Was Adolf Hitler Woodrow Wilson's love child?
Was Adolf Hitler Woodrow Wilson's love child?
WARNING: I'm a libertarian. Some of what I write below may offend the Left, the Right, or both. But as Walt Whitman said, "Who are you who only wants to be told what you've heard before?"
Previous versions of this article have appeared at Downsize DC, the Zero Aggression Project, and WarTruth.org.
Did U.S. policies help create Nazi Germany?
Yes. Two things were key...
U.S. intervention in World War One (WW1)
The Great Depression
Woodrow Wilson was complicit in both things. He signed the bill creating the Federal Reserve in 1913. He also led the charge for U.S. intervention in WW1.
The Versailles Treaty
U.S. participation in WW1 gave an undeserved victory to Britain and France. Wilson then allowed those countries to impose a harsh peace on Germany. This was the infamous Versailles Treaty. It helped spark the Nazi Party and World War Two (WW2).
The 25-point Nazi Party program supports the claim. The first two items dealt directly with the Versailles Treaty...
Point #1: "We demand the unification of all Germans in the Greater Germany on the basis of the people's right to self-determination." Self-determination was one of the key ideas in Woodrow Wilson's famous 14 Points, on which the peace treaty was supposed to be based. But the Versailles Treaty cut off some ethnic Germans in the Sudetenland and the Polish Corridor.
Point #2: "We demand equality of rights for the German people in respect to the other nations; abrogation of the peace treaties of Versailles and St. Germain."
Woodrow Wilson's intervention in WW1 made the Versailles Treaty possible. He also agreed to impose crushing reparations payments on Germany. The economic impact of those reparations would give the Nazi Party its first surge of support.
The Great German Inflation
The German state tried to pay its war reparations while still maintaining a lavish welfare state. Printing money - monetary Inflation - was one of their strategies.
Germany started expanding the money supply in June 1921. The inflation peaked in 1924. That was also when the Nazis ran their first election campaigns. The Nazis started strong when inflation was high but faded as the inflation ended.
May 4, 1924: The Nazis won 6.5% of the vote and 32 seats out of 472 in the Reichstag.
December 7, 1924: Nazi votes dropped to 3% and 14 Reichstag seats (out of 493)
May 20, 1928: Nazi votes dropped to 2.6% and 12 seats (out of 491).
The Nazis were small and getting smaller. So how did they gain total power a mere five years later?
The Federal Reserve & the Great Depression
Woodrow Wilson signed the Federal Reserve Act on December 23, 1913. It aimed to...
Provide a stable currency
Protect banks from economic shocks
End banking panics, recessions, and depressions
The Fed failed to maintain a stable currency almost immediately. It massively increased the money supply to fund the U.S. war effort in 1917/18. That caused some of the worst price inflation in American history. Savings and retirement incomes lost their value.
The Fed then reabsorbed the extra currency it had created during the war. That protected retirees by restoring the dollar's old value. The Fed’s governors knew this would also cause a depression. They accepted that cost because they knew rapidly falling prices would quickly compensate and restore prosperity. They were correct.
The 1920 downturn was short. James Grant tells the story in his fabulous book, The Forgotten Depression. This event teaches four lessons...
The Fed can cause price inflation by expanding the money supply.
The Fed can make prices drop by contracting the money supply.
Contracting the money supply can cause a depression (as it did in 1920 and again between 1930 and 1933).
The depression can be short-lived if prices are allowed to fall in concert with the shrinking money supply. (Politicians took steps to prohibit prices from falling after 1930, thus turning the resulting depression Great).
BONUS LESSON: The 1930-33 depression was the first one politicians tried to make better. The result was the deepest and longest economic downturn in history. It also led directly to the Nazi cataclysm. Beware of politicians who want to make things better.
Let’s follow the story step-by-step...
First came the Roaring Twenties boom
It looked like the Fed was maintaining a stable currency. Net price inflation was zero during the 20s (as measured by current methods). But looks can deceive.
Economist Murray Rothbard argued that the money supply was actually rising in the late 1920s. General prices may not have shown this, but stock prices did. Economist Friedrich Hayek noticed this. He wrote a February 1929 paper predicting that Federal Reserve monetary expansion would cause a crisis starting in the stock and credit markets.
