A History of the German Republic, Arthur Rosenberg 1936

Chapter VII: The Occupation of the Ruhr and the Inflation, 1923 [1]

After the fall of the Wirth government in 1922 a capitalist government was formed. Cuno, the managing director of the Hamburg-America Line, became Chancellor. He formed his Cabinet of so-called non-political experts, representatives of the People’s Party and the conservative wing of the Centre Party. In addition, Gessler received a portfolio, and the Democrat Oeser became Minister for the Interior. The Nationalists were not officially represented in the new government, but they supported Cuno’s policy. Cuno’s task was to organise national resistance to the demands of the Entente.

It could not in fairness be expected of Cuno that he should pursue a socialist policy. Within the limits of the class to which he belonged he was a thoroughly able man. He had a right understanding of the important problems with which German politics were then confronted. Cuno did not fail because his political principles were wrong, but because it was impossible to develop a truly national policy in alliance with the narrow and egotistical German capitalist class. Cuno was not strong enough to carry his nationalist policy into effect against German capitalism. He wanted to be both a nationalist and a man of the propertied class, and these two qualities were, as was shown in the course of the year 1923, impossible to unite.

It was very far from Cuno’s intention to provoke the French or to refuse payment of reparations. On the contrary, he made very far-reaching, positive suggestions to the Entente as to the manner in which Germany should fulfil her reparation dues. But Cuno demanded a final estimate which should be calculated proportionately to Germany’s capacity to pay. He did not wish to carry on the disastrous methods of his predecessors, who accepted every ultimatum of the Entente and were then obliged immediately to ask for postponement, and thus dragged Germany along from one date of payment to the next, without the least prospect of solution to the difficulties. If the Entente should refuse to agree to the honest and extensive offers of Germany, then it must be left to the victorious powers to do as they thought fit. Germany could not wage war, but it could offer determined resistance to the occupation of the Ruhr and any other coercive measures.

National resistance of this description, however, was only conceivable if inflation – that is to say, the plundering of the masses of the German people by a small number of speculators – ceased immediately. Cuno wished to take the necessary measures to end inflation simultaneously with his pursuit of an energetic foreign policy. In the existing circumstances his intentions were perfectly right and proper. The Cuno government found a support among the German people such as had been accorded to no other government since 1918. In the Reichstag Cuno’s foreign policy was supported by all the middle-class parties and by the Social Democrats. The Communists refused to agree to a political truce with the government, but they were in perfect accord with a policy of national resistance to France. Thus the days of August 1914 seemed to have returned, and after all the fearful convulsions through which German social life had passed, national concord seemed as by a miracle to have been newly forged. It was to be seen only too soon, however, that the opposed interests of the various classes were not consonant with national unity.

The French government under Poincaré refused Cuno’s proposals and insisted that Germany should fulfil all the payments and sanctions for which the Allies had asked during the past two years. If Germany did not pay, coercive measures were to be taken. It was not difficult to establish Germany’s default, since it had not, in fact, carried out the prescribed demands. The French government asserted that Germany had not delivered the appointed quantities of coal and timber. France would therefore occupy the Ruhr in order to confiscate the necessary amount of coal. On 11 January a Franco-Belgian army marched into the Ruhr. Although England and Italy did not take part in the French action, they also made no attempt to interfere with Poincaré’s plans.

The German government took up the challenge. All further payments or deliveries were forbidden to be made to the powers that had sent their troops to the Ruhr. The German officials in the Ruhr were instructed to refuse all help to the foreign invader. These orders were carried out. The French generals retorted by removing the German civil servants from the district and taking possession of the German railways. Relations between the French troops and the German inhabitants of the occupied area grew daily worse. There were clashes. French soldiers fired on German demonstrators. Arrests took place on a large scale, and numbers of persons – especially German officials – were banished from the Ruhr. It proved impossible to prevent a large French army occupying the Ruhr district and taking over its administration. The only sphere in which a really successful resistance could be made by Germany was the economic. The French government had sent its soldiers into the Ruhr to obtain coal. There was only one possible answer to this on the German side – that every pit should promptly be closed down. French cavalrymen and gunners could not change themselves into miners. It would not be easy to replace in a hurry half a million trained workers who knew the ground.

The general strike with which the workers of the Ruhr district proposed to meet the invasion of French and Belgian troops did not take place. It was prevented by the mine-owners. They kept the pits open because they did not care to face the loss in which the cessation of production would have involved them, despite the compensation offered by the government. As soon as the French had entered upon the occupation they forbade all export of coal into those parts of Germany which were not occupied. The German mine-owners pleaded that they must produce coal for the inhabitants and for the industries in the occupied area. Moreover, there must be a reserve of coal in order that the unoccupied areas might have deliveries again immediately in case a compromise were reached with France. The arguments of these ‘patriotic’ owners were successful. The production of coal in the Ruhr district, though it was much restricted by the abnormal conditions, never actually came to a standstill.

The so-called passive resistance of Germany in the year 1923 is really a fable. Bad as the situation was in general for the German masses in the Rhine and Ruhr districts, the really decisive economic battle over the coal-mines bore the features of a tragi-comedy. The scene is any pit in the Ruhr district. The miners peacefully work the coal and pile it at the pit mouth. One day French troops appear at the mine. The German miners and labourers indignantly leave the spot. The French remain there, and with great difficulty and the assistance of foreign labourers whom they have brought with them they clear the coal from the pit head. This done, they move off again. Immediately the German workers and officials reappear and carry on the work in the mine, until once more coal is piled up, and the French come back again. And so it goes on. The whole procedure was known as ‘national passive resistance’. [2]

Cuno should not have permitted the German mine-owners to play this game. The government should have ordered the cessation of work in all industries in the occupied area, and have regarded as a traitor any mine-owner who allowed the work of a pit to be carried on. Undoubtedly misery in the occupied area would have been greatly increased thereby. But if a war is in progress, no means must be shirked for furthering it. The German workers were at that time ready to make any sacrifice, but the great industrialists were unwilling to forgo their profits. In order to make the blackleg capitalists submit to the national exigencies an iron-handed government imbued with the spirit of 1793 would have been needed. But Cuno was no Robespierre. In spite of everything, he still felt that among the west German capitalists he was one of themselves and could not take strong measures against them. Thus passive resistance was from the very outset a pathetic and half-hearted proceeding, and the French authorities were able to announce with pride that the amount of coal seized by them in the Ruhr district was steadily increasing.

In January 1923 the Cuno government had taken the requisite measures and called a halt to inflation. They had fixed a rate of exchange that made the dollar worth about twenty thousand marks. The currency remained stable until April, and then the patience of the speculating German financiers and the industrialists failed. The dams gave way, and during the next few months the paper mark literally vanished in the void. Once again the capitalist class had broken through the front of national resistance. They had placed not Germany but their own profits before everything. Nor was Cuno capable of taking the necessary measures in this case, because he was the prisoner of his own class. When the dollar exchange crept up into the region of milliards, passive resistance was brought to an end and Cuno’s plan had failed.

Then followed the mad days in Germany, when for a loaf of bread notes were paid whose face value ran into milliards or even billions. The German currency had, in fact, lost all value. Those who, as has been indicated above, were making a profit out of the inflation – the financial speculators, great industrialists and estate owners – were enjoying a Golden Age. Since German factory-owners were able to produce goods at the most absurdly low costs, the German prices were lower than those of any competitor in the world market. Hence production rose in Germany in 1923 and goods were dumped upon foreign markets. The victims of the inflation were the German lower middle classes, the wage and salary earners. And those who had any savings in Germany lost their last farthing.

The systematic expropriation of the German middle classes, not by a Socialist government but in a bourgeois state whose motto was the preservation of private property, is an unprecedented occurrence. It was one of the biggest robberies known to history. On 29 June 1927 Stresemann, as winner of the Nobel Peace Prize, made a speech in Oslo in which amongst other things he said:

The historian still to a great extent regards the catastrophe of the war for Germany as being mainly the loss of territory, the loss of useful colonial work, the loss of public and private property. He often overlooks the most serious loss in which Germany has been involved. And this, as I see it, is the fact that the intellectual and productive middle class, which was traditionally the backbone of the country, has been paid for the utter sacrifice of itself to the state during the war by being deprived of all its property and by being proletarianised. How far reasons of state could justify the demand of such a sacrifice of a whole generation – a sacrifice that consisted in the total devaluation of money issued by the state, which was not replaced – is a question upon which the minds and perhaps also the practice of the legislature have hitherto been vainly exercised.

