In October 1922 Schwede co-founded a Nazi Party Branch Office () in Coburg, a historic city in northeastern Bavaria. One year later he became local Party chairman, by which time it had about 800 members. Under Schwede's guidance, anti-Semitic demonstrations and street battles instigated by the Sturmabteilung became commonplace in the city. Following the failure of the Beer Hall Putsch, the NSDAP was temporarily banned in 1924. The National Socialist Freedom Movement became its front organization and during the 1924 Coburg city council elections the Nazis managed to get 14.3% of the vote. This entitled them to 3 seats on the council and Schwede took one of them.