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  leading

  Jewish

  directors of the Böhmische Escompte Bank did not profit much from

  the sale. Directors Dr. Feilchenfeld and Dr. Lob died in a killing center;

  Director Dr. Kantor was hanged.1”

  The Kreditanstalt and Böhmische Escompte Bank are both cases

  in which the threat was felt across the border and reaction came before

  the Germans were in a position to use force. The Jews anticipated the

  force and complied with it in advance.

  Jewish

  enterprises

  that

  chose

  to

  wait

  for

  further

  developments

  were subjected to a broad pressure, which was designed to increase

  their readiness to sell at the lowest possible price. This pressure was

  applied not against any particular Jewish firm but against Jewish business as a whole. Mainly, an attempt was made to cut off the Jewish companies from their customers and their suppliers. The alienation of

  the customer was to be carried out by means of an anti-Jewish boycott;

  the severance of supplies was to be accomplished through a series of

  allocation measures. These efforts, it must be emphasized, were not

  compulsory

  Aryanization

  procedures.

  They

  were

  designed

  only

  to

  facilitate voluntary transfers.

  The boycott was initially organized by the party, which established

  a boycott committee on March 29, 1933. Its membership was as follows:"

  Julius Streicher, Chairman

  Robert Ley, German Labor Front

  Adolf Hühnlein, SA 8 9 10 11

  8. Ibid. See also affidavit by Joham, September 13, 1947, Nl-10998.

  9. Affidavit by Georg von Schnitzler, March 10, 1947, NI-5194. Von Schnitzler, a

  Vorstand member of the I. G., was chairman of the 1. G. Commercial Committee. To gain

  complete control of the Pulverfabrik, the I. G. had to buy out the interest of the Deutsche

  Bank.

  10. Interrogation of Engineer Jan Dvoracek (Zivno Bank), November 22, 1946,NI-

  11870. See also affidavit by Dvoracek, February 2, 1948, Nl-14348.

  11. Announcement by the Central Committee for Defense against Jewish Horror

  and Boycott, March 29, 1933, PS-21S6.

  97

  EXPROPRIATION

  Heinrich Himmier, SS

  Reinhold Muchow, Nazi Party Factory Cells

  Hans Oberlindober, Nazi Party Organization for Care of War Victims

  Jakob Spenger, Nazi League for Public Officials

  Walter Darre, Party Chief for Agricultural Matters

  Dr. von Renteln, Party Leader for the Middle Class

  Dr. Theodor Adrian von Renteln, Party Leader for the Middle Class

  Dr. Hans Frank, Party Legal Chief

  Dr. Gerhard Wagner, Party Health Chief

  Willy Kôrber, Hitler Youth

  Dr. Achim Gercke, Party Information Department

  The committee carried out its work by calling mass meetings, which

  were addressed by such personalities as Streicher and Goebbels, and

  by placing in front of Jewish stores “defensive guards” assigned by the

  brown-shirted SA and the black-uniformed SS. The guards were ordered only to “inform” the public that the proprietor of the establishment was a Jew.12 13 14 Sometimes the information was conveyed by smearing the show windows with the word Jude."

  It

  should

  be

  pointed

  out

  that

  the

  party's

  boycott

  committee

  launched its campaign not so much in order to facilitate the purchase of

  Jewish firms by German concerns as to remind the ministries of the

  “popular” hostility against Jewry and thus to influence the civil service

  in taking action against the Jews. However, the boycott had distinct

  economic effects which were intensified and widened.

  We have already seen that at the conclusion of the Schacht conference on August 20, 1935, it was decided to withhold all public contracts from Jewish firms. This decision was implemented by amending the

  Directive of the Reich Cabinet Concerning Awards of Public Contracts.“ At the same time, the boycott was made compulsory not only for Reich agencies but also for Reich employees. Upon the initiative of

  the Interior Ministry, it was ruled that civil servants could no longer

  receive subsidies for services obtained from Jewish physicians, lawyers, dentists, hospitals, drugstores, and—by suggestion of the Justice Ministry—also from maternity homes and funeral parlors.15 The compulsory boycott applied also to party members. In one particular case a party member, Dr. Kurt Prelie, was hauled before a party court be12. Order signed by Streicher, March 31, 1933, PS-2154.

