Third Reich not just a dictatorship, also a Kleptocracy. Hitler’s rule based not just on dictatorship, also on plunder, theft and looting. Important to recognise not just because it adds another dimension to the crimes of National Socialism but also because it helps us understand how the Third Reich worked.
Began early on. 1923 Hitler sent his stormtroopers to loot a Jewish bank to get funds. Later on, until 1933, he discouraged such actions. But in 1933 they were given free rein. Massive looting of trade union premises on 2 May 1933, when furniture, utensils, even beds taken away. Many other incidents. Attacks on Jewish synagogues and the destruction of 7,500 Jewish shops and the trashing of many thousands of Jewish flats and houses in the so-called Reichskristallnacht on 9-10 November 1938 accompanied by the theft or removal of many personal possessions and valuables of the owners. In the days following the Anschluss in March 1938, Austrian Nazis broke into Jewish homes, threw out inhabitants, and looted the contents; Jews were stopped on the streets, and robbed of the fur coats, jewellery and wallets.
Such street-level looting paled into insignificance in comparison to the systematic confiscation of Jewish assets, beginning almost immediately on the Nazi seizure of power in 1933. So-called Aryanization. Dept store chains, shops and businesses. A variety of legal instruments. Typical – Heydrich’s Devisenfahndungsamt (1936) could take companies into administration if they were found to be assisting the flight of capital from Germany – forged confessions, invented interrogation records, etc.. Regional Economic Consultants’ offices of the Nazi Party appointed trusetees to Jewish firms, used 7 April 1933 law to get rid of Jewish managers and owners. Four Year Plan used requisitioning powers. Pace increased after Reichskristallnacht when govt formally ordered the appropriation or Aryanization of remaining Jewish owned or run businesses. By eve of war no Jewish owned or run businesses left.
Maybe about one fifth of buy-outs were carried out by friends or sympathizers at a fair price or on good terms; 40 per cent paid the minimum allowed, e.g. not including ‘goodwill’ because supposedly there was none; 40 per cent effectively forced, using blackmail, Gestapo and sometimes open violence. Many profited – e.g. NS Regional Economic Offices took a 10% commission on purchase price of Jewish businesses; in Thuringia the NS Regional Economic Officer made more than a million marks in this way, and used it to buy up businesses himself.
This provided backdrop to massive looting of Jewish assets during war; action extended to Polish property as well. On 27 September 1939 the German military government in Poland decreed a blanket confiscation of Polish property, confirming the order again on 5 October 1939. On 19 October 1939 Göring announced that the Office of the Four-Year Plan was seizing all Polish and Jewish property in the incorporated territories. This practice was formalized by a decree on 17 September 1940 that set up a central agency, the Haupttreuhandstelle Ost, to administer the confiscated enterprises. In February 1941 these already included over 205,000 businesses ranging in size from small workshops to major industrial enterprises. By June 1941, 50 per cent of business and a third of the larger landed estates in the annexed territories had been taken over by Reich Trustees without compensation. These orders in effect constituted a licence to any Germans to loot what they wanted. In addition, the army took over a substantial number of farms to secure food supplies for the troops.
The German invaders also carried off large quantities of cultural booty. During a raid on the Bernadin monastery in Radeczina in November 1939, ‘all the gold and jewel votives were “confiscated”, as Klukowski recorded. This was only one of countless such incidents. Country houses along the invasion route were ransacked, and pressure applied to their aristocratic owners to reveal the whereabouts of hidden treasures. Soon, the process of cultural expropriation was put on a formal, organized basis, however. On 16 December 1939, the German authorities ordered the compulsory registration of all artworks and cultural objects dating from before 1850, together with jewellery, musical instruments, coins, books, furniture and so on from the same period. An official commissioner, Kajetan Mühlmann, who had previously carried out similar duties in Vienna, was put in charge of the process. By the end of November 1940 the registration was complete, and Hitler’s personal art agent Hans Posse arrived to select prime specimens for Hitler.
He was followed in due course by art museum directors from Germany, anxious for their share in the spoils. Quarrels broke out, as Hermann Göring tried to obtain pictures for himself while Hans Frank objected to the removal of prize loot from his headquarters. Perhaps this was not such a bad idea, however, since Frank had no idea of how to display or preserve Old Masters, and was once reprimanded by Mühlmann for hanging a painting by Leonardo da Vinci above a radiator. Private collections were ransacked as well as state museums, and the vast collection amassed by the Czartoryski family, including a Rembrandt and a Raphael, was systematically despoiled.
