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Friday, February 20, 2015

This Day in History: When Bankers and Big Business Betrayed a Nation

 by Nomad

When we look back at this date- February 20- we see it was a critical day in modern history. Eighty-two years ago today,  Hitler made his pitch for campaign financing to the leaders of banking and industry. It turned out to be a smashing success.


On this day in 1933, the Nazi party arranged a secret meeting between Adolf Hitler and 20 to 25 industrialists at the official residence of Hermann Wilhelm Göring, the minister of the interior in Hitler's government, 

The aim of this secret meeting was to allocate campaign financing for the Nazi party in the crucial upcoming elections. 

A German economist, banker, liberal politician Hjalmar Horace Greeley Schacht acted as a liaison/host for the event. As a fierce critic of his country's post-World War I reparation obligations, Schacht became a supporter of Adolf Hitler and his Nazi Party. He served in Hitler's government as President of the Reichsbank and Minister of Economics. 

Until his fall from grace in 1937, Schacht proved to be a useful tool for the regime and its rise to absolute power.

The Names on the List

The list of attendees is indeed impressive, representing the most powerful names in German industry and banking. 
Researchers have found the names of others. Historian Gerald Feldmann adds:

The meeting was highly significant because it was actually part of a larger plan to seize absolute control of the German government.
Only a few months before, the charismatic upstart Adolf Hitler had been sworn in as Chancellor and head of the coalition government. 
It was an astounding rise to power for a man who had once been thought of nothing more than a political joke.

When the Laughing Stopped

The Chancellor position had brought Adolf Hitler closer to being the supreme leader of the nation and yet it also came with certain checks on power. 
Even as the popularity of the Nazis, Hitler had one further obstacle: German president, Paul Von Hindenburg. The former war hero in the Prussian Army, was, at the age of 86, suffered from bouts of dementia and was, as well,  bedridden from poor health with lung cancer.

There was no love lost between the two men. In fact, Hindenburg had initially resisted calls to invite Hitler into his coalition government, reportedly saying, 
‘That man a Chancellor? I’ll make him a postmaster and he can lick stamps with my head on them.’
Eventually, however, Hindenburg would prove to be no obstacle at all and before his death a year later, he had handed over full power to the Nazi leader.  

Before the secret meetings, Hitler demanded that Hindenburg call for new parliamentary elections, to be held in the first week in March. At that time, the Nazis only had a third of the seats in government, not nearly enough to carry out its plan to rule without opposition or interference.

Winning a majority in parliament was therefore seen as a crucial part of the Nazis plan. With a two-thirds majority, the Nazis would have enough votes to pass the so-called Enabling Act. 
This legislation was to allow Chancellor Hitler to rule by decree, bypassing the last remaining opposition in the German parliament.  

Even before the meeting, the stage was being carefully prepared. Göring had set about removing senior police officers and replacing them with Nazi loyalists. (Later these men would form the enforcers of the regime, known as the Gestapo.)

Goering had claimed (rather ironically given the circumstances) that there was a plot to overthrow the government and used this unsubstantiated allegation to raid and arrest opposition parties.
From January when Hitler assumed power until the time of the February meetings, already seventy people had died in political protests.

