Germany - the Crisis of 1923

The Crisis of 1923

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THE DEFEAT OF Germany in the 1914-18 war had massive political, social and economic consequences. The Allies were determined to obtain their pound of flesh from the defeated Germany. The clear aim of the victor powers, as expressed in the Treaty of Versailles of 1919, was the crushing of German militarism and the bleeding of the German economy. As compensation for the Allies, Germany’s colonies were divided between Italy, France, Belgium, Japan and Britain, the latter taking the lion’s share. Germany itself was also dismembered: the Saar mines were transferred to France, as was Alsace-Lorraine, with its two million population and three-quarters of German iron production. The southern part of Silesia, with its industries and mines were ceded to Poland, whereas the north part of Schleswig went to Denmark.

The Allied nations seized 5000 cannons, 30,000 machine guns, 3000 mine throwers, 2000 aeroplanes, 100 submarines and eight cruisers. The German army was drastically reduced to 100,000 men, an adequate instrument to be used if needed against revolution.

In May 1921 the hard-headed Allies demanded the full payment of 132,000 million gold marks as reparations. To overcome any major difficulties, and show their generosity, payment in kind was arranged, whereby Britain was to receive tonnage for tonnage and class for class all her lost shipping during the war. The French were given 5000 trains, 150,000 railway wagons, 10,000 lorries and 140,000 cows. The Belgians also received their payment in cattle. Germany had been completely humiliated and economically stripped by the Allies. But the German bourgeoisie were able to make enormous profits from the inflation, while the mass of the population faced starvation and severe hardship.

The French Occupy the Ruhr

The reparations became an impossible burden on the economy. In January 1923 Germany defaulted on the payments. Within days, the French General...