The Coming of the Third Reich (45 page)

The newly prominent political position of the army found expression in the appointment by Hindenburg, acting above all on the advice of senior officers, including Schleicher, of Müller’s successor as Chancellor. From the outset there was no attempt to appoint a government that would rest on the democratic support of the parties represented in the Reichstag. Instead, a ‘cabinet of experts’ would be put in place, with the intention of bypassing the Reichstag through the use of Hindenburg’s power to rule by emergency decree. Of course, the scope of rule by decree was limited, and many measures, above all the budget, still had to be approved by the Reichstag. Steps were taken to ensure that this did not appear as the inauguration of an authoritarian regime. The new cabinet included such well-known Reichstag politicians as Josef Wirth, a former Reich Chancellor, for the Centre Party, Hermann Dietrich, for the Democrats (renamed the State Party in July 1930), Martin Schiele, for the Nationalists, Julius Curtius, for the People’s Party, and Viktor Bredt, for the small Economy Party. But it did not include the Social Democrats, to whom Hindenburg and his advisers were unwilling to entrust the power of ruling by decree. Without the Social Democrats it had no parliamentary majority. But this did not seem to matter any more.

The new government was led by a man whose appointment as Reich Chancellor proved in retrospect to be a fatal choice. Superficially, the President’s nomination of Heinrich Brüning, born in 1885, as Reich Chancellor was defensible in democratic terms. As floor leader of the Centre Party’s deputies in the Reichstag, he represented the political force that more than any other had been the mainstay of parliamentary democracy in the Weimar Republic. But already by the time of his appointment the Centre, under the influence of its new leader Prelate Ludwig Kaas, was moving towards a more authoritarian position, more narrowly concerned with defending the interests of the Catholic Church. Moreover, Brüning himself was at best a fair-weather friend of Weimar democracy. A former army officer, he had been shocked by the November Revolution, and remained a staunch monarchist all his life. In his memoirs, indeed, he portrayed the restoration of the monarchy as his main purpose after becoming Chancellor. Yet in doing so he was probably lending retrospective coherence to a political career that was dominated, like that of so many politicians, by short-term imperatives.
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Despite his inner conviction that a return to the Bismarckian system would be best for all, he had no detailed plan to restore the monarchy, let alone bring back the Kaiser. Nevertheless, his instincts were authoritarian at heart.
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He planned to reform the constitution by reducing the power of the Reichstag and combining the offices of Reich Chancellor and Prussian Minister-President in his own person, thus removing the Social Democrats from their dominance of Germany’s largest state. Brüning did not have sufficient backing from Hindenburg to put this idea into effect, but it remained on the table, ready for anyone to use who did. Brüning also began to restrict democratic rights and civil liberties.
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In March 1931, for instance, he introduced sharp curbs on the freedom of the press, especially when it published criticisms of his own policies. By mid-July the liberal
Berlin Daily News-Sheet
(
Berliner Tageblatt
) was estimating that up to a hundred newspaper editions were being banned every month across the country. By 1932 the Communist newspaper
The Red Flag
was being banned on more than one day in three. Press freedom was seriously compromised long before the Nazis came to power.
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In effect, Brüning thus began the dismantling of democratic and civil freedoms that was to be pursued with such vigour under the Nazis. Some, indeed, have argued that his much-criticized economic policy during the crisis was in part designed to weaken the trade unions and the Social Democrats, two of the main forces that kept Weimar democracy afloat.
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To be sure, Brüning was not a dictator and his appointment did not mark the end of Weimar democracy. Brüning had not reached his position in the Centre Party without becoming adept at political calculation and manoeuvre, or skilled in constructing political coalitions and alliances. He had won himself a considerable reputation as a specialist on finance and taxation, and a man who knew his way around in these often rather technical areas was clearly needed at the helm in 1930. But the room for manoeuvre was becoming rapidly narrower after 1930, not least because of his own catastrophic political miscalculations. And even his staunchest defenders have never maintained that he was a charismatic or inspiring leader. Austere in appearance, secretive, inscrutable, given to taking decisions without sufficient consultation, denied the gift of rhetoric, Brüning was not the man to win mass support from an electorate increasingly appalled at the economic chaos and political violence that were plunging the country into a crisis whose dimensions beggared even those of 1923.
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II

Brüning’s major task was to deal with the rapidly deteriorating economic situation. He chose to do this by radically deflationary measures, above all by cutting government expenditure. Government revenues were sinking fast, and the possibilities of borrowing to meet the state’s obligations were virtually non-existent. Moreover, while Germany’s currency had been stabilized after the great inflation of 1923 by tying it to the value of gold, it was by no means clear that it had been stabilized at the right level. The values arrived at were regarded as sacrosanct, however, so that the only way of dealing with a currency that became overvalued, because its reserves were being drained by a balance of payments deficit, was to cut prices and wages and raise interest rates at home.
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Finally, reparations still loomed over the German economic scene, even though they had been rescheduled and in effect substantially reduced by the Young Plan in the summer of 1930. Brüning hoped to cut German domestic prices by reducing demand, and so make exports more competitive on the international market, a policy by no means unwelcome to the export manufacturers who were among his strongest supporters.
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This was not a very realistic policy at a time when world demand had slumped to an unprecedented degree.

