Table of Contents

Tragedy and Hope

A History of the World in Our Time

By Carroll Quigley

PART NINE







Part Nine: Germany from Kaiser to Hitler: 1913-1945

Chapter 26: Introduction

     The fate of Germany is one of the most tragic in all human history, for seldom has a people of such talent and accomplishment brought such disasters on themselves and on others. The explanation of how Germany came to such straits cannot be found by examining the history of the twentieth century alone. Germany came to the disaster of 1945 by a path whose beginnings lie in the distant past, in the whole pattern of German history from the days of the Germanic tribes to the present. That Germany had a tribal and not a civilized origin and was outside the boundaries of the Roman Empire and of the Latin language were two of the factors which led Germany ultimately to 1945. The Germanic tribe gave security and meaning to each individual's life to a degree where it almost absorbed the individual in the group, as tribes usually do. It gave security because it protected the individual in a social status of known and relatively stable social relationships with his fellows; it gave meaning because it was all-absorbing— totalitarian, if you will, in that it satisfied almost all an individual's needs in a single system.

     The shattering of the Germanic tribe in the period of the migrations, fifteen hundred years ago, and the exposure of its members to a higher, but equally total ... social structure—the Roman imperial system; and the subsequent, almost immediately subsequent, shattering of that Roman system caused a double trauma from which the Germans have not recovered even today. The shattering of the tribe left the individual German, as a similar experience today has left many Africans, in a chaos of unfamiliar experiences in which there was neither security nor meaning. When all other relationships had been destroyed, the German was left with only one human relationship on which he turned all his energy—loyalty to his immediate companions. But this could not carry all his life's energy or satisfy all of life's needs—no single human relationship ever can—and the effort to make it do so can only turn it into a monstrosity. But the German tribesman of the sixth century, when all else was shattered, made such an effort and tried to build all security and all meaning on personal loyalty. Any violence, any criminal act, any bestiality was justified for the sake of the allegiance of personal loyalty. The result is to be seen in the earliest work of Germanic literature—the Niebelungenlied, a madhouse dominated by this one mood, in a situation not totally unlike the Germany of 1945.

     Into the insanity of monomania created by the shattering of the Germanic tribes came the sudden recognition of a better system, which could be, they thought, equally secure, equally meaningful, because equally total. This was symbolized by the word Rome. It is almost impossible for us, of the West and of today, imbued as we are with historical perspective and individualism, to see what Classical culture was like, and why it appealed to the Germans. Both may be summed up in the word "total." The Greek polis, like the Roman imperium, was total. We in the West have escaped the fascination of totalitarianism because we have in our tradition other elements—the refusal of the Hebrews to confuse God with the world, or religion with the state, and the realization that God is transcendental, and, accordingly, all other things must be, in some degree, incomplete and thus imperfect. We also have, in our tradition, Christ, who stood apart from the state and told his followers to "Render to Caesar the things which are Caesar's." And we have in our tradition the church of the catacombs, where clearly human values were neither united nor total, and were opposed to the state. The Germans, as later the Russians, escaped the full influence of these elements in the tradition of the West. The Germans and the Russians knew Rome only in its post-Constantine phase when the Christian emperors were seeking to preserve the totalitarian system of Dioclesian, but in a Christian rather than a pagan totalitarianism. This was the system the detribalized Germans glimpsed just before it also was shattered. They saw it as a greater, larger, more powerful entity than the tribe but with the same elements which they wanted to preserve from their tribal past. They yearned to become part of that imperial totalitarianism. They still yearn for it. Theodoric, the Ostrogoth (Roman Emperor, 489-526), saw himself as a Germanic Constantine. The Germans continued their refusal to accept this second loss, as the Latins and the Celts were prepared to do, and for the next thousand years the Germans made every effort to reconstruct the Christian imperium, under Charles V (Holy Roman Emperor, 1519-1555) as under Theodoric. The German continued to dream of that glimpse he had had of the imperial system before it sank—one, universal, total, holy, eternal, imperial, Roman. He refused to accept that it was gone, hating the small group who opposed its revival and despising the great mass who did not care, while regarding himself as the sole defender of values and righteousness who was prepared to sacrifice anything to restore that dream on earth. Only Charlemagne (died 814) came close to achieving that dream, Barbarossa, Charles V, William II, or even Hitler being but pale imitations. After Charlemagne, the state and public authority vanished in the Dark Ages, while society and the Church survived. When the state began to revive at the end of the tenth century, it was obviously a separate entity from the Church or society. The totalitarian imperium had been permanently broken in the West into two, and later many, allegiances. During the split in the Dark Ages of the single entity which was simultaneously Holy Roman, Catholic, Universal, and Imperial, the adjectives became displaced from the nouns to leave a Universal Catholic Church and a Holy Roman Empire. The former still survives, but the latter was ended by Napoleon in 1806, a thousand years after Charlemagne.

     During that thousand years, the West developed a pluralistic system in which the individual was the ultimate good (and the ultimate philosophic reality), faced with the need to choose among many conflicting allegiances. Germany was dragged along in the same process, but unwillingly, and continued to yearn for a single allegiance which would be totally absorbing. This desire appeared in many Germanic traits, of which one was a continued love affair with Greece and Rome. Even today a Classical scholar does more of his reading in German than in any other language, although he rarely recognizes that he does so because the appeal of Classical culture to the Germans rested on its totalitarian nature, recognized by Germans but generally ignored by Westerners.

     All the subsequent experiences of the German people, from the failure of Otto the Great in the tenth century to the failure of Hitler in the twentieth century, have served to perpetuate and perhaps to intensify the German thirst for the coziness of a totalitarian way of life. This is the key to German national character: in spite of all their talk of heroic behavior, what they have really wanted has been coziness, freedom from the need to make decisions which require an independent, self-reliant individual constantly exposed to the chilling breeze of numerous alternatives. Franz Grillparzer, the Austrian playwright, spoke like a true German when he said, a century ago, "The most difficult thing in the world is to make up one's mind." Decision, which requires the evaluation of alternatives, drives man to individualism, self-reliance, and rationalism, all hateful qualities to Germanism.

     In spite of these desires of the Germans for the coziness of totalitarian oneness, they have been forced as part, even if a relatively peripheral part, of the West to live otherwise. Looking hack, it seemed to Wagner that Germany came closest to its desires in the guild-dominated life of late medieval Augsburg; this is why his only happy opera was placed in that setting. But if Wagner is correct, the situation was achieved only briefly. The shift of world trade from Mediterranean and Baltic to the Atlantic destroyed the trans-Germanic commercial basis of German municipal guild life—a fact which Thomas Mann still mourned in our own day. Almost immediately the spiritual unity of the Germans was shattered by the Protestant Reformation. When it became clear that no degree of violence could restore the old religious unity, the Germans, in the settlement of Augsburg (1555), came up with a typically German solution: individuals would be saved from the painful need to make a decision in religious belief by leaving the choice to the prince in each principality. This solution and the almost contemporary reception of the Roman Law were significant indications of the process by which the German municipalism of the late medieval period was replaced by the Germany of principalities (Lไnder) of modern times.

     As a result of the loss of religious unity, the Germanies became divided into a Protestant northeast, increasingly dominated by the Hohenzollerns of Brandenburg-Prussia, and a Catholic southwest, increasingly dominated by the Habsburgs of Austria. Significantly enough, both of these began their dynastic rise as "marks," that is, frontier military outposts of Christian Germanism against pagan Slavdom of the East. Even when the Slav East became Christianized and, by copying Byzantium, obtained a society closer to the Germanic heart's desire than the West, the Germans could neither copy nor join the Slavs, because the Slavs, as outlanders from the tribe, were inferiors and hardly human beings at all. Even the Poles, who were more fully part of the West than the Germans, were regarded by the Germans as part of the outer darkness of Slavdom, and thus a threat to the still nonexistent Germanic tribal empire.

     Germany's misfortunes culminated in the disasters of the seventeenth century when Richelieu, on behalf of France, used the internal problems of Germany in the Thirty Years' War (1618-1648) to play off one group against another, ensuring that the Habsburgs would never unify Germany, and dooming the Germanies to another two hundred years of disunity. Hitler, Bismarck, and even Kaiser William II could well be regarded as Germany's revenge on France for Richelieu, Louis XIV, and Napoleon. In an exposed position in central Europe, Germany found herself trapped between France, Russia, and the Habsburg dominions and was unable to deal with her basic problems in her own fashion and on their merits. Accordingly, Germany obtained national unity only late and "by blood and iron," and never obtained democracy at all. It might be added that she also failed to achieve laissez faire or liberalism for the same reasons. In most countries democracy was achieved by the middle classes, supported by peasants and workers, in an attack on the monarchy supported by the bureaucracy and landed aristocracy. In Germany this combination never quite came off, because these various groups were reluctant to clash with one another in the face of their threatening neighbors. Instead, Germany's exposed frontiers made it necessary for the various groups to subordinate their mutual antagonisms and obtain unification at the price of a sacrifice of democracy, laissez faire, liberalism, and nonmaterial values. Unification for Germany was achieved in the nineteenth century, not by embracing but by repudiating the typical nineteenth-century values. Starting as a reaction against the assault of Napoleon in 1806, and repudiating the rationalism, cosmopolitanism, and humanitarianism of the Enlightenment, Germany achieved unity only by the following processes:

     1. by strengthening the monarchy and its bureaucracy;

     2. by strengthening the permanent, professional army;

     3. by preserving the landlord class (the Junkers) as a source of personnel for both bureaucracy and army;

     4. by strengthening the industrial class through direct and indirect state subsidy, but never giving it a vital voice in state policy;

     5. by appeasing the peasants and workers through paternalistic economic and social grants rather than by the extension of political rights which would allow these groups to assist themselves.

     The long series of failures hy the Germans to obtain the society they wanted served only to intensify their desire for it. They wanted a cozy society with both security and meaning, a totalitarian structure which would be at the same time universal and ultimate, and which would so absorb the individual in its structure that he would never need to make significant decisions for himself. Held in a framework of known, satisfying, personal relationships, such an individual would be safe because he would be surrounded by fellows equally satisfied with their own positions, each feeling important from his membership in the greater whole.

     Although this social structure was never achieved in Germany, and never could he achieved, in view of the dynamic nature of Western Civilization in which the Germans were a part, each German over the centuries has tried to create such a situation for himself in his immediate environment (at the minimum in his family or beer garden) or, failing that, has created German literature, music, drama, and art as vehicles of his protests at this lack. This desire has been evident in the Germans' thirst for status (which establishes his relationship with the whole) and for the absolute (which gives unchanging meaning to the whole).

     The German thirst for status is entirely different from the American desire for status. The American is driven by the desire to get ahead, that is, to change his status; he wants status and status symbols to exist as clear evidence or even measures of the speed with which he is changing his status. The German wants status as a nexus of obvious relationships around himself so there will never be doubt in anyone's mind where he stands, stationary, in the system. He wants status because he dislikes changes, because he abhors the need to make decisions. The American thrives on change, novelty, and decisions. Strangely enough, both react in this opposite fashion for somewhat similar reasons based on the inadequate maturation and integration of the individual's personality. The American seeks change, as the German seeks external fixed relationships, as a distraction from the lack of integration, self-sufficiency, and internal resources of the individual himself.

     The German wants status reflected in obvious external symbols so that his nexus of personal relationships will be clear to everyone he meets and so that he will be treated accordingly, and almost automatically (without need for painful decisions). He wants titles, uniforms, nameplates, flags, buttons, anything which will make his position clear to all. In every German organization, be it business, school, army, church, social club, or family, there are ranks, gradations, and titles. No German could be satisfied with just his name on a calling card or on the nameplate of his doorway. His calling card must also have his address, his titles, and his educational achievements. The great anthropologist Robert H. Lowie tells of men with two doctorate degrees whose nameplates have "Professor Dr. Dr. So-and-So," for all the world to see their double academic status. The emphasis on minor gradations of rank and class, with titles, is a reflection of Germanic particularism, just as the verbal insistence on the absolute is a reflection of German universalism which must give meaning to the system as a whole.

     In this system the German feels it necessary to proclaim his position by verbal loudness which may seem boastful to outsiders, just as his behavior toward his superiors and inferiors in his personal relationships seems to an Englishman to be either fawning or bullying. All three of these are acceptable to his fellow Germans, who are as eager to see these indications of his status as he is to show them. All these reactions, criticized by German thinkers like Kant as craving for precedence, and satirized in German literature for the last two centuries, have been the essential tissue of the personal relationships which make up German life. The correct superscription on an envelope, we are told, would be "Herrn Hofrat Professor Dr. Siegfried Harnischfeger." These pomposities are used in speech as well as in writing, and are applied to the individual's wife as well as to himself.

     Such emphasis on position, precedence, titles, gradations, and fixed relationships, especially up and down, are so typically German that the German is most at home in hierarchical situations such as a military, ecclesiastical, or educational organization, and is often ill at ease in business or politics where status is less easy to establish and make obvious.

     With this kind of nature and such neurological systems, Germans are ill at ease with equality, democracy, individualism, freedom, and other features of modern life. Their neurological systems were a consequence of the coziness of German childhood, which, contrary to popular impression, was not a condition of misery and personal cruelty (as it often is in England), but a warm, affectionate, and externally disciplined situation of secure relationships. After all, Santa Claus and the child-centered Christmas is Germanic. This is the situation the adult German, face to face with what seems an alien world, is constantly seeking to recapture. To the German it is Gemtlichkeit; but to outsiders it may be suffocating. In any case it gives rise among adult Germans to two additional traits of German character: the need for external discipline and the quality of egocentricity.

