The Downfall of Money: Germany’s Hyperinflation and the Destruction of the Middle Class (39 page)

The time of relative stabilisation in 1920-21, combined with the industrial recovery that followed the end of the blockade, had enabled Germany to import more food. The ‘Goldilocks’ policy of the government – the mark weak enough to subsidise exports, but strong enough to enable vital imports – had led to an improvement in the availability of food and, as a consequence, in the general level of public health (though not to the levels enjoyed before 1914).

The renewed depreciation of the mark after June 1921, accelerating through 1922 to hyperinflation, once more led to enormous problems with the importation of food. Foreign currency had to be released by the Reichsbank, which in turn, during the weeks following the Ruhr occupation, was forced to devote large proportions of its valuta reserves to supporting the mark as best it could. Shipments of food from abroad could get stuck in consignment at their German ports of arrival, waiting for the necessary foreign exchange to make its way through the system.
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German farmers were in no better position to make up this shortfall than they had been during the latter part of the war. Even allowing for the areas lost to Poland, the productivity of German agriculture had still not recovered to anything like the level reached before the war. Shortages of fertilisers, both natural and artificial, many of which had to be imported, remained serious. Nitrates had been systematically diverted from use as fertilisers to their other function, in explosives production, during the war. The neglected land had still not recovered. In any case, the authorities were having serious problems making the nation’s farmers supply food to the population – particularly the urban population – at reasonable prices in exchange for paper money. In 1922-3, the agricultural interest was able, if it was not too finicky – which it mostly wasn’t – to name its price when it came to selling either to individuals or to the wholesale merchants, honest or otherwise, who flocked from the urban areas to knock on its collective door seeking to buy up its produce.

A Bavarian official of the nationwide ‘Price Examination Agency’, whose job was to investigate, and if necessary prosecute, cases of blatant profiteering, wrote shortly before the hyperinflation took hold:

The concern about one’s daily bread is increasing not only among the workers, employees and civil servants, but also among a large number of those who are self-employed, not to speak of the military and social pensioners and the small
rentiers
. In the cities and in the better-off agricultural districts, the antagonisms are particularly pronounced. On the one side are the various wholesale and other merchants and the better-off farmers, on the other side there are the consumers who are struggling with necessity. It is obvious that under such circumstances the political antagonisms should also become more severe. The discontent of the labouring people is directed chiefly against the Jews and the peasants, as one can hear daily in the conversations which are conducted in the railway trains. The National Socialists appear to find increasing membership. If they do not always show the necessary self-restraint, on the other hand they form a not to be underestimated check for the left radicals for whom the creation of a dictatorship of the proletariat appears as the ideal.
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Clearly, Berlin was (and, for that matter, is) not Germany. The exotic tales of decadence and high living on the one hand, tuberculoid poverty on the other, that are told about life in the capital, do not reflect life elsewhere in Germany at the height of the inflation. In rural areas, there was some always food of some sort, either to be bought, especially if one had ‘contacts’, to be bartered, or to be grown.

In the early 1920s, farmers or peasants of various sorts still made up a considerable proportion of the nation. More than 2 million individuals (not counting their families) earned a living exclusively from farming, a figure not much reduced over the past fifteen or twenty years.
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Added to that, there were more than 3 million
Parzellisten
, owners of small plots of less than two hectares (approximately five acres). To make ends meet, many of these also worked in industry, or mines, or in a variety of other rural jobs. A third of all economically active Germans, making about thirteen million at this time, were dependent on the land in some way for their existence. The country dweller, even if he or she were not a proper farmer, usually had a garden, where vegetables could be grown, or a pig or some chickens kept. Even the least well-landed
Parzellist
might have to do without everyday luxuries, but he or she would not starve, no matter what happened to the paper mark or the mainstream economy.

August Heinrich von der Ohe, an assistant school headmaster and choirmaster in his fifties, was one of those Germans fortunate enough to live in a rural area, near Lüneburg on the north German plain. With some land to grow vegetables and keep animals, as well as possibly running a tavern or inn on the side, perhaps staffed by members of his family,
*
Herr von der Ohe seems to have struggled at times, but got by and, reading between the lines, even experienced a modest prosperity, certainly compared with millions of other Germans. He kept a diary which contained mostly lists of prices of food, clothing, livestock – we know that he had been born the son of a farmer, and as the inflation crisis went on, clearly depended more and more on what he could grow or rear. He also included occasional comments on his income from teaching duties. His salary was increased from time to time, but for the most part not nearly enough to cope with the rise in prices:

1 November 1921:

(Conversation with a music teacher) He was of the opinion that if we now went bankrupt, we could start from the beginning again. But if that were to be so, one would not know what one ought to do. If he had some money, he would buy pictures or some such. I advised him to buy stocks. He was of the opinion that this was also insecure.

10 November 1921:

At the mill no more coarse rye to be had. Only exchangeable for unprocessed rye, but the farmers are not selling any unprocessed rye. Maize costs 300 marks, potatoes cost 105, the dollar costs 300 marks.

