1.

The Quandt family had profited for decades from war and upheaval. But when Günther Quandt permanently moved to Berlin amid the flu pandemic in October 1918, war and upheaval were about to take the thirty-seven-year-old textile magnate’s country from him. Günther witnessed the demise of his beloved German Empire firsthand when it lost World War I, along with millions of its men in the trenches. Despite the imperial state’s crushing defeat, the Quandts made millions from the war. The family textile factories that Günther led in rural Brandenburg, a few hours north of the capital, had churned out thousands of uniforms a week for their longtime imperial client. Waves of young German soldiers were sent to the trenches and front lines, and each one needed a new uniform to replace the shredded fatigues of their fallen comrades. So it went, week in, week out, for four seemingly endless years.

Yet Germany’s loss was Günther’s gain. By the time the war had ended, the money Quandt had pocketed from it was enough to bankroll his permanent move to Berlin. During the war, Günther had managed to avoid military service, initially because he was found to be unfit physically, but later because he had become a leading figure in the empire’s war economy. From Berlin, he oversaw a government department that supplied the army and the navy with wool. At the same time, Günther managed his family factories, providing daily instructions via letter, while his two younger brothers and brother-in-law were fighting at the front. When they returned alive from battle, Günther told them that he was moving to Berlin for good. He would continue to oversee the textile factories from the raucous German capital. But he also aspired to operate on a bigger stage, explore new business ventures, and branch out to other industries.

Günther loved Berlin. He was born on July 28, 1881, in rural Pritzwalk, some eighty miles northwest of the imperial capital. As the firstborn son of a prominent textile family, and thus automatically his father’s heir apparent, he was sent to Berlin for a proper education at fifteen; he lived there with his English teacher. The German Empire had become a leading industrialized nation at the turn of the century, and Berlin its beating heart. Günther used his free time to explore the sprawling, bustling metropolis, where he witnessed the building of the elevated railway and the underground metro. Günther recalled his Berlin school days as “happy years.” He would have preferred going on to study architecture, but that was out of the question. Günther was called home to learn the textile trade from his sickly father, Emil, a tall, burly man with a thick mustache. This proud Prussian Protestant held to strict tenets of frugality, piety, and hard work.

But this time, Günther wasn’t moving to Berlin alone. His wife, Toni, and their two young sons, Hellmut and Herbert, were joining him. Günther had been married to Toni for twelve years, and Hellmut and Herbert were ten and eight years old, respectively. Toni, a pretty brunette, was the love of Günther’s life. He had almost been barred from marrying her, as his parents considered her family nouveau riche. Their attempts to end the relationship made Günther seriously contemplate immigrating to the United States. He even went so far as to find the cheapest route there, via boat to Baltimore, in order to look for work in Chicago. But Günther stayed put. In the end, love and persistence prevailed, and his parents gave their blessing.

On October 15, 1918, during the fall holiday, Toni and the two boys traveled to Berlin to visit Günther and the new family home. The family of four stayed at the luxurious Hotel Fürstenhof on Potsdamer Platz. Günther was eager to show them the mansion he had bought some fifteen miles southwest from the city center, in the leafy suburb of Neubabelsberg, a colony of villas that was home to many of Berlin’s bankers, industrialists, and moneyed intelligentsia. The house stood directly on a lake, Griebnitzsee, and at the edge of Babelsberg Palace Park, the site of the emperor’s summer residence; the grounds were filled with ancient trees. Toni had yet to fully recover from the operation that had followed Herbert’s complicated birth. She was hoping to regain her health at the house, with its pleasant setting: a lake, a park, and a street lined with lush sycamore, lime, and maple trees. “This is where I will become completely well,” Toni told Günther, after he showed her and the two boys around.

It was not to be. The day after their visit, Toni and her sons traveled back to Pritzwalk. That night Günther received a phone call from an employee: Toni had returned from Berlin with light flu symptoms. The boys had been brought to stay with a family member, in order to avoid infection. In a pandemic, you had to take every precaution — the Spanish flu spread so easily. Within two days, Toni’s flu developed into double pneumonia. Desperate, Günther drove to a doctor he knew, but the man couldn’t offer immediate help: he had almost a dozen patients suffering from the same illness. Toni died that cold October night. She was only thirty-four. The frail woman, who had longed for a fresh start, was no match for the second global wave of the Spanish flu, which was leaving millions of deaths in its wake.

In an instant, Günther became a widower, alone in the frantic capital of a defeated empire on the verge of extinction. What’s more, soon his two young sons, who had just lost their mother, would be moving in with him; they needed far more care than he could ever give. Günther had little time for them. He had to build an empire. After Toni’s funeral in Pritzwalk, on a sunny fall day, Günther stood at her grave and felt that he had lost “something irretrievable.” “I believed that people are capable of giving and receiving true love only once in their lives,” he later wrote.

But six months later, Günther fell in love again. It was an attachment that haunts the Quandts to this day. He became smitten with Magda Friedländer, who later would become well known as Magda Goebbels, “the First Lady of the Third Reich.”

2.

On the warm spring evening of April 21, 1919, Günther Quandt boarded a packed night train in Berlin. It was Easter Monday, and he was all set to travel first class, with two associates, to Kassel in central Germany, to attend a business meeting. Shortly before departure, a mother posited her teenage daughter outside the businessmen’s private compartment; the girl was weighed down with luggage and boxes. Her mother had searched the entire train for a free seat. Her parting instructions: “Magda, this is where you’ll stay put.” Günther waited two, three minutes before getting up and casually inviting the young girl to sit with them. It took many more minutes, and a few more invitations from Günther, before the timid Magda opened the compartment door and joined the trio of much older men.

After Günther helped her stow her things, Magda sank down into a plush upholstered seat. Once the two began to talk, Günther discovered just how attractive the girl was: “I had invited in an exceptionally beautiful apparition: light blue eyes, beautiful full blond hair, a well-cut, regular face, a slender figure,” he later wrote. Magda was only seventeen, twenty years younger than Günther and only six years older than his eldest son, Hellmut. Magda had just spent Easter holiday with her mother and stepfather in Berlin and was returning to her boarding school in Goslar, at the mountainous center of Germany. Günther and Magda talked throughout the entire train ride, discussing travel and Berlin’s theaters. He was infatuated with her. Around 1 a.m., the train stopped at Goslar station. Günther helped Magda get her belongings off the train; as inconspicuously as possible, he stole a glance at a luggage label and noted her boarding school’s address.

As soon as Günther arrived in Kassel, he sent Magda a letter, asking if he could visit her the following afternoon at the boarding school. He would pretend to be a friend of her father’s in order to get permission from the headmistress to take her out. Magda replied, giving her assent. The next day, Günther showed up at the school with a bouquet of roses — not for Magda, but rather to charm her headmistress into allowing Magda to take a stroll with him. A courtship began. On just their third date, during a scenic drive through the Harz mountains, Günther proposed to Magda in the back of his chauffeured car. Stunned, she asked him for three days to consider. The marriages she had witnessed over her seventeen years had been far from good.

Magda was born out of wedlock in Berlin on November 11, 1901. Her parents, the engineer Oskar Ritschel and the maid Auguste Behrend, eventually married. But Magda’s mother divorced Ritschel after discovering that he was having an affair. Auguste then remarried; her second husband, Richard Friedländer, was a German Jewish businessman. Now they too were about to get a divorce. Magda grew up an only child in a cosmopolitan, upper-middle-class household, moving with her mother and stepfather between Berlin and Brussels, where she attended a strict Catholic boarding school run by nuns. Her Jewish ties extended beyond her stepfather. When Magda met Günther, she had just split up with a boyfriend, Victor Chaim Arlosoroff, an ambitious Jewish émigré from Russia. He studied economics at Berlin’s prestigious Humboldt University. But as a shiksa, a non-Jewish woman, Magda felt that she would never truly belong in the Jewish community.

After three days of thought, Magda accepted Günther’s marriage proposal. She was bemused that this stout, older man, who wore double-breasted suits, starched collars, and golden cuff links and exuded money and power, took such an interest in her. A tall man with piercing blue eyes, a round, balding head, and a bad comb-over, Günther looked imposing — but not necessarily attractive. Yet the choice to marry someone two decades older wasn’t driven by romantic love; fascination and ambition played their part. Magda was impressed by Günther, who always wore a mischievous grin, as if he knew something that others did not. Magda longed to leave boarding school and become the wife of someone with great financial resources and esteem in the business world. She fantasized about running a large household and organizing social events for his friends and business partners. Günther, however, insisted that Magda meet two conditions before they married. She had to give up Catholicism and reconvert to Protestantism; she also had to reassume her original surname, Ritschel. Friedländer, her stepfather’s Jewish surname, was a no-go for Günther and his conservative Lutheran family. Magda dutifully obliged. She told her mother: “Religion doesn’t matter to me, I have my God in my heart.”

Günther Quandt.

bpk/Atelier Bieber/Nather

In early January 1921, Günther and Magda married in a spa hotel on the west bank of the Rhine, just outside Bonn. The bride wore a gown of Brussels lace. But the harmony between them didn’t last. The newlyweds’ differences in age and character quickly became painfully clear when the workaholic Günther abruptly ended their ten-day honeymoon in Italy to attend an “unmissable conference.” Even before this sudden departure, the trip had not been a success. While the couple was driving through the Italian countryside in a chauffeured Mercedes limousine, Magda discovered that her husband didn’t care much for the “real” Italy. As her mother, Auguste, later recalled, Magda realized that “fundamentally he was a man lacking all aesthetic sensibilities, a thorough-going pragmatist to whom art and beauty meant little. Nature, too, left him quite unmoved. As they traveled through Umbria, through the landscape of classical beauty and historical significance … Quandt was explaining to his wife the geological structure of the soil and calculating its possibilities for industrial exploitation.” The trip wasn’t a total flop, though. On November 1, 1921, a little more than nine months after their honeymoon, Magda gave birth to the one child they would have together, a son named Harald.

Magda Friedländer.

bpk/Atelier Bieber/Nather

She gave birth to him alone in the hospital. Günther was working, of course. Now that they were back home in Berlin, for him there was only business; he did not cultivate a personal life. When he took a trip with his wife and sons, visits to companies or factories were the main focus. He always worked twelve-hour days, arriving at his desk at 7:30 a.m. and returning home at 7:30 p.m., “tired and battered,” Magda’s mother later recalled. “After dinner, he would sit in his chair, open Berlin’s financial newspaper, and fall asleep three minutes later.” Günther was chronically exhausted. He complained that he had no time to read books or think up new ideas. Social life barely interested him — he might attend an affair if it was business-related, but it “was only arranged if unavoidable.” This pained Magda. Events at home provided the only moments when she, housewife and hostess, could be the center of attention. But there was barely any space for married life in Günther’s world. Magda had no choice but to adapt.

3.

In the early 1920s, as Günther and Magda Quandt were already growing apart, the new postwar German state, known as the Weimar Republic, was devolving into chaos. Many businessmen kept their distance from its volatile parliamentary politics, as one constitutional crisis followed another. Instead, they turned to another playing field for leverage and profit: the stock market.

Hyperinflation and the flight of capital out of Germany accelerated in summer 1922, following the assassination of the minister of foreign affairs, the Jewish industrialist Walter Rathenau, and the threat of defaulting on gargantuan reparation payments imposed on Germany under the Treaty of Versailles. After Rathenau’s murder in Berlin, any last shred of confidence in Germany’s currency evaporated. The nation’s inflation rate rose by 1,300 percent, and the Reichsbank began printing trillion-mark bills. Only the few wealthy Germans who had invested in tangible assets, such as real estate and factories, profited from this situation; any debt they held promptly evaporated. But most of Germany’s middle class had put its money in savings or in worthless bonds that had been used to finance World War I. Millions of Germans were ruined.

Stocks, however, floated somewhere between tangible and liquid, in a financial no-man’s-land where only the most audacious speculators dared tread. Günther Quandt was one of those speculators. In search of an opportunity to diversify the money he had made during the war, Günther turned to currency trading and stock market speculation. As prices fell, small investors began to sell off their shares, leaving those few firms backed by tangible assets to trade at bargain prices. It was a speculator’s dream — but a dangerous one. The unsteady German currency made for volatile price swings, and a rookie trader could easily get caught out, betting against big investors who were trying to snap up large packages of shares and using cheap debt to speculate.

