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Industrialists, Bankers, and the Problem of Unemployment in the Weimar Republic

Published online by Cambridge University Press:  16 December 2008

Gerald D. Feldman
Gerald D. Feldman
Affiliation:
University of CaliforniaBerkeley
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Extract

During the past decade and a half there has been considerable interest shown by economic and social historians in the problems of unemployment in the Weimar Republic, although we still await a work with the comprehensiveness and mastery of W. R. Garside's British Unemployment 1919–1939. Much of the literature on Germany has been devoted to the controversy over government studies of unemployment insurance and business and trade union attitudes toward work creation schemes. Social historians have engaged in a good deal of history from below and history of everyday life dealing with the unemployed themselves and have demonstrated, among other things, the devastating consequences of long-term unemployment and the welfare system on labor solidarity. Such historians are understandably more inclined to work on, and sympathize with, those who are fired rather than with those who do the firing, and are unlikely to lose much sleep about the effects of bad business conditions on capitalist behavior and solidarity. Nevertheless, I would argue that the everyday problems and decisions of Germany's bankers and industrialists have suffered from undeserved neglect.

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Articles
Information
Central European History , Volume 25 , Issue 1 , March 1992 , pp. 76 - 96
Copyright
Copyright © Conference Group for Central European History of the American Historical Association 1992

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References

This paper, here revised and slightly expanded, was originally presented as a lecture to the Annual Conference of the Economic History Society in Leicester, UK, on 10 April 1992. I wish to thank Theodore Balderston, Harold James, Carl-Ludwig Holtfrerich, and my colleagues at the Woodrow Wilson Center, especially Professor James Patterson, for their helpful comments and suggestions.

1. Garside, W. R., British Unemployment 1919–1939. A Study in Public Policy (Cambridge, 1990).CrossRefGoogle Scholar

2. The debate over government policy will be discussed and cited below. On unemployment insurance, see Führer, Karl Christian, Arbeitslosigkeit und die Entstehung der Arbeitslosenversicherung in Deutschland 1902–1927 (Berlin, 1990).Google Scholar Employer attitudes are discussed in Wolffson, Michael, Industrie und Handwerk im Konflikt mit staatlicher Wirtschaftspolitik? Studien zur Politik der Arbeitsbeschaffung 1930–1934 (Berlin, 1977).Google Scholar For organized labor's position, see Schneider, Michael, Das Arbeitsbeschaffungsprogramm des ADGB. Zur gewerkschaftlichen Politik in der Endphase der Weimarer Republik (Bonn, 1975)Google Scholar, and Winkler, Heinrich August, Der Schein der Normalität. Arbeiter und Arbeiterbewegung in der Weimarer Republik 1924 bis 1930, 2nd ed., (Berlin and Bonn, 1988), 28ff., 293ff., 489ff., 589ff., 777ff.Google Scholar, and idem, Der Weg in die Katastrophe. Arbeiter und Arbeiterbewegung in der Weimarer Republik 1930–1933 (Berlin and Bonn, 1987), 19ff.Google Scholar

3. Two valuable recent collections of essays are Evans, Richard J. and Geary, Dick, eds., The German Unemployed. Experiences and Consequences of Mass Unemployment from the Weimar Republic to the Third Reich (New York, 1987)Google Scholar, and Stachura, Peter D., ed., Unemployment and the Great Depression in Germany 1929–1939 (Houndhills, 1986).Google Scholar The Archiv für Sozialgeschichte 27 (1987) was devoted to the problem of unemployment and contains some articles on the Weimar period.

4. Important exceptions are James, Harold, The German Slump. Politics and Economics 1924–1936 (Oxford, 1987)Google Scholar and idem, “Reactions to the Depression and the Banking Crisis in Interwar Germany,” in Schröter, Harm G. and Wurm, Clemens A., eds., Politik, Wirtschaft und Internationale Beziehungen. Studien zu ihrem Verhältnis in der Zeit zwischen den Weltkriegen (Mainz, 1991), 59–76Google Scholar, and Weisbrod, Bernd, “Die Befreiung von den ‘Tariffesseln.’ Deflationspolitik als Krisenstrategie der Unternehmer in der Ära Brüning,” Geschichte und Gesellschaft 11 (1985): 295–325Google Scholar and “Industrial Crisis Strategy in the Great Depression,” in von Kruedener, Jürgen Baron, ed., Economic Crisis and Political Collapse. The Weimar Republic 1924–1933 (New York, Oxford, Munich, 1990), 45–62.Google Scholar

5. “Finanzbrief” sent by Hjalmar Schacht to Paul Reusch, 17 August 1949, Haniel Archiv, Duisburg, no. 400101290/143.

