How Goering Seized Power Over the German Economy
В stories There is a curious moment of the Third Reich that has not yet received a clear explanation. How did the Nazis gain complete control over the German economy? The fact is that in Germany there was no total nationalization of industry; private enterprises, structures and legislation of the private economy were preserved there. But at the same time, as is clearly seen, Germany in the last pre-war years and during the war, at least until the beginning of Bombenkrieg, generally acted as a single whole, including in the economy.
At the same time, there is an opinion, often presented as something that requires no proof, that there was no special centralization in Nazi Germany, if you don’t count the Fuhrer, and that at the top there were party bigwigs who fought among themselves for power and influence. Well, maybe there really was a struggle at the top, but the question remains: so how exactly did the Nazis control the entire German economy? By force of law? By force? Or were all, or most, Germans so converted to the Nazi faith that they zealously carried out any orders?
I have my own version, somewhat extravagant, but I think it allows us to understand what this control was based on.
Prices can't be raised! But some can
On October 18, 1936, Hitler issued a decree appointing Goering as the Plenipotentiary for the Four-Year Plan, with the right to issue instructions and orders, including to the highest state bodies. Goering was the Minister-President of Prussia, he had an apparatus from which he separated a group of employees headed by his personal secretary Paul Körner as the Office for the Four-Year Plan.
And no one asked how such a non-departmental and non-governmental body could manage the economy in principle. Apparently, the reference to Hitler's decree removed all doubts.
But there was still a question that bothered many rulers and administrators. On paper, you could decree anything. But what real powers would this body have? Why should anyone pay any attention to it and its instructions? There was the Reich Ministry of Economics, headed by Hjalmar Schacht, which had similar functions and which had established connections with industrial circles and certain agreements regarding cooperation and mutual understanding.
At the time of the creation of the new management post, Goering already had an ace up his sleeve, the use of which he most likely discussed with Hitler in advance.
Hitler and Goering are up to something
On 26 October 1936, Göring, as the Commissioner for the Four-Year Plan, issued a law establishing the post of Reich Commissioner for Prices (der Reichskommissar für die Preisbildung) with powers to control prices and wages throughout the German economy. The Reich Commissioner for Prices was subordinate to Göring. On 29 October 1936, the post was taken over by the Oberpresident of the two Prussian provinces of Lower Silesia and Upper Silesia, Josef Wagner.
It is believed that when Schacht learned about this law, he laughed for a long time. The new body was taking on an impossible job and was bound to drown in endless bureaucratic correspondence. It was almost impossible to control prices; thousands of prices were set daily in Germany. There was no way to control and prescribe all this. Therefore, as Schacht believed, Goering and his subordinates would now get bogged down in bureaucracy, break the pricing mechanism with their interference and discredit themselves.
But Goering had an original plan. A month after the new price control office was created, on November 26, 1936, Goering issued a directive in which, at the suggestion of the Reich Commissioner for Price Setting, he repealed all regulations and decrees in force at that time concerning pricing. On the same day, Goering issued another directive, this time prohibiting price increases. This directive categorically prohibited, under threat of a fine or imprisonment, raising prices above the level of October 18, 1936. However, according to the same directive, the Reich Commissioner for Price Setting could make exceptions if they were dictated by urgent economic necessity.
That's all!
Goering made the Reich Commissioner for Price Setting a permitting authority. Every entrepreneur, every trader who needed to raise prices above the permitted level had to apply to this department and prove the need to make an exception for him. This opened up the broadest possibilities for manipulating the entire economy as a whole and individual industries in particular, almost without resorting to formal orders. Entrepreneurs flocked to the representatives of the Reich Commissioner for Price Setting, while Goering's apparatus decided who would be granted an exception and allowed to raise prices for their products, and who would not, issuing the corresponding instructions.
I think it is now clear why Goering became as rich as Croesus and had handfuls of precious stones.
The Battle for the "Commanding Heights"
After this, Schacht realized that Goering had completely outplayed him, because under such a system, entrepreneurs, from small shopkeepers to Krupp and Thyssen, would go to Goering's Reich Commissioner whenever they felt like raising their prices. This would happen periodically, since world prices would change and rise, so industries dependent on imported raw materials would experience difficulties. Moreover, this Reich Commissioner would interfere with the work of the inspection and control institutions of the Reich Ministry of Economics itself, if only because they had to be informed about exceptions in the procedure for setting prices. And so it began to happen.
