Sunday, December 31, 2017

PART 3:CONJURING HITLER: HOW ENGLAND AND THE U.S. MADE THE 3RD REICH

Conjuring Hitler How Britain and 
America Made the Third Reich 
Guido Giacomo Preparata
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3 
The Meltdown and the Geopolitical Correctness of Mein Kampf Between the Kapp and the Beerhall Putsch, 1920–23 
Barbarians since time immemorial, rendered ever more barbarous by diligence, science and even by religion…This is a harsh thing to say, yet I must, because it is true: I cannot imagine a people that is more torn than the Germans. You see craftsmen, but no human beings, thinkers, but no human beings, priests, but no human beings, masters and servants, young ones and settled families but no human beings is this not like a battlefield, where hands, arms and limbs lie scattered helter-skelter, while gushes of lifeblood sink through the sand?… 
Friedrich Hölderlin, Hyperion1 

Yet I long for Kaukasos!…I was told long ago that our forefathers, the German tribe quietly coasted down the Danube of a summer’s day and reached the Black Sea, meeting with the children of the Sun seeking shade…For a while they stood in silence, then offered their hands in friendship. 
Friedrich Hölderlin, The Migration

Erzberger: 
one man alone against the inflation
Image result for IMAGES OF Matthias Erzberger 
After the Treaty of Versailles was ratified, the incubation of Nazism began. Underneath the republican pretense of Weimar, the reactionary Right slowly reorganized itself: it spoke through the Nationalist press, and intimidated the Leftist opposition by unleashing against it the rage of jobless hooligans, whom the Conservatives shielded and patronized. Mistaking the Weimar regime, which was but the sham government imposed by the Allies, for a workable political experiment, the Catholic politician Matthias Erzberger treated the phony Republic as a frail outfit which he trusted he might heal, without suspecting the perilous nature of the task. As he proceeded in the guise of Finance Minister to tax the elite heavily (1919), hoping thereby to defuse the risk of an inflationary implosion that loomed in the massive public debt amassed by Germany to fund the war, Erzberger was slandered, warned, and finally killed (1921). The incubation of Hitlerism, however, was from the first threatened by stalwarts of the old order , army generals and erstwhile high-ranking stewards of the Reich – that were seeking to enliven a monarchical league across Central Europe and Russia (1920). Nazism was still in its embryonic stage, and would have not survived such a change: the disgruntled royalists within the army wanted to go back to the old days; they shared a vision that had virtually nothing in common with that of the Nazis. 
Image result for IMAGES OF Ignaz Trebitsch-Lincoln
England signed on Ignatz Trebitsch-Lincoln, an agent steeped in counter-insurgency tactics and disinformation, to thwart, expose, and burn all the monarchists conspiring against the Weimar Republic. 
Image result for IMAGES OF Walter Rathenau
The powerful industrialist Walter Rathenau, who threw himself actively into the politics of Weimar in 1921, likewise had ideas about taxing the rich into oblivion and therefore elude the provisions of the Versailles Treaty, but he too was defamed at home, and manipulated abroad into ratifying a ‘secret’ and, at first glance, strange pact of Russo-German collaboration (1922), through which the two ‘European outcasts’ would engage in full military cooperation before worrying at each other’s throats in 1941. Before Matthias Erzberger might even begin to tap the financial holdings of the German absentee owners, these cashed in their War Loan certificates, and exported abroad the wealth of the country. As the rich redeemed their Treasury Bills and the government bought foreign exchange with which to pay reparations, the Reichsmark lost value fast: thus the so-called ‘external depreciation’ of the German currency was caused. Thence the Reich, in order to sustain the payments system, began to in debt itself at an accelerating pace by selling a swelling mass of government bonds (1921). The Reich’s short-term indebtedness soared until it literally ‘exploded’ in 1923 under the pressure of non-renewal and massive redemption on the part of the former subscribers, both of which contingencies obligated the central bank to transform the bonds into a sea of (worthless) paper notes. The year 1923 marked the near disintegration of the German community: in its calamitous course, the infant Nazi Party made its first attempt at seizing power with the Beerhall putsch in early November. The putsch failed, but the Nazi creature, though immature, held remarkable promise: marked by a fervent Anglophilism and a fanatical, unbounded hatred for the USSR, which Hitler perceived as an expression of Judaic subversion, a new movement had emerged that might very well be none other than Britain’s reactionary candidate for the forthcoming Russo-German conflict, as predicted by Veblen in 1920.

The story of Matthias Erzberger may best be understood if it is borne in mind that the Treaty of Versailles was never meant to weaken the elites of Germany, although the diplomatic and official rhetoric of the time gave credence to the contrary. As one historian put it, the Germany of the Second Reich was made of a Quartet and a head. The head of the quadruped was the monarchy, the administrative front legs were the bureaucracy and the army, whereas the agrarians and the industry formed the hind legs – the rest was cartilage and sinew. ‘The essence of German history from 1918 to 1933 can be found in the statement There was no revolution in 1918The only visible change was the monarchy’s decapitation in November.’3 What this signified was that any politician that would attempt to effect any sort of reform in the name of democracy with the newly available tools of a parliamentary system, would in fact be confronted by the opposing strength of the old order, which presently stood behind Nationalist parties set up ad hoc, with its industrial and financial might literally undiminished. That being so, any attack leveled at the upper class would be counteracted by a barrage of threats and abuse from the press, physical intimidation by thugs secretly protected by the elite, hostility from the judicial courts, and, last but not least, by the utter impassibility of Britain and the Allies, who would look on, surveying these savage fights with attentive detachment, like spectators in an amphitheater.
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Ever since its unreal conclusion, it has often been the vogue among historians to look upon Weimar as an era of missed opportunities. 

There were really two Germany's…Germany had tried the way of Bismarck…now it was ready to try the way of Goethe…The Republic was born in defeat, lived in turmoil, and died in disaster…Still, the choice of Weimar was neither quixotic, nor arbitrary; for a time the Republic had a real chance.4 

It never did. 

The Republic was, as Veblen understood, damned from the start. The salient developments of Weimar’s 15-year run-up to the Third Reich were but the pangs of Nazism’s gestation. The interminable parliamentary jockeying; the failures of 32 parties, 20 Cabinets and 9 elections; the 224,900 suicides 5 and 300 political assassinations;6 the relentless shuffling of numberless economic proposals with no future; the two financial shock therapies (1923 and 1931); the literal in-existence of the republic’s statesmanship and the puppeteer's of the Anglo-American clubs; the violence; the allegedly impotent cynicism of the Allies; the population’s leaden pessimism; the ‘hair splittings and tortured compromises over the reparations’ imaginary millions and billions, which all seem scarcely worth studying today’;7 all these are pieces of a chronicle captioning the rise of Hitlerism

The life-cycle of Germany’s sham republic may be divided into three periods:8 

1. a period of turmoil, 1918–23 
2. a period of fulfillment, 1924–30 
3. a period of disintegration, 1930–33.* 
* The second and third periods will be dealt with in Chapter 4.
The Weimar republic was a laboratory for a social experiment: with the clauses of Versailles, Britain was waiting to resurrect from the rubble of the Wilhelmine Reich a political manifestation not unlike Prussian militarized conservatism, yet far more ‘pure’ in its hostility: a German reactionary movement, without the cloying accouterments of regalia. That the operation was going to yield the hordes of the swastika, might not, possibly, have been forecast by the majority of the Elder Statesmen of the West. But the expectation of witnessing in post-war Germany the rebirth of a grassroots front, wrathful and vengeful, was hotly entertained from the outset. The Veblenian prophecy is proof of such anticipation. The Allies were playing a most dangerous game. 

In the helter-skelter aftermath of the failed revolution, the Germans, already sundered by the failure of all those policies of social insurance that Bismarck had introduced three decades earlier to pacify the proletarians, began to cannibalize one another immediately. ‘November 1918’ proved that Germany was incapable of revolution: the turmoil did not produce a single charismatic leader of the working masses. 9 After the generals were given carte blanche by the Socialist leaders to suppress the haphazard and hardly menacing riots of 1919, few doubted that the warriors would wait long before turning against the republic itself. 

No sooner did the war end than the forces of reaction fomented at home a clime of acrimonious antagonism. After the war, General Malcolm, head of the British Mission in Germany, paid a visit to General Ludendorff – the reckless soldier who had come to govern Germany during the last three years of the war in the company of his elderly duumvir, General Hindenburg, until he had been sacked by the Kaiser shortly before the surrender.* And as they sipped tea, the German tried to convey to his guest how deeply betrayed the General Staff had felt in 1918 by the weakness of the domestic front and the sailors’ mutinies; Malcolm, seeking clarification, queried the ex-Quartermaster: ‘Are you trying to tell me, General, that you were stabbed in the back?’ ‘Ludendorff’s prominent blue eyes lit up at the phrase, “That’s it!” he shouted triumphantly. “They stabbed me in the back! They stabbed me in the back!”10 

During his testimony to the constitutional assembly’s investigative committee on the war in November 1919, the other half of Germany’s former military tandem, General Hindenburg, the hero of the East that had smashed the Russian armies on the Masurian Lakes, would have coined this construction into the abiding slogan of Reaction: ‘because of the intentional mutilation of the fleet and the army…our operation necessarily miscarried; the collapse was inevitable…An English general said with justice: “The German army was stabbed in the back”.11 

A ‘stab in the back’: it seemed plausible at the time – after all, the German army had not suffered a crushing rout. The Red agitation had been real enough; the republic was Wilson’s idea, and the Treaty of Versailles was to all Germans a revolting disgrace. Therefore, many reasoned, Weimar was but a travesty, and an odious one to boot, regarded with indifference, at best, or contempt; Weimar could ask nothing else of Germany. The republic became a politicians’ affair – gray, tedious, and purposeless. Weimar’s interminable list of stewards was a triumph of anonymity – all obliterated figures, middling brasseurs d’affaires who took brief turns at the helm of a sinking ship swayed by external currents, which they could never resist. History, however, remembers two names: Matthias Erzberger and Walter Rathenau. 

Both men, though starkly different, were extraordinary expressions of the possible: protean creatures of such skill and flexibility – intellectual and worldly – as to believe by an enormous sin of vanity that they could bend the world in whichever direction they listed. Each thought himself capable of altering the course of Germany’s tragic destiny, and more concretely, of outwitting Britain at her own game by making Weimar a workable proposition: that is why history should remember them. Theirs was a gratuitous sacrifice, yet a revealing one as far as the Nazi gestation was concerned. 

Matthias Erzberger, a parliamentarian for the Catholic Zentrum of indomitable energy, began his career in the first decade of the twentieth century by investigating aggressively the scandals of the empire’s colonial policies (embezzlement, mistreatment of natives, inflated bills for government orders, and so on): his revelations in 1906 brought about the downfall of the director of the colonial administration, and of his young secretary, Karl Helfferich, who nonetheless would rise to great heights in German political life, and subsequently swear undying hatred for Erzberger.12 Like most of his contemporaries, Erzberger appeared to be an embodiment of Germany’s jarring duality, which Veblen unveiled at the time, namely the commixture of chauvinism and progressive aspirations. In the name of the ‘possible’ Erzberger resigned himself to the impossibility of winning the war: in 1914 he had clamored for conflict and demanded annexations; two years later he found himself seconding most actively by innumerable missions abroad a peace proposal initiated by the Vatican. When all efforts failed, undeterred, ever the partisan of feasibility, he lent himself to the scapegoating tactic of the generals, and brokered, as mentioned previously, both the Armistice (November 1918), and the ratification of the Versailles Treaty (June 1919). The conservatives had so far turned Erzberger’s vanity to account by making use of his prodigious art of the palliative, yet at heart they utterly despised his evolving appetite for practicable solutions, especially as these were now encroaching upon the ‘national honor.’ Thus, of the so-called ‘November criminals’ whom German reactionaries accused of having stabbed the nation in the back, Erzberger, blind to the consequences, had willingly and disingenuously become the symbol. After Versailles, a Democrat warned him: ‘Today we still need you, but in a few months…we will get rid of you.13 This was an omen, but Erzberger confidently flouted it. 

Since June 1919 Erzberger was aboard Weimar’s second Cabinet as Finance Minister. In his first speech delivered the following month at the National Assembly in that capacity, he outlined Germany’s present financial burden. By the end of the war, Germany had expended over 160 billion marks; this sum amounted roughly to twice her annual income at the end of 1918. The expense had been covered with long-term debentures to the extent of over 98 billion marks – this was the hard core of the country’s debt, the war loan (die Kriegsanleihe) – and 47 billion marks of short-term government bills, the paltry remainder having been paid for with taxes.14 

A war debt was a fair instance of the insanity of modern monetary systems: in this case, the German public was indebted ‘to itself’ for an amount twice as large as its income, expended on resources entirely dissipated. Individuals held portfolios of financial titles corresponding to property pulverized in a lost engagement, and they called it wealth – they expected to receive interest on it for many years to come. 

As to who owed what to whom, Erzberger provided the details. Over 90 percent of all subscriptions to the war loan* were for modest amounts; this was the investment of the ‘small people’: they stood behind a quarter of the Loan. This implied that the remaining 10 percent of the subscribers (4 million out of 39 million investors), that is, the rich and super-rich, accounted for the 75 million marks left over – not to mention their quota of the short-term portion.15 Of these 4 million affluent investors, about half possessed another quarter of the Kriegsanleihe. Finally, this breakdown led to the individuation of Germany’s richest, the absentee owners: 5 percent of the total claiming half the entire sum of the Loan. Thus, sampling the war debt confirmed that there existed before and after the war an elite numbering roughly 3 million individuals that commanded over half the country’s resources. 16 This was Germany’s top out-of-sight class, which the architects of Versailles had taken pains to shield, and expected therefrom, in time, the financial encouragement of an anti-Bolshevik movement. 
* The subscribers to the loan numbered 39 million individuals.

In defense of the petty investors, Erzberger vowed a financial crusade aimed at safeguarding the regular remittance of interest, that is, the income of the securities, to their legitimate owners. In sum, there were 160 billion marks worth of securities, yielding a yearly burden of 10 billion marks per annum weighing on the state’s budget. Now, the question was, ‘Who’s going to pay the interest?’ As it customarily happened, it was out of the wages of the laborers and, to a degree, of the middle class that the government levied the taxes with which the country’s rentiers – the coupon-clippers – obtained their free stream of unearned income, what was otherwise called ‘rent’ (that is, something for nothing). The pernicious repercussions of such a toll upon the German underclass prompted Veblen to recommend the unconditional repudiation of the war debt in its entirety, so as to curtail the sustenance of the German elite, and channel the amounts saved thereby to the reconstruction of the war-devastated areas. 
† Today, the system remains the same. But the Allies, deliberately, would not touch the war loan, and Erzberger had an unconventional idea. He declared his intention to overhaul drastically the incumbent fiscal system, centralize it, and instead of sweating the underclass for the benefit of the upper class, he left the underclass where it stood, and guaranteed the Mittelstand (the middle class) its flow of rents, at the expense of the absentees, which he proposed to tax incisively. His plan was, in fact, simple: single-handedly, he would have raised dramatically the tax bill of the wealthy, and invited them to discharge their obligations by paying, if they so wished, with the war loan certificates themselves. Once in its hands, the Reich would have proceeded to destroy them instantly. It was a roundabout scheme to force the absentees to surrender their paper certificates almost for free. Thus Erzberger thought he could gradually deflate the public debt – take the water out of the jar, so to speak, before it flooded the markets… 

In those days, neither such a paragon of the attainable as Erzberger, nor anyone else had sufficient imagination to contrive ways with which Weimar could service a debt of 160 billion marks, as well as transfer the forthcoming reparations installments and pay for the republic’s new social commitments. 

From Berlin’s Finance Ministry, the apex of a swiftly renovated and most efficient reticulation of fiscal collection, Erzberger fired an arsenal of newfangled levies at the elite. The absentees were now the target of five different types of exaction: a two-pronged war profit tax on property and income, a hefty inheritance tax, a luxury tax on consumption, and to crown it all, a capital levy – the infamous Reichsnotopfer, ‘Sacrifice to the Reich in its hour of need.’ The new directives were buttressed by additional regulations designed to block capital flight, and the modern innovation of tax ‘payment from the source by deduction from wages.’17 The Finance Minister proclaimed then ‘that in the future Germany the rich should be no more.’18 In short, Erzberger had committed political suicide. 

