-Caveat Lector-
an excerpt from:
Behemoth - The Structure and Practice of National Socialism
Franz Neuman
Oxford University Press�1942
Tronto/New York/London
532 pps. - first edition/out-of-print
--[2b]--
THE FINANCING OF THE NEW INDUSTRIES
State financial help has taken various forms, such as guarantees of profit or
turnover, or permission to write off investments in a short period. These
devices are not very different from the methods that every modern
capitalistic system uses in order to overcome the reluctance of businessmen
to undertake unknown risks. But Germany has also developed new methods of
financing the new technological processes, which led to so-called 'community
financing.' Its essence is the compulsion of the small and middle
entrepreneur to finance the expansion of the big one.
The new technology has thus led to the creation of new types of enterprise,
the most striking example of which is the corporate structure of the new
cellulose wool industry. Originally only two such plants existed, one being
run by the dye trust, the other by the Glanzstoff Bemberg rayon combine. New
works appeared imperative, and their regional distribution was necessary
since the consumers of cellulose wool are about equally distributed within
the federal territory. The capital for the establishment of the new works was
taken up under more or less pressure by the local textile factories. The
state then appointed experts for the management of the new corporations and
sometimes secured for itself a small share of the initial capital. The
shares, taken up with reluctance by the promoters, soon turned into a boon,
since they carried with them a quota for cellulose wool and thus secured raw
material for the textile manufacturers. Because many small textile
manufacturers bought the shares, they were fairly equally distributed, and
the board of directors very soon became the real power,* the more so since
the acquisition of new shares was dependent upon the consent of the minister
of economics, who used his authority to strengthen the hold of the combines.
In mid-1939, there were 11 cellulose wool plants. Very soon afterwards, they
merged first into cartels, then into combines, and within a year after the
foundation only four such combines remained. Besides the dye trust and the
Glanzstoff Bemberg combine, there was the Phrix group, dominated by the
textile combine of Christian Dierich, while the fourth group is still
dominated by the small and medium-size textile factories.[ * See P. 284.]
The financing of the lignite hydrogenation industry is even more striking.
The capital requirements are immense and only the wealthy dye trust could
take the risk of constructing such a plant (Leuna). By a decree Of 28
September 1934, therefore, a 'compulsory community of the lignite industry'
was created, composed of an lignite mines with a yearly production Of 400,000
tons or more. The community then set up a joint stock corporation for the
production of synthetic gasoline from lignite, the so-called
Braunkohlen-Benzin (Brabag). Ten enterprises were attached, in contrast to
the organization of the cellulose wool industry, in which hundreds of
factories are co-ordinated. The big ten control the whole production of
synthetic gasoline from lignite. With the exception of two state-owned works,
only the powerful combines are represented�Wintershall, Count Schaffgotsch,
Flick, the steel trusts, and the dye trust. The supervisory body of the
Brabag also reads like a list of the new elite. The party hierarch, Secretary
of State Keppler, is surrounded by delegates of the combines, who are often
leaders of their economic groups, by bankers, such as Kurt von Schroder, the
broker of the Papen and Hitler understanding of January 1933, and by
ministerial bureaucrats�but only four members of the supervisory body are
civil servants or delegates of the state.
The new technology and the new financing methods have undoubtedly accentuated
the process of monopolization.
THE ELIMINATION OF SMALL BUSINESS
While the cartel system has already eliminated inefficient and unreliable
businessmen,* legislative measures have opened a frontal attack on the
inefficient handicraftsman and retailer. Two such decrees have been enacted,
one for the 'purification of retail trade,' on 16 March 1939,[49] the other
'for the carrying out of the Four Year Plan in the sphere of handicrafts,' on
22 February 1939.[50] The aims of the decrees are twofold: to solidify the
position of the healthy entrepreneur and to gain labor power. Inefficient
retailers and handicraftsmen can be compulsorily liquidated without
indemnification. For retailers, the economic group carries out the
liquidation in conjunction with the local party leader, the local labor
exchange, and the trustee of labor. Handicrafts are 'purified' by the
chambers of handicrafts. The 'purified' retailer and handicraftsman become
manual laborers, thus sinking from the level of independence to the lowest
scale of the proletariat. At the handicrafts conference Of 7 May 1938,
Minister of Economics Funk reported that 90,448 out of 600,000 one-man plants
had been closed in 1936 and 1937, and that this process was by no means at an
end (Frankfurter Zeitung, 9 May 1938). In February 1939, Ministerial
Councillor Dr. Munz mentioned a figure of 104,000 closed one-man workshops
and also added that the trend would continue (Rheinisch-Westphdlische
Zeitung, 7 February 1939). These figures refer to the situation prior to the
enactment of the purification decrees. Funk candidly stated that handicrafts
had to bear the increase in the cost of production by a decrease in profits.
