|Frederick Flick's Opportunism and Expediency
By L. M. Stallbaumer
In 1947, the United States Military Tribunal tried six officials (including Friedrich Flick, the principal shareholder, and Otto Steinbrinck, his closest associate until 1939) of the German industrial conglomerate Flick Kommanditgesellschaft (hereafter, Flick KG), on a number of charges: using forced labor, plundering occupied countries, expropriating Jewish property, supporting SS organizations and membership in the SS (Steinbrinck). Throughout the trial, the defendants maintained their innocence and condemned the tribunal as "victor's vengeance." Flick, Steinbrinck, and one other defendant were convicted; the other three men were acquitted.1 Flick was sentenced to seven years in prison. (Flick was convicted of all charges except "expropriation," which was dismissed because it was not a crime against humanity. Steinbrinck was convicted of membership in the SS.)
At his sentencing, Flick asserted that he had committed no crimes. Within the context of Nazi social and legal norms, he was correct. But the tribunal was holding his company to a different standard, a belief that there are universal morals by which corporations should conduct themselves. In 1947, Flick explained his relationship with the Third Reich this way: "After the [Nazi] seizure of power, every industrialist in the long run had to get into some sort of relationship with the new holders of power."2 The profit motive and maintaining a competitive edge dictated Flick's behavior. He could not afford to cling to moral standards by refusing to support the regime or by declining to take advantage of opportunities it created. At the least, this could bring financial loss; at worst a "martyr's death."3 Flick was not willing to risk either. Flick's attitude became the guiding principle for the firm and its numerous companies.
Friedrich Flick and Nazism
Friedrich Flick (1883-1972) was a self-made millionaire, born in the west German region of Westphalia. He acquired relatively modest share holdings in a southern Westphalia steel company (Charlottenhütte AG), but accumulated his wealth by gaining majority control of several coal and steel companies in the Ruhr, Silesia, Bavaria, and in the vicinity of Berlin. He consolidated some of these holdings and sold others; the result was the creation of a steel conglomeration in September 1939 bearing his name. Flick KG controlled all stages of steel production from raw materials to manufactured products: coal, pig iron, rolling mills for girders, pipes, rails, cannon works, ammunition, and wheel frames, as well as the production and assembly of railway cars, armored cars, and airplanes. During the Second World War, it was one of the largest steel and coal producers in Germany, with operations located primarily in central Germany and the Ruhr, but also in France and the Soviet Union.
Prior to the Nazi seizure of power, Flick's political affiliations were typical of big businessmen. He was a member of the Deutsche Volkspartei (DVP), which promoted the interests of the upper-middle class and industrialists, and supported the fledgling Weimar Republic. When the DVP fell on hard times during the Great Depression, Flick, as far as can be determined, abandoned it. In any case, between 1929 and 1932, he made financial contributions to several Right-wing political parties and personalities, all of whom sought to replace the republic with some form of authoritarian government. Some of Flick's support went to the Nazis; Flick estimated 50,000 RM (equivalent to approximately $25,000).4 However, he claimed after the war that the contributions were neither significant nor an affirmation of Nazism, but only an attempt to pacify them in case their influence grew.5
Friedrich Flick did not join the Nazi party until 1937 or 1938, but his links to the Nazis were reinforced when he joined a group in 1935 or 1936 that eventually became known as the Himmler Circle of Friends (Freundeskreis Himmler). However, the Circle was not originally associated with Himmler and the SS. It was created by Wilhelm Keppler, an economic adviser to Hitler, who was currying favor with big business by consulting about economic questions, presumably for the purpose of formulating Nazi economic policy. Keppler originally invited Flick to join in 1932. Loathing political activity, Flick declined, but he endorsed Otto Steinbrinck's membership, in the hopes of obtaining inside information on the Nazis' plans for the economy. Little is known about what the Circle accomplished while under Keppler's leadership, or if Flick learned anything of economic significance through Steinbrinck. After the war Keppler maintained that he made use of what he "had learned in various meetings." Steinbrinck emphasized its social function and claimed that the conversations before 1933 were mere "palaver . . . nothing but chitchat."6 Nonetheless, Steinbrinck, a World War I naval officer, must have been impressed by the group's Nazi members; he joined the Nazi party and SS in May 1933.
