Responding to this, in many respects dispiriting, situation, Hitler adopted a strategy in the late summer and autumn of 1934 of ‘business as usual’. He carried out once again the programme of engagements planned for the previous year. At the beginning of September he made a total of eight speeches at the Party Rally in Nuremberg, which had been expanded since the previous year by additional parades put on by the women’s organization, war victims, the Labour Service, and the armed forces.1 In his speech to 100,000 SA and SS men he attempted to remove the ‘shadow’ of 30 June from the SA as an organization. His relationship with his SA men was, he assured them, ‘exactly the same as it had been for the past 14 years’ and he continued to regard the SA and SS as ‘guarantors of the National Socialist revolution’.2 Hitler also seized the opportunity offered by the Party Rally to claim for himself the role of supreme authority in cultural policy, which was yet another battleground within the Party. Conflict had arisen between Goebbels and Alfred Rosenberg, whom Hitler had appointed in January 1934 to be ‘responsible for supervising all matters relating to the intellectual and ideological training and education of the NSDAP’. Whereas Rosenberg insisted dogmatically on what was traditionally ‘Teutonic’ and wished to ban from the German cultural scene anything ‘alien’ and modern, Goebbels repeatedly advocated integrating specific modern elements. In his speech on culture for this year Hitler criticized both tendencies, the modern ‘destroyers of art’ as well as those who ‘looked backwards’ and their ‘Germanic art’. This left open the question of what National Socialist culture actually was.3
The Party Rally was followed on 30 September by the second Harvest Thanksgiving on the Bückeberg near Hamelin, then by the inauguration of Winter Aid on 9 October.4 On 8 November, at the Munich commemorations of the November 1923 putsch, he once again made a memorial speech in the Bürgerbräukeller, using this opportunity to defend the mistake he had made eleven years previously.5 This year there was no commemorative march through the city, for 30 June had left gaps that were all too visible.
During the summer and autumn of 1934 the German population was, however, preoccupied with other problems.
The economy in the shadow of rearmament
Although the incipient economic boom at the beginning of 1933 and the impact of work creation measures had at first led to some increase in employment levels, the German economy soon became dangerously unbalanced again. The culprit was the massive rise in expenditure on armaments; it is difficult, however, to provide more than an estimate of spending on armaments in the individual fiscal years because military allocations ceased to be included in the budget and there were numerous instances of concealed armaments spending, for example on infrastructure. Economic historians thus arrive at a variety of results. The British historian Adam Tooze nevertheless gives us a realistic idea of the scale of spending. According to his calculations, the proportion of national income spent on the military rose from less than 1 per cent in 1933 to almost 10 per cent in 1935. This unprecedented development, quite out of line with the norm for a capitalist market economy in peacetime, on the one hand produced a boom in the sectors of the economy directly or indirectly affected and on the other caused serious distortions that the regime had difficulty in controlling.6
During the summer and autumn of 1934 the wider population felt the impact of these in the form of price rises as well as through the restricted supply and declining quality of consumer goods. The pressure on foreign exchange caused restrictions on imports, which then led to shortages and disruptions to production in the consumer goods industry.7 The situation became so critical that at the end of September Hitler was prompted to call on the Reich Minister for Food to produce a report on the development of fat and milk prices. A few months previously he had had a detailed briefing from Darré about the food situation.8 In addition, since the spring of 1934 the unemployment figures had been reducing only slowly; from April 1934 to spring 1935 they dropped from 2.6 to 2.2 million.9 This trend was already clearly visible in the summer of 1934, so that Göring, for example, wrote to Seldte, Minister of Labour, on 20 August concerned about the possibility of the unemployment figures rising.10 Although this did not happen, in the winter of 1934/35 the labour market showed a sharper seasonal fall than in the previous year.