The absolute number of handicrafts enterprises fell from 1,734,000 in 1934 to
1,47 1,000 [51] on I April 1939. Figures for the decline of the retail trade
are difficult to gather. But the federal coal commissioner, appointed by
Goring to raise the efficiency, has announced that the number of coal
retailers (70,000) must be reduced by half in order to raise the
profitability of the remaining members of the trade.[52][ * See pp. 264.]
This process is intensified by the price-control measures, which often shift
burdens resulting from price cuts or price stabilization to the wholesale and
retail trader by either cutting down or freezing the trade margin.[53]
The trend moved sharply upwards during the present war. Many plants in the
consumers' goods industries (textiles, leather, soap, chocolate, and so on)
have been shut down. Since spring 1940, hundreds of thousands of workers
employed in the consumers' goods industries have been 'combed out' and
transferred into producers' goods industries and into the auxiliary army
(organization Todt and labor service). In 1940 alone, 480,000 men were thus
set free.[54] Some of the closed plants receive community help on the basis
of the decree of 19 February 1940, a financial assistance collected by and
within the economic groups. Others have been allowed to continue as mere
distributive agents. They had to give up production but are allowed to
merchandise the products manufactured by the more efficient plants. The trend
in the consumers' goods industries, produced by rationing, is thus in
accordance with that in the producers' goods industries, namely the wiping
out of small and medium-scale business.
This process is partly desirable, if it is carried out with sufficient
safeguards. For the economic position of the enormously swollen distributive
agencies and of small handicrafts has indeed become untenable and incurable.
In his book on the social stratification of the German people, the German
sociologist Theodor Geiger has distinguished three social types of handicraft
and the retail trade: the capitalist, the middle type, and the proletaroid.
And, on the basis of the industrial census of 1925, he found the following
ratio between them: [55]
Handicrafts: 4.5�65.5�30.0
Retail Trade: 2.4�65.0�33.5
According to these statistics, about one third of all retailers and
handicraftsmen are economically proletarians, although they are still
independent businessmen. This antagonism between economic reality and the
demand for social prestige could not be and had not been solved under the
Weimar Republic. National Socialism was compelled by the necessity of
securing the consent of at least some sections of the middle classes to
restore to them a sound economic position by destroying the smallest and most
impoverished groups of the middle classes. However bitter may be the descent
into the stratum of the proletariat and however brutally the whole process
may have been carried out, any other way was unthinkable. But the profits
accrued not only to the remaining sections of the middle classes, but also to
big business, which, by freezing or even cutting trade margins for the
trader, was able to shift some of the burdens resulting from the price policy
to the weakest groups in society. This whole process is not yet ended. In
fact there seems to be a bitter discussion regarding the future of the retail
and wholesale trades, as may be seen from the passionate defense of the
function of trade by the general manager of the national group that covers
trade.[56]
THE CORPORATION STRUCTURE
The legal form in which the process of monopolization is carried out is the
joint stock corporation.