Then came the bust
Hayek’s stock market prediction came true. The U.S. stock market crashed eight months later, on October 29. But what the Federal Reserve did next turned a mere stock market crash into a global catastrophe.
The Fed shrank the money supply by one-third between 1929 and 1933!
The result was the same as in 1920: a deep depression.
Why did the Fed do this? It isn’t clear. There was no need to counteract price inflation as there had been in 1920, and the market crash had already adjusted stock prices. The Fed simply needed to maintain a steady money supply. But it didn't.
The result was a deep worldwide depression.
The period when the money supply contracted is significant: 1930 to 1933.
It’s been said in various ways by various people...
“When America catches a cold, the world catches the flu.”
The U.S. is large and powerful. Everything it does impacts the world in a magnified way. Our depression spread around the globe, including to Germany.
The date range when the money contraction happened is precisely when the Nazis went from tiny to huge. The depression pushed fearful Germans into the Nazi's arms. You can see the change in the vote totals...
September 14, 1930: The Nazis won 18.3% of the vote and 107 seats in the Reichstag (18.5% of 577 seats).
April 1932: Nazi Party membership reached 800,000.
August 31, 1932: The Nazis won 37.3% of the vote and 230 seats (37.8% of 608 seats). This election made the Nazi’s the Reichstag's largest party.
November 6, 1932: The Nazis received 33.1% of the vote and 196 seats (33.5% of 584 seats). Nazi support had fallen, but they still had the most seats.
It’s normal for the largest party to control most ministries in a parliamentary system. This made it inevitable that the Nazi's would eventually acquire executive power. And so…
January 30, 1933: President Hindenburg appointed Hitler as Chancellor, giving him ministerial control.
March 5, 1933: The Nazis won 43.9% of the popular vote and 288 seats in the Reichstag (44.5% of 647 seats). They were now dominant.
The U.S. roots of Nazi power
Follow the chain of cause and effect...
First, U.S. intervention in WW1 gave victory to Britain and France. That allowed them to impose a harsh peace.
The Versailles Treaty midwifed the Nazi Party's birth.
Federal Reserve policies gave the Great Depression to the world and power to the Nazis.
Now, run the story another way...
Step one: Remove the U.S. intervention in WWI. That probably would have ended the war in a draw with a more balanced settlement. There would have been no Versailles Treaty.
Step two: Don't create the Federal Reserve, or, if the Federal Reserve does exist, avoid contracting the money supply between 1930 and 1933. That would have prevented the Great Depression and the Nazi rise to power.
The Nazis would've remained a tiny group of nutjobs, barely a footnote in history.
There would have been no WW2 and no Holocaust.
Other articles in this series
Do libertarians contradict themselves by opposing foreign intervention?
Did U.S. politicians support the more "evil" side in World War One
Books I've consulted
The rise of Nazi Germany
The Forgotten Depression by James Grant
America’s Great Depression by Murray Rothbard
A Monetary History of the United States by Milton Friedman and Anna Schwartz
Paris 1919 by Margaret Macmillan
The Russian Revolution
Comrades by Brian Moynahan
Russia Leaves the War by George F. Kennan
World War 1
The Illusion of Victory by Thomas Fleming
World War I by Richard Maybury
The Pity of War by Niall Ferguson
The Forgotten Depression by James Grant
The Spanish-American War, the conquest of the Philippines, and Teddy Roosevelt’s betrayal of Korea...
Bully Boy by Jim Powell
The Politics of War by Walter Karp
The War Lovers by Evan Thomas
Honor in the Dust by Gregg Jones
The Imperial Cruise by James Bradley
The Mexican War
A Wicked War by Amy S. Greenberg
*****
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Copyright © Perry Willis 2025
Perry Willis is the co-founder of Downsize DC and the Zero Aggression Project. He co-created, with Jim Babka, the Read the Bills Act, the One Subject at a Time Act, and the Write the Laws Act, all of which have been introduced in Congress. He is a past Executive Director of the national Libertarian Party and was the campaign manager for Harry Browne for President in 2000.