After a particularly risky trade on a wool firm netted Günther forty-five million marks in fall 1921, he commissioned a dozen banks to buy up shares in a dozen industrial companies. One firm he invested in was Germany’s massive producer of potash, Wintershall. Although Günther had already joined its mining board, he lacked overall control. This bothered him deeply. “I had nothing to say anywhere,” he later recalled. It was an unpleasant and unfamiliar role for the textile mogul, who, while leading his family factories from a distance, was determined to become a major player in a different industry. He had just turned forty, and time was ticking by. The prospect of using his fortune solely to speculate on stocks during “the evil period of inflation” repulsed him, Günther wrote. Yet for someone who proclaimed to have such an aversion to speculation, he was managing to overcome his professed disgust with great success. Even after his stock-buying spree, he still had thirty-five million marks left. He was ready to buy a firm of his own.

In spring 1922, Günther identified his prey: the Berlin-based business Accumulatoren-Fabrik AG (AFA). This company had become one of the world’s biggest producers of batteries. When Günther set his sights on AFA, electrification was in full swing around the globe. The firm also had deep ties to the arms industry, having supplied batteries to German submarines during World War I. However, AFA’s intrinsic value wasn’t reflected in its stock price. Its ownership was spread wide, and it lacked proper mechanisms, such as preferential shares, to protect it from a takeover.

As Günther began to make daily purchases of AFA shares, he used a web of shell companies, banks, and straw men, including family members, to avoid attention, remain anonymous, and raise more money. But he was forced to go public in September 1922, when the AFA board announced a capital increase, accompanied by an issuance of preferential shares. By then, Günther had amassed only a quarter stake in AFA. Acquiring a majority would be next to impossible if the share increase went through.

The day after the announcement, Günther was reading Berlin’s financial newspaper at his office desk when he came across an anonymous ad calling for fellow AFA shareholders to vote against the board’s proposals. Günther called Walther Funk, the newspaper’s editor in chief. Funk knew everyone of any business stature in Germany, and he revealed that a man named Paul Hamel had placed the ad; Günther arranged a meeting with him that night. Hamel was a partner at the private bank Sponholz and specialized in corporate takeovers. He and Günther decided to join forces.

After a month of strenuous negotiations with the board of AFA, the corporate raiders emerged victorious. No preferential shares were issued, and Günther received four supervisory seats on the board. Meanwhile, in secret he kept buying AFA shares, financed by his textile factories. In June 1923, Günther became supervisory board chairman, with his group controlling some 75 percent of the shares.

The hostile takeover of AFA was complete. Günther had gained control of a world-renowned firm in a new industry. He had made a swift transformation, from textile merchant to shrewd speculator to full-fledged industrialist. Plus, thanks to Funk, he had gained a business partner in Paul Hamel. After an AFA executive died in January 1925, Günther took over the late businessman’s office at company headquarters, at Askanischer Platz 3. It lay next to Berlin’s main railroad station, in the heart of the government and business district, close to money and power. From there, sitting behind a big, dark double desk in a large office suite with high, wood-paneled walls, Günther ruled over the nascent Quandt empire.

Three years later, Günther conquered a second company: Deutsche Waffen- und Munitionsfabriken (DWM). During World War I, the business had been one of the most important makers of arms and ammo for Germany’s imperial army. Its subsidiaries had produced the famous Mauser rifles and Luger pistols, plus millions of bullets and parts for fighter planes. Günther fondly thought of DWM as “a little Krupp,” referring to the infamous Krupp steel firm, Germany’s largest producer of arms.

But the once-mighty DWM was in dire shape when Günther and his business partners made a move for it in summer 1928. The Berlin-based firm had been forced to retool as part of Germany’s agreement to disarm after losing the war, and it now produced only kitchen appliances and sewing machines, among other harmless items. The only weapons DWM was allowed to make were sporting and hunting rifles. The company’s share price had plummeted, plagued by rumors of insolvency and an antiquated management team.

DWM’s sorry state made it a much easier, and cheaper, target for takeover than AFA had been. In his 1946 memoir, published in the wake of World War II, Günther desperately attempted to create the impression that he had never been deeply involved in the arms business. He alleged that it was Paul Hamel who brought him the opportunity to expand into the weapons industry. (The duo had added another Paul — Paul Rohde, a steel tycoon — to form a takeover trio for DWM.) According to Günther, Hamel mobilized investors so successfully at the next DWM shareholders’ meeting that the entire executive board resigned in July 1928. Revisionist history aside, it was ultimately Günther who, again, was named supervisory board chairman, due to his reputation for capably restructuring companies, whatever the industry.

4.

As the era of hyperinflation peaked and ended in late 1923, Friedrich Flick, a forty-year-old steel mogul, moved with his wife, Marie, and their sons to Berlin. They settled in a villa tucked away in the upscale Grunewald neighborhood, in the forested western part of the capital. Flick too had been profiting enormously from the heady years of speculation and inflation, which enabled him to leave his native Siegerland, a rural region southeast of the Ruhr area, and settle in the capital. Now Flick paced the well-kept gravel path around his new villa, chomping on cheap cigars and plotting his next audacious move.

To mark his arrival, Flick bought a stately office building at Bellevuestrasse 12, from which to rule his growing empire of industrial interests. It lay on a quiet street, right between the Tiergarten and Potsdamer Platz. Berlin’s bustling center was just down the road, and Günther Quandt’s headquarters on Askanischer Platz were only a three-minute drive south. With his dour determination, ruthlessness, and knack for numbers and subterfuge, Flick was rapidly becoming one of Germany’s most successful and influential steel tycoons. He rarely seemed to enjoy it. No hint of glee lit up Flick’s blue eyes, nor did any faint smile pass over his features. His squat build, gaunt face, focused stare, and full head of rapidly graying hair gave him an intimidating and stern look that befit the man who would become Nazi Germany’s most notorious industrialist.

Two years younger than Günther Quandt, Flick was born on July 10, 1883, in Ernsdorf, a sleepy village in imperial Germany’s burgeoning industrial heartland. The son of a timber merchant who held stakes in several ore mines, Flick studied business and economics in Cologne before parlaying his apprenticeship at a struggling Siegerland steel firm into a directorship at age twenty-four. He then joined the board of another local steel firm that was also in a financial bother. The move to the boardroom enabled Flick to marry Marie Schuss, daughter of a respected Siegen city councilor and textile producer, in 1913. Before long the couple had three sons: Otto-Ernst, Rudolf, and the latecomer Friedrich Karl. The Flick dynasty was beginning to take shape.

Friedrich Flick.

ullstein bild – ullstein bild

Flick had an uncanny gift for memorizing numbers and analyzing balance sheets. Back to back, he restructured the two struggling steel firms before seizing an opportunity presented by the outbreak of World War I. In 1915, Flick was appointed to the board of Charlottenhütte as its commercial director. The financially sound firm was the largest producer of steel in Siegerland, but it was still small compared to its many competitors across the German Empire. Flick’s fellow board members allowed him to embark on an ambitious spree of takeovers, quadrupling the balance-sheet total over the course of the war. The company profited handily from the army’s increased demand for weapons-grade steel.

As demand for weapons rose in the final two years of World War I, the prices of steel, ore, and scrap metal exploded along with it. Flick used Charlottenhütte’s exorbitant wartime profits to finance the company’s takeover strategy. At the same time, he implemented his own scheme: Flick began secretly buying up stock in Charlottenhütte, which had no dominant shareholder. He financed a stealthy takeover through a profitable side business in scrap metal, his father’s money, and his wife’s dowry. What’s more, he twice convinced his board and the state to issue preferred stock to ward off takeover threats, both realistic ones and those he exaggerated, so that no one else would end up gaining control of Charlottenhütte.

After fending off a real takeover threat by the legendary Ruhr steel mogul August Thyssen and after striking a deal with him in early 1920, Flick became Charlottenhütte’s controlling shareholder. He then transformed the firm into his personal holding company for a rapidly changing array of shares in steel, mining, and other heavy industry firms, often purchasing stocks through straw men and shell companies to hide his identity and intentions, much as Günther Quandt was doing at the same time. Flick’s menacing pace of share acquisitions, sales, and swaps brought him into fierce competition and occasional collaboration with established industrialists such as Thyssen, Krupp, and others.

After making a pact with Thyssen, Flick agreed to stay out of the Ruhr area, temporarily abandoning his ultimate aim. Instead, he started doing steel deals in Upper Silesia, a heavily contested region that went back and forth between German and Polish control. Its volatility was fertile ground for cheap buying opportunities. Flick’s Upper Silesian steel deals brought him national attention for the first time. A business journalist at the Berliner Tageblatt, the capital’s largest newspaper, was the first to profile Flick. In 1924, the reporter wrote that Flick was “seized with the spirit of the times and felt himself equally called upon. He jumped with both feet into the cauldron of the reshuffling process, dived under a few times and resurfaced as the new conglomerate king of heavy industry … Friedrich Flick — whose name is unknown to the public, but whom mining colleagues and big bank directors (who can’t stand him, because he shuts them out) acknowledge as one of the most powerful, successful, and skillful.” Flick hated any form of media attention and began bribing journalists to kill the articles they were writing about him.

Through his incursion into Silesia, Flick finally gained a foothold in the industrial region he coveted most: the Ruhr area. Over 1923–24, he swapped a large part of his Upper Silesian interests for stakes in Ruhr steel firms controlled by a competitor. The swap included shares in Gelsenberg, a mining firm. Flick’s next move was his boldest yet. In 1926, a group of Ruhr industrialists established the Vereinigte Stahlwerke (VSt), a conglomerate that regulated steel production and pricing, in Düsseldorf. Largely financed by American bonds, it became the world’s second-largest steel firm, bested in size only by US Steel. Flick received a sizable stake in the VSt because of his Silesian share swap and moved many of his business interests into the new Ruhr conglomerate. But it wasn’t enough. He wanted to control the entire VSt. When a few of its controlling companies merged, and Gelsenberg surfaced as the VSt’s largest shareholder, Flick seized the opportunity. He began buying up Gelsenberg shares in hopes of acquiring a majority stake. After making a series of stock swaps and trades, mainly with a former rival, Flick became the VSt’s majority shareholder, gaining control of one of the world’s largest industrial conglomerates. By 1929, at only forty-five years of age, he effectively ascended to the rank of Germany’s most powerful industrialist.

5.

The sky was also the limit for Günther Quandt in the late 1920s. Although his brothers were increasingly taking over the running of the textile factories back in Brandenburg, he continued to set the strategy for the family business. He was a major shareholder in Wintershall, Germany’s largest potash firm. And, most important, he had conquered two big industrial businesses that sold their goods around the world. A DWM executive wrote that Günther had converted to a new faith: “He belongs to those men whose strength only lies in their belief in the invincible power of money. His success only serves to strengthen this, again and again. This belief has turned into a religion for him, albeit one that doesn’t necessarily contain a faith in God.”

With the new money came the typical trappings of the parvenu. For years, Günther had been looking for a suitable pied-à-terre in central Berlin, so that he didn’t have to travel home after leaving the office late or going to the theater with Magda. One day in 1926, his real estate broker contacted him: a businessman needed to sell his townhouse immediately, to avoid bankruptcy. Günther bought the place, and all its contents, after haggling with the desperate owner to bring the price down. The townhouse, located in Berlin’s sophisticated Westend, came expensively furnished, with its entire inventory intact, down to the last wine bottle, artwork, and piece of cutlery. It was decorated far more stylishly than his own mansion — the centerpiece of its living room was a large organ. After buying the townhouse, Günther quipped to Magda: “See, dear, how wrong you were when you said that culture cannot be bought. I have bought it!”

But as his belongings steadily increased, Günther’s family life was falling apart once again. Disaster struck in early July 1927. His firstborn son and heir apparent, Hellmut, had just started a year-long work-study program abroad when he died in Paris, after a botched operation for appendicitis. He was only nineteen. Hellmut’s last words were addressed to Günther: “I would have so gladly helped you with your great work, my dear father.”

Günther was devastated. He wrote: “I lost my dear, sweet boy, who I was always so proud of, for whom I had built everything.” Magda, who had stayed at Hellmut’s bedside for days, was deeply shaken by her son-in-law’s death. Hellmut was only six years younger than she was, and the two had been very close — so much so that some suspected that the two shared romantic feelings. Hellmut was buried next to his mother, Toni, at Pritzwalk’s cemetery, in the family mausoleum that Günther had built. “Everything he was destined to carry in life now has to be taken over by his brother Herbert, the seventeen-year-old,” Günther wrote.

Günther’s second-born son, Herbert, seemed woefully ill-equipped to succeed his brother. A moody introvert, slender and shy, he was the opposite of his gifted, handsome, and empathetic older brother. What’s more, Herbert was born with a visual disability so severe, he had to be homeschooled from age ten. As he was barely able to read, Herbert was forced to memorize all his lessons, learning information by means of his private teachers’ oral explanations.

