The formal end of the war was signed in Versailles, France in 1919. The Treaty of Versailles in 1919 was a punitive measure, assigning blame for the war to Germany and Austria-Hungary and imposing severe unlimited and ill-defined reparations. Great Britain and France owed large debts to the United States, and they intended Germany should pay. The conference redefined both the maps of Europe and of Africa. Most of the borders of the Middle East fought over in the Gulf War of 1991 were created in Versailles in 1919. Many who came to the conference, including Indochinese activist Ho Chi Minh, left without being heard. The Germans formed a democratic government in Weimar, south of Berlin and Goethes birthplace. Marked by economic and political upheaval throughout its short existence, it was also marked by artistic eminence like the Bauhaus design movement and lasting legacy in film led by directors such as F.W Murnau.
Hitler, who found himself a gifted orator, moved to consolidate his power within the NASDAP. He defined the Nazi Party, gave it leadership, and by 1921 was the sole leader. By 1923, the Nazis were the best-organized political party and had 55,000 members. The National Socialists were openly anti-Semitic, nationalist, and attracted members from all over Germany.
The system of reparations set up in Versailles had the consequence of runaway inflation. From 1922 the mark lost ground against the dollar. In November 1918 the mark was worth 25¢, and by 1922 it was down to 400 marks to the dollar. By the summer of 1923, 4,000 marks to the dollar was a crisis. By November 1923, the purchasing power of money was being halved almost hourly. Germans rushed to convert their savings, if they had any, to durable goods. The endurable image of wheelbarrows of money to buy a loaf of bread is comically accurate. It took 4 million marks to obtain a single US dollar.
On November 8, 1923,Hitler, Hermann Goring and the Sturmarbeitelung surrounded the Bavarian leadership as they were speaking at a beer hall in Munich. Firing a pistol shot, Hitler ran to the podium and declared a revolution. Herding the Bavarian politicians into a back room, he tried to force them to step aside. When they refused, he announced their resignation anyway. Working with World War I hero General Erich Ludendorff, they held the leadership overnight and marched on Munich the next day. The Army did not join them, and sixteen Nazis and three policemen were killed. The Nazi martyred their dead, inscribing their names into every party members identification papers.
The Germans asked the French to end reparations. The French refused, but the Germans defaulted anyway. A plan to stop the runaway inflation did not allow for the end of reparations, but succeeded in stabilizing the German monetary system by devaluing the mark. A fixed sum was set in 1921. It worked well until the depression. The plan started a three-way payment system that was essentially a global pyramid scheme. The Americans lent money to Germany to rebuild, and Germany paid reparations to the British and French. The British and the French paid their war loans to the Americans. Two things prevented the system from working: the Versailles Treaty never defined how much, or for how long, the Germans would pay; and the possibility of the Americans running out of money was never taken into account.
So, in 1929, when the American economy collapsed, the German economy collapsed, and the British and French economy collapsed. The worldwide depression hit Germany as hard or harder then everywhere else. By 1932 the Nazis were making significant gains in the Reichstag, the Weimar Republics government. Street battles between Ernst Röhms SA and communists, socialists, and Social Democrats were frequent. Newspapers that criticized the Nazis were ransacked and their editors intimidated or murdered. Voter intimidation and election fraud were rife on all sides. Nevertheless, Hitler was not elected President. Paul von Hindenburg was reelected President of the Weimar Republic.
The Nazi Party was in danger of being eclipsed. Backroom negotiations benefited Hitler. In 1933, Adolf Hitler forced a compromise that would make him Chancellor of Germany. Hindenburg, tired of the street violence, thought that if he appointed Hitler Chancellor, that would be enough for the Bohemian Corporal. Within a year he was dead, and Hitler folded the powers of the Presidency into the Chancellery. Adolf Hitler was the Führer of Germany.