"Profits and Persecution: German Big Business and Holocaust Crimes" - Transcription:
Before and during WWII, German corporations went from the abandonment of Jewish colleagues, through profiting off the dispossession and murder of Jews, to working Jews to death. The leading executives of these companies embodied the “thoughtlessness,” the indifference to the people on the receiving end of their deeds. The actions taken by most of them, weren't just a means to keep their businesses running , but an opportunity to profit and shine - a "banality of evil" with deadly and lucrative results. In this episode, we hear about some of these executives, and some of these companies - several of which still manufacture and distribute products we may find ourselves using today.
Featured guest: Peter Hayes, Emeritus professor at Northwestern University, and the former chair of the academic committee at the United States Holocaust Memorial Museum.
Jonathan: Thanks for joining us again on the podcast. A lot of what we talk about here has to do with memory, with ethics, with personal tragedy; But today we’re talking about something a little more tangible, and very ordinary: today we’re talking about… money.
Peter Hayes: So the banks have this enormous reserves of money that come in that is blood money, it's tainted money. But they can use it for whatever their commercial purposes are until the SS withdraws it. And meanwhile they use these assets to pay the expenses of Theresienstadt or the deportation trains to the East, and the banks are transferring all that money.
Jonathan: So they're using the money they steal from the Jews to pay for the machine that's effectively killing the Jews.
Peter Hayes: Absolutely. The Holocaust made a profit. The Holocaust made a profit.
Jonathan: Welcome to “ON THE HOLOCAUST”, a podcast from Yad Vashem, the World Holocaust Remembrance Center. I’m your host Jonathan Gal, and the topic of this episode is German big business and the Holocaust. What role did large commercial companies play during the rise of the Nazis? How did they contribute to, or even profit from, the ‘Final Solution’? And how did all this affect their legacy? It’s a complicated story, a sad story; but definitely an important one to tell, and learn from.
Jonathan: Our guest today is The historian Peter Hayes, emeritus professor at Northwestern University, and the former chair of the academic committee at the United States Holocaust Memorial Museum. Professor Hayes is the author or editor of ten books on the Holocaust, including a prize-winning study of the pharma company IG Farben. He’s a leading scholar of the historiography of industry in Nazi Germany, and has been fascinated by the topic of the Holocaust for most of his life; this fascination begins, perhaps, in suburban Boston of the 1950s… when he was looking to buy a typewriter:
Peter Hayes: and a friend of mine’s mother said: "oh, you should go see so and so, she has an old Underwood that she's gonna sell” and so on, and I did. She lived down the street from me, and I bought it. And I remember I went to get it, and I think I paid ten dollars, it was ridiculous. And I went down the street to get it and it was a summer day, she was wearing a summer dress, and I saw that she had a tattoo on her forearm, and I knew what that was. Now, I was 13 years old and people think that you didn't know anything about the Holocaust in the 1950s. Well, I knew what it was, and... so I bought my first typewriter from a Hungarian Jewish woman now living in suburban Boston thirteen years after she had been liberated.
Jonathan: Hayes, who comes from an Irish-Catholic family, really finds his calling, around Christmas of nineteen sixty eight:
Peter Hayes: . My sister married a German, and I was… In 1968 I had won a scholarship to Oxford, so I was in Britain. And I didn't have any money to go home to America, so I went and spent the Christmas holidays with the German family from which my brother-in-law came. And that was how I started with this particular fascination. I had... I knew about the Holocaust before that time and I had seen movies like "Judgment at Nuremberg" and "Exodus" and "The Diary of Anne Frank", and I was interested in racial justice because I had... or prejudice, because I had grown up in the United States at the heyday of the civil rights movement. So all of these things suddenly came together when I got to Germany, because I started learning German. And then I started dealing with the rationalizations that Germans had. The family from which my brother-in-law came, his father had not been a Nazi, but his stepmother had been a member of "The League of German Girls", which was the Nazi girls organization. And his brother, that is my... my brother-in-law's uncle now, had been a Stormtrooper. And so I met all these people and I heard all the things they said and the rationalizations they used, like anti-communism was what they were really motivated by rather than antisemitism and so on. And then I began learning the language, and... It's gonna sound very strange. I fell in love with the German language.