Stresemann was right enough in his facts. But as a representative of a German capitalist government, he carefully replaced the word ‘robbery’ by the more refined expression ‘reasons of state’. The German working classes had few savings to lose. But in another way they lost just as heavily as the middle classes. True, the number of unemployed in Germany was relatively small in 1923. Nevertheless real wages were shrinking lower and lower between April and October, for the immense paper wages that were paid to the workers had hardly any purchasing power. The consequence was fearful distress among the broad masses of the people. A well-informed observer has reckoned that in October of this terrible year the wages of a trained and skilled worker for one week were just about sufficient to buy a hundredweight of potatoes. Pay for nine or ten hours of work was necessary to buy a pound of margarine. For a pound of butter a man would have to work for several days. A hundredweight of briquettes cost the pay for twelve hours’ work. A pair of ordinary boots took six weeks’ pay, and a suit of clothes that of twenty weeks. [3]

The result of such conditions was unexampled misery for the masses. The chief burgomaster of Berlin at the beginning of 1923 published a pamphlet on conditions in Berlin. [4] His material in general takes in only the year 1922, that is to say, not the worst period of the inflation. Nevertheless his figures and notes are sufficiently impressive. Thus of the children leaving school in the Berlin district of Pankow in 1922, 22 per cent of the boys and 25 per cent of the girls were below the normal level as regards size and weight. Thirty-one per cent of the boys and 30 per cent of the girls were unfit to work for reasons of health. In the district of Schöneberg in the year 1913, eight per cent of the children leaving school were tubercular or suspected of tuberculosis; in 1922 there were 15 per cent; and in 1923 the figure undoubtedly rose higher.

The official pamphlet continues:

Shocking accounts from the child welfare office and the head office of the War Pensions Ministry illuminate the prevailing misery of the children. Numbers of children, even the very youngest, never have a drop of milk and come to school without a warm breakfast. They have dry bread, sometimes spread with mashed potatoes. The children frequently go to school with no shirts or warm clothing, or are kept away from school owing to lack of underclothing. Want is gradually strangling every feeling for neatness, cleanliness and decency, leaving room only for thoughts of the fight with hunger and cold.

This was how the German proletariat lived under the shadow of the inflation.

When the French occupied the Ruhr district the Reichswehr also made preparations to meet the changed situation. There were at that time millions of men in Germany who had undergone military training and who had fought in the World War, as well as a sufficient number of officers. But there was a lack of the necessary weapons of modern warfare such as military aeroplanes, heavy artillery and tanks. Thus the Reichswehr was unable to offer armed resistance to the French invasion of the Ruhr. Nevertheless new situations might arise which, according to the opinion of the generals, Germany would not meet with purely passive resistance. The Poles might take advantage of Germany’s difficulties in the west to attack her eastern frontier, or the French might advance east of the Ruhr towards Berlin; and preparation must be made to meet such emergencies.

The Reichswehr High Command decided to increase the army above the 100,000 men allowed under the peace treaty. The loose connexion which had hitherto obtained between the Reichswehr and the defence associations was not sufficient. New regular units were established and incorporated in the Reichswehr under a slight disguise, for instance, under the name of ‘labour detachments’ (Arbeitskommandos). The new formations, which according to the wording of the peace treaty were not permitted officially to exist, were generally known as the ‘Black Reichswehr’. Psychologically the moment for strengthening the German army was more favourable than it had ever been since 9 November. The German people were unanimous without distinction of party in wishing to show resistance to the French, and were ready to make the greatest sacrifices. Nevertheless the result of the increase in the army was almost negligible. An authority, who was certainly conversant with the facts, estimates the total increase in the Reichswehr by all new formations at fifty thousand men. And the new soldiers were by no means always the best elements. Many of them were unreliable, hare-brained fellows who gave little satisfaction to the High Command.

During the years 1807-13 the Prussians had in the most difficult circumstances, under the severest supervision by the French conquerors, successfully carried out an illicit increase of their army. In 1813 when war broke out, the Prussian national army was suddenly on the spot, and it fought admirably and with a fine courage. Why could not Gessler and Seeckt repeat the work of Scharnhorst and Gneisenau? And why did all other attempts to play Scharnhorst fail so miserably in Germany after 1918? Gneisenau and Scharnhorst were politically the most radical men in the Prussia of their day. They fought for middle-class democracy and against the outworn aristocratic state. They were an organic part of the masses of the poor people, and therefore they were able to create an illicit national army without Vehm murders and conspiracies.

After 1918, however, the national liberation was to be effected in the name of capital and landed property. The successors of the very classes who had made life so bitter for the reformers in 1813 were the ones to pose as sole supporters of the nationalist ideal. General von Seeckt was an excellent professional soldier. During the war he had been successful in many battles as Chief of Staff to Mackensen. But in politics Seeckt was rigidly conservative, a man of traditions, who had no understanding of the labouring masses. The temper of the Reichswehr Ministry was always that of counter-revolution. The German working classes and republicans in general feared not without reason that increased German armaments would be used less against a foreign foe than against the democratic republic. It was exactly the opposite situation to that in 1813. In those days King Frederick William III and his court had trembled before their own revolutionary army.

Thus neither true national rearmament nor the creation of an illicit army was possible in the Germany of 1923. If the Reichswehr wanted new recruits it was obliged to rely upon nationalist former Free Corps men and professional conspirators. In their efforts to build up the Black Reichswehr, the generals very soon came into violent contact with the Racist leaders who were not at all inclined to serve the Reichswehr blindly and for the sake of pure idealism. Shortly before, there had been an open breach between the Free Corps and the great political parties of the counter-revolution. The active elements among the officers and men formerly belonging to the Free Corps were getting tired of the slow pacific methods of the People’s Party and the Nationalists. Towards the end of 1922 the Free Corps leaders and their friends provoked an open breach with the German National Party. The new German Racist Liberty Party came into being. Three Nationalist deputies who were particularly interested in the Free Corps – von Graefe, Wulle and Henning – joined the dissentients. The somewhat older National Socialist Party in Munich remained independent, but collaborated politically in the work of the Racist Party in north Germany.

When the Reichswehr was beginning to set up its Black units, it was anxious to enlist the individual Free Corps men in them, but only as individuals, not as complete detachments under their old leaders. The Free Corps leaders would not agree to this, for it would have meant the end of their detachments and their own political extinction. The Racist Party had immediately set about forming its own great defence association which bore the innocuous-sounding name of gymnastic societies. Lieutenant Rossbach, a well-known Free Corps leader who had fought in the Baltic states, became the head of these gymnastic societies. Rossbach and Graefe, as soon as they realised the intentions of the Reichswehr, went direct to Cuno. They endeavoured to explain to him that sooner or later his policy must in addition to the struggle in foreign policy against France lead to an internal political conflict with the Social Democrats and Communists. The government, they pointed out, needed strong armed forces, upon which it could rely firmly in the struggle with the internal as well as the external foe. All the defence associations should be united under the leadership of General Ludendorff, and the whole force would be at Cuno’s disposal. General Ludendorff, undoubtedly the most gifted soldier of his day, was in sympathy with nationalist aims. In 1920 he had supported the Kapp Putsch, and was now ready to help the defence associations.

If Cuno had agreed to these proposals, Germany would have had not only a Racist shadow government, but also a shadow counter-Reichswehr. The Reichswehr generals would certainly not have tolerated a general staff that was independent of themselves and in competition with them. Cuno put off the Racist leaders with words that bound him to nothing. Meanwhile the Reichswehr acted. In March Lieutenant Rossbach was arrested, and at the order of the Reich Public Prosecutor was kept in custody until October. The accusations against Rossbach and his friends were based upon the law for the security of the republic. It is clear from this case that the Public Prosecutor of the Reich and the Supreme Court suddenly, at the behest of the Reichswehr Ministry, developed a jealous regard for the safety of the republic and a stern disapproval of right-wing conspirators. An important part was already played during this year in the political actions of the Reichswehr Ministry by a member of its staff, Colonel Schleicher.

