1.

On July 28, 1941, Günther Quandt celebrated his sixtieth birthday with a grand dinner for 130 men at the Hotel Esplanade, one of Berlin’s famed luxury hotels. With its belle epoque sandstone façade and its neo-Rococo and neo-Baroque interior, the hotel towered over Potsdamer Platz in the bustling heart of the capital. Günther’s dinner likely took place in the Kaisersaal, where the German emperor Wilhelm II used to host lavish banquets. Parties befitting a kaiser usually followed in the hall next door, where, during Berlin’s hedonistic Golden Twenties, the movie stars Greta Garbo and Charlie Chaplin drank and danced the night away.

All those carefree, heady days were long gone, though. A vicious new war was raging in Europe and threatened to engulf the rest of the world. Hitler was at the peak of his power that summer. He and his allies controlled much of the continent. That same evening, Hitler’s armed forces, the Wehrmacht, were closing in on Leningrad and Kyiv as part of Operation Barbarossa, the invasion of the Soviet Union.

A different kind of headiness pervaded the hall where Günther’s dinner took place that sweltering summer evening. Günther and his male guests laughed and perspired the night away. They had all grown financially fat on war and conquest. They had been gorging on forced labor, on Jewish companies that they seized with impunity; many, like Hermann Göring, had become literally obese. Fulfilling the endless demand for artillery and tank shells kept the cash pouring in. Yet few had succeeded like Günther.

The Reichsbank president and minister of economic affairs, Walther Funk, began the evening with a “brilliant speech.” Funk was feeling sentimental; he and Günther had come a long way together. Twenty years earlier, Funk had merely been a well-connected editor of a financial newspaper, and Günther a rich stock speculator from the provinces. Now Günther had “accomplished something that is written with golden letters in the history of the German war economy,” Funk said. He wasn’t wrong. Through his arms, battery, and textile firms, Günther had established himself as one of the Third Reich’s leading industrialists. Göring had awarded him a phony title, Wehrwirtschaftsführer, “military economy leader,” and Günther reciprocated the gratitude. Thanks to the regime’s rearmament policies and expropriation decrees, he was benefiting massively.

Günther’s weapons firm, DWM, was manufacturing millions of bullets, rifles, and Luger pistols for the Wehrmacht. Its stock price would soon skyrocket by 300 percent because of the war and the insatiable demand for arms. Overall, business was going so well that he could afford to buy more shares and would finally become DWM’s majority shareholder. His firm AFA was churning out thousands of batteries for Nazi submarines, torpedoes, and rockets. His textile companies made so many millions of uniforms for the Wehrmacht, the NSDAP, the SS, and the SA that, if lined up, the cloth could have spanned more than half the country, from east to west. Günther was keeping up his old ways too, secretly buying up shares in Germany’s largest construction firm and mounting a hostile takeover. His greatest coup had occurred just two months earlier, when he entered two of Germany’s largest industries by buying a 60 percent stake in Byk Gulden, a pharmaceuticals and chemicals company formerly owned by Jews. Günther’s new 60 percent majority interest nicely corresponded to another milestone, his sixtieth birthday.

Even Das Reich, the weekly newspaper founded by Goebbels, published a birthday tribute to Günther: “Military cloth, accumulators, dry batteries, firearms, ammunition, light metal — whoever produces all this is rightly called Wehrwirtschaftsführer.” Günther had, in fact, been agonizing over whether to invite Goebbels to the evening’s festivities. Their feud was years behind them, but their relationship had stayed chilly, at best. Three weeks before the dinner, in a letter from his holiday address in the mountains, Günther fretted to an aide about what to do: “He almost certainly won’t come, but if he hears that Funk and Milch were there and that he wasn’t invited, he may take offense.” Günther couldn’t risk incurring Goebbels’s wrath again. He was convinced that his arms factories had caught Goebbels’s attention for a personal reason: nineteen-year-old Harald had developed an interest in mechanical engineering.

Günther ended up inviting Goebbels. And, as expected, Goebbels declined. In his place, Goebbels sent his new deputy, Leopold Gutterer, who earned a seat at Günther’s table, the largest one, in the middle of the Hotel Esplanade’s hall. Two months earlier, Gutterer had replaced Karl Hanke, Goebbels’s most trusted aide over the past decade, as the propaganda minister’s state secretary. Hanke’s dismissal involved Magda, and intimately. Now Gutterer was just weeks away from introducing a new policy affecting the entire German Reich: the mandatory labeling of Jews with the yellow Star of David.

Günther had fashioned his birthday bash as a networking event, and the party had started early. That morning in late July he held a reception at his newly acquired, extensively renovated four-story townhouse next to the Tiergarten, overlooking Berlin’s Landwehr Canal. At the former Hungarian delegation, they lined up to shake his hand: Günther’s executives and business partners, along with representatives of the regime, the Nazi Party, and the Wehrmacht. Above these middle-aged men, in their double-breasted suits and uniforms, hung paintings by the Italian Renaissance masters Tintoretto and Bonifacio Veronese. Günther had started to collect art. Impressionist paintings by Claude Monet, Alfred Sisley, and Camille Pissarro graced the dining room of his Babelsberg villa. He still thought culture could be bought. It was later said that Günther had obtained about ten paintings from the collection of the Dutch Jewish art dealer Jacques Goudstikker, which the Nazis had looted in the Netherlands.

At the Esplanade dinner, Günther arranged his executives across fourteen tables, seating each next to a Nazi bureaucrat or general to discuss arms deals and Aryanizations. Naturally, the men who financed these transactions — the leading executives of Commerzbank, Dresdner Bank, and Deutsche Bank — were present. These financiers of the Third Reich competed bitterly to serve the deep-pocketed Nazi regime and to satiate their private clients’ ravenous appetite for credit. Nazi Germany’s endless drive to expand arms companies, establish concentration camps and death camps, and extend conglomerates at home and in occupied territories was bringing in millions for the banks.

Günther maintained a close relationship to his biggest creditor, Deutsche Bank; he still served on its supervisory board. As a birthday present, one Deutsche Bank executive gifted Günther a seat on Daimler-Benz’s supervisory board. It was the official start of the Quandts’ lucrative relationship with Germany’s largest carmaker. The aloof, mustachioed Hermann Josef Abs, another Deutsche Bank executive at Günther’s table, represented the bank on the supervisory boards of DWM, AFA, and forty-four other companies. The pious Catholic was a towering business figure in Nazi Germany and “the lynchpin of the continent-wide plunder.” At the end of the dinner, the future Deutsche Bank chairman tapped his glass, got up, and toasted Günther’s health. “You were able to make the successful transition to the new era in 1933 as a result of your skillful tactics and your special abilities,” Abs said. “But your most outstanding characteristic is your faith in Germany and the Führer.” When Abs sat down again, Günther remained standing. As he surveyed the crowd of powerful, gluttonous men, his eyes glazed over and his thoughts wandered back to the past.

2.

Almost eight years earlier, on June 8, 1933, two miles southeast of where Günther Quandt was sitting in solitary confinement in Berlin’s Moabit jail, the Reichsbank president, Hjalmar Schacht, approved a gargantuan financial stimulus package to initiate the first phase of Nazi Germany’s rearmament. The decision was probably made in a discreet meeting with the new aviation minister, Hermann Göring; his deputy, Erhard Milch; and the defense minister, Werner von Blomberg. They decided that over the next eight years, almost 4.4 billion reichsmarks annually would be spent on rearming the military, totaling a massive 35 billion reichsmarks, some 5 to 10 percent of Germany’s annual GDP.

This had to be done in secret. Barring a few notable exceptions, Germany was strictly forbidden to produce weapons under conditions of the Versailles Treaty, a matter Hitler constantly railed against. So Schacht came up with an off-budget financing system for the military, setting up a shell company to pay arms producers in IOUs. A few months after the ministers’ meeting, Hitler withdrew from the League of Nations and international disarmament talks. Soon enough, billions were flowing to German industrialists and their arms companies.

Following his release from jail, Günther was exceptionally well positioned for the rearmament boom. Not only did he, in DWM, rule one of Germany’s largest potential weapons producers, but he also controlled AFA, the battery behemoth with historical ties to the defense and automobile industries. He began pursuing a dual strategy, servicing military and civilian clients while being careful not to rely too much on either.

Günther reactivated DWM’s Berlin facilities right after Hitler seized power. In the years leading up to 1933, from behind his massive, dark double desk overlooking Askanischer Platz, he had planned meticulously for rearmament. “It took no small effort to maintain the company’s intellectual, economic, and financial capacities undiminished during the years of decline,” Günther wrote in DWM’s anniversary publication on May 8, 1939, four months before the start of World War II. “But it was possible at the moment of the seizure of power to place plants at the disposal of the Führer in which the production of army equipment could be resumed immediately on a large scale.” For what followed, Günther credited Hitler, “who with indomitable will carried out the rehabilitation and rearmament of the German people.”

DWM’s arms complex, located in Berlin’s blue-collar Wittenau neighborhood, had stood largely empty since the start of the Great Depression. Its facilities were rented out to General Motors. But the weapons manufacturing machinery, parts of which had been dismantled and secretly stashed at scrap metal dealerships, were swiftly bought back, upgraded, and reinstalled. The entire complex was expanded, all paid for by the regime after an order from the Army Weapons Agency (HWA). It quickly became one of Berlin’s largest arms-manufacturing complexes, divided across three plots of land. DWM kept one plot, focusing on the production of gun parts and tank shells.

That same year, the HWA commissioned DWM to build a production facility for infantry ammunition in Lübeck. The thousand-acre site, camouflaged by trees, became the most important weapons complex in the Hanseatic port city. DWM’s research institute served as Nazi Germany’s nerve center for ammunition innovation, and it included a 6,234-foot shooting range for ballistic experiments. Günther’s firm hired a group of mathematicians to assist with ammo experiments, improve shell production and ballistics quality, and manufacture hand grenades and explosives. The cities in which Günther built his weapons factories started naming streets after the mogul.

The two other plots of land at Günther’s arms complex in Berlin were leased to Mauser and Dürener, DWM’s largest subsidiaries. On the verge of bankruptcy during the Great Depression, Mauser, renowned for its rifles and pistols, was “freed” from the “shackles of Versailles” after Hitler’s power grab. Mauser also received massive subsidies from the army and soon started cranking out the Karabiner 98k, the Wehrmacht’s service rifle, in the millions. Mauser also brought the Luger P08, one of the German army’s most-used pistols during World War I, back into production. To this day, the iconic black sidearm is easily recognizable as the weapon of choice for Nazi villains in movies. Allied officers came to call Mauser’s arms research facilities a “dream come true.”

However, it was Dürener, the other DWM subsidiary to lease a plot at Günther’s Berlin arms complex, that truly made the mogul a household name in military and government circles. Dürener was renowned in the aviation world for making Duralumin, a light aluminum with steel-like qualities. Defense aviation was quickly becoming Nazi Germany’s fastest-growing and most innovative industry, with Göring and Milch spending billions on the technological sector. As a result of this shelling out of cash, Günther’s Dürener became a key supplier to the Luftwaffe, Nazi Germany’s air force. Duralumin was an indispensable part of not only the Luftwaffe’s fighter jets, but also transport and civilian aircraft made by famous German aviation companies such as Junkers, Messerschmitt, Heinkel, Dornier, and Arado. A new aviation firm that came to rely on Dürener’s prized innovation as well was ATG, controlled by Friedrich Flick, who hadn’t been as well prepared for rearmament as Günther Quandt had been. But the austere industrialist was making up for lost time.

3.

As the Gelsenberg affair blew over, Friedrich Flick was eager to start capitalizing on his regained political clout and excess cash. His ability to sweep aside sentiment and adapt with the times, making his firms indispensable to whichever political regime was in power, defined him. A ruthless tactician, Flick bested even an indefatigable networker like Günther Quandt when it came to tenacious plotting and dealmaking. Aided by lieutenants like Otto Steinbrinck, Flick paid lobbyists, bureaucrats, and journalists to receive intel or suppress information. Nazi Germany was particularly susceptible to his brand of aggressive, under-the-radar politicking. But despite his massive industrial interests, Flick did have a weakness — he was still a relative newcomer to arms production, unlike his competitors Krupp and Thyssen. He developed a strategy to make his steel conglomerate essential to rearmament and break the traditional dominance of the Ruhr moguls in the weapons business. And he had ample resources at his disposal to do just that.

Flush with an added ninety million reichsmarks from the Gelsenberg deal, Flick was busy building his own steel, coal, and machinery conglomerate from Berlin’s Bellevuestrasse in spring 1933. The core of Flick’s new industrial empire consisted of two major steel firms in central and southern Germany: Mittelstahl, active in Brandenburg and Saxony, and Maxhütte, operating in Bavaria and Thuringia. In buying a majority in Harpener and Essener mining, Flick added hard coal from the Ruhr area to his conglomerate. In January 1933, he added Leipzig-based ATG to the train-, tractor-, and truck-making firms he already owned. With these new industrial and political connections, Flick was perfectly positioned for the rearmament era. He had only one thing left to do: convince Hitler’s regime to bring him in.

