As we have seen in part one, Article 231 of the Versailles treaty, the much maligned ‘war guilt paragraph,' did not assign war guilt to Germany. It was not the ‘burden’ caused by reparation demands that stood behind the calamitous collapse of the Weimar economy which accompanied the massive defection of middle-class voters to the Nazi Party from the late 1920s onward.

However, as we shall see, after the wounds left by the bitter division over Germany’s role in the war, chances that a united workers’ movement would give strength to the newborn Weimar Republic were slight.

When the armistice presaged the terms of the Versailles Treaty, many Germans did not realize the extent of German military defeat. Many Germans thus came to think that they had not lost the war. Its armies during the war had inflicted stunning defeats on Germany’s foes, especially in the east, and little of German soil had been occupied by Allied troops either during the war or in defeat. The military elite mounted a successful campaign in the 1920s to attribute the final German collapse to a “stab in the back” by enemies at home, particularly socialists, liberals, and Jews. This legend was rooted in stereotypes developed during the war and used established psychological dispositions.

When General Erich Friedrich Wilhelm Ludendorff (1865–1937) had to recognize that his war was lost in September 1918, he put the full blame for the defeat on the politicians in Berlin and asked them to sign the necessary armistice. Although Ludendorff’s outburst of fury was not public in the years following the war, millions of Germans were convinced of conspiracy theories.

Rather than the Versailles Treaty as such most historians now agree that these stab-in-the-back legends destabilized the Weimar democracy to a very high degree and contributed to the rise of National Socialism.

On 6 June 1920, a new Reichstag election was held. The result was a bitter blow for the SPD and its policies. Its share of the vote almost halved from 38 per cent to just over 21 percent. Its opponents in the labor movement, the Independent Socialists (at 17.9 per cent) and the newly founded Communist Party, which had emerged from the Spartacists (2.1 percent), together almost matched the SDP vote.

The Independent Socialists enjoyed their election success only briefly. The party split four months after the 6 June election over the issue of admission to the Third International, which Lenin had established in Moscow in 1919. The main conditions of entry required the adoption of the name ‘Communist Party’, and a firm commitment towards working for a proletarian revolution. Of the 900,000 party members, only a third supported common cause with the communists. Subsequent elections showed that the Independent Socialists had no electoral appeal, and they disappeared from the political scene. The Communist Party became the third largest in the Reichstag, gaining between 12 and 14 percent of the vote in all subsequent Reichstag elections. This following was not enough to challenge, let alone topple, the political, economic, or military establishment of the Republic, but it was enough to ensure that fear of communism remained a key issue until the Nazi ‘seizure of power’. The Bolshevik threat joined the Treaty of Versailles as the chief specter haunting Weimar Germany’s political life and, in the opinion of many Germans, was the chief reason for the Republic’s inglorious end.

The SPD recovered from the setback of the June 1920 election. It continued working constructively for the success of democracy, occasionally joining multi-party coalitions, even forming a government itself for a brief period. But it was to no avail in the end. When an Austrian lance-corporal managed to established himself at the helm, communists and social democrats alike ended up in concentration camps, where few survived. Although labor movements worldwide were affected by the success of the Bolsheviks in the Russian Revolution and their subsequent attempt to take over workers’ movements everywhere, nowhere was the resulting split so harmful as in post-war Germany.

 

Weimar politics and the Versailles Peace Treaty

The Weimar constitution was among the most advanced in the world. There was universal suffrage, with all men and women above the age of 21 having the right to vote. The provision was made for small parties to have a voice in the Reichstag: under a system of proportional representation, each political party was entitled to one member for every 60,000 votes received. There was no censorship of the press, and freedom of speech, as well as political, religious, and artistic expression, was guaranteed. The union movement was legalized — a longstanding goal of the German labor movement — and the eight-hour day, minimum wages, collective bargaining, and unemployment payments were decreed. Above all, an impressive free and comprehensive health and welfare system for all citizens were introduced (as it turned out, a fair share of these generous schemes were paid for with American money). 2 Organised labor in small to medium enterprises fared well. Industrial barons in the huge iron, steel, and mining industries, however, were as reluctant as ever to abandon their ‘Herr im Haus’ (master in the house) stance, and firmly opposed these welfare policies and the system of collective bargaining. Not surprisingly, many of the workers in their plants turned to communism.

