The Transfer Agreement (8 page)

Two years later, the Allied Reparations Commission levied additional reparations of
132
billion gold marks. Such a monumental sum, payable in cash and goods, would be a garnishment for generations, a commercial enslavement that would hold Germany captive for fifty to a hundred years.

Germany's population, and indeed world leaders and historians, would later brand the Versailles Treaty as merciless and intolerable. But the Allies were following in the tradition of previous German victories, which vanquished losers. For example, in February
1918,
when Russia, beset by revolution, tried to disengage from the war, German generals issued an ultimatum to surrender within five days or suffer unlimited destruction. At the same time, a renewed German offensive began. Lenin was forced to submit his new nation to the humiliating Treaty of Brest-Litovsk. Its terms defrocked Russia of a third of her farmland, 56 million people—or a third of her population—a third of her railroads, more than
5,000
factories comprising half her industrial capability, almost
90
percent of her coal, and beyond that a cash indemnity of 6 billion gold marks. The treaty was nullified after the Allied victory.

So Germany in
1919
was forced to recover from war under conditions similar to those she had previously imposed on her own enemies. However, the German people did not blame the precedents they themselves had established, but rather the political and economic weapons wielded against them at the Peace Conference. They blamed the blockade and their own civilian leaders for acceding to Allied demands and forfeiting German glory.

And, some Germans, such as the Nazis, blamed a Jewish conspiracy. In
their minds it was Jewish bankers who would prosper from Germany's economic tragedy, since massive loans would be necessary both to recover from the war and to pay war indemnity. In
Nazi minds, it was Jewish Bolshevism that would gain by undermining the German Empire and replacing it with a Weimar Republic where Marxism could flourish. In
their minds it was Jews who at the Treaty of Versailles gained rights of minority citizenship throughout war-reconstructed Europe.
⁷

Hitler's own words expressed the scapegoat rationale. Preaching to frantic, impoverished Germans, the Nazi leader cried: "Not so long ago, Germany was prosperous, strong, and respected by all. It is not your fault Germany was defeated in the war and has suffered so much since. You were betrayed in
1918
by Marxists, international Jewish bankers, and corrupt politicians."
⁸

Hitler attributed the stories of Germany's wartime atrocities to an international Jewish conspiracy, using newspapers Jews secretly controlled. And so the Nazis held a special fear of what they called
Greuelpropaganda,
or atrocity tales. In Nazi thought, it was
Greuelpropaganda
that distorted German valor into Hun-like savagery.
Greuelpropaganda
was a mighty weapon the Jews knew how to use to harness the German nation into bondage.

The lasting economic agonies of Versailles were soon apparent. Inflation wracked postwar Germany, as the Weimar Republic struggled to keep pace with Allied reparation demands and domestic recovery. German currency was printed-so fast that it was inked on one side only. In
1919,
the value of the mark was around
9
to a U.S. dollar; in
1921,
75 marks to a dollar; in
1921, 400
to a dollar; and in early January
1923, 7,000
marks equaled a dollar.

For reparations, France of course preferred commodities, such as timber, and coal, to valueless German currency. But German production was unable and unwilling to satisfy the payment schedule. When the Weimar Republic defaulted on the delivery of
1000,000
telephone poles, France exercised her treaty option and in mid-January
1923
invaded Germany's industrial heart-land, the Ruhr. Thousands of French troops took charge of mines, mills, and manufacturing plants. Germans were outraged that so petty an infraction could warrant a full-fledged French occupation. Workers throughout the Ruhr went on general strike with the full backing of the Weimar government. To support the strikers, the government cranked out millions upon millions of worthless marks as special welfare assistance. By late January
1923
,
the
mark had jumped to
18,000
to the dollar and began inflating astronomically,
until by
1924,
it was about 5 trillion to the dollar.

In 1924, German currency could be used for virtually nothing except lighting stoves. People's. savings were wiped away, their livelihood ruined. An international commisssion intervened and the Dawes Plan emerged, whereby France would withdraw from the Ruhr and scheduled reparations—mostly in goods—would be resumed. The goods would be manufactured after a national retooling financed by large foreign loans, mostly from America.

Within a few years, billions of U.S. dollars and other foreign currencies flowed into Germany, reequipping and overindustrializing that nation on an unparalleled basis in order to produce merchandise and other barterable items to repay the Dawes loans and war reparations. By the late 1920s,
America owned and controlled billions of dollars of German industry. And the entire German economy—which was becoming somewhat stable and
prosperous—was now also dependent upon export. Millions of jobs were wholly tied to the foreign market. Export was the oxygen, the bread, and the salt of the German work force. Without it, there would be economic death.
⁹

Just before the decade closed, on October
24, 1929,
Wall Street crashed. America's economy toppled and foreign economies fell with it. For Germany, intricately tied to all the economies of the Allied powers, the fall was brutal. Thousands of businesses failed. Millions were left jobless. Violence over food was commonplace. Germany was taught the painful lesson that economic survival was tied to international trading partners and exports.