The tax-gathering had merely begun, when Karl Helfferich, conservative stalwart, former imperial Vice-Chancellor and Finance Minister during the war indeed, the artificer of the giant war debt bubble , launched a libelous campaign against his arch-enemy Erzberger charging the latter of corruption, mendacity, and unlawful meddling in politics and personal business. While the Right-wing press supported the scourging passionately, and the Center-Left kept suspiciously mum, Helfferich bound his stack of tirades in a pamphlet titled ‘Fort mit Erzberger!’ (‘Let’s get rid of Erzberger!’). Erzberger bit the bait and sued for libel. He was forsaken, and fought alone. The trial began in January 1920. It nearly came to a premature end when a 21-year-old ‘half-crazed demobilized officer candidate,’ Oltwig von Hirschfeld, attempted to assassinate Erzberger as he was leaving the court a mere week after the beginning of the proceedings. The first bullet pierced the minister’s shoulder, whereas the second, the lethal one fired at the lungs, was deflected by the chain of his gold watch. After a few days, Erzberger was ready to resume the suit. Hirschfeld would claim in court that ‘Germany was injured every day that Erzberger continued in power.’ He expressed no regret, but, yielding to counsel, he pleaded that his intent was to wound, not kill, the politician. The female audience was charmed, and the useful idiot was ‘sentenced to a grand total of eighteen months.’19 In the meantime the Right did not spare itself in kindling the slander against Erzberger, including the fledgling Nazis, who, within the great choir of reaction, squealed from the nook of their taverns that the ‘fat’ Erzberger was a traitor for selling out the country to the victors at Compiègne in November, and foisting the Treaty upon the people. Yet no one dared to interject that both acts had been prompted by the military. Hugenberg, former director at Krupp, Germany’s steel temple, and presently leader of the Nationalists and of a powerful media consortium, moved in, too, to pillory ‘Erzberger the traitor’ and decry the minister’s ‘socialization measures,’ such as the ‘expropriation,’ he clamored, ‘of the middle class…’20 The denunciation did not lack in effect, though Hugenberg made his tongue slip in uttering it, for the class Erzberger was seeking to expropriate was not the middle, but the upper one. 

In fact, the absentees scented the brew of trouble and started to export hurriedly their liquid balances denominated in marks, which they converted, beyond the border, into foreign currencies. At the end of 1919, the Neue Zürcher Zeitung published the news that by June 35 billion marks had already fled the country.21 Between 1914 and 1918, because of the large injections of paper money devoted to financing the war virtually without taxes, the mark had lost half its purchasing power: so the inflation had already begun, but by early 1920 it was accelerating. Erzberger’s hope to defuse inflationary outbursts turned out to be ‘a poor prophecy.’ Not only did the Reichsnotopfer fail to stem the mounting inflation, but it actually stimulated it.22 

The trial was stacked, yet the prosecution could not even pin a crumb of malfeasance evidence on Erzberger. He was clean. His opponent, the tool of the elites, Helfferich, was found ‘guilty of both libel and making false accusations’ and ordered to pay the allegedly high cost of the trial,23 and a ludicrous fee, whose paucity the judge justified ‘by the fact that Helfferich had proved the substantial accuracy of his charges.’24 In other words, the calumnies of Helfferich were not judged unfounded, but merely fulsome. The plaintiff paid the symbolic charge and carried the day. The tribunal’s deliberation ended the political career of the defendant: Erzberger had defied the absentees, and, by plowing ever creative avenues of political understanding between the Socialists and Germany’s progressive bourgeoisie, he had striven, in Weimar, for the achievable.25 And thus, like Weimar, he was condemned. After the trial Erzberger resigned from his ministerial post, vowing to make a comeback as soon as the storm cleared up.

The court delivered its verdict on March 12, 1920. The following day, the republic experienced its first praetorian coup: the so-called Kapp-Lüttwitz putsch. 


Hiring Trebitsch-Lincoln to 
foil the Kapp Putsch 
After the stipulation of the peace, the supreme command of the German army – the Hindenburg-Groener duo – stepped down. With the lapse of the link connecting the army to the government, the troops found themselves effectively without command from June to November 1919. 

In the vacuum, the parties of Reaction, displaying uncommon resilience, joined forces at once to recapture what they perceived legitimately as theirs.26 Naturally, Britain had contemplated such an eventuality. What the British were observing in 1919, as they and their Allies waged the invisible war against the Russian Whites, was a counter-movement of sizable chunks of the German army seeking to reorganize themselves to reclaim their Middle European tenure. This somewhat confused but menacing stirring among the German warriors assumed unmistakable shape and color in eastern Prussia and portions of the Baltic states, where, many a month after the war’s end, a farrago of Freikorps and uniformed renegades had stubbornly entrenched itself, fighting the Poles on one front and the Bolsheviks on the other, while fraternizing with Russian White chiefs. 
Image result for images of Avalov-Bermondt.
The post-war situation stabilized after the lines of demarcation between Germany and Russia were made to encompass a cordon of brand new buffer states – from Czechoslovakia to Estonia by way of Poland – which were designed to keep the two states separated during the Versailles experiment. Then, at the insistent request of the Allies, the recalcitrant German generals were repatriated. Von der Goltz, the hero of the Latvian campaign, and a solid anti-Bolshevik, returned in August 1919, while his troops for the most part stayed behind to rally round a White adventurer, Avalov-Bermondt. Funded by Germany’s heavy industry to spearhead the overthrow of the Reds, Avalov’s vanguard was on standby, serving through the winter of 1919 as a bridgehead to penetrate Russia’s markets.27 Over the ridge, Avalov and the German divisions expected to make contact with Kolchak, Denikin, Wrangel, and the other White chieftains. 

From Tilsit in Eastern Prussia, on December 9, 1919, the British representative of an international commission set up to deal with this mutiny, General Turner, reported: 
† Now Sovetsk in the Kaliningrad area – Russia’s carved-out dock on the Baltic Sea.
Eastern Prussia does seem not aware that Germany has lost the war. The military party is omnipotent and militarism flourishes in all its forms. Personally I have no doubt that a plot is being hatched to overthrow the government at this time, nor do I doubt that the army has sufficient force to carry it out.28 

From his temporary exile in Sweden, Ludendorff regained Germany in February 1919. In October he patronized the Nationale Vereinigung (National Association), which garnered the cream of reactionary Germany: officers, bureaucrats, and industrialists, who since the Conciliar uprising and its bloody suppression in the spring of 1919, were bent on wrecking Weimar. 

Indeed, the Germans had not been routed: they could still count, adding to the army a vast constellation of subterranean paramilitary groupings, on a fully-equipped strike force of approximately 2 million men.29 If their coup succeeded, with the Russian panorama still in a state of flux, the Sea Powers’ strategy of protracted encirclement would have suffered a disastrous setback. If the coup succeeded, and likely it would, a consolidated front of Whites – Germans, Russians, and Hungarians – jutting out into European Russia, would have undermined, if not wiped out Russia’s Bolshevik rule, which was an Allied asset; and constituted the kernel of a Eurasian partnership, which in turn would have immediately led to Germany’s repudiation of Versailles and afforded her immunity from a British blockade. The men of the Nationale Vereinigung, monarchist Prussians of the old school, no less anti-Bolshevik than Anglophobic, posed a clear threat to Britain’s plans, and therefore they had to be stopped. Or better, burnt. 

How Britain effectively deep sixed the forthcoming coup of the German Whites – another glorious masterpiece of intrigue of the history of the twentieth century – remains something of a mystery to this day. But a string of elements gleaned from the known chronicles may afford a partial threading through this affair. 

On July 5, 1919, Ludendorff sent his former aide-de-camp Colonel Bauer to sound the British. Bauer, seemingly, laid out his cards on the table and queried the chief of staff of the British military government in Köln, Colonel Ryan, whether Britain would welcome a ‘stronger’ German government. Not a dictatorship, Bauer specified, but a resolute republic, which would brook no Socialist unrest, make the country ‘work,’ and thus honor its international obligations with punctuality and thoroughness. A republic, he concluded with a wink, which would find its most harmonious resolution in a constitutional monarchy, British-style.30 

Ryan sensed the bluff; he merely had to take Bauer for what he was: the emissary of a faction of staunch monarchists, who did not harbor the least inclination to bow to Versailles, and who had sworn revenge against Britain by seeking some form of entente with White Russia.31 But Ryan played the game and invited Bauer to pursue his project; he guaranteed the Allied blessing to the endeavor, provided that Bauer’s boss, the conspicuous Ludendorff, whom the Franco-British public still looked upon as a ‘war criminal,’ confined himself to the background.32 

On the same day, ‘a leading light’ of the reactionary cabal, Wolfgang Kapp, a former east Prussian officer in charge of agricultural affairs, and at the time an exponent of the Nationalists,33 felt the pulse of the Armeekommando Nord (northern detachment of the Reichswehr), and ran by its chief, General von Seeckt, the idea of tearing up the Treaty of Versailles, and expelling by force the Poles from the Posen enclave.* Seeckt was no friend of Poland, but he had no desire to plot, rashly, against the British. Kapp was temporarily rebuffed.34 
* One of the portions of Germany ceded at Versailles to the new state of Poland.
Meantime, in August, 1919, officially discharged from a British prison a month previously, Trebistch-Lincoln arrived in Berlin. 
Image result for images of Ignaz Trebitsch-Lincoln
If there are, indeed, more things in heaven and earth than are dreamt of in our sorry materialist philosophy, Ignatz Trebitsch-Lincoln is assuredly one of them. Hungarian by birth, in 1879 in Paks on the Danube, he watched his father, a petty merchant, go bankrupt at the end of the century.35 He then stole a gold watch, and fled family and jailers by seeking shelter in the Barbican mission for Jewish converts in London. There he pilfered the gold watch of his Anglican protector and returned to Hungary, which he abandoned immediately, and forever, as he found he was still wanted for the first theft. He was 19. 

He then reached, by the skin of his teeth, Hamburg, where he converted to Christianity (Presbyterian). Disliking the stern life of the seminary, and finding no employ there, he embarked, with a German wife, en route to the Jewish mission in Montreal. In Canada, he passed to the Anglican camp, did not convert a soul, but was ordained a deacon nonetheless. To anglicize his surname, he appended ‘Lincoln’ thereto. After two years, monetary strictures forced him back to Europe: to London, via Hamburg. In 1903, he found employment as a curate in Appledore, Kent, though he failed to become a priest. Lloyd George was allegedly seen attending a few of his sermons.36 

When Trebistch’s father-in-law died, leaving the couple a small fortune, he forsook his clerical post at once and hunted for an aperture into politics. Interviewed for a propagandist position in the temperance movement (anti-alcohol campaign), he was turned down, but on the occasion he stumbled upon the Cocoa King, chocolate entrepreneur Benjamin Rowntree, who was charmed by Trebitsch and offered him employment as a private secretary. From 1909 to 1916, as Rowntree’s retainer, he conducted social empirical research on the rural conditions of northern Europe. Possibly, he joined a lodge at this time.37 Boosted presumably by Lloyd George,38 he then ran as the Liberal nominee for the district of Darlington in York; Winston Churchill, by letter, wished him success, so did Lloyd George. His frequent travels to the Balkan area attracted the curiosity of consuls and attaches of the Foreign Office. On a free trade platform, Trebitsch won, sensationally, by 30 votes over the incumbent conservative opponent. The improbable MP did not last beyond two speeches, as shady business left him insolvent and without the Liberals’ endorsement. 

Like Parvus Helphand a decade earlier, he descended to the Balkans in search of easy money: he promoted oil undertakings fitted with expensive American equipment acquired heaven-knows-how, but unlike his brother in conspiracy, Helphand, Trebistch failed his hand at business. At the outbreak of World War I, he was back in London and offered to spy for British intelligence ‘as a censor of Hungarian and Romanian correspondence at the War Office and Post Office.’39 At this juncture the record becomes misty: it bifurcates into cautious yet terse archival collages on the one hand, and the vibrant narratives of dazzled raconteurs on the other, which the scribes of the former school dismiss altogether as ‘entertaining absurdities.’40 

Between December 1914 and January 1915, Trebitsch was in Rotterdam, the war’s torrid crucible of espionage. What he cooked therein for a fortnight was left unsaid. The masters of embroidery swore he was working as a double agent, passing on to British intelligence information on the positions of the German troops on the one hand, while studying with the German Services, on the other, a plan to block the Suez Canal – England’s gate to India – by sinking in its midst one or two ocean liners replete with cement.41 Upon his return to London, he tendered to the intelligence officers an envelope containing the Germans’ draft of unrestricted submarine warfare and the secret codes of Germany’s intelligence in America.42 A gift, he said. His case was then referred to Captain Reginald Hall, Director of Naval Intelligence, who gave him three days to disappear: it was unclear whether the British services were allowing Trebitsch to pay his way out of a death sentence for treason with the documents or setting him up for an assignment elsewhere.

In February he reached New York where he peddled sensationalist articles on his espionage activity between Britain and Holland. At the instigation of the British consul, he was arrested on charges of fraud: before the war, in the dire straits of insolvency, Trebitsch had falsified Rowntree’s signature on a series of promissory notes. While waiting for Scotland Yard to dock in New York and extradite him to Britain, Trebitsch gained some reprieve by offering the FBI his services as a decipherer of intricate German cables. The Bureau accepted. Trebitsch was thereby granted a regime of semi-liberty, which he escaped altogether by running to a farm in New Jersey, where he would be finally apprehended and shipped back to Britain to stand trial. In July 1916 he was ‘sentenced to three years’ penal servitude’ in a British penitentiary.43 In other words, he vanished from the official record for three years – it is hard to believe that he stayed behind bars for so long.44 Some claim that in the interim he even sojourned in Russia.45 

On August 11, 1919, from Britain he sailed off to Holland. From Holland he crossed over into Germany. 

‘Stalking the pavements of Berlin…unemployed, friendless and starved… a penniless refugee,’46 ‘foreign-born, Jewish-born, ex-jailbird,’47 Trebitsch, a mere fortnight after his arrival, managed to hook up with journalists gravitating in Right-wing circles and publish in their tendentious rags anti-British articles of the genre he had hawked in Manhattan in 1915. 

By mid September he had so comfortably penetrated the inner core of Ludendorff’s Nationale Vereinigung that he was ready to lead a mission to Holland to harness no less than the ex-Kaiser to the forthcoming coup. 

The cool-headed biographers of Trebitsch, anxious to discount any ‘conspiratorial fancies’ that could arise from musing over such outlandish happenings, are unsparing in their efforts to characterize Trebitsch’s trajectory merely as ‘the empty pyrotechnic display…of a manic-depressive scoundrel,’48 which, patently, is the most entertaining of all absurdities on this count. 

Neither a spy 49 nor an impostor, Trebitsch in all likelihood was, like Parvus, one of those ‘specialists’ fluent in the art of subversion, who were part of a wider network of mercenaries fascinated in one form or another by the ways of power. 

In 1919, so it appeared, Trebitsch, after being cooped up for a time, ransomed his freedom from Britain by carrying out one last assignment for the Crown. From the outset, isolated voices within Germany’s Right cried wolf, denouncing Trebitsch as an agent provocateur of Britain, dispatched to Berlin to sink the anti-republican enterprise. For instance, Helfferich, Erzberger’s foe, and allegedly former admiral Tirpitz, the father of the submarine sink-at-sight program, walked out of the game as soon as they were apprised of Trebitsch’s involvement.50 Yet by October, Trebitsch had Colonel Bauer completely in his grasp, and would work thenceforth as his closest collaborator. 

The mission in Holland to lure the ex-Kaiser and the Crown Prince failed: Wilhelm and his son, possibly advised by their residential councilors, refused, so as not to compromise themselves more than they already had, to see this strange adventurer who was inviting them to march at the front of a monarchist coup. Apparently, they wanted no more truck with power. 

