CHAPTER 2
THE First World War did not destroy German power. As in France after 1870 and Germany once more after 1945 recovery was swift. It was, however, punctuated by economic distress at the beginning and the end of the twenties which had profound political consequences, shaped by Germany’s refusal to accept the verdict of 1918 and by resentment against the terms of the peace treaty. Nor did the war destroy much of Germany’s pre-war social structure. The departure of the Hohenzollerns and other monarchs gave an appearance of political and social change which masked the fact that the rest of the ruling establishment remained in being and in power. Above all the army remained, until 1934, the arbiter of German politics.
Germany’s military traditions were a legacy of its Prussian origins. The Prussian army made Prussia in the seventeenth and eighteenth centuries, and transmitted its traditions to the German Reich in the nineteenth. These traditions included the social exclusiveness of its officers as an aristocratic caste, the military virtues of rectitude and obedience, and a somewhat vague and unspecified position as the guardians of the state’s wellbeing as well as its frontiers. The creation of the Reich in the nineteenth century reaffirmed the prestige of the army from the struggle against Napoleon I to the defeat of Napoleon III. The German officer was trained in the exercise of individual judgement on the grounds, elaborated by Clausewitz and other theorists, that the practice of war throws up a great variety of situations which cannot be foreseen and can best be handled by the officer who has learned to take decisions for himself. In addition the German officer had a wider education than his British or French counterpart in the sense that he was expected to concern himself with matters beyond the strictly professional. Yet, because freedom of speculation was not similarly encouraged, his actions in the wider political field were rigidly conditioned, politics were included in his province, but his political equipment was narrow. The German army was therefore significantly different from the British and French armies. The British army, from its beginnings in the time of Cromwell and his rule through Major-Generals, was more suspect as a threat to the civil power than respected as the guardian of the nation (a role reserved for the navy, which had the special advantage of all navies that it guarded the nation from outside without being able to interfere in the streets or take part in politics as easily as armies can). The British army had come to accept its place as subordinate and obedient to the civil government and was therefore denied some of the sources of esteem and self-esteem enjoyed by the German army. In France too the army was regarded since the Revolution as an instrument of civil government and not as properly a power in its own right. There was also a further difference between Great Britain and France on the one hand and Germany on the other. In all these countries the nineteenth century saw the haute bourgeoisie trying to get a share in political power. In Great Britain and France it did so by adopting liberal values but in Germany it opted instead for partnership with Bismarck and became a contented adjunct of a conservative oligarchy. The German bourgeoisie, having entered upon the political scene later than its French and British counterparts and – more important – at a stage in the evolution of Germany when military power was still actively forming the state, left power to the traditional classes and did not mediate between them and the deprived proletariat. Thus in Germany the power of the military aristocracy in affairs of state was not curbed by civilian, liberal, middle-class opinion. In Bismarck’s time it was curbed by Bismarck himself, who opposed and even snubbed the army when he felt so inclined, but he did so not because he incarnated the civil power but because he was Bismarck. After his retirement the army, confronting a series of weak Chancellors, achieved a pre-eminence which culminated in the First World War when Generals von Hindenburg and Ludendorff established a military régime which not only dictated to and dismissed civilian Ministers but also invaded the prerogatives of the Kaiser. In 1918 the Kaiser went too, and the army, contemplating even weaker governments than those of the last thirty years, claimed an autonomy which was not successfully challenged by the civil power until Hitler became Chancellor. Its first post-war chief, Hans von Seeckt, a general endowed with exceptional political acumen, devoted himself to preserving what was left of the German army and its traditions and to rebuilding it. He regarded the Weimar republic as something to be survived and he was prepared to wait and survive it.
The Weimar constitution provided a framework in which Germany might evolve from an oligarchical authoritarianism to a popular democracy, but the evolution was slow to start and then struck by adversity which it was too frail to survive. The middle classes, after being blanketed by the exigencies of war, were torpedoed by the post-war inflation. During the lifetime of the Weimar republic only the Roman Catholic Centre Party maintained its strength (at about 15 per cent of votes cast). Other centre groups declined steadily until they almost vanished. Further to the Left the Social Democrats, who remained to defend the republic with the Centre Party, also lost ground, unused to the political game from which they had been excluded too long, obsessed by the communist threat on their left, and puzzled by the adaptation of Marxism to a vigorous industrial society which falsified some of its premises and drew part of its sting. They ruled Prussia, but whereas Prussia had been the decisive element in Bismarck’s and William II’s Reich, in Weimar Germany it was only the most important administrative unit.
