Germany - Treaty of Versailles and the Post-war Economy, Part 2
Hitler was building his position in the Party and also making speeches, adding to this generally overheated political climate by rousing his followers in the denunciation of anything that went against his idea of the need for a truly authoritarian state. Organising the Party and building up the membership, however, took up most of his time By July 1921, as we have seen, he had become sole spokesman and Fuehrer of the Party. Hitler did not, however, make the mistake of criticizing the Army or the industrialists; they were not, after all, on the opposite side. Most were extreme right wing and continued to hold on to their power bases with the support of many in the Republican government. Political assassinations added to the unrest, further exacerbated by the first catastrophic fall in the Deutschmark ( a second was to occur in 1929.)
Inflation can be as deadly as a war, in the destruction of a country and even more so after a war. Countries have huge debts to repay, of money borrowed to finance the war, and need new money to revive agriculture and retool industry. Germany was luckier than most because it was not destroyed but two factors prevented it from recovering. The first was the Weimar government's overspending the budget by 100% each year, and the second the Allied bill for reparations. In all the accusations, the deliberate ignoring of the budget was the one thing of which the Weimar government was really guilty, but no one could stem the effect of the reparation payments. The figure finally presented by the Allies in April 1921, was $132 billion. A first payment of $5 billion had been made in 1919 in gold marks but now even quite ordinary people could see no point in struggling to put the country on its pre-war footing, when any gains would have to be paid away. In April 1921, the exchange rate was DM4 to a dollar. By August it had dropped to DM75, and DM400 a year later. After that it simply spiraled, aided by the French occupation of the Ruhr in January 1923, until, by November that year, it was nominally DM4 billion to one dollar.
The Army and the capital-owning classes were quite content to see this all happening. They were able to pay back war debt in useless money and, in late 1923, to pay all the reparations when the mark was taken off the gold standard. For the vast majority of Germans, however, the state of the economy was the most important fact in their lives, and many were completely ruined by this uncontrolled inflation. Not realizing that the chief beneficiaries were the industrialists and landowners, the government was again the scapegoat and more and more people started to listen to extreme right-wing groups, including the National Socialist German Workers' Party. But, after Hitler had become the leader, in July1921, it was to be another 2 ½ years before he was to attempt the big prize. These years must have been frustrating because he already had a programme, much of the Party organisation was in place and, above all he knew he was destined to be the country's future leader. What he lacked was a power base within the existing governmental framework of elected parliament, the Army, and the landed aristocracy.
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