by David Wragg
SHORTAGE OF RESOURCES
This was an inevitable consequence of the shortage of resources, including skilled industrial manpower. It was impossible to ensure the high level of spending and expansion for all three services equally. If the Kriegsmarine was given priority, then another service had to suffer relative neglect, and in this case it was the Army. That the Navy was inadequate for the tasks expected of it in the coming conflict was clear enough, but the Army was hardly fully equipped either for the task ahead, and nor was the Luftwaffe.
As we know, the Kriegsmarine lacked aircraft carriers and sufficient big ships, and indeed, it entered the war with far fewer U-boats than it needed, and throughout the war there was a shortage of destroyers. The Luftwaffe lacked heavy bombers capable of carrying out a strategic air war, while its transport aircraft were obsolescent and there were no dedicated transport squadrons, so that major airborne assaults relied on instructors from the bomber schools switching roles, interrupting training, often to a devastating degree if losses were heavy. The Army appeared impressive and capable of overwhelming force, but it achieved this by switching units around so that there was always sufficient armour to spearhead an assault, but the front had to be narrower than it needed to be. Worst of all, the German supply line was weak, with not only supplies but also artillery pulled by horses. Horses were slower and weaker than motor vehicles, and while the latter required fuel, it was less bulky for the power it produced than the feed for the horses, which also needed water. For their ‘tractive effort’, horses also required more manpower to control and look after them than motor vehicles. One can forget the image of a fast, modern, motorised army.
There was another problem. Before starting any major campaign, an army needed large stockpiles of munitions and other supplies. This at the current rate of production and expenditure, the Army could not do. It had sufficient stockpiled for a short campaign, not for a major war.
So, we have Goering demanding a massive rearmament programme in October 1938, and that same month insisting on an export drive. Even Hitler took up this theme in January 1939, telling people that Germany must ‘export, or die’, having been given the Reichsbank’s monthly report that stated simply, and starkly, that its gold and foreign exchange reserves no longer existed.
If the Reichsmark was starting the process of being reduced to Monopoly money, there were other measures that the state could take meantime. On 20 March 1939, the Neuer Finanzplan, or New Finance Plan, enforced the payment of services and goods by the Reich using tax credits for a minimum of 40 per cent of the contract value rather than paying in cash. Industry was able to offset its future tax liabilities using these credits and they also provided some worthwhile tax exemptions, but no interest was paid. This meant that having exhausted the willingness of the public and financial institutions to buy government bonds, the Reich was now insisting that its suppliers provided it with interest free loans.
Such measures were needed to ease the desperate cash flow situation of Hitler’s government. They were inadequate at the time, and could only afford temporary relief. After all, logic dictates that future tax receipts would be much reduced by the use of tax credits by industry. There was another problem. The tax credit scheme also imposed a desperate shortage of liquidity on government contractors at a time when they were supposed to be investing heavily in expansion and accumulating stocks of raw materials against the inevitable interruption that would come with the outbreak of hostilities. The impact of receiving at least 40 per cent of the money due in tax credits rather than cash can be best guessed at by the fact that it is very rare for any business to make a profit margin of more than 20 per cent, and often profit margins will be less than 10 per cent, especially given the price controls already in force. In short, German industry was subsidising its main customer to an incredible degree.
FOREIGN POLICY FAILURES
Hitler was counting on diplomacy to restrain the democracies from engaging in war with Germany until his rearmament plans were completed. He must have realised that his scope for manoeuvre was becoming increasingly limited as his pledge that war would break out after 1943 had already been trimmed back to 1942. His Foreign Minister von Ribbentrop believed that he could enable Hitler to absorb the remains of Czechoslovakia at the same time as he concluded an alliance with Poland, but Poland rejected the German offer and instead moved closer to the Soviet Union. This was a difficult and dangerous course of action as the Soviet leadership also viewed much of Poland as its territory, the country having achieved its independence from Tsarist Russia during the Russian Civil War.
Ribbentrop also wanted to conclude an alliance with Italy against Britain and France, but Italy was preoccupied with Africa and the Balkans, its own form of colonial expansion. An alliance with Japan against both the British Empire and the Soviet Union was also hoped for, but Japan’s priority was its expansion on the mainland of China, its own quest for Lebensraum.
Given the short interval between the Munich Agreement and the occupation of the remains of Czechoslovakia in 15 March 1939, no one should have been surprised at the diplomatic uproar that followed. Poland’s border defences were outflanked, but the country rejected the German offer of an alliance. By the end of March, the United Kingdom issued a public guarantee that it would protect Poland’s territorial integrity. Unfortunately, this ensured that Anglo-French efforts to conclude an alliance with the Soviet Union against Germany were fruitless.