The key role in the steady process of gearing the entire economy to rearmament was played by the new Minister of Economics, Hjalmar Schacht. In his dual capacity as President of the Reichsbank and Reich Economics Minister Schacht’s first task was to get a grip on the serious social and economic crisis affecting the country during 1933/34 following the drop in exports. He could then create the conditions for achieving his main aim, one that he shared with Hitler, namely ensuring that rearmament could proceed at the fastest pace possible. Schacht had a decisive hand in a series of measures that marked the start of the regime’s new economic strategy. His ‘New Plan’, agreed with Hitler in August 193411 and announced shortly afterwards at the Leipzig Fair,12 was based on limiting the import of manufactured and consumer goods in favour of essential foodstuffs and animal feeds, and also raw materials and goods needed for armaments.13 The state moved to a system of rigorous import controls implemented through a closely coordinated network of ‘supervisory offices’ and at the same time gave subsidies to German exports, which led to businesses being obliged from July 1935 onwards to pay an export contribution.14 Additionally, foreign trade was reoriented towards countries that were able to deliver raw materials and food, with the result that a system of offsetting could be developed that as far as possible avoided foreign exchange payments. Trade with the United States, Britain, and France was systematically wound down in favour of trading partners who were close geographically, in particular in south-east Europe, as a defence against any future blockade. The oil supplies essential to the Reich from Romania could, for example, be increased five-fold between 1933 and 1936. Thus between 1934 and 1936 Germany succeeded in marginally reducing imports over all, while reducing imports of manufactured goods by a considerable amount.
In the meantime significant progress was made under Schacht in gaining control of business organizations. This process had begun in the summer of 1933, when Schmitt was Minister for Economics, and was an essential precondition for Schacht’s increasingly dirigiste approach.15 He set about gradually imposing an ‘organic’ structure on the German economy (as it was called, to distinguish it from notions of a corporatist structure), in effect the imposition of membership of an organization embracing all businesses and companies. It encompassed the associations for specific industries, while what had hitherto been chambers of commerce at regional level were concentrated into district chambers of commerce. This created a relatively tightly structured instrument with which the state could control business and commerce.16 What turned out to be crucial for the financing of the enormous costs of rearmament, however, was the system invented by Schacht of artificially expanding the money supply, the so-called Mefo bills.17
These measures went hand in hand with immense efforts to replace imports with home-produced goods. At the Reich Peasants’ Rally in Goslar in November 1934 Darré, the Minister of Agriculture and peasants’ leader, declared that an agricultural ‘production battle’ with regard to food production was commencing. In spite of great effort its success was modest, as increased spending power and a growth in population were leading to higher consumption of food. From the end of 1935 onwards foreign exchange had therefore to be diverted from imports of raw materials for industry to imports for the food sector.18 As part of the desired move to ‘autarky’ in the German economy, in autumn 1934 Hitler gave his economic advisor Keppler a ‘special responsibility for raw materials’ and the task of implementing all ‘economic measures necessary in the light of the foreign exchange situation to replace raw materials from abroad with those produced at home’.19 Then in December 1934 Schacht received the legally binding order to conduct a ‘thorough search of Reich territory for exploitable resources’ and to secure the co
operation of owners of private property in this plan.20
Domestic oil extraction was almost doubled between 1933 and 1936.21 In addition, through the ‘petrol contract’ of December 1933 and more especially through the establishment of Lignite-Petrol [Braunkohle-Benzin] as a public company by law the following year the Reich took a decisive step towards expanding its production of petrol from coal by means of the so-called hydrogenation process. Yet even so, by 1936 domestic extraction and synthetic fuel accounted for only a quarter of consumption (which was increasing year on year).22 Considerable effort was also invested in creating ‘German textiles’ (artificial silk and spun rayon) and in the production of artificial rubber using the so-called Buna process. Between 1933 and 1936 German iron ore extraction increased by a factor of two and a half, but the economy’s growing need for iron ore far exceeded what could be extracted. The same was true of most non-precious metals: the increased demand created by the armaments boom could be met only by increasing imports.23
The large-scale interventions by the state to boost the economy encouraged inflationary pressures. In order to keep prices under control (wages were already to all intents and purposes frozen) in November 1934 Hitler appointed a Reich commissioner to monitor them. Carl Friedrich Goerdeler, the Oberbürgermeister of Leipzig, was chosen for this role. A former member of the DNVP, he had already held the post, though with considerably fewer powers, under Brüning until the end of 1932. By now the population’s dissatisfaction with rising prices when wages were stagnant had become a matter of personal prestige for Hitler. In cabinet on 5 November 1934, when the law to appoint the commissioner was under discussion, he declared he had ‘given workers his word not to allow prices to rise’. If he were not to take steps to curb them, employees would ‘accuse him of breaking his word’. The result would be ‘revolution’.24
Failure to ‘unite’ German Protestantism
Shortages of goods and price increases were not, however, the only causes of dissatisfaction among the population. The regime’s policies regarding the Churches were also giving rise to concern.
