Hell's Cartel

by Diarmuid Jeffreys

  What was commanding most of their attention, however, was the worryingly extreme rhetoric of the Nazi leader. As Hitler grew in political strength, the supposedly dangerous influence of Jews at the top levels of the nation’s leading industrial concerns became a regular theme in his speeches and in the party’s propaganda. Although IG Farben was by no means the only business singled out, it was targeted because several of the members of the Aufsichtsrat were Jewish, among them Arthur von Weinberg, Kurt Oppenheim, Max Warburg, Alfred Merton, Otto von Mendelssohn-Bartholdy, and Ernst von Simson. Their presence on the supervisory board, the Nazis claimed, was clear evidence that the concern was part of an international Jewish conspiracy of financiers intent on destroying Germany. Perversely enough, when these slurs were first made in 1927, they came from one of the firm’s own employees. Robert Ley was a chemist working at the old Bayer plant in Leverkusen but in his spare time he was also a local Nazi gauleiter. During one of his speeches he launched a fierce denunciation of Max Warburg, whose family had banking and investment interests in the United States as well as in Germany. The IG board sacked Ley when he refused to apologize but the incident presaged what was to come. By the summer of 1931 the IG was being regularly traduced in the Nazi press for its “disgraceful” susceptibility to Jewish pressure.

  The concern’s senior executives were made deeply uneasy by these attacks and tried their best to defuse them. Duisberg thought a direct appeal to the Nazis might help, so he enlisted his press secretary, Heinrich Gattineau, to contact Karl Haushofer, one of Hitler’s favorite intellectuals and, as it happened, Gattineau’s old university professor.* In June 1931, Gattineau wrote to Haushofer, explaining that the attacks on the IG were unfair because its leadership was actually composed of hardworking and patriotic German Christians who had only the country’s best interests at heart. He added, “If you could talk sometime to Herr H. about our situation … I would be most grateful.”

  Whether Haushofer did so or not isn’t clear, but the attacks diminished for a while. In an attempt to take advantage of the friendlier climate, Gattineau set up a tour of Leuna later that autumn for a group of Nazi economic specialists so they could see the concern’s famous synthetic fuel project for themselves. The experts were impressed and before they left they assured Gattineau that the IG’s work accorded completely with the goals of their movement. But the good relations didn’t last very long. The combine was too big and juicy a target. By the summer of 1932, the Nazi press was complaining again, only this time its theme was that the concern’s stranglehold on synthetic fuel, coupled with its internationalist tendencies, made a potentially vital technology dangerously vulnerable to foreign influences.

  This was exactly what Bosch didn’t want to hear. Just as he realized that the IG would have to approach the government for subsidies to keep Leuna going, the Nazis had substantially increased their presence in the Reichstag and were tightening their grip on the levers of power. Bosch had to find out what Hitler thought of the fuel project. He asked Gattineau to approach Haushofer and Rudolf Hess about arranging a meeting between Hitler and Heinrich Bütefisch, a young technical director at Leuna and—after Bosch himself—one of the IG’s most knowledgeable hydrogenation specialists.

  When Hitler arrived for the meeting in September 1932, both Gattineau and Bütefisch were immediately struck by how exhausted he looked and doubted whether they could hold his attention. They needn’t have worried. Hitler seemed eager and interested and quickly told them why: “Today an economy without oil is inconceivable in a Germany that wishes to remain politically independent. Therefore German motor fuel must become a reality, even if this entails sacrifices.… It is urgently necessary that the hydrogenation of coal be continued.” Germany’s deficiency in raw materials during World War I had been a decisive factor in its defeat, in Hitler’s view. Self-sufficiency in oil was therefore vital to reverse the country’s fortunes.

