The German Slump: Politics And Economics, 1924-1936

485 Pages·1986·6.642 MB·English

by  Harold James

THE GERMAN SLUMP

THE GERMAN SLUMP
Politics and Economics
1924-1936
HAROLDJAMES
CLARENDON PRESS • OXFORD
1986
Oxford University Press, Walton Street, Oxford OX2 6DP
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© Harold James, ig86
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British Library Cataloguing in Publication Data
James, Harold
The German slump: politics and economics
1924-1936
1. Germany—Economic conditions—1918-1943.
2. Germany—Politics and government—1918-1933.
3. Germany—Politics and government—1933-1943.
I. Tide.
330.943085 HC286.3
ISBN 0-19-821972-5
Library of Congress Cataloging in Publication Data
James, Harold Douglas.
The German slump.
Bibliography: p.
Includes index.
1. Germany—Economic conditions—1918-1945.
2. Germany—Politics and government—1918-1933.
3. Germany—Politics and government—1933-1945•
I. Tide.
HC286.3.J33 1986 33°-943°^5 65-21529
ISBN 0-19-821972-5
Set by Latimer Trend & Co. Ltd, Plymouth
Printed in Great Britain
at the University Printing House, Oxford
by David Stanford
Printer to the University
Preface
This is an analysis of the inter-war depression in Germany, of
its effects on political life, and in turn also of the influence of
politics on business. I found setting dates for the title very
difficult, since I regard the severe crisis at the end of the 1920s
as a product of causes some of which operated over a long
chronological span. Whereas economists are able and even
eager to be precise when dating business cycles, the economic
historian finds it very hard to say when a long-term process of
bureaucratisation and rigidification of institutions, a process
which is likely to produce structural crisis, began. In this sense
every historian is bound to feel some sympathy for the nine­
teenth-century French writer who set out to produce a history
of Napoleon III and only reached the Treaty of Verdun
(843). Equally, it is hard to know where to stop. If I have
gone on too long, and deal at great length with the Nazi
recovery, it is not because my typewriter behaved like the
brooms in the hands of the sorcerer’s apprentice. I believe that
it is absurd to stop accounts of crises at the low point of the
crisis (in this cáse in 1932), as some analysts have done, or at
the artificial boundary of 1933 created by the political revolu­
tion of National Socialism. Seeing what went on in the
recovery offers help in constructing a picture of what was
wrong before the Slump.
A sorcerer’s apprentice does not thank the sorcerer. In
contrast, I should like to express my gratitude and an intellec­
tual debt. In the first place, a book of this kind would not be
possible without the enormous volume of recent research on
Weimar produced in Germany, USA, and Britain. Secondly, I
have specific debts. Professor Knut Borchardt has shaken
German historians (and politicians) with his arguments on
Weimar. He has been immensely kind in offering me advice,
lending me material, and commenting on the manuscript. In
Cambridge, Lord Dacre (Professor Hugh Trevor-Roper), Dr
Jonathan Steinberg, and Professor Norman Stone, as well as
many others, have helped in discussing the ideas of this study.
VI Preface
Mrs Diane Kunz read the manuscript and suggested helpful
alterations. Dr Rudolf Tschirbs of Bochum kindly sent me two
draft chapters of his dissertation. At a critical stage in the
preparation of this work, Agnieszka Kolakowska provided
friendship and critical comments. The Master and Fellows of
Peterhouse, Cambridge and the staff of the Institut fur euro­
päische Geschichte in Mainz have put up with me.
I have had invaluable help from the following archivists: Mr
Carl Backlund of the Federal Reserve Bank of New York; Mr
Richard Gould of the National Archives, Washington DC;
Frau Dr Grahn of the Zentrales Staatsarchiv, Potsdam; Herr
Bodo Herzog of the Historical Archive of the Gutehoffnung­
shütte, Oberhausen; Frau Dr Maria Keipert of the Politisches
Archiv des Auswärtigen Amtes, Bonn; Mr John Keyworth of
the Bank of England; Frau Dr Renate Köhne and Herr Herwig
Müther of the archive of the Fried. Krupp GmbH; and Dr
Walter Meis of M.M. Warburg, Brinckmann Wirtz & Co.,
Hamburg. Frau Dr Gerti Meineke and Herr Eric Warburg
very kindly put private papers at my disposal.
