a rational security measure and more like victim-blaming on an industrial scale. The Jewish Chronicle, which just a few months earlier had defended a wartime government’s “right to interfere drastically with the freedom of the individual,” now likened the “disgraceful hounding of refugees” to “Gestapo methods.” Readers agreed. “It seems strange that in order to defeat the Gestapo abroad, it should be considered necessary to introduce their methods at home,” wrote Moya Woodside in a typical letter published in the Northern Whig. The public’s attitude had changed. Policy would duly follow.

While still far from secure, Britain’s general position in the war had shifted enough that, as Churchill put it to his cabinet, it was now possible to “take a somewhat less rigid attitude in regard to the internment of aliens.” Arrests, which had continued at a rate of around 150 per day throughout July, were suspended. If a so-called enemy alien had thus far managed to avoid being apprehended, they would most likely remain free for the remainder of the war. Mass internment was finished.

“That tragedy may… have served a useful if terrible purpose,” said Lord Faringdon of the Arandora Star in a speech to the House of Lords later that week. “For it may have opened the eyes of those responsible, and of members of the public, and of His Majesty’s Government.” It would take months and years to unpick the tangled mess of internment. Politicians’ efforts to justify and distance themselves from the episode were, by contrast, immediate.

Leave a comment

Filed under Austria, Britain, Canada, democracy, Germany, migration, military, nationalism, war

by Joel | 16 April 2024 · 8:37 am

U.S. vs. U.K. on Mass Internment

From The Island of Extraordinary Captives: A Painter, a Poet, an Heiress, and a Spy in a World War II British Internment Camp, by Simon Parkin (Scribner, 2022), Kindle pp. 65-67:

ON SEPTEMBER 1, 1939, TWO days before Britain declared war on Germany, police forces around the country received the order to unseal the envelopes sent by MI5 and arrest those individuals named within. In London, officers escorted the internees to the Olympia exhibition hall on Hammersmith, which had been set aside as a clearing center, even forcing the men to pay for the taxi ride. By the end of the week, 350 individuals had been arrested across the country and delivered to Internment Camp No. 4, an out-of-season seaside resort at Clacton-on-Sea in Essex, just fifteen miles away from the Kindertransport camp at Harwich.

Despite months of investigation and planning, this first wave of arrests—intended to capture only the most dangerous Nazi sympathizers and fervent communists—was characterized by mistakes and misunderstandings. Eugen Spier, Alex Nathan, and Dr. Bernhard Weiss, all Jews and staunch anti-fascists, were among the first men arrested and taken to Olympia, where they were herded alongside bona fide Nazis such as Hitler’s friend Ernst Hanfstaengl. Weiss was the former Berlin police chief and had become famous in Germany after he sued Joseph Goebbels, Hitler’s minister of propaganda, more than forty times for libel and won every time. It was difficult to imagine a less likely suspect for a Nazi spy.

With those MI5 had deemed highest risk interned, the question of what was to be done with the thousands of other “enemy aliens” living in Britain immediately arose. In the House of Commons on September 4, the MP Arthur Greenwood put the following question to the home secretary, Sir John Anderson, who had been on the job only a day: “What steps [do you] intend to take to deal with aliens in time of war?”

For the first time in public, Anderson began to explain the government’s plans.

“A number of aliens whose suspicious activities have been under observation are already under detention,” explained Anderson. Others, he said, would now have to report to the police and obtain permits for change of residence, travel, and the possession of items such as cameras and motorcars.

“A large proportion of the Germans and Austrians at present in this country are refugees, and there will, I am sure, be a general desire to avoid treating as enemies those who are friendly to the country which has offered them asylum,” Anderson continued. “At the same time, care must be taken to sift out any persons who, though claiming to be refugees, may not, in fact, be friendly to this country.”

Here was the essence of the problem facing the British government. In a letter to the foreign secretary, Sir John Anderson explained that “It was felt… it would be wrong to treat as enemies [those] refugees who are hostile to the Nazi regime, unlikely to do anything to assist the enemy and often anxious to assist the country which has given them asylum.” And yet, there was a risk that there could be enemies posing as refugees, spies who had already entered Britain under the cloak of asylum.