     The Englishman is disciplined from within so that he takes his self-discipline, embedded in his neurological system, with him wherever he goes, even to situations where all the external forms of discipline are lacking. As a consequence the Englishman is the most completely socialized of Europeans, as the Frenchman is the most completely civilized, the Italian most completely gregarious, or the Spaniard most completely individualistic. But the German by seeking external discipline shows his unconscious desire to recapture the externally disciplined world of his childhood. With such discipline he may be the best behaved of citizens, but without it he may be a beast.

     A second notable carryover from childhood to adult German life was egocentricity. The whole world seems to any child to revolve around it, and most societies have provided ways in which the adolescent is disabused of this error. The German leaves childhood so abruptly that he rarely learns this fact of the universe, and spends the rest of his life creating a network of established relationships centering on himself. Since this is his aim in life, he sees no need to make any effort to see anything from any point of view other than his own. The consequence is a most damaging inability to do this. Each class or group is totally unsympathetic to any point of view except the egocentric one of the viewer himself. His union, his company, his composer, his poet, his party, his neighborhood are the best, almost the only acceptable, examples of the class, and all others must be denigrated. As part of this process a German usually chooses for himself his favorite flower, musical composition, beer, club, painting, or opera, and sees little value or merit in any other. Yet at the same time he insists that his myopic or narrow-angled vision of the universe must be universalized, because no people are more insistent on the role of the absolute or the universal as the framework of their own egocentricity. One deplorable consequence of this has been the social animosities rampant in a Germany which has loudly proclaimed its rigid solidarity.

     With an individual personality structure such as this, the German was painfully uncomfortable in the totally different, and to him totally unfriendly, world of nineteenth-century individualism, liberalism, competitive atomism, democratic equality, and self-reliant dynamicism. And the German was doubly uncomfortable and embittered by 1860 to see the power, wealth, and national unity which these nineteenth-century traits had brought to Britain and France. The late arrival of these achievements, especially national unity and industrialism, in Germany left the average German with a feeling of inferiority in respect to England. Few Germans were willing to compete as individuals with British businessmen. Accordingly, the newly unified German government was expected to help German industrialists with tariffs, credit, price and production controls, cheaper labor costs, and such. As a consequence Germany never had a clearly competitive, liberal economy like the western Powers.

     The failure to achieve democracy was reflected in public law. The German Parliament was more of an advisory than a legislative body; the judiciary was not under popular control; and the executive (the chancellor and the Cabinet) were responsible to the emperor rather than to Parliament. Moreover, the constitution, because of a peculiar suffrage system, was weighted to give undue importance to Prussia (which was the stronghold of the army, the landlords, the bureaucracy, and the industrialists). Within Prussia the elections were weighted to give undue influence to these same groups. Above all, the army was subject to no democratic or even governmental control, but was dominated by the Prussian Officers' Corps whose members were recruited by regimental election. This Officers' Corps thus came to resemble a fraternity rather than an administrative or professional organization.

     By 1890, when he retired from office, Bismarck had built up an unstable balance of forces within Germany similar to the unstable balance of powers which he had established in Europe as a whole. His cynical and materialistic view of human motivations had driven all idealistic and humanitarian forces from the German political scene and had remodeled the political parties almost completely into economic and social pressure groups which he played off, one against another. The chief of these forces were the landlords (Conservative Party), the industrialists (National Liberal Party), the Catholics (Center Party), and the workers (Social Democratic Party). In addition, the army and the bureaucracy were expected to be politically neutral, but they did not hesitate to exert pressures on the government without the intermediary of any political party. Thus there existed a precarious and dangerous balance of forces which only a genius could manipulate. Bismarck was followed by no genius. The Kaiser, William II (1888-1918), was an incapable neurotic, and the system of recruitment to government service was such as to exclude any but mediocrities. As a result, the precarious structure left by Bismarck was not managed but was merely hidden from public view by a facade of nationalistic, anti-foreign, anti-Semitic, imperialistic, and chauvinistic propaganda of which the emperor was the center.

     The dichotomy in Germany between appearance and reality, between propaganda and structure, between economic prosperity and political and social weakness was put to the test in World War I, and failed completely. The events of 1914-1919 revealed that Germany was not a democracy in which all men were legally equal. Instead, the ruling groups formed some strange animal fording it over a host of lesser animals. In this strange creature the monarchy represented the body, which was supported by four legs: the army, the landlords, the bureaucracy, and the industrialists.

     This glimpse of reality was not welcome to any important group in Germany, with the result that it was covered over, almost at once, by another misleading facade: the "revolution" of 1918 was not really a revolution at all, because it did not radically change this situation; it removed the monarchy, but it left the quartet of legs.

     This Quartet was not the creation of a moment, rather it was the result of a long process of development whose last stages were reached only in the twentieth century. In these last stages the industrialists were adopted into the ruling clique by conscious acts of agreement. These acts culminated in the years 1898-1905 in a deal by which the Junkers accepted the industrialists' navy-building program (which they detested) in return for the industrialists' acceptance of the Junkers' high tariff on grains. The Junkers were anti-navy because they, with their few numbers and close alliance with the army, were opposed to any venture into the fields of colonialism or overseas imperialism, and were determined not to jeopardize Germany's continental position by alienating England. In fact, the policy of the Junkers was not only a continental one; on the Continent it was klein-deutsch. This expression meant that they were not eager to include the Germans of Austria within Germany because such an increment of Germans would dilute the power of the small group of Junkers inside Germany. Instead, the Junkers would have preferred to annex the non-German areas to the east in order to obtain additional land and a supply of cheap Slav agricultural labor. The Junkers wanted agricultural tariffs to raise the prices of their crops, especially rye and, later, sugar beets. The industrialists objected to tariffs on food because high food prices made necessary high wages, which they opposed. On the other hand, the industrialists wanted high industrial prices and a market for the products of heavy industry. The former they obtained by the creation of cartels after 1888; the latter they obtained by the naval-building program and armaments expansion after 1898. The Junkers agreed to these only in return for a tariff on food which eventually, through "import certificates," became a subsidy for growing rye. This alliance, of which Blow was the creator, was agreed on in May 1900, and consummated in December 1902. The tariff of 1902, which gave Germany one of the most protected agricultures in the world, was the price paid by industry for the Navy bill of 1900, and, symbolically enough, could be passed through the Reichstag only after the rules of procedure were violated to gag the opposition.

     The Quartet was not Conservative but, potentially at least, revolutionary reactionaries. This is true at least of the landlords and industrialists, somewhat less true of the bureaucracy, and least true of the army. The landlords were revolutionary because they were driven to desperation by the persistent agricultural crisis which made it difficult for a high-cost area like eastern Germany to compete with a low-cost area like the Ukraine or high-productivity areas like Canada, Argentina, or the United States. Even in isolated Germany they had difficulty in keeping down the wages of German agricultural labor or in obtaining agricultural credit. The former problem rose from the need to compete with the industrial wages of West Germany. The credit problem rose because of the endemic lack of capital in Germany, the need to compete with industry for the available supply of capital, and the impossibility of raising capital by mortgages where estates were entailed. As a result of these influences, the landlords, overburdened with debts, in great jeopardy from any price decline, and importers of unorganized Slav laborers, dreamed of conquests of lands and labor in eastern Europe. The industrialists were in a similar plight, caught between the high wages of unionized German labor and the limited market for industrial products. To increase the supply of both labor and markets, they hoped for an active foreign policy which would bring into one unit a Pan-German bloc, if not a Mittel-europa. The bureaucracy, for ideological, especially nationalist, reasons, shared these dreams of conquest. Only the army hung back under the influence of the Junkers, who saw how easily they, as a limited political and social power, could be overwhelmed in a Mittel-europa or even a Pan-Germania. Accordingly, the Prussian Officers' Corps had little interest in these Germanic dreams, and looked with favor on the conquest of Slav areas only if this could be accomplished without undue expansion of the army itself.

Chapter 27: The Weimar Republic, 1918-1933

     The essence of German history from 1918 to 1933 can be found in the statement There was no revolution in 1918. For there to have been a revolution it would have been necessary to liquidate the Quartet or, at least, subject them to democratic control. The Quartet represented the real power in Germany society because they represented the forces of public order (army and bureaucracy) and of economic production (landlords and industrialists). Even without a liquidation of this Quartet, it might have been possible for democracy to function in the interstices between them if they had quarreled among themselves. They did not quarrel, because they had an esprit de corps bred by years of service to a common system (the monarchy) and because, in many cases, the same individuals were to be found in two or even more of the four groups. Franz von Papen, for example, was a Westphalian noble, a colonel in the army, an ambassador, and a man with extensive industrial holdings, derived from his wife, in the Saarland..

     Although there was no revolution—that is, no real shift in the control of power in Germany in 1919—there was a legal change. In law, a democratic system was set up. As a result, by the late 1920's there had appeared an obvious discrepancy between law and fact—the regime, according to the law, being controlled by the people, while in fact it was controlled by the Quartet. The reasons for this situation are important.

     The Quartet, with the monarchy, made the war of 1914-1918, and were incapable of winning it. As a result, they were completely discredited and deserted by the soldiers and workers. Thus, the masses of the people completely renounced the old system in November 1918. The Quartet, however, was not liquidated, for several reasons:

     1. They were able to place the blame for the disaster on the monarchy. and jettisoned this to save themselves;

     2. most Germans accepted this as an adequate revolution;

     3. the Germans hesitated to make a real revolution for fear it would lead to an invasion of Germany by the French, the Poles, or others;

     4. many Germans were satisfied with the creation of a government which was democratic in form and made little effort to examine the underlying reality;

     5. the only political party capable of directing a real revolution was the Social Democrats, who had opposed the Quartet system and the war itself, at least in theory; but this party was incapable of doing anything in the crisis of 1918 because it was hopelessly divided into doctrinaire cliques, was horrified at the danger of Soviet Bolshevism, and was satisfied that order, trade-unionism, and a "democratic" regime were more important than Socialism, humanitarian welfare, or consistency between theory and action.

     Before 1914 there were two parties which stood outside the Quartet system: the Social Democrats and the Center (Catholic) Party. The former was doctrinaire in its attitude, being anticapitalist, pledged to the international brotherhood of labor, pacifist, democratic, and Marxist in an evolutionary, but not revolutionary, sense. The Center Party, like the Catholics who made it up' came from all levels of society and all the Catholics who made it up, came from all levels of society and all shades of ideology, but in practice were frequently opposed to the Quartet on specific issues.

     These two opposition parties underwent considerable change during the war. The Social Democrats always opposed the war in theory, but supported it on patriotic grounds by voting for credits to finance the war. Its minute Left wing refused to support the war even in this fashion as early as 1914. This extremist group, under Karl Liebknecht and Rosa Luxemburg, became known as the Spartacist Union and (after 1919) as the Communists. These extremists wanted an immediate and complete Socialist revolution with a soviet form of government. More moderate than the Spartacists was another group calling itself Independent Socialists. These voted war credits until 1917 when they refused to continue to do so and broke from the Social Democratic Party. The rest of the Social Democrats supported the war and the old monarchial system until November 1918 in fact, but in theory embraced an extreme type of evolutionary Socialism.

     The Center Party was aggressive and nationalist until 1917 when it became pacifist. Under Matthias Erzberger it allied with the Social Democrats to push through the Reichstag Peace Resolution of July 1917. The position of these various groups on the issue of aggressive nationalism was sharply revealed in the voting to ratify the Treaty of Brest-Litovsk imposed by the militarists, Junkers, and industrialists on a prostrate Russia. The Center Party voted to ratify; the Social Democrats abstained from voting; the Independents voted No.

     The "revolution" of November 1918 would have been a real revolution except for the opposition of the Social Democrats and the Center Party, for the Quartet in the crucial days of November and December 1918 were discouraged, discredited, and helpless. Outside the Quartet itself there w as, at that time and even later, only two small groups which could possibly have been used by the Quartet as rallying points about which could have been formed some mass support for the Quartet. These two small groups were the "indiscriminate nationalists" and the "mercenaries." The indiscriminate nationalists were those men, like Hitler, who were not able to distinguish between the German nation and the old monarchial system. These persons, because of their loyalty to the nation, were eager to rally to the support of the Quartet, which they regarded as identical with the nation. The mercenaries were a larger group who had no particular loyalty to anyone or to any idea but were willing to serve any group which could pay for such service. The only groups able to pay were two of the Quartet—the Officers' Corps and the industrialists—who organized many mercenaries into reactionary armed bands or "Free Corps" in 1918-1923.

     Instead of working for a revolution in 1918-1919, the two parties which dominated the situation—the Social Democrats and the Centrists— did all they could to prevent a revolution. They not only left the Quartet in their positions of responsibility and power—the landlords on their estates, the officers in their commands, the industrialists in control of their factories, and the bureaucracy in control of the police, the courts, and the administration—but they increased the influence of these groups because the actions of the Quartet were not restrained under the republic by that sense of honor or loyalty to the system which had restrained the use of their power under the monarchy.

     As early as November 10,1918, Friedrich Ebert, chief figure of the Social Democratic Party, made an agreement with the Officers' Corps in which he promised not to use the power of the new government to democratize the army if the officers would support the new government against the threat of the Independents and the Spartacists to establish a soviet system. As a consequence of this agreement Ebert kept a private telephone line from his office in the Chancellery to General Wilhelm Groener's office at the army's headquarters and consulted with the army on many critical political issues. As another consequence, Ebert and his Minister of War Gustav Noske, also a Social Democrat, used the army under its old monarchist officers to destroy the workers and radicals who sought to challenge the existing situation. This was done in Berlin in December 1918, in January 1919, and again in March 1919, and in other cities at other times. In these assaults the army had the pleasure of killing several thousand of the detested radicals..