The quarrel between the Reichswehr and the Free Corps did not assist the development of the Black Reichswehr. Among the recruits and also the newly appointed officers of the Black Reichswehr were not a few who preferred to follow the slogans of the Free Corps leaders rather than the instructions of the Reichswehr. From March 1923 onwards the breach between the Reich government and the Reichswehr Ministry on the one side and the Racists and the Free Corps on the other was clearly marked all over Germany except in Bavaria. This must not, however, be taken to imply a clear division for or against racist ideas. The great mass of the electors of the Nationalist and of the People’s Parties, especially those who belonged to university and military circles, remained susceptible to racist ideals. No real ideological breach had occurred with the right parties. Only the extremist spokesmen of the racist movement and of the Free Corps had cut themselves off from the Reichswehr or the Nationalist Party as the case might be.

In Bavaria there was no corresponding breach between Conservatives and Racists. Taken all in all the counter-revolutionaries in Bavaria preserved even after March 1923 the united front that had been formed since the victorious issue to the Kapp Putsch in Munich. The chief influence in the Bavarian government was in the hands of the Bavarian’s People’s Party, which was supported mainly by the Catholic peasantry. To this were added the German Nationals as the party of the propertied middle classes and of the Protestant landowners in Franconia, the National Socialists as the Racist Free Corps Party of Bavarian stamp, and finally the Bavarian Reichswehr and all the various large and small defence associations and Racist organisations which had sprouted so freely upon the fertile Bavarian soil. Within these forces of the ruling right there were many personal or group antagonisms, and at times serious discords. Nevertheless there was a general feeling of unity, which remained until November 1923.

The Bavarian counter-revolution possessed a middle-class majority in the Diet and was thus able to cloak itself with a show of legitimacy. The distinctive development in Bavaria expressed itself in the ruthless suppression of the labour movement, in unpunished Vehm murders, in terrorist sentences in the law courts against so-called traitors, in the completely unfettered development of legal and illegal defence associations. The Bavarian Reichswehr maintained the closest relations with the defence associations and the National Socialists. Captain Röhm was the liaison officer between the Bavarian Reichswehr and the National Socialists. In Munich there was a constant succession of militarist and nationalist demonstrations. The Bavarian counter-revolutionaries could nevertheless not indulge in active opposition to Cuno’s Reich government while the Ruhr struggle was in progress, but they were determined in case any signs of a swing to the left should be seen in Berlin to go their own way.

The Free Corps and the defence associations in the unoccupied portions of Germany sought to influence the Ruhr struggle in accordance with their own ideals. They sent small divisions of shock troops into the occupied area, who endeavoured to hinder the transport of French troops and of confiscated coal by blowing up sections of the railway lines. The positive results of this active resistance were slight. Every explosion produced a retort from the French in the form of the most severe retaliatory measures upon the civilian population. The Racist shock troops were riddled with spies and traitors to such an extent that their plans were generally in the possession of the French authorities before they had been carried out. In one such action in the Ruhr district the well-known Free Corps leader Schlageter, who had also fought in the Baltic states, was captured and shot by order of a court-martial.

The more the passive and also the active resistance in the Rhine and Ruhr districts proved themselves to be useless, and the more the inflation consumed the substance of the masses, the greater became their desperation and embitterment, and finally their desire for revolution. There has never been a period in recent German history which would have been so favourable for a socialist revolution as the summer of 1923. In the chaos of monetary devaluation all traditional ideas of order, property and legality had disappeared. And nobody could put the responsibility for the ghastly conditions that had developed since the occupation of the Ruhr on to the shoulders of the Socialists or republicans. The Cuno government had sprung from so-called nationalist circles. It was free of the taint of socialism. It was responsible for the dispute with France and for the orgies of the inflation. It was not only the workers who felt more clearly every day that conditions were intolerable, and that the whole system must come to a terrible end. The middle class too, which had lost its all by the inflation, was filled with revolutionary ferment and wished for a break with capitalist profiteering. If there had been a really great popular movement against the ruling system, the civil servants – who were after all themselves victims of the inflation – including the police, would hardly have displayed much severity, and whether the Reichswehr soldiers would have fired on their starving fellow-citizens for the sake of exchange profiteers is very doubtful.

Nevertheless the revolutionary temper of the German people found no echo among the political parties. Neither the SPD nor the KPD showed any serious disposition to assume power at the head of the masses and to replace the hated capitalist system by a new socialist system. It will be asked why, if all were so ripe for revolution, the masses waited for the word from their parties and did not strike alone spontaneously. But the spontaneous energy of the German workers had, as was shown above, suffered grievously from the unfortunate issue to the fighting in 1919-21. The masses now needed to be determinedly led by a party if they were to make a fresh advance.

Social Democracy persisted in its pessimistic view of the general situation. It did not really believe in the possibility of revolution, and did not want to do anything that could further increase the existing chaos in Germany. The SPD was prepared, if the call were to come, to take over responsibility once again for the government of the Reich. It would then take the necessary steps to end the Ruhr war and the inflation, and to make life worth living again for the German workers. But the SPD was not prepared to proceed by ways that would have diverged from the path of legality. The party leaders did not believe in the possibility of cooperation with the Communists, and remained exceedingly distrustful of suggestions for the formation of a united proletarian front.

In the course of the year 1923 the power of the SPD steadily decreased. The party passed through a crisis which was reminiscent of that of 1919. The independent trade unions especially, which had always been the chief support of Social Democracy, were in a state of complete disintegration. The inflation destroyed the value of the union subscriptions. The trade unions could no longer pay their employees properly nor give assistance to their members. The wage agreements that the trade unions were accustomed to conclude with the employers became useless when the devaluation of the currency made any wages paid out a week later worthless. Thus trade union work of the old style became unavailing. Millions of German workers would have nothing more to do with the old trade union policy and left the unions. The destruction of the trade unions simultaneously caused the ruin of the SPD.

Since the SPD failed to find a way out of the existing misery, the disappointment of the workers in the Cuno government was to some extent transferred to Social Democracy. The SPD was obliged to pay in 1923 for mistakes in policy of which they were entirely innocent, merely because their legal tactics seemed to imply acquiescence in the laws and therefore in the existing state of affairs. The KPD had no revolutionary policy either, but at least it criticised the Cuno government loudly and sharply and pointed to the example of Russia. Hence the masses flocked to it. As late as the end of 1922 the newly-united Social Democrat Party comprised the great majority of the German workers. During the next half-year conditions were completely changed. In the summer of 1923 the KPD undoubtedly had the majority of the German proletariat behind it.

It is difficult to give any statistical evidence for this statement. During the periods of radicalism, the middle-class majorities in the parliaments together with the administrative bureaucracy took care that there should be no elections, for radical electoral successes would have inflamed the masses still further. Thus the Reichstag which had been elected in 1920 remained in existence until 1924, despite all the German political crises, and although it had long ceased to be representative of the popular temper. A single election to a provincial diet took place in the summer of 1923 in the insignificant little agrarian state of Meckleburg-Strelitz. Very different was the course of German politics after 1930, when it became an affair of rendering the German republic defenceless before a final assault by a series of National Socialist victories. Then the authorities saw to it that one election after another took place, so that the republicans did not know whether they were standing on their heads or their heels – a fact that contributes to an understanding of the so-called German democracy.

At the local elections in Strelitz in 1920 the Social Democrats had received twenty-five thousand votes, and the USPD two thousand. The Communists had taken no part in them. In July 1923 the Socialists polled only twelve thousand votes, and the Communists eleven thousand. At a poll taken by the members of the Berlin metal workers’ union in July the Communists had fifty-four thousand votes, and the Social Democrats only twenty-two thousand. As late as the Reichstag elections in May 1924, when the revolutionary wave was long past and the KPD was on the downward grade again, the proportion of Communist to Social Democrat votes in the Reich as a whole was as four to six. Thus no doubt can be entertained but that in the summer of 1923 the KPD was stronger among the German proletariat than the SPD.

