Treaty of Versailles – The government had signed Treaty despite ‘war guilt’ clause that stated that Germany had to pay reparations to make up for the cost of damage during war. Many believed the politicians had betrayed that army. Hitler and many others believed that they had been “stabbed in the back” by the “November Criminals”.
Communist rising Communist group called the Spartakists, led by Rosa Luxemburg and Carl Liebknecht, attempted to begin a revolution but the rising was suppressed with the help of the army and the leaders were executed.
Kapp Putsch – Wolfgang Kapp led right-wing attempt to seize power in Berlin in 1920. Army refused to act and the official government left Berlin; but a general strike by the trade unions meant that Kapp could not control the situation and the rebellion failed.
Hitler’s Beer Hall Putsch – In 1923 Hitler led a right wing attempt to seize power in Munich but his attempt collapsed when he faced opposition from the police.
Reparations – The Allies now fixed the total amount of reparations at 132,000 million marks (6,600 million British pounds). Germany claimed this was completely unrealistic since she had lost important resources and industrial land because of the Treaty in 1919.
Hyperinflation and the invasion of the Ruhr – The government continued to print paper money even when it did not have sufficient resources to support the currency; this led to constantly rising inflation. By 1923 prices had become ridiculous, although people who had taken out large loans (such as industrialists) benefited, and German goods were cheap for other countries to buy, which stimulated trade and employment. When Germany could not make the reparations payment due in 1923, France and Belgium invaded the Ruhr, which made the economic situation even worse.
Social effects of hyperinflation – money almost worthless, many people couldn’t maintain standard of living. Middle class savings wiped out, and professionals who depended on cash payments had less demand for their services, e.g. doctors, teachers and lawyers. Unemployment was rising and there was a high level of discontent within society.
Social divisions – deep divisions within society. Some wanted revolution like Russia to give power to the workers; others wanted a strong government to protect industry and the rich against trade unions and Communism.