Hitler. 1936-1945: Nemesis

18 November 1938, he told them: ‘Gentlemen, the financial situation looks very critical.’²⁹ The following month, Goebbels noted in his diary: ‘The financial situation of the Reich is catastrophic. We must look for new ways. It cannot go on like this. Otherwise we will be faced with inflation.’³⁰ Indeed, the massive rearmament programme, stimulating increased demand from full employment, but without commensurate expansion of consumer goods, was intrinsically inflationary.³¹ Price controls and the threat of draconian punishment had contained inflationary pressures so far. But they could not be kept in check indefinitely. In early January 1939, the Reichsbank Directorate sent Hitler a submission, supported by eight signatories, demanding financial restraint to avoid the ‘threatening danger of inflation’.³² Hitler’s reaction was: ‘That is mutiny!’ Twelve days later, Schacht was sacked as President of the Reichsbank.³³

But the Cassandra voices were not exaggerating. Nor would the problem go away by sacking Schacht. The insatiable demand for raw materials at the same time that consumer demand in the wake of the armaments boom was rising had left public finances in a desolate state. By the time of Schacht’s dismissal, the national debt had tripled since Hitler’s takeover of power. The Ministry of Economics concluded that it would simply have to be written off after the war. Hitler was aware of the problem, even if he did not understand its technicalities. He ordered a reduction in the Wehrmacht’s expenditure in the first quarter of 1939 — an order which the army simply ignored.³⁴ A way of addressing the problem through more conventional fiscal policies and a reversal to an export-led re-entry into the international economy could not, of course, be entertained. The decision to reject such a course had been taken in 1936. There was now no turning back.

Beyond the crisis in public finances, the labour shortage which had been growing rapidly since 1937 was by this time posing a real threat both to agriculture and to industry. The repeated plaintive reports of the Reich Minister for Food and Agriculture, Richard Walther Darre, left no doubt of the severity of the difficulties facing farming.³⁵ There had been a 16 per cent drop in the number of agricultural workers between 1933 and 1938 as the ‘flight from the land’ to better-paid jobs in industry intensified.³⁶ No amount of compulsion or propaganda could prevent the drain of labour. Nor was mechanization the answer: scarce foreign exchange was needed for tanks, guns, and planes, not tractors and combine-harvesters. Signs of falling production were noted. That meant further demands on highly squeezed imports.³⁷ Women, many of them members of the farmer’s household, were already employed in great numbers in agricultural work. Girls’ labour service on the land and drafting the Hitler Youth in to help with the harvest could help only at the margins.³⁸ The only remedy for the foreseeable future was the use of ‘foreign labourers’ that war and expansion would bring. It was little wonder that when the first ‘foreign workers’ were brought back after the Polish campaign and put mainly into farm work, they were initially regarded as ‘saviours in a time of need’ (‘Retter in der Not’).³⁹

Industry was faring no better than agriculture, despite the influx of labour from the land. By 1938, reports were regularly pouring in from all sectors about mounting labour shortages, with serious implications for the productive capacity of even the most crucial armaments-related industries.⁴⁰ A sullen, overworked, and — despite increased surveillance and tough, state-backed, managerial controls — often recalcitrant work-force was the outcome.⁴¹ One indication among many of the dangerous consequences for the regime of the labour shortage was the halt on coal exports and reduction in deliveries to the railways in January 1939 on account of a shortage of 30,000 miners in the Ruhr. By that time, the overall shortage of labour in Germany was an estimated 1 million workers. By the outbreak of war, this had risen still further.⁴²

Economic pressures did not force Hitler into war. They did not even determine the timing of the war.⁴³ They were, as we have noted, an inexorable consequence of the political decisions in earlier years: the first, as soon as Hitler had become Chancellor — naturally, with the enthusiastic backing of the armed forces — to make rearmament an absolute spending priority; the second, and even more crucial one, in 1936 to override the objections of those pressing for a return to a more balanced economy and revived involvement in international markets in favour of a striving for maximum autarky within an armaments-driven economy focused on war preparation. The mounting economic problems fed into the military and strategic pressures for expansion. But they did not bring about those pressures in the first place. And for Hitler, they merely confirmed his diagnosis that Germany’s position could never be strengthened without territorial conquest.

