The Gilded Reich Part I: The Birth of Nazi Germany
- Dillon Wall
- Jun 16
- 11 min read
Updated: Jun 24
The following article is part one in “The Gilded Reich” series. See The Gilded Reich.
Post-War Germany
World War I had come to a close, but this was the mere beginning of the suffering for the Germans who were left humiliated. There were no parades or glory for the soldiers who returned home- or rather what used to be home. Cities were left in ruins. Unrecognizable.
The Treaty of Versailles would seal the humiliation into the minds of the public. For the German citizens, this was not peace, but a betrayal. As the economy collapsed, hope dwindled and a new movement began in the shadows. A movement fueled by resentment.
The Armistice and the End of the Kaiserreich (1918)
By the fall of 1918, Germany was collapsing. They were losing the war. Morale at the front had collapsed. Soldiers were deserting and civilians were rioting. The Allies were pushing back hard on the Western Front as the exhausted and demoralized German army retreated. Starvation was widespread due to the British naval blockade. The Germans were war-weary and furious.
On November 9, 1918, Kaiser Wilhelm II, who had ruled the German Empire since 1888, fled to the Netherlands where he would live in exile until his death in 1941. He was a brash and nationalistic leader who was obsessed with Germany’s image as a growing imperial power.
On November 11, Germany signed an armistice, or a ceasefire while peace terms were negotiated. The terms were harsh. Germany had to evacuate occupied territories, surrender all of its weapons and accept occupation of the Rhineland (a strategic point of contention in West Germany). A key factor that will be mentioned later is that the armistice was not signed by military leaders, but by civilian leaders- leading to the myth that Germany had been betrayed by traitors in the home front.
With the monarchy gone and a civil war on the horizon, the Social Democrats of Germany quickly put together a provisional government known as the Weimar Republic. This was Germany’s first democratic government formed to prevent total collapse.
Many Germans did not think they were losing the war, so when the government collapsed, it came as a shock. The war was lost, the monarchy was gone, and no one knew how it could have happened so quickly.
Treaty of Versailles (1919)
After WWI, the victorious allied powers- primarily France, Britain, and the United States- met in Paris to build the terms of peace. Germany was not invited to participate in these negotiations and was only summoned to sign the final draft. Each of the allied leaders had different priorities when putting the document together:
France - George Clemenceau
France had suffered immense loss at the hands of the war with nearly 1.4 million soldiers killed and much of the fighting taking place on French soil, leaving their land in ruins. Clemenceau had seen France invaded twice in less than fifty years and wanted to ensure that it would never face a German invasion again. His goals:
Cripple the German military and economy.
Recover Alsace-Lorraine (Northeast region in France) from Germany.
Demand harsh reparations to rebuild France and punish Germany.
Demilitarize the Rhineland as a buffer zone and push for total disarmament.
Britain - David Lloyd George
Britain had also paid a heavy cost with their death toll almost reaching 900,000, but they had not suffered the same physical destruction as France. British citizens wanted revenge, but Lloyd George feared that an overly harsh treaty would push Germany toward communism or a future war. His goals:
Maintain the balance of power in Europe.
Protect British trade. He knew a weakened German economy would not be able to afford British goods.
Limit French power.
Secure reasonable reparations that would not cripple the Germans.
Maintain control of German colonies, especially in Africa.
United States - Woodrow Wilson
Wilson arrived in Paris with grand ambitions. His diplomatic idealism would define his presidency. He envisioned a new world order based on democracy and self determination. His famous 14 points outlined a peace free from revenge or secret treaties and aimed to create strong world alliances. His objectives were to:
Create a League of Nations to prevent future wars.
Allow nations to govern themselves without intervention.
Avoid punishing Germany too harshly.
Uphold open diplomacy and disarmament for all nations.
Outcome of the Treaty
The Final Draft of the treaty was detrimental for Germany. In punishing Germany to prevent future aggression, they humiliated the nation and made peace feel like a defeat. The treaty redrew European and Middle-East borders, creating new countries from fallen empires. The intention was to let ethnic groups govern themselves, but it got messy with new countries like Poland, Czechoslovakia, and Yugoslavia being formed with diverse and clashing populations. Many Germans found themselves in new countries that didn’t necessarily want them.
The treaty didn't really aim to rebuild Germany as the Allies focused on punishment rather than reconstruction. It also gave birth to the League of Nations, which Wilson idealized, but the U.S. ironically never joined after the Senate rejected. The league had no military power and key nations like Germany, the Soviet Union, and later Japan, were excluded. Some key elements of the treaty include:
Article 231 - The War Guilt Clause placed sole responsibility for the war on Germany and its allies.
