The Third Reich at War (57 page)

Coal, which still provided the basic fuel for electricity generation, industrial power and domestic use, was present in Western and Central Europe in huge quantities, but production in occupied countries plummeted as workers slowed down. Some even went on strike in protest against impossibly low food rations and deteriorating conditions. In 1943-4, about 30 per cent of the coal used in Germany came from occupied areas, particularly Upper Silesia, but far more could have been obtained, particularly from the rich coal seams of northern France and Belgium. The British blockade cut off imports of grain, fertilizer and animal fodder from overseas, while German confiscations of these materials from French, Dutch and Belgian farms, together with the drafting of farmworkers into forced labour schemes in Germany, had a disastrous effect on agriculture. Farmers had to slaughter pigs, chickens and other animals in vast quantities because there was nothing to feed them with. The grain harvest in France fell by more than half in the two years from 1938 to 1940. The German occupiers introduced food rationing. By 1941, official rations in Norway were down to 1,600 calories a day, in France and Belgium a mere 1,300. This was not enough for anybody to live off, and, as in occupied Eastern Europe, a black market rapidly emerged, as people began to break the law in order to stay alive.
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All this meant that the addition of the economies of Western Europe did far less than had been hoped to strengthen the German war effort. Not only did productivity in the coalmines decline, but the confiscation of French, Belgian and Dutch rolling stock and railway engines also severely disrupted the movement of coal supplies across the country, hampering industrial production. As coal supplies fell, steelworks, starved of the coke essential for smelting, began to get into trouble as well. Not only was the German economy unable to take much advantage of the acquisition of coalmines in France and Belgium, but conditions in the German mines began to deteriorate too. Matters were not helped by the drafting of many key workers into the armed forces, and attempts to induce men to go down the mines by raising wages were undermined by already long hours, including Sunday working, dangerous conditions and above all the poor food rations on which miners had to subsist.
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All in all, therefore, the German war economy gained far less from the conquest of other European countries than might have been expected.

All of this reflected, in the end, the primacy of ruthless exploitation dictated by the state. Some economists, such as Otto Br̈utigam, a senior official in Rosenberg’s Ministry for the Eastern Territories, considered that Germany could have extracted far more from the economies of the countries it had conquered, above all in Eastern Europe, if its leadership had followed the ideas of a collaborative economic New Order in Europe rather than policies of racial subjugation, oppression and mass murder.
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Some businessmen and capitalists may have thought along similar lines, but on the whole they took the regime’s policies towards its subject peoples as a given, and tried to gain what they could out of them. This was clearly, as the exiled political scientist Franz Neumann put it during the war, a
command economy
, a capitalist market economy increasingly subjected to direction and control from above.
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Was it any more than that? Was the Nazi economy moving away from free enterprise capitalism altogether? There is no doubt that, in the course of the war, the regime intervened ever more intrusively in the economy, to an extent that amounted to far more than merely steering it in certain directions, or forcing it to work within the political context of a global war. Price and exchange controls, the regulation of labour and raw materials distribution, the capping of dividends, forced rationalization, the setting and resetting of production targets and much more besides constituted a drastic deformation of the market. The state’s vast and precipitous increase in armaments expenditure distorted the market by pulling resources away from consumer goods production and towards arms-related and heavy industries. Industry thus came increasingly to serve the purposes and interests of an ideologically driven political regime.