Germany was counting on strict American neutrality, but the one success of Britain and France was to open the door to deliveries of US armaments, hitherto banned because of US neutrality. The French in particular were having massive difficulties with aircraft production, with their aircraft industry in chaos following national-isation, but President Franklin Roosevelt ensured that a French purchasing mission was shown the very best that American industry could offer. The Germans began to believe that an Anglo-American Trade Agreement, signed on 2 November 1938, included secret clauses on military aid, although this was untrue. Nevertheless, the growing rapprochement between the United States and the two European allies was in stark contrast to Washington’s attitude towards Berlin. The United States was fully aware of the plight of the German Jews and especially the horrors of Kristallnacht. The Munich Agreement brought some time for Germany, but the occupation of Czechoslovakia in March 1939 brought a 25 per cent punitive tariff on German exports to the United States, the world’s biggest and richest market. The Germans regarded this as a declaration of economic war.
Despite the growing threat of action by the United Kingdom and France, and the increased willingness of the United States to support them, Hitler still hoped that his occupation of Poland would not result in a wider conflict. He still believed that it would be possible to repeat his success over the Sudetenland, especially after effectively concluding his conquest of Czechoslovakia without any threat of military intervention. The Wehrmacht was instructed to prepare plans for the invasion of Poland, provided that the exercise could be isolated diplomatically. On 23 August, a secret pact was signed between Ribbentrop and the Soviet Foreign Minister, Molotov, covering the occupation of Poland and this must have increased Hitler’s confidence, since it would deny the United Kingdom and France their much sought after third partner and prevent Germany from being squeezed between East and West as in the First World War. On the debit side, and at this stage there was always a drawback to any diplomatic advantage gained, Germany’s agreement with the Soviet Union made it impossible for the Japanese to ally themselves with Hitler, struggling as they were to keep the Soviet Union out of Manchuria. When the Nazi-Soviet Pact was announced, the pro-German civilian government in Tokyo resigned and power passed to the Japanese Army.
Again, there were contradictions in policy and in announcements. The Soviet Union was effectively an ally with regard to Poland, but Hitler still believed that Germany, Hungary, Italy and Spain could provide an anti-Comintern alliance capable of defending Germany and allowing the pla
n for Lebensraum to be implemented. There were also hopes that Romania and Turkey would ally themselves with Germany. In fact, the Soviet leader, Joseph Stalin, was using Germany for his own ends. By concluding a pact with Germany, he bought time. If, as he expected, Germany ended up fighting the British and French, he expected all three countries to exhaust themselves. The beneficiaries of such a conflict would be the Soviet Union and the United States.
The one success of German diplomacy at this time was the signing of a German-Romanian Trade Treaty on 23 March 1939. This was achieved through bribery and coercion, including the threat of invasion by Hungary, but it secured oil and grain supplies for Germany. It seems that the Romanians had also been buying time and trying to stave off German pressure, for they soon managed to persuade the French to guarantee their security and the British had little option but to agree as well. Meanwhile, the French joined the British in the guarantee to Poland.
Turkey, meanwhile, was drifting away from Germany and towards the Allies, although initially this seemed to be because the country expected Britain and France to conclude an alliance with the Soviet Union, Turkey’s difficult neighbour. A belief in an Anglo-French-Soviet alliance also pushed Yugoslavia and Greece, and even Bulgaria, towards London and Paris. Romania also started to show that she was not prepared to give Germany everything she wanted, insisting that oil and grain deliveries be paid for by arms deliveries. In June 1939, Romania suspended oil supplies for Germany, forcing Germany to agree to divert Messerschmitt Bf109s from the Luftwaffe to Romania, but Hitler vetoed the deal, largely because he suspected that Romania could not be relied on if war did break out. Nevertheless, those directing the Four Year Plan suddenly realised that without Romanian oil, peacetime petrol rationing might be necessary. Goering intervened and Romania got its fighters delivered and oil supplies to Germany resumed. The solution was clear, but at the time unspoken, as the Wehrmacht had already estimated that Romania’s oil production would only be sufficient for German needs if the country was occupied and its entire oil output sent to Germany.
To achieve a balance of power, Hitler needed to forge an alliance with both Germany and Italy, but this continued to elude Ribbentrop throughout most of 1939. A sharp dose of reality was provided for the Nazi regime on 24 May 1939 by Major-General Thomas of the military-economic office of the Wehrmacht. Thomas compared the defence expenditure planned by the United States, United Kingdom and France for 1939–1940 with that of Germany and Italy combined. After making adjustments for differences in spending power, he estimated that during the period being reviewed, the three democratic countries would outspend Germany and Italy by at least 2 billion Reichsmarks. The contrast was even worse if military expenditure as a proportion of national income was taken into account, for while Germany was planning to spend 23 per cent in 1939, France was planning to spend 17 per cent, the United Kingdom 12 per cent and the United States just 2 per cent.
There were two ways of looking at Thomas and his estimates. On the one hand, he may well have been quietly hoping that the sums would force Hitler to take a longer view and wait rather than rush into war. Certainly, it is known that he was opposed to premature war, knowing full well the weaknesses of the different German armed services. On the other, to Hitler and his henchmen, the figures also suggested that Germany could not win an arms race. Time was not on her side.