All the greater was therefore the responsibility resting upon the leaders of the KPD and upon the leading men in the Third International. Nevertheless the leaders of the KPD refused during the first half of 1923 to believe in the advent of a German Revolution, and the Moscow government, which concluded the Treaty of Rapallo with the German middle-class republic, shared their view. In deference to the opinion of the Moscow government, the KPD leaders prohibited its agitators from making any propaganda for the dictatorship of the proletariat and for the socialist revolution. The only battle-cry permitted at the time was that for a parliamentary labour government formed by an alliance between the KPD and the SPD. The party Chairman, Brandler, zealously carried out the policy recommended by Moscow. Actually his views upon the fundamental questions of German politics were precisely the same as those of the leaders of the Social Democrats. The men around Brandler were separated from the SPD only by the past, not by the present. Brandler imagined that events would take the following course. In a short time Cuno’s government would come to the end of its resources, then Social Democracy would take the helm again and be obliged to form a coalition with the Communists and possibly also with the Christian trade unions. The KPD must prepare for such a situation, but must not waste its energies in futile demonstrations.

It was certainly no political crime in 1923 for anyone to aim at a unification of the German proletariat. A German labour government such as Brandler and his friends imagined would have been an immense advance. The great mistake of the KPD lay in the fact that they mistook the way to reach this goal. In peaceful orderly conditions a labour government may come to power through parliamentary elections and work for the proletariat within the framework of a middle-class constitution, as is shown by the examples of England, Australia, Sweden, etc. But in a country that is in the throes of a terrible revolutionary crisis, as Germany was in 1923, the transference of power from one class to another cannot be effected in this peaceable manner. Even a labour government composed of representatives of the SPD, the KPD and the Christian trade unions could in 1923 only have come into being as a consequence of a tremendous mass movement, but never as the result of a parliamentary negotiation. The great industrialists and the Reichswehr generals would never have obeyed a parliamentary resolution that took the power from them. The fate that was to overtake the legal and parliamentary labour governments in Saxony and Thuringia in October 1923 showed plainly how much a parliamentary majority decision was worth at that time.

The left oppositional wing of the KPD protested violently against Brandler’s tactics, and demanded that resolute preparations should be made for a German Revolution. But the party leaders and the leading men in Russia would not be moved from the path they had marked out. The energies of the Communist International were in 1923 directed more strongly against the Communist opposition than against the ruling capitalist class in Germany. In consequence the KPD did nothing to prepare the masses for a revolutionary movement, and no use was made of the unprecedentedly favourable situation for the German working classes in 1923.

At this time a new left wing was also forming within the SPD, which did not, however, consist of the former leaders of the USPD. Its members were chiefly the Saxon and Thuringian local party officials who were dissatisfied with the tactics of their party leaders. They demanded a proletarian power-policy, and to this end an alliance with the KPD. Zeigner, the Saxon Prime Minister, became the most important spokesman of the new left-wing SPD. By a piece of ill fortune this left-wing SPD in its efforts to induce greater proletarian activity ran straight into the arms of the Communist leaders under Brandler. The policy of their own party leaders was too opportunist to please the left Social Democrats, but in joining Brandler they were going from the frying-pan into the fire. In Saxony and Thuringia the SPD and the KPD together were in a majority over the middle-class parties. In both states, Social Democrat governments were formed which maintained their position by the help of the Communist votes in the Diet. Moscow was greatly pleased at the way things were shaping in Saxony and Thuringia. For the first time labour governments had come into being according to plan, and it was hoped that their example would soon be followed in the rest of Germany.

In August the conviction grew more and more widespread among the German people that Cuno’s government could not last. On 11 August there was a general strike in Berlin, led by Communist shop-stewards. In addition to the safeguarding of their food supplies, the workers demanded Cuno’s resignation. The movement spread from Berlin to other parts of the Reich. The SPD realised that Cuno could no longer be kept in power in face of the popular animosity, and therefore entered into opposition to the Reich government. On 12 August the Cuno government resigned. Passive resistance to the French invasion had failed completely, and at the same time the destruction of the German currency appeared to be involving Germany in economic dissolution and political chaos. The general strike soon collapsed after it had gained its main political aim. But the ‘November mood’, as it was called in memory of 1918, remained in the country. The great capitalists no longer felt capable of retaining the government in their own hands. They were as in 1918 prepared to make considerable sacrifices in order to avert the worst – expropriation. Stresemann, the leader of the capitalist People’s Party, formed a new government with the decisive assistance of the Social Democrats.

Social Democrats assumed the portfolios for Home Affairs (Sollmann), Finance (Hilferding), Justice (Radbruch), and also provided the Vice-Chancellor (Schmidt). Stresemann himself became Minister for Foreign Affairs. His party also furnished the Minister for Economy (von Raumer) and for Food Control (Luther). The remaining ministries were filled from the Centre and the Democrats. Gessler was also a member of the Cabinet. The influence of Social Democracy in the Cabinet was very strong, since the party had direct control of finance, civil administration and justice. If the SPD considered a revolutionary assumption of power to be impossible, then, in fact, nothing remained but to make such a division of power with the middle classes. The Social Democrat ministers wanted to bring the Ruhr war to an end and to come to an understanding with the Entente as soon as possible. They wished to stabilise the currency and thus to provide for the workers wages that kept their value. Drastic taxation of property-owners on the gold basis was to assure the continuance of social reform and to put the Reich finances on a sound footing again. For the moment the capitalist class was so cowed that it agreed to a considerable labour influence in the Reich government. How matters would develop when the pressure of the masses was relaxed remained to be seen.

From August 1923 until his death six years later, Gustav Stresemann was the leading personality in German political life – for the first few months as Chancellor and Foreign Minister, and then for six years as Foreign Minister of the German republic. Even after he had resigned the post of Chancellor, Stresemann exercised a strong influence upon internal policy. Stresemann had been a National Liberal deputy in the prewar Reichstag. During the war his authority in parliament increased. Stresemann was independent of traditional symbols, catchwords and party shibboleths to a degree uncommon among German politicians. As a result he was at times involved in serious difficulties, but on other occasions it gave him an immense advantage. During the World War it was customary for men who believed in a German victory to support conservatism in internal politics. And conversely those who advocated democratisation of the country demanded the so-called peace by understanding. Stresemann was almost the only person who cared nothing for this distinction. He advocated both a victorious peace and liberal reforms in internal politics. After the revolution Stresemann’s position was at first very difficult. Any politician who had believed in a German victory was regarded as a dark reactionary. Hence Stresemann joined the counter-revolutionary People’s Party, the party of the industrialists and financial capitalists. Stresemann’s economic and social principles fitted into this framework very easily, for he would have nothing to do with socialism, and as a true prewar National Liberal insisted upon the sanctity of capitalist private property.

With the passage of time Stresemann again came into conflict with the conventionalised limitations of German politics. The average German Christian capitalist was in favour of the black-white-red past as compared with the Weimar Republic, and supported a restoration of the monarchy or at all events the establishment of some form of dictatorship. Stresemann did not admit the inevitability of this association of ideas. Why should not the propertied middle classes be able to make their influence felt within the framework of the republic and the democratic constitution? Could not Germany produce a stable middle-class republic in the manner of France and the United States? If the propertied middle classes were able to win the cooperation of at least the moderate members of the working classes by a swing over to the republic and democracy, it would be all the better. In foreign policy Stresemann had drawn the conclusion from the course of the Ruhr conflict that Germany would get no further by the use of force, obstructionism and nationalist emotionalism. An attempt must be made to reach an understanding, and this could be arrived at if intelligent use were made of England and America as intermediaries between Germany and France.

Later developments showed that Stresemann was really alone in Germany in his political views. He was divided from the proletarian and democratic masses by his definite belief in capitalism. On the other hand, the German capitalists refused their allegiance to the democratic republic. It has been said that the only link between the old and the new Germany was the person of Stresemann. Even in his own party Stresemann was virtually isolated. As the best speaker and the most gifted statesman among German capitalists, Stresemann had indeed assumed the leadership of the People’s Party. Other influential men in the party nevertheless showed the greatest reluctance to follow him as soon as they realised the nature of his new aims and methods. There is a touch of the dramatic in the sight of this solitary man unsupported by the armed forces or by any reliable organisation of the masses impressing his will upon the development of Germany and remaining in power until his death without any considerable difficulties. Moreover, Stresemann was able to achieve in foreign policy nearly all the objects that he deemed necessary for his defeated country. Such an achievement certainly testifies to the strength of Stresemann’s personality. Nevertheless it was only made possible because the international economic and political situation in those years tended to furnish the solution envisaged by Stresemann.