Weimar Germany enjoyed a number of years of economic prosperity and a remarkable cultural outburst, but politically it remained a promise unfulfilled. It looked as though it might become a parliamentary democracy but it did not look as though it had. After the election of Field Marshal von Beneckendorf und Hindenburg (who had retired from active service in 1911) to succeed Ebert as Chancellor in 1925 it looked more like the pre-war monarchy than anything else and so long as he lived Hindenburg, himself an avowed monarchist, seemed more likely to play General Monk than General Washington. Thus Weimar Germany, besides being smaller and weaker than the old Reich, was uncertain and disunited. At first it was also turbulent. Free Corps, formed out of the disbanded army originally to guard Germany’s eastern frontiers, became autonomous units owing shadowy allegiance to senior army officers but acknowledging none to the state. They assumed roving commissions to put down left-wing activities (1919 saw a rash of communist risings in large cities) and where they thought fit they organized murders. They were a throw-back to the medieval Free Knights, freebooters tricked out in romantic trappings. In 1920 the Kapp putsch in Berlin, a right-wing and pro-monarchist attempt by one of these Free Corps to overthrow the government with the open support of a part of the army, demonstrated – the more so because it was a ludicrous failure – the weakness of government and the instability of society. Kapp and his associates failed to take over the government but the government, by failing to punish them or to disband the Free Corps, showed that it was not master in its own house. A similar coup in Munich succeeded and all but withdrew southern Germany from Berlin’s authority. There was a continuing struggle for power in Germany in a vacuum in which groups operating outside the law took things into their own hands by virtue only of the fact that they had arms. The atmosphere of violence was aggravated by the murder, by the Free Corps, of the moderate political leaders Matthias Erzberger and Walther Rathenau and also by the fascist march on Rome in 1922 and the Franco-Belgian occupation of the Ruhr in 1923. But the years 1924–9 (from the Dawes settlement to the Great Depression) were much less turbulent: under Stresemann’s guidance Germany sought to satisfy its grievances by discussion and by entering into the comity of Europe: it joined the League of Nations in 1926 and saw the withdrawal of the victors’ Military Control Commission in 1927; American loans and efficient administration combined to stabilize the currency, modernize communications, re-equip industry and reduce unemployment to (in 1928) 650,000. The army remained in the background. The more extreme parties made less noise. Germany began to look and to behave like the bourgeois politicians who were in charge of its affairs. By the end of this period it had the best roads, the fastest railways and the most modern merchant fleet in Europe. Real wages were back to what they had been before the war; industrial production was more than 20 per cent higher. But the republic was perpetually threatened by a possible alliance between the nationalist ruling classes and the nationalist masses and its governments were inevitably constricted by the aftermath of defeat.
The peace treaty had taken from Germany all its colonies, one eighth of its European territory and one tenth of its European population, and most of its iron and steel and shipping; it had placed the Rhineland and the Saar temporarily under foreign control, eliminated the German navy and air force and reduced the German army to a force of 100,000 men who were required to serve for at least twelve years in order to prevent the creation of reserves; it had extracted from Germany a written admission of war guilt and imposed an obligation to pay extensive but as yet unlimited reparations. These terms were harsh. This, however, was to be expected. They came also to be considered unjust, not only by Germans, on the pleas that the war guilt clause was a vindictive oversimplification of the causes of the war, that the reparations were excessive, that the plebiscitary principle was applied only to Germany’s disadvantage and was excluded where it might have worked the other way, and that Germany had surrendered on the terms of Wilson’s Fourteen Points which the peace treaty had then contravened. This last plea does not stand up to examination since no such bargain was struck, but the belief was independent of the facts – like the belief, fostered by the ruling classes, that Germany had not been defeated in the field at all but had been forced to surrender by the collapse of civilian morale.
There was nothing unusual about charging the cost of a war to the losers. Most of the war damage had been done to and not by the victors and they felt entitled to get back what they could in order to repair the damage done to their lands and buildings, their disabled soldiers and their widows and children. The obvious way to do this was to present a bill and demand payment in cash; a more sophisticated method, devised by British and French officials and welcomed by the Germans, whereby the damage in north-eastern France would have to be repaired by German labour using German materials, was blocked by French building interests. What was unusual about the bill presented to Germany after the First World War was the refusal of the victors to say how much would satisfy them. For twelve years the Germans did not know how much they might have to pay. In 1921 the Allied Reparations Commission produced the figure of 132 milliard gold marks (£6,850 million) but this amount might be increased later if the Commission decided that Germany could pay more. J. M. Keynes, whose own assessment of Germany’s capacity to pay was £2,000 million, stigmatized this arrangement as morally detestable, politically foolish and economically nonsensical. Keynes also argued that all inter-allied war debts should be cancelled, since otherwise they would only be repudiated, in which prophecy only Finland proved him wrong.
