THE STATE OF GERMAN ARMAMENTS IN 1942
DRAWING ON INFORMATION gleaned from his work on the US Strategic Bombing Survey, John Kenneth Galbraith published an article in 1945 attempting to explain why Germany had lost the war.1 His answer was very simple. Germany had been slow to mobilise industry for wartime production. Before the war the books had been cooked to create the impression that the country was armed to the teeth. In 1940 Britain outstripped Germany in the production of both tanks and aircraft, and did so again in 1941. Civilian consumption in Germany dropped a mere 10 per cent in 1940 and again in 1941. With the fall of France the leadership, imagining that the war was already won, apart from some mopping-up operations in Britain and the Soviet Union, cut back on armaments production. Confident that Operation Barbarossa would be over within four months, no preparations were made for a lengthy campaign. Even though the Wehrmacht was meeting with ferocious opposition in freezing conditions, armaments production was further reduced. By December 1941, 30 per cent fewer weapons were produced than in July the previous year. With their army halted before Moscow and Operation Barbarossa in ruins, the Germans, under the forceful leadership of Albert Speer, at last began the serious business of war production. Output increased in spite of Allied bombing, but even so civilian consumption continued to provide for a comfortable standard of living, with a mere 20 per cent reduction from the pre-war level.
This plausible account was to be reinforced in Speer’s skilfully trimmed memoirs, as well as by the testimony of a number of his closest associates.2 In their version Hitler, mindful of the disastrous collapse of morale on the home front in 1918, which resulted in the army being ‘stabbed in the back’, opted for a ‘civilian economy in wartime’ and a strategy of Blitzkrieg – limited campaigns with limited resources. As a result Germany was inadequately prepared for the invasion of the Soviet Union, and Speer could claim that had he been in charge of armaments from the outset of the war he would have provided the Wehrmacht with the tools to do the job.3 Speer’s chief statistician, Rolf Wagenführ, produced a mass of figures to reinforce the Speer legend. They seemed to confirm the assessment of the United States Strategic Bombing Survey.4
In order to test Speer’s claim to have orchestrated an ‘armaments miracle’ it is essential to examine the situation that he inherited on being appointed Minister of Armaments in February 1942. The German economy had made rapid progress after Hitler’s appointment as chancellor in January 1933. The situation was in some ways analogous to the ‘economic miracle’ (Wirtschaftswunder) after the currency reform in 1948. A booming economy resulted in full employment within three years, but the question remained as to what caused this rapid rate of growth. Was it due to deliberate measures to stimulate the economy and to create jobs, or was it the result of massive expenditure on armaments?5 Was it a case of ‘guns before butter’ or the result of Keynesian pump priming, which had been initiated before the Nazis came to power?6
The programme for work creation, initiated by the state secretary in the Ministry of Finance, Fritz Reinhardt, only came into effect on 1 June 1933. Thus the sharp increase in employment in the first three-quarters of 1933 was due to pump priming by the Papen and Schleicher governments.7 A further stimulus to growth was that on account of the depression prices for raw materials and semi-finished products were falling.8
From the very outset the regime decided to spend staggering sums on a massive rearmament programme. This contributed decisively to the reduction of unemployment, but it also caused a dramatic increase in the national debt. It is not quite clear when the decision was taken to commit 35 billion Reichsmarks to armaments over an eight-year period, because the Wehrmacht documented the rearmament process retrospectively in 1938. It was probably at a cabinet meeting held on 8 June 1933.9
By 1935 the stimulus measures of the Brüning and Schleicher governments were no longer applied. Full employment was now largely due to a marked increase in armaments production. The Nazis’ ‘economic miracle’ was thus conceived on an unsound basis. It threatened international stability, resulted in a chronic lack of foreign exchange, led to deficit spending on an alarming scale, made industry reluctant to make further investments, and cut Germany off from the world market.10
Nevertheless the ill effects of large-scale military Keynesianism on consumers have often been exaggerated.11 Per capita real consumption expressed as an index number was 88 in 1933, rose to 100 in 1936 and to 108 in 1939. It did not fall back to the 1936 level until 1942.12 The industrial production of consumer goods followed the same trend. Taking 1936 as 100, it rose to 110 in 1939 and dropped back to 100 in 1942. The Nazis were thus able to produce ‘as much butter as necessary, as many guns as possible’.13
Spending on rearmament rapidly got out of control. The initial plan envisaged spending at the rate of slightly over 4.3 billion Reichsmarks per year over an eight-year period in order to build a military force strong enough to launch a credible offensive. By 1935 expenditure had reached almost 6 billion Reichsmarks and was bound to rise even higher as France, Britain and the Soviet Union began to rearm in response. The military, certain of Hitler’s enthusiastic support, started clamouring for modern weaponry. The War Minister Werner Blomberg went on a wild spending spree, deliberately ignoring all budgetary restraints.14
As soon as what the Nazis called the ‘Liberation of the Rhineland’ was successfully completed in 1936, with German troops occupying the demilitarised Rhineland in defiance of the Treaty of Versailles, Hitler appointed Hermann Göring, Schacht’s most powerful opponent, to take charge of foreign exchange and the import of raw materials. Hitler outlined the new approach in a memorandum announcing a Four-Year Plan.15 He argued that Germany’s economic problems could only be solved by war and the conquest of ‘living space’ (Lebensraum) to secure adequate supplies of food and raw materials. War was in any case essential because Bolshevism, behind which stood world Jewry, had to be destroyed or the Judeo-Bolshevik front would cause ‘the final destruction, in other words the annihilation of the German people’. The armed forces and the economy had therefore to be ready for war within four years. This was a clear signal to the military to abandon all restraint and they acted accordingly. The army, restricted to a hundred thousand men by the Treaty of Versailles, was to expand to over four million within four years, but it was still an old-fashioned force. It was to march on foot, its materiel moved by hundreds of thousands of horses. Expenditure on tanks was still relatively small, but the projected total cost was nevertheless astronomical.