Spun by the undaunted Trebitsch, the intrigues suddenly took a swerving turn towards the East: Soviet Russia became involved. The adventurer from Paks seemed to have talked the German conspirators into trucking with the Bolsheviks, as an insurance policy in view of an eventual defeat of the Russian Whites. 
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In November 1919, the Soviets had de facto two representatives in Berlin. One was Karl Radek, former Polish Socialist and talented publicist, who had thrown in his lot with the Bolsheviks, and had been thereafter selected as one of the privileged few that had accompanied Lenin in the journey through Germany scheduled by Parvus in April 1917. On December 8, 1919, Bauer met Radek.51 

Before Radek, Bauer adumbrated the possibility of an understanding between officers and workers: he asked Radek whether Moscow could placate the laborers via their German mouthpiece, the K.P.D, and thus prevent them from striking and thus disrupting the smooth development of the impending coup. Radek, non-committal, replied that such a decision rested with Moscow.52 

The other Soviet official presence in Berlin, was that of Vigdor Kopp, ambassador of sorts since November 1919, who, according to the memoirs of Trebitsch, encountered Bauer several times. Again, Bauer asked Kopp to exert pressure on the K.P.D not to hamper the coup with the proclamation of a strike.53 But while these fantastic negotiations were being woven, the German monarchists secretly printed counterfeit money for the White Army of Avalov.54 

In 1920 the pace of events accelerated. On January 10 the Versailles Treaty went in force. The Allied note demanding that Germany hand over the ‘war criminals’ (Articles 227–30 of the Peace Treaty) exploded ‘like a bomb’ on February 3; it was accompanied by a list of 900 names, including those of Kaiser Wilhelm, Ludendorff, Tirpitz (who pioneered the use of poison gas on the Western Front) and Helfferich. Though France was not feigning, Britain, of course, was: she had no desire to see Kaiser Wilhelm, one of Victoria’s grandchildren, hang, but the news had sufficiently envenomed the public spirit: the Reichswehr generals were ready to resume the war.55 The German government tarried, and nothing would come of the Allied requests – no ‘patriot’ would ever be surrendered. 

On March 8, Colonel Bauer called on the British once again, but this time, General Malcolm, Chief of the British Mission in Germany, responded with a clear rebuff. ‘The Entente,’ he sentenced, ‘refuses categorically any counter-revolutionary coup.’56 Such an action, Malcolm added, was ‘sheer madness.’57 

On March 10, the commander of the Berlin detachment of the Reichswehr, General von Lüttwitz, refusing to comply with the injunction to reduce the army by 200,000 by April 10, ‘aggressed’ the Cabinet enjoining it to resign, revoke the disbandment order, call for new elections, and allow the formation of a cabinet of non-partisan technocrats. His demands were rejected; President Ebert ordered Lüttwitz to give way and go into retirement at once. 

On March 12, Erzberger was politically finished, and on March 13, the Ehrhardtbrigade, the jewel in the crown of the Freikorps, marched into Berlin – the coup had begun. It would last exactly 100 hours, from March 13 to March 17, 1920. 

The ex-bureaucrat Wolfgang Kapp and the dastardly von Lüttwitz fronted the putsch. Trebitsch had taken over the post of Press Chief. All the while, the meanest of the mean poured through the schick arteries of the capital: Freikorps troops mingled with the Baltikums – the veterans of the Baltic fights, identifiable by the white gamma cross adorning their helmet. They could be heard singing: ‘Hakenkreuz am stahlhelm, schwarz weiss rotes Band, die Brigade Ehrhardt werden wir gennant’ (‘Swastika on helmet, black, white, and red brassard, the Ehrhardt brigade is what we are called’).58 

They are young, green young for the most part. They display the grimy countenance of men who have long campaigned. They are swift and supple, drilled. Beautiful soldiers…They examine the riches and occasionally the landmarks of the great city with a curiosity laced with savage covetousness…The Gauls must have been like this on the first hours of the conquest of Rome.59 

Germany was torn: East and North were with Kapp, whereas the South and West, excepting Bavaria, seemed loyal to the republic, or resolved to stay neutral. The army, however, was silent and on the lookout: von Seeckt, since November 1919 Chief of the Army Command – the reconstituted and much reduced replica of the General Staff of yore – pressured by the Cabinet, refused to intervene against Lüttwitz: ‘the army would sit on a fence until the issue of this trial of strength could more clearly be discerned; it would then descend…on the side of the winner…Whatever the outcome,…the army would retain its position as the ultimate source of sovereign power.’60 Which is to say that the success of the coup would not hinge on the will of the army, no matter how favorable it was to the putsch. 

In principle, three were the parties whose endorsement the putsch needed to succeed: the army, labor, and banking. The first, as proven by Seeckt’s temporizing, had been virtually won over. The second, in spite of Colonel Bauer’s anxiety, was in fact irrelevant. 

It has often been claimed that the Kapp putsch was muffled in the general paralysis created by the unions’ courageous call to strike in Berlin. But that was not the case. The strike was set in train haltingly, as the coup was struck on a Saturday. It was not proclaimed by the Cabinet exiled in Stuttgart,61 but triggered by the Socialist unions, initially without the accolade of the K.P.D’s leadership, which, instead, diffused an appeal on the 13th not ‘to lift a single finger for a government engulfed in the shame of the murderers of Karl Liebknecht and Rosa Luxemburg.’62 Rhetorical reference was here being made to the responsibility of the Socialist Minister Noske, who had bargained with the Freikorps for suppressing the Berlin Council in January 1919. This instance was of singular importance, for it proved that the Russian representatives (Radek and Kopp) had kept their word, at least for a day, and that the German Communist Party (the K.P.D) was indeed being instructed by Moscow to refrain from thwarting the praetorians’ putsch. 

Only on the following day would the K.P.D join the strike, pulled by the fervor of the rank and file eager to lend a hand to ‘their trade-union comrades.’63 The initial abstention of the K.P.D was all the more striking as the officer directly responsible for the assassination of Liebknecht and Luxemburg in 1919, Captain Waldemar Pabst, was himself one of Kapp’s putschists. 

The strike gathered steam only after March 15, on Monday, when the coup had already failed. In fact, the true protagonists of the putsch, the soldiers, did not in the least suffer from the faltering interruption of public services: shops and telephone lines were unaffected, while the strike was indeed in risk of misfiring as distress was mostly felt in the working class neighborhoods, which could not avail themselves of any kind of technical assistance.64

General van der Goltz, in putschist outfit, ordered to shoot at the picketers, but his order was disobeyed for the match had been settled elsewhere, and it was now over. 

The fate of the putsch was decided in the halls of the Reichsbank. On Sunday, March 14, Rudolf Havenstein, the governor of the central bank, received emissaries of the putschists, who addressed him with a request for money with which to pay the troops drafted on a mere piece of paper undersigned by Kapp. Havenstein with protocolar punctiliousness responded that withdrawals could only be effected by means of special checks, which were in possession of the Chancellery. And, almost derisively, the governor added that the bank did no business on Sundays…The envoys politely retired, and reappeared the next morning with the checks regularly signed by Kapp; the banker, cool as ever, replied that he knew of no Kapp. The scene repeated itself the following day, as Havenstein refused to honor a few more checks signed this time by Lüttwitz. On the brink of desperation, the cabal summoned Ehrhardt, the Kapitän himself, to seize by force the reserves of the Reichsbank. Ehrhardt retorted that he was an officer, not a safe-cracker. The Kapitän must have understood that cash could only tide the coup over for a week, as banks were not chests bursting with shimmering tokens, but lenders of ‘keys’ – keys to their network, which in common parlance were referred to as ‘lines of credit.’ And the lines of credit, that is, the money, had been denied; the jig was up. 

By the 17th, all had fled: Kapp had taken a plane to Sweden; Lüttwitz had gone into hiding in Hungary; Ehrhardt, Ludendorff, and several other Freikorps commanders had run south, to Munich; Trebitsch was ‘among the last of the conspirators to leave the Reich Chancellery building.’65 

On March 17, an old war plane flown out of Munich by the former ace Greim had just landed on a Berlin airfield, carrying Dietrich Eckart and his assistant Adolf Hitler, who had been sent by Captain Mayr ‘to instruct Wolfgang Kapp on the situation in Bavaria.’66 As Hitler alighted, a man rushed in his direction and shouted at him: ‘Beat it! Lüttwitz is finished, the Reds have taken over the city!’67 Allegedly, the man was Trebitsch. According to another source, in the disarray of the last hours, Eckart and Hitler reached the Chancellery, where they caught a glimpse of Trebistch climbing up the stairs. Eckart was supposed to have said: ‘Come on, Adolf, we have no further business here.68 

With false identification supplied by the legate of the Soviet embassy, Vigdor Kopp, Trebitsch and Bauer abandoned Berlin.69 The insurrections sparked by the general strike across Germany (especially in the Ruhr), and subsequently repressed by the Reichswehr battalions all through the spring,caused about 3,000 deaths, and proved once again that proletarian uprisings in Germany, however truculent, never posed a serious threat. 

In Bavaria events had taken the opposite course. The local Reichswehr commander, von Möhl, ‘without supporting Kapp directly,’ had taken the ‘opportunity to remove the Hoffman (Social-Democratic) government from office at to install Gustav von Kahr, a senior official with conservative monarchist leanings, as commissioner.’70 Thus in Munich, unlike in Berlin, the officers had managed not to alienate the party of finance and industry. Had the Kappists proceeded likewise in Berlin, so thought historian Arthur Rosenberg, the coup would have succeeded.71 The British press representative in Germany, Lord Riddell, confided to his diary in March 1920 that a successful royalist coup might ‘change everything.’72 

What was Trebitsch attempting to achieve through this enterprise? After the conspirators’ escape from Berlin, rumors circulated in the press to the effect that the coup ‘could be blamed on a certain British agent – TrebitschLincoln, [who] had started the putsch and then had caused it to fail, “with the object of winning the confidence of credulous officers and politicians, and of keeping the British Government informed – naturally by indirect channels – and receiving its instructions for every step”.’73 This surmise of an ‘imaginative journalist from Berlin,’ otherwise discarded by Lincoln’s biographers as yet another ‘absurd conjecture,’ held, however, more promise than the opposite contention, namely that Trebitsch had thrown himself body and soul in the coup for the sake of his putative megalomaniacal thirst. 

Though we may reasonably assume that Trebitsch was indeed hired to make the putsch fail, we do not know exactly how he did it:74 the documentary evidence is too thin, although there is every warrant in the presumption that the true paralysis created at the center of the Reich in mid March 1920 issued not from the strikers, but from Trebitsch’s improvised Press Office. He disseminated, solo or in concert is impossible to tell, an avalanche of false, incendiary, and contradictory information in a cross pattern of unfathomable complexity. At least three of such key messages seemed to originate from him: 

1. To the political Left. On April 18, 1920, the press organ of the K.P.D (Die rote Fahne, the Red Flag) revealed that the adventurer TrebitschLincoln, ‘the true political mind of the Ludendorff-Bauer consortium,’ had declared to a ‘trustworthy source’ that the Kappists were looking forward to provoking the working classes to launch a putsch of their own, which would be ‘drowned in blood.’75

2. To the bourgeoisie. Starting on March 17, the Frankfurter Zeitung, the voice of finance and heavy industry, which for the past three days had in an odd turn of phrase called for open resistance against Kapp and ‘foreign imperialism’76 (who was the foreigner?), diffused a series of communiqués, according to which von Lüttwitz himself, Colonel Bauer, and Captain Pabst had conducted negotiations with the Independent Socialists aimed at guaranteeing the Baltikums’ support to the Communists for the establishment of a Councils’ Republic. 77 

3. ‘To the British.’ At the putsch’s inception Trebitsch told ‘the foreign correspondents that he had spoken with General Malcolm, who assured him that the British government favored the new regime.’78 The British Mission denied the canard so vehemently as to incommode BrockdorffRantzau, Germany’s former Foreign Secretary, beseeching him to disabuse the Kappists of such dangerous fancies. Thereupon the diplomat stormed into the Chancellery to inform the putschists Kapp and Ludendorff, who swore to the friendship of the British, that the claim was a sacré mensonge (‘a bloody lie’). ‘That got the two gentlemen.’79 The collapse ensued. 

Two additional clues: 

1. When one of Russia’s chief envoys to Germany, the journalist Radek, returned to Moscow in February 1920, he drafted a report for the People’s Commissars, in which he opposed the project of a military league with Germany; the Soviets decided neither to accept or refuse. On March 3, however, Radek was heard on the radio conciliating: ‘We think that now capitalist countries can exist alongside a proletarian state.’80 And on March 14, the second day of the Kapp putsch, he wrote in the mouthpiece of the Soviet regime, Isvestia: ‘The military coup in Germany is an event of world significance…By ousting Noske, General Lüttwitz has torn that rag called the Treaty of Versailles…As long as this regime lasts we are ready to live in peace with it, though we expect its imminent end…’81 This was the identical line recited by the German K.P.D in summoning the workers not to join the anti-Kapp strikes. 

2. Trebitsch disclosed to the correspondent of the Daily News ‘that his party had the support of Winston Churchill, received through Cologne.’ In this regard, Britain’s chief military representative in Germany, General Malcolm, annotated in his diary on April 15, 1920, ‘Except in so far as Winston Churchill is concerned there is just the shadow of truth in it, and this, no doubt is the foundation of all the stories of British support.’82 ‘Rumors of British involvement persisted for several weeks in spite of further denials…by Malcolm, and even by Prime Minister Lloyd George, in a statement at the House of Commons.’83 

So the chief of the British Mission in Germany did confirm that Winston Churchill had indeed granted some sort of recommendation to Trebitsch. This was an extraordinary confession. A confession that enables one to guess with some ease the nature of the operation. 

The Trebitsch mission filled a twofold role. First, it was a plan to flush from the brush the German White guards and prevent them from consolidating their not insignificant influence within industry and finance, by dragging them to center stage in a premature coup that could only abort. 

Trebitsch must have presented exceptional credentials to the generals for being taken in so fast and so deeply within the conspiracy: among these a ‘solid connection’ to the British – this was the link to Churchill, which Malcolm authenticated, and which explained the stubborn conviction of Kapp, Bauer, and Ludendorff that their position was always secure from that angle. At this time, Churchill served officially as Air Minister, though he acted, thought, and breathed for Britain’s Secret Intelligence, with which since 1909 he had sealed an indissoluble bond that would govern the rest of his life.84 

The other, indispensable ace was, as previously emphasized, the connivance of Soviet Russia, who pretended from the start to flirt with the German generals, knowing as well as the British, whom the Russians informed of every move,85 that Ludendorff and company were bent on overthrowing them: everyone was aware that it was with the Russian Whites, not the Reds, that the German generals wanted to consort. When the putsch began, the K.P.D stayed put. Soviet Russia’s fake-up allowed Trebistch to conjure a specter of enormous proportions, which would have appalled the bourgeoisie and kept newspapers of all colors abuzz with speculation for a long time thereafter: namely the fantastic bogus of a so-called ‘National Bolshevik conspiracy’; that is, the rumored entente between German officers and working-class leaders – which was an impossibility. 86 

In the K.P.D’s rote Fahne, Trebitsch would be depicted as the ‘deus ex machina of National-Bolshevism.’ General Ludendorff’s right-hand man, Colonel Bauer, and a handful of officers were indeed seen in Berlin confabulating with trade union leaders but not one of these showed any desire to cooperate. The depth of the mystification was such that a paper as informed as the Frankfurter Zeitung went as far as to contend, absurdly, that Freikorps commanders like, say, Pabst and Ehrhardt, who had truly drowned in blood the Workers’ Councils of Berlin and Munich in 1919, were actually partaking in a National-Bolshevik coup seeking to resurrect those very same Councils (!). These were all falsehoods manufactured and artfully diffused by Trebitsch, thanks to the excellent and complicit stage acting of Britain and the USSR. 

Trebitsch played his cards all at once: (1) he foxed the generals with the trump of his ‘British connection’; (2) he terrified the Socialists and led them to strike by fabricating the rumor that the Freikorps had come to provoke, and thence terminate violently, a rebellion of the workers; (3) and he estranged the parties of finance and industry with the bogey of the resurrected Councils. 

