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Adolf Hitler and German Heavy Industry, 1931–1933*

Published online by Cambridge University Press:  03 February 2011

George W. F. Hallgarten
George W. F. Hallgarten
Affiliation:
Washington, D.C.
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Extract

Adolf Hitler's position in the economic life of his days has been the object of ardent discussions from his early beginnings down to the present time. The Marxist and leftist view which sees in the Führer one of the most outstanding servants of German monopoly capitalism has been contested not only by Hitler's own followers but, to an even greater extent, by the spokesmen and legal representatives of the German industrial circles, who wished to disclaim any responsibility for the disastrous events of that period. A scientific investigation of this problem is the more imperative, since die preponderant role played by socioeconomic factors in the rise of the Führer is quite obvious. A leader of an insignificant little group who distinguished himself from the many antiproletarian dictator candidates of his time mainly by his qualities as a demagogue, rooted in his neurotic reaction to the experience of social decline, Hitler in 1923 suffered a complete political fiasco, because his following was too small. While times of full employment and economic boom were unfavorable for his party, his movement benefited greatly from periods of depression, such as die one that followed the stabilization of the mark in 1923, and especially from the big depression after 1929. This depression not only caused the ruined masses of the German middle class to follow a leader who knew how to fight his social decline by donning a field-grey uniform but it also made some big German producers more eager than before to listen to a man who seemed to be conquering a disaster that had been caused, to a large extent, by their own rationalization policy.

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Articles
Information
The Journal of Economic History , Volume 12 , Issue 3 , Summer 1952 , pp. 222 - 246
Copyright
Copyright © The Economic History Association 1952

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References

1 This paragraph gives a short summary of the findings of the first part of this essay which could not be printed. The best work on the transformation of German heavy industry after 1925 is Brady, Robert A., The Rationalization Movement in German Industry, a Study in the Evolution of Economic Planning (Berkeley: University of California Press, 1933)Google Scholar.

2 Stadtler, Eduard, Lebenserinnerungen (2 vols.; Berlin, 1935)Google Scholar.

3 Heiden, p. 250. The diaries and other papers of the treasurer of the National Socialist Party (N.S.D.A.P.), Franz Xaver Schwarz, who died in 1947, are said to have been burned by him in the Munich Braunes Haus, in April 1945.

4 Heiden, p. 249. According to Heinrichsbauer (p. 52) the total amount the N.S.D.A.P. received from this source from 1930 to 1933 “did not exceed 500 to 600 000 RM.”

5 According to what Thyssen told Reves (Thyssen, p. 102), Hugenberg, in the last years before 1933, gave Hitler 2 million reichsmarks a year. This statement must be used with caution, as it might have been merely a guess.

6 Frankfurter Zeitung, September 29, 1931.

7 Heiden, p. 277.

8 Heiden's presentation of this episode (p. 277) has been fully confirmed by Funk's own statement.—Nazi Conspiracy and Aggression; A Collection of Documentary Evidence, prepared … for presentation before the International Military Tribunal at Nuremburg (Washington, 1946) supplement A, pp. 1196ff. The names of Funk's collaborators, given in the text, are contained in this statement.

9 Heinrichsbaucr, p. 42.

10 Heiden, p. 277.

11 Flick Trial, Exhibit #679. Keppler's version suggests the conclusion that Hitler's own attempts in this field had not been too successful.

12 Frankfurter Zeitung, January 8, 1932. Reinhardt was introduced to Hitler by Funk. So were O. C. Fischer, of the Deutsche Credit Gesellschaft, and sundry others (see footnote 8).

13 Frankfurter Zeitung, January 19, 1932. The Funk statement (see footnote 8) confirms this fact. Through Grauert, the party received 100,000 reichsmarks for its Essen paper and the same amount for the spring election of 1932. The latter gift, made upon advice of Fritz Thyssen, was sharply attacked by E. Poensgen, as head of the Grauert organization.—Heinrichsbauer, p. 56. This forced Thyssen to refund the money.

14 Frankfurter Zeitung, March 9 and June 22, 1932.

15 The impression furnished by Thyssen's memoirs, which in many points are self-revealing, was confirmed, to me, by an oral report about Thyssen I received from a former member of the Reich Federation of Heavy Industry.