     A somewhat similar anti-revolutionary agreement was made between heavy industry and the Socialist trade unions on November 11, 1918. On that day Hugo Stinnes, Albert V๖gler, and Alfred Hugenberg, representing industry, and Carl Legien, Otto Hue, and Hermann Mller representing the unions, signed an agreement to support each other in order to keep the factories functioning. Although this agreement was justified on opportunist grounds, it clearly showed that the so-called Socialists were not interested in economic or social reform but were merely interested in the narrow trade-union objectives of wages, hours, and working conditions. It was this narrow range of interests which ultimately destroyed the average German's faith in the Socialists or their unions.

     The history of the period from 1918 to 1933 cannot be understood without some knowledge of the chief political parties. There were almost forty parties, but only seven or eight were important. These were, from extreme Left to extreme Right, as follows:

          1. Spartacist Union (or Communist—KPD)

          2. Independent Socialist (USPD)

          3. Social Democrats (SPD)

          4. Democratic

          5. Center (including Bavarian People's Party)

          6. People's Party

          7. Nationalists

          8. "Racists" (including Nazis)

     Of these parties only the Democrats had any sincere and consistent belief in the democratic Republic. On the other hand the Communists, Independents, and many of the Social Democrats on the Left, as well as the "Racists," Nationalists, and many of the People's Party on the Right, were adverse to the Republic, or at best ambivalent. The Catholic Center Party, being formed on a religious rather than on a social basis, had members from all areas of the political and social spectrum.

     The political history of Germany from the armistice of 1918 to the arrival of Hitler to the chancellorship in January 1933 can be divided into three periods, thus:

          Period of Turmoil 1918-1924

          Period of Fulfillment 1924-1930

          Period of Disintegration 1930-1933

     During this span of over fourteen years, there were eight elections, in none of which did a single party obtain a majority of the seats in the Reichstag. Accordingly, every German Cabinet of the period was a coalition. The following table gives the results of these eight elections:

               Jan.     June     May     Dec.     May     July     Sept.     Nov.March

     Party          1919     1920     1924     1924     1928     1930     1932     19321933

     Communist     0     4     62     45     54     77     89     10081

     Independent

     Socialist      22     84

     Social

     Democrats     163     102     100     131     153     143     133     121120

     Democrats     75     39     28     32     25     20     4     2     5

     Center          91     64     65     69     62     68     75     70     74

     Bavarian

     People’s          21     16     19     16     19     22     20     18

     Economic

     Party          4     4     10     17     25     2     2     0     0

     German

     People’s

     Party          19     65     45     51     45     30     7     11     2

     Nationalists     44     71     95     103     73     41     37     52     52

     Nazis          0     0     32     14     12     107     230     196288

     On the basis of these elections Germany had twenty major Cabinet changes from 1919 to 1933. Generally these Cabinets were constructed about the Center and Democratic parties with the addition of representatives from either the Social Democrats or the People’s Party. On only two occasions (Gustav Stresemann in 1923 and Hermann Mller in 1928-1930) was it possible to obtain a Cabinet broad enough to include all four of these parties. Moreover, the second of these broad-front Cabinets was the only Cabinet after 1923 to include the Socialists and the only Cabinet after 1925 which did not include the Nationalists. This indicates clearly the drift to the Right in the German government after the resignation of Joseph Wirth in November 1922. This drift, as we shall see, was delayed by only two influences: the need for foreign loans and political concessions from the Western Powers and the recognition that both of these could be obtained better by a government which seemed to be republican and democratic in inclination than by a government which was obviously hand in glove with the Quartet.

     At the end of the war in 1918 the Socialists were in control, not because the Germans were Socialistic (for the party was not really Socialist) but because this was the only party which had been traditionally in opposition to the imperial system. A committee of six men was set up: three from the Social Democrats (Ebert, Philip Scheidemann, and Otto Landsberg) and three from the Independent Socialists (Hugo Haase, Wilhelm Dittman, and Emil Barth). This group ruled as a sort of combined emperor and chancellor and had the regular secretaries of state as their subordinates. These men did nothing to consolidate the republic or democracy and were opposed to any effort to take any steps toward Socialism. They even refused to nationalize the coal industry, something which was generally expected. Instead they wasted the opportunity by busying themselves with typical trade-union problems such as the eight-hour day (November 12, 1918) and collective bargaining methods (December 23, 1918).

     The critical problem was the form of government, with the choice resting between workers' and peasants' councils (soviets), already widely established, and a national assembly to set up an ordinary parliamentary system. The Socialist group preferred the latter, and were willing to use the regular army to enforce this choice. On this basis a counterrevolutionary agreement was made between Ebert and the General Staff. As a consequence of this agreement, the army attacked a Spartacist parade in Berlin on December 6, 1918, and liquidated the rebellious People's Naval Division on December 24, 1918. In protest at this violence the three Independent members of the government resigned. Their example was followed by other Independents throughout Germany, with the exception of Kurt Eisner in Munich. The next day the Spartacists formed the German Communist Party with a non-revolutionary program. Their declaration read, in part: "The Spartacist Union will never assume governmental power except in response to the plain and unmistakable wish of the great majority of the proletarian masses in Germany; and only as a result of a definite agreement of these masses with the aims and methods of the Spartacist Union."

     This pious expression, however, was the program of the leaders; the masses of the new party, and possibly the members of the Independent Socialist group as well, were enraged at the conservatism of the Social Democrats and began to get out of hand. The issue was joined on the question of councils versus National Assembly. The government, under Noske's direction, used regular troops in a bloody suppression of the Left (January 5-15), ending up with the murder of Rosa Luxemburg and Karl Liebknecht, the Communist leaders. The result was exactly as the Quartet wanted: the Communists and many non-Communist workers were permanently alienated from the Socialists and from the parliamentary republic. The Communist Party, deprived of leaders of its own, became a tool of Russian Communism. As a result of this repression, the army was able to disarm the workers at the very moment when it was beginning to arm reactionary private bands (Free Corps) of the Right. Both of these developments were encouraged by Ebert and Noske.

     Only in Bavaria was the alienation of Communist and Socialist and the disarmament of the former not carried out; Kurt Eisner, the Independent Socialist minister-president in Munich, prevented it. Accordingly, Eisner was murdered by Count Anton von Arco-Valley on February Zl, 1919. When the workers of Munich revolted, they were crushed by a combination of regular army and Free Corps amid scenes of horrible violence from both sides. Eisner was replaced as premier by a Social Democrat, Adolph Hoffman. Hoffman, on the night of March 13, 1920, was thrown out by a military coup which replaced him by a government of the Right under Gustav von Kahr.

     In the meantime, the National Assembly elected on June 19, 1919, drew up a parliamentary constitution under the guidance of Professor Hugo Preuss. This constitution provided for a president elected for seven years to be head of the state, a bicameral legislature, and a Cabinet responsible to the lower house of the legislature. The upper house, or Reichsrat, consisted of representatives of eighteen German states and had, in legislative matters, a suspensive veto which could be overcome by a two-thirds vote of the lower chamber. This lower chamber, or Reichstag, had 608 members, elected by a system of proportional representation on a party basis. The head of the government, to whom the president gave a mandate to form a Cabinet, was called the chancellor. The chief weaknesses of the constitution were the provisions for proportional representation and other provisions, by articles 25 and 48, which allowed the president to suspend constitutional guarantees and rule by decree, in periods of "national emergency." As early as 1925 the parties of the Right were planning to destroy the republic by the use of these powers.

     A direct challenge to the republic from the Right came in March 1920, when Captain Ehrhardt’s Brigade of the Free Corps marched into Berlin, forced the government to flee to Dresden, and set up a government under Wolfgang Kapp, an ultra-nationalist. Kapp was supported by the army commander in the Berlin area, Baron Walther von Lttwitz, who became Reichswehr minister in Kapp's government. Since General Hans von Seeckt, chief of staff, refused to support the legal government, it was helpless, and was saved only by a general strike of the workers in Berlin and a great proletarian rising in the industrial regions of western Germany. The Kapp government was unable to function, and collapsed, while the army proceeded to violate the territorial disarmament clauses of the Treaty of Versailles by invading the Ruhr in order to crush the workers' uprising in that area. Seeckt was rewarded for his non-cooperation by being appointed commander in chief in May 1920.

     As a consequence of these disturbances, the general election of July 1920 went against the "Weimar Coalition." A new government came in which was completely middle-class in its alignment, the Socialists of the Weimar Coalition being replaced by the party of big business, the German People's Party. Noske was replaced as Reichswehr minister by Otto Gessler, a willing tool of the Officers' Corps. Gessler, who held this critical position from March 1920 to January 1928, made no effort to subject the army to democratic, or even civilian, control, but cooperated in every way with Seeckt's secret efforts to evade the disarmament provisions of the peace treaties. German armaments factories were moved to Turkey, Russia, Sweden, the Netherlands, and Switzerland. German officers were drilled in prohibited weapons in Russia and China. Inside Germany, secret armaments were prepared on a considerable scale, and troops in excess of the treaty limits were organized in a "Black Reichswehr" which was supported by secret funds of the regular Reichswehr. The Reichstag had no control over either organization. When the Western Powers in 1920 demanded that the Free Corps be disbanded, these groups went underground and formed a parallel organization to the Black Reichswehr, being supplied with protection, funds, information, and arms from the Reichswehr and Conservatives. In return the Free Corps engaged in large-scale conspiracy and murder on behalf of the Conservatives. According to The Times of London, the Free Corps murdered four hundred victims of the Left and Center in one year.

     The middle-class Cabinet of Konstantin Fehrenbach resigned on May 4, 1921 and allowed the Weimar Coalition of Socialists, Democrats, and Center to take office to receive the reparations ultimatum of the Allied governments on May 5th. Thus, the democratic regime was further discredited in the eyes of Germans as an instrument of weakness, hardship, and shame. As soon as the job was done, the Socialists were replaced by the People's Party, and the Wirth Cabinet was succeeded by a purely middle-class government under Wilhelm Cuno, general manager of the Hamburg-American Steamship Line. It was this government which "managed" the hyperinflation of 1923 and the passive resistance against the French forces in the Ruhr. The inflation, which was a great benefit to the Quartet, destroyed the economic position of the middle classes and o\ver middle classes and permanently alienated them from the republic.

     The Cuno government was ended by a deal between Stresemann and the Socialists. The former, on behalf of the People's Party, which had hitherto been resolutely anti-republican, accepted the republic; the Socialists agreed to support a Stresemann Cabinet; and a broad coalition was formed for a policy of fulfillment of the Treaty of Versailles. This ended the Period of Turmoil (August 1923).

     The Period of Fulfillment (1923-1930) is associated with the name of Gustav Stresemann, who was in every Cabinet until his death in October 1929. A reactionary Pan-German and economic imperialist in the period before 1919, Stresemann was always a supporter of the Quartet, and the chief creator of the German People's Party, the party of heavy industry. In 1923, while still keeping his previous convictions, he decided that it would be good policy to reverse them publicly and adopt a program of support for the republic and fulfillment of treaty obligations. He did this because he realized that Germany was too weak to do anything else and that she could get stronger only by obtaining release from the more stringent treaty restrictions, by foreign loans from sympathetic British and American financiers, and by secret consolidation of the Quartet. All these things could be achieved more easily by a policy of fulfillment than by a policy of resistance like Cuno's.

     The Bavarian government of the Right, which had been installed under Gustav von Kahr in 1921, refused to accept Stresemann's decision to readmit the Socialists to the Reich government in Berlin. Instead, Kahr assumed dictatorial powers with the title of state commissioner of Bavaria. In reply the Stresemann Cabinet invested the executive power of the Reich in the Reichswehr minister, an act which had the effect of making von Seeckt the ruler of Germany. In terror of a rightist coup d’้tat (putsch), the Communist International decided to allow the German Communist Party to cooperate with the Socialists in an anti-Right front within the parliamentary regime. This was done at once in the states of Saxony and Thuringia. At this the Reichswehr commander in Bavaria, General Otto von Lossow, shifted his allegiance from Seeckt to Kahr. Stresemann-Seeckt in Berlin faced Kahr-Lossow in Munich with the "Red" governments of Saxony and Thuringia in between. The Reichswehr chiefly obeyed Berlin, while the Black Reichswehr and underground Free Corps (especially Ehrhardt's and Rossbach's) obeyed Munich. Kahr-Lossow, with the support of Hitler and Ludendorff, planned to invade Saxony and Thuringia, overthrow the Red governments on the pretext of suppressing Bolshevism, and then continue northward to overthrow the central government in Berlin. The Reich government headed this plot off by an illegal act: The Reichswohr forces of Seeckt overthrew the constitutional Red governments of Saxony and Thuringia to anticipate Bavaria. As a result, Lossow and Kahr gave up the plans for revolt, while Hitler and Ludendorff refused to do so. By the "Beer-Hall" Putsch of November 8, 1923, Hitler and Ludendorff tried to abduct Kahr and Lossow and force them to continue the revolt. They were overcome in a blast of gunfire. Kahr, Lossow, and Ludendorff were never punished; Hermann Goring fled the country; Hitler and Rudolf Hess were given living quarters in a fortress for a year, profiting by the occasion to write the famous volume Mein Kampf.

