The Rise of the Third Reich

"269 billion gold marks! God, how can they ask for so much? How much gold is that equivalent to? Sixty thousand tons or seventy thousand tons..."

It is January 28, 1921, and the presidential palace in Berlin is in chaos. President Ebert walked around the room angrily, Chancellor Konstantin Fehrenbach (Catholic Center Party) sat silent on the sofa, Defense Minister Otto Gessler stood transfixed at the window, and the Transport Minister Admiral William Groener was breathing heavily.

From the second half of 1920 to the present, the Weimar Republic's economy has improved slightly. Thanks to orders from Soviet Russia and the Baltics, Germany's industrial production began to recover. Government revenue also increased. In the last few months of 1920, revenue could cover nearly 70% of expenditures, and the currency value of the mark also remained stable. Seeing that the German economy was likely to recover in 1921, the Allied Reparations Commission gave the Weimar Republic a blow! No, not a blow, but a time bomb tied to the Weimar Republic!

Britain and France announced the death of the Weimar Republic with an astronomical compensation of 269 billion gold marks - which was unpayable in the era of the gold standard!

The Weimar Republic had no economic future, and the mark, which was guaranteed by gold and national credit, could not escape the fate of becoming a waste paper. Even if it does not become waste paper, Germany's monetary sovereignty has been lost. From now on, it can only rely on British and American borrowings - relying on foreign borrowings as guarantees for the issuance of banknotes, and allowing the German Reichsbank (central bank) to accept de facto international condominium. (Half of the members of the Reichsbank's General Council are foreigners). The essence of the so-called "Dawes Plan" lies in this. It cannot save the Weimar Republic, but can only delay its destruction.

It can be said that when the Allied Compensation Commission announced this compensation figure, it was destined that German tanks would run rampant on the European continent.

But on January 28, 1921, few people could have predicted such consequences, including those in President Abbott's office. They just see the reality clearly now: the demise of the Weimar Republic is certain, and no one can save the regime that brought democracy to Germany...

"Constantine, what should we do?" President Albert looked at his political opponent, Konstantin Fehrenbach, chairman of the Catholic Center Party who serves as prime minister, with almost despair.

"Mr. President, we can't get it!" Konstantin Fehrenbach also felt desperate. Current fiscal revenue can only cover 70% of expenditures, which means that 30% of expenditures are maintained by printing money. With such a financial situation, let alone 269 billion gold marks, even one-tenth of this figure cannot be provided.

"If they don't get it, they will occupy the west bank of the Rhine!" Albert looked at Defense Minister Gessler and Transport Minister Groner again. This is actually asking the two of them how much resistance Germany still has.

The two looked at each other and shook their heads at the same time. Gesler said: "There are only 200,000 soldiers in the army now, and there are not many heavy weapons and no aircraft. It is impossible to resist."

Groener said: "The Baltic Republic still has 45,000 defense troops, but they can quickly expand to 150,000. Before signing the Treaty of Versailles, we will also have 1,500 cannons of various types and 10,000 machine guns. and 500,000 steel helmets, as well as a large number of artillery shells and bullets hidden in Miuta. In addition, the Baltic Defense Forces have now established an air force with 200 very superior aircraft near Riga. The manufacturing complex and the factories of the Junkers-Fokker Aircraft Company (which was established at the end of 1920 to specialize in the production of large transport aircraft) can deliver about 100 aircraft per month if we need them..."

"Okay, I get it!" President Albert's face looked slightly ugly. Hiding so many weapons in the Baltic Republics was a clear violation of the Compiègne Agreement and the subsequent Treaty of Versailles. And what's worse is that as president, he didn't know anything about it before!

"It seems that we can resist for a while!" Albert said, "Refuse! Then we can negotiate to reduce the compensation to 50 billion gold marks and postpone the payment for another four years, so that we may be able to sustain it."

…

"If we do not count the gold we have in Switzerland, the entire German financial system, including the reserves of the Reichsbank, the total of all gold, silver and foreign exchange is only equivalent to about 2.3 billion gold marks..."

In the Charlottenburg district, inside the headquarters of the Economic Development Corporation. An emergency meeting was also held at this time. In addition to several members of the Industrial Promotion Committee, including Hersmann, Schleicher, R. Haushofer, Colonel Schleicher, and Dr. Schacht, the meeting was attended by , that is, Chief of the General Staff Seeckt, General Ludendorff who has established a cooperative relationship with the National Socialist German Workers' Party, and Colonel Oskar von Hindenburg, the son of Field Marshal Hindenburg. In addition, there are Two members of Congress, Gustav Stresemann of the People's Party and Colonel von Papen of the Center Party.

Dr. Schacht, the general manager of the National Bank, first told everyone about the entire German financiers. After successively handing over gold coins, foreign exchange, precious metals and physical objects (mainly physical objects) worth 20 billion gold marks, Germany really does not have much wealth left.

“We also spent a lot on gold stored in Switzerland,” Schacht added. “A quarter of it (worth 600 million gold marks) was lent to the Baltic Republics to prepare for the issuance of the Baltic Mark. In addition, The same amount of gold was used to establish a 'Special Overseas Investment Fund' to support large German industrial companies in transferring production capacity overseas or acquiring heavy industry and mining companies in the former Austro-Hungarian Empire... But even if the Swiss gold was not used, It’s impossible for us to pay compensation of 269 billion gold marks. I think they understand this, so they don’t really want us to pay.”

"You don't really want compensation?" Ludendorff asked angrily, "Then what do they mean?"

Hersmann said: "They are fighting a currency war with the goal of destroying Germany's monetary and financial sovereignty!"

Ludendorff looked at Dr. Schacht, who nodded: "Yes, the Lieutenant Colonel is right. If they really want us to compensate, they can ask us to repair towns, factories and railways in Belgium and northern France." … If we can keep all the gold and foreign exchange as the basis of the mark, we can raise funds by issuing bonds and printing money, and let German companies and workers repair those things. This is not the same as taking the gold directly!”

If the Germans are asked to repair what is broken, then the German government pays businesses and workers in paper marks that can be printed out. In addition, companies will generate profits and pay taxes, and workers will receive wages to stimulate consumption, thus driving economic development. Of course, the mark will also depreciate as a result, but the extent of the depreciation is controllable because the government and the Imperial Bank have large amounts of gold and foreign exchange reserves. You can take action to support the market when necessary. But once Germany loses most of its gold and foreign exchange, and there is no government that can strongly control the German economy - such as the governments of Nazi Germany and Soviet Russia - then the currency can be redeemed at any time (that is, paper currency is linked to gold). convertible) era, Germany’s credit currency system will not be able to maintain, and the collapse of the currency system will be quite fatal to the German economy!

Schacht finally said in an extremely low tone: "So, they are not asking us to pay reparations, but they are launching a currency war aimed at destroying the German economy!"

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