Meanwhile, a mutiny among the sailors in the Imperial Navy at Kiel sparked a revolution in Berlin on November 9, 1918, and separatist movements in Bavaria, Rhineland, and Silesia. On December 12, revolutionary soldiers from Kiel, supported by the Spartacists, took Friedrich Ebert, President of the Weimar Republic, and his colleagues prisoner. The next day, a Freikorps contingent from Potsdam arrived and shelled the rebels out of the Chancellery. Consequently, the Spartacus Party severed connections with the Independent Socialists and formed the German Communist Party (K.P.D.). On January 6, 1919, the Spartacist leader Karl Liebknecht declared the Ebert government deposed and proceeded to station armed militia in major Berlin buildings. Again, the Freikorps was summoned and ruthlessly executed Liebknecht and other major K.P.D. directors upon re-conquering Berlin. Although the revolution was formally aborted on February 5, independent socialists and anarchists proclaimed a council dictatorship on April 7 in Munich. On April 13, the communist faction in Munich seized power after a garrison uprising, following which the Freikorps was called in, crushed the communist forces, and re-instituted the conventional government. The revolutionaries had wanted (1) democratization of society, (2) industrial socialization, and (3) the conversion of the army into an egalitarian militia, none of which were realized or adopted by the Social Democrats who resumed power. The political chaos had a detrimental effect on the mark-dollar exchange rate. The mark fell 12.4% between October-November, 11.3% between January-February 1919, and 21.4% in the March-April period compared to 0.3% in September-October of 1918.

After the signing of the Treaty of Versailles on June 23, 1919, the economic crisis deepened. Germany was burdened with a payment of 20 billion gold marks due by May 1, 1921. She was faced with two payment options: (1) from government revenue, which could only be plausible with increased taxation or decreased expenditures on social services, or (2) by borrowing, which would lead to hyperinflation from the enormous issuance of notes and consequent devaluation of the currency. Both would lead to social discontent and unrest. Between July 1919 and February 1920, the mark fell an average of 33.5% per month.

Footnotes

       

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