Weimar’s subsequent political and economic history may be divided into three periods: 1919-23, 1924-29, and 1930-33. From 1919-23, the Republic was dominated by the Left and Center. The social and political gains of the Revolution remained in force, though many were eroded by the inflation. Still, the devaluation of Germany’s currency made its goods cheaper on the world market, which led to a general expansion of the economy. But in 1923, that turbulent and fateful year, France and Belgium occupied the Ruhr, one of Germany’s major industrial regions, because Germany had reneged on its reparations obligations. The government declared a policy of passive resistance, and the economy in the Ruhr ground to a virtual halt. Galloping inflation became hyperinflation, which destroyed any and all possibility of rational economic calculations. On the Left, the KPD gained political momentum, as did a myriad of extremist organizations on the Right. Both the KPD and the National Socialist Workers Party (NSDAP, or Nazi Party) attempted revolutions in October 1923 (the Communists had tried one earlier as well). Both failed.
Having finally recognized the futility of passive resistance, the government ended the policy on September 26, 1923. The way was now open for negotiation with the Allies, especially since France and Belgium had come to recognize the futility (and high cost) of the occupation. On November 15, 1923, the government issued a new currency, the Rentenmark. The result was immediate currency stabilization, but at the cost of effectively expropriating those Germans who had saved money. Complicated negotiations over the course of 1924 finally led to a French and Belgian withdrawal from the Ruhr in exchange for a schedule of reparations payments that Germany committed itself to meeting.
Meanwhile, the SPD withdrew from the government, and the entire political landscape shifted to the Center-Right. Business managed to roll back many of the social gains won in the Revolution, notably the eight-hour work day. With the active support of the Weimar government, owners reintroduced the prewar, twelve-hour work shift in factories (eight and one-half hours in the mines). A series of strikes failed to halt the effort.
But in spite of collapsing coalitions and changing party alliances, the middle years of the Weimar Republic were remarkably stable. The loans extended by American banks helped fuel a major economic recovery and helped Germany pay its reparations debt. The parties on the extreme Left and Right lost ground. In the 1928 Reichstag election, the SPD’s electoral fortunes revived and a Grand Coalition government, composed of the SPD on the Left and the German People’s Party (DVP) on the Right, took office. A comprehensive unemployment insurance law, passed in 1927, marked a notable broadening of the social welfare state, as did a law that protected women’s jobs six weeks prior to and six weeks after childbirth (though without pay). The Reich government arbitrated many labor disputes and brought work shifts back down, closer to the hallowed eight-hour day. However, the rationalization movement that had taken hold in industry resulted in long-term structural unemployment, especially among youth.
The rancorous disputes over the war’s settlement eased as well. In the Locarno treaties, signed on December 1, 1925, Germany, France, and Belgium renounced the use of force to alter the borders between them. A year later, on December 10, 1926, Germany was admitted to the League of Nations. The key political figure in all this was Gustav Stresemann of the DVP, who occupied the post of foreign minister for much of the Weimar period. He represented the “spirit of Locarno” and the “policy of fulfillment,” which promised that Germany would fulfill its reparations obligations and at the same time strive to alter the terms of the Versailles Treaty – but only by diplomatic means.
But the Republic needed a long period of political stability and economic growth in order to win the popular legitimacy it deserved. The KPD and both the extreme and the more traditional Right kept up a steady drumbeat of attacks on the Republic, even in the middle period marked by Locarno and economic expansion. It is possible to imagine that, given those conditions, the parties and movements that deprived the Republic of legitimacy would have eventually been marginalized. The Republic had lost the middle class in the hyperinflation and much of the working class in the stabilization. With peace and prosperity, they might eventually have been brought into the republican fold.