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Financing the SS.

Milton Goldin explores Himmler's ambitions to establish the SS as a `state within a state', and highlights schemes the Nazis devised to finance the organisation through industrial enterprise and plundered Jewish assets.

Long before links between Swiss banks and the Third Reich triggered renewed interest in Nazi spoliation, historians agreed that Reichsfuhrer-SS Heinrich Himmler successfully manoeuvred to create a mighty `state within a state'. But how the SS acquired more than forty businesses with some 150 plants and factories, paid for the Final Solution of the 'Jewish Question' and financed the training and equipping of thirty-eight divisions has received less attention,

Nor has Himmler's commercial agenda been studied in detail. Consider his efforts to persuade Germans to drink mineral water instead of beer (ostensibly to reduce drunkenness). By 1942, thanks to expropriations of Czech Jewish and non-Jewish concerns, the SS was Europe's leading mineral water distributor. Heartened by success, it ventured into fruit concentrates, despite the fact that SS theorists continued to disclaim interest in mere profit.

There were previous indications that Himmler would devote close attention to cash-flow issues. Even as late as 1938, only 3,500 of 14,000 SS officers received monthly pay. Men also had to pay for their uniforms. What accounted for this situation (apart from Himmler's stinginess) was that operating funds came grudgingly from Minister of the Interior Wilhelm Frick, an enemy of Himmler from the Nazi Party's early Munich years, and from the Party's treasurer, Franz Xaver Schwarz, whose close audits of expense accounts caused fear and trembling among National Socialists. At the end of 1936, Standartenfuhrer Oswald Pohl, the senior administrative and economic officer of the SS, dejectedly wrote to Schwarz that he did not have sufficient funds for proper training exercises.

The predicament could not be blamed on lack of SS zeal. On March 21st, 1933, the Volkischer Beobachter announced that the organisation would henceforth administer a model', 5,000-inmate `concentration camp' near Dachau. In June, Oberfohrer Theodor Eicke, recently a patient in a psychiatric clinic, became commander of the Dachau camp. Eicke wrote a camp manual; among guiding principles, tax-payers must not be burdened. Subsequently, in the camp at Oranienburg, inmates purchased `camp money' with reichsmarks from home, which they used to buy necessities at exorbitant prices in the camp canteen. After Kristallnacht in November 1938, SS guards in Dachau sold metal bowls and spoons to Jewish captives for RM5 each. A fortunate few inmates able to pay ransoms purchased freedom.

SS funding also came from a Big Business group created by Wilhelm Keppler, a gelatine manufacturer, to advise Hitler. In 1937 an offshoot of this, the new Freundeskreis Heinrich Himmler `Circle of Friends of Heinrich Himmler', began meeting on a monthly basis. Himmler, not always present, checked attendance records, but the Circle's forty members neither requested nor received accountings of their contributions. The Reichsfuhrer-SS used proceeds to purchase arms and to finance a Society for the Protection and Maintenance of German Cultural Monuments.

Earlier, Himmler had initiated commercial enterprises with a publishing house that printed antisemitic nonfiction and novels. In 1936, he authorised the purchase of a porcelain factory in Allach, that subsequently moved to Dachau in 1937. But Himmler's personal staff purchased half the output at 40 per cent of the list price, and thus limited profits.

The business that eventually proved the most lucrative for the SS was, not surprisingly, the one most clearly attuned to Hitler's interests. The Fuhrer made clear that he planned to reconstruct Berlin. Thus in 1937, Himmler created the Deutsche Erd- und Steinwerke GmbH (German Excavation and Quarrying Company, Inc., or DEST), which produced building materials and was the first of four SS corporations. A second, Deutsche Ausrustungwerke GmbH (German Equipment, Inc.), later operated factories in concentration camps to produce bread-making machinery and cutlery; a third, the Deutsche Versuchsanstalt fur Ernahrung und Verpflegung GmbH (German Experimental Establishment for Foodstuffs and Nutrition, Inc.), managed herb farms, forests, and fisheries; and finally, the Gesellschaft fur Textil- und Lederverwertung GmbH (Society for Textile and Leather Work, Ltd.), in Ravensbruck, the women's concentration camp, produced SS uniforms.