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Moreover, as time went on, state and Party interests owned a growing proportion of the economy. Practically the whole newspaper and magazine industry had already fallen into Nazi ownership before the war, for instance, and other media, including film studios and book publishers, were similarly largely owned by branches of the Nazi Party organization. In some regions like Thuringia, regional Party bosses had been able to lay their hands on key industries. After 1939, state or Party agencies were able to take over companies with foreign owners whose countries were at war with Germany, and the Aryanization of Jewish firms in occupied countries provided still further opportunities. The state-run Hermann G̈ring Works spread its tentacles ever further in this way. The SS Economy and Administration Head Office under Oswald Pohl mushroomed into a complex network of businesses covering an astonishing variety of fields. The holding company set up by Pohl in 1940, the so-called German Economic Enterprise (
Deutscher Wirtschaftsbetrieb
), owned or leased and effectively controlled housing corporations, furniture, ceramics and cement manufacturers, a quarry and stone business, munitions works, woodworks, textile factories, book publishers and much more besides. Often these reflected Himmler’s own particular, sometimes rather eccentric personal interests. Thus, for example, Himmler was concerned to reduce alcohol consumption in Germany and particularly in the SS, so he arranged for the Apollinaris mineral water company at Bad Neuenahr, which was British-owned before the war, to be leased from its German trustees to the SS holding company, rewarding it with a large contract to supply mineral water to the SS. The existing manager could not be ousted, but he was forced to work with a deputy appointed by the SS, giving it a large measure of control. Other companies fell under direct ownership. The SS economic empire expanded very quickly as a result of such developments.
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At the same time, however, it had no clear overall conception of what it wanted its role to be. It simply grew by accretion, in a haphazard way, as the example of the Apollinaris mineral water company suggests. Nor was the eventual domination of the German economy a significant aim of the SS; this always took second place to security and racial policy.
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In the last two years of the war, indeed, these latter aims pushed the economic ambitions of the SS into the background.
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Striking though these developments were, however, they did not do much to alter the fact that Germany was still a capitalist economy, dominated by private enterprise. Regulation was widespread and intrusive, but it was carried out by many different, often competing institutions and organizations.
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Industrial managers and company executives managed to preserve at least some freedom of action, but they were acutely aware that their autonomy was being increasingly restricted during the war along with the operation of a free market economy, and they were deeply worried that the regime would go over to a fully ‘socialist’, state-run economy; Joseph Goebbels, widely regarded as a ‘socialist’, was a particular bogey-man in this respect, but the growing economic empires of the SS and the Hermann G̈ring Works, among others, were a cause of anxiety as well. Such concerns drove many businessmen and industrialists to co-operate with the regime as much as they could, in order to ward off, as they thought, even more drastic encroachments on their decision-making powers.
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Thus managers, executives and company chairmen were more than willing to take advantage of the many inducements the state had to offer, most notably of course the provision of lucrative arms contracts. German businesses benefited from the activities of the SS as well. The Dresdner Bank, for example, issued credits to the SS, and senior executives were rewarded by being made officers in the organization. Its services to the SS included providing loans for construction works in Sachsenhausen and finance for the building of Crematorium II in Auschwitz.
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Huta, the small firm that built the gas vans used to kill Jews at Chelmno and elsewhere, the engineering company of Topf and Sons, who built the gas chambers at Auschwitz, and many other firms were only too happy to profit from the business of death. Some, such as the company that supplied Zyklon-B to Auschwitz, may possibly have been unaware of the use to which their products were being put, but in most cases it was only too obvious. Those who processed the gold from the dental fillings extracted from the corpses of Jews killed at Auschwitz and other death camps can have had few doubts as to the provenance. After collection at the camps, the fillings were sent to a refinery operated by the Frankfurt-based Degussa firm, Germany’s leading company for the processing of precious metals. The gold was melted down and made into bars, along with other gold materials, jewellery and the like, taken from Jews and others in the conquered areas of Europe. Altogether, it has been estimated, Degussa earned about 2 million Reichsmarks from the plundering of the Jews between 1939 and 1945; 95 per cent of the firm’s gold intake between 1940 and 1944 came from loot.
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Degussa earned such profits by selling the gold on via the Reichsbank to finance houses such as the Deutsche Bank.
