The Economic Struggle of German Jews, 1933-1943 (Part B)
Source: A. Barkai, From Boycott to Annihilation, The Economic Struggle of German Jews 1933 - 1943, Hanover & London 1989, pp. 37 - 53, 77 - 92, 106 - 109.
At the start of 1933, there were twenty-five small Jewish credit associations in existence. These were viewed more as means to provide 'constructive welfare assistance' than as credit institutes. The independent capital of all of these associations amounted to a total of only approximately RM 750,000 and was used for providing small, interest-free (or almost interest-free) loans of from RM 100 to RM 200 to small-enterprise artisans and tradesmen. Such credit associations had initially been set up in the 1920s in Eastern Europe by the 'Joint' and spread from there to Germany. They had fulfilled an important function, particularly in Poland, where there was a large impoverished Jewish middle class suffering from an anti-Semitic boycott that had been openly endorsed and supported by the government. In Germany, such loan associations had had a much smaller company of beneficiaries until 1933, consisting principally of Eastern European artisans and small tradesmen who could indeed be materially assisted by such modest loans 80 .
Jewish self-help efforts were also able to link up with already existing initiatives in the field of occupational-vocational training and counselling. During the Depression years, job placement bureaux had been set up by the Gemeinden to assist school graduates and jobless youngsters in choosing a vocation and to provide help in locating jobs and apprenticeships. In addition, the Zionist youth leagues maintained agricultural training farms that prepared young people for emigration to Palestine. At the beginning of 1933, these institutions, which until then had served only a small number of Jewish youth, were literally swamped by a sudden deluge of applications from thousands of young and even older Jewish men and women. The Jewish job placement bureaux and training centres formed the nucleus of a comprehensive system of occupational counselling and job retraining. Many placed their hopes in learning a new profession in order to be able to build new lives for themselves later either in Germany or abroad. The available places were far too few, even if it had proved feasible to multiply their numbers quickly. By the end of 1933, the system of organised vocational training encompassed more than six thousand people, including a number of older persons. Thirteen hundred were studying and living in communal training centres, mainly on the agricultural teaching farms, the so-called hachshara (Hebrew for 'training') program of the Zionist leagues. The others received training in individual teaching centres. Almost half of the training courses were devoted to agriculture and gardening; the remainder were in areas such as artisan crafts and even in the field of domestic help 81 .
The impressive figures indicate just how swiftly the respective organisations responded to the new circumstances. Nonetheless, only a small number of people could be accommodated. In earlier years, the greater proportion of Jewish youngsters leaving school and entering the job market, as well as older persons who needed to learn a new trade, had made their vocational choices individually, and then had found themselves a suitable place for training. In 1933, however, despite the upswing in the job market, it became more and more difficult for Jews to find apprenticeship places, even before the introduction of official sanctions. Under these circumstances, the various services expanded by the Jewish Gemeinden - such as the occupational counselling and job placement bureaux, as well as the training/retraining courses in agriculture and the craft trades - all took on a growing importance. After a certain amount of time, it proved possible to mollify the German authorities 82 , particularly the Gestapo, who had initially viewed these efforts with scepticism and had interfered at various points. This was done repeatedly emphasising one salient argument: vocational training served to prepare people for later emigration.
Beginnings of a 'Jewish Economic Sector'
The efforts of the Jewish job placement bureaux were focused after January 1933 mainly on Jewish firms. Increasingly, Jewish blue-collar and white-collar workers could hope to find jobs only with Jewish employers. As long as the number of independent firms Jewish firms and businesses was still relatively large, it was possible to facilitate procurement of many jobs and apprenticeship positions in this way. This then represented the beginning of the development of an independent - though by no means autarkic - Jewish economic sector previously non-existent in Germany. The more the vocational and job prospects of Jews were restricted as a result of legislation, 'spontaneous' boycott, or administrative measures and chicanery, the closer the Jewish community joined together, closing ranks in economic respects as well. And the more hopeless the legal battle to maintain existing positions in the economy proved to be, the clearer was the recognition by ever increasing numbers of Jews that in their struggle for economic survival they could rely only on themselves and perhaps on the support of their co-religionists abroad. Jewish economic life thus began to undergo a restructuring: more and more, Jews were now working for and employing Jews, assuring themselves a livelihood by means of economic intercourse among themselves.