After the Reichsbank president, Hjalmar Schacht, approved Germany’s secret arms budget in June 1933, Flick and his aides went to work preparing an aggressive marketing blitz to pitch the conglomerate as an arms producer for the German government. In September, his office sent a memo to the relevant Nazi ministries across Berlin; parts of it sounded like a weapons catalog. It laid out what Flick’s firms could offer the regime: a massive steel-production capacity that could quickly be recalibrated to make guns, ammunition, missiles, bombs, tanks, or aircraft parts; a wealth of raw materials; and factories located across central Germany.

To get a leg up on the competition, Flick walked from his office on Berlin’s Bellevuestrasse to the nearby Reichsbank in late November 1933 to personally pitch and lobby Schacht, whom he had known for over a decade. The Reichsbank president directly introduced Flick to the defense minister, von Blomberg, and the usually secretive Flick invited von Blomberg to personally tour three of Flick’s steel factories near Dresden. During the tour, on December 5, Flick explained to the defense minister and his clique of officials why his factories were the best choice to produce arms for Germany: they were independent of the Ruhr area and foreign countries for sources of energy, and better protected from air strikes due to their relatively obscure locations and distance from the country’s borders. Flick had written Schacht to thank him: the defense minister had been “extraordinarily kind” and showed “very great interest” in his presentation and factories, which, von Blomberg admitted, were not familiar to him.

Now, Flick thought, the arms orders would come flowing in. But nothing happened.

A few months earlier, Flick had instructed Otto Steinbrinck to use his naval credentials and connections as leverage to secure arms deals. Flick’s lieutenant had already signaled a renewed interest in all things lethal by joining the SS that year. Over the summer of 1933, Steinbrinck’s contacts paid off immediately; he convinced the navy to finance Flick’s acquisition of new machines that made artillery casings. But no other orders followed. Unlike the navy, the HWA wasn’t convinced that abandoning the tycoons of the Ruhr area was a good idea. Plus, the HWA viewed Steinbrinck as too closely aligned with the navy and refused to place any orders for arms with Flick’s factories. Flick, stuck between two parties, complained vehemently to von Blomberg, who intervened directly with the HWA on the mogul’s behalf. The defense minister stated that he was “extremely agitated” by the lack of orders for Flick.

Soon after this intervention, the army placed its first series of orders at Flick’s plants for millions of grenades and artillery shells. Moreover, in August 1934, Kurt Liese, the general who was heading the HWA, told Steinbrinck that managers at Flick’s steel factories “should not hesitate to prepare themselves for a continuous flow of big orders for a number of years.” Flick was in, but not before a little quid pro quo.

4.

Over the spring and summer of 1934, Friedrich Flick did the HWA, and himself, a massive favor by facilitating the expropriation of Donauwörth, a Bavarian arms firm on the Danube River that produced artillery ammo. Unfortunately for the company’s owner, Emil Loeffellad of Stuttgart, the HWA had labeled his factory indispensable to the rearmament effort. But since the Allies still strictly prohibited military weapons production in Germany, the army had to find a way to seize Donauwörth secretly and operate it under the guise of a normal business. Flick entered the picture through a former employee. One of Flick’s steel firms provided the HWA with a shell company called Montan (German for “mining”), which served as a front through which a legitimate transaction could take place. In May 1934, Loeffellad was arrested by the Gestapo, accused of corporate espionage, classified a “state pest,” and forced to sell his business to Montan. The HWA kept most of the purchase price as an “atonement sum” for Loeffellad’s alleged improper use of government funds.

In July 1934, the HWA-controlled Montan leased Donauwörth back to Flick’s steel firm, where it continued to produce artillery ammo. The so-called Montan scheme was beneficial to both parties. It enabled the HWA to buy arms firms in secret, invest in them, and ensure competent business leadership. At the same time, it let Flick secure a major customer with no costs involved. The solution was so convenient that Montan became a secret holding company for all army-owned weapons firms collaborating with German industry. When the war started, Montan controlled more than a hundred arms firms and employed some thirty-five thousand people. Flick soon joined its supervisory board.

The Montan scheme was a turning point in Flick’s tense relationship with the HWA. He now became one of the preferred partners for the army. Like Günther Quandt, who financed one of his weapons facilities through Montan, Flick could now build new factories, expand old ones, shift the costs to the army, and make his arms plants as modern as those of his Ruhr competitors, Krupp and Thyssen. It was a dream come true for the industrialist.

But Flick didn’t yet seize every opportunity to expand his business empire at the expense of others. In October 1934, the HWA general Kurt Liese asked Otto Steinbrinck whether his boss was interested in buying Simson, a machine-gun factory in Suhl, a city in Thuringia. The Simson family had a remarkable monopoly. At the time, they owned the only firm in Germany that the Allies allowed to produce light machine guns. But the Simsons were Jewish. Their arms monopoly was grist for the mill for the Nazi Party. The family had become a target of vitriolic anti-Semitic propaganda, particularly from Fritz Sauckel, Thuringia’s ambitious Gauleiter, a short, bald man with a Hitleresque mustache and a heavy rural accent. He wanted to expropriate the Simsons, bring their firm under his control, and turn it into an NSDAP-run weapons company.

The HWA generals had no problem with seizing a Jewish-owned firm. However, they wanted competent business leaders, not some Nazi hack with no entrepreneurial experience running a company in which the HWA had invested twenty-one million reichsmarks. And they were particularly concerned with the “smooth cooperation” of the factory owner, Arthur Simson. Steinbrinck euphemistically relayed Flick’s interest in the idea, “if for general national-political reasons the takeover of Simson by our group should be required.” But the initial negotiations quickly fell apart.

Seven months later, in early May 1935, Hitler’s economic adviser Wilhelm Keppler, backed by the SS leader Heinrich Himmler, offered the Simson firm to Flick once again. A few days later, Arthur Simson was arrested on Sauckel’s instructions; he was accused of “excess profits,” a practice of extortion; such accusations soon became commonplace as a means of forcing Jewish entrepreneurs to sell their companies. With his back against the wall, Simson signaled his “willingness” to sell his family’s firm. Steinbrinck reiterated Flick’s interest but now offered a lower price. “We as a private group can only buy, if Simson can meet us without coercion and in complete freedom. We would have to refuse an expropriation in favor of the Flick/Mittelstahl group,” Steinbrinck wrote in a memo in late May, coyly covering his boss’s hide. It was a textbook feint by Flick’s right-hand man. Steinbrinck did share Flick’s willingness to buy the Simson firm, but under one condition: the HWA had to first seize the arms business and then sell it on to the mogul. An expropriation was fine as long as Flick and his conglomerate did not directly have to dirty their hands. They wanted an intermediary to do the grunt work for them. Plus, Flick wasn’t planning on indiscriminately seizing companies. A takeover target had to add something of significant value to his conglomerate.

Sauckel soon prevailed over the HWA. The Gauleiter expropriated the Simson factory and made it a part of a Nazi-run conglomerate consisting of companies stolen from Jews. The Simson family, meanwhile, fled to America via Switzerland. Flick didn’t mind the outcome. The final negotiations for Simson took place just months before the Nuremberg Race Laws were enacted, in September 1935; they provided a legal basis for the expulsion of German Jews from their own society, along with the expropriation of their properties. The laws stripped them of citizenship and professional standing, and forbade them sex with and marriage to those deemed to be “of German blood.” But at this time, expropriations of Jewish firms were still rare. For the moment, Flick remained concerned about negative optics associated with buying such a factory, which might have consequences for his financial obligations abroad. He also did not want to make a powerful enemy of Sauckel, who would come to provide him with tens of thousands of people to do forced labor. Meanwhile, Flick and Steinbrinck were drawing closer to the man who would become the architect of the Holocaust. The duo had, quite literally, entered Himmler’s Circle of Friends.

5.

In early September 1934, Friedrich Flick and Otto Steinbrinck attended the annual Nazi Party convention in Nuremberg at Himmler’s invitation. Like many other guests of honor, they were put up at the city’s only grand hotel, at the entrance to Nuremberg’s old town, a short drive from the party festivities. One gloomy morning, guests made their way downstairs for breakfast only to find a sign hanging outside the small dining room. It read: RESERVED FOR THE GUESTS OF THE REICHSFÜHRER SS. This was Himmler’s official title. His thirty-three-year-old aide, Fritz Kranefuss, had placed the sign there.

That drab morning, Kranefuss took the reins of his uncle’s group, the Keppler Circle, and turned it into Himmler’s Circle of Friends. As Hitler’s economic adviser, Wilhelm Keppler was too busy negotiating between the regime and German businesses — arranging a weapons deal here or an expropriation there — to devote time to his circle. Plus, the group had made no impact on Hitler’s economic policies, which was its original purpose. Kranefuss had helped his uncle establish the circle and recruit its members. Now he could do with it what he wanted. He was like any good Nazi — what pleased his boss pleased Kranefuss even more. So he decided to turn the circle into an invitation-only networking group for big business and the SS.

The circle’s rebranding implied that it had an amicable connection with Himmler. But Himmler didn’t have any friends. He could not have cared less about these rich men. He was interested only in what they represented and what he could gain from them — and they had the same attitude toward him. Himmler knew the moguls were interested in the ultimate insurance: a relationship with the SS leader, the Third Reich’s chief of police. But even he was always competing for influence. Now that Göring was emerging as the most powerful man in the Nazi economy, Himmler wanted his own ties to big business to benefit the SS. First he would lure the tycoons in. Then he would take their money.

When Flick and Steinbrinck entered the reserved room that morning, they saw many familiar faces among those whom Kranefuss had invited: Keppler, who was present for the handover and was named an honorary member; executives from Commerzbank and Dresdner Bank, nicknamed “SS-Bank,” on whose supervisory board Flick served; Göring’s corrupt half brother Herbert; and the CEO and chairman of Wintershall. For whatever reason, Wintershall’s major shareholder, Günther Quandt, wasn’t invited. Kurt Schmitt was there too, this time without August von Finck, who wasn’t included because he was known to be excessively frugal. Himmler had just promoted Schmitt to honorary SS general, only months after Schmitt had resigned as minister of economic affairs due to burnout. The “physically impressive” Schmitt loved parading around in his black SS uniform. Himmler hadn’t come to greet his “friends.” He would see them later, at dinner.

6.

Friedrich Flick came to praise Himmler’s Circle of Friends as a “mirror image” of German business. But at the next Nazi Party convention, a new member joined who didn’t quite fit that description. Richard Kaselowsky was a pudding executive from the provinces, far removed from Berlin and the Ruhr area and the mighty moguls who exercised power there. He hailed from Bielefeld, a sleepy city in the region of East Westphalia, not far from the Dutch border. Kaselowsky, a stout man with oily brown-gray hair and a meaty face, was determined to put Bielefeld on the map. The forty-seven-year-old was the CEO of Dr. August Oetker, a food company whose namesake founder had pioneered packaged cake and pudding mixes and ingredients like baking powder in Germany. Kaselowsky had married into the family business through Ida Oetker, the widow of his best friend. His main task, besides serving as CEO, was to prepare Rudolf-August Oetker, his teenage stepson and the designated company heir, to one day succeed him.

Kaselowsky with his Nazi Party badge.

ullstein bild – Teutopress

What Kaselowsky lacked in business stature, he made up in zeal for Hitler. He handed out signed copies of Mein Kampf to new employees and hung a portrait of the führer in his office suite. Moreover, Kaselowsky and Himmler shared a common background as poultry farmers. Kaselowsky and the SS leader were both intrigued by the agrarian aspects of Nazism, specifically its (re)settlement of people to the countryside. The idea went hand in hand with Hitler’s desire to gain more Lebensraum (living space) for the German people; Himmler and his acolytes propagated the concept of Blut und Boden (blood and soil) — a “racially pure Nordic” people would leave the decadent and depraved cities to settle and work as peasant farmers in grounded rural communities.

Kaselowsky’s dedication to Nazism often came at the expense of the firm he led. Between 1933 and 1935, he spent hundreds of thousands of reichsmarks in company money on settlement projects in the east of Germany, which failed. And he clearly learned nothing from those experiences. In the summer of 1935, he merged a profitable regional newspaper, owned by an Oetker-controlled publisher, with a local Nazi Party publication that was losing money.

