By Thomas Childers, Ph.D., University of Pennsylvania
In 1922, the NSDAP was a popular political party in Munich and in the surrounding villages in Bavaria. It was seen as a minor phenomenon on the lunatic fringes of German politics. The dramatic ascent of the NSDAP and Adolf Hitler began in 1923 when Germany was facing economic hardship. How did that happen?
The German Economy
During the First World War, the German government had paid for the huge expenses of the war effort by consciously inflating the economy. All wartime economies were inflation economies, but when the war ended, France, Britain, and the United States went through a period of readjustment, in which there was a recession, unemployment, and all the things that usually come with this transition from a wartime to a peacetime economy.
But the Weimar authorities didn’t think they could afford that and, as a consequence, continued the wartime policy of inflation.
Inflation is, by definition, in the short run, at any rate, a progressive policy. There’s money to spend on programs. The new Weimar government spent money on welfare, on daycare centers, and so on. But in the end, there had to be a reckoning, and in 1923, it came.
This is a transcript from the video series A History of Hitler’s Empire, 2nd Edition. Watch it now, Wondrium.
The Reparations for Germany
During the course of 1921–22, there had been a number of international conferences to try to determine how much in the way of reparations Germany actually owed. The Germans at Versailles had been forced to sign a blank check, recognizing there was an obligation to pay, but not how much.
There still was no agreement on this in 1922, and the German government had tried all kinds of things. It didn’t want to pay; no German government wanted to pay the reparations. At one point, they even tried to pay the French and the Belgians with paper marks, which the French and Belgians weren’t having.
The French and Belgian Invasion in Ruhr
But the French had had enough; and, in January 1923, French and Belgian troops poured into the Ruhr to occupy the industrial heartland of Germany, to extract reparations from the Germans.
The German government responded by issuing a policy of passive resistance: German workers should slow down or simply not work at all, but the German government would pay their salaries through a complicated arrangement. The result was that the German government simply let the printing presses roll, making it impossible to determine, for the French or the Belgians, just exactly how much a mark was worth.
Learn more about the peace treaty of Versailles.
Hyperinflation in the German Economy
In 1914, if you had a dollar and were standing in the Munich train station, and wanted to buy marks, a dollar would bring you five marks. By the end of the war, in 1919, a dollar would bring you 14 Reichmarks. In January of 1922, a dollar could bring you 191 Reichmarks.
In January, shortly after the French and Belgians invaded, and the German government had declared its policy of passive resistance, there was a complete collapse of the German currency. By November of 1923, a dollar would bring you 4 trillion, 420 billion Reichmarks.
Hyperinflation: A Living Nightmare for the Germans
By the autumn of 1923, a German hausfrau needed 90 billion marks to buy a kilo of potatoes. Workers were paid three times a day. If you were a worker, you went to work in the morning and were instantly paid.
Then, you had to have somebody from your family come along to take that money and instantly go out and buy lunch, because if you waited until lunch to use that money to buy it, the money would already be so valueless that it wouldn’t buy you a slice of wurst.
At lunchtime, a family member came, you gave them the lunchtime money, they went out and bought dinner. At dinner, you were paid one last time, the stock markets closed for the evening, and you were relatively safe until the next morning.
Shopkeepers didn’t want to sell anything; if they sold something one day and took the paper marks to the bank the next day, it would be worth nothing. People were buying things in dollars and pounds sterling.
Big businesses knew how to operate in this. They had access to foreign currency, and contracts called for payment in gold, gold marks, and so on. But for the average German, it was a nightmare.
Lear more about the First World War and its legacy.
Political Turmoil in Germany
In the midst of this economic chaos, the political fabric of the republic began to unravel. There was a Rhenish Separatist movement, sponsored by the French in Cologne, in Achen, in Coblintz.
There were rumors of Communist coups in Saxony and Thuringen where the Communists and Social Democrats were in the government alliance. The government declared martial law, and, in fact, the army was in charge now of maintaining order.
Hitler Makes a Move
This situation convinced Hitler that the time was ripe for action. He’d always been wary of making any alliance with the other right-wing organizations around Munich. He wanted his own party; he wanted it to stand out.
He enlisted the NSDAP in a conspiracy—the kampfbund—in early 1923. It was made up of monarchists, right-wing radicals, and separatists, in order to overthrow the government. He enlisted Erich Ludendorff, the great hero of the First World War, who was a great military man, but in politics, was seen as unstable.
The Beer Hall Putsch
On November 8–9, this coalition of right-wing forces attempted to overthrow the Bavarian government, and then the plan was to march on to “Red Berlin”. In fact, they were copying Mussolini’s 1922 march on Rome, which had led to Mussolini’s establishment in power.
The revolutionaries met in Munich in a beer hall overnight. Around daybreak, the procession began to march down toward the center of Munich, past the Rathaus, down a very narrow street, headed into a large open plaza around the Feldernhalle, where they encountered a barricade.
German troops had lined themselves across this open area, and ordered the marchers to halt. Hitler was in the front row, along with General Ludendorff. When the marchers didn’t stop, the troops opened fire.
A number of the marchers were killed, many were injured, and quite a few ran away. However, Hitler miraculously escaped injury. Ludendorff marched all the way across the plaza, and was taken into protective custody.
The Beer Hall Putsch turned out to be a disaster. Yet, Hitler managed to transform it into a political victory.
Common Questions about Hyperinflation and Hitler’s Coalition
In early 1923, Hitler enlisted the NSDAP in a conspiracy called the kampfbund.
In January 1923, the French and Belgian troops poured into the Ruhr to occupy the industrial heartland of Germany, to extract reparations from the Germans.
In January 1923, shortly after the French and Belgians invaded, and the German government had declared its policy of passive resistance, there was a complete collapse of the German currency.