It was more than just Schacht’s reputation abroad, however, which inspired Hitler to retain him. He also seems to have wanted to keep Göring from getting too powerful. Schacht’s dogged efforts to combat his rival’s presumption were not unwelcome to their mutual boss. In any case, for months Hitler merely sat back and watched Göring and Schacht’s battle for power simmer. In early July 1937, Göring concluded an agreement with Schacht in which both men agreed to carry out their respective tasks in “close cooperation with one another.”100 But the deal was not worth the paper it was written on, as became clear a few days later when Göring announced the creation of the “Reich Works for Ore-Mining and Steel-Making Hermann Göring” in the town of Salzgitter without previously informing the Economics Ministry about his plans. This affront was too much for Schacht. In an enraged letter to Göring, Schacht declared that he could no longer countenance such unilateral actions, writing that “in a totalitarian state it is impossible to conduct a split economic policy.”101
In a conversation with Hitler on 11 August on the Obersalzberg, Schacht once more tendered his resignation, but the dictator again refused to let him go. Hitler appealed to Schacht to come to an understanding with Göring and take two months to think things over. Hitler only accepted Schacht’s resignation in late November 1937, appointing Goebbels’s deputy Walther Funk as his successor. Schacht remained at the helm of the Reichsbank, however. Although practically without power, he continued in that post until 20 January 1939, at which point Hitler dismissed him with the remark “You don’t fit into the whole National Socialist framework.”102 What prompted Schacht’s dismissal was a memo he had written on 7 January in which he again underscored, in dramatic words, the danger of inflation. “The unlimited swelling of state expenditures demolishes any attempt at an orderly budget,” Schacht had warned. “It brings state finances to the brink of collapse and shakes the national bank and the currency.”103 The monetary doomsayer had exhausted Hitler’s patience long before that, but the dictator wanted to avoid a public break and appointed Schacht minister without portfolio. Schacht had no scruples about enjoying the privileges associated with that title, including a healthy annual salary and an official chauffeured car.
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The year-long power battles between Göring and Schacht are a classic example of Hitler’s technique of promoting instead of mediating rivalries, leaving things up in the air and avoiding clear decisions as long as they did not impinge on his own authority as Führer. This style of rule was also evident in the distribution of tasks within the NSDAP directorship—another minefield of jealousy and rivalry. On 21 April 1933, he ordained Hess as his deputy and empowered him “to decide in my name on all questions of party direction.”104 Hess owed this promotion to the absolute loyalty he had shown to Hitler as his private secretary prior to 1933. The dictator could be sure that his deputy, who harboured only limited desires for power, was not a potential rival.105 The extremely succinct decree making Hess the “Führer’s deputy” put him in a superior position to other elite party circles. On the other hand, however, Hitler had intentionally stopped short of subordinating the Reich directors and Gauleiter to Hess’s authority. The result was a constant tug of war for responsibility within the party. Hess’s ability to survive had less to do with his own battling nature than with the persistence and tactical cleverness of Martin Bormann. Born in 1900 as the son of a postal worker, Bormann had joined a Freikorps paramilitary group in 1918 and had spent a year in jail for a politically motivated killing committed in the spring of 1923. After that, he had worked in the administration of the Weimar Gau, before taking over the “SA Insurance” at Munich party headquarters, an entity that he expanded into the “NSDAP Relief Fund.” In early July 1933, the industrious but widely unknown Bormann was named “staff director of the deputy to the Führer” and received the rank of an NSDAP Reich director the following October.106
Hess and Bormann did not just have to deal with pushy Gauleiter who insisted on their independence and knew how to exploit their connections to Hitler to get decisions made in their favour. Another source of resistance to the deputy to the Führer’s claim to party pre-eminence was Reich Organisational Director Robert Ley, who possessed enormous influence as the head of the German Labour Front. Ley enviously followed the establishment of Hess’s staff, which laid claim to an increasing number of responsibilities that had formerly been his own. In the subsequent power struggle between Hess/Bormann and Ley, Hitler behaved as usual, telling the rivals to reach an understanding on their own. Only when this failed did he mediate a compromise—albeit one that did not clarify spheres of responsibility, but instead rather encouraged further rivalry.107 As a result there existed, alongside the main personnel office of the Reich organisational director, the personnel office in the staff of the deputy to the Führer which became increasingly involved in filling lower-level party posts.
