Hitler was, in fact, in no position to act as an outright dictator when he came to office on 30 January 1933. As long as Hindenburg lived, there was a potential rival source of loyalty – not least for the army. But by summer 1934, when he combined the headship of state with the leadership of government, his power had effectively shed formal constraints on its usage. And, by then, the personality cult built around Hitler had reached new levels of idolatry and made millions of new converts as the ‘people’s chancellor’ – as propaganda had styled him – came to be seen as a national, not merely party, leader. Disdain and detestation for a parliamentary system generally perceived to have failed miserably had resulted in willingness to entrust monopoly control over the state to a leader claiming a unique sense of mission and invested by his mass following with heroic, almost messianic, qualities. Conventional forms of government were, as a consequence, increasingly exposed to the arbitrary inroads of personalized power. It was a recipe for disaster.
II
There were few hints of this at the beginning. Aware that his position was by no means secure, and not wanting to alienate his coalition partners in the government of ‘national concentration’, Hitler was at first cautious in cabinet meetings, open to suggestions, ready to take advice – not least in complex matters of finance and economic policy – and not dismissive of opposing viewpoints. This only started to change in April and May. In the early weeks, Finance Minister Schwerin von Krosigk, who had met Hitler for the first time when the cabinet was sworn in on 30 January, was not alone in finding him ‘polite and calm’ in the conduct of government business, well-briefed, backed by a good memory, and able to ‘grasp the essentials of a problem’, concisely sum up lengthy deliberations, and put a new construction on an issue.
Hitler’s cabinet met for the first time at five o’clock on 30 January 1933. The Reich Chancellor began by pointing out that millions greeted with joy the cabinet now formed under his leadership, and asked his colleagues for their support. The cabinet then discussed the political situation. Hitler commented that postponing the recall of the Reichstag – due to meet on 31 January after a two-month break – would not be possible without the Zentrum’s support. A Reichstag majority could be achieved by banning the KPD, but this would prove impracticable and might provoke a general strike. He was anxious to avoid any involvement of the Reichswehr in suppressing such a strike – a comment favourably received by Defence Minister Blomberg. The best hope, Hitler went on, was to have the Reichstag dissolved and win a majority for the government in new elections. Only Hugenberg – as unwilling as Hitler to have to rely on the Zentrum, but also aware that new elections would be likely to favour the NSDAP – spoke out expressly in favour of banning the KPD in order to pave the way for an Enabling Act. He doubted that a general strike would take place. He was appeased when Hitler vouched for the fact that the cabinet would remain unchanged after the election. Papen favoured proposing an Enabling Act immediately and reconsidering the position once it had been rejected by the Reichstag. Other ministers, anticipating no promises of support from the Zentrum, preferred new elections to the threat of a general strike. The meeting was adjourned without firm decisions. But Hitler had already outflanked Hugenberg, and won support for what he wanted: the earliest possible dissolution of the Reichstag and new elections.
The following evening, Hindenburg was persuaded to grant Hitler that which he had refused Schleicher only four days earlier: the dissolution of the Reichstag. Hitler had argued, backed by Papen and Meissner, that the people must be given the opportunity to confirm its support for the new government. Though it could attain a majority in the Reichstag as it stood, new elections would produce a larger majority, which in turn would allow a general Enabling Act to be passed, giving a platform for measures to bring about a recovery. The dissolution scarcely conformed to the spirit of the Constitution. Elections were turned into a consequence, not a cause, of the formation of a government. The Reichstag had not even been given the opportunity of demonstrating its confidence (or lack of it) in the new government. A decision which was properly parliament’s had been placed directly before the people. In its tendency, it was already a step towards acclamation by plebiscite.