Cuts in government expenditure came first. A series of measures, culminating in emergency decrees promulgated on 5 June and 6 October 1931, reduced unemployment benefits in a variety of ways, restricted the period for which they could be claimed, and imposed means-testing in an increasing number of cases. The long-term unemployed thus saw their standard of living being steadily reduced as they went from unemployment insurance pay onto state-financed crisis benefits, then local authority welfare support and finally no support at all. By late 1932 there were only 618,000 people left on unemployment insurance pay, 1,230,000 on crisis benefits, 2,500,000 on welfare support and over a million whose period of joblessness had run through the time-limits now set on all of these and so lacked any kind of regular income.
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Whatever Brüning’s wider aims might have been, growing poverty made the economic situation worse. People who were barely in a situation to supply themselves and their families with the basic necessities of life were hardly going to spend enough money to stimulate industry and the service sector into recovery. Moreover, fear of inflation was such that even without the international agreements (such as the Young Plan) that depended on maintaining the value of the Reichsmark, devaluation (the quickest way to boost exports) would have been politically extremely hazardous. In any case, Brüning refused to devalue, because he wanted to demonstrate to the international community that reparations were causing real misery and suffering in Germany.
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In the summer of 1931, however, the situation changed. A fresh crisis hit the economy as the flight of capital reached new heights, leading to the collapse of the Darmstadt and National (or Danat) Bank, heavily dependent on foreign loans, on 13 July, and threatening a collapse of credit more generally.
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The impossibility of baling out the German government with foreign loans had become starkly clear in any case: one calculation estimated that the amount required to cover the budgetary deficit in Germany would be greater than the entire gold reserves of the United States. International financial co-operation had been made effectively impossible by the rigidities imposed by the Gold Standard. Brüning and his advisers saw no alternative but to put a stop on the convertibility of the Reichsmark, a step they had been so far reluctant to take because of their fear that it would cause inflation. From this point onwards, therefore, the Reichsmark could no longer be exchanged for foreign currency.
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This rendered the Gold Standard meaningless as far as Germany was concerned, allowing a more flexible approach to monetary policy, and permitting an expansion of the currency supply that could, theoretically at least, ease the government’s financial situation and allow it to begin reflating the economy through job-creation schemes.
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Fatally, however, Brüning refused to take such a step, because he was nervous that printing money that was not tied to the value of gold would cause inflation. Of all the long-term effects of the German inflation, this was probably the most disastrous. But it was not the only reason why Brüning persisted with his deflationary policies long after feasible alternatives had become available. For, crucially, he also hoped to use the continuing high unemployment rate to complete his dismantling of the Weimar welfare state, reduce the influence of labour and thus weaken the opposition to the plans he was now concocting to reform the constitution in an authoritarian, restorationist direction.
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The bank crisis put into Brüning’s hands another card that he was unwilling to use. In view of the flight of foreign funds from the German economy in the spring and early summer of 1931, reparations payments, along with other international capital movements, were suspended by the Hoover Moratorium, issued on 20 June 1931. This removed another political constraint on the freedom of manoeuvre of the German government. Up to now, almost any economic policy it had undertaken - such as increasing taxes, or boosting government revenue in some other way - had run the risk of being accused by the far right of contributing to the hated reparations payments. This was now no longer the case. Yet for Brüning this was not enough. It was still possible, he thought, that once the crisis was over the Moratorium would be lifted and demands for reparations payments would resume.
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So he did nothing, even though the means of escape were now there and voices were already being raised in public in favour of stimulating demand through government-funded job-creation schemes.
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Brüning’s deflationary stance could not be shaken. The events of 1931 made the Depression even worse than before. And it showed no signs of ending. Brüning himself told people that he expected it to last until 1935. This was a prospect that many, and not just amongst the unemployed and the destitute, found too appalling to contemplate.
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Soon Brüning, who issued another emergency decree on 8 December requiring wages to be reduced to their 1927 level and ordering a reduction of various prices, was being called ‘the Hunger Chancellor’.
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Satirists compared him to the mass-murderer of the early 1920s, Fritz Haarmann, whose habit of chopping up the bodies of his victims was the occasion of a nursery-rhyme used to frighten small children and still repeated in Germany today:

Wait a while and just you’ll see,
And Bruning will come up to you
With the ninth emergency decree
And make mincemeat out of you.
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There never was a ninth emergency decree; but even after promulgating only four of them, Brüning found himself the most unpopular Chancellor there had yet been in the Weimar Republic.
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III

Like many traditional conservatives, Brüning wanted to curb or emasculate the rabid radicalism of the extreme right, and at times showed some courage in attempting to do so. Like them, however, he also underestimated its power and influence. His adherence to what he regarded as Prussian virtues of piety, objectivity, non-partisanship and selfless service to the state derived not least from the patriotic traditions of the Centre Party since Bismarck’s attack on the supposed national disloyalty of the Catholics in the 1870s. It gave him a lasting distrust of party politics, and an instinctive faith in the political reliability of a Prussian political icon such as President Hindenburg - a faith that turned out in the end to be completely misplaced.
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Moreover, this was not Brüning’s only fateful miscalculation. From the outset, he used the threat of wielding Hindenburg’s power under Article 25 of the constitution to call new Reichstag elections to bring the Social Democrats, the major oppositional force, into line. When they joined with the Nationalists and the Communists in refusing to approve a starkly deflationary budget, he had no hesitation in putting this threat into action and brought about a dissolution of the Reichstag. Ignoring the evidence of local and regional elections that had brought massive gains for the Nazis, the Social Democrats assumed that voters would continue to act along well-worn lines, and had every hope of a result that would provide sufficient support for their way of thinking. Like many Germans, Brüning and his political opponents on the left still found it impossible to take the Nazis’ extremist rhetoric and bullying tactics on the street as anything other than evidence of their inevitable political marginality. They did not conform to the accepted rules of politics, so they could not expect to be successful.
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