1922 in Germany
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Overview
Issues of disarmament and the trial of war criminals had previously been similar sources of anxiety and unrest in Germany, but now receded into the background. In their place was the issue of reparations, which dominated the life of Germans in 1922. Although these social questions remained in the public consciousness, Germans focused most heavily on the economics of how Germany would meet the reparation obligations stipulated by the Treaty of Versailles.
Reparation Battles
The Supreme Council in Cannes
As a practical precaution, Germany requested postponement of its reparation payments at the beginning of 1922. Unfortunately for Germany, the request was denied. However, this request forced the Supreme Council of the Allies to seek a new solution to the reparations problem. When the Prime Minister of France, Aristide Briand, convened the conference of the Supreme Council at Cannes, the first subject discussed was reparations, but no decision was reached. Walther Rathenau, the head of the German delegation, set forth the extent of Germany's capacity to pay, which was severly limited. Unfortunately, the conference was broken off prematurely because a cabinet crisis had broken out in France.
Still, on January 13, immediately before conference dissolved, the Reparations Commission granted Germany a temporary postponement. In exchange, Germany would have to pay 31 million gold marks every ten days and also within 14 days Germany would be required to submit a complete plan for amending the German budget, guaranteeing paper currency and developing a scheme for cash payments during 1922.
The German government replied on January 28 by proposing to pay 720 million gold marks in cash and 1.45 billion in kind during 1922. To fulfill the rest of the bargain, Germany pointed to an agreement recently reached with the People's Party that would allow them to better collect taxes and introduce new taxes, which were expected to increase revenues significantly.
Revisions and Requests
On March 21, the Reparations Commission answered by fixing the obligations of Germany at the figures proposed by the German government, but with certain conditions which would have to be carried out by May 31, including requiring a new taxation scheme of 60 billion marks. A number of measures for securing strict control over German finances and the German budget were required to be introduced at early dates, and the scheme for an internal loan submitted by April 30.
By 248 votes to 81, with 43 abstentions, the Reichstag on March 30 passed a resolution protesting the new regulations, which many believed would cause the rapid depreciation of German money.
The World Economic Congressional Meeting in Genoa
Meanwhile, the great World Economic Congress met in Genoa -- the one positive result of the Cannes conference. The congress lost much of its significance for Germany as France had consented to take part in it only on condition that reparations were not officially raised. Nevertheless, the German government regarded the congress as a moral victory. Yet very little actual progress was made.
Recognition of Soviet Russia
The German delegation became the object of unwelcome attention when it concluded a political and economic agreement with the Russian foreign minister Georgi Chicherin in Rapallo on Easter Sunday (April 16). The agreement had been drawn up in Berlin, but laid aside before being finally adopted. This agreement finally established peace between the two countries, waived all claims arising from the war on both sides and restored diplomatic relations. Thus, the Bolshevist government was accorded open recognition. The former Russian ambassador's palace in Berlin, after being empty for years, had already been handed over. This step added some difficulty to the negotiations of the Great Powers with the Moscow government due to the open hostility that many of the European democracies displayed against the Communist regime.
German delegates' assurances that no disloyalty had been intended by these agreements were rejected with scorn. German delegates futilely asserted that they had reliable information that the other powers were about to conclude arrangements with Russia which would put Germany in a tight corner if she did not act quickly. The French delegation showed itself particularly indignant, as did the British.
Negotiating an International Loan
Of more consequence to Germany was the approach of May 31, with the threat of dire consequences if the obligations fixed by the Reparations Commission were not carried out. New French Prime Minister Raymond Poincaré had already set forth the programme of pledges and sanctions with which he meant to overcome the alleged "bad will" of Germany. Accordingly, the German finance minister, Andreas Hermes, went to Paris. As a result of his discussions with the Reparations Commission, the government was able to make a proposal that was accepted. The government promised to keep its finances in order so that it could pay the reparations, even if it meant raising taxes. The Reparations Commission consented.
Loan Renegotiation
At the beginning of November the Reparations Commission went to Berlin in the hope of there finding a way out of the impasse. At the same time, a conference was held in Berlin of economic and financial authorities who had been asked to give reasoned opinions on the possibility of stabilizing the mark. Both conferences ended without positive result. The Reparations Commission failed to find the concrete proposals that it had looked for.
On November 13, the Wirth government made definite proposals regarding stabilization and reparations in a note to the Reparations Commission. These proposals were: to fix the German reparation obligations definitely at a tolerable figure, to release Germany for three to four years from all payments in cash and kind, to summon an immediate conference of international financiers to consider the granting of a bank credit to Germany, and, finally, to support Germany's demand for complete equality of treatment in trade and commerce.
Politics
Assassination and Instability
The most serious event of the year internally occurred on the morning of June 24, when Walther Rathenau was shot dead by assassins in front of his house. Walther Rathenau was the minister for foreign affairs. The immature, excited Nationalist assassins, saw him only as the hated Jew. This event spurred another economic downturn for the Weimar Republic. Four days before the assassination, the Mark was still at one sixty-seventh of its par value. On June 27, just one week later, it had sunk to one-eightieth of par, on July 3 to one hundred-and-fourteenth, and on August 1 to one hundred-and-fiftieth.
