by Ian Kershaw
Hitler had not put forward a plan for war to his generals. Nor had he outlined a stage-by-stage programme for the acquisition of ‘living-space’. In broad terms, he had restated the fixed ideas he had held to since the mid-1920s at the latest. A war for ‘living-space’ in the east was certainly implicit in what he was saying. But few had taken his earlier utterances and writings as a serious statement of intent. And few of the generals now regarded ‘living-space’ as more than a loose metaphor for expansionism – of which they did not disapprove.
Hitler’s sole aim at Hammerstein’s had been to woo the officers and ensure army support. He largely succeeded. The military leaders’ reaction to the speech was mixed. General Ludwig Beck later claimed he had immediately forgotten its content – an indication, if true, that he was unconcerned by what Hitler had to say. Others, such as Werner von Fritsch, Friedrich Fromm, and Eugen Ott, were apparently worried initially by what they heard. Erich Freiherr von dem Bussche-Ippenburg thought Hitler spoke nonsense for an hour, before coming on to the matters concerning the army. Generalleutnant Wilhelm Ritter von Leeb commented acidly that a businessman with a good product did not need to shout about it like a market seller. But there was no opposition to what Hitler had said. And many of those present, as Admiral Erich Raeder later commented, found Hitler’s speech ‘extraordinarily satisfying’.52 This was hardly surprising. However disdainful they were of the vulgar and loudmouthed social upstart, the prospect he held out of restoring the power of the army as the basis for expansionism and German dominance accorded with aims laid down by the army leadership even in what they had seen as the dark days of ‘fulfilment policy’ in the mid-1920s.53 And Hitler’s promises to remove the army from internal politics, place it above party, and to build up the armed forces as the pillar of a militarized nation were music to the ears of the generals – according completely with what Blomberg had told Group- and Army District Commanders earlier in the day.54 Hitler was, in effect, protecting the army from any possible involvement in a civil war – a danger taken most seriously in late 1932.55 From the point of view of the army leadership, rearmament and rebuilding the armed forces (predicated on removal of the shackles of Versailles) as the vehicle for restoring Germany’s great-power status through expansion (accepting the risk of war) had remained unbroken aims throughout the 1920s and had been restated with new urgency towards the end of the decade. They went hand in hand with the axiom that the officer caste (which was in reality now greatly altered – less ‘feudal’, more professionally ‘modern’, youthful, and bourgeois)56 would regain the status and power in the state that it had traditionally wielded before the Revolution, but which had been threatened and partially undermined by ‘Marxism’ and democracy. Whatever the generals’ scepticism about Hitler, the mass support he commanded offered the prospect of these aims now being fulfilled. While their aims were not identical, it meant that there was a significant overlap in what Hitler and the army leadership wanted. The ‘pact’ of 1933 was founded on this ‘partial identity’.57
The strong man in Blomberg’s ministry, his Chief of the Ministerial Office, Colonel Walther von Reichenau – bright, ambitious, ‘progressive’ in his contempt for class-ridden aristocratic and bourgeois conservatism, and long a National Socialist sympathizer – was sure of how the army should react to what Hitler offered. ‘Into the new state and uphold there the position due to us,’ he is reported to have stated.58 Never before had the armed forces been ‘so identical with the state’, he went on, indicating the clear aim, if not the full reality of the position, at the very beginning of the Third Reich.59 The real meaning of keeping the army out of politics was also made plain by Reichenau, when – in the midst of Göring’s unleashed police terror against the Left in Prussia – he remarked at a meeting of army commanders: ‘It has to be recognized that we are in a revolution. What is rotten in the state has to go, and that can only happen through terror. The party will ruthlessly proceed against Marxism. Task of the armed forces: stand at ease. No support if those persecuted seek refuge with the troops.’60 Some of those present were concerned at what they heard. But the message got through, and was passed on. Only one of the officers there protested, and lost his command as a consequence.61 Though not for the most part as actively sympathetic towards National Socialism as was Reichenau, the leaders of the army which had blocked by force Hitler’s attempt to seize power in 1923 had now, within days of his appointment as Chancellor, placed the most powerful institution in the state at his disposal.
