5

The Profits of Persecution

Hitler became German chancellor on January 30, 1933, and in less than three months his government promulgated decrees restricting Jews from work as doctors, dentists, lawyers, teachers, and civil servants. In October a decree barred non-Aryans (or persons married to non-Aryans) from work as editors. Nazi officials denounced “Jewish culture” in literature and the cinema; storm troopers burned books.1

The Nazi party and the SS, not the industrial and financial elite, initiated the Holocaust. But they succeeded in their program of genocide only by enlisting a broad collection of collaborators. They gave financial incentives to the German business community to participate in, first, persecution and dispossession of Jews, later in outright murder. The business community’s enthusiastic response to these initiatives at times actually outstripped the Nazi state’s own anti-Semitic persecution, particularly during the first half of Hitler’s rule.

The Nazis’ genocide of Jews was not driven solely by economic factors. Noted Holocaust historian Raul Hilberg and others have presented convincing evidence that the Nazi party and the SS pursued the destruction of Jewry in the final stages of the Holocaust even in circumstances when it was economically or militarily disadvantageous to the Germans to do so.2 But Hitler’s government did make it possible for businesses to reap rewards from persecution of Jews as well as from exploitation of POWs and forced laborers from the East. German finance and industry made the most of the opportunity.

Private enterprise first fed on the German government’s program to “Aryanize” Jewish property—that is, to force the sale of Jewish-owned property at a fraction of its value to ethnic German entrepreneurs. The first phase was the so-called “voluntary” Aryanizations, when Jews hoping to flee Germany sold off property at the best price they could find. These transfers took place mainly between 1933 and 1938 in Germany, and they continued as late as 1941 in some of the Nazi-occupied territories.³

Later came the compulsory Aryanizations, which began in November 1938.⁴ The government seized Jewish property without compensation and sold the plunder to German companies or individuals. The Nazis also consolidated some formerly Jewish- or Polish-owned companies useful in war production into large manufacturing conglomerates run by the German state or the SS.

The forced sales of the 1930s usually maintained the trappings of ordinary commerce, complete with negotiations, attorneys, and formal bills of sale. German businesses were thus able to maintain a facade of legitimacy in the eyes of foreign affiliates and trade partners, so that international markets remained open and foreign exchange continued to flow. For some Jews there was still some room to play German off against German in an effort to reduce the damage inherent in any forced sale.⁵

The “voluntary” Aryanizations provided strong incentives for tens of thousands of Germans to profit from this supposedly minor form of persecution. Aryanization thus built support for Nazi rule, particularly among German merchants and the business elite, who relied on continued Nazi rule to ensure the legitimacy of their new acquisitions. Most of these expropriations continue to be recognized by German courts to this day.⁶

The earliest Aryanizations can be traced to the national boycott of Jewish businesses initiated by the Nazi party shortly after Hitler came to power. “For local Nazi leaders persecution of Jews [during the boycott] meant a show of power,” historian Anne Bloch has written. “For Aryan businessmen, the boycott was a convenient means of ridding themselves of Jewish competitors, and of acquiring new enterprises cheaply.… It also served to fulfill the material promises made to prominent Party members.”7

Large-scale theft through Aryanization soon became a fact of German business life. Early in Hitler’s rule for example, Dr. Ignatz Nacher, a prosperous Berlin Jew, decided to sell Germany’s second largest brewery, the Engelhardt Brauerei A.G., following repeated harassment and a Nazi-organized boycott of his brands. This was well before Hitler had consolidated his power, and Nacher hoped to flee the country with his fortune intact. The sale was to be finalized in May 1934.

But the Dresdner Bank caught wind of the arrangement. According to an affidavit filed in a Munich court, “the Dresdner Bank … due to the fact that they had an interest in acquiring the business, had seen to it that Nacher was arrested under some pretext.… He was put under such pressure that he had to give his lawyer unlimited power of attorney for the disposal of his possessions. He was informed that he would not be set free if he did not sign this power of attorney.”⁸ The attorney then sold the brewery to the Dresdner Bank for a fraction of its value, and Dresdner sold the largest share in the business to one of the bank’s own directors, Karl Rasche, who installed himself as the chairman of the brewery’s management board.