Meanwhile Hans Frank was busy decorating his headquarters with looted artworks, and shipping tropies back to his home in Bavaria. When American troops arrived there in 1945, they found a Rembrandt, a Leonardo, a fourteenth-century Madonna from cracow, and looted vestments and chalices from Polish churches. He even referred to himself as a robber baron. He confiscated the country estate of the Potocki family for use as a rural retreat, and drove around his fiefdom in a limousine large enough to attract critical comment even from colleagues such as the Governor of Galicia. Aping Hitler, he built an imitation of Hitler’s Berghof in the hills near Zakopane. The magnificent banquets he staged caused his waistline to expand so fast that he consulted a dietician because he could barely fit into his dress uniform any more.
At the same time, conditions of life for ordinary Poles were becoming increasingly difficult, as food supplies grew more scarce. The situation was made worse by continued looting and expropriation. Confiscations were not confined to cultural objects, but included for example the removal of scientific equipment from university laboratories for use in Germany. Even the Warsaw Zoo’s collection of stuffed animals was taken away. As in the Reich itself for some time, iron and steel objects, such as park railings and garden gates, even candelabras and saucepans, were collected to be melted down and used in armament and vehicle production in Germany. When the cold winter really began to bite, in January 1940, the hospital director Dr Zygmunt Klukowski noted, ‘the German police took all sheepskin coats from passing villagers and left them only in jackets’. Not long afterwards the occupation forces began raiding villages and confiscating all the banknotes they found there. Similar actions during and after invasion of USSR in June 1942.
Reasons for all this. First, Jews and Poles considered inferior. Hitler’s order to destroy Polish culture, kill Polish intelligentsia etc.. Second, strong feeling among Nazis that Jews in particular had stolen the stuff from the Germans in the first place, through exploitation and ‘profiteering’. Neither Jews nor Poles were really cultured; they did not therefore deserve all the cultural objects they had in their possession. Finally, forced requisitioning and appropriation had become a regular part of economic life in the Third Reichn and so it was also by extension in occupied Poland and the USSR.
But other justifications, or motives, too. Key factor was the extra-legal basis of Hitler’s authority. What Hitler said and did was law. This ‘prerogative’ state extended all the way down the hierarchy to what people often referred to as the ‘little Hitlers’, the local party bosses, and even to grass-roots party members. Contempt for law already evident in 1920s. So long as it did not contravene basic tenets of Nazi ideology, extra-legal behaviour was tolerated, if it could be justified in the name of National Socialism.
In addition, the Reichstag and legislative assemblies had been effectively muzzled, the press and media taken under control of the Propaganda Ministry, and the prosecution service and police forces thoroughly Nazified. Thus all the means by which in a normal democratic society corruption is investigated had been silenced.
Ordinary party members expected rewards under the Third Reich for their sufferings in the so-called “time of struggle”. Sacrifice for the nation in the fight for its renewal was all very well, but now they expected a pay-off. This in turn was an important means of cementing the inner cohesion of the party, building factions within it, and creating close relationships of mutual obligation between leaders and followers at every level.
In addition, the generation of young Germans to whom many active Nazis belonged, born between 1900 and 1910, had a disturbed relationship towards money and financial probity, having grown up in the deprived years of the war, having seen money lose its value spectacularly during the inflation of 1922-23, having lived through the febrile get-rich-quick Weimar years, with its fabled cases of corruption and criminality, immortalized in Christopher Isherwood’s Mr Norris Changes Trains, and then having been plunged into the unemployment and destitution of the Depression from 1929 onwards; no wonder they had no scruples in seizing what they considered their due when the moment came.
As in the case of the Jews and Poles, corruption and plunder could also be a way in which the Nazis humiliated their opponents, destroying them through engendering in them a sense of impotence as they lost their jobs and their possessions.
As the Nazis came to power in a country with an unemployment rate of well over 30%, the first thing lower ranking stormtroopers and party members expected was a job. In July 1933 Rudolf Hess promised a job to everyone who had been a party member since before 30 January 1933, and in October the government officially organized the provision of employment for members with a membership number below 300,000 (i.e. late 1930), and members of the SS, SA and Stahlhelm who had joined before 30 January 1933.
By 1937 the Reich Post Office had given more than 30,000 jobs to ‘deserving National Socialists’. By October 1933 the Berlin party had already found employmenbt for 30,000 members. 90 per cent of all newly available white-collar jobs in the public sector went to ‘old fighters’. Many made available by dismissals under law of 7 April 1933. Many Nazis already had jobs but used this policy to get better ones. Length of party membership counted in calculating seniority, so better promotion chances. Often the jobs were not really needed. An audit of Hambuirg Sickness Fund in 1934 found it had employed 228 more administrators than it really needed. Local railway system took on more than 1,000 new employees in 1933-34. Often new incumbents completely unsuited for jobs to which they were appointed. Many simply took the salary without bothering to turn up to work.