Herbert’s doctor predicted that he could find a professional future only in agriculture, working with his hands. Günther therefore bought Herbert the grand Severin estate in the northern state of Mecklenburg. The center of the estate was a neo-Renaissance brick manor, dating from the 1880s, which was surrounded by about twenty-five hundred acres of land, ranging from farmland to forest. Its fields, meadows, and woodlands rested on a gentle ridge. Günther appointed his former brother-in-law, Walter Granzow, as Severin’s caretaker, and a profitable agricultural business soon developed. Before long, the estate would serve a much darker purpose.

Hellmut’s death speeded the unraveling of Günther and Magda’s marriage. They were mismatched from the start, and whatever romantic feelings Magda retained for Günther vanished after her stepson’s death. On his deathbed at the hospital on Paris’s rue de Clichy, Hellmut had begged his constantly fighting father and stepmother to “always be kind to each other.” Hellmut’s words pierced Günther’s heart “like a stab,” he wrote. “I felt that if Hellmut died, our marriage would break up. He was the strong support that, unconsciously perhaps, had always led us to each other.”

Günther was right, and the problem was of his own making. For six years, Günther had neglected Magda emotionally, socially, and financially. He had been stingy with her, initially giving her an allowance that was a third of what the maids received in pay. She had to keep a record of all household expenses, and whenever Magda showed the record book to her husband, he would leaf wordlessly through it page by page, finally writing, in red ink: “Read and approved, Günther Quandt.” Her whole life consisted of looking after children and managing a household staff of five in a Berlin suburb. But Magda was made for adventure, not domesticity. She was well-educated, spoke many languages, and loved the fine arts. She wanted more from life, preferably the limelight, and had expected, in vain, that being married to a rich industrialist would give her a socially prominent place in Berlin’s roaring 1920s.

In fall 1927, a few months after Hellmut’s death, the couple went on a trip to the United States. Günther hoped it would revive their marriage. He even shipped over a luxury motorcar, his red Maybach cabriolet, for the occasion. Despite his efforts, the road didn’t rekindle their love. But a different kind of spark did ignite. In Midtown Manhattan, of all places, Günther and Magda received their first overtures from the Nazi Party. Kurt Lüdecke, a jet-setting playboy and an early member of the NSDAP, was based in New York for the time being and was hoping to sell the Nazi cause to wealthy Americans. Lüdecke had just failed to raise funds from Henry Ford, the virulently anti-Semitic automobile tycoon from Detroit. Maybe, Lüdecke thought, he would have more luck with a rich German like Günther, who happened to be the older brother of a friend.

The couple met Lüdecke at the Plaza Hotel, where they were staying during their visit to New York. “I lunched with him and his charming young wife,” Lüdecke wrote in his memoir, I Knew Hitler. “He was now one of the richest men in Germany, with the mentality typical of internationally and economically minded business machines who have little or no imagination left for other things. Of course he had become at once another object for speculation for me — I wanted to get him and his money interested in our cause. But he was skeptical.”

Günther didn’t take the bait, so Lüdecke changed his focus. Magda seemed “much more open to suggestion,” he wrote. “Her eyes sparkled when I told her about Hitler and the Nazi heroics. By the time I said good-bye to them on the ship which carried them home to Germany, Frau Quandt had become my ally. She promised to read the Nazi books I had given her and to work on her husband, and warmly invited me to visit them in Berlin. We became close friends during my visit in Germany in the summer of 1930, and I made a fervent Nazi out of her.”

They became far more intimate than that. It wasn’t Magda’s first affair, nor would it be her last. After returning to Berlin from their American trip in early 1928, Günther gave Magda more freedom and more money. The tycoon, consumed with the DWM takeover, upped her allowance and stopped criticizing her clothing, her daily plans, and her spending. Magda was finally allowed to engage distinguished fashion designers to upgrade her wardrobe and to attend society balls on grand estates. Still, she wasn’t happy. Her feelings for Günther were gone. She repeatedly asked him for a divorce, but Günther wouldn’t have it.

At one of these balls, Magda met a young student from a wealthy family, and the two started an affair. She had no qualms about taking trips with her new lover. When Günther became suspicious, it wasn’t because of Magda’s frequent absences but rather her mood, which had changed from sulking to radiant. He had a private detective shadow her, and soon it was documented that Magda and her lover were staying at a hotel in the same Rhine River town where she and Günther got married. When Günther confronted her, she admitted to everything.

The ramifications were severe. Magda was to leave the house immediately. Günther initiated divorce proceedings. Suddenly, young Magda found herself in an unenviable position: the industrialist’s wife was to become penniless overnight. Having admitted to the affair, Magda stood to lose everything in court: her marriage, her son, Harald, and any prospect of alimony. But she wasn’t helpless after all — she had her own dirt on Günther. Years earlier, she had discovered in his writing desk a pack of love letters from other women. Now she was prepared to use them to bring Günther back to the negotiation table.

Her plan worked. Günther and Magda’s marriage was dissolved on July 6, 1929, in Berlin’s regional court. Her lawyers, Katz, Goldberg, and others, got her a good deal. Magda had to assume the blame for the divorce and the legal costs because she had “forsaken her marital duty” by refusing to sleep with her husband for over a year. And the once frugal Günther would have to provide generously for his ex-wife. She was to receive a monthly alimony of almost four thousand reichsmarks, twenty thousand reichsmarks in case of any illness, plus fifty thousand reichsmarks to finance the purchase of a new home. Magda also got custody of Harald until he turned fourteen. Then he would return to Günther, to be groomed by him so that he could one day take over half of the Quandt business empire. This custody arrangement rested on one condition: if Magda were to remarry, Harald would return to his father immediately. Günther didn’t want his son to be influenced by another father figure. In addition to this custody clause, Günther granted Magda the right to use his Severin estate without any restrictions. These provisions would have major consequences for the former spouses and their son.

While Günther devoted tens of pages in his memoir to describe his life with Magda, he spent only one terse paragraph documenting their divorce, which he considered amicable: “In summer 1929, I separated from Magda … Since then, we were on friendly terms with each other.” Günther at first took responsibility for the failed marriage, blaming his workload, but then he switched to absolving himself: “With all the stress, I didn’t look after Magda as she needed and deserved. I have often blamed myself bitterly for this. But how often do we humans blame ourselves, without actually being guilty.” Still, Günther kept a soft spot for his ex-wife: “Even when our ways parted, I always thought of her with admiration.”

After the divorce papers were signed, Günther sent Magda a bouquet of flowers and took her to dinner at Restaurant Horcher, one of Berlin’s most exclusive dining spots and Göring’s favorite. Initially, the occasional family gatherings that followed the divorce were “in greatest harmony,” Günther’s elder son, Herbert, later declared. Magda was a free woman and well provided for. She rented a seven-room apartment on Reichskanzlerplatz 2 in Berlin’s Westend, around the corner from Günther’s townhouse. She could finally be the host that Günther had never allowed her to be. She had to look after her young son, but since she could afford to hire a maid and a cook, Magda had more free time than she knew what to do with. Although she was still seeing the young student, she was looking for a more mature man. She had other suitors, including a rich nephew of the American president, Herbert Hoover, but when he proposed marriage, she declined. Magda was restless, searching for new meaning in life. She soon found it — in the burgeoning Nazi Party and its most vocal proponent besides Hitler: Dr. Joseph Paul Goebbels.

6.

The Nazi playboy Kurt Lüdecke first introduced twenty-eight-year-old Magda Quandt to the more refined circles of the National Socialist movement in the summer of 1930. As Lüdecke put it: “With nothing to do and a good income to do it on, she became an active Nazi supporter.” The wealthy divorcée made her entry through the Nordic Ring, an elite racial debating club in Berlin. It counted among its ranks many German aristocrats, equally bored and wealthy. The group advocated a “Northerning” of the German people, as they considered “the Nordic race” superior to all others. One evening “after consuming considerable quantities of alcohol,” Magda complained to the intoxicated clique that “her life repelled her and that she thought she was going to die of boredom.” Prince Auwi, a son of the abdicated emperor, Wilhelm II, was sitting at her table and leaned toward Magda with a conspiratorial smile: “Bored, my dear? Let me make a suggestion: come and join us! Come work for the Party.”

Magda immediately took Prince Auwi’s advice. On a stifling hot summer evening in late August 1930, Magda visited a Nazi Party election rally in Schöneberg’s Sportpalast, Berlin’s largest convention hall. It was her first encounter with that night’s main speaker — Joseph Goebbels — Herr Doktor, as he had obtained a PhD in literature from the University of Heidelberg. Goebbels had failed as a fiction writer, playwright, and journalist before joining the nascent Nazi Party in 1924. With his gift for rhetoric and bombast and his slavish devotion to Hitler, he rapidly rose through the ranks. Hitler had promoted his trusted friend to Berlin Gauleiter in 1926. Now, four years later, the thirty-two-year-old Goebbels had risen even higher. He was now a member of the Reichstag, the Nazis’ chief of propaganda, and the architect of the party’s national election campaign. Votes would be cast in just two weeks, and Goebbels was only getting warmed up.

Goebbels had a long nose, a pale face, a high forehead, and swept-back dark-brown hair. He rarely smiled. His large head was an awkward contrast to his height (only five feet five) and his scrawniness. He walked with a limp because of a clubfoot, and he wore ill-fitting shirts and suits. Why would an attractive, rich divorcée who attended a debating club that preached the virtues of Nordic superiority notice him at all? And yet that night, as Goebbels began to address the crowd of thousands, Magda was hooked. He had a deep, booming voice; he could sneer and screech; his tone veered from sadness to sarcasm. He hurled fast insults at his enemies: the Jews, the Communists, and even the capitalists. Magda’s mother later described her daughter’s first experience of hearing Goebbels as near-erotic: “Magda was inflamed. She felt addressed by this man as a woman, not as a supporter of the ‘party,’ which she hardly knew. She had to get to know this man, who from second to second could make you boiling hot and freezing cold.”

A few days later, on September 1, 1930, Magda joined the Nazi Party. She bought Hitler’s Mein Kampf, his autobiographical manifesto, and read it from cover to cover; she studied the work of Alfred Rosenberg, the Nazi theorist who was a rival of Goebbels. After a failed stint leading the NSDAP’s working-class women’s committee in her tony neighborhood, Magda went in search of another job. She had to get close to Goebbels. One gray day in late October, she chanced it. She traveled to Berlin’s city center, showed up unannounced at the fortresslike regional headquarters of the Nazi Party, and offered her services. When she highlighted her knowledge of foreign languages, she received a warm welcome. Three days later, she took the post of secretary to Goebbels’s deputy.

After a few days in the office, Magda was descending the stairs when a short man in a trench coat came up in a hurry. It was Goebbels. When they passed in the stairwell, they briefly exchanged glances. Magda, cool as ever, walked on and didn’t look back. Goebbels immediately turned to his adjutant and asked: “Who was that amazing woman?” The next day Magda was summoned to Goebbels’s office. He told her that he was looking for a reliable person to make a private archive for him and asked her if she could do it. The archive was to consist of domestic and international news clippings about the Nazi Party, Hitler, and, above all, Goebbels himself. Goebbels knew the power of information. He handpicked news items to use in his deceptive propaganda campaigns. Newsgathering also gave him an advantage in navigating the NSDAP’s bloody palace intrigues. Goebbels was always looking for the competitive edge. He wasn’t a celebrated aviation war hero like Hermann Göring or the leader of the SS like Heinrich Himmler. Goebbels had only his wits and his devotion to Hitler to rely on.

Magda accepted the job. She first appears in Goebbels’s diary on November 7, 1930: “A beautiful woman named Quandt is making me a new private archive.” As Magda came under the spell of Nazism and Goebbels, her relationship with Günther changed. The former spouses still kept in frequent contact. Harald lived with her, so Günther and Herbert often visited the two at their apartment on Reichskanzlerplatz. She even joined them for family holidays. Magda was at Günther’s side in Florence for Christmas 1930, after he suffered a hip injury. They traveled to St. Moritz together, where Günther recuperated in the mountain air.

But something had come over Magda. Their conversations now focused on politics alone. Magda had tried to convert Günther to the Nazi cause after attending her first rally. “It was supposedly absolutely necessary to join this movement, it would be the only salvation from communism, which Germany would otherwise face given its difficult economic situation,” Günther later recalled her saying. On subsequent visits, he noticed “that Magda became an ever more zealous propagandist for the new cause and that she was wholeheartedly involved.” Günther initially thought that Magda merely had an “infatuation” with Goebbels’s oratorical gifts, but when she kept repeating the same message, he limited the visits.

