Modern history



On 16 April 1938, a Munich businessman who had been working as an expert consultant in Aryanization cases wrote a strongly worded letter to the local Chamber of Commerce and Industry. He was, he noted, a ‘National Socialist, member of the SA, and admirer of Hitler’. Nevertheless, he went on, he was

so disgusted by the brutal . . . and extortionate methods employed against the Jews that, from now on, I refuse to be involved in any way with Aryanizations, even though this means losing a handsome consultancy fee . . . As an experienced, honest, and upstanding businessman, I [can] no longer stand idly by and countenance the way many Aryan businessmen, entrepreneurs and the like . . . are shamelessly attempting to grab up Jewish shops and factories etc. as cheaply as possible and for a ludicrous price. These people are like vultures, swarming down with bleary eyes, their tongues hanging out with greed, to feed upon the Jewish carcass.165

Aryanization did indeed offer many opportunities to non-Jewish businesses and businessmen to enrich themselves. Many eagerly grasped them. At the very least, when Jewish businesses went into liquidation, non-Jewish businesses in the same branch of the economy could congratulate themselves on losing some of the competition. This was true at all levels. In January 1939, for instance, 2,000 shops were said to be standing empty in Hamburg as a result of the Aryanization process, a fact singled out for favourable mention by the leader of the Nazi Traders’ Association in the city. Since the majority of Jewish business enterprises were small-scale, it was predominantly modest-sized non-Jewish enterprises that benefited from their closure. Indeed, to a degree the regime actually tried to ensure that this was so, as when Jewish chain stores in Hamburg like Bottina shoes or Feidler’s stocking shops were broken up and the individual shops sold off separately.166

To be sure, this was not widely recognized at the time. Particular resentment was caused among small shopkeepers by the regime’s failure to keep its promise to close down the department stores and break up the big chains. ‘Department stores,’ complained one in 1938, ‘whether they are Jewish or Aryan, are still firms that compete unfairly against small businesses.’167 A Berlin businessman, writing to the exiled Social Democratic leadership while on a trip outside Germany in 1939, claimed indeed that it was overwhelmingly large companies that were snapping up Jewish businesses. ‘This process has led to an enormous concentration of industrial and financial power in every branch of the economy, a power that is wielded without compunction by the leaders of the big concerns.’168 But large firms initially hesitated before moving in too aggressively. Large-scale Jewish enterprises and conglomerates were less susceptible to local boycotts and attacks than smaller, independent businesses and shops were, and at least in the early years of the Third Reich, the regime was careful not to put too much pressure on them because it needed them for economic recovery and rearmament, and many of them were internationally well known.169

Thus, Jews remained on the boards of firms such as Mannesmann and I.G. Farben for some time after 1933. The Deutsche Bank still had a Jewish member of the supervisory board as late as July 1938, though he had been abroad since the previous year. Nevertheless, these were exceptions. Most firms bowed earlier to pressure to dismiss Jewish directors, board members and employees. In the Dresdner Bank, internal Aryanization continued a policy of slimming down the workforce begun when the bank took over the Danat Bank in 1931 after it had crashed; the difference now was that it was mainly directed against Jewish employees. The Dresdner Bank was obliged to do this because on 9 May 1933 the Law of 7 April was extended to ‘legally recognized public bodies and equivalent institutions and undertakings’, which covered a very wide range of institutions indeed. The bank’s employees now had to fill out forms detailing their religious and racial background, their war service and other relevant factors. The regulations allowed institutions to claim ‘urgent need’ as a reason for retaining employees, so the bank was able to avoid the chaos that would have resulted from mass, simultaneous dismissals; but after 30 June 1934 no more such permits were issued by the Economics Ministry. By the end of the year, all Jews had left the bank’s supervisory board; 80 per cent of unprotected Jews had left the bank’s service by October 1935, and all remaining Jewish employees were gone a year later. These measures were no doubt welcome to the younger non-Jewish men who worked for the bank since they cleared paths to promotion that would probably have stayed blocked for some time. The seven top managers who were forced to resign in 1933-4 because they were Jewish were replaced by men in their thirties and early forties who might not otherwise have been promoted. Those who took over showed little compassion for those who had left. Only in some instances, such as, notably, I.G. Farben, were Jewish employees transferred to positions in foreign subsidiaries instead of having to lose their livelihoods altogether.170 Whatever their fate, the removal of Jewish managers from German businesses assisted the rise of a new, young managerial elite that was already beginning to take over from the older generation by the time the war came.171

