Germany was forced to give up her colonies to the allies and to surrender all trading rights. This coupled with the other strenuous policies mentioned in the Treaty of Versailles meant that Germany’s economic stability was shattered.
Germany having accepted responsibility to the war was to be made to pay for the damage caused to the allies. There was no consideration for Germany’s people or economic state and thus the allies written a blank cheque to Germany that they would fill in when they had calculated the overall damages caused by Germany.
Due to the vast amount of debt and economic problems within Germany, payments of reparations would often be paid in kind with gold, timber and coal. On one such payment to France a cargo of timber telegraph poles did not arrive in France. Due to this France clamped down on Germany harshly and occupied the Ruhr with 100,000 French troops. This heavy industrial area was one of Germany’s main economic areas of income and they could not afford to lose it.
Unable to resist the occupation by force due to troop reduction in the Treaty of Versailles the German people resorted to passive resistance which was effectively a general strike. Business men, civil servants and workers were called to take part in passive resistance and anyone who did so would be compensated from public funds. Such government spending at a time when revenue was low due to the Ruhr Crisis was not a good. The government covered the gaping gap between incomes and spending by simply printing more money which meant that any confidence that was left in the mark was simply destroyed which led to currency delirium/hyperinflation.
Political Problems
Workers blamed the government for hyperinflation due to them printing more money to cover the gap between income and expenditure, which in theory it was. Due to poor leadership during the hyperinflation crisis and the Ruhr Crisis the middle classes became disillusioned mostly due to the fact that they were the main losers of hyperinflation and thus lost confidence in the government and were more susceptible to be swayed to support other more extreme parties such as Hitler’s Nazi party.
The right were angry when Gustav Stressemann called off passive resistance and saw this as a weakness, as if they had given in to the French. The Beer Hall Putsch was in protest of the passive resistance being called off. Orders were issued for the disbandment of the Freikorps its leaders refused and appealed to General Luttwitz for support. He thus responded and called on President Ebert and Defence Minister Noske to stop the programme of troop reductions. When Ebert refused, Luttwitz ordered the Freikorp to march on Berlin and once again the government fled Berlin to Stuttgart. Noske called upon the army to suppress this putsch and they blatantly refused. General Von Seeckt told Noske “Reichswehr does not fire on Reichswehr” As the government fled it asked all of Germany’s workers to come out on general strike in order to outnumber the Freikorps.
In addition there was ongoing resentment due to the signing of the armistice and thus the stab in the back myth. If the government didn’t sign the armistice they would be occupied by the allies. Many members of the right believed that it was the government’s fault that the war was lost and not the armies. Next the right detestd the Treaty of Versaille and believed that they were being dictated to (a dictated peace) which further increased the hatred of the government. The resentment of government further increased more as many thought that they could have taken a harder stance with the allies instead of accepting what the allies said. The right fed of this resentment further due to what they thought as the humiliating War Guilt Clause. In this the government accepted all responsibility for the war which in itself left the right fealy disgraced and betrayed. They fed off this to gain support more their motives and extreme methods.