Hitler’s opening gambit stretched no further than new elections, to be followed by an Enabling Act. His conservative partners, as keen as he was to end parliamentarism and eliminate the Marxist parties, had played into his hands. On the morning of 1 February he told the cabinet of Hindenburg’s agreement to dissolve the Reichstag. The elections were set for 5 March. The Reich Chancellor himself provided the government’s slogan: ‘Attack on Marxism.’ That evening, with his cabinet standing behind him in his room in the Reich Chancellery, wearing a dark blue suit with a black and white tie, sweating profusely from nervousness, and speaking – unusually – in a dull monotone, Hitler addressed the German people for the first time on the radio. The ‘Appeal of the Reich Government to the German People’ that he read out was full of rhetoric but vacuous in content – the first propaganda shot in the election campaign rather than a stated programme of political measures. Full of pathos, Hitler appealed on behalf of the government to the people to overcome class divisions, and to sign alongside the government an act of reconciliation to permit Germany’s resurgence. ‘The parties of Marxism and those who went along with them had fourteen years to see what they could do. The result is a heap of ruins. Now, German people, give us four years and then judge and sentence us,’ he declared. He ended, as he often concluded major speeches, in pseudo-religious terms, with an appeal to the Almighty to bless the work of the governent. With that, the election campaign had begun. It was to be a different campaign from the earlier ones, with the government – already enjoying wide backing – clearly separating itself from all that had preceded it in the Weimar Republic.
Towards the end of his proclamation, Hitler had posed for the first time as a man of peace, stating, despite love of the army as the bearer of arms and symbol of Germany’s great past, how happy the government would be ‘if through a restriction of its armaments the world should make an increase of our own weapons never again necessary’. His tone when invited by Blomberg to address military leaders gathered in the home of the head of the army General Kurt Freiherr von Hammerstein-Equord on the evening of 3 February was entirely different.
The atmosphere was cool, the attitude of many of the officers reserved, when Hitler began his lengthy speech. But what he said could not fail to find appeal. The build-up of the armed forces was the most important premiss to the central aim of regaining political power. General conscription had to be brought back. Before that, the state leadership had to see to it that all traces of pacifism, Marxism, and Bolshevism were eradicated from those eligible for military service. The armed forces – the most important institution in the state – must be kept out of politics and above party. The internal struggle was not its concern, and could be left to the organizations of the Nazi movement. Preparations for the build-up of the armed forces had to take place without delay. This period was the most dangerous, and Hitler held out the possibility of a preventive strike from France, probably together with its allies in the east. ‘How should political power, once won, be used?’ he asked. It was still too early to say. Perhaps the attainment of new export possibilities should be the goal, he hinted. But since earlier in the speech he had already dismissed the notion of increasing exports as the solution to Germany’s problems, this could not be taken by his audience as a favoured suggestion. ‘Perhaps – and probably better – conquest of new living space in the east and its ruthless Germanization’ was his alternative. The officers present could have been left in no doubt that this was Hitler’s preference.
Hitler’s sole aim at Hammerstein’s had been to woo the officers and ensure army support. He largely succeeded. There was no opposition to what he had said. And many of those present, as Admiral Erich Raeder later commented, found Hitler’s speech ‘extraordinarily satisfying’. This was hardly surpris
ing. However disdainful they were of the vulgar and loudmouthed social upstart, the prospect he held out of restoring the power of the army as the basis for expansionism and German dominance accorded with aims laid down by the army leadership even in what they had seen as the dark days of ‘fulfilment policy’ in the mid-1920s.
The strong man in Blomberg’s ministry, his Chief of the Ministerial Office, Colonel Walther von Reichenau – bright, ambitious, ‘progressive’ in his contempt for class-ridden aristocratic and bourgeois conservatism, and long a National Socialist sympathizer – was sure of how the army should react to what Hitler offered. ‘It has to be recognized that we are in a revolution,’ he remarked. ‘What is rotten in the state has to go, and that can only happen through terror. The party will ruthlessly proceed against Marxism. Task of the armed forces: stand at ease. No support if those persecuted seek refuge with the troops.’ Though not for the most part as actively sympathetic towards National Socialism as was Reichenau, the leaders of the army which had blocked by force Hitler’s attempt to seize power in 1923 had now, within days of his appointment as Chancellor, placed the most powerful institution in the state at his disposal.