Nacher’s partners sued Dresdner for breach of contract and damages, and for a time the dispute worked its way through Munich courts. Then the Gestapo summoned the partners to Berlin and threatened them with arrest. They dropped the case.⁹

Under Karl Rasche, the brewery became a center of Nazi power and patronage. Dresdner Bank handed out positions on the brewery’s board of directors to a half-dozen major industrial figures, including steel magnate Paul Plieger. Nazi satraps took over local distribution rights, and many old Nazis remember the Engelhardt brew as the drink of choice at party gatherings. (Rasche was convicted at Nuremberg of crimes against humanity in connection with the organized plunder of entire countries. By then, the brewery extortion had been almost forgotten.)¹⁰

Legal expropriation soon became a gold rush. In June 1936, the mainstream business newspaper Frankfurter Zeitung published a glowing article praising German economic progress since the Nazis had come to power, appending a long table listing the biggest Aryanizations over the previous three years.11 The entry for 1933 recorded six major deals, two of which were acquisitions financed by the Dresdner Bank on behalf of the Flick group. In another contract, German shoe manufacturer Richard Freudenberg purchased his major competitor, the Jewish-owned Conrad Tack & Co. This was the first of a number of such Aryanizations for Freudenberg, the U.S. government was later to report,¹² and helped build his business into the worldwide shoe and leather empire that it remains today.

The Frankfurter Zeitung table listed twenty-one very large transfers and consolidations in 1934; most were forced buyouts of multi-million-dollar Jewish firms by their German competitors. In 1935, thirty-two such large contracts were reported, including two major acquisitions of Jewish firms by the Siemens group,* one by the Robert Bosch concern, one by the Link-Hoffman Werke, and another by Flick. The pace accelerated during 1936 with twenty-two major acquisitions in the first five months alone, including two more by Flick and one by the German subsidiary of the Ford Motor Company.¹³

Ford’s attempted Aryanization of Jewish property was symptomatic of the role U.S. business played in Germany throughout the first decade of Hitler’s rule. At Ford headquarters in the U.S., executives indicated that they wished to acquire the former Stoewer-Werke AG, a “bankrupt German company,” for use as an auto-body production plant building Fords for sale throughout Central and Eastern Europe. Although the company declined to disclose the terms of the deal, it did acknowledge that Ford’s German subsidiary had become one of the U.S. company’s most important overseas units.14

In Germany, Frankfurter Zeitung reported that Ford’s purchase indicated a “realization of the world view of race as the basis of the [German] economy”—in a word, an Aryanization.¹⁵ Ford’s German director Heinrich Albert wrote to headquarters in Dearborn, Michigan, that taking over Stoewer was the best means to secure new German military contracts and to create the “psychological basis … [to win] the support of the dominating circles, especially the National Socialist Party,” by assisting in the expulsion of Jews from the German economy.¹⁶ Ford’s German subsidiary—whose directors included Ford’s U.S. president Edsel Ford, its overseas chief Percival L. D. Perry, Berlin attorney Heinrich Albert, and German automotive leader Carl Bosch—adopted race as a criterion for employment at the company as early as 1935. The next year Ford dismissed its general manager, Erich Diestel (who had carried out many of the dismissals), when it was discovered that he had a Jewish ancestor.¹⁷

In a revealing development, however, Ford abandoned the Stoewer-Werke acquisition, when the company discovered it would cost too much to introduce new technology and mass-production methods into the body works. Thus, Ford was willing enough to participate in Nazi anti-Semitism if it turned a profit.¹⁸ This opportunistic pattern became typical of relations between large enterprises and Hitler’s government for the remainder of the Nazi regime.

Other U.S. banks, companies, and investors participated in and profited from Aryanizations. In the early 1930s, Germany imposed tight currency restrictions on foreign companies, forcing U.S. corporations to choose between investing their profits from German sales exclusively in the Third Reich or abandoning the German market to the competition. Virtually all U.S. companies chose to stay.¹⁹ This reinvestment requirement created pressure on foreign companies to find profitable new investments inside the Reich. Two areas seemed especially promising: Aryanizations and the semiclandestine German rearmament program.