Proportional representation did not necessarily assist with the formation of stable coalition cabinets, but the claim that Weimar’s electoral system undermined government does not bear scrutiny. 3 More serious shortcomings of the Weimar constitution were articles providing the president with emergency powers: article 53 allowed for the dismissal of cabinets at will; Article 25 enabled the president to dismiss the Reichstag at any time and to call new elections; and, in particular, Article 48 provided sweeping emergency powers enacting rule by decree and e of the army in times of trouble. Although article 48 was intended to be used only in exceptional circumstances, Weimar’s first President, Ebert, applied it 136 times. During the Ruhr conflict of 1920, he frequently enforced the article to give post-facto legal sanction to summary executions of members of the workers’ Red Army. 4 In the final years of the Republic, President Hindenburg’s continuous reliance on Article 48 contributed to the rise of the Nazis.

The June Reichstag election saw the vote of the three democratic parties — the SPD, the Catholic Centre Party, and the German Democratic Party or DVD, the successor of the pre-war left-liberal Progressive People’s Party, reduced from 76.2 per cent to 43.6 per cent. They were not able to form a government in their own right in subsequent elections, and the government could only be formed in co-operation with opponents of Weimar’s political system. A coalition with the communists — detested by the other parties as much as the communists detested them — was out of the question. There were two right-wing parties. The German National People’s Party or Nationalists (the DNVP, the conservatives of the Kaiser’s time) were opposed to the Republic and wanted the return of the Bismarckian Reich and the Kaiser. They gained, on average, 20 per cent of the vote, but participated — reluctantly — in only two of Weimar’s 21 cabinets. More inclined to compromise was the German People’s Party (DVP), the successor of the pro-Bismarckian National-Liberals. Although they would have preferred a return to the pre-war order, they were willing to regularly participate in coalition governments.

Governing Weimar was a difficult and tedious process. In the fourteen years of the Republic, there were 20 different coalitions. Reichstag coalitions normally had to settle for the lowest common denominator and added little to the overall quality of the Republic’s political life.

A compounding difficulty was the political attitude of the dominant sections of German society. The old guard of the Kaiser’s time still held key positions in the upper levels of the civil service, the judiciary, the army, and the education system, and they held little sympathy for the new order. Many senior civil servants were opposed to the Republic, but they carried on their administrative duties, and by and large refrained from undermining the Weimar system. More damaging was the stand taken by the German judiciary. Whereas in the British legal system, judges were appointed to their position after a long period at the bar, the German judiciary was trained for this task from the beginning of their university education. The majority of Weimar’s judges had served during the Kaiser’s time and still adhered to the principles and values of Imperial Germany.

Imperial law-making in pre-war Germany has been branded as ‘Klassenjustiz’ — justice meted out according to social standing. As a result, the German working class suffered from legal injustices, a process that continued into the Weimar Republic. Crimes committed by the political left received severe sentences; criminals of nationalist right-wing persuasion were more lightly dealt with. A contemporary critique pointed out that the twenty political murders committed by the left between 1919 and 1922 resulted in ten executions and prison sentences averaging 15 years. In contrast, of the 354 murders which were said to have been committed by right-wing activists, only 24 led to convictions, there were no executions, and prison sentences amounted to a mere four months on average. Twenty-three right-wing murderers who had confessed to their crimes were in fact acquitted by the courts. 5

Right-wing terrorists targeted leading politicians. Reichstag Centre Party deputy Matthias Erzberger was assassinated in August 1921. The assassins escaped to Czechoslovakia, were given hero status in Nazi Germany, and received short prison sentences after the Second World War in the Federal Republic.

Walther Rathenau, at the time of his murder the Republic’s foreign minister, fell victim in July 1922. Of the thirteen people charged, one was sentenced to fifteen years jail for having been an accomplice to murder, three were acquitted, and the rest were given prison sentences ranging from one year to five

Independent Socialist leader Hugo Haase was shot on 8 October by Johann Voss, a leather worker. Haase died a month later. His assassin was judged mentally ill, and no charges were laid.

In March 1920, when it seemed that Freecorps units were about to be disbanded, its mercenaries marched on Berlin, where they installed a government led by Wolfgang Kapp, a former public servant with extreme right-wing views. The Reichswehr refused to support the legitimate government, which again sought refuge in Weimar. Rebuffed, it was forced to move to Stuttgart, the capital of Württemberg, in the southwest of Germany. The ineptitude of the Putschists, together with a general strike, brought about the collapse of the Kapp Putsch. Five hundred people were involved, but charges of high treason were laid against only one hundred, of whom a handful was eventually put on trial. All that resulted was a single sentence. General Lüttwitz, one of the leaders of the putsch, was forced into retirement on his general’s pension.