During each economic crisis the Nazis scored electoral triumphs among the disadvantaged. In the boomlike year
1928,
the Nazis could poll no more than
810,000
votes nationally. But two years later, well into the Depression, the Nazis' support leaped to about 6.5 million. In July of
1932,
at the height of the crisis, oppressed by 6 million unemployed, the nation delivered
13.5
million votes for Hitler, most of it from the young, unemployed middle class.
¹⁰

Shortly after the July
1932
election, the economy improved somewhat, due more to psychological than true financial factors. A bumper wheat and potato harvest made Germany temporarily independent of imported grain and starch related foodstuffs. Public makework gave short-term relief to the most severely hardshipped in big cities. More than
74,000
gardens and
26,000
settlement houses were erected to help feed and shelter the jobless in small towns. Seasonal unemployment came a bit later and less severely that autumn than in previous years. Total acknowledged unemployment was under these circumstances down to just more than 5 million. In certain segments of German society, confidence began to take hold.
¹¹

As the bankrupt Nazis approached the November
1932
contest, they were unable to pay for a last-minute voter drive. In the aura of stability and with reduced Nazi campaigning, the electorate backed away from the radical program of National Socialism, casting
2
million fewer votes for the NSDAP. But after the November election, with the Nazis nevertheless assured of a leading role in the government, the brief improvement in the economy vanished.
¹²
The moderate moment had been lost.

Commercial recovery was Adolf Hitler's prime mission when he came to power in January
1933.
But Hitler and his circle's conception of their problem and the twisted explanations they ascribed to real and perceived trends became the new determining economic factors. The greatest obstacles to recovery now were, in fact, political instability and bizarre economic policies, including import restrictions that provoked retaliatory bans on German exports.

Economic policies and the worldwide economic depression combined to deprive Germany of her place among the world's trading nations. Without exports, Germany was denied foreign currency—the essential ingredient to
her survival. Without foreign exchange, she could not pay for the imported raw materials she needed to continue manufacturing nor for imported foodstuffs to compensate for recurring shortages. Worse, Germany couldn't even borrow money to pay for raw materials and food because without foreign exchange to pay her war reparations and other foreign obligations, her credit was once again unreliable.
¹³

In late
1932,
the president of the Reichsbank warned the cabinet that further deterioration in foreign exchange would force Germany into another fiscal default. What's more, if there was a sudden run on Germany's banks, it would trigger another total crash of the economy.
¹⁴

But when Hitler and his circle saw Germany deadlocked in depression, they did not blame the world depression and the failures of German economic policy. They blamed Bolshevik, Communist, and Marxist conspiracies, all entangled somehow in the awesome imaginary international Jewish conspiracy. The Jews were not just a handy scapegoat. The paranoid Nazis
believed
in the legendary, almost supernatural economic power of the Jews. When they promulgated the motto "The Jews are our bad luck," they meant it.
¹⁵

Complicating the Reich's response to economic developments was Hitler's impatience for economic details. A British embassy report compiled in early
1933
explained: "Hitler is a pure visionary who probably does not understand the practical problems he is up against." In fact, Hitler saw only the superficial aspects of any economic problem. He was well known for exhorting his followers:
"
If
economic experts say this or that is impossible, then to hell with economics .... if our will is strong enough we can do anything!
¹⁶
Therefore, when problems persisted, the Nazi response was to scream "conspiracy" and make snap decisions to plug holes rather than rebuild the dike.

In the Nazi mind, the Jewish-led, anti-Nazi boycott would reduce exports and foreign currency below the viable threshold. By Nazi thinking, a second prong of the Jewish offensive would be publicizing German atrocities to undermine confidence in the new regime and turn the non-Jewish world against Germany. In this instance, Nazi fears approximated the reality. As an overindustrialized nation dependent upon exports, Germany was especially prone to boycott. Therefore, as the American Jewish War Veterans escalated their anti-Reich agitation in late March
1933,
a primary order of Nazi business would now be to end the atrocity claims and stop the boycott.
¹⁷

Nazi preoccupation with the anti-German boycott was not merely a fear of Jewish power. The Nazis dogmatically believed in the power of boycotts in general. Boycott had long been a prime tactic of the German anti-Semitic movement. When in
1873
an economic depression followed a stock market fall, the German Conservative party falsely blamed Jewish speculators and organized anti-Semitic campaigns, including boycotts. A few years later, the Catholic party joined the movement, coining the motto "Don't buy from
Jews." By
1880,
Berlin women's organizations had formed housewife boycott committees.
¹⁸

During the years prior to
1933,
Hitler, Goebbels, Goering, and other Nazi leaders regularly struggled to attract public support by advocating the anti-Jewish boycott. Brownshirt pickets around a store with signs reading
DON'T BUY FROM JEWS
served to remind Germans of the Jews' secure economic status and warn Jews of what was in store should National Socialism come to power. The Nazis were convinced that an official countrywide boycott would totally destroy the commercial viability ofthe Jews in Germany.
¹⁹

But during the first years of the Nazi party, German anti-Semites also became painfully aware of the Jewish power of boycott and backlash. The lesson came in a confrontation waged not in Germany but in the United States, pitting the Jewish community against the American anti-Semite most revered by the Nazis: Henry Ford.

The richest man in America, whose name
was
stamped on every Model
T,
quickly catapulted to the forefront of political anti-Semitism after he became convinced of the Jewish conspiracy cliche. Henry Ford's nineteenth-century rural mentality didn't adapt well to the complexities of the twentieth-century world. He did things in his own peculiar way, regardless of the cost. Shortly after the Great War began in Europe, Ford claimed he had discovered "proof' that Jews were behind the world's troubles. In
1918,
Ford purchased the weekly
Dearborn Independent
and soon thereafter changed its editorial thrust to virulent anti-Semitism.
²⁰