  13. When Austria was occupied. German stores in Vienna sometimes found it

  necessary to mark their establishments Arisches Geschâft ("Aryan store”). Gauleiter

  BQrckei (Vienna) to Hess. March 26,1938, PS-3577.

  14. Instructions by Reich Propaganda Ministry, enclosing the amended directive,

  March 26, 1938, G-61.

  15. Pfundtner to Highest Reich Authorities, May 19, 1936, NG-26I2. Stuckart to

  Highest Reich Authorities, September 9, 1936, NG-2612.

  ARYANIZATIONS

  cause his wife had, without his knowledge, bought 10 pfennig worth of

  picture postcards in a store owned by a Jew named Cohn. Prelle was

  expelled by the party court and, upon request of the deputy of the

  Führer (Hess), was also to be forbidden to practice his profession as a

  notary, because there was doubt whether he was ready to support and

  defend the National Socialist state at all times. '*

  That efforts should have been made to enforce the boycott among

  party members, civil servants, and Reich agencies is not surprising, for

  the “movement” and the Reich were supposed to be in the vanguard of

  political action. They were to set the example, and the people were to

  follow. In its very nature, however, a total boycott was unwieldy

  enough to generate unwanted effects. In particular, the rapid collapse

  of a Jewish firm without the corresponding expansion of a German

  enterprise could result in the joblessness of non-Jewish employees, the

  erosion of economic activity, and a loss of tax revenues as well. For

  cities with a significant volume of Jewish business, such prospects

  could be sobering.16 17 18

  All the same, the pressure was intensified. From the middle of the

  1930s, attempts were made to isolate Jewish producers not only from

  customers but also from suppliers. Shipments of raw materials could

  be reduced in three ways; (1) voluntary refusal by German suppliers to

  sell to Jews; (2) action by cartels, in which raw material quotas of

  Jewish members could be cut or eliminated; (3) the downward adjustment of foreign currency allocations by the state with a view to depriving Jewish

  producers

  of

  imported

  materials.

  These

  controls

  were

  cumbersome and by no means fully effective, but they were invoked as

  part of the general scheme to depress the price of Jewish firms."

  16. Decree ordering investigation of Prelle, signed by Staatssekretär Dr. Schlegelberger of the Justice Ministry, December 6, 1938, NG-901. See also investigation or
der signed by Schlegelberger concerning another notary. Dr. Wolfgang Rotmann, who bought

  cigars in a Jewish store, June 3, 1939, NG-901.

  17. File memorandum of Economic Office tWirlschaftsamt) in the city of Frankfurt, February 17, 1934, Kommission zur Erforschung der Geschichte der Frankfurter Juden, Dokumente zur Geschichte der Frankfurter Juden 1933-1945. (Frankfurt am

  Main, 1963) pp. 178-85.

  18. See letter by Rohde to Steinbrinck (internal correspondence. Flick steel concern). November 22, 1937, NI-1880. Rohde reported that the Jewish steel enterprise Rawack and Grünfeld was no longer authorized to purchase ores, "which should certainly influence the market value of {Rawack and Griinfeld] shares."

