The Downfall of Money: Germany’s Hyperinflation and the Destruction of the Middle Class (38 page)

This idea was not new. Nor was the general, unofficial idea of squeezing the foreigner who, in the
Manchester Guardian
’s phrase, had a yen for exploiting the favourable exchange rate to enjoy ‘that cheap holiday in Germany’.
5
The
Manchester Guardian
reported that the Prussian government was proposing a tax of four gold marks (no paper marks for the wise tax collector), then worth about five shillings sterling, for every day the foreigner spent in Germany.
The Times
picked up the same story, running an even less forgiving headline: ‘Fleecing the Foreigner. Germans Ready for the Tourist’. It continued: ‘As the tourist season approaches in Germany the problem of exploiting the foreign visitor is eagerly discussed.’ Noting the five shillings a day tourist tax, and frequent ‘surcharging’ techniques used against foreigners in shops, hotels and restaurants, it went on into a broader rant which perhaps owed something to the virulently anti-German views of its very hands-on proprietor, Lord Northcliffe, who had recently visited the Rhineland:

In Germany the foreigner is swindled - it is well to call the thing by its real name – wherever the salesman sees a chance. There is not in the average intercourse in hotels and shops the vaguest glimmer of ordinary commercial morality. The surcharge can occasionally be easily defeated by employing a German acquaintance or even a German on commission; it can more easily be avoided by not completing the transaction when the price is manifestly excessive.

One cannot altogether blame the German tradesman for wanting a share in the swindle when Governments set him the example. Bavaria, for instance, has announced that for admission to performances at any of the State theatres or opera houses British subjects are to be charged five times the prices charged to Germans; the inquisition is to be controlled by inspectors authorised to demand passports with all the attendant chicanery. The result is that the merry game of ‘swindling the foreigner’ has taken a firm hold in the Munich hotels and shops, on the assumption that what is right in the State cannot be wrong in the subject.
6

Northcliffe would be dead three months later at the age of fifty-seven, suddenly taken ill at the French spa resort of Evian. There were contemporary rumours that the press magnate died from the effects of tertiary syphilis. The usually accepted explanation is that he succumbed to septic endocarditis, a bacterial infection of the heart valves, which might account for the fevered quality of his last weeks and days. Clearly unhinged at the time of his death, the never exactly temperate press magnate wrote numerous telegrams that, on medical advice, were never sent by his staff. One, to the editor of
The Times
, Wickham Steed, said: ‘POISONED BY GERMANS BY ICE CREAM’.
7

As the mark depreciated at an ever more precipitous rate during the early weeks of 1923, the currency situation became bewildering for the average foreigner. On a day when the mark was running at 22,800 to the dollar, or around 107,000 to the pound sterling,
8
a correspondent for the
Manchester Guardian
reported: ‘There is a current story in Berlin of a woman who went shopping with a basket to carry her paper money. She put it down for a minute, and on looking round found that the basket had been stolen – but the paper money left behind!’

One puzzling thing for the inexperienced visitor was that officially set prices such as those of tram or railway tickets, or tickets for state-run theatres and opera houses, remained relatively low, since, unlike the manufacturer or the shopkeeper, the state or municipality employee was in no position to raise or lower public tariffs on some kind of daily indexed basis. The
Manchester Guardian
’s correspondent continued:

For instance, in buying . . . a ticket for the opera, or in taking a tram ride, you remain among the hundreds [of marks]. That is why the high cost of living, while making it impossible for a German intellectual to carry on research or buy books, does not deprive the people of all intelligent enjoyment. ‘I am hungry anyhow, so why not be a little hungrier and go to the opera!’ said one young girl, philosophically, when asked for the reason of the packed opera-houses one found everywhere in Germany, even during the present crisis. ‘The price of the ticket would not in any case buy a loaf of bread.’

Such, however, is the anomaly of prices in German today, that directly you get away from theatres and trams and begin to buy unrationed bread, on which most people subsist, or margarine, or Ersatz-Kaffee (coffee substitute), or, of course, sausage and meat and butter, you soon jump into the thousands.
9

. . . So, it was possible to travel by train from Berlin to Dresden (200 kilometres) for the price of a pound of margarine. But how much to tip the porter at the station? And what about having the temerity to call a taxi when you get to your destination station? Then you find it costs more than the train trip for a three-minute ride.

Finally, when you have mastered, roughly, the incongruities of these different tariffs, there is always the chance that you may mix them all up again and offer somebody tens of thousands instead of thousands. Fortunately, in the case I have in mind, the kind waiter (a prisoner-of-war in England), who for three days concealed the fact that he spoke perfect English lest it should be thought a reflection on his client’s German, gently returned them and saved her from paying 50,000 instead of 5,000 marks for an evening meal – an economy of about half-a-crown
*
at the rate of exchange then obtaining.