6. These issues will be discussed at some length in Feldman, Gerald D., The Great Disorder: Politics, Economics and Society in the German Inflation, 1914–1924 (New York, 1993)Google Scholar, but see also Feldman, Gerald D., “The Political Economy of Germany's Relative Stabilization during the 1920/21 Depression,” Feldman, Gerald D. et al. , eds., The German Inflation Reconsidered. A Preliminary Balance (Berlin and New York, 1982), 180–206CrossRefGoogle Scholar, and Feldman, Gerald D. and Steinisch, Irmgard, Industrie und Gewerkschaften 1918–1924. Die überforderte Zentralarbeitsgemeinschaft (Stuttgart, 1985).CrossRefGoogle Scholar

7. Two important studies are, Blaich, Fritz, Die Wirtschaftskrise 1925/26 und die Reichsregierung. Von der Erwerbslosenfürsorge zur Konjunkturpolitik (Kallmünz, Oberpfalz, 1977)Google Scholar, and Hertz-Eichenrode, Dieter, Wirtschaftskrise und Arbeitsbeschaffung. Konjunkturpolitik 1925/26 und die Grundlagen der Krisenpolitik Brünings (Frankfurt am Main & New York, 1982).Google Scholar

8. For important analyses of German government finances, see Witt, Peter-Christian, “Die Auswirkungen der Inflation auf die Finanzpolitik des Deutschen Reiches 1924–1935,” in Feldman, Gerald D. and Müller-Luckner, Elisabeth, eds., Die Nachwirkungen der Inflation auf die deutsche Geschichte 1924–1933 (Munich, 1985), 43–95Google Scholar and “Finanzpolitik als Verfassungs- und Gesselschaftspolitik. Überlegungen zur Finanzpolitik des Deutschen Reiches in den Jahren 1930 bis 1932,” in Geschichte und Gesellschaft 8 (1982): 386–414.Google Scholar See also McNeil, William C., American Money and the Weimar Republic. Economics and Politics on the Eve of the Great Depression (New York, 1986), esp. chap. 4.Google Scholar

9. Happily, some of Borchardt's more important essays are now available in English. See Borchardt, Knut, “Constraints and Room for Manoeuvre in the Great Depression of the Early Thirties: Towards a Revision of the Received Historical Picture,” “Economic Causes of the Collapse of the Weimar Republic,” and “Germany's Exchange Rate Options During the Great Depression,” in Knut Borchardt, Perspectives on Modern German Economic History and Policy (Cambridge, 1991), 143–203;CrossRefGoogle Scholar “A Decade of Debate about Brüning's Economic Policy,” in von Kruedener, Economic Crisis, 99–151. The von Kruedener volume, which contains a valuable introduction to the controversy and a bibliography, and Kershaw, Ian, ed., Weimar: Why Did German Democracy Fail? (London, 1990)Google Scholar provide very fine presentations of the various positions in the controversy for those who do not read German. For readers of German, Geschichte und Gesellschaft 11 (1985) provides important contributions to the debate, and they should also consult Knut Borchardt, “Das Gewicht der Inflationsangst in den wirtschaftspolitischen Entscheidungsprozessen während der Weltwirtschaftskrise,” and Gerhard Schulz, “Inflationstrauma, Finanzpolitik und Krisenbekämpfung in den Jahren der Wirtschaftskrise, 1930–1933,” in Feldman and Müller-Luckner, Nachwirkungen, 233–96.

10. See Holtfrerich, Carl-Ludwig, The German Inflation 1914–1923. Causes and Effects in International Perspective (Berlin & New York, 1986)CrossRefGoogle Scholar for his views on the inflation. For his major articles disagreeing with Borchardt, see “Alternativen zu Brünings Wirtschaftspolitik in der Weltwirtschaftskrise,” Historische Zeitschrift 235 (1982): 605–31;Google Scholar“Arbeitslosigkeit, Sozialabbau, Demokratieverlust. Ergebnis zu hoher Löhne in der Weimarer Republik?” Gewerkschaftliche Monatshefte 11 (1983): 714–22;Google Scholar“Zu hohe Löhne in der Weimarer Republik? Bemerkungen zur Borchardt-These,” Geschichte und Gesellschaft 10 (1984): 122–41Google Scholar; “Was the Policy of Deflation in Germany Unavoidable?” in von Kruedener, Economic Crisis, 63–80; “Economic Policy Options and the End of the Weimar Republic,” in Kershaw, Weimar, 58–91.