Embezzlement frequent. Friedrich Stäbel, new head of national students’ union Sept 1933, bought cars, clothes etc for himself with union funds, and even employed a marching band for his own amusement. The line was drawn when it came to party posts, of which of course there were also many new ones from 1933 on, as party membership rocketed into the millions after the seizure of power. 1 Jan 1934 to 31 Dec 1941 there were nearly 11,000 court prosecutions for misappropriation of party funds.
Yet in many parts of the Nazi power apparatus corruption continued unchecked. Particularly notorious: the Labour Front. Vast organization, encompassing virtually all employed people, replacing Trade Unions, with a huge number of employees, all former trade union properties, numerous business operations. Its construction department was led by Anton Karl, who had convictions for theft and embezzlement dating from the 1920s; he paid out over 580,000 Reichsmarks in bribes in 1936-7 alone to secure contracts. Karl sent gifts to anyone he thought important: the leader of Hitler’s bodyguard received silk shirts, hunting weapons, and a holiday in Italy for his wife, and duly rewarded Karl with the contract to reconstruct his unit’s barracks in Berlin. In 1935 the Labour Front gave Hitler’s adjutants, as well as his photographer, 20,000 marks as a Christmas present. As a secret agent reporting for the banned SPD noted, ‘the corruption in the Labour Front is vast, and the general standard of morals correspondingly low.’
This applied particularly to the Labour Front’s leader Robert Ley,whose salary for this post, at 4,000 Reichsmarks a year, was augmented by another 2,000 Reichsmarks as Reich Organization Leader of the Party, 700 RM as a Reichstag deputy, and 400 RM as a Prussian State COuncillor. The Labour Front put in bulk orders for his books and pamphlets, and he earned personally 50,000 RM a year from the newspaper he edited. His entertainment expenses were paid by the Labour Front, which also maintained his villa in Berlin’s posh Grunewald district until 1938. When he went on a cruise organized by the Labour Front tourism and culture division, known as Strength Through Joy, on a new ship named, inevitably, the Robert Ley, he was accompanied by a bevy of blonde, blue-eyed young women for ‘companionship’, and had to be flanked by two sailors every time he appeared on deck to make sure he did not fall overboard.
Other Nazi leaders were not far behind Ley in feathering their own nests. Hermann Göring, famously, spent 15 million RM on extending and refurbishing his hunting lodge, which cost a rufther 500,000 RM of taxpayers’ money in upkeep every year; he had six further hunting lodge, a castle, an Alpine chalet, a villa in Berlin, and a private train, with space for ten automobiles and a working bakery to satisfy his appetite for cream cakes; the taxpayer forked out another 1.32 million RM on refurbishing his two private coaches on the train even without the extravagant furnishings and fittings. Just to make sure the taxman did not look too closely at the affairs of Göring and other Nazi leaders, the government ruled in 1939 that their income tax had to be dealt with by the tax offices of either Berlin or Munich, which were stuffed with Nazi officials who would turn a blind eye to any irregularities.
There were many popular jokes about Nazi corruption. A ‘reactionary’ was defined as ‘someone who has a well-paid job that a Nazi likes the look of’. Two Nazi officials are walking along the road when one of them sees a 50-Reichsmark note and picks it up. “I’ll donate it to the Party’s Winter Aid programme”, he says. “Why do it the long way round?” his friend replies – “just put it straight into your pocket”. The cabarettist Wilhelm Finck was actually sent to a concentration camp for telling a joke in 1934, when he stood on the stage of Berlin’s Catacomb club with his right arm raised in a Nazi salute and a tailor measuring him for a new suit. “What sort of jacket should it be?” asked the tailor. “With pockets wide open, in the current fashion”, Finck replied.
One leading Nazi, however, was exempt from popular disapproval of this kind. Hitler himself enjoyed a reputation for probity, even Puritanism. Unmarried, a vegetarian, teetotaler and non-smoker, he projected an image of sacrificing private pleasure for the sake of Germany. Another joke had the children of Joseph Goebbels, the Propaganda Minister, going round for tea to the homes of Göring, Ley and other leading Party figures. After each visit they come home raving about the cream cakes, sweets, and other goodies they have been given. After a visit to Hitler, however, where they only receive malt coffee and a few tiny, plain biscuits, they ask their father: “Isn’t the Führer a member of the Party, then?”