During that Christmas holiday, Magda went further, and tried to proselytize both father and son, urging them to join her new cause. “She became the most fervent advocate of National Socialist ideas and tried to convert my son and me for the party. That we should at least provide money for this cause. The arguments seemed so fanciful; it wasn’t easy to go against them. When we saw from our further conversations that only the party was being talked about, and no longer … beautiful things, my son Herbert and I decided to stop our visits to her,” Günther later testified in court. He said that he stopped seeing her altogether after their time in St. Moritz.

Herbert confirmed his father’s recollection under oath. Despite all the “admiration and gratitude” he felt toward his former stepmother, he had been so startled about “this development of views and fanaticism” that it seemed pointless to keep in touch with Magda, “since she had become too stubborn to be told otherwise.” But Günther and Herbert lied. Their visits did not stop, and father and son Quandt were far more interested in fascist thought than they ever did admit.

7.

Although the period of the Weimar Republic was profitable for Günther Quandt, he was no fan of the new, more liberal Germany. There was too much political turmoil and economic volatility. He missed the days of the stricter German Empire. Günther had witnessed its demise firsthand. On October 5, 1918, ten days before Toni died, he attended the Reichstag session in which imperial Germany’s last chancellor acquiesced to US president Woodrow Wilson’s demands for peace by asking for an immediate ceasefire and an end to World War I. It was the first and last time Günther went to the Reichstag. “A picture of misfortune is all I remember,” he later wrote. “Our fatherland was facing chaos.” Over the years, Günther developed an interest in authoritarian ways of ruling. Whereas Magda entered the Nordic Circle, Günther joined the Society for the Study of Fascism in Berlin. The invitation-only study and debate group of about two hundred members explored fascism as practiced by the Italian dictator Benito Mussolini. The group, established in 1931, aimed to bring ideological unity to Germany’s disparate far-right factions, and it examined how the fascist system might work as an alternative to the democratic Weimar Republic.

The group’s head and driving force was Waldemar Pabst, the ardent anti-Bolshevist who had ordered the executions of the German Communist leaders Rosa Luxemburg and Karl Liebknecht in 1919. The club’s mix of elites included conservative academic theorists who studied Italian fascism, aristocratic landowners, the trio of future Nazi ministers of economic affairs (Hjalmar Schacht, Walther Funk, and Hermann Göring), Günther’s business partners (the two Pauls), and Fritz Thyssen, a steel industrialist who was an early supporter of the Nazi Party.

At the club, Günther led a study group that drew up guidelines for the reduction of unemployment in Germany. The club organized evening lectures, readings of pamphlets on fascism, and discussions of alternative ways of ruling. The wealthy members of the group were essentially the fascist counterpart of “salon socialists.” Interest in the group, however, proved short-lived. Its members found ideological unification closer to home, opting to support a homegrown brand of fascism: Nazism.

Initially, most business tycoons viewed Hitler and his Nazis as loud, violent, boorish, brutish uniformed curiosities from the uneducated and impoverished hinterlands — just some outlandish figures to joke about. That changed in the wake of the worst global slump in the stock market, culminating in the collapse of share prices on the New York Stock Exchange on October 29, 1929. Plummeting stock prices wiped out most investors and firms, many of them leveraged on credit. Demand for goods and services was shattered. The Great Depression took a devastating toll on Germany. By late 1930, the stock market had lost two-thirds of its value, industrial production had halved, and millions of Germans were unemployed.

In mid-September 1930, Hitler’s Nazi Party rode a wave of economic and political discontent to become the second-largest party in the Reichstag, receiving 6.4 million votes. The Goebbels-led election campaign — which blamed Jews and Communists for the financial crisis — was a resounding success. That winter, Hitler began trying to make inroads among Germany’s wealthiest businessmen. Economic malaise opened the door for him; many moguls feared political upheaval from the left while the financial system was teetering. Günther and his fellow tycoons soon received a call inviting them to Hitler’s corner suite at Berlin’s Hotel Kaiserhof.

8.

On Sunday morning, February 1, 1931, Hitler was at his home base in Munich and went to see Otto Wagener, his chief economic adviser. The leader of the Nazi Party had money on his mind. Hitler and Wagener began considering ways to get hold of millions of reichsmarks to arm the Sturmabteilung (SA), the Nazi Party’s paramilitary wing, in case a putsch from the left turned into civil war. They settled on the business community, but there was one problem: neither of them had any good contacts there. That needed to change, and fast. Wagener immediately called Walther Funk at his home in Berlin. The newspaper editor was eager to set up meetings with industrialists and financiers for the Nazi leader, and he recommended that Hitler and his entourage set up shop at the capital’s chic Hotel Kaiserhof. Funk told Wagener that this place, Berlin’s first grand hotel, was the only suitable location if Hitler wanted to make a good first impression on the tycoons and if he wanted a serious chance at getting some money from them. The building was situated opposite the Reich Chancellery, around the corner from the offices of Günther Quandt and Friedrich Flick. Funk would reserve the appropriate rooms.

The next morning, Hitler, Wagener, and their entourage left Munich by car. It took more than a day to drive to Berlin. Wagener prepared Hitler, urging him to first discuss economic issues with the men, ease them into conversation, and then ask them for money to acquire weapons for the SA. They finally arrived at the hotel at 2 p.m. on Tuesday, February 3. Funk awaited them in the lobby and showed them their rooms: a large corner suite on the third floor. Hitler had his own bedroom, with a private bath. The rest were quartered together. The Nazi leader would receive his guests in the suite’s richly decorated sitting room, overlooking the Reich Chancellery park. Funk had moved quickly. In two hours, at 4 p.m., Hitler’s first introduction of the week was due to arrive: Baron August von Finck.

The thirty-two-year-old aristocratic financier from Munich was Bavaria’s richest man. His father had left him a business empire, including control of Merck Finck, one of Germany’s major private banks, and the largest stakes in two global insurance giants, Allianz and Munich Re.

August von Finck was tall and regal in bearing, with a cool expression and a full head of immaculately swept back brown hair. He was to the manor born. Von Finck’s father, Wilhelm, was a cofounder of both Allianz and Munich Re. And insurance wasn’t even his main profession. Wilhelm was a financier who built his own private bank, Merck Finck. His entrepreneurial spirit was boundless. Wilhelm started beer breweries, helped expand the railway network, cofounded a venture with the inventor of diesel, and helped build the first hydroelectric power station in the German Empire. In recognition of his many efforts, he was ennobled: Wilhelm Finck became Baron Wilhelm von Finck in 1911. He bought thousands of acres of land and became one of the largest landowners in Bavaria. All in all, he was a tremendously successful man, especially for a pious Protestant living in a devoutly Catholic part of Bavaria.

But disaster struck the family during World War I, when August’s older brother was killed at the front in 1916. Wilhelm had planned on leaving his eldest son his bank, business interests, and board positions; the land and its agricultural enterprises were intended for August. At eighteen years of age August entered the army — on the same day that his older brother was killed in action. August served for two years in a forage unit in the Balkans, searching for food and other provisions. He was injured, but not badly — his right knee was hurt.

After his eldest son’s death, a grieving Wilhelm decided that his bank should be liquidated when he passed away. But on his deathbed in 1924, he reconsidered. Wilhelm changed his will, appointing August to succeed him as principal partner at Merck Finck and as proprietor of all his other business interests, from insurers to breweries. August also inherited an enormous amount of land.

Thus, at age twenty-five, August took up about two dozen board positions, including two of the most important ones in global finance: supervisory board chairman of both Allianz and Munich Re. After all, this was no meritocracy. August also inherited his fathers’ devout Protestantism and famed thriftiness. The young heir became known in his circle as the richest and stingiest man in Bavaria, with a frugality that made him appear cruel and distant. A die-hard conservative, August withdrew to the reactionary aristocratic salons of Munich during the dying years of the Weimar Republic, when a bored and listless Magda was doing the same in Berlin. But now the time had come for him to emerge from that insular far-right clique. August too was feeling more ambitious than ever and ready to get to work on something new and radical.

On that freezing, cloudy Tuesday afternoon in early February 1931, August von Finck, accompanied by Kurt Schmitt, the opportunistic and well-connected CEO of Allianz, was to meet Hitler for the first time. Allianz’s headquarters were across the street from the Hotel Kaiserhof. At 4 p.m., the two men arrived at the suite. Walter Funk took them to the sitting room where Hitler was waiting. Over the next half hour, Hitler sketched a capitalist’s nightmare to the financier duo; he “conjured up the specter of unemployed masses rising in a leftist revolt.” Von Finck and Schmitt agreed with Hitler’s view. The two were displeased with the political situation and the hopelessness of providing millions with jobs. They were “absolutely convinced … of the eventual eruption of riots and a major shift to the left,” they told Hitler. After the meeting, Funk walked the two out. He soon returned to the suite with big news: von Finck and Schmitt had pledged to make five million reichsmarks available via Allianz to arm the SA as a stay against a putsch, which might devolve into civil war.

Hitler was speechless. After Funk left, Hitler marveled to Otto Wagener at “the kind of power big business wields.” It was as if the monetary strength of capitalism had revealed itself to the Nazi leader for the first time. But his economic adviser warned him about the businessmen: “They want to earn money, nothing but money, filthy money — and they don’t even realize that they are chasing a satanic phantom.”

Hitler did not care. Many more millions were about to be pledged. Funk had invited Günther Quandt to visit the Kaiserhof the next morning.

9.

The next day, Wednesday, February 4, 1931, the ex-spouses Günther and Magda Quandt each met Hitler for the first time and in the same place — but unbeknownst to each other. That morning, Günther and two Wintershall executives spoke with Hitler in his hotel suite. By the time they left, the amount pledged to arm the SA had reached thirteen million reichsmarks. (The fundraising ended the following afternoon, at twenty-five million reichsmarks, after Funk had summoned four more businessmen to the suite. But in the end, none of the tycoons had to pay up, as the leftist putsch never occurred.) Günther’s impression of Hitler, eight years his junior, was underwhelming: “I can’t say that Hitler made a significant or meaningless, a sympathetic or repulsive impression on me. He struck me as perfectly average,” the mogul later wrote.

Günther left the Kaiserhof by noon. At 4 p.m., one of Hitler’s bodyguards entered the suite and announced that a boy was waiting outside the door, wanting to speak to the Nazi leader. Hitler told the bodyguard to let him in. A slender, handsome, and confident-looking nine-year-old strode into the suite. He was wearing a blue uniform, with a dagger on one side and a forage cap over his blond hair. It was Harald Quandt, Günther’s younger son. Magda had sent Harald up from the lobby, unannounced. Harald gave the men the Nazi salute and introduced himself: “The youngest Hitler Youth in Germany is reporting to his Führer!”

An amused Hitler asked Harald for his name and age, and posed another question: “Who made you this beautiful uniform?”

“My mother,” Harald replied.

“And how does the uniform make you feel?”

“Twice as strong!”

Hitler told Harald to visit again soon and to send regards to his mother, this mysterious woman who was having tea in the lobby. Minutes after Harald left, Goebbels arrived. The romance between him and Magda was developing, but slowly. Goebbels first had to let another fling fizzle. But he was about to have some romantic competition for Magda, and from the man he revered like nobody else: Hitler himself.

Goebbels had reserved a corner table for Hitler’s group in the hotel lobby for high tea. Hitler, unaware of the budding romance between Magda and Goebbels, asked if he could invite mother and son to the table. Goebbels obliged and left the suite. Moments later Hermann Göring arrived. When Hitler told him they’d be meeting “a Frau Quandt” for tea soon, Göring exclaimed: “Oh Goebbels’ Madame Pompadour!” He was comparing Magda to the chief courtesan of the French king Louis XV.

Otto Wagener’s eyewitness report of the five-o’clock tea could have come straight out of a pulp romance: “Even at first glance, Frau Quandt made an excellent impression, which only increased in the course of our conversation … She was dressed well but not excessively, calm in her movements, assured, self-confident, with a winning smile — I am tempted to say: enchanting. I noticed the pleasure Hitler took in her innocent high spirits. I also noticed how her large eyes were hanging on Hitler’s gaze. And whenever the conversation ground to a self-conscious halt, young Harald always served as the catalyst to restore contact.” Wagener had to tear his boss away from Magda to get him ready for the opera. Nevertheless, the economic adviser had “no doubt that a closer tie of friendship and veneration between Hitler and Mrs. Quandt had begun to take shape.” Hitler was devastated when, later that night, he was told that Goebbels already had a key to Magda’s apartment. But the new lovers had yet to consummate their relationship.