Hitler, for his part, lost no time in making plain to the cabinet that military spending was to be given absolute priority. During a discussion in cabinet on 8 February on the financial implications of building a dam in Upper Silesia, he intervened to tell his cabinet colleagues that ‘the next five years must be devoted to the restoration of the defence capacity of the German people’. Every state-funded work-creation scheme had to be judged with regard to its necessity for this end. ‘This idea must always and everywhere be placed in the foreground.’
These early meetings, within days of Hitler becoming Chancellor, were crucial in determining the primacy of rearmament. They were also typical for the way Hitler operated, and for the way his power was exercised. Keen though Blomberg and the Reichswehr leadership were to profit from the radically different approach of the new Chancellor to armaments spending, there were practical limitations – financial, organizational, and not least those of international restrictions while the disarmament talks continued – preventing the early stages of rearmament being pushed through as rapidly as Hitler wanted. But where Blomberg was content at first to work for expansion within the realms of the possible, Hitler thought in different – initially quite unrealistic – dimensions. He offered no concrete measures. But his dogmatic assertion of absolute primacy for rearmament, opposed or contradicted by not a single minister, set new ground-rules for action. With Hjalmar Schacht succeeding Hans Luther in March as President of the Reichsbank, Hitler found the person he needed to mastermind the secret and unlimited funding of rearmament. Where the Reichswehr budget had on average been 700–800 million RM a year, Schacht, through the device of Mefo-Bills – a disguised discounting of government bills by the Reichsbank – was soon able to guarantee to the Reichswehr the fantastic sum of 35 billion RM over an eight-year period.
Given this backing, after a sluggish start, the rearmament programme took off stratospherically in 1934. The decision to give absolute priority to rearmament was the basis of the pact, resting on mutual benefit, between Hitler and the army which, though frequently troubled, was a key foundation of the Third Reich. Hitler established the parameters in February 1933. But these were no more than the expression of the entente he had entered into with Blomberg on becoming Chancellor. The new policy was possible because Hitler had bound himself to the interests of the most powerful institution in the land. The army leaders, for their part, had their interests served because they had bound themselves, in their eyes, to a political front-man who could nationalize the masses and restore the army to its rightful power-position in the state. What they had not reckoned with was that within five years the traditional power-élite of the officers corps would be transformed into a mere functional élite, serving a political master who was taking it into uncharted territory.
III
In the first weeks of his Chancellorship, Hitler took steps to bring not just the ‘big battalions’ of the army leadership behind the new regime, but also the major organizations of economic leaders. Landholders needed little persuasion. Their main organization, the Reich Agrarian League (Reichslandbund) – dominated by East Elbian estate-owners – had been strongly pro-Nazi before Hitler became Chancellor. Hitler left agrarian policy in its initial stage to his German National coalition partner Hugenberg. Early measures taken in February to defend indebted farm property against creditors and to protect agricultural produce by imposing higher import duties and provide support for grain prices ensured that the agrarians were not disappointed. With Hugenberg at the Economics Ministry, their interests seemed certain to be well looked after.
The initial scepticism, hesitancy, and misgivings of most business leaders immediately following Hitler’s accession to the Chancellorship were not dispelled overnight. There was still considerable disquiet in the business community when Gustav Krupp von Bohlen und Halbach, head of the mighty Krupp’s iron and steel concern and chairman of the Reich Association of German Industry, and other leading industrialists received invitations to a meeting at Göring’s official residence on 20 February, at which Hitler would outline his economic policy. Krupp, up to then critical of Hitler, went to the meeting prepared, as he had done at meetings with previous Chancellors, to speak up for industry. In particular, he intended to stress the need for export-led growth and to underline the damaging consequences of protectionism in favour of agriculture. In the event, he could make neither point. The businessmen were kept waiting by Göring, and had to wait even longer till Hitler appeared. They were then treated to a classic Hitler monologue. In a speech lasting an hour and a half, he barely touched on economic matters, except in the most general sense. He assuaged his business audience, as he had done on earlier occasions, by upholding private property and individual enterprise, and by denying rumours of planned radical experimentation in the economy. The rest was largely a restatement of his views on the subordination of the economy to politics, the need to eradicate Marxism, restore inner strength and unity, and thus be in a position to face external enemies. The coming election marked a final chance to reject Communism by the ballot-box. If that did not happen, force – he darkly hinted – would be used. It was a fight to the death between the nation and Communism, a struggle that would decide Germany’s fate for the next century. When Hitler had finished, Krupp felt in no position to deliver his prepared speech. He merely improvised a few words of thanks and added some general remarks about a strong state serving the well-being of the country. At this point, Hitler left.
