(Published in GralsWelt 18/2001)
At the Congress of Vienna in 1815, after Napoleon's defeat, European diplomats created a so-called balance of power, which was supposed to give the continent stable conditions and save wars.
The unification of the German provinces into a common state (1871) and the subsequent rise of the German Empire to an important industrial nation disturbed this balance of forces.
Such shifts in political, economic, and military weights had regularly led to armed conflicts throughout the history of the world. Wars were considered a legitimate “continuation of politics by other means” (Clausewitz). It was only nuclear weapons that made these “other means”, that is, large-scale armed conflicts, irresponsible for the diplomats.
At the beginning of the 20th century, the interests of European nations collided: the French demanded Alsace-Lorraine, annexed by Germany in 1871; Russians pushed towards the Bosporus; Austria-Hungary and Russia (like France and Italy) had options in the Balkans; England, traditionally striving for political equilibrium on the continent, was adversely affected by the successful competition of German industry; it was beset by crises in its colonies and saw its importance waning; etc. etc. Not to mention the differences between the colonial powers overseas.
Mutual distrust determined politics and the European states armed. In tsarist Russia internal tensions escalated and gave rise to fears of a revolution that influential circles wanted to cover up with a war.
The German Empire, through failed diplomacy and the clumsiness of its saber-rattling emperor Wilhelm II. (1849-1951, Emperor from 1888-1918) in isolation, had close political ties with Austria-Hungary, the multi-ethnic state that was considered a relic from the Middle Ages in the times of exuberant national consciousness.
When the Austrian heir to the throne was murdered in Sarajevo on June 28, 1914, the subsequent hectic diplomatic rush between Austria and Serbia triggered a worldwide war, the Egon Friedell (1878-1938) saw "the end of the modern age".
The First World War was the primary calamity for Europe in the 20th century. Exaggerated nationalism, envy of competition, overarming and inability of all those responsible - not just Germany - unleashed him. With the peace order that followed the First World War, the decline of Europe from the top of the world and the end of colonialism began. Unjust peace treaties dictated by greed and hatred (Versailles, St. Germain, Sèvres, Trianon, etc.) set the course for the Second World War and caused unsolved problems to this day, for example in the Middle East. After the First World War, Germany's economy was shattered by currency devaluation of hitherto unknown proportions, and the priceless reparations demands of the victorious powers imposed poverty for generations. A brief recovery phase of the world economy in the "Golden Twenties" (the "golden 20s") ended in the Great Depression of 1929, which plunged even the rich US into its deepest crisis since the civil war. Germany, which was still suffering from the consequences of the war, was badly shaken and the prerequisites for the success of right-wing extremism were created.
Anyone looking for the guilty party for this catastrophe today should not only study the articles of the Versailles Treaty, which attributed sole responsibility to Germany, but also to the English prime minister David Lloyd George (1863-1945) look up:
“The more one reads of the memoirs and books that have been written in different countries about the outbreak of war, the more clearly one realizes that none of the leading men really wanted this war. They slipped in, so to speak, or rather: they stumbled and stumbled in, out of folly! "
In August 1914, hardly anyone suspected what was about to happen. Because the first "modern war" - the American civil war with enormous human losses and terrible suffering of the civilian population  - did not serve as a warning to Europeans for lack of knowledge. Thus the horrors of a mass war waged with all technical means broke out over the old continent, while one had only expected a short, quick "armed conflict".
The course of the great war
The first thing the German General Staff wanted to do was overthrow France, following the Schlieffen Plan. To this end, German troops marched through neutral Belgium, whereupon England declared war on Germany. The German attack stalled in front of Paris and the dreaded two-front war broke out. A victory over the Russians invading the east in the Battle of Tannenberg did nothing to change that.
The "Central Powers" (Germany and Austria-Hungary) as well as Turkey were encircled by Russia, France, England, and from 1915 also by Italy, and most recently had to fight against more than 30 enemy states, including Japan. Access to overseas resources was denied to the Central Powers that were not prepared for a blockade. A hitherto unknown arms industry had to be raised from the ground.
Then in 1917 peace seemed possible. The Central Powers had suffered unspeakably, France was on the verge of collapse, and Russia was revolutionary.
