The Third Reich in Power

by Evans, Richard J.

  Nevertheless, the department stores soon began to experience discrimination in less obvious ways. When the Ministry of Finance began to issue marriage loans from the summer of 1933 onwards, for instance, the purchase coupons through which the loans were made were not allowed to be redeemed in department stores, whether or not they were Jewish-owned, or in Jewish businesses of any kind. One official report estimated that those shops and businesses affected lost at least 135 million Reichsmarks in sales in 1934. Department stores, irrespective of their ownership, and Jewish businesses of all kinds were also banned from advertising in the press from the middle of 1933 onwards. Coming on top of a decline in sales that had begun already with the onset of the Depression in 1933, this got them into serious difficulties. Sales figures for the Hermann Tietz stores fell by up to 41 per cent in 1933. The company was forced to seek a loan of 14 million Reichsmarks from the banks. Brokered by Economics Minister Schmitt, who wanted to avoid a spectacular bankruptcy involving the loss of 14,000 jobs, serious damage to suppliers and financial problems for the banks, the loan was made conditional on the ‘Aryanization’ of the management, or in other words the removal of Jewish owners, board members and other senior officials. The remaining Tietz brothers were forced out in 1934 after a lengthy audit, with a compensation of 1.2 million Reichsmarks. Covering his back, Schmitt made sure to obtain Hitler’s approval for these arrangements. From now on the stores were known under the name Hertie, which ingeniously kept the link to their founder’s name while at the same time advertising to everyone that the business had been placed on a new footing; Leonard Tietz’s stores were renamed with the neutral-sounding title of Kaufhof, or ‘shopping court’.135

  These events prompted the remaining members of the Wertheim family to take action to preserve their own interests. A family friend, the banker Emil Georg von Stauss, who knew Hitler and Göring personally and supported the Nazi Party in various ways, was brought onto the board. His protection ensured that attempts by stormtroopers to close down the Wertheim store in Breslau were frustrated. But Nazi Party activists, especially those connected with its trade union branch, the Factory Cell Organization, barred Georg Wertheim from going into his own stores. He never ventured into one after 1934 and stopped taking part in meetings of the company’s supervisory board. To avoid a repetition of the problems that had assailed the Tietz family, he transferred his shares and some of his late brother’s to his wife Ursula, who was not Jewish. She now became the majority shareholder. However, this did not get the firm out of difficulties. As Hertie and other chains successfully neutralized the Nazi assault on department stores by making it clear that they were not Jewish-owned, the hostility of both local Nazis and the central government and Party organizations was directed more precisely towards the chains, like Wertheim, that still were. The Propaganda Ministry ordered all Wertheim’s book departments to be closed early in 1936 following a denunciation by a former employee in Breslau, though the firm had already withdrawn at least 2,500 banned books from its shelves. Stauss managed to reverse the order, though only at the price of a donation of 24,000 Reichsmarks from the firm to the German Schiller Foundation. Complaining about such pressures in an interview with the Minister of Economics, Georg Wertheim and his son were told by Schacht: ‘You have to howl with the wolves.’136

  The howling increased noticeably in 1936. Wertheim’s sales had in fact grown while those of its rivals had fallen. This may have been because the removal of Jewish managers and employees from rival chains had led to the appointment of inexperienced personnel in their stead, or because only Wertheim had retained its well-known and trusted image, name and style intact. Nevertheless, Stauss, who now held Ursula Wertheim’s shares in trust while she spent her income on expensive holidays, first forced the smaller family shareholders to transfer their shares to non-Jewish shareholders at well below their value, then made it clear to Georg and Ursula Wertheim that Hess’s office demanded that they must divorce if she was to be allowed to keep her shares; they did so in 1938. Charged by Hitler with buying land in Berlin on which the new Reich Chancellery was to be built, Stauss selected a site occupied by a number of properties owned by Wertheim, had the banks undervalue them to save money, then pressured Wertheim into selling them to pay off some of the debts that creditor banks were now calling in. By 1938 there were no more Jewish shareholders, both Jewish managers had been forced out, and the last thirty-four Jewish employees had been fired; there is no evidence that they received any severance pay, in contrast to their colleagues in the other chains. In consultation with the Ministry of Economics, Stauss agreed to change the stores’ name from Wertheim to AWAG. This was a similar though less obvious compromise to the renaming agreed on for Tietz. Most people thought the new name was an acronym for A. Wertheim AG (Albrecht Wertheim Aktien-Gesellschaft , or Albrecht Wertheim Company). But it actually stood for Allgemeine Warenhaus Aktien-Gesellschaft, or General Department Store Company, thus severing it from any association with the family at all. Georg Wertheim, now over eighty years old and nearly blind, died on 31 December 1939. A year later, his widow married Arthur Lindgens, a non-Jewish member of the supervisory board of the new company.137

