The Downfall of Money: Germany’s Hyperinflation and the Destruction of the Middle Class (32 page)

Until 1914 the
Bildungsbürgertum
had managed to maintain its standard of life and its social status, despite the inroads being made by the new, aggressive class of industrialists and business managers on the one side and the increasingly aspirational junior white-collar and skilled working classes on the other. This small but disproportionately influential elite group – calculated, even if their families are included, at less than 1 per cent of the population at this time, or between a half and three-quarters of a million people altogether
6
– had always depended on inherited money and privilege to perpetuate itself. It was in good part due to this fact that in 1913, 15 per cent of Germany’s wealth had its origins in investment income rather than wages and salaries. During the course of the inflation, this would be subject to a drastic reduction, falling to a mere 3 per cent.
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The money of the educated middle class, be it from academic or legal fees, or from a civil servant’s salary, was not the flashy wealth of the big businessman or the great landed aristocrat. All the same, it was steady, and comfortable enough in more stable times, if prudently invested, to house this caste’s members in a decent apartment or villa. Above all, until the war and the inflation intervened, it was sufficient to ensure that the males of each generation could afford to take the essential step of studying a traditional subject at a traditional German university. In this way they would acquire the qualifications and connections (the latter often through student duelling clubs) that enabled them to gain footholds on the civil service, judicial or academic career ladders, like their fathers and grandfathers before them.

The old, smooth pre-war career path was now a thing of the past. In the summer of 1921, 92 per cent of students at the technical university in Dresden filled in a questionnaire about their financial circumstances. At that time (when the mark had temporarily stabilised at around 60-70 marks to the dollar) it was reckoned a student needed 450 to 500 marks a month to sustain a minimal standard of living. Of 865 responders, 217 had 450 or more marks a month to live on, and the rest – 648 – less. Often a lot less. Almost a quarter of the students had around 300 marks, and another quarter less than that, in nine cases as little as 100. The situation was similar at other universities.
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The post-war period saw the unprecedented rise of the
Werkstudenten
(working students), usually from a newly impoverished middle-class background, who worked their way through university where their fathers would have been treated to a more or less comfortable parental allowance to do so. The idea of the
Werkstudent
may seem normal to modern readers – and, indeed, ‘working your way through college’ was already an everyday phenomenon in America in the 1920s – but in the social and political context of Germany after the First World War it was perceived as shocking, a sign of class and therefore (from this hitherto privileged group’s point of view) national decline.

It was typical of the inflationary era, however, that the individual who was prepared to improvise and ‘think outside the box’ – not to mention to go against social conventions – could end up not just surviving but thriving. One such
Werkstudent
from a formerly comfortable middle-class home recalled later in life how his family got by after his father died, and how he financed his university education:

My father had left a fortune of 800,000 marks, but by the summer of 1922 the value of
t
he
mark had dropped to 400 per dollar. Every month, it got worse. My
mo
t
her
finally used her last 65,000 marks to buy a typewriter, and she began
t
yping
students’ theses to support the youngest children. I went to Holland
t
ha
t
spring,
looking for anything that would earn hard currency, and I found a job a
t
the Queen Anna coal mines in the province of Limburg. We worked far down,
a
t
the bottom of the mine, hacking away with pickaxes. It was
t
remendously
hot, usually one hundred degrees or so, and full of dust, but
by
the end of the spring vacation I’d saved fifty guilders, which was about
t
wen
t
y-
five dollars. Then I figured out how to beat the inflation. I used the guilders
as
security for a short-term bank loan, and then I’d repay the bank loan with
t
he
deflated marks and take out another loan. I paid for a whole semester
a
t
Heidelberg that way, and at the end I still had the same fifty
guilders.
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His case was not typical. Perhaps, in a sad way, it helped that his father was dead, that a woman had been forced to take over as head of the family, and that they therefore knew it was a matter of
sauve qui peut
.

During the war, the educated middle class had already suffered a fall in its relative standard of living. Now it found itself both economically and psychologically besieged. The higher civil servants, such as Sebastian Haffner’s father, and the museum director who had found himself an object of a British journalist’s pity back in the spring of 1920, were especially hard hit. By 1920, the real value of their salaries was reckoned at only 20 per cent of what it had been in 1913.
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And still the insistence held among such men that ‘a Prussian civil servant does not speculate’.

A Prussian civil servant’s wife, however – the mother of his children – was in no position to take refuge in a government office, as her husband did, and pretend that nothing had changed. When inflation began to rise again, from the summer of 1921 onwards – good news as this might seem to be for business – a woman such as Haffner’s mother finally ceased being a privileged Frau Senior Government Councillor and became a survivor like any other.

