Hell's Cartel

by Diarmuid Jeffreys

  The financial relief offered by these measures was potentially very significant. Increasing the cost of imported natural petroleum promised to make the IG’s synthetic version far more attractive to German consumers. The prohibition on imported nitrogen was even more beneficial because, without the competitive presence of the foreign product, domestic synthetic nitrogen prices could be substantially increased. Over time, the additional revenue generated by these price rises might be sufficient to help the IG finance its fuel project. The news was certainly enough to convince Duisberg and the other skeptical members of the Vorstand that a fresh and hopefully definitive study on the future viability of Leuna should be carried out. Yet again it seemed that Bosch might be about to pull his beloved hydrogenation process back from the brink of disaster—provided, of course, that the report was to his advantage.

  He entrusted the task to Wilhelm Gaus, from Sparte I, who had to find a way both to reconcile the competing interests of some of the most powerful figures in IG Farben and to come up with a series of recommendations acceptable to everyone. Presumably Bosch hoped that because Gaus had been involved in the synthetic fuel project in the past—most notably by helping to arrange the Standard Oil deal—he would enthusiastically endorse its continuation, just as Fritz ter Meer had done. But though Gaus admired and respected Bosch—most of the managers at IG Farben were fond of their boss, infuriating though he could be at times—and wanted desperately to make the sums work out in his favor, it quickly became clear to him that even with the government’s protectionist measures the Leuna project was still going to make a huge hole in the company’s finances. Like many of his colleagues, he could not shake off the feeling that it was somehow wrong to hang the company’s well-being on trade embargos and tariffs. Internationally IG Farben had always been in favor of free trade and against trade barriers. Was it not hypocritical, then, for the concern to rely on them at home when it had always campaigned vigorously for their abolition abroad?

  After much agonizing, Gaus felt he had no choice but to come down against the project, and in June 1932 he wrote to tell Bosch the bad news: “After a careful consideration of all the factors affecting the calculation of profits I do not see any reason at all to support the expansion of gasoline production. I have therefore decided to recommend the complete shutdown of gasoline production. Whether it should be resumed again in better times is a question to be decided later.” Bosch was infuriated by the letter and responded by shuffling its unfortunate author off to less interesting work in Sparte II. In the short term, Gaus’s report had little impact, because Bosch immediately produced a contrasting set of figures from the IG’s accountants (calculations that he had probably kept up his sleeve for just such a time), which showed that it would actually cost more to shut Leuna than it would to keep the plant running at a loss.

  But he knew he couldn’t keep pulling rabbits out of the hat. The fuel project’s balance sheet was becoming too dreadful to ignore and Bosch was in danger of losing the support of even his most faithful colleagues. There was only one option left. The time had come to act on the unthinkable proposal raised by Friedrich Jaehne over a year earlier, an idea that everyone had rejected many times over because of its implications for the concern’s autonomy. IG Farben would have to swallow its pride and ask the government for subsidies. Unfortunately, with Germany in political turmoil, it was an inauspicious moment to go begging for favors.

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  THE DEPRESSION HAD fatally undermined the Weimar Republic. As successive governments failed to find solutions to Germany’s economic plight, more and more people gravitated toward the political extremes. On the left the Communists were the principal beneficiaries. They welcomed the economic collapse because they saw it as the beginning of the end of the capitalist system. The new millions of proletarian jobless were ripe for recruitment to the cause, and in industrial areas such as the Ruhr and in the larger cities, the party had massively boosted its membership. Inevitably, the result was more ostentatious parades, violent demonstrations, rent strikes, and hunger marches, which all ratcheted up the fears of the propertied classes. When some of the poorer areas of Berlin were declared “red districts,” to be defended at all costs against the despised bourgeoisie and their agents in the police, the threat of revolution suddenly seemed very real. But the increase in social tension was made a great deal worse by the fact that the Communists directed much of their venom and violent rhetoric toward the Social Democrats, whom they saw as compromisers and collaborationists. This antagonism was reciprocated, needless to say, because the SPD viewed the Communists as rabble-rousing agitators whose paramilitary Red Front Fighters’ League was just a Soviet-inspired cover for anarchy, treason, and disorder. Rather than unite to present a common front against the extreme right, the two parties of the left sought constantly to undermine each other.