The American President Woodrow Wilson (1856-1924) believed in the "common sense of the nations" and tried to mediate on the basis of a "peace without victory"; the Pope also intervened. But foolish nationalists still swore to victory and prevented a mutually acceptable compromise peace.
The Quartermaster General Erich Ludendorff (1865-1937) had become the most important man in the German Empire, for whom the Kaiser was not only in command of the army under the nominal supreme command of Paul von Hindenburg (1847-1934) largely left a free hand. The political leadership was also under the influence of Ludendorffwho believed in victory in the West after the armistice with Russia. The peace negotiations were doomed to failure by excessive German demands. For example, Germany wanted to annex Belgium; a demand unacceptable to England. Great Britain had not tolerated a sea power on the Flanders coast for centuries and would not give in now!
Germany had gone to war convinced that in the midst of peace it had been attacked by its enemies. In 1914 German soil had to be defended against an overwhelming force. In 1917, deluded German nationalism turned the defensive war into a predatory war, thereby placing itself in the wrong with the world.
When the United States finally entered the war, convinced of defending freedom and democracy, the Allies had the military and economic preponderance.
In the summer of 1918 the last great German offensive failed, and the army command, which was still so sure of victory weeks ago, had to apply for an armistice in order to save the German army. When the German government submitted an armistice offer to the American president on October 3, 1918, based on Wilson's “14 points”, the political room for maneuver was wasted. The Allies saw that Germany was defeated; accordingly were their conditions, which made a possible continuation of the war impossible for Germany after the failure of the negotiations. A German delegation learned this to their horror on November 8, 1918.
Later you have that Revolution at home blamed for the defeat. The revolution began in Kiel. The deep-sea fleet had lain idle in the ports for most of the war, because after the greatest sea battle in history (in the Skagerrak, May 31, 1916) they shied away from a renewed confrontation with the English fleet.
Now, after the war was obviously lost, on October 24, 1918, the naval war command ordered a relief attack for the army in the direction of the Thames estuary; a senseless journey of death that could no longer change anything. The red flags went up in Kiel on October 29th. The sailors mutinied, allied themselves with shipyard workers and formed a soldiers' council based on the Bolshevik model. The Reich government sent the Social Democratic MPs Gustav Noske (1868-1946) who later reported:
"The driving moment that prevailed with elementary violence was this: The matter is over, and at that moment we no longer die, but go home to women and children!"
The revolution reached Munich on November 7th and overthrew the oldest German monarchy, the Wittelsbachers, on the night of November 8th.
The majority of Germans still wanted to save the monarchy, but not Kaiser Wilhelm II, because he was responsible for the war and had to go. But this hesitated and was overtaken by the events: On November 9th, the general strike was called in Berlin. To forestall the Bolshevik revolution, shouted Philipp Scheidemann (1865-1939) at 2 p.m. from a window of the Reichstag the German Republic. Only 2 hours later proclaimed Karl Liebknecht (1871-1919) the “Free Socialist Republic of Germany” in front of the Berlin Palace.
On the evening of November 9th, the last "imperial" Chancellor handed over the Prince Max of Baden (1867-1929) the business of government to the Social Democrats Friedrich Ebert (1871-1925). The monarchy could no longer be saved and the emperor knew no better way than to emigrate to the Netherlands on November 10th.
In the shadow of defeat
The "German Republic" proclaimed by Scheidemann was in ruins. Although no enemy soldier had conquered German land, the war was lost. The economy, marked by war and blockade, was down and a peace treaty dictated by the victors, which made severe conditions feared, was imminent.
After tremendous efforts on many fronts and many sufferings and hardships at home, the German people could not believe the defeat.
The political landscape is rugged. Above all, the largest party, the Workers' Party, the SPD, believed in the merits of democracy. But since 1917 this was split into a moderate part (the SPD or MSPD = majority SPD) and the USPD (Independent Social Democratic Party). The cause had been a dispute over the approval of war credits.
There was a lack of democratic awareness and understanding of the advantages and disadvantages of democracies among the people, and many longed for the old order, for emperor and king, for peace and quiet.
Was the fall of the monarchy a loss? Two English statesmen from different political camps - Winston Churchill (1874-1965) and Ernest Bevin (1881-1951) - agreed after the Second World War that Hitler would hardly have come to power in an imperial Germany. And even if so, the authority of a monarch could have prevented the worst; for even the weak Italian monarchy was finally able to get rid of the dictator.