New German conglomerates built mainly on the seizure of Jewish-owned companies sold bonds on the international market to raise capital to Aryanize still more companies at fire-sale prices.20 Bankers traded German corporate securities that were de facto Aryanization bonds—though not called by that name—in New York, London, Zurich, and other financial centers. Dillon, Read vice president William Draper emerged as one of the most prosperous traders in these markets. As director of the German Credit and Investment Corporation of New Jersey, he specialized in U.S. investments in Hitler-era Germany. After the war, Draper was to become U.S. economics chief in occupied Germany.²¹

Many U.S. companies bought substantial interests in established German companies, which in turn plowed that new money into Aryanizations or into arms production banned under the Versailles Treaty. According to a 1936 report from Ambassador William Dodd to President Roosevelt, a half-dozen key U.S. companies—International Harvester, Ford, General Motors, Standard Oil of New Jersey, and du Pont—had become deeply involved in German weapons production, in part because of difficulties in repatriating profits from more conventional business. “Our airplanes people,” Dodd continued, also “have secret arrangements with the Krupps.”²²

U.S. investment in Germany accelerated rapidly after Hitler came to power, despite the Depression and Germany’s default on virtually all of its government and commercial loans. Commerce Department reports show that U.S. investment in Germany increased some 48.5 percent between 1929 and 1940, while declining sharply everywhere else in continental Europe. U.S. investment in Great Britain, while larger than that in Germany, barely held steady over the decade, increasing only 2.6 percent.²³

The pace of Aryanization in Germany intensified to the point that some German bankers began contending that any failure to participate in the legalized looting of Jews would open them up to charges of being poor managers of depositors’ funds. Dresdner Bank managers, for example, complained in 1935 to senior management that the rival Deutsche Bank had a five-million-mark Aryanization fund that could be exploited by lending officers without the usual time-consuming procedures for approving large investments. This gave Deutsche Bank a leg up when a particularly choice “object” came up for liquidation, Dresdner’s managers said.²⁴ They got their own contingency fund.

By 1938, the shoe was on the other foot, at least as Deutsche Bank saw things. “Letters regarding Aryanizations were sent by the Vorstand [comparable to the chief executive officer’s office in a U.S. corporation] of the Deutsche Bank to the individual main branches around the end of 1938,” the bank’s Berlin senior manager, Erhardt Schmidt, told interrogators after the war. “They stated first of all that Aryanizations were now quite common and then pointed out that the Dresdner Bank was deriving appreciable profits from such transactions. For [that] reason, the Deutsche Bank in its own interest would have to take advantage of all opportunities along these lines.”25

The competitive dynamics are important here. These institutions saw Aryanization as a legitimate business opportunity that they could not afford to pass up. Further, their drive to take advantage of Aryanization continued regardless of whether individual bankers considered themselves to be anti-Semitic.

At first, the Nazis played only a limited role in the Aryanization markets. The state created the legal framework within which Jews could be exploited with impunity, but the profits from this form of looting flowed almost exclusively to private German interests. By late 1935, however, Economic Minister Hjalmar Schacht sensed the profits that the government could derive by imposing itself as a middleman in Aryanization deals. Under Schacht’s plan, much of the capital gain would go to the German state, which would also collect a variety of taxes and transfer charges.

Schacht’s comments and actions during the months leading up to the promulgation of the notorious anti-Semitic Nuremberg race laws in 1935 tacitly confirm that the German private sector had often been a driving force in the economic persecution of Jews. Schacht was not opposed to afflicting Jews, as even his self-flattering postwar memoirs make clear.*²⁶ But he was convinced that the Nazi state should play a greater role in regulating Aryanizations in order to maintain German economic stability and to avoid reigniting inflation.

Schacht agitated for faster liquidation of Jewish businesses in his speeches to manufacturers’ groups and financial forums. But he insisted that Hitler’s state should control the process and become its principal beneficiary. “The Jew must realize that their influence is gone for all times,” Schacht proclaimed in August 1935. “We desire to keep our people and our culture pure and distinctive.… But the solution of these problems must be brought about under state leadership, and cannot be left to unregulated individual actions, which mean a disturbing influence on the national economy …”27

Overall, Aryanization appears to have been second only to the vast economic trauma of the Depression in its contribution to increasing the concentration of wealth and economic power in the hands of a few German combines during the 1930s, according to a 1939 study by Guenter Keiser. According to Keiser, virtually every major German company had adopted the practice.²⁸

The mining and armament industries, long before 1936, had been dominated by four mammoth concerns: the Stahlverein, Krupp, Kloeckner and Gutehoffnungshuette. [After 1936,] Mannesmann, Friedrich Flick, Otto Wolff and Reichswerke Hermann Goering gained influence in these fields. All four of the newcomers had directly benefitted from Aryanizations.…

In the chemical industry, Jewish plants manufacturing soaps and cleansers, paints and varnishes were taken over by middle-sized Aryan concerns. [In] the paper and cellulose industries … the large Hartmann holdings went into Aryan hands.

