The Downfall of Money: Germany’s Hyperinflation and the Destruction of the Middle Class (37 page)

Hitler’s line on the Ruhr was not necessarily popular among the rank and file, though he breathed more than sufficient fire on other matters to send the supporters he referred to as ‘an army of revenge’ home happy.
The Times
, reporting on the meeting, wrote:

Herr Hitler asked his supporters to return home quietly and to avoid
any
demonstrations in the streets. In spite of this advice, however, bands
of ‘s
t
orm
troops’ paraded the streets, singing the Fascist war songs, and
a serious
attack was made on the Hotel Vier Jahreszeiten, where members
of
t
he
Allied Control Commission are quartered. The police were prepared, and in a hand-to-hand struggle the attackers were beaten off. Towards
midnigh
t
,
crowds assembled in front of the Rathaus, where, after singing the
‘The
Watch on the Rhine,’ the meeting dispersed, but first of all a solemn oath was sworn ‘to be revenged on France for the invasion of the
Ruhr’.
5

It was clear that Hitler saw the Ruhr struggle as a distraction from the main task of building up a Fascist-style formation ready for a ‘march on Berlin’, on the model of Mussolini’s seizure of power in October 1922. In line with this, the Führer’s party continued to grow, and its actions to become more menacing. On 1 May, the Nazis, some 1,200-strong, fought pitched battles in Munich with leftists. By
s
ome
accounts, Hitler’s followers were armed with light machine guns. ‘The number of men
wear
i
ng
Swastika badges to be seen during a walk through the streets of Munich is amazing,’
The Times
, organ
of
the British Establishment, noted three weeks
l
ater. The
Völkischer Beobachter
was ‘sold in most cafés and restaurants every evening by youths in full fascist uniform. It seems to have a considerable circulation.’
6

By the early summer, the Nazis had nevertheless clearly decided to hedge their bets on the Ruhr issue. Two weeks after Schlageter’s execution, on 10 June, a memorial ceremony was staged on the Königsplatz in Munich through the initiative of the NSDAP. Forty thousand members of various nationalist organisations attended, and Hitler gave ‘an aggressive speech’ according to
The Times
, advocating ‘active resistance’ and declaring that ‘a storm would soon break forth’.
7

Schlageter was on his way towards a position atop the Pantheon of Nazi heroes. There would be many more. Not that Hitler, though he had clearly tacked to suit the political wind, fundamentally changed his policy on the Ruhr. The French actions there were an outrage, but then the French were . . . simply being French. The real guilty parties in this affair remained, as ever, the democratic parties of Weimar and their politicians. Not forgetting their alleged Jewish backers, who were, of course, also behind the French plutocrats who had engineered the Ruhr occupation.

The notion of the Jews being to blame for everything fitted even better into the framework of the post-war inflation. Jews represented, for the German far right, internationalism, mobile finance capital, the rendering to mere unreliable (and stealable) paper of the honest, tangible wealth that came from making and growing things. Therefore the destruction of real value that the inflation had brought with it was seen as an essentially Jewish phenomenon.

Interviewed in November 1922 by the American diplomat-cum-spy Colonel Truman Smith at the NSDAP’s still relatively modest headquarters in Munich, Hitler thundered that ‘the printing of paper money must be stopped. This is the worst crime of the present government.’
8
It was a theme the Führer hammered away at even more enthusiastically in the early part of 1923, referring constantly to the ‘Jewification’ (
Judaisierung
) of the economy. ‘The government calmly goes on printing these scraps of paper because, if it stopped, that would be the end of the government,’ Hitler declared:

Because once the printing presses stopped – and that is prerequisite for the stabilisation of the mark – the swindle would at once be brought to light . . . Believe me, our misery will increase. The scoundrel will get by. But the
decen
t
,
solid businessman who doesn’t speculate will be utterly crushed; first the
little
fellow on the bottom, but in the end the big fellow on top too. But the scoundrel and the swindler will remain, top and bottom. The reason: because the
s
t
a
t
e
itself
has become the biggest swindler and crook. A robbers’
s
t
a
t
e! . . . If the horrified people notice that they can starve on billions, they must arrive at this conclusion: we shall no longer submit to a state which is based on the fraudulent idea of a majority and demand a dictatorship.
9

Time would tell if these ‘starving billionaires’ could be mobilised to sweep the Nazis into power before the democratic government got the inflation under control. As yet, there was little sign of that.

20
‘It Is Too Much’

In the late summer of 1922, the twenty-three-year-old soon-to-be-famous novelist Ernest Hemingway was still living in re
l
at
i
ve
poverty among the American expatriate community in Paris. Because he wasn’t making a
li
v
i
ng
from
fiction, Hemingway was forced to earn his crust as a correspondent for the
Toronto Star
.
On
the paper’s behalf in mid-August he travelled with his wife to the eastern borders of France. They made the trip by the increasingly fashionable means of an aeroplane, half price for journalists.