5/6 December 1921:

A pound of butter costs 44 marks. A litre of milk in Lüneburg 5 marks, here 3 marks, a hundredweight of potatoes 100 marks, a hundredweight of rye 300 marks; buckwheat, because not well grown, 500 marks; coarse maize at 160 marks, one egg 4 marks. We have got a new salary law. According to this I receive a basic salary of 2600 marks; local and inflation supplement 8400 marks, child supplement 5600 marks, and nevertheless one cannot get by on this. If we did not have our tavern, things would go badly for us.
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There was a massive increase during the war and into the period of inflation in the number of Germans owning or renting small garden plots, including those in, and on the edge of, cities. The figure for those belonging to registered gardening clubs almost tripled between 1913 and 1919 from 37,000 to 91,000, and the actual number of amateur gardeners could be expected to have reached several times this figure. A national organisation for small gardeners was founded in 1921 and rapidly reached a total membership of 400,000.
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In Vienna, where inflation was raging in similar conditions, the number of eggs for sale from large-scale commercial production in 1918 was 13.7 million against 2 million from hens kept on small plots or allotments. By 1922 the figures were drastically changed: only 9.5 million came from commercial production while quantities originating from privately kept hens had increased almost tenfold to 19.2 million.
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Despite the growth in the popularity of big-city allotments, for many town dwellers at this point the crucial factor was whether they had family in the country. Again and again, in personal accounts, the story of a schoolteacher’s family in Silesia stands for the rest:

Of course, a family with four children at this time could hardly live from the purchasing power of the 1920s. Here the farming background of both my father and my mother came to our aid. Whether it was from my mother’s family in Himmelwitz, seven kilometres distant, or from Hohndorf, fifty kilometres away, as in my father’s case, we received from those farms enough bread, smoked meat, ham, eggs and butter so that the teacher’s children did not need to go hungry.
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For many in the early 1920s, faced with food shortages and employment difficulties in the towns and cities, a solution lay in choosing to contribute to a short-lived but in its way spectacular reversal of what had been a long-established and seemingly inevitable demographic trend: the steady urbanisation of the Reich. During the early post-war years, including the time of the hyperinflation, 2 million Germans emigrated from the urban areas back to the countryside.
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The city dweller who stayed put, who had no rural relations, who worked in a factory or mine or office or shop and lived in an apartment block with no garden, was faced with severe shortages or, as the inflation soared out of control, with unaffordable black market prices. In February, a little less than a month after the Ruhr invasion had sparked another dramatic fall in the mark, the London
Sunday
Times
reported from Berlin:

. . . the general effect of the slump has been the rapid increase in the price of food. Meat, for instance, has gone up about 250 per cent in the last fortnight, and there have been food riots in several of the poorer districts in Berlin. The public takes it out on the retail dealer, for whom there also exists a special profiteers’ court. But it is now generally admitted that the farmer is mainly responsible. He snaps his fingers at the Government orders, and quotes his prices only in the equivalent of dollars. He knows full well that any interference with him would bring the Agrarian party buzzing about the ears of Dr Cuno’s administration.
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The answer to the shortages for many was expressed in the German verb
hamstern
, to forage. The needy townie would head out into the nearby countryside and try to buy, beg or barter food from the local farmers. Many a farmstead would suddenly acquire a store of someone else’s heirlooms, many a farmer’s wife or daughter would sport fine jewellery or clothing of recent provenance.

Not all of the urban population were prepared to go to the countryside to do deals with farmers for food. Some sought other, more drastic solutions to their plight. In Saxony, Germany’s oldest, now somewhat rundown, industrial area, and the other major central German state, Thuringia, the left remained strong. In April 1923, following elections, the Social Democratic Party had taken power in Saxony with the support of the Communist Party, which had made strong gains at the local polls following its absorption of the left-wing members of the now defunct Independent Social Democratic Party. Later in the year, the local Social Democrat Premier in Thuringia would also go into a formal coalition with the Communist Party. This meant social as well as political polarisation.

Neither the middle classes in either of these states, nor the farming population, were prepared to cooperate with these left-wing governments. In response, socialist and Communist worker groups fanned out into the countryside, not to offer heirlooms for turnips, but to take what they felt the farmers were withholding from the working class.

Cases of workers leaving the towns and plundering farmers’ fields for food were common, here as elsewhere in Germany during this time. In Saxony it was more organised, in fact semi-official. For instance, 500 workers from a porcelain factory at Radeberg, near Dresden, marched out to a nearby agricultural village, where they discovered and confiscated large quantities of dairy products. Admittedly, the farmers were issued with receipts for the produce, in exchange for a promise to supply the townspeople in future, but this was quasi-official expropriation on the Soviet model by any other name. Butchers arrived at the village a few days later, to slaughter livestock to feed the town.
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Even in the countryside, the battle for existence was taking on ugly forms. The war of all against all that became the most recognisable human symptom of the hyperinflation had begun.

Having decided to bet all the chips it held on ‘passive resistance’ in the Ruhr, Chancellor Cuno’s government now decided to exploit the rare, and temporary, mood of unity in the Reich to try to regain some kind of stability in the economy and in the political life of the country. In February and March there was, despite everything, a short breathing space, where if things did not get better, they at least did not get much worse.

The question was whether this so-called ‘government of experts’ was capable of the task that had defeated every previous Weimar government. The omens were not good.

Footnotes

*
12½ pence.

*
Herr von der Ohe refers to the
Wirtschaft
which provides extra income. This can mean a tavern or inn, or more generally just a ‘business’.

21
The Starving Billionaires

Faced with the inevitability of an enormous increase in his government’s already huge budget deficit due to support measures for the ‘passive resistance’, the man who, before he became Chancellor, had been the country’s most popular politician, put together a multi-faceted financial and diplomatic package. This, Cuno and his other ‘technical experts’ hoped, would enable Germany to weather the crisis, get the French out of the Ruhr, and come through on the other side with some kind of game-changing revision of the reparations terms.