Hitler, for his part, lost no time in making plain to the cabinet that military spending was to be given absolute priority. During a discussion in cabinet on 8 February on the financial implications of building a dam in Upper Silesia, he intervened to tell his cabinet colleagues that ‘the next five years must be devoted to the restoration of the defence capacity (Wiederwehrhaftmachung) of the German people’. Every state-funded work-creation scheme had to be judged with regard to their necessity for this end. ‘This idea must always and everywhere be placed in the foreground.’62
At a meeting the next day of the Committee for Work Creation to deal with the expenditure envisaged of the 500 million RM available under the revamped Immediate Programme for Work Creation, which Reichskommissar Gereke had prepared for the Schleicher administration, Blomberg expressed his readiness to accept for rearmament purposes the 50 million RM assigned to him by the Finance Minister, while the newly created Reich Commissary for Air Travel was allocated 42.3 million RM in 1933 (out of 127 million RM over a three-year period). Hitler could not contain his impatience. He referred to his comments of the previous day on the absolute priority for rearmaments and the need to assess all public spending on the Immediate Programme in that light. ‘For Germany’s rearmament,’ the Reich Chancellor continued, according to the minutes of the meeting,
billions (Milliardenbeträge) are necessary. The sum of 127 million RM for aviation purposes was the minimum that one could consider at all. Germany’s future depended exclusively and solely on rebuilding the armed forces. All other expenditure had to be subordinated to the task of rearmament. He could only be satisfied with the petty funds requested by the Defence Ministry on the grounds that the tempo of rearmament could not be more sharply accelerated during the coming year. At any rate he took the view that in any future clash between demands of the armed forces and demands for other purposes the interest of the armed forces had, whatever the circumstances, to take precedence. The provision of funds from the Immediate Programme had also to be decided on this understanding. He viewed the combating of unemployment through the provision of public orders as the most suitable means of aid. The 500-Million Programme was the greatest of its kind and specially suited to be placed at the service of the interests of rearmament. It best allowed the camouflage of works for improving the defence of the country. It was necessary to place special weight on this camouflage in the immediate future since he was convinced that the period between the theoretical recognition of equal military rights of Germany and the re-attainment of a certain level of armament would be the most difficult and most dangerous one. Only when Germany had rearmed to such a level that it was capable of alliance with another power, if need be also against France, would the main difficulties of rearmament have been overcome.63
These early meetings, within days of Hitler becoming Chancellor, were crucial in determining the primacy of rearmament. They were also typical of the way Hitler operated, and of the way his power was exercised. Keen though Blomberg and the Reichswehr leadership were to profit from the radically different approach of the new Chancellor to armaments spending, there were practical limitations – financial, organizational, and not least those of international restrictions while the disarmament talks continued – preventing the early stages of rearmament being pushed through as rapidly as Hitler wanted. But where Blomberg was content at first to work for expansion within the realms of the possible, Hitler thought in different – initially quite unrealistic – dimensions. He offer
ed no concrete measures. But his dogmatic assertion of absolute primacy for rearmament, opposed or contradicted by not a single minister, set new ground-rules for action. It changed the concept of the Gereke-Programme for work creation entirely, turning it into a framework for rearmament. It provided, whatever the early practical limits on the scope of rearmament, immediate opportunities for new planning and rebuilding within the armed forces. It prompted by the beginning of April the ‘Second Armaments Programme’, with funding provided outside the state budget and placed in the hands of the army itself. With Hjalmar Schacht succeeding Hans Luther in March as President of the Reichsbank, Hitler found the person he needed to mastermind the secret and unlimited funding of rearmament. Where the Reichswehr budget had on average been 700–800 million RM a year, Schacht, through the device of Mefo-Bills – a disguised discounting of government bills by the Reichsbank – was soon able to guarantee to the Reichswehr the fantastic sum of 35 billion RM over an eight-year period.64
Given this backing, after a sluggish start, the rearmament programme took off stratospherically in 1934. The result, as Schacht later acknowledged, was an inevitable collision between armaments and consumer spending, which would eventually lead to major economic difficulties.65 These were to surface in the first substantial economic impasse of 1935 – 6 that culminated in the Four-Year Plan. But since that Plan underlined and reaffirmed the absolute primacy of rearmament, the problem could only deepen in the remaining peacetime years and not be resolved outside war. The ruination of state finances was implicit in the decision – taken on political and ideological grounds at the very outset of Hitler’s Chancellorship – to make unlimited funding available for rearmament, whatever the consequences for the economy. Though war was not actually planned in February 1933, the rearmament policy then adopted tilted the economy in a direction which could only be remedied either by a re-entry into the international economy or by conquest and domination attained through the gamble of war. Hitler had never made a secret of which option he would prefer.
The decision to give absolute priority to rearmament was the basis of the pact, resting on mutual benefit, between Hitler and the army which, though frequently troubled, was a key foundation of the Third Reich. Hitler established the parameters in February 1933. But these were no more than the expression of the entente he had entered into with Blomberg on becoming Chancellor.66 The new policy was possible because Hitler had bound himself to the interests of the most powerful institution in the land. The army leaders, for their part, had their interests served because they had bound themselves, in their eyes, to a political front-man who could nationalize the masses and restore the army to its rightful power-position in the state. What they had not reckoned with was that within five years the traditional power-élite of the officers corps would be transformed into a mere functional élite, serving a political master who was taking it into uncharted territory.67
II
In the first weeks of his Chancellorship, Hitler took steps to bring not just the ‘big battalions’ of the army leadership behind the new regime, but also the major organizations of economic leaders. Landholders needed little persuasion. Their main organization, the Reich Agrarian League (Reichslandbund) – dominated by East Elbian estate-owners – had been strongly pro-Nazi before Hitler became Chancellor. Hitler left agrarian policy in its initial stage to his German National Coalition partner Hugenberg. Early measures taken in February to defend indebted farm property against creditors and to protect agricultural produce by imposing higher import duties and provide support for grain prices ensured that the agrarians were not disappointed.68 With Hugenberg at the Economics Ministry, their interests seemed certain to be well looked after.