Over the years, the deputy to the Führer’s staff created a parallel office for every area of the Reich Organisational Directorship, in what amounted to a never-ending feud. In June 1939, only a few weeks before the start of the Second World War, Ley lobbied for the Reich Organisational Directorship’s responsibilities to be clearly limited to what they had been before the expansion of Hess’s office. That was the only way, he argued, to avoid “the organisationally superfluous and now untenable doubling of personnel and budgetary work.”108 Bormann brusquely rejected this demand:
It is beyond doubt that the Führer’s responsibility is boundless. Equally beyond doubt is the fact that the deputy to the Führer represents him, in so far as he wishes to be represented, in the entire realm of the party, so that the deputy’s authority here is also fundamentally boundless. Any limitation of the responsibility of the deputy to the Führer is thus not only unnecessary, but…impossible.109
In this instance, too, the side that could claim to be doing the Führer’s will on the basis of a commensurate mandate had more leverage in the struggle for power and influence.
Hitler’s aversion to adopting definitive positions was even more apparent in the allocation of executive responsibilities between the state and the party. The Law for the Securing of Unity of Party and State of 1 December 1933 may have stipulated that the NSDAP, as “the bearer of the German idea of state after the triumph of the National Socialist revolution,” was “indivisibly linked with the state.”110 But it was unclear what that meant in practice, and Hitler did not exactly clear up the issue when he proclaimed at the 1935 Nuremberg rally: “What can be solved by the state will be solved by the state. What the state because of its very nature is unable to solve will be solved by the movement. The state is after all only one of the organisations of ethnic-popular life.”111 The parallel existence and rivalries between local group leaders, district leaders, Gauleiter and the deputy to the Führer as a supreme party authority on the one hand, and chief administrative officers, senior civil servants, state governments and the Reich ministries on the other, generated permanent tension and friction. Hitler-appointed special representatives and their staffs succeeded in usurping a considerable amount of functions of state. As deputy to the Führer and—since 1 December 1933—minister without portfolio, Hess was even able to extend his power to the legislative process. On 27 July 1934, during a joint visit to the Wagner Festival in Bayreuth, he secured Hitler’s signature on a decree that gave him the right to influence and monitor all legislative plans by the ministries. A further Führer decree in September 1935 required all government offices to submit the personnel files of all candidates for higher public office, whether promotions or new appointments, to Hess for prior approval.112
Hitler had little interest in a clear delineation of party and state spheres. Instead, he tended to blur responsibilities, as the institution of the Reich governors shows. The Second Law for Bringing the States into Line with the Reich of 7 April 1933 installed Reich governors—Reichsstatthalter—in all German states except Prussia. They were charged with “ensuring that the p
olitical direction determined by the Reich chancellor was maintained,” but they were not supposed to be members of the respective state governments. On Hitler’s recommendation over the course of May 1933, Hindenburg named Gauleiter as governors in almost all the states.113 The Law for the Reconstruction of the Reich of 30 January 1934, which dissolved the sovereignty of the states in favour of the Reich, actually rendered the Reich governors superfluous. But instead of getting rid of them, Article 3 of the law subordinated them to the “supervision of the Reich interior minister.”114 The Gauleiter/governors resisted this idea, claiming the right to refer any difference of opinion between themselves and Reich or state ministers to the Führer for settlement. Wilhelm Frick, in turn, found that this contradicted “the idea of a central, unified leadership of the Reich by the Reich chancellor and the specialised ministers at his side” and demanded that Hitler put the Gauleiter/governors in their place. Hitler agreed in principle with Frick but wanted to make an exception “with questions of special political significance,” as Hans Heinrich Lammers told the interior minister. Such a solution was in accordance with “the Reich chancellor’s own understanding of his leadership.”115 That decision essentially voided Article 3 of the law. In keeping with his policy of divide and conquer, Hitler retained the role of the final arbiter.