In the textile and clothing industries, the wave of concentration in the years of 1936–1939 coincided with the process of Aryanization. Many Jewish enterprises changed owners, many others were merged with existing Aryan concerns. Still others were totally liquidated, which meant an automatic increase in business for the remaining Aryan establishments.… In 1938 alone, 900 out of 6500 existing firms in the clothing industry were liquidated. The situation in the shoe and leather industries was similar.…

In the food industry, Jewish and foreign (especially French) enterprises, particularly mills, were put at the disposal of medium and small Aryan concerns. In the tobacco industry, the great majority of Jewish cigar firms in southern Germany were acquired by Aryans. Former employees [e.g., Germans] often took over Jewish firms in the wholesale and retail trade.

In the field of private banking, the process of shrinking which had its origin in the inflation of 1921–23 assumed an almost stormy tempo with Aryanization. The smaller Jewish firms were liquidated almost without exception. Some of the medium-sized private banks met with the same fate.29

The systematic expropriation of Jewish property was well advanced by the time the German government instituted compulsory Aryanization in late 1938. The new economics minister, Walther Funk, reported in November that of seven billion marks’ worth of stocks, bonds, real estate, and business assets registered in Germany as Jewish-owned, some two billion had already been taken by German nationals through Aryanizations.³⁰ That month, the state announced a new tax, the Suhneleistung, or “atonement payment,” designed to tax Jews for the damages of the Kristallnacht pogroms that the Nazis had themselves instigated. The collection of this new payment was reported to have been administered by the Deutsche Bank.³¹ The amount stated at first was one billion marks, purportedly as recompense for the “abominable crimes” of Jews, but within a week, Reichsminister Goering increased the levy. Hitler’s government collected still another 900 million marks through the Reich flight tax, which seized at least a quarter (and often more) of the assets of every person who emigrated from Germany.32

By mid-1940, Aryanizations and punitive taxes had seized roughly four billion marks from German and Austrian Jews. This was equal to more than 75 percent of Germany’s annual investment in armament plants and military facilities on the eve of the war.³³ It was about equal to the total assets of the Deutsche Bank³⁴ and more than twelve times the assets of Nazi Germany’s giant industrial holding company, the VIAG.³⁵

Hermann Goering, the senior official in charge of war mobilization, was later to claim that Germany’s preparations for war had been bankrolled by two main sources: Aryanization of Jewish property and the looting of the Austrian state treasury following the 1938 Anschluss.³⁶ Goering was exaggerating; German state borrowing under a variety of pretexts probably played a larger role than either of these factors in financing the military buildup. But his comment illustrates that the Nazi leaders saw the forced liquidation of Jewish assets as essential to the economic viability of the Third Reich.

The Aryanizations were probably crucial to the Nazis’ political survival as well, at least during the first decade of their rule. The collaboration of German big business, shopkeepers, and professionals that was crucial to Hitler’s power in the 1930s would likely not have occurred without widespread Aryanizations, according to economic historian Arthur Schweitzer. Each of these sectors prospered in part by preying upon Jews; without Aryanizations, their competing economic interests would likely have created political divisions that the Nazis could not control. “Violent anti-Semitism became accepted by various segments of the middle class as a policy of economic reform,” Schweitzer wrote.³⁷

Most members of the German economic elite were not Nazi ideologues or fanatical anti-Semites, at least not as individuals.³⁸ They were, however, willing to sacrifice the lives of innocent people in order to achieve or maintain a privileged position in German society. Many became “institutional” as distinct from “individual” anti-Semites, so to speak. They compensated for their complicity in mass murder through grumbling and doubts, acts of self-interest that in some instances ran counter to the wishes of the Nazi state, and in rare cases, acts of charity toward persecuted people. After the war, German executives (or military officers, religious leaders, etc.) often put forward some individual deed as proof of “resistance” to the Nazis. In reality though, during the Hitler years most of them had developed and maintained institutions essential to the system of destruction. This split between individual and institutional behaviors became central to the elite’s largely successful effort to escape culpability for the Holocaust once the war was over.

