The people of Germany found these terms extremely difficult to deal with. The Government complained that it had no choice, but the press called for revenge; firstly against the allies and then against the government. The republic found themselves in an impossible position and the crisis was only to worsen.
After 1921, the German economy experienced hyper-inflation; this was mainly as a result of the huge reparations bill put forward by the allies. The value of the mark declined rapidly between 1921 and 23, also, in January of the same year French troops invaded the Ruhr to collect reparations still owed to them. The mark soon became worthless and many people lost their life savings or pensions. To add to their problems, the republic fuelled the inflation by authorizing the printing of masses of paper notes. However ,it was a dangerous game being played by the government, as there were those who saw the economic collapse as a perfect opportunity to bring about the fall of the Weimar Republic.
There were two attempts to overthrow the Republic. The first, March 1920, was led by Dr Wolfgang Kapp; who marched on Berlin with 5000 supporters intending to set up a right wing government. The government withdrew to Dresden and called for a general strike of German workers in the essential services; gas, water, electricity and transport. Without these, Kapp had no hope to govern, so eventually gave up and fled abroad. This attempt was known as the Kapp Putsch.
Another attempt was made in November 1923, at the height of the economic crisis, by Adolf Hitler. Hitler, who had recently become leader of the Nazi Party, felt that the government was ripe for destruction. He attempted to organize a march from Munich to Berlin- however this attempt proved to be unsuccessful. The march was broken up by Bavarian police in Munich itself, and Hitler was arrested and later put in prison. This attempt was known as the Munich Putsch.
Both attempts shared one thing; they both blamed the Republic for the surrender of Germany and the Treaty of Versailles. Both Kapp and Hitler spread the false accusation that the German army had been ‘stabbed in the back’ by German politicians. By this they meant that the Government had surrendered while the army was still willing to fight. In this particular instance, the claim was unsuccessful, however, two years later the same argument was to be used again- this time with a much greater success.
In 1929, the golden age of the Weimar came to a sudden and abrupt end. The reason was another crisis which eventually killed democracy within the Republic- and then the Republic itself. The crisis had two related parts- an economic collapse and political problems which proved impossible to overcome.
Firstly, the economic crisis. The German recovery after the inflation of 1923 had been brought about largely by American investment, a direct result of the Dawes Plan (1924). The investment was in the form of short-term loans which could be ended at any time and repayment demanded in full- this is precisely what happened. For the majority of the 1920s, the American economy had expanded rapidly and investors were happy to renew loans to Germany as they were needed. But, in October 1929, disaster struck- the Wall Street Crash. The value of shares collapsed and many businesses were ruined. The Americans had no option but to pull out their investments from Germany and demand immediate repayment.
The whole basis of Germany’s recovery was destroyed. Thousands of businesses went bankrupt, deprived of the money which had previously kept them going. To make matters even worse, most countries in the world slid into a ‘depression’ as overseas markets for their goods suddenly declined. This meant that even those few German businesses which had managed without loans were also badly affected. As a result, the number of unemployed increased rapidly, reaching a huge 6 million by 1932. The result was social misery, many people had to give up their homes because they could no longer afford the rent on them. The memory of the earlier economic crisis of 1919-23 returned, leaving many people doubly bitter.
Political crisis. Economic crises nearly always produce political crises, because governments suddenly find themselves having to deal with an impossible situation. This is precisely what happened from 1929 onwards.