Second, the miscarriage of the Kapp putsch was a spectacular dress rehearsal of the scheme performed 20 years later to deceive Hitler prior to the attack against Russia, which consisted in splitting the British power base into two virtually opposed factions (that is, Churchill versus Malcolm), and employing some means – in this case Trebitsch – to make the opponent believe that the faction allegedly supporting him was the stronger one. After the storm, Berlin’s chief of police, Richter, was at a loss to read the conspirators’ mind: ‘either they belong to the asylum,’ he reflected, ‘or they have been deceived deceivers.’87 

But the European adventure of Trebitsch was not yet over. Undeterred, the putsch survivors gathered in Munich to revive a drawn-out scheme ‘for monarchical coups in Austria, Hungary, Czechoslovakia and Germany, and for a subsequent march on Russia by forces of these countries assisted by White Russians and former prisoners of war.’88 By mid 1920, the rout of the White Russians was all but complete, and such conspiracies had grown somewhat threadbare, but Trebitsch’s task was not accomplished – not until, that is, Middle Europe was rinsed clean of all Whites. 
Image result for images of Major Franz von Stephani,
Of the inner clique of plotters, only Major Franz von Stephani, another Freikorps chief, suspected the truth, and without mincing words he proposed to Bauer and fellow Freikorps commander Ehrhardt to dispatch Trebitsch on the spot. Bauer paid no heed to the murderous purposes of Stephani. But Trebitsch found out. The juncture was propitious for exploding the so-called ‘White International,’ once and for all. 

Disguising it as the panicked counter-move of a man fearing for his life, Trebitsch spirited a thick folder of the Whites’ late conspiratorial designs, which he sold to the Czechs in Vienna, who in turn handed it over to the French and the British: as a result several secret military organizations were disarmed and most Middle European White conspirators exposed and burnt. Then, armed with six passports, Trebitsch disappeared in the Far East. ‘Nothing more is heard of him until September 4th, 1922, when he called upon the United States Embassy in Tokyo. One report, never verified, stated that at the time he carried a Soviet Russian passport,…and that he was on his way to Tibet to help German officers organize an attack on India’. Trebitsch would resurface in Shanghai as a Buddhist monk named Chao-Kung (‘Light on the Expanse’).89 

‘A royalist coup,’ as the British put it, would indeed have ‘changed everything.’ Had the coup succeeded, the Versailles Treaty might have all been for naught. True, Kolchak was already finished when the Kappists invaded Berlin: thus a White, full-fledged Russo-German alliance could hardly have come into being at the time of the putsch, but a revived dynastic Reich, propped by a few satellites in Central Europe, would have certainly conspired, and successfully so, to loosen completely the unsteady grip of Bolshevism over Eurasia in the medium term by bolstering the armies of the other Russian Whites – Denikin, Yudenitch, and the survivors of the Siberian debacle. Second, though the sparse presence among the Kapp conspirators of the Baltikums, with their be-swastikaed helmets and chilling chants, might have made the putsch look like a precursor of Nazi awakening, to interpret it as such would be a great mistake: this coup was a royalist, not a Nazi, uprising. Kapp, Ludendorff, and associates had nothing to share with the resurfaced racialist cult of underground Germany, which would later rally round the ‘gifted personality’ of Hitler – the eventuality that Veblen had scented in 1915. Had the generals had their way in 1920, they would have re-established a pale copy of the Wilhelmine order, and this would have thrown a wrench in the British works; it would have thrown the Nazi incubation out of kilter. Thus, all in all, Trebitsch fulfilled his assignment splendidly: he burnt the European Whites at the a critical time when these could have helped to reverse the fate of the Russian civil war, and repudiated Weimar, with its mock parliamentarism, reparations, chronic social strife, and built-in devices for incubating ‘the enemy of tomorrow.’ 

Trebitsch had been a midwife to Nazism. On March 31, 1920, virtually on the morrow of the Kapp putsch, Hitler was officially discharged from the army, and would from then on devote himself exclusively to politics. He set out to rebuild the party, which was so broke that it did not even have a rubber stamp,90 by changing its name to the ‘National Socialist Workers’ Party of Germany’ (NSDAP)By February of the following year he had eclipsed all other personalities within his burgeoning movement, and risen as its leader and unchallenged propagandist. In August 1921, preparing for the clash against Communist and Socialist militias, he assembled the nucleus of the SA (Sturm Abteilung: ‘shock division,’ also known as the ‘Brownshirts’), which he disguised under the charter of an athletic association.
*Nationalsozialistische deutsche Arbeiterpartei.

While the SA were being fitted, Matthias Erzberger spent a holiday in the Black Forest of Baden before his return to politics, which he had announced in June at a meeting of his party – the Catholic Center-party, the Zentrum. He intimately trusted that he would become Chancellor soon. 

On his walk up to the Kneiben mountain on August 26, 1921, accompanied by a friend, he was accosted by two youths, who crippled him with bullets and finished him off at close range as he crawled to seek shelter behind a pine tree. 

The police had warned him repeatedly of a possible attack. No tears were shed. The conservative press wrote that: ‘A man like Erzberger…was a standing menace so long as he was alive.’91 The killers, two young officers by the names of Heinrich Tillesen and Heinrich Schultz, fl ed to Hungary, aided by certain nationalist elements within the Bavarian police. 

Hitler’s shock troops were put to the test in November 1921 in the first of a lengthy sequence of bloody tavern brawls with Socialist and Communist workers: SA commander Rudolf Hess proved his mettle. 

In May 1921, the London schedule for the war reparations was finally disclosed. Germany presently owed the Allies a total sum of 132 billion marks ($34 billion). The Germans were, unsurprisingly, outraged. 

In June, the country went to the election booths, and the vote swung unmistakably to the Right – no less unsurprisingly, the S.P.D, and with it the republic, had pleased no one. Now the leadership was made of a coalition of the Center with the Democratic Party. There began the so-called Erfüllungspolitik (the ‘policy of fulfillment’): the government declared that Germany would do its best to comply with Allied demands.


Walter Rathenau, the Reluctant 
Victim of the Russo-German pact 
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Walter Rathenau was, despite the progressive if not revolutionary nature of his late social visions, one of those diehard's of yesterday’s world – a late captain of industry longing to become a utopian king. He came to symbolize the spiritual disarray of Germany: a country unhinged by the war, and incapable of mastering the consequences. Resolved after the defeat to commit seriously to politics, Rathenau, as Reich Minister,would try to reason with the Allies on the subject of reparations and foreign policy – the keystones of the British conspiracy. Though honest and well intention's, he, like Erzberger before him, would do so with a conceit and presumption such that all he would be able to procure for Germany and himself was a death sentence from the Right-wing clans. His was but one of many remarkable German tragedies of the era: an exceptionally gifted individual who refused to acknowledge the devilish entrapment into which the British had fitted Germany after the war; he refused to own that he was in fact attempting to do politics ‘in a cage,’ and that no amount of maneuvering, however brilliantly conceived, could dissolve those constraints. Not even a man of his stature, in fact, would be able to achieve a single task of all those he had set out to accomplish; and his conspicuous political impotence culminated in the reluctant acquiescence to the 1922 deal between Russia and Germany: a semi-secret military cooperation that would pave the way for Germany’s martial rehabilitation, and would last, unbelievably, two decades – until the very last days preceding Barbarossa, in June 1941. 

By May 1921, Germany paid only 40 percent of the preliminary $5 million slice it owed according to the Treaty of Versailles. When the final bill was issued the grand bluff of the reparations reached a climax amidst a welter of conferences, experts’ opinions, and infinite accounting cryptograms filling the pages of Europe’s financial papers that rendered the matter all the more impenetrable: of the $132 billion, $82 billion was packaged as bond issues to be honored in the foreseeable future, which is to say that they were set aside and forgotten – the extra ciphers had been thrown in for mere sensational display. 

That meant that Germany was to pay the other $50 billion at a rate of $2.5 billion a year in interest and $0.5 billion a year to reduce the total debt.92 An annual tranche of the debt amounted to around 5.8 percent of Germany’s 1921 GDP, or about 40 percent of the country’s foreign obligations per annum:93 to remit that much in gold or foreign exchange seemed unthinkable.94 

Could Germany pay? She could if (1) the Reich scored a perennial budget surplus, or (2) if she sold abroad more than she bought from foreigners: a surplus on the foreign accounts would afford pools of foreign currencies, which would be then remitted to the enemies of yesterday. The scheme would in fact amount to sending gifts abroad: exporting gratis. Because of her immense war debt, and because of the Allies’ steely resolve to impede Germany’s competing on the world markets, neither condition was satisfied.95 As proven by the murder of Erzberger, German absentees resisted taxation; and the French, themselves indebted to Britain and America, refused to be paid the reparations in the only form in which they could have been remitted: that is, through acceptance of German goods and services. To cap it all, Britain placed a 26 percent tax on all imports from Germany. Thus everybody knew, as Veblen had presumed, that Germany could not, and thus would not pay. 

So, Germany found herself beholden to France (and Britain), France to Britain, and Britain to America: the United States was therefore saddled with the unattractive role of the soulless financial taskmaster. Not a single encounter at the top on the subject of reparations would end without a choral entreaty to the American representatives to cancel the inter-Allied debt. And not one would end without their ‘sadistic’ refusal.96 

As all blamed the Americans for the deadlock, the latter bounced the issue back to the British, who blamed the French, who again blamed the Germans. And so on. In this unique script of the théatre de l’absurde, Germany, as Minister for Reconstruction Walther Rathenau saw it, played the part ‘of a sane man taken and confined against his will in an insane asylum during a long period with the result that he gradually assimilates the mental traits of his associates.’97 Menaced in the distance by America, harassed by a hysterical France, listened to but profoundly deceived by the British hypocrite and her pet Soviet sphinx, Germany did go insane. 

In such an atmosphere, Walther Rathenau made himself the victim of hopeless candor when, in March 1921, he approached the US negotiators to suggest that Germany could perhaps put an end to the charade by cutting the Gordian knot: she could shoulder the Allied debts in bulk, by offering to pay America $11 billion in 41 installments of $1.95 million each.98 Thereby she would in-debt herself directly to the United States, set the Allies free, and deflate at once the bulging load of European grievances. Upon hearing the proposition, Washington hissed, and the British Foreign Office rebuked: ‘no such compromises would be tolerated.’ A recent study found Rathenau’s proposal ‘bizarre’: thus, even to this day, Rathenau has not been pardoned for partially discerning in a moment of stillness the purposeful perfidy of the reparations.99 

Diplomats…handled the important but alien field of economics with the circumspection of men charged with the care of an unpredictable elephant, while [Rathenau] treated it with the nonchalance of the native speaker.100 And though he grasped the technical details of the matter at hand, Rathenau yielded to vanity: like Erzberger, this other Demiurge of the ‘possible’ belittled the chauvinistic hostility of the German environment, and thought himself fully capable, alone, to redress the fate of Germany and shape her in his image. 

On August 31, 1921, Germany paid her first billion gold marks of reparations. The transfer was a veritable ordeal: the money was raised by pawning with the international banking network thousands of tons of silver and gold, which were conveyed by caravans of railroad boxcars to Switzerland, Denmark and Holland, and by a fleet of steamers to the United States – a treasure trove epic from the Dark Ages.101 This first remittance caused an immediate drop of the mark vis-à-vis the dollar, from 60 to 100 (marks per dollar).102 As Germany suffered the hemorrhage of gold, which by law had to cover every paper note in a ratio of 1 to 3, the market predicted a fall in the ‘value’ of the paper mark. Indeed, in May 1921, the German central bank had suspended the gold convertibility: in other words, it had proclaimed that its notes were no longer ‘as good as gold’ – the hyperinflation was approaching. 

Walther Rathenau was the crown heir of an economic empire inherited from his father, Emil, who had built it with the sweat of his brow. With a patent purchased from Edison, Rathenau senior founded A.E.G (Allgemeine Elektrizitäts Gesellschaft, the ‘General Electric’ of Germany), which illuminated Berlin and Germany, and through interlocking stakes in a galaxy of local companies and foreign banks, brightened Madrid, Lisbon, Genoa, Naples, Christiania, Mexico City, Rio de Janeiro, Irkutsk, and Moscow.103 A brilliant scion of a great corporate dynasty, Walther was groomed, schooled and raised like a prince; he juggled with polyvalent facility business intricacies and technological detail, which he seasoned with Talmudic lore and classical erudition. ‘He talks about love and economics, chemistry and trips in kayaks; he is a scholar, a landowner and a stockbroker, in short, what the rest of us are separately, he is rolled into one.’104 

Rathenau’s first political assignment, like Erzberger’s, concerned the colonies of the empire: in 1907 he had accompanied the colonial secretary Dernburg on an inspection in Africa. During the war, Rathenau helped to organize the home front by designing the mechanics of an imposing system of resource mobilization (the so-called Kriegswirtschaftsgesellschaften),* which, via requisitions, foreign purchases, and the procurement of ersatz materials (substitutes), fed the hungry war machine 105 – a tradition that would be resurrected in Goring’s Four-Year Plan in preparation for World War II. Then, sensing ‘change’ in the air, as the war had unleashed new spiritual flows, he etched out a blueprint for tomorrow’s society in a bestseller that consecrated him as one of Germany’s most popular authors. 
* Consortium for the War Economy

Society, he averred without blushing, was governed by ‘300 individuals’ who knew one another, an odious oligarchy, ‘arrogant in its wealth,’ exercising ‘both secret and open influence,’ which was trailed by a ‘decaying middle-class…[endeavoring] to save itself from being pushed down into the proletariat,’ all the while ‘the real proletariat…silent, stands beneath; a nation by itself, a dark sea.’106 In Von kommenden Dingen (In Days to Come), written in 1916, Rathenau prophesied that ‘a will surging from the depths of the folk soul’ was bound to destroy capitalism; ‘a responsible lordship’ made of ‘intelligent dynasts’ would cleanse Germany of the encumbrances and injustices of inheritance rights and forever impeach free trade in capital, so that the community’s wealth might be shielded and its lifeblood conserved. In October 1918, he could not bring himself to digest the surrender of the Reich; from the columns of the Vossische Zeitung, he summoned the German soldiers to put up a dogged resistance, while haranguing the citizenry at the same time to take to the streets in a levée en masse. Then, in 1921–22, he contributed the fruits of this kaleidoscopic experience to the Erfüllungspolitik he too was now a modern champion of the possible, as well as a compromised creature of the old order. 

In April 1922, as Weimar’s Foreign Minister (since October 1921), Rathenau, despite himself, became at last the unwitting prey of the ‘asylum tactics’ played against Germany on the international scene. The occasion was the Genoa conference, which for the first time since Versailles, gathered ‘both the Russians and the Germans – the two bad boys of the European family.’107 

At Genoa, the customary comedy was re-enacted: Britain encouraged France by inviting it to draft, jointly, a memorandum on reparations, in which emphasis was laid on Article 116 of the Treaty. Article 116 provided that Russia could, whenever she wanted, be cut in on the German reparations.108 The gambit whetted France’s appetite in that she believed that she was offered yet another weapon with which Germany might be further excuriated: and that was by offering Russia an economic partnership to be funded not by France herself, but by an additional amputation of Germany’s wealth. The Soviets were then instructed to exploit this threat by luring the Germans, who were fearful of Article 116, into ratifying a secret alliance with them. The stratagem was orchestrated from Lloyd George’s residence, the Villa Alberti, where British, French, and Russian diplomats held negotiations behind closed doors, while the Germans were left outside to consume themselves with anxiety. Three times Rathenau demanded to be received by the British Prime Minister while the pour parlors were under way; three times he was ignored. Historians have lamented ever since Lloyd George’s ‘discourtesy,’ but the ‘impoliteness’ was merely the final ruse in a critical sub-game of Versailles’ ploy. Late in the evening of April 14, the Russians sought out the Germans, and proposed to retreat like eloper's to the nearby resort of Rapallo where they would conclude a friendly compact. The German diplomats held a session in their pajamas, and after much deliberation, agreed – it was ‘Rathenau who held out the longest.’109 The Treaty of Rapallo was signed on April 16, 1922. Rathenau signed somewhat against his will.110 He was attracted to the Bolshevik idea, but he then confided to his entourage that he wished he could have undertaken such a step with the official accolade of the Allies: he was not comprehending the game in the least; he had lost all touch with political reality. 

