The Rise and Fall of the Third Reich: A History of Nazi Germany (54 page)

Buried under mountains of red tape, directed by the State as to what they could produce, how much and at what price, burdened by increasing taxation and milked by steep and never ending “special contributions” to the party, the businessmen, who had welcomed Hitler’s regime so enthusiastically because they expected it to destroy organized labor and allow an entrepreneur to practice untrammeled free enterprise, became greatly disillusioned. One of them was Fritz Thyssen, one of the earliest and biggest contributors to the party. Fleeing Germany at the outbreak of the war, he recognized that the “Nazi regime has ruined German industry.” And to all he met abroad he proclaimed, “What a fool [
Dummkopf
] I was!”
¹⁵

In the beginning, however, the businessmen fooled themselves into believing that Nazi rule was the answer to all their prayers. To be sure, the “inalterable” party program had sounded ominous to them with its promises of nationalization of trusts, profit sharing in the wholesale trade, “communalization of department stores and their lease at a cheap rate to small traders” (as Point 16 read), land reform and the abolition of interest on mortgages. But the men of industry and finance soon learned that Hitler had not the slightest intention of honoring a single economic plank in the party program—the radical promises had been thrown in merely to attract votes. For the first few months in 1933, a few party radicals tried to get control of the business associations, take over the department stores and institute a corporate state on lines which Mussolini was attempting to establish. But they were quickly thrown out by Hitler and replaced by conservative businessmen. Gottfried Feder, Hitler’s early mentor in economics, the crank who wanted to abolish “interest slavery,” was given a post as undersecretary in the Ministry of Economics, but his superior, Dr. Karl Schmitt, the insurance magnate, who had spent his life lending money and collecting interest, gave him nothing to do, and when Schacht took over the ministry he dispensed with Feder’s services.

The little businessmen, who had been one of the party’s chief supports and who expected great things from Chancellor Hitler, soon found themselves, many of them, being exterminated and forced back into the ranks of wage earners. Laws decreed in October 1937 simply dissolved all corporations with a capital under $40,000 and forbade the establishment of new ones with a capital less than $200,000. This quickly disposed of one fifth of all small business firms. On the other hand the great cartels, which even the Republic had favored, were further strengthened by the Nazis. In fact, under a law of July 15, 1933, they were made compulsory. The Ministry of Economics was empowered to organize new compulsory cartels or order firms to join existing ones.

The system of myriad business and trade associations organized during the Republic was maintained by the Nazis, though under the basic law of February 27, 1934, they were reorganized on the streamlined leadership principle and put under the control of the State. All businesses were forced to become members. At the head of an incredibly complex structure was the
Reich Economic Chamber
, whose leader was appointed by the State, and which controlled seven national economic, groups, twenty-three economic chambers, one hundred chambers of industry and commerce and the seventy chambers of handicrafts. Amidst this labyrinthine organization and all the multitude of offices and agencies of the Ministry of Economics and the Four-Year Plan and the Niagara of thousands of special decrees and laws even the most astute businessman was often lost, and special lawyers had to be employed to enable a firm to function. The graft involved in finding one’s way to key officials who could make decisions on which orders depended or in circumventing the endless rules and regulations of the government and the trade associations became in the late Thirties astronomical. “An economic necessity,” one businessman termed it to this writer.

Despite his harassed life, however, the businessman made good profits. The heavy industries, chief beneficiaries of rearmament, increased theirs from 2 per cent in the boom year of 1926 to
6
½ per cent in 1938, the last full year of peace. Even the law limiting dividends to 6 per cent worked no hardship on the companies themselves. Just the opposite. In theory, according to the law, any amount above that had to be invested in government bonds—there was no thought of confiscation. Actually most firms reinvested in their own businesses the undistributed profits, which rose from 175 million marks in 1932 to five billion marks in 1938, a year in which the total savings in the savings banks amounted to only two billions, or less than half the undistributed profits, and in which the distributed profits in form of dividends totaled only 1,200,000,000 marks. Besides his pleasant profits, the businessman was also cheered by the way the workers had been put in their place under Hitler. There were no more unreasonable wage demands. Actually, wages were reduced a little despite a 25 per cent rise in the cost of living. And above all, there were no costly strikes. In fact, there were no strikes at all. Such manifestations of unruliness were
verboten
in the Third Reich.

