The Downfall of Money: Germany’s Hyperinflation and the Destruction of the Middle Class (46 page)

The trouble was that the existence of the ‘proletarian hundreds’ undoubtedly raised the threat of a Communist coup in Saxony and Thuringia, which might then lead on to a Communist takeover in Berlin and other major cities, and eventually even to a Soviet Germany. This was precisely the justification that the far right in Bavaria needed in order to arm its own supporters to the teeth, and to threaten a ‘march on Berlin’ via Saxony and Thuringia. In other words, the far left and far right fed off each other’s activities. Each group blamed its worryingly eager preparations for civil war on the other side.

Meanwhile, the government in Berlin, for a while, seemed helpless to intervene in either of these places. But if the Berlin government did finally summon the will to intervene in these parts of Germany where its writ had become all but ineffectual, where and how would this happen?

The situation in central Germany was coming to a head, in its different way, but absolutely of a pace with that in Bavaria. On 10 October, the Communists, who had hitherto merely provided parliamentary support for the Social Democratic Premier in Saxony, joined his government, as instructed by Moscow.
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The Communists took over the finance and economy ministries in Dresden, and the party’s leader became head of the cabinet office. A few days later, the Thuringian Communists were also given government posts, in the economy and justice ministries.

In fact, when steps were taken by the Berlin government, they were directed only at Saxony and its junior partner in leftism, Thuringia. On 15 October, the day the cabinet was due to make a final decision on the setting up of a new currency bank that would end the inflation, the commander of the Reichswehr’s troops in Saxony, General Müller, issued a reprimand to the new socialist-Communist government. Its officials had put up posters explaining its programme in public places without the General’s permission, which was required under the recent emergency laws. Socialists all over Germany protested at this, including the Social Democrat cabinet ministers in Berlin. Stresemann pointed out to his colleagues that this action had been agreed with President Ebert and that furthermore, as the cabinet record had it, ‘if the government took no action in Saxony, the danger existed that those circles in Saxony who were threatened [i.e. business and farming interests] would turn to Bavaria for help. He did not need to go into details about how this would mean civil war and the disintegration of the Reich.’
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Not the best of days to decree the creation of the new currency bank, but then the government had no choice but to press on.

Everyone wanted a dictatorship. The Communists wanted one, of the proletarian kind. The conservative nationalists wanted one that bore some resemblance to the old monarchy. Hitler’s Nazis thought of nothing else, and their obvious model was Mussolini, who had seized power in Italy in October 1922. Even the democratic ‘Weimar’ parties had decided, rather gloomily, that the country needed a strong hand, albeit on a temporary basis. Lastly, the man so many in Germany considered the country’s secret ruler had also made a decision along these lines. Hugo Stinnes wanted a dictatorship, too.

So strongly did Stinnes feel on this issue, and had felt for some time, that he even approached the American ambassador, Alanson B. Houghton, in mid-September, seeking his support or at least tolerance for such a solution to Germany’s problems. Stinnes told the American that he expected 3 to 4 million unemployed in Germany by the next month and that the Communists would exploit this situation to launch a general strike, followed by a nationwide uprising. In response – and Stinnes thought it was important not to strike the first blow, for fear of losing international sympathy – parliamentary democracy would have to be suspended and a Bavarian-style authoritarian regime introduced that would use ruthless force to defeat the Communists. A dictator would have to be found, Stinnes insisted, according to Houghton’s subsequent dispatch to Washington:

. . . equipped with the power to do everything necessary. Such a man must speak the language of the people and be himself of bourgeois origins, and such a man stood ready. A great movement, originating from Bavaria, determined to restore the monarchy, was near.
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So, who was this unnamed man of destiny who would come out of Bavaria and clean up Germany? Was Stinnes referring to Hitler? It has often been claimed that Stinnes was among the supporters of Hitler in these critical days.
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Stinnes’s daughter, Clärenore, thought that he had met Hitler through General Ludendorff, whom Stinnes knew well (and admired) from his wartime relations with the High Command. Stinnes’s sons Edmund and Hugo Jr, however, both stated later in life that their father had turned down a meeting with the Führer. What both Clärenore and Hugo Jr both definitely recalled (using exactly the same phrase) was that the hard-headed inflation king had dismissed Hitler privately as a ‘fantasist’ (
Fantast
), and for all his faults Stinnes did not waste time with fantasists. It seems more likely that the Bavarian ‘messiah’ Stinnes alluded to as one possible leader for Germany was, in fact, the wartime strongman, Ludendorff. The restless General had settled in Munich and had for some time been plotting, with Hitler and others, to set up exactly the dictatorship that the right and many of the major industrialists longed for.
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Key to Stinnes’s thoughts in September was the prospect of a Communist uprising, which would give a decent pretext for a right-wing dictatorship. A month later, it seemed that this moment might have come.

Trotsky, with an eye for drama, had initially proposed 9 November, the fifth anniversary of the proclamation of the German Republic, for the date of the Communist revolution, the so-called ‘German October’. However, the local leadership had other plans. General Müller, the commander of the Reichswehr troops in Saxony, had been granted full executive powers in the state by the Berlin government, and after the Communists joined the government he lost no time in putting a formal ban on the ‘proletarian hundreds’ in Saxony. When the units failed to disband, a confrontation was clearly on the cards, and if the Communists were, in fact, to mount a coup, it had to be soon.

Chemnitz, an important industrial city between Dresden and Leipzig, with a population of around 320,000, had become a Communist stronghold. It was here that the Communists summoned a conference of factory councils for 21 October 1923. Heinrich Brandler, chair of the Communist Party, and for a week since also head of the Cabinet Office in Dresden, travelled there to address the delegates. His speech was supposed to inspire the workers to declare a general strike against the tyranny of the Reichswehr, thus providing the trigger for nationwide armed revolution.

The Chemnitz conference turned into a fiasco, at least for Brandler and his comrades. His clarion call met with an almost complete lack of response from the workers’ representatives. Despite the rocketing unemployment, the food shortages and the threat from the Reichswehr, the conference refused to vote for a general strike. Humiliating defeat in communism’s Saxon stronghold could mean only one thing: the German working class was not interested in violent change. For Brandler and his hopes of revolution, it amounted – as one of his colleagues drily remarked – to a ‘third-class funeral’.
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The plans for revolution were duly abandoned in Saxony and Thuringia. Only in that other great radical heartland (and unemployment black spot), Hamburg, did some hotheads around Ernst Thälman dare to hope that they could succeed where Brandler had failed. Between 23 and 25 October, after armed militants had seized public buildings, including police stations, there followed street fighting that left twenty-four Communists and seventeen police dead. However, in Hamburg, too, the mass of the workers refused to answer the activists’ call. Again, the German Communist Party revealed itself to be isolated.

In the meantime, the Berlin government had moved against the Communist-socialist coalition in Saxony. The Reichswehr in Saxony was reinforced from outside the state, including troops from Berlin, and quickly occupied most major towns. Berlin then demanded that Erich Zeigner, the left-socialist Premier of Saxony, dissolve the coalition with the Communists. On 28 October, Zeigner issued a formal refusal. Within less than twenty-four hours, Stresemann invoked a further set of emergency powers, allowing his government to remove from office any ministers or officials deemed to be acting illegally. A Reich Commissioner was given full authority until a new government could be formed. Finally, the Reichswehr, in full military order, complete with a marching band, occupied the ministries in Dresden and forcibly removed the ministers and officials, including the Premier. Though technically compliant with orders from the democratic government in Berlin, the action was a pretty brutal display of old-fashioned militaristic arrogance.
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The affair was not quite bloodless. There was shooting in Chemnitz. In the mining town of Freiberg the troops fired on a crowd that refused to disperse, killing twenty-three and injuring thirty-one civilians. All the same, in the end the so-called ‘Reich Enforcement’ (
Reichsexekution
) action in Saxony was a much less drastic operation than had been feared. This was partly because Stresemann had refused to allow his Defence Minister to appoint a Reich Commissioner with indefinite powers for an indefinite period, as the minister had suggested. The man sent to Dresden from Berlin had executive powers, but for a specific mission that would end when its goal was achieved: to enable the formation of new government that did not include Communists. He achieved this within two days, after which executive power was handed back to the Social Democratic politician, Alfred Fellisch, who had been elected by his party to take the post.

