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At the end of the World War I, the forces of the German Empire had mostly disintegrated, the men making their way home individually or in small groups. Many of them joined the Freikorps(free corps), a collection of volunteer quasi-military units that were involved in revolution and border clashes between 1918 and 1923.
The newly-formed Weimar Republic did need a military though, and on 6 March 1919 a decree established the Vorläufige Reichswehr ("Provisional German Defense Force"), consisting of a Vorläufige Reichsheer (Provisional Reich Army) and a Vorläufige Reichsmarine (Provisional Reich Navy). About 400,000 men served in the Reichsheer.
On 30 September, the army was reorganized as the Übergangsheer ("Transitional Army"). This lasted until 1 January 1921, when the Reichswehr was officially established according to the limitations imposed by the Treaty of Versailles.
Limited by treaty to a total of 100,000 men, the Reichswehr was composed of the Reichsheer, an army consisting of two group commands, seven infantry divisions, and three cavalry divisions, and the Reichsmarine, a navy limited to a handful of ships.
Despite the limitations on size, the analysis of lost WW I, research and development, secret testing abroad (secret cooperation with Sovietunion) and planing for "better times" went on. During this time many of the future leaders of the Wehrmacht, for instance, Heinz Guderian, first formulated the ideas that they were to use so effectively a few years later.
The reduction of the peace strength of the German army from 780,000 (1913) to 100,000 guranteed for the quality of the Reichswehr: Only the best soldiers could stay in the army.
The Reichswehr was never a friend of the democracy but stayed loyal to the democratic German gouvernment. This was done by emphasizing the apolitcality of the Reichswehr. This gave the democracythe chance to develop without intervention from the military leadership but reduced also the likeness of military resistance againts Adolf Hitler. The biggest influence of the development of the Reichswehr had Hans von Seeckt(1866-1936), 1920-1926 "Chef der Heeresleitung" ("head of army lead").
During 1933 and 1934, after Adolf Hitler became Chancellor, the Reichswehr began a secret program of expansion, which finally became public with the formal announcement of the Wehrmacht in 1935.