This interim reparations settlement was almost immediately destroyed by the collapse of the mark which fell during 1922–3 from a par value of 4.20 to the dollar to 4,200 billion to the dollar. Germany could neither pay nor borrow. It defaulted at the end of 1922, whereupon France and Belgium exercised in January 1923 their right to reoccupy the Ruhr. Great Britain disapprovingly kept apart. A new mark, the Rentenmark, was called into existence by Hjalmar Schacht, President of the Reichsbank, to replace the old mark which had become a valueless string of noughts, and in 1924 a fresh attempt was made to quantify reparations. Under the Dawes Plan Germany undertook to resume payments at the rate of 1 billion new marks a year (about £50 million) rising to 2.5 billion in 1928–9. These sums were charged on the product of customs, railways and industry and were to be paid by the Reichsbank to Germany’s creditors, who provided half the directors of the Reichsbank and also exercised control over the German railways. The money for the first payments was lent to Germany by the principal foreign national banks. There was still no limit fixed to Germany’s total indebtedness, but Germany’s more pressing worries were relieved by its creditors’ willingness to lend and go on lending. In the next six years, 1924–30, they lent over 30 billion marks, enough not only to meet the Dawes outgoings but also to replace the capital destroyed by the great inflation of 1922–3, finance post-war reconstruction, pay annual deficits on foreign trade and create a gold reserve. These were good years for Germany. Then in 1929 the Young Plan reduced the Dawes payments, fixed a limit for German reparations, provided Germany with yet another loan of $300 million, removed foreign controls over the Reichsbank and the railways, and secured the evacuation of the Rhineland in 1930 instead of partly in 1930 and partly in 1935.
But the Young Plan still kept Germany under a heavy economic sentence. Reparations were to continue for fifty-nine years and, as The Times noted, Hitler was able to appeal to millions of Germans who could ‘know nothing of the war but that the bill for it will outlast their lifetime’. Moreover the Young Plan, unlike the Dawes Plan, did not turn out to be a fresh start. The depression, which had started in the United States in 1928–9, was already spreading to Europe. Factories were closing, unemployment was growing and American loans were ceasing. Among the casualties was the Weimar republic and among those who gained was Hitler.
During the twenties Germany was put back on its feet by foreign governments, especially the United States, but the mere fact that Germany was once more an active competitor in the world economy revived international strains which had accompanied Germany’s first advance to economic power at the end of the nineteenth century. The technically advanced countries were producing more than they themselves and the rest of the world could buy. The obvious remedy for this state of affairs – produce less – was not available since the industrial and technical revolutions which had increased the productivity of the strongest economies had also increased their need for capital accumulation and hence their appetite for higher profits and bigger markets. By the end of the twenties overproduction was creating unemployment, while in various parts of the world surplus stocks were lying unmoved and unconsumed. Germany, with its post-war neuroses and without colonial markets, was particularly vulnerable in this competition for the best slices of the international cake and its business community was looking for a government which would give priority to the requirements of its section of the nation and would secure by any means the revision of a post-war settlement which had cut down Germany’s place in the world. Germany was thus predisposed to become increasingly authoritarian and revisionist.
The depression of the late twenties was virtually worldwide. It put twenty to thirty million people out of work, halved the volume of international trade, impoverished national banks and exchequers as well as families, baffled political leaders and helped men like Hitler to take power. It was dramatized, near its beginning, by the sensational collapse of the New York stock exchange in the last hour of business on 23 October 1929. On that day nearly 20 million shares were sold at lower and lower prices and by the end of that month investors were poorer by some $40 billion.
In the United States the late twenties was one of those periods of immense material optimism in which people stop thinking about limits. In a booming economy men of property believed, or acted as if they believed, that an era of richness for all had arrived and that stock prices would continue indefinitely their great leaps forward. As profits and savings satisfied and exceeded the demand for consumer goods and luxuries, they were used to create yet more monetary wealth and were re-consigned to the stock market, where they pushed stock prices up further still. Those who paused to think assumed that higher prices were being matched and justified by higher productivity. In fact, however, the great American boom had shown signs of slackening several months before the stock market’s crash in October. Industrial production had taken a downward turn. This had happened before, temporarily, but in 1929 the setback was not followed by a quick recovery; it was not a pause but an about turn.
The effects of the collapse were felt over a vast area because the United States had failed to adjust to the post-war situation in the world at large. During the twenties countries all over the world were importing American goods and borrowing American money. The borrowing had two principal reasons. The first was the high tariffs which the United States maintained and which prevented its customers from selling in the United States enough goods to balance their purchases; they were forced to balance their trade either by payments in gold or by continuous American loans. The second reason was a consequence of the First World War, which created vast intergovernmental debts, partly contracted by the victors in the course of fighting the war and paying for it and partly in the form of reparations. The bulk of the inter-allied debts was owed to the United States, Great Britain and France (although France was only a net creditor if Russian debts were taken at their face value) and the bulk of the reparations payments was owed by Germany to its near neighbours. The debtors borrowed from the United States in order to discharge their obligations. After 1929, however, American loans were no longer forthcoming and at the same time the United States raised its tariffs still further, notably by the inopportune Smoot-Hawley Act of 1930. Since American lending had been financing post-war reconstruction and development in Europe as well as debt settlements and international trade, the turning off of the American tap – first because private investors preferred to play the rising markets in the United States and then because of the collapse of those markets – throttled Europe’s economies.