Owing to this new development, the German government on July 12 made a fresh application for postponement of the payments that had been fixed for 1922, and for a simultaneous reduction of the monthly payments for the clearing of private prewar claims from £2,000,000 to £500,000. The Reparations Commission promised to reply, if possible, by August 15. But France returned an abrupt negative to the request for a reduction of the clearing payments, and even threatened reprisals if Germany did not carry out its clearing obligations by August 5. Eventually, an agreement was reached. Eventually, Germany was allowed to stop cash payments for the rest of 1922 via a conference of the Allies, which commenced on August 7.
Inflation and Repercussions
Despite the ending of cash payments for the rest of 1922, the main cause of Germany's inability to pay, the steady depreciation of the mark, was ongoing. Towards the end of the year it assumed a disastrous rapidity. On August 1, the US Dollar still stood at 643 Marks to the Dollar and the British Pound at 2,850 Marks to the Pound. But on September 5 the dollar had already risen to 1,440 Marks and the pound to 6,525 Marks, and in December the pound was worth between 30,000 and 40,000 marks and the dollar between 7,000 and 9,000.
In such circumstances it was impossible to exercise proper supervision over the national finances. The budget submitted at the beginning of the year had provided for an ordinary revenue and expenditure of 103,208,000,000 Marks. With the mark at one forty-fifth of its par value, the cost of carrying out the terms of the peace treaty was now 187,531,000,000 marks. Of this sum 16,500,000,000 were provided by the ordinary budget; the other 171,000,000,000 would have had to be raised by a loan. As soon as the mark fell to a sixtieth of par the deficit became 210,000,000,000 instead of 171,000,000,000; and it swelled to fantastic dimensions with the further depreciation of the mark which followed. The floating debt had risen from 247,000,000,000 at the beginning of the year to 272,000,000,000 by March 31, then to 962,000,000,000 and to 1,494,000,000,000 by the end of the year.
The government sought to prevent the further fall of the mark by a regulation forbidding dealing in foreign currencies. The measure, however, was not well conceived and proved wholly ineffective; it met with sharp opposition, and soon had to be altered.
Cuno Takes Over as Prime Minister
Late in 1922, the Wirth cabinet found itself compelled to resign owing to party dissensions. In order to secure a broader basis for his government in the critical situation which faced the republic, Dr. Wirth had sought to gain the adherence of the German People's Party, which represented the property-owning classes. Previously, the moderate socialist party had reunited with the Independent Social Democrats who had seceded during the war, while as a kind of counterpoise the bourgeois parties in the government coalition had formed a "working agreement" in the Reichstag with the German People's Party. The united Social Democrats objected to the entry of the German People's Party into the government coalition. Having made this a question of confidence, Dr. Wirth felt himself compelled to resign.
The president entrusted the formation of a new cabinet to Dr. Wilhelm Cuno, manager of the Hamburg-America Line, who accomplished the task with some difficulty. As the Social Democrats refused to join, Dr. Cuno formed a so-called business ministry, which usually is composed of non-politicians. In this case, however, it was largely composed of deputies of the bourgeois coalition in addition to Cuno, who did not belong to any party and in fact was not a member of the Reichstag when he first took over. These parties did not form a majority in the House by themselves. Consequently, the cabinet depended on the good will either of the Social Democrats or the German Nationalists.
Cuno's cabinet was as follows:
- Wilhelm Cuno - Chancellor
- Frederic Hans von Rosenberg - Foreign Minister
- Rudolf Oeser (German Democratic Party (DDP)) - Interior Minister
- Andreas Hermes (German Centre Party (Z)) - Finance Minister
- Johannes Becker (German People's Party (DVP)) - Economics Minister
- Heinrich Brauns (Z) - Labour Minister
- Rudolf Heinze (DVP) - Justice Minister
- Otto Gessler (DDP) - Defence Minister
- Karl Stingl (Bavarian Centre Party (BVP)) - Postal Minister
- Wilhelm Groener - Transport Minister
- Hans Luther - Food Minister
- Heinrich Albert - Treasury and Reconstruction Minister
The new government continued the reparations policy of its predecessor. When a conference of the Allies met in London to consider the German request for a postponement of payment, the new government made fresh proposals on matters of detail regarding the periods and the application of the loans it had in view. The conference rejected the proposals as inadequate. The London negotiations brought no solution of the reparations question. Poincaré's plans for the seizing of "productive pledges" and the occupation of the Ruhr valley met with the opposition of the other powers, while Poincaré on his side was not to be moved from his designs, which were of a military and political rather than economic character, by any offers of England for a mutual cancellation of debts. Thus the year ended with a situation full of ominous uncertainty.