  II

  The fate of the department stores illustrated in microcosm how the Nazi Party’s priorities had changed since 1920. Starting off with a pronounced anti-capitalist message, they had first soft-pedalled it under the influence of economic necessity, then substituted for it a determined drive to remove the Jews from the German economy. The department stores themselves did not disappear; indeed, the campaign against Jewish owners opened up new opportunities for non-Jewish companies to expand their operations. If, as the Nazis claimed, the country’s economic ills in the 1920s and early 1930s had originated with the Jews, then would they not be solved by, among other things, getting rid of the Jewish economic influence on business rather than by attacking business itself? The boycott of 1 April 1933 had already advertised the Party’s intentions in this respect. Although the boycott itself had met with relatively little public support, local Party groups continued to harass and attack Jewish shops and businesses, as the example of the Wertheim store in Breslau indicated. Stormtroopers continued to paint slogans on the display windows of Jewish-owned shops, to discourage people from patronizing such establishments, or to pressure local authorities into placing their orders elsewhere. Alarmed at the economic effects of such actions, the government and the Party issued a series of official warnings. Hitler himself issued a declaration at the beginning of October 1933 expressly permitting civil servants to buy goods in Jewish-owned shops and department stores. Yet in 1933’s Christmas shopping season, gangs of stormtroopers were again standing outside Jewish-owned shops in many localities with placards proclaiming anyone who went inside to be a traitor to the German race. Increasing numbers of local markets barred Jewish traders, no Jewish firms were permitted to advertise any more, local authorities broke off all business relations with Jewish-owned companies, and there were further, quite widespread boycott actions again in the spring of 1934. Violence often accompanied such events, ranging from the smashing of Jewish shop windows to a bomb attack on the synagogue in Ahaus, Westphalia. It culminated in a mass demonstration of up to 1,500 inhabitants of the town of Gunzenhausen, in Franconia - a town whose entire population numbered no more than 5,600. Inflamed by a vehemently antisemitic speech from a local Nazi leader, the demonstrators broke into the houses and flats of Jews in the town, and dragged thirty-five people off to the local prison, where one was subsequently found hanged.138

  German consumers gave little support to boycott actions. Under threat of reprisals if they patronized Jewish shops in their own small town, people in Falkenstein, noted the diarist Victor Klemperer in June 1934, travelled to nearby Auerbach to shop in a Jewish establishment there, where they would not be recognized; the inhabitants of Auerbach in turn visited the Jewish shop in Falkenstein.139 Even Hermann Göring was seen as late as 1936 paying a lengthy visit to Bernheimer’s carp
et store in Munich, which ended with the purchase of two carpets for the impressive sum of 36,000 Reichsmarks. The February sales at Sally Eichengrün’s textile house in Munich in the same year were said by the local police to be attracting queues of customers. Both enterprises were Jewish-owned. The following year, the Security Service of the SS complained that - especially in Catholic areas - people were still ignoring the Party’s exhortations not to buy from Jewish businesses.140 Nevertheless, Party activists were not deterred. Many of them were motivated by the personal desire to get rid of business rivals at a time when the consumer economy was in the doldrums.141 Violent boycott campaigns continued throughout 1934 and reached a new high point in the Christmas shopping season. In November, for example, the district Party leadership of Baden-Baden sent the following threatening letter to a Jewish-owned toyshop, informing the owner: That we will in no way tolerate you, as a non-Aryan toyshop, selling models of SA and SS men. People are already upset by this and complaining to us about it. So we urgently request you to take these SA and SS model figures out of your Jew-shop, otherwise we will not be in any position to guarantee public order and tranquillity.142