By and large, it was individuals who suffered from legal improprieties during the Weimar Republic, but the wholesale maladministration of justice in the November 1923 uprising in Munich had more far-reaching consequences.

Commonly referred to as the ‘Beer Hall Putsch,' its chief instigator was Adolf Hitler, the leader of the Munich-based National Socialist German Workers’ Party (NSDAP). He was charged with and found of guilty of high treason. Four policemen had been shot dead in the attempt, offenses which should have carried the death penalty. Instead, Hitler was sentenced to a mere five years’ confinement in the prison fortress of Landsberg. The jury felt that even this was too severe, but the presiding judge assured them that the prisoner would be eligible for parole after six months. In the end, Hitler spent nine comfortable months at the old castle, working on account of his life that was published a year later under the title Mein Kampf (‘ My Struggle’). Had proper justice been meted out, Hitler’s career would have been over.

Historians have long warned against overrating the importance of the individual in history. In his monograph In Defence of History, Cambridge don Richard J. Evans raises the question of whether history would have taken a different course had Hitler, for example, died in 1928. The chances of Weimar’s democracy surviving the 1929 Depression, he argues, were small. A right-wing dictatorship or the return of the monarchy, ‘would almost certainly have led to a similar sequence of events to that which took place anyway: rearmament, revision of the Treaty of Versailles, Anschluss in Austria, and the resumption, with more energy and determination than ever before, of the drive for conquest which had been so evident in Germany’s war, aims between 1914 and 1918’. 6 Even anti-Semitism was by no means confined to the Nazis.

Nevertheless, it is doubtful whether without Hitler’s tireless dedication and, eventually, his large popular appeal, the NSDAP would have gained office, and the subsequent course of history would have plunged to such a unique level of evil.

The German army was even more opposed to the Republic than the judiciary was. At its head stood General Hans von Seeckt, an authoritarian reactionary who, wearing a monocle over his left eye, epitomized the old Prussian officer class. He refused to assist the government during the Kapp Putsch and worked consistently towards undermining Weimar democracy. Evans’ claim that as far as foreign policies were concerned, there was little difference in the ambitions of the German military and the policies pursued later by the National Socialists, can readily be demonstrated. Consider, for example, a memorandum prepared in 1926 by Colonel Joachim von Stülpnagel, a leading army official, on behalf of the Reichswehr for the German Foreign Office:

The immediate aim of German policy must be the regaining of full sovereignty over the area retained by Germany, the firm acquisition of those areas at present separated from her and the reacquisition of those areas essential to the German economy. That is to say: (1) liberation of the Rhineland and the Saar area; (2) the abolition of the Corridor and the regaining of Polish Upper Silesia; (3) the Anschluss of German Austria; (4) the regaining of her world position will be the task for the distant future … It is certainly to be assumed that a reborn Germany will eventually come into conflict with the American-English powers in the struggle for raw materials and markets and that she will then need adequate maritime forces. But this conflict will be fought by a firm European position after a new solution of the Franco-German problem has been achieved through either peace or war. 7

 

Establishment of a ‘firm European position’ implied armed conflict and territorial annexation.

The one unifying element in Weimar Germany’s political system was hatred of the Versailles Peace Treaty, coupled with a determination to repudiate most of it. Article 231 was the chief target. To combat the allegation that Germany had been responsible for the outbreak of war in 1914, the German Foreign Office arranged for the publication of a large number of documents aimed at illustrating that Germany was no more guilty than any other of the great powers. The scholars chosen to carry out this project were Johannes Lepsius, a Protestant missionary and orientalist; Albrecht Mendelssohn-Bartholdy, professor of law at Hamburg University; and the librarian Friedrich Thimme. Published between 1922 and 1927, Die Grosse Politik der Europäischen Kabinett amounted to a collection of forty volumes, in 54 parts, of German Foreign Office documents on various aspects of international relations between 1871 and 1914. The enterprise was financed by the Foreign Office itself, though this was hidden from the public. The editors’ claim that their selection was guided solely by scholarly considerations and made in complete objectivity is unconvincing.

Until this time, foreign-policy matters had not been published in a major way. The documents provide some insight into the conduct of Europe’s diplomatic history in the decades preceding the war. The material presented in Grosse Politik illustrates that there were rivalry and a steady deterioration in European relations and that the foreign policies pursued by all the powers were influenced by vested national and imperial interests, security matters, and defense arrangements.