The Allianz insurance company, whose chief Kurt Schmitt had been Schacht’s predecessor as Economics Minister, was another firm that did not actively pursue a policy of dismissal. It treated its two Jewish directors well when they were forced to resign. On the other hand, the firm offered no serious resistance when it came under pressure from the Nazi press and the Reich Supervisory Office for Insurance to dismiss Jewish employees and sever connections with Jewish salespeople and agents. In 1933, for instance, the company extended the contract of its agent Hans Grünebaum, who had worked for its Stuttgart branch since 1929, for five years, then in 1936 extended it again until 1941. However, this attracted hostile comment from the local press and then a threatening letter from the Nazi Party Regional Leader’s office. The company riposted by arguing that Jewish agents were needed to deal with Jewish customers. But this cut no ice with the Nazis. Grünebaum’s contract was terminated at the beginning of June 1938; the company agreed to pay him his full annual commission of 35,000 Reichsmarks, covering the period to the end of 1939, though how much of this he was able to take with him when he emigrated to America is uncertain. By this time, government bans on Jews acting as travelling salesmen, estate agents and the like had effectively put an end to this particular kind of business relationship in any case.172

In a number of instances, large firms seem to have offered fair prices for Jewish businesses in the early years of the Third Reich, as in the case of the acquisition of the Jewish-owned North German Hop Industry Company by the Henkel Company.173 Reflecting this, the Regional Economic Consultants’ Offices of the Party frequently sent contracts back even when they had assured themselves that the purchasers had the necessary money, were expert in the area concerned, and were racially and politically acceptable. In southern Westphalia, indeed, the great majority of contracts were referred back for renegotiation because the price offered was considered too high.174 However, as Aryanization gathered pace, big business, especially where it was relatively recent in origin, began to drop any scruples it might have had to begin with, and to join in the profiteering.175 As in the case of the Wertheim department stores, it could in some cases be managed internally, with Jewish directors making way for non-Jewish ones; of the 260 large firms that had passed from Jewish into non-Jewish hands by the end of 1936, indeed, relatively few had done so through a takeover by another company.176 From 1936 onwards, however, given the number of Jewish enterprises now coming onto the market, large firms began to keep a look-out for business opportunities. By 1937 many were seizing them with alacrity. Thus the engineering firm Mannesmann took over the Wolf, Netter and Jacobi company in the metal industry, with a turnover of more than 40 million Reichsmarks in 1936-7; it also participated in a consortium that absorbed the Stern scrap metal company in Essen, which had been forced to sell up after the cancellation of contracts.177 In some cases, Aryanization offered a way out of economic difficulties brought on by the policies of the regime, particularly in the consumer industries. The Salamander shoe company, for instance, which had Aryanized itself in 1933, came under heavy pressure under the Four-Year Plan to export leather shoes for much-needed foreign currency, and use leather substitutes for the shoes it sold on the home market. Leather itself, however, was strictly rationed as early as 1934. It made sense for Salamander to create a series of vertically integrated combines by buying up Jewish-owned leather companies and tanneries like Mayer and Son in Offenbach, which it purchased in 1936; working in the opposite direction, the leather processing company of Carl Freudenberg bought up the Jewish-owned shoe firm Tack, which was already suffering from boycotts and attacks by the local Nazis in 1933.178

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 75,000 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


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 Freedomand 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 personal 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

