Nazi Billionaires

The Dark History of Germany's Wealthiest Dynasties

David de Jong

• Publisher: William Collins
• Year: 2022
• ISBN:
  9780008299781
• Topic: Storia
• Subtopic: Storia tedesca

PART I

“PERFECTLY AVERAGE”

1.

The Quandt family had profited for decades from war and upheaval. But when Günther Quandt permanently moved to Berlin amid the flu pandemic in October 1918, war and upheaval were about to take the thirty-seven-year-old textile magnate’s country from him. Günther witnessed the demise of his beloved German Empire firsthand when it lost World War I, along with millions of its men in the trenches. Despite the imperial state’s crushing defeat, the Quandts made millions from the war. The family textile factories that Günther led in rural Brandenburg, a few hours north of the capital, had churned out thousands of uniforms a week for their longtime imperial client. Waves of young German soldiers were sent to the trenches and front lines, and each one needed a new uniform to replace the shredded fatigues of their fallen comrades. So it went, week in, week out, for four seemingly endless years.

Yet Germany’s loss was Günther’s gain. By the time the war had ended, the money Quandt had pocketed from it was enough to bankroll his permanent move to Berlin. During the war, Günther had managed to avoid military service, initially because he was found to be unfit physically, but later because he had become a leading figure in the empire’s war economy. From Berlin, he oversaw a government department that supplied the army and the navy with wool. At the same time, Günther managed his family factories, providing daily instructions via letter, while his two younger brothers and brother-in-law were fighting at the front. When they returned alive from battle, Günther told them that he was moving to Berlin for good. He would continue to oversee the textile factories from the raucous German capital. But he also aspired to operate on a bigger stage, explore new business ventures, and branch out to other industries.

Günther loved Berlin. He was born on July 28, 1881, in rural Pritzwalk, some eighty miles northwest of the imperial capital. As the firstborn son of a prominent textile family, and thus automatically his father’s heir apparent, he was sent to Berlin for a proper education at fifteen; he lived there with his English teacher. The German Empire had become a leading industrialized nation at the turn of the century, and Berlin its beating heart. Günther used his free time to explore the sprawling, bustling metropolis, where he witnessed the building of the elevated railway and the underground metro. Günther recalled his Berlin school days as “happy years.” He would have preferred going on to study architecture, but that was out of the question. Günther was called home to learn the textile trade from his sickly father, Emil, a tall, burly man with a thick mustache. This proud Prussian Protestant held to strict tenets of frugality, piety, and hard work.

But this time, Günther wasn’t moving to Berlin alone. His wife, Toni, and their two young sons, Hellmut and Herbert, were joining him. Günther had been married to Toni for twelve years, and Hellmut and Herbert were ten and eight years old, respectively. Toni, a pretty brunette, was the love of Günther’s life. He had almost been barred from marrying her, as his parents considered her family nouveau riche. Their attempts to end the relationship made Günther seriously contemplate immigrating to the United States. He even went so far as to find the cheapest route there, via boat to Baltimore, in order to look for work in Chicago. But Günther stayed put. In the end, love and persistence prevailed, and his parents gave their blessing.

On October 15, 1918, during the fall holiday, Toni and the two boys traveled to Berlin to visit Günther and the new family home. The family of four stayed at the luxurious Hotel Fürstenhof on Potsdamer Platz. Günther was eager to show them the mansion he had bought some fifteen miles southwest from the city center, in the leafy suburb of Neubabelsberg, a colony of villas that was home to many of Berlin’s bankers, industrialists, and moneyed intelligentsia. The house stood directly on a lake, Griebnitzsee, and at the edge of Babelsberg Palace Park, the site of the emperor’s summer residence; the grounds were filled with ancient trees. Toni had yet to fully recover from the operation that had followed Herbert’s complicated birth. She was hoping to regain her health at the house, with its pleasant setting: a lake, a park, and a street lined with lush sycamore, lime, and maple trees. “This is where I will become completely well,” Toni told Günther, after he showed her and the two boys around.