  See also the circular letter by Wirtschaftsgruppe Eisenschaffende Industrie (Economy Group Iron-Producing Industry) to Fach- and Fachuntergruppen and member firms, January 13, 1938, NI-8058. Also. Wirtschaftsgruppe Gross- Ein- und Ausfuhrhandel/

  Fachgruppe Eisen- und Stahlhandel (Economy Group Large Import and Export TVade/

  Branch Group Iron and Steel TVade) to member firms and the Wirtschaftsgruppe

  Eisenschaffende Industrie, March 28, 1938, NI-8059. Germany was an importer of iron

  99

  EXPROPRIATION

  As a result of allocation control, boycott, and the Jewish apprehension that more was still to come, many Jewish businessmen were ready to sell their holdings. There was now a “market." German enterprises

  by the thousands were surveying the country in search of suitable

  Jewish firms. In German business parlance, the Jewish enterprises had

  now become Objekte (objects). Since it was not always easy to find an

  Objekt, the process of searching became a specialized business in itself. The institutions that specialized in this business were the banks. It was a lucrative activity. The banks collected threefold profits from the

  Aryanization transactions: (I) commissions (ca. 2 percent of the sales

  price) for work done in bringing together buyers and sellers, (2) interest

  on loans extended to buyers, and (3) profits from subsequent business

  contracted between the bank and the Aryanized firm. (Such business

  usually derived from a provision in the contract between prospective

  buyer and bank pursuant to which the buyer was to designate the bank

  as “principal banking connection" for his newly acquired firm.)19 20

  Moreover, the banks were not only agents—steering Objekte to interested buyers—they were buyers themselves, and they missed no opportunity to buy out a Jewish bank or some choice industrial shares.

  Every type of German business was in the scramble, but the banks

  were in the very midst of it.

  Jewish casualties in the Aryanization boom were heavy, but by the

  beginning of 1938 there were signs of a general weakening in the German business sector. Jewish holdouts survived their own fears and German pressure. In May 1938 an official of the Dresdner Bank complained that there were more Jewish enterprises than German buyers.

  It was especially difficult to find buyers for the large Jewish holdouts.

  In analyzing this reversal of the trend, the Dresdner Bank expert drew

  only one major conclusion: the price had to come down."

  To decrease the price of Jewish “objects,” direct pressure was

  needed. In order to apply direct pressure on Jewish enterprises, competition among buyers had to cease. In the words of an economic journal: "The temptation to swallow a formerly strong [Jewish] competitor, or even to snap such a delicious morsel from under the nose of another [German] competitor, must surely have led to overvaluation in

  many cases.”21 With the elimination of buyers’ competition, the Jewish

  owner would face either one German negotiator or a united front.

  19. See report on Aryanizations by Böhmische Escompte Bank (Dresdner Bank

  subsidiary), signed by Kanzler and Stitz, August 6, 1941, NI-13463. For a '‘principal

  banking connection” clause, see contract between Böhmische and Oswald Pohl, October

  5,1940, NI-12319. The Böhmische, originally under Jewish control, had been Aryanized

  itself.

  20. Memorandum by Dr. P. Binder, May 7, 1938, N1-Ö906.

  21. Der Volkswirt 12 (September 9,1938): 2409.

  100

  ARYAN1ZATIONS

  The means by which such concerted action was brought about was

  the buyers' agreement, of which there were two types: one covered the

  purchase of one Jewish enterprise by several buyers acting together;

  the other provided for the allocation of several Jewish enterprises to

  specific buyers. The first type of agreement is exemplified by a contract

  concluded

  on

  November

  30,

  1937,

  by

  Mitteldeutsche

  Stahlwerke

  (Flick) and L. Possehl and Company for the purchase of shares of the

  Jewish firm Rawack & Grünfeld on a fifty-fifty basis. The agreement

  provided that after the purchase and before January 1, 1943, neither

  party could dispose of its shares without the consent of the other. After

  January 1, 1943, neither party could dispose of its shares unless it

  offered half its package to the other party.“ A single Jewish enterprise

  could also be taken over by a consortium of companies varying in their

  financial strengths, provided that credit-worthy firms in the group were

  willing to back weaker participants seeking necessary loans in banks.“

  When several parties were interested in several Objekte, it was

  customary to assign one Objekt to each purchaser. For example, on

  March 23,1939, the Dresdner Bank, Deutsche Bank, and Kreditanstalt

  der Deutschen agreed to parcel out three Jewish-controlled banks. The

  Dresdner Bank was to acquire the Böhmische Escompte Bank, the

  Deutsche Bank was to purchase the Böhmische Union Bank, and the

  Kreditanstalt der Deutschen was to take over the Länderbank.2* Both

  types of agreements were designed to deprive the Jewish owners of a

  chance to bargain. As a general rule, Jews affected by such agreements

  could sell at the buyer’s price or not sell at all.