The treaty with the Russians acknowledged the intention of both countries to resume commercial intercourse, and nullified any financial cross-claims that existed before the war: in other words, Russia would not claim any moneys from Germany. This move seemed a tiny step in the direction of the Eurasian embrace. But was it? Did Britain appear worried? Hardly. Naturally France screamed with disappointment, but Maltzan, the German diplomat in charge of Russian affairs, was seen dancing at the conference’s ball with Mrs. Lloyd George, whose husband entertained no doubt that Rapallo signified first and foremost a pact of military cooperation between Russia and Germany. Not only did the British Prime Minister not disapprove of the treaty, but he also justified it conveniently and diplomatically as a beneficent counterweight to France’s bullheaded pressure to extend the French border to the Rhine and thus dissolve German national unity: British ‘appeasement’ towards Germany had already begun. 111 Thus Britain had altered her tactics somewhat: now she openly declared that a rehabilitation of Germany was necessary to counteract French arrogance; but behind this ploy lay Britain’s ultimate goal, and that was the gradual rearmament of Germany. Here we may observe another standard British routine at work: Britain used French hostility as a pretext to shield Germany, and relied on the assistance of Russia to achieve the objective. 

Twice so far the expectant recruits of the Freikorps had been let down: after the liquidation of the Councils, and with the cacophonic coda to the Kapp putsch. In the seedy rentals of Berlin, they talked politics, plotted, and drew up lists. Lists filled with names of Erfüllung politicians, artificers of the possible that were trying their best, by nurturing Weimar, to impede the exhalation of ‘mystical forces which the mind, with all its patterns, cannot get to know.’112 Weimar’s new ‘outlaws’ – Cadets, Freikorps veterans, and demobilized soldiers, the young crop of Germany’s Conservative Revolutionaries – were on the hunt: men like Rathenau stifled them – he was on the list. 

‘One can’t breathe!’ panged ex-Naval officer of the Ehrhardt brigade, Erwin Kern, 24, as he painted his despair to his comrades Ernst von Salomon and Hermann Fischer. ‘We’ve got to pierce the crust to let in some air in our cramped German spaces!’113 Von Salomon would live to tell the tales of these Geächteten (the Banished Ones) in a book by the same title that would become one of the ‘sacred texts’ of Germany’s New Right. ‘On November 9,’ Kern cried, ‘I shot a bullet through my head…I am dead…the force demands destruction, and I destroy…I have no choice but to devote myself to my beautiful, implacable destiny.’114 Rathenau? 

Rathenau had begun an ‘active policy’ of fulfillment; he was ‘a bridge’: a bridge between Jewry, which Rathenau depicted as ‘the dark, pusillanimous cerebral breed’ of his ancestors,115 and the blond heroic, mindless Aryans, whom he adored; he was a corporate scion wishing for capital taxation and the abolition of bequeaths; an economist yearning for theocracy, a technician dreaming of the commune. Rathenau, von Salomon complained, was too much, and too little, ‘all rolled into one,’ like his book, Of Days to Come, which all the Geächteten had read and thought it lacked ‘dynamite’: to them, he was attempting to lock Germany on a path that was not her own.116 

The assassination was scheduled for June 24, 1922. 

Von Salomon, not selected to turn the heat on Rathenau because of his 19 years of age, asked Kern what to tell the police if the rest of the commandos were arrested. ‘Say whatever you will,’ he replied, ‘say that Rathenau was one of the Elders of Zion, or some such idiocy…They will never understand what moves us.’117 

Meanwhile, on the political stage, Rathenau, like Erzberger, was thrown to the wrath of the Right. The Nationalist partisan Helfferich, again, not content with having driven Erzberger to his death, resumed the invectives of yesteryear to lash out at Rathenau in the same fashion. 

As the pan-Serbs did with Ferdinand, the Outlaws ambushed their victim’s limousine. As the car came into view, Kern sallied forth and squeezed on Rathenau ‘a nine-bullet burst point blank.’ Fischer lobbed a grenade. Rathenau was seen being catapulted in the air. His chauffeur sped him home, where a doctor pronounced him dead.118

The mark began to plummet: from 370 in June it fell to 1175 to the dollar in August, 1922. 

Barricaded, after a mad chase, in the top floor of the ramshackle castle of Saaleck, the two young assassins, Kern and Fischer, made a last stand against the siege of the police. In the ensuing shoot-out Kern was killed by a bullet through the temple. Fischer laid his companion on a stretcher, shouted out the window a last ‘Hoch!’ for his leader Ehrhardt, and blew his brains out.119 At the trial, Kern’s accomplices perfunctorily rehashed as the motive for their crime the ‘idiocy’ that Rathenau was indeed one of the 300 Elders of Zion conspiring to dominate the world. 

All these murderous youths were armed and financed, and all recent political killings, including Erzberger’s and Rathenau’s, were systematically traced back to the conspiratorial panel of an unidentified O.C (Organization Consul, Ehrhardt’s informal crew of bodyguards). Speculation was rife, but proof was scant; Freikorps commander Ehrhardt, for instance, denied that his boys had anything to do with Erzberger’s death, though he did not entirely disown the kids that participated in the assassination of Rathenau. 

Yet forensic certitude was never of the essence: everyone intuited that the ‘boys’ were simply the longa manus of Germany’s reactionary Right: Erzberger, Rathenau, and many others, were but the collateral damage of this horrid fratricidal feud, which Britain had caused by shoehorning the dynastic Reich into a sham republic. She made the Germans play the parliamentary game, while waiting for the Reaction to make a comeback at the opportune time: these deaths, like the rest of the innumerable catastrophes that would beset Germany throughout the interwar period, were the effect of this perverse plan. 

[Writer Ernst Jünger] asked [von Salomon] in his drawling Lower Saxon accent: ‘Why didn’t you have enough courage just to say that Rathenau was killed because he was a Jew?’…[von Salomon] answered: ‘Because it wasn’t so.’120 

Hitler, however, disapproved of the Outlaws’ terroristic tactics: ‘It is laughably illogical to kill some isolated fellow,’ he commented, ‘while nearby sit dogs who have two million dead on their conscience. What we need is 100,000 fanatical fighters for our way of life.’121 
Image result for images of General von Seeckt,
The Treaty of Rapallo was the formal ratification of an entente that dated back to late 1920, when the envoys of the Truppenamt* chief, General von Seeckt, had established contact with Trotsky, Radek, and the commanders of the Red Army for laying the groundwork of both countries’ rearmament.122 Already by January 1920, even before the Kapp putsch, Seeckt had accepted ‘a future political and economic agreement with soviet Russia as “an irreversible purpose of our policy”, while at the same time proclaiming that “we are ready to form a wall against Bolshevism”.123 Putatively, the cornerstone of the new alliance was the destruction of Poland, their common enemy, yet Poland for the time being was left alone while military collaboration on the other hand was sizably scaled up. Facilitated since 1921 by the Soviet factotum in Berlin, Vigdor Kopp, with the approval of Trostky, and the full intelligence of the French, British, and Polish services, the promotion on Russian soil of German drilling stations and factories of poison gas, planes, and tanks, and an intense traffic of officers in both directions proceeded most smoothly.124 For the purpose ‘General Kurt von Schleicher created within the Defense Ministry the “Special Branch R”, which in 1922 sent the first officers to be trained in Russia…A number of Russian officers, among them the future Chief of Staff of the Red Army, Tukhachevsky…came to Berlin to study the way of the Truppenamt trained aspiring officers.’125 Further plants for military production were built in Turkey, Sweden, the Netherlands, and Switzerland.126
* ‘A camouflage for the General Staff, which Germany was forbidden, by the Versailles Treaty, to maintain’ (Carr, Bolshevik Revolution, p. 319)

The telegraph wires remained hot with news of German arms sales to Russia, and German officers serving in the Russian army…Foreign Office officials noted these violations of articles 170 and 179 of the treaty of Versailles* , but nothing happened. At no time did the Foreign Office visibly react to the incoming information. In reply to a parliamentary question concerning German-Russian negotiations [Secretary] Curzon simply evaded the issue by stating that His Majesty’s Government had no official information about the talks.127 
* Article 170 forbade in Germany the production, import and export of ‘war material,’ whereas Article 179 prohibited the promotion of German foreign military missions and exchanges.
And so, if Germany had to rearm, she had to do it in a ‘presentable’ fashion: namely by hiding the process behind a pact of outcasts, as it were, sealed with the Soviets, which were engaged from the start in a double deception: passing off as capitalism’s enemy and Germany’s friend. As for France, Britain would never let her perform as anything other than the perennial thorn in Germany’s side. 

With or without Seeckt, who resigned in 1926, or Rathenau, the so called Abmachungen – the ‘special operations’ of the Reichswehr in Russia – would continue until March 1935, when Hitler abrogated the Treaty of Versailles.128 

Indeed, the only stable feature of the Weimar regime was the tenure of Defense Minister Gessler, the army’s nexus to the government, who would hold on to his ministerial saddle through 13 Cabinets, from 1920 to 1928. The constancy denoted the permanence of the Reichswehr as ‘a state within the State,’ provisioned by a special budget out of the purview of the Reichstag, which cascaded in a myriad of secret slush funds untraceable even by the most seasoned of parliamentarians. 

Since 1920, the German Republic always had a double government: that of the Chancellor of the Reich with his ministers and that of the generals. Whenever a disagreement arose, the army always won. All of this was called ‘German democracy.’129 


The hyperinflationary purge of 1923 
The collapse of the German currency in the winter of 1923 is one of the most famous economic disasters of the twentieth century. The great German inflation concluded Weimar’s preliminary period of turmoil; and it was of tremendous significance for it projected the Nazis to the forefront of international news. This episode was a spectacular illustration of the way in which financial earthquakes might give birth to peculiar political developments. There is no basis for claiming that the plotters of Versailles could have aimed at provoking a Nazi coup by engineering a financial landslide. But there remains the incriminating clue that the British deliberately abstained from sequestering at Versailles the certificates of the German war loan from their wealthy subscribers, who held the bulk of such securities. Now, when the victors of World War I imposed the payment of vast sums in foreign cash to Germany, whose debt bubble was twice the size of her income, it is somewhat difficult to believe that they could be unaware of the serious repercussions of such a set-up. Therefore, considering how deeply proficient the British stewards were in the matters of finance, we may confidently assume that London fully anticipated a short-term financial calamity in Germany. 

What Britain most likely sought to obtain therefrom was a ‘purge’ of the Reich’s accounts: as a gargantuan inflation has the effect of annulling the government’s debt, the Allies were possibly counting on turning Germany into a tabula rasa for a massive foreign investment campaign, which would indeed be organized from London with American money in 1924 (see Chapter 4). In addition to this immediate and crucial economic result, the annihilation of the country’s currency, clearly, might also be expected to destabilize the nation greatly; and at the paroxysm of Germany’s monetary dissolution (November 1923), finally, the Nazi movement erupted onto center stage. It attempted, and bungled, a rash coup in Munich, which recycled even a few Kappists. But, most important, it introduced to the great audiences the ‘gifted,’ ‘erratic’ drummer of the movement: the 34-year-old Fuhrer, Adolf Hitler. 

Thus evolved the exchange rate of the paper mark to the dollar according to the official statistics of the Reichsbank and the quotes of the Berlin Exchange between 1918 and 1923 (Table 3.1):130


Table 3.1 
Paper mark 
dollar exchange rates, 
1918–23 
 Exchange rate 
1 October 1918                                            4.00 
1 October 1919                                           31.28 
1 March 1920                                            100.00 
1 June 1920                                                44.87 
2 January 1921                                           74.40 
1 July 1921                                                 75.00 
2 January 1922                                          186.75 
1 July 1922                                                401.49 
2 January 1923                                       7,260.00 
1 July 1923                                         160,000.00 
1 August 1923                                  1,100,000.00 
4 September 1923                           13,000,000.00 
1 October 1923                              242,000,000.00 
1 November 1923                    130,000,000,000.00 
30 November 1923         4,200,000,000,000,000.00

In this interval, the German currency traversed four phases.131 In 1919, with the lifting of the blockade, as imports of necessities far exceed exports, the government relied on its depreciated currency to stimulate international commerce. Foreign investors banked on it too, and from July to November 1920 the mark experienced a short spell of ‘good health’: unemployment was virtually null and trade, domestic and foreign, was brisk (second phase). Then, from May to November 1921 (third phase), when the London schedule of reparations began to bite into the foreign reserves of Weimar, the upswing of 1920 betrayed its artificial nature, and the public alienated itself from the mark progressively: in other words, people started to get rid of their marks either by jettisoning them on the exchanges or spending them on tangible goods (Sachwerte). From late 1921, and especially since the assassination of Rathenau (June 1922) until the end of the 1923, Germany was in the clutches of hyperinflation – that regime of currency depreciation whereby prices rise by a monthly rate greater than 50 percent.132 

Exasperated by America’s veto to the cancellation of the inter-Allied debt, France, in a fit of fury far exceeding the expectations of Britain, decided to improvise: on January 9, 1923, she accused Germany of defaulting on her obligations. Two days later, 17,000 French and Belgian troops, accompanied by a corps of professional engineers, marched in the Ruhr – West Germany’s coal-rich industrial basin – to commandeer the deliveries of coal, which, by the letter of the Treaty, were their due. Alluding to the intransigence of a number of Midwestern congressmen behind the American veto to European debt remission, a British journalist sneered: ‘The secret of the Ruhr must be sought into the Mississippi Valley.’133 

Britain publicly condemned the invasion, yet she did not budge to hinder it. The area occupied was no more than 60 miles long by 30 miles wide, but contained 10 percent of Germany’s population and produced 80 percent of Germany’s coal, iron, and steel; its railway system was the most complex in the world.134 

The ‘policy of fulfillment’ died with Rathenau: the Wirth Cabinet fell in November 1922, to be replaced by Weimar’s first uniform ‘capitalist government,’135 headed by the director of a prominent shipping company, Wilhelm Cuno. When the French invaded, Cuno proclaimed Weimar’s new course, ‘passive resistance’ it was called: a general summons to resist Allied prevarication by refusing to comply. The French raped, provoked, and bullied. Special money was printed by the state to sustain the striking miners. In 1923 an egg came to cost 8 million marks, and pasteboard shells were substituted for wooden coffins.136 Unemployment trebled, prostitution was rampant, and malnutrition in the slums led to malformation: working class children, according to zealous Reich inquests, formed a miserable lot in these days. The Nationalists were ablaze. For the first time since 1919, the people rallied solidly behind the Republic, though Hitler and the Nazis roused them to boycott the general strike: ‘Weimar is the proximate enemy,’ Hitler raged, ‘not France!’ All the while, countless acts of sabotage by isolated and despaired patriots – 400 of whom would be executed, 300 by Germans – hardly made a dent in France’s requisitions: the Ruhr industrialists themselves, for fear of losing market share, guaranteed the supply. At dawn the workers rose to extract the coal; they heaped it into towering piles, which at dusk the invaders carted off to France. So much for ‘passive resistance,’ which, with the complete collapse of the mark in late 1923, marked the catastrophic conclusion of Cuno’s Cabinet and of Weimar’s convulsed preamble.137

How could a single dollar reach a quotation of 4.2 trillion marks by November 1923? Two broad explanations have since been advanced: an inculpatory and an exculpatory one. The Anglo-American inculpatory thesis held in brief that the Germans cheated their way out of the reparations burden by printing money recklessly; whereas according to the German exculpatory thesis, the reparations toll imposed at Versailles had sent the Reich authorities scrambling for foreign cash, which they could only obtain by depleting part of the country’s stock of precious metals, and by selling marks ever more cheaply. Such a drop of the Reichsmark abroad, so went the German thesis, rendered imports more expensive, and therefore caused a general rise in price levels: the general price increase spread to wages and salaries, and forced the government to accommodate, by running an exploding short-term debt, the growing requests for more means of payment. In the words of Reichsbank governor Havenstein: 

The fundamental cause…is the boundless growth of the fl oating [shortterm] debt and its transformation into the means of payment through the discounting of the Reich Treasury bills and the Reichsbank. The root of this growth, the enormous burden of reparations on the one hand, the lack of suffi cient sources of income for the ordinary budget of the Reich, on the other, are known…For the Reich must live, and real renunciation of discounting in the face of the tasks set by the budget…would have led to chaos.138 

The British thesis, more specifi cally, ascribed every surge in domestic prices and the international fall of the mark to the steadily swelling shortterm indebtedness of the Reich, which, indeed, as shown by the record, suffered an irresistible expansion throughout the triennium 1920–23. What additional money the public was not eager to lend to the state, the latter procured from the central bank, which ‘discounted,’ that is, advanced cash against the Treasury bills: to every such advance corresponded a net injection of liquidity into the economy. Every time the central bank bought government bonds, it ‘transformed’ these bonds into ‘money’: partly in check money, which traveled on checking accounts, and partly in cash – bills and coins, which the state printed and minted upon orders from the central bank. Up until mid 1922, the public and the Reichsbank each covered half the Reich’s expenditures. 