It was already known in political circles in August 1923 that Stresemann genuinely believed in the Weimar Constitution, and refused to have anything to do with racist conspiracies or any idea of a dictatorship. This knowledge made collaboration with Stresemann easier for the Social Democrats. There was reason to hope that, as Chancellor, Stresemann would prevent trickery on the part of his own party and of the German capitalist class in general. Stresemann and the SPD were agreed at least upon their two main objects – peace abroad and the stabilisation of the currency at home. There even seemed to be some chance of an understanding being reached upon the delicate question of the army since the Reichswehr generals had come into open conflict with the Racist Free Corps leaders. A sort of understanding had been reached between the Reichswehr Ministry and the Social Democrat Home Minister of Prussia, Severing. According to this, the Prussian administration was not to interfere with the Reichswehr’s work of rearmament, on condition that the Reichswehr attended to all military matters itself and permitted no influence to be exercised upon them by the illicit corps.

The Reich government recognised the inevitable and gave up the so-called passive resistance in the Ruhr that had become worse than useless. An official German declaration on this subject followed on 26 September. In it the government’s acquiescence in the French occupation of the Ruhr was implied if not definitely stated. The German local authorities were able from now on to cooperate with the French forces of occupation, and French orders were obeyed. Any improvement in the situation was only possible for Germany by means of negotiations that dragged on for a very long time before they led to any result.

At the same time, the Reich government embarked upon the stabilisation of the currency. Since the summer of 1923 the German capitalists had acquiesced in the fact that inflation could go no further. They must now return to a stable currency before it was too late and all that remained of the existing order was swept away by a socialist revolution. The first scheme for the stabilisation of the currency that attracted serious attention was evolved by the banker and German National deputy Helfferich. He suggested the introduction of a so-called ‘rye-mark’, whereby the value of money was to depend upon the value of grain. A similar project had been made at the time of the inflation during the French Revolution. A currency dependent upon rye would from its very inception have been lacking in stability, since it was bound to a completely unstable standard of value. No adjustment would have been possible between the new German currency and the stable foreign currencies, and the cover for Helfferich’s money was also very doubtful. Nevertheless, Helfferich’s project proved that the big capitalists of Germany saw the inevitability of stabilisation.

The Reich Minister for Finance, Hilferding, very properly refused to adopt so speculative a scheme. He insisted upon a stable currency which was only possible upon a gold basis. On 10 September the Cabinet determined to create a gold note bank which, while it was to have complete legal autonomy and to be altogether independent of the Reich finances, was to carry on its functions in organic connexion with the Reichsbank. Luther, the Minister for Food, suggested his so-called ‘land mark’, the cover for which was to be German landed property. A compromise between the various conflicting ideas was finally evolved in the suggestion made by Hilferding of a ‘new mark’. All the essential preliminaries for the stabilisation of the German currency were carried out in the short time in which Hilferding was at the head of the Reich Finance Ministry. Only his sudden overthrow robbed him of the honour of having brought the German inflation to an end.

The masses of the people indeed knew practically nothing of the various currency plans, and if they happened to hear anything about them, they did not understand them and gave no credence to official promises. All that the populace saw was that the inflation continued uninterruptedly from August to October, that misery increased and obviously nobody knew how to find any way out. The feverish revolutionary mood continued throughout the country but there was no party to exploit it. The SPD was hampered by its cooperation in the government, and the KPD did not change its policy. The leading men in Russia had meanwhile changed their opinion about Germany, but the German workers knew nothing of this change. Since the proletarian movement was hanging fire and the general strike of 11 August was not repeated, it became obvious that the pressure from the left was weakening and therefore the counter-revolutionaries took the initiative.

As was to be expected, Bavaria led the way. The Conservative – Racist united front in power in Bavaria regarded the progress of affairs in Berlin after 11 August with increasing bitterness. The inclusion of Social Democrats in the Reich government seemed to imply that the hated Weimar system was to continue. Munich was resolutely opposed to any consolidation of the democratic republic. On 26 September the Bavarian government declared a state of emergency throughout Bavaria, and appointed the former Prime Minister von Kahr to be State Commissar with dictatorial power. Kahr was thought to be the strongest personality in the ranks of the Bavarian counter-revolutionaries. The establishment of an open dictatorship of the right in Bavaria was an unmistakable warning to the Reich.

Under pressure from the Reichswehr generals, Stresemann decided upon a retaliatory measure of doubtful utility. The executive power in the Reich was invested in the Reichswehr Minister, who entrusted its execution to General von Seeckt. The civil administration throughout the Reich was thus subordinated to the military power. The effect of this action in Bavaria was to make Kahr at least officially subordinate to the Reichswehr. In event of his refusing to obey the Reich government, the Reichswehr could take action against him. The real question at issue in the event of an open conflict between Berlin and Munich was whether the Bavarian Reichswehr would really use force on behalf of Stresemann and Seeckt against Kahr. In order to be prepared for this, an event that was by no means certain, a form of military dictatorship had been set up throughout the Reich. Stresemann felt himself to be strong enough to keep the generals in their place and to keep the reins of government in his own hands. Nevertheless the proclamation of martial law throughout the Reich had seriously shifted the domestic balance of power to the disadvantage of the socialist and democratic elements.

At the beginning of October a rebellion occurred in the detachments of the Black Reichswehr stationed at Küstrin under the leadership of a Racist, Major Buchrucker. All the efforts of the Reichswehr High Command had been unavailing to prevent their so-called labour detachments being filled up with all manner of hotheads and of fanatical Racists. The Black Detachments lived in continual fear of real or imaginary traitors. Hence Vehm murders occurred with horrifying frequency. The labour detachments were waiting for war or a coup d'état, and at last the most undisciplined of the units lost patience and started an independent revolt. Since the Reichswehr itself did not support the undertaking the Küstrin revolt was suppressed without any difficulty. Nevertheless it was possible that what had happened today in Küstrin might very well be repeated in other places tomorrow. [5]

Since September only the counter-revolutionaries had played any active part in Germany – the Bavarian government, the Reichswehr, the Black Reichswehr. Now the great capitalists joined the movement, and at the same time the People’s Party made a move with a view to breaking the influence of the SPD in the government of the Reich. Hilferding’s resignation was called for, and the SPD was required to forgo the eight-hour day, which was the most important social achievement of the revolution. The great industrialists were preparing for the time when the currency should be stabilised. They could not hope to go on amassing fortunes from the inflation for much longer. Their object was to keep costs of production as low as possible even with a stable currency. The sacrifices which had to be made as a consequence of the stabilisation of the currency were to be borne by the workers in the form of low wages and longer hours of work. Moreover, they intended that the fiscal policy of the Reich should be adjusted to suit their own ends.

The conflict between the SPD and the People’s Party led to the fall of the Stresemann government on 3 October. Three days later Stresemann formed a new Cabinet. A compromise was achieved after lengthy negotiations. The Social Democrats gave up the Finance Ministry. It was taken over by Luther, who had the confidence of the German People’s Party. The Social Democrats also agreed to a form of economic dictatorship, and on 13 October the Reichstag granted power to the Reich government by means of an act of enablement to promulgate orders which should have the force of law in the domains of industry, finance and social policy. It is true that this enablement act was only to remain in force for so long as the then political composition of the government should persist. If the Stresemann government were to resign, or even if only the Social Democrat ministers were to retire, the enablement act became null and void.

A certain guarantee was thus given to the working classes by this clause in the act of enablement. Nevertheless, taken all in all, the issue of the governmental crisis was a complete victory for the great capitalists. The Social Democrats had not been able to retain either the Ministry of Finance or the principle of the eight-hour day. Germany had now an economic as well as a military dictatorship. Of the democratic constitution little remained, since the Reichstag had abdicated in favour of the Cabinet and the generals wielded the executive power. It would have been better for the Social Democrats not to have agreed to such a compromise and to have left the Cabinet. For the great capitalists and their political friends had ignored the SPD ministers since the end of the Reichstag crisis. Stresemann had allowed himself to be pushed dangerously far from the principle of constitutional government by the pressure of circumstances.