A case in point is Deutsche Bank director Hermann Abs, who became probably the single most influential German economic leader after 1945. He has been remembered warmly in recent years by many senior German-Jewish bankers. Eric Warburg, of the powerful Hamburg and New York banking family, has termed Abs “my close friend” and praised his “extraordinary knowledge of the banking business and the economy.”39 William Petschek, whose family’s extensive coal and steel holdings were Aryanized by the Nazis on the eve of the war, publicly expressed his confidence in Abs. Writing in 1970, Petschek remembered a September 1939 meeting in which Abs and the Deutsche Bank “agreed to do everything to help protect our capital for the future.” More or less similar testimony on Abs’s behalf has been offered by Rudolf Loeb, whose banking house, Mendelssohn & Co., was liquidated with Abs’s assistance in 1938, and by other prominent Jews.⁴⁰

There is no reason to doubt their accounts. Abs and a number of other members of the international banking and legal networks described in earlier chapters were quite open to assisting wealthy Jews flee Germany with as much of their family fortunes as possible. Providing welcome assistance to a colleague in distress had an obvious moral appeal—and so much the better if the one who is helped is a millionaire many times over. These rescues could also be a lucrative business, even when carried out without taking predatory advantage of the situation that the Nazis had created.

Thus, Abs reemerged in some circles after the war as the archetype of a decent German whose reputation had been unfairly blackened by public preconceptions—at least until the Simon Wiesenthal Center and Nazi-hunter Charles Higham stepped forward with a blistering exposé of Abs’s institutional role during the Third Reich.41 For those more critical observers, Hermann Abs was not only the director of Germany’s most powerful war industries, he was also the financier of slavery and Aryanization.

Abs’s career during the Nazi takeover of Austria is a good example of the complex role played by the German financial elite in the Holocaust. Hitler’s government, the Deutsche Bank, and most of Germany’s large corporations regarded the absorption of Austria into the Reich as a test case for managing the emerging German empire in Eastern Europe. The theft of Jewish assets that had taken years in Germany was carried out in Austria in months. The persecution measures used in this new Reich proved to be faster and more sophisticated than those used in Germany itself.⁴²

Hitler’s Ministry of Economics tipped off the Deutsche Bank to Germany’s plan to march into Austria in early 1938, well before the Anschluss. Deutsche Bank director Abs quickly assembled a team of the bank’s foreign trade specialists to identify Austria’s choicest Jewish-owned businesses and real estate for acquisition. At the top of Abs’s list was the Rothschild-owned bank Creditanstalt-Bankverein AG, which the Deutsche Bank had been attempting to take over for almost a decade. Deutsche Bank held a small interest in the Creditanstalt, but it had been largely shut out of the Vienna bank’s operations. Abs’s team began a campaign to use the Anschluss and Aryanization to take total control of the Rothschild bank.⁴³

The Deutsche Bank’s chief rival in this effort was the German state-owned VIAG industrial combine, which owned a major Berlin bank, the Reichskredit Gesellschaft (RKG).

About a week before the Germans marched into Austria, Abs met with the Creditanstalt board to offer a deal that the Deutsche Bank team had hammered out over the previous three months: Cooperate with the Deutsche Bank and become its leading agency for further German corporate penetration into southeastern Europe, or face a takeover and probable liquidation at the hands of the VIAG when the storm troopers moved in. The Creditanstalt board considered Abs’s ultimatum overnight, then appointed him to its board the following morning. The bank’s directors did not reveal their knowledge of the coming Nazi invasion to the Austrian public, nor so far as can be determined, did they inform Austria’s government. Two weeks after the Nazis’ invasion, Creditanstalt formally became a subsidiary of Deutsche Bank.⁴⁴

The transaction did not go smoothly thereafter. VIAG, its subsidiary RKG, and the Dresdner Bank objected vehemently and blocked the deal. VIAG used its status as a German state-owned syndicate to establish itself as a trustee for a large block of Creditanstalt stock on behalf of the Reich government.45

Different factions within the Reich offered competing strategies for empire-building in Europe. Nazi state agencies and government-owned companies such as the VIAG favored direct government control over most of the large enterprises in the countries coveted by Germany. They wanted production in these territories to be organized along a relatively centralized, planned-economy model, with maximum emphasis placed on satisfying the needs of a self-sufficient Third Reich. Private enterprises should be strictly subordinate to the needs of the Reich and to the racial ideology of Nazism. The “de-judification” of subject economies would be carried out as radically as possible, with little concern for its impact on private German businesses or for how Germany’s behavior might be perceived outside of its borders. All these would be steps toward true National Socialism, they contended.