Internal Unrest
The interal position of the republic was somewhat weakened by unrest arising from economic fragility, which resulted from uncertainty concerning the war debts and its adverse effect on the economy. In February, a strike engineered by the more reckless elements of labor among the railway employees paralyzed traffic for six days in North Germany and a part of Baden. It then collapsed, and was followed by disciplinary action against some of the instigators and also those participators in the strike who had been guilty of acts of violence and sabotage. The government, supported by public opinion, held that state employees had no right to strike, and received a vote of confidence on this point in the Reichstag. A frivolous strike of the Berlin municipal workers, which left the capital without light, water, and electricity, ended after three days with an unconditional resumption of work. Food disturbances broke out at some places in the summer, but they were easily suppressed.
More disturbing to the peace of the republic were the subterraneous movements which were forming in anti-republican circles. The preceding year had been marked by the murder of Matthias Erzberger. This year was marked by the aforementioned murder of Walther Rathenau, an attempt to poison Philipp Scheidemann, the lord mayor of Kassel, with prussic acid on Whit Monday, and the stabbing of journalist Maximilian Harden on July 3. The feeling aroused found vent in great demonstrations on the part of the republican section of the population, especially among the working classes. In certain places, e.g., Zwickau, near Magdeburg, Freiburg, Darmstadt, etc., violent exhibitions of popular resentment erupted, at times accompanied by bloodshed.
Political Repercussions
The republican authorities acted with great energy, and proclaimed relentless warfare against the "Right". An order (invoking the infamous Article 48 of the Weimar Constitution]] was issued investing the government with extraordinary powers to cope with the emergency. A few days later it was withdrawn in favour of a bill "for the protection of the republic", increasing the penalties for attacks on republican institutions and officials, establishing a special State Court within the Reich Court, and laying down regulations for the strict control of societies, meetings, and printed matter. This was followed by an amnesty bill, a crimes bill, and a supplement to the officials law. The Reichstag passed the bill for the protection of the republic after a long discussion by 303 votes to 102. The other bills were also passed by large majorities. Only the German Nationalists, the Bavarian People's Party, the Communists, and certain members of the German People's Party voted against them.
Politically Motivated Trials
In response to the Law for the Protection of the Republic, a number of organizations which espoused anti-republican sentiment, were dissolved. In the trial of ex-Captain Manfred von Killinger in May for abetting the murder of Erzberger it became apparent that there must have been parties behind the scenes, but the identities of the parties remained unknown, and the accused was acquitted, although his connection with the murderers of Erzberger was not in doubt. The actual murderers of Rathenau, the engineer Hermann Fischer and Naval Lieutenant (retired) Erwin Kern, had escaped arrest and condemnation by suicide. A number of persons who were accused partly of complicity, partly of abetting or assisting, were brought before the new court in October.
A political trial held at Munich was of quite a different character. The author Freiherr Hubert von Leoprechting was on trial for high treason. This man was accused of being in the pay of Dard, the French envoy in Munich, who left the city for good a few days before the trial. It came out in the trial that Dard had acquainted the accused with the plans for separating South from North Germany, and that these plans were, if necessary, to be assisted by an advance of French troops through the Main valley. He was condemned to imprisonment for life and loss of civil rights.
Wolfgang Kapp, the instigator of the notorious Kapp Putsch of March 1920, was going to put to trial, but died before he could put on trial.
Treaties and the Creation of Poland
A number of treaties were concluded with various states, including Switzerland, the United States, Italy, Latvia, and Finland. Most were economic in character, and served to clear away the debris left by the war. The extension of the Russo-German Treaty of Rapallo to the Soviet republics federated with Russia, including the Ukraine, White Russia, Georgia, Armenia, Azerbaijan, and the Republic of the Far East, took place as a matter of course, and aroused no attention.
Poland and Germany made good progress towards coming to terms on the question of Upper Silesia. Through the mediation of the Swiss deputy Felix Calonder, the two countries came to an agreement in April. The agreement was designed to last fifteen years, which gave prospect of a lasting settlement. The most difficult questions were those of the protection of minorities, and of German private property liquidation in the portions of Upper Silesia assigned to Poland. Difficulties arose when Poland claimed an unrestricted right of liquidation, and failed to recognize the right of the chairman of the Mixed Commission to arbitrate. A compromise was reached, in which Poland gained a limited right of liquidation, without inflicting too great a hardship on the German owners.
On July 17, the transfer to Poland of the parts of Upper Silesia assigned to her commenced. At the same time, large portions of the population moved from newly-Polish districts into the parts that remained German. A few weeks later, the German districts voted on whether they should become an autonomous federated state, or remain incorporated with Prussia. The result was: 513,126 votes for Prussia, 50,400 for autonomy. It was now possible to hold the elections to the Reichstag and the Prussian Landtag which had been postponed on account of the occupation. They ended unfavourably for the Poles, who won no seat out of five in the Reichstag, and one out of eight in the Landtag.
Great dissatisfaction arose in Germany in response to the fate of five villages on the east bank of the Vistula. These villages had formerly belonged to West Prussia, were inhabited almost entirely by Germans, and had voted for assignment to Germany. The boundary commission nevertheless assigned them to Poland, in spite of protests by the inhabitants, the Reichstag, and the Prussian Landtag. The Prussian premier Otto Braun emphatically stigmatized this decision as a "scandalous breach of the peace of Versailles". The protest was so effective that the execution of the decision was postponed and had not yet been carried out at the end of the year.