That happened ten days later, on Valentine’s Day, 1931. “Magda Quandt comes in the evening. And stays very long. And blossoms into a ravishing blonde sweetness. How you are my queen! (1) … Today I walk almost as if in a dream,” Goebbels wrote in his diary. Throughout March he indicated in parentheses when the couple had sex: “Magda … goes home late. (2.3.)” Five days later: “Magda, the lovely … Some more learning about me and about her, and we’ll be a perfect match. (4.5.)” One week later, on March 22: “Magda … shoos all my worries away. I love her very much (6.7.)” The final (sex) diary parentheses coincided with the night of their first fight and makeup sex. The two clearly entered couplehood on March 26: “A lot of work done until the evening. Then came Magda, there was love, a fight, and again love (8.9.). She’s a fabulous child. But I mustn’t lose myself in her. The work is too big and momentous for that.”

Harald also began to appear in Goebbels’s diaries. “In the afternoon Magda came with her boy Harald. He is 9 years old and a lovely chap. All blond and a bit cheeky. But I like that,” the top Nazi wrote on March 12, 1931. Goebbels was immediately taken with Harald, an Aryan poster child indeed: tall for his age, with big blue eyes and long, light-blond hair. He was handsome, with almost girlishly delicate features. In countless diary entries Goebbels gushed at how “sweet” Harald was. He soon began bringing Harald to school, writing that he would make “a useful boy out of him.”

And Goebbels wasn’t Harald’s only fan. Hitler loved Harald “idolatrously.” That fall, shortly before Harald’s tenth birthday, the two top Nazis began using the boy as a prop in their propaganda campaigns. In mid-October 1931, Hitler and Goebbels took Harald to a two-day SA march in Braunschweig, in central Germany. Impressed by Harald’s dress performance at the Hotel Kaiserhof, Hitler had ordered members of the entire Nazi organization to wear their uniforms in public at all times. More than 100,000 people, including tens of thousands of SA and SS men, took part in the rally, the largest paramilitary march ever held in the Weimar Republic. In his diary Goebbels described Harald at the event: “Harald looks so sweet in his new SA uniform. His long yellow boots. He’s all man now. We leave together with boss … Torchlight procession! Harald’s in the car with boss. He’s all man. Ovation of thousands. A rush of enthusiasm. Boss is completely overjoyed. He picks up Harald’s arm. The sweet boy has stood brave beside me all day.”

Magda, meanwhile, was like a mad groupie, following Goebbels around on his work travels across Germany. The rich divorcée would surprise Goebbels by waiting for him in his hotel room or by showing up in whichever city he was giving a speech or attending a Nazi Party function. Magda spoiled Goebbels, who had little money, showering him with flowers and taking him to the Berlin zoo. Unlike Günther, the top Nazi let Magda be a part of his life. Goebbels was grateful for her support. “She stood by me during the hard days: I won’t forget that,” he wrote in April 1931. Goebbels also could be possessive and jealous. “Small quarrel with Magda, who at 8 in the evening receives her ex-husband at home. That’s so careless and only fuels gossip. She has now cut off all ties there and belongs only to me,” he wrote in late June 1931.

A young Harald Quandt, with his mother, Magda, and Joseph Goebbels, 1931.

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But Günther’s largesse toward his ex-wife was a key element in strengthening the relationship between Magda and Goebbels. In the divorce agreement, Günther had granted her the right to use his Severin estate without restrictions. From the start, Magda had no problems with bringing her new lover to her ex-husband’s country estate. It became the couple’s favorite getaway, a mere three hours’ drive north from Berlin; they spent an entire week there over Pentecost in 1931. Hitler also started spending weekends on Günther’s estate with his entourage. Rural Severin and its surroundings were an NSDAP stronghold. Walter Granzow, the estate’s caretaker, welcomed them all. An ambitious Nazi, he had set his sights on public office.

At Severin over Pentecost, the couple decided on their future together. “Now we are clear on everything. We have made a solemn promise: when we conquer the Reich, we will become man and wife,” Goebbels wrote in his diary on May 31, 1931. They didn’t wait for that to happen, however, and announced their engagement later that summer. Magda broke the news to Günther and Hitler on the same day. The men didn’t take it well. “Magda … had a talk with G. Quandt on Saturday. Told him we are getting married. He was devastated. Magda took revenge for all the harm he did to her. Then with boss. Told him the same thing. He was also devastated. He loves her. But he’s loyal to me. And Magda too … Hitler is gloomy. He’s very lonely. Has no luck with women. Because he is too soft with them. Women don’t like that. They have to feel the master over them … Poor Hitler! I’m almost ashamed to be so happy. I hope this doesn’t cloud our friendship,” Goebbels wrote in his diary on September 14, 1931. To his massive dissatisfaction, Hitler and Magda kept on flirting whenever they met, often when Goebbels wasn’t around. There was nothing the jealousy-stricken Goebbels could do about that. This was Hitler, after all.

Hitler envisioned an important role for Magda. He told Otto Wagener that “she could represent the feminine counterpart to my single-mindedly male instincts.” Wagener came up with a peculiar proposition, which became known as “the arrangement.” Hitler had renounced marriage: his “bride” was the German people. (He was, at the time, just getting to know Eva Braun.) Wagener therefore suggested a triangular relationship that would be platonic where Hitler was concerned. Through her marriage to Goebbels, Magda would serve as the unofficial First Lady of the Third Reich. Hitler was practically already a family member. He and his entourage spent many a night at Magda’s apartment on Reichskanzlerplatz, dining on special meals that her cook prepared for the vegetarian Nazi leader and talking until the early hours of the morning. Magda and Goebbels accepted this pact with the man they worshipped, and they decided to move their wedding up to December.

By sheer coincidence, Günther and Hitler met for a second time, two days before Magda broke the news of the engagement. “Nausea: Mr. Günther Quandt has been to the boss,” Goebbels wrote in his diary on September 12, 1931. “Of course he posed and tried to make an impression. Boss fell for it. Loved him. When I tell Magda, she turns white with anger and rage. I can understand that. But maybe that’s what it takes for her to be cured for good.” As it turned out, there was no reason for the engaged couple to be suspicious about what transpired between Günther and Hitler. The two had simply talked about dry economic policy.

According to Günther’s postwar description of the encounter, he had been invited to this second meeting at Hitler’s Kaiserhof suite by his own business partners, the two Pauls. Hitler wanted to hear the three moguls’ ideas on how Germany’s economic crisis could be remedied. Günther advised the Nazi leader that workdays should be reduced from eight to six hours, to deal with the high unemployment. Furthermore, he suggested cutting wages by 25 percent, prohibiting consumer credit payments, and eliminating unemployment benefits. The money saved could then be spent on state infrastructure, while the construction industry was stimulated by tax breaks. It was conventional wisdom, Günther explained to Hitler, that the economy improves when the construction industry flourishes.

In turn, Hitler thanked the three businessmen and told them that he wanted to fight unemployment with large state contracts. Above all, he aimed to boost the economy through rearmament of the military. This was very welcome news for the trio of weapons producers. The conversation between Hitler and the men, scheduled to last for fifteen minutes, had taken three times as long, as Günther later proudly noted. But though he was under the impression that Hitler considered his proposals “impressive,” and had even asked Otto Wagener to write down his name so the two could speak again, Günther never again heard directly from the Nazi leader. Years later, on the stand in a courtroom, he remembered his meetings with Hitler a little differently: “Our views were so different that we never understood each other. Hitler didn’t let me speak at all in the two conversations I had with him.”

10.

Günther Quandt and Joseph Goebbels finally met in person at Magda’s thirtieth birthday party, which took place on November 11, 1931, at the apartment on Reichskanzlerplatz that she had rented since the windfall of her divorce. Goebbels was about to move in with her. Günther “instinctively felt that we didn’t match,” he later recalled about that night. The feeling was mutual. When the mogul visited his own estate a few weeks later to see Harald, who was staying at Severin with Magda and Goebbels, the Nazi politician vented in his diary about the intrusion, calling the industrialist “a tactless lout. The typical capitalist. A citizen of the worst kind.” This, while Goebbels was living off Magda’s royal alimony, in her massive apartment, enjoying the hospitality of the Quandt estate, all paid for by Günther.

Despite the two men’s immediate aversion to each other, Günther would drop in on his ex-wife and her husband-to-be from time to time, to hear them out on politics and to donate money to the Nazi Party — later he would lie about both these activities. On December 11, 1931, Goebbels documented one such visit: “Günther Quandt came in the evening. He wants to give money to the party. Magda takes him to task. She’s our best advocate … I talk politics. He’s completely taken. An old man. But the smart, energetic, brutal capitalist has come over to us completely. As he should — and give money, too. I get 2,000 [marks]. That’s for the prisoners and wounded. For my people, I’ll take it. With a heavy heart.” However, Goebbels added: “The conversation wasn’t as cold as I thought.” The atmosphere was much improved by Günther’s donation as well as his praise for Goebbels’s new book, Battle for Berlin, which Günther was reading, or so he told the Nazi.

Goebbels could not refuse Günther’s money. The Nazi Party was constantly broke and needed all the funds it could get. Goebbels lived off a meager salary, supplemented by his wife’s massive alimony — and that support was about to run dry. With their wedding only eight days away, Magda and Goebbels were about to lose her alimony as a source of income, as stipulated in the divorce agreement. Worse, they would lose Harald too. He would have to return to Günther. The tycoon didn’t want his youngest son to be raised and influenced by another man — let alone by the Nazi Party’s master of propaganda.

Magda and Goebbels’s wedding ceremony took place on December 19, 1931. A biographer of Magda later called the wedding “from start to finish unequalled for its lack of taste.” Magda Quandt became Magda Goebbels on her ex-husband’s Severin estate, of all places — and without his permission. The wedding had been planned by Günther’s estate manager and former brother-in-law, Walter Granzow, who agreed to keep it a secret from his boss. Granzow was keen on making a swift career pivot to the NSDAP. He had already been offering up Günther’s estate to host secret meetings between Hitler, Goebbels, and other Nazi leaders. Severin, which Günther had bought to secure a future for his near-blind son Herbert, had been turned into Mecklenburg’s de facto Nazi headquarters. Günther suspected it, but his repeated requests to Magda not to turn Severin into the local nerve center of the party fell on deaf ears. There was little Günther could do about it, since he had granted her unrestricted use of the estate, including the right to receive guests. Thus the wedding breakfast was held around Günther’s dining table. Toasts to the couple’s health were raised with his glasses at the reception, which was held in his manor.

Magda and Joseph Goebbels arm in arm at their wedding, with Harald Quandt, 1931. The best man, Hitler, is in the background.

ullstein bild – ullstein bild

The Protestant wedding ceremony took place in Severin’s small village church; Hitler served as Goebbels’s second witness. For the occasion, the church altar had been adorned with the flag of the Nazi Party, draped around a crucifix. The eighteen members of the wedding party walked from Günther’s manor to the church for the ceremony, through the woods of Severin, and back again for the reception. Magda, who was secretly pregnant, and Goebbels walked arm in arm through the snow-covered forest. They were both dressed entirely in black, except for the white shawl of Brussels lace draped around Magda’s shoulders — a piece of the gown she had worn for her first wedding, to Günther. It was the last glimmer of the precocious young woman she had been.

Ten-year-old Harald, wearing a costume modeled on the SA uniform, with shank boots, breeches, a brown shirt, and a belt with shoulder strap, walked beside his stepfather. Directly behind the couple walked Magda’s mother, Auguste. Next to her, his arm in hers, strode Hitler. His face was almost obscured by his wide-brimmed hat, and his body was shielded from the cold by a double-breasted coat. Along the route, SA men wearing white shirts and ties stood between the trees, ramrod straight and performing the Nazi salute, paying homage to the newlyweds.

Günther later wrote that he might easily have visited Severin that December day and unwittingly barged right into his ex-wife’s wedding. He blamed Hitler, who apparently pushed for the event to take place in an obscure rural location, and Granzow, who put his Nazi career interests above those of his employer. Günther fired Granzow, but the estate manager’s planning paid off. He made a swift ascent within the Nazi Party.

In the weeks after the wedding, Günther enforced his legal custody of Harald, and a battle between him and the newlyweds erupted. Whatever détente had existed among the three adults turned into all-out war. Goebbels flew into a rage when Magda told him Günther was taking Harald back. Magda too was “furious like a lioness for her cub. I will help her. This hypocrite’s mask must be torn off his face,” Goebbels wrote in his diary on December 29, 1931. “Up late with Magda … planning revenge. Poor Günther Quandt! I wouldn’t want to have Magda as an enemy.” The date of the entry was no coincidence. Three days later, on New Year’s Day, 1932, Harald officially moved back into his father’s townhouse, although Günther often allowed him to visit his mother around the corner on Reichskanzlerplatz.