The Four-Year Plan created more problems than it solved. The autarchy programme required colossal investments in what were unlikely ever to be economically viable projects. Shortages of steel were such that it had to be strictly rationed. The chronic dearth of foreign exchange had to be addressed, were the rearmament programme ever to reach its goals. Even the most extreme proponents of autarchy and National Socialist economics had to admit that bitter reality simply had to be faced. Exports had to be boosted by the Schachtian method of generous subsidies combined with the allocation of more steel to export industries than to armaments and the Four-Year Plan combined.16 This was effective, due largely to an upswing in world trade, but only because the military were forced to accept drastic cuts. The army warned that it would not be able to meet its target of reaching full fighting strength for the foreseeable future. The Luftwaffe talked of cutting aircraft production by 25 per cent.
It soon became apparent that the shortage of steel meant that the rearmament goals set in 1936 could not possibly be met. Since it would be years before the Hermann Göring Works began large-scale production, the only solution was to lift the restriction on steel production, but this in turn would involve increasing imports, thereby placing an intolerable strain on the meagre foreign currency reserves. Faced with this intractable situation Hitler, who once said that his only call was to go for broke, decided in 1938 to intensify tensions both at home and abroad.
The annexation of Austria in March 1938, known as the Anschluss, was the first dramatic act of the new course. Shortly thereafter Hitler began to put pressure on Czechoslovakia by heightening tensions in the Sudetenland. Hitler fanned the crisis throughout the summer until Chamberlain and Daladier sold out their ally at Munich in September. On 21 October 1938 Hitler, having been given the Sudetenland at Munich, issued orders for the ‘destruction of the remainder of Czechoslovakia’.
Hitler’s speech to the Reichstag on 30 January 1939 is best known for his promise that: ‘if the Jews that control finance in Europe and elsewhere are once again successful in plunging the nations into a world war, the result will not be the bolshevisation of the earth and thus the victory of Jewry, but the annihilation of the Jewish race in Europe.’ Amid this vile tirade he made it quite clear that the only solution to the problems facing the German economy, especially the dependence on imports, was the extension of Germany’s Lebensraum. To this end the Four-Year Plan had to be intensified and the reserves of labour fully exploited.17 War was thus designed as a pre-emptive strike against Jewish financiers as well as to ensure that Germany’s import and foreign exchange problems, caused in large part by armaments, were finally solved.
On 23 May 1939 Hitler told the heads of the armed services of his intention to attack Poland, warning that this could very well lead to a war that would last for ten to fifteen years. The strategy was now to transform the economy to meet the requirements of a lengthy war. The army argued that they were far from being prepared for a new world war, to which Hitler retorted that a swift campaign against Poland would provide the additional resources required to fight a full-scale war. General Thomas at the Armed Forces High Command (OKW) had already used the argument that the defeat of Poland would relieve the problem of the shortage of raw materials. This was also the view of a number of leading industrialists.18
The German-Soviet Commercial Agreement of 19 August 1939 and the Molotov-Ribbentrop Pact four days later encouraged Walther Funk to make the extravagant claim to Hitler that the economy was fully prepared for any eventuality in the next two years, by which time the Four-Year Plan would have reached its armaments goal. General Thomas rightly considered Funk’s attitude to be utterly irresponsible. He felt that Germany was not sufficiently armed in depth and that the economy was nowhere near to being on a war footing. He now argued that war should be avoided until the country was prepared for every eventuality.19 The navy and the Luftwaffe were equally pessimistic, but Keitel at OKW was not one to stand in Hitler’s way. Hitler was well aware of the risks involved. He knew all too well that the time factor was not on Germany’s side, announcing at the onset of the war that Germany could only hang on for a few years, adding that Göring agreed with him.20 He used this argument to throw caution to the winds, opting to launch a series of offensives in rapid succession before his enemies brought their massive economic advantage to bear. It was a desperate gamble that very nearly paid off.