Himmler became associated with the Circle of Friends in September 1935, when Hitler asked him to serve as the group's host at the Nuremberg Nazi party rally. Within months, Keppler was supplanted by Himmler, and the nature of the group's activities changed dramatically. Flick also joined the Circle some time between September 1935 and the first event that Himmler formally sponsored in February 1936. Himmler invited the group to visit an SS barracks and the SS porcelain factory in southern Germany. After the tour, the Circle was solicited for contributions by two of its members: Otto Steinbrinck and Kurt von Schröder, a prominent banker. They requested that "the Circle of Friends [agree] to put -- each according to his means -- at the Reich Leader's disposal . . . funds which [were] to be used for certain tasks outside of the budget."7 Between 1936 and 1944, the Circle made annual contributions to the SS exceeding one million RM; Flick's contribution amounted to 100,000 RM annually. Although Flick, Steinbrinck, and others portrayed the Circle only as an innocuous gentleman's club whose members attended monthly lectures and occasionally toured SS facilities, the group gave tacit approval and financial support to the Nazi regime's racist agenda. The Circle's donations helped to finance Himmler's "cultural" interests: the operation of the Ahnenerbe, a pseudoscientific research institute devoted to studying Germany's ancient past as well as to carrying out deadly experiments on concentration camp inmates.8 Whether intentional or otherwise, the businessmen helped to create an environment that smoothed the way for the radicalization of the Third Reich's racial policies and its "Aryanization" of Jewish property.
Expansion through "Aryanization"
Flick, after the war, rejected the accusation that he worked with the Nazis to "Aryanize" Jewish businesses. He maintained that the Jewish companies he acquired after Hitler attained power were obtained by negotiating legitimate business deals. Convincing evidence indicates that his position is untenable. Flick KG did not operate in a vacuum in the 1930s; its executives were not ignorant of the racial persecution that was forcing German Jews to sell their businesses. Between 1933 and 1937, Friedrich Flick was given a couple of opportunities to "Aryanize" Jewish property, but citing business reasons, he did not actively pursue them. However, between 1937 and 1939, Flick KG energetically involved itself in three Aryanization projects that increased Flick's coal and pig iron supplies, so that his company was less dependent on outside producers (thereby reducing production costs9). The Flick group acquired Hochofenwerk Lübeck, a blast furnace operation; the lignite mines Anhaltische Kohlenwerke - Werschen Weissenfelser AG (AKW-WW), owned by the Julius Petschek family; and select lignite mines located in central Germany belonging to the Ignaz Petschek family. In the first two Aryanizations, Flick KG advantageously used state power to conclude deals even though this involved risks -- the state could have nullified the company's initiatives and appropriated the property for itself. Why was Flick willing to risk this and other problems associated with Aryanization?