11. For an account and the relevant literature, see Garside, British Unemployment, 20ff.

12. Holtfrerich in Kershaw, Weimar, 84.

13. For discussions of the interconnections of the three periods of Weimar history, see Gerald D. Feldman, “Weimar from Inflation to Depression: Experiment or Gamble?” in Feldman and Müller-Luckner, Nachwirkungen, 385–401, and Feldman, Gerald D., “The Weimar Republic: A Problem in Modernization?” Archiv für Sozialgeschichte 26 (1986): 1–26.Google Scholar

14. Brüning's, HeinrichMemoiren 1918–1934 (Stuttgart, 1970)Google Scholar have not been very helpful to would-be sympathizers and there is good reason to believe that his recently opened papers at the Houghton Library in Harvard will not be either. Two good critical discussions of his policies are Mommsen, Hans, “Heinrich Brüning als Reichskanzler: Das Scheitern eines politischen Alleinganges,” in Holl, Karl, ed., Wirtschaftskrise und liberale Demokratie. Das Ende der Weimarer Republik und die gegenwärtige Situation (Göttingen, 1978), 16–45Google Scholar and Schulz, Gerhard, “Reparationen und Krisenprobleme nach dem Wahlsieg der NSDAP 1930,” Vierteljahrschrift für Sozial- und Wirtschaftsgeschichte 67 (1980): 200–222.Google Scholar

15. Borchardt, Knut and Schötz, Hans Otto, eds., Wirtschaftspolitik in der Krise. Die (Geheim-)Konferenz der Friedrich List-Gesellschaft im September 1931 über Möglichkeiten und Folgen einer Kreditausweitung (Baden-Baden, 1991).Google Scholar

16. Professor Holtfrerich has assured me of this in personal conversation.

17. See Borchardt's introduction to Wirtschaftspolitik in der Krise, 46.

18. See Borchardt in von Kruedener, Economic Crisis, 151.

19. See Holtfrerich in Kerschaw, Weimar, 80ff.

20. Blinzig to Leffingwell, 7 January 1928, Historisches Archiv, Deutsche Bank, Generalsekretariat 1928.

21. See the correspondence between Director von Stauss and General Director Kissel, Bundesarchiv Potsdam, Deutsche Bank, no. 16263 and 16277.

22. Report by Max Müller, 16 February 1930, ibid., no. 16265, Bl. 101.

23. Stahl to the Supervisory Board of the Mansfeld Copper Company, 4 january 1932, Historisches Archiv, Deutsche Bank, no. P 1321, Bl. 252f.

24. Holtfrerich in von Kruedener, Economic Crisis, 78.

25. For Holtfrerich's sunny view of the quality of the inflationary reconstruction, see German Inflation, 205f. My own less enthusiastic appraisal will be found in the Epilogue to The Great Disorder.

26. See Feldman, Gerald D., “The Political Economy of Germany's Relative Stabilization during the 1920/21 Depression,” in Feldman, Gerald D., Holtfrerich, Carl-Ludwig, Ritter, Gerhard A., Witt, Peter-Christian, eds., The German Inflation Reconsidered. A Preliminary Balance (Berlin and New York, 1982), 180–206;CrossRefGoogle Scholar“Banks and the Problem of Capital Shortage in Germany, 1918–1923,” in James, Harold, Lindgren, Hakan, Teichova, Alice, eds., The Role of Banks in the Interwar Economy (Cambridge, 1991), 49–79;Google Scholar and “Banks and Banking in Germany after the First World War: Strategies of Defence,” in Cassis, Youssef, ed., Finance and Financiers in European History 1880–1960 (Cambridge, 1992), 243–62.Google Scholar

27. See Feldman, The Great Disorder, chap. 6.

28. See Harold James, “Banks and Bankers in the German Interwar Depression,” in Cassis, Finance and Financiers, 263–82, and Theodore Balderston, “German Banking between the Wars,” forthcoming in the Business History Review. I am grateful to Professor Balderston for placing the manuscript at my disposal.

29. Wassermann, Oscar, “Notwendige Vorbedingungen für die Erfüllung der heutigen gesamtwirtschaftlichen Aufgaben des privaten Bankgewerbes. Referat des Herrn Oscar Wassermann, Vorstandsmitglied der Deutschen Bank, Berlin, auf dem VI. Allgemeinen Deutschen Bankierstag zu Berlin” (Berlin, 1925), 3, Deutsche Bank, Historisches Archiv, Personen Ordner “Wassermann.”Google Scholar

30. The structuring of the Stinnes enterprises will be discussed in the biography I am writing of Hugo Stinnes, Sr. Much relevant material on the role of the banks is to be found in Bundesarchiv Koblenz, Nachlass Silverberg, no. 552. For the Deutsche Bank and the Stollwerk firm, see Bundesarchiv Potsdam, Deutsche Bank, no. 18715, 18725, 18723, 18734, 18713, 18716.

31. Maser of the Deutsche Bank Augsburg to Director von Stauss, 1 December 1930, Bundesarchiv Potsdam, Deutsche Bank, no. 24449, Bl. 159.

32. James in his German Slump, 142ff., tends to emphasize loss of managerial dynamism among the bankers, while Balderston in “German Banking” stresses the role of competition from abroad in limiting banker options.