16 The speech was published in pamphlet form in German as Vortrag Adolf Hitler's vor westdeutschen Wirtschaflern im Industrie Klub Duesseldorf am 27 January 1932. The complete text has been translated in Baynes, , Hitler's Speeches (London and New York, 1942), pp. 777 ff.Google Scholar

17 See the entire chapter “Captain of Industry at the Cross Roads,” in Dietrich's book (pp. 46 ff.).

18 Thyssen, p. 101. In his later statements, Thyssen emphatically denied that the assembled industrialists attempted to finance Hitler, and so did competent witnesses at his denazification trial. Most probably, the contributions referred to by Thyssen in dictating the above passage to Reves were made privately by individual participants of the Düsseldorf meeting.

19 Poensgen memoirs (quoted in Preliminary Memorandum Brief), p. 5.

20 The famous memorandum of the Federation of German Iron and Steel Industrialists and of the Federation of German Iron Miners, submitted to the German high command in December 1917, requesting the “Incorporation of the Franco-Lorrain Iron Ore Basin into the German Reich Territory” (printed as manuscript) is signed by Voegler, on behalf of the German iron miners. See also Gatzke, Hans W., Germany's Drive to the West (Baltimore: The Johns Hopkins Press, 1950)Google Scholar.

21 See below, p. 233.

22 Flick Trial, pp. 5051 and 6176.

23 One of the best-informed sources for the history of this policy and of that entire time is the book by Meissner, Otto: Staatssekretaer unter Ebert-Hindenburg-Hitler (Hamburg, 1950)Google Scholar. See particularly, pp. 230 ff.

24 Heiden, p. 303.

25 For instance by Heiden, pp. 287 ff., and Meissner, pp. 222 ff.

26 Flick Trial, p. 43, gives many important details about Flick's former career and a good summary of the Gelsenkirchen transaction, which is more involved than can be shown here.

27 The Rhein Elbe Union, one of the two main bases of Stinnes' fabulous might, comprised the three vertical trusts, Deutsch-Luxemburg, Bochumer Verein, and the Gelsenkirchen Mining Co., the enterprise made prominent by Emil Kirdorf.

28 Frankfurter Zeitung, July 30, 1932. The Frankfurter Zeitung took special pride in probing into this matter relentlessly. The material it produced is most interesting, though the main features of the transaction remained hidden until recently.

29 Frankfurter Zeitung, July 30 and 31 and August 3, 1932.

30 Flick testimony, Flick Trial, pp. 3198 ff. This version sounds less nationalist than the one he gave in his above-mentioned letter of 1932.

31 Early in 1914, the French armament firm Schneider-Creusot made the French public believe that the German firm of Krupp intended to buy the Russian Putilov works which, being the main armament plant of Tsarist Russia who was France's ally, had been allowed to share many French industrial secrets, and which had been under Schneider's control. The story was later proved to have been planted, in order to urge the French state to subsidize Schneider. See Delaisi, Francis, L'Affaire Poutiloff (Paris, 1914)Google Scholar, and Hallgarten, George W. F., Imperialismus vor 1914 (Munich, 1951), II, 356 ff.Google Scholar

32 Flick's testimony, Flick Trial, pp. 3164 ff.; Conrad Kaletsch's testimony, pp. 7502 ff.; Steinbrinck's testimony, pp. 5082 ff.

33 Ibid. The Preliminary Memorandum Brief contains the copy of the contract between the Flick group and the Harriman group (“Die Gruppe Harriman”), signed by Irving Rossi, February 15; 1929.

34 Frankfurter Zeitnng, July 28, 1932. The preliminary agreement, concluded in March, was replaced, May 31–June 1, by a final agreement between Flick and the Reich. The double date symbolizes the fact that both the outgoing Bruening government which had initiated and concluded the deal and the incoming Von Papen cabinet approved of it. According to testimony in the Flick trial (p. 3630) the Reich, through the bank of Hardy, paid a flat sum of 25 million reichsmarks, and took over 65 million reichsmark debts of the Flick group, 26.2 of which were contracted in the name of the Gelsenkirchen. Flick immediately used the money he received for acquiring the firm of Rheinisch Brown Coal which was controlled by Gelsenkirchen. He thus initiated the dismemberment of Gelsenkirchen which was later completed under Hitler and which deprived the Reich of the fruit of the transaction, though it did not fare too badly, because of the international boom.