Deprived of his
trade unions
, collective bargaining and the right to strike, the German worker in the Third Reich became an industrial serf, bound to his master, the employer, much as medieval peasants had been bound to the lord of the manor. The so-called
Labor Front
, which in theory replaced the old trade unions, did not represent the worker. According to the law of October 24, 1934, which created it, it was “the organization of creative Germans of brain and fist.” It took in not only wage and salary earners but also the employers and members of the professions. It was in reality a vast propaganda organization and, as some workers said, a gigantic fraud. Its aim, as stated in the law, was not to protect the worker but “to create a true social and productive community of all Germans. Its task is to see that every single individual should be able … to perform the maximum of work.” The Labor Front was not an independent administrative organization but, like almost every other group in Nazi Germany except the Army, an integral part of the N.S.D.A.P., or, as its leader, Dr. Ley—the “stammering drunkard,” to use Thyssen’s phrase—said, “an instrument of the party.” Indeed, the October 24 law stipulated that its officials should come from the ranks of the party, the former Nazi unions, the S.A. and the S.S.—and they did.

Earlier, the
Law Regulating National Labor
of January 20, 1934, known as the “Charter of Labor,” had put the worker in his place and raised the employer to his old position of absolute master—subject, of course, to interference by the all-powerful State. The employer became the “leader of the enterprise,” the employees the “following,” or
Gefolgschaft
. Paragraph Two of the law set down that “the leader of the enterprise makes the decisions for the employees and laborers in all matters concerning the enterprise.” And just as in ancient times the lord was supposed to be responsible for the welfare of his subjects so, under the Nazi law, was the employer made “responsible for the well-being of the employees and laborers.” In return, the law said, “the employees and laborers owe him faithfulness”—that is, they were to work hard and long, and no back talk or grumbling, even about wages.

Wages were set by so-called labor trustees, appointed by the Labor Front. In practice, they set the rates according to the wishes of the employer—there was no provision for the workers even to be consulted in such matters—though after 1936, when help became scarce in the armament industries and some employers attempted to raise wages in order to attract men, wage scales were held down by orders of the State. Hitler was quite frank about keeping wages low. “It has been the iron principle of the National Socialist leadership,” he declared early in the regime, “not to permit any rise in the hourly wage rates but to raise income solely by an increase in performance.”
¹⁶
In a country where most wages were based at least partly on piecework, this meant that a worker could hope to earn more only by a speed-up and by longer hours.

Compared to the United States, and after allowances were made for the difference in the cost of living and in social services, wages in Germany had always been low. Under the Nazis they were slightly lower than before. According to the
Reich Statistical Office
, they declined for skilled workers from 20.4 cents an hour in 1932, at the height of the depression, to 19.5 cents during the middle of 1936. Wage scales for unskilled labor fell from 16.1 cents to 13 cents an hour. At the party congress in Nuremberg in 1936 Dr. Ley stated that the average earnings of full-time workers in the Labor Front amounted to $6.95 a week. The Reich Statistical Office put the figure for all German workers at $6.29.

Although millions more had jobs, the share of all German workers in the national income fell from 56.9 per cent in the depression year of 1932 to 53.6 per cent in the boom year of 1938. At the same time income from capital and business rose from 17.4 per cent of the national income to 26.6 per cent. It is true that because of much greater employment the total income from wages and salaries grew from twenty-five billion marks to forty-two billions, an increase of 66 per cent. But income from capital and business rose much more steeply—by 146 per cent. All the propagandists in the Third Reich from Hitler on down were accustomed to rant in their public speeches against the bourgeois and the capitalist and proclaim their solidarity with the worker. But a sober study of the official statistics, which perhaps few Germans bothered to make, revealed that the much maligned capitalists, not the workers, benefited most from Nazi policies.