As in other areas, Jewish young people here too showed themselves to be more inventive and farsighted than many adults or than a number of Jewish organisations. As early as May 1933, an appeal was circulated by the National Committee of Jewish Youth Leagues, signed by Ludwig Tietz and Georg Lubinski. It called on the local branches of all Jewish youth organisations to take an active part in efforts to procure jobs for the Jewish unemployed. Each member was obligated to locate at least one vacant job or apprenticeship by making inquiries among friends and relatives. An effort was to be made to find places for individual agricultural training ('individual hachshara ') among local farmers - if necessary only in exchange for food and lodging and even with the supplementary payment of a small sum of money to the farmer. In the course of a few weeks, several hundred positions, mainly agricultural apprenticeships, were located and arranged in this manner 83.
Beginning during the Weimar Republic, appreciable numbers of Jewish blue-collar workers and even more white-collar personnel had found employment in Jewish-owned firms. This was one by-product of the anti-Semitic boycott that had already intensified at the time of the Depression; it was also a consequence of intentional efforts undertaken by the Jewish job placement offices. A large proportion of these workers were dismissed during the course of the April boycott under pressure from NSBO factory cells and the supervision by the DAF was less effective. In a number of cases, the employment of new Jewish workers was combined with the awarding of contracts by Jewish institutions to the employment firms. In this way, both the new Jewish employee and his or her Jewish employer came to benefit economically from the arrangement 84 .
The Jewish newspapers were also mobilised in the search for jobs. The success of recurring appeals in the press appears to have been only negligible in the early period, when circulation figures for the Jewish press had just started to climb at a slow pace. But it was at this juncture that the importance of Jewish newspapers for the subsequent development of the Jewish economic sector began to emerge and make itself felt. Clearly articulated in the columns of these papers was the urgency of the need to procure gainful employment for Jewish workers and an appeal to the feeling of Jewish solidarity: as, for example, in an article published in September 1933 with the characteristic title 'We accuse!' The article criticised Jewish master craftsmen, cooks, barbers, tailors, and the other artisans because they were prepared to take on Jewish apprentices only in exchange for the payment of an apprentice fee. This was denounced as an attempt to try to profit from the distressful hard times. Where should these people, who sometimes did not even have enough for a warm meal, get the necessary money to pay such fees? 85
Along with press releases, the Wirtschafshilfe issued a mimeographed bulletin entitled 'Vermittlungsdienst' (Exchange Service). Its first issue in the spring of 1933 reflected the desperate situation faced by the jobless and impoverished. Doctors and lawyers appealed to their colleagues in particular, requesting to be kept in mind when they were buying tea, coffee, or soap. Their wives advertised assistance with various types of written work and knitting. Dismissed judges and state attorneys offered their gowns for sale and their legal libraries 'at bargain prices.' The mimeographed pages also carried requests for and offers of capital investment, ranging from RM 3,000 to RM 40,000, although there were more requests than offers. Frequently, factories shops were offered for sale at what appeared to completely ridiculous prices: for example, a 'shipping firm in Mannheim' for the incredible sum of RM 1,000; or a doctor's practice, completely equipped and with a family home, in an office whose rent was prepaid until April 1935 - RM 5,000 to RM 6,000! 86 The sources do not indicate whether buyers were found for the properties. Yet how desperate must the situation have been for those who had placed the ads.
And so it was that the Jewish economic sector came into being - unplanned and by no means conceived as the long-term solution to the crisis situation of German Jewry - in the early months of the Nazi regime at the initiative of individuals and groups who suddenly found themselves jobless and without any income. Many may have taken the assurances of the new rulers at face value - namely, that Jews had nothing to fear in the field of the vocational trades - and thus ventured in such trades to build a new basis for their continued economic existence in Germany. Others sold off their legal or medical practices in order to emigrate to a new homeland. It seemed reasonable to everyone in need of help to turn first to their own community.