     In order to deal with the economic crisis and the inflation, Stresemann's government was granted dictatorial powers overriding all constitutional guarantees, except that the Socialists won a promise not to touch the eight-hour day or the social-insurance system. In this way the inflation was curbed, and a new monetary system was established; incidentally, the eight-hour day was abolished by decree (1923). A reparations agreement (the Dawes Plan) was made with the Allied governments, and the Ruhr was successfully evacuated. In the course of these events the Social Democrats abandoned the Stresemann government in protest at its illegal suppression of the Red government of Saxony, but the Stresemann program continued with the support of the parties of the Center and Right, including, for the first time, the support of the anti-Republican Nationalists. Indeed, the Nationalists with three or four seats in the Cabinet in 1926-1928 were the dominant force in the government, although they continued to protest in public against the policy of fulfillment, and Stresemann continued to pretend that his administration of that policy exposed him to imminent danger of assassination at the hands of the Right extremists.

     The German Cabinets from 1923 to 1930, under Wilhelm Marx, Hans Luther, Marx again, and finally Hermann Mller, were chiefly concerned with questions of foreign policy, with reparations, evacuation of the occupied areas, disarmament agitation, Locarno, and the League of Nations. On the domestic front, just as significant events were going on but with much less fanfare. Much of the industrial system, as well as many public buildings, was reconstructed by foreign loans. The Quartet were secretly strengthened and consolidated by reorganization of the tax structure, by utilization of governmental subsidies, and by the training and rearrangement of personnel. Alfred Hugenberg, the most violent and irreconcilable member of the Nationalist Party, built up a propaganda system through his ownership of scores of newspapers and a controlling interest in Ufa, the great motion-picture corporation. By such avenues as this, a pervasive propaganda campaign, based on existing German prejudices and intolerances, was put on to prepare the way for a counterrevolution by the Quartet. This campaign sought to show that all Germany's problems and misfortunes were caused by the democratic and laboring groups, by the internationalists, and by the Jews.

     The Center and Left shared this nationalist poison sufficiently to abstain from any effort to give the German people the true story of Germany's responsibility for the war and for her own hardships. Thus the Right was able to spread its own story of the war, that Germany had been overcome by "a stab in the back" from "the three Internationals": the "Gold" International of the Jews, the "Red" International of the Socialists, and the "Black" International of the Catholics, an unholy triple alliance which was symbolized in the gold, red, and black flag of the Weimar Republic. In this fashion every effort was made, and with considerable success, to divert popular animosity at the defeat of 1918 and the Versailles settlement from those who were really responsible to the democratic and republican groups. At the same time, German animosity against economic exploitation was directed away from the landlords and industrialists by racist doctrines which blamed all such problems on bad Jewish international bankers and department store owners.

     The general nationalism of the German people, and their willingness to accept the propaganda of the Right, succeeded in making Field Marshal Paul von Hindenburg president of the republic in 1925. On the first ballot none of seven candidates received a majority of the total vote, so the issue went to the polls again. On the second ballot Hindenburg received 14,655,766 votes, Marx (of the Center Party) received 13,751,615, while the Communist Ernst Thไlmann received 1,931,151.

     The victory of Hindenburg was a fatal blow to the republic. A mediocre military leader, and already on the verge of senility, the new president was a convinced anti-democrat and anti-republican. To bind his allegiance to the Quartet more closely, the landlords and industrialists took advantage of his eightieth birthday in 1927 to give him a Junker estate, Neudeck, in East Prussia. To avoid the inheritance tax, the deed to this estate was made out to the president's son, Colonel Oskar von Hindenburg. In time this estate came to be known as the "smallest concentration camp" in Germany, as the president spent his last years there cut off from the outside world by his senilities and a coterie of intriguers. These intriguers, who were able to influence the aged presidential mind in any direction they wished, consisted of Colonel Oskar, General Kurt von Schleicher, Dr. Otto Meissner, w ho remained head of the presidential office under Ebert, Hindenburg, and Hitler; and Elard von Oldenburg-Januschau who owned the estate next to Neudeck. This coterie was able to make and unseat Cabinets from 1930 to 1934, and controlled the use of the presidential power to rule by decree in that critical period.

     No sooner did Hindenburg become a landlord in October 1927 than he began to mobilize government assistance for the landlords. This assistance, known as Osthilfe (Eastern Help), was organized by a joint session of the Reich and Prussian governments presided over by Hindenburg on December 21, 1927. The stated purpose of this assistance was to increase the economic prosperity of the regions east of the Elbe River in order to stop the migration of Germans from that area to western Germany and their replacement by Polish farm laborers. This assistance soon became a sink of corruption, the money being diverted in one way or another, legally or illegally, to subsidize the bankrupt great estates and the extravagances of the Junker landlords. It was the threat of public revelation of this scandal which was the immediate cause of the death of the Weimar Republic by Hindenburg's hand in 1932.

     The combination of all of these events (the real power of the Quartet, the shortsighted and unprincipled opportunism of the Social Democrats and the Center Party, the coterie around Hindenburg, and the Osthilfe scandal) made possible the disintegration of the Weimar Republic in the years 1930-1933. The decision of the Quartet to attempt to establish a government satisfactory to themselves was made in 1929. The chief causes of the decision were (1) the realization that industrial plants had been largely rebuilt by foreign loans; (2) the knowledge that these foreign loans were now drying up and that, without them, neither reparations nor internal debts could be met except at a price which the Quartet was unwilling to pay; (3) the knowledge that the policy of fulfillment had accomplished about as much as could be expected from it, the Allied Control Missions having ended, rearmament having progressed as far as was possible under the Versailles Treaty, the western frontier having been made secure, and the eastern frontier having been opened to German penetration.

     The decision of the Quartet did not result from the economic crisis of 1929, but was made earlier in the year. This can be seen in the alliance of Hugenberg and Hitler to force a referendum on the Young Plan. The Quartet had accepted the much more severe Dawes Plan in 1924 because they were not then ready to destroy the Weimar regime. The challenge to the Young Plan not only indicated that they were ready; it also became an indication of their strength. This test was a disappointment, since they obtained only five million votes adverse to the plan from an electorate of 40 million. As a result, for the first time, the Nazis began a drive to build up a mass following. The moment for which they had been kept alive by the financial contributions of the Quartet had arrived. The effort would never have succeeded, however, were it not for the economic crisis. The intensity of this crisis can be measured by the number of Reichstag seats held by the Nazis:

     April          Dec.                    July     Dec.          March

     1924          1924     1928     1930     1932     1932          1933

     7          14     12     107          230     196          288

     The Nazis were financed by the Black Reichswehr from 1919 to 1923; then this support ceased because of army disgust at the fiasco of the Munich Putsch. This lack of enthusiasm for the Nazis by the army continued for years. It was inspired by social snobbery and fears of the Nazi Storm Troops (SA) as a possible rival to itself. This diffidence on the part of the army was compensated by the support of the industrialists, who financed the Nazis from Hitler's exit from prison in 1924 to the end of 1932.

     The destruction of the Weimar Republic has five stages:

          Brning:           March 27, 1930 May 30, 1932

          von Papen:           May 31, 1932-November 17, 1932

          Schleicher:           December 2, 1932-January 28, 1933

          Hitler:                January 30, 1933-March 5, 1933

          Gleichschaltung:      March 6, 1933-August 2, 1934

     When the economic crisis began in 1929, Germany had a democratic government of the Center and Social Democratic parties. The crisis resulted in a decrease in tax receipts and a parallel increase in demands for government welfare services. This brought to a head the latent dispute over orthodox and unorthodox financing of a depression. Big business and big finance were determined to place the burden of the depression on the working classes by forcing the government to adopt a policy of deflation—that is, by wage reductions and curtailment of government expenditures. The Social Democrats wavered in their attitude, but in general were opposed to this policy. Schacht, as president of the Reichsbank, was able to force the Socialist Rudolf Hilferding out of the position of minister of finance by refusing bank credit to the government until this was done. In March 1930, the Center broke the coalition on the issue of reduction of unemployment benefits, the Socialists were thrown out of the government, and Heinrich Brning, leader of the Center Party, came in as chancellor. Because he did not have a majority in the Reichstag, he had to put the deflationary policy into effect by the use of presidential decree under Article 48. This marked the end of the Weimar Republic, for it had never been intended that this "emergency clause" should be used in the ordinary process of government, although it had been used by Ebert in 1923 to abolish the eight-hour day. When the Reichstag condemned Brning's method by a vote of 236 to 221 on July 18, 1930, the chancellor dissolved it and called for new elections. The results of these were contrary to his hopes, since he lost seats both to the Right and to the Left. On his Right were 148 seats (107 Nazis and 41 Nationalists); on his Left were 220 seats (77 Communists and 143 Socialists). The Socialists permitted Brning to remain in office by refusing to vote on a motion of no confidence. Left in office, Brning continued the deflationary policy by decrees which Hindenburg signed. Thus, in effect, Hindenburg was the ruler of Germany, since he could dismiss or name any chancellor, or could permit one to govern by his own power of decree.

     Brning's policy of deflation was a disaster. The suffering of the people was terrible, with almost eight million unemployed out of twenty-five million employable. To compensate for this unpopular domestic policy, Brning adopted a more aggressive foreign policy, on such questions as reparations, union with Austria, or the World Disarmament Conference.

     In the crisis of 1929-1933, the bourgeois parties tended to dissolve to the profit of the extreme Left and the extreme Right. In this the Nazi Party profited more than the Communists for several reasons: (1) it had the financial support of the industrialists and landlords; (2) it was not internationalist, but nationalist, as any German party had to be; (3) it had never compromised itself by accepting the republic even temporarily, an advantage when most Germans tended to blame the republic for their troubles; (4) it was prepared to use violence, while the parties of the Left, even the Communists, were legalistic and relatively peaceful, because the police and judges were of the Right. The reasons why the Nazis, rather than the Nationalists, profited by the turn from moderation could be explained by the fact that (1) the Nationalists had compromised themselves and vacillated on every issue from 1924 to 1929, and (2) the Nazis had an advantage in that they were not clearly a party of the Right but were ambiguous; in fact, a large group of Germans considered the Nazis a revolutionary Left party differing from the Communists only in being patriotic.

     In this polarization of the political spectrum it was the middle classes which became unanchored, driven by desperation and panic. The Social Democrats were sufficiently fortified by trade unionism, and the Center Party members were sufficiently fortified by religion to resist the drift to extremism. Unfortunately, both these relatively stable groups lacked intelligent leadership and were too wedded to old ideas and narrow interests to find any appeal broad enough for a wide range of German voters.

     The whole of 1932 was filled with a series of intrigues and distrustful, shifting alliances among the various groups which sought to get into a position to use the presidential power of decree. On October 11, 1931, a great reactionary alliance was made of the Nazis, the Nationalists, the Stahlhelm (a militaristic veterans' organization), and the Junker Landbund. This so-called "Harzburg Front" pretended to be a unified opposition to Communism, but really represented part of the intrigue of these various groups to come to power. Of the real rulers of Germany, only the Westphalian industrialists and the army were absent. The industrialists were taken into camp by Hitler during a three-hour speech which he made at the Industrial Club of Dusseldorf at the invitation of Fritz Thyssen (January 27, 1932). The army could not be brought into line, since it was controlled by the presidential coterie, especially Schleicher and Hindenburg himself. Schleicher had political ambitions of his own, and the army traditionally would not commit itself in any open or formal fashion.

     In the middle of this crisis came the presidential election of March-April 1932. It offered a fantastic sight of a nominally democratic republic forced to choose its president from among four anti-democratic, anti-republican figures of which one (Hitler) had become a German citizen only a month previously by a legal trick. Since Hindenburg appeared as the least impossible of the four, he was reelected on the second ballot:

                              First Ballot     Second Ballot

          Hindenburg               18,661,736     19,359,533

          Hitler                    11,338,571     13,418,051

          Thไlmann, Communist     4,982,079     3,706,655

          Dsterberg, Stahlhelm               2,557,876

     Hindenburg continued to support Brning until the end of May 1932, when he dismissed him and put in Von Papen. This was done at the instigation of Von Schleicher who was hoping to build up some kind of broad-front coalition of nationalists and workers as a facade for the Reichswehr. In this plan Schleicher was able to get Hindenburg to abandon Brning by persuading him that the chancellor was planning to break up some of the bankrupt large estates east of the Elbe and might even investigate the Osthilfe scandals. Schleicher put in Papen as chancellor in the belief that Papen had so little support in the country that he would be completely dependent on Schleicher's ability to control Hindenburg. Instead, the president became so fond of Papen that the new chancellor was able to use Hindenburg's power directly, and even began to undermine the influence of Schleicher in the president's entourage.

     Papen's "Cabinet of the barons" was openly a government of the Quartet and had almost no support in the Reichstag and little support in the country. Papen and Schleicher realized that it could not last long. Each began to form a plot to consolidate himself and stop the polarization of political opinion in Germany. Papen's plot was to cut off the financial contributions from industry to Hitler and break down the Nazi Party's independence by a series of expensive elections. The chancellor felt sure that Hitler would he willing to come into a Cabinet of which Papen was head in order to recover the financial contributions from industry and prevent the disruption of his party. Schleicher, on the other hand, hoped to unite the Left wing of the Nazi Party under Otto Strasser with the Christian and Socialist labor unions to support the Reichwehr in a program of nationalism and unorthodox finance. Both plots dependent on retaining the favor of Hindenburg in order to retain control of the army and of the presidential power to issue decrees. In this, Papen was more successful than Schleicher, for the aged president had no liking for any unorthodox economic schemes.

     Papen's plot developed more rapidly than Schleicher's and appeared more hopeful because of his greater ability to control the president. Having persuaded his close friends, the industrialists, to stop their contributions to the Nazis, Papen called a new election for November 1932. In the balloting the Nazis were reduced from 230 to 196 seats, while the Communists were increased from 89 to 100. The tide had turned. This had three results: (1) Hitler decided to join a coalition government, which he had previously refused; (2) the Quartet decided to overthrow the republic in order to stop the swing to the Communists; and (3) the Quartet, especially the industrialists, decided that Hitler had learned a lesson and could safely be put into office as the figurehead of a Right government because he was growing weaker. The whole deal was arranged by Papen, himself a colonel and an industrialist as w ell as a Westphalian aristocrat, and was sealed in an agreement made at the home of the Cologne banker Baron Kurt von Schroder, on January 4, 933.