33. Filialdirektoren-Sitzung, 3 March 1926, Deutsche Bank, Historisches Archiv, Ordner “Direktionssitzungen.”

34. Denkschrift der Deutschen Bank und Disconto-Gesellschaft über die Juli-Ereignisse im Bankgewerbe,” 1 10 1931, in Maurer, Ilse and Wengst, Udo, eds., Politik und Wirtschaft in der Krise 1930–1932, in Quellen zur Ära Brüning [Quellen zur Geschichte des Parlamentarismus und der politischen Parteien].Google Scholar Series 3, Die Weimarer Republik, vol. 4, part 1 (Düsseldorf, 1980), 843–54.Google Scholar

35. Aufzeichnung Redelmeier, 21 August 1931, Bundesarchiv Potsdam, Deutsche Bank, No. 24343, Bl. 35.

36. See Turner, Henry A. Jr, German Big Business and the Rise of Hitler (Oxford, 1985), 254.Google Scholar

37. See Harold James, “Did the Reichsbank Draw the Right Conclusions from the Great Inflation?” in Feldman and Müller-Luckner, Nachwirkungen, 211–31.

38. Jakob to Hans Riesser, 12 February 1927, Bundesarchiv Koblenz, Kleine Erwerbungen, no. 549, vol. 2.

39. These comments are based on a study of the relevant files in the Bundesarchiv Koblenz, Deutsche Bank and the Deutsche Bank, Historisches Archiv.

40. For interesting material on the “Kleinwagen” and the problems of the industry, see Bundesarchiv Potsdam, Deutsche Bank, no. 10266, 16296, 16411, 16413. There was much upset in the Daimler-Benz firm in 1932 when Gregor Strasser, the “most prominent man after Hitler,” and eleven other “more and less prominent National Socialists” in Munich decided to buy Horch cars instead of their Daimlers. Rohde to Director Kissel, 16 July 1932, ibid., no. 16310.

41. See the correspondence in ibid., no. 15405. 15408.

42. Max von Wassermann to Director von Stauss, 6 August 1932, ibid., no. 15406, 17–19. It is worth noting that German motor companies were not alone in their interest in German rearmament. The American firm Pratt & Whitney sold licenses for its advanced motors to BMW for use by Lufthansa, and as one of its executives wrote on 6 February 1933, a week after Hitler assumed power, “[T]he present situation in Germany is beginning to change from past conditions. It seems pretty clear that Germany is about ready to insist upon [a] reasonable armament program, which will undoubtedly include aircraft. In the meanwhile Luft Hansa [sic] are beginning to expand their program. It seems reasonable and possible that within the next five years the German Government will provide itself, both for military and commercial purposes with a considerable amount of new equipment.” Quoted in Kossmann, Joachim, “Nationale Sicherheitspolitik und transnationaler Technologie-Transfer. Das ‘Nye-Committee’ und die deutsche Luftrüstung 1934–1936,” in Schröter, Harm G. and Wurm, Clemens A., eds., Politik, Wirtschaft und Internationale Beziehungen. Studien zu ihrem Verhältnis in der Zeit zwischen den Weltkriegen (Mainz, 1991), 97–116, quote on 108.Google Scholar

43. James, German Slump, 146ff.

44. Meeting of Brüning with representatives of the mining industry, 27 June 1931, in Koops, Tilman, ed., Akten der Reichskanzlei. Weimarer Republik. Die Kabinette Brüning I u. II., 3 vols. (Boppard am Rhein, 1982ff.), 2:1239–41.Google Scholar

45. Meeting of 18 September 1931, ibid., 1700–5.

46. Ibid., 1704.

47. Brüning to Goetz, 26 August 1956, Brüning papers, Harvard University. I am grateful to Professor Harold James for placing this document at my disposal.

48. Deutsche Bank, Historisches Archiv, P 415, Bl. 130.

49. Velten report, 18 September 1931, Bundesarchiv Potsdam, Reichsbank, no. 6870, 194–95.

50. Schacht to Vögler, 21 July 1931, Haniel Archiv, Duisburg (Gutehoffnungshütte), no. 400101290/33a. On Vögler's program, see Weisbrod in Kruedener, Economic Crisis, 55.

51. Meetings of the Presidium of Continental Gas, 10 September 1931 and 15 August 1933, Deutsche Bank, Historisches Archiv, no. 5, 503.

52. Supervisory Board meeting of 19 January 1935, Deutsche Bank, Historisches Archiv, P 620, 14.

53. Ibid. The four-year program refers to Hitler's mandate under the Enabling Act of March 1933 and should not be confused with the Four Year Plan of 1936.

54. VEW Supervisory Board meeting of 15 April 1933, ibid., 15.