Yet the ensuing joining of hands economically also marked the beginning of a new process of intellectual and organisational self-assertion by the Jewish community, which had been left to fend for itself. Individual Jews reached a decision, sometimes earlier than those in positions of leadership in the community: to liberate themselves from the sway of the arbitrary measures introduced by the new rulers, to contend to the best of their abilities with the new circumstances, and to cope for the present with their new lot - whether in order to remain in Germany, economically active and productive despite of everything, or to rescue and transfer as much as possible of their capital at the time of their prospective emigration.
First Attempts to Salvage Personal Assets
The difficulties inherent in transferring assets abroad originally had no connection with Nazi policy of persecution of the Jews. In 1931, the Bruening government had imposed legal restrictions on currency export to prevent the calamitous flight of capital during the Depression. Even the Reich Flight Tax (Reichsfluchtsteuer), later utilised by the Nazi regime to rob and despoil departing Jews, had already been introduced at that time 87 . In 1933, capital transfer abroad was almost completely suspended. The new rulers issued regulations on exceptions pertaining to the transfer of Jewish assets in order to accelerate Jewish emigration. In the first two or three years of the new regime, it was still relatively simple, despite the tense currency situation, to transfer funds abroad. For this reason, it proved possible during this period to salvage a certain amount of Jewish capital and spirit it out of the country, in contrast with later years.
Affluent and farsighted Jews tried to utilise the existing possibilities for immediate or imminent emigration. Heads of large industries and bankers with the advantage of foreign business and financial connections were naturally in a far better position to do this than the great majority of the middle classes, whose capital was largely tied up in business and real estate. In the first few months of the new regime, before the complete Nazification of all government offices, an appreciable number of wealthy Jews appear to have found ways to liquidate their assets and emigrate without absorbing any large capital loss. For this reason, there were a good many affluent Jews in the first wave of emigration 88 .
Member of the Jewish upper class who chose to remain in Germany for the time being began to spirit their capital abroad by means of trading deals and the investment of foreign firms their companies. In addition, the transferral of their firms, even if only to partial foreign ownership, afforded them the advantage of a certain protection from boycott measures and other encroachments, at least for a brief period of time.
By 1933, something tantamount to a new 'branch' of financial consultants and transfer experts had come into being. The Gestapo files report of their activities. Thus, a letter written by a Berlin financial adviser was confiscated in the offices of a Dortmund businessman and then passed on to the Gestapo. The writer of this letter offered his services to preserve Jewish capital, especially legal investment abroad'; this naturally would have to be compatible with German interests.' In addition, he claimed to have also arranged conversions of Jewish businesses and industries, so-called Gleichschaltungen' , without the Jewish partner having lost influence in the firm.' This economic adviser informed the Berlin Gestapo, in written reply to an inquiry, that he had got the idea of Gleichschaltungen because I wished to give Aryan friend an opportunity to find a position. It is a matter of general knowledge that non-Aryan businesses can be bought very cheaply today, since a large number of owners are contemplating emigration. I am involved in arranging Gleichschaltungen in order to enable non-Aryan entrepreneurs to emigrate, while at the same time helping my previously unemployed friends to find a position'. The Gestapo appears to have found this double motive understandable and convincing. It is characteristic of the situation at the time that this economic adviser was under constant Gestapo surveillance until 1941 but was allowed to continue his activities, as indicated by regular entries in Gestapo files. In 1935 and 1937, he was repeatedly interrogated and was briefly taken into custody. He had been anonymously accused of camouflaging Jewish firms as Aryan, buying up patents with Jewish money for illicit sale abroad, as well as engaging in the illicit sale and transfer of assets outside the country.' Yet in none of these cases could any punishable charge be proved against him. 89