Bad business decisions aside, Kaselowsky’s financial devotion to hopeless Nazi causes put him in excellent standing with Westphalia’s Gauleiter, who invited him to the Nazi Party convention that September. As second-tier guests of honor, Kaselowsky and his wife were put up at Nuremberg’s Hotel Bamberger, where Hitler’s secret girlfriend, Eva Braun, and the movie director Leni Riefenstahl were also staying. Word of Kaselowsky’s spending had somehow made its way to the grand hotel, and Fritz Kranefuss soon invited the provincial pudding boss to join Himmler’s inner circle.

Kaselowsky readily accepted. He was hooked from the start. Present at every meeting, he loved the perks and elite access that came with membership. Every second Wednesday of the month, Kaselowsky traveled from Bielefeld to Berlin to meet up with Himmler’s Circle of Friends at the Aero Club. In the heart of the capital, Göring had repurposed Prussia’s majestic parliament as a lavish clubhouse with a round-the-clock bar, a beer room, and a famous restaurant, all next door to the Ministry of Aviation and opposite the headquarters of Himmler’s security apparatus. After a drink to welcome them, the forty men would dine lavishly, in a seating order that rotated from meeting to meeting. Afterward, they withdrew to clubrooms to talk shop but never politics.

Himmler came to collect his dues just before Kaselowsky joined. On a bright, cold morning in January 1936, Flick, Steinbrinck, and the rest of the circle met the SS leader at Munich’s Regina Palace Hotel on Maximilianstrasse, from which they embarked on a day trip. A bus waited outside the luxury hotel to take them to a destination northwest of town: Dachau concentration camp. When they arrived, Himmler walked the men into the camp, passing a group of inmates in prison uniform. The SS leader’s personally guided tour of Dachau was “very carefully prepared and dressed up,” one member later declared. He first showed the men to the camp barracks and workshops, where imprisoned tailors, carpenters, and shoemakers plied their trades. The tycoons had lunch in the camp canteen, after visiting the kitchen to taste the food that was being prepared. Himmler even led the men into a passage of cells, unlocking one to personally check on a prisoner. Afterward the group visited a nearby SS-run porcelain factory before returning to Munich, where they dined together.

After dinner, Himmler stood to make a short speech. Now that he had showed the men that concentration camps weren’t as bad as the rumors made them out to be, he had something to ask of his wealthy friends. Himmler said, in a humble tone, “For the SS and my other tasks, I need no money and want no money, but for some cultural tasks and for doing away with certain states of emergency for which I have no funds at all, if you want to place funds at my disposal for that purpose, then I would be most grateful to you.” His pet projects included the Lebensborn, a human-breeding association in whose maternity homes children were bred for the “master race.”

Of course, none of the businessmen dared say no. Kranefuss suggested an annual membership contribution of at least 10,000 reichsmarks. He had already lined up Baron Kurt von Schröder, the financier at whose villa Hitler and von Papen had sealed Germany’s fate, to serve as group treasurer. To collect the fees, von Schröder opened “special account S” at his private bank in Cologne. Steinbrinck would be in charge of fundraising. Millions soon flowed in. Flick started giving 100,000 reichsmarks a year to the circle. Kaselowsky gave 40,000 reichsmarks. Although he had missed the Dachau excursion, Kaselowsky was present for Himmler’s personally guided tour of another concentration camp, Sachsenhausen, north of Berlin. Different camp, same spiel.

7.

In late June 1934, Ferdinand Porsche signed a contract with the skeptical, reluctant Reich Association of the German Automotive Industry to develop the Volkswagen. The carmakers’ organization had accepted financial responsibility for the project, and its members were dismayed that Hitler had picked the volatile designer Porsche over more established names to create the first car for the masses. Of course, the executives didn’t dare contest the führer’s will, but they also didn’t believe Porsche could actually, in a matter of months, pull off the task of developing a small car that would cost only a thousand reichsmarks. At the contract-signing ceremony in Berlin, one executive sneered at Porsche, saying, “If … you can’t turn out such a car at the expected price, don’t worry. Just tell Hitler it can’t be done and that the man in the street should just go by bus!” In making sure the profligate Porsche didn’t spend too much of the association’s money, he was allowed to charge them only as much as twenty thousand reichsmarks a month to develop the car; plus, the first prototype had to be finished in ten months. It was a herculean task. Ultimately, it would take Porsche 1.75 million reichsmarks, two years, three versions of the design, and much political pandering to Hitler to complete a suitable prototype of the Volkswagen.

In the meantime, Porsche and his son-in-law, Anton Piëch, tightened the family grip on the car design office in Stuttgart. On September 5, 1935, ten days before the Nuremberg Race Laws were enacted, the cofounder of Porsche, Adolf Rosenberger, was arrested by the Gestapo in his hometown near Stuttgart, charged with “race defilement,” and put in remand prison in Karlsruhe. His “crime” was dating a gentile girl. Given his prominence as a Jewish entrepreneur and a former race-car driver, Rosenberger had been warned that he was a target of the Gestapo. He ignored the writing on the wall.

The signs had been clear. Five weeks earlier, on July 30, 1935, Rosenberger had transferred his 10 percent stake in the car design firm to Porsche’s twenty-five-year-old son, Ferry. The young man had been working for his father’s firm for almost five years, under the tutelage of Porsche and veteran engineers. The once struggling firm had finally become profitable through Porsche’s Volkswagen contract and a race-car design that he and Rosenberger had developed. Company profits that year neared 170,000 reichsmarks. So, Porsche and Piëch started to buy out the two shareholders who were not part of the family: Adolf Rosenberger and Baron Hans von Veyder-Malberg.

They bought out their Jewish cofounder at a fraction of the value of his shares. In fact, the duo bought out Rosenberger for the exact same nominal amount he had paid for his founding stake in Porsche in 1930: just three thousand reichsmarks. Despite all that Rosenberger had done for the company, the price severely undervalued his shares in Porsche. “It was held against me that a pennant or the like as a Jew-free company would not be given as long as I was a shareholder … I don’t accuse Mr. Porsche and Mr. Piëch at any rate of personal anti-Semitism,” Rosenberger later contended. “But … they used my membership as a Jew to get rid of me cheaply.”

Father and son Porsche in the 1930s.

Courtesy of Corporate Archives Porsche AG

Porsche and Piëch denied the allegation. Still, regardless of motive, the duo’s acquisition of Rosenberger’s Porsche stake was an “Aryanization,”plain as day. An asset was considered Aryanized in the Third Reich when the Jewish “element” of ownership had been removed. Aryanizations could involve paying less than the actual value for firms, houses, land, jewelry, gold, art, or shares owned by Jews, as had been the case with Rosenberger; it could extend to the outright theft of possessions. Because of Nazi Germany’s penchant for formal legal procedure, Aryanizations often had the veneer of a normal business transaction. But eventually that nicety was discarded.

On September 23, 1935, after almost three weeks in the Gestapo prison, Rosenberger was transferred to Kislau, a concentration camp south of Heidelberg. After four days of beatings, he was suddenly let go. Baron von Veyder-Malberg, Rosenberger’s successor at Porsche, had intervened with the Gestapo in Karlsruhe, successfully lobbying for his release. But Rosenberger still had to pay the Gestapo fifty-three reichsmarks and forty pennies for his time in “protective custody,” as the euphemism went. Despite later claims to the contrary, Ferdinand Porsche and Anton Piëch did nothing to secure their cofounder’s freedom. Via his lawyer, Rosenberger begged Porsche to help save his life, but Porsche was too busy hobnobbing at the Spanish Grand Prix, outside Bilbao.

Rosenberger left Germany a month later and moved to Paris in November 1935. Following his departure as Porsche’s commercial director in early 1933, he had been working on a contractual basis for the design firm. Even after his imprisonment, the thirty-five-year-old remained a foreign representative for the company, licensing Porsche patents in France, England, and America. Rosenberger could keep 30 percent of sales provisions with a contract running until 1940, or so he thought. Porsche and Piëch weren’t quite finished with demeaning their persecuted cofounder, but they had to contain their cruelty for now. First, Porsche needed to introduce the führer to his long-awaited masterpiece: the Volkswagen.

On a blisteringly hot afternoon in early July 1936, Porsche presented two test cars to Hitler, Göring, and their entourage at the chancellor’s Bavarian mountain retreat on the Obersalzberg. The top Nazis were sweating in their jackboots and uniforms, which were decked out in rows of medals and ribbons — awards for sycophancy. Hitler wore just one such decoration: his Iron Cross First Class, given to him as a lance corporal in the Bavarian army in World War I. He didn’t need to flaunt any other awards. He was the führer, after all. Porsche sold Hitler on the design firsthand. Years later, in the midst of the war, with his end drawing near, Hitler would reminisce to a journalist about that sunny July day: “The way these Volkswagens whizzed up Obersalzberg, buzzing around and overtaking … big Mercedes cars like bumblebees, was enough to impress anyone.” After Porsche’s presentation, Hitler gave a tour of the Eagle’s Nest, the teahouse that was being built for him, overlooking the quiet mountain town of Berchtesgaden. Hitler had already decided that he would have Europe’s largest car factory built in the center of Germany, just to make the Volkswagen. Now they had to find the right location for it.

8.

Rudolf-August Oetker, the “pudding prince,” knew he had a special position in life. Named after a father and a grandfather he never knew, he grew up with a sense of purpose and entitlement in the family villa on the Johannisberg in Bielefeld. As the sole male heir, destined to carry on the family food company and surname, Rudolf-August realized early on that “the most valuable thing I inherited is the Oetker name.” His stepfather, Richard Kaselowsky, whom he considered his real father and always addressed him as such, diligently prepared him for the task of taking over Dr. Oetker. Yet Rudolf-August was a bad student. He preferred riding horses, much like Kaselowsky, who was an avid rider and breeder himself. Whereas his thrifty mother disliked her husband’s expensive hobbies, Rudolf-August’s grandmother had no such reservations. She spoiled the boy rotten, gifting him a BMW convertible for Christmas in 1933. When he later had to sell his BMW motorbike, as a consolation she gave him a horse.

Rudolf-August began riding horses when he was twelve. When his local riding school was incorporated into the Reiter-SA in 1933, the sixteen-year-old Oetker was automatically enrolled as a member of the paramilitary organization’s horse-riding division. It was hardly a political statement on his part. But another membership was. Rudolf-August’s stepfather joined the Nazi Party in May 1933. His mother followed, and then his older sister. Rudolf-August was the last one to do so. They were a Nazi family, through and through.

Rudolf-August Oetker standing between his grandmother (right) and her chauffeur (left), 1933.

Courtesy of Dr. August Oetker KG, Company Archives

When Rudolf-August finished high school in September 1936, he took part in six months of Nazi-mandated labor service. For the labor service’s graduation ceremony, he bused in two hundred female employees from Dr. Oetker in Bielefeld as dance partners for his comrades. He would remember it as “a fun party.” After dropping out of military service because of health problems, he moved to Hamburg in 1937 to complete a bank apprenticeship. Hardly your average apprentice, Rudolf-August first lived in the Four Seasons Hotel on central Hamburg’s Inner Alster Lake, but soon he started searching for a suitable residence on the banks of the Outer Alster, Hamburg’s priciest location.

He quickly found a property at Bellevue 15. There, Rudolf-August bought an Aryanized lake villa with a large plot of land previously owned by Kurt Heldern, a Jewish tobacco executive who had fled Nazi Germany for Sydney, Australia. Rudolf-August was aware of the acquisition’s dubious provenance; even his Nazi stepfather was initially against the purchase. “It’s out of the question,” Kaselowsky told him. “Tears stick to this house.” Undeterred, Rudolf-August bought the villa and the land through Dr. Oetker, at far below their market value. His new neighbors included Hamburg’s Nazi mayor, whom his stepfather knew from Himmler’s Circle of Friends. Rudolf-August then Aryanized a plot of land behind his new villa from a different neighbor: the Lipmanns, a Jewish couple. They were forced to sell their land, among other belongings, to finance their “desperate emigration efforts.” The land was worth at least 119,000 reichsmarks. “After lengthy negotiations,” Rudolf-August stated that he was willing to pay just half. The local Nazi authorities, who had to approve the sale of any Jewish-owned asset, lowered the final price to 45,500 reichsmarks. The Lipmanns eventually managed to flee to Uruguay.

Rudolf-August, meanwhile, was making the most of his move to Hamburg. He often spent weekends with friends along the Baltic Sea, in fashionable beach towns like Heiligendamm. There, he ran into Joseph Goebbels, who was on a family holiday. Rudolf-August approached the propaganda minister and introduced himself, and they exchanged a few “friendly words.” At the town’s racecourse, Hermann Göring awarded Rudolf-August the prize when a stud from his stepfather’s stable won a race. The Oetker heir’s group of friends in Hamburg included Jews, who “must have suffered from the reprisals,” but like so many other Germans, Rudolf-August was indifferent to their plight. He also knew about the concentration camps but accepted the regime’s line that the camps held only enemies of the state. “We thought nothing more of it. After all, those who came out of the concentration camp said nothing,” Rudolf-August later recalled. But the heir had gotten to know concentration camps much better than he let on. After all, the SS had trained him in one.