  At the opposite end of the political spectrum, the Nazi Party had been gathering strength. The NSDAP had come a long way since the failed comic-opera putsch of 1923, for which Adolf Hitler was sentenced to five years in Landsberg Fortress. Paroled after a mere ten months of soft living and visits from well-wishers, Hitler had made good use of his imprisonment. Not only had he been able to dictate Mein Kampf to his chauffeur, Emil Maurice, and his ever-willing drudge Rudolf Hess, he had also had time to ponder the importance of bringing the disparate elements of ultranationalism together under his sole leadership and of gaining mass support. Over the subsequent five years he met the first of these aims, largely through his own speaking ability, the talents of his tireless administrator Gregor Strasser, and the propagandizing of his newest recruit, Joseph Goebbels, a failed novelist from southwest Germany. The party had created an elaborate and formidable organizational structure with numerous subdivisions and specialist groups (from the Hitler Youth to the National Socialist Factory Cell Organization) and of course it had recruited heavily into the ranks of its brown-shirted paramilitary wing, the Sturmabteilung, or SA, whose members fought, with increasing regularity and enthusiasm, their opposite numbers on the left. After Hitler had swatted away a small internal challenge to his authority in 1926, these factions had bonded together around unconditional loyalty to his cult of leadership and began to extend the reach of their power.

  The Great Depression gave Hitler the opportunity he was looking for. The economic failings of successive Weimar administrations, allied to fears about a Communist uprising, alarmed the petit bourgeoisie particularly, and the Nazis were able to harvest their support. White-collar workers anxious about losing their jobs, farmers bankrupted by loans, civil servants, teachers, and small businessmen—all were increasingly attracted to a movement that seemed to project an image of youth, dynamism, and strong, decisive action. The Nazis became a catchall party for protest votes, transcending social boundaries to a degree never seen before in Germany. Hitler’s solutions, propagated through speeches, slogans, and imagery, were vague and inchoate, but what mattered was they were expressions of opposition to the weakening republic. People read into his program whatever they wished, even writing off brownshirt hooliganism as a justifiably arduous response to the Marxist menace. The Nazis promised an end to vacillation and incompetence and a better, safer future. For now, for many people, that seemed to be enough.

  This support began to pay extraordinary electoral dividends. In May 1928 the NSDAP had won only 2.6 percent of the vote and a derisory 12 seats in the Reichstag, but in the election of September 1930 the Nazi Party gained 107 seats and 18.3 percent of the votes. This breakthrough had transformed the political landscape and brought the Nazis into even starker opposition to the Communists, who had also increased their numbers of delegates. Parliamentary proceedings frequently degenerated into uproar as both sides shouted each other down, raised interminable points of order, and challenged one another to fistfights. Outside on the street, knuckle-dusters, truncheons, and belt buckles were more the norm.

  With the Reichstag in periodic chaos and suspended more often than it was in
session, Chancellor Heinrich Brüning ruled increasingly by emergency decree. But despite his efforts to assert control—with decrees that banned political uniforms and curbed the freedom of the press—his authority was waning. The economy was still failing and Brüning’s harsh prescriptions for rescuing it weren’t working. Measures such as cutting government expenditure, suppressing demand, and raising domestic interest rates may well have been popular with large firms like IG Farben because they reduced prices and made German exports more attractive overseas, but in the short term they only increased the suffering of the economically marginalized and gave more ammunition to the extremists. Even Brüning’s patient negotiations toward ending reparations (he laid the groundwork for a deal to be agreed on at the Lausanne Conference of July 1932) went largely unheralded. The street violence went on, and with the police increasingly shaky in their allegiance to Weimar democracy (yet institutionally more prone to direct their attentions toward the disorder coming from the left rather than from the right), the situation was rapidly deteriorating. The chancellor’s allies began deserting him.