The SPD did not feel strong enough to undertake any action of an extra-parliamentary nature. On the other hand, it looked in October as if the KPD were going to act. Since the great strike in August and Cuno’s fall the leading men in Russia had at last realised that there was a revolutionary situation in Germany. The middle-class republic appeared to be doomed. The Russians evidently feared that a working-class revolution would take place in Germany without their assistance, and they therefore decided to revise their German policy. At the secret meetings of the Third International and of the KPD there was now talk of an imminent rising of German workers, and that the KPD must make the necessary preparations for such an event.

Nevertheless a party which is not the expression of vital forces, but is ruled according to foreign directions by a bureaucracy, cannot make a revolution. The party officials of the KPD continued to perform their usual functions, and their agitationist activity remained as peaceable as before. The workers were still told tales of a united front and a labour government. The masses observed nothing of the party’s change of attitude. Nevertheless little bands of shock troops composed of tried workers were organised secretly in preparation for the rising. Brandler and his friends were clearly anxious to leave both ways open – to be ready to join in if the masses rose of their own accord, and if revolution could be avoided to continue striving for a labour government on parliamentary lines. The result was worthy of this deplorable policy of sitting on the fence.

About the middle of October the German working classes heard with astonishment that the KPD had joined the governments in Saxony and Thuringia. In both states there were now coalition governments composed of Communists and left-wing Social Democrats. Brandler and the Russians later affirmed that the Communists had only entered the two governments in order to procure arms for the workers. In reality nothing of the kind happened. Nevertheless the industrialists and the Reichswehr generals had made up their minds if only on moral grounds not to tolerate these labour governments.

In the days when it was to be expected that the Reichswehr would at any moment take forcible action against the Saxon and Thuringian governments, a meeting of the Saxon industrial councils took place in Chemnitz. At this conference Brandler submitted to the Social Democrat ministers in the Saxon government the question whether they would participate in an armed resistance to the Reichswehr. The leaders of the KPD thus put the responsibility for whether or not the workers revolution should break out in Germany upon the shoulders of the left-wing Social Democrats. This manoeuvre on the part of the KPD committee was very surprising, for the KPD was at that time the leader among the German proletarian mass movements. On the other hand, the forces upon which the left-wing SPD could rely were very slight. Its only real strength lay in Saxony and Thuringia. If the great KPD wished to strike, it must do so on its own responsibility. It could not thrust the decision upon the Saxon SPD ministers.

If the left-wing Socialist ministers in Saxony were not willing to assume the responsibility for the rising in Germany, the KPD declared that no further resistance to the Reich government and the German capitalists was possible. The labour governments in Saxony and Thuringia collapsed without a hand being raised to help them. By a misunderstanding that can be explained by the confusion in the last week of October, the Hamburg KPD believed that the signal had been given for the rising throughout Germany. The trained shock troops – only a few hundreds strong – took up arms in Hamburg. The whole episode was grotesque. The KPD had not prepared the workers in any way for a decisive struggle. There was no local political crisis and no general strike. One morning as the Hamburg population was going quietly to work, it was observed that bands of Communists were storming the police stations. After stout fighting the little detachments of Communists were overcome by the police without the mass of Hamburg workers having taken any part in the struggle. When at the end of October the Central Committee of the KPD admitted its failure to the masses and ordered a retreat, the power of resistance of the German proletariat was at an end. The counter-revolution was left undisputed master of the field.

During the course of October it was not clear in what form the German capitalists and generals would exercise their power, whether on the Berlin or the Munich model. There were in October still several Social Democrat ministers in Berlin, and a Chancellor who despite all tactical manoeuvres was anxious to save the constitution. The Berlin government was in open conflict with the Racist Party. In Munich, on the other hand, a Conservative – Racist united front was ruling without any regard for either the workers or the constitution. The different constituents of the ruling powers in Berlin and Munich and the correspondingly different policies of the two governments made for an open breach.

The struggle between Munich and Berlin was brought to a head about the middle of October by comparatively slight causes. The first question was how the Reichswehr would behave in Bavaria. General von Lossow, the chief of the Bavarian Reichswehr, decided to refuse obedience to the Reichswehr Minister and to the Chief of the General Staff in Berlin. He put himself at the disposal of the Bavarian government. On 22 October, the Bavarian government officially took over the Reichswehr in Bavaria as ‘trustee for the German people’, as Kahr put it. This was the beginning of an open counter-revolution in Bavaria. According to the existing laws the action of Lossow and his troops was mutiny and treason. Germany now had two governments that did not mutually recognise one another – the Stresemann – Seeckt government in Berlin and the Kahr – Lossow government in Munich. The rulers of Bavaria did not talk of secession from the Reich or of any form of separation, but merely stated that the true interests of the German people were now represented by them and not by the Berlin government. [6]

After 22 October civil war between Berlin and Munich seemed inevitable. Racist associations under Captain Ehrhardt mobilised on the northern frontier of Bavaria, in order to proceed at once to march on Berlin. If the Bavarians were to advance in Central Germany they would come within the sphere of the Socialist – Communist governments of Saxony and Thuringia. If Kahr should succeed in ‘tidying up’ these two states, then his authority would be so strengthened that the Berlin government would not be able to offer him any resistance.

Stresemann decided to anticipate the danger by a bold stroke. On 29 October the Reichswehr deposed the Zeigner government in Dresden by order of the Reich government. The Thuringian Cabinet suffered the same fate. The action of the Reich against Saxony was an act of arbitrary brutality and an open breach of the law. Both state governments had come into being constitutionally and were supported by the majority in the Diets. Both governments had in every way discharged their liabilities to the Reich. But their political colour did not suit those who were at the head of affairs in Berlin, and so they were driven out by the Reichswehr. It is clear that constitutionalism meant nothing in Germany at that time.

The Social Democrat ministers in the Reich Cabinet could not assume responsibility for such an act against members of their own party, and resigned on 2 November. President Ebert, however, remained in office. Ebert’s real power at this time was slight. In case of any conflict with the Reich government he could rely neither upon a majority of the people nor on the Reichswehr. As a strictly constitutional head of the state he felt it to be his duty to support whatever government happened to possess the confidence of the Reichstag. It may also be that Ebert felt that a presidential crisis at this moment would mean the end of the republic. So he remained at this post, but in doing so alienated the working classes.

At this moment Stresemann sought to make a show of authority and conservative strength. The deposition of the two labour governments and the resignation of the Social Democrat Reich ministers at first strengthened Berlin’s position as against that of Munich. After the Berlin government had also broken with the Social Democrats and had set up a military dictatorship in Central Germany, there was no longer very much difference between it and Munich. The actual difference was really only that Kahr and Lossow were on friendly terms with the Racists, while Stresemann and Seeckt were not. It was a question whether it was still worthwhile for the Bavarian Conservatives to indulge in civil war against north Germany when actually there was hardly any difference of opinion between them and the heads of the government in Berlin.

Kahr had from the outset quietly watched the development of affairs in Saxony and Thuringia, and had not interfered with the actions of the Reich government. But at the beginning of November he was obliged to make up his mind. Either the Munich government must come to terms with Berlin, or it must launch a military offensive. Kahr seemed to be hesitating, and therefore the Racist leaders resolved to force his hand in order to make any compromise with Berlin impossible. Von Graefe and Rossbach, the north German Racist leaders, came to Munich and got in touch with Ludendorff and Hitler.

It was still quite possible, indeed probable, that Kahr and Lossow would fight out the issue with Berlin to a finish. Relations with Berlin were really broken off by the mutiny of the Bavarian Reichswehr. Once Kahr had gone so far he might just as well give the order to invade Thuringia. From the standpoint of a determined counter-revolutionary it could be said that Stresemann deserved no confidence and would only take half measures. It was essential that a completely reliable government should be set up by force in Berlin. But no action against Berlin was conceivable unless the Conservatives and the Racists remained united in Bavaria. An isolated attack on the part of the Racists would have been utterly useless, because they would never have been able to overpower the Bavarian Reichswehr and police and the organisations allied with Kahr, quite apart from any resistance with which they might meet in Northern Germany.