Hitler's determination eventually to reconstruct much of Germany guaranteed DEST's future. He approved the use of camp inmates as cost-free labour, and Himmler obligingly opened camps at Flossenburg, Gross Rosen and Mauthausen to take advantage of nearby granite quarries. With a subsidy of RM9.5 million from Albert Speer, chosen by Hitler as chief architect to rebuild Berlin, DEST constructed the world's largest brickyard in Oranienburg.

These large commercial ventures required bank loans, and the Dresdner was overwhelmingly the SS's bank of choice. Three members of its executive board -- Dr Emil Meyer, Dr Karl Rasche, and Dr Fritz Kranefuss -- were reserve SS officers. Rasche, later chairman of the board, missed only five Circle meetings.

It depressed Himmler that Hitler evinced little interest in a cherished SS dream -- to create vast armies which would require large SS budgets. The question was how to counter the Fuhrer's arguments that current SS units sufficed and warfare could be left to Germany's armed forces.

On the dark side for Himmler, some Party leaders, and even Hitler on occasion, thought the Reichsfuhrer-SS mentally unhinged. Alte Kampfer noted that Himmler had experimented early in his career breeding super-chickens. It amused the Fuhrer that Himmler dabbled in astrology and Aryan head-measuring.

What changed the Fuhrer's mind in January 1942 about the need to expand Waffen-SS divisions was the unparallelled ferocity with which three such units -- Das Reich, Leibstandarte Adolf Hitler, and Totenkopf -- fought on the Eastern Front during that winter. Hitler agreed to an increase. But he baulked at an SS industrial empire. Given staggering Soviet manpower losses, he reasoned that Stalin's armed forces must soon collapse. Moreover, he had another assignment for Himmler.

On January 20th, 1942, Obergruppenfuhrer Reinhard Heydrich, Himmler's second-in-command, chaired the infamous Wannsee Conference. Heydrich's purpose was not to announce the Final Solution, about which attendees already knew, it was to ensure interagency co-operation and discuss strategy and financing. Among Heydrich's directives, Sturmbannfuhrer Adolf Eichmann, chief of Gestapa IVB4, the SS's Jewish office, would arrange deportation financing. (Eichmann would deceive Jews into paying for their own deportation.)

Two weeks after the conference, Himmler and Pohl reorganised SS administrative and economic offices to form the SS Wirtschaft-und Verwaltungshauptamt (Economic and Administrative Head Office, or WVHA). On April 16th, the Inspectorate of Concentration Camps became part of the WVHA, and on the 20th, Himmler promoted Pohl to obergruppenfuhrer und General der Waffen-SS, making him the third highest-ranking officer in the SS. Eighteen weeks after Wannsee, a Czechoslovak commando team mortally wounded Heydrich, advancing Pohl to Number Two. In Heydrich's honour, the destruction of European Jewries was named Aktion Reinhard.

Himmler's choice to command the operation was Gruppenfuhrer Odilo Globocnik, who maintained a headquarters in Lublin and received guidelines for the `treatment and distribution of the belongings of [deported] Jews' from Obergruppenfuhrer August Frank, deputy chief of the WVHA despite his sister's marriage to a Jew whom she refused to divorce.

Foreign currency, rare metals, diamonds, precious stones, pearls, gold teeth, and gold objects taken from victims in death camps were to be deposited in SS Reichsbank accounts. Watches, fountain pens, lead pencils, shaving utensils, penknives, scissors, pocket flashlights and handbags would go to WVHA workshops in Lublin for cleaning and repair before shipment to SS post exchanges. German relief agencies acquired men's and women's clothing, umbrellas, prams, sunglasses and briefcases.