Hitler reinforced his incorruptible image by publicly renouncing his salary as Reich Chancellor, which came to 45,000 Reichsmarks a year, and his annual expenses allowance, which came to another 18,000. Whe public was not told, however, that he had never paid any tax, nor that when the Munich tax office attempted to slap a bill of 400,000 Reichsmarks on him in arrears in 1934, the tactless officials received a quiet visit from the Gestapo, after which they wrote off the whole sum and destroyed Hitler’s tax files into the bargain. In return, a grateful Hitler gave the head of the Munich tax office a tax-free annual pay supplement of 2,000 Reichsmarks for his services.
Hitler’s real income came from sales of Mein Kampf, bulk-bought by Nazi Party organizations, and amounting to 1.2 million Reichsmarks in 1933 alone; from 1937 onwards he earned huge sums from the copyright fee levied on the use of his portrait on postage stamps (50 million Reichsmarks in one year alone); fees and royalties on every printing of any of his speeches in the press; legacies left to him by the grateful Nazi dead; from the Adolf Hitler Donation of German Industry; and after the death of Hindenburg in 1934, from the official funds of the President, which were now removed from the civil service auditing procedure. All of this allowed him to build up a state fund for his personal disposal that by 1942 had reached the astonishing sum of 24 million marks.
Hitler used this first to give pensions to elderly racist and anti-Semitic writers he described as Nazi ‘precursors’, then to over 100 Nazi activists who had been imprisoned in the Weimar Republic, and then, importantly, to the army, in effect corrupting its leading generals to persuade them not to undertake any action against the regime. He gave them military paintings for the regimental headquarters, he paid 100,000 Reichsmarks a year for officers to go on ‘rest cures’, he increased the pensions of retired officers, he provided Field Marshal von Mackensen with a tax-free gift of a landed estate together with 350,000 Reichsmarks to cover renovation costs, and he repeated this kind of gesture with other aristocratic landowners who still hankered for the return of the Kaiser. Hitler’s largesse became even more generous during the war, when he showered the generals with magnificent gifts of money, paintings, property and much more besides. At the same time, rapid promotion, the creation of numerous new generals and Field-Marshals, brought its own rewards in the form of rapidly increasing salaries. Hitler added substantial monthly sums to the salaries of senior ministers and officials, he gave his favourite sculptor Arno Breker a quarter of a million Reichsmarks as a present in 1940, and in general he spread his donations around large parts of the military, ministerial, civil service and cultural elites. In effect, therefore, one of the major and too often neglected factors holding the top ranks of the Nazi Party together was corruption: the receipt of massive gifts, huge increases in income, property and so on, that cemented the patronage relationship they had with Hitler in a relationship of clientage that then repeated itself on a smaller scale all the way down the hierarchy to the very bottom.
The increase of corruption during the war went hand in hand with a commensurate increase in the scale and intensity of plunder, looting and robbery, as I have already suggested in the case of Poland. Of course, while the property and indeed the lives of Eastern Europeans in areas occupied by the Nazis were treated as entirely at the disposal of their conquerors, the same was not true in countries like France, Denmark, or Italy. Still, Hitler and Göring had no scruples about acquiring art objects for their collections, and in particular for Hitler’s planned art museum in his old home town of Linz, from major collections there, and as living conditions deteriorated in occupied towns, so German officers and administrators were frequently able to snap up art objects at knock-down prices from desperate Belgians or Dutchmen looking for money to save themselves from starving.
The extermination of Europe’s Jews that began in the second half of 1941 also brought large amounts of Jewish assets into the hands of the Nazis, whether through the confiscation of their property and their businesses or through the plundering of their bodies; major German banks profited for example from the extraction of gold fillings from the teeth of murdered Jews. All of this went further to add to a shared sense of complicity in crime that was yet another factor holding the echelons of the Nazi power structure together as the military situation began to deteriorate.
Looting and plunder also had a wider role to play, however. Recently the radical German historian Götz Aly has argued that it was so extensive that it effectively kept the mass of ordinary Germans loyal to the regime during the war by maintaining their living standards at an acceptable level. Soldiers and officials sent back regular packets of food, shoes, clothing and much else besides to their families at home. Aly cites for example the wartime letters of the later novelist Heinrich Böll that accompanied such packets, with butter, cheese and other foodstuffs that could be purchased cheaply in France but were difficult to come by in Germany itself, where food was strictly rationed. The food, clothing, furniture and much else besides that belonged to deported Jews was confiscated and also sent back to Germany in a systematic action. All of this was conducted on a vast scale. In the first three months of 1943, for example, the troops of the 18th army on the Leningrad front sent more than three million parcels back home, stuffed with goods of all kinds, far more than came in the other direction, despite all the privations the German troops were having to endure in the Russian winter. There was a roaring trade in looted furs, for example.
