This economic disruption can be traced in part to the Treaty of Versailles. Among its other provisions, the treaty stripped Germany of almost 15 percent of her prewar territory. In the west, the French occupied the Rhineland and took possession for 15 years of the Saar province and its rich coal mines. In the east, Germany lost West Prussia, most of Posen, and the port of Memel. Danzig became a “free city” under the protection of the League of Nations. In addition, Germany lost her African colonies and suffered a reduction in her merchant fleet. And in 1920, the Allied Reparations Commission assessed the staggering sum of 132 billion gold marks as damaged owed, virtually guaranteeing that the German economy would be crippled for years.
The treaty had less-tangible consequences as well. When German troops marched home after the armistice of 1918, they were told by Fredrich Ebert (no right-wing nationalist, but a Social Democrat who became the first president of the Weimar Republic), “You have not been beaten on the field of battle.” This was, of course, a lie, as the generals who had sought the armistice knew full well. But the lie became legend, and the legend became the Germans’ substitute for a true understanding of their defeat. The harsh reality of the 1919 treaty, then, came as a shock. The nation went into mourning and then on a monumental binge of self-pity. Suddenly the Germans had to adjust not only to the reality of defeat and their culpability, but also to the verdict of the Versailles treaty that Germany was solely responsible for the War.
For many Germans, there was no adjustment, only rejection. And so over a decade of political unrest the legend became the myth of the “stab in the back,” the shameful betrayal by the “November criminals.” These men, who had little choice but to accept the terms the Allies had dictated, were now the men of the Weimar Republic.
From the beginning, the Weimar government was as weak as it was democratic; it could not guarantee basic political or economic security. Although the Republic succeeded in adopting a democratic, parliamentary constitution (modeled in part on the American one), it was often forced to suspend the very rights it guaranteed in order to put down political violence. Large German cities ― Leipzig, Hanover, Hamburg, and especially Munich ― were all at various times ruled by Soviet-style Communist councils, which were actively supported by the Soviet Union. As early as January of 1919, the radical-Communist Spartacists were battling government forces in the streets of Berlin, and the hard-pressed government had to turn to the army for help. Gustav Noske, a pillar of the Social Democrats and a member of the cabinet, ordered the formation of the Freikorps, units made up of veterans and drifters and led by former army officers. The first significant political murders of the Weimar Republic were committed by members of the Freikorps, who abducted and murdered two Spartacist leaders, Karl Liebknecht and Rosa Luxemburg. It was a vile and senseless act. Both Liebknecht and Luxemburg, for all their radicalism, had already urged their supporters to lay down their arms and to take part in the upcoming elections for the national assembly. These killings set a pattern for countless others, and irrevocably widened the gulf between the Communists and the Social Democrats, the two parties of the workers. Soon they would hate each other more than they would hate their right-wing enemies. Hitler, more skillfully than anyone else, would later turn this bitter rift to his advantage.