There was nothing new or of major importance in the documents published, and they do not provide an answer to the question of how the war had come about in 1914. Documents were selected only from files of the pre-war Foreign Office, and there was no material from other offices involved in war preparations, such as the War Ministry, the General Staff, the Navy Office, or the bureau responsible for the economic preparation for war. The documents selected were often shortened and, indeed, falsified. In particular, the 1914 July crisis is inadequately dealt with:

[T] he editors failed to include (perhaps destroyed) a number of utterly critical documents: the discussion on 5 and 6 July at Potsdam not only among German leaders but also with Austro-Hungarian representatives, the detailed analysis of the Viennese ultimatum to Serbia, missing in Die Grosse Politik but handed to the Baden plenipotentiary on July 20, any and all contacts between Wilhelm II and his political as well as military leaders after the monarch’s return from his northern cruise on 27 July, and, last but not least, any and all notes pertaining to important telephone calls, telegraphs or other verbal communications. 8

The only three documents listed for July 1914 concern a planned British-Russian Naval agreement. The Foreign Office also established a ‘war guilt department’ (Kriegsschuldreferat) to distribute the material. It published a historical journal, Die Kriegsschuldfrage, which influenced scholars in Britain and the USA to adopt a more pro-German attitude regarding the outbreak of war and the Versailles Peace Treaty.

All historical accounts and history textbooks from primary to tertiary levels continued to glorify Germany’s Prussian past and to allege that the Allies had encircled the German empire and wanted to destroy the German nation — and, to top it off, they now blamed Germany for the outbreak of war and were attempting to ruin the country economically.

On the other hand, anything implying German responsibility for the events of July– August 1914 was suppressed, and authors were persecuted. Some of the documents that should have been included in Grosse Politik were presented in a further study, conducted by Hermann Kantorowicz, relating to the origins of the war. Gutachten zur Kriegsschuldfrage 1914 (‘Report on the question of war guilt 1914’) was never published during the Weimar Republic. It was brought out decades later in the wake of a revisionist debate about the causes of the war that was set off by Fritz Fischer.

Kantorowicz was born in Posen in 1877, the son of a Jewish spirit merchant who had moved his business to Berlin around the turn of the century. He studied law in Berlin and was appointed a lecturer in 1907 at the University of Freiburg, where he became a professor in 1913. Frequent contact with British officer POWs during the war resulted in his admiration of England and contributed to his embracing the new parliamentary democracy with enthusiasm. He attracted negative headlines in late 1921 when he wrote a newspaper article criticizing the glorification of Bismarck and his policies, which he saw still permeating German thinking. The article provoked a backlash from the university’s establishment and the political right. But surprisingly, it was he — ‘a Jew, an Anglophile, a pacifist, a republican, and a democrat’ 9 — who was asked to write a report on the events of July 1914.

Kantorowicz had gained the support of Eugen Fischer-Baling, general secretary of the Reichstag’s commission investigating the causes of the war, who was impressed by Kantorowicz’s democratic fervor and his lucid thoughts. Kantorowicz worked on the project between 1921 and 1927, and, on its completion, was confronted by strong opposition from the Foreign Office, which wanted the publication stopped at all costs. He also saw his academic future impeded. The Foreign Office did everything to prevent his appointment to the chair of the Law Faculty at the University of Kiel. Foreign Minister Gustav Stresemann, in particular, warned that the publication of Kantorowicz’s findings and his appointment to the Kiel Chair would greatly damage Germany’s international reputation:

The report, if published, will damage our reputation abroad because by laying the chief blame for the outbreak of the World War upon Austria and Germany he plays into the hands of the Entente propaganda. Professor Kantorowicz’s meager and quibbling method to judge and evaluate events according to legal principles strips his presentation of all credibility. Moreover, his arguments are based on such poor scientific foundations that there should be no difficulty to prove him wrong. But what I object to most is the spiteful way the report is presented. As there is no scientific objectivity to his argument, and as we have succeeded thanks to untiring efforts over the last years to persuade practically the entire world of a more realistic assessment of the events leading up to the war, his work will be viewed with embarrassment even in countries not favorably inclined to us. All told we are dealing with a sorry effort, which because of its low quality, is not likely to cause the damage that I originally feared. 10

Kantorowicz was eventually appointed to Kiel, but the Nazi takeover of power in Germany forced him to flee to England. Cambridge University offered him the position of assistant director of research in law, an office he held until his death in 1940.