This instance has been described here in detail because it presents a realistic picture of the concrete co-operation between German and Jewish official agencies, including the Gestapo, in promoting Jewish emigration. Such co-operation was already in effect by the beginning of 1933. Nourished by totally opposed motives, it led to an agreement that made possible the transfer of a portion of Jewish assets to Palestine and other countries. Only after it was stabilised and had been strengthened by its successes on the economic front and in foreign policy did the Nazi regime switch to a policy of expropriating Jewish capital and forcing Jews whose assets had been plundered and who were now destitute to leave the country. Earlier, when such an approach did not seem feasible, the regime was prepared to deal flexibly with the existing laws in the interest of accelerated Jewish emigration. Not only did this attitude lead to the conclusion of various agreements with representative Jewish bodies - such as the Haavara Transfer Agreement discussed below - it was also a key factor operative in individual initiatives. In the summer of 1933, the director of the Anglo-Palestine Bank in Tel Aviv, who had come to Berlin to participate in negotiations on the transfer of capital, wrote in his July 1933 confidential report:
Practical actions goes its own ways. It does not wait for the official bureaux, and can achieve a great deal. There are many avenues for individual action ... such as private agreements with persons or corporations who have payments to make in Germany, etc. It goes without saying that there is also the illegal way. Naturally, a businessman who has maintained contacts abroad over the years, the man who knows his way around the government agencies - and any clever and resourceful person - have things easier in this regard than some simple fellow, say a university graduate, who has twenty or maybe fifty thousand marks in liquid assets and is waiting for some administrative office that will arrange to get the money out of the country for him.' 90
The Haavara Transfer Agreement 91 came about through an initiative that was originally private. Sam Cohen, director of HLtd., a firm dealing with citrus plantations in Palestine, concluded a kind of clearing agreement with the Reich economy minister in May 1933. According to this agreement, every Jew wishing to emigrate was permitted to deposit a sum of up to RM 40,000 in a blocked account. In return, they received from Hanotea the full equivalent value in Palestine currency, based on the official exchange rate (similar to the pound sterling), in the form of real estate such as a house or a citrus plantation in Palestine. Hanotea in turn, obligated itself to use the funds in the blocked account for importing German goods to Palestine, mainly pipes, pumping equipment, fertilisers, and the like. In July 1933, the agreement with Hanotea was expanded to the sum of RM 3 million on the condition that the official Zionist organisation be involved in the scheme. 92
These negotiations sparked vehement discussion and dispute within the Jewish public in Palestine and in other countries. An arrangement that directly or indirectly helped promote German exports contradicted all efforts to organise a world wide boycott of German export goods as a protest against the persecution of Jews in Germany, including efforts by non-Jewish organisations such as the British trade union movement. The Haavara Agreement was the subject of public controversy and heated discussion in the Jewish press and at the Prague Zionist Congress in August 1933. The executive of the Zionist World Organisation initially hesitated to accept the transfer agreement and take over its implementation. However, when the financial situation of the German Jews continued to deteriorate and the urgent necessity for them to emigrate became absolutely clear, the 19th Zionist Congress in Lucerne decided that the entire activity of the Haavara scheme should be placed under the official control of the Jewish Agency for implementation. The desire was to rescue at least a portion of Jewish assets and to give to German Jews the possibility of emigrating to Palestine. According to the regulation of the British Mandatory Government for Palestine, there were annual immigration quotas for Jews without means, so-called capitalists who had the sum of least £1,000 Palestine (approximately RM 15,000 at the time) in their possession, were issued a 'capitalist immigration certificate'. That certificate enabled them to immigrate without any restrictions. 93
The circular letter issued by the Economy Ministry on August 28, 1933, informing all foreign currency bureaux about the signing of the Haavara Agreement, reveals something about the possible underlying motives of the German government. It is stated there, among other things, that the agreement had been concluded with the official Jewish organisations involved ... in order to continue to promote the emigration of German Jews to Palestine by granting the requisite sums - without putting an excessive burden on the foreign currency reserves of the Reichsbank, while at the same time increasing German exports to Palestine.' 94 The 'granting' of the 'requisite sums', which constituted a clear exception under foreign currency regulations in effect at the time, referred to the amount of at least £1,000 stipulated by the Mandatory authorities. In the first few years, this was provided by the Reichsbank in foreign currency at the official rate to emigrating Jews.