Although in his speech to the Reichstag of 30 January 1934 Hitler had made much of continuing the ‘work of unifying’ the Protestant Church, this initiative ultimately led to a dead end. Reich Bishop Müller continued to pursue his ‘policy of integration’ and, supported by August Jäger, appointed his legal administrator (who since 1933 had been the State Commissioner for the Protestant Churches in Prussia), he was in fact able to bring the majority of the state [Land] churches into line.25 In the process, however, it became increasingly clear that Jäger (who secured the support of the German Christians) and Müller were not aiming to unite the fragmented Protestant Church but rather to create a supra-confessional German ‘National Church’, which in the final analysis would mean the replacement of both Christian confessions in Germany by some kind of völkisch ‘Germanic Christianity’.26
Since the beginning of 1934, however, a broadly-based opposition to the German Christians and Müller’s integration policy was forming within the Protestant Church.27 On 13 March the bishops of the state churches in Württemberg (Theophil Wurm) and Bavaria (Hans Meiser), both members of this opposition movement within the Church, met Hitler,28 and told him that cooperation with Müller was impossible because he did not abide by existing agreements. Thus they no longer regarded themselves as bound by their declaration of loyalty of 25 January. At a Protestant synod that met from 29 to 31 May 1934 in Wuppertal-Barmen a ‘Theological Declaration on the present situation of the German Protestant Church’ was issued rejecting the ‘erroneous teachings’ of the German Christians. After this synod a plethora of confessing congregations was formed, overseen by informal governing bodies called ‘councils of brothers’, which refused to be governed by the official Church leadership.
After 30 June 1934 Hitler considered that the time had come finally to push through the plan for a unified Protestant ‘Reich Church’ under Nazi control. On 18 July he received Jäger and Müller and in an official statement announced his support for the continuation of the ‘task of unification’.29
In his speech opening the Reich Party Rally on 5 September Hitler again emphasized, this time with explicit reference to Martin Luther, that he was determined to put an end to the ‘purely organizational fragmentation’ of the German Protestant Churches by establishing ‘one great Protestant Reich Church’.30 In a show of support, Hitler made an appearance alongside Müller, whose Reich Church leadership had used a National Synod in August to empower itself to bring rebellious state Churches to heel.31 In response to complaints from Bishops Wurm and Meiser about the policies of the Reich Church, Hitler had Otto Meissner, the state secretary in the President’s office, inform them on 11 September that Müller’s measures met with his approval.32 After the Party Rally and before the end of September the Reich Church leadership appointed Reich commissars in the regional Churches of Württemberg and Bavaria, where German Christians continued to be in the minority. Bishop Meiser in Munich and Bishop Wurm in Stuttgart were both placed under house arrest by the police and it was announced they had been removed from office.33 In both states, however, Protestant churchgoers, among them many members of the Nazi Party, strongly objected to these measures. There were demonstrations and letters of protest, delegations were sent to the state capitals, and there were threats of mass exits from the Church and the Party.34 At the beginning of autumn 1934 these conflicts were reaching their climax.