In spite of the distortion of the peacetime economy by an emphasis on armaments, historians are reluctant to speak of a ‘wartime economy’ until Speer took command. Various alternatives have been mooted such as a ‘peacetime economy in wartime’ or ‘blitzkrieg economy’. It was argued that Hitler was determined to ease the burden on the home front by rapid campaigns with limited resources and that this blitzkrieg strategy was a means to escape from the bottlenecks caused by a ‘wartime economy in peacetime’ and relieve the pressure on the population by giving them the fruits of a swift predatory war.21 These ideas soon came under attack when it was argued that since the Nazis thought in terms of a long war, from the outset they strove for the total mobilisation of the economy.22 Indeed it soon became questionable whether the term blitzkrieg had any meaning whatsoever.23
In the euphoric atmosphere after the swift defeat of Poland the ideologues’ arguments were strengthened, as the need for rigorous controls no longer seemed such a pressing concern. Further confusion arose from Hitler’s uncertainty as to whether an attack on France would get bogged down in a lengthy campaign or result in another swift victory. The end result was a proliferation of power centres and decision-making bodies. Old structures collapsed amid a confusing search for political direction, resulting in disorganisation and wastefulness characteristic of the mounting polycentric tendencies typical of the Third Reich.24
Hitler persistently demanded all-out rearmament, regardless of the consumer sector, immediate needs or long-term projections. He arbitrarily picked 1 October 1941 as the date when armaments production was to peak. General Thomas argued that for this to be possible a militarised command economy that paid no heed to the exigencies of a post-war economy was absolutely imperative. For this to be possible a powerful person had to be put in command. He would have to be assisted by a committee comprising leading figures in the military and the relevant civilian ministries. Thomas considered Göring to be the ideal man for the job. Industry would then be placed under strict military control. Hitler rejected this suggestion out of hand, realising that it was an attempt to create an all-powerful armaments minister. Instead he abolished Funk’s office of Chief Plenipotentiary for Economics and gave Göring additional authority over the war economy. The General Council of the Four-Year Plan was thereby expanded to include representatives of the military and relevant ministries. It was a stop-gap measure that solved nothing.25
It was soon obvious that these new arrangements would not deliver the goods. Göring therefore sought to be appointed Minister of Armaments, but Hitler turned down the suggestion, repeating his conviction that industry should be the province of industrialists and those sympathetic to them. Ruhr barons might shower the Field Marshal with lavish gifts, but they resented his despotic meddling and self-important posturing. The ineffectual Funk, Minister of Economics and president of the Reichsbank, was much less of a threat. He stood for private enterprise, whereas Göring with his Four-Year Plan was the personification of a command economy combined with the nebulous Nazi concept of an ‘economic racial community’.26 Hitler was opposed to further centralisation and bureaucratisation, whether in the hands of the Four-Year Plan or the Ministry of Economics.27 This to him smacked of Bolshevism. Nazi ideology also favoured a decentralised economy that strengthened small businesses. The wellbeing of the butcher, the baker and the candlestick-maker was an integral part of ‘German socialism’, as against the selfish interests of the ‘plutocrats’ on the Rhine and Ruhr. A National Socialist war economy should thus be based on small enterprises, not encourage big business to make windfall profits and drive their rivals to the wall. But smaller companies saw no reason to switch over to armaments production – a lengthy and expensive undertaking with uncertain prospects – unless they were forced to do so. They knew that a war economy meant that they would either be forced to close down or would become fully dependent on the big industrial combines. They had significant support within the Nazi Party.
Neither the Ministry of Economics nor the military wanted to be held responsible for creating a command economy, thereby opening themselves to the charge of ‘Bolshevism’. It was not until 3 February 1940 that Göring, having discussed the matter with Hitler, wrote to Funk suggesting that non-essential sectors of the economy should be diverted to war work. The emphasis was to be on converting existing capacity rather than building new facilities.28 The Ministry of Economics promptly sent instructions to its regional offices calling for ‘drastic’ action in this regard; but this was empty rhetoric. Fearing fierce resistance, Funk was reluctant to take further action. He knew that businesses would appeal to local party officials, who would sympathise with their plight. On 21 February he ordered that a comprehensive review of non-essential production be completed by 26 March 1940. This was an impossible undertaking, not least because no clear criteria had been established as to what constituted ‘non-essential’.
A number of firms were forced to close or were in serious difficulties because of a harsh winter, inadequate transport facilities and coal shortages, but this did not help the military. Often the local Nazi Party officials came to the rescue, or things were kept going by shortening the working week. By this time there was general agreement that something drastic had to be done to radically improve the output of materiel, but there was widespread reluctance to act. Most important of all, during the ‘Phoney War’ there was no sense of urgency, as there had been for the Germans by 1917, when they had established a mechanism for closing down or amalgamating inessential firms. Even the prospect of a lengthy and bloody campaign in the West was insufficient incentive for them to take decisive action.
There was one man who completely transformed the situation by establishing a viable structure that made possible a significant increase in armaments production. Fritz Todt, an engineer specialising in road building, had been appointed Generalinspektor für das deutsche Straßenwesen or Inspector General of German Roads immediately on Hitler’s appointment as chancellor. In 1938 he founded Organisation Todt (OT), made up of government firms, private companies and the Reichsarbeitsdienst or German Labour Service. The latter was a military auxiliary organisation in which all young men were required to do six months of compulsory service. OT’s main task was to build the Westwall or Siegfried Line that ran from the Dutch border at Kleve to the Swiss frontier at Weil am Rhein. Todt completed this gigantic project with exceptional speed and efficiency. From his experience in building the Autobahns he firmly believed in the principle of ‘industrial self-determination’ (Selbstverantwortung der Industrie), in other words letting private industry make decisions independently within an overall plan. It was a system that had proved its worth under Walther Rathenau during the First World War. The free exchange of technical information, the division of labour between different factories, rationalisation and standardisation led to a doubling of production using the same amount of industrial plant and without any increase in labour costs. Industry was assured that the system was to be strictly limited to the duration of the war.29 Todt thereby won many friends and supporters in the private sector. Having joined the Nazi Party in January 1922, he was one of the oldest of the ‘Old Warriors’ and was particularly close to Hitler. This gave him considerable power and influence within the party.30 He also enjoyed the respect of his professional colleagues.
