The Downfall of Money: Germany’s Hyperinflation and the Destruction of the Middle Class
‘Kerensky Offensive’ after the socialist firebrand who had been appointed Defence Minister in March) collapsed within a couple of weeks, turning into a full-scale rout accompanied once more by massive desertions. The catastrophe brought German forces deep into Russia proper, their capacity to advance at will hindered by little except problems of transport and supply.
    By early November (October under the old calendar still used in Russia, and hence always celebrated as the ‘October Revolution’), a coup in Petrograd brought to power the far-left Bolshevik party. It was led by the brilliant Marxist theorist and agitator Vladimir Ilyich Lenin, whose passage from Swiss exile back to Russia during the summer had been arranged by the German authorities precisely in order to facilitate Russia’s exit from the war.
    Sure enough, negotiations between the Bolsheviks – committed to ending the war and desperate to consolidate their uncertain grip on power – and the representatives of the triumphant Central Powers led in December to an armistice on the Eastern Front. Further negotiations soon stalled, however. The recently appointed Bolshevik Commissar for Foreign Affairs, Leon Trotsky, defied Lenin’s wishes and held out against the tough German and Austro-Hungarian demands – possibly in the hope that, if the war dragged on, discontent in the enemy countries, like that in Russia during the earlier part of the year, might yet bring about revolutions in Berlin, Vienna and Budapest. Finally, in February 1918, talks broke down. The Germans and their allies resumed their all but unopposed advance into Russia, within just a couple of weeks of taking control of further huge areas of Ukraine and Belarus. At one point, they managed to push forward 150 miles in a little over five days. 16
    On 3 March 1918, with the advancing Germans drawing close to Petrograd, the Bolshevik leadership at last agreed terms. A treaty was signed at a ceremony in the imposing early nineteenth-century tsarist fortress of Brest-Litovsk, on the border between historic Poland and Russia, which had been in German hands since August 1915. Leading the Bolshevik delegation was Trotsky’s deputy, Georgi Chicherin, a close ally of Lenin.
    So what price was the revolutionary clique in control of Petrograd prepared to pay? The cost of peace was, in fact, a lot worse than the one the Bolsheviks had rejected earlier in the winter. The new Marxist Russia was forced to acknowledge the loss of Poland, the Baltic lands, plus Finland, Ukraine and Belarus. Georgia became independent, and strategic parts of the Caucasus were ceded to Turkish control.
    The areas forfeited contained a third of the former Russian Empire’s population, a third of its arable land and nine-tenths of its coal mines. At a stroke, the Bolsheviks abandoned virtually all the territory Russia had gained since the eighteenth century, and their domain was reduced almost entirely to the ancestral Russian-speaking lands. Huge swathes of the Tsars’ Russia became effectively a German protectorate. Although technically both sides renounced any claim on conventional war reparations, after further negotiations the Bolsheviks also agreed to pay a sum of 6 billion gold marks. This supposedly represented restitution for German property and businesses confiscated as a result of war and revolution, as well as the Bolsheviks’ default on pre-war tsarist bonds bought by German investors.
    With the Germans so uncomfortably close to Petrograd, a little more than a week after signing the treaty the Bolsheviks moved their capital back to the relative safety of Moscow, which had been the seat of the Tsars until the time of Peter the Great. The centre of gravity of the new revolutionary republic switched therefore almost 400 miles inland and south-eastwards, away from the Baltic and the occidental influences to which Peter the Great, Petrograd’s builder, had been so eager to expose his subjects.
    As to how the Treaty

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