It was not to be. The day after their visit, Toni and her sons traveled back to Pritzwalk. That night Günther received a phone call from an employee: Toni had returned from Berlin with light flu symptoms. The boys had been brought to stay with a family member, in order to avoid infection. In a pandemic, you had to take every precaution — the Spanish flu spread so easily. Within two days, Toni’s flu developed into double pneumonia. Desperate, Günther drove to a doctor he knew, but the man couldn’t offer immediate help: he had almost a dozen patients suffering from the same illness. Toni died that cold October night. She was only thirty-four. The frail woman, who had longed for a fresh start, was no match for the second global wave of the Spanish flu, which was leaving millions of deaths in its wake.

In an instant, Günther became a widower, alone in the frantic capital of a defeated empire on the verge of extinction. What’s more, soon his two young sons, who had just lost their mother, would be moving in with him; they needed far more care than he could ever give. Günther had little time for them. He had to build an empire. After Toni’s funeral in Pritzwalk, on a sunny fall day, Günther stood at her grave and felt that he had lost “something irretrievable.” “I believed that people are capable of giving and receiving true love only once in their lives,” he later wrote.

But six months later, Günther fell in love again. It was an attachment that haunts the Quandts to this day. He became smitten with Magda Friedländer, who later would become well known as Magda Goebbels, “the First Lady of the Third Reich.”

2.

On the warm spring evening of April 21, 1919, Günther Quandt boarded a packed night train in Berlin. It was Easter Monday, and he was all set to travel first class, with two associates, to Kassel in central Germany, to attend a business meeting. Shortly before departure, a mother posited her teenage daughter outside the businessmen’s private compartment; the girl was weighed down with luggage and boxes. Her mother had searched the entire train for a free seat. Her parting instructions: “Magda, this is where you’ll stay put.” Günther waited two, three minutes before getting up and casually inviting the young girl to sit with them. It took many more minutes, and a few more invitations from Günther, before the timid Magda opened the compartment door and joined the trio of much older men.

After Günther helped her stow her things, Magda sank down into a plush upholstered seat. Once the two began to talk, Günther discovered just how attractive the girl was: “I had invited in an exceptionally beautiful apparition: light blue eyes, beautiful full blond hair, a well-cut, regular face, a slender figure,” he later wrote. Magda was only seventeen, twenty years younger than Günther and only six years older than his eldest son, Hellmut. Magda had just spent Easter holiday with her mother and stepfather in Berlin and was returning to her boarding school in Goslar, at the mountainous center of Germany. Günther and Magda talked throughout the entire train ride, discussing travel and Berlin’s theaters. He was infatuated with her. Around 1 a.m., the train stopped at Goslar station. Günther helped Magda get her belongings off the train; as inconspicuously as possible, he stole a glance at a luggage label and noted her boarding school’s address.

As soon as Günther arrived in Kassel, he sent Magda a letter, asking if he could visit her the following afternoon at the boarding school. He would pretend to be a friend of her father’s in order to get permission from the headmistress to take her out. Magda replied, giving her assent. The next day, Günther showed up at the school with a bouquet of roses — not for Magda, but rather to charm her headmistress into allowing Magda to take a stroll with him. A courtship began. On just their third date, during a scenic drive through the Harz mountains, Günther proposed to Magda in the back of his chauffeured car. Stunned, she asked him for three days to consider. The marriages she had witnessed over her seventeen years had been far from good.

Magda was born out of wedlock in Berlin on November 11, 1901. Her parents, the engineer Oskar Ritschel and the maid Auguste Behrend, eventually married. But Magda’s mother divorced Ritschel after discovering that he was having an affair. Auguste then remarried; her second husband, Richard Friedländer, was a German Jewish businessman. Now they too were about to get a divorce. Magda grew up an only child in a cosmopolitan, upper-middle-class household, moving with her mother and stepfather between Berlin and Brussels, where she attended a strict Catholic boarding school run by nuns. Her Jewish ties extended beyond her stepfather. When Magda met Günther, she had just split up with a boyfriend, Victor Chaim Arlosoroff, an ambitious Jewish émigré from Russia. He studied economics at Berlin’s prestigious Humboldt University. But as a shiksa, a non-Jewish woman, Magda felt that she would never truly belong in the Jewish community.