In response to a speech made on 18 September in Hanover on a ‘Rome-free German Church’ in which Müller demanded a united German national Church bringing together Protestants and Catholics,35 Foreign Minister Neurath decided to intervene. He summoned Müller and, in view of the consternation caused in Protestant Churches abroad, told him that ‘no Church institution could be permitted to threaten the Reich’s whole political strategy’. Hitler, continued Neurath, was letting Müller know that ‘if he were to continue making speeches like the one in Hanover he would find he no longer had the support of the Reich Chancellor and would have no further access to him’.36 Although Frick and Meissner were present as representatives of the state when, a few days later, Müller was formally installed as Reich Bishop, Hitler could not bring himself to send so much as a greeting.37 In the light of the dramatic events in Württemberg and Bavaria the leaders of the Church opposition proclaimed an ‘ecclesiastical emergency’ at their second confessional synod on 19 and 20 October 1934 in Berlin-Dahlem, on the grounds that the Reich Church leadership had ‘removed the Christian foundation of the German Protestant Church’. It was declared that the Reich Church had no authority and a Reich Brotherhood Council was established as the sole ‘legitimate’ source of leadership within the Church.38
Hitler, on the other hand, was still set on the idea of completing the ‘work of unification’ by means of a symbolic act of submission by the ‘Reich Church’ to him as the highest authority.39 A bill was hurriedly prepared providing for an oath of loyalty to be taken by the new leader of the Protestant Church to the ‘Führer of the German Reich and nation . . . as is fitting for one appointed to serve in the German Protestant Church’.40 It was not until 19 October, the day the Dahlem synod began, that Hitler decided to give up the idea of swearing in the Reich Bishop and postpone the reception to 25 October.41 He left unanswered the increasingly urgent requests of the Bavarian government to release Meiser from his house arrest.42 During this period he was shown reports from the German ambassador in London stating that the Archbishop of Canterbury had clearly indicated that public protests from Protestant Churches outside Germany were on the cards, if the bishops were not immediately set at liberty.43 Hitler discussed the matter at length three times with Goebbels but could still not make up his mind to abandon the Reich Bishop, as his Propaganda Minister urged.44 Then on 24 October a submission by the Reich Justice Minister Gürtner tipped the scales; he had the task of telling Hitler that a Supreme Court trial, in which Pastor Martin Niemöller was challen
ging his dismissal from his post in Dahlem, would probably be decided in Niemöller’s favour. The expectation was, according to Gürtner, that in the explanation for its judgment the Court would cast doubt in principle on the legal basis underlying the Reich Church leadership’s ‘work of unification’. This would represent a public rebuke to Hitler, since he had given such open support to Müller’s and Jäger’s strategy.45
On 25 October – the Reich Bishop was due to be received at 5 p.m. – Hitler decided literally at the last minute to cancel the appointment and remove the former SA leader Pfeffer, who since March had been Hitler’s special appointee for Church matters. Müller had no choice but to announce at the last moment to the senior Church functionaries who had gathered for the ceremony that Hitler was suffering an attack of toothache and could regrettably not be present. Jäger’s resignation was inevitable, whereas Müller, though clearly damaged, was able to continue in office.
On 25 October the house arrest imposed on Meiser and Wurm was lifted. Both Church dignitaries as well as August Marahrens, bishop of the Hanover state Church and similarly representing a Church not dominated by German Christians, were invited to a meeting in the Reich Chancellery. There Hitler told them that the measures taken against the state Churches had been in breach of the Church constitution and were null and void. Hitler then conceded that his plan to set up a ‘Unified Reich Church’ had failed. He would now withdraw from active Church politics and leave the Churches to go their own way, though they could no longer count on any financial support from the state.46
At a conference of Reich Governors on 1 November Hitler justified his retreat primarily as the result of his having gained the impression that the Church constitution had been contravened by the Reich Church. According to the minutes, he as ‘Führer’ and Reich Chancellor had ‘intended to create a single, strong Protestant Church. Evidently, some of the clergy did not want that.’47 In the months following he consistently refused to receive representatives of the Protestant Church and tended to treat Church issues in a dilatory manner.48
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