In the early stages of the war Todt used his closeness to Hitler to free himself from the control of the military, thereby ensuring that he had adequate supplies of manpower and raw materials for his various projects. He sided with the entrepreneurs, managers and technicians who were critical of the military procurement offices, whose officers mostly lacked technical know-how and whose military training left them unable to fathom the foreign culture of the business world. Todt fed Hitler with complaints about the military procurement offices. Hitler, who was locked in battle with the army over a number of issues, lent him a willing ear. Todt soon got the upper hand over Robert Ley, a chronic alcoholic and murderous anti-Semite, who was leader of the German Work Front and Organisational Head of the NSDAP. He tried to strengthen the party’s influence over industry, but he was no match for Todt in the ensuing struggle for power and influence.31 Hitler gave Ley the task of formulating a comprehensive programme of social insurance that was to relieve much of the hardship among ‘racial comrades’ caused by wartime sacrifices. Ley’s ambitious schemes alarmed the business sector, which regarded his ideas as suspiciously socialist.
In February 1940 Göring appointed Todt General Inspector for Special Duties in the Four-Year Plan or Generalinspektor für Sonderaufgaben im Vierjahresplan, with the task of finding ways to save metals.32 This gave him considerable influence over the military’s armaments programme, but for him to consolidate his position he needed Hitler’s full support. The situation was advantageous. The military saw Todt as a villain who was hoarding raw materials for his construction projects that were needed for armaments. They demanded that his allocations should be halved. Todt told Hitler that the section of the Westwall he was building near Saarbrücken could not be completed because the military refused to cooperate. Hitler, who at that time was obsessed with defences and heavy artillery, was outraged. Alarming reports that the French armaments industry was roaring ahead caused him to fear that his forthcoming offensive might get stuck, resulting in a static war in which Todt’s defensive emplacements would play a critical role. Hitler blamed the complex bureaucratic apparatus of the Army Armaments Office for the sluggish performance in the armaments sector. He now began to think in terms of appointing a civilian as Minister of Armaments and blamed himself for rejecting the idea the previous autumn.33 When Keitel heard from Göring that Hitler was thinking in these terms he suggested that the future ministry should be within OKW and that General Thomas was the obvious man for the job, but Hitler had already made up his mind.
Keitel and Thomas soon recovered from the initial shock at the suggestion that Todt be appointed Minister of Armaments. They fondly imagined that Todt would concentrate of the technical problems of production, while they could continue making demands on industry as they saw fit. They hoped that Todt would fully respect their needs and would work closely with the military procurement offices. They were therefore highly alarmed when, at a meeting in the chancellery to discuss the functions of a new ministry, it was established that Todt was not only to have overall responsibility for munitions production but was also to be responsible for weapons development. The military’s hopes that Todt would be obliged to cooperate closely with them were dashed when Hitler ordered that the new minister was to be fully independent.34 The military were appalled, the industrialists delighted. Todt was sympathetic to the industrialists’ demands to have a greater say in how contracts were awarded. He endorsed their due concern for economies of scale. He agreed to reconsider how profits were to be calculated. He promised to end the price freeze and even offered some fiscal relief.
Todt was officially appointed Reichsminister für Bewaffnung und Munition or Reich Minister for Armaments and Munitions on 17 May 1940, one week after the campaign in the West began. It was an impressive title, but although he was responsible for munitions in all three services, he was only responsible for the army’s weapons requirements, and then only to a certain extent. He was head of a pseudo-ministry that was typical of the Third Reich. It was in effect a commissariat rather than a traditional ministry. It was a managerial organisation, led by a charismatic figure, whose executive power was not restrained by bureaucratic practice or legal norms, but depended on his ability to enforce his decisions by decrees from Hitler and his skill in outwitting his rivals within the hierarchy. Like the Four-Year Plan of Himmler as Reich Commissar for the Strengthening of the German Race, it was an example of the National Socialist ‘Leadership Principle’ in action.35 After due consultation, industry presented Todt with a list of its main concerns: relaxation of price controls, greater freedom in the system of awarding contracts and the channelling of more resources to the larger firms. Thus from the outset the Ministry of Armaments established a very close relationship with heavy industry and was prepared to make major concessions to its demands.36
Todt had no time for the military’s notion that industry should do its soldierly duty for Führer and Fatherland. He agreed with the industrialists that it was profit that motivates business ventures and that a sense of patriotic obligation was not a viable alternative; but he did not want to abolish all forms of price control. He adopted the system that had proved effective when building the Westwall. Where possible, fixed prices at a reasonable level gave enterprises room to rationalise and increase profits. The industrialists had to wait until Speer took office for the profit motive to take priority.37
The industrialists used their considerable influence to make sure how contracts were awarded. The system had become hopelessly inefficient because OKW and the Army Armaments Office were frequently at loggerheads. Todt supported the Reich Industrial Group’s proposal that the procedure be decentralised, with working groups from different manufacturing sectors deciding how best to allocate the military’s requirements. He also supported industry’s request to have a greater say in research and development. The Professional Association of the Iron and Metal Industry (Fachgemeinschaft Eisen und Metallindustrie) established a Munitions Advisory Board (Munitionsbeirat) in Berlin that coordinated the efforts of the regional munitions committees. General Karl Becker as head of the Army Weapons Office made a desperate effort to counter these measures and reassert the primacy of the military. Hitler was sympathetic to Becker’s proposals, but when Erich ‘Cannon’ Müller, head of artillery development at Friedrich Krupp AG, heard of this he told Hitler bluntly that industry did not want to have the military interfering in its affairs and indignantly spoke of certain problems in the Becker household. Becker was informed by telephone not only that Hitler had changed his mind, but also that his character had been defamed. This was the last straw for a man who suffered from long bouts of depression and was blamed for all the bottlenecks in the production of munitions. His suicide at his home in Berlin on 8 April 1940 was symbolic of the victory of the industrialists over the officers, but although they had won a battle they had yet to win the war.38 Becker was given a state funeral that was attended by Hitler.