The Consequences of the world war were serious for Europe and the world:
Bolsheviks ruled Russia. The communist ideology, the aim of which was world revolution, became the hope of the poor in the world.
Between the states of Europe, even within its peoples and nations, there were no longer any common values: democracy and dictatorship, free economy and collectively planned economy, nationalism and internationalism, conservatism and progressive thinking faced each other irreconcilably and threatened to tear the state structures apart.
Germany was internally torn in the area of tension between Western democracy and Bolshevik dictatorship; His young democracy, born of defeat, unloved and misunderstood by the population, had to find new ways to convince his people. There were riots, uprisings, council governments and left-wing propagandists who called for a popular uprising and believed that, following the Russian example, a moderate left government (in Russia Kerinsky) would have to be followed by the radicals (in Russia Lenin) in order to bring the revolution to a close, if necessary by force . It was fortunate for Germany that the majority of the Social Democrats were striving for an honest democracy, as they did before Otto Braun (1872-1955) said in a commentary on the Bolshevik coup of January 5, 18:
“Socialism cannot be erected on bayonets and machine guns. If it is to last and last, it has to open democratic way be realized. "
One of the first official acts of Friedrich Ebert was therefore the call for calm and order. He found support from the army. In a phone conversation with Wilhelm Groener (1867-1939), the successor of the resigned Ludendorff, the new government was assured the support of the army, which was urgently needed.
Because the USPD, especially its radical left wing, the Spartakusbund, wanted the revolution to be completed and called for a revolutionary struggle. At its head stood with Rosa Luxemburg (1871-1919) and Karl Liebknecht (1871-1919) two charismatic propagandists. In many places they sparked strikes and uprisings, so that the social democratic governments had to use armed force against the Spartacists. The law enforcement officers deployed for this purpose were the Freikorps and the army, both of which were more loyal to the emperor than democratic and hardly the constitutionally loyal armed forces who needed democracy. The majority of the people wanted peace and quiet.
In December 1918 a council congress in Berlin decided to call for democratic elections to the National Assembly on January 19, 1919. The way to parliamentary democracy was free. Even in January 1919 a Spartacus uprising in Berlin could not change this, but it was suppressed. The Spartakist leaders became Rosa Luxemburg and Karl Liebknecht murdered by embittered volunteer corps officers.
The difficult road to democracy
The elections to the National Assembly took place, and now it was a matter of giving the republic a constitution, preserving imperial unity, protecting the country against external threats, keeping extremism from right and left in check and, last but not least, the economic problems especially dealing with inflation.
The National Assembly met in February in Weimar, not in unrest-shaken Berlin, and set up a new government. First head of government was Philipp Scheidemann (1865-1931), the first Reich President Friedrich Ebert (1871-1925).
Weimar was chosen to contrast the “Spirit of Potsdam” with the “Spirit of Weimar”, the city of Goethe.
But not for all Germans Potsdam was a symbol of militarism and soulless cadaver obedience. Millions saw in Potsdam the symbol of a past in which there was incorruptible loyalty and the principle of serving the cause, not for the sake of money. The demand that the spirit of Potsdam must perish was therefore designed to divide the nation from the beginning and to give right-wing forces a boost. The choice of the colors black / red / gold of the 48 revolution for the imperial flag was also incomprehensible for many.
Incidentally, the outcome of the first elections was a disappointment for the SPD, the strongest democratic force. It only reached 37 % and was dependent on the cooperation with DDP (German Democratic Party), CVP (Christian People's Party, Center). A very democratic electoral process had been chosen: free, equal, secret voting (for the first time also for women) and a mandate for 60,000 votes each, so that the number of MPs depended on the turnout. So many factions came into parliament and coalitions later often became difficult.
But for now the government had other concerns. The first months of 1919 were more restless than the November and December weeks of 1918. Strikes, occupations of factories and public buildings and even short-lived council republics (Bremen, Munich) took place in many parts of the Reich. It took the massive deployment of the army and volunteer corps to end the riot.
As a consequence of this civil war, the supporters of the parliamentary republic were confronted not only with vehement opposition from right-wing forces but also with an emphatic, even system-hostile opposition from the extreme left. Already in the first months of the young republic there was a double threat to democracy from the right and the left, to which it was ultimately to succumb.