9.

In the summer of 1936, Günther Quandt was helping a Jewish arms executive in order to benefit both men. That past November, Frankfurt’s Goethe University had sent Georg Sachs, a professor of metallurgy, on leave soon after the Nuremberg Race Laws came into effect. Just a few months earlier, Günther had installed Sachs on Dürener’s executive board as head of its research department. In Nazi Germany, whom you knew and how useful you were could mean the difference between life and death. Few understood that better than Erhard Milch, Hermann Göring’s deputy and the son of a Jewish pharmacist. Although Milch had a combative relationship with his boss, Göring shielded him from persecution, squelching a Gestapo investigation as rumors about Milch’s heritage swirled around the Ministry of Aviation in Berlin. “I’ll decide who’s a Jew!” Göring allegedly said. Milch’s value to the regime and to business lay in his authority over the Luftwaffe and its billions; Hitler would soon provide the Luftwaffe at least 40 percent of the entire war budget. Hence, Günther gave Milch a particularly warm welcome at Dürener’s showy anniversary party in 1935.

That same opportunism is what made Sachs, with all his expertise in metallurgy, almost as important to Günther. In April 1936, Goebbels’s Berlin district got wind that Günther had appointed a Jew to the board of one of his arms companies. Günther was forced to suspend Sachs, but Milch decided that Sachs could continue to be employed in a lower-profile role, despite his “dark spot.” After all, Milch knew about those all too well. However, in mid-July 1936, Sachs wrote a letter to Günther, asking to be let go “in the interest of both parties.” Günther initially refused his request, keen to keep the man because of his expertise, but he grudgingly acquiesced weeks later. Sachs was leaving Nazi Germany while he still could. Günther gave Sachs about thirty-six thousand reichsmarks to help him settle his emigration bill — Sachs had to pay a Reich “flight tax” of twenty-three thousand reichsmarks. Days before Sachs left for America, in early fall 1936, Günther visited him at his home to say farewell. Sachs quickly found a position as a professor of physical metallurgy at Case Western Reserve University in Cleveland, Ohio, where his family joined him soon after. Sachs’s wife later said that “old Quandt” proved to be “an upstanding helper.” And Sachs came to return the favor, after the war.

A problem had been solved for both parties. Dürener soon proudly reported that no “foreign or Jewish capital” had a stake in the firm. In late 1937, Göring rewarded Günther for his mass arms production with the title of Wehrwirtschaftsführer (military economy leader), awarded to those business owners and executives whose firms were deemed crucial to rearmament. Friedrich Flick and Ferdinand Porsche received the title soon after. The benefits it bestowed were limited to an ornate gold badge and good standing with the regime, as long as one remained useful. Günther later said that the Ministry of Aviation had awarded him the title because of his work with Dürener. He figured the firm’s lavish anniversary bash had clinched the decision. The benefits of throwing a good party were certainly clear to Günther. But when he invited Milch to his sixtieth-birthday dinner, planning to seat the half-Jewish Nazi by his side, at the last moment the state secretary decided not to attend.

10.

While Berlin was hot with Olympic fever in late summer 1936, Magda Goebbels had something to confess. On August 1, during the opening ceremony at Berlin’s Olympic Stadium, the Nazi theorist Alfred Rosenberg told Joseph Goebbels about “an unpleasant thing” that had transpired years earlier between Magda and Kurt Lüdecke, who had introduced her to the NSDAP. That evening, at their new villa, Goebbels confronted Magda with the story. Magda started crying and at first denied everything, but eventually she came clean to her husband: she’d had an affair with Lüdecke in the first years of their marriage. After her confession, Goebbels wrote in his diary the next day: “I’m very depressed about this. She lied to me constantly. Huge loss of trust. It’s all so terrible … It will take me a long time to recover from this.” Since Lüdecke had long ago fled back to America, after falling out with other top Nazis, Goebbels had to find a different way to exact revenge. Nearby, an opportunity beckoned.

Two months earlier, on the muggy evening of June 2, 1936, Goebbels and his three-year-old daughter, Helga, were taking a stroll on Schwanenwerder Island. Goebbels, Magda, and their three children, plus Harald, had just moved to the exclusive residential enclave in Berlin’s southwestern corner. Father and daughter were almost home when they ran into a neighbor, a famous actor. The thespian was accompanied by his twenty-one-year-old girlfriend, Lida Baarová, a Czech movie star. The beautiful brunette had recently started acting in German films. Baarová had been cast in femme fatale roles by Berlin’s prominent movie production company, UFA, whose studios were in nearby Babelsberg. At Goebbels’s request, Baarová and her boyfriend showed him and Helga around their house that night. Baarová didn’t know it yet, but Goebbels was about to consume UFA and her personal life.

After Magda confessed to her affair with Lüdecke, Goebbels decided to get to know Baarová better. He arranged for her latest UFA movie, appropriately named Traitor, to have its grand premiere at Nuremberg’s Nazi Party convention in early September 1936. Back in Berlin, Goebbels invited Baarová and her boyfriend to his box at the opera and organized a screening of the boyfriend’s latest movie at the villa on Schwanenwerder. Soon Goebbels and Baarová started meeting more often, and alone, often at the minister’s lakeside timber cottage north of Berlin. As fall turned into winter, the two started an affair. They quickly took their tryst public, and Goebbels began to take Baarová as his date to movie premieres. Her actor boyfriend sent her packing. Magda, preoccupied with health issues and birthing more children for the Reich, seemed to care little at first. Hitler, on the other hand, was still deeply invested in the Third Reich’s most famous marriage.

11.

Prominence had its perks, Richard Kaselowsky soon discovered. On May 1, 1937, Dr. Oetker was one of thirty German businesses to be awarded the honorary title of “national-socialistic model company.” During the award ceremony at Berlin’s Aero Club, Hitler gave Kaselowsky a golden flag. The food firm garnered the prize for taking such good care of its employees and, decisively, for its dedication to Nazi ideals concerning labor. As for Kaselowsky, he wore the mantle of Nazi CEO with pride and jumped at the opportunity for Dr. Oetker, its subsidiaries, the Oetker family, and the other firms they controlled to Aryanize assets.

After Kaselowsky forced the Oetker-controlled publisher Gundlach to merge its profitable newspaper with the unprofitable Nazi Party publication in 1935, the firm tried to offset the considerable loss by looking to the magazine market. Once “non-Aryan” publishers and those who opposed the regime were censored and then forbidden to own and distribute paper media by Goebbels’s Reich Press Chamber, the rights to their magazines and publications could be bought on the cheap. Over the course of 1935, a Berlin magazine publisher and its office on Potsdamer Strasse were Aryanized by Gundlach, as were the rights to a magazine previously owned by a Jewish distributor. In Austria, Gundlach Aryanized Oskar Fischer, a Viennese publishing house that owned six magazines. In January 1936, Kaselowsky approved an Aryanization by a subsidiary of Dr. Oetker in the Nazi-ruled “Free City of Danzig” (Gdansk). In the Baltic Sea port city, a majority stake in a packaging business was Aryanized by the firm at an “extremely favorable” price, some 60 percent below actual market value, after its Jewish majority shareholders announced their withdrawal from the company.

The Kaselowsky/Oetker family also bought stakes in three companies that had previously been Aryanized by other parties. Most prominent among them was a firm owned by the Berlin beer brewer Ignatz Nacher, whose companies had been brutally Aryanized by Dresdner Bank and, separately, by a consortium led by private bankers from Munich. Around the same time that Friedrich Flick acquired Nacher’s Bavarian estate in 1937, the Oetker family acquired a one-third stake in Groterjan malt beer, one of the breweries Aryanized from Nacher by the bankers’ consortium. The brewery marked the Oetker dynasty’s entry into the alcoholic beverage industry, still a major part of the family empires today. But the Aryanizations by Kaselowsky, Oetker, and Porsche-Piëch paled in comparison to the size and scope of those carried out by Günther Quandt, Friedrich Flick, and August von Finck.

12.

In late spring 1937, while deeply entangled with Lida Baarová, Joseph Goebbels was busy planning art exhibitions. He had Baron August von Finck to thank for that. What the frugal financier lacked in generosity, he made up for by inspiring it in others. In four years’ time, von Finck had raised twelve million reichsmarks for Hitler’s new museum in Munich, enough money to cover the building’s continual cost overruns. Bavarians were mockingly calling the massive building “the white sausage temple.” The Nazi Party had to contribute only 100,000 reichsmarks to its construction; von Finck did the rest. The banker combined business trips with his fundraising mission, visiting other tycoons at their villas and estates. As rearmament millions flowed from the regime into industrialists’ pockets, von Finck convinced some of the biggest names in German business to give back and become founding members of the museum — and all this for just 100,000 reichsmarks. Friedrich Flick, Gustav Krupp, Carl Friedrich von Siemens, and Robert Bosch were among the munificent moguls who got their checkbooks out.

In early June 1937, Hitler and Goebbels flew to Munich to inspect the museum and its jury-picked inaugural show, called “The Great German Art Exhibition.” Von Finck personally led the tour. The duo, however, were appalled: “They have hung works here that make your flesh creep,” Goebbels wrote in his diary. “The Führer is seething with rage.” The walls were mostly lined with grisly historical scenes depicting German conquests. Apparently, those planning the exhibition had focused on the Nazi theme of “blood and soil,” interpreting the concept quite literally. The resulting show didn’t quite live up to the chancellor’s artistic vision of National Socialism. Hitler considered postponing it for a year rather than “display such muck,” and he appointed his personal photographer to curate the show going forward. But the high-profile exhibition couldn’t be dismantled at a moment’s notice without causing the chancellor some minor embarrassment. The show had to go on.

When Hitler and Goebbels returned a month later for the opening, the chancellor was happier. Nothing had been changed thematically; the number of gory paintings had simply been reduced. On July 18, 1937, the führer opened the Haus der Deutschen Kunst and its premier exhibition, with von Finck standing at his side. At the vernissage, Magda and Goebbels spent fifty thousand reichsmarks on Nazi art for their homes. Goebbels had staged another show, just a few blocks away in the Hofgarten Arcades, which was intended to run at the same time. Goebbels had come up with the idea of displaying confiscated works by mostly German modern artists, and some foreign ones; together they were meant to represent art that had no place in the Third Reich, at least in Goebbels’s opinion. The exhibition of “degenerate art” displayed six hundred works by artists such as Max Beckmann, Marc Chagall, Max Ernst, Otto Dix, Paul Klee, George Grosz, and Wassily Kandinsky. The show quickly drew over two million visitors, twice as many as attended the exhibition at the Haus der Deutschen Kunst.

Overall, the regime was pleased with von Finck and his efforts to raise funds for Hitler’s museum. The banker would soon be rewarded for his service.

Months later, Goebbels gave his feedback on another prized Nazi innovation. In early September 1937, Goebbels visited Stuttgart to join Ferdinand Porsche for a test ride in the Volkswagen. “The car has fabulous pulling power, climbs well and has excellent suspension. But does it have to be so unadorned on the outside? I give Porsche some advice on that. He takes it readily,” Goebbels wrote in his diary. He preferred to ride in fancy limousines. The propaganda minister inspected the Volkswagen again three months later and was happy with the improvements. “Dr. Porsche delivers a masterpiece here,” Goebbels wrote, pleased as he always was when someone obeyed him. He soon awarded Porsche the National Prize of Art and Science. Even bigger rewards awaited Porsche down the road.

13.

Months after helping one Jewish family flee Germany, Günther Quandt robbed another. On June 9, 1937, his weapons firm DWM published a one-sentence statement in Berlin’s financial newspaper, noting that it had taken over a new business: Henry Pels, a state-of-the-art toolmaker that produced hole punches and iron cutters at its factory in Erfurt, Thuringia’s largest city. What wasn’t explained in the terse announcement was how Günther had viciously Aryanized the business eleven days earlier. On the morning of May 29, 1937, the Berlin surgeon Fritz Heine had been forced to sell his wife’s majority stake in her family firm at far below market value, and to resign his supervisory board seat. It all took place during a tense shareholders’ meeting at Günther’s office on Askanischer Platz. Heine had been the only “non-Aryan” supervisory board member, representing his wife, Johanna. She had inherited the stake after her father, the firm’s founder, Henry Pels, and her mother died, in 1931. Her only brother had already died a “heroic death for his fatherland” as a German officer in World War I. The Heines and their two children had been baptized Protestant, but that would not save them under the Nuremberg Race Laws, as their parents were Jewish.