Becker’s death did not solve Todt’s problems with the Army Armaments Office. His successor, General Emil Leeb, was determined to resist Todt’s attempts to assert the primacy of industry. He begged General Thomas to do all he could to get rid of the Ministry of Armaments and to ensure that decision-making and allocation should be according to the wishes of the military and not those of industry.39 For his part Thomas began to imagine that he and Todt were not so very far apart. They agreed that OKW stood in the way of effective planning and that each arm of the services should be treated independently. It was decided that a committee should be formed to coordinate the demands of the army, navy and Luftwaffe and then discuss them with representatives of industry. General Thomas was to be in the chair.40
Todt, realising that he would thereby give Thomas and the military too much power, promptly suggested an alternative arrangement whereby a new planning committee should be formed. It was strikingly similar to the one to which he had just agreed. The only significant difference was that Todt rather than Thomas was to be the chairman. None of this solved the fundamental problem that the committee had no executive power. It could merely forward its desiderata to Hitler or Göring. Keitel, who objected to Thomas’s willingness to place military experts at the minister’s disposal, fiercely contested Todt’s initiative. He urged Thomas to work together with Göring, who also saw Todt as a dangerous rival. Thomas’s main concern was now to preserve the power and influence of his office. Todt, unlike his successor Speer, saw Thomas as a potential ally rather than as a rival. Thomas in turn, bent on further weakening the influence of the Ministry of Economics, saw Göring as a useful confederate.
In the early stages Todt’s ministry consisted merely of three of his closest associates: Karl-Otto Saur, an engineer who was his right-hand-man at OT and an exceptionally forceful character, the architect Eduard Schönleben and Günther Schulze-Fielitz, a civil engineer. Inevitably the ministry expanded, but by the end of 1940 it comprised only fifty people – minuscule in comparison with the Army Armaments Office of five thousand or General Thomas’s staff of five hundred. Were the ministry to be effective it had to break free from this bureaucratic tangle, the indistinct command structures and the struggles between the military, the Four-Year Plan, the party and the industrialists. It then had to have executive power. Todt wanted to ensure that the industrialists were fully integrated into the decision-making process. He was determined to resist any attempt to militarise the economy or to establish a bureaucratised command economy. He was thus bound to meet with considerable opposition from both the military and the party.
The swift victory over France threw the whole system into turmoil. Planning had been based on the presumption that this would be a lengthy campaign that might well get bogged down in positional warfare. Now, in his euphoria over his lightning victory, Hitler turned his attention once again to his monumental building projects in Berlin. Resources were diverted from armaments to these pharaonic monuments; but this did not mean that there was a return to a peacetime economy. The war was to continue, even though it was imagined that Britain would soon throw in the towel. Assuming that his campaign against the Soviet Union would result in yet another swift victory, Hitler told Keitel that it would be ‘child’s play’.41 As far as armaments were concerned the emphasis was to be on tanks and mobilised infantry for the campaign in the East, while the Luftwaffe and the navy were to be prepared for operations against Britain.
Todt’s ministry was totally in the dark as to Hitler’s plans for the future. It was generally assumed that the war would soon be over. Hitler briefly ordered a degree of industrial demobilisation in order to increase the manufacture of consumer goods. The directive was soon rescinded, but the armaments industry was thereby seriously disrupted. Funk tried to reduce the wartime tax burden on both capital and labour. Robert Ley promised that his German Work Front would introduce extensive welfare reforms for the working population as a step towards the creation of a genuine ‘racial community’ (Volksgemeinschaft) – an initiative that was viewed by management with considerable alarm. Industry, fearing a confrontation with the party, thought it wise to treat the workforce with circumspection. The agreement between the military and industry that workers should be harshly disciplined and further exploited was thus no longer binding.42
In this period of confusion the various arms of the services vied with one another with renewed vigour. The navy demanded the concentration of resources to build U-boats. Göring insisted that the Luftwaffe should be the absolute priority. The army called for an emphasis on tanks and troop carriers. There was at least general agreement that weapons should now take precedence over munitions, an indication that the next campaign was intended to be short and swift. Hitler then decided that Britain, having stubbornly refused to admit defeat, was to be the next objective. Thereupon OKW ordered that the demands of all three services be met. Each was to list their priorities.
Todt was left sidelined, awaiting the outcome of these struggles. Realising that the military was intent on undermining his position, he strengthened his links with industry. He created a Tank Committee under the capable chairmanship of Walther Rohland from United Steel (Vereinigte Stahlwerke), who as ‘Panzer’ Rohland was soon to play a key role in the Ministry of Armaments by wresting control over tank production from the army. Todt seized the opportunity offered by the change of emphasis from munitions to weapons to strengthen his position against OKW. His intention was that his local Armaments Committees (Rüstungsausschüssen) should work together with the Army Armaments Office’s local bodies, thereby bypassing OKW’s Armaments Inspectors (Rüstungsinspektoren). ‘Panzer’ Rohland gave Todt his energetic support with his apodictic pronouncement that: ‘Industrial self-determination is more effective than quotas. Quotas spell the death of industry.’43 For the time being, however, these hopes could not be fulfilled. The armaments industry remained under military control, but the divisions and rivalries within the armed services still left them vulnerable to a determined attack on their primacy. The basic problem was that the Treaty of Versailles had forbidden Germany to produce a wide range of armaments. These had therefore been produced clandestinely during the Weimar Republic. Since they could not be developed by private industry, an overblown military bureaucracy had evolved to oversee weapons production. This made it all the harder to hand over responsibility to the private sector.44
Yet for all the shortcomings, rivalries, uncertainties and lack of coherent planning, the achievements of the German armaments industry in the first seven months of 1940 were truly amazing. Between the beginning of January and the end of July, production doubled. Nothing during Speer’s time in office was to match these figures. In a concerted effort by all concerned, the seemingly impossible had been achieved. The figures suggest that perhaps the harshly criticised officials in the army procurement offices and the regional armaments inspectorates did not do quite such a bad job.45 Particularly impressive were the figures for ammunition and front-line aircraft, foremost of which was the Junkers Ju 88 twin-engine bomber intended to knock Britain out of the war.46 The basic reason for this success was the huge increase in the allotment of metals to the armaments industries once the war began. After all, it takes about six months for raw materials to be transformed into an aircraft.
