1923: A year of reckoning

Volker Ullrich's account of the rise of Hitler offers timeless lessons in governance

Germany 1923

Author: Volker Ullrich

Publisher: W W Norton

Pages:432

Price: Rs 2,481

The standard narrative of Hitler’s rise to power begins with Germany’s post-World War I humiliation with heavy reparations and territorial losses, the chaotic Weimar Republic interregnum, the global economic crisis and, eventually, demands for a “strong” leader to restore the country to mythical past greatness. Newer Weimar Republic histories have added nuance, pointing to a less disastrous path for Germany had politics been less radicalised. 

That remains one of the most intriguing “what ifs” of history. But the year 1923, German historian Volker Ullrich writes in this micro-study, shaped Germany’s future in many ways.

Most remember it for hyperinflation and a failed putsch by Hitler, then a bit player on the political scene. But 1923 also saw a “temporary state of emergency…with no end set and political system verged on collapse, radicals from the Right and Left planned assaults on the Republic and various separatist movements threatened the territorial integrity of the German nation. By Autumn 1923, the country was teetering on the brink of an abyss.”

And yet, the Republic lasted another 10 years, volatile, unstable, but hanging in there. Germany 1923 shows how it did so and why it failed. Dr Ullrich, author of a perceptive two-volume biography of Hitler, is a captivating writer, building his history from the minutiae of diplomatic cables and minutes of cabinet meetings and parliamentary proceedings — offering fascinating insights into the intricate political machinations implicit in democratic governance — as well as contemporary diaries, letters, newspapers and journals to give readers an authentic flavour of the times.

His book delves into the key personalities as much as it does into the historical narrative. Among them are flawed heroes such as President Friedrich Ebert and his iron commitment to the Weimar constitution, Chancellor Gustav Stresseman, a corporate lawyer who parried left and right elements in his government to stabilise the republic in its darkest hour, leftists such as Saxon premier Erich Zeigner , who took on the military and big business nexus in Saxony, and Hugo Stinnes, right-wing politician and powerful owner of a business conglomerate.

Dr Ullirch is good at teasing out interpretations from micro-histories, evident in his 2021 book  Eight Days in May: How Germany’s War Ended, a day-by-day chronicle from Hitler’s suicide to Germany’s surrender. For this book, he has chosen a thematic rather than chronological approach, given the breathless pace and confusing profusion of events.  The starting point is the French and Belgian occupation of the Ruhr in January to enforce the reparations bill that Germany struggled to pay. Unable to retaliate militarily, the government chose passive resistance. Mine owners were instructed to cease coal deliveries to France and Belgium, and civil servants were forbidden to obey occupation authorities. 

But the occupiers retaliated quickly, convincing allies to cancel negotiations over a moratorium on reparations, arresting industrialists, locking out workers, replacing railway employees by French operators, deporting civil servants, and erecting a customs border around the region. But it was a ban on exporting Ruhr coal to the rest of Germany that hit hardest.  

With supply chains disrupted, shortages of food and essentials became acute. Denied Ruhr coal, German exports suffered a crushing blow just as industry started to reap the gains of a reviving global economy. Without foreign exchange earnings, Germany’s ability to pay reparations bills became near impossible. The enforcement of these payments is considered the key cause of hyperinflation when the value of the mark famously plummeted against the dollar from millions to trillions on a daily basis. But Germany was in an inflationary spiral before that. Dr Ullrich says the causes stretched back to the First World War when the German Empire chose to finance the war not by raising taxes but issuing domestic bonds on the assumption that defeated enemies would be made to repay them after the Kaiser’s inevitable victory. This, not Hitler’s pet theory about Jews, was the real stab-in-the back.

The Reichsbank met exploding costs with a loose monetary policy that saw money supply jump by six times over the course of the war. By the end of the war, interest payments alone on German debt amounted to 90 per cent of the Reich’s regular expenditure. The Ruhr occupation tipped the scales from inflation to hyperinflation because the government had to shoulder the costs of passive resistance, such as supporting sacked civil servants and workers. 

The many tragi-comic stories of Germans’ experience with inflation are well known, but Dr Ullrich makes the point that this episode scarred German collective memory and policy responses long after the introduction of the Rentenmark in September, the abandonment of passive resistance, and a sharp reordering of state finances by downsizing and cutting expenditures restored sanity to currency and prices.

Nightmare memories of hyperinflation deterred the Weimar government from expanding welfare payments when rampant unemployment broke out after 1929. This, again, was the indirect downside of the bailout plan structured by American banker Charles Dawes, which stabilised the economy and restarted foreign investment inflows, mostly from the US. It tied Germany to American business cycles and the 1929 stock-market crash delivered the coup de grâce.  

In 1923, Hitler’s poorly planned putsch was part of a vortex of rebellions in Saxony, Thuringia, and the Rhineland in response to hyperinflation and political instability. The critical difference, as Dr Ullrich points out, is that Berlin responded to left-wing revolts in Saxony and Thuringia with military crackdowns, whereas the Munich coup, backed by army veterans and big business, was let off lightly. 

Viewed from a century of hindsight, this work offers striking lessons in governance and non-governance, which the author outlines in the last chapter that covers early 1924. Chief among them are the dangers of succumbing to radicalism, allowing big business and the military to influence policymaking, the fragility of democratic guardrails and institutions without the scaffolding of political commitment, and the sustained demonisation of minorities.