Günther bought the Heines out of their stake with hard-to-sell treasury notes worth about 500,000 reichsmarks, cheating the Heines out of at least 1.5 million reichsmarks. The nominal value of Johanna’s stake was about two million reichsmarks, but its actual value was likely much higher. Günther valued the company’s machinery alone at three million reichsmarks, soon after the Aryanization. Günther became Henry Pels’s supervisory board chairman, filled the board with his business partners and executives, and retooled the company into a productive weapons business. By 1938, the firm had already turned a gross profit of six million reichsmarks, producing gun mountings, cannons, and anti-aircraft artillery for submarines. Günther also Aryanized the company name, removing the name of Johanna’s father (Henry Pels) and rechristening the company Berlin-Erfurter Maschinenwerken. Yet business correspondence was frequently carried out using stationery stamped with the old “non-Aryan” name.

Things didn’t end well for the Heines. Their son had already moved to America after finishing his engineering studies, and their daughter soon fled to England, aided by a pastor in Berlin. But the couple stayed in Germany. They were confident that “the National Socialist haunt will soon pass.” It did not. Johanna and Fritz Heine were forced to move out of their villa in Berlin’s Westend; they scrambled to sublet two rooms. On October 24, 1941, they were deported by train from Berlin to Lodz in the Warthegau, a Nazi-named area in occupied Poland where Günther’s acquaintance, the cruel Gauleiter Arthur Greiser, ruled over millions — including those in Lodz’s Jewish ghetto, which was the main collection point for Chelmno, the extermination camp. The Heines were likely murdered in Chelmno in mid-November 1941, although their death certificates said Litzmannstadt, the Nazis’ new name for Lodz. Back home, the couple’s remaining possessions were confiscated as an exit tax for “fleeing” Reich territory. For Günther, the Heines were merely the start of his juggernaut of plunder, which would stretch across Germany and other parts of Europe.

And he wouldn’t be working alone. Günther had discovered a young talent to help him expand his empire. On a rainy morning in September 1937, Günther sat behind his double desk in his office on Askanischer Platz 3, interviewing the dashing lawyer who sat opposite him. Günther carefully wrote down the man’s answers to his questions. He had met the twenty-nine-year-old Horst Pavel at a business reception and sensed the man’s gift for dealmaking. At noon, Günther offered Pavel the role of head of AFA’s legal department. Pavel had three hours to consider the offer; he accepted it at 3 p.m. Günther thought that his elder son and heir apparent, Herbert, could do with a little competition. Herbert had finished his four-year management training at AFA in May 1937 and had started to work as a director at Pertrix, a subsidiary of AFA in Berlin, which produced flashlights and batteries. Pavel was two years older than Herbert, and just as ambitious. He would do his utmost to best the boss’s son.

Günther, thinking in Darwinian terms, encouraged the competition. He wrote about his son’s “struggle for life.” Günther gave Pavel the office next to his own, and shortly after hiring him, he took his new protégé on a cruise, lasting almost four months, to South America. Writing from the cruise ship Cap Arcona, Günther shared some personal observations about Latin Americans in a letter to his executives back in Germany: “The principle of the pure race is impossible [in Brazil] since the whole country consists of Italians, Spaniards, Germans interbred with Indians,” he wrote. “In addition to Negroes, with whom one also mixed indiscriminately. This has given rise to a race that is resistant to the murderous climate with enough intellectual impact from the white and red skinned. Hostile to this stands the white country of Argentina. It has the higher intelligence.” During the cruise, Günther made Pavel a sweeping offer: the entire commercial management of AFA and an executive board position, provided he stayed with the Quandt group. Just like that, Günther made Pavel his right-hand man, and Herbert would once again have to fight to get his father’s attention.

14.

In the fall of 1937, Friedrich Flick was preparing for plunder. On November 4, Flick’s lieutenant, Otto Steinbrinck, had written in a memo to his boss that Wilhelm Keppler, Hitler’s ubiquitous intermediary between regime and business, had informed him that “for some time Jewish assets in Germany have been seized by a new wave of sales.” Even Jewish owners “from whom one wouldn’t have expected it before” were striving to “get rid of their possessions in Germany,” Steinbrinck wrote. Flick promptly seized the opportunity. Some of the first Jewish-owned assets that he purchased were for his own private use. He loved buying grand properties. This time, Flick bought three estates: one in Bavaria, one near Berlin, and one, a hunting property, in Austria. All came from Jewish business families who needed to sell while they still had the option of doing so. (The Bavarian estate and the Austrian hunting grounds are still owned by some of Flick’s grandchildren.)

By November 1937, Flick’s first Aryanization had been underway for months. Late that summer, he had started pursuing the Lübeck blast furnaces, a major pig-iron plant in the Hanseatic port town and one of the few larger firms in German heavy industry owned by Jews. Lübeck’s shareholders were mostly German Jewish business families, as well as companies and banks affiliated with them. Flick had eyed the firm for almost a decade. Now it was time to strike.

Earlier that year Flick had come to see acquisition of the Lübeck blast furnaces as acutely important. They could supply his steel firms with pig iron; there was a major shortage of this metal. What’s more, Lübeck had a Nazi CEO, who was eager to help Aryanize the firm he led. He saw his Jewish shareholders as the main reason why the company was being passed over for weapons contracts from the HWA. Flick now swung into action. First, he successfully staged a hostile takeover of Lübeck’s second-largest shareholder, an iron-ore trading firm classified as a Jewish company. When some of the firm’s shareholders tried to pool their shares and move their stock abroad, Flick invoked the threat of regime sanctions to force Jewish shareholders to sell. He did not, however, attend the final takeover meeting at his headquarters on Berlin Bellevuestrasse in early December 1937. Its aim was to convince the final holdouts, a group of foreign shareholders and the Warburg bank, to sell their stock. Flick explained his absence to Walther Oldewage, the regime’s enforcer on the deal: “The discussion with this committee is a renewed Jewish trick, which I’m not willing to fall for after my bad experiences so far.” In the end, the shareholders sold.

In the days after that deal was struck, Flick approached Lübeck’s largest shareholders, the Hahns, a Jewish family. They agreed to sell their stake to him in two parts almost immediately, and for millions below market value, but on one condition. To protect their own family firm, a steel mill in the Ruhr area, the Hahns insisted on receiving a written statement to the effect that a sale of their Lübeck shares would be interpreted by the authorities as a sign of their goodwill, and that their steel mill would be spared any coercive measures. But Oldewage refused; instead he gave only an oral statement to that effect. The Hahns still went ahead with the deal, selling the first part of their Lübeck shares to Flick in December 1937. Weeks later, Flick poached Oldewage from the government. As a reward for his help, Flick stashed him away in a middle-management job on a generous salary at one of his steel firms. As Oldewage was about to assume his new role, Steinbrinck gave him some parting feedback: “[Oldewage] seems to be a little too soft in human terms; I personally advised him to give in less to Jewry.”

In the weeks after the Hahns’ first sale of shares to Flick, the Nazis put even more pressure on the Jewish family. They were threatened with arrest and internment in a concentration camp. When the Hahns went to the Aryanization department of the Ministry of Economic Affairs in Berlin to make good on the assurance that their firm would be left alone, a Nazi official told them he couldn’t believe they had been foolish enough “to accept a bill of exchange for which there is no cover.” The Hahns saw only one option at that point: to sell their steel mill to a major competitor and immigrate to England. The family sold the last part of its Lübeck shares to Flick, once again for millions under market value; they needed the money to get out. Flick now had his majority in Lübeck, and he was already busy with his next Aryanization project.

On their one-way flight to London, the Hahns ran into Otto Steinbrinck. Flick’s lieutenant was on a business trip. He sneered at the Jewish family: “You’re lucky to get out at all.”

15.

Friedrich Flick’s next and much bigger Aryanization was already taking shape during his assault on Lübeck. In early November 1937, Wilhelm Keppler told Otto Steinbrinck that a number of other firms were also slated for Aryanization. These included German assets owned by the Julius and Ignaz Petschek conglomerates, which were originally established by the eponymous Petschek brothers, who were Czech Jews. By the time the two conglomerates caught Flick’s eye, they had long been separately owned and operated by the siblings’ sons, who weren’t on good terms with each other. The Nazi regime took an enormous interest in the Petschek heirs. Taken together, the cousins controlled about 65 percent of the brown coal reserves in eastern and central Germany, making them responsible for 18 percent of raw coal production in the entire German Reich. And this was just a small part of the Petscheks’ operations. The larger part was a range of coal mines in Bohemia and Moravia, Czech regions on which Hitler had already set his sights.

When Keppler told Steinbrinck that the Petscheks’ German interests were slated to be Aryanized, he confirmed something that Flick and Steinbrinck had heard from other sources: the Prague-based Julius Petschek group, the smaller of the two conglomerates, was already in talks with two companies to sell its majority stakes in two big German brown-coal firms. And these weren’t just any two companies vying for control of the Petschek’s German assets: they were Wintershall, the potash and oil giant that Günther Quandt owned a quarter of, and IG Farben, the world’s largest chemicals firm. If Flick could just get his hands on the Petschek brown coal interests in Germany, he could secure a fuel base for his main steel firm for decades to come. This was a “matter of life,” Steinbrinck told Keppler on November 3, 1937. Two weeks later, Steinbrinck reiterated to Keppler that the Flick conglomerate, “under all circumstances,” wanted to participate in the “liquidation of P.’s property.” The duo agreed on “making trouble for the Jewish element,” as Keppler called it.

The “Petschek or P. problem,” as Flick and his aides euphemistically called their Aryanization effort, became top priority. Flick and Steinbrinck began to lobby the Nazi regime and Petschek contacts in order to enter the negotiations in pole position. Many of these contacts were fellow members of Himmler’s Circle of Friends. Most notable among them was Herbert Göring, the Reichsmarschall Hermann’s half brother. Simply because of this family relationship, Herbert had gained a position as general secretary in the Ministry of Economic Affairs and then got appointed to various executive positions at major German firms. As one historian put it, Herbert Göring “created an outright parasitic position in the Third Reich by turning direct access to his powerful half-brother into cash.” Flick and Steinbrinck bought into the ploy, promising Herbert a big payout “in case of a solution to the P. problem.”

In a meeting with Steinbrinck, Herbert Göring said the Petscheks had the full attention of his half brother. Hermann Göring was in the midst of executing his “Four Year Plan” for Nazi Germany’s economy. His grandiose design aimed at the further rearmament of the country, but, most important, at making Germany an autarky: a self-sufficient state in all respects, no longer dependent on imports from foreign countries. The Petscheks’ brown coal reserves, owned by Jewish foreigners no less, would form a natural part of that. In a follow-up meeting with Flick, Herbert Göring confirmed that whereas the Julius Petschek heirs wanted to sell, the Ignaz Petschek group rejected all overtures. They would have to be dealt with later.

With backing from both Görings, Flick established a leading position at the negotiating table. In mid-December 1937, Flick informed Wintershall’s CEO, who was also Günther Quandt’s business partner and yet another member of Himmler’s Circle of Friends, that he was making a claim to Julius Petschek’s German brown-coal firms. The CEO responded with “angry silence.” Simultaneously, Herbert Göring told a Julius Petschek board member that the negotiations were to be handed over to a consortium under Flick’s leadership. The information was relayed to one of Julius Petschek’s sons, who promptly broke off negotiations with Wintershall and IG Farben, signaling their willingness to talk with Flick. But the process stalled. Julius Petschek’s sons, Czech citizens, had created a complicated ownership structure. They had long ago moved the main holding company for their German shares safely overseas. The shares now sat with the United Continental Corporation (UCC) in New York; its former chairman was John Foster Dulles, the future US secretary of state. Furthermore, Julius Petschek’s heirs wanted to be paid in American dollars, but Hermann Göring and the Nazi authorities didn’t allow this currency to be used for the purchase of German companies.

In mid-January 1938, Steinbrinck wrote an extensive memo that Flick would use one week later in a presentation on how to solve the “Petschek problem.” On January 21, Flick spoke to an audience of one in Berlin: Hermann Göring. Flick suggested to the Reichsmarschall that a two-pronged Aryanization be undertaken. Flick alone would negotiate a deal with Julius Petschek’s sons, but a compromise on the issue of foreign currency would be necessary, the mogul said. Flick argued that he should be given the sole mandate to negotiate on this matter; multiple bidders would drive up the price and give the Petscheks a choice of the best offer. In turn, a voluntary sale would weaken the holdout position of the Ignaz Petschek heirs. Flick’s presentation was a major success. Hermann Göring signed a prepared document providing Flick with the exclusive negotiating mandate for both Petschek groups, albeit a nonbinding one with no commitment on the issue of foreign currency.