Occasionally recipients of stolen property complained. Gau Wartheland's Winter Aid Programme representative remarked on trousers and jackets spotted with dirt and blood but sent them on to Circle offices; the Litzmannstadt Circle office suggested that Stars of David be removed from clothing. SS men purchased `ordinary' watches in px's, without comment; Himmler presented gold and platinum watches to Waffen-SS heroes.

To cut overheads, camp guards used Jewish crews to search belongings as soon as victims arrived at railway sidings. Other groups extracted gold teeth from corpses before being gassed themselves, like the search teams. In Treblinka, storage buildings could only hold a fraction of the loot; shoes, clothing and other items spilled out into the open. In Belzec, a locomotive shed had to serve as a storehouse.

Money, gold and valuables were transported to the Reichsbank in armoured cars and in special railway carriages. In a final report to Himmler on January 5th, 1944, Globocnik estimated that Aktion Reinhard had delivered RM178.7 million in cash from forty-eight countries, gold coins from thirty-four countries, and 16,000 carats in diamonds. Globocnik did not estimate how much SS men and Ukrainian auxiliaries stole. Nor did he indicate what be himself had taken, which troubled Pohl, who by July 1943, was concerned that Globocnik might not be honest. Pohl dispatched Standartenfuhrer Josef Vogt, the SS's senior auditor, to Lublin. Vogt discovered that Globocnik kept two sets of books, one for himself and the other for the SS, a fact duly reported to Pohl and Himmler.

Although Himmler had eventually to dismiss Globocnik, the Reichsfuhrer-SS could take comfort that the Reichsbank had had finally to open seventy-six accounts to accommodate the avalanche of shipments. An SS auditor in civilian clothes, Hauptsturmfuhrer Bruno August Peter Melmer, had (according to a post-war deposition by Albert Thorns, a Reichsbank official) delivered items `as a private individual with truckloads of suitcases, boxes, packages, bags, etc'. Thorns thought the items just `ordinary "booty" or spoils of war from Jews', adding that many were later sold through municipal pawn shops. Actually, these transactions had been arranged in conversations between Himmler and Pohl on behalf of the SS, Walter Funk and Emil Pohl, president and vice president, respectively, of the Reichsbank, and Finance Minister Graf Lutz Schwerin von Krosigk, on behalf of the Reich.

1942 was the first year in which SS enterprises claimed a profit (RM1,306,055, on total operating budgets of RM76,009,100) but the claim cannot be verified. DEST and the other three SS corporations had been registered as private organisations whose directors were legally compelled to issue public statements only to shareholders, of which there were none. A holding company for the four concerns, Deutsche Wirt schaftsbetriebe, created by Pohl, list: ed Pohl and his deputy, Gruppenfuhrer-SS Georg Lorner, as the only directors.

Documents make clear, however, that funds received via Aktion Reinhard paid off SS debts, financed SS business activities, and were loaned to several organisations including the German Red Cross, from which the SS had previously borrowed RM.6.8 million. Above all, Aktion Reinhard freed Himmler and Pohl from financial dependence on Reich and Party agencies. Himmler now had only Hitler to fear, and Hitter was more and more reliant on the Waffen-SS.

While Himmler consolidated SS management in March 1942, the Fuhrer appointed Thuringia's gauleiter, Fritz Sauckel, plenipotentiary for labour recruitment. Securing workers was Germany's most critical economic issue; the following month, Pohl counselled Himmler on the `increasing importance' of `prisoner labour'. But before turning full attention to this subject, Himmler toured bomb-damaged cities. He returned to advise Pohl that the SS should begin `the large-scale manufacture of door and window-frames'.

Himmler's subsequent unshakable conviction that he could profitably supply industry with workers caused rifts within the SS. On one hand, Himmler and SS diehards remained determined to complete the Final Solution. To protests from the Wehrmacht that deportations would cause the closure of arms and textile factories, Himmler responded that `the Wehrmacht must transfer its outstanding orders to us and we will guarantee the continuation of the deliveries of the clothing it requires'. On the other hand, the Reichsfuhrer-SS and the WVHA determined that slaves must be preserved as `investment goods'. In a letter to camp commanders on December 2nd, 1942, Himmler stressed that `corporal punishment is no instrument for... commanders and supervisors who are too lazy and incompetent to educate...'.

