The birth of the Weimar Republic coincided with the revolutionary uprising of the Spartacist League on the pattern of the Bolshevik Revolution in Russia. Soviets of workers and sailors were established in many cities. The political atmosphere in Berlin was charged with demands for Soviet-style governance. Those opposed to this – as the sociausts, Democrats and Catholics such met in Weimar to give shape to the democratic republic. The Weimar Republic crushed the uprising with the help of a war veterans organisation called Free Corps. The anguished Spartacists later founded the Communist Party of Germany. Communists and Socialists inceforth became irreconcilable enemies and could not make common cause against Hider. Both revolutionaries and militant nationalists craved for radical solutions.
Political radicalisation was only heightened by the economic crisis of 1923. Germany had fought the war largely on loans and had to pay war reparations in gold. This depleted gold reserves at a time resources were scarce. In 1923 Germany refused to pay, and the French occupied its leading industrial area, Ruhr, to claim their coal. Germany retaliated with passive resistance and printed paper currency recklessly. With too much printed money in circulation, the value of the Germ mark fell. In April the US dollar was equal to 24,000 marks, in July 353,000 marks, in August 4,621,000 marks and at 98,860,000 marks by December, the figure had run into trillions. As the value of the mark collapsed, prices of goods soared. The image of Germans carrying cartloads of currency notes to buy a loaf of bread was widely publicised evoking worldwide sympathy. This crisis came to be known as hyperinflation, a situation when prices rise phenomenally high. Eventually, the Americans intervened and bailed Germany out of the crisis by introducing the Dawes Plan, which reworked the terms of reparation to ease the financial burden on Germans.
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