The representatives of the Julius Petschek heirs arrived in Berlin the next day. Their chief negotiator was George Murnane, a well-connected New York investment banker who had succeeded his friend Dulles as UCC chairman. Murnane wanted to create a “calming atmosphere,” but Flick directly drew a hard line in their first meeting, saying that he alone had been authorized to negotiate on “orders from top quarters [sic].” Dollar payments for German resources were out of the question. Without quick concessions from the Petscheks, Flick threatened that an involuntary takeover would be likely. But Murnane refused to budge on foreign currency and an asking price of about $15 million. Although not before expressing his sympathy for what he called the “German problem, namely the rearmament question and the Jewish question.”

After two more fruitless meetings, Flick abruptly broke off negotiations at the start of a new round on January 31, 1938. He lied, saying that his mandate to negotiate had expired that day. In the final passage from a statement that Flick cryptically read aloud in the meeting room, he made it clear that the Petschek heirs would be expropriated without a deal. The impervious Murnane, whom Flick had put under constant surveillance, called his bluff and said that he had already received an offer of $11 million from Günther Quandt’s Wintershall. Murnane then upped the ante: German companies in America could be “threatened … by the same problems as those that now preoccupied him in Germany.”

Murnane’s response set off alarm bells at the highest levels of Nazi economic leadership. Faced with this threat to German assets abroad, particularly IG Farben’s American subsidiaries, Hermann Göring and his lackeys gave up their opposition to a dollar payment. Flick, however, was in no rush to resume the negotiations. Hitler’s annexation of Austria was imminent, and Flick wanted to wait and see how it would affect his bargaining position. As it turned out, it had a very positive effect.

After Hitler annexed his home country, Austria, in mid-March 1938, and threatened that Czechoslovakia would be next, the Julius Petschek heirs were willing to lower their asking price significantly. More political pressure soon followed. In late April 1938, Hermann Göring issued several decrees intensifying the persecution of Jews. All sales or leases of an asset were now subject to state authorization if a Jew, German or foreign, was involved, and foreign Jews now also had to declare all their property in Germany to the authorities. Göring also outlined the possibility of state expropriation if it was in the interest of the German economy.

On May 10, 1938, Flick and the UCC, now represented by Murnane’s British associate Viscount Strathallan, resumed their negotiations in Baden-Baden, a chic spa town near the French border. In follow-up meetings in Berlin a week later, they hashed out a deal for $6.3 million, less than half of the shares’ market value and almost $5 million less than Wintershall’s offer and $9 million less than Murnane’s initial asking price three months earlier. The mood and the balance of power had shifted in Flick’s favor. Strathallan thanked Flick and praised “the spirit of all our talks.” Murnane cabled Flick from New York: “Wish express my admiration your ability and fairness in carrying out transaction and your skill in negotiating.” Flick responded in kind, attributing the success to “working together in mutual loyalty and we encountered on your side a broad understanding of German conditions.” (US investigators later accused Murnane of badly representing “the interests of his customers.” The Americans thought that “he played the Petschek-property into the hands of the nazis by giving way … in all points and by showing weakness.”) The Julius Petschek heirs managed to sell their remaining assets in Sudetenland to a Czech consortium just weeks before Hitler occupied the area. Then they immigrated to the United States and Canada.

Flick wasn’t done yet. He proceeded to sell some of the Julius Petschek brown coal mines to Wintershall and IG Farben. Flick ended up making a profit of almost $600,000 on the entire Aryanization, in addition to securing a fuel base for his steel firms free of charge. As a broker’s fee, Flick temporarily transferred one million Lübeck shares to Herbert Göring. The Reichsmarschall’s corrupt half brother could keep them until the shares yielded a dividend. Flick also gave him a loan to buy into a shipping conglomerate. According to Flick, Herbert Göring repaid the loan after making a “rather good deal” by selling the majority stake to Flick’s arms and steel competitor, the Krupp dynasty. Wintershall ultimately lost out in the Julius Petschek Aryanization, but Günther Quandt wasn’t deterred. He would have plenty opportunities in shady deals to come. And anyway, you win some, you lose some. Flick was about to learn that same lesson.

16.

The Haus der Deutschen Kunst opened in July 1937, just as the Aryanizations began to take off, and Baron August von Finck was ready to capitalize on all his hard work for Hitler. Nazi Party luminaries, like the führer’s personal lawyer Hans Frank and Munich’s corrupt chief Christian Weber, already held NSDAP and personal accounts at the aristocrat’s private bank, Merck Finck. Now it was time for von Finck to expand his financial institution and get rid of his Jewish rivals. He first attacked a competitor in Munich: Martin Aufhäuser, senior partner at H. Aufhäuser, one of Germany’s largest private banks. The financier had protested against the Nuremberg Race Laws, under which he was classified as Jewish. Aufhäuser applied for an exemption in order to have his personal rights reinstated and to save his family bank, a procedure that required Hitler’s personal permission. Unsurprisingly, the führer rejected the application.

August von Finck and Hitler giving the Nazi salute at the Haus der Deutschen Kunst.

SZ Photo/Süddeutsche Zeitung Photo

Von Finck seized the chance to escalate the matter. In a letter to Munich’s Chamber of Commerce on November 11, 1937, he laid out a proposal on how to eliminate the H. Aufhäuser bank, concluding: “Today, the German private banking sector is still largely made up of non-Aryan firms. The gradual cleansing of this trade, which is so strongly influenced by the Jewish element, must not be halted by the granting of applications for exemptions but must … be promoted by all means.” The H. Aufhäuser bank was seized during Kristallnacht, the notorious pogrom against Jews that occurred throughout Nazi Germany on November 9 and 10, 1938, and swiftly Aryanized. After spending weeks in “protective custody” at Dachau concentration camp, Martin Aufhäuser and his brother fled Germany and ended up in America. Their other bank partner and his wife committed suicide after Kristallnacht. Von Finck, as state representative for Bavaria’s private banks, was responsible for the liquidation of Martin Aufhäuser’s private portfolio of shares. The proceeds were used to pay Aufhäuser’s “flight tax” after he managed to escape the country.

Von Finck’s first Aryanization presented itself while he was ramping up attacks against his Jewish colleagues at Aufhäuser. Otto Christian Fischer, a prominent Nazi banker who served on the museum board of trustees with von Finck, was a key figure in finance Aryanizations as head of the Reich banking authority. In fall 1937, Fischer put von Finck in touch with Willy Dreyfus, the owner of the prominent German private bank J. Dreyfus, and Paul Wallich, a partner at Dreyfus’s Berlin branch.

Willy Dreyfus had decided to sell his family bank because of the pressure to agree to an Aryanization. He had already closed his Frankfurt branch, after one of his partners was threatened with deportation to a concentration camp. At the same time, Dreyfus started to look for a buyer for the bigger Berlin branch. Adding an office in the capital was a rare opportunity for von Finck. His private bank still had only a Munich branch, but all the action was in Berlin. Naturally, he wanted in.

The negotiations between Willy Dreyfus and von Finck’s deputy began in December 1937. Julius Kaufmann, a half-Jewish Dreyfus director, witnessed the three-month talks in Berlin. He later detailed how von Finck coerced Dreyfus to lower the sale price of his bank branch. For starters, von Finck refused to take over the bank’s pension obligations, worth 450,000 reichsmarks, to its Jewish employees and pensioners. After Willy Dreyfus submitted a balance sheet that already included provisions and depreciations that lowered the value of his bank branch by another 400,000 reichsmarks, von Finck pressured the man for further reductions, including undervaluing his real estate. These adjustments took another 700,000 reichsmarks off the sale price, which came out to about two million reichsmarks. All in all, Julius Kaufmann estimated that von Finck forced Willy Dreyfus to sell his Berlin branch for at least 1.65 million reichsmarks (about $1.5 million at the time) below its actual value. But Merck Finck would later assert that “friendly negotiations” had led to the Dreyfus “takeover.”

Paul Wallich, the Berlin branch’s former partner, signed a contract to stay on for a decade as a consultant. This, despite Merck Finck’s having issued a company rule stating that the bank could employ only individuals of “pure German blood”; “proof of Aryan origin” for an employee’s spouse was also required. Wallich and Julius Kaufmann were both classified as Jewish under the Nuremberg Race Laws, but they had married gentiles. Both men were allowed to transition from Dreyfus to Merck Finck, but the arrangement lasted only as long as the two Jewish men, in “privileged mixed marriages” that predated Hitler’s power grab, were deemed useful to Merck Finck.

Baron Egon von Ritter, a close friend of von Finck, became the leading partner at Merck Finck’s Berlin branch. Von Ritter quickly fired Kaufmann for being “non-Aryan” but forced him to stay on for the remaining six months of his employment contract to help with the reorganization. Kaufmann at least survived. Paul Wallich fared far worse. His contract was terminated once Merck Finck no longer required his services, but only after taking advantage of his help in reallocating client accounts. Wallich committed suicide on a business trip to Cologne, just days after Kristallnacht.

The Dreyfus Aryanization gave von Finck’s bank instant notoriety in Berlin, where it became known as the “bank of the Führer.” It was the greatest compliment one could give to a Hitler-obsessed zealot like von Finck. The Aryanization was also lauded in German financial circles as a blueprint for the further “dejewification” of the private banking industry, triggering a run on smaller Jewish-owned banks across the country. After the Aryanization was finalized and published on March 5, 1938, Willy Dreyfus immigrated to Basel, Switzerland. But he hadn’t seen the last of von Finck.

17.

The most spectacular private banking Aryanization landed in August von Finck’s lap one week after the conclusion of the Dreyfus takeover. On March 12, 1938, the German army drove into Austria and incorporated the country into the Reich. Thousands of Austrians lined the roads and streets to welcome the troops. The persecution of the nation’s Jewish population, by both Germans and Austrians alike, began while the Anschluss, as the takeover was called, was still in progress. Von Finck was soon offered the chance to Aryanize S.M. von Rothschild, the country’s largest private bank, which belonged to the Austrian branch of the famed Rothschild dynasty. Baron Louis von Rothschild led the Vienna-based bank founded by his great-grandfather. Louis was arrested during the annexation and imprisoned at the former luxury Hotel Metropole, the Gestapo’s new headquarters in Vienna’s old town. The Rothschilds’ family bank was seized. All their other personal belongings, including their art and palaces, were looted. Adolf Eichmann’s notorious Central Office for Jewish Emigration was quickly established at one of the Rothschilds’ palaces.

Emil Puhl, vice president of the Reichsbank under Walther Funk, later recalled that Funk’s Ministry of Economic Affairs preferred having a private bank Aryanize S.M. von Rothschild. Funk wanted to prevent the major commercial banks, like Deutsche and Dresdner, from increasing their influence in Austria. Puhl said that many German private banks wanted to Aryanize S.M. von Rothschild, but that Merck Finck’s selection “undoubtedly goes back to the influence Mr. Fink [sic] had on party and state.” Von Finck, among his many positions under the Nazi regime, served on the Reichsbank’s advisory board.

Von Finck’s father and Louis von Rothschild’s father had been good friends. The younger von Finck was therefore invited to Zurich by a representative of the Rothschilds in early May 1938 “to discuss possible solutions” for the seized bank. Afterward, von Finck traveled on to Vienna, where he met with Josef Bürckel, the capital’s corrupt Gauleiter and Austria’s Reich commissioner following the Anschluss. Von Finck told Bürckel that he wanted to expand his bank to southeast Europe and asked him for help “in obtaining for that purpose a Jewish-owned bank in Vienna.”

In a bigger meeting the next day, von Finck was told that the S.M. von Rothschild bank would be best suited to his needs, and Merck Finck was appointed as its trustee. But the SS refused to transfer trusteeship of such a valuable asset. Von Finck then traveled to Berlin to ask Hermann Göring to intervene. Only after Göring signed and sent a telegram to Austria’s ranking SS chief, with the assurance that von Finck was “up to tackling difficult jobs” and had “excellent party connections,” did the SS recognize his bank’s trusteeship. Administration of S.M. von Rothschild was transferred to Merck Finck in early July 1938 — just in time for the baron’s fortieth-birthday bash, coming up in two weeks.

Weeks before concluding his second Aryanization, von Finck refused another one. On June 3, 1938, he received a letter from Nuremberg’s Nazi mayor. In it, the mayor asked von Finck if he was still interested in Aryanizing the private bank Anton Kohn, citing preliminary talks they had held on the matter. The financial institution, owned by the Jewish Kohn brothers, had been Bavaria’s premier private bank alongside Merck Finck, but it had fallen on hard times under Hitler. On June 11, 1938, von Finck wrote back to the mayor, stating that he was no longer interested in Aryanizing Anton Kohn because of the bank’s bad financial state and its limited “Jewish clientele.” In von Finck’s eyes, the lack of Jewish customers meant there were fewer assets up for grabs. With less to steal, it just wasn’t an attractive business proposition for the anti-Semitic aristocrat.

