The Third Reich in Power

by Evans, Richard J.

  Seldte presented further, more ambitious proposals based on a new issue of treasury bonds for labour-intensive public works projects. These were accepted by the cabinet, and on 1 June 1933, the government promulgated the first Law on the Reduction of Unemployment, which made an additional 1,000 million Reichsmarks available for public works in the so-called ‘First Reinhardt Programme’, named after the State Secretary in the Reich Finance Ministry, Fritz Reinhardt. A second Law on the Reduction of Unemployment, also known as the ‘Second Reinhardt Programme’, issued on 21 September 1933, made 500 million Reichsmarks in credits available for private businesses, particularly in the construction industry, to take on new projects and employ new workers.24 Taking these schemes all together and adding other, minor interventions to them, it has been calculated that the government had placed more than 5,000 million Reichsmarks at the disposal of job-creation schemes by the end of 1933, of which some 3,500 million were spent by early 1936. In this way, it hugely expanded the modest dimensions of the programme it had taken over from the Schleicher government at the beginning of the year.25 In addition, the regime developed a scheme for subsidizing house purchases, conversions and repairs started under the Papen government in September 1932 to stimulate the construction industry. Finally, it steered substantial funds towards areas of special deprivation, above all mainly agrarian provinces; at the back of its mind was also the thought that when war broke out, the more industries that were relocated out of the big cities, the less damage would be done to industrial production by enemy bombing.26

  The new regime also acted quickly to take people out of the labour market as well, thereby reducing the number of economically active persons against whom the proportion of unemployed were measured. The most notable scheme in this area was the issuing of marriage loans, begun as part of the Law on the Reduction of Unemployment issued on 1 June 1933 and backed up by subsequent regulations. Young couples intending to get married could apply in advance for an interest-free loan of up to 1,000 Reichsmarks provided that the prospective wife had been in employment for at least six months in the two years up to the promulgation of the law. Crucially, she had to give up her job by the time of the wedding and undertake not to enter the labour market again until the loan was paid off, unless her husband lost his job in the meantime. That this was not a short-term measure was indicated by the terms of repayment, which amounted to 1 per cent of the capital per month, so that the maximum period of the loan could be as much as eight and a half years. In practice, few loans were made at the maximum rate - the average was 600 Reichsmarks, amounting to roughly a third of the average annual earnings of an industrial worker. However, the loans were made more attractive, and given an additional slant, by a supplementary decree issued on 20 June 1933 reducing the amount to be repaid by a quarter for each child born to the couple in question. With four children, therefore, couples would not have to repay anything. Of course, the loans were only made to couples recognized as Aryan, so that like so much else in the Third Reich they became an instrument of racial policy in addition to their primary functions. Not only did all applicants have to undergo a medical examination to prove their fitness, as laid down in a supplementary decree on 26 July 1933, but they were likely to be turned down if they had any hereditary diseases, or were asocial, or vagrants, or alcoholics, or connected with oppositional movements like the Communist Party. Moreover, to stimulate production and ensure that the money was well spent, the loans were issued not in cash but in the form of vouchers for furniture and household equipment.27

  The idea of reducing unemployment amongst men by taking women out of the labour market was not new in 1933. Indeed as part of government retrenchment measures in the stabilization of 1924 and the crisis of 1930-32, so-called double earners, that is, married women who augmented their husband’s income by engaging in waged or salaried labour themselves, had been fired from the civil service, and were also under pressure in the private sector.28 All political parties in the Weimar Republic, despite the advent of female suffrage, agreed that a woman’s place was primarily with her family, at home.29 The Nazis were only saying what others were saying, but more loudly, more insistently, and more brutally. Here, as in so many other areas, Hitler gave the lead. The idea of women’s emancipation, he told a meeting of National Socialist women on 8 September 1934, was the invention of ‘Jewish intellectuals’ and un-German in its essence. In Germany, he proclaimed, the man’s world was the state, the woman’s ‘her husband, her family, her children, and her home’. He went on: We do not consider it correct for the woman to interfere in the world of the man, in his main sphere. We consider it natural if these two worlds remain distinct. To the one belongs the strength of feeling, the strength of the soul. To the other belongs the strength of vision, of toughness, of decision, and of the willingness to act.30

  Goebbels had already put it in more homely terms in 1929: ‘The mission of the woman is to be beautiful and to bring children into the world . . . The female bird pretties herself for her mate and hatches the eggs for him. In exchange, the mate takes care of gathering the food, and stands guard and wards off the enemy.’31 This demonstrated among other things Goebbels’s extreme ignorance of ornithology: there are of course many species, such as peacocks or birds of paradise, where it is the male who is the gaudy one, and others, like the emperor penguin, where it is the male who keeps watch over the eggs. It was also characteristic of Goebbels that he should lay some emphasis on women’s duty to be beautiful, something that never seems to have concerned Hitler very much. However, the point was clear, and the analogy from the natural world telling. ‘The German resurrection’, as a primer of Nazi ideology put it in 1933, ‘is a male event.’ Women’s place was in the home.32