The economic interdependence of different parts of the world was largely a consequence of the industrial and technical revolutions which had begun and flourished in western Europe and northern America. These revolutions created both a demand for primary products in places where they did not exist and speedy means of getting them there. Western Europe, with its higher standards of living and advanced skills, consumed the food and the minerals which other continents produced for its kitchens and factories. But this pattern contained the seeds of its own transformation since international trade enriched the poorer countries as well as the richer and helped the poorer to improve their own standards of living and so eat more of the food they could grow. The First World War also affected the pattern. By concentrating man’s needs on munitions it boosted the demand for minerals and their price, and by disrupting communications it boosted food production for local consumption and, likewise, the farmer’s profits. In the United States and other prosperous societies agriculture expanded owing to the fear that the war would prevent food from distant countries from reaching its destination. When therefore the war ended, more food was being produced than could be disposed of. Prices began to fall and continued to do so throughout the twenties with only a brief pause in 1925–8. Instead of reducing production, governments, in particular the government of the United States, subsidized the farmer’s prices and so encouraged him to keep under cultivation the land which he had worked so successfully under different circumstances. Moreover, since the wartime expansion of American agriculture had been financed by credit, the farmer in the post-war world was not merely an over-producer but an indebted over-producer. From 1929 the system took perforce the violent way to solution by numerous bankruptcies.
The end of the war also brought a drop in the prices of primary products other than food. Initially this change benefited the manufacturing countries at the expense of the producers, but it soon damaged the industrial societies too by contracting their markets; the suppliers of raw materials were also the purchasers of manufactured goods, and when they no longer got good prices for their raw materials they ceased to be able to buy manufactured goods. Less was bought and sold throughout the world. There was less wealth.
By the end of the twenties there were therefore three interlocking problems: agricultural overproduction; the shrinkage of international trade, which was leading nations to protect themselves by tariffs and other barriers; and reparations and inter-allied debts which, like the reconstruction of Germany and deficits on trade between the United States and Europe, were being financed by copious but not inexhaustible American loans. At the end of the twenties the politicians who were grappling with these economic problems became overwhelmed by them.
In Europe the acute phase of the crisis began in Austria in the spring of 1931. Austria, from having been the centre of a great empire, had become a small new state athwart the division between modern industrial western Europe and the relatively backward agricultural hinterlands of southeastern Europe. It was prohibited by the treaty of St Germain – Austria’s counterpart of Versailles – from uniting with Germany and this prohibition had been reinforced by the Geneva Protocol of 1922 when economic aid had been provided for Austria in return for renewed assurances that it would not unite with Germany. Equally Austria was prevented from combining with its other neighbours in a Danubian of central European federation, because these neighbours were determined to have nothing to do with anything which looked like a revival of the Austro-Hungarian empire. Austrian independence was a shibboleth of France as the foremost champion of the post-war settlement, of Czechoslovakia as the most vigorous of the new progeny of the settlement, and of Rumania and Yugoslavia as its beneficiaries, but independence in this case did not mean the defence of Austrian independence against an aggressor but insistence on Austrian independence against, if necessary, the interests of the Austrians themselves. Since Austria was poor as well as small, those who insisted on its independence had to pay to keep it solvent or see it become a dependency of some other power.
Austria’s future became an active topic of discussion and negotiation in 1930. Germany was afraid that Austria was looking to Italy for its salvation and regarded an Austro-German union as the only natural solution. Many Austrians would have preferred a wider solution in order not to become a mere province in a new German empire, but this way seemed to be blocked. France and Great Britain were at cross purposes. France was determined to prevent an Austro-German union but Great Britain was less alarmed by this prospect and wanted to patch up Franco-German differences rather than give France unequivocal support. Great Britain preferred the role of mediator to that of ally. In March 1931 Germany and Austria announced that they had agreed to form a customs union. France in particular regarded this projected union as a political scheme rather than an economic expedient. It was referred to the Permanent Court of International Justice at The Hague, which eventually declared it contrary to the Geneva Protocol but not contrary to the treaty of St Germain (in both cases by eight votes to seven). The plan was abandoned.