Jonathan: At one point he visits Frankfurt with his new German in-laws, where they arrive at a large statue: a man, rising from the ground, breaking chains…
Peter Hayes: And on the base of that monument were names. Mauthausen, Dachau, you know, the concentration camps. And my 18 year old German sort of brother-in-law, who had just done his Abitur did not know what they were. And so I asked him: "What is that?", and he said: "Well, you know, when we get in... when we got history classes, we stopped at world war two". And I think that is pretty much the way Germany was in the 50s and 60s. Now that breaks in the 70s. It changes remarkably, but that was the... the way the country was. It was a collective amnesia.
Jonathan: Let’s start to put together a chronology: on the eve of Hitler’s takeover of Germany, the general attitude of German big business towards the Jews was, as Peter Hayes puts it - ‘ambivalent’:
Peter Hayes: It isn't quite accurate to say that most of the leaders of Germany's leading corporations were antisemites.But they were mistrustful of certain groups of Jews, and this made them fundamentally ambivalent about defending Jews. They did not feel that the Jews that they came into daily contact with in business affairs and so forth, were a menace to Germany, the way the Nazis depicted them, but they did think that some Jews were a menace to Germany. And what categories am I talking about? Well first, I think the...What they would refer to as the "Ostjuden''. They were about a 100,000 immigrants to Germany... Jewish immigrants to Germany in that period. Most of them came from Poland, many of them were orthodox and traditional. They often seemed shockingly alien to many middle class Germans. And then the other thing that irritated corporate leaders in thinking about Jews, was the prominence of Jewish intellectuals in what you can loosely call "Leftist circles". You know, people who were critical of capitalism, people... not necessarily communists, people who were liberals. And they were very prominent in German newspapers and in German cultural life, particularly play writers and theater directors and so forth. A lot of German corporate executives thought, you know: "These people are disturbances. They threaten our walks of life" and so on. So what happened is when the Nazis were rising, is on the one hand, German business leaders tended to think: "oh, well, you know, antisemitism it's just agitation to appeal to the masses." So they underestimated what they were facing. But on the other hand, they also were not fervent anti-antisemites. They didn't necessarily have the conviction that categorizing these people as dangerous was by definition evil.
Jonathan: Then, around early 1933, the Nazis begin to threaten and intimidate. Politically, financially, personally:
Peter Hayes: Nazis in... in the middle management levels of companies began coming to work in their uniforms, and then they began demanding that Jewish coworkers be dismissed. Because remember this is still a depression and the Nazi managers would say, you know: "We still have a lot of good loyal national socialists "out there who don't have jobs. Fire the Jews and replace them with these national socialists".
Jonathan: Threats are also made on the national level: at one point in 1933, Hitler summons the leaders of German business and industry to a meeting.
Peter Hayes: And what basically happens is that Hitler gives a speech and Göring gives a speech, and they basically say to the industrial leaders: "There's gonna be blood in the streets if you don't give us money and help us win the election, because we wanna win, but even if we lose we are not going to give up office." In other words, he threatened them with civil war, and he basically said: "Get on our team," and they do. They contribute basically three million reichsmarks.
Jonathan: This is when a pattern begins to develop, in what Hayes describes as a slippery slope of morals. The original sin? Agreeing to the Nazis’ early demands.