     This agreement came into effect because of Papen's ability to manage Hindenburg. On January 28, 1933, the president forced the resignation of Schleicher by refusing to grant him decree powers. Two days later Hitler came to office as chancellor in a Cabinet which contained only two other Nazis. These were Minister of Air Goring and Frick in the vital Ministry of the Interior. Of the other eight posts, two, the ministries of economics and agriculture, went to Hugenburg; the Ministry of Labor went to Franz Seldte of the Stahlhelm, the Foreign Ministry and the Reichswehr Ministry went to nonparty experts, and most of the remaining posts went to friends of Papen. It would not seem possible for Hitler, thus surrounded, ever to obtain control of Germany, yet within a year and a half he was dictator of the country.

Chapter 28: The Nazi Regime

Coming to Power, 1933—1934

     When Adolf Hitler became chancellor of the German Reich on January 30, 1933, he was not yet forty-four years old. From his birth in Austria in 1889 to the outbreak of war in 1914, his life had been a succession of failures, the seven years 1907-1914 being passed as a social derelict in Vienna and Munich. There he had become a fanatical Pan-German anti-Semite, attributing his own failures to the "intrigues of international Jewry."

     The outbreak of war in August 1914 gave Hitler the first real motivation of his life. He became a super-patriot, joined the Sixteenth Volunteer Bavarian Infantry, and served at the front for four years. In his way he was an excellent soldier. Attached to the regimental staff as messenger for the First Company, he was completely happy, always volunteering for the most dangerous tasks. Although his relations with his superiors were excellent and he was decorated with the Iron Cross, second class, in 1914 and with the Iron Cross, first class, in 1918, he was never promoted beyond Private, First Class, because he was incapable of having any real relationships with his fellow soldiers or of taking command of any group of them. He remained on active service at the front for four years. During that period his regiment of 3,500 suffered 3,260 killed in action, and Hitler himself was wounded twice. These were the only two occasions on which he left the front. In October 1918 he was blinded by mustard gas and sent to a hospital at Pasewalk, near Berlin. When he emerged a month later he found the war finished, Germany beaten, and the monarchy overthrown. He refused to become reconciled to this situation. Unable to accept either defeat or the republic, remembering the war as the second great love of his life (the first being his mother), he stayed with the army and eventually became a political spy for the Reichswehr, stationed near Munich. In the course of spying on the numerous political groups in Munich, Hitler became fascinated by the rantings of Gottfried Feder against the "interest slavery of the Jews." At some meetings Hitler himself became a participant, attacking the "Jewish plot to dominate the world" or ranting about the need for Pan-German unity. As a result he was asked to join the German Workers' Party, and did so, becoming one of about sixty regular members and the seventh member of its executive committee.

     The German Workers' Party had been founded by a Munich locksmith, Anton Drexler, on January 5, 1919, as a nationalist, Pan-German, workers' group. In a few months Captain Ernst Rohm of Franz von Epp's corps of the Black Reichswohr joined the movement and became the conduit by which secret Reichswehr funds, coming through Epp, were conveyed to the party. He also began to organize a strong-arm militia within the group (the Storm Troops, or SA). When Hitler joined in September 1919, he was put in charge of party publicity. Since this was the chief expense, and since Hitler also became the party's leading orator, public opinion soon came to regard the whole movement as Hitler's, and Rohm paid the Reichswehr's funds to Hitler directly.

     During 1920 the party grew from 54 to 3,000 members; it changed its name to National Socialist German Workers' Party, purchased the V๖lkischer Beobachter with 60,000 marks of General von Epp's money, and drew up its "Twenty-five-Point Program."

     The party program of 1920 was printed in the party literature for twenty-five years, but its provisions became more remote from attainment as years passed. Even in 1920, many of its clauses were put in to win support from the lower classes rather than because they were sincerely desired by the party leaders. These included (1) Pan-Germanism; (2) German international equality, including the abrogation of the Treaty of Versailles; (3) living space for Germans, including colonial areas; (4) German citizenship to be based on blood only, with no naturalization, no immigration for non-Germans, and all Jews or "other aliens" eliminated; (5) all unearned incomes to be abolished, the state to control all monopolies, to impose an excess-profits tax on corporations, to "communalize" the large department stores, to encourage small business in the allotment of government contracts, to take agricultural land for public purposes without compensation, and to provide old-age pensions;(6) to punish all war profiteers and usurers with death; and (7) to see that the press, education, culture, and religion conform to "the morals and religious sense of the German race."

     As the party grew, adding members and spreading out to link up with similar movements in other parts of Germany, Hitler strengthened his control of the group. He could do this because he had control of the party newspaper and of the chief source of money and was its chief public figure. In July 1921, he had the party constitution changed to give the president absolute power. He was elected president; Drexler was made honorary president; while Max Amann, Hitler's sergeant in the war, was made business manager. As a consequence of this event, the SA was reorganized under R๖hm, the word "Socialism" in the party name was interpreted to mean nationalism (or a society without class conflicts), and equality in party and state was replaced hy the "leadership principle" and the doctrine of the elite. Tn the next two years the party passed through a series of crises of which the chief was the attempted Putsch of November 9, 1923. During this period all kinds of violence and illegality, even murder, were condoned by the Bavarian and Munich authorities. As a result of the failures of this period, especially the abortive Putsch, Hitler became convinced that he must come to power by legal methods rather than by force; he broke with Ludendorff and ceased to be supported by the Reichswehr; he began to receive his chief financial support from the industrialists; he made a tacit alliance with the Bavarian People's Party by which Prime Minister Heinrich Held of Bavaria raised the ban on the Nazi Party in return for Hitler's repudiation of Ludendorff's anti-Christian teachings; and Hitler formed a new armed militia (the SS) to protect himself against Rohm's control of the old armed militia (the SA).

     In the period 1924-1930 the party continued, without any real growth, as a "lunatic fringe," subsidized by the industrialists. Among the chief contributors to the party in this period were Carl Bechstein (Berlin piano manufacturer), August Borsig (Berlin locomotive manufacturer), Emil Kirdorf (general manager of the Rhenish-Westphalian Coal Syndicate), Fritz Thyssen (owner of the United Steel Works and president of the German Industrial Council) and Albert V๖gler (general manager of the Gelsenkirchen Iron and Steel Company and formerly general manager of United Steel Works). During this period neither Hitler nor his supporters were seeking to create a mass movement. That did not come until 1930. But during this earlier period the party itself was steadily centralized, and the Leftish elements (like the Strasser brothers) were weakened or eliminated. In April 1927, Hitler spoke to 400 industrialists in Essen; in April 1928, he addressed a similar group of landlords from east of the Elbe; in January 1932 came one of his greatest triumphs when he spoke for 3 hours to the Industrial Club of Dsseldorf and won support and financial contributions from that powerful group. By that date he was seeking to build his movement into a mass political party capable of sweeping him into office. This project failed. As we have indicated, by the end of 1932 much of the financial support from industry had been cut off by Papen, and party membership was falling away, chiefly to the Communists. To stop this decline, Hitler agreed to become chancellor in a Cabinet in which there would be only three Nazis among eleven members. Papen hoped in this way to control the Nazis and to obtain from them the popular support which Papen had so sorely lacked in his own chancellorship in 1932. But Papen was far too clever for his own good. He, Hugenberg, Hindenburg, and the rest of the intriguers had underestimated Hitler. The latter, in return for Hugenberg's acceptance of new elections on March 5, 1933, promised that there would be no Cabinet changes whatever the outcome of the voting. In spite of the fact that the Nazis obtained only 44 per cent of the ballots in the new election, Hitler became dictator of Germany within eighteen months.

     One of the chief reasons for this success rests on the position of Prussia within Germany. Prussia was the greatest of the fourteen states of Germany. Covering almost two-thirds of the country, it included both the great rural areas of the east and the great industrial areas of the west. Thus it included the most conservative as well as the most progressive portions of Germany. While its influence was almost as great under the republic as it had been under the empire, this influence was of quite a different character, having changed from the chief bulwark of conservatism in the earlier period to the chief area of progressivism in the later period. This change w as made possible by the large numbers of enlightened groups in the Rhenish areas of Prussia, but chiefly by the fact that the so-called Weimar Coalition of Social Democrats, Center Party, and Liberal Democrats remained unbroken in Prussia from 1918 to 1932. As a consequence of this alliance, a Social Democrat, Otto Braun. held the position of prime minister of Prussia for almost the whole period 1920 1932, and Prussia was the chief obstacle in the path of the Nazis and of reaction in the critical days after 1930. As part of this movement the Prussian Cabinet in 1930 refused to allow either Communists or Nazis to hold municipal offices in Prussia, prohibited Prussian civil servants from holding membership in either of these two parties, and forbade the use of the Nazi uniform.

     This obstacle to extremism was removed on July 20, 1932, when Hindenburg, by presidential decree based on Article 48, appointed Papen commissioner for Prussia. Papen at once dismissed the eight members of the Prussian parliamentary Cabinet and granted their governmental functions to men named by himself. The dismissed ministers were removed from their offices by the power of the army, but at once challenged the legality of this action before the German Supreme Court at Leipzig. By its verdict of October 25, 1932, the court decided for the removed officials. In spite of this decision, Hitler, after only a week in the chancellorship, was able to obtain from Hindenburg a new decree which removed the Prussian ministers from office once more and conferred their powers on the federal vice-chancellor, Papen. Control of the police administration was conferred on Hermann Goring. The Nazis already held, through Wilhelm Frick, control of the Reich Ministry of Interior and thus of the national police powers. Thus Hitler, by February 7th, had control of the police powers both of the Reich and of Prussia.

     Using this advantage, the Nazis began a twofold assault on the opposition. Goring and Frick worked under a cloak of legality from above, while Captain Rohm in command of the Nazi Party storm troops worked without pretense of legality from below. All uncooperative police officials were retired, removed, or given vacations and were replaced by Nazi substitutes, usually Storm Troop leaders. On February 4, 1933, Hindenburg signed an emergency decree which gave the government the right to prohibit or control any meetings, uniforms, or newspapers. In this way most opposition meetings and newspapers were prevented from reaching the public.

     This attack on the opposition from above was accompanied by a violent assault from below, carried out by the SA. In desperate attacks in which eighteen Nazis and fifty-one opposition were killed, all Communist, most Socialist, and many Center Party meetings were disrupted. In spite of all this, it was evident a week before the election that the German people were not convinced. Accordingly, under circumstances which are still mysterious, a plot was worked out to burn the Reichstag building and blame the Communists. Most of the plotters were homosexuals and were able to persuade a degenerate moron from Holland named Van der Lubbe to go with them. After the building was set on fire, Van der Lubbe was left wandering about in it and was arrested by the police. The government at once arrested four Communists, including the party leader in the Reichstag (Ernst Torgler).

     The day following the fire (February 28, 1933) Hindenburg signed a decree suspending all civil liberties and giving the government power to invade any personal privacy, including the right to search private homes or confiscate property. At once all Communist members of the Reichstag, as well as thousands of others, were arrested, and all Communist and Social-Democrat papers were suspended for two weeks.

     The true story of the Reichstag fire was kept secret only with difficulty. Several persons who knew the truth, including a Nationalist Reichstag member, Dr. Oberfohren, were murdered in March and April to prevent their circulating the true story. Most of the Nazis who were in on the plot were murdered by Goring during the "blood purge" of June 30, 1934. The four Communists who were directly charged with the crime were acquitted by the regular German courts, although Van der Lubbe was convicted.

     In spite of these drastic measures, the election of March 5, 1933, was a failure from the Nazi point of view. Hitler's party received only 288 of 647 seats, or 43.9 percent of the total vote. The Nationalists obtained only 8 percent. The Communists obtained 81 seats, a decrease of 19, but the Socialists obtained 125, an increase of 4. The Center Party fell from 89 to 74, and the People's Party from 11 to 2. The Nationalists stayed at 5: seats. In the simultaneous election to the Prussian Diet, the Nazis obtained 211 and the Nationalists 43 out of 474 seats.

     The period from the election of March 5, 1933, to the death of Hindenburg on August :, 1934, is generally called the Period of Coordination (Gleichschaltung). The process was carried on, like the electoral campaign just finished, by illegal actions from below and legalistic actions from above. From below, on March 7th throughout Germany, the SA swept away much of the opposition by violence, driving it into hiding. They marched to most offices of trade unions, periodicals, and local governments, smashing them up, expelling their occupants, and raising the swastika flag. Minister of the Interior Wilhelm Frick condoned these actions by naming Nazis as police presidents in various German states (Baden, Saxony, Wrttemburg, Bavaria), including General von Epp in Bavaria. These men then proceeded to use their police powers to seize control of the apparatus of state government.

     The new Reichstag met on March 23rd at the Kroll Opera House. In order to secure a majority, the Nazis excluded from the session all of the Communist and 30 Socialist members, about 109 in all. The rest were asked to pass an "enabling act" which would give the government for four years the right to legislate by decree, without the need for the presidential signature, as in Article 48, and without constitutional restrictions except in respect to the powers of the Reichstag, the Reichsrat, and the presidency.

     Since this law required a two-third majority, it could have been beaten if only a small group of the Center Party had voted against it. To be sure, Hitler made it very clear that he was prepared to use violence against all who refused to cooperate with him, but his power to do so on a clear-cut constitutional issue in March 1933 was much less than it became later, since violence from him on such a question might well have arrayed the president and the Reichswehr against him.