  As the discussion progressed, Gattineau was astonished by the Nazi leader’s apparent grasp of the scientific complexities. He recalled later that Hitler “surprised me again and again by his amazing understanding of technical matters.” In truth, Gattineau was probably a little overawed by the situation and took Hitler’s apparent ease with the jargon as evidence of knowledge that didn’t exist.* Nonetheless the interest seemed to be genuine and although the two-hour conversation never got as far as specific commitments, the IG men went away impressed. Carl Bosch’s feelings were more those of relief. After Bütefisch had told him what had happened, he said, “The man is more sensible than I thought.”

  Over the next few months, as the last acts in the Weimar drama were played out, there were no further official encounters between the two sides. The Nazis carried on complaining about the undue influence of Jews in key German industries but backed off from specific attacks on the IG; Bosch continued to fight a rearguard battle against those who were skeptical of his beloved fuel project. Support for the Nazis at the top levels of the cartel was limited to Wilhelm Mann, the head of the IG’s pharmaceutical interests and the only director on the Vorstand to join the NSDAP. He had obtained his party card in February 1932 but allowed his membership to lapse later in the year. Until the political situation became clearer, no one else, it seemed, was prepared to make an open commitment to Germany’s most popular party.

  Then came Adolf Hitler’s appointment as Reich chancellor and his prompt decision to hold fresh elections. The Nazi leader had not yet achieved the absolute authority he craved. In the Reichstag, he was short of a majority and had to rely on the support of the nationalist DNVP. In the cabinet, men from Hindenburg’s circle of aristocratic reactionaries, including Franz von Papen, who had been appointed vice chancellor, continued to occupy key posts. With the DNVP’s Alfred Hugenberg holding the Economics Ministry and the army’s General Werner von Blomberg at the Defense Ministry, the Nazis were left with only one other major office of state, that of minister of the interior, which went to Wilhelm Frick.

  Admittedly, the judicial powers of this latter post—augmented with those held by Hermann Göring as Reich minister without portfolio and acting Prussian minister of the interior—allowed the NSDAP considerable control over the forces of law and order, which could surely be used to the party’s advantage, but it wasn’t yet the out-and-out victory that Hitler had promised his supporters.*

  The window of opportunity for securing that victory was closing. For the past three years the Nazis had been riding a wave of popular discontent fed largely by economic failure and fears of a Soviet-style uprising. But the Depression was bottoming out and much of the rest of the world was already on the way to recovery. With the end of reparations having been secured at Lausanne, it would not be long before better times returned to Germany, too. When that happened, widespread anxiety about a Marxist revolution would surely dissipate and protest voters who had once flocked to the Nazis would soon revert to more moderate habits. Hitler knew that the elections, called for March 5, 1933, could be his last chance of obtaining a mandate and consolidating his position.

  And so, as the Nazis stepped up their marches and parades and began using their newly acquired police powers to suppress their opponents’ political activities, Hitler’s election apparatus geared up for one last surge. All that remained was to find someone willing to pay for it.

  * * *

  TWO AND A HALF weeks after Hitler’s appointment, twenty-five of Germany’s leading industrialists received a polite but pointedly worded telegram. It told them that they had been:

  INVITED RESPECTFULLY TO A CONFERENCE IN THE HOME OF THE PRESIDENT OF THE REICHSTAG, FREIDRICHEBERT STRASSE, ON MONDAY, FEBRUARY 20, 6 O’CLOCK AFTERNOON, DURING WHICH THE REICH CHANCELLOR WILL EXPLAIN HIS POLICIES. (SIGNED) PRESIDENT OF THE REICHSTAG GÖRING, MINISTER OF THE REICH.

  This wasn’t the first time the Nazis had tried to engage the interest of the business community, but until recently few bankers or industrialists had bothered to pay much attention. There had been some notable except
ions, of course. Fritz Thyssen, the steel manufacturer, had been an early supporter, as had Hjalmar Schacht, the banker who had overseen the stabilization of the mark back in 1924. Others were Friedrich Flick, a coal mine owner and a director of the Dresdener Bank; Robert Bosch, the electrical manufacturer (and Carl Bosch’s uncle); Hugo Stinnes, Otto Wolff, and Ernst Poensgen, all owners of Ruhr coal mines and steel plants; the influential financiers Kurt von Schroeder and Walter Funk; and Wilhelm Keppler, a minor industrialist. But even the most passionate of these supporters had been hedging their bets, flirting with other right-wing political groups and handing out discreet donations here and there until they could feel which way the wind was blowing. They were all committed nationalists, and profoundly conservative ones at that, but they were also businessmen—pragmatic, self-interested, and opportunistic—and not yet convinced that the Nazis were capable of running the country or the economy. Nevertheless, modest as they were, their donations had given the party at least the tincture of respectability during times when others of their class had seen only an ill-disciplined rabble and an outspoken Austrian parvenu.