The American scholars, Berle and Means,[57] have shown in detail the
techniques by which small amounts of capital are able to dominate large
combines. These devices have been known and practiced in Germany ever since
joint stock corporations played a major role. Even the form of the joint
stock corporation is a departure from the principle of the free entrepreneur,
and this was recognized by Adam Smith. The modern corporation, whether
monopolistic or not, has already changed the function of property.[58] By the
very form of the joint stock corporation, the capital function is divorced
from the administrative one and thereby creates the germ for the development
of a managerial bureaucracy, destroying that very cornerstone of free
competition, the free entrepreneur, who risks his capital and labor in order
to achieve certain economic ends. However, this divorce need not be harmful
so long as the capitalists, the stockholders, obtain control of the
management-that is, so long as the corporations are democratic bodies. But
that is not and cannot be the case. It was Walther Rathenau, who, in a little
pamphlet entitled Vom Aktienwesen, drew attention to the fact that the
democratic structure of the joint stock corporation inevitably gives way to
an authoritarian one.[59] Within the joint stock corporations the very same
changes occur as in a political democracy. Just as the cabinet becomes
independent of parliament, so the board of directors establishes its
sovereignty over the stockholders. Preferential stocks, voting by proxy
(where the power of attorney is already contained in the conditions of the
banks in which the stockholder deposits his stock), the very size of the
corporation, which makes it both impossible to convene meetings of thousands
of stockholders and impossible for stockholders to attend, and a number of
other devices have made the stockholder powerless. Just as in parliament the
power of the individual deputy gives way to that of political parties bound
by strict discipline, so the stockholders' meeting is no longer a discussion
between industrial capitalists, but a struggle between powerful monopolistic
groups, which bargain with the management and support it when their own ends
are attained.
The power of the management under the Weimar Republic was in many cases used
for entirely selfish purposes, even sacrificing the well-being of the
corporation proper and leading to enormous capital destruction. Only a hint
can be given how the authoritarian power of the management was misused. The
famous Schultheiss Brewery in Berlin was financially ruined by the chairman
of its Vorstand (president), who, with the help of the banks, acquired the
stock of his own corporation in order to facilitate a merger with an
overcapitalized concern, a mixture of factories, mills, cement works, and
machine plants. The ensuing loss of 70,000,000 marks had to be home by the
brewery, though the stockholders and even the members of the supervisory
board knew nothing of the transaction. The famous insurance corporation of
Frankfort o.M. was reduced to complete bankruptcy by its directors, who
considered the corporation merely a pot from which to rob as much as possible
in as short a time as possible. The famous wool concern (Nordwolle) was also
ruined by the criminal activities of its presidents, costing more than
200,000,000 marks. The directorate of the North German Lloyd bought shares in
its own corporation in conjunction with members of its supervisory council
and thrust the ensuing loss squarely on the North German Lloyd when the
shares fell on the stock exchange. The famous industrialist Otto Wolff sold
the shares of his own corporation to another one that he controlled at a
price far exceeding the value, earning a sum of 10,000,000 marks. The
managers of a leading department store, Karstadt, speculated violently. These
are just a few examples of the misuse for selfish purposes of the
independence of the management from control.
This phenomenon has a deep political significance, too. For just in that
period the National Socialist party began violent propaganda against
corruption within the Social Democratic party, because some of its leaders
were, or were asserted to be, connected with speculators like the Barmats,
Kutisker, and so on. But while the criminal activities of the small fry
received enormous attention in the German press and led to severe political
reverberations, really big cases of the misuse of the corporate structure for
the furtherance of the egoistic ends of the managers had practically no such
political consequence. The anti-corruption campaign of the National Socialist
party was solely and exclusively directed against Jewish and Social
Democratic corruption.
The rule of the board, by which we understand the board of managing officers
and the supervisory council, was sanctified by the theory of the 'enterprise
as such,' [60] that is, by the permeation of individualistic legal theory
with the institutionalist doctrine. This theory maintains that a corporation,
if it is economically and socially powerful, is divorced from its
shareholders and the managing board, and that it constitutes an institution
the fate of which must not be identified with that of the persons owning and
directing it. Rathenau, for instance, had made the point that a bank like the
Deutsche Bank, because of its size and national importance, must not be
allowed to go into voluntary liquidation, since public interest demanded its
continued operation.
>From this institutionalist * point of view, the right of the indiSee P. 448
on institutionalism.
vidual shareholder was a mere nuisance and in consequence the theory became
one of identifying the enterprise with its board, which was thus freed from
any control by the shareholders.'". The German courts slowly adopted this
doctrine and the democratic ministry of justice, in its draft for a new
company act, subscribed to the view that 'the interests of the enterprise as
such are as worthy of protection as the individual interests of the
shareholders.' It is worthwhile recalling the criticism by one of Germany's
outstanding lawyers of this draft and of its underlying institutionalist
philosophy.