     In spite of Hitler's intimidating speech, Otto Wels of the Social Democrats rose to explain why his party refused to support the bill. He was followed by Monsignor Kaas of the Center Party who explained that his Catholic Group would support it. The vote in favor of the bill was more than sufficient, being 441-94, with the Social Democrats forming the solid minority. Thus, this weak, timid, doctrinaire, and ignorant group redeemed themselves by their courage after the eleventh hour had passed.

     Under this "Enabling Act" the government issued a series of revolutionary decrees in the next few months. The diets of all the German states, except Prussia (which had had its own election on March 5th) were reconstituted in the proportions of votes in the national election of March 5th, except that the Communists were thrown out. Each party was given its quota of members and allowed to name the individual members on a purely party basis. A similar procedure was applied to local governments. Thus the Nazis received a majority in each body.

     A decree of April 7th gave the Reich government the right to name a governor of each German state. This was a new official empowered to enforce the policies of the Reich government even to the point of dismissing the state governments, including the prime ministers, diets, and the hitherto irremovable judges. This right was used in each state to make a Nazi governor and a Nazi prime minister. In Bavaria, for example, the two were Epp and Rohm, while in Prussia the two were Hitler and Goring. In many states the governor was the district leader of the Nazi Party, and where he was not, he was subject to that leader's orders. By a later law of January 30, 1934, the diets of the states were abolished; the sovereign powers of the states were transferred to the Reich; and the governors were made subordinates of the Reich Ministry of the Interior.

     All the political parties except the Nazis were abolished in May, June, and July 1933. The Communists had been outlawed on February 28th. The Social Democrats were enjoined from all activities on June 22nd, and were expelled from various governing bodies on July 7th. The German State Party (Democratic Party) and the German People's Party were dissolved on June 28th and July 4th. The Bavarian People's Party was smashed by the Storm Troopers on June 22nd, and disbanded itself on July 4th. The Center Party did the same on the following day. A series of pitched battles between the SA and the Stahlhelm in April-June 1933 ended with the absorption of the latter into the Nazi Party. The Nationalists were smashed by violence on June 21st; Hugenberg was unable to penetrate the SA guard around Hindenburg to protest; and on June 28th his party was dissolved. Finally, on July 14, 1933, the Nazi Party was declared to be the only recognized party in Germany.

     The middle classes were coordinated and disappointed. Wholesale and retail trade associations were consolidated into a Reich Corporation of German Trade under the Nazi Dr. von Renteln. On July 22nd the same man became president of the German Industrial and Trade Committee, which was a union of all the chambers of commerce. In Germany these last had been semipublic legal corporations.

     The breakup of the great department stores, which had been one of the Nazi promises to the petty bourgeoisie since Gottfried Feder's Twenty-five-Point program of 1920, was abandoned, according to Hess's announcement of July 7th. Moreover, liquidation of the cooperative societies, which had also been a promise of long duration, was abandoned by an announcement of July 19th. This last reversal resulted from the fact that most of the cooperatives had come under Nazi control by being taken over by the Labor Front on May 16 1933.

     Labor was coordinated without resistance, except from the Communists. The government declared May 1st a national holiday, and celebrated it with a speech by Hitler on the dignity of labor before a million persons at Tempelhof. The next day the SA seized all union buildings and offices, arrested all union leaders, and sent most of these to concentration camps. The unions themselves were incorporated into a Nazi German Labor Front under Robert Ley. The new leader, in an article in the V๖lkischer Beobachter, promised employers that henceforth they could be masters in their own houses as long as they served the nation (that is, the Nazi Party). Work was supplied for labor by reducing the work week to forty hours (with a corresponding wage cut), hy prohibiting aliens to work, by enforced "labor service" for the government, by grants of loans to married persons, by tax cuts for persons who spent money on repairs, by construction of military automobile roads, and so forth.

     Agriculture was coordinated only after Hugenberg left the government on June 29th and was replaced hy Richard Darr้ as Reich minister of food and Prussian minister of agriculture. The various land and peasant associations were merged into a single association of which Darr้ was president, while the various landlords' associations were united into the German Board of Agriculture of which Darr้ was president also.

     Religion was coordinated in various ways. The Evangelical Church was reorganized. When a non-Nazi, Friedrich von Bodelschwing, was elected Reich bishop in May 1933, he was forcibly removed from office, and the National Synod was forced to elect a Nazi, Ludwig Mller, in his place (September 27th). At the elections for Church assemblies in July 1933, government pressure was so great that a majority of Nazis was chosen in each. In 1935 a Ministry of Church Affairs under Hans Kerrl was set up with power to issue Church ordinances having the force of law and with complete control over Church property and funds. Prominent Protestant leaders, like Martin Niem๖ller, who objected to these steps, were arrested and sent to concentration camps.

     The Catholic Church made every effort to cooperate with the Nazis, but soon found it was impossible. It withdrew its condemnation of Nazism on March 28, 1933, and signed a Concordat with von Papen on July 20th. By this agreement the state recognized freedom of religious belief and of worship, exemption of the clergy from certain civic duties, and the right of the Church to manage its own affairs and to establish denominational schools. Governors of the German states were given a right to object to nominations to the highest clerical posts; bishops were to take an oath of loyalty, and education was to continue to function as it had been doing.

     This agreement with the Church began to break down almost at once. Within ten days of the signing of the Concordat, the Nazis began to attack the Catholic Youth League and the Catholic press. Church schools were restricted, and members of the clergy were arrested and tried on charges of evading the monetary foreign-exchange regulations and of immorality. The Church condemned the efforts of Nazis like Rosenberg to replace Christianity by a revived German paganism and such laws as that permitting sterilization of socially objectionable persons. Rosenberg's book, The Myth of the Twentieth Century, was put on the Index; Catholic scholars exposed its errors in a series of studies in 1934; and finally, on March 14, 1937, Pope Pius XI condemned many of the tenets of Nazism in the encyclical Mit brennender Sorge.

     Attempts to coordinate the civil service began with the law of April 7, 1933 and continued to the end of the regime without ever being completely successful because of the lack of capable personnel who were loyal Nazis. "Non-Aryans" (Jews) or persons married to "non-Aryans," politically unreliable persons, and "Marxists" were discharged, and loyalty to Nazism was required for appointment and promotion in the civil service.

     Of the chief elements in German society, only the presidency, the army, the Catholic Church, and industry were not coordinated by 1934. In addition, the bureaucracy was only partially controlled. The first of these, the presidency, was taken over completely in 1934 as the result of a deal with the army.

     By the spring of 1934 the problem of the SA had become acute, since this organization was directly challenging two members of the Quartet, the army and industry. Industry was being challenged by the demand of the SA for the "second revolution"—that is, for the economic reforms which would justify the use of the word "Socialism" in the name "National Socialism." The army was being challenged by the demand of Captain Rohm that his SA. be incorporated into the Reichswehr with each officer holding the same rank in the latter as he already held in the former. Since the Reichswehr had only 300,000 men while the SA had three million, this would have swamped the Officers' Corps. Hitler had denounced this project on July 1, 1933, and Frick repeated this ten days later. Nevertheless, R๖hm repeated his demand on April 18, 1934, and was echoed by Edmund Heines and Karl Ernst. In full Cabinet meeting Minister of War General von Blomberg refused.

     A tense situation developed. If Hindenburg died, the Reichswehr might have liquidated the Nazis and restored the monarchy. On June 21st Hindenburg ordered Blomberg to use the army, if necessary, to restore order in the country. This was regarded as a threat to the SA. Accordingly, Hitler made a deal to destroy the SA in return for a free hand to deal with the presidency w-hen it became vacant. This was done. A meeting of SA leaders was called by Hitler for June 30, 1934, at Bad Wiessee in Bavaria. The SS, under Hitler's personal command, arrested the SA leaders in the middle of the night and shot most of them at once. In Berlin, G๖ring did the same to the SA leaders there. Both Hitler and G๖ring also killed most of their personal enemies; the Reichstag incendiaries, Gregor Strasser, General and Mrs. von Schleicher, all of von Papen's close associates, Gustav von Kahr, all those who had known Hitler in the early days of his failure, and many others. Papen escaped only by a narrow margin. In all, several thousands were eliminated in this "blood purge."

     Two excuses were given for this violent action: that the murdered men were homosexuals (something which had been known for years) and that they were members of a conspiracy to murder Hitler. That they were in a conspiracy was quite true, but it was by no means mature in June 1934, and it was aimed at the army and heavy industry, and not at Hitler. In fact, Hitler had been wavering until the last moment whether he would throw in his lot with the "second revolution" or with the Quartet. His decision to join the latter and exterminate the former was an event of great significance. It irrevocably made the Nazi movement a counterrevolution of the Right, using the party organization as an instrument for protecting the economic status quo.

     The supporters of the "second revolution" were driven underground, forming a "Black Front" under the leadership of Otto Strasser. This movement was so ineffectual that the only choice facing the average German was the choice between the reactionary mode of life built about the surviving members of the Quartet (army and industry) and the completely irrational nihilism of the inner clique of the Nazi Party.

     Only as the regime approached its end did a third possible way appear: a revived progressive and cooperative Christian humanism which sprang from the reaction engendered within the Quartet by the realization that Nazi nihilism was merely the logical outcome of the Quartet's customary methods of pursuing its customary goals. Many of the persons associated with this new third way were destroyed by the Nazis in the systematic destructiveness which followed the attempt to assassinate Hitler on June 20, 1944.

     In return for Hitler's decisive step—the destruction of the SA on June 30, 1934—the army permitted Hitler to become president following Hindenburg's death in August. By combining the offices of president and chancellor, Hitler obtained the president's legal right to rule by decree, and obtained as well the supreme command of the army, a position which he solidified by requiring a personal oath of unconditional obedience from each soldier (Law of August 20, 1934). From this time on, in the minds of the Reichswehr and the bureaucracy, it was both legally and morally impossible to resist Hitler's orders.

The Rulers and the Ruled, 1934—1945

     Thus, by August 1934, the Nazi movement had reached its goal—the establishment of an authoritarian state in Germany. The word used here is "authoritarian," for, unlike the Fascist regime in Italy, the Nazi regime was not totalitarian. It was not totalitarian because two members of the Quartet were not coordinated, a third member was coordinated only incompletely and, unlike Italy or Soviet Russia, the economic system was not ruled by the state but was subject to "self-rule." All this is not in accord with popular opinion about the nature of the Nazi system either at the time it was flourishing or since. Newspaper men and journalistic writers applied the term "totalitarian" to the Nazi system, and the name has stuck without any real analysis of the facts as they existed. In fact, the Nazi system was not totalitarian either in theory or in practice.

     The Nazi movement, in its simplest analysis, was an aggregation of gangsters, neurotics, mercenaries, psychopaths, and merely discontented, with a small intermixture of idealists. This movement was built up by the Quartet as a counterrevolutionary force against, first, the Weimar Republic, internationalism, and democracy, and against, second, the dangers of social revolution, especially Communism, engendered by the world economic depression. This movement, once it came to power at the behest of the Quartet, took on life and goals of its own quite different from, and, indeed, largely inimical to, the life and goals of the Quartet. No showdown or open conflict ever arose between the movement and the Quartet. Instead, a modus vivendi was worked out by which the two chief members of the Quartet, industry and the army, obtained their desires, while the Nazis obtained the power and privileges for which they yearned.

     The seeds of conflict continued to exist and even to grow between the movement and its creators, especially because of the fact that the movement worked continually to create a substitute industrial system and a substitute army parallel to the old industrial system and the old Reichswehr. Here again the threatening conflict never broke out because the Second World War had the double result that it demonstrated the need for solidarity in the face of the enemy, and it brought great booty and profits to both sides—to the industrialists and Reichswehr on one hand and to the party on the other hand.

     Except for the rise of the party, and the profits, power, and prestige which accrued to the leaders (but not to the ordinary members) of the party, the structure of German society was not drastically changed after 1933. It was still sharply divided into two parts—the rulers and the ruled. The three chief changes were: (1) the methods and techniques by which the rulers controlled the ruled were modified and intensified, so that law and legal procedures practically vanished, and power (exercised through force, economic pressures, and propaganda) became much more naked and direct in its application; (2) the Quartet which had held real power from 1919 to 1933 were rearranged and increased to a Quintet, such as existed before 1914; and (3) the line between rulers and ruled was made sharper, with fewer persons in an ambiguous position than earlier in German history; this was made more acceptable to the ruled by creating a new third group of non-citizens (Jews and foreigners) which could be exploited and oppressed even by the second group of the ruled.

     The following table shows the approximate relationships of the ruling groups in the three periods of German history in the twentieth century:

     The Empire          The Weimar Republic          The Third Reich

     Emperor                                   Nazi Party (leaders only)

     Army               Army                         Industry

     Landlords          Bureaucracy                    Army

     Bureaucracy          Industry                    Bureaucracy

     Industry          Landlords                    Landlords

     The ruled groups below these rulers have remained roughly the same. In the Third Reich they included: (1) peasants; (2) laborers; (3) the petty bourgeoisie of clerks, retailers, artisans, small industry, and so on; (4) professional groups, such as doctors, druggists, teachers, engineers, dentists, and so on. Below these was the submerged group of "non-Aryans" and the inhabitants of occupied areas.

     A revealing light is cast on Nazi society by examining the positions of the ruling groups. We shall examine each of these in reverse order.

