Second Stresemann cabinet

The first Stresemann cabinet resigned late on 3 October 1923 due to disagreement between the political parties over the extent to which the planned enabling act should give the government the power to change the length of the working day by decree. The grand coalition of the German People's Party (DVP), Social Democrats (SPD), Centre Party and German Democratic Party (DDP) was not replaced by a new configuration that included the right-wing German National People's Party (DNVP), which would have been consistent with the earlier decisions taken by the DVP Reichstag members. Since the majority of the DVP wanted to keep Stresemann in office and it proved impossible to form a different coalition under him, the original parties once again tried to form a government. Hans von Raumer (DVP) and Rudolf Hilferding (SPD) did not return, as demanded by the DVP. Raumer had resigned on 2 October, prior to the whole cabinet's resignation the next day. To replace Hilferding at the Ministry of Finance, Stresemann considered the future Reichsbank president Hjalmar Schacht but had to drop the idea after Schacht's actions during the occupation of Belgium during World War I became the subject of criticism. Hans Luther was then switched from Food and Agriculture to Finance. Von Raumer's successor was Joseph Koeth, an independent ex-officer and head of the former Ministry for Economic Demobilisation. Johannes Fuchs [de], acting Minister for the Occupied Territories, wanted to resign but was persuaded to remain in office. Finally, on 22 October, Gerhard von Kanitz, another independent who was close to the DVP and to landed interests within the DNVP, was appointed to Food and Agriculture.^[1]

The members of the cabinet were as follows:^[2]

The enabling act that was originally discussed in the first Stresemann cabinet was passed on 13 October.^[3][4] It gave the government the powers to implement by decree the measures it thought necessary to stop the ongoing hyperinflation. The most significant of the measures was the successful replacement of the all but worthless Papiermark with the stable Rentenmark on 15 November 1923. Due to a lack of gold reserves, the new currency was backed by a special forced mortgage placed on all land in Germany used for business or agricultural purposes.^[5][6]

The cabinet had to deal with several crucial issues that threatened Germany's integrity. The most pressing was the occupation of the Ruhr, which was closely connected to the issue of war reparations and a major cause of the economic collapse and hyperinflation brought on by the policy of passive resistance against the French and Belgian intervention.^[7]

Stresemann had announced the end of the Ruhr resistance on 26 September,^[8] but industrial production did not resume immediately. The second Stresemann cabinet was closely involved in negotiations that resulted in the MICUM Accord [de], a series of treaties signed between November 1923 and September 1924 that ended the ruinous period of work stoppages in heavy industry, which had resulted from passive resistance. Since the payments to the occupying nations did not reflect just a resumption of reparation payments but also included compensation for the occupation costs, they were seen as marking the failure of passive resistance and, ultimately, a capitulation by Germany to French demands.^[7]

During the occupation of the Ruhr, the French actively encouraged separatism in the Rhineland, which resulted in the establishment of two short-lived separatist and pro-French entities, the Rhenish Republic and the Autonomous Palatinate [de]. Since they did not enjoy widespread support among the German population, they soon collapsed. The British government also resolutely opposed France's attempt to extend its sphere of influence permanently to all of Germany west of the Rhine.^[9]

Finally, there were regional challenges to the government's authority from the left in Thuringia and Saxony and from the right in Bavaria. On the left, the Social Democrats under Minister Presidents Erich Zeigner in Saxony and August Frölich [de] in Thuringia allied with the Communist Party (KPD) and made use of the economic crisis and the threat of right-wing counter-revolution in Bavaria (see below) to set up armed militia called the Proletarian Hundreds that soon numbered around 100,000 men. It brought on a confrontation with the government in Berlin, which asked President Ebert to declare martial law and set into motion a process of military action called a Reichsexekution against the state governments of Saxony and Thuringia. On 23 October, Otto Gessler ordered the Reichswehr to move into both states. In Thuringia, the militias were disbanded and the communist ministers resigned. In Saxony, however, there was armed resistance, and Zeigner refused to remove the Communist ministers from his cabinet. Stresemann then appointed Rudolf Heinze Reich commissioner for Saxony. Heinze had the state government deposed and arrested.^[10][11]

In Bavaria – a hotbed of right-wing opposition against the democratic government in Berlin and home to numerous activists including Erich Ludendorff, Gustav von Kahr and Adolf Hitler – Minister President Eugen von Knilling refused to accept the authority of Stresemann's cabinet and appointed von Kahr as state commissioner, in effect establishing a right-wing dictatorship in Bavaria. It also declared martial law and considered a march on Berlin to depose the government. Local commanders disobeyed orders from Hans von Seeckt, the Reichswehr's commander in chief. Since von Seeckt refused to use military force against the Bavarian government, there was no repeat of the events in Saxony.^[12][11]

On 8/9 November, Hitler launched his Beer Hall Putsch in Munich, but von Kahr failed to side with him and had the attempted government takeover put down by local troops and police.^[12]