It is surprising to see how, in an age of democracy and sovereignty of the
people, an oligarchification of company matters is aimed at, degrading the
shareholders to a mere misera contribuens plebs. Even the outworn stock
phrase of the organism of the company had to be used to glorify a fascist
tyranny of the board, not to speak of minorities for the benefit of which
otherwise�in Geneva and elsewhere�such well-meant speeches are nowadays made.
These bureaucratic tendencies cannot be sufficiently strongly resisted. They
originate from a totally wrong principle. As in the case with the state, so,
too, the company does not serve its own purposes, but those of its members,
and the gentlemen of the board are not masters, but servants. L'etat, ce sont
nous.[62]
By a decree of the president of the Reich, on 19 September 1931, the German
company law was changed under the impact of the financial scandals we have
just mentioned. But the decree did not break the power of the board. It
merely demanded more publicity (in balance sheets, profit and loss accounts,
and reports of the directors). It instituted compulsory auditing by certified
accountants, made the acquisition of the company's own shares more difficult,
and allowed for the reduction of capital in an easier form.
The National Socialist company act of 1937 carries these principles still
further. The middle-class ideology of National Socialism had frowned upon the
joint stock corporation and its anonymous character. An act of 1934,
therefore, allowed the conversion of joint stock corporations into
partnerships or limited-liability companies in a more or less formless
manner. The act of 1937 provides that the minimum capital of joint stock
companies is 500,000 marks and that the nominal value of a share must be at
least 1,000 marks. Exemptions are, however, admitted. The act further allows
the dissolution of a company whose board 'grossly violates the law or the
principles of responsible business methods.' The main feature of the new act,
however, is the re-definition of the relation between board and shareholders.
While the Academy for German Law desired the introduction of the leadership
principle, however, not of an appointed, but of an elected leader, the
statute itself does not go as far, but nevertheless strengthened the position
of the board against 'the mass of irresponsible shareholders who largely lack
the necessary insight into the position of business.' The shareholders have,
in consequence, lost most of their rights. Normally now, the accounts are
established by the supervisory council if it accepts them as they are
prepared by the board of directors. The shareholders' meetings are thus
deprived of the right to accept or reject the yearly accounts unless the
board of managers and the supervisory council submits them to the meeting, or
unless the supervisory council rejects the proposal of the board of managers.
This change, of course, merely sanctifies a de facto practice, since in
reality the meetings of the shareholders had usually been a mere formality.
Besides, the shareholders' meeting is formally forbidden to decide questions
of management. Plurality shares are admitted only with the permission of the
federal minister of economics.
The National Socialist act thereby gives legal sanctions to a trend apparent
in all modern corporations. It now lays the sacrificing of the rights of the
shareholders to the very principle of company law.
Under National Socialism, the number of joint stock corporations declined,
but the average capital invested in each corporation increased. [63] There is
no doubt, therefore, that the new corporation law and the law allowing the
conversion of joint stock corporations into partnerships materially
contributed to the process of monopolization.[64] Shareholders are mere
rentiers. Interlocking directorates, proxy voting, plurality votes, exchange
of shares, pooling of profits, all these well-known devices have made
possible the erection of a system of combines not surpassed in any country,
not even the United States.
WHO ARE THE MONOPOLISTS?
Are the monopolists merely managers, or are they only or also genuine private
capitalists? The outstanding achievement in building up an industrial empire
is that of Friedrich Flick, industrial condottiere who outranked every
industrial competitor, above all, Fritz Thyssen. His career is meteoric. From
the middle German steel industry, he soon reached into the United Steel
Trust, into the North German steel industry (blast furnace work, Lubeck). He
acquired a coal basis (Harpen and Essen), he got control of a considerable
lignite basis (formerly Petschek), and he finally again entered into
manufactory.[65] This process started in 1936 and reached its height in 1937.