The hidden agenda of the meeting became clear once Göring started speaking. He repeated Hitler’s assurances that economic experiments need not be feared, and that the balance of power would not be altered by the coming election – to be the last for perhaps a hundred years. But the election, he claimed, was nonetheless crucial. And those not in the forefront of the political battle had a responsibility to make financial sacrifices. Once Göring, too, had left, Schacht bade those present to visit the cash-till. Three million marks were pledged, and within weeks delivered. With this donation, big business was helping consolidate Hitler’s rule. But the offering was less one of enthusiastic backing than of political extortion.
Despite their financial support, industrialists continued at first to look with a wary eye at the new regime. But its members were already realizing that their position was also not left untouched by the changes sweeping over Germany. In early April, Krupp capitulated to Nazi pressure to replace the Reich Association by a new, nazified body, for the dismissal of Jewish employees, and the removal of all Jewish businessmen from representative positions in commerce and industry. The following month, the once-mighty Association dissolved itself and was replaced by the nazified Reich Estate of German Industry (Reichsstand der Deutschen Industrie). Alongside such pressure, business recovery, high profits, secure private property (apart from that of Jewish
businessmen), the crushing of Marxism, and the subduing of labour saw big business increasingly content to adjust to full collaboration with the new regime, whatever the irksome bureaucratic controls imposed on it.
Hitler’s style, as the industrialists experienced on 20 February, was certainly different from that of his predecessors in the Chancellor’s office. His views on the economy were also unconventional. He was wholly ignorant of any formal understanding of the principles of economics. For him, as he stated to the industrialists, economics was of secondary importance, entirely subordinated to politics. His crude social-Darwinism dictated his approach to the economy, as it did his entire political ‘world-view’. Since struggle among nations would be decisive for future survival, Germany’s economy had to be subordinated to the preparation, then carrying out, of this struggle. That meant that liberal ideas of economic competition had to be replaced by the subjection of the economy to the dictates of the national interest. Similarly, any ‘socialist’ ideas in the Nazi programme had to follow the same dictates. Hitler was never a socialist. But although he upheld private property, individual entrepreneurship, and economic competition, and disapproved of trade unions and workers’ interference in the freedom of owners and managers to run their concerns, the state, not the market, would determine the shape of economic development. Capitalism was, therefore, left in place. But in operation it was turned into an adjunct of the state.
Lacking, as he did, a grasp of even the rudiments of economic theory, Hitler can scarcely be regarded as an economic innovator. The extraordinary economic recovery that rapidly formed an essential component of the Führer myth was not of Hitler’s making. He showed no initial interest in the work-creation plans eagerly developed by civil servants in the Labour Ministry. With Schacht (at this stage) sceptical, Hugenberg opposed, Seldte taking little initiative, and industry hostile, Hitler did nothing to further the work-creation schemes before the end of May. By then, they had been taken up by the State Secretary in the Finance Ministry, Fritz Reinhardt, and put forward as a programme for action. Even at this stage, Hitler remained hesitant, and had to be convinced that the programme would not lead to renewed inflation. Finally, on 31 May, Hitler summoned ministers and economic experts to the Reich Chancellery, and heard that all but Hugenberg were in favour of the Reinhardt Programme. The following day, the ‘Law for Reduction of Unemployment’ was announced. Schacht now conjured up the necessary short-term credits. The rest was largely the work of bankers, civil servants, planners, and industrialists. As public works schemes initially, then increasingly rearmament, began to pull Germany out of recession and wipe away mass unemployment more quickly than any forecasters had dared speculate, Hitler garnered the full propaganda benefit.