Chancellors Of Germany

"In January 1947, the US and Britain established a common economic policy for their zones. France joined the following year, making it the ‘Trizone’. The economist Ludwig Erhard was appointed as director of the Economic Council and oversaw the smooth transition to the new currency, the Deutschmark. He coupled it with eliminating both price controls and rationing. Erhard’s bold economic policy inspired a recovery that eventually enabled political reconstruction based on a constitution approved by the Allied Powers."

"Thomas Hazlett: Do you have any examples in mind of countries that, once having flirted with socialism or the welfare state, have been able to reinstitute the rule of law? Friedrich Hayek: Oh, very clearly Germany after World War II, although in that case it was really the achievement of a single man, almost. Hazlett: Ludwig Erhard? Hayek: Ludwig Erhard, yes."

"It seemed a miracle when West Germany—a defeated and devastated country—became one of the strongest economies on the continent of Europe in less than a decade. It was the miracle of a free market. Ludwig Erhard, an economist, was the German Minister of Economics. On Sunday, the twentieth of June, 1948, he simultaneously introduced a new currency, today's Deutsche Mark, and abolished almost all controls on wages and prices. He acted on a Sunday, he was fond of saying, because the offices of the French, American, and British occupation authorities were closed that day. Given their favorable attitudes towards controls, he was sure that if he had acted when the offices were open, the occupation authorities would have countermanded his orders. His measures worked like a charm. Within days the shops were full of goods. Within months the German economy was humming away."

"May I tell you the story of when I last spoke to Dr Ludwig Erhard? We were alone for a moment and he turned to me and said, “I hope you don't misunderstand me when I speak of a social market economy (sozialen Marktwirtschaft). I mean by that that the market economy as such is social, not that it needs to be made social.”"

"Freedom can be saved only for those who are willing to hold and defend it, and for whom it means more than a desirable, but not really essential luxury. Freedom demands above all self-restraint, and it does not flourish in an atmosphere that is indifferent to values. Even where we speak of individual freedom, we think of it in relation to the human conscience, and having its proper place in the community and the body social. I repeat what I have often said: "Freedom without order will only too easily drift into chaos—order without freedom will deliver us to coercion.""

"Who carries the real responsibility and who is responsible to whom? Naturally the Christian reply is: Let every man carry responsibility, and in fact each man is responsible to his conscience, his fellowmen and finally to God. But when I, for example, have the pleasure of holding discussions with representatives of various groups, I seldom feel that they are aware of this responsibility; on the contrary, I hear talk of nothing but a unilateral responsibility to the interests they are representing. In such cases, if the concept of 'responsibility' is not turned upside-down, it is at least so devalued and falsified that one can only speak of rank misuse."

"Like everyone else, I was familiar with Erhard's heavy bulk, and I knew his reputation for stubbornness. But when I met him, I found that he was subtle and highly intelligent – although we did not always agree. The prestige he enjoyed was well deserved: he had shown clear-sighted courage in successfully imposing and carrying out his ideas. He had no reason to doubt the superiority of the so-called ‘liberal’ economic policies that had worked so well in his own country. He was no nationalist, but the Schuman Plan had no place in his vision of an international economy based on pure free trade. Where we were proposing a code of good conduct, he scented the danger of dirigisme; where we were organizing European solidarity, he suspected protectionism."

"What Erhard said was breath-taking in its simplicity. Provided the state defends the currency, he said, there is no need to control prices, wages, goods, capital or anything else. In fact, so long as these controls remain, we shall continue to suffer from both inflation and scarcity. Abolish the lot and all will come right. The miracle was that he got away with being allowed to do it. ... In the early stages of his policy, Erhard was surrounded by capitalists and unionists, economists and bankers, crying “Woe, woe” and warning of the dire and imminent consequences of removing what they imagined were the foundations on which the fabric of things rested. As he used to say, “My room resounds with catastrophe from morn to night.” But he was right, and they were wrong: the new mark stayed rock hard and Germany in a decade was contemplating the economies of her victors with patronising contempt."

"Erhard was a man who had his moment in history and grasped it. As head of the Economic Department of the administration which preceded the creation of the Federal Republic of Germany, he was the author of the decision to combine the currency reform of 1948 with the abolition of rationing, and of restrictive regulations concerning production, distribution and capital movements. Many have argued that Germany’s ‘economic miracle’ (and not less the political miracle) owes much to these decisions which at the time were regarded as either unrealistic or indefensible by many, including the Occupation Powers."

