The Downfall of Money: Germany’s Hyperinflation and the Destruction of the Middle Class Read Online Free Page B

ships carrying goods of presumed enemy destination, ownership or origin’. 2 For the remaining duration of the war, and for the months of armistice that followed, German overseas trade was confined to the Baltic and to occasional forays into the North Sea.
    The Reich’s enemies knew perfectly well that before the war Germany had needed to import large quantities of food to supply her population. It became clear that the Entente’s (and especially Britain’s) intention was to bring about Germany’s defeat at least in part by a policy of deliberate starvation. The German civilian population was quite specifically targeted. As Britain’s most senior defence official, Maurice (later Lord) Hankey, asserted in a confidential memorandum from the summer of 1915, ‘Although we cannot hope to starve Germany out this year, the possibility that we may be able to do so next year cannot be dismissed . . .’ 3
    That the Entente blockade killed large numbers of Germans directly or indirectly, there can be little doubt. The suffering increased as the years went on. It was estimated that in 1915 some 88,000 German civilians died of causes attributable to the blockade, and in 1916 around 121,000. The months straddling 1916-17 were known as the ‘turnip winter’, because of the lack of protein and other vital foodstuffs available to the German population – especially in the country’s cities. By the end of the war the total number of victims was thought to have reached more than 760,000. 4
    In the city of Düsseldorf, in the northern Rhineland – its adult population a mix of white-collar officials and industrial workers – staples such as potatoes were often unavailable for months at a time.
    In 1916, the shortage of fats began in earnest. Legumes such as lentils, barley and peas were available only rarely or not at all. By 1917, ‘war coffee’, which contained no real coffee at all, was the only kind for sale. The city officially allotted one egg to each adult every three weeks, but did not always have them to distribute. All kinds of cheese were scarce; dried fruit was not to be found. The only type of food available steadily in Düsseldorf was vegetables, and the kind and quantity depended on the season. 5
    By 1917 the diet of the average industrial worker in Düsseldorf compared very unfavourably, as regards both quantity and diversity, with that provided to an adult male in the pre-war poorhouse in the city of Hamburg. 6
    Germany’s inability to trade meaningfully also reflected her inability to participate in what was left of the global financial system. Britain and France could continue, to some extent, to import and export, and to raise money for the war through borrowing on the international markets. In the four years between 1914 and 1918, Britain earned £2.4 billion from shipping and other ‘invisible’ sources, sold £236 million of its foreign investments, and borrowed almost £1.3 billion abroad. 7 Before August 1914, Germany had held overseas investments of between £980 million and £1,370 million in countries with which she later found herself at war. At least 60 per cent of these were subjected to outright confiscation. 8 Moreover, unlike Germany, Britain and France remained in possession of large overseas empires. This meant that they could also make good any shortfalls in domestic food supplies, as well as calling on vast extra material resources and manpower.
    After the failure of early attempts by Germany to raise funds on the New York financial markets, it became clear that by contrast the Reich stood alone. Again, though Britain also had to raise vast sums of money for the war, the capacity (and willingness) of the City of London, the world’s greatest financial centre, to absorb far greater quantities of short-term ‘floating’ debt than the comparatively tiny German money market, gave it a vital advantage, in particular lessening the inflationary effect of such borrowing on the general economy.