The Downfall of Money: Germany’s Hyperinflation and the Destruction of the Middle Class by Frederick Taylor Read Free Book Online Page B

By the next year, Liebknecht was no longer alone. Within two years the Social Democratic Party (SPD) had split down the middle, and the anti-war left mushroomed as the bloody struggle continued, seemingly without sense or end. By the third and fourth years of the war, although the large majority of Germans of all classes remained committed to victory, a substantial proportion of the population, including socialist, Catholic and liberal Reichstag deputies, had turned in favour of either a negotiated compromise peace or even peace at any price. In July 1917 a majority of the Reichstag, in a telling act of defiance which showed how far the split within the nation had widened, ignored pleas from the government and the High Command and passed a resolution calling, albeit in ringing patriotic phrases, for just such a negotiated peace without annexations on either side.
    In reaction to the Peace Resolution, on 2 September 1917 the nationalist and radical right, supported behind the scenes by the political soldiers within the High Command, created an organisation devoted to uniting all groups and individuals in Germany committed to conquest, annexations and a fight to the bitter end. Called the ‘Fatherland Party’ ( Vaterlandspartei ), by July 1918 it could claim a million and a quarter members. 11 This figure, if accurate, gave it a bigger membership than the Social Democratic Party, hitherto the largest political grouping in the country. However, it is questionable whether the Fatherland Party was really a ‘party’ at all – any more than, under the Obama administration of the present century, America’s ‘Tea Party’ is a political party – but actually a pressure group, albeit a very impressive one during its heyday. 12
    The war had been a disaster for most of the population in Germany, as it had in every country involved except America. The polarisation within the Reich reflected the different situations of different sections of society. Those industrialists involved in supplying arms and equipment for the war effort had done well – in some cases spectacularly so, with some large firms achieving dramatic growth. Others, especially in consumer goods and services, had suffered disastrous declines in production and profits. By 1918, for instance, the number of males employed in the textile industry was only a quarter of what it had been in 1913, with even the female workforce only three-fifths of its pre-war strength. Numbers in the building industry had more than halved. 13
    Overall, taken throughout the war years, industrial production in Germany had declined by between a quarter and a third, more than that of any of the Entente powers.
     
    Indices of industrial production (1914 = 100) 14
     
    Germany
Britain
Russia
Italy
1914
100
100
100
100
1915
81
102
115
131
1916
77
97
117
131
1917
75
90
83
117
1918
69
87
83
117
     
    Increases in the production of weapons and other materiel of war contrasted with a related decline in consumer manufacturing and non-war-related services. This became especially pronounced after the ‘Hindenburg Programme’ was inaugurated in late 1916, a greatly, in fact almost grotesquely, accelerated armaments production programme that threw all consideration of Germany’s actual material and human resources to the wind. It resulted in an even more distorted economy by war’s end. 15
    The wine and tobacco harvests proved bumper ones, but other food products suffered badly. Production of beer in Germany, for instance, was reduced by two-thirds in the course of the war. Agriculture in general was hit by severe manpower shortages (the army took no account of the crucial nature of food production when scouring the countryside for recruits) and shortages of imported fertilisers due to the British blockade. Production of wheat was halved. 16 The shipping industry, hit by the slump in trade and the Entente blockade, with many of its vessels either marooned in neutral ports or seized by the enemy,