  On 23 and 24 December 1934, Party members in civilian clothing blocked the entrances to Jewish-owned shops and department stores in Frankfurt am Main, and shouted insults at customers, beating up those who persisted in trying to go in. They smashed the shop windows, and when police arrived to arrest them, they became so threatening that the officers had to draw their weapons.143 This campaign proved the prelude to a much wider wave of economic terror, in which local Party organizations threatened to withdraw welfare payments from anyone seen entering a Jewish-owned shop. Civil servants and municipal employees in many localities were ordered to stay clear of such establishments. Such actions were particularly common in small-town Pomerania, Hesse and Central Franconia. In Marburg a large group of students entered a Jewish-owned shoe shop, drove out the customers and looted or destroyed the contents. In Büdingen almost all the shop windows of

  Jewish-owned retailers were smashed in the night of 18-19 April 1935. Similar incidents took place elsewhere. As these actions died down, a new wave of antisemitic attacks on Jewish-owned shops rolled across the country in the summer of 1935, including a total boycott in the centre of Munich on 25 May, carried out mainly by SS men in civilian clothes, some of whom burst into the shops and beat up the assistants. The action only came to an end after the boycotteers tried to storm a police station to release one of their number who had been arrested.144

  The reaction of government ministers to these actions was mixed. Foreign Minister von Neurath for example told his colleagues that the antisemitic incidents would have no effect on foreign opinion; stopping them was not going to lead to any improvement in Germany’s international position. On the other hand, Economics Minister Hjalmar Schacht declared himself extremely worried about their effect on the economy, including economic relations with other countries. Indeed, when the Party organization in the town of Arnswalde, in Brandenburg, put up a picture of the wife of the local branch manager of the Reichsbank in a display cabinet as a ‘traitor’ because she had been seen shopping at a Jewish-owned establishment, Schacht closed the branch in protest. On 18 August 1935 he spoke out in a public address held in Königsberg. ‘Lord’, he said, ‘preserve me from my friends. That is,’ he went on, ‘from the people who heroically daub shop windows under cover of darkness, branding every German who buys goods in a Jewish shop as a traitor to the people . . .’ Nevertheless, Schacht, despite his later claims to the contrary, was not opposed in principle to driving the Jews out of economic life. He believed, as he explained to a group of ministers and senior officials two days later, ‘that letting this lawlessness take its course among other things puts a question mark under rearmament. His remarks’, the minutes of the meeting reported, ‘culminated in the statement that the programme of the NSDAP must be carried out, but only on the basis of legal decrees.’ Schacht agreed with the Gestapo and Party representatives that the way forward lay in an orderly, legal restriction of the ability of Jews to engage in business, the public marking of Jewish shops as such, and the exclusion of Jewish businesses from public contracts. 145 Indeed, Schacht shared in full measure the antisemitic prejudices of many bourgeois Germans, remarking as late as 1953 that Jews had brought an ‘alien spirit’ into German culture in the Weimar Republic, and had been too prominent in many areas of public life.146 He co-operated fully in the dismissal of Jewish officials from the Reichsbank under the so-called Law for the Re-establishment of a Professional Civil Service and publicly defended the antisemitic laws passed by the regime in the years 1933 and 1935; it was only open violence that he rejected.147

  Yet there were less violent means of putting pressure on Jewish firms, and these were often more effective. The huge size of Nazi organizations like the SA, the Labour Front or indeed the Party itself gave them a great deal of economic power through the placing of bulk orders for constructions, furnishings, flags, uniforms and supplies of all kinds. They used these from the outset to discriminate against Jewish-owned businesses. The shoe industry was a case in point. Under the Third Reich, not surprisingly, it profited enormously from a tremendous rise in demand for jackboots. But these orders went of course to non-Jewish companies. Jewish-owned firms, however, dominated the industry, so that there was an immediate pressure on them to Aryanize. Almost as soon as Hitler became Reich Chancellor, for example, a campaign began against the Salamander shoe company, which was half Jewish-owned and had contracts with about 2,000 individually owned branches, some 500 of which were also Jewish-owned. Stormtroopers had already burst into some of these shops and closed them down by the end of March 1933, while the Nazi press organized a boycott campaign against the firm itself, accusing it (without any justification) of fleecing its customers and ensuring that it did not receive any bulk orders from Party organizations. Sales began to plummet. Seeing a crisis looming, the Jewish family that owned half of the shares sold its holding for a million Reichsmarks to the non-Jewish family that owned the other half. The company then fired its Jewish employees, removed its Jewish board members, and cancelled its contracts with its Jewish-owned branch stores, 20 per cent of which had already passed into non-Jewish hands in any case by the end of 1934. The press campaign, the boycotts and the closures ceased forthwith, and turnover grew again. Yet there was no evidence in this instance of any overtly ideological antisemitism on the part of the firm’s owners or managers; they had simply bowed to the economic realities of the situation imposed on them by local Party and brownshirt organizations.148