35 Frankfurter Zeitung, July 6 and July 23, 1932.

36 See above, p. 228.

37 Frankfurter Zeitung, July 28, 1932.

38 Flick's testimony, Flick Trial, pp. 3171 ff.; Steinbrinck's testimony, pp. 3644 ff.

39 Flick's testimony, Flick Trial, pp. 3609 ff.

40 In making one of his contributions to the Von Papen election fund, in November 1932, Flick wrote to Hugenberg: “I am giving you this money so that in the coming elections the bourgeoisie can consolidate itself against National Socialists and prevent the National Socialist movement from taking a radical turn sooner or later” (Flick Trial, p. 3171). That the bulk of the heavy industry, with the exception of the United Steel group, backed Von Papen is shown by the testimony of Ludwig Grauert, the Nazi-connected representative of the employer organization in the Ruhr, who says he was severely criticized by this organization for having spent 100,000 reichsmarks for Nazi election purposes, since heavy industry, led by the Ruhrlade, had decided diat no funds were to be given to the N.S.D.A.P., but only to the Von Papen cabinet. (This testimony, given in a hearing on S.S. organizations in Nuremberg, July 1, 1946, is quoted in Preliminary Memorandum Brief, p. 11; above, bibliographical footnote, p. 220).

41 Steinbrinck's testimony, Flick Trial, p. 5069; Flick's testimony, p. 3185. The date of the Goering-Flick conversations in the Gelsenkirchen matter which Steinbrinck says took place in “May or June,” must have been June, since this was the month when the affair broke. The fact that the conversations lasted several days and that not only Goering (as the public testimony of the defendants shows) but also Hitler approved of the deal is mentioned in the opening statement of the Prosecution (Flick Trial, p. 52) on the basis of affidavits given by the defendants.

42 A good summary of the relations between Flick and Goering is contained in a Brief of the Prosecution on Defense Claims of Coercion, dated November 29, 1947, pp. 15 ff., to which I was given access.

43 Flick's testimony, Flick Trial, pp. 3200 f.

44 Flick's right-hand man Otto Steinbrinck, in his testimony in the Flick Trial, p. 5078, stated this fact explicitly. Pointing out that, around that time, he was in close contact with Keppler and Kranefuss, who advised Hitler in economic questions, he continued: “In 1932, at the end of 1932, and in the beginning of 1933 we were faced with a few very important transactions: the sale of the majority of the Rheinish Soft Coal and the exchange for Harpener shares, the concentration of the Vereinigte Stahlwerke and the remaining solution and dissolution of all Vereinigte Stahl. All these transactions seemed only possible if we could make sure that on the part of the economical political party agency, i.e., of Keppler, who at the same time was the economic adviser to the Fuehrer, no difficulties arose.”

That this co-operation did not exclude the continuation of existing differences between the Nazi supporters among the businessmen and the bulk of the party is shown by the inner discussions in the newly established Circle of Friends which took place simultaneously (Keppler's affidavit, exhibit 679 of the Flick Trial record; see further, Flick Trial, pp. 4426 ff. [testimony of banker Curt von Schroeder] and pp. 5076 ff. [Steinbrinck's testimony] as well as interrogations of Schroeder, reproduced in Preliminary Memorandum Brief, mentioned in the introductory footnote). The assembled businessmen haughtily ridiculed the average Nazis' “half-baked” socialist ideas, defended the business ethics of the German monopolies, and voiced protest against the kind of controlled economy later attempted by Hitler and his henchmen. Their attitude later enabled Himmler to wean the Circle away from Hitler and to bring it under his personal control. If the Circle had any political importance, it lay more in the activity of some of its members, such as Von Schroeder, than in its work as a group.

45 Thyssen, p. 110.

46 One of the best sources of information on the policy of General von Schleicher is still the book by Caro, Kurt and Ochme, Walter, Schleicher's Aufstieg (Berlin, 1932)Google Scholar. See also Berendorrf, Hans R., General Zwischen Ost und West (Hamburg, 1951)Google Scholar.

47 According to press reports and diaries of that time, the German Sozialdemokratie, led by the trade unions since the Reichstag dissolution of September 1932, openly prepared for remilitarization by supporting institutions such as the Reichsamt für Jugendertüchtigung, and was ready for Von Schleicher's offers.

48 Steinbrinck's testimony, Flick Trial, p. 5056.

49 Extract of letter from Salm-Horstmar to Krupp, October 12, 1932, reproduced in Preliminary Memorandum Brief, p. 31. The author of the letter, a former president of the Flottenverein (Navy league) of the Kaiser period, is known from a now rather famous letter, first published in the appendix of the late Kehr's, Eckart brilliant study, Schlachtflottenbau und Parteipolitik (Berlin, 1930)Google Scholar, in which Salm asked the Imperial Government to speed up the building of the imperial fleet, a policy which would have a beneficial influence on the situation of the stock exchange which is pictured as suffering from a depression. (It was the slump of 1901.)