The upshot was that the SS worked slaves to death. Businesses placed orders for `workers' at camps near factories and at Pohl's headquarters, in Oramenburg. Buchenwald earned profits of between RM1.5 million and RM2 million per month, and the Reich received RM.2 million per month as its share of Auschwitz orders. Pohl raised slave charges as supplies ran short: final levies demanded RM5 per day for a skilled person, RM4 for an unskilled worker., and RM 1.5-2 for female workers.

I.G. Farben, Germany's largest conglomerate and a major Circle contributor, was the archetypal slave customer. Farben, not the Reich or the SS, financed I.G. Monowitz, a factory-camp adjacent to Auschwitz, through loans obtained from the Deutsche Bank; Farben executives hid findings that their Auschwitz enterprises had already cost nearly a billion marks, delivered minimal amounts of ersatz materials and would use more electricity than the city of Berlin. For these depressing results, Farben blamed the SS, which did not understand `working methods of... free enterprise'.

Impressed that Himmler could deliver slaves as well as fanatical troops, in 1944 Hitler accepted the SS as `a state within a state'. This disconcerted Speer, Reich Minister for Armaments and Production since 1942. War crimes judges would later find Speer guilty of exploiting slaves, but innocent of complicity in their deaths, about which he claimed to have no knowledge. His subsequent books clearly indicate detailed information on SS operations, however. In Infiltration (1981), he explains that with 300 inmates per barrack, with construction costs per barrack of RM41,000, and with 556 barracks needed for 171,000 `prisoners' in the autumn of 1943, housing costs soared to RM23.5 million. Speer concludes:

The SS could have achieved greater

profits if it had hired out the able-bodied

prisoners at an average daily rate of 4.7

marks. In the autumn of 1943, according

to Pohl's figures, 107,730 of the 171,000

prisoners were able-bodied. The daily

income would thus have been 506,000

marks, ie, 184 million marks a year. But

Himmler's plans for building up an

industrial empire obstructed each

rational consideration.

In early 1944, while Himmler and Speer bitterly competed for Hitler's favour, the Red Army prepared to smash Germany's eastern defences. Hungary, Germany's ally, held secret peace talks with the Anglo-Americans, reports of which reached Berlin. Hitler resented not only Hungarian disloyalty but that Jews still managed critical Magyar industries. The situation demanded German occupation of Hungary -- both because of advancing Russians and because of increasing dependence on Hungarian exports. judging by the speed with which Red armies moved, the possibility also existed that Hungarian Jews might escape the Final Solution.

When German troops entered Budapest on March 19th, Eichmann and his Gestapa IVB4 complement arrived with them. These old hands demanded the finest in luxury goods, paintings and women's lingerie from a hastily-formed Jewish Council, whose members hoped offerings would guarantee safety for 800,000 coreligionists. On the contrary, less than two months later Eichmann would begin to deport 457,402 men, women and children to Auschwitz, a hundred per sealed freight car.

Hungary brought Eichmann competitors, a problem unique in his experience. By 1944, he was contemptuously ignoring SS generals, let alone senior public servants, who dared interfere with his procedures. But what to (to about Kurt Becher, who had served with an SS cavalry unit on the Eastern Front? In Himmler's view, Obersturmbannfuhrer Becher possessed superior skills at ferreting out Jewish wealth, skills now of far more use to the SS than arranging deportations.

Shortly after Eichmann arrived in Hungary, Becher followed to establish his own luxurious headquarters, complete with mistress, in the former residence of Ferenc Chorin, a member of Hungary's wealthiest Jewish family, the Weisses. Becher's avowed purpose was to purchase 20,000 horses. In fact, it was to Aryanise for the SS the Manfred Weiss Works, a mammoth corporation wholly owned by family members, whose 30,000 workers produced trucks, bicycles, canned goods, aircraft and ammunition for Germany's armed forces.