     The influence of the landlord group in the earlier period rested on tradition rather than on power. It was supported by a number of factors: (1) the close personal connections of the landlords with the emperor, the army, and the bureaucracy; (2) the peculiar voting rules in Germany which gave the landlords undue influence in Prussia and gave the state of Prussia undue influence in Germany; (3) the economic and social power of the landlords, especially east of the Elbe, a power based on their ability to bring pressure to bear on tenants and agricultural laborers in that area.

     All these sources of power were weakening, even under the empire. The republic and the Third Reich merely extended a process already well advanced. The economic power of the landlords was threatened by the agricultural crisis after 1880 and was clearly evident in their demand for tariff protection after 1895. The bankruptcy of the Junker estates was bound to undermine their political influence even if the state was willing to support them with subsidies and Osthilfe indefinitely. The departure of the emperor and the change in the position of the army and bureaucracy under the republic weakened these avenues of indirect influence by the landlords. The change in the voting regulations after 1918 and the ending of voting after 1933, combined with the increasing absorption of Prussia and the other Lไnder into a unified German state, reduced the political power of the landlord group. Finally, their social influence was weakened by the migration of German farm laborers from eastern to central and western Germany and their replacement by Slav farm labor.

     This decrease in the power of the landlord group continued under the Third Reich and was intensified by the fact that this group was the one segment of the Quartet which vv as successfully coordinated. The landlords lost most of their economic power because the control of their economic life was not left in the hands of the landlords as was done with industry. In both cases economic life was controlled, chiefly by cartels and associations, but in industry these were controlled by industrialists, while in agriculture they were controlled by the state in close cooperation with the party.

     Prices, production, conditions of sale, and, in fact, every detail about agriculture was in control of a government corporation called the Reichsnไhrstand which consisted of a complex of groups, associations, and boards. The leader of this complex was the minister of food and agriculture, named by Hitler. This leader appointed the subordinate leaders of all the member organizations of the Reichsnไhrstand, and these, in turn, named their subordinates. This process was continued down to the lowest individual, each leader naming his direct subordinates according to the “leadership principle." Every person engaged in any activity concerned with agriculture, food, or raw-material production, including lumber, fishing, dairying, and grazing belonged to one or several associations in the Reichsnไhrstand. The associations were organized both on a territorial and on a functional basis. On a functional basis they were organized in both vertical and horizontal associations. On a territorial basis were twenty regional "peasant-ships" (Landesbauernschaften) subdivided into 515 local "peasant-ships" (Kreisbauernschaften). On a horizontal basis were associations of persons in the same activity, such as grinding flour, churning butter, growing grain, and so on. On a vertical basis were associations of all persons concerned with the production and processing of any single commodity, such as grain or milk. These organizations, all formed on the "leadership principle," were chiefly concerned with prices and production quotas. These were controlled by the state, but prices were set at a level sufficient to give a profit to most participants, and quotas were based on assessments estimated by the farmers themselves.

     While the landlords lost power in this way, they received economic advantages. As befitted a counterrevolutionary movement, the Nazis increased the wealth and privileges of the landlords. The report on the Osthilfe scandal, which had been made for Schleicher in 1932, was permanently suppressed. The autarky program gave them a stable market for their products, shielding them from the vicissitudes which they had suffered under liberalism with its unstable markets and fluctuating prices. The prices fixed under Nazism were not high but were adequate, especially in combination with other advantages. By 1937, prices paid to farmers were 23 percent more than in 1933 although still 28 percent below those of 1925. Larger farms which used hired labor were aided by the prevention of unions, strikes, and rising wages. Labor forces were increased by using the labor services of boys and girls in the Nazi Youth Movement and Labor Service. Payments for interest and taxes were both reduced, the former from 950 million marks in 1929-1930 to 630 million marks in 1935-1936, and the latter from 740 million to 460 million marks in the same six years. Farmers were exempt completely from unemployment-insurance contributions which amounted to 19 million marks in 1932-1933. The constant threat of breaking up the bankrupt great estates was removed whether it arose from the state or from private creditors. All farms of over family size were made secure in possession of their owner's family, with no possibility of alienation, by increasing the use of entail on great estates and by the Hereditary Farms Act for lesser units.

     These benefits were greater for larger units than for smaller ones, and greatest for the large estates. While small farms (5 to 50 hectares), according to Max Sering, made a net return of 9 marks a hectare in 1925, large ones (over 100 hectares) lost 18 marks a hectare. In 1934 the corresponding figures were 28 and 53, a gain of 19 marks per hectare for small units and of 71 marks per hectare for large units. As a result of this growth in profitability of large units, the concentration of ownership of land in Germany was increased, thus reversing a trend. Both the number and the average size of large units increased.

     Thus the landlords won great privileges and rewards in the Third Reich, but at the cost of a drastic reduction in their power. They were coordinated, like the rest of society outside the ruling groups, with the result that they became the least important of these groups.

     The bureaucracy was not completely coordinated, but it found its power greatly reduced. The civil service was not, as we have indicated, purged of non-Nazis, although Jews and obvious anti-Nazis were generally retired. Only in the Ministry of Economics, perhaps because of the complete reorganization of the ministry, was there any extensive change at first. But this change did not bring in party members; it brought in men from private business. Outside the Ministry of Economics the chief changes were the ministers themselves and their secretaries of state. The newly created ministries, of course, had new men, but, except on the lowest levels, these were not chosen because they were party members. The old division of the bureaucracy into two classes (academic and non-academic), with the upper open only to those who passed an academic examination, continued. Only in the lowest, non-skilled ranks did party members overwhelm the service.

     By 1939, of l.5 million civil servants 28.2 percent were party members, 7.2 percent belonged to the SA, and 1.1 percent belonged to the SS. The act of 1933, which expelled non-Ayrans and political unreliables, affected only 1.1 percent (or 25 out of 2,339) of the top civil servants. But new recruits were overwhelmingly party members so that, in time, the bureaucracy would have become almost completely Nazi. The Civil Service Act of 1937 did not require party membership, but the candidate had to be loyal to the Nazi idea. In practice, 99 percent of those appointed to the grade of assessor (the lowest academic rank) were party members from 1933 to 1936. However, a law of December 28, 1939 stated, what had always been understood, that in his civil service work a party member was not subject to party orders but only to the orders of the civil service superior. Here again the lower ranks were more subject to party control by means of the office "party cell" which permitted party members to accomplish their ends by terror. This opens up an important, if nonofficial, aspect of this subject.

     A chief change was that where formerly the bureaucracy governed by rational, known rules, under the Nazis it increasingly governed by irrational and even unknown rules. Neither earlier nor later were these rules made by the bureaucracy itself, and to some extent the later rules, because of the bureaucracy's well-known anti-democratic proclivities, may have been more acceptable to the bureaucracy. More important was the influence of party terrorism, through the SA, the SS, and the secret police (Gestapo). Even more important was the growth, outside of the bureaucracy, of a party organization which countermanded and evaded the decisions and actions of the regular bureaucracy. The regular police were circumvented by the party police; the regular avenues of justice were bypassed by the party courts; the regular prisons were eclipsed by the party's concentration camps. As a result, Torgler, acquitted by the regular courts of the charge that he conspired to burn the Reichstag, was immediately thrown into a concentration camp by the secret police; and Niem๖ller, having served a brief term for violation of the religious regulations, was taken from a regular prison to a concentration camp.

     The Reichswehr Officers' Corps was not coordinated, hut found itself more subject to the Nazis than it ever was to the Weimar Republic. The republic could never have murdered generals as Hitler did in 1934. This weakening of the power of the army, however, was not in relationship to the party as much as it was in relationship to the state. Previously, the army very largely controlled the State; under the Third Reich the state controlled the army; but the party did not control the army and, for failure to do so, built up its own army (SS). There was a statutory provision which made it illegal for members of the armed services to be simultaneously members of the party. This incompatibility was revoked in the autumn of 1944. However, the army was quite completely subjected to Hitler as chief of the state although not as Fuhrer of the Nazi Party. The army had always been subordinated to the chief of the state. When Hitler obtained this position (with army consent) at the death of Hindenburg on August 2, 1934, he strengthened his position by requiring army officers to take their oath of loyalty to himself personally, and not merely to the German Fatherland as had been done previously. All this was possible because the army, although not coordinated, generally approved of what the Nazis were doing and, where they occasionally disagreed, did so only for tactical reasons. The relations between the two were well stated by Field Marshal Werner von Blomberg, Reich minister of war and commander in chief of the armed forces until February, 1939:.

     "Before 1938-1939, the German generals were not opposed to Hitler. There was no reason to oppose Hitler since he produced the results which they desired. After this time some generals began to condemn his methods and lost confidence in the power of his judgment. However, they failed as a group to take any definite stand against him, although a few of them tried to do so and, as a result, had to pay for this with their lives or their positions." To this statement it is necessary only to add that the German Officers' Corps maintained its autonomous condition and its control of the army by the destruction of its chief rival, the SA, on June 30, 1934. For this it paid on August 2, 1934. After that, it was too late for it to oppose the movement, even if it had wished to do so.

     The position of the industrialists in Nazi society w as complex and very important. In general, business had an extraordinary position. In the first place, it was the only one of the Quartet which drastically improved its position in the Third Reich. In the second place, it was the only one of the Quartet which was not coordinated significantly and in which the "leadership principle" was not applied. Instead, industry was left free of government and party control except in the widest terms and except for the exigencies of war, and was subjected instead to a pattern of self-regulation built up, not on the "leadership principle," but on a system where power was proportional to the size of the enterprise.

     In these strange exceptions we can find one of the central principles of the Nazi system. It is a principle which is often missed. We have been told that Germany had a corporate state or a totalitarian state. Neither was true. There was no real corporate organization (even fraudulent, as in Italy and Austria), and such an organization, much discussed before and after 1933, was quickly dropped by 1935. The term "totalitarian" cannot be applied to the German system of self-regulation, although it could be applied to the Soviet system.

     The Nazi system was dictatorial capitalism—that is, a society organized so that everything was subject to the benefit of capitalism; everything, that is, compatible with two limiting factors: (a) that the Nazi Party, which was not capitalist, was in control of the state, and (b) that war, which is not capitalist, could force curtailment of capitalist benefits (in the short run at least). In this judgment we must define our terms accurately. We define capitalism as "a system of economics in which production is based on profit for those who control the capital." In this definition one point must be noted: the expression "for those who control the capital" does not necessarily mean the owners. In modern economic conditions large-scale enterprise with widely dispersed stock-ownership has made management more important.... Accordingly, profits are not the same as dividends, and, in fact, dividends become objectionable to management, since they take profits out of its control.

     The traditional capitalist system was a profit system. In its pursuit of profits it was not primarily concerned with production, consumption, prosperity, high employment, national welfare, or anything else. As a result, its concentration on profits eventually served to injure profits.

     This development got the whole society into such a mess that enemies of the profit system began to rise up on all sides. Fascism was the counterattack of the profit system against these enemies. This counterattack was conducted in such a violent fashion that the whole appearance of society was changed, although, in the short run, the real structure was not greatly modified. In the long run Fascism threatened even the profit system, because the defenders of that system, businessmen rather than politicians, turned over the control of the state to a party of gangsters and lunatics who in the long run might turn to attack businessmen themselves.

     In the short run the Nazi movement achieved the aim of its creators. In order to secure profits it sought to avert six possible dangers to the profit system. These dangers were (1) from the state itself, (2) from organized labor; (3) from competition; (4) from depression; (5) from business losses; and (6) from alternative forms of economic production organized on nonprofit bases. These six all merged into one great danger, the danger from any social system in which production was organized on any basis other than profit. The fear of the owners and managers of the profit system for any system organized on any other basis became almost psychopathic.

     The danger to the profit system from the state has always existed because the state is not essentially organized on a profit basis. In Germany this danger from the state was averted by the industrialists taking over the state, not directly, but through an agent, the Nazi Party. Hitler indicated his willingness to act as such an agent in various ways: by reassurances, such as his Dusseldorf speech of 1932; by accepting, as a party leader and his chief economic adviser, a representative of heavy industry (Walter Funk) on the very day (December 31, 1931) on which that representative joined the party at the behest of the industrialists; by the purge of those who wanted the "second revolution" or a corporative or totalitarian state (June 30, 1934).

     That the industrialists' faith in Hitler on this account was not misplaced was soon demonstrated. As Gustav Krupp, the armaments manufacturer, writing to Hitler as the official representative of the Reich Association of German Industry, put it on April :5, 1933, "The turn of political events is in line with the wishes which I myself and the Board of Directors have cherished for a long time." This was true. The "second revolution" was publicly rejected by Hitler as early as July 1933, and many of its supporters sent to concentration camps, a development which reached its climax in the "blood purge" a year later. The radical Otto Wagener was replaced as chief economic adviser to the Nazi Party by a manufacturer, Wilhelm Keppler. The efforts to coordinate industry were summarily stopped. Many of the economic activities which had come under state control were "re-privatized." The United Steel Works, which the government had purchased from Ferdinand Flick in 1932, as well as three of the largest banks in Germany, which had been taken over during the crisis of 1931, were restored to private ownership at a loss to the government. Reinmetal-Borsig, one of the greatest corporations in heavy industry, was sold to the Hermann G๖ring Works. Many other important firms were sold to private investors. At the same time the property in industrial firms still held by the state was shifted from public control to joint public-private control by being subjected to a mixed board of directors. Finally, municipal enterprise was curtailed; its profits were taxed for the first time in 1935, and the law permitting municipal electric-power plants was revoked in the same year.