  On April 26, 1938, the ministerial bureaucracy took another decisive step for the depression of price levels. Henceforth a contract for the transfer of a business from a Jew to a German would require official

  approval.“ A month after this decree was issued, Regierungsrat Dr.

  Gotthardt of the Economy Ministry explained to a Dresdner Bank 22 23 24 25

  22. Agreement between Mittelstahl and Possehl, November 30, 1937, Nl-1944.

  23. Allusion to such an Aryanization is found in a draft memorandum by Karl

  Kimmich, Vorstand member of the Deutsche Bank, undated (probably November or

  early December 1938), as excerpted in Dietrich Eichholtzand Wolfgang Schumann, eds.,

  Anatomie des Krieges (East Berlin, 1969), pp. 197-98.

  24. Summary of bank discussion held on March 21. 1939, in the building of the

  Czech Ministry of Commerce (signed by Kiesewetter), March 23, 1939. NI-13394. The

  list of participants was as follows:

  Dr. Köster, German Economy Ministry; Dr. Schicketanz. Office of the Reichskommissar in the Sudetenland; Dr. Rasche, Dresdner Bank; FreiherT von Lüdinghausen, Dresdner Bank; Dr. Rösler, Deutsche Bank; Pohle, Deutsche Bank; Osterwind,

  Deutsche Bank; Dr. Werner, Vereinigte Finanzkontore. Berlin; Kiesewetter, Kreditanstalt der Deutschen; Dr. Baumann, Kreditanstalt der Deutschen; Pulz, Kreditanstalt der Deutschen. The conference was held in Prague barely a week after German troops had

  marched into the
city. The Dresdner Bank had already swallowed its morsel.

  25. Decree of April 26,1938, RGBl I, 415.

  101

  EXPROPRIATION

  official the purpose and effect of the measure. According to Gotthardt,

  purchasers had in the past paid not only for the plant value of an

  enterprise but also for such intangibles as “good will” (trademarks,

  reputation,

  sales

  contracts,

  and

  other

  factors

  enhancing

  the

  value).

  From now on, buyers were no longer to pay for “good will,” because

  nowadays

  non-Aryan

  concerns

  had

  no

  good

  will.

  Furthermore,

  the

  German purchaser was to deduct from the purchase price such sums as

  he might have to pay after transfer for the unilateral breach of contracts,

  including

  employment

  contracts,

  contracts

  with

  Jewish

  wholesalers, and so on. In general, therefore, the Economy Ministry

  would give its approval only to such contracts that provided for the

  payment of 66% to 75 percent of the original value.*

  The choice presented to the Jewish owners was now clear: they

  could sell at prescribed terms, or they could wait for further developments. No Jew thought that further developments would ease the situation, but a few, owners of some of the most powerful firms, were

  ready to face the future.

  In the central German coal belt, which stretches into Czechoslovakia, three Jewish families, in control of vast properties, were determined to hold out, come what might. These three families, who were unwilling to give up their holdings for any price in German currency,

  were the Rothschilds, the Weinmanns, and the Petscheks. The battle

  that they put up was not a Jewish battle. Rather, there were three

  separate struggles waged for three separate interests in a vain attempt

  to live through, if not with, Nazism. The determination to resist the

  pressure of buyers was bom of the conviction that the losses resulting

  from the clash would be smaller than the sacrifice that was inherent in

  the sale of the shares, for these Jews measured their resources not in

  the current market value of the stocks but in production statistics,

  plant

  capacity,

  ore

  and coal

 

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