Later that summer, von Finck and Friedrich Flick actually teamed up for a banking Aryanization. In September 1938, they provided capital in the Aryanization of Simon Hirschland, a prominent Jewish-owned private bank in the Ruhr area. In this transaction, led by Deutsche Bank, they received assistance from the Aryanization expert Hugo Ratzmann, the banker whom Günther Quandt used in his seizure of Henry Pels one summer earlier. The moguls all knew one another well by now. Von Finck served on the supervisory boards of a steel firm and a coal company of Flick’s. The two also served on Allianz’s supervisory board together and at AEG, a producer of electrical equipment, with Günther.

Like Flick, von Finck had developed a mutually beneficial bond with Hermann Göring. Merck Finck soon bought S.M. von Rothschild out of trusteeship for about 6.3 million reichsmarks, some forty-two million below the bank’s estimated value. The acquisition was partly financed with securities stolen from the Rothschilds’ private bank accounts. After the sale, Göring again intervened at von Finck’s request. This time, it was Funk’s Ministry of Economic Affairs that refused to release the S.M. von Rothschild assets to Merck Finck. After Göring once again intervened, the ministry directly transferred the assets to von Finck’s private bank.

The Aryanizations brought von Finck and Flick even closer to Göring. All avid hunters, von Finck and Flick attended Göring’s birthday gatherings at Carinhall, his country estate north of Berlin, numerous times. Von Finck gave Göring birthday presents, worth as much as ten thousand reichsmarks, as thanks for his aid in getting the Rothschild bank. Flick went even bigger, gifting to Göring some Old Master paintings he had bought at auction. Bribes were a staple of the Göring family.

They were a staple of the Nazi regime too. After thirteen months of imprisonment, Louis von Rothschild was released from Gestapo custody after having been forced to sign over his family bank and personal possessions. Von Finck later claimed that he used his own contact with Göring to secure Rothschild’s release, when in truth it was Rothschild’s two siblings who paid some $21 million for the release of the bank executive. It remains the largest known ransom paid in modern history, totaling about $385 million in current value. Rothschild immigrated to America.

The Aryanized S.M. von Rothschild was reestablished as the Eduard von Nicolai bank, named after the new principal partner in Vienna. Von Finck provided most of the capital and retained a majority stake in the bank. The other partner in Vienna was Baron Edmund von Ritter. He was recommended to von Finck by his brother Egon, the principal partner at Merck Finck’s Aryanized Berlin branch. Two baron brothers, two different Aryanizations. Eduard von Nicolai didn’t endear himself to the Viennese business community at all. His “aggressive and elbowing tactics in the acquisition of new business for his banking house were of such a nature that they gave a bad name abroad to German businessmen,” according to Allianz’s director in Austria. Managing to stand out for bad business behavior was quite an achievement; in the Third Reich it was a particularly crowded and competitive field.

Von Finck’s fundraising efforts for Hitler’s pet project had paid off massively. Within one year of the museum’s opening, he had Aryanized two major private banks. Merck Finck’s assets quickly quadrupled, from 22.5 million to 99.2 million reichsmarks. Despite his famed stinginess, von Finck shared the spoils with his friends. The baron had started by making his fellow aristocrats, the von Ritter brothers, partners at his Aryanized banks. Then he rewarded his fellow museum trustee Otto Christian Fischer for his Aryanization referral by making the top Nazi banker a partner and shareholder at Merck Finck. With those shrewd moves, one historian concluded, Merck Finck “established itself as the most successful private bank in the National Socialist era.” It was an expansion built on business savvy, some good old-fashioned networking, and of course, the spoils of virulent anti-Semitism.

18.

On May 26, 1938, Hitler stood at a podium in a forest clearing, his visor cap shielding him from the sweltering sun, and snarled at an audience of more than fifty thousand people: “I hate the word impossible!” He was about to lay the foundation stone for the Volkswagen factory. The building site was located in Nazi Germany’s geographic center, in the municipality of Fallersleben, near an estate called Wolfsburg. It was perfectly positioned next to the highway from Berlin to Hannover, the railroad from Berlin to the Ruhr area, and a shipping canal. One year earlier, Hitler had moved the responsibility for building Europe’s largest factory away from the car industry to the German Labor Front (DAF), the Nazi organization that had replaced trade unions. He deemed the DAF better equipped to handle a project of such national importance and huge expense; earlier estimated to cost ninety million reichsmarks, it was already nearing two hundred million. The DAF’s corrupt and alcoholic leader, Robert Ley, had issued Ferdinand Porsche a blank check for the project, financed by membership fees and assets seized from the unions. For the factory site, the DAF had bought thirty-seven hundred acres of meadowland from a count. As far as the impoverished aristocrat was concerned, the loss of his estate’s hundred-year-old oaks paled in comparison to a potential expropriation. So he succumbed to the lure of Nazi millions.

On the morning of the ceremony, thousands of people were transported to the countryside in specially reserved trains. They lined the road to the construction site, where Hitler arrived in an open car amid the sounding of trumpets and shouts of “Sieg Heil!” The SS had difficulty controlling the crowd. Everyone pushed ahead to get a glimpse of the führer and the shiny new cabriolet in which he rode. “In the cordoned-off area reserved for Hitler and his entourage, three models of the ‘people’s car’ … gleamed in the sunlight, strategically placed in front of the wooden grandstand draped with fresh forest green,” a chronicler wrote. From there, the German chancellor delivered his speech. Toward the end of the hour-long event, broadcast live on national radio, Hitler made a surprise announcement: the new car would not be called the Volkswagen, but rather the Kraft durch Freude-Wagen (Strength Through Joy–Car), after the DAF’s tourism organization. Ferdinand Porsche, horrified, looked on. Its impracticality aside, the name was far removed from the one Porsche desired: his own.

Laying the foundation stone at the Volkswagen factory, May 26, 1938.

Bundesarchiv, Atlantic

The previous summer, Porsche had met his longtime hero Henry Ford at Ford’s River Rouge factory complex in Detroit. Ferdinand Porsche wanted to be for Germany what Ford was for the United States. The Volkswagen plant would be modeled after Ford’s. And just like Ford, with his eponymous creation, Porsche hoped the Volkswagen would be named for him. Yet this wasn’t meant to be. After the ceremony, Porsche’s twenty-eight-year-old son, Ferry, driving the cabriolet, took Hitler back to his private train. His father, disappointed, sat in the back.

Nevertheless, the ceremony was good publicity for the Volkswagen. A correspondent for the New York Times excitedly wrote about the prospect of European highways filled with “thousands and thousands of shiny little beetles,” thereby unwittingly coining the car’s nickname, which endured when the vehicle became a global phenomenon years later. Pictures of Ferry, driving the führer to his train, circulated all over the world. The Porsche design office in Stuttgart was inundated with love letters, racy pictures, and marriage proposals addressed to Hitler’s handsome impromptu chauffeur.

Now that his father had become director of the Volkswagen factory, Ferry would take control of the design office back in Stuttgart. Porsche was in the midst of an expansion, to be financed by the DAF’s millions. One month after the ceremony, the car design firm moved from its office in central Stuttgart’s Kronenstrasse to a major plot of land in the city’s Zuffenhausen district. A factory had been built on the site, where cars could be constructed. The land, still part of the site where Porsche’s headquarters stand today, had been Aryanized from a Jewish family, the Wolfs, that previous spring, at a price below market value. It was business as usual for Porsche. Another matter involving the firm’s Jewish cofounder, whose shares Ferry had received, needed to be handled immediately.

In early June 1938, Adolf Rosenberger received a letter at his Paris apartment on avenue Marceau, around the corner from the Arc de Triomphe. The message from Stuttgart contained bad news. Baron Hans von Veyder-Malberg informed his predecessor that Porsche was no longer able to maintain its patent licensing contract with him “on higher authority.” The man who had freed Rosenberger from a concentration camp was now cutting off all professional and personal contact because of “certain aggravations in the internal situation.” The letter was dated June 2, one week after Hitler had laid the foundation stone for the Volkswagen factory. Ferdinand Porsche and Anton Piëch were severing their last ties with the firm’s Jewish cofounder.

On July 23, 1938, Rosenberger wrote to Piëch, who was also the company’s tough legal counsel, suggesting two ways to part amicably: $12,000 to start over in the United States or a transfer of Porsche’s American patent license to Rosenberger. But Piëch did not merely go along with the Nazis as a necessity for doing business; he shared their ideology and had just become a party member for the second time. As an Austrian native, he first entered the NSDAP’s sister party in his home country in May 1933, only to apply for membership in the German Nazi Party on June 2, 1938. Later, Piëch sought to gain admission to the SS and was accepted.

In a separate letter, Rosenberger made a personal appeal to the firm he cofounded: “Dr. Porsche has told me on several occasions that, in view of our many years of cooperation and the risk that I have assumed for the company at all times, I can count on him at any time, and I believe that the modest claims for compensation that I’m making will meet with his full approval and that he too will use all his influence to bring our eight-year relationship to an amicable end.” Rosenberger acknowledged “that it may be difficult for you to continue to work with me as a non-Aryan in the old way.”

But, adding insult to Aryanization, Anton Piëch coldly rejected the proposal. “My company does not recognize your claims under any circumstance and rejects them for a lack of legal basis,” Piëch responded on August 24, 1938, on the grounds that Rosenberger hadn’t succeeded in selling any patent licenses abroad in recent years. That same month, the Gestapo began the process of revoking Rosenberger’s German citizenship. It was time for him to leave Europe.

19.

Things between Joseph and Magda Goebbels ruptured on a sweltering Sunday in mid-August 1938. For the past two years there had been three in their marriage. Now the couple thought they had found a solution. That day, Goebbels invited his lover, Lida Baarová, to join him, Magda, and some friends on his yacht, Baldur. They would go on a trip on the Havel River, which flowed by their villa on Berlin’s Schwanenwerder Island. The couple had something important to ask the Czech actress. Over lunch, Goebbels and Magda proposed a ménage à trois: Magda would remain the wife who would look after the house, the children, and Reich duties, and Baarová would be Goebbels’s official mistress. Perplexed, Baarová asked for time to think it over. Magda immediately had second thoughts, and the next evening she poured her heart out to Hitler. The führer retained a deep-seated affection for Magda. Plus, he’d had a particular platonic arrangement with the married couple since 1931: Magda and Goebbels were supposed to be his role models for matrimony.

Hitler ordered Goebbels to the Reich Chancellery and demanded that he end the affair. The next day Goebbels wrote in his diary, “I’ve come to some very difficult decisions. But they are final. I drive around in the car for an hour. Quite a long way, without going anywhere in particular. I’m living almost as if in a dream. Life is so hard and cruel … But duty comes before everything else.” He then had “a very long and very sad telephone conversation” with Baarová. “But I remain firm, even though my heart threatens to break. And now a new life begins. A hard, tough life dedicated to nothing but duty. My youth is over,” he wrote on August 16, 1938. But in truth, he continued his affair with Baarová. Magda began to consider a divorce.

Goebbels and Magda agreed to a truce, postponing any decision on their marriage until the end of September. Bigger things were at hand. War was nearing; Hitler had threatened to invade and occupy Czechoslovakia’s Sudetenland, a region whose population largely consisted of ethnic Germans. When the couple’s truce ran out at the height of the Sudetenland crisis, Goebbels asked his longtime deputy, Karl Hanke, to mediate in the marital mess, happy to have someone to confide in. After Hanke spoke to all parties involved, Goebbels asked him to put the matter before Hitler again. “Everything depends on his decision,” he wrote in his diary on October 11, 1938, a day after Hitler completed the annexation of Sudetenland.

Hitler hadn’t changed his position. He was tired of the “divorce mania” among the ranks of Nazi leaders. Goebbels finally acquiesced. He developed “terrible heart pains” and went to see Baarová’s most recent film, aptly titled Prussian Love Story, to catch a final glimpse of her. Because Goebbels lacked the courage to break up with her himself a second time, he had his close friend Count Helldorf, Berlin’s chief of police, “carry out my difficult task.” Adding insult to injury, Helldorf told Baarová that she was no longer allowed to work as an actress in Germany. She immediately left Berlin for Prague, which fell under German occupation just a few months later.

Goebbels, however, wasn’t happy with Hanke’s performance as a mediator. “I’m not talking to Hanke anymore. He is my cruelest disappointment,” Goebbels wrote in his diary just before Hitler reaffirmed his decision. As one biographer of Goebbels delicately put it: “It appears that he had traded upon his position of mediator to offer more than kind words of comfort” to Magda. She confessed her affair with Hanke to her husband the next summer. “Hanke has proven to be a first-class rogue. My mistrust of him was fully justified,” Goebbels wrote on July 23, 1939.