This was how the British ambassador in Berlin, Lord d’Abernon, characterized the Reichsbank policy:

Reichsbank governor Havenstein…although honest and straightforward, is ignorant and obstinate…Havenstein apparently considers that the fall in German exchange is quite unconnected with the gigantic increases of German note issues, and he goes on merely turning the handle of the printing press, completely unconscious of its disastrous effect.139 

Despite the state of disrepair that still characterizes the debate on the German hyperinflation, the British thesis seems to have won the day and acquired in time the veneer of dogma: in fact, it is simple, plausible, self righteous and, despite d’Abernon, completely false, whereas the German argument, instead, is ashamedly elliptical, and thus only half true. 

German wealth was rated at 300 billion marks in 1913.140 Approximately a third of this wealth had been shot into the air during the war, which left Matthias Erzberger in 1919 with the implausible task of taxing, especially by means of his capital levy, about half the country’s patrimony to redeem the 98 billion marks of the war loan: he failed, and paid with his life for having tried. 

But Erzberger’s attempt triggered a fundamental reaction that has been egregiously undocumented by the Reich statistics and the vast literature on the subject: capital flight. In the absence of reliable figures, many a ‘scholar’141 has hastened to belittle the significance of the capital escapades through the ‘the hole in the West’ (das Loch im Westen), that is, all those avenues afforded by complacent banks for the export of capital out of Germany and into the marketplaces of the West. Yet there is no ground to impeach the supposition that after 1919 the net transfer of German wealth abroad was immense. In 1923, the New York Times, in an attempt to assess the magnitude of German deposits in the United States, arrived by guesswork at a figure of nearly $2 billion,142 that is, approximately a quarter of Germany’s GDP in 1923: that in the United States alone.143 But the largest recipient of Germany’s capital flight was reputedly Holland, though Switzerland, Norway, Sweden, Denmark, and Spain were the repositories of much additional fleeing money. Innumerable steel and industrial potentates literally dismantled the factories at home and re-erected them across the border. From the Netherlands, the re-established corporations proceeded by mergers to acquire in Germany insolvent concerns, which were used to camouflage profitable ventures abroad: these German branches supplied the holding company headquartered in Holland for amounts denominated in paper marks, and well below the true value of the consignments to defraud the German fiscal, while the mother firm stored abroad the precious foreign exchange earned through her international sales.144

After 1923 the Dutch economy began to grow at an unprecedented rate…The large deficits on the balance of trade disappeared…Shipment of goods through Dutch harbors that were dominated by transit trade with the German hinterland grew at the staggering rate of 16% p.a. between 1920 and 1929…The Dutch economy had never seen anything like this before, and these rates still compare favorably with the 1950's and 1960's.145 

Goodwill. Holland would not show herself an ingrate 20 years later: in the first months of World War II, when fighting in France was still in progress, Dutch arms manufacturers already accepted German orders, and the railway system was put at the disposal of the German authorities so that trains could run directly to the French border.146 

Large patrimonial possessions in Germany were seldom caught in the nets of the fiscal authorities, which unavoidably ended up collecting (depreciated) money mostly from the middle class: Erzberger’s financial crusade, run aground by the inflation, boomeranged and ended up harming his very proteges. By 1921, the Right would have wrecked in the Reichstag every project designed to confiscate the money of the wealthy investors.147 

So capital flight, as mentioned earlier, was already in motion by the end of 1919; what quota of Germany’s wealth the absentees managed to lay away in foreign countries is unknown. The transfer of such funds in marks, and their subsequent conversion into other currencies, exerted a tremendous pressure on the exchange value of the mark, and on the Reich’s budget, which was deprived to a large extent of its taxable base. 

Contra the British thesis, the advocates of the German explanation have repeatedly and justifiably called attention to the Reich statistics, which reveal: (1) that the public debt rose as the inflation regressed, and vice versa (lack of systematic correlation); (2) that the drop in the exchange value of the mark was always far steeper than the increase in paper money circulation;148 and (3) that the so-called ‘external’ depreciation of the mark always preceded the domestic rise in prices, the ‘internal’ depreciation:149 that is, it was only after the mark lost points abroad that the currency’s growing weakness was revealed at home by rising prices – which led Havenstein to arraign the reparations payments for such a loss and its pernicious consequences. But the (external) depreciation was truly driven by the capital flight, and only at a second remove by the tribute of Versailles. 

The fact that in 1920 the fall of the mark was not as dramatic as a massive outflow of capital would cause it to be was due to a counterbalancing of foreign capital, which began earnestly in 1920. Between 1919 and 1921,foreigners acquired more than 40 percent of all German liquid balances (that is, cash and checking accounts). Theirs was a purely speculative bet: as soon as Germany began to disappoint the investors’ gluttonous anticipation, a scramble to convert these balances should have followed.150 Thus what the German absentees withdrew, the rich ‘tourists’ – British, American and French – provisionally and partly poured back in the course of an unedifying razzia, whereby they also looted with their ‘strong’ currencies Germany’s ‘dirt-cheap’ property, goods, and services. 

The German thesis provided only a partial explanation of the phenomenon; aside from glossing over capital flight, it made no mention of the kernel round which the hyperinflation snowballed. 

The seed of the meltdown lay, quite naturally, in the war loan.151 In this connection, British press representative Lord Riddell noted in his diary during his stay at Versailles: 

We talked of the indemnity. [Lloyd George] read me a memorandum suggesting seizure of the German War Loan, which would place the Allies in possession of eight million pounds. I said: ‘That is a ridiculous scheme. It begs the whole question.’ Lloyd George: ‘Yes. A pretentious foolish proposal.’152 

It is not at all clear why Lloyd George should have thought that the seizure of the German war loan for the purpose of indemnification was a ‘pretentious, foolish proposal.’ In fact, the opposite was true: it did not ‘beg the question,’ it would have actually solved it, provided ‘the question’ remained indeed how to exact from the Germans a tribute with which the devastated areas could have been rebuilt.* Therefore the only remaining explanation accounting for the astounding ‘negligence’ on the part of the British was that they intentionally left the bomb ticking. The ultimate objective being, as mentioned above, to purge the Reich of its war debt, and proceed to bail Germany out with foreign capital in the second half of the 1920's (see the following chapter). 
* Which could have been effected by seizing the War Loan, freezing the principal, reducing the amount of the annual interest payment, extending the diminished payments over two or three decades, and allowing Germany at all times to discharge her obligation by paying in kind. But in the light of the game that was being played by Britain, which was to impoverish the ordinary people and strengthen the German elite, these considerations are by the way
Simple ratios afford some interesting considerations: between 1919 and 1920, the money allotted to pay interest on the war loan and redeem (in cash) the certificates not renewed by the subscribers amounted approximately to 30 percent of the Reich’s comprehensive expenditure – that is, a figure roughly equivalent to 60 percent of all money (cash and check money) created in Germany during that biennium.153 

In fact, as they exported the country’s wealth abroad while the mark depreciated, the wealthy Germans also cashed in their war loan certificates: between 1920 and early 1922, 50 percent of the war debt had been refunded by the state. The other half stayed in the hands of the petty investors, who clung to their certificates till the end, when they would be worth nothing. 

The interest payments, on short- and long-term state bonds, plus the redemption of the war loan certificates into cash, contributed a net addition of monetary signs on the markets, with no physical counterpart whatsoever: it was pure ‘air,’ pure inflation. 

The public conveyed this net shot of liquidity along two avenues. They converted them either into foreign currencies or tangible goods, and thus depressed the mark further. Alternatively, or in conjunction, they reinvested them in short-term Reich bills, which were, until late 1921, still considered ‘safe’: needless to say, such recycling imposed an ever growing layer of interest dues on the books of the Reich. 

It was this second channel that precipitated the herd movement in late 1922. In 1920 the foreigners followed suit and bought the Reich’s bills: the meltdown was briefly postponed. The decline of the mark was irreversible, however: after Rathenau was killed, and the Ruhr invaded, the debacle triggered a stampede of conversions of Reich bills into cash, which led to the frantic issues of late 1923, when the state, impotent before the innumerable requests for redemption, activated the country’s provincial mints to print notes around the clock. Such was the meltdown: a wholesale conversion of government bonds into paper money. 

Havenstein was not ‘playing the victim’ when he lamented that ‘his hands were tied.’ ‘The quantity of notes issued every year…depended exclusively (then as much as today) on the number of Treasury bills that the public was willing to renew, subscribe, or not renew.’154 Thus Hitler, in a private conversation, condensed in 1941 the other half of the work of inflationary dynamics – to which, in spite of all, he owed his grand debut on the political stage: 

The inflation could have been overcome. The decisive thing was a home war-debt: in other words, the yearly payments of 10,000 millions in interest a year on a debt of 166 thousand millions…To pay the interest the people were compelled to walk the plank with paper money – hence the  depreciation of the currency. The just thing would have been…to suspend payment of interest on the debt…I’d have forced the war-profiteers to buy, with good…coin of the realm, various securities which I would have frozen for a period of twenty, thirty or forty years…Inflation is not caused by increasing the fiduciary circulation. It begins on the day when the purchaser is obligated to pay, for the same goods, a higher sum than asked the day before.155 

In sum, the causal sequence: 
(1) to pay interest on the enormous war loan, the Reich commissioned to the Reichsbank a vast amount of cash and check money, which was shot in the system, causing domestic prices to climb steadily; 

(2) when the rich perceived that the inflation was eroding their wealth and fearing Erzberger’s draconian tax reform, they began to cash in their war loan certificates and send their capital abroad; 

(3) the evaded capital denominated in marks was converted beyond the border into dollars, guilders, pounds and francs: thus the mark depreciated steeply against these (the ‘external depreciation’); 

(4) the tax shortfall at home forced the Reich to run further into short-term debt: it printed more bonds, half of which until 1922 were converted into cash by the central bank, the other half being bought by private savers; 

(5) to pay for reparations, Germany purchased foreign cash, pawning gold and spending marks, and thus weakened even more the Reichsmark vis-à-vis the other currencies; 

(6) this reinforced external depreciation affected the price of imports, which in turn affected the cost of living, and so prices kept soaring; 

(7) the Reich sank ever more deeply into debt, but for about two years (1920–22) the foreign and domestic subscriptions of government bonds prevented the inflation from detonating the meltdown; 

(8) after the invasion of the Ruhr in early 1923, the final repudiation of the floating (short-term) debt left the government and the Reichsbank no choice but to reimburse in cash, mark for mark, all the certificates that the investors, foreign and otherwise, were no longer willing to renew; from then on all new bond issues, which the Reich emitted to pay for its expenditures, were shouldered by the central bank alone: it sucked in all the bonds and converted them into (by now worthless) bank notes – the mark accordingly plunged. 

In the avalanche, the Reichsbank suffered the drain of half of its gold, and Governor Havenstein died of a heart attack in November 1923. The farmers weathered the storm and kept their granaries bursting while the people went hungry, the proletarians had nothing to lose, and the absentee owners, their wealth being sheltered abroad, were better off than they were at the end of the war. But the petty bourgeoisie (die Kleinbürgertum), which lived and saved off a fixed income, was literally wiped out. The hyperinflation effaced the savings of the middle class: from the mid 1920's this pauperized cohort would merge into the Nazi mass following. 

The Weimar hyperinflation was a story of foreign conspiracy and domestic betrayal, hence the dishonesty of the British thesis and the contrite incompleteness of the German apologia: contrary to what the German defense held, the reparations did not set off the meltdown; they merely sped it up. Between 1919 and 1922, Germany would surrender under that head around 10 percent of her income,156 this was all Germany would ever pay as war tribute to the Allies until the advent of Hitler. 157 

Within the ‘cage’ of Weimar, the German elite savaged the mark by exporting to nearby fiscal havens a considerable, though never assessed, portion of the wealth of the country. The Reich palliated by running a massive floating debt, which by 1923 had been all but redeemed in an ocean of paper. It was rather the German absentees that had relentlessly stabbed their own country in the back, allowing thereafter, unconcerned, the bitterly resentful middle class to fall prey to the slogans of the Nazis, who would frequently speak of the merits of Radikalisierung. Such was precisely the development that Veblen foresaw when he uncannily presaged that the reparations would foment ‘radicalism at home.’ 

In the end, the Reich was ‘purged’ of the war loan. Germany’s entire war debt, which had amounted to over a third of the entire wealth of the Kaiserland at its apogee, was worth $1.23 (almost nothing) in November 1923. 

Now that Germany was cleansed of her imperial debt, America suddenly manifested the desire to reappear on European shores to meddle directly in the monetary overhauling of her former enemy: Weimar was at the threshold of her ‘golden’ quinquennium (1924–29). 


The Maiden Storm of 
the Nazi fundamentalists 
Right when the Reichsmark was about to hit bottom, they finally arrived, the Nazis. At first, no one but a fistful of Bavarian's showed any awareness of this splinter group. They seemed to cut the figure of yet another bunch of rowdy homeboys wanting to go back to the pre-war days of national glory. But the Nazis, as the Germans would come to learn in time, formed something altogether alien to the general patriotic nostalgia, which was presently putting up a truculent resistance to the Weimar republic. Whereas most veterans’ and Nationalists’ associations fluttered a variety of insignia borrowed from their recent imperial past – eagles, crosses, and the black,white, and red of the Prussian Reich – it was only the swastika that defined the Nazis; it was as though the Hitlerites, riding German nationalism like a Trojan horse, had come to diffuse a foreign creed in a common language – the reactionary idiom understandable by the disheartened folk. The particular cosmology symbolized by the dextrogyrate* swastika – all that lore treasured behind the closed doors of the Thule lodge – never figured, not even allusively in the speeches of Hitler and his followers; that was the exclusive privilege of the initiates. Unlike the Nationalists of the old guard, the Nazis were, instead, a religious sect fronted by a political outfit, the N.S.D.A.P, and shielded by a private militia, the SA (later reinforced by the praetorian squad of the SS). For the time being, however, with the conspicuous exception of their emblem, the Nazis deported themselves like the vast majority of Right wing reactionaries: they fought their political battle against Weimar with invectives, obstructionism, rabble-rousing, and continual clashes against the ‘proletarian battalions’ of the regimented Left. 
* Spinning to the right.
For the USSR, whose every move towards Germany seemed to complement perfectly Britain’s agenda, the disaster of the inflation presented a unique opportunity to taunt the German Right with political subversion: on the one hand the Soviets helped the Reichswehr rearm (as officially sanctioned by the Treaty of Rapallo), while on the other they purposely enflamed the Nationalists. As later revealed in the memoirs of Krivitsky, the Soviet intelligence chief in charge of German destabilization at this time, acts of terror, sabotage and violence designed to spread fear in the German community were carried out by Bolshevik agents through secrets cells, called ‘T-units.’ These were funded and trained by Moscow ‘to demoralize the Reichswehr and the police [especially by means of] assassinations.’158 The Red Terror was not intended to have durable effects, but sought only to shock the country and provoke riots by instigating cohorts of patsies, young German Communists for the most part, in gratuitous deeds of defiance: tavern and street brawls, strikes, intimidation, and so on. It was on such Soviet-inspired ‘insurrections’ that the Right-wing activists, and the Nazis, would feed. Everything seemed to conspire in favor of the Hitlerites: they could count on London for the political and financial strangulation of the German people, and they could thank Moscow for causing all this Communist inferno, which made them stand tall as the Fatherland’s defenders. 

It was thus hardly a shock to see the Hitlerites mature into political adolescence in the fall of 1923, when Germany came to be torn by a mayhem of strikes, street battles, and runaway inflation. During the Franco Belgian invasion of the Ruhr, Hitler cried ‘Let us have misery!’ from the columns of the Nazi organ, the Völkischer Beobachter. 159 

Disgraced by the hyperinflation, the Cuno Cabinet fell in August 1923 and was replaced by a new one, led by the bourgeois Stresemann, which featured the heartily unwelcome reappearance of Socialist ministers. 
Image result for images of Premier von Kahr.
On September 25, owing to Nazism’s rising popularity, Hitler was nominated political chief of the Kampfbund, the encompassing ‘Fighting League’ of the southern Right. But on September 26, 1923, the Bavarian government, hell-bent on opposing the re-emergence of Socialist politics and Hitler’s takeover as Reaction’s populist leader, declared a state of emergency and delegated dictatorial powers to the former Bavarian Premier von Kahr.* In Berlin, as a sensational counter-measure, the new Chancellor Stresemann devolved power to the chief of the army, von Seeckt. The head of the Bavarian Reichswehr, General von Lossow, resolved not to pledge allegiance to his chief in Berlin von Seeckt, and put his armies at the disposal of the seditious von Kahr. There ensued between Munich and Berlin a confrontation that might have ushered in civil war. 
* Von Kahr, who had risen to power on the occasion of the Kapp putsch, stepped down in 1921.
In October, two states (Saxony and Thuringia) swept a coalition of Communists and Socialists into power. Again, the German Right shuddered with horror. 