In the autumn of 1934, in an attempt nonetheless to subjugate the Reich governors, whose actual power rested in the fact that they were Gauleiter, Frick planned a law that would have rescinded the decree of 7 April 1933 and unified the offices of Reich governor and state president. In their new office as “leaders of the state government,” however, the Reich governors would be strictly bound to instructions from the Interior Ministry. Hitler approved of the basic idea but characteristically insisted on revoking the new regulation’s general applicability. Paragraph 4 of the Reich Governors’ Law of 30 January 1935 therefore read: “The Führer and Reich chancellor can charge the Reich governor with the leadership of the state government.” The replacement of “must” with “can” gave Hitler the freedom to do as he wanted. Whereas he immediately named the Reich governors as the state presidents of Saxony and Hesse, he refused to take the same steps in Württemberg, Baden and Thuringia, although he had already signed the preliminary documents at Frick’s request.116
The dualism of party and state remained unresolved. All of Frick’s efforts to reorganise the states with a comprehensive “Reich reform” and rationalise administrative structures never got beyond the initial stages. They foundered on Hitler’s aversion to committing himself. The Führer also scuppered Frick’s plan to replace the Enabling Act, which expired on 31 March 1937, with a Law Concerning Reich Legislature that would have transformed the emergency arrangement into a permanent, legally normative procedure. He had “doubts whether the moment was right for instituting that sort of law,” Hitler told his cabinet on 26 January 1937 to justify his decision to have the Enabling Act extended: “Only if a new basic law of state was short enough for schoolchildren to learn by heart, would it be advantageous to revise the whole procedure of the Reich legislature.”117 There was never any “new founding law of state,” and the dictator never believed that there would be one. In his later monologues at the Führer’s main headquarters, Hitler mocked the tendency of bureaucracies to put everything down in written rules: “Exception is a foreign word to them. That’s why they lack the courage to take on large responsibilities.” In this context, he dismissed the idea of unified laws for the entire Reich as a blind obsession. “Why not have a regulation for a part of the Reich?” he asked. The only thing that mattered to the leadership was to “maintain an overview of the activities of the administration and keep the strings of power in its own hands.”118 The characteristic nebulousness that ran through all levels and authorities in the Nazi system of rule was not the result of the incompetence of those in power: it reflected Hitler’s desire politically to secure for himself the greatest possible room to manoeuvre and intervene wherever he saw fit.
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The regime’s departure from normative commitments bolstered not only radicalism but encouraged unprecedented degrees of corruption, patronage and outright embezzlement. In their first years in power, the National Socialists may never have tired of excoriating the alleged dishonesty of democratic politicians during the Weimar Republic, but they themselves flung the door to corruption wide open within their own ranks. This began with preferential treatment for long-standing party members in the procurement of jobs. Thanks to political favouritism, National Socialists poured into open positions in the civil service even though they sometimes lacked even the most basic qualifications. Moreover, city utilities—water, gas and electricity companies—and former union-owned and union-affiliated institutions like the Volksfürsorge insurance company or the GEG consumer cooperative became, in the words of the historian Frank Bajohr, “job-creation entities for National Socialists.”119
The sense of personal entitlement and privilege flourished most at the top levels of the regime. “The degree and extent of corruption in the ruling class is without parallel,” complained Sebastian Haffner in 1940, looking back at the years 1933 to 1938, before he fled to Britain.120 Hitler led his underlings by poor example. In October 1934, a conscientious auditor determined that the chancellor owed 405,494.40 reichsmarks in taxes for the fiscal year 1933–34 alone. Munich Superior Financial President Ludwig Mirre was hastily summoned to Berlin where the state secretary in the Finance Ministry, Fritz Reinhardt, informed him that Hitler was exempt from taxes “due to his constitutional status.” In December, Mirre consequently instructed the head of Hitler’s local tax office: “All tax notifications in so far as they concern an obligation on the part of the Führer are by definition null and void…with that the Führer is exempt from taxes!”121 As an expression of gratitude for his “official help,” Mirre received a monthly raise of 2,000 reichsmarks and was named president of the Reich Financial Court in April 1935.