Gutachten zur Kriegsschuldfrage was shelved by the Foreign Office but was rediscovered in microfilm form by American scholars twenty years after World War II. The Foreign Office’s fury at Kantorowicz’s survey is easy to understand because his findings undermined the official version of German innocence peddled by the Kriegsschuldreferat. Documents referred to in Kantorowicz’s study include Wilhelm II’s ‘Blanco-Vollmacht’ (blank cheque) for Austria-Hungary to take any action considered necessary against the Kingdom of Serbia, and the Kaiser’s subsequent confirmation that the German empire would honor its alliance obligation to Habsburg should tsarist Russia declare war. 11 He also pointed out that under article three of the Triple-Alliance agreement, Germany had not been obliged to come to Austria-Hungary’s assistance in July 1914. Article 3 stipulated that the casus foederis (Bündnispflicht) in the Triple Alliance would come into existence only if one of the partners were the victim of an unprovoked attack by two major powers. This was not the case in July 1914. Russia had not attacked the Danube Monarchy; instead, the Austrian government declared war on Russia on 6 August on German insistence. In the absence of an unprovoked attack, Kantorowicz lamented that the German people ‘had been led to the slaughter’ via a treaty obligation that did not exist. 12

Subsequent documents illustrated Austria-Hungary’s determination to cripple Serbia, which was supported in Berlin, and showed that warnings from the British government failed to stop Vienna’s declaration of war on 28 July. Kantorowicz did not see the mobilization of the Russian army as a necessarily aggressive act. The tsar’s claim that this step was a precautionary measure may well have been valid; the Netherlands and Switzerland had also ordered full mobilization on that day. Kantorowicz felt that Berlin was responsible for the subsequent escalation of the war: although the government regarded the Russian mobilisation as a defensive measure, it nevertheless embarked upon preventive warfare as outlined in the Schlieffen Plan. 13 The German declaration of war on Russia on 1 August and on France on 3 August, together with the German invasion of Belgium in the morning of 4 August, turned a regional war into a global war. 14

The Foreign Office was further outraged by Kantorowicz’s account of the extent to which the principle of preventive warfare had gripped Germany’s political and military elites. His references to statements made by Bethmann-Hollweg in the final days of peace, that the impression had to be given ‘that Germany was forced into the war’, that under no circumstances should the German people get the impression that this was otherwise, and that it was ‘most important that Russia must be seen as the guilty party’ for the widening of the conflict, brought the office’s anger to boiling point. 15 With the Gutachten unpublished, Kantorowicz saw six years of intense work wasted.

Worse was the fate of the left-wing journalist Felix Fechenbach, who was charged after having published in 1919 Bavarian files suggesting Germany’s responsibility for the First World War. He was accused of having damaged Germany’s position at the Versailles Peace Conference, and was sentenced to eleven years imprisonment by a ‘People’s Court’. These courts had been set up during the Bavarian Revolution of 1918 to dispense summary justice to looters and murderers. Their function, however, was soon widened to deal with ‘treason’ cases. They were outlawed by the Weimar constitution, but ‘People’s Courts’ continued to function in Bavaria for a further five years. Those charged had no right of appeal against their verdicts. 16

The leading Social-Democratic revisionist Eduard Bernstein urged the party at its first post-war congress, held in Weimar in June 1919, to tell the truth about the war, but he was firmly opposed. Refusal to face reality was bound to have grave consequences:

The incessant din about the injustices heaped upon a defeated Germany, allegedly undefeated in the field and stabbed in the back at home, in effect serve to reinforce an idea that things would be normal if only the external burdens, imposed by the allies, could be lifted. That is to say, the constant — indeed ritual — complaints about Versailles in effect served to disguise the extent to which the War had impoverished Germany … These illusions were dangerous … [because] … as long as the truth about the War, its causes and consequences remained excluded from mainstream public political discussion, it was impossible to face harsh economic and political realities … Responsible politics remained a hostage to myths about the First World War, and Weimar democracy eventually had to pay the price. 17

 

