The Third Reich in Power

by Evans, Richard J.

  By 1937, virtually every large company in Germany was joining in the division of the spoils. A big company like Allianz abandoned any reluctance it had previously felt and participated with increasing cynicism in taking advantage of the plight of Jewish insurance agencies now forced to abandon their businesses. While it was still possible, Allianz also offered mortgage loans to the purchasers of Jewish properties and their assets.179 Banks in their turn stood to make a good deal of money on commission from such sales; in 1935, for instance, when the Jewish owner of the Aron Works Electricity Company in Berlin, a major manufacturer of radios, finally gave in after several spells in a concentration camp and agreed to sell his company to Siemens-Schuckert and another company, the Deutsche Bank made 188,000 Reichsmarks on the transaction. Soon the major banks were competing with each other for this lucrative business. The Deutsche Bank charged a commission of 2 per cent for brokering such transfers, and between 1937 and 1940 made several million Reichsmarks in this way.180 In a similar way, the Commerzbank acted as an agent for purchasers of Jewish businesses, acting out of commercial logic when it refused new loans to the latter. No help or advice was offered to Jewish vendors; on the contrary, since it was competing in an obviously growing market against other banks doing the same thing, at a time when its freedom to invest in industry or foreign trade was becoming increasingly restricted, the Commerzbank actively sought out companies from which it could gain a commission on such transactions. By 1938, Aryanization actions had become an integral part of the everyday business of the big banks.181

  Direct participation in the Aryanization of Jewish-owned businesses brought far greater rewards. The chain-store empire of Helmut Horten, for example, was largely built up through the process of Aryanization.182 Of course, some purchases - perhaps a fifth of such transactions altogether - were carried out by personal friends or sympathizers of Jewish businesspeople who persuaded them to buy their enterprises for inflated prices (to disguise the banned inclusion of goodwill) or for sums including secret bonuses, or, where this was not possible, to hold them in trust until the Third Reich came to an end, whenever that would be. Paying a fair price under the Third Reich, particularly in the later 1930s, and thereby maintaining basic business ethics, was in effect a criminal offence; indeed, to get round the rules and regulations governing Aryanization by this time, some sympathetic businessmen even gave the Jewish vendors secret and illegal monthly payments not mentioned in the transfer documents, or, in one case, smuggled Swiss watches and gold chains to Amsterdam to be collected by the Jewish vendor when he emigrated. Others, like the Degussa chemical company, acting more from commercial logic than from moral principle, kept the Jewish bosses of the Aryanized firms in office for some time because they valued their expertise and their contacts in the business.183

  A far larger proportion of buyers - perhaps 40 per cent - made no attempt to circumvent the regulations. They paid the minimal price that had become customary, taking advantage of the devaluation of inventory and stocks to get themselves a bargain. There is every indication that they regarded these transactions as entirely legitimate; indeed, after the war, many of them reacted with outrage when faced with demands for compensation to the former Jewish owners of the businesses they had taken over in this way. A third category, also about 40 per cent, and including many active Nazi Party members, encouraged Aryanization and drove down the price as hard as they could. In Hamburg, for instance, business rivals campaigned against the Beiersdorf company, which made Nivea hand cream, by paying for advertisements in the local press and issuing stickers notifying customers that ‘Whoever buys Nivea articles is helping to support a Jewish company’.184 Some did not scruple to use threats and blackmail, or to bring in the Gestapo. A characteristic incident occurred in the summer of 1935, in the town of Fürstenwalde, when the Jewish owner of a shop agreed after lengthy negotiations to sell it to a non-Jewish purchaser who had repeatedly attempted to beat the price down. As he took the money from the purchaser during the final meeting in his lawyer’s offices, the door opened and two Gestapo officers came in and declared the money confiscated on the basis of a law covering the property of ‘enemies of the state’. Seizing it from the Jewish vendor, they arrested him for resisting authority, while the purchaser banned him and his family from returning to their business and to their home above the shop, although the contract allowed them to do so.185