No German would, or for the sake of their survival could, make such a mistake. One of the many anomalies was, in fact, the situation of performers in Germany’s theatres and opera houses. The relatively cheap theatre tickets celebrated by both foreigners and culture-hungry locals naturally left the managements of these places, unless they enjoyed state subsidies that were constantly adjusted to allow for inflation, hard pressed to pay their performers decently, or provide them with some job security, and still make a profit. Extra resentment was caused by the fact that the craftsmen and technicians, such as scene carpenters or electricians, being unionised, generally remained further ahead of the inflationary game than the ‘creatives’. There was also resentment against the supposed vulgarisation of the theatres’ programmes to suit the tastes of the inflation profiteers. By this, critics meant plays by Frank Wedekind (
Pandora’s Box
– famous in the English-speaking world as the main component of the drama
Lulu
) and Arthur Schnitzler (
Der Reige
, known outside Germany as
La Ronde
). Such dramas were alleged to suit the new,
nouveau riche
theatre-goers who, due to the impoverishment of the educated classes, now made up the audiences and even, in some cases, controlled the boards of the commercial theatres. All this led at the end of November 1922 to an actors’ strike in Berlin’s privately owned theatres.
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The ‘star’ actors were better off than the mass, especially as they could also command high (and often, by negotiation, inflation-adjusted) salaries in the booming German film industry. All the same, outside the immediate realm of the day-to-day theatre, there was limited public sympathy for the strike. And, as things turned out, though begun in great passion, it was fairly short-lived, ending in some disarray just before Christmas.

Siegfried Jacobsohn, who had started out as a drama critic and had originally called his magazine
Die
Schaubühne
(‘The Stage’) before broadening its content to include politics, economics and world affairs and changing its name to
Die Weltbühne
(‘The World Stage’), criticised the actors for failing to see that their fate was similar to that of many thousands of other intellectual workers. He presented his argument playfully as an imaginary conversation between an actor, a theatre director and a drama critic, with the critic pointing out coolly:

What will become of the countless journalists, painters, lecturers, doctors? If 682 of the 2300 lawyers in Berlin do not have an income of more than 18,000 marks, then they have the choice of starving or changing their hopeless professions, and when they are forced to, they make their choice one by one. They, and whatever no longer has a function, cannot expect to be kept going by a pathetically impoverished people for their own sake, for the sake of their beautiful eyes, beautiful voices, beautiful legs.
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Jacobsohn also pointed out that, with less than a third of Berlin’s theatres still open, because of the strike, the city was witnessing ten full theatres instead of thirty-five half-full ones as hitherto. Elementary, and pretty ominous, economics for actors, directors and theatre owners alike.

Writers, composers and painters were also presented with serious problems by the inflation. Even before the inflation, in fact before the war, the argument between creative producers of various descriptions and the publishers or purchasers of their works had been a passionate one, in Germany as elsewhere, as it naturally still is. Authors producing literary and scholarly works had always found themselves at a disadvantage when pitted against the economic power of the publisher, and without the popular writer’s ability to use his or her high sales as a bargaining chip.

Even at a relatively early stage in the currency’s decay, this situation got appreciably worse. Publishers, themselves struggling to adjust to a time of uncertain costs and even more uncertain profits, and with the educated class that represented a large chunk of their market in desperate financial straits, began driving a very hard bargain and demanding subsidies for scholarly books, with the possible exception of textbooks and reference works.
12
When in 1921 writers’ and artists’ organisations managed to get some political support for the idea of a 5 or 10 per cent tax on books, sheet music and concert performances – to be used to support distressed artists, composers and writers – the publishers struck back without mercy:

The entire nation is in distress. We find ourselves in a ‘shrinking economic basis for a highly cultured people.’ No one has enough any more. Certainly one cannot disregard the fact that the material compensation for intellectual work has remained behind that of manual labour during and after the Revolution . . . But whoever places himself and his fate upon so uncertain a foundation cannot complain if the ground gives way when his creative powers fail or because he lives in a time of crisis.
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A bitter exchange followed over the next two years in the pages of
Die Weltbühne
. Low fees apart, with the depreciation of the mark accelerating, what had appeared to be a reasonable schedule of payments at time of contract might, months or even years later when the work was delivered, be more or less worthless. Publishers would insist on a ‘mark-for-mark’ policy (which was, in fact, official Reichsbank policy), making no allowance for changes in the purchasing power of the sum agreed and therefore allowing no inflationary indexing of payments. A writer might accept an advance payment involving a royalty based on a percentage fixed cover price for a print run of his/her book, only to find, every time he or she went past a bookshop where the work was displayed, the price ticket inexorably rising. Any author with the temerity to demand recompense for increasing bookshop prices did not get far. All the same, the publisher Kurt Wolff admitted to the author Herbert Eulenberg, with whom he and other publishers were involved in this fierce, continuing battle in the columns of
Die Weltbühne
:

In the end the author in general stands at the coffin of the paper mark in a more weakened state than an economic enterprise such as a publishing house, for the publisher has had the possibility of using certain business techniques to create equivalents which, if they did not fully compensate for the mark depreciation, at least prevented the complete ruin of his operation. I am thinking of the inflation profits made through the possibility of being sometimes able to pay with bills of acceptance for new stocks of paper and printing and binding bills and then paying off the commercial bills of acceptance with currency that was worth less than on the day the bills were issued. Without such crutches the German publishing business would have shut down long ago.
14

In effect, the publisher was the mini-Stinnes, producing print and paper rather than coal and steel, and able to pay off their bills and loans with devalued marks.

Elsewhere, the flight into ‘material assets’ continued.

The importation of food to Germany had always placed a burden on the country’s balance of payments. This was so even before the war, and the surrender of around 15 per cent of German agricultural land to Poland and France in 1919 had made the situation worse.
15
Moreover, due to territorial losses in both east and west, a great many raw materials needed for German industry (especially coal and zinc from Upper Silesia, now Polish, and iron ore from Lorraine, now returned to France) had to be imported. The German government could therefore rightly complain in the post-war period that gold and foreign currency required for the importing of foodstuffs was either being diverted to other imports that before the war had been sourced within German territory, or was being demanded by the Allies as reparations, leaving the German people to go hungry.