II

Hitler’s regrets over the Munich Agreement and feeling that a chance had been lost to occupy the whole of Czechoslovakia at one fell swoop had grown rather than diminished during the last months of 1938.⁴⁴ His impatience to act had mounted accordingly. He was determined not to be hemmed in by the western powers. He was more than ever convinced that they would not have fought for Czechoslovakia, and that they would and could do nothing to prevent Germany extending its dominance in central and eastern Europe. On the other hand, as he had indicated to Goebbels in October, he was certain that Britain would not concede German hegemony in Europe without a fight at some time.⁴⁵ The setback which Munich had been in his eyes confirmed his view that war against the West was coming, probably sooner than he had once envisaged, and that there was no time to lose if Germany were to retain its advantage.⁴⁶

Already on 21 October 1938, only three weeks after the Munich settlement, Hitler had given the Wehrmacht a new directive to prepare for the ‘following eventualities’: I. securing the frontiers of the German Reich and protection against surprise air attacks; 2. liquidation of remainder of the Czech state; 3. the occupation of Memelland.’ The third point referred to the district of Memel, a seaport on the Baltic with a largely German population, which had been removed from Germany by the Versailles Treaty. On the key second point, the directive added: ‘It must be possible to smash at any time the remainder of the Czech State should it pursue an anti-German policy.’⁴⁷ Recognizing the perilous plight they were in, the Czechs in fact bent over backwards to accommodate German interests. In extremis, rather than end their existence as a country, the Czechs were prepared to turn themselves into a German satellite.⁴⁸ Why, then, was Hitler so insistent on smashing the remnants of the Czech state? Politically it was not necessary. Indeed, the German leadership cannot fail to have recognized that an invasion of Czechoslovakia, tearing up the Munich Agreement and breaking solemn promises given only such a short time earlier, would inevitably have the most serious international repercussions.

Part of the answer is doubtless to be found in Hitler’s own personality and psychology. His Austrian background and dislike of Czechs since his youth was almost certainly a significant element. Yet after occupation, the persecution of the Czechs was by no means as harsh as that later meted out to the conquered Poles. ‘They must always have something to lose,’ commented Goebbels.⁴⁹ And, following his victorious entry into Prague, Hitler showed remarkably little interest in the Czechs.

More important, certainly, was the feeling that he had been ‘cheated’ out of his triumph, his ‘unalterable wish’ altered by western politicians. ‘That fellow Chamberlain has spoiled my entry into Prague,’ he was overheard saying on his return to Berlin after the agreement at Munich the previous autumn.⁵⁰

His ‘sheer bloody mindedness’ — his determination not to be denied Prague — probably also has to be regarded as part of the explanation.⁵¹ And yet, the Goebbels diary entries, which we have noted, indicate plainly that Hitler had decided before Munich that he would concede to the western powers at that point, but gobble up the rest of Czechoslovakia in due course, and that the acquisition of the Sudetenland would make that second stage easier.⁵² That was Hitler’s rationalization at the time of the position he had been manoeuvred into. But it does indicate the acceptance by that date of a two-stage plan to acquire the whole of Czechoslovakia, and does not highlight vengeance as a motive.

There were other reasons for occupying the rump of Czechoslovakia that went beyond Hitler’s personal motivation. Economic considerations were of obvious importance. However pliant the Czechs were prepared to be, the fact remained that even after the transfer of October 1938, which brought major raw material deposits to the Reich, immense resources remained in Czecho-Slovakia (as the country, the meaningful hyphen inserted, was now officially called) and outside direct German control. The vast bulk of the industrial wealth and resources of the country lay in the old Czech heartlands of Bohemia and Moravia, not in the largely agricultural Slovakia. An estimated four-fifths of engineering, machine-tool construction, and electrical industries remained in the hands of the Czechs.⁵³ Textiles, chemicals, and the glass industry were other significant industries that