In August 1940 General Fromm, the Army Armaments Chief, issued instructions for the forthcoming invasion of the Soviet Union. Armaments Plan B called for an army of 180 divisions to be supplied with minimum equipment within nine months. It was to be fully equipped within three years.47 This is a truly astonishing document. Germany intended to attack numerically stronger forces with far greater resources and the advantage of vast space with a minimally equipped army and inadequate logistical support. The Germans were not only going to launch a major campaign without the armaments industry going flat out, they were going to do so with a system which by general consent was hopelessly inefficient, even though the numbers looked impressive. On the military side, the weapons inspectors complained about the duplication of work in an overblown bureaucracy. Speaking both for the Ministry of Economics and the Four-Year Plan, Hans Kehrl complained that the various civilian and military bodies involved were ‘opposed, juxtaposed, interposed and superimposed’.48 He considered the military bureaucracy to be ‘laggardly, accommodative and indolent’.49
The hopeless confusion and lack of clear direction in the armaments sector was compounded by the fact that Nazi Germany had no effective central government. Hitler gave ambiguous guidelines, OKW seemed incapable of providing clear plans and setting priorities, the civilians were unable to assert themselves and the industrialists were frustrated by the frequent chops and changes in the orders they received. On behalf of the Army Armaments Office, General Leeb pronounced the whole system to be a ‘dog’s breakfast’ (Planungswirrwarr) and complained that Todt’s planning staff had been lulled to sleep (sanft eingeschlafen). Funk, having no real understanding of the economy, but with a modest competence in monetary policy, concentrated on his duties as head of the Reichsbank. He left economic policy to his State Secretary Friedrich Landfried, a man whom Kehrl considered to be an unimaginative plodder.50
The demands of the army – even for the minimum requirements specified in Armaments Plan B – were such that the navy was unable to build the number of U-boats it needed for the campaign in the Atlantic. Aircraft production stagnated. Raw materials, thanks to the ruthless exploitation of the resources of occupied Europe, were hardly a problem. Hopeless bureaucratic confusion and sclerosis were the major hindrances to an effective armaments programme. Todt gradually strengthened his position, first by lending full support to ‘Panzer’ Rohland and giving his Tank Committee greater responsibilities. He then created an analogous Special Committee ‘X’ under ‘Cannon’ Müller – another of Hitler’s intimates – to deal with weapons. Todt’s initiatives were highly alarming to the Army Armaments Office and to OKW. General Thomas now turned to Göring for support against Todt’s attempts to gain control over his Defence Economy and the Armaments Office.
In November 1940 Hitler ordered the army to report on its preparations for the offensive in the East. The results were alarming. The goals set by the minimum programme had not been met. There was little improvement in the following months, but Hitler still did not want to hear about the serious problems in the war economy. In his view, if resources were not available to build enough hydrogenation plants to produce synthetic fuel, then Germany must seize the oil wells in the Caucasus. For this to be possible the army had to be given priority. This strengthened Todt’s position because he and ‘Panzer’ Rohland had by now gained almost complete control over tank production, the most important weapon in the forthcoming campaign. Germany was thus in the difficult position of planning a campaign with inadequate means in order to overcome the shortcomings within its armament programme. Small wonder then that a number of prominent figures were uncomfortably aware of this contradiction, but none would dare confront the dictator.
The armaments industry was still working well below capacity, even when figures based on the daily production of only one shift were used. Even so there were already serious shortages in the consumer sector. Food rations were reduced on 1 May 1941. This led to the widespread impression that the country had reached an economic impasse. Civilian morale was rapidly sinking and Goebbels’ boasting that Germany was sufficiently armed to meet all eventualities found few takers.51
At times Hitler seems to have realised that the economy was fundamentally unsound. In June 1941 he told Goebbels that he needed Ukrainian grain to feed the population as well as labour from the Soviet Union to build the weapons he was going to need against the United States. With the Red Army concentrated near the frontier and with Germany’s superior weapons he was confident that the campaign would be over within four months. Goebbels believed that it would be even shorter.52 Hitler told Todt that it was ‘better and cheaper’ to get hold of raw materials by conquest than to build the plant that Carl Krauch was demanding for the production of synthetic fuel and rubber. He had forgotten that six weeks previously he had ordered priority to be given to basic materials at the expense of the armaments industry.53 The great gambler imagined that he could destroy the Soviet Union in a swift campaign, thereby solving all Germany’s immediate difficulties, and then prepare for the next round. The question remained whether the armed forces were up to the job. Many senior officers doubted that they were.