There were many similar cases all over Germany. Municipal utilities, such as gasworks, waterworks and the like, offered ample opportunity for SA men to find employment, often surplus to requirements. An audit of the Hamburg Sickness Fund office found that it had employed 228 more administrators than it actually needed. Thousands of old Party men found comfortable jobs in the transport system; the Hamburg local railways took on over a thousand in 1933-4, though whether they really needed them was another matter. The Hamburg Regional Farmers’ Leader Herbert Duncker, for instance, was paid 10,000 Reichsmarks a year as ‘agricultural adviser to the Hamburg Electricity Works’ without ever once turning up even to see what the job might involve. In this way, public corporations were in effect required to subsidize the Nazi Party and its ancillary organizations. Similar pressures were brought to bear on a wide variety of private enterprises. Meanwhile, laws passed in 1934 and 1938 indemnified Party members against claims for damages as a result of the destruction they had meted out to trade union and other offices in 1933, and allowed them to clear their debts without penalty if they had got into financial difficulties before 1 January 1934.196 By contrast, former activists in the Communist or Social Democratic Party found their attempts to get a job repeatedly rebuffed, until the demand for labour in the arms industry became so insistent that their previous political activity could conveniently be forgotten. The experience of Willi Erbach, a skilled engineering worker who had been a member of the Reichsbanner, the paramilitary wing of the Social Democrats, cannot have been unusual: sacked for his political activities in 1933, he did not find a job again until three years later, in 1936, when the labour exchange suddenly assigned him to the Krupp factory in Essen. Meanwhile, less skilled workers found getting a job easy enough if they were members of the Nazi Party.197

The opportunities for self-aggrandizement went all the way down the scale, right down to the ordinary brownshirts who helped themselves to the cash-boxes, the furniture, the bed-linen and the equipment they found in the trade union premises they raided on 2 May 1933, and in the homes of the men and women they arrested. Not untypical was the case of the leader of the Munich Student Union, Friedrich Oskar Stäbel, victor in a bout of in-fighting that resulted in his appointment as head of the national German Students’ Union in September 1933. Stabel celebrated his climb to the top by using student union fees for personal expenditure, clothes, cars and the like, and to finance and equip a marching band for his own entertainment. The local student union in Berlin spent its members’ contributions on the purchase of no fewer than seven automobiles for the personal use of its officers.198 The quantity of money and property flowing into the Party from early 1933 onwards was so vast that few proved able to resist the temptation to squirrel some of it away for themselves. The Party Treasury did not take kindly to embezzlement from its own funds, and between 1 January 1934 and 31 December 1941 it brought no fewer than 10,887 prosecutions for misappropriation of Party funds before the courts; they involved ancillary organizations of the Party as well as the Party itself. The auditing of accounts and the control of finances in general were almost bound to be chaotic in a situation like that of 1933, when the Nazi Party and its myriad subordinate groups were growing almost exponentially. It was hardly surprising that among the 1.6 million people who joined the Party in the first few months of 1933 there were many who hoped to make their fortune by doing so.199


With such money flowing into their accounts, it was small wonder that Nazi officials at every level of the hierarchy were soon enjoying a lifestyle they had not even dreamed of before 1933. This included the men at the very top. Reich Propaganda Minister Joseph Goebbels, for instance, had declared an annual income of no more than 619 Reichsmarks to the tax authorities in 1932. Within a few years, however, he was earning 300,000 Reichsmarks a year in fees for his weekly leading articles for the Nazi magazineThe Reich, a sum that was out of all proportion to standard journalistic rates and represented in practice a huge annual bribe from the magazine’s publisher Max Amann. For his part, Goebbels wrote off 20 per cent of his earnings as business expenses, although in fact he had none. With this money, The Propaganda Minister bought among other things a villa on the Berlin island of Schwanenwerder, which its previous owner, the Jewish physician Charlotte Herz, had been forced to sell. In 1936 the city of Berlin placed another property at his lifelong disposal, on Lake Constance: he then spent 2.2 million Reichsmarks on extending and refurbishing it. In 1938 he sold the Schwanenwerder property to the industrialist Alfred Ludwig, who then let it to him rent-free. Yet Goebbels counted in popular opinion as one of the less corrupt of the Nazi leaders, as did Albert Speer, whose architectural fees, augmented by the usual Christmas presents from the Labour Front Leader Robert Ley and the tax concessions commonly made to leading Nazis, made him a millionaire already before the war.200