Despite the strife over Harald, Günther did attend a two-hour speech Goebbels made in February. While, according to Goebbels, Günther was “over the moon” with what he heard and saw, it didn’t bring the men any closer in the custody conflict. Günther later claimed that he went to this Nazi rally in Berlin only to get “an idea of the public speaking and popular sentiment” after his meetings with Hitler; after attending the rally he “never cared for this movement again.”

Apart from young Harald, Goebbels came to have a low opinion of the Quandt men. When he met Günther’s elder son, Herbert, for the first time, in April 1932, Goebbels thought that the near-blind future savior of BMW was “slightly retarded.” Upon later hearing that Magda’s best friend, Ello, had left her husband, Werner Quandt, Günther’s younger brother, Goebbels called him “a real prole.” After Magda and Goebbels told Hitler about “the capitalist” Werner, the German chancellor flew into a rage and promised to do something about him. Despite the threat, Günther’s younger brother was left untouched. Even so, Goebbels clearly had it in for most of the Quandt men, and his power was growing.

11.

Another Berlin capitalist was in much bigger trouble by spring 1932. Friedrich Flick had finalized his takeover of the Düsseldorf-based VSt steel conglomerate, and right between the global rout of the stock market and the start of the Great Depression, no less. He had been able to finance a majority stake in Europe’s largest industrial conglomerate only by taking out massive loans and bonds. The debt was secured by his shares in the VSt through Gelsenberg, both of which Flick had put up as bank collateral. However, given the stock market’s collapse, the value of these shares had plummeted, and Flick owned few other tangible assets that could serve as further collateral. Flick’s holding company and Gelsenberg were on the brink of insolvency; he was about to be wiped out.

In early 1932, Flick needed to make a quick financial exit from Gelsenberg. At the same time, Hitler too needed money, yet again. He wanted financial backing for the upcoming presidential election. Walther Funk arranged an introduction to Flick, again at the Hotel Kaiserhof, on an icy February morning, a year after Günther Quandt and August von Finck had visited Hitler’s suite at the invitation of the cunning newspaperman. In the year since that first meeting, Funk had left Berlin’s financial newspaper and started editing the NSDAP’s economic newsletter. He had also become acquainted with Otto Steinbrinck, Flick’s ruthless right-hand man.

Steinbrinck was a highly decorated navy veteran who had sunk more than two hundred merchant ships as an enterprising submarine commander during World War I. Flick had spotted his business talent when Steinbrinck prepared an investing memo for him. He had quickly risen to become Flick’s most trusted confidant. Flick, who cultivated a public image of abstinence from politics, made Steinbrinck his liaison with the Nazis after he proved himself very capable in backroom dealing in business and politics.

Flick’s right-hand man, Otto Steinbrinck, in his SS uniform, 1934.

bpk/Atelier Bieber/Nather

Funk relayed Flick’s Kaiserhof invitation through Steinbrinck. Flick was keen to get to know the man who had started to play such a major role in German politics. But their one-hour meeting in late February 1932 was a disaster. As Steinbrinck waited outside the suite, Hitler mistook Flick for the naval hero and talked endlessly about his plans for a confrontation with the Polish navy. As the two men walked back from the hotel to their office nearby, Flick told his top aide that he had not been able to get a word in with Hitler. The Nazi leader too was disappointed with the one-sidedness of the conversation. Miffed, Flick decided to throw his financial might behind Paul von Hindenburg, the sitting president and the conservative establishment’s candidate; he donated almost a million reichsmarks to his reelection campaign.

Flick badly needed some clout with the government. The state was the only liquid buyer for his Gelsenberg stake and had no clue about the sorry state of his finances. He had only just started negotiating a deal when he first met Hitler. Talks dragged on for months, but Flick at last succeeded. In a stunning act of gamesmanship, he managed to sell his Gelsenberg stake to the government for more than ninety million reichsmarks, about three times its market value, in late May 1932. Flick strong-armed the state at the negotiating table by alleging that his fellow VSt shareholder Fritz Thyssen was willing to buy out his majority stake with financial backing from French lenders. A takeover of Germany’s largest conglomerate with French money was unthinkable. It had been only a few years since France had co-occupied the Ruhr area in response to Germany’s failure to continue reparation payments. When the government bailed out Flick at an enormous premium, he was able to pay off his debts. The deal left him flush with cash.

When news of Flick’s backroom deal with the government broke in mid-June 1932, it caused a national scandal. At the height of the Great Depression, with more than six million Germans unemployed, the state had used taxpayer millions to unwittingly bail out a speculating industrialist and his private holding company. But in a matter of weeks, the Gelsenberg affair was eclipsed by bigger news: the parliamentary elections of July 31, which for the first time made the NSDAP Germany’s largest party in the Reichstag. By late summer 1932, as the public and the politicians moved on from the financial scandal, Flick began to prepare for Nazi Party rule.

Although the Gelsenberg affair had made Flick even richer, the PR disaster associated with it had tainted his name. Flick had also spurned Hitler’s initial advances, and now the magnate was convinced he needed political protection; he was happy to pay handsomely for it. In early fall, Walther Funk dropped by Flick’s headquarters on Berlin’s Bellevuestrasse with a new request from the NSDAP: money was needed for yet another election campaign cycle. Funk left with some thirty thousand reichsmarks. Soon, a procession of Nazis soliciting for funds found their way to Flick’s office door. The SA needed new boots for another torchlight parade: two to three thousand reichsmarks. Flick’s handlers wanted positive coverage of their boss in the press: a few thousand reichsmarks to Nazi newspaper and magazine editors. As Flick and Steinbrinck discovered, “Giving money to Nazis was rather like shedding blood while swimming in the presence of sharks.”

Then the SS came knocking. On a somber gray day in late fall 1932, the chicken farmer turned SS leader, Heinrich Himmler, visited Flick’s headquarters. He had come to make a deal. To put an end to the requests for Flick’s money that were emanating from every corner of the Nazi universe, Himmler proposed that the steel tycoon’s future donations go solely to the SS. Flick quickly agreed. It was a devil’s pact. The rising paramilitary organization offered the ultimate political protection, but at what price? Flick would soon find out.

Steinbrinck and Himmler’s aide Fritz Kranefuss helped broker the agreement between their bosses. The ambitious Kranefuss was a nephew of Wilhelm Keppler, a failed businessman who was quickly becoming Hitler’s favored economic adviser. Earlier that year, Hitler had told Keppler to establish a council comprising industrialists and financiers who could advise him on economic policies and “who will be at our disposal when we come into power.” He enlisted his nephew to help recruit members and establish the Keppler Circle, as it soon became known. One of their first recruits was Otto Steinbrinck. He joined the group as Flick’s representative just as the Gelsenberg affair erupted. His beleaguered boss instructed him to find out which way “the wind was blowing” in the Nazi elite. Flick was eager to use that information to ready himself for rearmament.

12.

As the rainy summer of 1932 wound down in Berlin, tensions between the Goebbels and Quandt households continued to rise. In late September, Magda and Goebbels hid Harald at a friend’s place after the couple got into a fight with Günther over the phone. It took Günther’s threat of legal action to convince the couple to return Harald. Günther later said that Goebbels never forgave him for his dogged fight for the boy: “Goebbels … got it into his head that Harald … whom he dragged along to all sorts of party events and who was therefore in the public eye naturally considered as his son, was his to keep. The boy was tall and blond, so a good showpiece for a Nazi leader, who himself didn’t exactly have the appearance of a Nazi German.”

In early November 1932, around Harald’s eleventh birthday, tensions between the two men somewhat eased. Goebbels wrote in his diary that he “talked to G. Quandt. He’s not entirely unreasonable. Not even in social matters.” Günther agreed to let Harald spend Christmas break with the Goebbelses. But when Harald arrived at their apartment on Christmas Eve, his mother wasn’t there. It was only Goebbels. Magda had just been committed to the hospital with severe stomach pains, he told Harald; the boy then burst into tears. Goebbels consoled Harald over Christmas by taking him to the cinema and opera. They visited Magda in the hospital and brought her a lit-up Christmas tree adorned with presents. The day after Christmas, Hitler invited Goebbels and Harald to spend New Year’s Eve at the small chalet Hitler rented on Bavaria’s Obersalzberg, near the border with Austria. Goebbels and Harald drove over. On the last day of the year, Hitler, Goebbels, and Harald wrote a letter to Magda with their best wishes for her health. Magda remained in the hospital, riddled with fever. She was recuperating from a miscarriage. They didn’t know it yet, but 1933 would change the course of their lives and transform Germany and the world.

On December 29, 1932, Hitler received a message at the chalet: the former chancellor, Franz von Papen, wanted to meet. A week later, the men gathered at dusk in Cologne at the mansion of Baron Kurt von Schröder, a virulently anti-Semitic private banker. Hitler and von Papen brokered a backroom deal at the financier’s villa that night. Von Papen was plotting a return to power and believed that he could use the more popular Hitler as an instrument to that end. Convinced that he could control Hitler, he persuaded Reich president von Hindenburg to appoint the Nazi leader as chancellor and himself as vice chancellor. This would turn out to be one of the most catastrophic miscalculations in human history. Instead of reducing the Nazi leader to a figurehead, von Papen enabled Hitler to seize power.

On the evening of January 30, 1933, members of the SA celebrated their führer’s ascent to the position of chancellor with a torchlight parade through the center of Berlin, marching over Unter den Linden, under the Brandenburg Gate, and past the Reichstag and the Tiergarten to hear Hitler speak from the balcony of the Reich Chancellery, his new home. Parliamentary elections were scheduled five weeks out, for March 5. Democratic rule was on the horizon again, so it seemed. Few understood that Hitler actually had seized power that night — that the Third Reich had begun, that the Weimar Republic had been transformed into Nazi Germany, and that it would remain so for more than twelve long, dark, bloody years.

With Hitler in charge, the balance of power between Günther and Goebbels shifted decisively. Six days after Hitler’s power grab, Günther visited Goebbels at Magda’s apartment to congratulate him. After he left, Goebbels triumphantly wrote: “Mr. Quandt came to visit. Overflowing with devotion. That makes the victory.”

13.

On the day that Adolf Hitler seized the most powerful post in the country, an entirely different Adolf quit his job. On January 30, 1933, the thirty-two-year-old Adolf Rosenberger gathered the staff of nineteen at the office of the Porsche automobile design firm in central Stuttgart’s Kronenstrasse and told them he was resigning as their commercial director. Rosenberger had cofounded the company two years earlier with two partners: the mercurial but brilliant car designer Ferdinand Porsche and his son-in-law, Anton Piëch, a pugnacious Viennese lawyer. Rosenberger was the firm’s financial backer and fundraiser, but he had grown tired of spending his own money and raising funds from family and friends for the Porsche firm, which was burning through cash and nearing insolvency. Rosenberger had arranged a successor: Baron Hans von Veyder-Malberg, a retired race-car driver and an acquaintance of both Rosenberger and Porsche. The firm was in such dire straits that the Austrian aristocrat had to bring in forty thousand reichsmarks as a bridge loan. Despite the financial situation, Rosenberger left his job on good terms. He would stay on as a shareholder and focus on peddling Porsche patents to foreign markets in more of a freelance role.

Adolf Rosenberger could not have been more different from the new chancellor, despite the shared first name. The handsome, tech-savvy German Jew had been a race-car driver for Mercedes. Some of his race cars were designed by Ferdinand Porsche. Rosenberger’s racing career ended abruptly in 1926, after a serious accident at the Grand Prix in Berlin left three people dead; he was severely injured. He instead began investing in real estate in his hometown, then partnered with Porsche to help finance their race-car designs and turn them into drivable prototypes.

When Ferdinand Porsche started his namesake firm in Stuttgart at the height of the Great Depression, it was the first time that the fifty-five-year-old mustachioed autodidact had struck out on his own as an entrepreneur. Previously, he had been terminated twice as chief technical designer, most recently at Austria’s Steyr Automobiles, where he was laid off after a few months because of the economic crisis. Before that, his executive contract at Daimler-Benz wasn’t renewed because his designs were exceedingly expensive and the personal debt that he owed to the carmaker was mounting; he had taken loans from Daimler to finance the building of a vast family villa on a hill in Stuttgart.