On the 31st or the first of the month, my father received his monthly salary, which represented all we had to live on – bank deposits and savings certificates had long since become worthless. How much the salary was worth, it was hard to say; its value fluctuated from month to month . . . In any case, my father would try to acquire a monthly season ticket for the underground railway as fast as he could, so that during the next month he could at least travel to work and back, although this means of transport involved considerable detours and expenditure of time. Then cheques were written for the rent and school fees, and in the afternoon the whole family would go to the hairdresser. What money remained was handed over to my mother – and the next day the entire family, even the housemaid, though not my father, got up at four or five a.m., and took a taxi to the central market. There a big shopping session was organised, and in the course of an hour the monthly salary of a Senior Government Councillor was spent on non-perishable food. Huge cheeses, whole hams, hundredweights of potatoes, were all loaded into the taxi. If there wasn’t enough room, the housemaid and one of us children would get hold of a hand cart. At around eight o’clock, just before school time, we would return home, more or less supplied with enough to see us through a month’s siege. And that was the end. For another month there was no more money.
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The middle class had seen its standard of living and status take a severe tumble since the euphoric days of August 1914. As for senior civil servants, their continued conservative-monarchist loyalties also began to affect their traditional command of the corridors of bureaucratic power. Especially in Prussia and other Social Democrat-controlled states, democratic politicians started co-opting sympathetic ‘political officials’ into their departments to ensure that reforms and changes were not blocked by the pre-1914 old guard. More insult. More injury.
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All the same, the educated class still had advantages. As Haffner’s description shows, the fact that a civil servant’s or academic’s salary was paid monthly made bulk buying possible. This became increasingly important as the rate of inflation began to rise still further, so that prices changed by the week, or even the day. For the manual worker living close to the existence minimum, especially if he or she was on piece work or in irregular employment, the day’s price had to paid. It was literally a matter of hand to mouth.

Even if family savings had become more or less worthless, the middle classes generally had reserves of, for instance, more and better quality clothing than a working-class household. They possessed superior, more durable household implements, and often still a maidservant to keep the kitchen, to sew and mend. An extra pair of hands in the house also allowed more time to search and queue for affordable, decent food as inflation led to shortages and shopping queues lengthened.
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And generally the middle class had more spacious houses or apartments. Rooms could be let for extra income.

None of the above prevented this class from developing a sharp sense of both deprivation and collective humiliation. Heinz Flügel, then in his mid-teens, was forced to watch as his father, a former career diplomat, though still only in his fifties, was gradually shunted into retirement. Now they travelled on wooden seats in fourth class for their increasingly rare summer holidays. They still had the family villa in Zehlendorf, a pleasant Berlin suburb, but life had become noticeably harder. Flügel wrote many years later:

I can see in my memory how my father, who had been used to being waited upon, had to maintain the stoves at home. While we were busy with our school homework, he would haul the heavy coal buckets, without complaint, up from the cellar into the first floor. Today we may not be so surprised by such a thing; at that time the change felt abrupt.
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Ernst Troeltsch, despite being a scholar of international standing and having a civil service job at the Prussian Ministry of Culture and Religion, told of the tight budgets and the ‘make do and mend’ measures that even such a household as his was forced to adopt. For working people, these were bad times, where
die Teuerung
(rising prices), as most ordinary people referred to the inflation, made already poor living standards even worse. For the educated middle classes, the fall in social as well as economic expectations was dizzyingly steep. Things once taken for granted were now beyond reach.

Writing in March 1922, Troeltsch was acutely aware that, like most German academics and even educational institutions, because of the exchange rate he could no longer afford foreign books and publications. To travel abroad was, of course, impossible. ‘All luxury in art and science, all travelling, is at an end in these circles,’ he wrote. These were particular humiliations that those who still had money, and foreigners in particular, could not grasp.

This leads to the main question, which is how Germans are actually faring. The French generally see only the luxury hotels and places of entertainment, which they pay for with German money or with better foreign currency. They see the shops in the cities and the whirlwind of pleasure seeking. It would be very important to find out from trustworthy people how things really are. But that is a very hard question to answer in definite terms. Few statistics are available to the private citizen, and the official figures no one believes. At base, however, in this area of things we only get our knowledge from chance individual observations and can hardly even make an estimation of our own situation. What is clear is the downright desperate misery of those who live off small investments and pensions. The first group, in many cases, are simply consuming their capital, with the hope – or intention – when it is all used up, of dying. Conditions for workers with children are also very hard. The necessity of returning to a free economy and stopping state subsidies means, with the prices rising as they are, rising poverty. The situation for artists, writers and all sorts of Bohemians is almost as desperate as that of the small investor. The downward pressure on the way of living for the entire middle and official class is also a matter of great sensitivity. These are the new poor, who face the new rich. All their income is swallowed up by housing expenses, heating and food; so far as everything else goes, one lives from old things and uses one’s old clothes absolutely to the limit . . . But the old things will wear out, and then the hardship will be bitter, without even taking account of the difficult accommodation situation.
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The men of the educated middle class began referring to themselves as ‘the intellectual proletariat’. The gap between them and the lower middle class of clerks and self-employed craftsmen no longer looked so wide, or their self-identification as superior to such people so automatic. A mixture of angry nostalgia for what had been lost, and a resentment at what continued to be taken from them, made even those who had initially accepted the revolution and Republic inclined to move further and further towards the anti-democratic right.

Further down the social scale were others disastrously affected by the inflation even during these early years. They may have been accustomed to lower standards of living than the educated classes were used to, but they were equally dependent on schemes with a fixed return. Most seriously affected were those who depended on basic government pensions and benefits of all sorts.