"Ludwig Erhard...deserves far greater credit for the restoration of a free society in Germany than he is given for either inside or outside Germany... It must be admitted, however, that Erhard could never have accomplished what he did under bureaucratic or democratic constraints. It was a lucky moment when the right person in the right spot was free to do what he thought right, although he could never have convinced anybody else it was the right thing."

"A collectivist-totalitarian economic system, which in the final analysis serves only to glorify and increase the power of the state, can achieve great success in the easily controllable field of the basic industries but it will always remain incapable of serving man, in other words of providing the rich abundance of goods which gives the individual consumer a free choice and which enriches and beautifies his life."

"In a community of free people the freedom of economic activity is an inseparable part of the whole, and only this freedom will ensure a life worth living."

"As I have said time and again, the focal point of our economy is the individual."

"[Erhard] emphasized that the aim of a common market was to free the movement of goods and capital. It did not exclude differentiation in tariffs, but he had been at pains to allay any anxiety lest the establishment of a common market by the six countries would mean discrimination against Britain. He believed that he had succeeded in dissipating some of the fears regarding European integration."

"[Erhard said that] no other country had advanced to such a degree as western Germany in the past five years. They could not stand still, however; production must be raised and consumption increased. ... Abroad...it had become the habit to speak about the German "miracle". In fact, there was no miracle. What had been achieved in the past five years was due to German initiative and industriousness. Western Germany to-day had one of the soundest currencies in the world; bottlenecks had been overcome and the trade balance was favourable. He looked forward to widening consumption so that such things as refrigerators, washing machines, motor-cycles, and motor-cars could be made available to new classes of the community. Plans were in hand for stimulating consumption to this end."

"The German economy compared very favourably with the situation in other countries: the average income of workers here had risen in the past two years by 16 per cent. while the cost of living had gone up by only four per cent. He was anxious to avoid making too little of the rise in prices, but pointed out that whereas the cost of living in the Federal Republic was now 13 per cent. above the 1950 figure, in Britain and France the rise over the same period was a third or more."

"Any liberal system must proceed from the assumption that freedom is one and indivisible and that elementary human freedom in all spheres of life must go hand in hand with political, religious, economic and spiritual freedom. The strategy of collectivist thinking has always been to split up this most essential and most universal of human values as a means of making inroads into the free system itself."

"Heartiest congratulations on your great victory. I look forward to an early chance to meet with you again and to discuss our great common tasks in working for the peace of Europe, the reunion of Germany, and the steady growth of the Atlantic community."

"[Erhard said that] a new phase in the development of the German free economy would begin with the transformation of publicly owned enterprises into joint stock companies in which those with small savings could invest."

"National autonomy in economic matters should not be an obstacle to a free world economic system. But to achieve free convertibility within the European Payments Union only would lead to further upheavals. The dollar and the pound sterling should be included in any such step, if a new single world market was to be created. A free political order implied a free economic order; this would stand foremost amongst the preoccupations of the new Bundestag."

"[Erhard said that] in the next four years he would fight unrelentingly against all forms of restrictive practices. The threat to the German economy came not so much from the Social Democrats as from opposition within the economy to free competition. "I will not retreat one step from my stand on the subject of cartels and professional rings. It will be a hard fight." He warned industrialists that they endangered the whole economic system by their predilection for cartels in the search for an illusory security. There was no security for the owner of a business."

"[Erhard] forecast that this year German exports would reach a volume of 16,000m. marks. He recalled that in 1948, when exports totalled 2,000m. marks, he had calculated that in 1952 they might be 8,000m. marks. ... a balanced budget could be achieved in the long run only by a steadily rising volume of goods, a greater national income, higher productivity, and increased national wealth. To-day the Federal Republic had virtually attained full employment."

"[Erhard said his] ambition was to drive up the German standard of living until it approximated to that of the United States. That could not be achieved overnight, but it could be done, for the standard of living in the United States was determined not by the climate but by a successful economic policy."