     The danger from labor was not nearly so great as might seem at first glance. It was not labor itself which was dangerous, because labor itself did not come directly and immediately in conflict with the profit system; rather it was with labor getting the wrong ideas, especially Marxist ideas which did seek to put the laborer directly in conflict with the profit system and with private ownership. As a result, the Nazi system sought to control the ideas and the organization of labor, and was quite as eager to control his free time and leisure activities as it was to control his working arrangements. For this reason it was not sufficient merely to smash the existing labor organizations. This would have left labor free and uncontrolled and able to pick up any kind of ideas. Nazism, therefore, did not try to destroy these organizations but to take them over. All the old unions were dissolved into the German Labor Front. This gave an amorphous body of 25 million in which the individual was lost. This Labor Front was a party organization, and its finances were under control of the party treasurer, Franz X. Schwarz.

     The Labor Front soon lost all of its economic activities, chiefly to the Ministry of Economics. An elaborate facade of fraudulent organizations which either never existed or never functioned was built up about the Labor Front. They included national and regional chambers of labor and a Federal Labor and Economic Council. In fact, the Labor Front had no economic or political functions and had nothing to do with wages or labor conditions. Its chief functions were (1) to propagandize; (2) to absorb the workers' leisure time, especially by the "Strength Through Joy" organization, ( 3 ) te tax workers for the party's profit; (4) to provide jobs for reliable party members within the Labor Front itself; (5) to disrupt working-class solidarity.

     This facade was painted with an elaborate ideology based on the idea that the factory or enterprise was a community in which leader and followers cooperated. The Charter of Labor of January 20, 1934, which established this, said, `'The leader of the plant decides against the followers in all matters pertaining to the plant in so far as they are regulated by statute." A pretense was made that these regulations merely applied the "leadership principle" to enterprise. It did no such thing. Under the "leadership principle" the leader was appointed from above. In business life the existing owner or manager became, ipso facto, leader. Under this system there were no collective agreements, no way in which any group defended the worker in the face of the great power of the employer. One of the chief instruments of duress w as the "workbook" carried by the worker, which had to be signed by the employer on entering or leaving any job. If the employer refused to sign, the worker could get no other job.

     Wage scales and conditions of labor, previously established by collective agreements, were made by a state employee, the labor trustee, created May 19, 1933. Under this control there was a steady downward reduction of working conditions, the chief change being from a period wage to a piecework payment. All overtime, holiday, night, and Sunday rates were abolished. The labor trustee was ordered to set maximum wage rates in June 1938, and a rigid ceiling was set in October 1939.

     In return for this exploitation of labor, enforced by the terroristic activity of the "party cell' in each plant, the worker received certain compensations of which the chief was the fact that he was no longer threatened with the danger of mass unemployment. Employment figures for Germany were 17.8 million persons in 1929, only 12.7 million in 1932, and 20 million by 1939. This increased economic activity went to non-consumers' goods rather than consumers' goods, as can be seen from the following indices of production:

                    1928          1929          1932     1938

     Production          100          100.9          58.7     124.7

     a. Capital goods     100          103.2          45.7     135.9

     b. Consumers’ goods     100          98.5          78.1     107.8

     Business hates competition. Such competition might appear in various forms: (a) prices; (b) for raw materials; (c) for markets; (d) potential competition (creation of new enterprises in the same activity); (c) for labor. All these make planning difficult, and jeopardize profits. Businessmen prefer to get together with competitors so that they can cooperate to exploit consumers to the benefit of profits instead of competing with each other to the injury of profits. In Germany this was done by three kinds of arrangements: (1) cartels (Kartelle), (2) trade associations (Fackverbไnde), and (3) employers' associations (Spitzen-verbไnde). The cartels regulated prices, production, and markets. The trade associations were political groups organized as chambers of commerce or agriculture. The employers' associations sought to control labor..

     All these existed long before Hitler came to power, an event that had relatively little influence on the cartels, but considerable influence on the other two. The economic power of cartels, left in the hands of businessmen, was greatly extended; the employers' associations were coordinated, subjected to party control through the establishment of the "leadership principle," and merged into the Labor Front, but had little to do, as all relations with labor (wages, hours, working conditions) were controlled by the state (through the Ministry of Economics and the labor trustee) and enforced by the party. The trade associations were also coordinated and subject to the "leadership principle," being organized into an elaborate hierarchy of chambers of economics, commerce, and industry, whose leaders were ultimately named by the Ministry of Economics.

     All this was to the taste of businessmen. While they, in theory, lost control of the three types of organizations, in fact they got what they wanted in all three. We have shown that the employers' associations were coordinated. Yet employers got the labor, wage, and working conditions they wanted, and abolished labor unions and collective bargaining, which had been their chief ambition in this field. In the second field (trade associations) activities were largely reduced to social and propaganda actions, but the leaders, even under the "leadership principle," continued to be prominent businessmen. Of 173 leaders throughout Germany, 9 were civil servants, only 21 were party members, 108 were businessmen, and the status of the rest is unknown. Of 17 leaders in provincial economic chambers, all were businessmen, of whom 14 were party members. In the third field, the activities of cartels were so extended that almost all forms of market competition were ended, and these activities were controlled by the biggest enterprises. The Nazis permitted the cartels to destroy all competition by forcing all business into cartels and giving these into the control of the biggest businessmen. At the same time it did all it could to benefit big business, to force mergers, and to destroy smaller businesses. A few examples of this process will suffice.

     A law of July 15, 1933, gave the minister of economics the right to make certain cartels compulsory, to regulate capacity of enterprises, and prohibit the creation of new enterprises. Hundreds of decrees were issued under this law. On the same day, the cartel statute of 1923 which prevented cartels from using boycotts against nonmembers was amended to permit this practice. As a result, cartels were able to prohibit new retail outlets, and frequently refused to supply wholesalers or retailers unless they did more than a minimum volume of business or had more than a minimum amount of capital. These actions were taken, for example, by the radio and the cigarette cartels.

     Cartels were controlled by big business, since voting power within the cartel was based on output or number of employees. Concentration of enterprise was increased by various expedients, such as granting public contracts only to large enterprises or by "Aryanization" (which forced Jews to sell out to established firms). As a result, on May 7, 1938, the Ministry of Economics reported that 90,448 out of 600,000 one-man firms had been closed in two years. The Corporation Law of 1937 facilitated mergers, refused to permit new corporations of below 500,000 marks capital, ordered all new shares to be issued at a par value of at least 1,000 marks, and ordered the dissolution of all corporations of less than 100,000 marks capital. By this last provision 20 percent of all corporations with 0.3 percent of all corporate capital were condemned. At the same time share-owners lost most of their rights against the board of directors, and on the board the power of the chairman was greatly extended. As an example of a change, the board could refuse information to stockholders on flimsy excuses.

     The control of raw materials, which was lacking under the Weimar Republic, was entrusted to the functional trade associations. After August 18, 1939, priority numbers, based on the decisions of the trade associations, were issued by the Reichstellen (subordinate offices of the Ministry of Economics). In some critical cases subordinate offices of the Reichstellen were set up as public offices to allot raw materials, but in each case these were only existing business organizations with a new name. In some cases, such as coal and paper, they were nothing but the existing cartels.

     In this way competition of the old kind was largely eliminated, and that, not by the state but by industrial self-regulation, and not at the expense of profits, but to the benefit of profits, especially of those enterprises which had supported the Nazis—large units in heavy industry.

     The threat to industry from depression was eliminated. This can be seen from the following figures:

                                   1929          1932     1938

National income, 1925-1934

prices billions - RM                         70.0          52.0     84.0

Per capita incomes, 1925-1934 prices - RM          1,089.0     998.0     1,226.0

Percentage of national incomes:

     to industry                         21.0%          17.4%     26.6%

     to workers                         68.8%          77.6%     63.1%

     to others                         10.2%          5.0%     10.3%

Number of corporate bankruptcies               116          134     7

Profit ratios of corporations

(heavy industry)                         4.06%          -6.94%     6.44%

     In the period after 1933 the threat to industry from forms of production based on a nonprofit organization of business largely vanished. Such threats could come from government ownership, from cooperatives, or from syndicalism. The last was destroyed by the destruction of the labor unions. The cooperatives were coordinated by being subjected "irrevocably and unconditionally to the command and administrative authority of the leader of the German Labor Front, Dr. Robert Ley," on May 13, 1933. The threat from public ownership was eliminated under Hitler, as we have indicated.

     It would seem, from these facts, that industry was riding the crest of the wave under Nazism. This is quite true. But industry had to share this crest with the party and the army.... Party participation in business activities was not the threat to industry which it might appear to be at first glance. These participations were the efforts of the party to secure an independent economic foundation, and were largely built up of unprofitable activities, or non-Aryan, non-German, or labor-union activities, and were not constructed at the expense of "legitimate" German industry. The Hermann G๖ring Works arose from government efforts to utilize low-grade iron ore in Brunswick. To this was added various other enterprises: those already in government control (which were thus shifted from a socialized to a profit-seeking basis), those taken from newly annexed areas, and those confiscated from Thyssen when he became a traitor. The Gustloff Works, in complete party control, were made up of non-Aryan properties. The Labor Front, with sixty-five corporations in 1938, was an improvement over the previous situation, since all, except the People's Auto enterprise (Volkswagen), were taken from labor unions. Other party activities were in publishing, a field of little concern to big industry, and largely non-Aryan previously.

     ... Industry wanted to prepare for war, since it was profitable.... [I]ndustry was not ruling Germany directly, but was ruling through an agent. It was not government of, by, and for industry, but government of and by the party and for industry. The interests and desires of these two were not identical. The party was largely paranoid, racist, violently nationalistic, and really believed its own propaganda about Germany's imperial mission through "blood and soil." Industry wanted re-armaments and an aggressive foreign policy to support these, not in order to carry out a paranoid policy but because this was the only kind of program they could see which would combine full employment of labor and equipment with profits. In the period 1936-1939 the policies of "rearmament for war" and "rearmament for profits" ran parallel courses. From 1939 on they ran parallel only because the two groups shared the booty of conquered areas and were divergent because of the danger of defeat. This danger was regarded as a necessary risk in pursuit of world conquest by the party; it was regarded as an unnecessary risk in pursuit of profits by industry.

     This brings us to the new ruling group, the party. The party was a ruling group only if we restrict the meaning of the term "party" to the relatively small group (a few thousand) of party leaders. The four million party members were not part of the ruling group, but merely a mass assembled to get the leaders in control of the state, but annoying and even dangerous once this was done. Accordingly, the period after 1933 saw a double action, a steady growth of power and influence for the Reichsleiter in respect to the ruled groups, the Quartet, and the ordinary members of the party itself, and, combined with this, a steady decrease in the influence of the party as a whole in respect to the state. In other words, the leaders controlled the state and the state controlled the party.

     At the head of the party was the Fhrer; then came about twoscore Reichsleiter; below these was the party hierarchy, organized by dividing Germany into 4 districts (Gaue) each under a Gauleiter; each district was subdivided into circles (Kreise) of which there were 808, each under a Kreisleiter; each Kreis was divided into chapters (Orts-gruppen), each under an Ortsgruppenleiter; these chapters were divided into cells (Zellen) and subdivided into blocks under Zellenleiter and Blockleiter. The Blockleiter had to supervise and spy on 40 to 60 families; the Zellenleiter had to supervise 4 to 8 blocks (200 to 400 families); and tie Ortsgruppenleiter had to supervise a town or district of up to 1,500 families through his 4 to 6 Zellenleiter.

     This party organization became in time a standing threat to the position of the industrialists. The threat became more direct after the outbreak of war in 1939, although, as we have indicated, the issue was suspended for the sake of sharing the booty and for the sake of solidarity in the face of the enemy. The three ruling groups, party, army, and industrialists, remained in precarious balance although secretly struggling for supremacy in the whole period 1934-1945. [Actually the industrialists were secretly in control of Hitler, the party and army.] In general, there was a slow extension of party superiority, although the party was never able to free itself from dependence on the army and business because of their technical competence.

     The army was brought partly under party control in 1934 when Hitler became president and obtained the oath of allegiance; this control was extended in 1938 when Hitler became commander in chief. This resulted in the creation of centers of intrigue within the Officers' Corps, but this intrigue, although it penetrated to the highest military level, never succeeded in doing more than wound Hitler once out of a dozen efforts to assassinate him. The power of the army was steadily subjected to Hitler. The old officers were removed from control of the fighting troops after their failure in Russia in December 1941, and by 1945 the Officers' Corps had been so disrupted from within that the army was being guided to defeat after defeat by nothing more tangible than Hitler's "intuition" in spite of the fact that most army officers objected to subjecting themselves and Germany to the jeopardies of such an unpredictable and unproductive authority.

     Business was in a somewhat similar but less extreme position. At first, unity of outlook seemed assured, largely because Hitler's mind was able to adopt the colors of an industrialist's mind whenever he made a speech to businessmen. By 1937 businessmen were convinced that armaments were productive, and by 1939 ... had even decided that war would he profitable. But once the war began, the urgent need for victory subjected industry [smaller industries, not large industries] to controls which were hardly compatible with the vision of industrial self-government which Hitler had adopted from business. The Four-Year Plan, created as early as 1936, became the entering wedge of outside control. After war began the new Ministry of Munitions under the control of Fritz Todt and Albert Speer (who were Nazis but not businessmen) began to dominate economic life.

     Outside its rather specialized area, the organization of the Four-Year Plan, almost completely Nazi, was transformed into a General Economic Council in 1939, and the whole range of economic life was, in 1943, subjected to four Nazis forming the Inner Defense Council. Industry accepted this situation because profits were still protected, promises of material advantages remained bright for years, and the hope did not die that these controls were no more than temporary wartime measures.

     Thus the precarious balance of power between party, army, and industry, followed in a secondary role by bureaucracy and landlords, drove themselves and the German people to a catastrophe so gigantic that it threatened for a while to destroy completely all the established institutions and relationships of German society.

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