Revolution in Bavaria
In November 1918 almost every residence had its own revolution. Workers 'and soldiers' councils were formed everywhere, seizing the existing administrative structures and forming their own governments. At first they did not think of subordinating themselves to the distant central authority in Berlin. There was therefore the danger of the division of the empire, which must have caused the government of the empire one more concern. The most serious case was Bavaria, which experienced turbulent political developments.
Catholic Bavaria only approved the founding of the empire in 1871 with a heavy heart; The reservations against the overpowering Protestant Prussia were too deep. The revolution of 1918 aroused separatist tendencies that could hope for friendly support from France; for the French wanted the south and the Rhine provinces to be split off from the German Empire.
The Bavarian Revolution began on November 7th, 1918 with a rally for which my then 16-year-old mother was given no school leave. The magistrate of the city of Munich also released its employees for the afternoon. Around 3 p.m., around 50,000 people gathered on the Theresienwiese. My mother was frightened by the hateful attacks on the royal couple, the “Milli farmers” and the “Topfenresl”. The anarchist Erich Mühsam demanded - allegedly the first in Germany - "the deposition of the dynasties and the establishment of a free Bavarian soviet republic". Then demonstrations marched through the city and to the barracks; most of the soldiers chose the revolution. In the course of the night, all of Munich's important public buildings were occupied.
The King Ludwig III. (1845-1921) was surprised by the revolution. He certainly knew that the war was lost - that had long been clear to his son Rupprecht, who was in command at the front - and that the monarchy was in danger. But what more could he do now to avert the worst?
Then a workers 'and soldiers' council was formed, and on November 8, 1918, its first chairman appointed Kurt Eisner (1867-1919) presented his socialist cabinet as the new Prime Minister. The new government can easily establish itself; the ministers of the now-fled king, who were deposed by the revolutionaries, even instruct their successors in their office. Eisner is not an extreme and wants to solve the problems at hand in peace and quiet.
The power of the new government does not go far. There will soon be workers 'and soldiers' councils everywhere that the state government is reluctant to accept. Eisner falls into disrepute because he allegedly spoke of Germany's war guilt, denounced the Berlin government as not being revolutionary enough and striving for an independent Bavaria. On February 21, 1919, he was murdered by a right-wing fanatic on his way to Parliament, where he was about to abdicate after a devastating election defeat. This senseless murder becomes a beacon for the left, Eisner himself is considered a martyr.
After this murder, power fell to the councils, which, together with left-wing parties (SPD, USPD and KPD), form an action committee and elect a “Central Council of the Bavarian Republic” to take over government affairs. Becomes first chairman Ernst Niekisch (1889-1967) from the left wing of the SPD. A “Congress of Workers, Soldiers and Peasants' Councils”, which met in Munich at the end of February, then decided on the political future of Bavaria. A proposal Erich Mühsams (1878-1934) on the proclamation of the Soviet republic was rejected and power was transferred to the state parliament. This met on March 17th and 18th and put a government under Johannes Hoffmann (1867-1935), which could not prevail.
The left camp was divided. Political slogans and rumors whip up the workers, the party leaders tacted, and the bourgeoisie feared Bolshevism. The news of the proclamation of the Hungarian Soviet Republic on March 21 struck like a bomb. In order to create a fait accompli, the "Bavarian Soviet Republic" was proclaimed on the night of April 6th to 7th. The Hoffmann government moved to Nuremberg and later to Bamberg. Radical socialists or anarchists like serious Great (1893-1939), Gustav Landauer (1870-1919) and Erich Mühsam (1878-1934) wanted to get serious about the utopia of a humane society. They saw a lack of political experience as an advantage.
In the following days (April 7th and 8th, 1919) the Soviet republic was proclaimed in large parts of Bayer, in the hope of an uprising of the masses. But in conservative Bavaria, the response, especially among the peasantry, remained minimal. The anarchist spook seemed to be over when on the night of Palm Sunday, April 13, the Social Democrat-led “Republican Protection Force” occupied the Wittelsbacher Palais and arrested several members of the council government. The next morning, however, spontaneously formed workers' services, under the leadership of the sailor and communist, succeeded Rudolf Egelhofer (1896-1919) to fight back the counterrevolution. A second Soviet republic was proclaimed, which even gained some popularity among the workers.
