Read The Downfall of Money: Germanys Hyperinflation and the Destruction of the Middle Class for Free Online Page B
Authors: Frederick Taylor
of Brest-Litovsk was received in Germany itself, there was celebration among the extreme nationalists, who were delighted by the dramatic extension of German occupation and control into territories long seen in such circles as ripe for incorporation into the Reich. 17 Even those who understood the treaty for the brutal thing it was experienced a certain weary relief that, on one front at least, the war had been brought to a victorious conclusion. Almost everyone hoped that triumph in the east might presage the breaking of the bloody stalemate in the west, to Germany’s advantage.
There was universal hope that the commitment of the new, independent Ukraine, which had signed a separate treaty with Germany, to supply the Reich with wheat would alleviate the now desperate shortage of bread. The treaty was popularly known as the ‘bread peace’, even though, as things turned out, disappointingly little of the grain from the fertile Ukrainian steppes ever found its way to the German civilian population before the fortunes of war and revolution made the treaty redundant. 18
Romania was also brought to its knees that spring. At the Treaty of Bucharest, signed in June 1918, Germany claimed Romania’s agricultural output and virtual ownership of the country’s crucial oil industry. This, too, was not a treaty to impress the world, and especially Germany’s vengeful enemies, with the Reich elite’s benign intentions.
Footnotes
* Formerly St Petersburg, later Leningrad, now once again St Petersburg.
3
From Triumph to Disaster
Then, as now, the international financial world respected power. By the time of the Bolshevik Revolution, the mark had depreciated in the currency markets to a rate of 7.29 marks to the US dollar, as opposed to 4.20 on the outbreak of war in 1914. Five months later, in March 1918, with the victorious conclusion of the war on the Eastern Front giving apparent grounds for optimism, it had climbed to 5.11, the strongest level for almost three years.
It may be that the firming up of the mark’s official value (to be distinguished from its informal or black market rate, and, more importantly, from its actual domestic purchasing power) was the result of renewed optimism in Germany and elsewhere about the country’s prospects in the war. If so, what it did not take into account was the fact that in other, perhaps less obvious, regards Germany’s situation had actually become decidedly worse.
A little less than two weeks before the Treaty of Brest-Litovsk was signed, American troops saw their first real action on the Western Front. Two dozen of them joined a French raid on enemy trenches near Chevregny in Picardy. German prisoners were taken. 1 It was an unremarkable event in itself, but the point was that these troops were among the million Americans who would join the Allied forces in France by July 1918. Moreover, even after July they were still arriving at the rate of 10,000 a day.
As Winston Churchill later wrote:
The impression made . . . by this seemingly inexhaustible flood of gleaming youth in its first maturity of health and vigour was prodigious. None were under twenty, and few over thirty. As crammed in their lorries they clattered along the roads, singing the songs of a new world at the tops of their voices, burning to reach the bloody field, the French Headquarters were thrilled with the impulse of new life . . . 2
The contrast with the state of Germany’s population, soldiers and civilians alike, could not have been more stark.
The spring of 1918 saw a rise in popular hopes that the war would finally turn in Germany’s favour. However, the situation for most of the Reich’s hard-working and long-suffering population remained in almost all other ways dire.
Although conditions were not quite as appalling as they had been during the ‘turnip winter’ of 1916-17, food prices were moving ever higher – where food was available. Rationing for basic foodstuffs had begun in 1915
There was universal hope that the commitment of the new, independent Ukraine, which had signed a separate treaty with Germany, to supply the Reich with wheat would alleviate the now desperate shortage of bread. The treaty was popularly known as the ‘bread peace’, even though, as things turned out, disappointingly little of the grain from the fertile Ukrainian steppes ever found its way to the German civilian population before the fortunes of war and revolution made the treaty redundant. 18
Romania was also brought to its knees that spring. At the Treaty of Bucharest, signed in June 1918, Germany claimed Romania’s agricultural output and virtual ownership of the country’s crucial oil industry. This, too, was not a treaty to impress the world, and especially Germany’s vengeful enemies, with the Reich elite’s benign intentions.
Footnotes
* Formerly St Petersburg, later Leningrad, now once again St Petersburg.
3
From Triumph to Disaster
Then, as now, the international financial world respected power. By the time of the Bolshevik Revolution, the mark had depreciated in the currency markets to a rate of 7.29 marks to the US dollar, as opposed to 4.20 on the outbreak of war in 1914. Five months later, in March 1918, with the victorious conclusion of the war on the Eastern Front giving apparent grounds for optimism, it had climbed to 5.11, the strongest level for almost three years.
It may be that the firming up of the mark’s official value (to be distinguished from its informal or black market rate, and, more importantly, from its actual domestic purchasing power) was the result of renewed optimism in Germany and elsewhere about the country’s prospects in the war. If so, what it did not take into account was the fact that in other, perhaps less obvious, regards Germany’s situation had actually become decidedly worse.
A little less than two weeks before the Treaty of Brest-Litovsk was signed, American troops saw their first real action on the Western Front. Two dozen of them joined a French raid on enemy trenches near Chevregny in Picardy. German prisoners were taken. 1 It was an unremarkable event in itself, but the point was that these troops were among the million Americans who would join the Allied forces in France by July 1918. Moreover, even after July they were still arriving at the rate of 10,000 a day.
As Winston Churchill later wrote:
The impression made . . . by this seemingly inexhaustible flood of gleaming youth in its first maturity of health and vigour was prodigious. None were under twenty, and few over thirty. As crammed in their lorries they clattered along the roads, singing the songs of a new world at the tops of their voices, burning to reach the bloody field, the French Headquarters were thrilled with the impulse of new life . . . 2
The contrast with the state of Germany’s population, soldiers and civilians alike, could not have been more stark.
The spring of 1918 saw a rise in popular hopes that the war would finally turn in Germany’s favour. However, the situation for most of the Reich’s hard-working and long-suffering population remained in almost all other ways dire.
Although conditions were not quite as appalling as they had been during the ‘turnip winter’ of 1916-17, food prices were moving ever higher – where food was available. Rationing for basic foodstuffs had begun in 1915
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