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

Authors: Frederick Taylor

Tags: #Business & Money, #Economics, #Inflation, #Money & Monetary Policy, #Finance, #History, #Europe, #Germany, #Professional & Technical, #Accounting & Finance

The Downfall of Money: Germany’s Hyperinflation and the Destruction of the Middle Class (12 page)

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A plate of ham, 12 marks; brawn, 19 marks a pound; small tin of paté de foie gras, 16 marks; tea, 37 marks per pound; cotton stockings, 10 marks (children have been allowed four pairs per year); muslin, 40 marks; crêpe de chine, 60 marks; boots (not all leather) 150 marks; zephyr,
*
10.50 per metre; madapollam,

9.50 per metre; butter, nominally, 30 marks a pound.
9

 

‘. . . butter, nominally’, as the reporter explained, because in fact butter seemed available only in exchange for commodities such as tobacco, cloth or some such. As for the state of the poor, she noted that ‘half the little boys of Wiesbaden are clothed in father’s uniform cut down’. And the men disabled by war? ‘The German wounded, by the way,’ the lady added cheerfully, ‘have a most excellent crutch, which can be adjusted very easily to the various heights needed.’

 

In Berlin, during this harsh twilight of the blockade, fighting between the Spartacist revolutionaries and the authorities increased towards the end of the year, and got worse after the beginning of 1919. Nevertheless, what most observers noticed was the strangely normal feel of the city streets away from the actual places where political violence was occurring.

The trio of British officers noted during their visit in February 1919 that, although in a working-class district of the city they witnessed an armed clash which claimed the lives of five individuals and led to fifty injuries, the ‘general public seemed . . . quite content to enjoy themselves on the edge of the precipice’. They then visited a cabaret where they saw ‘a huge crowd of middle-class men and women, the majority between the ages of 35 and 50 . . . waltzing and fox-trotting and drinking extremely expensive wines’.
10

There was no question that the German public’s thirst for entertainment and pleasure was, if anything, more pronounced during the peacetime blockade. Nightclubs and dance halls, which had been officially forbidden for most of the war, returned with a vengeance once the ban was relaxed from New Year’s Eve 1918. ‘The public launched itself like a pack of hungry wolves into the long-forbidden pleasure,’ wrote the liberal
Berliner
Tageblatt
on 1 January 1919. ‘Never have Berliners danced so much, and so frantically.’
11

Leo Heller, a Berlin journalist, recalled in one of his popular books about the Berlin
demi-monde
visiting a joint called the Magic Flute, one of the nightclubs that opened in the weeks after the armistice. As Heller tells it, at the entrance to the place, waiting to pay his two marks fifty entrance fee, he met a plump Berlin lady of a certain age who seemed to be a regular customer (entrance one mark only for ladies, she told him) and who kindly offered to be his guide.

Although the room was dimly lit, Heller noticed that the woman’s red silk dress was stained. ‘A little spot of German champagne,’ she explained, and blamed the blemish’s continued existence on the shortages of cleaning agents due to the blockade. ‘You know, cleaning is so expensive, business just doesn’t stretch to it. Have to wait until Wilson’s Fourteen Points are in the bag.’ The mass of perspiring dancers, too, was representative of the time. The owner of a pub from round the corner, dancing with a woman who was not his wife. A young officer and his girlfriend strutting their stuff alongside revolutionary sailors and soldiers taking time off from the struggle: ‘See, there’s that tall guy, Lulatsch, with the quiff, he’s a real crazy. I think he’s been a Spartacist from the moment he was born. I’m just sorry for that girl, because she really cares about him.’
12

After more than four years of war and deprivation, Germans longed for good times, and for a better life. Particularly in Berlin, the tension between political radicalism and the desire for the simple and normal produced bizarre contrasts.

So, for instance, as the first post-war Christmas approached, there were bloody battles in central Berlin between the revolutionary sailors, now organised into the several thousand-strong so-called ‘People’s Marine Division’ and based in the
Marstall
(royal stables) opposite the
Stadtschloss
, and the few loyal army units that Groener (with Ebert’s secret complicity) had scraped together to provide some alternative pro-government force.