The British Academy, the British Council, the Deutscher
Akademischer Austauschdienst, the German Historical Insti­
tute in London, the Master and Fellows of Peterhouse, and the
Volkswagen-Stiftung have provided very generous financial
help, without which my archival work would have been
impossible. Mrs Hazel Dunn typed the work with her usual
efficiency and friendliness.
My greatest debt, however, is to my parents.
hj
Peterhouse, Cambridge
September y 1984
Contents
List of Tables ix
Abbreviations xiii
I Introduction I
II The Political Development of Weimar Germany
25
III Public Finance 39
The Reich
The Länder
The Communes
IV The Structure of Industry: Stagnation and
Retardation 110
Risk Avoidance through the Organised Economy?
The Chronology of Growth and Change
Conclusion: The Mania about the Rationalisation
Mania
V The Politics of Business in Weimar Germany 162
Business Attitudes
Industrial Corporatism and the Course of Political
and Economic Development
VI Labour Problems: Consequences or Causes of
the Stagnant Economy? 190
Wages and the National Economy
Wages and Technology
The Structure of Wages
The Origins of State Intervention in the Labour
Market
The Development of Wages after the Stabilisation
Briining’s Wage Revolution
VII Agriculture 246
The Legacy of the Kaiserreich, War, and Inflation
Stabilisation Problems
Agrarian Radicalism: the Response to the
Farmers* Crisis
The Government’s Response: Tariff Increases or
Debt Reduction
Contents
VIII The Banking Crisis 283
The Banking Crisis and Business
The Story of the Crisis
Coping with the Bank Collapse
The Implications of the Banking Crisis
X Economists and the Depression 324
X A Nazi Recovery? 343
Hitler’s Economic Programme
Agriculture
The Mittelstand
Labour in the Third Reich
The State Budget
Nazi Trade Policy
Germany’s Debts
Innovation and Conservatism in Recovery
Bibliography 421
Index 457
List of Tables
i Distribution of Wealth and Income in the Wei­
mar Republic 51
ii German Public Revenue, Expenditure, and
Debt 1926/7-1932/3 (m. RM) 52
in Increase in German Communal Debt 1928/9-
1930/1 (m. RM) 95
iv Proportion of Unemployed on Welfare Support
in Cities over 100,000 Population 98
v s Tax Revenue of Communes 1928/9-1932/3
(m. RM) 99
vi Debts of Communes over 10,000 Population
1928-1930 (m. RM) 100
vn Unemployment and Short Work, September
1930 (as % of union membership) 113
vm Average Annual Growth Rates of Industrial
Output in Inter-war Germany (%) 115
ix Gutehoffnungshütte Exports as a Proportion of
Total Sales 1925/6-1933/4 (%) 122
x Taxation and Social Payments as a Proportion
of National Income in Britain, France, and
Germany 1925-1929 (%) 132
xi Loans of Major Credit Groups (not including
advances on goods or bills discounted)
1924-1933 (m. RM) 133
xii Industrial Investments of Corporate Enterprise
1924-1931 (m. RM) 134
xiii Ruhr Hard Coal-mining 1913-1931 155
xrv Price and Production Falls in Five European
Economies during the Inter-war World Eco­
nomic Crisis (%) 160
xv Cumulative Real Wage Position 1925-1933
(Base 1938) 193
List of Tables
German Industry and Artisan Production
1925-1932: Hourly Wages and Productivity 196
Hourly Wage Rates (Yearly Average) 1925-
1932 205
Urban Population Employed in Industry and
Services: Selected European States (m.) 2o8
Days Lost Through Labour Disputes: Germany
1924-1932 218
Fried. Krupp AG: Gußstahlfabrik Essen: Calcu­
lation of Costs 221
Employment at Siemens und Halske and Siemens-
Schuckertwerke 1928-1934 225
Rhine-Ruhr Industry: Employment 1927-1932 227
Cereal Yields in Germany 1913-1924 (100 kg./
ha.) 25O
Average Weight of Slaughtered Animals 1906-
1924 (kg.) 25I
Number of Animals in Germany (December)
I9I3_,924 (m ) 25I
German Agricultural Debt 1925-1930 (m. RM) 255
Debt of German Farms on 1 July 1929 (RM/ha.) 257
Proportion of Farms operating at a loss or with
Interest Payments higher than 105% of Net
Return, 1 July 1929 (%) 258
German Agricultural Interest Payments 1924-
1932 267
Sample of German Joint-Stock Companies: Debt
and Investment 1927-1933 286
Coal Inventories 1928-1932 ( 1,000 t.) 288
New Domestic Orders for German Machine
Industry 1927-1932 (1928=100) 29O
Life Insurance in Germany: % of New Business
denominated in RM 3o1
Income and Expenditure of German Agriculture
1928-1936 (m. RM)
356
Government Expenditure and Revenue
1932-1937 (fiscal year) (m. RM)
374