Finally, the take-home pay of the German worker shrank. Besides stiff income taxes, compulsory contributions to sickness, unemployment and disability insurance, and Labor Front dues, the manual worker—like everyone else in Nazi Germany—was constantly pressured to make increasingly large gifts to an assortment of Nazi charities, the chief of which was
Winterhilfe
(Winter Relief). Many a workman lost his job because he failed to contribute to Winterhilfe or because his contribution was deemed too small. Such failure was termed by one labor court, which upheld the dismissal of an employee without notice, “conduct hostile to the community of the people … to be most strongly condemned.” In the mid-Thirties it was estimated that taxes and contributions took from 15 to 35 per cent of a worker’s gross wage. Such a cut out of $6.95 a week did not leave a great deal for rent and food and clothing and recreation.

As with the medieval serfs, the workers in Hitler’s Germany found themselves being more and more bound to their place of labor, though here it was not the employer who bound them but the State. We have seen how the peasant in the Third Reich was bound to his land by the
Hereditary Farm Law
. Likewise the agricultural laborer, by law, was attached to the land and forbidden to leave it for work in the city. In practice, it must be said, this was one Nazi law which was not obeyed; between
1933 and 1939 more than a million (1,300,000) farm workers migrated to jobs in industry and trade. But for industrial laborers the law was enforced. Various government decrees beginning with the law of May 15, 1934, severely restricted a worker’s freedom of movement from one job to another. After June 1935 the state employment offices were given exclusive control of employment; they determined who could be hired for what and where.

The “workbook” was introduced in February 1935, and eventually no worker could be hired unless he possessed one. In it was kept a record of his skills and employment. The workbook not only provided the State and the employer with up-to-date data on every single employee in the nation but was used to tie a worker to his bench. If he desired to leave for other employment his employer could retain his workbook, which meant that he could not legally be employed elsewhere. Finally, on June 22, 1938, a special decree issued by the Office of the Four-Year Plan instituted labor conscription. It obliged every German to work where the State assigned him. Workers who absented themselves from their jobs without a very good excuse were subject to fine and imprisonment. There was, it is obvious, another side to this coin. A worker thus conscripted could not be fired by his employer without the consent of the government employment office. He had job security, something he had rarely known during the Republic.

Tied down by so many controls at wages little above the subsistence level, the German workers, like the Roman proletariat, were provided with circuses by their rulers to divert attention from their miserable state. “We had to divert the attention of the masses from material to moral values,” Dr. Ley once explained. “It is more important to feed the souls of men than their stomachs.”

So he came up with an organization called Kraft durch Freude (“Strength through Joy”). This provided what can only be called regimented leisure. In a twentieth-century totalitarian dictatorship, as perhaps with older ones, it is deemed necessary to control not only the working hours but the leisure hours of the individual. This was what “Strength through Joy” did. In pre-Nazi days Germany had tens of thousands of clubs devoted to everything from chess and soccer to bird watching. Under the Nazis no organized social, sport or recreational group was allowed to function except under the control and direction of Kraft durch Freude.

To the ordinary German in the Third Reich this official all-embracing recreational organization no doubt was better than nothing at all, if one could not be trusted to be left to one’s own devices. It provided members of the Labor Front, for instance, with dirt-cheap vacation trips on land and sea. Dr. Ley built two 25,000-ton ships, one of which he named after himself, and chartered ten others to handle ocean cruises for Kraft durch Freude. This writer once participated in such a cruise; though life aboard was organized by Nazi leaders to a point of excruciation (for him), the German workers seemed to have a good time. And at bargain
rates! A cruise to Madeira, for instance, cost only $25, including rail fare to and from the German port, and other jaunts were equally inexpensive. Beaches on the sea and on lakes were taken over for thousands of summer vacationers—one at
Ruegen
on the Baltic, which was not completed by the time the war came, called for hotel accommodations for twenty thousand persons—and in winter special skiing excursions to the Bavarian Alps were organized at a cost of $11 a week, including carfare, room and board, rental of skis and lessons from a ski instructor.