Ruhr+Crisis+(1923)

The years following the end of World War I were characterized by political and economic chaos for Germany. The Treaty of Versailles (1919) had been determined, with much internal conflict, by the victors of the Great War; Germany was belatedly and under-represented 1. In the end, Germany was punished heavily: she lost much of her territory and all of her colonies; faced disarmament, forced withdrawal of troops, and an army limited to 100,000; had to accept full responsibility and guilt for the war; and was charged with massive reparations. These were to be monetary compensations for both Allied military and civilian losses, the surrendering of most merchant and fishing fleets, and funding of the Allied occupation of the Rhineland. These were to be paid immediately, and the total was placed at $32 billion 2. With the threat of resumed war, the cornered country had little choice but to sign and ratify.
 * The Ruhr Crisis**

Many Germans were outraged by the terms of the treaty, nicknamed the “Diktat”, namely the war guilt clause and reparations. Much of the resentment was turned towards the new and fragile Weimar Republic 3. The elections that occurred during the peace negotiations in Paris were divided over a wide swath of new parties, with the moderate Majority Socialists leading in seats won 4. They faced, though, frequent attempts of removal from both the far-left and far-right. The racist considered //Protocols of the Learned Elders of Zion//, a fabricated document that blamed all the misery of recent history was due to a Jewish conspiracy to rule the world 5. Rightist units of roving military personnel called //Freikorps// brutalized the political leaders, and even seized Berlin in what was named the Kapp Putsch after the politician that designed it. The seizure was only halted by general striking of socialist and communist workers 6. The government scrambled between maintaining control and paying the debts, but hardly succeeded. The German currency, Mark, began to inflate, extreme factions vied back and forth to win the favor of the increasingly desperate citizens, and the reparation payments fell more and more behind. In 1921, Germany was behind on its reparation payments, and France was impatient, demanding full compliance to the payment schedule, despite Britain and the US favoring relaxation on the treaty’s original measures. In April of 1922, France declared it would use force if any more delay should occur; in November, Germany was forced to request a 3 to 4 year moratorium on the payment to allow its economy the chance to recover. In 1923, France invaded the Ruhr Valley, key to the German economy because of the steel, iron, and coal mines, in order to divert the revenue to themselves in lieu of the reparations. The only ally to offer France minor support as opposed to condemnation was Belgium 7. German chancellor Cuno reacted by canceling all reparations and calling for workers to not cooperate with the French, to which workers all too enthusiastically complied – passive resistance spread all across the region. The government took on paying wages of nonworking employees 8. With this burden and the loss of the economic output from the valley, the economy crumbled, the already incredibly weak deutschmark (about 190 to the dollar) with it.

It was the “worst inflation in modern history” 9. At the trough of the collapse, the exchange was 4.2 trillion marks to an American dollar 10. “  By mid-1923 the German mark was losing value by the minute: a loaf of bread that cost 20,000 marks in the morning would cost 5,000,000 marks by nightfall; restaurant prices went up while customers were eating; and workers were paid twice a day” 11. The government frantically churned out bills, but citizens were forced to be creative. It was more efficient for families to burn the virtually worthless notes for warmth or cooking instead of buying wood; children used bundles of money as building blocks. The marks had to be transferred by the wheelbarrow-load.

The resolution to the crisis came later in 1923 when the German government ordered its workers back to work, and the US and Britain forced France to withdraw and to accept continued reparations under the Dawes Plan 12. However, the economic damage had already been wrought. France’s own economy was destabilized from investing efforts in a fruitless venture. The German middle class had been undermined as life-savings were wiped out. The extreme political factions had tried to take advantage of the turmoil. While Communists schemed, Adolf Hitler, leader of the National Socialist German Workers’ (NAZI) Party, seized the moment to align with other right-wing groups, and attempted a coup in November 1923 in the Beer Hall Putsch, by using Bavaria as a base to march on Berlin in order to overthrow the Weimar government for which he blamed the country’s humiliation and ills 13. Gustav Stresemann, newly appointed chancellor in August 1923, issued a new currency – the Rentenmark,, “ theoretically based on the mortgage value of all national lands and industry” 14. They replaced the old deutschmarks at a rate of about 4.2 to the dollar. “The rebellions subsided, Hitler went to jail, and peaceful political competition replaced the street fighting” – a temporary sense of stability had returned 15.

1. Turk, Eleanor L. "Germany: The First World War and the Weimar Republic." __The History of Germany__. Santa Barbara, CA: Greenwood Press, 1999. __Daily Life Online__. ABC-CLIO. 13 Sep 2009. . 2. Ibid 3. "Germany." Encyclopædia Britannica. 2009. Encyclopædia Britannica Online School Edition. 13 Sept. 2009  <[]>. 4. Turk, Eleanor L. "Germany: The First World War and the Weimar Republic." __The History of Germany__. Santa Barbara, CA: Greenwood Press, 1999. __Daily Life Online__. ABC-CLIO. 13 Sep 2009. . 5. "Germany." Encyclopædia Britannica. 2009. Encyclopædia Britannica Online School Edition. 13 Sept. 2009  <[]>. 6. Ibid 7."Ruhr Valley Occupation." //World History: The Modern Era//. ABC-CLIO, 2009. Web. 13 Sep. 2009. . 8. "Germany." Encyclopædia Britannica. 2009. Encyclopædia Britannica Online School Edition. 13 Sept. 2009  <[]>. 9.  Turk, Eleanor L. "Germany: The First World War and the Weimar Republic." __The History of Germany__. Santa Barbara, CA: Greenwood Press, 1999. __Daily Life Online__. ABC-CLIO. 13 Sep 2009. . 10.  "Germany." Encyclopædia Britannica. 2009. Encyclopædia Britannica Online School Edition. 13 Sept. 2009  <[]>. 11. Ibid 12. Turk, Eleanor L. "Germany: The First World War and the Weimar Republic." __The History of Germany__. Santa Barbara, CA: Greenwood Press, 1999. __Daily Life Online__. ABC-CLIO. 13 Sep 2009. . 13. "Germany." Encyclopædia Britannica. 2009. Encyclopædia Britannica Online School Edition. 13 Sept. 2009  <[]>. 14. Turk, Eleanor L. "Germany: The First World War and the Weimar Republic." __The History of Germany__. Santa Barbara, CA: Greenwood Press, 1999. __Daily Life Online__. ABC-CLIO. 13 Sep 2009. . 15. Ibid