Porsche’s Jewish cofounder, Adolf Rosenberger.

Courtesy of the Adolf Rosenberger/Alan Arthur Robert estate

Porsche moved back to Stuttgart from Austria with his family in 1930. Finding a job during the worst economic crisis in modern times was tough, especially for a man in his midfifties operating in a niche industry and expecting a good salary. Plus, Porsche had a reputation for being difficult. Those in the automotive industry viewed him as an “unemployable perfectionist” because of his lack of financial discipline and volatile temper. So Porsche started his own company. He hired veteran engineers and partnered with cofounders who could lend balance where he lacked it. But Porsche could not overcome his worst impulses. He still threw tantrums, often grabbing the wide-brimmed hat he always wore, throwing it on the ground, and stomping on it like a petulant child. What’s more, his designs continued to be too costly. They would never be approved for production during a depression. He found himself facing bankruptcy.

When Hitler seized power, Porsche had just turned down a job to head up vehicle production for Joseph Stalin’s Soviet regime in Moscow. After careful consideration, Porsche declined this lifeline. He deemed himself too old, and besides, he didn’t speak Russian. Politics didn’t matter to Porsche; he cared only about his car designs. When the dictator back home threw Porsche another lifeline, he grabbed it with both hands.

At 10 a.m. on February 11, 1933, twelve days after Adolf Rosenberger quit his job, Hitler gave his first opening speech at Berlin’s International Motor Show. In his upbeat address, the chancellor announced tax relief for motorists and a modern road-construction plan to revive the ailing car industry, which was still reeling from the economic crisis. Hitler, a car nut who had never even obtained a driver’s license, praised Germany’s automotive designers and engineers “whose genius creates these marvels of human ingenuity. It’s sad that our people hardly ever get to know these nameless men.” The führer was, however, about to get to know one particular car designer exceptionally well.

Hitler’s message was met with cheers back at the Porsche office in Stuttgart, where the whole team was listening to the speech on the radio. After Hitler finished speaking, Ferdinand Porsche sent him a telegram, providing a brief résumé and offering his services: “As the creator of many renowned constructions in the field of German and Austrian motor and aviation and as a co-fighter for more than 30 years for today’s success, I congratulate Your Excellency on the profound opening speech.” Porsche and his staff were ready to put their “will and ability at the disposal of the German people,” he cabled to Berlin. In an accompanying telegram, Porsche wrote: “We express the hope that in our endeavors we will receive Your Excellency’s attention and encouragement.” His telegrams weren’t just acknowledged by Hitler’s state secretary. They were received graciously, and Porsche promptly was sent words of encouragement.

Porsche’s first contact with Hitler had been indirect, and a sheer coincidence. In 1925, the Mercedes limousine that was used to chauffeur Hitler was brought to Daimler’s body shop in Berlin for repair. Porsche, then Daimler’s technical director, happened to be visiting the garage and diagnosed the problem: heavily contaminated lubricating oil. He had no idea whose shiny black limo it was. A year later, the two men were properly introduced on the sidelines of a racing event in Stuttgart. Now, seven years later, Ferdinand Porsche was about to become Hitler’s favorite engineer.

On May 10, 1933, Hitler and Porsche met again, this time at the Reich Chancellery in Berlin. During their thirty-five-minute meeting, Porsche convinced Hitler to allocate state subsidies for the development of a race car that Porsche and Rosenberger had designed, regaling the car-crazy führer with tales of technical innovation. Hitler’s decision helped Porsche turn things around financially. And when the time came for Hitler to look for a man capable of realizing his prestige car project — the Volkswagen — he knew just where to find him: at his drawing desk in Stuttgart.

14.

On the cold, pitch-black evening of February 20, 1933, Günther Quandt, Friedrich Flick, and Baron August von Finck met with the führer and his economic advisers once again in Berlin. Only this time, the location had been upgraded — instead of a discreet suite at the nearby Hotel Kaiserhof, they entered the palatial domicile of the parliamentary president, and more than twenty other tycoons and executives joined them there. Von Finck was again accompanied by Allianz’s CEO, Kurt Schmitt, one of the four future Nazi ministers of economic affairs in attendance. The other three — Walther Funk, Hjalmar Schacht, and Hermann Göring — were on hand to convince these two dozen titans of German industry and finance, one final time, to donate to a Nazi election campaign.

After Hitler’s and Göring’s speeches and Schacht’s call to pony up, it was up to the tycoons to make the next move, a delicate one. In keeping with his legendary thriftiness, August von Finck made a beeline for the exit “at the first possible moment” after realizing that Schacht was coming to extract a personal pledge from him on the spot. Friedrich Flick donated royally. As was his custom, he hedged his bets and gave to all parties involved — as much as 120,000 reichsmarks each to the Nazi Party and its nationalist coalition partner. The smallest contribution that evening came from Günther Quandt. He wired 25,000 reichsmarks to the Nazi slush fund via his battery firm AFA, weeks later. The gift paled in comparison to the six-figure donations made by IG Farben and Flick. But Günther recognized a cheap opportunity when he saw one. This ability, after all, was what had made him rich.

Of course, Günther had a far more pressing personal reason to stay on the good side of the Nazis. Goebbels was about to get a promotion. Just days after Günther’s donation, Hitler appointed Goebbels as Reich minister of public enlightenment and propaganda. He was now one of the most powerful men in Nazi Germany, controlling every aspect of the press, cultural life, and political promotion. In the end, the outcome of the March 5, 1933, elections had not mattered. Six days before it, the Reichstag burned down, under mysterious circumstances, exactly one week after the secretive meeting at Göring’s residence next door. The rule of law was suspended, and democracy in Germany was dead. Hitler was in control.

15.

On May 1, 1933, the Nazi regime celebrated Labor Day, a national holiday in Germany for the first time. As many as 1.5 million people gathered at dusk on Berlin’s Tempelhof airfield to hear Hitler give a speech about the German work ethic. The chancellor was positioned high above the crowd, flanked by massive swastika flags; from an immense grandstand he thundered on about workers’ rights. The next day, he would bust and ban all labor unions.

Günther Quandt joined the Nazi Party that Labor Day, receiving membership number 2,636,406. He and hundreds of thousands of other Germans, including August von Finck, had joined just in time, as Hitler imposed a membership ban the next day. Some 1.6 million Germans had joined the NSDAP since his power grab in January, bringing the total to 2.5 million within just a few months. Hitler worried that these rapidly climbing numbers were diluting the value of party membership. He kept the ban in place for four years; Friedrich Flick and Ferdinand Porsche had to wait until May 1937 to join.

After the war had ended, Günther concealed his Nazi Party membership and prided himself on his “disapproving attitude to the party.” He was, however, soon enough forced to explain himself when documentation surfaced about his entry into the party. He claimed that Goebbels had coerced him. On a warm spring day in late April 1933, according to Günther, he was summoned to a meeting at the propaganda minister’s office in the Ordenspalais, just off Wilhelmsplatz, a ten-minute walk from his own headquarters. When he sat down, Goebbels coolly sized up Günther and asked him whether he had joined the party yet. Günther responded no; as a businessman he had “never belonged to a political party.” He vividly described how Goebbels began to blackmail him on the spot: “His face changed color. Brutally and extortionately, he said in a threatening voice that I had to become a party member immediately. Otherwise, the party would take over my son’s education.” In Günther’s telling, Goebbels threatened him with “insane disadvantages” if he didn’t enter the NSDAP and donate more money: “Goebbels kneeled on my soul, reminding me of the death of my eldest son in Paris, and that I had the choice of keeping my second son or not. I said that I didn’t mind the penny contribution to the party and I joined.”

In his diary, Goebbels noted that he had received Günther at his office on Friday, April 28, 1933, but suggested a scenario that was the complete opposite of Günther’s story: Quandt was eager to join the NSDAP and wanted to tell the top Nazi in person before signing up. “Received Dr. Quandt,” Goebbels wrote the next day. “He’s so insignificant now. Wants to enter the party.”

Günther’s NSDAP membership did nothing to protect him. On May 3, 1933, two days after joining the party, he was attending a meeting of the Deutsche Bank supervisory board in Berlin when the police stormed in. Günther was handcuffed, driven to police headquarters on Alexanderplatz, and put in a basement cell. The next day, he was transferred to a jail in the capital’s working-class Moabit neighborhood, where he was held in solitary confinement on undisclosed charges. His houses were searched, and his business headquarters on Askanischer Platz and one of his AFA factories were occupied.

One week after his arrest, Nazi Party officials publicly announced that Günther had been detained because he had shifted money abroad and wanted to relocate factories to foreign countries. His arrest allegedly “prevented” both. Günther, meanwhile, still had no idea why he had been arrested. One evening he was taken from his cramped, musty isolation cell to a cold, gray interrogation room, where two high-ranking members of the Justice Department awaited him. According to Günther, his inquisitors began playing “good cop, bad cop” and finally revealed the reason for his arrest: an anonymous complaint had supposedly come in, vaguely accusing him of violating German commercial law. The duo, who had set up an anticorruption unit, told Günther “in a courtly manner” that he would be released if he signed over AFA to one of his executives, an early member of the NSDAP. Günther laughed at them, refused, and was taken back to his cell immediately, where a written charge of embezzlement awaited him.

On June 13, 1933, after almost six weeks in solitary confinement and countless nightly interrogations, Günther paid four million reichsmarks in bail, a gargantuan sum, and was released from jail. “$1,144,000 Bail Furnished by a German Industrialist,” the New York Times reported the next day. Under the conditions of his release, Günther wasn’t allowed to visit his headquarters on Askanischer Platz or any of his Berlin residences. Instead, he set up shop in a suite at the Hotel Kaiserhof.

In the weeks after his release, Günther donated about forty-three thousand reichsmarks to a new Nazi fund: Voluntary Donations for the Promotion of National Labor. Whereas the initiative was meant to help reduce unemployment by providing money to German businesses, the funds were sometimes used to “buy impunity from prosecution” in certain legal proceedings. Günther’s house arrest was lifted in early September 1933, soon after he started donating the money. The charge of embezzlement, however, wasn’t dismissed until two years later.

16.

Günther Quandt later lamented that “the year 1933 formed a sudden and abrupt barrier for me everywhere.” But following his release from solitary confinement, he vigorously capitalized on Nazi Germany’s newly codified anti-Semitism. The month after his house arrest was lifted, he demanded the removal of membership and voting rights for Jewish members of Berlin’s Association of Merchants and Industrialists. And that was after he had already, “lightheartedly and shamefully early,” ousted four Jewish executives serving on his own firms’ supervisory boards, a historian later discovered.

Günther opportunistically claimed that the arbitrariness of his arrest and his time in jail remained a defining trauma for him. “It became clear to me that a hitherto unknown state of legal insecurity had commenced,” he wrote in his memoir. “This was a shocking experience for me, since I was raised to be unconditionally loyal to the state. The reasons for my arrest were never disclosed to me.” But they had been. His two interrogators at the jail had revealed to him that one of his AFA executives, the early member of the Nazi Party, had orchestrated the corporate coup against him. After the war, however, Günther handily used his time in jail to portray himself as a victim of the vindictive Goebbels, claiming that Goebbels had masterminded his arrest and imprisonment. This too was a lie.

On May 5, 1933, two days after Günther’s arrest, Goebbels wrote in his diary: “Günther Quandt arrested. Why? Tax matter. With Hitler. He’s outraged that the economy isn’t allowed to settle down. Göring is to investigate the Quandt case. I don’t feel sorry for him, just for dear Harald.” One day later, Goebbels discussed the “G. Quandt case” with Hitler again, alone. Industrialists and their firms were essential to the chancellor’s soon-to-be-initiated rearmament policy. So he was troubled by rebellious factions within the Nazi Party who attacked businessmen and tried to seize their companies. These upstarts threatened to destroy the goodwill that Hitler had so carefully cultivated with the tycoons.

Goebbels was immediately informed when Günther got out of jail. “Detention warrant against Günther Quandt,” Goebbels wrote on June 14, 1933. “Released for about 4 million. That’s how it goes. I’m not interfering in any way. If he messed up, he should pay.” Günther’s former sister-in-law, Ello, followed the affair at the side of her best friend, Magda. “Goebbels said he knew nothing about it, but that it was just as well,” Ello later declared. “He welcomed the arrest. Goebbels said upon his release that, unfortunately, no one could touch the guy anymore.”