On September 29, Cordell Hull, the US secretary of state, sent a telegram to the American embassy in London warning of the moral dangers inherent in a policy of mass internment. Hull referenced the lessons of the First World War, when “the rigorous… internment of enemy aliens” caused “widespread and seemingly unnecessary suffering to thousands of innocent persons.” Copies of the message were also sent to the American embassies in Berlin and Paris, a pointed sign of US neutrality at this stage of the war.

For now, however, the threat of mass internment seemed both remote and mitigated by the plan for the tribunals that, between October 1939 and March 1940, would deliberate no fewer than 73,353 cases, including that of Peter Fleischmann. Most were refugees, and the others long-established residents or people who, by chance, were in Britain at the outbreak of war. Nevertheless, the reliability and loyalty of everyone would be examined by a panel. If suspicions remained, they were to be interned.

Not everyone condoned such a magnanimous approach. Guy Liddell, MI5’s head of counterintelligence, summed up his view of the decision to forgo mass internment with a single word: “Farce.”

Leave a comment

Filed under Britain, democracy, Germany, migration, military, nationalism, U.S., war

by Joel | 14 April 2024 · 12:39 pm

Death of Stresemann, 1929

From The Weimar Years: Rise and Fall 1918–1933, by Frank McDonough (Bloomsbury, 2023), Kindle pp. 506-508:

As news spread of Stresemann’s death, there was a flood of tributes. The Deutsche Allgemeine Zeitung (German General Newspaper) wrote, ‘It seemed necessary for this man to die for his real greatness to be appreciated by his compatriots.’ There were glowing tributes from leading world leaders, including Ramsay MacDonald, the British Prime Minister, who commented: ‘His memory is secure, and I cannot believe the great service he has given to pacification with such patience and faith can now be undone.’ Aristide Briand, the French Prime Minister, sent a telegram to Stresemann’s widow Käte, which read: ‘I will always retain the deepest respect for his memory. In pursuit of our common ideal, Dr Stresemann caused me to appreciate his lofty outlook and fine loyalty.’

Stresemann lay in state in the German parliament. Thousands of people filed past the open coffin to pay their respects before his state funeral on 6 October. Hermann Müller, the Reich Chancellor, bowed to the coffin in the Plenary Hall of the Reichstag, where the memorial service was held, before delivering a moving eulogy, describing Stresemann as a towering figure in world politics. There was then a solemn funeral procession through Berlin, pausing for several minutes outside the Foreign Ministry, before proceeding to burial in the Luisenstädtischer Friedhof in Kreuzberg, Berlin. It was estimated that a crowd of 200,000 had lined the route. Film newsreels of the event appeared in cinemas around the world.

Gustav Stresemann’s record entitles him to be seen not only as the Weimar Republic’s most successful Foreign Minister, but undoubtedly its most dominant political figure. It is impossible to see German history in the 1920s taking the same course without him. Some politicians make an enormous difference, and he was one of those who did. He was a member of every German cabinet from 1923 to 1929, and the Social Democrats were his most consistent supporters. Stresemann raised Germany from a humiliated and disgruntled foe in 1923 into a diplomatic equal and Great Power again at the time of his death. His achievements as Foreign Minister ended the Ruhr occupation of 1923, contributed to the stabilisation of the Republic, finalised the Locarno and Rapallo Treaties and the Kellogg–Briand Pact, took Germany into the League of Nations, eased Germany’s reparations burdens through the Dawes and Young Plans, and brought the foreign occupation of Germany to an end. Never has the Nobel Peace Prize had a more justified recipient.

Stresemann’s death left a huge void in German political life. He had been a force of stability within a deeply unstable political system, and had gained admiration around the world. There was no speech at the League of Nations in the months following his death that did not begin with a homage to his memory. There was simply no one in Germany or outside it capable of stepping into his shoes.