The sailors were restive because they had not been paid – the government insisted that they could only give them their money if they put themselves under the orders of the War Ministry and evacuated the area round the
Stadtschloss
. This the sailors refused to do, because they suspected – correctly – that counter-revolutionary plans were afoot. As a consequence, on 23 December the sailors stormed the Reich Chancellery, arresting Ebert and his fellow People’s Commissioners, cutting the main phone lines, and also holding Otto Wels hostage in the
Marstall
. They were now promised their pay, but by then several of their number had been killed and the sailors wanted justice, and were not prepared to abandon their gains before they got it.

Things underwent a further escalation the next day. Groener, directing what was left of his army from the High Command’s wartime headquarters at Schloss Wilhelmshöhe in Kassel, almost 300 kilometres to the west of Berlin, had managed to talk with the beleaguered Ebert via their secure phone line, which remained unknown to the revolutionaries. The general and the politician agreed that the sailors must be evicted from the
Stadtschloss
and environs.

Acting on orders from Groener, loyal army units, relatively small in number but equipped with heavy weapons, began to advance against the sailors’ rifles and machine guns. Serious fighting broke out, in the course of which the armed sailors, plus a substantial number of Berlin workers who had joined them, beat the regulars soundly. The once all-powerful army was forced into a humiliating retreat. With the government – and arguably the whole of Berlin – now at their mercy, on Christmas Eve the revolutionaries got their pay, and kept their headquarters.
13

Astonishingly, a few hours later, the victorious revolutionaries put away their weapons, evacuated the occupied buildings, including the Reich Chancellery, and went home for Christmas. It was a Christmas without much in the way of festive food or candles or decorations, but it was the first one for five years unscarred by war, and for these men and their friends and families, to celebrate it together was the most important thing imaginable.

Many of those men, along with ordinary Germans all over the country, hoped that 1919 would see, as the lady in the red dress had put it to Leo Heller, ‘Wilson’s Fourteen Points in the bag’ – a just peace for the new Germany in a just world.

Footnotes

*
Probably refers to a lightweight worsted cloth popular in the late nineteenth and early twentieth centuries.

 


A type of soft cloth akin to calico.

7
Bloodhounds

The blockade was maintained until the very last moment in July 1919. Some food was allowed into Germany from March onwards, but basically her nearly 70 million people were excluded from world markets, from food and raw materials, for almost three-quarters of a year after the armistice had first been signed. This insistence on the Allies’ part was no less than a ruthless power-political exercise designed to ensure, whatever the cost in human suffering, that Germany would have no alternative but to accede to the terms of the coming peace treaty.

Meanwhile, the Reich, far from uniting to face the post-war dangers, was riven by continuing political violence.

The Christmas break was used by the government and its allies in the army to regroup and ensure that they were not caught unawares again. The High Command set to work reorganising what forces it could from among the defeated army to act as a bolster for ‘order’ in post-revolutionary Germany. By the beginning of 1919, a word started to impinge on the public consciousness: ‘Freikorps’ (Free Corps).

The vast majority of demobilised German soldiers, disillusioned with war and influenced by the revolutionary passions sweeping the country, had either made their own way home from the front, or had disappeared, as soon as humanly possible, back to their communities and families. Nevertheless, not all their comrades felt the same aversion to conflict. With the unofficial approval of the army leadership, anti-revolutionary officers and men loyal to them had begun setting up recruitment and training camps, including in the countryside surrounding Berlin, where those not yet tired of bearing arms, or determined to oppose the revolution, could gather and plan a fight back against the subversives who threatened all they held dear. Many thousands of men were attracted to these ad hoc groups, which rapidly expanded into a force of up to 400,000 fighters. Though individual units gave themselves different names, they became known collectively as the Freikorps.