Meanwhile economic forces were gaining control. In May the principal Austrian bank, the Credit-Anstalt für Handel und Gewerbe, closed its doors. It was unable to meet its short term obligations because of the decline of Austrian industry and trade which had impoverished Austrian concerns to which the bank had lent its money. Its difficulties were accentuated when France blocked continued Austrian borrowing in the French money market. Although German banks and the Bank of England lent to the Credit-Anstalt, they were unable to save it and succeeded only in weakening themselves. Before the end of the month the German banks were in similar troubles from their own clients. By June the Reichsbank had lost over a billion marks and in July one of the leading German banks, the Darmstadter Nazional, also closed its doors. American banks which had lent to German banks began to feel alarmed. The Bank of England too was in trouble and borrowed from the Bank of France – France was financially the strongest country in Europe. British industrial and commercial activities were in decline. Unemployment was growing, and in June it became known that under existing arrangements the British government could meet only half of the calls on it for unemployment relief. The Labour government decided that it must balance its budget as a precondition to getting loans from American finance houses, even if part of the cost had to be paid by the unemployed. A special cabinet committee recommended cuts in public expenditure amounting to £78.5 million. The full cabinet decided that cuts of £56 million would do but it then disagreed over one item, a proposal to reduce by one tenth the dole payable to the unemployed. At Invergordon there was a mutiny when it was discovered that cuts in the pay of the lower ranks in the Royal Navy were to exceed the 10 per cent deduction required of all employees of the Crown. The government broke up and the country went off the gold standard.
Some temporary relief, psychological rather than economic, was provided by President Hoover’s offer to suspend for one year the payment of debts due to the United States if other inter-governmental debts were likewise suspended. Hoover’s offer anticipated an inevitable German default and shortly afterwards Germany declared that it would not resume payments after the end of the Hoover year. The Young Plan was scrapped and a conference at Lausanne in 1932 sanctioned, in camouflaged language, the abandonment of reparations. Another conference at Stresa later in the year tried to find a solution to the economic ailments of Austria and south-eastern Europe but, failing, left the area open to Germany.
The great crash and the great depression shattered more than material things. They destroyed morale. They injected a great amount of fear into ordinary people (including the ordinary people who sat in cabinets) and so turned them to an intent concern for their own affairs, present and future. The sense of community narrowed. Nation protected itself against nation, class turned against class. The millions of victims of the mysterious workings of economics looked for somewhere to lay the blame for their sufferings, and for somebody to lead them out of the mess. And nowhere were the confusion and disruption worse than in Germany, which had relied most completely on foreign loans. There too factories began to close, unemployment grew by leaps and bounds, and the cost of unemployment relief exceeded the capacity of the treasury to pay it. The resulting problem sundered the democratic parties. The Left wanted higher taxes, the Right higher unemployment contributions and lower relief; the Left, in other words, wanted the economy as a whole to subsidize the unemployment fund, while the Right wanted the fund to balance itself at whatever level was dictated by circumstances. Although both sides were prepared to temper their claims, neither would go far enough to meet the other. For two years Heinrich Brüning, who had been appointed Chancellor in March 1930, tussled with diminishing success with these economic and political storms.
Brüning was an intelligent man in his mid-forties, socially of the middle class, politically of the centre-Right, well intentioned and determined to save the republic. It was his fate to preside over the collapse of German credit and German democracy. By 1929 the steady economic expansion of 1925–8 had come to a halt and in the three ensuing years – 1930–32, the worst of the crisis – the national income was almost halved and one in three of the working population was put out of work. The Austrian crisis having triggered off a German crisis and foreigners (to whom half of all German credits were owed) having hurried to demand repayment of their short-term loans, the credit system collapsed. At the same time the problem of how to relieve the unemployed created dissensions among the centre parties of the Reichstag. Brüning, whose instinctive loyalties went not so much to democratic institutions as to the person of the chief of state, once his regimental commander, failed to hold the coalition together, a failure for which the Social Democrats share the blame. His policies were wrong enough to aggravate political dissension among the moderates and then belatedly right enough to give his ultimate successors, the Nazis, a good start. His methods – government by decree in the last resort – accustomed Germany to procedures which the Nazis turned into common form, and so accustomed foreigners to seeing Germany governed that way.