"We also concur with the Reich Chancellor's program as regards the Flemish people. However, the Belgian question also has an important political aspect. If Belgium is not to become a glacis for our enemies again, then not only must the status quo ante be precluded, but Germany's military, political and economic supremacy must be guaranteed."

"We see the strongest guarantee of peace for Europe in a policy of expansion. When have we exploited the embarrassments of other peoples? When Russia was at war with Japan, the Tsar was able to take his last regiment away from our frontier. We did not regard Morocco as an object of war, we looked on while East Africa was divided, while France was creating a great colonial empire of Tunis, Algiers and Morocco, while Italy occupied Tripolis, while Persia was divided between Britain and Russia into two spheres of interest—the world could always rely on the German Kaisers and the German people's love of peace. And what thanks have we had? A world of enemies.... When one awakens in this way from a beautiful dream one must not follow that dream again, must not in future believe that renunciation of a world policy will be a guarantee of permanent freedom. They grudged us the right to economic development. We thank the Chancellor for what he said yesterday concerning our security in the East and West."

"Napoleon once compared England with Carthage. Carthage sank down from her height. England also can sink and will sink. For on our side is the true right and on our side the might to strike the blow at her heart, if we understand how to exploit the hour."

"From Antwerp to Baghdad there lies before us a large economic field in which German enterprise can develop. If we succeed in translating into reality the idea of a Central European customs agreement, which is in the air, and to which at one time Friedrich List in Germany and a man like Schäffle in Vienna devoted their energies, then the way to an understanding may be left open—and a large economic area opposed to Chamberlain's Greater Britain and the power of the United States, which would afford sufficient space for the co-existence and co-operation of the German and Austro-Hungarian national economies through the exchange of goods and through an advance towards Asia Minor, which the policy of Emperor William II has indicated and upon which German enterprise has already started through the grandiose project of the Baghdad Railway."

"Despite all the obscuration of history and all the incomplete diplomatic documents... and despite all the recent systematic endeavours to represent Russia as the incendiary of the world war, those who have carefully followed the economic struggle between Britain and Germany for a long time will not in the least depart from the view that this war is in the first place an economic war between Germany and Britain and that—even though the external cause of the outbreak of war may have lain in St. Petersburg—the inward cause was Britain's jealousy of Germany's world economy."

"We must become so strong and must so ruthlessly weaken our opponents that no enemy will ever dare to attack us again. To achieve this a modification of frontiers in the west as in the east is essential."

"The restoration of German vitality is not guaranteed by the status quo ante. It will also be necessary to make territorial changes; don't let us hamper our statesmen with assertions to the effect that the German people do not want this."

"The conquest of Riga is of the greatest importance not only from the military, but also form the political point of view.... Our military situation was never more glorious than it is at present. Meanwhile, there is also the U-boat war, which is taking its course. The destruction of enemy tonnage that was expected of it on the basis of official predictions, has not only been achieved, but partly exceeded by more than half.... Time is working for us. Britain to-day is fighting the war with a watch in her hand, and it is in this that I see the fundamentally decisive effect of the U-boat weapon for us and the approach of peace.... If we are to achieve anything through compromise and understanding, then the Government must not be forced to make any statements renouncing something from the outset. For this reason the tactics by which it has been and is still being tried to make the Government declare its disinterestedness in Belgium, are wrong. Even those who share the attitude of Herr Scheidemann ought to fight for the last stone in Belgium, in order to exploit to the utmost that which possession has made into a dead pledge.... However, the fact that we are going to have peace—and, we hope, soon—will in my conviction be due, apart from our military achievements, to the effects of unrestricted U-boat warfare, of which I have repeatedly said before the Main Committee that while I reject the formula that it will force Britain to her knees, I believe as firmly in the formula that it will force Britain to the conference table."

"The world is listening with bated breath to the struggle which to-day is rending the peoples of Europe to pieces. The knowledge that England is our chief enemy in this struggle is altogether good. 'On thine island, envious England, thou art the fundamental enemy.' The present world war may, in future, be described as the most gigantic economic struggle of all time. Economic in its origin, through British jealousy of the amazing development of German national and world economy, it has essentially also become a struggle waged with economic weapons and will be continued in the economic field even when the military weapons are silenced."