  Where economic considerations of a different kind played a role, local and regional Party organizations could urge restraint too. In Hamburg, for example, a port city whose interests did not coincide with the rearmament and autarky priorities of the regime, the local economy was a good deal slower to recover from the Depression than elsewhere. Continuing economic problems, which contributed to a startling 20 per cent ‘no’ vote in the plebiscite of 19 August 1934 on Hitler’s self-appointment as head of state, made Regional Leader Karl Kaufmann particularly sensitive to any disruption of the city’s economy. There were over 1,500 Jewish-owned companies in Hamburg, and they mostly lasted a good deal longer than their counterparts in the rest of the Reich. Hamburg’s mercantile elite was less than enthusiastic about the antisemitic policies of the regime, and leading institutions such as the Chamber of Commerce refused to provide information about which firms were Jewish and which were not. As late as November 1934 it was still using a Jewish printer to produce its information sheets. Older merchants and businessmen had a traditionally allergic reaction to any interference by the state in the business world, and saw Aryanization as a portent of a larger state takeover of business.149 Yet attitudes had changed by 1938. By this time it seemed clear to even the most diehard Hanseatic merchant that the Nazi regime was going to last. Economic recovery had reached a point where the removal of Jewish businesses no longer seemed such a
threat to economic stability. Most important of all, growing restrictions on foreign currency dealings in 1936-7 had forced the closure of a substantial number of Jewish-owned import and export companies in the city. A raft of investigative bodies, including the Foreign Currency Search Office (Devisenfahndungsamt) established under the aegis of Reinhard Heydrich on 1 August 1936, and a local equivalent, allowed the authorities to take companies into administration if they were suspected of assisting the flight of capital from Germany. Officials working for these bodies forged confessions, invented interrogation records and denounced solicitors acting for Jewish companies to the Gestapo. As a result, 1,314 securing orders were granted against Jewish businessmen in Hamburg between December 1936 and October 1939.150

  Such policies were justified in memoranda and other internal documents in strongly antisemitic language, replete with references to ‘Jewish unscrupulousness’, ‘Jewish black marketeers’ and the like. The President of the Hamburg Regional Finance Office described one Jewish suspect in 1936 as a ‘parasite upon the people.’. While the state played its part in this way, the Regional Economic Consultant of the Nazi Party asserted himself in 1936 as another co-ordinating agent for the Aryanization of Jewish businesses. More than in some other parts of Germany, the Consultant’s office took the lead in the process, although it did not in fact have any legal right to do so. It appointed trustees to Jewish firms, and insisted that all remaining Jewish employees be fired. It also set the purchase price for these firms deliberately low, not least by demanding that they be sold without any ‘goodwill’ being taken into account, since (it was argued) as Jewish firms they had none. The occupants of the office were all young men from an academic background; convinced Nazis with little business experience, such as Dr Gustav Schlotterer (aged twenty-six), Carlo Otte (twenty-four) and Dr Otto Wolff (twenty-five). The economist in charge of the Aryanization Department in Hamburg, Karl Frie, was just nineteen when he joined the Consultant’s office. Their ruthlessness, characteristic of the generation that had been born just before the First World War and grown up in the years of inflation, revolution, political instability and economic depression, brooked no opposition. Soon the Hamburg Chamber of Commerce had abandoned its previous reluctance to go along with the Aryanization programme and was ordering that all purchases of Jewish firms made before 1938 be reinvestigated and refunds made for any goodwill element included.151