By late June 1941, even though the German army was rapidly advancing in the East, General Thomas came to the alarming realisation that Germany was in serious difficulties. Grave mistakes had been made. It had been assumed that Britain and France would remain neutral in 1939. In 1940 Britain was expected to negotiate an end to the war. Now the British, with increasing support from the United States, were playing a waiting game, preparing to wear down a Germany that was already affected by the naval blockade and would soon be disrupted by a large-scale bomber offensive. A decision had therefore been taken to think in terms of a lengthy war of attrition.54
A report in July from Generals Thomas and Udet warned that by the following spring Britain and America would have an ever-increasing superiority over the Axis. Friedrich Siebel, the engineer in charge of the Air Ministry’s own factory in Halle, wrote a report on the American aircraft industry, which Udet presented to Hitler. It showed that the Americans were producing two or three times more aircraft than the Germans and that their technology was far more advanced. Hitler was not at all impressed. He said to Udet: ‘What you’ve written here is all very well. Maybe the gentlemen are correct, but I’ve already got victory in my pocket.’55 Hitler agreed with Udet and Göring that air power would be all-important in future campaigns, but the priority given to the Luftwaffe was compromised by Hitler’s other pet schemes, such as the heavy ‘Tiger’ tank, which was classified as ‘urgent’. The demands made on the armaments industry were out of all proportion to its capacity, while productivity was steadily declining due to a workforce weakened by poor nutrition and lengthy working hours. Increasing productivity by technical innovation was hardly possible because of the shortage of machine tools owing to the armed forces hogging all the resources. Rationalisation and centralisation were hampered by strong political objections to closing down small businesses. Where such action was taken it was often counter-productive.
Hitler continued to insist that victory in the Soviet Union was imminent and that all the shortcomings in the economy would thereby be overcome. General Thomas was not so confident. He argued that any gains made from the occupation of the western part of the Soviet Union would be offset by the export of American weaponry.56 Hitler was not impressed. He considered American weapons to be of poor quality. In his view German weapons were of such superior quality that they compensated for the enemy’s numerical advantage. Speer was soon to convince himself that this was true and it was to become a leitmotiv of his public pronouncements.
In December 1941 the Army Armaments Office published its estimates for the army in the following year.57 It made alarming reading. In the first quarter, 60 per cent fewer motor vehicles would be manufactured. There would be a severe shortage of optical devices. The output of ammunition, with the exception of that for tanks and anti-tank guns, would dry up. Thirty per cent fewer tanks would be produced, even though they had been given top priority. A number of important research projects, such as the rocket programme in Peenemünde, would have to be curtailed owing to a chronic shortage of non-ferrous metals. A similar report from Erich Raeder showed that the navy would be hamstrung without a sizeable increase in the amount of raw materials allocated. The situation was rendered even worse when Hitler promised the Romanians that he would equip ten to fifteen armoured divisions in return for a guaranteed supply of oil. This prompted the Hungarians to ask Hitler for the gift of one division as recompense for their support of Germany in the Soviet Union. Hitler ignored these warnings. He told Goebbels that he had conquered enough territory in the East. The important thing now was to organise the German sphere of influence so effectively that victory would not be compromised.58
When Hitler appointed himself commander-in-chief of the army in December 1941, General Fromm, who had recently been talking of an urgent need to end the war, felt that he could now break free from General Thomas and OKW and appeal directly to the Führer so that the army, like the navy and the Luftwaffe, could act independently with regard to armaments. This did not worry Thomas. He concentrated on shoring up his position by arguing that the question of the allocation of resources to each of the services had to be settled and that the military had to stand up to Todt, whose influence was steadily increasing.59 There was general agreement that with Operation Barbarossa in ruins the army had to be given top priority, so that additional divisions could be created to enable the offensive to continue in 1942. Even though the United States was now in the war the navy would have to economise. Only the U-boat programme was to continue; other projects had to be abandoned. The Luftwaffe also had to make sacrifices. Thomas assumed that these measures would have to continue well into 1943.60
Hitler did not agree. Having recovered from a brief bout of depression and gloom he confidently predicted that the campaign in the Soviet Union would be victoriously concluded in 1942. Every effort would then be concentrated on fighting the British and the Americans. That would mean that the navy and the Luftwaffe would be privileged at the expense of the army. Once again planners had to face the difficulty of squaring the need for a long-term agenda with short-term changes of priorities. For the moment the services simply had to make the best of what they had. For Erhard Milch and the Luftwaffe this meant rationalisa-tion in order to make more with less. His experts estimated that by such means output could be increased by up to 50 per cent. The danger for Thomas remained that General Fromm’s insatiable appetite would result in both the navy and the Luftwaffe being starved of resources. The Ministry of Armaments and the Army Armaments Office would thereby be greatly strengthened at the expense of Thomas’s Defence Economy and Armaments Office.