Perhaps still more surprising is the rise of the Quandt combine, though its
size cannot be compared with the big ones. The Quandt family, originally
small textile manufacturers, soon entered into machine construction
(Accumulatoren Fabrik, Hagen), into armament and munitions, and from there
into metallurgy (Durener Metall), thence into electricity, transportation,
building construction, lignite, and potash. In 1939 its general manager took
over the management of parts of the Hermann Goring works.[66] The combine is
a family affair, as is the Flick combine. How this phenomenal rise can be
explained we do not know. Perhaps the fact that the leader of the combine was
Mrs. Goebbels' first husband may help to explain it.
Rapidly rising to the fore is the Otto Wolff combine.* Wolff started in trade
and then acquired minorities in the United Steel Trust and in the Mansfeld
Copper combine. But he soon exchanged his minorities for acquisitions that he
controlled exclusively, and rapidly built up a kingdom, if not an empire.
>From Jewish hands he acquired the steel mills of Thale. He then gained
control of the Weser iron works and of the Bochum iron and steel mills. The
Anschluss with Austria rounded off his kingdom, after he had already pushed
into the Saar territory.[67] Otto Wolff had already played a considerable
role under the Weimar Republic, closely collaborating with the right wing of
the Center party, playing the cultured gentleman and even writing a
biographical novel about Ouvrard, Napoleon's financial condottiere. His
combine reached its height in 1937.[ * Otto Wolff died in 1939.]
The Mannesmann combine is well known to all students of international
relations. Under National Socialism it realized an old dream, its extension
from a specialized to an all-embracing combine. It is the most distinguished
beneficiary of Aryanization, but it went far beyond swallowing Jewish
property. In 1935 its famous steel-pipe works acquired a rolling mill in the
Saar. In 1936 it rounded off its holdings in the Kronprinz; corporation. In
1938 it acquired further rolling mills.[68] It is not by chance that its
general manager, W. Zangen,* is also the leader of the national group
industry.[ * See also P. 390.]
The Count Ballestrem[69] combine knew how to establish its absolute control
in the Upper Silesian iron industry, pushing from there into lower Silesia
and lower Austria. From the Prussian state it acquired the remaining capital
of the Upper Silesian mill works. This expansion gave no rest to the other
Upper Silesian, Count Von Schaffgotsch,[69] whose combine rounded off its
holdings in the Upper Silesian coal and mining industry, profiting heavily
from Aryanization.
Perhaps the most striking phenomenon is the rise of the Wintershall potash
combine. It offers a convincing proof that the cartel system, by guaranteeing
differential profits, gave rise to a combine that invested its savings in a
large number of other branches. Even under the Weimar Republic the
Wintershall combine accounted for about 50 per cent of all the potash
produced in Germany. In 1936, it incorporated a competitor, the Burbach
combine, and reached out into oil production, oil refining, coal and lignite
mining,[70] and then into the production of synthetic gasoline. The only
remaining potash competitor, the Salzdethfurth combine, followed suit.[71].
It strengthened its position in potash, acquired the Otto Wolff holdings of
copper shares, and finally entered into lignite mining, again profiting from
Aryanization.
We cannot continue this story. We have not even mentioned the old combines,
the Krupp, Haniel, Gutehoffnungshutte, Klockner, nor have we mentioned the
concentration in the textile, electrical, glass, cement, and ceramics
industries. It is the same story repeatedly. It is not restricted to the
production goods industry, but is equally true of consumption goods
industries. In the cigarette industry, there is one combine, Reemstma, which
had always supported National Socialism and had found financial support from
the Weimar Republic, which had granted respites from the payment of cigarette
taxes and had finally waived a considerable amount.
This combine now produces 95 per cent of all cigarettes.[72] The same process
is also true of banking, where it has taken on tremendous dimensions. Private
banks rapidly decreased.[73] The big banks again expanded and soon entered
industry, thus playing havoc with the National Socialist theory that creative
capital should not be dominated by financial companies. According to an
estimate of the German Business Cycle Institute,[74] all raw and
semi-manufactured goods produced within Germany and about half of all
finished industrial goods were bound by monopoly or cartel agreements.