Attentively, Hitler studied the standoff between the Bavarian Nationalists and the Berlin central. He understood that the forces of Reaction centered in Munich were gearing up to replay a royalist putsch à la Kapp: this junta of army generals and colluded administrators was ready to conquer Munich, restore the Bavarian king to his throne, march against these newly elected Red constituencies in Saxony and Thuringia, topple them, and eventually storm Berlin. If this plan got off the ground, the royalists would be strong enough to rally all Reactionary protesters to their banner and muffle in the process the slightly discordant voice of the Nazis. 

The Hitlerites had to act fast, and insinuate themselves onto the monarchist bandwagon, so as to impede the latter to mastermind entirely the forthcoming ‘National Revolution.’ Hitler chose the anniversary of the Revolution, November 9, to stage an uprising, but upon being informed that von Kahr was scheduled to address on the 8th a crowd at a large beerhall, the Bügerbräukeller, by a day he shortened the wait. To snatch the revolution from the royalists, the Nazis erupted in the tavern. Hitler, interrupting von Kahr, hopped on a table, unsheathed a gun and fired a shot at the ceiling. He proclaimed the National Revolution and received an ovation.

The monarchist triumvirate – Kahr, Lossow, and the commander of the Bavarian state police, Seisser, present at the occasion under duress, vowed its support. But as soon as Hitler and his boyish neo-pagans turned their backs to let Kahr go home, the latter proceeded to cross them at once by signing with the approval of the army a decree promulgating the disbanding of the NSDAP. When Hitler and his troopers discovered the treachery the following morning, accompanied by Ludendorff, they improvised a desperate cortege through the streets of downtown Munich, until they reached the Odeonplatz, where files of policemen were waiting for them, poised to take aim. The Nazis marched on. Fourteen were shot dead – the first martyrs of Nazism. Hitler was thrust to the floor by a wounded companion, and bruised his shoulder. 

In fact, the previous night, Bavaria and Berlin had already made peace behind the back of the Nazis: to pacify Munich’s royalists, the armies of General von Seeckt had marched from Berlin to overthrow the Leftist governments of Saxony and Thuringia; afterwards, the Bavarian's had given up their plans for revolt. The Beerhall putsch was finished before it began. Again, Seeckt’s army prevailed: the General would rather see Germany the captive of Weimar than surrendering her ‘to those sinister forces which the distracted masses had produced and which were aiming at power’.160 

The recidivist General Ludendorff, who had taken part in this putsch as well, strode past the bullets with frosty indifference; he was taken in by the police and promptly released. Hitler was arrested; he was arraigned for high treason and turned his defense into a mesmerizing ventriloquy of the nation’s lament: his time was yet to come, but the turbulence of the hyperinflation had made a German sensation out of him. Hitler stated: ‘You may pronounce us guilty a thousand times, but the Goddess who presides over the Eternal Court of History…acquits us.’161 He was sentenced to five years’ imprisonment in the state prison of Landsberg. The detention would be commuted to nine months. Hitler’s teacher, Dietrich Eckart, the guru of the Thule lodge that had pulled a few strings in this putsch, was also incarcerated; the shock of detainment rattled his heart, which failed shortly after his acquittal
Image result for images of Dietrich Eckart,
In Landsberg, with the ghost-hand of his faithful Hess, Hitler composed Mein Kampf (My Struggle). To his master, the recently defunct Dietrich Eckart, ‘who devoted his life to the awakening of his…people,’162 he dedicated the opus. The first volume would be published in July 1925, the second in December 1926.

Mein Kampf was the exploded scheme for the creation of an Aztec like empire in the plains of Central Asia. As a political program, whose dispositions the Third Reich would enact with unfaltering rigor, Mein Kampf was a fusion of Gnosticism with a compatible strategic appendage. As hinted in an earlier section, the religious fervor of the movement fed off the lore of the Thule society. According to this peculiar cosmology, ‘the body of light’, that is, the German people as a collective ‘folk spirit’, was encrusted in the corrupting darkness of matter, whose ‘affirmers’ were believed to issue from the antagonistic clan of the Jews. Salvation for the Germans could only be achieved by separation – separation from the fetters of materiality. For the Germans, existence perforce signified struggle – the two were inseparable.163 The missionary elan was coupled with the political imperative, as Bolshevism and Judaism were made to coincide. The enemy – a Soviet International fraught with Jewish leaders – had nested in Russia. 
Image result for images of Alfred Rosenberg,
‘Germany awake!’: such was the last verse of a strophe reworked by Eckart in 1922, which his pupil Alfred Rosenberg, the future race ideologue of the Third Reich, selected as the motto underlining the swastika on the red standards of Nazism.164 

Sturm, Sturm, Sturm! 
Läutet die Glocken von Turm zu Turm!… 
Judas erscheint, das Reich zu gewinnen, 
Läutet, daß blutig die Seile sich röten… 
Wehe dem Volk, das heute noch träumt, 
Deutschland erwache! 

[Storm, Storm, Storm! Toll the bells 
from tower to tower!… 
Judas has come to conquer the Reich, 
So may the bell ropes be crimsoned with blood… 
Woe to those that are still a dream, 
Germany awake!] 

In Chapters IV, XIII and XIV of Mein Kampf, Hitler detailed the geopolitics of Nazism. Overpopulation, always an oligarchic byword veiling genocidal intent, marked the point of departure of the Hitlerite discourse. There are four ways, he wrote, to tackle the hypothetical strain of human reproduction upon Nature’s powers of sustenance: (1) artificial reduction of births, (2) internal colonization, that is, increase the yield of domestic acreage, (3) acquisition of new soil, (4) engage in active world trade to procure vital imports. 

To limit birth, Hitler contended, was to shield at all costs the life one saved: it was thus the avowed fostering of weaklings, who would enfeeble the hardy fiber of the race. To colonize internally was but a prorogation of the problem, and a disastrous one at that, as it afforded rival races a decisive territorial advantage in the struggle for life. To acquire protectorates and play the colonial game versus Britain, as the Second Reich had foolishly done, had borne the catastrophic fruits now before the eyes of the world. Therefore, the Fuhrer concluded, the only workable alternative was the third one: conquest. 

Where? 

If land was desired in Europe, it could be obtained by and large only at the expense of Russia…For such a policy there was but one ally: England…No sacrifice should have been too great for winning England’s willingness…Only an absolutely clear orientation could lead to such a goal: renunciation of world trade and colonies…Concentration of all the State’s instruments of power on the land army.165 

This was in synthesis the foreign policy of Nazism; nothing more and nothing less than a profession of passionate admiration for Britain, whose folklore and tradition Hitler revered,166 and whose partnership he desired above all else; a passion for Britain and a promised carnage in the East to create the great Nazi empire of the Herrenvolk – the Chosen Race. 

The heedlessness of the testament of Mackinder was all the more astonishing as Hitler was on several occasions during the seclusion at Landsberg, mentored by an expert strategist, by no less a figure than the founder of the German school of Geopolitik, General Karl Haushofer, who was fluently conversant with these themes. As the derivation of Hitler’s anti-Semitism was easily traceable to Eckart, the formation of the Fuhrer's geopolitical outlook was, instead, hazy. Hitler’s 1920 allocution's made no room for the staples of his mature oratory, namely the preoccupation with overpopulation and the emphasis upon the notion of Lebensraum (‘living space’). Indeed, in August 1920, he jotted ‘among the notes of one of his speeches “brotherhood toward the East (Verbrüderung nach Osten),”’167 which attested to the shapelessness of his politics at the beginning of his career. However, by 1922 Hitler was growing increasingly deaf to any score of Eurasian harmony: conservative ideologue Moeller van den Bruck, who longed to witness a blending of the Occident with ‘the great human poetry of the Orient’,168 encountered the Nazi leader and engaged him in a long discussion, at the end of which, exhausted, he confided to a friend: ‘The fellow never comprehends.’169 Ernst Hanfstaengl, a sophisticated art dealer and early haut-bourgeois maecenas of the gruff lance corporal, remembered Hitler rehearsing in early 1923 one of his customary lines: ‘The most important thing in the next war will be to make sure we control the grain and food supply of Western Russia.’170 Hanfstaengl chalked up Hitler’s anti-Slav fixation to the influence of Alfred Rosenberg, who, indeed, envisioned the reconfiguration of the Eurasian living spaces under the joint rule of Germany, and her Nordic racial sisterhood: Balt's, Scandinavians, and Britons. 171 

The point has been disputed,172 yet there should be no reason to doubt that Hitler perfected his geopolitical outlook with the mysterious Haushofer, who was also Rudolf Hess’s Professor of geopolitics at the University of Munich, as well as an initiate into many secrets of the Orient. While it is true that Haushofer did not voice in his voluminous scholarly production a radical opposition to Soviet Russia, he nonetheless left the choice open between ‘the pan-Asiatic movement of the Soviets’ and ‘the pan-Pacific alliance of the Anglo-Americans,’ on the one hand,173 and encouraged an active geopolitical partnership with Britain, on the other.174 Such a position hardly entailed a choice, in fact; it was very much in keeping with late Nazi diplomacy, which planned to sign a truce with Russia, only to smash her later with the hopeful support of Britain. 

In the concluding section of the book, the geopolitical agenda of the Third Reich was clearly exposed: ‘The aim of German foreign policy,’ announced Hitler, ‘must be the preparation for the reconquest of freedom for tomorrow.’175 Britain, indeed, was bent upon ‘world dominion,’ but she had no further interest, he added, ‘in the complete effacement of Germany,’ which would bring about ‘French hegemony on the continent.’ Therefore, he concluded, since: (1) ‘Britain’s desire is and remains the prevention of the rise of a continental power to political importance’; (2) ‘French diplomacy will always stand in conflict with…British statesmanship’; and (3) ‘the inexorable mortal enemy of the German people is and remains France’; the initial conclusion was reaffirmed: Germany’s priority was an alliance with Britain. 176 The foregoing argument, which failed to consider that the first proposition best applied to Germany, was a reiteration of the fallacious hope that Britain could be lured with such a shoddy bait as the hostility towards France, when in fact the fate of the British empire had always been staked on the prevention of the Eurasian embrace. No amount of coaxing could induce Britain to conceive her dominion otherwise. 

During World War I, Hitler conceded, ‘we could have propped ourselves on Russia and turned against Britain.’ But ‘today conditions are different.’177 Today, ‘Fate itself,’ insisted the Fuhrer, ‘seems desirous to give us a sign’: Fate had handed Russia to Bolshevism. Germany would march to the East, and in the East loomed the true, archetypal, enemy. To dispel the doubts of his British readership, Hitler envisioned for an instant the possible consequences of a German alliance with Russia: if it were consummated, he averred, France and Britain would pounce upon Germany ‘with the speed of light.’ The conflict upon German soil would degenerate into a catastrophic devastation, against which the irremediably retarded industrial base of Russia would afford no defense worth the name. Hitler’s simulation of the embrace with Russia was a mere abstraction, however, as no alliance whatever was possible with the Bolsheviks, the ‘scum of humanity,’ for whom Germany was ‘the next great war aim.’178 Thus the embrace was being contemplated, analysed, and unconditionally rejected. 

A final admonishment from the ‘Political Testament of the German Nation’ achieved the Nazi manifesto: 

Never suffer the rise of two continental powers in Europe. Never forget that the most sacred right on this earth is a man’s right to till with his own hands, and the most sacred sacrifice the blood that a man sheds for this earth.179 

So here was a German ‘drummer,’ a hater of Weimar, a herald of bloody crusades in the East, enamored of Britain, and haunted by nightmares of breeds exceeding the ‘natural limits’; a veteran of the Great War turned hierofant of a cult disguised as a political party; and a charmer of Germany’s patriotic elite, who was also prone to crush France. 

Admittedly for Britain, here was a dark horse that was truly worth playing 

next
‘Death on the Installment Plan’