The Sales Pitch

At the February 20 meeting, Hitler did what he did best. 
In a two and a half hour speech, Hitler warned the assembled bankers and business leaders of the threat of Communism and a Communist take-over of the nation. Their own livelihoods were at stake, he said.  For if the Communists ever seized power in Germany, they would destroy a nation and seize their corporations and personal property.   
It is not enough to say we do not want Communism in our economy. If we continue on our old political course, then we shall perish ....
He hinted of outlines of a secondary plan if the elections results did not give the Nazis a necessary majority.
Regardless of the outcome, there will be no retreat, even if the coming election does not bring about decision, one way or another. If the election does not decide, the decision must be brought about by other means.
Those methods need not be limited to constitutional manipulations.
There are only two possibilities, either to crowd back the opponent on constitutional grounds, and for this purpose once more this election; or a struggle will be conducted with other weapons, which may demand greater sacrifices.
Whether anybody inquired what exactly this phrasing denoted is not recorded. Perhaps they did not want to know the details. They were interested in the bottom line, in results.
Hitler concluded his speech with:
I hope the German people thus recognize the greatness of the hour.
The meeting was an astounding success. The assembled industrialists and bankers expressed their whole-hearted support and generously donated some three-million Reichsmarks to the political campaign fund. 
According to one source, international bankers and industrialists also participated in the funding of the Nazi Party at this same time. 
A total of three million Reichmarks was subscribed by prominent firms and businessmen, suitably "washed" through an account at the Delbruck Schickler Bank, and then passed into the hands of Rudolf Hess for use by Hitler and the NSDAP.
(American complicity, especially prominent Wall Street financiers has been discussed in full on another post on American ambassador to Nazi Germany, William E. Dodd. Outside of banking, both Ford Motors, General Motors and General Electric were both implicated in the financing of Hitler at this stage in his career.)

As it turned out, the sum was much more than was needed. According to some sources, 600,000 marks remained unspent after the election.

Of course, there was a good reason why the full amount of the campaign financing assistance of Big Business was unnecessary. Hitler had prepared a different way to guarantee the outcome.

To Skin a Cat

One week later after this historic gathering, on February 27, the Nazis successfully arranged one of the most successful false flag operations in modern history: the arson attack on the Riechstag building, the meeting place of the German parliament. 
Most historians today believe the fire was a little too timely not to have been a Nazi operation. 

After a perfunctory investigation, a young man from the Netherlands, Marianus van der Lubbe was accused and later executed. Because Lubbe had once been a Communist in his youth, the Nazis blamed the attack on secret cells of Communists inside Germany. 

The actual responsibility for the Reichstag fire even today remains an ongoing topic of debate and research. One source makes the claim that the arsonists obtained access to the Reichstag through a tunnel from a house where German business and close confidant of Hitler, Ernst Franz Sedgwick Hanfstaengl was staying. Hanfstaengl later claimed to have alerted Hitler and Göring about the Reichstag fire. 

One can draw their own conclusion about a conspiracy. It is clear however that whatever the truth about the arson, the Nazis made very good use of the events.
According to historians, Hitler had demanded that all leaders of the German Communist Party "be hanged that very night." 
The idea was rejected by the president but Hindenburg conceded that Hitler should be given unlimited dictatorial powers to respond to the terrorist attack. (Upon Hindenburg death in August 1934, the offices of President and Chancellor would be combined.)

Thousands of members of the Social Democrat Party and Communist Party were arrested and sent to recently opened to concentration camp.

Naturally, this made the idea of a free and fair election something of a bad joke. Nevertheless, despite his false flag operations, and the kind generosity of the captains of industry and the cadre of bankers, the election did not provide the Nazis with the tools it needed for a victory in the March elections. The Nazi Party received
43.9% of the vote and only 288 seats out of the available 647. The increase in the Nazi vote had mainly come from the Catholic rural areas who feared the possibility of an atheistic Communist government.
(The role of the Catholic church in the rise of the fascists has also been covered in another blog post.)

Of course, by that time, the former democratically-elected Chancellor - turned Der Fuhrer- had made the German parliament all but obsolete and powerless.
One of their last meaningful acts was more or less a surrender of power, the long desired prize: the Enabling Act was approved and signed on 24 March.

With this new-found authority, Hitler banned all political parties but its own, and suppressed freedom of speech. The German constitution too was nullified and Hitler was now allowed to rule by decree.  
Through the use of fear-mongering and the appeal to the pride of nationalism, he had in the span of a few months utterly destroyed the democratic principles of government.

This day in history marks the moment when the German banking industry and an assortment of top-level industrialists happily betrayed their nation.