Economic Crisis and the Beer Hall Putsch in Germany (1923)

Economic Crisis in Germany

• Treaty of Versailles Clause: Germany was held responsible for WWI and had to pay reparations.
  • By January 1923, Germany failed to deliver reparation payments.
• Occupation by France and Belgium:
  • French and Belgian troops occupied the Ruhr, an industrial area, to extract resources as reparations.
  • Germany adopted a policy of passive resistance, halting reparation payments.
• Inflation and Hyperinflation:
  • The German government printed more money, causing inflation.
  • By November 1923, the exchange rate was 4.2 billion marks per US dollar.
  • There were 200 factories producing banknotes full-time.
  • Price Changes: A loaf of bread cost 1 mark in 1919 and 1 billion marks in 1923.
  • Hyperinflation Crisis: Extremely high inflation rates, leading to a devaluation of currency.

Impact of Hyperinflation

• Winners:
  • People with debts could easily pay them off due to the devalued currency.
• Losers:
  • Savers: Savings lost value.
  • Fixed income earners: Salaries became worthless.

The Beer Hall Putsch

• September 1923: Adolf Hitler (NSDAP - Nazi Party) attempted to seize the government.
  • Formed a battle league with right-wing groups in Bavaria.
  • Supported by General Ludendorff.
• November 8, 1923:
  • Bavarian leader Gustav von Kahr addressed a large group in Munich.
  • 600 Nazis and SA members surrounded the building.
  • Hitler declared the revolution had begun.
• Quelling the Putsch:
  • The Weimar government ordered the Bavarian authorities to suppress the revolt.
  • Fighting occurred around Munich.
  • Hitler was arrested after marching 3,000 people into Munich.
  • Hitler's Injury: Allegedly shot in the shoulder or dislocated it.
  • Trial and Imprisonment: Hitler was sentenced to five years but served only a few months.
  • Wrote Mein Kampf during this time, outlining Nazi ideology.

Conclusion

• 1923 was a pivotal year in Germany.
• Highlighted challenges of hyperinflation and political extremism.
• Next, the discussion will focus on how democracy survived these challenges and the Golden Age of the Weimar Republic (1924-1928).