862.4016/620

The Chargé in Germany (Gordon) to the Secretary of State

No. 2287

Sir: In continuation of my telegram No. 43 of March 23, 11 a.m.,67 with regard to the plan of the Nazis to remove important industrialists and replace them by Nazi and Nationalist henchmen, as a part of the general movement for obtaining control of every phase of German activity, I have the honor to report the following developments in this field.

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The key organization of German industry is the Reichsverband der Deutschen Industrie. This group embraces the bulk of German industry and furthermore is well organized and disciplined. It is, of course, a conservative organization, and the bulwark of capitalism in the country. In view of the socialistic character of the German governments after the War, the Verband was unable to express its loyalty to the Republic until as late as 1928. It was thereafter, however, on close terms with the subsequent governments until the appointment of von Papen as Chancellor. With the formation of the Hitler Cabinet, it, too, took a “wait and see” attitude. This was true in particular of Dr. Kastl, the business manager of the Verband. (See the Embassy’s telegram No. 15 of February 2, 11 a.m., third paragraph.)68 The Verband, however, was unable to withstand the pressure put on it by the Nazis, and, consequently, on April 2nd, the Voelkische Beobachter, the official organ of the Nazi Party, announced the retirement of Dr. Kastl, the reorganization of the management of the Verband, and the inclusion in the managing-board of Dr. Hans von Lucke, a trusted Nazis representative, and of Herr Alfred Nöllers, a Nationalist member of the Reichstag and chairman of the Bund fur National Wirtschaft und Werkgemeinschaft, as the representative of German national industrial circles. The announcement added that with this change in the industrial policies of the country the complementary foreign policies of the Nazis would be reflected in the Verband.

Inasmuch as Dr. Kastl was neither a Jew nor a Socialist, but, on the contrary, a former German officer and an official in the colonial service, with strong Nationalist leanings, his retirement caused much surprise. In his capacity as a member of the German Standstill delegation he was well known to American and other foreign bankers. In tariff policies he opposed the Government’s plan of export contingents.

On April 6, the Board of Directors held a meeting and “unanimously” decided that, in agreement with the responsible authorities, a committee would be named which would advise and consult with the Government concerning the complete reorganization of the Verband and its affiliated societies.

A similar step was next taken by the Nazis in connection with the Langnam-Verein, the most important organization of the West German heavy industry. This Verein was completely reorganized on April 4th, on the new basis of the Gleichschaltung, or equal direction. In accordance with this principle of equalization first applied in the political life of the country, and now to be extended to economic and other fields, the conduct of the organization hereafter, including all its technical as well as administrative functions, is to be controlled by a new group of [Page 272] officials, representing both the Nazis and the Nationalists. The object of the reorganization is to bring the activities of the Verein into line with the tendencies of the new Government, and to abolish the friction between organized industry and the authorities.

The same procedure was followed on April 4th in regard to organized agrarian interests. Hitler personally has taken over the “protectorate” of the newly-united societies of German agriculture. It was also decided to reorganize the state and provincial agrarian societies on a new basis, in accordance with the principle of Gleichschaltung.

Chambers of Commerce throughout the country, including those of the Cities of Berlin, Cologne and Koenigsberg, are being reorganized along similar lines. The employers’ association, the Deutsche Gross und Überseehandel, and the Union of Wholesale Merchants, and other societies have effected similar reorganizations. Although the Gleichschaltung has not yet been applied to all private industrial concerns, a similar procedure has been followed in many cases; in addition numerous enterprises, including the General Electric Company, and Karstadt, and Leonhard Tietz (two of the largest German department stores) have upon their own initiative announced the outright replacement of Jewish directors by Gentiles.

Respectfully yours,

George A. Gordon
  1. Post, p. 328.
  2. Ante, p. 186.