By 1936-1937, the Nazi regime's accelerated armaments program was being undermined by unsound economic policies.10 The state's most ominous measure was the creation of the Reichswerke Hermann Göring, which competed with private industry in the production of coal and steel. The emergence of this new state competition -- and escalating rivalries in the private sector -- was a major influence on Friedrich Flick's decision to take advantage of the Aryanization policy. As for the moral issues involved: Flick, first and foremost a businessman, was not averse to exploiting the government's persecution of Jews when it benefited Flick KG. By participating in Aryanizations, Flick (an all others like him) lent legitimacy within Germany to the oppression of Jews.11
The demands of a total war economy and the deepening shortage of manpower prompted heavy industry in the Third Reich to make use of foreign laborers during World War II. The use of force to recruit workers became a dominant feature of the foreign labor program during the spring of 1940, although some foreigners from Western Europe and Italy continued to work in Germany voluntarily. Forced laborers mostly came from the East, where Nazi recruitment tactics were especially vigorous and violent. Nazi ideology -- fears of racial integration and "defilement" -- determined the manner in which East European forced workers (particularly Poles and Soviet civilians and prisoners of war) were treated.12 Lodging, meals, pay, medical treatment and "leisure time" for forced laborers were regulated by a variety of instruments of the state: the Four Year Plan, the SS and Gestapo, the Labor Ministry and the German Workers Front (DAF). But whatever the controlling agency, regulations institutionalized the abuse of Eastern forced workers to the greatest extent possible. They were segregated in guarded barracks, and their freedom of movement and social contact with Germans was restricted (sexual relations were punishable by death). They were expected to do the heaviest, most dangerous work, for lower wages greatly reduced by special taxes and deductions for food and housing (regardless of quality). The segregation and terror methods (e.g., labor education camps and executions) used to punish forced laborers guaranteed that their relationship with Germans rarely violated Nazism's sense of propriety.13 Slave laborers received no compensation whatsoever, and were treated even more brutally than forced laborers. They were provided by the SS (Schutzstaffeln), through the system of concentration camps that they operated, and were paid for by employers.
Flick KG was initially reluctant, for strictly business reasons, to employ forced workers on a large scale, because the maze of relevant government regulations was quite burdensome, but as the war went on and the manpower shortage deepened, all of Flick's companies became heavily reliant on forced labor. Personnel issues came under the purview of the conglomerate's individual companies; however, Friedrich Flick and his associates kept well informed about the use of forced laborers through company reports, organizational newsletters, and government decrees and instructions. That forced workers were compelled to work for Flick KG and that the government's rules pertaining to them were dehumanizing went uncontested by the company's executives.
Before 1941, Flick's Harpener Bergbau AG (Harpen) was only interested in hiring foreign workers as a stopgap measure; it hoped for a brief war and that the German manpower shortage would be temporary. The forced laborers that were deployed prior to 1941 came from Poland and there were relatively few of them. They were obtained by the regime's labor offices, with the assistance of police and military-occupation authorities. It was only in late 1941 that Ruhr industrialists reluctantly acknowledged their need for more forced labor -- and that meant Soviet labor.14 Early the next year, several hundred Soviet civilians and prisoners of war were dispatched to Harpen. The numbers increased dramatically in January 1943 and by 1944, East European forced workers comprised between one-fourth to one-half of Harpen's total labor force. Several of Flick's Mitteldeutsche Stahlwerke GmbH (Mittelstahl) plants, located in the vicinity of Berlin, exhibited a similar pattern, with the exception that beginning in October 1944 they also exploited slave labor (approximately 2,000 individuals, who were sent from SS concentration camps).
The working conditions for Harpen's forced laborers were appalling, and difficult to improve even when government officials and employers acknowledged the negative impact that this had on productivity.15 Scrutinizing how Flick's Harpen coal mining operations tried to resolve the problem of food supplies is revealing. Harpen's business records disclose that the most persistent problem pertaining to forced workers was the lack of nutritious food. The Harpen board of directors recognized that malnutrition lowered worker productivity, but beyond official complaints to government officials and the food supplier (Northwest German Grocery Distributors or Noleg), Harpen found no creative solution to this fundamental problem.16 Temporarily increasing rations for workers who arrived in physically weak conditions and scheduling the heaviest meal at the beginning of the workers' shifts brought no significant improvement in productivity, and certainly had no long- term beneficial impact on the workers' health. In April 1942, Fritz Sauckel, who was in charge of the forced labor program, introduced measures to improve the diet of Eastern forced laborers, but these coincided with a reduction in rations for the German population and proved unpopular.17 Therefore, when later that month Noleg suggested that Harpen plant a garden of potatoes and cabbage, Harpen officials discussed the proposal, but there is no indication that they followed through on it. Harpen eventually took the position that it was nearly impossible to improve the quality of food for forced laborers when the company's German employees were being subjected to increasingly strict food rationing. This attitude undoubtedly intensified as Germany suffered reversals in the war. Humanitarian concerns could not or would not be contemplated by the Harpen board of directors, an attitude consistent with the highest level of leadership at Flick KG.