The situation of this second Soviet republic was actually hopeless from the start. Confined to Munich, isolated from the rest of the country, and threatened by advancing units of the Freikorps and the army. But the fanatical revolutionaries hoped for a miracle and did not give up. At Dachau they even achieved a small military success.
On May 1st, the Freikorps and government troops marched into Munich and met with little resistance. The "Red Army" Egelhofers had disbanded and most of the workers turned their backs on the councils. Unfortunately, the victorious "whites" resulted in shootings, also in retaliation for hostage murders by the Red Army soldiers who shot 2 soldiers and 8 members of the right-wing Thule Society on May 30th. In total there were at least 600 deaths, including Landau and Egelhofer. Around four thousand criminal cases followed, imposing harsh sentences on communists and anarchists.
The Soviet republics left an anti-communist trauma in the population of Munich. Even in old age, my mother remembered with disgust the “backpack Spartakists” who roamed the city as armed looters and frightened the bourgeoisie. My grandfather became an active member of the “residents' defense” in order to prevent another coup. Both suppressed the terror directed against the left from the right; for communism represented a diabolical ideology for the citizenry and the church, the fight against which justified every means.
Nobody can say to what extent the shock of the Soviet republics led to a shift to the right in the already conservative Bavaria, which alienated Bavaria from the Reich and later Hitler, as a staunch anti-communist, facilitated his ascent.
The revolutionary events in Munich, which are insignificant in a larger context, are exceptionally well documented with copious amounts of images Heinrich Hoffmann (1885-1957), who later became a personal photographer Adolf Hitler, and other photographers with their cameras were almost everywhere.
Beyer, Hans "Revolution in Bavaria", VEB Deutscher Verlag der Wissenschaft, Berlin 1988.
Bosl, Karl "Bayern im Umbruch", Oldenbourg, Munich 1969.
Herz, Rudolf / Halfbrodt, Dirk "Revolution and Photography, Munich 1918/19", Dirk Nishen, Berlin 1988.
Neubauer, Helmut "Munich and Moscow", Isar Verlag, Munich 1958.
In the summer of 1919 the “Weimar Constitution” was passed against the votes of the opposition, written by convinced democrats. The government was responsible to parliament, the possibility of a referendum restricted the sole rule of parliament. The head of state elected directly by the people, the Reich President, could override parliament in exceptional times with emergency ordinances. This paragraph 48 of the Weimar Constitution was to play a role from 1930 on that nobody could think of in 1919. For the time being, the empire seemed constitutionally organized.
However, the states had fewer freedoms than in the imperial era. In countries like Bavaria, with its long history as an independent state, they did not want to accept this centralism: the Bavarian center separated from the party as a whole and in Bavaria the “red republic” was rejected. Echoes from this time still affect the separation of CDU and CSU today.
How hostile powerful forces were to the new state became apparent on March 13, 1920. A Freikorps, die Ehrhardt Brigade, marched into Berlin and sat wolfgang Cap (1858-1922) as Reich Chancellor. The Reichswehr remained neutral, because "Reichswehr does not shoot the Reichswehr", as the chief of the troop office General Hans von Seeckt (1866-1936) said. After 5 days, Kapp had to flee because the workers called a general strike and the officials refused to cooperate. The republic's reputation had suffered.
The Treaty of Versailles
The newly established democratic government was faced with innumerable problems of all kinds; but the worst, which ultimately contributed decisively to the failure of the first German democracy, was still to come: the peace treaty. The harsh armistice terms made this treaty unlikely, but the facts then produced by the Allies exceeded the predictions of the worst pessimists.
On January 18, 1919, the day before the Germans elected their national assembly, representatives of the victorious powers met in Versailles. There was already symbolism in the choice of location, because exactly 48 years ago to the day Wilhelm I was proclaimed German Emperor at this location.
Germans were initially not allowed to take part in the negotiations; they could only hope for the American President and his humanity, who in his "14 Points" had conceived acceptable war aims. Indeed Wilson was no match for the European diplomats. Not just France's "tiger" Georges Clemenceau (1841-1929) hated and feared the Germans; also England's Prime Minister David Lloyd George (1863-1945) ran an election campaign in December 1918 with the slogan "Hang the Kaiser".