This monopolistic structure is not maintained solely by the general managers
(Generaldirektoren), but just as much by capitalists.* Otto Wolff, Friedrich
Flick, and Gunther Quandt are not managers, but powerful capitalists. They
are not rentiers who at the end of the year cut the dividend coupons of their
stock certificates and cash their dividends. Nor are the managers themselves
simply managers, that is, salaried employees. They have long ago assumed the
role of capitalists proper, investing their savings in shares and often
speculating with the funds of their own corporations, thereby strengthening
their personal financial power within them. Moreover, the managerial
positions are often as hereditary as those of the capitalists proper.[ * See
also the chapter on the New Society, pp. 385-91.]
At this stage we need only show that markets and competition have by no means
been abolished. The conflicts are reproduced on a higher level and the
incentives of competition remain operative. The defeat of Thyssen is a major
example. His economic decline was an accomplished fact long before his flight
from Germany, which, in reality, may have been merely the consequence of his
defeat by his competitors, Friedrich Flick and the Goring combine.
Competition is even intensified by the scarcity of raw materials, and the
state itself is drawn into the struggle between the competing combines.
Cartellization and monopolization are not the negation of competition, but
only another form of it. Following some National Socialist economists, we may
distinguish three types of economies existing within Germany: a competitive
economy, a monopolistic economy, and a command economy; [75] and, on the
basis of our material, we may agree with their conclusion that the
monopolistic economy is at least as powerful an element as the command
economy. We may even go beyond this statement and maintain that, far from
negating competition, cartels assert it. The struggle for production or sales
quotas within the cartel-for raw materials, for capital, for
consumers-determines the character, the stability, and the durability of the
cartel. It is true that the more monopolistic the system, the less it is open
to scrutiny. The veils become thicker, the anonymity takes ever more
complicated forms. But competition, even cut-throat competition, still goes
on. Opponents are compelled to surrender not by price cutting or ruinous
underbidding but by the cutting off of supplies of raw materials and capital.
Entrepreneurial initiative is not dead; it is as vital as ever before and
perhaps even more so. Karl Lange, general deputy for machine building and
general manager of the economic group covering the machine industry, in
discussing the performance of the German machine industry in comparison with
England and America,[76] again stressed the fact that without the energetic
co-operation of private industry success could not have been attained. The
motivating power of expansion is profit. The structure of the German economy
is one of a fully monopolized and cartellized economy.
pps. 255-292
--[notes]--
III: THE MONOPOLISTIC ECONOMY
1. The most important contribution in this field is Karl Renner, Die
Rechtsinstitute des Privatrechts und ihre soziale Funktion, Tubingen, 1929
(1st ed. published under the pseudonym Josef Kamer, 1904, in Vol. 1 of the
Marx-Studien). I adapted these ideas to the German situation 1920-32 In my
book Koalitionsfreiheit und Reichsverfassung, Berlin, 1932, and to National
Socialism in my article 'Der Funktionswandel des Gesetzes im Recht der
burgerlichen Gesellschaft,' in Zeitschrift fur Sozialforschung, 1937 (VI),
PP- 542-96, trans. by the University of Chicago in Second Year Course in the
Study of Contemporary Society, 8th ed., Chicago, 1939
2. Adam Smith, A Theory of Moral Sentiments, 6th ed., 1790, Vol- 1, Part in,
Ch. 3, pp. 339; and Vol. 1, Part II sec. 11, Ch. 2.