There can be no question that the fall of the radical left coalition in Dresden came as a great relief to many, both inside and outside Saxony. As the US consul in Dresden, Louis Dreyfus, reported after the ‘Reich Enforcement’ operation:

The Saxon bourgeois population greeted this development. The entire life in the towns suddenly took on another aspect. The shops which had previously closed their show-windows throughout the day, opening, if at all, merely the entrance door in order to be able to shut down at once in case of a repetition of the daily riots of the unemployed, again displayed their goods. The cafés and restaurants in the cities whose guests had repeatedly been forced to leave were again opened. In Dresden . . . the public spirit seemed entirely changed. Instead of the dead impression, which the closed shops had given the city, the streets once more became full of life, more cheerful and crowded, quite in contrast with the situation where everyone hurried away from the centre of town in order not to be molested by occasional riots.
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The threat of a Communist uprising removed, the question remained: what would the Berlin government do about the Bavarians? After all, the Saxon and Thuringian governments, even at their most defiant, had not been guilty of the kind of extreme disobedience that had become routine for the Munich government, especially since Kahr had taken power. On 20 October, for instance, Seeckt had formally sacked the disobedient Reichswehr commander in Munich, General Lossow. The Bavarian government promptly declared the Reichswehr in Bavaria directly subordinate to its orders and reinstated Lossow as commander of what was now essentially a separate Bavarian army. Repeated appeals to dissolve paramilitary nationalist units were ignored. During the second half of October, the Bavarian government began to carry out openly anti-Semitic policies, expelling Jews of Polish origin whom it accused of profiteering and currency offences. These actions were obviously intended to garner support among the restive battalions of the far right, many of whom, including the Nazis, were demanding nothing less than the death penalty for such offenders. It turned out that many of these alleged criminals were in fact Munich residents of long standing and apparent respectability. It was a fateful precedent, a pre-echo of much worse horrors to come in following decades.
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The Berlin government’s troubles were not by any means over. On 20 October, government aid for the Ruhr had ceased. There were food riots in the larger towns. Local political leaders in the Rhine and Ruhr, including the Mayor of Cologne, Konrad Adenauer, demanded the right to conduct independent negotiations with the French, raising the spectre of separatism in the west as well as the south of Germany. Stresemann, struggling to deal with several different crises at once, persuaded the Finance Minister, Luther, to maintain a slightly more favourable dole for the unemployed in the Ruhr, as a lingering recognition of their special sacrifice, but this could only be a temporary measure. It was only possible while the Reich continued to print paper money. Once the reform of the mark (and the reform of the Reich’s finances required to make it stick) was completed, such payouts would have to be discontinued. Leaders in the occupied west were, of course, also perfectly aware of this fact, which again led to fears that they would make an agreement, any agreement at all, with the French – even involving a separate currency for the west – in order to survive. The new currency was not necessarily good news for everyone.
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On 2 November, subjected to huge pressure from their party’s grass roots, which were outraged by the differences between the forceful suppression of the ‘left-unity’ governments in Saxony and Thuringia and the continuing failure to dare a similar confrontation with the far right in Bavaria, the Social Democratic ministers resigned from the cabinet. Stresemann was now Chancellor of a minority administration, and with the Social Democrats’ exit from the government had automatically lost his special powers under the enabling act of 13 October.