Becher convinced Chorin, earlier arrested by the Gestapo, to persuade relatives to accept an offer that Pohl would outline for Himmler on June 15th. The SS would `lease' the Weiss Works for twenty-five years, at the ludicrously low cost of RM3 million. Forty-eight members of the Weiss family, including non-Jews, could then leave Hungary.

Becher and Eichmann undertook separate ransom talks for the rest of Hungarian Jewry. On March 24th, an Eichmann aide, Dieter Wisliceny, and two members of the Zionist Relief and Rescue Committee, Rudolf Kasztner and Joel Brand, had discussed a $2 million ransom with a $200,000 down payment to the SS against a guarantee that Hungarian Jews would not be forced into ghettoes or deported. Wisliceny accepted the down payment but did not think $2 million enough of a ransom. The outcome was that Kasztner and Brand delivered only $92,000 by April 9th and only $77,000 more on April 21st. This incensed IVB4 personnel, who complained that they thought `honourable men' negotiated on the other side.

On May 16th, following three other meetings on the subject, Eichmann summoned Brand to carry a ransom demand to the Anglo-Americans. One million European Jews would be released, in return for foodstuffs and 10,000 trucks for use on the Eastern Front. London and Washington turned down the offer on July 19th, the day before the attempt on Hitler's life and the day on which one group of Weiss family members arrived in Lisbon. Three days before Brand and a double agent, Bandi Grosz, departed, Eichmann had begun deporting Hungarian Jews.

Becher meanwhile took bribes for the SS in the form of goods from Jewish artisans and bribes for himself in the form of cash and jewellery. He also took a $20,000 tip from Zionists in mid-July, to intercede with Himmler against further deportations, resulting in the Reichsfuhrer-SS ordering Eichmann to stop deporting Jews.

Becher further suggested that Himmler permit a trainload of ransomed Jewish `notables' to travel from Budapest to the Holy Land via Romania. Eichmann opposed the idea, arguing that SS ties with the Grand Mufti of Jerusalem could be prejudiced. Unwilling to be left out of negotiations, Eichmann elbowed his way in, first demanding $200 per person and then raising the price to $500. Becher began asking $2,000 per ticket but settled for $1,000, payments to be made in foreign and Hungarian currency, gold and/or jewels.

The train, loaded with 1,654 persons, left Budapest on June 30th and travelled west to the border town of Magyarovar. There, Austrian authorities refused permission for passengers to enter the country because of measles cases on board. Following lengthy discussions, the train then headed north-west to Bergen-Belsen, but not before SS men relieved passengers of their remaining cash, 180 carats of diamonds, and 18 kilograms of gold. At Bergen-Belsen, the Jews would unknowingly await the results of yet other negotiations.

These talks began on August 21st near the Swiss town of St Margarethe, and involved Becher, Kasztner and Saly Mayer, a retired Swiss lace manufacturer. Mayer had entered the picture at the behest of the American-Jewish joint Distribution Committee, whose Lisbon office the SS had contacted.

Becher advised Himmler that Mayer's participation was proof positive that American Jews had close ties to the White House. Himmler concluded that Jews might be manipulated to arrange peace talks between himself and the Anglo-Americans, an objective now more important than murdering Jews, acquiring their money and property, or enslaving them. Nonetheless, ingrained SS habits died hard. Becher recapitulated Eichmann's Jews-for-trucks demand and added other items the SS would exchange for `notables' as well as the remainder of the Hungarian Jews.

Washington permitted Mayer to dangle an offer of SF5 million before Becher but not to part with cash. Thus Mayer and Roswell McClelland, an American counsellor assigned by Washington's War Refugee Board to Mayer, dragged out talks. Becher heatedly denied that Germans would be so crass as to sell human beings for goods and demanded $50 million on August 29th. By September 6th Becher was ready to settle for $25 million and shuttled between Vienna, Switzerland, and Himmler's Berlin headquarters, alternately haggling with Mayer and reassuring the Reichsftihrer-SS.