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The origin of much of this gold was clear enough to those who processed it on the factory floor. The fillings arrived at the Degussa factory for processing, as one worker recalled long after the war, in a condition that made it all too clear where they had come from: ‘The crowns and the bridges, there were those where the teeth were still attached . . . That was the most depressing, the fact that everything was still there. It was probably just like it had been when broken out of a mouth. The teeth were still there and sometimes still bloody and with pieces of gum on them.’
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‘NO BETTER OFF THAN PIGS’

I

Speer’s achievement in galvanizing the war economy into increased production, futile though it was to prove in the end, rested not least on the effective use of the labour force. The proportion of the industrial workforce engaged in arms manufacture had grown by 159 per cent from 1939 to 1941 and by the time Speer took up office, there was little room left for any further growth in this area. Speer encouraged the more efficient use of labour, not only through increasing the amount of shift-work but also through his general rationalization of production, halving the number of man-hours needed to make a Panzer III tank, for example. The number of combat aircraft made in German factories quadrupled between 1941 and 1944, and even if the choice of terminal dates for the statistics maximized the increase, the growth in production was still real enough. Yet this was achieved with an aircraft factory workforce that in 1944 was not much larger than it had been three years previously, at 390,000 instead of 360,000.
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At the same time, fresh labour was poured into the armaments industries, increasing the size of the workforce dramatically in a few key areas. In 1942 the number of workers engaged in producing tanks grew by nearly 60 per cent. A 90 per cent increase in the number of employees in railway locomotive factories in the same year helped boost production from under 2,000 in 1941 to more than 5,000 two years later. The crucial growth came in ammunition production, where 4 50,000 workers were employed by the autumn of 1943, compared to 160,000 in tank factories and 210,000 in the manufacture of weapons. Here too there were major increases, although they had been inaugurated not by Speer, but by a programme announced on 10 January 1942 under Todt.
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The task of recruiting these new workers was allotted to the man whom Hitler appointed as General Plenipotentiary for Labour Mobilization on the creation of this new post on 21 March 1942: Fritz Sauckel. Sauckel was a very different character from a smooth, cultivated bourgeois professional like Speer. Born on 27 October 1894, the son of a post office worker, Sauckel grew up in poor circumstances in Franconia, left school at the age of fifteen, became a cabin boy on a freighter and spent the First World War in a prison camp when his ship was sunk by a French warship as soon as hostilities broke out. Back in Germany in 1919, he worked as a lathe operator in a ball-bearing factory before studying engineering. Here, therefore, was a real plebeian, in both his origins and his lifestyle. Unlike some of the other leading Nazis, Sauckel appears to have had a happy marriage, during which he fathered no fewer than ten children. In 1923 he heard Hitler speak and was converted by his message of the need for national unity. Sauckel remained loyal to Hitler after the failed beer-hall putsch of the same year, and Hitler rewarded him by appointing him Regional Leader of Thuringia in 1927. Elected to the Thuringian legislative assembly in 1929, Sauckel became Minister-President of Thuringia when the Nazis came out of the 1932 state elections as the strongest party.
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In the 1930s, he not only led the Aryanization of one of the biggest arms manufacturers in Thuringia but also ensured that it was taken over by his own holding company, the Wilhelm Gustloff Foundation. Despite his origins, therefore, Sauckel was no stranger to the world of business and industry. His experience was to stand him in good stead in 1942. Sauchel’s plebeian populism found dramatic expression on the outbreak of war, when, after Hitler had turned down his request to be allowed to serve in the armed forces, he smuggled himself on to a U-boat as a stowaway, only being discovered after the submarine had put to sea. Given his prominence, the head of the U-boat fleet, Admiral Karl Dönitz, recalled the vessel to port, but the episode did Sauckel’s reputation no harm. A close ally of Martin Bormann, he seemed both to Bormann and, indeed, to Hitler to possess the qualities of energy and ruthlessness needed to solve the labour problem in 1942. His record as a hardline Nazi would reassure the Party that he was not going to be soft on ‘subhuman’ Slavs even if their labour was vital to the German war effort.