The citizens of both countries - England and France - were still under the impression of hateful war propaganda, which saw the Germans as the sole culprit for all the sufferings of recent years. Not to forget that the Allies would not have made it through the war without US help. Now the allies were immensely indebted to the United States and felt it was only fair to have the Germans pay off this debt.
On May 7, 1919, German delegates were given a practically finished contract of 440 articles, and the German negotiators were given 14 days in which to raise objections. In a tough exchange of notes, only a few, slight reliefs were achieved, and in Germany soon there was only talk of the “Dictation of Versailles”, especially its humiliating paragraphs Hitler supplied ammunition for his propaganda speeches for a decade.
As a result of the treaty permeated with hypocritical justice, Germany lost a tenth of its population - about half of which had German as their mother tongue -, an eighth of its country, most of its iron ore and a considerable part of its coal. All German patents were cashed out. Immeasurable values that were not even calculated because they were only intended to make amends for old injustices.
Of course, Germany also lost its colonies, which never brought in much; but not because it was defeated, but because the Germans, through their barbarism, had shown themselves to be unworthy of colonial possession. The fact that other nations had taken on far more guilt in their colonial policy - just think of the Congo - played no role in the victors who hyped justice.
Around Germany, Polish, Czech and Slovak nationalists were able to realize the dream of their own state, which unfortunately began with the oppression of the Germans now living on their territory.
The worst part was the reparations. They began with the immediate delivery of ships, locomotives, cables, etc. and made unbearable payments on the empire for decades. These ruinous humiliations were justified with the sole German guilt for the war, which was not explicitly stated in the treaty, but was fixed by a note from Clemenceau. Overall, this contract went even to the not exactly German-friendly one at the time Lloyd George too far when he said: "Now we have a contract that guarantees us war in twenty years".
A wave of indignation ran through Germany; even the most well-intentioned could not simply accept such a contract. The government Scheidemann resigned and the parliamentary groups in the National Assembly fought fiercely. But the Allies were adamant. Since a resumption of the war was out of the question, there was only the choice between accepting the treaty or invading Allied troops.
The government Gustav Bauer (1870-1944) had to accept their helpless situation and win the approval of the National Assembly for the "contract of shame". Foreign Minister Hermann Muller (1876-1931) and Minister of Transport and Colonial Affairs Johannes Bell (1868-1949) signed in Versailles on June 28, 1919. The insightful supporters of the signature, including Matthias Erzberger (1875-1921) were from then on defamed as "fulfillment politicians" by the right.
The fight on the Ruhr
As soon as the peace treaty was signed, the struggle against the treaty and the men who had signed it began. There was hardship and inflation in the country, and revolts broke out, which had to be bloodily suppressed. The reparations burden was heavy.
When Germany fell behind with its supplies to the Allies (a few rail loads of telegraph poles and coal were missing), the French Prime Minister let Raymond Poincare (1860-1934) on January 11, 1923, five French divisions invade the Ruhr area; Belgium joined with a division while England held back. So wanted Poicaré get what the Germans supposedly did not want to deliver.
People in Germany were outraged; In their common will to defend themselves against blackmail, the people showed a unanimity that had not been known since 1914. President of the empire Ebert and the imperial government proclaimed the "passive resistance". Industry, railways and traffic were idle. There were reprisals, bloody incidents, mass expulsions, assassinations and executions. At all political rallies it was said "Hands off the Ruhr area" and from France it echoed back: "The German bitch is still defending herself!".
The passive resistance led to a dead end and resulted in prohibitive costs in the long run. In view of the general emergency, it was hardly possible to implement tax increases, and so the only way left was to keep the printing press running. The Reichsmark fell into the abyss; on August 1, 1923, the dollar was already costing over one million Reichsmarks.
On August 12, the government of Wilhelm Cuno (1876-1933) in favor of Gustav Stresemann (1878-1929) abdicate.
"It is fair to say that the Great Depression was the most important event of the century so far because of its effects on human behavior - at least for Americans." John Kenneth Galbraith, 1975.