Personally advancing a rescue plan with no reference to cash or to peace talks, on March 21st, 1945, Himmler wrote to his Swedish masseur, Felix Kersten, that he was ready to co-operate in freeing Jews from camps. Three days later, Kersten wrote to Hillel Storch, head of the World Jewish Congress branch in Stockholm, that Himmler hoped to save some 350,000 Jews still under German control.

On the 28th, the American ambassador in Sweden advised Washington that he questioned whether `Storch should be permitted to go to Berlin'. Three weeks later, however, an SS honour guard in the beleaguered capital's Tempelhof airport welcomed Kersten and Norbert Masur, an associate of Storch, who were driven to Kersten's Hartzwalde estate. Himmler arrived in the early morning hours of April 20th, after leaving a birthday party for Hitter in the Fuhrer's bunker.

In this surreal atmosphere, the Reichsftihrer-SS blamed Jews and the Soviet Union for the catastrophes that had befallen them and suggested that the time had come for `Jews and Germans to bury the hatchet'. Masur tried to exact promises that surviving Jews would not be murdered. Himmlet countered `in the strongest possible terms' that `absolute secrecy must surround [the] liberation of any Jews'. Himmler derived no tangible benefits from this attempted detente. In a manic fury, Hitter dismissed him on April 28th, after learning from a Reuters' dispatch that Himmler had offered to discuss peace terms with Winston Churchill. Two days later, the Fuhrer committed suicide in his bunker.

At a final SS staff conference in Flensburg on May 5th, Himmler announced plans for a `reformed' Nazi administration with headquarters in Schleswig-Holstein. SS offices, including the WVHA, would be dissolved. But dismissed by Germany's second and last Fuhrer, Grand Admiral Karl Donitz, Himmler abandoned his efforts, assumed a disguise as a Wehrmacht private, and wandered the countryside until he surrendered to a British sentry at a bridge, on May 21st. Two days later, when a British Army doctor asked him to open his mouth, Himmler's eyes narrowed, his chin moved, and within seconds he was dead after biting down on a cyanide capsule.

In a mine discovered at Merkers on April 7th, American forces listed art works, gold and other items transferred in February from the Reichsbank's Berlin vaults. Among containers, 1.89 had tags inscribed with the name `Melmer'. Colonel Bernard Bernstein, Financial Adviser for Civil Affairs and Military Government to General Eisenhower, concluded that the total worth of the gold, including the Melmer containers, was $241,113,302. (The gold was valued at $35 per fine ounce.)

No one since Bernstein's inventory has suggested that the Melmer containers account completely for SS loot. Given Swiss success over the last fifty years in blocking information, we may never learn how much in SS deposits still remains in Swiss banks or how much gold and other valuables taken from Jews by the SS was shipped from Switzerland to Argentina, Portugal and Spain.

What is certain is that what the SS took from persons it murdered and earned from Jewish slave labour financed the `state within a state'. As Israeli historian Yitzak Arad writes: `The murderers inherited all'.


Yitzak Arad, Belzec, Sobibor, Treblinka: The Operation Reinhard Death Camps (Indiana University Press, 1987); Yehuda Bauer, Jews for Sale? Nazi-Jewish Negotiations, 1933-1945 (Yale University Press, 1994); Joseph Borkin, The Crime and Punishment of I.G. Farben (Free Press, 1978); Heinz Hohne, The Order of the Death's Head (Ballantine, 1971); Albert Speer, Infiltration (Macmillan, 1981).

Milton Goldin is the president of a fundraising consultancy in New York State, and author of Why They Give (Macmillan, 1976).
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Title Annotation:Nazi industry, and plunder of Jewish assets, led by Heinrich Himmler
Author:Goldin, Milton
Publication:History Today
Date:Jun 1, 1998
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