  The marriage loans scheme and the declaration of war on women working outside the home were thus central to Nazi ideology as well as useful for the reduction of unemployment figures. And as soon as the scheme was launched, Nazi propagandists greeted it as an outstanding success. In the first full year of the scheme, 1934, nearly a quarter of a million loans were issued. The number fell to just over 150,000 in 1935, but increased to over 170,000 in 1936, by which time about a third of all newly contracted marriages were assisted by a state loan.33 These were impressive figures. Yet the effects of the measure on unemployment were less than the Nazis claimed. For women on the whole were not competing with men for the same jobs, so that taking a woman out of the labour market would seldom in practice mean freeing up a job for a man. The gender balance in the economy was shifting during the 1920s and 1930s. Still, the same basic pattern of gender differences remained as in the late nineteenth century. Less than a quarter of those classed as workers were female. Within this category they were concentrated above all in textiles, clothing and food and drink. Most domestic servants were also women, as were the greater proportion of ‘family assistants’. By contrast, there were very few women in the major industrial employment sectors. The main difference the marriage loans made, therefore, was to overall employment statistics; they did not in reality create space for unemployed men to get back to work, for no unemployed steelworker or construction labourer was likely to take up household cleaning or weaving, no matter how desperate his situation might be. Moreover, the take-up of the marriage loans has to be viewed in the context of the economic recovery that began tentatively in the second half of 1932 and gathered pace thereafter. During the Depression, previously unregistered women had come onto the labour market as their fathers or partners had lost their jobs, and as men began to find work again, above all in the heavy industrial sector that was so crucial to rearmament, so these women gave up their jobs, glad to be rid of the double burden of housekeeping and childcare on the one hand and working outside the home on the other. Many had delayed getting married and having children because of the economic crisis. The very high take-up of loans in the first year suggests that a large proportion of those who received them belonged in this category. Their decisions were taken largely indepen
dently of government incentives, therefore.34

  None the less, the Nazis soon began loudly to proclaim that with measures such as these, they had drastically reduced the catastrophic unemployment levels that had devastated the German economy and society since the end of the 1920s. By 1934 the official statistics showed that unemployment had fallen to less than half the levels of two years before; by 1935 it stood at no more than 2.2 million, and by 1937 it had dropped below the million mark. Hitler’s boast that he would solve the unemployment problem within four years of taking office seemed to have been triumphantly justified. Incessant Nazi propaganda boasting that the ‘battle for work’ was being won gained widespread credence. It helped win over many doubters and sceptics to the government’s side from May 1933 onwards, and pumped new euphoria into the Third Reich’s supporters. Belief that Hitler really was reconstructing the German economy was a major factor in underpinning popular acceptance of his regime in its early months.35 Was this, then, ‘Hitler’s economic miracle’, as some have suggested, involving the conquest of unemployment, a Keynesian kick-starting of the economy by a bold policy of deficit spending, a huge increase in investment, and a general recovery of prosperity and the standard of living from the depths to which they had sunk in the Depression? Did this sow the seeds from which, after the destruction of the war, the West German economic miracle of the 1950s sprang?36

  To some extent, of course, worldwide economic recovery was already under way, though slowly; in Germany it was helped by rapidly growing business confidence as a result of the political stability that the Third Reich seemed to guarantee, in contrast to its immediate predecessors, and in consequence of the suppression of the labour movement, which gave employers the feeling they had far more room for manoeuvre than before. Moreover, while the unemployment problem of the Depression years from 1929 to 1931 had been made worse by the fact that the large birth-cohorts of the years immediately before the First World War were flooding onto the labour market after leaving school, the situation was reversed from 1932 onwards, as the small birth-cohorts of the war years entered adulthood. Indeed, over two million births expected according to observable statistical trends did not take place in 1914-18, while the death-rate amongst children in the war years, strongly affected by food shortages during the war, was 40 per cent above normal. So the labour market benefited from the consequent fall in people’s overall demand for jobs as well.37

  The impression that the Nazis were extremely lucky in coming to power when the economy was already starting to recover is strengthened when it is realized that some of their much-trumpeted measures did little more than restore the status quo of the pre-Depression years. In housing, for instance, the numbers of newly built or converted dwellings looked impressive at 310,490 in 1936; but this was still below the figure of 317,682 which had been achieved by the despised Weimar Republic in 1929. The government had in fact cut public subsidies for housebuilding back from a billion Reichsmarks in 1928 to almost nothing by 1934 and concentrated its resources on subsidizing repairs. Beyond this, too, the figures of additional workers in the construction industry were mostly derived from employment, much of it compulsory, on large earth-moving projects that had no connection with housing at all.38 The regime was indeed far from averse to cooking the books. Not only men drafted into labour service but also previously unregistered family and other effectively unpaid farm helpers, most of whom were women, were now counted as employed. None of these people could be considered as active participants in the labour market; none of them received a regular wage with which they could support themselves, let alone support a family. On this reckoning there were at least one and a half million ‘invisible unemployed’ in Germany at this time, and the total number of unemployed, which Nazi statisticians put at just over two million, was in fact much nearer four.39 As late as January 1935, a contemporary observer reckoned that there were still over four million unemployed people in Germany.40 There were subtler methods of statistical manipulation too. Occasional workers were now counted as permanently employed. Between January 1933 and December 1934 the number of long-term unemployed dependent on welfare fell by over 60 per cent in cities with more than half a million inhabitants, an impressive achievement, at least on paper. Yet this was not least because the figures of ‘welfare unemployed’ were now drawn from those registered with labour exchanges for job applications rather than, as previously, those who had signed on at welfare offices for receipt of benefits. In Hamburg, for example, the labour exchange counted 54,000 welfare unemployed at the end of March, 1934, in contrast to the welfare office’s figure of close on 60,000.41