Peter Hayes: There was another event that occurred that historians have often overlooked, and that is that a group of Nazis invaded the headquarters office in Berlin of the National Association of German Industry, and said to the head of the association: "We want you to fire all your Jewish employees as well as the two vice-chairmen of the organization, who are politically unacceptable to us, and replace them with two other people we want. And if you don't do this, we're not leaving". So it was basically a sit-down. The head of the national association was a famous industrialist named Gustav Krupp von Bohlen und Halbach. The head of the Krupp firm that made munitions and coal and steel and so on. And Krupp immediately turned to Hitler, called Hitler and said: "Please, you know, get these people out of my office and, you know, we don't want to accept these demands". And Hitler told him: "No". And then Krupp basically caved. He fired the people as the Nazis had demanded, he dismissed the Jewish employees, which was illegal under German labor law. And he was then reproached by several of his colleagues who said: "You shouldn't have done that. We will never be able to resist a Nazi demand again, because you have done this". And he then turned to those colleagues and said: "You either back me up, or I quit". And then they caved.
Jonathan: By the middle of 1934, fully half the Jewish directors in the largest corporations in Germany had been either dismissed or forced to resign.
Peter Hayes: I think it's important to recognize that it happens under pressure, because most German historians who write about this subject are understandably reluctant to say anything that seems to excuse or exculpate these industrial leaders. So you don't want to talk about them being under pressure, because that seems to make it... their behavior somehow understandable. I'm not saying that. It's not understandable. But they were under pressure. And I think for a fair historical account we have to show this. And the pressure was not just about, you know, "Your business will be harmed". I mean, some of them were arrested.
Jonathan: So they get rid of most of the Jews working in the companies, and then, phase two – they start buying up all the Jewish companies and assets.
Peter Hayes: Because companies see opportunities. The Jewish owners want to sell. These companies have not yet reacquired their pre-depression value, so they're cheap. And the companies that would buy them are recovering, as the Nazi economic policies take hold, there's more money in the economic system. And the pressure that the Jewish owners are under steadily mounts, because the regime expands its targets from publishing and… beer manufacturers were of big importance to the Nazis. They wanted to drive Jews out of the manufacture of things that the stormtroopers would consume. So banks become a source of major pressure on Jewish owners, because all medium size and large businesses operate with lines of credit from banks. They're thinking: “The Jewish owners are under such pressure, that they might not be able to repay the line of credit". So the banks go from being helpful to Jewish owners, to in fact pressuring them to sell. And you have not only the established corporations doing this, but the worst of these figures in German's Corporate history is a man named Friedrich Flick. And Flick builds an empire of coal mines and steel factories and ironworks in the 1930s predominately by buying Jewish owned companies as the owners tried to get out. And so he becomes, by 1942 he's the second largest steel producer in Germany. And in 1932 he was a nobody.
Jonathan: By this time, late 1937 and into ‘38, German business is booming: they've got all these new toys they bought super cheap from the Jews, some lucrative government contracts with a war looming, and it all leads up to Kristallnacht, the November Pogrom:
Peter Hayes: Kristallnacht, the burning of the synagogues and all of that, is the culmination of a year of intense persecution. And during that year, the banks become instrumental in helping the regime persecute Jews, because Jews are forced to turn almost everything they own into cash. Jewelry had to be monetized, insurance policies had to be monetized. You had to turn them in to the insurance company and collect the face value. And then all that money was put into a bank deposit in the name of the individual Jew, and then trustees were appointed by the Nazi state to restrict how much money the Jew could take out of the account. All of this was administered by the banks, not by the SS, and they become the transmission belts for property of Jews going from the possession of Jews into the possession of the Nazi state. And the insurance companies after Kristallnacht refused to pay for the damages to the Jewish owned shops that they had insured.
Jonathan: After that: deportation, ghettos, hunger, and the death camps.
So just to recap: the Jews were fired, their assets gone, and finally they themselves were sent away. Now here’s another part of this story, with huge financial implications to the German companies in question: we’re about 75 years after the end of the civil war in America - and these companies are using slave labor:
Peter Hayes: By late 1943-44, the overwhelming majority of laborers from concentration camps are Jews. Most of the slave laborers initially were put to work on construction. The problem was that the rates that the SS charged were generally beyond what paid for the companies, because these were not people experienced with construction work. They were often weakened by years of starvation before they got there. But the companies keep hiring them for two reasons: One is they don't have anybody else. The other is - the Nazi state was a state in which political favor was very important. It was an economy in which the state provided well over half the demand. So companies were very eager to keep good relations with the SS and with the leaders of the Nazi state. So In the case of the I.G. Farben factory in Auschwitz for instance, the leaders of that factory knew that the inmate labor was not essential to completing the factory, because it just wasn't doing enough. It couldn't do a lot of sophisticated things, but they kept paying the SS for the labor.