It is difficult to calculate the exact part his tragic death played in the destruction of German democracy, and the souring of international relations, but he was probably the one Weimar politician who, through the sheer force of his personality, might have saved it, though Stresemann himself thought everything in politics was determined by the state of the economy. Critics of Stresemann have depicted him as an opportunistic and deceitful power-politician with a hidden militaristic agenda, with some even trying to depict him as Hitler in a morning suit. Between the extremes of Dr Jekyll and Mr Hyde, Stresemann was predominantly Dr Jekyll, whereas Hitler was always Mr Hyde. But there is truly little evidence in his private papers or his diaries of Stresemann desiring a war of revenge or territorial expansion beyond restoring the territory lost by Germany under the terms of the Treaty of Versailles, and putting an end to reparations.

Leave a comment

Filed under Britain, democracy, France, Germany, nationalism, war

by Joel | 5 April 2024 · 4:23 pm

Death of Weimar President Ebert, 1925

From The Weimar Years: Rise and Fall 1918–1933, by Frank McDonough (Bloomsbury, 2023), Kindle pp. 355-357:

The Barmat-Kutisker Scandal did little to improve the failing health of President Ebert, who had been suffering from undiagnosed severe stomach pain for weeks. He became even more ill in mid-February, and was confined to bed with what was initially diagnosed as a severe bout of influenza. His condition then deteriorated further, and his doctors next thought he was suffering from a recurrence of a severe gall-bladder infection known as cholecystitis. Finally, on 23 February, he was admitted to a hospital in Charlottenburg with appendicitis and peritonitis. Ebert underwent an emergency appendectomy, performed by August Bier, one of Germany’s most eminent surgeons. At first, he seemed to be recovering, but then his condition suddenly worsened. On 28 February at 10.15 a.m., Ebert died in his sleep, aged just 54, of post-operative septic shock, with his wife and family at the bedside.

Friedrich Ebert was a Social Democrat of humble origins, and a firm supporter of democracy, who had led democratic Germany through six difficult years from the ashes of defeat in 1918 to the threshold of international reconciliation. He considered himself a patriot and a social reformer, not a rabble-rouser. Despite all the hostility he faced from the extreme Left and Right, he remained the Republic’s anchor of stability, always showing a willingness to find a consensus among different viewpoints. His departure from the political scene was undoubtedly a bitter blow and a key turning point in the history of the Weimar Republic.

The state funeral of Friedrich Ebert was a huge public event, attended by vast crowds in Berlin and Heidelberg. Ebert’s coffin was draped in the flag of the Reich President in which the black-red-gold colours of the Republic were prominent. The black eagle on a yellow background was also displayed. The main ceremony was held in the presidential palace, followed by a sombre funeral procession including representatives of the police, the Reichswehr, the Reichstag and the German states, which wound a slow passage through Berlin’s streets to the Brandenburg Gate, and to the nearby Reichstag building, then proceeded to Potsdam railway station where the coffin remained for a while so that ordinary Germans could pay their respects.

…

The funeral train journeyed to Ebert’s home town of Heidelberg for the service and burial in the Bergfriedhof Cemetery. The memorial service began with the funeral march from Beethoven’s Eroica symphony, played by the orchestra of the German State Opera. A moving eulogy was then read by Hans Luther, the German Chancellor, and the ceremony ended movingly with the music of Mozart. A short newsreel film of the funeral, showing scenes from the Berlin and Heidelberg ceremonies, appeared in cinemas throughout Germany.

Leave a comment

Filed under democracy, Germany, military, nationalism, philosophy, war

by Joel | 2 April 2024 · 8:23 am

New Reichsmarks and Elections, 1924

From The Weimar Years: Rise and Fall 1918–1933, by Frank McDonough (Bloomsbury, 2023), Kindle pp. 341-343:

Whilst the Allied Control inspection was in progress in the autumn of 1924, there was a huge shake-up in German currency. On 11 October, the Reichsmark (RM) was introduced, as part of the Dawes Plan [to pay war reparations under the Versailles Treaty], as a permanent replacement for the interim currency, the Rentenmark, which had restored economic stability, and the old Papiermark, which had collapsed under the weight of hyperinflation. The denominations of Reichsmarks came in lower-value coins and banknotes of 5M, 10RM, 20RM, 50RM, 100RM and 1,000RM. Each Reichsmark was divided into 100 Reichspfennigs. Germany finally had a stable currency once again, guaranteed by the independent Reichsbank. The Reichsmark remained the German currency until it was replaced by the Deutsche Mark on 23 June 1948, which itself was succeeded by the Euro in 2002.