  Foreign-owned businesses were also active in the Aryanization of their workforces. Concerned about their status under an obviously nationalistic regime, some of them moved particularly quickly to divest themselves of their Jewish employees when the Nazis seized power in 1933. The managing director of Olex, the German subsidiary of what subsequently became British Petroleum, fired its Jewish employees, or limited their contracts, as early as the late spring of 1933. Later on the same year, the Swiss chemical company Geigy sought official certification as an Aryan concern so that it could continue selling dyes to the Nazi Party to make ‘symbols of the national movement’.186 Major foreign-owned firms, like the car manufacturer Opel, a subsidiary of General Motors, and the German branch of the Ford Motor Corporation, went along with the Aryanization policy and rid themselves of Jewish employees. Both these companies also allowed their factories to be converted to war production, although of course foreign currency restrictions did not permit them to export their profits to their headquarters in the USA. There was little point, therefore, given these restrictions, in foreign-owned companies joining the scramble to take over Jewish businesses.187

  That scramble degenerated all too easily in the hands of some of those involved into a morass of blackmail, extortion, corruption and plunder. True, Goring, in his capacity as head of the Four-Year Plan, and Hess, the Leader’s Deputy, had ordered that Aryanization had to be carried out legally and that Party office-holders were not to obtain any financial advantage from the process, an order repeated by other senior Nazis such as Heinrich Himmler and the Regional Leader of Baden, Robert Wagner. But it was already clear from the frequency and insistence of such warnings that Party officers were all too prepared to exploit the expropriation of Jewish businesses to their own personal gain. Middle-and lower-ranking Nazi activists were simply not prepared to let the despised organs of the state and the law get in the way of the struggle against the Jews, and frequently regarded the plunder they stood to make as a just reward for the sacrifices they had endured in the ‘time of struggle’ under the Weimar Republic. In any case, they reasoned, Jewish-owned property and funds had been stolen from the German race. The mass, nationwide and largely uncoordinated violence that underpinned the Nazi seizure of power in the first half of 1933 provided the context for brownshirts to purloin gold and jewellery from Jewish houses and flats, on occasion torturing the owners until they got the keys to the safe. It was not uncommon for arrested Jews to be released on provision of a large amount of ‘bail’ money, which disappeared immediately into the pockets of the SA or SS men who had taken them into custody. Party officials in Breslau who had threatened Jews with violence if they did not pay up were first arrested for obtaining money with menaces, then amnestied as the state prosecutor excused their action as ‘excessive National Socialist zeal’.188

  After the ‘Night of the Long Knives’ at the end of June 1934, such actions more or less ceased, although a few more did occur in the summer of the following year. The Aryanization of Jewish businesses, however, especially where it was driven forward by the Party’s Regional Economic Consultants’ offices, provided opportunities for gain on a much larger scale. In Thuringia, for instance, the Party’s Regional Economic Adviser took a 10 per cent commission on the purchase price of Aryanization actions, in order, he said, to cover office costs; in the end he was able to bank more than a million Reichsmarks from this procedure, opening a special Party account from which funds were then disbursed to favoured Party members to buy further Jewish businesses when they came up for sale. Thus ‘Party Comrade Ulrich Klug’ was provided with a ‘loan’ of 7
5,000 Reichsmarks to help him buy a cement works, while ‘Party Comrade Ignaz Idinger’ was supplied with 5,000 Reichsmarks for the Aryanization of the Hotel Blum in Oberhof. Similar practices could be found in other regions too. The money was never expected to be repaid. Senior Nazi Party officials could enrich themselves very substantially by such means. The Regional Leader of the Party in Hamburg, Karl Kaufmann, demanded ‘Aryanization contributions’ from vendors and purchasers alike, using them for example to buy up all the shares of the Siegfried Kroch Company, a chemicals factory. The Regional Educational Leader of the Party in Württemberg-Hohenzollern managed to buy a slate quarry in Metzingen which increased his annual income tenfold.189