Jonathan: Between the stolen assets, the government and military contracts, and the cheap labor; German big business was, quite literally, making a killing.
Peter Hayes: The prosecution of the Jews assembles, concentrates, large assets, and those assets, when they’re turned into money, have to be deposited somewhere. They’re deposited in the subsidiaries of the Deutsche and the Dresdener banks in Prague. And the biggest depositors in the Deutsche Bank subsidiary and the Dresdner Bank subsidiary are respectively the ghetto at Theresienstadt and the transfor office of the SS for the assets of the Czech Jews before they’re deported. So the banks have this enormous reserves of money that come in that is blood money, it's tainted money. But they can use it for whatever their commercial purposes are until the SS withdraw it. And meanwhile they use these assets to pay the expenses of Theresienstadt or the deportation trains to the East, and the banks are transferring all that money.
Jonathan: So they're using the money they steal from the Jews to pay for the machine that's effectively killing the Jews.
Peter Hayes: Absolutely. The Holocaust made a profit. The Holocaust made a profit. We actually know in one country, we know this down to almost the penny, that is in the Netherlands. The costs of deporting the Dutch Jews... of whom about a 110,000 died. The cost of deporting them comes to two percent of the total confiscated assets from Jews in the Netherlands.
Jonathan: It's hugely profitable.
Peter Hayes: It's hugely profitable. And... and then the other part of this war time story is... is the camps. I mean Auschwitz. And Auschwitz was hugely profitable. Auschwitz made a profit of basically a hundred percent. We know pretty much what Auschwitz collected for the labor of inmates, and we know pretty much what it cost to operate Auschwitz. And the second is half the first number. It's 30 million to 60 million Reichsmarks.
Jonathan: One of the most chilling parts of this story is realizing that a lot of products we buy and use to this day, might be manufactured and distributed by those same German companies Peter Hayes has spent his career studying. Take a look around you: your stereo system, your blender… your pills maybe… Some of the brand names have changed over the years. But many have not.
Peter Hayes: Well two of the most famous companies I think that were involved in this, is first... is Siemens. And Siemens is a particularly interesting story, because Carl Friedrich Von Siemens who was the head of the company in 1932 was not a pro-Nazi figure. Actually came to New York in December 1931, gave a speech to : business group in New York in which he warned about the dangers of the Nazis. But Siemens is a kind of prototype of this line, that is he was ambivalent about the Jews in the beginning. He caved very fast in 1933, because he said, you know: "If I stand up for these individuals I risk losing the whole operation". And that was the calculation he made right away. Now that shows you how little imagination these people used, because those were not the only two choices.You could think of things to do that would have at least blunted the force of this. But he gave it... he capitulated so fast. And then by 1942, Siemens has never joined the Nazi Party, was not an active proponent of the regime, but by 1942 his company was hiring slave laborers. And they had a factory right outside the gates of Ravensbrück in north Germany, which is a concentration camp for women. And they worked many of these women to death under atrocious circumstances. He also had a factory, a smaller one, at a place called Bobrek, which is right outside of Auschwitz. It's all a decision out of practicality. This is not driven by antisemitism, it's driven by a kind of blinkered mentality. Looking only at the success of the firm, which in Siemens's case was for him kind of irresistible. His family had built up the firm. He probably felt an enormous responsibility to his grandfather and father and all of this, and he had totally devoted his life to this company. He couldn't imagine this... making a decision on any other basis.