50 Gustav Krupp replied by a letter of October 12 (quoted at the same place) that “it really is impossible for me for a number of reasons to sign the appeal.”

51 The draft of the circular letter to Hindenburg, found in Schroeder's files, was submitted to the International Military Tribunal in Nuremberg in the case against Goering and others, and was marked exhibit #837.

52 Letter from Voegler to Schroeder, November 21, 1932, quoted in Preliminary Memorandum Brief, p. 30.

53 Letter from Keppler to Schroeder, November 13, 1932, ibid.

54 Schacht to Hitler, November 12, 1932 (exhibit #773 of the International Military Tribunal).

55 A very good account of the desperate situation of the party during these weeks, bared in Goebbels' diaries and other sources, is given by Heiden, p. 305. Still, Heiden when he wrote his book could not yet see the economic problems involved in the way we see them now, on the basis of documentary evidence.

56 Military Tribunal, case #10, The United States of America against Alfred Krupp et al., (Nuremberg, 1947), p. 690, testimony of Curt von Schroeder. Von Schroeder was a key witness in a number of war-crimes trials.

57 The above presentation combines the statement of Heiden (p. 314) that the drive to save the Nazis financially was headed by Voegler and Springorum, and aimed at the paying of election debts with the statement made in a Von Schroeder affidavit in the Flick Trial (exhibit #680) that the Circle of Friends gave the S.S. one million reichsmarks. See further the account of the Cologne meeting in Nazi Conspiracy and Aggression, II, 922 ff. Von Papen's own version of the conference with Hitler is given in his interrogation by a United States investigator, ibid., pp. 1453 ff.

58 Thyssen, p. 109, states that, being looked at askance by Nazi radicals such as Rudolf Hess, he remained uninformed about the Cologne meeting. He adds that Goering, who might have notified him about the event, was not in the plot.

59 Thyssen, pp. 35 f.

60 Economically, the Gelsenkirchen matter was settled under Hitler, in accordance with the expectations of heavy industry, by the simple device of dissolving the Gelsenkirchen Company which the Reich had bought so expensively. This freed United Steel from Reich control. Details about this complicated transaction which was preceded by “lengthy negotiations between the companies in question, American creditors, and German ministries” are given in the Frankfurter Zeitung, October 27 and 28, 1933.

61 See Funk's Statement in Nazi Conspiracy and Aggression, Suppl. A, pp. 1194 ff. Of the above listed men, Gustav Knepper was on the boards of United Steel, of the Gelsenkirchen, and of several Flick firms; Ernst Buskuehl was director of the Mannesmann tube factories; the three Tengelmanns formed the directorate of the Gelsenkirchen; while Otto Kellermann represented the Nordstern Insurance Co. Gattineau and Von Schnitzler maintained liaison between the Nazis and I-G Farben. The other men mentioned by Funk have been referred to before.

62 The names of the non-Hitlerian industrialists are given in the statement by Funk, quoted in footnote 61. Siemens is mentioned by Heiden, p. 312. One of the greatest enemies of Hitler among the steel producers was the Catholic Otto Wolff who had a Jewish business partner, Othmar Strauss. (Some information on Wolff is contained in Flick's testimony in the Flick Trial, pp. 5050 ff.) The non-Hitlerian group was joined by the bulk of the chemical industry which enjoyed a monopoly on the world's markets and which, being more depression proof than the steel men, played a waiting game.—R. R. Sasuly, J-G (New York, 1947), p. 66; Heiden, p. 312.

63 Thyssen, pp. 106 ff.

64 Thyssen, pp. 106 ff.

65 Von Papen's interrogation, Nazi Conspiracy and Aggression, Supplement B, pp. 1459 ff.

66 Preliminary Memorandum Brief, pp. 36 ff., quotes several sources about the amount given by the industrialists. According to a statement made by Funk, dated June 28, 1945, which is among these sources, the total contributions amounted to 7 million reichsmarks. The figure of 3 million, given in the text, was furnished by Schacht.

67 Sasuly, p. 106. According to testimony produced in the trial against I-G Farben (document books Schmitz I and II) Bosch's despair about the fact that Hitler was using his inventions for war purposes became an obsession with him, which caused him to take to drinking and isolated him socially.