Tensions between agrarians and industrialists over the vexed issue of protection of agriculture had existed since the 1890s. The new favouritism shown to agriculture seemed destined to sour relations with big business. The initial scepticism, hesitancy, and misgivings of most business leaders immediately following Hitler’s accession to the Chancellorship were not dispelled overnight. There was still considerable disquiet in the business community when Gustav Krupp von Bohlen und Halbach, head of the mighty Krupp iron and steel concern and chairman of the Reich Association of German Industry, and other leading industrialists received invitations to a meeting at Göring’s official residence on 20 February, at which Hitler would outline his economic policy.69 Krupp, up to then critical of Hitler, went to the meeting prepared, as he had done at meetings with previous Chancellors, to speak up for industry. In particular, he intended to stress the need for export-led growth and to underline the damaging consequences of protectionism in favour of agriculture. In the event, he could make neither point. The businessmen were kept waiting by Göring, and had to wait even longer till Hitler appeared. They were then treated to a classic Hitler monologue. In a speech lasting an hour and a half, he barely touched on economic matters, except in the most general sense. He assuaged his business audience, as he had done on earlier occasions, by upholding private property and individual enterprise, and by denying rumours of planned radical experimentation in the economy. The rest was largely a restatement of his views on the subordination of the economy to politics, the need to eradicate Marxism, restore inner strength and unity, and thus be in a position to face external enemies. The coming election marked a final chance to reject Communism by the ballot-box. If that did not happen, force – he darkly hinted – would be used. It was a fight to the death between the nation and Communism, a struggle that would decide Germany’s fate for the next century.70 When Hitler had finished, Krupp felt in no position to deliver his prepared speech. He merely improvised a few words of thanks and added some general remarks about a strong state serving the well-being of the country.71 At this point, Hitler left.
The hidden agenda of the meeting became clear once Göring started speaking. He repeated Hitler’s assurances that economic experiments need not be feared, and that the balance of power would not be altered by the coming election – to be the last for perhaps a hundred years. But the election, he claimed, was nonetheless crucial. And those not in the forefront of the political battle had a responsibility to make financial sacrifices.72 Once Göring, too, had left, Schacht bade those present to visit the cash-till. Three million marks were pledged, and within weeks delivered.73 With this donation, big business was helping consolidate Hitler’s rule. But the offering was less one of enthusiastic backing than of political extortion.74
Despite their financial support, industrialists continued at first to look with a wary eye at the new regime. Some drew satisfaction from Hitler’s vague expression of support for export trade and commitment to currency stability in his speech on 23 March, and the Reich Association correspondingly voiced its support for the new government. But its members were already realizing that their position was also not left untouched by the changes sweeping over Germany. In early April, Krupp capitulated to Nazi pressure to replace the Reich Association by a new, nazified body. He also agreed to the dismissal of Jewish employees, and the removal of all Jewish businessmen from representative positions in commerce and industry. The following month, the once-mighty Association dissolved itself and was replaced by the nazified Reich Estate of German Industry (Reichsstand der Deutschen Industrie). Alongside such pressure, business recovery, high profits, secure private property (apart from that of Jewish businessmen), the crushing of Marxism, and the subduing of labour saw big business increasingly content to adjust to full collaboration with the new regime, whatever the irksome bureaucratic controls imposed on it.75
Hitler’s style, as the industrialists experienced on 20 February, was certainly different to that of his predecessors in the Chancellor’s office. His views on the economy were also unconventional. He was wholly ignorant of any formal understanding of the principles of economics. For him, as he stated to the industrialists, economics was of secondary importance, entirely subordinated to politics. His crude social-Darwinism dictated his approach to the e
conomy, as it did his entire political ‘world-view’. Since struggle among nations would be decisive for future survival, Germany’s economy had to be subordinated to the preparation, then carrying out, of this struggle. That meant that liberal ideas of economic competition had to be replaced by the subjection of the economy to the dictates of the national interest. Similarly, any ‘socialist’ ideas in the Nazi programme had to follow the same dictates. Hitler was never a socialist. But although he upheld private property, individual entrepreneurship, and economic competition, and disapproved of trade unions and workers’ interference in the freedom of owners and managers to run their concerns, the state, not the market, would determine the shape of economic development. Capitalism was, therefore, left in place. But in operation it was turned into an adjunct of the state. There is little point in inventing terms to describe such an economic ‘system’. Neither ‘state capitalism’, nor a ‘third way’ between capitalism and socialism suffices. Certainly, Hitler entertained notions of a prosperous German society, in which old class privileges had disappeared, exploiting the benefits of modern technology and a higher standard of living. But he thought essentially in terms of race, not class, of conquest, not economic modernization. Everything was consistently predicated on war to establish dominion. The new society in Germany would come about through struggle, its high standard of living on the backs of the slavery of conquered peoples. It was an imperialist concept from the nineteenth century adapted to the technological potential of the twentieth.76