"There is much sentimentality in the Fourteen Points of Wilson's peace program. As far as we are concerned the question of Alsace-Lorraine is one that we cannot discuss and it cannot even be raised at any international conference. The territorial integrity of Turkey must be maintained. The Reich Chancellor has declared that we do not seek the annexation of Belgium. However, the Flemish movement is working for independence. The Reich Government should make it its task to support this movement. With regard to the question of self-determination... it must be remembered that there is no political education in Lithuania and that from seventy to eighty per cent of the population there is illiterate.... [Poland does] not need freedom."

"For him the only thing that mattered was the interest of the Reich."

"His political enemies maintained, and still maintain, that his achievements were not worth the efforts involved, but it is clear that this view is inspired by violent Party dissension, and is not an impartial and measured judgment. The name of Stresemann will be indissolubly connected with the most intensive and fruitful period in German reconstruction."

"Mr Asquith is recorded to have warned Sir Austen Chamberlain against him as a "typical Junker"."

"He was well aware both of the Reichswehr's secret arrangements with Russia and its rearmament efforts at home. And it was largely due to his patient labors that the military fetters of Versailles, which Seeckt one day hoped to burst by force, were gradually loosened and finally slipped off altogether. Stresemann conveniently supplied the diplomatic front, behind which "Seeckt perfected his military foundation for the Greater Germany of the future." More specifically, Stresemann freed the Reichswehr from the annoying supervision of the Inter-Allied Military Control Commission, which had been set up to check on Germany's fulfillment of the military provisions of Versailles."

"There were, of course, alternatives to Hitler. It was just that none of them was viable. Gustav Stresemann of the People's Party had offered compromise with the Western powers - symbolized by the 1925 Treaty of Locarno - and the hope of revanche in the East. But he had died of a heart attack on October 3, 1929, at the age of just fifty-one."

"From the evidence that has been presented it should be abundantly clear that Stesemann supported, at times actively and always in his heart, any move on the army's part that tended to remedy Germany's military impotence. He did so partly because of all the army had meant to Germany in the past—in other words, Stresemann was a nationalist and there is ample evidence that he remained one to the end of his life; although his nationalism became more moderate and tolerant as he grew in stature. But more decisive than such personal admiration for things military in shaping Stesemann's attitude were reasons of state. Among all the various elements which determine a country's international rank, from size and geographic location to natural resources and industrial potential, the possession of a powerful army has always proved the most immediately effective. As Stresemann once put it: "The main asset [of a strong foreign policy] is material power—army and navy.""

"Many people believed that the Treaty of Locarno was of importance, and Austen Chamberlain received the Order of the Garter in recognition of his services in concluding it. People believed that it had brought Germany back into the comity of nations and that it would serve as the basis of her future relations with France and England. But the Germans saw it merely as a step towards recovering the strength they needed to wage a war of revenge, and they broke its terms as soon as it suited them to do so. Their true intentions were made perfectly plain to the ex-Crown Prince of Germany at the time by Stresemann, who had signed the treaty on behalf of Germany. Later, when I came to know Grandi while he was Italian Ambassador in London and before we had driven Italy into the arms of Germany, he told me that during the Hague Conference he had seen a great deal of Stresemann and would often go back with him to his hotel after the day's work was over. Stresemann would always drink a bottle of champagne before going to bed, and in the course of one of their late conversations he said to Grandi with unusual solemnity: "I am an old man, and I am dying, but you are young and you will live to see the second Punic War." This was told to me long before the formation of the Axis or the advent of Hitler to power, and should be remembered by those who are inclined to attribute all the crimes of Germany to the Nazis."

"At this time [January 1925] Stresemann and his colleagues were governing Germany with an iron hand, exercising dictatorial powers which, as Vorwärts observed, involved the "total suspension of freedom of opinion" (Meinungsfreiheit). At the same time Stresemann was declaring in the Reichstag and to audiences of foreign journalists that the disarmament of Germany was "complete", protesting to the Allied Governments against any further exercise of control, repeatedly demanding the withdrawal of the Control Commission, and even declaring that there had never been any obstruction to the work of the Control Commission... The whole of his statements on the subject of Disarmament were untrue."