Schacht and Goering are sitting next to each other and applauding something.
It must be said that such a method would only work in Germany and on the German mentality, which combined law-abidingness and thrift. When goods are sold at a higher price than the permitted level, many Germans will be indignant and demand the return of the previous prices. The price-setting system will have many millions of voluntary assistants who will report to the appropriate authorities if a shopkeeper, store or enterprise that has raised prices does not have permission from the Reich Commissioner for Price Setting.
This order lasted until about the summer of 1944, when defeats at the front and massive bombing raids radically undermined German order and the German economy, and the black market broke free from restrictions, because “necessity knows no commandments.”
But then, at the end of 1936, the price control system quickly came into being and began to function. Schacht, however, decided to rebel. Traces of it have been preserved in document 376-EC, published in the collection of documents from the Nuremberg Trials. On December 11, 1936, Schacht wrote a circular letter to the supervisory authorities, in which he stated that they were to act only according to his instructions. The instructions received from the commissioner for the four-year plan, the groups subordinate to him, and the Reich commissioner for price fixing were to be followed only if they corresponded to the instructions given by Schacht and the previously approved guidelines. In all other cases, he was to be immediately informed, even about individual attempts at outside interference in the work.
Less than a week after this circular, on December 17, 1936, Goering held a meeting of about one hundred leading industrialists in Berlin, to whom he delivered a speech on the principles of a new economic policy within the framework of the four-year plan. This speech is known from a transcript, partly verbatim and partly in summary, which was published in English translation in the Nuremberg Trials (document NI-051).
First of all, Goering emphasized:
"I am invested with the full confidence of the Führer and with far-reaching powers of decision. I am the master of German money, but unfortunately I cannot say the same about foreign currency."
A very significant statement.
A little time passed. In February 1937, Reich Minister of War Werner von Blomberg wrote to Hitler that Schacht was not doing any military-economic work and asked him to resolve this situation. And this despite the fact that on January 22, 1937, on his 60th birthday, Schacht was congratulated by the military command, and on January 30, 1937, on the anniversary of his rise to power, Hitler awarded Schacht a gold NSDAP badge.
Something knocked Schacht off his game, so much so that he acknowledged Goering's leadership. In April 1937, Schacht wrote him a long letter asking him to help develop German exports. Formally, Goering and Schacht signed an agreement on cooperation in the military-economic sphere in July 1937. But it did not last long. On September 5, 1937, Schacht went on vacation, and then he was asked to leave the ministry. On November 26, 1937, Walther Funk became Reich Minister of Economics. Soon, Schacht was asked to leave his post as president of the Reichsbank.
Thus, subsequent events show that at the end of December 1937, when Goering proclaimed himself “master of German money,” he had already won this battle for the “commanding heights” in the German economy.
It is difficult to say for sure what happened there. One can assume something like the following. Goering, faced with open resistance from Schacht, apparently brought Himmler to the forefront with some compromising material. This compromising material was probably weighty enough for Schacht not only to shut up, but to break down and soon drop out of work. Somehow he was so influenced that even the gold party badge did not bring him joy.
Centralization of powers
This Reich Commissariat for Price Setting, subordinated to Goering, established real power over the German economy, and on a scale that no ruler in Germany had ever had before. The levers of control of the Reich Commissariat for Price Setting reached every smallest shop, store, craft establishment or farmstead. It was impossible to buy or sell anything, it was impossible to hire a worker without looking at the instructions of this Reich Commissariat.
For those who would like to spit on the law, the Nazis have already shown that it is better not to mess with their security forces, especially those subordinated personally to Himmler. The Dachau concentration camp had been operating since 1933, and many have already heard of it.
It was a turning point in history. There was no force left in Germany that could either stop Hitler and Goering from carrying out their plans or thwart them. All of Germany was at their disposal.
Is this centralization or not? In my opinion, it is centralization. Just of an unfamiliar type. It can be called centralization of powers, when the Fuhrer, concentrating the highest political power in his hands, grants some person the powers to resolve this or that issue. This person, in our case Goering, formalizes his powers as it suits him, and all other ministries and departments are forced to obey him.
Moreover, all this is not based on informal relations, but all according to the law. The decree of the Fuhrer - the order of Goering - the instructions and orders of lower-ranking authorized representatives. You just need to read the Reichsgesetzblatt more often on the relevant issues, fortunately it is now completely scanned and posted on the Internet.
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