This time, it was Magda who brought her affair before Hitler. Once again, the führer would decide the fate of the Third Reich’s most high-profile marriage. His decision was the same: they were to stay together. After all, their marriage was a matter of state. Goebbels sent Hanke on permanent leave from the Ministry of Propaganda. Hanke had fallen madly in love with Magda and wanted to marry her. Instead, he went to fight on the front. The Goebbelses reconciled, and Magda soon gave birth to Heidrun, their sixth and last child.

20.

After the Julius Petschek German brown-coal firms had been Aryanized, by early June 1938, the Ignaz Petschek heirs still retained control of their own family conglomerate, which was larger. But Friedrich Flick was ready to make a move on that too, and by any means necessary. However, from the company’s headquarters in Sudetenland’s Aussig on the Elbe, a twenty-minute drive from the German border, the message remained the same: a resounding no. The Petschek family refused to negotiate about the assets that Flick was eyeing, a vast range of brown-coal mining, production, and trading operations in central Germany valued at as much as a quarter billion reichsmarks. Karl Petschek, one of Ignaz’s sons, oversaw the family’s German brown-coal assets. “These people want to slaughter me … well they will not succeed,” he mused combatively. Karl argued that he wasn’t able to sell the family assets because his father had already “sold” them by securing stakes across holding companies in the tax havens of Monaco, Switzerland, and Luxembourg.

However, even foreign residency or business ownership no longer guaranteed safety from Nazi greed. With the Sudetenland crisis beginning to brew, Flick decided to turn up the heat on the Ignaz Petschek heirs. Over the course of June 1938, Flick’s legal counsel, Hugo Dietrich, dug up heaps of information on the Ignaz Petschek ownership interests in corporate registries, which Otto Steinbrinck provided to the relevant Nazi authorities. Steinbrinck complained to one Nazi bureaucrat that the Petscheks’ “attitude is completely indifferent.” But he considered the rumor that “J. P. Morgan [Jr.] is behind the Ignaz Petschek group improbable. Morgan has always been an anti-Semite, and even tempted by excellent business, will hardly be prepared to camouflage Jews.” Steinbrinck had Dietrich write a legal opinion arguing that the Petschek heirs actually ran their businesses from Berlin; therefore the companies could be taken over through “regular” Aryanization procedures. Dietrich also drafted a decree that provided for the state to appoint a trustee at any company that was classified as Jewish-owned. According to the draft, that trustee could then sell the business against the will of its owners. These ideas were subsequently fed to Walther Funk’s Ministry of Economic Affairs and Göring’s Four Year Plan office, in hopes that they would be adopted as official party policy. It was all that Flick could do. The Ignaz Petschek heirs still refused to negotiate with anyone, and all hopes of acquiring their German interests through the private sector had been dashed. Now it was the regime’s turn to step in.

In late July 1938, an interministerial working group was formed in Berlin, solely dedicated to “solving” the Ignaz Petschek “problem.” The Nazi bureaucrats soon landed on what had become a tried-and-true method of Aryanization: they imposed a gargantuan fictitious back tax on the conglomerate, allowing the regime to seize the Petschek coal assets as payment. Starting at 30 million reichsmarks in September, the claim eventually grew to 670 million, about three times higher than the actual value of the Petscheks’ German brown-coal assets. The heirs lost their leverage.

So had Flick. With the Aryanization preparations now firmly in the hands of the Reich Ministry of Finance, the tycoon suddenly faced stiff competition for the coal interests. Germany’s industrial firms were lining up to pick the conglomerate clean. Most prominent among these new players was the Nazi regime itself, via Reichswerke Hermann Göring, a stateowned industrial conglomerate upon which the megalomaniac minister had conferred his own name. Flick also had a powerful new adversary in Paul Pleiger, the state complex’s CEO and one of the Third Reich’s most important economic functionaries.

Pleiger had a problem to solve. The Reichswerke lacked a major source of energy. In late June 1938, he told Flick he was “very displeased” at having been left out of the spoils from the Aryanization of Julius Petschek’s German assets, which Flick had captured from Julius’s branch of the embattled family only weeks earlier. Flick’s advice to the director of the Reichswerke was to hop into the ring this time. Pleiger coyly responded that he could envision a swap of brown coal for hard coal. Pleiger desperately needed to secure a hard coal base for the Reichswerke in central Germany, which, unlike firms in the Ruhr area, didn’t have its own coal mines for making coke. Massive quantities of coke were needed to smelt ore and produce iron competitively. Having its own supply would lower the Reichswerke’s costs and free it from its current dependency on the Ruhr moguls for this source of energy.

As it happened, Flick had much more hard coal than he could process through his Harpener and Essener coal mines in the Ruhr area, and he wanted more brown coal. Pleiger was well aware of this. Whereas hard coal had a much greater value for heating, brown coal was more profitable. Pleiger needed energy; Flick wanted to corner a lucrative market.

Hitler occupied Sudetenland in early October 1938, and over the course of ten days the territory was ceded to Germany. On the first day of the invasion, the Nazis raided the offices of the Ignaz Petschek conglomerate. Documents that remained there were confiscated. At the same time, Pleiger returned to Flick with his idea for a coal swap, just after Göring promised him that the Reichswerke would have a stake in the Aryanization of the Petschek conglomerate. But Flick was in no hurry to settle. He knew a trustee would soon be appointed at Ignaz Petschek.

On December 3, 1938, just three weeks after Kristallnacht, Hermann Göring issued the “Decree Concerning the Utilization of Jewish Assets.” It had a premise similar to Hugo Dietrich’s draft law. Going forward, the state would appoint a trustee to any company classified as Jewish, and this trustee would be able to sell the business against the will of its owners. However, the decree would eventually expand in scope. The Nazi regime would use it to deprive Jews living within the territory of the Reich of all belongings of relative value: firms, houses, land, shares, art, jewelry, and gold. It robbed them of almost everything they owned, except for possessions that served their most basic needs. Theft of those items was still to come.

A trustee was appointed at the Ignaz Petschek conglomerate in January 1939. Although Flick’s mandate to serve as sole negotiator for all Petschek assets remained valid, it was losing its value. With competition mounting and the regime veering toward an outright expropriation of the assets, Flick saw that his best chance at getting any of the loot was to cut a deal with Pleiger. So he agreed to Pleiger’s proposition. The Reichswerke would receive its share of the Ignaz Petschek brown coal assets and then swap them for some of Flick’s hard coal mines. The regime soon signed off on the plan.

However, the negotiations between Flick and Pleiger in Berlin were contentious and protracted, lasting a year. The main issue was quantifying the valuations and volumes of the coal. In addition, Pleiger wanted much more hard coal than Flick was willing to give up. Neither side was initially willing to compromise. Pleiger, who was staking his position in the Reich on this deal, turned out to be a fickle negotiator. When Flick thought they had reached an agreement in early June 1939, Pleiger changed the terms. Flick then angrily withdrew from the negotiations. It was only in early December that both sides came to an agreement, but the execution of it would drag on until the end of the war.

Flick drew the short straw in the negotiations with the state conglomerate. He forced his prized Harpener mines in the Ruhr area to give up more than one-third of their employees, coke, and coal production. Pleiger secured 1.8 billion tons of hard coal, plus some potentially productive mines. Flick could manage the losses, but he would have to do some costly reinvestments. In return, Flick gained 890 million tons of lignite, making him the most powerful player in Nazi Germany’s brown coal industry.

Of course, the only people who truly lost out were the Ignaz Petschek heirs. Whereas their cousins had managed to sell their companies in the nick of time, Karl Petschek and his siblings received nothing for their family interests. The gargantuan tax claims against them were offset against their assets, and the family was ruthlessly expropriated by the Nazi regime, aided and abetted by Friedrich Flick.

21.

On April 20, 1939, Ferdinand Porsche gifted the first finished Volkswagen, a black Beetle convertible, to a delighted Hitler at the führer’s fiftieth-birth-day party in Berlin. Göring received the second, and Goebbels the fourth. The “people’s car” was not, in fact, delivered to the people. Only 630 of them were built during the Third Reich, and they all went to the Nazi elite. The 340,000 Germans who signed up for the DAF’s program to save for the purchase of the car were bilked of around 280 million reichsmarks. Meanwhile, the Volkswagen factory complex in Fallersleben was nowhere near finished; soon work was underway to retool it for arms production. Aided by his son, Ferry, and his son-in-law, Anton Piëch, Volkswagen’s factory chief, Ferdinand Porsche, had to abruptly change gears. The designer of civilian automobiles and race cars became a maker of weapons, tanks, and army cars.

But to produce anything, there first had to be a factory that was fully functional. When Hitler visited the plant in early June 1939, Porsche dared show him only the pressing shop, because it was the most developed part of the complex. The factory’s massive red-brick façade, measuring eight tenths of a mile in length, obscured the largely empty inner halls. What was supposed to be the world’s largest automobile plant, capable of churning out 1.5 million cars per year, still lacked much basic machinery. Fallersleben was little more than a dusty barracks camp, mostly filled with the three thousand Italian construction workers that Hitler’s ally Mussolini had sent over to help finish construction. German men were barely available, as most had been called to military service. By the time the brutally cold winter of 1939 arrived, Volkswagen’s main factory halls remained unheated, and its stairwells were missing window glass. Many more workers were needed to finish the job and keep the place running. Ferdinand Porsche did not care whether they came voluntarily or by force.

22.

On the evening of Friday, December 29, 1939, Otto Steinbrinck sat down at his desk at home in Berlin’s lush Dahlem neighborhood and wrote a letter to Friedrich Flick, his boss of fifteen years, who was spending the Christmas holidays at his estate in Bavaria. Steinbrinck was resigning. He had found a new job. The regime was appointing him to oversee the expropriated steel empire of Fritz Thyssen. The first mogul to openly back Hitler, Thyssen had now turned against the führer. As a member of the Reichstag, Thyssen had refused to consent to the declaration of war and fled Germany.

Steinbrinck too was under a pall; he was leaving the Flick conglomerate on terrible terms. His relationship with Flick had been deteriorating for years. The workload was stifling, the men’s wives didn’t get along, and Steinbrinck had fallen out with Flick’s elder son, Otto-Ernst, who was being groomed to succeed his father. Steinbrinck’s professional ambitions were going unfulfilled, and he wanted a more prominent position. The Flick family conglomerate would never give it to him — he would never be part of the dynasty. “The effort of a forced cooperation has destroyed in us more than the worth of the superficial profit achieved. Several times you expressed the opinion that I did my work with too much ambition and personal zeal. Today I know that your criticism of my work, within your sphere of interests, is right,” the fanatical SS officer wrote bitterly to his boss. “I have remained in the first line a soldier and therefore I have not always been able to share the opinion of a merchant who merely calculates and risks much.” Flick dictated an angry response to his secretary, reproaching Steinbrinck for what he saw as duplicity. But he didn’t send the letter. Instead, Flick accepted the resignation and promoted two relatives to take Steinbrinck’s place.

By then, World War II had started. The peaceful years of rearmament and Aryanizations had been exceptionally good to Flick. He was now Nazi Germany’s third-largest steel producer, overseeing about 100,000 employees, up fivefold from 1933. Flick’s taxable income from 1937 to 1939 alone had been sixty-five million reichsmarks, some $320 million in today’s money. And the territorial conquests achieved by Hitler’s army across Europe were about to provide Flick with far more opportunities to expand his industrial empire. Now he had to train his successor and embark on a new mission of plunder — although without the help of his trusted lieutenant. But that did not in the least slow down the enterprising tycoon.

23.

Though he had become one of Nazi Germany’s largest producers of arms, Günther Quandt didn’t want war. “Most disturbing news,” he wrote at the time of the Sudetenland crisis. He was glad when it seemed that war had been avoided: “Things are looking up again!” Günther had always considered German rearmament a defensive measure. “I didn’t believe they would let it come to war,” he wrote after the Third Reich had fallen. But when Germany invaded Poland, on September 1, 1939, he quickly adapted to the new reality. “The German people are fighting for their life rights. Full of confidence we look to our Führer and his Wehrmacht, which has already achieved unprecedented successes in a short time and fills us with pride and admiration,” Günther wrote to the employees at his AFA battery firm two weeks after the invasion.

War was good for his business. Günther projected that annual sales at AFA would grow to 150 million reichsmarks, a record revenue figure and a threefold increase from sales during the years of peace. And his weapons firm DWM soon surpassed that benchmark — even doubled it. A few days after the war began, Günther told one of his executives: “If there’s war, there’s war and then we must act as if it never ends. Let us be happily surprised by peace.” Günther’s elder son, Herbert, deemed his father’s stance a “sober corporate strategy.” Whereas his half brother, Harald, was about to volunteer on the front, Herbert had to prove himself to his imperious father on the equally merciless battleground of business succession. Neither field of conflict rewarded moral character.