Jonathan: So greed is one explanation for the decisions made by these companies and executives, but it’s not the only one. For some business magnates it was family pride, personal ego, or a matter of professional reputation:
Peter Hayes: I often think, as an example of this, there was a man named Kurt Prüfer. Kurt Prüfer was the engineer who designed the gas chambers that were built in Birkenau. And the income on building those gas chambers is not very much. The commission that he earned was not very much. But what he did get out of doing it, and he knew what those chambers were gonna be used for. He actually advised the SS on how to make the chambers more effective in killing people. What he was gonna get was bragging rights: "I am such a good engineer that I could solve this problem". And he wasn't going to get rich off of this, except indirectly, because the bragging rights might make him rich. And so it's a little more complicated than just money.
Jonathan: If you’ve never heard the name, I.G. Farben was a German chemical and pharmaceutical conglomerate, once the largest company in Europe and the largest chemical and pharmaceutical company in the world. It was also a Nazi Party donor and relied on slave labor from concentration camps, including thirty-thousand from Auschwitz. I.G. Farben was involved in medical experiments on inmates at both Auschwitz and Mauthausen, and one of its subsidiaries supplied the poison gas, Zyklon B, that killed over one million people in the gas chambers. The Allies seized the company at the end of the war, and the US authorities put its directors on trial.
Peter Hayes: That employee knew what the substance was being used for. We have no proof that he told the leaders of Degussa, his owners, but we do know that he knew. He had a conversation with a leading SS man, who told him what was happening. The various accounts of what words he used to tell him, but he knew. And he continued to sell the stuff to the SS. He was himself a fervent Nazi, so it was not a hard decision for him. And then I suppose the other companies that you know nowadays of course. Volkswagen used camp inmates to build aluminum smeltery, alongside their main plant. Ironically that smeltery never worked. After the war people are very very slow. German company leaders are very slow to admit to any of this. They constantly say: "oh well, you know, it was Nazi... it was Nazi… Germany was a dictatorship, we had to do these things". And what I'm trying to say is of course that's not true. They didn't have to do these things. They might have been penalized if they had not done some things, but most of them didn't run that risk. They didn't even try to think of something else. They don't say "No". They just automatically conform, because these are the prevailing conditions. That's incidentally a phrase that was used right from the beginning in 1933. Companies wouldn't... when they were firing people, they would write to the Jewish employee and say: "Taking into consideration ‘die gegebenen verhältnissen’”, the prevailing conditions, the given conditions, “we have to… we feel that we are compelled to do this and so". So there's always this adaptation. There's always that sort of sense of "You accommodate".
Jonathan: You might be thinking back at this point to “Schindler's List”, that iconic film, based on true events of course, about a German, gentile industrialist, exactly the type of person we’re describing in this episode. But - one who made a dangerous moral decision to save Jews.
Though there were a few German industrialists who attempted to save Jews working in their factories, Peter Hayes said he couldn’t really point to another Schindler. He describes a certain lack of creativity: even if these men were not Nazis themselves, they just could not think of another way to deal with the Nazis.
Peter Hayes: There were trials. The United States tried the leaders of I.G. Farben, 23 of them, for war crimes. Krupp’s leaders were put on trial. Two of the leaders of the Dresdner Bank were put on trial. And I think the corporate world rapidly concluded that if you admit you knew anything, then you were admitting guilt, and that would lead to then punishment. So they close ranks immediately, and they construct the story about "We had to do it, we were forced to do it" and so on. And besides, we are necessary to the reconstruction of West Germany in the face of the communist threat. And therefore, let's forget about this and so on. And then they believed it and they cling to their story well into the late 1960s, early 1970s, when the things began to break. But the evidence of their complicity is largely hidden, because all of these companies sit on their archives.
Jonathan: Hayes tells of nights spent in the archives of these companies, where he understood exactly how they controlled their narratives:
Peter Hayes: Well, Siemens had an archive and you could get into the Siemens archive. I did in the early 1980's. But you couldn't necessarily see everything that was in it. I remember once being asked to see a file that had to do with political contributions in the late 1920s-early 1930s. And the worker there, who rolled the trolley of the documents up to me, looked at me and said: "Sie wissen, diese akten sind schon bereinigt worden”, “You know that these documents have been cleaned out", is what he said to me.