  On a smaller scale, many humble Party activists were able to get the money from Aryanization actions to buy up lottery concessions, tobacco stalls and the like. Given the official ban on direct profiteering, it was not surprising that close relatives of leading local Party officials got in on the act instead, as with Gerhard Fiehler, who bought a Jewish shoe and leather goods shop for himself through the good offices of his brother, the Mayor of Munich. In many such instances it was clear that the family of the Nazi official in question was acting in concert. Such actions, circumventing the law rather than openly flouting it, shaded off into clearly criminal activities when Nazi Party officials obtained money from Jews by deception through fraudulent offers of help or protection, or took bribes to help them get round the financial regulations that made emigration so hard. Businessmen who wanted to be well placed to buy up Jewish firms on the cheap were even more generous in their bribes. ‘To do business under the Nazis’, an Aachen estate agent who had profited considerably from the Aryanization of Jewish property told an American agent, ‘you had to have a friend in every government office, but it was too dangerous to bribe openly. You had to work it indirectly.’ Inviting the key Party functionary out for an expensive meal with fine wines, or buying rounds of drinks in the pubs and bars frequented by the local party elite, were his favoured methods. ‘It cost me plenty of money,’ he admitted, ‘but in the end I made his acquaintance.’190

  II

  Aryanization was only one part of a vast and rapidly growing system of plunder, expropriation and embezzlement under the Third Reich. It started at the very top, with Hitler himself. To begin with, when Hindenburg died, Hitler was able to lay his hands on the President’s official funds. Expenditure from these had previously been subject to internal audit in the Finance Ministry and the ultimate approval of the Reichstag, as had also been the case with the Reich Chancellor’s personal budget. With the effective emasculation of the Reichstag and the removal of any element of critical investigation of government actions by the press and the mass media, not to mention the overwhelming personality cult that surrounded Hitler himself, a cult that brooked no criticism of the Leader in any respect, the way was now open for the expenditure of these funds for any purpose Hitler desired. Despite some misgivings in the higher ranks of the civil service, Hitler now began to dole out money to all and sundry with increasing liberality. Aware of this, leading Nazis now began to suggest to the Chancellor objects deserving of his largesse. Already in the autumn of 1933, at the suggestion of the Reich Interior Minister and one of his officials, Hitler had granted from the Reich Chancellor’s funds a monthly pension of 300 Reichsmarks to seventeen individuals who were designated as ‘racist and antisemitic precursors’ of the Nazi movement. The writer Richard Ungewitter, from Stuttgart, author of numerous books with titles such as From Serving the Jews to Freedom and The Undermining of the Race by Jews, was included on the list along with other, similar individuals. By 1936 Hitler’s generosity in this manner had extended to people who had been imprisoned in the Weimar Republic for treasonable activities of one kind and another. Over a hundred men and women received pensions of between 50 and 500 Reichsmarks a month for their special services to the Party. By issuing such grants, Hitler made it clear he was compensating racist and antisemitic propagandists and Party activists for the sacrifices they had made before the seizure of power, thus underlining the self-image of the brownshirts and the ‘old fighters’ as selfless martyrs in a great cause and binding them to the new regime in a symbolic as well as a material sense.191

  Nor did Hitler neglect the army, whose regimental headquarters were the frequent recipients of presents of oil paintings with military themes donated by the Leader. Moreover, from July 1937 onwards, Hitler’s official funds were used to pay out 100,000 Reichsmarks a year ‘for officers of the armed forces to go on rest cures’. Keeping the armed forces happy was certainly an important matter, particularly in the wake of the assassination of General von Schleicher during the ‘Night of the Long Knives’, and Hitler also paid out considerable sums of money to increase the pensions of retired officers such as Vice-Admiral von Reuter, who had ordered the sinking of the surrendered German fleet at Scapa Flow on 21 June 1919. August von Mackensen, by the mid-1930s the last surviving Field-Marshal of the Kaiser’s army, and thus a significant symbolic figure for the army, received a large tax-free gift of a landed estate in the Prenzlau district, together with 350,000 Reichsmarks to cover the costs of renovation. As a monarchist, Mackensen felt it necessary to write to the former Kaiser Wilhelm II in exile excusing himself for accepting the gift, since in his view only the Kaiser himself was actually entitled to make such donations. Predictably, the ex-Kaiser was not amused, and regarded the Field-Marshal from this point on as a traitor to his cause. Hitler made generous subventions to a number of other aristocratic landowners to help them with their debts and keep them conspiring with the ex-Kaiser.192