Here plunder and loot shaded off into other kinds of exploitation: much of what German soldiers sent back home was legitimately purchased, for example, but on the other hand, their purchasing power was often greater than that of native inhabitants of the occupied areas, they either had priority over them in such matters or enforced it by actual or implicit threats of violence, and the occupying authorities made special arrangements for the cheap or even free export of purchased food and other materials to Germany, suspending export regulations in the process. Only towards the end of the war, as stemming the rising tide of resistance became an increasingly important issue, did the occupation authorities begin to put limits on such exports, imposing for example a quota of seven to eight on the amount of herrings each German soldier could send out of Norway in the course of a year.
On a larger scale, German organizations requisitioned, bought up or simply confiscated major economic assets in conquered countries to bolster the economy back home; these ranged from forced takeovers of rival Western European firms by the chemicals giant I G Farben to the requisitioning of over 8,000 railway wagons from the Belgian railways by their German counterpart. According to Götz Aly, all of this allowed German war industries to keep going and, perhaps even more important, it enabled the German state to keep taxes low since, in effect, the income was made up from the looted produce of occupied countries in kind.
At this point, however, it is necessary to sound a note of caution. It is all very well to stress the material factors that bound the Nazi hierarchy together and bound the German people to the Nazi hierarchy, but one must not exaggerate the scale of their overall impact. The German economy was overwhelmingly geared towards arms production and the support of vast numbers of troops and their equipment. Already in 1939 this amounted to 20 per cent of the state’s entire annual budget. Money was poured into arms and arms-related industries, while the interests of the consumer were neglected or pushed to one side. Compared to the vast scale of military expenditure, income gained from occupied territories or from the expropriation of Europe’s Jews – the vast majority of them, in Poland and Eastern Europe, desperately poor people – paled into insignificance. Foodstuffs and other supplies may have entered Germany in large quantities from the rest of Europe, but not in sufficient quantities to balance out the privations caused by rationing, food shortages, declining income from non-military-related occupations, and from 1943 onwards, the mass bombing of German towns and cities.
There is a considerable body of evidence that indicates a rapid decline in German civilian morale from this point, even before the stream of income and supplies from occupied countries began to shrink and dry up as German armies started their long retreat. Increasingly in the last two years of the war, Germans were bound to the regime by terror, as the Nazi party escalated its repression until by early 1945 it was openly hanging ‘traitors’ on the streets.
Finally, materialist explanations such as Aly’s ignore the crucial importance of ideology in keeping the regime and the people together: German national pride, restored by German victories up to and especially including the defeat of France in 1940, invested in the German armed forces, and focused on the person of Hitler himself. It was after all ideology – the ideology, if one likes, of the Master Race – that enabled German troops to embark on their career of looting and plunder in the first place.
Similarly, corruption may have played a part in holding the Nazi party and government apparatus together, but ideology was important here too, perhaps even more so. If Nazi leaders enjoyed the material rewards and trappings of power, they none the less held that power in the first place as a result of their ideological convictions. Above all, perhaps, it was ideology, not the need or desire for loot, that fuelled the Nazi policy of exterminating Europe’s Jews. It is true, of course, that the Nazis made a series of decisions not to waste resources, as they saw it, on feeding and maintaining the four million Soviet prisoners of war they captured in 1941-2, or on the millions more Jews they encountered in Poland, the Ukraine and Belorus. But the primary decision to kill these people was a function not of economic necessity but of ideology: of the Nazis’ contempt for what they saw as Slavic subhumans, and, more radically, of their determination to rid Europe and perhaps ultimately the world of what they conceived of as a vast Jewish threat to Germany’s existence.
Despite all the work that has been done in the last few years, we still know far too little about the effects of looting and plunder on the German economy, above all during the war. Whatever these were, however, the looting itself was on a large enough scale to occupy us still over sixty years later, as the continuation of restitution actions in respect of cultural objects and other kinds of property show almost every month. Perhaps in the end, too, the effects of corruption on the Third Reich and the way it operated, both at home and abroad, were a special case of the effects of untrammeled power in general. It’s a cliché, I know, but there’s no better way of ending this brief talk than to quote Lord Acton, Regius Professor of Modern History in my own university just over a century ago: “Power tends to corrupt, and absolute power corrupts absolutely.”