Most notorious of all was Hermann Goring, whose hunting lodge Carinhall was extended and refurbished at a cost of more than 15 million Reichsmarks in taxpayers’ money. The upkeep and administration of these palatial premises cost not far short of half a million marks, again paid for by the taxpayer; and beyond this, Goring also owned another hunting lodge in East Prussia, a villa in Berlin, a chalet on the Obersalzberg, a castle, Burg Veldenstein, and five further hunting lodges, not to mention a private train whose coaches accommodated ten automobiles and a working bakery, while Göring’s private quarters on the train, taking up two whole carriages, cost the state 1.32 million Reichsmarks in 1937 even before the extravagantly luxurious furnishings and fittings had been installed. In the same year, the Reich Association of Automobile Manufacturers donated to him a yacht worth three-quarters of a million Reichsmarks for his personal use. In all these locations Goring displayed a large and ever-growing collection of artworks, though his real chance for building it up would not come until the war. Like the other leading Nazis, he also managed to conceal much of his income from the tax authorities and obtain massive concessions on the rest; tax evasion was made easier by a ruling in 1939 that the tax affairs of Reich Ministers and Nazi Party Reich Leaders were to be dealt with exclusively by the finance offices of Berlin Central and Munich North, where they could be sure of a sympathetic handling.201

Such conspicuous consumption was not just a mark of the personal corruption that affects every dictatorship, but also expressed a widespread desire among the higher Nazi officials to demonstrate symbolically that they were the new masters of Germany. Hunting became a favourite pastime of many Regional Leaders, who bought themselves hunting grounds even where they had shown no previous interest in this most aristocratic of pastimes. Faced with the need to keep up with his colleagues in this respect as in others, the Regional Leader of Hamburg, Karl Kaufmann, was unable to do very much initially, since his urban fiefdom had no hunting land. With the creation of Greater Hamburg in 1937, however, the incorporation of a wooded area to the north of the city gave him the chance; he immediately declared it a nature reserve, stocked it with game, enclosed it from the public with eleven kilometres of fencing, and then leased it from the city for his own use. In a similar way, most of the leading Nazis followed Hitler’s example and purchased Old Masters and new works from the Great German Art exhibition to put on the walls of their grandiose villas and hunting lodges, not because they were particularly fond of art, but because this was an obvious symbol of their status in the Nazi hierarchy.202

Not surprisingly, corruption allied itself to theft and extortion when Nazi leaders and their underlings came into contact with the helpless and the powerless. The hatred that Nazi activists felt for Jews, Communists, ‘Marxists’ and other ‘enemies of the Reich’ gave them free rein to plunder them at will. In the course of the violent seizure of power in 1933, brownshirt gangs enrolled as auxiliary police carried out ‘house-searches’ that were little more than pretexts for robbery. In the concentration camps, officers and commanders treated the workshops staffed by inmates as their personal possessions, taking furniture for their quarters, pictures and paintings for their walls, and so on. The commandant of the concentration camp at Lichtenburg had inmates make new bindings for his books, shoes and boots for himself and his family, letterboxes and ironing-boards for his household, and much more besides. Lower camp officials forced inmates to steal asparagus and strawberries for them from the camp vegetable garden, they ‘organized’ food for themselves from the camp kitchen, and embezzled money from the camp canteen. Theft of personal possessions and money brought into the camps by those unfortunate enough to be sent to them was the rule, not the exception. In 1938 the commandant of Buchenwald, Karl Koch, confiscated no less than 200,000 Reichsmarks’ worth of goods and currency from Jews brought into the camp, dividing some of it amongst his subordinates but depositing most of the money in his personal account.203