In contrast, much of the banking and industrial elite of Germany favored a more traditional, imperial approach to acquiring a new empire in Europe. Among their principal spokesmen were Economics Minister Hjalmar Schacht, Hermann Abs, and a young Reichsbank director, Karl Blessing. Their strategy favored integrating businesses in countries occupied by the Germans into private industrial syndicates coordinated through German-based cartels and through private institutions such as Deutsche Bank. The private companies in turn pledged their loyalty to Hitler’s government. German military conquest should be used to create conditions through which German corporations could buy up the key enterprises in newly subjugated countries at very favorable prices, this faction contended, but only in rare instances should the state take direct command of industry. Much of the senior leadership of the Deutsche Bank, IG Farben, the Siemens group of companies, and other German-based cartels maintained that Germany should reenter the world marketplace rather than attempt to build up the orthodox Nazi dream of a self-sufficient German empire in Central and Eastern Europe. This faction’s attitude toward Aryanization was often more complex than that of the Nazi ideologues. It was fine to absorb Jewish properties, but might the National Socialists’ radical economic measures one day be turned on the bankers themselves?46

The Anschluss with Austria and Germany’s reemergence as a major military power crystallized the debate over German strategy. Abs’s rivalry with the state-owned RKG over control of the Creditanstalt and other Vienna banks soon became a focal point of the struggle.

SS Brigadeführer Hans Kehrl confronted Abs shortly after the Anschluss and told him that the Reich “could not consent to the acquisition by the Deutsche Bank of the [Creditanstalt] share capital” because with it would inevitably come “control over the entire structure of Austrian industry.”⁴⁷ SS banking specialist Wilhelm Keppler was more blunt: The Deutsche Bank wants to “rob” the Third Reich by acquisition of Creditanstalt, he wrote. “It came to Vienna with twenty men to take over.”⁴⁸ The SS men were comfortable with Deutsche Bank’s playing a subordinate role in Creditanstalt, but no more.

Hermann Abs replied in kind. He argued in policy meetings that “Deutsche Bank would be in a better position to exploit [Creditanstalt] for the Reich” if VIAG and the RKG were “not permitted to interfere.” Using his strategy, Abs contended, Creditanstalt “was in a position to reinforce German economic influence in southeastern Europe, provided that its friendship with the Deutsche Bank were further cemented.” His bank alone, he concluded, should be given the authority to select staff and set policy for the Austrian institution.⁴⁹

Abs won undisputed control of Creditanstalt through a series of stock swaps with RKG over the next three years. He became Creditanstalt’s vice chairman, and two other Deutsche Bank directors joined the board.⁵⁰ Meanwhile, Deutsche Bank carried out the transformation of Creditanstalt into an “Aryan” institution so abruptly and thoroughly that it was recognized during and after the war as a “model” of Nazification. A postwar investigation indicated that within days after the Anschluss the bank purged its Jewish employees, brought in new German directors from Deutsche Bank and IG Farben, and re-staffed the bank’s senior management largely with Nazi party members.⁵¹

Abs helped Aryanize scores of properties in Austria, depriving hundreds of Jewish families of their livelihoods and setting the stage for their deportation to concentration camps. Creditanstalt eventually became the single most active bank in the Aryanization of Austrian businesses, according to captured records of the Nazi agency for “de-judification” in Vienna. Typically, these transactions involved provision of Creditanstalt loans to Nazi activists and to German businessmen interested in purchasing Jewish businesses at a fraction of their value. In some particularly promising transactions, Creditanstalt bought up Jewish assets for the bank’s own portfolio.52 Hermann Abs was at that time vice chairman of the Creditanstalt board with direct responsibility for approval of all of the Vienna bank’s larger transactions, a later U.S. investigation reported.*⁵³

The Nazi takeover in Vienna linked the special anti-Semitic machinery of the Nazi state—the Agency for Capital Transfer, the SS’s Central Agency for Jewish Emigration, and so on—to the powerful existing social institutions of commerce, contract law, exchange, and other day-to-day structures of conventional enterprise. The Germans stressed observance of purported legality, orderliness, and careful paperwork when carrying out expropriations. In this way, the Nazis succeeded for a time in harnessing the vast inertial movement of ordinary society to their project of wiping out Jews.

