When Germany defaulted on war reparations in December 1922, French and Belgian forces occupied the Ruhr region, Germany’s industrial heartland, to force payment. At the urging of the Weimar government, Ruhr authorities and residents launched passive resistance; shop owners refused to sell goods to the foreign troops, and coal miners and railway employees did not work. Both Germany and France suffered financial losses as a result. Following United States intervention, in August 1924, the two sides agreed on the Dawes Plan , where German reparations payments were restructured, and the U.S. and British government extended loans to help with Germany’s economic recovery. French troops then withdrew From the Ruhr region. Subsequently in August 1929, with the adoption of the Young Plan , Germany’s reparations obligations were reduced and payment was extended to a period of 58 years. As a result of these and other measures, including stronger fiscal control, introduction of a new currency, and easing bureaucratic hurdles, Germany’s economy recovered and expanded during the second half of the 1920s. Reparations were made, foreign investments entered the domestic market, and civil unrest declined.
(Taken from Weimar Republic – Wars of the 20th Century – World War II in Europe)
Near the end of World War I, Germany was beset by severe internal tumult, as industrial workers, including those involved in war production, launched strike actions that were fomented by communist political and labor groups that long opposed Germany’s involvement in the war. Then in late October-early November 1918 when German defeat in the war became imminent, German Navy sailors at the ports of Wilhelmshaven and Kiel mutinied, and refused to obey their commanders who had ordered them to prepare for one final decisive battle with the British Navy. Within a few days, the unrest had spread to many cities across Germany, sparking a full-blown communist-led revolt (the German Revolution) that peaked in January 1919, when democracy-leaning forces quelled the uprising. But in the chaos following German defeat in World War I, the monarchy under Kaiser (King) Wilhelm II ended, and was replaced by a social democratic state, the Weimar Republic (named after the city of Weimar, where the new state’s constitution was drafted).
The Weimar Republic, which governed Germany from 1919-1933, was permanently beset by fierce political opposition and also experienced two failed coup d’états. A full spectrum of opposition political parties, from the moderate to radical right-wing, ultra-nationalist, and monarchist parties, to the moderate to extreme left-wing, socialist, and communist parties, wanted to put and end to the Weimar Republic, either through elections or by paramilitary violence , and to be replaced by a political system suited to their respective ideologies. One radical political movement that emerged at this time was the National Socialist German Workers’ Party, which came to be known in the West as the Nazi Party, and its members called Nazis, and led by Adolf Hitler. The Nazis participated in the electoral process, but wanted to end the Weimar democratic system. Hitler denounced the Versailles treaty, advocated totalitarianism, held racial views that extolled Germans as the “master race” and disparaged other races, such as Slavs and Jews, as “sub-humans”. The Nazis also were vehemently anti-communist and advocated lebensraum (“living space”) expansionism in Eastern Europe and Russia.
A common theme among right-wing, ultra-nationalist, and ex-military circles was the idea that in World War I, Germany was not defeated on the battlefield. Rather, German defeat was caused by traitors, notably the workers who went on strike at a critical stage of the war and thus deprived soldiers at the front lines of their much-needed supplies. As well, communists and socialists were to blame, since they fomented civilian unrest that led to the revolution; Jews, since they dominated the communist leadership; and the Weimar Republic since it signed the Versailles treaty. This concept, called the “stab in the back” theory, postulated that in 1918, Germany was on the brink of victory , but lost after being stabbed in the back by the “November criminals”, i.e. the communists, Jews, etc. After coming to power, the Nazis would appropriate the “stab in the back” theory to fit their political agenda in order to denounce the Versailles treaty, suppress opposition, and establish a dictatorship.
Germany, financially ravaged by the war, was hard pressed to meet its reparations obligations. The government printed enormous amounts of money to cover the deficit and also pay off its war debts, but this led to hyperinflation and astronomical prices of basic goods, sparking food riots and worsening the economy. Then when Germany defaulted on reparations in December 1922, French and Belgian forces occupied the Ruhr region, Germany’s industrial heartland, to force payment. At the urging of the Weimar government, Ruhr authorities and residents launched passive resistance; shop owners refused to sell goods to the foreign troops, and coal miners and railway employees did not work. Both Germany and France suffered financial losses as a result. Following United States intervention, in August 1924, the two sides agreed on the Dawes Plan , where German reparations payments were restructured, and the U.S. and British government extended loans to help with Germany’s economic recovery. French troops then withdrew From the Ruhr region. Subsequently in August 1929, with the adoption of the Young Plan , Germany’s reparations obligations were reduced and payment was extended to a period of 58 years. As a result of these and other measures, including stronger fiscal control, introduction of a new currency, and easing bureaucratic hurdles, Germany’s economy recovered and expanded during the second half of the 1920s. Reparations were made, foreign investments entered the domestic market, and civil unrest declined.
The Versailles treaty was a heavy blow to the German national morale, and was seen as a humiliation to the Weimar state, which had been forced by the Allies to agree to it under threat of continuing the war. From the start, the Weimar government was determined to implement re-armament in violation of the Versailles treaty. Throughout its existence from 1919-1933, the Weimar Republic carried out small, clandestine, and subtle means to build its military forces, and was only restrained by the presence of Allied inspectors that regularly visited Germany to ensure compliance with the Versailles treaty. These methods included secretly reconstituting the German general staff, equipping and training the police for combat duties, and tolerating the presence of paramilitaries with an eye to later integrate them as reserve units in the regular army.
Also important to Germany’s secret rearmament was the Weimar government’s opening ties with the Soviet Union. Relations began in April 1922 with the signing of the Treaty of Rapallo, which established diplomatic ties, and furthered in April 1926 with the Treaty of Berlin, where both sides agreed to remain neutral if the other was attacked by another country. In the aftermath of World War I, the Germans and Soviets saw the need to help each other, as they were outcasts in the international community: the Allies blamed Germany for starting the war, and also turned their backs on the Soviet Union for its communist ideology.
Military cooperation was an important component to German-Soviet relations. At the invitation of the Soviet government, Weimar Germany built several military facilities in the Soviet Union; e.g. an aircraft factory near Moscow, an artillery facility near Rostov, a flying school near Lipetsk, a chemical weapons plant in Samara, a naval base in Murmansk, etc. In this way, Germany achieved some rearmament away from Allied detection, while the Soviet Union, yet in the process of industrialization from an agricultural economy, gained access to German technology and military theory.