John Maynard Keynes as appeaser

Enlargement of the German Navy had led Britain to abandon its policy of ‘splendid isolation’ and to enter into an entente cordial with France in 1904 and with Russia in 1907. The subsequent years saw a general deterioration in British-German relations. This policy of moving away from their ‘racial cousins’ on the continent by siding with the Latin-French and the Slavonic Russians caused apprehension among sections of Britain’s social and intellectual elite and middle classes. Throughout the nineteenth century, Oxbridge historians had emphasized Britain’s Germanic past, and German achievements in the arts and sciences were widely admired. An image of two Germanys began to emerge: the traditional Germany of cultural achievements, of Goethe, Schiller, Hegel, and Wagner, and the Prussian Germany — expansionist, militarist, aggressive, and arrogant. 18

Apart from a small group of pacifists, Britain’s war effort enjoyed the full support of the country, but this consensus started breaking down during the peacemaking process. Parliamentarians, leading churchmen, journalists, and members of the British delegation at Paris claimed that the terms imposed on Germany were far too harsh. Perhaps spending the war in the safety of the workplace or home had inclined some to call for a generous peace. Younger civil servants in the Treasury and Foreign Office may also have seen their hopes for a new and better world dashed. Among these was John Maynard Keynes.

First Baron Keynes of Tilton was born at Cambridge in 1883, son of John Neville Keynes, a lecturer in moral sciences at Cambridge University, and his wife, Florence Ada Keynes, a local social reformer. John Maynard showed from his early youth great talent in all subjects, and above all in mathematics. He won a scholarship to Eton College in 1897, entered King’s College at Cambridge in 1902, and graduated with a first class B.A. in mathematics in 1904. His career as a public servant began in October 1906 as a clerk in the India Office. The quality of his publications on various economic aspects over the next years saw him appointed to a position at the Treasury shortly after the outbreak of war. This appointment was soon to lead him into moral conflict.

In his Cambridge days, Keynes had befriended a group of young intellectuals with pacifist leanings known as the Bloomsbury Circle. Most of his friends had applied for exemption from military service as conscientious objectors — and were facing severe consequences. Keynes himself toyed with the idea of becoming a conscientious objector, which would have meant resigning from the Treasury, but eventually decided against it. A bitter confrontation with his Bloomsbury friends followed. 19

Sent to Paris as chief Treasury representative of the British delegation at Versailles, he established himself as the leading advocate for moderate peace terms. His estimate that Germany would not be able to pay more than £ 3 billion brought upon his head the wrath of the chair of the Reparation Commission, Billy Hughes, and of the ‘heavenly twins,' Lords Cunliffe and Sumner. The German counter-proposal of £ 5 billion in gold undermined his reputation. 20 Although the final amount Germany would pay was yet to be specified, Keynes felt that the treaty was repugnant, resigned from the Treasury, and immediately began to work on what would become The Economic Consequences of the Peace.

According to his biographer, it was not only the Peace Conference that led to his furious attacks upon Wilson, Lloyd George, Clemenceau, and other participants in the peacemaking process. He felt guilt for his part in the war. Other historians saw the reasons for the jeremiad that flowed from his pen in his resentment ‘at seeing his authority usurped by the deaf little Australian Prime Minister and the detestable “heavenly twins”.’ 21 An American observer claimed that ‘Keynes got sore because they wouldn’t take his advice, his nerve broke and he quit.’ 22

The Germanophile sentiments of his social class and peer group influenced his Economic Consequences. The fact that he fell in love with a German financial delegate to the conference, the banker Dr. Melchior, was another influence, 23 as was his dislike of the French. Keynes did not want to be objective. Passions were to guide him. The book, he admitted, ‘is the child of much emotions.' 24

‘Paris,' he wrote, ‘was a morass, a nightmare, and everyone there was morbid,' the atmosphere ‘hot and poisoned,' the halls ‘treacherous,' the conference rooms ‘a thieves’ kitchen.' The statesmen at the conference were ‘dangerous spellbinders … most hypocritical draftsmen’, inspired by ‘debauchery of thought and speech’. Their labours were ‘empty and arid intrigue’. President Wilson was a ‘blind and deaf Don Quixote … playing a blind man’s bluff’. He was ‘bamboozled’ by the French Chauvinist and the Welsh Siren. The treaty was clothed with a ‘web of Jesuit exegesis’, its provisions were ‘dishonourable’, ‘abhorrent and detestable’, revealing ‘imbecile greed’ reducing ‘Germany to servitude’, perpetrating its economic ruin, starving and crippling its children. All told, Versailles was a ‘Carthaginian Peace’, a huge repository of vindictiveness, masquerading as justice — ‘one of the most outrageous acts of a cruel victor in civilised history’. 25

Overpowering emotions have led to outstanding literature. They do not provide a good basis, however, for the writing of a monograph on the economic consequences of the Versailles Peace Treaty, and Keynes’ book is flawed. Keynes reiterated the false claim made by Count Brockdorff-Rantzau in his speech replying to the presentation of the Fourteen Points that the treaty ‘would sign the death-sentence of many millions of Germans, men, women, and children’. The malnutrition that observers noticed was caused by a distribution system which favored the military and kept rations for the civilian population scarcely above subsistence levels. The ending of the war brought internal improvements in distribution, and food entered Germany from neutral countries.