What lessons can we draw from Flick KG's experiences during the Nazi era? After the war, the Allied authorities who prosecuted German industrialists strongly believed that large German businesses played a significant role in the rise of Nazism and the subsequent policies and actions of the Nazi state. However, historians today who have analyzed the dynamics of power in the Third Reich have suggested that big business had less influence on Nazi policy than Allied prosecutors in the immediate postwar era believed. Is this latter conclusion an exculpation of the Flick group for enabling Nazi policies (intentionally or otherwise)? Certainly not; but what should concern us even more is how easily opportunism and expediency could lead to immoral acts that contributed to the Nazis' Aryanization projects, forced labor program, and racist agenda.
Friedrich Flick showed no remorse for his participation in these activities. He was released from Landsberg prison in 1950, his sentence reduced for good behavior. His conglomerate was investigated by American occupation authorities for possible reorganization, reorganization whose goal was to eliminate the concentration of economic power that was under Friedrich Flick's control. However, the political division of Germany had effectively "deconcentrated" Flick KG; half of its companies were now located in East Germany and nationalized. Moreover, even before the war, Friedrich Flick had transferred ownership of Flick KG to his two sons; they owned 90 percent of the share holdings. Therefore, the laws which required the deconcentration and reorganization of conglomerates technically did not apply to Friedrich Flick, who owned the remaining 10 percent of Flick KG. Flick KG remained in existence, and the Flick family retained control of its steel works in Bavaria, Eisenwerk Gesellschaft Maximilianshütte; its blast furnace operations, Hochofenwerk Lübeck; and its Ruhr coal operations, Harpen and Essener Steinkohlenbergbauwerke AG. Flick KG played a major role in the postwar reconstruction of West Germany while enjoying renewed prosperity.
If we find this morally offensive, our indignation rings hollow if we only use this state of affairs as an opportunity to condemn Germany's Nazi past. The relative ease with which Flick, and many other industrialists, re-entered the postwar business world was not only made possible by a German desire to forget the past, but by the United States's Cold War policies, which depended on a fully restored Germany to serve as a bulwark against the spread of communism in Europe. When the U.S. High Commissioner of Germany, John J. McCloy, granted clemency in January 1951 to German industrialists still in prison, it was interpreted by many -- in Germany and elsewhere -- to mean that German corporate executives shared little responsibility for the crimes of the Nazi era. Their actions had been reduced to nothing more than "white collar crimes," for which capitalist societies show a high degree of toleration. Opportunism and expediency prevailed again.18
1. Parts of this essay partially draw upon my dissertation research, L. M. Stallbaumer, "Strictly Business? The Flick Concern and 'Aryanizations': Corporate Expansion in the Nazi Era," (Ph.D. diss., University of Wisconsin-Madison, 1995).
2. Flick Testimony, Trials of War Criminals before the Neurnberg [sic] Military Tribunals under Control Council Law No. 10: Case 5. The Flick Case, vol. 6 (Washington, D.C.: 1952), 394. Hereafter referred to as TWC.
3. Flick Testimony, TWC, 810-811.
4. Miscellaneous Receipts and Correspondence, 1932, FL-1; Flick Testimony, TWC, 390-391.
5. Flick Testimony, United States of America v. Friedrich Flick, et al. (Case 5), United States National Archives (USNA), RG-238, M891/5/3172. Steinbrinck Affidavit, 28 January 1947, NI-3508. Gerhard Volkland, "Hintergründe und Politische Auswirkungen der Gelsenkirchen-Affäre im Jahre 1932," 310; and Henry A. Turner, German Big Business and the Rise of Hitler (Oxford University Press, 1985), 255.