  Brüning’s resignation on May 11, 1932, a mere two years after his taking office, marked the effective end of parliamentary democracy in Germany. His replacement as chancellor, Franz von Papen, was a member of the landed gentry and an old friend of Germany’s octogenarian president, Field Marshal Paul von Hindenburg. He had previously sat in the Prussian parliament as a member for the Center Party but had fallen out with them and been drifting to the far right ever since. Now Papen was to preside over a cabinet of largely unknown aristocratic reactionaries who disdained party affiliations and were bent on erasing the last vestiges of the Weimar Republic. Believing that this could be achieved only with the support of the Nazi Party (which Papen’s coterie believed could be manipulated and controlled), they quickly persuaded Hindenburg to dissolve the Reichstag and call fresh elections to give the suspension the cover of legitimacy. In the meantime Papen lifted Brüning’s ban on paramilitary uniforms in an attempt to get Hitler on his side and deposed the minority SPD-run state government of Prussia on the grounds it was no longer able to maintain law and order. When the Social Democrats failed to call out their supporters to resist this obvious coup or even to mobilize their power base in the labor movement for a general strike (the unions had been emasculated by three years of unemployment and it had become plain that the SPD could expect no help from the Communists), both the conservatives and the Nazis realized that the way was now opening to some kind of authoritarian regime. The only question was what flavor of dictatorship it would be.

  It would take nearly another year for the answer to emerge. But first came the election of July 1932, which was fought amid almost uncontrolled hysteria. The Communists portrayed it as the last dying twitch of capitalism before the revolution; the SPD urged its supporters to rise up and overcome the threat of fascism from right and left; the bourgeois parties appealed desperately for calm and stability. Hitler, meanwhile, was flying around the country in a specially hired airplane tantalizing massive crowds with his utopian message of national unity and the restoration of German power, while denouncing the betrayal and humiliations of the Weimar era in ever more frenzied terms. It was an election dominated by slick propaganda, torchlight parades, symbols and imagery, apocalyptic warnings, and racial hatred—fought amid escalating paramilitary violence and the disintegration of civil society. In the aftermath of his failed putsch in 1923, Hitler had told his subordinates, “Instead of working to achieve power by an armed coup, we will have to hold our noses and enter the Reichstag. Sooner or later we will have a majority, and after that—Germany.” Now he was determined to deliver on that promise.

  The results were almost—but not quite—what he had hoped for. It was true that the Nazis received a massive boost in parliamentary influence, more than doubling their vote from 6.3 million to 13.8 million and becoming the largest party in the Reichstag, with 230 seats. But still Hitler could not translate these gains into actual power. Immediately after the election he declared that he would enter an administration only as Reich chancellor. Anything else would involve being a junior partner in a coalition government led by others, something he refused to countenance. But President Hindenburg wasn’t yet prepared to give way. Increasingly uneasy about the violence on the streets, he was reluctant to be seen as endorsing any sort of return to full parliamentary rule by appointing the leader of the largest party to the most senior role in government. The stalemate wouldn’t be broken until the Reichstag met in September. Having failed to win a decisive majority on his own part, Papen hoped to get the parliament dissolved on the day it opened so he could carry on ruling by emergency decree. But instead the Nazis responded by cynically supporting a Communist-led motion of no confidence in Papen’s leadership. Overwhelmingly defeated, the administration was compelled to seek a fresh mandate through another election.

  As the weary parties geared up for the poll in November, Hitler climbed back on board his campaign plane. But this time his messianic appeal seemed to be fading. Enraged by Papen’s refusal to accept immediate defeat in the previous election and by new decrees banning political and paramilitary demonstrations, Hitler launched a series of vitriolic attacks on the government that alarmed some of his more moderate followers. To make matters worse, Nazi propaganda methods that had once seemed fresh and interesting had long since been copied by the opposition and had lost their capacity to surprise—a problem exacerbated by the fact that the party’s coffers had been all but drained by the July campaign and there was less money to spend on torchlight parades, posters, flags, and all the other paraphernalia that the Nazis held so dear. At a time when the Nazis needed to spend heavily to attract the attention of an increasingly disillusioned electorate, Hitler found himself giving speeches to half-empty meeting halls because there had been no cash available to advertise his appearances.