"[T]he disarmament clauses of the Treaty had never been effectively enforced... The full story of General von Seeckt's secret plans, by which, in spite of the Allied Control Commission, all the preparations were made for the moment when a new German Army, and a new German General Staff, could arise, like a new phoenix from the ashes of the old, with new arms ready to be poured out from the factories, is truly astonishing... How far all the democratic Ministers of the Weimar Republic were party to these deceptions is perhaps uncertain. It is clear, however, from his papers, that Stresemann actively abetted this process of rearmament and was guilty of making Briand his dupe. During the Locarno negotiations he knew and approved the wholesale breach of their treaty obligations by the German military authorities."

"Dr. Stresemann was generally regarded as a representative of the 'good' Germany, and Sir Austen Chamberlain and M. Briand certainly did their best to give him every chance. After Dr. Stresemann's death, however, his memoirs showed that his apparent moderation was a mere cloak under which to prepare an eventual policy of force."

"The most famous and significant conference of the 1920s took place at Locarno, on Lake Maggiore in northern Italy, in October 1925. The principals were the foreign ministers of Britain, France and Germany—Austen Chamberlain, Aristide Briand and Gustav Stresemann. Their great achievements were to guarantee the Rhineland borders of France and Germany and to bring Germany into the League of Nations. The so-called spirit of Locarno became a benchmark for diplomacy. In retrospect, however, Locarno looks more ambiguous. Stresemann had succeeded in bringing Germany in from the cold without abandoning any of its demands for lost territory in the east. These demands, particularly over Poland, were to prove the fuel for the next war."

"During this session [in 1927], Stresemann also came to luncheon, when I sat next to him. I recall chiefly his quick, clear brain, forceful character and formidable appetite. Throughout the meal he laughed often and spoke his part in a harsh voice. His bonhomie gave no inkling of the fixed purpose to restore Germany's power. Had he lived, his ambitions might have been dangerous, but he would have disclosed them carefully."

"The picture of Stresemann that emerges from all we have said, then, is that of a great German statesman, the greater perhaps for the two-faced policy which devotion to his country and the belief in its future made him pursue, and which at the same time was so at variance with his upright character as an individual. Yet he was not the "good European," the "honest dreamer of peace and apostle of reconciliation," as he appeared to many of his contemporaries and most of his biographers. We might call him a "good European" if we thought of Europe as ending on the Vistula. Or we might say he was as good a European as Bismarck had been, the one among his predecessors to whom he has often been compared, whose concept of Realpolitik he admired, and with whom he shared the realization that politics is the art of the possible. But when all is said and done, truly good Europeans are extremely rare, and one should least expect to find them among politicians of a defeated country in an age where nationalism is still a potent force."

"Stresemann was as determined as the most extreme nationalist to get rid of the whole treaty lock, stock, and barrel: reparations, German disarmament, the occupation of the Rhineland, and the frontier with Poland. But he intended to do this by the persistent pressure of events, not by threats, still less by war.... There was a great outcry in allied countries against Stresemann after his death when the publication of his papers revealed clearly his intention to destroy the existing treaty-settlement. The outcry was grotesquely unjustified. Given a great Germany—and the Allies had themselves given it by their actions at the end of the war—it was inconceivable that any German could accept the treaty of Versailles as a permanent settlement. The only question was whether the settlement would be revised, and Germany become again the greatest Power in Europe, peacefully or by war. Stresemann wanted to do it peacefully. He thought this the safer, the more certain, and the more lasting way to German predominance. He had been a bellicose nationalist during the war; and even now was no more inclined to peace from moral principle than Bismarck had been. But, like Bismarck, he believed that peace was in Germany's interest; and this belief entitles him to rank with Bismarck as a great German, even as a great European, statesman. Maybe even as a greater."

"Stresemann, an ex-jingo annexationist, the best available German. He knew and denied German rearmament, would have Germany in the League chiefly for propaganda, wished East and West closer, but stiffened the Bolsheviks by assurance of protection from sanctions. Russia reciprocated by proposing the fourth partition of Poland. Yet, weighed between swings and roundabouts, Stresemann was an asset. He lasted a few months as Chancellor, endured as Foreign Minister and, despite subsequent revelations, deserved his Nobel Prize."

"Great Germany can only be created on a republican basis."

"We ask you to be convinced that millions of Germans with us, even under the new conditions... will adhere to the monarchic idea and will stand against any undignified estrangement (Abkehr) from the august ideals of the German Emperordom and Prussian Kingdom."