notes
Chapter 3
1. Friedrich Hölderlin, Hyperion, Empedokles (Weimar: Erich Liechenstein Verlag, 1922 [1799]), p. 207.
2. Friedrich Hölderlin, Hymns and Fragments (trans. Richard Siebuhr) (Princeton: Princeton University Press, 1984 [1801–06]), pp. 61–3.
3. Carroll Quigley, Tragedy and Hope. A History of the World in Our Time (New York: Macmillan Company, 1966), p. 418.
4. Peter Gay, Weimar Culture. The Insider as Outsider (New York: W. W. Norton & Company, 2001), pp. 1–2.
5. I. Benoist-Méchin, Histoire de l’armée allemande, (Paris: Éditions Albin Michel, 1966) Vol. 3, p. 105. 
6. Harry Kessler, Rathenau (Bologna: Il Mulino, 1995 [1928]), p. 314.
7. George Kennan, Russia and the West under Lenin and Stalin (Boston: Little, Brown & Co., 1960), p. 203.
8. Quigley, Tragedy, p. 422.
9. Arthur Moeller van den Bruck, Il Terzo Reich (Das dritte Reich) (Roma: Edizioni Settimo Sigillo, 2000 [1923]), p. 152.
10. D. J. Goodspeed, Ludendorff. Soldier, Dictator, Revolutionary (London: Rupert HartDavis, 1966), pp. 223–4.
11. Paul von Hindenburg, ‘The Stab in the Back,’ in A. Kaes, M. Jay and E. Dimendberg (eds), The Weimar Republic Sourcebook (Berkeley: University of California Press, 1994), p. 15.
12. Klaus Epstein, Matthias Erzberger and the Dilemma of German Democracy (Princeton: Princeton University Press, 1959), p. 54.
13. Ibid., p. 323.
14. F. W. Henning, Das industrialisierte Deutschland 1914 bis 1972 (Paderborn: Ferdinand Schöningh, 1974), pp. 42–3. 
15. Matthias Erzberger, Reden zu Neuordnung des deutschen Finanzwesens (Berlin: Verlag von Reimar Hobbing, 1919), pp. 4–6.
16. Ludwig Holtfrerich, L’infl azione tedesca 1914–1923 (Die deutsche Infl ation) (Bari: Laterza, 1989 [1980]), p. 280.
17. Epstein, Erzberger, pp. 336–43.
18. Costantino Bresciani-Turroni, The Economics of Infl ation (New York: Augustus M. Kelley Publishers, 1968 [1931]), p. 55.
19. Ibid., pp. 357–9. Preparata 03 chap06 276 10/3/05 12:01:19 pm Notes 277
20. Johannes Erger, Der Kapp-Lüttwitz Putsch. Ein Beitrag zur deutschen Innenpolitik. (Düsseldorf: Droste Verlag, 1967), p. 77.
21. Ibid., p. 78.
22. Epstein, Erzberger, p. 342.
23. Erich Eyck, Storia della repubblica di Weimar, 1918–1933 (Geschichte der Weimarer Republik) (Torino: Giulo Einaudi Editore, 1966 [1956]), p. 152.
24. Epstein, Erzberger, p. 367.
25. Ernst Troeltsch, La democrazia improvvisata, la Germania dal 1918 al 1922 (Napoli: Guida Editori, 1977 [1924]), p. 111.
26. Arthur Rosenberg, Storia della repubblica tedesca (Deutsche Republik) (Roma: Edizioni Leonardo, 1945 [1934]), pp. 99–100.
27. Edward Hallett Carr, The Bolshevik Revolution 1917–1923, Vol. 3 (London: Macmillan & Co. Ltd., 1953), p. 310. 
28. Eyck, Weimar, p. 150.
29. Morgan Philips Price, Dispatches from the Weimar Republic. Versailles and German Fascism (London: Pluto Press, 1999 [1919–29]), p. 66.
30. Erger, Kapp-Lüttwitz Putsch, p. 41.
31. Ibid., p. 42.
32. Erwin Könnemann, ‘Kapp-Putsch gegen die weimarer Republik. Ein Spiel mit den Roten und den weissen Russen,’ in Der Tagesspiel (March 14, 2000), p. 2.
33. E. J. Feuchtwanger, From Weimar to Hitler. Germany, 1918–1933 (New York: St. Martin’s Press, 1995), p. 73.
34. Könnemann, ‘Kapp-Putsch,’ p. 2.
35. Bernard Wasserstein, The Secret Lives of Trebitsch-Lincoln (New York: Penguin Books, 1988), chapters 1–8.
36. Ibid.
37. Werner Gerson, Le Nazisme société secrète (Paris: J’ai lu), p. 278.
38. Donald McCormick, The Mask of Merlin. A Critical Study of David Lloyd George (London: Macdonald, 1963), p. 75.
39. Ibid., p. 80.
40. Wasserstein, The Secret Lives, p. 343.
41. Maurice Laporte, Bouddha contre l’Intelligence Service (Paris: Alexis Redier Éditeur, 1933), p. 82.
42. Imre Gyomaï, Trebitsch-Lincoln. Le plus grand aventurier du siècle (Paris: Les Éditions de France, 1939), p. 100.
43. Wasserstein, The Secret Lives, p. 148.
44. Laporte, Bouddha, p. 82.
45. Felix Gross, I Knew Those Spies (London: Hurst & Blackett, 1940), pp. 81–2.
46. Wasserstein, The Secret Lives, pp. 155, 166.
47. David Lampe and Lazlo Szenasi, The Self-made Villain. A Biography of I. T. TrebitschLincoln (London: Cassell, 1961), p. 110.
48. Wasserstein, The Secret Lives, p. 336.
49. Sidney T. Felstead, German Spies at Bay. Being an Actual Record of the German Espionage in Great Britain during the Years 1914–1918 (Compiled from Offi cial Sources) (London: Hutchinson & Co., 1920), p. 61.
50. Wasserstein, The Secret Lives, p. 166, and Gyomaï, Trebitsch, pp. 150–151.
51. Louis Dupeux, National-Bolchévisme en Allemagne, sous la République de Weimar (1919–1933) (Paris: Librairie Honoré Champion, 1974), p. 147.
52. Ibid., p. 148.
53. Erger, Kapp-Lüttwitz Putsch, p. 105.
54. Könemann, ‘Kapp-Putsch,’ p. 5.
55. Benoist-Méchin, Armée allemande, Vol. 2, pp. 79–81.
56. Könnemann, ‘Kapp-Putsch,’ p. 6. Preparata 03 chap06 277 10/3/05 12:01:19 pm 278 Conjuring Hitler
57. John Wheeler-Bennett, The Nemesis of Power. The German Army in Politics 1918–1945 (London: Macmillan & Co., 1961), p. 73.
58. Alex De Jonge, The Weimar Chronicle. Prelude to Hitler (New York: Meridian Books, 1978), p. 64.
59. Benoist-Méchin, Armée allemande, Vol. 2, p. 96.
60. Wheeler-Bennett, Nemesis of Power, p. 76.
61. Anton Golecki (ed.), Das Kabinett Bauer (21 Juni 1919 bis 27 März 1920). Akten der Reichkanzlei weimarer Republik (Boppard am Rhein: Harald Boldt Verlag, 1980), p. 687.
62. Heinrich August Winkler, La repubblica di Weimar, 1918–1933: storia della prima repubblica tedesca (Roma: Donzelli Editore, 1998 [1993]), p. 135
63. Carr, Bolshevik Revolution, p. 172.
64. Hagen Schulze, La repubblica di Weimar, la Germania dal 1918 al 1933 (Weimar, Deutschland 1918–1933) (Bologna: Il Mulino, 1993 [1983]), pp. 262–3.
65. Wasserstein, The Secret Lives, p. 185.
66. Ian Kershaw, Hitler: 1889–1936: Hubris (New York: W. W. Norton & Co., 1998), p 153.
67. Gerson, Nazisme, p. 84.
68. Wasserstein, The Secret Lives, p. 186.
69. Ibid., p. 189.
70. Feuchtwanger, From Weimar to Hitler, p. 77.
71. Rosenberg, Republica tedesca, p. 117.
72. L. Riddell, Intimate Diary of the Peace Conference and After, 1918–1923 (New York: Reynal & Hitchcock, 1934), p. 177.
73. Lampe and Szenasi, Self-made Villain, p. 139.
74. Gerson, Nazisme, p. 83.
75. Dupeux, National-Bolchévisme, p. 129.
76. Benito Mussolini, Opera omnia, Vol. XIV (1919–1920) (Firenze: La Fenice, 1954), pp. 374–5. 77. Dupeux, National-Bolchévisme, p. 150.
78. Wasserstein, The Secret Lives, p. 182.
79. Sigrid Schultz, Germany Will Try It Again (New York: Reynal & Hitchcock, 1944), pp. 58–9.
80. Carr, Bolshevik Revolution, p. 160.
81. Dupeux, National-Bolchévisme, p. 149.
82. Wasserstein, The Secret Lives, p. 191.
83. Ibid., p. 183.
84. David Stafford, Churchill and the Secret Service (New York: Overlook Press, 1999), p.24.
85. Riddel, Intimate Diary, p. 177.
86. Dupeux, National-Bolchévisme, p. 168.
87. Ibid., p. 157. 88. Lampe and Szenasi, Self-made Villain, p. 148.
89. Ibid., p. 166, and Wasserstein, The Secret Lives, p. 324.
90. Kershaw, Hubris, p. 140.
91. Epstein, Erzberger, p. 387.
92. Quigley, Tragedy, p. 305.
93. Gerald Feldman, The Great Disorder. Politics, Economics and Society in the German Infl ation, 1914–1924 (Oxford: Oxford University Press, 1997), p. 400.
94. Geminello Alvi, Dell’estremo occidente. Il secolo americano in Europa. Storie economiche (Firenze: Marco Nardi Editore, 1993), p. 177.
95. Quigley, Tragedy, p. 306.
96. Holtfrerich, Infl ation, p. 128.
97. Feldman, Great Disorder, p. 449. Preparata 03 chap06 278 10/3/05 12:01:20 pm Notes 279
98. Alvi, Occidente, p. 175.
99. Feldman, Great Disorder, p. 333.
100. Robert Musil, The Man Without Qualities (Der Mann ohne Eigenschaften) (New York: Vintage books, 1995 [1930–52]), p. 206.
101. Feldman, Great Disorder, p. 345.
102. Kessler, Rathenau, p. 275.
103. Benoist-Méchin, Armée allemande, Vol. 2, p. 208.
104. Musil, Man Without Qualities, p. 203.
105. Quigley, Tragedy, pp. 231, 235, and Kessler, Rathenau, p. 169.
106. Walther Rathenau, In Days to Come (Von kommenden Dingen) (London: George Allen & Unwin, 1921[1917]), p. 158.
107. Kennan, Russia, p. 212.
108. Ibid., p. 213.
109. Ibid., p. 219. 110. Kessler, Rathenau, p. 303.
111. Ibid., pp. 280, 305, 306.
112. Von Salomon, Die Geächteten, p. 234.
113. Ibid., 176.
114. Ibid., p. 242.
115. Benoist-Méchin, Armée allemande, Vol. 2, p. 214.
116. Ibid., p. 217.
117. Von Salomon, Die Geächteten, p. 249.
118. Richard Hanser, Putsch! (New York: Pyramid Books, 1970), p. 256.
119. Ibid., p. 257.
120. Ernst von Salomon, The Answers of Ernst von Salomon. The 131 Questions in the Allied Military Government. ‘Fragebogen’ (London: Putnam, 1954 [1951]), p. 56.
121. Hanser, Putsch!, p. 259.
122. Hebert Helbig, Die Träger der Rapallo Vertrag (Göttingen: Vandenhoeck & Ruprecht, 1958), p. 123.
123. Carr, Bolshevik Revolution, pp. 310–11.
124. Cecil F. Melville, The Russian Face of Germany (London: Wishart & Co., 1932), pp. 86–97, and Hans W. Gatzke, ‘Russo-German Military Collaboration During the Weimar Republic’, in H. W. Gatzke (ed.), European Diplomacy Between Two Wars, 1919–1933 (Chicago: Quadrangle Books, 1972), pp. 50–4. 
125. Walther Goerlitz, History of the German General Staff 1657–1945 (New York: Frederick A. Praeger Publishers, 1962), pp. 231–3.
126. Quigley, Tragedy, p. 425.
127. Stephanie Salzmann, Great Britain, Germany and the Soviet Union. Rapallo and After, 1922–1934 (Woodbridge, Suffolk: Boydell Press, 2003), p. 21.
128. Gatzke, ‘Russo-German Military Collaboration,’ p. 59.
129. Rosenberg, Republica tedesca, p. 126.
130. Benoit-Méchin, Armée allemande, Vol. 2, p. 205, and André Fourgeaud, La dépréciation et la revalorisation du Mark allemand, et les enseignements de l’experience monétarire allemande (Paris: Payot, 1926), p. 11.
131. Max Hermant, Les paradoxes économiques de l’Allemagne moderne 1918–1931 (Paris: Librarie Armand Collin, 1931), pp. 31–3. 132. Holtfrerich, Infl ation, p. 14.
133. Ibid., p. 149.
134. Quigley, Tragedy, p. 307.
135. Rosenberg, Republica tedesca, p. 152.
136. Bresciani-Turroni, Infl ation, p. 329.
137. Rosenberg, Republica tedesca, p. 155.
138. Fritz K. Ringer, The German Infl ation of 1923 (New York: Oxford University Press, 1969), p. 94; emphasis added. Preparata 03 chap06 279 10/3/05 12:01:20 pm 280 Conjuring Hitler
139. Viscount D’Abernon, The Diary of an Ambassador (New York: Doubleday, Doran & Company Inc., 1929), p. 329; emphasis added.
140. Holtfrerich, Infl ation, p. 132.
141. F. D. Graham, Exchange, Prices and Production in Hyper-Infl ation Germany, 1920–1923 (Princeton: Princeton University Press, 1930), pp. 52ff.
142. Fourgeaud, Dépréciation, pp. 93–4.
143. Germany’s GDP in 1923, in terms of 1913 prices, was 34.9 billion marks; $2 billion correspond, at the rate of 4.2 marks per dollar, to approximately 9 billion marks, that is, 25 percent of 1923 GDP.
144. Fourgeaud, Dépréciation, pp. 94–6.
145. Jan Van Zanden, The Economic History of the Netherlands, 1914–1995 (London: Routledge, 1997), pp. 102–4.
146. Ibid., p. 118.
147. Bresciani-Turroni, Infl ation, p. 58. 
148. Fourgeaud, Dépréciation, p. 13. 
149. Alvi, Occidente, p. 181, and Hermant, Paradoxes, pp. 54–5.  
150. Holtfrerich, Infl ation, pp. 290–5.
151. Hermann Jacques, Allemagne, société à responsabilité limitée (Paris: Éditions de la revue mondiale, 1932), pp. 118, 141.
152. Riddell, Intimate Diary, p. 40.  
153. The origin of the meltdown can be discerned from the following statistics: Table 3.2 Germany’s infl ationary meltdown Year Repayment Interest Interest Expenses Increase in of funded burden of service + of the Discounted debt the Reich debt Reichs bills (Graham) (Henning) repayment (Henning) (Bresciani-Turroni) 1919 – 10.4 10.4 54.9 31.2 1920 10.8 36.2 47.0 145.3 66.4 1921 20.0 30.0 50.0 298.8 94.3 1922 23.0 33.0 56.0 327.9 1247.9 All figures are in billions of current marks. The first column is obtained by multiplying the data in gold marks (Graham, Hyper-Infl ation, pp. 40–1, Table IV) by the yearly average exchange rate of the gold mark expressed in paper marks (Bresciani-Turroni, Infl ation, p. 441). In 1922, 23 billion additional marks of the funded debt were repaid, but by that time, infl ation had rendered this last installment insignifi cant. So altogether, from 1920 to 1922, 50 percent of the Kriegsanleihe had been cashed in. The second and fourth columns are derived from two sets of data provided by Henning (Industrialisierte Deutschland, pp. 59–60), whereas the net variation in the Reich’s discounted bills, reproduced in the fi fth column, is taken from Bresciani-Turroni (Infl ation, pp. 439–40). The third column is the sum of the fi rst and second. After 1922, the private sector, which until then had absorbed about 50 percent of every issue of state bonds, shunned government paper altogether, and left the Reichsbank alone in shouldering the Reich’s bills, which the economy was redeeming en masse (Graham, Hyper-Infl ation, pp. 60–1, and Fourgeaud, Dépréciation, p. 118). In 1923, the de-cumulation of Reich bills had defi nitively taken over the dynamics of the infl ation, and by 1923 the redemption of bills for cash would surpass the discounting thereof and liquefy the German mark into annihilation. Thus the sum of interest and refunded debt (that is, the cashing in of the war loan) between 1919 and 1920 (that is, 57.4 billion marks – the sum of the fi rst two data in column 3) tallied up to circa 30 percent (28.7) of Preparata 03 chap06 280 10/3/05 12:01:20 pm Notes 281 the Reich’s total outlay (the sum of the fi rst two data in column 4) and corresponded roughly to 60 percent (58.8) of the total amount of money created during that time (that is, the bills discounted by the Reichsbank: 97.6 billion marks; the sum of the the fi rst two data in column 5, assuming that no part of this debt could have been covered with taxes).
154. Marcel Mauss, Écrits politiques (Paris: Librairie Arthème Fayard, 1997 [1924]), p. 665. 
155. Adolf Hitler, Hitler’s Secret Conversations 1941–1944 (New York: Farrar, Straus & Young, 1953), p. 54.
156. Holtfrerich, Infl ation, p. 155.
157. Quigley, Tragedy, p. 312.
158. W. G. Krivitsky, In Stalin’s Secret Service (New York: Enigma Books, 2000 [1941]), pp. 28–38.
159. Konrad Heiden, Der Fuehrer. Hitler’s Rise to Power (Boston: Houghton Miffl in Company, 1944), pp. 130–1.
160. Von Salomon, The Answers, p. 242.
161. Quoted in Louis Kilzer, Churchill’s Deception. The Dark Secret that Destroyed Germany (New York: Simon & Schuster, 1994), p. 100.
162. Hitler, Mein Kampf, (Boston: Houghton Miffl in Company, 1971 [1925]), pp. 687.
163. Claus-Ekkehard Bärsch, Die politische Religion des Nationalsozialismus (München: Wilhelm Fink Verlag, 1998), pp. 63–70. 
164. Ibid., p. 90.
165. Adolf Hitler, Mein Kampf, pp. 131–43; emphasis added.
166. David Irving, The War Path: Hitler’s Germany, 1933–1939 (London: Michael Joseph, 1978), p. 56.
167. Ian Kershaw, Hubris, p. 151. 
168. Arthur Moeller van den Bruck, L’uomo politico (Der politische Mensch) (Roma: Settimo Sigillo, 1997 [1918]), p. 93. 
169. Paul Harrison Silfen, The Völkisch Ideology & The Roots of Nazism. The Early Writings of Artur Moeller van den Bruck (New York: Exposition Press, 1973), p. 11.
170. Ernst Hanfstaengl, Hitler: The Missing Years (New York: Arcade Publishing, 1994 [1957]), p. 64.
171. Alfred Rosenberg, Der Mythus des 20. Jahrhunderts. Eine Wertung der seelisch-geistigen Gestaltenkampfe unserer Zeit (München: Honeichen-Verlag, 1934), p. 640.
172. See for instance, Detlev Rose, Die Thule-Gesellschaft. Legende, Mythos, Wirklichkeit. (Tübingen: Grabert Verlag, 1994), pp. 176–7.
173. Karl Haushofer, Weltmeere und Weltmächte. (Berlin: Zeitgeschichte Verlag, 1937), p. 284.
174. Woodruff D. Smith, The Ideological Origins of Nazi Imperialism (Oxford: Oxford University Press, 1986), p. 223.
175. Hitler, Mein Kampf, p. 610. 
176. Ibid. pp. 615–19. 
177. Ibid., pp. 662, 663. 
178. Ibid., pp. 660–2. 
179. Ibid., pp. 664.