The "golden" twenties
In memories of the time after the First World War, people speak of the “golden twenties”, the “golden twenties”. During that decade, between 1920 and 1930, Europe slowly recovered from the wounds of war, and art and culture flourished. Many developments, the effects of which can still be felt today, such as the rise of the film industry, began back then. The German Reich, which was heavily burdened by the consequences of the war and reparations, also experienced a brief (sham) bloom.
This happy time, at least for the upper class and the intellectuals, came to an abrupt end with the stock market crash of 1929, which ushered in the most drastic global economic crisis to date.
This was preceded by a stock boom that encouraged many speculators to speculate in credit-financed stocks. Banks readily gave loans that appeared to be backed by stocks. As long as stock prices rose faster than lending rates piling up, it was good business. But no boom lasts forever; if the prices rose excessively, a “correction” followed every time. In the United States, the price slide began on October 24, 1929 (a “black” Thursday), which expanded into a terrifying price drop on “black Tuesday” October 29.
The shares deposited as security no longer covered the loans after the share price fell; the banks asked for their money back. Shares were sold in a panic. The courses fell and fell; frivolous speculators were bankrupt.
And this is what the facts looked like:
The New York Times stock index rose from 134 to 449 in late 1924 through the summer of 1929; more than three times as much in less than 5 years. In July 1932 this index stood at 58, a little more than an eighth of the high! Real estate fared no differently; temporarily they fell to a tenth of the 1929 value.
For fear of bank failures, many investors withdrew their cash deposits; half of American banks went bankrupt and the money entrusted to them by their customers was lost.
This crash was not limited to the United States. Due to the monetary entanglements (the European, especially the German, economy was largely supported by loans from the USA), the European and thus the world economy plunged into a deep crisis. Bankruptcies, layoffs, liquidations, production restrictions, falling prices and wage cuts dominated events around the globe, and the masses of unemployed people rose explosively.
In 1932 there was civil war in China, war in South America, oil war in Asia Minor. Industrial production and producer prices had fallen drastically and there were unemployed people everywhere (almost 7 million in Germany, 13 million in the USA).
A way out of this world depression had to be found!
Today we are of the opinion that this stock market crisis, as it usually occurs after overheating, should not have led to an economic crisis. The responsible heads of government thought too restrictively and did not act in a coordinated manner.
To the German Chancellor Heinrich Brüning (1885-1970) must be credited with the fact that he wanted to prove to the world how unattainable the reparations demands of the Versailles Treaty were. But also Herbert Hoover (1874-1964), the 31st President of the USA, knew no remedy for the Depression for his rich country. Both - Hoover and Brüning - had to vacate their posts.
In the US it was launched in January 1933 Franklin D. Roosevelt (1882-1945) President. Under the heading “New Deal”, he made state funds available and launched a variety of measures to stimulate the flagging economy.
In Germany, the crisis on January 30, 1933 helped Adolf Hitler (1889-1945) to the office of Reich Chancellor. Experts advised Hitler to adopt a program similar to that dared by Roosevelt. However, with the difference that the “Third Reich” invested primarily in armaments, while civil investments were planned in the USA.
Worldwide, the “free market economy” fell into disrepute, which supposedly oscillates between boom and crash. A time followed when exchange controls, high tariffs and quotas hampered world trade. To this end, the focus was on bilateral cooperation. Totalitarian economic methods, as in the USSR or in National Socialist Germany, could feel confirmed by the crisis caused by the free economy, and the politics of the "Berlin-Rome axis" was also in line with the trend of the time.
 Cf. on this in "Brief, scarce, curious" on page 446 "Slavery ended, racism remained".
 John Maynard Keynes (1883-1946) then provided the missing economic theory of “deficit spending” in 1936.
Ambrosius, Gerold "Social and Economic History of Europe in the 20th Century", CH Beck, Munich 1986.
Eyck, Erich "History of the Weimar Republic", Eugen Rentsch, Erlenbach-Zurich / Stuttgart 1954.
Fernau, Joachim "Germany, Germany above everything ...", Gerhard Stalling, Oldenburg 1952.
Friedell, Egon “Cultural History of the Modern Age”, CH Beck, Munich 1931.
Galbraith, John K. “Money”, Droemer-Knaur, Munich 1976.
Krummacher, FA; Wucher, Albert "The Weimar Republic", R. Löwit, Wiesbaden 1965.
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