…

The German national election took place on 7 December 1924. Voter turnout was 78.8 per cent. The parties who had supported the Dawes Plan did well. The party gaining the most seats was the SPD, which won 131 seats, a gain of 31 from May 1924, with a popular vote of 26 per cent (7.88 million), up 5.5 per cent. The middle-class parties made smaller gains. The DVP, led by Gustav Stresemann, won 51 seats, up from 45, and polled 3.05 million votes, or 10.1 per cent of the electorate, an increase of 0.99 per cent since May. Zentrum won 69 seats, up from 65, polling 13.6 per cent overall (4.11 million), only up by a narrow 0.22 per cent since May. The DDP improved its position slightly, winning 32 seats, up from 28, taking 6.3 per cent of the popular vote (1.91 million), an increase of 0.6 per cent. The big electoral surprise was the performance of the nationalist DNVP, which improved its position, winning 103 seats, an increase of eight from May, taking 20.5 per cent of the popular vote (6.20 million), an increase of just 1 per cent.

The two other parties who had opposed the Dawes Plan, the Communists and the National Socialists, performed poorly. The KPD won 45 seats, a loss of 17 seats since May, polling 8.9 per cent of votes (2.7 million), down 3.7 per cent. The National Socialist Freedom Party (NSFP), led by Ludendorff, won 14 seats, down 18 on May, polling a total vote of 3 per cent (907, 242), down by 3.55 per cent. The mediocre performance of these extreme parties was proof of the change that had come over the economy since the May election. The gradual consolidation of economic affairs was clearly impacting on voting behaviour. Inflation was now under control and unemployment was falling. This meant the working classes and the lower middle class were much better off than they had been six months earlier. In these circumstances, the parties of the extreme Right and Left seemed much less attractive.

Leave a comment

Filed under democracy, economics, Germany, labor, nationalism, war

by Joel | 27 March 2024 · 2:27 pm

Revolts Left, Right, and Rhenish, 1923

From The Weimar Years: Rise and Fall 1918–1933, by Frank McDonough (Bloomsbury, 2023), Kindle pp. 289-291:

The Munich Beer Hall Putsch is the most notorious event in the early history of Hitler and the National Socialist Party (NSDAP). It was hurriedly planned, bungled in execution, and resulted in humiliating failure. Because of what came later it has been elevated to the status of a monumental event, when in fact what occurred was a small, localised revolt, confined to Munich, which lasted a few hours. It failed because Hitler had allowed his party to become a purely paramilitary organisation involved in an ill-defined conspiracy with disparate Bavarian right-wing politicians. Hitler, who had never been brought into the heart of Kahr’s conspiracy, had whipped up his own supporters into a frenzy only to find that he had already been deserted by his supposed co-conspirators before he ever arrived at the Bürgerbräukeller.

Gustav Stresemann gave a speech on 11 November 1923 in which he reflected on the recent events in Munich, admitting that ‘Germany is now confronted with the demand for a dictatorship’, but he stressed that anyone thinking a dictatorship would improve matters was making a ‘great mistake’. The recent attempt by Hitler to bring about a dictatorship via a beer hall in Munich would have brought no help to the German people. Stresemann was most ‘deeply shaken’ by the involvement of Ludendorff in Hitler’s attempted coup. Stresemann thought a ‘destructive force’ such as Hitler’s movement represented could never have provided competent government for Germany, even if he had succeeded.

At the same time as the left-wing revolt in central Germany and the right-wing struggle in Bavaria were going on, a much more dangerous threat to the territorial unity of the Weimar Republic had erupted in the Rhineland. In the occupied area, separatist associations and parties flourished, primarily under the patronage of the French occupying authorities. The Reich government was powerless to intervene, as it was prohibited from using the Reichswehr in the demilitarised Rhineland under the terms of the Treaty of Versailles.