  In order to facilitate such generosity, the funds allocated in the state budget for Hitler’s personal disposal increased steadily until they reached the astonishing sum of 24 million Reichsmarks in 1942.193 Hitler could add to these sums the royalties derived from sales of My Struggle, purchased in bulk by Nazi Party organizations and a virtually compulsory item on the ordinary citizen’s bookshelf. These amounted to 1.2 million Reichsmarks in 1933 alone. From 1937 Hitler also claimed royalties on the use of his portrait on postage stamps, something Hindenburg had never done; one cheque alone handed over by the Minister of Posts was for 50 million Reichsmarks, as Speer, who was present on the occasion, reported later. The annual Adolf Hitler Donation of German Business added a further sum, along with fees and royalties paid every time one of Hitler’s speeches was published in the papers. Hitler also received considerable sums from legacies left to him in the wills of the grateful Nazi dead. When all this was taken into account, it was clear that Hitler had little use for the modest salary of 45,000 Reichsmarks he earned as Reich Chancellor, or for the annual expense allowance of 18,000 Reichsmarks; early on in his Chancellorship, therefore, he publicly renounced both salary and allowance in a propagandistic gesture designed to advertise the spirit of selfless dedication in which he ruled the country. Nevertheless, when the Munich tax office reminded him in 1934 that he had never paid any income tax and now owed them more than 400,000 Reichsmarks in arrears, pressure was brought to bear on the tactless officials and before long they had agreed to write off the whole sum and destroy all the files on Hitler’s tax affairs into the bargain. A grateful Hitler granted the head of the tax office, Ludwig Mirre, a pay supplement of 2,000 Reichsmarks a year for this service, free of tax.194

  Hitler’s personal position as the Third Reich’s charismatic Leader, effectively above and beyond the law, gave not only him but also others immunity from the normal rules of financial probity. His immediate subordinates owed their position not to any elected body but to Hitler alone; they were accountable to no one but him. The same personal relationships replicated themselves all the way down the political scale, right to the bottom. The result was inevitably a vast and growing network of corruption, as patronage, nepotism, bribery and favours, bought, sold and given, quickly assumed a key role in binding the whole system together. After 1933, the continued loyalty of the Party faithful was purchased by a huge system of per
sonal favours. For the hundreds of thousands of Nazi Party activists who were without employment, this meant in the first place giving them a job. Already in July 1933 Rudolf Hess promised employment to all those who had joined the Party before 30 January 1933. In October the same year, the Reich Office for Unemployment Insurance and Jobs in Berlin centralized the campaign to provide jobs for everyone with a Party membership number under 300,000, all those who had held a position of responsibility in the Party for over a year and anyone who had been in the SA, the SS or the Steel Helmets before 30 January 1933. This caused some resentment, since the Party membership had already passed the number 300,000 at the end of 1930, so many who had joined since were ineligible. In practice, however, these regulations counted for little, as anyone with a claim to be an old Nazi was likely to be included, while ambitious Nazis who already had jobs used the scheme to get better ones. By 1937 the Reich Postal Service had given jobs to more than 30,000 ‘deserving National Socialists’, while only 369 out of 2,023 Nazis who had been given permanent and well-paid state employment in the Ministry of War by the end of 1935 had actually been previously without a job.

  This system of ‘jobs for the boys’ was in fact modelled on a long-held practice in Prussia and elsewhere, whereby retiring non-commissioned officers in the army automatically received employment in the state service, notably in the police but also in other branches of the public sector. The application of this principle to members of the SA and the Nazi Party was a different matter, since they were being rewarded as members of a political party, not former servants of the state. Its scale and suddenness were also new. The Nazi Party in Berlin found jobs for 10,000 members by October 1933, while 90 per cent of all white-collar jobs in the public sector went to ‘old fighters’. When a candidate for a job was proposed by the local stormtroopers, it was a brave employer who refused, however poor his qualifications might be. Many of those who obtained state employment found that their previous service in the Party, the SA or the SS was counted in calculating their seniority in their new positions, giving them a clear advantage over their colleagues when it came to promotion to the next grade up. Some of these jobs were obvious sinecures. In July 1933, for instance, the brownshirt Paul Ellerhusen, commandant of the concentration camp in Fuhlsbüttel, and an unqualified clerk who had been unemployed since 1929, was appointed personal secretary to the Reich Commissioner for Hamburg with the title of State Councillor; not long afterwards he was transferred to a better-paid job in the city’s Youth Office, though he seldom turned up for work, it was reported, because he was almost permanently drunk.195