Why was 1923 so bad for Germany?

We could answer this in two ways: First, it was so bad because French and Belgian troops had occupied the Ruhr humiliating Germany in the process; also because Germany suffered hyperinflation that ruined the lives of millions of Germans; and because there was a putsch to overthrow the German government. This shows us that it was indeed a bad year for Germans, but it doesn’t explain why it was so bad. That would require us to explain why French and Belgian troops had occupied the Ruhr, why this led to hyperinflation and a putsch to overthrow the German government. In this short piece I will attempt to look at both how bad 1923 was for Germany, and why.

In the Treaty of Versailles Germany had lost territory, which meant farmland, factories and mines, and also meant people, which meant workers, consumers and taxpayers. But it had reparations to pay: 132 billion gold marks, equivalent to £6.6 billion pounds in annual instalments which equated to 2% of its annual output. In 1921, they paid the first instalment of £50 million, some of it in gold, but most of it in goods: coal, iron and wood. But in 1922 the German government claimed it simply couldn’t afford to make its second payment. There are still those who argued it could have done though it would have meant a slower recovery, perhaps raising taxes, but nevertheless, it could have paid. Ebert tried to negotiate concessions from the Allies but the French, who had their own problems, were not in the mood for concessions. So in January, 1923 60,000 French and Belgian troops marched into the Ruhr (which they were allowed to do under the terms of the Treaty of Versailles) in order to take what was owed them in raw materials and goods. They took over coal mines, steel works, factories and railways.

The results of this occupation were disastrous for Germany and the Republic. Disastrous both economically and politically. Germany could not respond militarily, it had been forced to reduce the size of its army to just 100,000 men and it would have been quickly crushed. So the government instead ordered passive resistance. This meant that government officials in the Ruhr region refused to cooperate and the workers went on strike. In this way, the Germans hoped that the French would have nothing to take. But it brought a harsh response from the French and Belgian troops. They were already taking food and other supplies as they needed it, but now they arrested and imprisoned those officials who refused to cooperate and they expelled something like 150,000 people from their homes, driving them out of the region. In the protests over 100 people were killed, thirteen were killed, for example, when workers in the Krupp steelworks refused to obey the soldiers’ orders. Germany was again being humiliated and what is more, its currency was about to collapse.

The workers needed to be given money in order to live, and those who had been forced out of the region and had no family outside of the region to support them, needed government help if they were not to be left homeless and starving. This was paid by the German government who were already burdened with war pensions and generally struggling to recover from the war. The government responded by simply printing more money (they had actually been doing so before the occupation in order to pay off debts) but in doing so, inflation was already on the rise.

But the situation in Germany in 1923 got so bad that we refer to what happened as hyperinflation. Money became worthless and things became quite silly. Wages were paid daily, even twice a day, because prices were going up by the hour. If a queue was long, the price might have gone up before you got to the front of it. Wages were carried home in wheelbarrows (workers would not have had bank accounts at this time). Eventually, paper money was so worthless that it was used to light fires or it was given to children to play with.

Those with loans, businesses or individuals, found them easy to pay off but almost everybody else suffered as a consequence, at least to some extent, because wages didn’t fully keep up with the price increases and neither did state benefits, and there were shortages which pushed prices up even more. Bartering helped many to just about get by. But the reality was that if food could be bought, the gas to cook it might not be affordable. Certainly gas to heat the home might well not be affordable (and German winters are cold). Two groups particularly suffered. First, those with pensions as the government couldn’t keep up with the spiralling prices or else private pensions that were set at a fixed level. Elderly people are particularly vulnerable in any such situation and, unable to afford food or heating, many died. The other group were those with savings, the middle class, because their savings became worthless. For the middle classes this meant that all their hard work, the risks they might have taken in opening a business, the sacrifices they had made, had all been for nothing. And, of course, many of those business were forced to close as normal trade became impossible.

And the blame for what had happened fell firmly on the government, the government that had accepted the Treaty of Versailles, that had called for passive resistance and that had printed more and more money. And even when a new government, headed by a new Chancellor, Gustav Stresemann, who became Chancellor in August, 1923, ended the policy of passive resistance and got Germans back to work, he gained no credit from the right-wing nationalists. Too much damage had already been done. To the government and to the Republic itself. They no longer had the support of the middle classes.

And in the beginning of November, the government faced another putsch. This time from the Right, from Adolf Hitler. I’m not going into what lay behind the putsch here, other than to make the important links to the French-Belgium occupation of the Ruhr, the hyperinflation and to Stresemann’s calling off of the passive resistance and his commitment to paying the reparations, but I will outline what the putsch, and Hitler’s subsequent trial, said about the state of German politics.

For Hitler had called for a new dictatorship, dismissing the whole idea of parliamentary government, and in a long list of demands, he prioritised ridding Germany of the Treaty of Versailles. And there were many amongst the elites, still in their old positions of power, in the economy, politics, the civil service, the judiciary and the army, who agreed with him. And Hitler knew that the trial was an opportunity to present himself as a national hero, and was a platform to present his own views, and those of his Party, and to show the weakness of those in power. Hitler seized that opportunity. His voice had been heard, by the elites and the whole nation, and hadn’t been forgotten. This was not his time, his putsch had failed. But in the 1930s when Weimar again seemed to be letting the people down, his voice would be heard again. And 1923 was put together with the Great Depression, together with the ‘November Criminals’ and the ‘Treaty of Shame’ and this time the people’s voice would be heard too.