Germany had to pay an estimated 132 billion gold marks (around $400 billion today).
German land was returned to France or placed under control of the League of Nations.
The military was limited to 100,000 men with no tanks, air force, or submarines, and complete demilitarized Rhineland.
The Birth of the Weimar Republic
The Weimar Republic was Germany’s first democracy. It began during revolution, economic collapse, and national humiliation. From its inception, the Weimar Republic was seen as a symbol of surrender and weakness and associated with Germany’s surrender.
After Wilhelm II fled, the provisional leaders of Germany called for a national assembly to write a constitution for a democratic Germany and establish legitimacy. The assembly met in Weimar which was a small city in central Germany. The result was one of the most democratic constitutions in the world at that time with universal suffrage, proportional representation, individual rights, and a system of checks and balances.
The document also included Article 48, a clause allowing the President to rule by decree in an emergency. This would later be a devastating blow to the republic.
Collapse and Consequences (1921-1923)
Going into WWI, Germany expected a quick victory. With this in mind, they borrowed massively instead of raising taxes assuming that the reparations from the defeated enemies would cover the debt. But, Germany lost. And now, it was Germany who was expected to pay reparations.
In 1921, the reparations figure of 132 billion gold marks was finalized. With Germany struggling to pay and industry failing, Germany defaulted on its reparation payments. French Prime Minister Raymond Poincaré believed Germany was deliberately sabotaging its obligations. France depended on these reparations to rebuild after losing a large portion of their workforce and infrastructure.
In retaliation, France and Belgium invaded the Ruhr (Germany’s industrial heartland) in January of 1923 to seize goods as payment. 60,000 troops were marched into the Ruhr Valley, Germany’s most vital industrial zone, rich in steel and coal production. The German government had no response to this, lacking a military. So, they instead called for peaceful resistance. German workers refused to cooperate with the occupiers, factory output stopped and transportation networks were shut down. Many workers were arrested or deported by French forces.
The government continued paying the workers. But, without any real revenue, they resorted to printing money which flooded the economy with paper marks that triggered hyperinflation.
The French occupation was politically explosive with other nations fearing this would destabilize Europe. Germans saw this as yet another humiliation on the world stage and proof that the Weimar Republic was weak.
Dawes Plan (1924)
In response to the economic crisis, the Reparations Committee (part of the postwar treaty) organized a multinational committee led by American banker and diplomat Charles G. Dawes. This committee was formed to assess Germany’s economic condition and create a realistic reparation payment schedule to restore stability in Europe. The committee included experts from the U.S., Britain, France, Italy, and Belgium.
At this point, the United States had not ratified the Treaty of Versailles, but it was acting as mediator for a few reasons. It was the only country with a stable enough economy to loan Germany money and bankers and officials alike were invested in global recovery and stability.
Key Points of the Dawes Plan
Reparation payments were reduced at first and would gradually increase as the economy recovered.
Germany received an initial American loan of 800 million gold marks, mostly from American banks. The loans would continue, making Germany reliant on them- a ticking time bomb if the loans were to cease.
Ended occupation of Ruhr Valley.
Golden Twenties (1924-1929)
The Dawes plan saw the German mark replaced with a new, stable currency named the Rentenmark. Business returned and foreign investment flowed into the country.
1924 to 1929 actually became known as the “Golden Twenties” (or “Goldene Zwanziger) in Germany, even though prosperity was uneven and fragile. Germany experienced a brief but dazzling cultural and economic boom. Jazz clubs, avant-garde art, Bauhaus architecture, sexual liberation, and urban modernism.
Industry soared and unemployment fell. Germany even joined the League of Nations in 1926 which symbolized international reintegration.
During this time, Germany became one of the most technologically advanced nations in Europe. Cities like Berlin Frankfurt and Hamburg thrived while automobile, radio, and film industries expanded. Public infrastructure improved. Berlin drew comparisons to cultural hubs like New York and Paris at the time.
But…
While urban centers flourished, the countryside remained poor and resented the decadent and immoral city life. The economy was built on debt and there was no deep structural reform. Rather, temporary relief. Industrialists, landlords, and foreign investors thrived while the working class was struggling.
Extremism Breeds in Crisis (1919-1923)
Before we get too ahead of ourselves, we need to take a look back at the early years of the Weimar republic to see the extremism that was brewing. The war was over, but there was a power vacuum that became a proving ground for extremism on both sides. Hungry ex-soldiers returned home to find more chaos than peace with strikes and barricades and rival flags. There was no order, with police uniforms carrying no weight. Arguments were often settled with pistols.
“Democracy” existed- on paper. And paper had already failed the German people with their currency becoming worthless.