He took office with the determination not to inflate. The post-war inflation was remembered with such horror that any degree of inflation was very difficult to contemplate. A moderate or controlled inflation was not part of the German experience; inflation meant run-away inflation, a situation in which the value of a house falls to that of a box of matches between breakfast and lunch. Any inflation was a national phobia. So Brüning took the traditional, but beyond certain limits socially intolerable, course of deflation. His immediate problem was the flight of capital from Germany. Having decided against devaluation he resorted to import licensing and exchange controls (both of which were later developed by the Nazis) and to deflation, but deflation failed to boost German exports partly because the government deflated too little and partly because Germany’s customers had devalued their currencies. The balance of payments grew worse and the reserves went on falling. At home the attempt to balance the budget by cutting social benefits and increasing taxes widened the rift between Right and Left. Brüning’s 1930 budget had to be enacted by decree. The Social Democrats moved in the Reichstag to annul the decrees. The President dissolved the Reichstag. No parliamentary majority could be found. If Brüning hoped to gain control of the Reichstag by new elections he was disappointed, for at the elections of September 1930 the Nazis increased their seats from twelve to 107 and the communists from fifty-four to seventy-seven. The anti-parliamentary extremes were carried by the votes of the unemployed to a dominant position in the parliament and even with Social Democrat cooperation Brüning was now dependent on the President and his power to legislate by decree. By the beginning of 1931 unemployment was approaching the 5 million mark (it continued to rise until the latter part of 1932), production had declined by nearly half of what it had been in 1928, and parliament and the constitution were unworkable. Brüning’s policy had failed and the failure, a product of the unenlightened economics of the time in government in Washington, Berlin and other political capitals, visited on the German populace economic hardships unparalleled in peacetime in an advanced industrial country. It also alienated an influential segment of the business class which had previously supported Brüning’s Centre Party and so, indirectly, the Weimar republic. The economic crisis laid bare weaknesses in the German banking system which the government could not go on ignoring, but Brüning’s attempts to correct these weaknesses – by the introduction of state supervision and inspection of banking practices – caused bankers and their associates in industry and commerce to look round for other parties to patronize. The developed world’s economic ignorance and incompetence played a large part in making Germany choose Hitler.
Deflation was abandoned in 1932. It had done no good except to prove the need for something different. A new expansionist policy, based on expenditure on public works, was adopted. It was to be greatly expanded by the Nazis and to reduce unemployment – even before the impact of rearmament – from a peak of over 6 million to 2.6 million at the end of 1934. The Nazis, unafraid of state interference with private enterprise and unhampered by the trade unions, which they overpowered, pursued a policy of inflation controlled by tax increases and by wage, price and dividend restrictions. By 1937 Germany was short of labour. But a few years earlier inflation had seemed impossible. Because there had been so much of it in the early twenties, there was too little of it in the early thirties and too late. Deflation reduced Germany to something approaching despair and chaos at a time when powerful forces – the Nazis and the communists – could see that despair and chaos were what they needed.
The Nazi Party had made little impression during the years of prosperity (1924–9). It won only twelve seats in the Reichstag in 1928, but between 1929 and 1933 it grew into a mass party of the discontented. The Nazis attacked in the name of socialism the parties and policies which could produce nothing better than unemployment; they accused the entire political establishment of callousness and unimaginativeness. At the same time and in the name of nationalism they denounced the treaty of Versailles as an affront to Germany and a prime source of its economic ills. In the Reichstag elections of September 1930 they jumped from the category of a splinter party on the lunatic fringe into that of a political force which could be left out of no calculation. Six and a half million Germans voted Nazi and made the party the second biggest in the Reichstag. Newspapers abroad dug into their records to tell their readers something about its Austrian leader, Adolf Hitler, who now became world famous. Less than two years later this popular vote was more than doubled to give the Nazis 230 seats and make it the biggest in the Reichstag. But they never polled half the electorate in a free election. Even after Hitler won the chancellorship the Nazi vote in the election of March 1933 was only 43.9 per cent. But by then figures no longer meant much.
The rapid rise in Hitler’s popular support created a problem for the other nationalist and right-wing parties. Either Hitler would come to power in alliance with them or he would be swept into power by the masses, with or without violence. Hitler could see this too and in the declining years of the Weimar republic he played politics in the knowledge that the German Right was in a dilemma. The Right had this much in common with the Nazis, that both were anti-republican. The Right believed, or hoped, that Hitler’s wilder strains were the sort of political moonshine which can be ignored by sensible men and which is forgotten by even the worst demagogue when he gets office; Hindenburg among others seemed more put off by Corporal Hitler’s social inferiority than by his manic utterances. The Nationalist Party, led by the rich industrialist and newspaper owner Alfred Hugenburg, was the first to make an alliance with the Nazis. Others waited, but when Hitler stood against Hindenburg for the presidency in 1932, the Right voted for Hitler. There were four candidates for the presidency, none of them democrats. Only Hindenburg was strong enough to beat Hitler. So the Field Marshal, receiving substantial support from an unaccustomed quarter, was re-elected, after a second poll, by the votes of the Left – to which he was now useless from senility as well as conviction.