The name Freikorps had a pedigree going back to the wars of the eighteenth century, and, more importantly for the men of 1918, to the Napoleonic era and the so-called ‘war of liberation’ fought by German patriots against French occupation. The growth of a resistance movement after 1807 had led to the formation of informal volunteer units, including many students and intellectuals, who fought more out of patriotic idealism than for pay. Initially a guerrilla force, these grew into something resembling conventional army units. In this role they played an important role, in concert with the regular military, in driving the enemy from German soil during the years 1813-15 and bringing about Napoleon’s eventual defeat. The tradition continued after Bonaparte’s fall, with the uniformed student duelling associations dubbing themselves ‘Freikorps’ in honour of their fathers’ and grandfathers’ struggle. However, what had begun in the 1820s as liberal organisations took on a reactionary tone as the nineteenth century progressed and the middle and upper middle classes increasingly came to identify with authoritarian Prussian values.

In October 1918, there had been talk in High Command circles, in response to growing political unrest, of setting up volunteer units, which might prove useful should a revolution threaten. These would be led by young, patriotic officers, and made up of other ranks considered to be politically reliable. It was an idea that particularly appealed to an ambitious thirty-six-year-old major, Kurt von Schleicher, who had advanced to the position of head of the political department of the High Command. Schleicher, soon to rise to prominence as one of the post-war era’s most notorious political soldiers, found it hard to convince his traditionally minded superiors. However, others, in the chaos of the Eastern Front (where Germany’s eastern borders were threatened by Bolsheviks and Polish nationalists) and in the disturbed industrial areas of central and western Germany, where to conservative military eyes the socialist radicals were already running amok, began to have the same thought.
1

In fact, it was Major Schleicher who had taken the call when Ebert had used the secret telephone connection at the Reich Chancellery to contact Groener in the small hours of 23/24 December 1918. The two men spoke again after the debacle that followed the attempt to crush the People’s Marine Division. According to Groener’s account, when asked what he planned to do, the defeated Ebert had replied: ‘Above all, I’m going to some friends’ place to get a good night’s sleep, which I’m in dire need of.’ Then he continued, as yet unaware that the sailors and the other revolutionaries had, in fact, decided to take a Christmas break: ‘Let Liebknecht occupy the Chancellery if he wants. He’ll be landing in an empty nest.’ Other eyewitnesses, according to at least one writer, report that Ebert was actually all but panic-stricken, weighing up whether he should take himself and the rest of the government out of Berlin, and muttering, ‘We simply can’t go on like this. We simply can’t govern like this.’
2
A sentiment with which it is hard not to sympathise.

The Christmas Eve confrontation, and the defeat of the government’s few loyal troops by armed sailors and workers, revealed plainly the impotence of the forces of order in Berlin. In the second week of December, the Council of People’s Commissioners had agreed to raise a force of volunteers loyal to the new Republic, organised along ‘democratic’ lines (with elected officers and so on), to defend the gains of the revolution. However, two weeks later little had been done to facilitate this urgent task, despite widespread support in the big cities and the ready availability of working-class men who had received military training during the war. Modest progress was made, but not enough.

And then, a few days after the Christmas Eve confrontation, the Independent Socialist commissioners left the governing Council in disgust at the use (however unsuccessful) of the army against the workers, leaving only the Majority Social Democrat representatives. The rump commission simply co-opted two of their own number to the Council, making it exclusively Majority Social Democrat in complexion. The broad coalition of democratic socialists that had taken charge of the revolution back in November had lasted a mere seven weeks.
3
Ebert and his colleagues, though weakened in one way, could now at least act according to what passed as their convictions.

The new year, 1919, brought more incidents, more fears of chaos. The diarist Count Harry Kessler wrote on New Year’s Day of having dinner in a restaurant where the meal was interrupted by the irruption from the street of a delegation of revolutionary waiters, with red tabs in their hats and carrying a red flag, representing restaurant staff on strike in other parts of Berlin. The waiters threatened the proprietor that unless he gave in to their demands (unspecified by Kessler) within ten minutes, they would shut the place down. Five minutes later, the deal was done. ‘Blackmail completed,’ the Count observed dryly, ‘we could return to the matter of food.’

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