The leading figure in the Rhineland separatist movement was Hans Dorten, the wealthy owner of a porcelain company, who created the Rhenish People’s Union (Volksvereinigung), which demanded a Rhenish republic as an autonomous state within the Reich, but his opponents suspected his real aim was an independent Rhenish republic. In the occupied Ruhr the separatist movement also flourished, with various groups sprouting up, including the Rhenish Republic People’s Party and the Rhenish Independence League. Separatists armed themselves, held demonstrations, occupied town halls, and called for the foundation of an autonomous Rhenish republic. Some of their supporters even advocated the full integration of the Rhineland into France. After the end of passive resistance, separatist demonstrations broke out in several Rhineland cities. On 21 October, separatists led by Leo Deckers captured the City Hall in Aachen, and proclaimed a Free and Independent Rhenish Republic. This so-called Rhenish Republic was based in three areas: North (Lower Rhine), South (Upper and Middle Rhine) and the Ruhr, but it received little support from the local population.

The French gave the impression in many places they supported the separatists. The military authorities thought a Rhineland buffer state would offer additional security from a future German invasion, and there is no doubt the French provided arms and offered military security for separatist demonstrations. This was especially true in the Bavarian Palatinate, where the French General Georges de Metz, was in command. He encouraged the local state parliament to proclaim the Palatinate’s independence on 24 October. On 26 October, Paul Tirard, the French High Commissioner, announced the separatists were also in effective control of Koblenz, but it had been recaptured with French military support.

Leave a comment

Filed under democracy, economics, France, Germany, industry, labor, military, nationalism

by Joel | 26 March 2024 · 4:30 am

Weimar-Soviet Rapprochement

From The Weimar Years: Rise and Fall 1918–1933, by Frank McDonough (Bloomsbury, 2023), Kindle pp. 229-230, 232:

The Treaty of Rapallo, signed on 16 April, was the first of Germany’s major diplomatic surprises of the inter-war period. The agreement was not the result, as is often supposed, of a spur-of-the-moment flight of inspiration by Rathenau, but resulted from painstaking secret diplomacy by the German Foreign Ministry, led by Maltzan, which had already resulted in the signing of a Russo-German trade agreement on 6 May 1921, and had also led to the formal diplomatic recognition of the Soviet government by the German government.

The Treaty of Rapallo was called a ‘treaty of friendship’, with both signatories agreeing to improve trade relations by offering each other ‘most favoured’ trading status, re-establishing normal diplomatic relations, and renouncing reparations claims against each other. The German government also agreed to waive indemnities and losses sustained by German citizens due to the abolition of private property in Soviet Russia. The treaty did not contain any secret military provisions, but secret military cooperation did develop in the years following.

The agreement came as a huge surprise to the British and French governments. Their first reactions were a combination of anger and fear. The agreement between Europe’s two political outcasts was viewed by the Western Allies as a potential menace to the European balance of power. The French government’s response was particularly bitter. Poincaré voiced his objections plainly in a speech on 24 April, in his home town of Bar-le-Duc. He declared the treaty a provocation and reiterated his determination to ensure the complete fulfilment of the provisions of the Treaty of Versailles by Germany. He also warned that if the Allies could not agree how to secure their treaty rights and reparations payments, then the French government would resort to unilateral action against Germany.

The British government was also deeply alarmed. Lloyd George had been trying to create an alliance of the non-socialist countries to force Soviet Russia to recognise the debts incurred by the deposed Tsarist regime before the 1917 Bolshevik Revolution. The release of Soviet Russia from the diplomatic ghetto gave him no pleasure whatsoever. Lloyd George had also been trying to restrain Poincaré from taking unilateral military action by occupying the Ruhr, and he thought the Treaty would only serve to gain support in France for military action.