After his re-election Hindenburg discarded Brüning and replaced him with Franz von Papen, the nominee of the anti-parliamentary forces of the Right – the army, the big landowners and big business. Papen was a member of the lesser nobility who was sufficiently insensitive to political reality to imagine that he could outwit Hitler and run a right-wing government without him. Papen fell between two stools. First he destroyed what slight chance of a centre coalition still existed when, in violation of the constitution, he dismissed the Social Democrat government of Prussia and subordinated it to the central government of the Reich. Then he changed his mind about the Nazis and offered Hitler the Vice-Chancellorship. But he was too late. His offer was not good enough for Hitler, who had meanwhile, in the elections of July 1932, become the leader of the biggest parliamentary party. Hitler asked for the Chancellorship. He was refused. Hindenburg declared that he would not give the Nazis full powers because ‘they intended to use these powers to further their own ends’. Hitler was both checked and humiliated. Optimists grasped at any sign that somehow somebody was going to prevent Hitler from triumphing. But there was also a growing feeling that the Nazis would and should come to power. The more they spread chaos the more they gave the impression that they alone could allay it. Street violence was an everyday occurrence: public political murders, put at forty-two in 1929 and fifty in 1930, had quadrupled in the first half of 1931 and were still increasing. Terror and brutality, by communists as well as Nazis, sickened public opinion and alarmed the army, which shrank from the prospect of having to fight Nazis and communists at once. Hitler deliberately raised the stakes by sending a telegram of sympathy and support to some Nazis who had broken into the house of a young communist called Hans Potempa and kicked him to death before his mother’s eyes. At the same time the Nazis were saying – and demonstrating – that they alone had the energy and the will-power to restore order. The public became inured to the idea that the price of order was a Nazi government.
On the parliamentary front Nazis, communists and socialists combined to defeat Papen in the Reichstag in September and in the ensuing elections in November the Nazi tide receded slightly. But Papen still commanded no majority in the Reichstag and, having failed to contain the Nazis or come to terms with them, he was no longer any use. He had been made Chancellor because the army wanted him and the President commanded him, and his failure forced the army to take the Chancellorship itself in the person of General Kurt von Schleicher. Papen had been a nominee of the army, Schleicher was its embodiment: seconds were out. Schleicher had been in favour of bringing Hitler into the government until he discovered that Hindenburg would not have Hitler. He still thought it necessary to bring Nazis into the cabinet and he proceeded to offer the Vice-Chancellorship to Gregor Strasser, the leader of the northern and more radical section of the party and the representative of what was left of socialism in National Socialism (a by-product of attempts in the twenties to woo the working classes and lesser bourgeoisie). Strasser was willing but stipulated that Hitler must first bless the union, which Hitler refused to do. It is difficult to understand how either Schleicher or Strasser ever imagined that he would, and Strasser merely destroyed himself by letting Schleicher use him in this way. Schleicher, who was a political neophyte, next tried an approach to the democratic Left, whereupon the financial and industrial establishment put pressure on Hindenburg to recall Papen and install a Papen–Hitler coalition. The army too failed to stand solid for its own Chancellor. Some officers, led by General von Blomberg, went over to the Nazis. Hitler now had enough backing from the conservatives, the moneyed interests and the army to make his own terms. This was the end of Schleicher, whose short period in office marked the end of the German army’s exercise of political power. Out of deference to Hindenburg, who thus performed a last service by easing Hitler into power, Schleicher quietly relinquished his post. On 30 January 1933 Hitler was appointed Chancellor by Hindenburg with Papen as his Vice-Chancellor.
Hitler became Chancellor constitutionally. To say that he became Chancellor legally would be to ignore the activities of his party, which, in the preceding years, had committed countless acts of criminal violence, including murder; but technically Hitler (like Mussolini) did not seize office, it was conferred upon him. There is a difference between seizing office and assuming power. Hitler assumed power between 1929 and 1933 by violent means but he forbore to lay hands on the institutions of the state which he proposed to manipulate. Ever since his abortive putsch in 1923 Hitler had been sagacious enough to sense and insist upon the advantages of observing prescribed constitutional processes. He was a better respecter of pieces of paper than pieces of humanity, because he realized the strength of formalities and the bemusing effect of a show of continuity. He had made no secret of his intentions. In 1931, for example, he had told a German editor, a political opponent, that although he intended to come to power by winning seats in the Reichstag, after he had done so the Reichstag might as well close its doors and be turned into a museum; and after his appointment as Chancellor it took him only a matter of months to master the whole apparatus of power and propaganda in Germany. The steps which he took were characteristic: legislation and murder.