  By 1932, however, the Nazi election machine required more money than this small core group of benefactors could supply. It had also become clear the party needed more influential sympathizers in the higher echelons of society if Hindenburg and his associates were ever to take the NSDAP seriously. Walter Funk and Kurt von Schroeder were thus charged with spreading the word among their fellow businessmen and arranging for Hitler to meet wealthy potential backers, while Wilhelm Keppler was asked to gather together a circle of likeminded individuals who could advise Hitler on how to win the support of the wider financial community.

  The Nazis’ hopes that this approach might pay dividends were given a small boost on January 27, 1932, when Fritz Thyssen invited over six hundred members of the Industrie Klub to a meeting at Düsseldorf’s Park Hotel. To the astonishment of many present, who had not been warned what to expect, Hitler made a dramatic entrance with a bodyguard of brownshirts and then proceeded to give a two-and-a-half-hour address. Despite the theatrics it was one of his more platitudinous speeches. He denounced Bolshevism, as he always did, and told them of his belief in the merits of private property and hard work. But he said nothing at all about the Jews and gave little if any detail of how he actually planned to revive the economy. Such things were principally a matter of national unity, he said. Marxism was the main obstacle to economic recovery. The National Socialists were working hard to overcome that threat and once it had been dealt with better times would follow.

  It would take more than vague generalities to impress such a knowledgeable audience. Although the meeting was hailed as a triumph by the party’s propagandists and there was a small increase in donations from the business community in the weeks that followed—Siemens, the Dresdener Bank, and United Steel were among those companies who gave money around this time—the flow soon dried to a trickle again and then the party’s accounts at the J. H. Stein bank in Cologne were as exhausted as they had been before. If the industrialists had been mildly reassured by the emollient nature of Hitler’s address (his rare omission of anything anti-Semitic was presumably carefully calculated to avoid alienating a group of people that might have Jewish friends and business associates), they were still not ready to give their support to a man who thought that patriotism and ideological ardor were the only remedies to Germany’s economic ills.

  Just over a year later, however, the situation had changed entirely. Hitler was now chancellor—albeit with a very tenuous hold on power—and, like it or not, business leaders were going to have to live with that fact. When the most powerful among them received telegrammed invitations to a select gathering at the official residence of the new president of the Reichstag, they therefore felt compelled to attend.

  The identities of many of those present that February evening have been lost to history (the event was meant to be confidential, after all, and later on there was little incentive for the attendees to own up to their presence), but the group was led by Gustav von Krupp, the head of the eponymous armaments concern that had been a central player in German military-economic circles since the Franco-Prussian War. As president of the Reichsverband der deutschen Industrie (RDI) and perhaps not yet fully attuned to the new realities, von Krupp had prepared a memorandum in advance of the meeting. In it he had set out some of his federation’s concerns about the Nazi Party’s fiscal program and the importance of keeping a “clear demarcation between the state and the economy.” It was clear that he expected a two-way discussion and as he took his seat in the front row he was probably reassuring his neighbors about what was to come.