Hitler had ordered that the army on the eastern front should be refreshed and strengthened by 1 May 1942, but General Fromm had to admit that this was not possible. He reported to Hitler that a choice had to be made between freshening up the existing army – even though it would be impossible to bring it up to the strength it had enjoyed at the beginning of Barbarossa – or to arm brand new units, leaving the existing formations seriously under strength.61 OKH, like Hitler, preferred the second alternative, which was the only way to make further operations possible even though, for the time being at least, the eastern army would be starved of materiel. Fromm cautioned that this would mean that the army would resume operations in 1942 without any reserves; furthermore it would be impossible to build up any reserves, even by 1943. Blaming OKW for mishandling the allocation of raw materials, Fromm called for a major change in armaments policy. Thomas had proposed to cut the army’s allocation by 40 per cent in the third quarter of 1942 in order to meet the Luftwaffe and the navy’s requirements. This would make it impossible for the army to be adequately supplied. General Fromm also blamed Thomas for resisting the army’s request that workers in the armaments industry be enlisted and replaced by prisoners of war. General Franz Halder, the army’s chief of staff, gave Fromm his full support, saying that it was time to ‘get some life into the joint’, but Hitler ignored Fromm’s appeal. He still had faith in Keitel, who was not given to making such pessimistic assessments. He boldly claimed that Todt would make sure that the production side worked effectively.62
Todt skilfully tutored Hitler on the major problems concerning the war economy. German industry was based on coal, therefore output had to be significantly increased. Industry was working at nowhere near full capacity, therefore attention must be paid to the rational apportioning of labour and raw materials. Wherever possible factories should employ two or three shifts. Industry had to be centralised to increase efficiency and reduce the pressure on an overworked transport system. Mass production had to replace traditional German workmanship, which was time-consuming and wasteful. On 13 January 1941 Todt told the General Council of the Reich Industrial Group that the setback at Moscow meant that armaments production had to be greatly increased. Wilhelm Zangen, the group’s chairman, responded by quoting Frederick the Great: ‘Battles are won with bayonets; wars can only be won by the economy.’63
On 7 February 1942 Todt went to Hitler’s headquarters in the Masurian woods near Rastenburg (Kętrzyn) in East Prussia, determined to enlist the Führer’s support for the reorganisation of the war economy. Hitler approved of his plans for fixed prices, the expansion of his committees and a diminution of the influence of the military, particularly that of the Army Armaments Office. There was heated discussion of Goebbels and Ley’s contrary ideas, Hitler having agreed with the Propaganda Minister’s views only a few hours before Todt arrived. The other thorny question was whether Todt could be made independent of Göring, from whom he had become ever more estranged. Göring had given Werner Mansfeld, an undersecretary in the Ministry of Labour and deputy director of labour in the Four-Year Plan, plenipotentiary powers over the allocation of labour. This was a direct challenge to Todt, whom Hitler had already given control over the employment of Soviet prisoners of war and who wanted to extend this power to include all sources of labour. OKW in turn was determined to frustrate Todt’s bid for power over the workforce. Hitler was as usual unwilling to make a decision on this key matter and the interview ended on a disagreeably frustrating note.
Hitler then demanded to see Speer, who was at headquarters to report on his recent inspection of building operations in the Ukraine, to discuss the rebuilding of Berlin. It was now one o’clock in the morning. Hitler was tired and ill-tempered, but soon perked up as Speer briefed him on progress in Berlin. The interview ended at three. In view of the late hour Speer cancelled his early morning flight with Todt.
After a brief sleep Todt boarded a plane to fly back to Berlin. A few seconds after take-off it veered sharply to the left as if attempting an emergency landing. The plane then exploded and all on board were killed. ‘Panzer’ Rohland was convinced that the SS, probably at Hitler’s urging, had murdered Todt. There is no evidence to support this view, but the very fact that such rumours should circulate was indicative of the tensions and strains within the leadership after the disastrous failure of Barbarossa and with the recent declaration of war on the United States.64
Speer gives a number of different accounts of Todt’s death.65 In the 1953 draft of his memoirs he wrote: ‘Immediately after Todt’s accident Hitler ordered Milch to investigate the causes. He had a suspicion that there was something odd about it.’ In the 1967 draft this was changed to: ‘Upon Hitler’s orders – as he suspected something odd about the accident – the Air Ministry undertook an investigation as to whether my predecessor’s crash could have been due to sabotage ... they came to the conclusion that sabotage could be excluded.’ This passage is followed by the closing remarks of the Air Ministry’s inquiry: ‘Judging from the examination of the wreck it certainly seems reasonable to suppose that the plane (which according to the inquiry had a self-destruction mechanism) exploded at low altitude. But how, by whom and due to what was the mechanism activated? It is a question which allows latitude to all speculation, however fantastic.’
In the fourth and final draft of his memoirs in 1968 this is again changed to read: ‘Hitler seemed to treat Todt’s death with the stoic calm of a man who must reckon with such incidents as part of the general picture ... [Hitler] thought it was a successful act by the secret service of our enemies. But then, it is doubtful that he would have expressed to me any mere conjecture.’ In the German version this was changed to: ‘He thought it was a successful stroke by the secret services.’ Whether he meant the British, the American, the Soviet or his own is left unclear. The English version is quite different: ‘he was going to have the secret services look into the matter’.
The machine, a Heinkel 111 converted to passenger use, had been placed at Todt’s disposal by Field Marshal Hugo Sperrle, because his own plane was undergoing repairs. It was said, like all courier planes, to have been fitted with a self-destruction device, operated by a lever beside the pilot’s seat. Shortly after the accident, Todt’s eighteen-year-old fighter-pilot son was able to prove that the plane was not equipped with such a device. Nicolaus von Below, Hitler’s Luftwaffe adjutant, makes no mention of such a device in his account of the accident. He does however record that he had an argument with Todt because Hitler had issued an order that his top people were not to fly in twin-engine planes. Todt was furious and told him to mind his own business.
We may never know the true cause of the crash, just as we shall never know what Hitler said to Speer that night after Todt had gone to bed. Had he persuaded him not to board the same plane as Todt? Had he already decided to replace the pessimistic Todt with his faithful vassal Speer?