The speed and efficiency of this form of looting startled even the Germans. The SS in Vienna used an early type of computer known as a Hollerith machine acquired from IBM to register Jewish properties and keep track of their liquidation. The Vienna edition of the Nazi party newspaper crowed that, as a result of this modern registration system, “within six weeks we shall have laid hands on all Jewish fortunes over 5,000 marks; within three years, every single Jewish concern will have been Aryanized.”⁵⁴ Private German banks and businesses used the SS registration data to take over about 5,000 of the most prosperous Jewish companies in less than eighteen months, according to contemporary SS reports, and liquidated about 21,000 smaller Jewish businesses to make room for competing German enterprises. About 7,000 cases were still left to process in early 1940, according to the SS, though as a practical matter many of the Jews who nominally owned the remaining enterprises had already been deported to the forced labor center at Mauthausen.55 Most did not survive.

* One of these was the acquisition by the Deutsche Bank and Siemens of the Aronwerke Elektrizitäts AG of Berlin, a manufacturer of electric meters and radios. According to a later U.S. government study, Aronwerke’s owner Manfred Aron had until 1935 been determined to hold on to his firm and to wait out the years of Nazi rule. But after the Gestapo arrested him several times and threatened his family, Aron decided to sell his company for a fraction of its value in the late summer of that year. The Deutsche Bank financed the deal on behalf of a Siemens holding company. The Siemens group dismissed the Aron family directors, installed its own men, and changed the company name to Heliowatt AG. Once under Siemens control, Heliowatt became a holding company for a number of other new Siemens acquisitions. The Siemens companies eventually emerged as one of the largest contractors for concentration camp labor in Germany.

* Here is Schacht speaking in his own defense in his memoirs, explaining why he did not consider himself to be an anti-Semite: “As I see it there is one single factor which gives rise to the widespread unpopularity of the Jews. It is not the religious antithesis; rather it is the fact that owing to his ability, and whenever he resides in a non-Jewish community, the Jew endeavors to insinuate himself into the intellectual and cultural leadership of that community … No one grudged the Jews a free hand in commerce and industry. But when the legal and medical professions showed an unusually high percentage of Jews; when most of the theaters, the press, the concerts, were under Jewish management, then this constitutes the incursion of a foreign element into the hostess nation … A nation whose civilization is rooted in Christianity will therefore always be at pains to preserve Christianity as the basis of its civilization and to discourage foreign elements in its cultural life. So long as the Jews fail to appreciate this fact they will come up against difficulties.…”

Thus it is the Jew’s fault that there is anti-Semitism, as Schacht saw things. Further, he continued, it was entirely appropriate for a “Christian” nation such as Nazi Germany to take measures to attack the Jewish “foreign elements” in its midst, despite the fact that most German Jews had been resident in Germany for generations, and even for centuries.

Schacht’s self-defense then goes on to claim that it was “almost painful [for Schacht] to have to recount all that I had done for the Jews—painful because to champion such persecuted people is, at bottom, no more than the duty of any decent man.”

* Jewish businesses taken over as their owners sought to flee the country included the Delka shoe factory (purchased by Creditanstalt at 40 percent of the owners’ asking price); the Brunner Brothers’ lamp and metalware factory (asking price not disclosed); Samuel Schallinger’s Hotel Bristol and the Imperial Wine wholesalers (at 64 percent of the asking price); and the Toffler family’s “Tiller” brand textile and uniform company (at less than 25 percent of the asking price). The Aryanization of the Brunner factory was jointly handled by Creditanstalt and by Deutsche Bank’s Berlin office, captured records show. Meanwhile IG Farben, which was also represented on Creditanstalt’s board, Aryanized and took control of one of Austria’s largest pharmaceutical manufacturers, Serum Union AG.