3. Adam Smith, Lectures on justice, Police, Revenue and Arms (Cannon ed.),
Oxford, 1890, pp. 177
4. Adam Smith, Wealth, Book IV, Ch. 8.
5. Ibid. Book v, Ch. 1, 31. iii, Art. 1.
6. Hegel, Philosophy of Right, trans. by Dyde, sec- 71
7. Reichswirtschaftsgerichtsrat Dr. W. Rittgen, 'Berufsanforderungen im
Rundfunkgrosshandel,' in KR, 1940 (38), pp. 321-33
8. A. Kaumann, 'Auswirkungen der An- und Aberkennungsrichtlinien" in
Rundfunkbandler, 12 April 1939, P. 297
9. Decision of the federal economic tribunal of 12 July 1939, KR, 194o (38),
pp. 13
10. Claire Russell, 'Die Praxis des Zwangskartellgesetzes; in ZS, 1937 (97),
PP499-548, esp. pp. 500
11. KR, 1940 (38), pp. 335
12. KR, 1940 (38), pp. 337 (Decree Of 28 September 1940).
13. KR, 1940 (38), pp. 82 (Decree Of 27 January 1940,[11)
14. KR, 1940 (38), pp. 42.
15. In Preussische Jahrbficher, 1903 (110), p. 7
16. DAZ, 27 November 1938.
17. DAZ, 2 November 1938.
18. Franz Bohm, Wettbewerb und Monopolkampf, Berlin, 1933, Pp. x and 358
19. FZ, 18 November 1938
20. Leonhard Miksch, WK. 1936 (15), No- 4
21. Barth, Op. Cit. P. 82.
22. Ibid. pp. 75
23. Ruling of 12 November 1936, KR, 1936 (34), PP- 753-6o, and Barth, op.
cit. pp. 75
24. DV, 1941, No. 22, P. 825
25. Otto Suhr, 'Umwalzungen in der Glasindustrie,' in WK, 194o (19), pp.
83-92.
26. Leonhard Miksch, 'Bewirtschafrungskartelle,' in WK, 1940 (19), pp. 24-32,
27. KR, 1940 (38), pp. 95
28. Karl Euling, Die Kartelle im oberschlesischen Steinkohlenherghau, Jena,
1939
29. In the Ruhr coal syndicate, 100,000 tons sale and 150,000 tons
consumption secure one vote.
30. Gunter Keiser, 'Der jungste Konzentrationsprozess,' in WK, 1939 (18), pp.
136-56, 214-34; esp. pp. 150.
31. Acquired the iron and steel work Thale; see KR, 1939 (37), P. 514
32. Acquired Rawack and GrUnfeld�now called A.-G. fur Montaninteressen; see
KR, 1939 (37), p. 514
33. Acquired Wolff-Netter-Jacobi, see KR, 1938 (36), p. 179, and the Hahnsche
Werke (capital 9,900,000 marks), KR, 1938 (36), p. 318.
34. DV, 1941 (15), No. 22, P. 820.
35. The account is based on the following sources: FZ, 30 March 1941, p. 15;
FZ, 19 April 1941, p. 2; BA, 1941, No. 71 p. 151
36. Borussia limited liability Corp.; Deutsche Erdol, A.-G.; Gewerkschaft
El-werath; Wintershall A.-G.; Preussische Bergwerks- und Hutten A.-G.; I. G.
Farbenindustrie A.-G.; Braunkohle-Benzin A.-G.; Deutsche Bank; Dresdner Bank;
Reichskreditgcsellschaft; Berliner Handelsgesellschaft.
37. 'Der Montanblock im Westen,' in FZ, 11 July 1941. On the penetration of
the German banks in the conquered territories, cf. 'Die deutschen Banken in
Kontinentaleuropa,' in BA, 1941, No. 10, P. 214
38. Cf. the excellent paper 'Technological Trends and Economic Structure
under National Socialism,' in Studies in Philosophy and Social Science, 1941
(7), pp. 226-64, by Dr. A. R. L. Gurland, with whom I have discussed all the
problems of this section of my book.
39. Such as: Krupp, Hoesch, Mannesmann, United Steel Trust, Flick, etc. Cf.
Deutsche Montankonzerne, 1929 (Spezialarchiv der deutschen Wirtschaft),
Berlin, 1929 (publication sponsored by the Dresdner Bank).
40. The connection between chemical industry and coal is discussed in detail
in Die grossen Chemie-Konzerne Deutschlands (Spezialarchiv der deutschen
Wirtschaft), Berlin, 1929.
41. FZ, 13 March 1941.
42. On coal output see Gurland, op. cit.; on gasoline and other oil
production see General Loeb in VP, 1938, No. 2, and FZ, 18 April 1939.
43. According to Gurland, op. cit., the volume of buna production must be
about one fourth or one third of the total German rubber requirements. See
'Chemie-Bilanz 1938,' in DZ, 1 January 1939
44. On machine production, see Hans Ilau, 'Der Maschinenhunger,' in WK, 1939
(18), pp. 19-29.