Between 9 and 10 p.m. on 27 February 1933 the Reichstag was burnt to the ground. Hitler at once blamed the communists. He probably really thought they had done it. Others equally promptly assumed that the Nazis had burnt it with the intention of incriminating the communists and liquidating their party, and at the end of the war General Halder said that Goering had boasted in 1942 that the fire was his doing. The question remains obscure and there is much to be said for the view that the Dutch communist Marinus van der Lubbe did, as he himself claimed, conceive the conflagration and effect it on his own as a one-man protest. It is evident that the three Bulgarian communists tried with van der Lubbe (who was executed) had nothing to do with the deed. They were even acquitted. Whatever the truth the Nazis seized their opportunity with alacrity – proof either of their efficiency or their complicity. Arrests were made within a matter of hours, communist newspapers were suppressed, and an emergency decree was issued the next day overriding basic civil rights such as freedom of expression and assembly, permitting arbitrary searches and seizure of property, empowering the central government to assume the functions of local authorities and imposing severe penalties. This decree was never repealed. In March Hitler supplemented it by an Enabling Act which in effect converted him into a one-man legislature. This act, which required a two-thirds majority in the Reichstag, was passed only because the Centre Party (at the bidding of the Vatican) voted for it. A few Social Democrat voices were raised, for the last time, in courageous but futile protest. With the powers thus conferred upon him Hitler decreed all parties except his own out of existence, subordinated the federal states to the central government, and won 92 per cent of the vote in elections which he staged in November 1933. He abolished free trade unions, intimidated the churches and virtually annexed the judiciary and the educational system, thus moulding a new society in which only Nazi ideas, ethical, social and political, might be expressed and protected.
Hitler also struck down a part of his own movement, the armed SA or Sturmabteilungen, led by Ernst Röhm, an even earlier member of the Nazi Party than Hitler himself and one of the few men with whom he used the intimate second person singular du. The SA had had a job to do on the streets in the days before the Nazis came to power. They provided the rough and tough arguments for supporting the Nazis or keeping out of their way. But Hitler had had trouble with them from the start. They regarded themselves as an independent force like the Free Corps from which many of them were initially drawn and they wished to be as autonomous vis-à-vis the party as the German army traditionally was vis-à-vis the state. Hitler had been obliged in 1930 to eliminate their leader Franz Pfeffer von Salomon, an ex-Free Corps man, because he proved too independent and opposed Hitler’s policy of achieving power by constitutional means. He also had to suppress an open revolt by the Berlin SA in the same year and had further trouble in the next year. Moreover the SA were growing fast. At the beginning of 1931 they were 100,000 strong, the same size as the army; at the end of that year they were 300,000 strong. By the middle of 1934, their ranks swollen particularly by unemployment and by the march-fever which swept through Germany in these troubled years, they had reached a strength of 4.5 million and were scaring the army as well as Nazi Party chiefs. The SA was the most prominent of various Nazi organizations which duplicated the organizations of the state (like a shadow cabinet duplicates a cabinet) but which had become irrelevant or embarrassing once their party had become the state. Röhm saw the SA as replacing the regular army. Politically naïve and temperamentally unbalanced, he overplayed his hand fantastically. He thoroughly alarmed the officer caste by letting it be known that in his view the armed services should be reduced to being training organizations for the SA, and he failed to see that Hitler needed the army. His ambitions contributed to the alliance which both Hitler and the army desired and provided it with a sacrificial victim. The army began at this period to dismiss its Jewish officers to please Hitler and early in 1934 Hitler forced Röhm to agree, formally and in writing, to moderate his ambitions. But rumours of an SA putsch persisted and in June Blomberg, now Minister for Defence, warned Hitler that the army would turn him out, get Hindenburg to declare martial law, hand over the government to the military and probably restore the Hohenzollerns if the SA were allowed to usurp the functions of the army; if the SA were suppressed, the army would see that Hitler got the Presidency. Hitler thereupon organized a massacre. On 30 June Röhm and about fifty other SA leaders were murdered. The opportunity was taken to murder a great many other people too; they included Schleicher and also Gregor Strasser, although there are doubts whether Hitler wanted the latter’s death. But the principal beneficiaries of the destruction of the SA were not the army but Heinrich Himmler and his SS or Schutzstaffeln, which flourished on the ashes of the SA and became the rival military force which the army had sought to destroy with the SA.
A month later Hindenburg died. The office of President was merged with that of Chancellor. More important, the death of Hindenburg provided Hitler with the opportunity to annex the officer corps to his revolution. With some exceptions the officer corps disliked the Nazis but it shared some of Hitler’s aims and was confident that its power was greater than his. From Hitler’s point of view the army differed in two ways from every other institution in the state: it was too powerful to be destroyed and he needed it. Although within Germany it might challenge the power of the Nazis, externally it was essential to Hitler’s purposes, especially for the conquest of Lebensraum. Therefore it had to be strengthened and at the same time rendered domestically harmless. On the day after Hindenburg’s death every member of the armed services swore a new oath of obedience to Adolf Hitler in person as ‘the Führer of the German Reich and people and Commander-in-Chief of the armed forces’. This oath was devised by General Walther von Reichenau, one of a group of officers who were at this time keenly pro-Nazi. It gave Hitler a moral authority over the officer corps which endured almost undented until the end of his life. The army, which had virtually ordered the elimination of the SA, had placed itself under the Führer’s personal orders by the oath, the mystic force which bound the army together and determined its relation to the state. By this oath the army equated the guardianship of the German state with obedience to the command of Hitler, who was henceforward not only Führer but also President and Supreme War Lord.