It was ambitious of Keynes to attempt a major analysis of Germany’s ability to meet reparation claims given the huge overall dislocation of industry and commerce in all countries brought about by the war, the uncertainty of international trade conditions post-war, and the absence of reliable data about Germany’s economic potential. Other factors affecting the viability of his study were questions not yet settled at the time of writing, to do with collecting the booty and the liability amount. None of Keynes’ Cassandra calls eventuated.

Nevertheless, his arguments were accepted more or less without question by an increasingly guilt-ridden English-speaking world. Those who finally analyzed his claims in detail found them wanting. French economist Étienne Mantoux wrote The Carthaginian Peace or the Economic Consequences of Mr. Keynes during the Second World War. He was killed in action one week before Germany capitulated. His monograph, which debunked Keynes’s book as a self-fulfilling prophecy, was published posthumously by his son Paul Mantoux, but went virtually unnoticed, 26 perhaps because the author was a Frenchman. It is worthwhile presenting his conclusions, which left the emperor with few clothes, verbatim:

In The Economic Consequences of the Peace, Mr. Keynes predicted that the Treaty, if it was carried into effect, ‘must impair yet further, when it might have restored, the delicate, complicated organization, already shaken and broken by war, through which alone the European peoples can employ themselves and live.' Europe would be threatened with ‘a long, silent process of semi-starvation, and of a gradual, steady lowering of the standards of life and comfort.' Ten years after the Treaty, European production was well above its pre-war level, and European standards of living had never been higher

He predicted that the iron output of Europe would decline as a consequence of the Treaty. In the ten years that followed the Treaty, the iron output of Europe, which had fallen considerably during the War, increased almost continuously. In 1929, Europe produced 10 per cent more iron than in the record year 1913, and would no doubt have produced still more had not the producers combined to restrict output for fear of injuring prices by overproduction. He predicted that the iron and steel output of Germany would diminish. By 1927, Germany produced nearly 30 percent more iron and 38 percent more steel than in the record year 1913, within the same territorial limits. He predicted that the efficiency of the German coal-mining industry lowered by the War would remain low as a consequence of the Peace. By 1925, the efficiency of labor, which had dropped seriously in the meantime, was already higher, in the Ruhr coal industries, than in 1913; in 1927 it was higher by nearly 20 percent, and in 1929 by more than 30 percent. He predicted that a pre-war level of output could not be expected in the German coal industry. In 1920, 1921, and 1922, coal output was well above the average level of the five years preceding the war, within the same territorial limits. It fell sharply in 1923, and was slightly below pre-war average in 1924. It was above that average in 1925; and in 1926, it was already higher than in the record year 1913.

He predicted that Germany ‘cannot export coal in the near future … if she is to continue as an industrial nation. In the first year following the Treaty, Germany exported (net) 15 million tons of coal; and in 1926 she exported (net) 35 million tons, or twice [Mantoux’s italics] the amount of the average (1909– 13) pre-war exports of all [Mantoux’s italics] her pre-war territories.

He predicted that the German mercantile marine ‘cannot be restored for many years to come on a scale adequate to meet the requirements of her own commerce.' The total German tonnage was a little above 5 million in 1913. It was reduced in 1920 to 673,000, but in 1924 it already approached 3 million tons; in 1930 it was well above 4 million, and German liners were the wonder of the transatlantic world.

He predicted that ‘after what she has suffered in the war and by the Peace,' Germany’s annual savings would ‘fall far short of what they were before.' The monthly increase in German savings bank deposits was 84 million in 1913; in 1925 it had become 103 million, and in 1928 it was nearly 210 million.

He predicted that Germany’s annual surplus would be reduced to less than two milliard marks. In 1925, the net accumulation of domestic capital was estimated at 6.4 milliards, and in 1927 at 7.6 milliards.