The tax-exempt dictator also had a plethora of funds into which he could dip to reward favourites and loyal vassals or to finance his private art collection. Among them were the Reich chancellor’s and (after Hindenburg’s death) the Reich president’s discretionary funds, with which he as the head of state could do as he pleased. Along with royalties from sales of Mein Kampf, which earned him 1–2 million reichsmarks a year, Hitler acquired another enviable source of income in 1937, when he was paid a percentage of the revenues brought in by stamps bearing his image. The annual resulting income was in the tens of millions—Reich Postal Minister Ohnesorge presented Hitler with a cheque every year on his birthday.122 Even more lucrative was the “Adolf Hitler donation of the German economy,” instituted in June 1933 at the suggestion of Gustav Krupp von Bohlen und Halbach. It had employers paying a quarterly tax-deductible donation of 0.5 per cent of their wage costs into a private account that Hitler could use as he saw fit. Hitler appointed Martin Bormann to manage this account, and he used it, for instance, to cover part of the costs of expanding Haus Wachenfeld into a stately Alpine residence, the Berghof.123
Most of Hitler’s paladins followed the lead of their Führer and had themselves declared exempt from taxes, acquired luxurious homes and set up special funds, foundations and secret bank accounts shielded from any public financial scrutiny. Göring—the Third Reich’s “second man”—may have been particularly conspicuous with his grandiose lifestyle, including his feudal estate “Carinhall” in Schorfheide, north of Berlin. But other leading figures in the regime were hardly slouches either when it came to unscrupulously abusing their positions for personal gain. Goebbels, one of the more vitriolic critics of “bigwigs” in the Weimar Republic, lived in splendid fashion in his villa on Schwanenwerder Island in Lake Wannsee and had a second home on Lake Bogensee, north of the capital. And despite bemoaning the corruption among the clique of Nazi leaders while writing his memoirs in Spandau prison, Albert Speer was a more-than-willing beneficiary of the system of patronage, concealing his rocket
ing income from the tax authorities and acquiring an estate in Oderbruch to go along with his large new house on Berlin’s Lichtensteinallee.124
Functionaries lower in the party hierarchy, from the Gauleiter on down to the district and local leaders, exploited their respective networks in the same way as the top members of the regime. Wasting public resources, embezzlement, abuse of party funds, shameless greed and crass careerism were part of everyday reality.125 There was “no combating it,” Fritz Wiedemann reasoned in retrospect, because the Nazified press was not allowed to report on corruption and because Hitler covered up abuses committed by the party’s old guard: “This plague ate its way from the top to the bottom. What was allowable for the bigwigs was also all right for the little guy.”126
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Along with flourishing corruption, another of the most striking characteristics of National Socialist rule was a feverish mania for massive construction projects. From the very beginning, Hitler thought in dimensions that went beyond anything that had previously existed. Size beyond all rational proportion, in Speer’s interpretation of his logic, “would impress and intimidate the people and psychologically secure his own rule and that of his successors.”127 Nazi architecture was intended as a visual representation of the power of the Third Reich, which Hitler’s genius had built up after a period of Germany’s decline and which he had bestowed as a gift upon its people. The monumental projects he commissioned, Hitler told those attending the Nuremberg rally in 1937, were conceived neither for the year 1940 nor for the year 2000. “They are intended,” Hitler said, “to cast their shadows like the cathedrals of our past into the millennia of the future.”128 One had to build “on as large a scale as technically possible,” he declared on another occasion, “and for all of eternity!”129
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