Nevertheless a racist revolt was planned in Munich for 8 November. There was no question of a revolt against Kahr and the Bavarian government; but gentle pressure was to be brought to bear upon – a probably not unwilling – Kahr to induce him to order an offensive against Berlin. At the same time a new German Reich government was to be officially formed. On the evening of 8 November Kahr made a speech in the Bürgerbräu Hall in Munich. Bands of National Socialists under Hitler pushed their way into the meeting, proclaimed a ‘National Revolution’, and invited Kahr and Lossow to cooperate with them. After a dramatic scene an agreement was reached. It was announced that in the new National government of the Reich, Hitler would be the political leader; General Lossow was to be Reichswehr Minister; Colonel Seisser, the chief of the Bavarian Police and a friend of Kahr’s, was to be Minister of the Interior; General Ludendorff, Commander-in-Chief of the troops marching on Berlin; while Kahr would rest content with continuing to govern Bavaria. If the agreement of 8 November had been adhered to, a Conservative – Racist coalition government with a strong Reichswehr backing would have been formed and the march on Berlin would have been undertaken at once.

Would such an undertaking have been hopeless in the then condition of affairs in Germany? This question cannot be answered in the affirmative here as definitely as is usually done. If the Bavarian Reichswehr together with Ehrhardt’s troops and other formations, under the leadership of Ludendorff, had invaded Thuringia, it is very doubtful whether the Reichswehr then would have fired on them. And once the advance through Thuringia had been successfully accomplished Ludendorff had a clear road to Berlin. The German working classes were at that time so demoralised that they would in no circumstances have repeated the general strike that had occurred at the time of the Kapp affair. In Berlin itself the German National Party stood aloof from the government and would at once have put itself at the disposition of Ludendorff’s army. Stresemann was even attacked violently by his own party in the Reichstag at the beginning of November. At the same time General von Seeckt had advised the Chancellor’s resignation and the formation of a Cabinet upon a different basis, in order that the right-wing extremists might be ‘gaffed’. It is clear that there was a widespread disposition in right-wing circles in northern Germany to compromise with Kahr and Ludendorff.

Stresemann himself, on 5 November at a meeting of the Reichstag deputies of the People’s Party, said amongst other things:

It will be decided this week whether the Racist associations dare to join the issue. The Reich government has sufficient Reichswehr troops at Coburg. If the Reichswehr fails, these associations will be victorious. Then we may have a Racist dictatorship. I am leading a dog’s life. If these gangs manage to push their way into Berlin, I shall not go to Stuttgart [as the Reich government had done at the time of the Kapp Putsch in 1920]. I shall remain where I have the right to be, and they can shoot me there if they wish to.

These words seem to indicate that Stresemann reckoned quite seriously with the likelihood of a victory on the part of the Munich counter-revolutionaries. The determination with which Stresemann rejected any form of compromise and hazarded his life proves that as far as he was concerned the various dictatorial and violent measures – such as the action against Saxony and the enabling law – were only intended as means to an end. He wanted to steer his way through the confusion of the moment back to a constitutional republic. But in November 1923 he was almost alone among the leaders of the parties of the right and the German generals in his pursuit of this aim.

However, the counter-revolution in Munich collapsed altogether during the night of 8-9 November. While Kahr was holding the meeting in Munich, he and his closest friends had already decided to make peace with Berlin. Kahr and Lossow no longer regarded the existing differences of opinion as sufficiently great to warrant a march on Berlin. The Racist leaders, however, knew nothing as yet of Kahr’s change of front, and therefore they undertook the experiment of 8 November.

Kahr and Lossow believed that they would be exposed to personal danger if they did not at least appear to agree with the proposals of the armed bands who were forcing their way into the hall. But as soon as they had left the hall they revoked their declarations, and that same night mobilised the Reichswehr and the police against the Racists. On the morning of 9 November, Hitler and Ludendorff realised that the Bavarian Conservatives had deserted them. And now the Racists decided against a rising that held out no greater prospect of success than on the previous occasion if they remained alone. But they organised a great public demonstration by their followers in Munich in the hope, doubtless, that Kahr and Lossow would once again revise their decision if they saw the masses in Munich filled with enthusiasm for a national revolution. This proved, however, to be an illusion. The police fired on the National Socialist demonstrators and dispersed them.

Once the Bavarian government had shown that it would act against the Racist leaders by force of arms, peace was restored again between Munich and Berlin. A tacit amnesty covered the mutiny of General von Lossow and the treason of Herr von Kahr. The Bavarian Courts of Justice sentenced Hitler and various other leaders of the revolt on 8 November to brief periods of detention in fortresses. The trial was a juridical curiosity, since the chief culprits, Kahr and Lossow, were never accused and continued to hold their offices and dignities.

On 16 November a new stabilised currency was introduced – the ‘rentenmark’. Germany had not at that time sufficient gold reserves to go immediately on to the gold standard, and so this curious transitional phenomenon made its appearance. A so-called renten bank issued the rentenmark, which was put into circulation to the least possible extent. At the same time the issue of paper money ceased, and a fixed ratio of one rentenmark to one billion paper marks was established between the old paper mark still in circulation and the new currency. The whole operation was carried out under the supervision of the Finance Minister, Luther, and Schacht, the currency commissioner of the Reich government. Actually the rentenmark was only a piece of bluff. Its backing was supposed to be German real estate – an absurd idea reminiscent of the experiment of the fool in the second part of Faust. Nevertheless, the bluff worked at first, because the government enforced ruthless measures of economy, and really did pay its way with the scanty supply of existing rentenmark, and also because industry imposed the same restrictions on itself. The rentenmark, however, could not have maintained its stability permanently, especially in the face of foreign countries. It was not until Germany went over to the gold standard with the help of the Dawes Loan in 1924 that the German currency was really put on a secure footing.

The credit for the political success of the rentenmark went to the Stresemann government. Nevertheless the government was unable to maintain itself. Since the occurrence of the events in Saxony, the Social Democrats had very naturally lost confidence in Stresemann’s leadership, and the Nationalists regarded the Chancellor as an obstacle in the way of a real dictatorship of the right. On 23 November the Reichstag refused a vote of confidence to Stresemann. The Centre, the Democrats and the People’s Party voted for the Chancellor. Most of the deputies belonging to his own party probably only voted for Stresemann because his overthrow was in any case a certainty.

In conformity with existing conditions the new government bore a wholly Conservative character. The conservative Centre leader, Wilhelm Marx, became Chancellor. In Imperial days he had been a High Court Judge in Prussia. Luther remained Finance Minister. Stresemann also entered the new Cabinet as Foreign Minister. It was not desirable to disturb the important negotiations in which he had for the past few months been engaged concerning the question of reparations. How far Stresemann would be in a position also to exercise an influence upon the internal policy of the Reich was at that time still very doubtful. The old enabling law had become void with the dissolution of the Stresemann government. Now the Marx Cabinet demanded a fresh one. Any laws of a character to alter the constitution required a two-thirds majority in the Reichstag. The extraordinary weakness of the German labour movement at the end of this eventful year is shown by the fact that on 8 December the Social Democrats gave their assent to the enabling bill, that is to say, to a capitalist economic and financial dictatorship.

The conversion of German industry from the speculative and hazardous methods of the inflation to the steady principles of stabilisation was carried out entirely at the expense of the workers. Unemployment had attained vast proportions, since the easy sale and export conditions of the inflation period no longer existed to help German manufacturers. In July 1923 the number of unemployed in receipt of relief throughout Germany was only one hundred and eighty thousand. In December it was a million and a half. Of the members of the trades unions three and a half per cent were totally unemployed in July 1923. By December the figure had risen to 28 per cent. To this were added in December 42 per cent short-time workers, so that of every hundred workers organised in unions, only thirty were now in regular employment.

The effect of the loss of the eight-hour day upon the majority of German workers is seen from the following trade union statistics, which, though they only include a minority of German workers, do on the whole give a true picture of the situation. Of the workers included in these statistics – compiled in May 1924 – 45 per cent worked up to forty-eight hours a week, 42 per cent from forty-eight to fifty-four hours, and 13 per cent over fifty-four hours a week. The hours of work were, as a rule, longest in the largest concerns. Moreover, wages during the first months after the stabilisation were exceedingly low. Some idea of the situation may be gained by a comparison of the wages during the winter of 1923-24 with those obtained in the later, more favourable, period of the German republic. In the year 1928, it is true, the income of a German workman was not great, but it was at least sufficient for ordinary needs. A skilled textile worker in July 1928 earned nearly thirty-seven marks a week; in January 1924 he was only getting twenty marks. The weekly income of a skilled metalworker in July 1928 was something over fifty marks, in January 1924 it was only twenty-eight marks. The index figure of the German standard of life was, according to official statistics, 142.2 in 1923 and 152.6 in July 1928. Hence it will be seen that towards the end of 1923 living was nearly as expensive in Germany as it was in the summer of 1928. Nevertheless wages at the beginning of the stabilisation were only about half of what they were in 1928.