  In addition, new regulations were introduced cutting working hours in some branches of trade and industry, making it necessary to employ more workers but cutting the wages of those already in employment quite substantially. Labour exchanges were usually able only to provide short-term employment; permanent jobs were still in short supply. Young men and some women too came under massive pressure to enrol in the so-called Voluntary Labour Service or to be drafted into agricultural work, where the peasants often resented their lack of experience and regarded them as simply more mouths to feed. Deprivation of welfare payments, forced labour or even imprisonment threatened those who resisted. In some areas all unemployed young men between the ages of eighteen and twenty-five were rounded up and given the choice of serving on the land or losing all benefits forthwith. Yet the payment for such work was so poor that in many instances it actually fell below welfare benefit levels, and if workers had to live away from home on these schemes they still needed benefits to meet the additional expenditure this involved.42 Even on the prestigious motorway projects, working conditions were so poor, food rations so low and hours so long that there were frequent protests, all the way to the burning down of the workers’ barracks. Many of those drafted onto the projects, such as hairdressers, white-collar workers or travelling salesman, were wholly unsuited to hard physical labour. Accidents were frequent, and repeated, acts of protest on one construction site led to the arrest of thirty-two out of the 700 workers in the space of a few months; the most vociferous complainers were sent to Dachau for ‘re-education’ and to intimidate the others into silent acquiescence.43 Such measures also helped, along with strict labour controls and the abolition of the unions, to keep net real wages down.44

  The so-called Voluntary Labour Service was not in fact a creation of the Nazis; it had already been in existence before the seizure of power, with 285,000 men enrolled already in 1932. By 1935 the number had increased to 422,000, but many of these were city-dwellers employed as short-term agricultural labourers for jobs, such as bringing in the harvest, which would otherwise have been carried out by rural workers anyway. So while these schemes led to a reduction of the numbers of the unemployed that figured in the official statistics, they did not bring about a general increase in the purchasing power of the population. Informed observers pointed out that the recovery had not affected consumer goods, where production in May 1935 was still 15 per cent below the level of seven years previously. Retail trade actually declined in quantity between 1933 and 1934, as wages continued to be pegged down while prices of food and clothing rose. The classical Keynesian theory of job creation, adopted at least in theory by the Papen government, envisaged a kick-start to the economy as state loans and job-creation schemes put money into workers’ pockets and fuelled consumer demand, thus stimulating production, leading to more employment, and so on, until the process of recovery became self-sustaining. Two and a half years after Hitler had come to power, there was still little sign of this happening.45

  III

  In fact, the Nazi job-creation programme was about something quite different than starting a general economic recovery. Its real aims were explained by Hitler to the Ministers on 8 February 1933:The next 5 years in Germany must be devoted to the rearmament of the German people. Every publicly supported job creation scheme must be judged by the criterion of whether it is necessary from the point of view
of the rearmament of the German people. This principle must always and everywhere stand in the foreground . . . Germany’s position in the world will be decisively conditioned by the position of Germany’s armed forces. Upon this, the position of Germany’s economy in the world also depends.46

  The motorways, he added, were also to be built ‘on strategic principles.’47 When Hitler presented the motorway construction plan to industrialists on 29 May 1933 he even suggested that the motorways should be roofed over with reinforced concrete to protect them against enemy attacks from the air while tanks and armoured troop-carriers rumbled along beneath them on their way to the front. In the end, the routes they followed were too far from any possible front lines in a war, and the road surface was too thin to carry tanks and heavy military equipment. Their gleaming white surfaces were to provide enemy aircraft with such an easy means of orientation that they had to be covered in camouflage paint during the war. Still, for all the importance given to their ideological, aesthetic and propaganda functions, the intention behind them, not only in Hitler’s mind but also in the mind of their architect, Fritz Todt, was primarily strategic.48 Hitler called attention to what he believed was the vital, if indirect importance of the motor industry for Germany’s military future. ‘Automobiles and airplanes have a common basis in the motor industry,’ he declared: ‘Without the development of, for instance, the diesel engine for motor traffic, it would have been practically impossible to lay the necessary groundwork for its utilization in aviation.’49 The build-up of automobile production would allow factories to be converted to military production at short notice, while the profits from motor manufacture could be used to finance the development of aero engines by the same companies.50