He got an article for the
Star
out of that. He also got one out of a visit to
the
German border town of Kehl, just a walk across the bridge from the ancient city of Strasbourg, until recently German but now once more French. His task? To investigate for his paper’s readers back in Canada the bizarre phenomenon that was German
i
nf
l
at
i
on
:

There were no marks to be had in Strasburg, the mounting exchange
has
cleaned the bankers out days ago, so we changed some French money in
t
he
railway station at Kehl. For 10 francs I received 670 marks. Ten
francs amoun
t
ed
to about 90 cents in Canadian money. That 90 cents lasted
Mrs
Hemingway and me for a day of heavy spending and at the end of the day
we
had 120 marks
lef
t
!
1
 

They bought some apples from a fruit stand, where ‘a very nice looking, white-bearded old gentleman’ watched them, then shyly asked how much their purchase had cost. When told, twelve marks, he smiled. ‘It is too much.’

He
went
up the street, walking very much as white-bearded old gentlemen of the old regime walk in all countries, but he had looked very longingly at
t
he
apples. I wish I had offered him some. Twelve marks, on that day, amounted
t
o
a
little under 2 cents. The old man, whose savings were probably, as most of
t
he
non-profiteer classes are, invested in German pre-war and war bonds, could
no
t
afford the 12 mark expenditure. He is a type of the people whose income
does
not increase with the falling purchasing value of the mark
. . .

Lunch at the town’s best hotel cost the equivalent of fifteen Canadian cents. And the French invaded the place every afternoon to gorge themselves on the excellent German cream cakes. ‘
The proprietor and his helper were surly and didn’t seem particularly happy when all the cakes were sold,’ Hemingway commented. ‘The mark was falling faster than they could bake.
’

By January 1923, even the bare minimum of tolerance between French and Germans that Hemingway had witnessed in Kehl was a thing of the past. The Ruhr invasion had wrenched relations back to a level of bitterness as bad as, in some ways perhaps even worse than, the two nations had experienced between 1914 and 1918. And the mark, which in September been 800 to the Canadian dollar (valued at slightly less than the American) was now worth roughly one-fiftieth of that miserable sum. The old gentleman who had looked so longingly at the apples at the fruit stall in Kehl would have found a kilo of them, and by now much more besides, as far beyond any prospect of purchase as a kilo of Beluga caviar.

Hemingway could live decently in Paris because, for someone paid in dollars, it was cheap
. Two and a half to three dollars a day, he said, would keep the visitor in comfort. ‘At the present rate of exchange,’ he wrote for the
Toronto Star
earlier in 1922, ‘a Canadian with an income of one thousand dollars a year can live comfortably and enjoyably in Paris. If exchange were normal the same Canadian would starve to death. Exchange is a wonderful thing.’
2

The cheapness of living in France – and the franc continued to decline, steadily though at a more modest rate than the mark, throughout this period – was a great lure to the ‘lost generation’, as were Paris’s cultural riches, although escaping Prohibition was another one. Some other American expatriates went the whole hog and moved to Berlin, where in these years the economic power that their currency provided was, literally, fantastic. Matthew Josephson, the American writer and critic, moved to Germany in the early 1920s and ran
a
literary magazine from his apartment. A visitor from New York
repor
t
ed:

For a salary of a hundred dollars a month in American currency, Josephson lived in a duplex apartment with two maids, riding lessons for his wife,
dinners
only in the most expensive restaurants, tips to the orchestra,
pic
t
ures
collected, charities to struggling German writers – it was an insane life
for
foreigners in Berlin
. . .
3

In November 1922, the London
Observer
reported on the ‘very strong anti-foreigner movement which is growing among the population of Berlin’. It had begun, the report said, with resentment against the poor Jews who had arrived during and after the war from Galicia, the formerly Austrian part of Poland. Then, as it became clear that foreigners with ‘hard currency’ could live as they wanted, a wave of anger against them followed:

There are whole neighbourhoods consisting of big blocks of buildings – ‘mansions’, containing from ten to fifty flats have been bought up by those who speculated in marks soon after the Armistice was signed, and who have viewed with ever-increasing dismay the depreciation of the paper they held. To buy anything that stood in brick or stone meant that some solid value might yet be obtained for the outlay. The German house owner was obliged to sell owing to the rental restrictions imposed by the government, which have reduced landlords to beggary, and to sell quickly for the fear of ‘socialisation’.

Half the professional classes owned some such house representing the family fortune, and the plight of the intellectuals is as inextricably bound up with their property as is their profession. The Spaniard, Dutchman, and, of late, the Czech, have bought whole streets, and refuse any more repairs than the law imposes on the unfortunate German landlord. One such house owner can incur the undying hatred of as many people as his property will hold. It is now being realised that when the mark is stabilised the actual ruin of the former possessing classes will be complete. A very great deal of the sudden proletarian ‘hatred’ [of foreigners] can be explained this way, and peculiar treatment in train, tram, and public places may be laid at its door.
4

In January 1923, State Secretary Eduard Hamm of the Reich Chancellery wrote a report in which he called for strict immigration controls, not just on Jews coming in from the east (or not explicitly - he used the code word
Ostwanderer
, or ‘east migrants’), but on all foreigners seeking to do business and to find (and especially buy) housing in Germany. He was an enthusiastic supporter of charging higher prices to foreigners in hotels, theatres, restaurants and other places of entertainment, and also of introducing special taxes and fees that would apply to foreigners, both on entry to the country and while living there. All this was clearly related to popular resentment, an all-too-understandable feeling that foreigners were exploiting Germany’s time of weakness for their own pleasure and profit.