Jonathan: When did it finally begin to change? Many decades later, and many thanks to the American legal system…
Peter Hayes: In the late 1990's, because of the class action suits in the United States that threatened German companies that assets here that... the suits were usually filed on behalf of surviving slave laborers from these companies who wanted restitution, and they could file in American courts because there was American property of these companies that could be used to pay the restitution. And this led these companies in many cases to decide: "Okay, we better get the record out. No matter how bad the record is, it can't be worse than what they're saying about us, so let's get it out". And many of these companies opened their archives. Degussa opened its archives to me. The Dresdner Bank, which actually had not just sat on its archives, it had hidden them in a bunker in Berlin, an air raid bunker. And it had never even cataloged them. The Dresdner Bank then hired a group of historians and brought them to the bunker, opened the door and said: "Here it is". It took them two years just to sort the material, before they could begin to use it and write the history.
Jonathan: Some of these companies, it should be said, contribute significantly to Jewish and Israeli institutions...
Peter Hayes: But the contributions companies have made bear no relation to what they did. They are based on a percentage of the company's current sales. So a company that was deeply involved in prosecution, in the first place can decide for itself whether it wants to contribute or not, and then may contribute an amount that is well below what it gained by having participated in the prosecution. Degussa made money selling the gold that was taken from... not only assets of Jews, but also from the mouths of Jews, fillings from Auschwitz and so forth. They made a fair amount of money. I calculated it at the time… I calculated it as about two million dollars. They also to this day still own some of the companies they acquired from Jewish owners in the 1930s, which turned out to be very rewarding over time. So I believe in general you can say that whatever firms have paid in, it is not commensurate with what they did.
Jonathan: There’s the very famous quote by the philosopher Hannah Arendt on “the banality of evil”, which we reference quite a lot here, maybe too much… When I asked Peter Hayes if there’s something we can learn from this story, he pulled that quote, originally written about Adolf Eichmann. Hayes says: it actually makes much more sense when applied to these men…
Peter Hayes: The banality of Eichmann was that he was thoughtless, and what she meant by that was he could not put himself in the place of other people. He could not... that was his thoughtlessness. Well, we know that's not true of Eichmann. We know Eichmann was a fervent believer in what he was doing. He thought what he was doing was good. And so the people who were truly thoughtless were the people who were sitting in these boardrooms, making these decisions as if the people subject to their decisions were not human beings.
Jonathan: But they were capitalist. They were thoughtful, they were thoughtful above anything else about the bottom line.
Peter Hayes: The bottom line. but also this personal mission too. It's not just greed.
Jonathan: They are building empires. For many of them it's family businesses, I am the company.
Peter Hayes: I am the company. There's certainly something we can learn from the story and it's chilling. It is that... Well, Jean Renoir has a film in which one of the characters says: " The tragic thing about life is everybody always has their reasons". And these people reasoned in a way that is very familiar to us. We can see how they thought. And it took them down the road to participating in the murder of people. And I think that's the chilling thing. It's the… One of the historians who participated in the volume on the Dresdner Bank wrote... has a marvelous line in that volume. He said: "The moment they began to reason pragmatically, they were lost".
Jonathan: That’s it for this episode of “ON THE HOLOCAUST”, a podcast from YAD VASHEM, the world holocaust remembrance center. My name is Jonathan Gal. Sound editing and mixing by Dor Komet; Tova Shimanov was our producer. Thanks to our guest, Peter Hayes, Emeritus professor at Northwestern University, and the former chair of the academic committee at the United States Holocaust Memorial Museum. Subscribe to this feed wherever you get your podcasts, for more episodes, with more stories you might not have heard before. Thanks for listening, be well.
Source of image: gallica.bnf.fr / Bibliothèque nationale de France