If anyone at a relatively senior level was prosecuted for such offences then it was more likely to be as a result of carelessness than of any sense of rectitude on the part of his superiors. When Robert Schöpwinkel, a senior official of the Reich Association of German Hoteliers and Innkeepers, was tried and sentenced with his two most senior officials for embezzling 100,000 Reichsmarks, this was mainly because their corruption had become so notorious in the trade that the innkeeper of the Rheinhotel Dreesen, in Bad Godesberg, where Hitler frequently stayed, approached the Leader and told him that if nothing was done to bring Schöpwinkel to book, the whole innkeeping trade in the Rhineland would become disaffected from the regime.204 A few court cases such as this enabled the leaders of the regime to portray themselves as resolute in the combating of corruption, unlike their predecessors under the Weimar Republic. In fact, corruption of this kind was more often concealed from the media. It was encouraged by the lack of any press or public control over the government and the Party, by the personal nature of power in the regime, and by the general distaste of the Nazis for formal administrative structures and rules. In the depressed economic climate of the early and mid-1930s, power seemed a quick way to riches, and there were few in any position of responsibility in the Nazi Party who could resist the temptation to take it. Rumours and stories about corruption spread rapidly amongst the population. In September 1934 Victor Klemperer recorded a conversation with a Hitler Youth member, the son of a friend, who described how Group Leaders embezzled the members’ contributions for excursions and used them to buy luxuries as expensive as motorbikes for themselves. All this was common knowledge, he said.205

The morass of corruption into which the economy rapidly sank after 1933 was the source of a good deal of bitter humour amongst the population. The definition of a ‘reactionary’ was said to be ‘someone who has a well-paid post that a Nazi likes the look of’. Göring’s taste for uniforms and titles was a particular butt of popular humour. A ‘Gör’ was popularly said to be ‘the quantity of tin that one man can carry on his chest’. On a visit to Rome to negotiate with the Vatican, Goring wired back to Hitler: ‘Mission accomplished. Pope unfrocked. Tiara and pontifical vestments are perfect fit.’ At night, according to another joke, Göring’s wife woke up to find her naked husband standing next to the bed waving his marshal’s baton around. What was he up to, she asked. ‘I am promoting my underpants to overpants,’ came the reply. Jokes about corruption even made it onto the stage: in 1934 the cabarettist Wilhelm Finck, doing a stand-up comic routine at Berlin’s Catacomb, posed holding up his right arm in the Nazi salute while a tailor measured him for a new suit. ‘What sort of jacket should it be?’ asked the tailor: ‘With chevrons and stripes?’ ‘You mean’, said Finck, ‘a straitjacket?’ ‘How would you like your pockets?’ ‘Wide open, in the current fashion,’ came Finck’s reply. Not long afterwards, the cabaret was closed down on Goebbels’s orders and Finck taken off to a concentration camp. Hitler was usually exempt from jibes about corruption, whether public or private. Complaints about corruption were directed against his subordinates, above all the ‘little Hitlers’ who ruled the roost in the regions. A typical joke had the Goebbels children invited to tea in turn to the houses of Goring, Ley and other leading Party figures. After each visit they came home raving about the wonderful cream cakes, treats and other goodies they had been given. After a visit to Hitler, however, in which they had only been given malt coffee and tiny cakes, they asked: ‘Daddy, isn’t the Leader in the Party?’206