  In the row immediately behind him sat four representatives from Europe’s largest corporation, IG Farben. Although the identities of two of the quartet are still a mystery, we do know that the concern’s two leading figures were not in attendance. That evening Carl Duisberg was at the IG plant at Leverkusen, near Cologne, preparing to flick the switch on the world’s largest electrical sign—a 236-foot-diameter Bayer Aspirin logo strung with thousands of lightbulbs. It is not clear whether his absence was due entirely to his legendary love of flummery and symbols (of which the giant sign was a perfect expression) or because he simply thought it wise to keep his distance from the Führer, but his nonattendance was noteworthy. As a hugely influential figure in German industry, Duisberg would normally have been expected to play a key role in such a gathering. He also had a reputation as one of the IG’s most ardent nationalists. As early as 1925 he had been telling the RDI that Germany needed “a strong man,” something “always necessary for us Germans, as we have seen in the case of Bismarck”; a year later he publicly called for “leaders who can act without concern for the caprices of the masses.” But though his instincts were undoubtedly authoritarian, they were always more Hindenburgian than Nazi and it is doubtful that such a patrician figure would ever have had much time for the Austrian upstart.

  Carl Bosch was absent too. The IG boss had his obsessions but they tended to be scientific rather than political. Though he certainly would have been invited, it was more his style to avoid making personal political commitments unless absolutely necessary. In such matters his normal boldness gave way to caution. He left the grand statements to others and sat back to watch events unfold.

  The two IG attendees whose identities are known were both members of the Vorstand. One, Gustav Stein, was a relatively minor director who was also head of the Gewerkschaft Auguste-Victoria, an IG subsidiary. The other, Baron Georg von Schnitzler, was a much more significant figure, the IG’s commercial chief and head of its Dyes Committee. Although formally the leader of the concern’s four-man party, he later claimed to have had only a watching brief. His role was to listen and observe and then report back to Bosch with a confidential account of what had transpired.

  At the outset, Hitler made a point of shaking everyone’s hand. This was one of his standard gambits in small gatherings because it allowed him to stare straight into the eyes of the person he was talking to—a disconcerting experience for those who hadn’t met him before and a useful trick for influencing people. Then, speaking without notes, he addressed the assembled group for the next ninety minutes.

  The first half of his speech was in keeping with most of his previous statements to business audiences. Again avoiding any mention of Jews, he restated his commitment to private property and his belief in the merits of enterprise. He touched on rearmament, Germany’s right to self-determination, and the importance of a martial spirit in resolving economic questions. Other familiar themes followed: the threat of Marxism, the failures of democracy to combat it, and the Nazis’ historic struggle to provide “salvation from the Communist menace.” Then he hit his stride and spelled out the message that he wanted delivered loud and clear: only one chance remained to work within the system, one final election to restore national unity and power. Should it fail, he assured his listeners, “there will be no retreat.… There are
only two possibilities, either to push back the opposition on constitutional grounds … or the struggle will be conducted with other weapons, which may demand greater sacrifices.”

  Hitler’s meaning was plain: if the Nazis didn’t win at the polls there would be all-out civil war. Leaving this stark ultimatum ringing in his audience’s ears, he sat down.

  After a moment’s dazed silence, Gustav von Krupp rose to thank him, having clearly decided that the chances of dialogue were slim and that the proceedings should therefore be brought to an end. But before he could speak, Hermann Göring took to the floor. In order to fight the next election the NSDAP needed money, he told the audience, and they were going to have to provide it. It was only right that “business should carry the burden of this struggle, as befits its position.” Then, in words heavy with sardonic consolation, he added, “The sacrifices asked for will be easier for industry to bear if it is realized that the election of March 5 will surely be the last one for the next ten years, probably even for the next hundred years.”

  As Hitler and Göring left the room to the whispering executives, the Nazi financier Hjalmar Schacht got to his feet and administered the final sting. “And now, gentlemen, pay up!” Three million reichsmarks were required and the sooner they were handed over the better. Most of those present reached for their checkbooks, but Georg von Schnitzler told Schacht that he lacked the authority to pledge an immediate contribution. He would have to speak to his colleagues first. Two days later he sat down with Carl Bosch to report on the meeting. The IG’s boss heard him out in silence and then “shrugged his shoulders in reply.” To Schnitzler it seemed that Bosch had already come to a decision.