The same couldn’t be said of Magda’s childhood boyfriend from Berlin, Victor Chaim Arlosoroff. Three days after Günther’s release, Arlosoroff was assassinated by two gunmen while taking an evening stroll with his wife on a beach in Tel Aviv. The Zionist leader had returned from Germany two days earlier, where he had brokered an agreement with Hitler’s regime, allowing about sixty thousand German Jews to immigrate, with their possessions, to the British Mandate for Palestine. Arlosoroff’s murder remains unsolved to this day.

17.

In May 1933, Günther Quandt’s elder son, Herbert, returned to a Germany that was unrecognizable to him. His home city, Berlin, was now the capital of a new state. His former stepmother was now considered the First Lady of the Third Reich, and her new husband was the Nazi minister for propaganda. Meanwhile, his father was sitting in a cell in a Moabit jail, on unknown charges, while a corporate coup was being engineered against him at AFA.

The twenty-two-year-old Herbert had spent much of the past four years outside Germany, after barely finishing his “downright torturous” schoolwork for good. For better or for worse, he was, after Hellmut’s death, his father’s heir apparent. Herbert relished the opportunity despite his visual impairment. (His sight had remarkably improved over the years due to medical treatment.) The Great Depression also had no negative effect on him. Herbert had learned English and French in London and Paris, traveled around the world with his father, and received vocational training at an AFA battery factory in Germany and at firms in Belgium, England, and the United States.

He especially enjoyed his time in America and told his family repeatedly over Christmas in 1932 that he planned to move there if Communism drove the Quandts from Europe. “That danger wasn’t small,” Herbert later wrote, in fall 1979. “Why did Hitler come to power at the time? Because, I’m not afraid to say this here, he had declared war on communism in Germany again and again in a very impressive and pithy way.” While Herbert said he was “a blank page politically,” by January 1933 he saw Communism, not Nazism, as the great German peril. “The looming red communist danger, which had already been brought to my attention by the press in America, I now experienced firsthand as a threatening, ever-growing monster,” he later recalled.

Still, Herbert kept his head down until his father was released from jail and had returned to the office. Herbert then married his fiancée, Ursula; moved to the villa his father bought for him near the family mansion in Babelsberg; and began a four-year stint as a management trainee at AFA in Berlin. Not until two years after Hitler seized power did Herbert sign up as a supporting member of the SS.

18.

On June 30, 1933, two weeks after Günther Quandt’s release, Hitler appointed Allianz CEO Kurt Schmitt as his Reich minister of economic affairs. Schmitt beat out Hitler’s economic adviser Otto Wagener, who jockeyed too hard for the position and fell entirely out of favor with the Nazi leader. Baron August von Finck had fervently advocated for Schmitt as the best candidate for the job. Von Finck “was anxious for business to have a strong voice in the new regime and felt [that the appointment of Schmitt] would be helpful to Allianz and to his bank,” according to a fellow Allianz executive. Hitler and Göring, who was looking to become the de facto leader of the Nazi economy, agreed with von Finck, but for a different reason. In the eyes of the two Nazi leaders, the business community had to be placated as the Nazis consolidated power and jump-started rearmament.

The consummate corporate insider, Schmitt seemed to be the perfect point man for this task, but he quickly resigned his post after collapsing from stress during a speech. Another establishment figure, Hjalmar Schacht, succeeded him. Meanwhile, von Finck’s devotion to Hitler deepened. Schmitt, far more an opportunist than a believer, found von Finck’s “outlook on the world … rather provincial. He had little first-hand knowledge of the countries outside of Germany and had never … traveled in foreign countries. Hence … his inner faith in Nazism and particularly in Hitler never faltered,” Schmitt told an American interrogator after the war.

Von Finck’s devotion to the führer stood out to all his colleagues and friends. Hitler “exercised on him a great fascination” and “a hypnotic influence,” according to Hans Schmidt-Polex, a longtime friend of the aristocrat. Hans Hess, who succeeded Schmitt as CEO of Allianz but refused to ever join the Nazi Party, revealed after the war that von Finck had told him on several occasions “that he believed that Hitler was sent by God, to become Führer of the German people.”

Nonetheless, von Finck’s zealotry stopped at his wallet. The banker’s stinginess didn’t endear him to NSDAP officials. They “felt that his contributions to the Party were not in keeping with his wealth,” Allianz’s press chief, Baron Edgar von Uexküll, declared after the war. The Nazis had to find a way to capitalize on the devotion, clout, and connections of Bavaria’s wealthiest man, but without making him spend a penny of his own fortune. Around the time of Schmitt’s appointment, Hitler came up with an idea: he would give von Finck the opportunity to spend other people’s money. After the ceremony at the Reich Chancellery, Hitler took von Finck aside, looked him in the eye, and said: “You are my man. You must build me a house of German art.”

In July 1933, Hitler, once a dilettante painter himself, appointed von Finck as chairman of the board of trustees for the Haus der Deutschen Kunst, an art museum to be built in Munich. It was Hitler’s pet project. The führer envisioned it as a prime example of Nazi architecture, where artworks that he considered quintessentially German would be placed on display. The museum was to be built on Prinzregentenstrasse, on the southern edge of Englischer Garten and near Hitler’s luxurious apartment.

On October 15, 1933, Hitler was to lay the cornerstone of the building in an elaborate ceremony. At its conclusion, Hitler struck the cornerstone three times with a specially designed silver hammer. But the tool broke, and its parts scattered across the ground. Von Finck looked on somberly from behind. Enraged, Hitler forbade any mention of the mishap in the German press. Despite the bumpy start, a von Finck–führer synergy soon developed. To begin a museum-related event, the two men would stand side by side before the audience, their posture stiff, the right arm of each man suspended in the air, with the hand held straight. Von Finck would give a three-minute speech to introduce Hitler, and the führer would then ramble on for an hour. Going forward, von Finck would be Hitler’s museum guide, enjoying the distinct honor of sitting at the chancellor’s right side during ceremonies and dinners. He had secured proximity to his beloved führer.

Hitler striking the museum’s foundation stone with August von Finck, in suit, standing directly behind him. Moments later, the silver hammer broke.

Bundesarchiv

19.

On March 7, 1934, Hitler returned to Berlin’s International Motor Show for another opening speech. This time he wasn’t happy. The chancellor berated the carmakers for focusing only on luxury vehicles and accused them of peddling the idea that the automobile was only for the rich. Hitler felt bitter about the “millions of decent, industrious, and hardworking fellow citizens” who could not even contemplate buying a car. It was high time, the führer thundered, for the vehicle to lose its “class-based and, as a sad consequence, class-dividing character.” His voice boomed through Berlin’s largest exhibition hall as executives from Daimler-Benz grimly looked on, chastened and terrified. Ferdinand Porsche, on the other hand, found that he and the führer shared the same view. He had recently added something new to his repertoire: designing small, affordable cars. Earlier that year, on January 17, Porsche’s design office had sent a twelve-page memo from Stuttgart to the Reich Ministry of Transport on Berlin’s Wilhelmplatz; it outlined plans for the construction of a Volkswagen, a “people’s car.”

Porsche’s unsolicited memo had not made it to Hitler’s desk, though. The führer had apparently taken inspiration from the designs of Josef Ganz, a Jewish car engineer. Of course, a Jew would never get to design the car for the people of Nazi Germany. A Daimler car salesman turned confidant of Hitler, however, did read Porsche’s memo after the speech and alerted the chancellor to it. A week later, early on a spring day, Hitler summoned Porsche to the Hotel Kaiserhof. Hitler had retained the suite for off-the-record conversations. In the Reich Chancellery, opposite the hotel, every word he uttered was recorded in writing. And after a year in power, Hitler knew the value of privacy. He had become accustomed to bypassing the bureaucracy and awarding political contracts to people he trusted — and Porsche was about to become one of them.

Ferdinand Porsche didn’t know exactly why he had been summoned to the Kaiserhof, but he fondly recalled the conversation with Hitler from the previous May, when he saved his company by wowing the führer with racing stories. Porsche expected much of the same this time around. He was wrong. As soon as Porsche entered the suite, the Nazi chancellor began barking orders at him: the Volkswagen had to be a four-seater with a diesel-powered, air-cooled engine that could be converted for military purposes. Hitler didn’t have just “the people” on his mind. Rearmament was the real priority.

Porsche absorbed the demands of the autodidact car nut in silence. Then came the kicker. Hitler had read somewhere that Henry Ford, a man he revered, was building a car in Detroit that cost a thousand dollars. The Volkswagen, therefore, could not cost more than a thousand reichsmarks, Hitler declared. Porsche looked at him incredulously but did not dare talk back. Finally, the issue of Porsche’s citizenship arose. The fifty-eight-year-old designer had been born in North Bohemia, then part of the Austro-Hungarian Empire; now, in 1934, it was a region of Czechoslovakia. Porsche had chosen Czech citizenship after the empire had collapsed. But to Hitler, a citizen of a despised Slavic country could never design the German people’s car. Two weeks later, Porsche and his family discovered that they were suddenly citizens of Nazi Germany, though they had done little to effect this change. Back home in Stuttgart, in his vast villa on the hill, Porsche shrugged and told a relative: “I really don’t see what we can do about it.” He had bigger problems to solve anyway.

20.

After his release from jail, Günther Quandt soon discovered that his newfound untouchability did not extend to keeping custody of his twelve-year-old son, Harald. The Goebbelses remained hell-bent on getting Magda’s firstborn for themselves. In spring 1934 they finally succeeded. On Friday, April 13 — the day Magda gave birth to her second daughter, Hilde — Goebbels complained in his diary that Günther had refused to hand over Harald days earlier to spend time with the growing family over Easter. In addition to Hilde, Harald now had a one-year-old half sister, Helga. The next child, Goebbels’s only biological son, was named Helmut, after Günther’s dead son, to whom Magda had been so attached. Three more H-named siblings would follow, all sharing the first letter of their first name with Harald and his brothers — and with the surname Hitler.

Goebbels had reached the breaking point with Günther. “We’ll now bring out the big guns. I’m not giving in to this anymore,” Goebbels wrote. Three days later, he told Hitler about the couple’s “fight for Harald.” According to Goebbels, the chancellor was “completely on our side. Magda will get her Harald.” The propaganda minister then discussed the “Harald matter” with Göring and the leader of the SA, Ernst Röhm, on April 18, 1934. “They both support me a lot,” Goebbels wrote. (Ten weeks later, Röhm and most of his allies in the SA were executed on Hitler’s orders, with urging from Göring and Himmler, during the Night of the Long Knives massacre.)

Goebbels also spoke with Günther on April 18. The propaganda minister wrote in his diary that he was “tough on [Günther’s] sentimentality.” Apparently, the strategy worked. “He gives in,” Goebbels wrote. “Magda gets her Harald back. She’s overjoyed!” Günther expected the couple to return Harald after Easter break, but that didn’t happen. In early May, Günther hired a prominent Berlin litigator to force Harald’s release. He was one of the few remaining attorneys in Germany still bold enough to file a kidnapping claim against Goebbels and his wife, now the most powerful couple in the country. It made no difference. A week later the lawyer returned to Günther empty-handed. No court in the capital dared to accept the lawsuit.

Goebbels was furious when Magda told him that Günther had hired a lawyer to sue them. “I won’t put up with this rude treatment any longer,” the propaganda minister wrote. “We won’t give Harald back … I tell Quandt. He’s furious.” On May 8, 1934, the couple visited Magda’s lawyer to sign a new custody agreement with a revised plan for visitation. “She’s happy. Now Günther Qu. has to agree,” Goebbels wrote. Günther had no choice but to accept the new arrangement. Harald belonged to Magda and Goebbels now. The boy was allowed to visit Günther twice a month.

Goebbels’s final diary entry featuring Günther would be written four years later, in early June 1938. On that balmy spring day in Berlin, Harald told his stepfather that his biological father was getting married again. “Old fool!” Goebbels wrote after he heard the news. The rumor turned out to be false. Günther never remarried. With Toni’s death and Magda’s troubles, Günther had experienced enough marital distress to last him a lifetime. He chose the safer confines of business and the single life.

With the custody battle over, Günther no longer weighed on Goebbels’s mind. But the two men, with their intertwined personal histories, still had to coexist. At least now they had space for the things that made them tick. Goebbels was beginning to exert power. There was a country to be led into battle, and a part of its population to be alienated and disenfranchised — and exterminated. Plus, there was a continent, then a world, to be conquered.

Günther, meanwhile, had a different empire to expand, and he fully dedicated himself to the task. Despite the rough start, he had established himself as a prominent participant in Hitler’s new Germany. The country was climbing out of the Great Depression, and rearmament was about to take off. With all the financial opportunities that the Third Reich provided, things were finally looking up for Günther. There was business to do, and money to be made. The world spun on.