In 1920 in the Kapp Putsch members of the Freikorps attempted to seize power. The putsch was badly organised and soon brought to an end by a general strike in Berlin. Ominously ,however,the army refused to come to the aid of the government and few of those responsible for the putsch were punished.
By 1923 the German government found that it was unable to continue paying the reparations required by the Treaty of Versailles. French and Belgian governments responded to this by sending their troops into the Ruhr, the main centre of Germany’s coal, iron and steel production. The German people and industrialists who had investments in the Ruhr were outraged by this and organised a resistance campaign. The occupation of the Ruhr led to a collapse of the German economy. There was a massive inflation and an increase in unemployment. At this stage Germany was unable to pay any reparations at all. In January 1921 there were 64 marks to the dollar and by November 1923 this had changed to 4,200,000,000,000 marks to the dollar. Inflation was so extreme at one point that one egg cost 80 million marks, the German people had lost all confidence in their currency and the Weimar Republic was hit by ‘one of the worst inflationary crises in History.’ The people were forced to reduce to bartering or using coal and sausages as currency. There were also major food shortages as farmers refused to sell food for worthless money. However many Germans actually benefited from the collapse of the value of the mark such as mortgage holders, people who rented property, exporters, and foreigners. However hyper-inflation was catastrophic for the majority. The greatest losers were those with savings especially many pensioners who lived off fixed interest investments. The value of their hard earned savings disintegrated. Many people blamed and still blame the allies for hyper- inflation. However they argued that the occupation of the Ruhr was only one factor and that the German government’s actions had a big influence. Between 1914 and 1918 they lavished a great deal of money on the war effort claiming little back through there low taxation.
The crisis also led to the beer hall putsch in munich, when Hitler tried to seize control of the Bavarian government as a prelude to a march on Berlin. However the army remained loyal to the government , even though general Ludendorff supported Hitler. The rising was suppressed and Hitler imprisoned. Hyper-inflation had a major economic, social, political and psychological effect on the republic and there is no doubt that it played a major role in its collapse.
In 1924 Charles G. Dawes, an American banker, was asked by the Allied Reparations Committee to investigate the problem of inflation. His report, published in April, 1924, proposed a plan for annual payments of reparations on a fixed scale. He also recommended the reorganization of the German State Bank and increased foreign loans. German politicians like and attacked the Dawes Plan because it did not reduce the total. They also disliked the idea that foreigners would have control over the German economy. The Dawes Plan was initially a great success. The currency was stabilized and was brought under control. Large loans were raised in the and this investment resulted in a fall in . Germany was also able to meet her obligations under the for the next five years.
These next five years (1925-1929) are considered to be the golden era of Weimar Germany's political history. Gustav Stresemann was in power and he had the respect of many overseas political leaders. He used this respect to ensure the economic stability of the nation through the Dawes and Young plans. Sensible and progressive foreign policies enabled Germany to come out of the imposed isolation. Germany was finally allowed to become a member of the League of Nations in 1925 as a result of the Locarno treaties. This, along with the previously mentioned economic developments ensured that German self esteem was significantly improved as life in general was improving for the majority of Germans. However not all was well in Stresemann's Germany. There was still political instability as no one party could gain a majority in the republic. This meant that decision making was difficult and could ‘easily be overturned at the whim of a minority of parliamentarians’. Unemployment did not fall, it rose in the period: which lead to further economic problems. Also the nation relied heavily on the support of the USA. This support enabled not only the stability of Germany but enabled the high level of payments that the Weimar government was making on benefits and health care. After the Wall Street crash this reliance would prove to be disastrous for the Weimar Republic.
The 1920’s saw a massive explosion of new cultural ideas both in traditional forms such as painting, literature, and music, and in the newly developing mass culture created by advance in technology. Many Germans welcomed the atmosphere of optimism and experimentation. For many others however it re-enforced fears that their world was collapsing. These fears of cultural decay were politicized by the right and blamed on the un- German Weimar Republic. The centre parties campaigned against the ‘tides of filth’ and the Nazi party created a campaign against nudism, homosexuality, birth control, Americanization and female emancipation, and were in favour of traditional activities like churchgoing. They organized disruption of performances of unpatriotic performances such as ‘all quiet on the western front’. The prominence of Jews amongst the cultural experimentation was seen by the right as ‘proof of the harm the cosmopolitan Weimar Republic was doing to Germany’ .Its seems that more Germans reacted against the cultural experimentation than were attracted to it. ‘To most Germans… the energy, the experimentation, the chaotic creativity which made the Weimar culture the envy and Mecca of so many foreigners represented cultural communism, the overturning of forms and values in a world in which too much had been overturned already. The predominant cry was in favour of … “a conservative revolution”.’ The Weimar Republic was not ruined by the disfigured paintings but such activities for many Germans symbolized all that was wrong with their country. So this made the Germans more likely to vote against the Republic or not vote at all.
After the in October 1929 the United States, desperate for money, began to withdraw loans from Europe. One of the consequences of this was a rapid increase in unemployment. Germany, whose economy relied heavily on borrowed money from the United States, suffered more than any other country in Europe. Before the Wall Street crash, 1.25 million people were unemployed in Germany. By the end of 1930 there were nearly 4 million unemployed. Hitler, who was considered a fool in 1928 when he predicted economic disaster, was now seen in a different light. People began to say that if he was clever enough to predict the depression maybe he also knew how to solve it. The depression had a major effect on the Weimar republic it seemed to sweep away all the gains of the past five years and reinforce Germany’s hostility to the failing democratic system. Historian William Carr has wrote that: ‘it is inconceivable that Hitler could ever have come to power had not the Weimar Republic been subjected to the unprecedented strain of the world economic crisis’. In 1930 the coalition between the social democrats, the centre party and the peoples party collapsed becauser of disagreements about measures to deal with the budget deficit .President Hindenburg appointed Bruning ,leader of the centre party as chancellor. Unable to get a majority in the Reichstag , Bruning used the presidents emergency powers to force through his proposed expenditure cuts. On the Streets the communists and Nazis were increasingly turning to political violence.In September 1930 a general election was called. Bruning thought the violence of
The extremists would increase support for the moderate parties, but instead the instability of the Weimar system led many to turn to the extremes. The Nazis gained 107 seats and the communists77.With the moderate parties at odds with each other and no party willing to co-operate with the Nazis or communists, it was impossible to construct a government with a majority and so Ariticle 48 had to been used and Weimar ceased to be a functioning democracy.