Taking into account these facts about unemployment, hours of work and wages, the situation of the German workers at the end of the inflation period becomes more or less clear. The proletariat had suffered a decided defeat, and was therefore obliged to pay the costs of the war. It was the third great defeat that the German working classes had sustained since 9 November 1918, if the fighting between January and May 1919 is taken as the first, the result of the Kapp Putsch as the second, and October 1923 as the third defeat. The political responsibility in each case lies with the party that was exercising the decisive influence on the German workers at the particular time – the SPD in 1919, the USPD, and especially its left wing, in 1920, and the KPD in 1923. The fact that the political culpability is distributed so remarkably evenly over all shades of opinion in the German labour movement shows that it cannot be due to the incapacity of individual leaders. The German working classes were in truth not equal to the gigantic tasks with which they were faced, with practically no preparation, on 9 November 1918.

At the end of 1923 the great German capitalists, together with the Reichswehr generals, were the undisputed victors. The KPD had unresistingly allowed itself to be suppressed, and was now engaged in domestic disputes under the ban of illegality. The SPD had also capitulated by its acceptance of the enabling law. The democratic wing of the Centre Party no longer existed as a political force. On the other hand, the Racist Party had also been suppressed. The Racists and Free Corps leaders who had been too seriously compromised were either in prison or in hiding. The executive power throughout Germany was in the hands of the Reichswehr, except in the districts which were occupied by the Entente troops. In economic and social questions the Reich government exercised an unlimited dictatorship by the help of decrees legalised by the enabling law.

In December 1923 no thoughtful observer would have wagered five shillings on the continuance of the Weimar Republic, for all the democratic forces in the country had been demobilised and all the trumps were in the hand of the counter-revolution. But when the next spring came the state of martial law faded softly and silently away. The enabling law expired, the currency remained stable, and the democratic republic suddenly reappeared without creating any particular sensation and without any dramatic struggle. This miracle came as a result of a change in reparations policy, resulting from the intervention of the New York Stock Exchange in German affairs, and also as a consequence of Stresemann’s efforts.


1. Gustav Stresemann, Vermächtnis. His papers in three volumes. Published by Henry Bernhard in collaboration with Wolfgang Goetz and Paul Wiegler (Berlin, 1932-33). This is a primary source for the years 1923-29. Stresemann’s Vermächtnis is not strictly a book of memoirs, but a collection of notes and documents of all descriptions with a short text uniting them into a coherent whole (English translation, Gustav Stresemann, London, 1936). Important too, are the memoirs of Lord d'Abernon, the British Ambassador in Berlin.

2. An indispensable work is Wentzcke, Ruhrkampf. Einbruch und Abwehr im Rheinisch-Westphälischen Industriegebiet, Volume 1 (Berlin, 1930). Wentzcke wrote his book with the assistance of the municipal councils and of the industrialists of the Ruhr. His sympathies are wholly with the middle-class parties and with the Black Reichswehr. Nevertheless he did his work carefully, and is the first to bring to light a number of important facts on the subject of the so-called passive resistance, see especially his remarks on pp 301 et seq, 376 et seq and 428 et seq.

3. On the subject of the standard of life of the German workers during the inflation, cf Pawlowski, Vor dem Endkampf in Deutschland (Berlin, 1923).

4. Cf Chief Burgomaster Böss, Die Not in Berlin. Tatsachen und Zahlen (Berlin, 1923).

5. The Reichstag Committee for the investigation of the Vehm organisation and the Vehm murders met in 1926 and 1927. The minutes of its meetings were published as Reichstag pamphlets. Especially important are the minutes of the meeting of 30 March 1927 with the report of deputy Levi on the documents in the Rossbach case. Only a few excerpts can be given here from the wealth of material. Thus Rossbach wrote to his counsel on 18 September 1923 from the prison where he was detained on remand. (A copy of the letter was among the documents. Rossbach usually shortens the Reichswehr to RW; AG stands for labour association, one of the innocuous aliases for the secret societies; Fr Rex is ‘Fridericus Rex’, another alias for the Black Reichswehr. Eberhard was one of Rossbach’s officers. Rossbach wishes to prove how close his association with the Reichswehr has always been, and that therefore the charge of high treason against him is absurd.) ‘My own personal relations with the RW go back to the days of the AG in Pomerania, say about 1920. At that time I often carried on negotiations with two RW officers in Stettin, one of whom now occupies one of the chief posts in the army of the Reich. Hence I can only discuss this with you by word of mouth and furnish proof of it if the attitude of General von Seeckt makes it necessary. I had undertaken at that time to raise a battalion in case of mobilisation. Equipment, arms, etc, had been settled. [Once more new RW activities come to light here.] Later direct communication was dropped, because I refused to agree to the demand of the Reichswehr and to have my men absorbed into the Reichswehr altogether. (Reasons for this I will give you later orally.) Disappointed at my determined attitude in this matter, the later so-called Black RW (Fr Rex, etc) tried to inveigle the men of my former organisation into its ranks one by one. The result was the row in Mecklenburg (Eberhard can tell you about it) and the new ideas on the Upper Silesian question. Owing to the urgency of the situation I finally succumbed to the blandishments of the then representative of the RW, Colonel von Schwarzkoppen, at Breslau, and despite resistance at first, I did in the end allow my men to be used... I suppose nobody in the government or Reichswehr will deny that the self-defence there was financed by them. Regular RW officers and men were actually fighting in the regiment “Silesia” which was under my command.’ In the same letter Rossbach writes later: ‘Finally, I am convinced that the Marxists of all shades of opinion both in the government and in the Courts of Justice are certainly not going grey over the fact that the Reichswehr and the Swastika men are at loggerheads with one another. The super-clever Herr von Schleicher should also realise this.’ In these documents Herr von Schleicher is continually appearing as the real originator of all the political measures taken by the Reichswehr Ministry. Also in September 1923 Rossbach’s counsel moved that General von Seeckt should be examined on the following points: 1: That he knew that so-called Black Reichswehr detachments were in existence throughout the whole Reich, and that it was with his knowledge that invitations were issued to all members of Nationalist associations to join marching battalions (Marsch-Bataillone), which had now been established in every single district, and for which estimates had also been drawn up by the secret Reichswehr officials. 2: That he knew of a regulation whereby if these things should come to the ears of the authorities, every single man who was caught should deny any connexion with the Reichswehr and take the matter on his own shoulders alone. Among the various questions which were to be put to Herr von Seeckt the following is particularly interesting in view of the future putsch at Küstrin: ‘Is General von Seeckt acquainted with Major Buchrucker and his activities?’ While in the rest of the Reich the Reichswehr was carrying on its conflict with the Racist leaders, matters were different in Bavaria. Thus, in the letter of 18 September from Rossbach, quoted above, is the following passage: ‘Graefe himself must decide whether any questions are to be asked about Bavaria. For there is here an official Rossbach division among the National Socialist units. If General von Seeckt denies all connexion with Rossbach men, that is, of course, understandable, but the manner in which he (or Herr von Schleicher) does it is, to say the least of it, not clever. For Bavaria obviously still forms part of the German Reich, and the Reichswehr there is under the control of Gessler and von Seeckt. However, as I said before, here begins a chapter about which Herr von Seeckt must decide for himself.’ This is an obvious allusion to the fact that up to November 1923 the SA, the Rossbach men, etc, in Bavaria were officially part of the Black Reichswehr, and that in Bavaria not even the camouflage was necessary that was practised in the remainder of the Reich.

6. On the subject of the Black Reichswehr in the summer of 1923, Wentzcke says in Ruhrkampf (p 435): ‘The total number of volunteers and mercenaries available throughout Germany is estimated rather too liberally at fifty to eighty thousand men.’ The curious vagueness regarding the number is not to be explained by any superficiality on the part of Wentzcke; but evidently Seeckt and Schleicher themselves did not in the confused state of affairs know on how many men they could reckon if matters became serious.