The left wing Communist Party of Germany led by Rosa Luxemburg and Karl Liebknecht staged a revolution in January 1919 named the Spartacist Uprising. The provisional government hired the Freikorps (a militia made of veterans) who put down the revolt in a brutal fashion. Luxemburg was dumped in a canal and Liebknecht was shot in a park. The movement was left to bleed out and the public lost trust in the communists.
The Freikorps would soon turn their rage to the Weimar Republic itself, calling them the “November Criminals” who had signed the Armistice and the Treaty of Versailles that humiliated Germany. Between 1919 and 1923, right-wing cells assassinated over 350 politicians and intellectuals. The courts, staffed by conservative judges, handed down mild sentences or none at all. Killing the republic came with very little risk.
When Berlin ordered two Freikorps brigades to be disbanded in 1920, the commanders instead marched on the capital. People cheered and the army refused to fire. “Reichswehr does not shoot Reichswehr.” This event showed that the army was loyal to their own kind more than the parliament.
Enter Adolf Hitler
In Munich’s beer halls where fringe parties gathered, an army informant named Adolf Hitler was assigned to attend the tiny German Workers’ Party (DAP). While monitoring the group, he found himself intrigued by the ideas and took to the mic for himself blaming Jews, Marxists and Versailles for the German crisis. The party leaders were impressed and invited him to join the party.
Hitler had no formal education or money to his name, but his speaking skills proved himself to be very charismatic. He quickly became a top speaker of the party, drawing larger and larger crowds to the beer halls. His speeches attacking the Jews, Marxists, and democrats were all captivating for the humiliated and desperate German public.
As Hitlers influence grew, the party evolved into the National Socialist German Workers’ Party (NSDAP) in February 1920. The name combined nationalism and socialism, but the socialist part was mostly rhetoric to attract working class Germans who might otherwise support communism or the Social Democrats. By the end of 1920, membership had jumped from 100 to over 2,000 and continued with Hitler’s rise to face of the party.
As the meetings grew larger and more heated, Hitler needed protection. Not just from rival parties, but to intimidate enemies and control the crowds. In 1921, he helped for the Sturmabteilung (SA) which was a paramilitary wing of the Nazi party.
Members of the SA wore brown uniforms, which gave them the nickname, “Brownshirts.” Many were WWI veterans, Freikorps members, or young men looking for purpose or power. With the Treaty of Versailles limiting the German military to 100,000 men, young boys did not have the opportunity to fight for their country like previous generations. The SA acted as bodyguards and enforcers, beating up hecklers at Nazi rallies.
The rallies became a show of strength. The SA’s violence was not hidden. It was a part of the appeal. The Germans saw the Nazi party as a display of order and discipline which they had not seen in years. Munich’s conservative police turned a blind eye.
Beer Hall Putsch
By November 1923, hyperinflation had eaten through savings and left people desperate. Paychecks were collected in sacks, a basket of coal costed billions, and Frances occupation of Ruhr Valley only threw salt in the wound. Hitler thought this would be a golden opportunity.
On November 8, 1923, he and his armed followers burst into Bürgerbräukeller, a Munich beer hall where 3,000 people had gathered to hear Bavarian government leaders speak. Hitler and his armed SA fired a shot into the ceiling and declared a national revolution. He forced the officials into a back room at gun point and tried to win them over. Eventually, they appeared to agree to support the coup. Outside, Hitler announced that a new national government had been formed and that they planned to march on Berlin and overthrow the Weimar Republic.
The next morning, 2,000 Nazis marched toward the city center with the goal being to seize control of government buildings. At the Feldherrnhalle, a ceremonial monument, police opened fire. 16 Nazis were killed as well as 4 police officers. Hitler was thrown to the ground dislocating his shoulder. Then, he fled. By that afternoon, the coup was over.
Two days later, Hitler was arrested and charged with high treason. But, the trial gave him a stage that he used to defend his actions, calling them patriotic and necessary. The judges were sympathetic. Instead of a death sentence, he received 5 years in prison. He instead served a comfortable 9 months at Landsberg Fortress.
While imprisoned, he wrote his infamous “Mein Kampf” to his deputy, Rudolf Hess. The book combined an autobiography, his racial ideology, and a call for German expansion. Mein Kampf became the ideological foundation for the Nazi Party.
If Hitler learned anything from his failed coup, it was that he needed to seize power legally.
Conclusion: Nazi Germany on the Horizon
By the time Hitler was free in December of 1924, Germany had cooled down with a stable currency and relief from the Dawes plan. After a tumultuous few years, Germany was prospering, at least for some. But, this prosperity would soon be shaken to the core.
And this time, Hitler’s revolution would come through ballots, not bullets. The illusion of calm was soon to come to an end.
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