In 1923 German government was unable to pay the reparations required under the terms of the Treaty of Versailles. The French and Belgian governments responded by sending in troops to the Ruhr, the main centre of Germany's coal, iron and steel production.
The German people were outraged and Fritz Thyssen and other industrialists who had investments in the Ruhr, organized a passive resistance campaign. The French responded by bringing in their own workers to operate the mines and began arresting leaders of the resistance movement.
The occupation of the Ruhr led to a collapse of the German economy. There was massive inflation and large increase in unemployment. Germany was now unable to pay any reparations.
Charles G. Dawes, an American banker, was asked by the Allied Reparations Committee to investigate the problem. His report, published in April, 1924, proposed a plan for instituting annual payments of reparations on a fixed scale. He also recommended the reorganization of the German State Bank and increased foreign loans.
Gustav Stresemann, the German chancellor called off the passive resistance and began paying reparations again. The French and Belgian troops withdrew from the Ruhr in 1925.
The French occupation of the Ruhr had swung German opinion to the Right. That encouraged Hitler and his Fascists in Bavaria and, on November 9th, they struck and tried a coup from the Right. But the Government of the Republic in Berlin at last acted against the Right also. Ludendorff and Hitler escaped and hid, while fourteen of their followers were killed. The stabilization of German currency followed with financial help from America, and things temporarily got on an even keel again. Here I end my story, for I am only relating what I saw and experienced in Germany and from now on I saw and experienced no more.
My years in Germany enabled me to see and report about the weakness of parliamentary and democratic institutions existing there after defeat in the First World War. The Majority Social-Democrats allowed themselves to become prisoners of the military reaction and of the Officers' Corps. The Communists lost their best and wisest leader, Rosa Luxemburg, by murder and deteriorated into a rabble which accepted orders from Moscow, and Moscow was quite ignorant of German affairs. The whole history of Germany during this time was one frightful tragedy which led to Armageddon Number Two.
I left Germany with a feeling of despair, the very opposite to what I had experienced when I left Russia with a feeling of hope and enthusiasm. But perhaps I was now getting more experienced and possibly more sceptical of humanity than I had been when I was in Russia. That does not, however, entirely explain my attitude. The fact was that I was beginning to feel that Germany had to go through another trial to get rid of her political past and become a modern democracy.