  It is perhaps not surprising, then, that the Nazis did badly. Their share of the popular vote fell to 11.7 million and the party lost thirty-four of its Reichstag seats. They were still the largest party in the chamber but now they had fewer seats than the combined ranks of the SPD and the Communists. Indeed, the latter had actually done rather well, gaining another eleven Reichstag deputies, and were now only just behind the Social Democrats in number. For Franz von Papen, of course, the election was a complete humiliation; his government still faced an overwhelmingly hostile majority in a chaotic legislature. After trying and failing to persuade the Nazis and the Center Party to join him in a coalition, he toyed briefly with the idea of getting the army’s backing for an outright coup, before accepting the inevitable and standing down.

  Von Papen’s replacement, Kurt von Schleicher, the minister of defense, fared little better. His administration lasted a mere seven weeks, collapsing after he revealed economic proposals that included nationalizing the steel industry and distributing bankrupt Junker estates to the peasantry. As a former adviser to President Hindenburg, he had kept these disturbingly socialist-style ideas to himself. When he brought them to light as chancellor, they were enough to sow seeds of uncertainty in his patron’s mind. When Schleicher approached Hindenburg with a request for extraconstitutional powers to govern the country, he was refused and had no option but to resign.

  Negotiations to choose his successor were already under way. The president and his circle had recognized that with every passing week in which street violence continued unabated Hitler’s claim to some sort of government post had become stronger. The belief was still that the Nazis, crude and vulgar though they were, could be tamed, but only if they could be brought into the fold. Thus, unable to find any alternative way out of the political deadlock, Hindenburg and his advisers now made one of the more unfortunate decisions in history. On January 30, 1933, Adolf Hitler was finally sworn in as Reich chancellor.

  * * *

  THE BOSSES OF IG Farben had kept a watchful if somewhat disdainful eye on all these developments. Initially, they had been most worr
ied by the growth of support for the Communist Party because of its implications for their holdings and its potential for causing industrial unrest. In 1929 the firm held elections to its works councils and for the first time the Communist-led Revolutionary Trade Union Opposition (Revolutionäre Gewerkschaftopposition, or RGO) put up candidates. Although the more moderate SPD-influenced unions won most of the seats, in some plants, to the Vorstand’s considerable alarm, the RGO won around 20 percent of the vote. Management-worker relations had never been perfect within the IG and there had been moments, especially during the company’s earliest years, when anxieties over rationalization and job losses had made the atmosphere quite tense. These pressures had dissipated between 1925 and 1928 as the economy improved, not least because the company was able to grant wage increases well above the rate of inflation, which went a long way toward easing workers’ concerns and kept strikes at bay. But the economic downturn of 1929, with its resulting redundancies and drastically reduced working hours, had brought radicalism back to the shop floor. The RGO vote was a clear sign to IG Farben’s management that the dangerous politics of the outside world had entered the factory gates.

  Up until this point, the Nazis had been seen as much less of a problem in the workplace than the Communists. There were far fewer of them, for one thing—the party didn’t put forward any candidates for works councils until 1930, when they won less than 10 percent of the poll—and although their taste for political activism made them noticeable, it initially consisted of little more than putting up posters in prominent places to annoy their opponents. But from that autumn things began to get markedly more heated. Despite company policy that national politics should be left at home, fighting broke out between extreme left- and right-wing factions in one of the canteens at Leverkusen. Then, in June 1931, a group of Nazi workers at Oppau stole explosives from a company store. Their intention, it later transpired, was to make bombs and grenades that could be used against the Communists in the event of a civil war. One of the weapons went off prematurely and the police were able to identify and arrest the ringleaders, but the IG’s managers took the episode as a clear warning that Nazi influence in the workplace was increasing.