If we return to the naval context, and consider just the aircraft carriers included in Plan Z. The plan promised four aircraft carriers by 1944, but the Royal Navy would have six fast, armoured carriers by that time in addition to the latest ship, Ark Royal, while France would have at least two new carriers, possibly three or four. Germany had the first of a new class of battleships fitting out, as had France, while the first of a new class of British battleships was already building. As for aircraft, the Supermarine Spitfire was just entering RAF service, an aircraft that could engage the Messerschmitt Bf109 in combat, while heavy bombers were planned. Most significant of all, Britain and France could clearly count on American support. What would the outcome be if the United States decided to increase its defence expenditure, even if it just doubled or trebled it as a percentage of gross domestic product? Germany could not compete with American industry. Indeed, even Great Britain was matching the current reduced rate of aircraft production in Germany.
As time passed, and Hitler managed to occupy Czechoslovakia, his attention turned to the true state of his armed forces. In April 1939, he demanded to know the position in respect of ammunition in April and October 1940. The reply was anything but reassuring. If raw materials continued to be allocated as at July 1939, there would be less than 37 million rounds of infantry ammunition produced each month instead of the 375 million rounds considered necessary. Worse, 3.7-cm anti-tank round production would amount to 39,000 per month instead of 650,000; and there would be just over 56,000 light howitzer shells produced instead of the 450,000 needed.
The mad dreams of massive armaments production in the wake of the Munich Agreement were dissipating in the cold light of reality. It was not money as such that was lacking, but the lack of foreign exchange.
Meanwhile, the Germans enjoyed an advantage in the air and on the ground as a result of having been building up their armed forces since 1934. Even with British aircraft production matching that of Germany in 1939, the British were making up for lost time, leaving Germany ahead. The Germans had also tested their aircraft and refined their tactics during the Spanish Civil War. Even at sea, the comparison between the Kriegsmarine and the Royal Navy had to be set against the tremendous global demands on the British. This still left the Royal Navy stronger in home waters, but the difference was not that vast, especially if a continental war was envisaged.
Increasingly, the logic of Germany’s position pointed to war sooner than later. If the British and French failed to support Poland, a gamble would have paid off handsomely. If they did support Poland and war resulted, the sooner and quicker it was over, the better.
WAR AT LAST
Major-General Thomas attempted to persuade his superiors to see reason in the last days of August 1939. His first approach on Saturday 26 August, was not well received. He tried again the following day, and earned a sharp rebuke from the Fuhrer himself. Thomas was not alone, and nowhere was pessimism about the outcome more marked than in the Kriegsmarine. Admiral Raeder, its commander-in-chief, noted that the Kriegsmarine was ‘not at all adequately armed for the great struggle’, concluding that the service ‘can only demonstrate that it knows how to go down with dignity …’
Surprisingly to many, the Luftwaffe was also pessimistic. Its senior officers were chronically aware of the weakness inherent in scrapping the heavy bomber programme during the late 1930s. The RAF could reach Germany, and would no doubt suffer heavy losses in doing so, but the Luftwaffe would find it more difficult to reach Britain unless it could gain bases in Belgium and Northern France. Bases in Northern France would also help the Kriegsmarine, with surface raiders and U-boats spared the lengthy voyage around the north of Scotland, which consumed fuel and time as well as adding to the dangers of being caught by the Royal Navy or the Royal Air Force.
In short, everything depended on the Army. Yet, it had been the Army that had been worst affected by the cuts in the steel allocation in 1939. It was the Army that still used horsepower. Surprisingly, most of the generals engaged in planning operations in Poland did not share Thomas’s pessimism.
The invasion of Poland enjoyed popular support. This was Germany reversing the injustices of Versailles and regaining her territory in the east. It was also yet another case, as with Austria and the Sudeten Germans, of reuniting the German people as a significant minority of those living in Poland were German speakers, and in future would become German nationals. Ein Volk! Much as hatred of Britain had been fostered by the German leadership, hatred of Poland was even stronger.
Poland was an easy victim. Her armed forces were ill-equipped. She had a very small navy. Once fully mobilised, th
e Polish Army was strong on paper, but poorly equipped and lacked the ability to manoeuvre of the Germans. Even so, the German Army and the people were surprised at how easy victory was, with Warsaw occupied in just three weeks and the Polish armed forces destroyed. The mood of pessimism evaporated. There were even those who expected both the United Kingdom and France to be broken and suing for peace by the end of the year. Confidence was further boosted by U-29 torpedoing and sinking the British aircraft carrier HMS Courageous on 17 September. The following month, on 14 October, there was a further boost from U-47 penetrating the British Home Fleet’s forward anchorage at Scapa Flow in Orkney, torpedoing and sinking the battleship HMS Royal Oak. This was something that the Germans had failed to do during the First World War when antisubmarine detecting devices were in their infancy.
The Kriegsmarine needed these early successes from its still small fleet of submarines. As soon as war broke out, Plan Z was scrapped and only those capital ships close to completion had work continue. This even extended to the first German aircraft carrier, the Graf Zeppelin. The Army and the Luftwaffe would from this time onwards have priority, save for the U-boat fleet, for which production of 25 boats a month was envisaged, later rising to 40. Dönitz’s argument that the production of U-boats required far less resources and manpower than the surface fleet was clearly accepted, if only tacitly, but it took some time before production built up and it was not until autumn 1940 that significant numbers of U-boats were being launched.