…

A belief commonly held among the Allies was that the treaty contained secret military clauses. Both the German and Soviet governments denied this, publishing the treaty in full to pour icy water on this accusation. Yet soon after the signing of the Treaty of Rapallo, Seeckt did conclude a secret agreement with the Russian Army general staff. To conceal secret German military training and rearmament, Seeckt was granted generous funds from the German government to set up the Society for the Encouragement of Commercial Enterprises (GEFU). Under cover of this organisation, he negotiated opportunities for German military training in the use of tanks and aircraft in Soviet Russia. This led to the later creation between 1929 and 1933 of the secret Kama Tank school near Kazan, in the Soviet Union, which trained Germans in the use of modern tanks, and the Lipetsk Fighter-Pilot school, in Lipetsk, also in the Soviet Union which trained German pilots. In return, Russian officers gained valuable training in military strategy from their German counterparts. The Russian military were also commissioned to manufacture artillery ammunition, planes, and poison gas for Germany. These secret military training arrangements and armaments supply deals remained in effect throughout the Weimar years.

Leave a comment

Filed under Britain, democracy, economics, France, Germany, military, nationalism, USSR, war

by Joel | 25 March 2024 · 5:28 am

Weimar Inflation, 1921–22

From The Weimar Years: Rise and Fall 1918–1933, by Frank McDonough (Bloomsbury, 2023), Kindle pp. 218-219, 238, 242:

The Weimar Republic would have undoubtedly been helped by having a stable economy, but instead it was fragile, with a rate of growth well below that of its major competitors. German growth from 1913 to 1929 was 0.3 per cent, compared to 1.4 per cent in the UK and 2.2 per cent in the USA. The state of the German budget in 1921 made grim reading. The accumulated government debt was over 400 billion marks. The government had to also bear the cost of food and wage subsidies to deal with rising inflation. The Weimar government refused to cut expenditure or to raise taxes to deal with the deficit. This kept people in jobs. Unemployment in 1921 was at a record low of 0.9 per cent.

In response to rising prices, the German government simply printed money, which only served to push prices up still further. The rising cost of living was already causing industrial unrest in the Ruhr, in the autumn of 1921, and led to bread riots. There were also severe shortages of food in shops. Prices of basic goods rocketed by 40 per cent in the last three months of 1921. Inflation was worst for those on fixed incomes, as it was gradually wiping out their savings and reducing their real spending power. This affected even previously affluent pensioners and those with investments, usually people in solid salaried middle-class occupations such as academics, civil servants, and lawyers. War widows, disabled war veterans and those on welfare on fixed benefits also suffered greatly from the rise in the cost of living.

It would be wrong, however, to think that inflation was bad for everyone. Industrial workers, supported by strong unions, saw their working hours decrease, but their wages increase, often in line with inflation. Big industry also did very well, with industrial production increasing by 20 per cent in 1921–22. The rich industrialists – among them Hugo Stinnes, the richest of them all – grew much richer during the era of high inflation and spent their money on material assets, especially property and new machinery. They also had access to foreign currency loans at low interest rates, and because of inflation interest payments on these were reducing week by week.

…

Meanwhile, Germany’s reparations payment difficulties continued. During July, prices inside Germany rose by 50 per cent, which was then accepted as the beginning of the hyperinflation period. A litre of milk had cost 7 marks in April 1922, but rose to 16 marks in August, and then to 26 marks by mid-September. The prices of other basic goods rose in a comparable manner. The German government response to rising inflation was to continue printing money, with the number of marks in circulation rising from 35 billion in 1919 to 200 billion in 1922.

Hyperinflation led in turn to a dizzying fall in the value of the German mark, which the Reichsbank, lacking gold and foreign currency reserves, was powerless to stop. On 29 July, the mark hit a new low of 650 to 1 US$. The German government claimed this fall in the value of German currency was linked to the demand by the Allies for cash reparations payments. State and local authorities began to issue money tokens called Notgeld [’emergency money’] to replace payments in worthless paper marks.

…

On 14 August [1922], the Conference on Reparations ended without any agreement on Germany’s request for a further payment holiday. On the next day, the German government once more defaulted on its reparations payments, claiming it could not afford to pay. The downward tumble of the mark continued. On 24 August, it plummeted to a new all-time low of US$2,000 to 1 mark [sic; should be 2000 marks to 1 US$!], or 9,000 to the British pound. On 31 August, the Allied Reparations Commission decided to grant Germany an exceptional six-month moratorium on reparations payments.