45. Ibid. P. 24
46. Otto Suhr, 'Umwalzungen in der Glasindustrie,' in WK, 1940 (19), p. 83
47. On production of cellulose wool and rayon see Friedrich Sarow,
'Zellwolle,' in WK, 1938 (17), PP- 263-76; and Wochenbericht, Institut fur
Konjunkturforschung, 9 March 1939 and 15 March 1939.- Cellulose wool
production should be increased by 1939 to 200,000 and by 1940 to 275,000
tons. See FZ, 4 June 1939. Also: Friedrich Dorn, 'Die Zellstoff- und
Papierwirtschaft in und nach dem Kriege,' in VP, 1940, No. 23, p. 1033
48. On production of iron, steel and aluminum, see: Horst Wagenfuhr,
'Kontrollierte N.E.-[non-ferrous) Metalle auf dem Weltmarkt,' in KR, 1939
(37), P. 211.
49. SP, 1939 (48), p. 403.
50. VP, 1939 (3).
51. Handicraft statistics:
Registration of Extinction of
New Plants Plants Decrease
1936 104,234 132,109 27,875
1 937 75,153 137,726 62,573
1938 59,700 122,642 62,942
239,087 392,477 153,390
Source: VP, 1939 (3), P. 1029.
52. FZ, 9 January 1941
53. Molders, Vol. II group 6, p. 69. Decree on prices and trade margins in
the trade with automobiles and spare parts of 18 February, 17 April, 17
November 1937
54. Erich Kasler, 'Stillegung und Wiederaufleben,' in DV, 1941 (15), No.
35/36, pp. 1254-9. For the soap industry, cf.: Decree of 6 October 1939
(Molders, Vol. II group 6, p. 413) and the ruling of the price commissar No.
115/39 Of 28 October 1939 (Molders, Vol. II group 6, p. 414a) where the
closing down of plants and their transformation into mere sales agencies is
regulated.
55. Geiger, Die soziale Schichtung des deutschen Volkes, Stuttgart, 1932, p.
74
56. Otto Ohlendorf, 'Kriegswirtschafdiche Gegenwartsfragen im, Handel.' in
VP, 1941 (5), pp. 513-15
57. A. A. Berle and G. C. Means, The Modern Corporation and Private Property,
New York, 1935
58. Rudolf Hilferding, Das Finanzkapital, Vienna, 1923, p. 112.
59. Rathenau, from Aktienwesen, Berlin, 1918.
60. Excellent remarks on the German corporation law by F. A. Mann, 'The New
German Company Law and its Background,' in Journal of Comparative Legislation
and International Law, November 1937.
61. Excellent critique by Arthur Nussbaum (now at Columbia University), in
Juristische Wochenschrift, 1932, p. 2585
62. Hans Reichel, in Juristische Wochenschrift, 1930, p. 1459. Translation
from Mann's article. On the reactionary character of the institutionalist
theory, see Neumann, OP. Cit. PP. 587-95.
63. Concentration of capital in joint stock corporations:
Total Capital in Average Capital
Number Billion Marks in Million Marks
1931 10.437 24.6 2.25
1938 5.518 18.7 3.39
Source: WS, 1939, P. 237.
64. Keiser, op. cit. p. 154-
65. Ibid. p. 137
66. From Freies Deutschland, 1939 (3), 27 July
67. Keiser, op. cit. p. 215
68. KR, 1939 (37), p. 448
69. KR, 1938 (36), p. 116.
70. KR, 1938 (36), pp. 115, 234
71. Keiser, op. cit. p. 142, and KR, 1938 (36), p. 114
72. Keiser, op. cit. p. 147. Three plants in 3934 produced 83.3 per cent of
all cigarettes. See KR, 1938 (36), P. 235. The cigarette industry is
protected by a decree of the minister of economics, prohibiting the
establishment of new plants, of 11 March 1938. See KR, 1938 (36), P. 285
73. On bank statistics, see BA, 1941, No. 4, p. 90.
74- Wochenbericht, Institut fur Konjunkturforschung, 1936 (9), p. 198.
75. Willy Neuling, 'Wettbewerb, Monopol und Befehl in der heutigen
Wirtschaft,' in ZS, 1939 (99), PP- 279-318
76. 'Maschinenindustrie und Kriegspotential,' in VP, 1941 (9), p. 512.
-----
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