It is true that the Haavara Agreement did not promise the German side any additional influx of foreign currency, since all goods exported to Palestine were paid for in reichsmarks drawn from the blocked Haavara account. However, the Economy Ministry was doubtless banking on the anticipated stimulus for employment of the increased volume of exports. The government, overestimating the financial might of 'world Jewry,' also appears to have had definite fears about the impact of a world wide boycott of German products. It expected the foreign boycott efforts would be more successful than they actually turned out to be. The German consul general in Jerusalem, Heinrich Wolff, who actively supported efforts for the agreement, may have shared this apprehension, or may have been cleverly playing on such fears, when he pointed out the danger of further drops in exports as a result of the Jewish boycott in an April 1933 report to the Foreign Office in Berlin 95 .
After the agreement had been concluded with official Jewish representatives, including the German Zionist Federation (ZVfD), the Palaestina Treuhandstelle (Palestine Trusteeship Office, abbreviated 'Paltreu') was set up in Berlin. Two Jewish private banks - Warburg in Hamburg and Wassermann in Berlin - also had financial involvements with the Paltreu Office. The Haavara, registered with the Anglo-Palestine Bank, functioned as partner in Palestine. By the end of 1933, these institutions had already transferred some RM 1.255 million; this sum had risen to nearly 140 million by the outbreak of the war in September 1939. The monies transferred considerably eased the burdens of emigration to Palestine for approximately fifty-two thousand German Jews and their subsequent absorption there. In many cases, such emigration was possible at all only as a result of the Haavara scheme.
References:
80. JWSP , 1933/34, pp. 123ff, 215ff.
81.Ibid., p. 113.
82.Szanto, Erinnerungen , p. 153f.
83.Schaeffer, file no. 26.
84.Ibid., Szanto, Erinnerungen , p. 150ff.
85. C. V. Zeitung , 15 September 1933.
86.Wirtschaftshilfe der juedischen Gemeinde Berlin, Wiener Library, Tel Aviv, PC3/4, no. 4. The official exchange rate of the reichsmark was pegged early during the Nazi period at an overvalued RM 2.5 to the U.S. dollar (instead of the long-standing rate of 4.2 to the dollar) but was manipulated in an extremely complex manner, resulting in a panoply of multiple rates, depending on type of transaction. Cf. Howard S. Ellis, Exchange Control in Central Europe (Cambridge, Mass., 1941), especially pp. 233ΓÇô242. Also Gustav Stolper et al., The German Economy: 1870 to the Present (New York, 1967), especially p. 329 (chart).
87.See Barkai, Wirtschaftssystem , p. 136f.
88.Rosenstock, p. 378f.; Strauss 1980, p. 345; Strauss 1981, p. 348f.
91.The Hebrew word for 'transfer' ( haavara ) was also the official term in the German documents.
92. Haavara-Transfer , p. 21ff.
93.Ibid., pp. 19, 51. A detailed discussion of the Haavara Agreement in the Jewish public and press abroad preceded the Zionist Congress decision. One of the initiators, the head of the Political Department of the Jewish Agency, Haim Arlosoroff, was murdered in June 1933, a case that has never been fully cleared up. Withing the Jewish public, his murder was associated, most probably incorrectly, with the negotiations on Haavara. In any event, these public debates and discussions, as well as the later literature, prove just how misleading the subtitle of Black's book ( The Untold Story of the Secret Agreement... ) is. It is just as untrue that the story was 'untold' as that the Haavara Agreement was 'secret' in nature. Therefore, it remains astonishing that a reputable publisher engaged in such a sensationalist promotion campaign for the book and indeed stooped to publish the volume at all.