6. Steinbrinck Testimony, TWC, 357.
7. Schröder and Steinbrinck to Emil Meyer, 25 February 1936, NI-10103.
8. Michael H. Kater, "Heinrich Himmler's Circle of Friends, 1931-1945," MARAB-A Review, 2 (Winter 1965-66): 74-93; and Reinhard Vogelsang, Der Freundeskreis Himmler (Musterschmidt, 1976).
9. L. M. Stallbaumer, "Big Business and the Persecution of the Jews: The Flick Concern and the 'Aryanization' of Jewish Property Before the War," Holocaust and Genocide Studies, 13 (Spring 1999); 1-27. Cf. Helmut Genschel, Die Verdrängung der Juden aus der Wirtschaft im Dritten Reich (Musterschmidt, 1966); Peter Hayes, "Big Business and 'Aryanization' in Germany, 1933-1939," Jahrbuch für Antisemitismusforschung 3 (1994); 254-281; and Karl-Heinz Thieleke, Fall 5. Anklageplädoyer, ausgewählte Dokumente, Urteil des Flick-Prozesses (mit einer Studie über die 'Arisierung' des Flick-Konzerns) (VEB Deutscher Verlag der Wissenschaften, 1965).
10. R. J. Overy, "Heavy Industry and the State in Nazi Germany: The Reichswerke Crisis," European History Quarterly, 15 (1985): 32-33; Avraham Barkai, Nazi Economics: Ideology, Theory and Policy, trans. Ruth Hadass-Washitz (Yale University Press, 1990), 110ff; Matthias Riedel, Eisen und Kohle für das Dritte Reich. Paul Pleigers Stellung in der NS-Wirtschaft (Musterschmidt, 1973), 226; R. J. Overy, Goering: the "Iron Man" (Routledge & Kegan Paul), 72; and Gerhard Mollin, Montankonzerne und 'Drittes Reich'. Der Gegensatz Zwischen Monopolindustrie und Befehlswirtschaft in der deutschen Rüstung und Expansion 1936-1944 (Vandenhoeck & Ruprecht, 1988), passim.
11. Hayes, "Big Business and 'Aryanization'," 272.
12. Ulrich Herbert, Hitler's Foreign Workers: Enforced Foreign Labor in Germany under the Third Reich, trans. William Templer (Cambridge University Press, 1997); and Edward L. Homze, Foreign Labor in Nazi Germany (Princeton University Press, 1967).
13. Herbert, Hitler's Foreign Workers, 134-135.
14. Ibid., 154.
15. This aspect of my research, on forced labor within the Flick concern, is still in its initial phases. Hence, my focus on Harpen.
16. Harpen, Niederschrift über die Vorstandssitzung, 24 November 1942, USNA, RG-242, T83/44/3410561; "Merkblatt über die allgemeinen Grundsätze für die Behandlung der im Reich tätigen ausländischen Arbeitskräfte," 15 April 1943, T83/44/3409960-9963; Zeche Hugo [Harpen], Vermerk, 11 June 1943, T83/44/3410496; Zeche Hugo [Harpen], Vermerk, 20 June 1943, T83/44/3410488; and Reiss to Harpen's Gefo III, 23 June 1943, T83/44/3410489; and Harpen, Niederschrift; über die Vorstandssitzung, 13 July 1943, T83/42/3047701.
17. Ulrich Herbert, Hitler's Foreign Workers, 180-82.
18. Benjamin Ferencz, Less than Slaves: Jewish Forced Labor and the Quest for Compensation (Harvard University Press, 1979), 32, 72ff, 192; and Raymond Stokes, Divide and Prosper: The Heirs of I. G. Farben under Allied Authority, 1945-1951 (University of California Press, 1989).
L. M. Stallbaumer is an assistant professor of history at Bloomsburg University of Pennsylvania. Her Ph.D. dissertation examined the Flick conglomerate's role in "Aryanizing" Jewish property before World War II. She is currently researching a book on the history of the Flick
This article orignially appeared in Dimensions, Vol. 13, No. 2.