He predicted that in the next thirty years, Germany could not possibly be expected to pay more than two milliard marks a year in Reparation. In the six years preceding September 1939, Germany, by Hitler’s showing, had spent each year on re-armament alone about seven times as much. 27

With new sources becoming available in the second half of the twentieth century, Mantoux’s Economic Consequences of Mr. Keynes has been vindicated by scholars in the field. Their studies have shown that a relatively moderate increase in taxation, coupled with an equally moderate reduction in consumption, would have enabled the Weimar Republic to meet the reparation debt. 28 In fact, Stephen Shuker has shown that the net capital inflow ran towards Germany in the period 1919 to 1933 at a minimum of at least 2 per cent. 29

The reparation terms obliged Germany to pay 50 billion gold marks. Keynes — expecting that the C Bonds would eventually be canceled — advised the German government to accept. 30 Despite his undisputed command of economics, he did not pick up that most of the London schedule was phony money. When, by the second half of the 1930s, it had become clear that Germany had not been ruined by the Treaty of Versailles but was recommencing its attempt to take possession of most of continental Europe, he saw that he had erred, and regretted having written The Economic Consequences of the Peace. 31 It was too late.

 

1. Weimar Erhard Lucas, Märzrevolution im Ruhrgebiet, 3 vols (Verlag Roter Stern, Frankfurt Main, 1970– 78).

2. Richard J. Evans, The Coming of the Third Reich, pp. 139– 41. Note also Schuker, American ‘Reparations’. Op. cit., pp. 83– 84.

3. Op. cit.

4. p. 80.

5. Op. cit., p. 135– 36.

6. Richard, J. Evans, In Defence of History, pp. 132– 33.

7. Cited in Volker Berghahn, Modern Germany: society, economy and politics in the twentieth century (Cambridge University Press, Cambridge, 1983), pp. 66– 67.

8. Holger H. Herwig, ‘Clio Deceived: patriotic self-censorship in Germany after the Great War’, in Keith Wilson (ed.) Forging the Collective Memory: government and international historians through two world wars, p. 97.

9. Imanuel Geiss, foreword to Hermann Kantorowicz, Gutachten zur Kriegsschuldfrage 1914, p. 18.

10. Cited in op. cit., p. 32.

11. Walter Schücking and Max Monteglas, ‘Deutsche Dokumente zum Kriegsausbruch (DD), Berlin 1927’, Appendix iv, p. 2, DD 15, cited in Hermann Kantorowicz, Gutachten zur Kriegsschuldfrage 1914, pp. 232– 34.

12. Op. cit., pp. 235– 36.

13. Die deutschen Dokumente zum Kriegsausbruch, edited by Graf Max Montgelas and Walter Schiicking, 5 vols, Charlottenburg 1919 (cited hereafter as DD), 554, cited in Kantorowicz, op. cit., p. 253.

14. Kantorowicz, op. cit., p. 260.

15. DD 323, DD 395, DD 456, p. 176, cited in Kantorowicz, op. cit., pp. 300– 01.

16. Evans, The Coming of the Third Reich, pp. 136– 37.

17. Richard Bessel, ‘Why did the Weimar Republic collapse?’, in Ian Kershaw (ed.), Weimar: why did democracy fail?, pp. 126– 27.

18. Boyce, The Great Interwar Crisis and the Collapse of Globalization, pp. 24– 29.

19. Robert Skidelsky, John Maynard Keynes, 1883– 1946: economist, philosopher, statesman, pp. 191– 95.

20. Lentin, Lloyd George and the Lost Peace, p. 42.

21. Keylor, ‘Versailles and International Diplomacy’, p. 495.

22. Ibid.

23. Skidelsky, John Maynard Keynes, pp. 220, Keylor, ‘Versailles and International Diplomacy’, p. 486.

24. Lentin, Lloyd George, Woodrow Wilson and the Guilt of Germany, p. 137.

25. Cited in Étienne Mantoux, The Carthaginian Peace or the Economic Consequences of Mr Keynes, p. 5

26. Mantoux, The Carthaginian Peace, pp. ix– xiv.

27. Op. cit., pp. 62– 63

28. Keylor, ‘Versailles and International Diplomacy’, pp. 501– 02; Schuker, American ‘Reparations’, pp. 18– 19.

29. Schuker, op. cit., pp. 10– 11.

30. Marks, ‘Reparations Reconsidered’, p. 361.

31. As quoted in Elisabeth Wikemann, The Europe I Saw, 1968, p. 53.

 

 

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