Yet alongside such humour was a widespread feeling that the Nazi regime had achieved a good deal in the economic sphere by 1939. After all, the economy had recovered from the Depression faster than its counterparts in other countries. Germany’s foreign debt had been stabilized, interest rates had fallen to half their 1932 level, the stock exchange had recovered from the Depression, the gross national product had risen by 81 per cent over the same period, and industrial investment and output had once more attained the levels they had enjoyed in 1928. The two greatest economic bugbears of the Weimar years, inflation and unemployment, had been conquered.207 All this had been achieved by a growing state direction of the economy which by 1939 had reached unprecedented proportions. Whatever the propaganda messages about the battle for work might claim, Nazi economic policy was driven by the overwhelming desire on the part of Hitler and the leadership, backed up by the armed forces, to prepare for war. Up to the latter part of 1936, this was conducted in a way that aroused few objections from business; when the Four-Year Plan began to come into effect, however, the drive for rearmament began to outpace the economy’s ability to supply it, and business began to chafe under a rapidly tightening net of restrictions and controls. More ominously, private enterprise started to be outflanked by state-run enterprises founded and funded by a regime increasingly impatient with the priority accorded by capitalism to profit. Yet none of this, whatever critics suspected, represented a return to the allegedly socialist principles espoused by the Nazis in their early days. Those principles had long been left behind, and in reality they were never socialist anyway. The Third Reich was never going to create total state ownership and centralized planning along the lines of Stalin’s Russia. The Darwinian principles that animated the regime dictated that competition between companies and individuals would remain the guiding principle of the economy, just as competition between different agencies of state and Party were the guiding principles of politics and administration.208

What Hitler wanted to ensure, however, was that firms competed to fulfil the overall policy aims laid down by himself. Yet those aims were fundamentally contradictory. On the one hand, autarky was designed to prepare Germany for a lengthy war; on the other hand, rearmament was pursued with a headlong abandon that paid scant regard to the dictates of national self-sufficiency. Measured by its own aims, the Nazi regime had only succeeded partially at most by the summer of 1939. Its preparations for a large-scale war were inadequate, its armaments programme incomplete; drastic shortages of raw materials meant that targets for the construction of tanks, ships, planes and weapons of war were not remotely being met; and the situation was exacerbated by Hitler’s own inability to set stable and rational priorities within the rearmament programme. The answer was plunder. The corruption, extortion, expropriation and downright robbery that became the hallmarks of the regime and its masters and servants at every level in the course of the Aryanization programme put plunder at the heart of the Nazi attitude towards the property and livelihood of peoples they regarded as non-Aryan. The enormous stresses and strains built up in the German economy between 1933 and 1939 could, Hitler himself explicitly argued on several occasions, ultimately only be resolved by the conquest of living-space in the east. The ‘old fighters’ of the Party had been rewarded for their sacrifices during the ‘years of struggle’ under the Weimar Republic with money, jobs, property and income after the seizure of power. Now, writ large, the same principle was applied to the German economy and the economies of the rest of Europe: sacrifices were demanded of the German people in the build-up to war, but once war came, they would be rewarded with a vast new domain in Eastern Europe that would deliver wealth on an unprecedented scale, supply the nation with food for the foreseeable future, and solve all Germany’s economic problems at a stroke.209

Meanwhile, the German people had to make the sacrifices. The regime bent all its efforts towards building up production while keeping the lid firmly on consumption. Shortages of fat, butter and other consumables, not to mention luxury items such as imported fruit, had become a standard part of daily life by 1939. People were constantly exhorted to make contributions to savings schemes of one kind and another. Savings were directed into government bonds, loan certificates and tax credits, so that the vast bulk of them became available for spending on arms. People were remorselessly exhorted to save, save, rather than spend, spend, spend. Compulsory pension schemes were introduced for the self-employed that forced them to invest funds in insurance companies which the government could then draw upon to help finance rearmament. At the same time, government departments and the military often delayed paying contractors for well over a year, thus extracting from them what was in effect a kind of hidden loan. In many small and medium-sized enterprises engaged on arms production or arms-related projects, this created cash-flow problems so serious that they were sometimes unable to pay their workers’ wages on time.210 The regime justified all this with its customary rhetoric of sacrifice for the greater good of the German racial community. But did people accept the reality of that community? Did the Third Reich, as the Nazis had promised, sweep away the class antagonisms and hostilities that had rendered Weimar democracy unworkable and unite all Germans in a rebirth of national unity and struggle for the common cause? On the fulfilling of this promise a great deal of the regime’s popularity and success would surely depend.

You can support our site by clicking on this link and watching the advertisement.

If you find an error or have any questions, please email us at Thank you!