After three days of thought, Magda accepted Günther’s marriage proposal. She was bemused that this stout, older man, who wore double-breasted suits, starched collars, and golden cuff links and exuded money and power, took such an interest in her. A tall man with piercing blue eyes, a round, balding head, and a bad comb-over, Günther looked imposing — but not necessarily attractive. Yet the choice to marry someone two decades older wasn’t driven by romantic love; fascination and ambition played their part. Magda was impressed by Günther, who always wore a mischievous grin, as if he knew something that others did not. Magda longed to leave boarding school and become the wife of someone with great financial resources and esteem in the business world. She fantasized about running a large household and organizing social events for his friends and business partners. Günther, however, insisted that Magda meet two conditions before they married. She had to give up Catholicism and reconvert to Protestantism; she also had to reassume her original surname, Ritschel. Friedländer, her stepfather’s Jewish surname, was a no-go for Günther and his conservative Lutheran family. Magda dutifully obliged. She told her mother: “Religion doesn’t matter to me, I have my God in my heart.”

Günther Quandt.

bpk/Atelier Bieber/Nather

In early January 1921, Günther and Magda married in a spa hotel on the west bank of the Rhine, just outside Bonn. The bride wore a gown of Brussels lace. But the harmony between them didn’t last. The newlyweds’ differences in age and character quickly became painfully clear when the workaholic Günther abruptly ended their ten-day honeymoon in Italy to attend an “unmissable conference.” Even before this sudden departure, the trip had not been a success. While the couple was driving through the Italian countryside in a chauffeured Mercedes limousine, Magda discovered that her husband didn’t care much for the “real” Italy. As her mother, Auguste, later recalled, Magda realized that “fundamentally he was a man lacking all aesthetic sensibilities, a thorough-going pragmatist to whom art and beauty meant little. Nature, too, left him quite unmoved. As they traveled through Umbria, through the landscape of classical beauty and historical significance … Quandt was explaining to his wife the geological structure of the soil and calculating its possibilities for industrial exploitation.” The trip wasn’t a total flop, though. On November 1, 1921, a little more than nine months after their honeymoon, Magda gave birth to the one child they would have together, a son named Harald.

Magda Friedländer.

bpk/Atelier Bieber/Nather

She gave birth to him alone in the hospital. Günther was working, of course. Now that they were back home in Berlin, for him there was only business; he did not cultivate a personal life. When he took a trip with his wife and sons, visits to companies or factories were the main focus. He always worked twelve-hour days, arriving at his desk at 7:30 a.m. and returning home at 7:30 p.m., “tired and battered,” Magda’s mother later recalled. “After dinner, he would sit in his chair, open Berlin’s financial newspaper, and fall asleep three minutes later.” Günther was chronically exhausted. He complained that he had no time to read books or think up new ideas. Social life barely interested him — he might attend an affair if it was business-related, but it “was only arranged if unavoidable.” This pained Magda. Events at home provided the only moments when she, housewife and hostess, could be the center of attention. But there was barely any space for married life in Günther’s world. Magda had no choice but to adapt.

3.

In the early 1920s, as Günther and Magda Quandt were already growing apart, the new postwar German state, known as the Weimar Republic, was devolving into chaos. Many businessmen kept their distance from its volatile parliamentary politics, as one constitutional crisis followed another. Instead, they turned to another playing field for leverage and profit: the stock market.

Hyperinflation and the flight of capital out of Germany accelerated in summer 1922, following the assassination of the minister of foreign affairs, the Jewish industrialist Walter Rathenau, and the threat of defaulting on gargantuan reparation payments imposed on Germany under the Treaty of Versailles. After Rathenau’s murder in Berlin, any last shred of confidence in Germany’s currency evaporated. The nation’s inflation rate rose by 1,300 percent, and the Reichsbank began printing trillion-mark bills. Only the few wealthy Germans who had invested in tangible assets, such as real estate and factories, profited from this situation; any debt they held promptly evaporated. But most of Germany’s middle class had put its money in savings or in worthless bonds that had been used to finance World War I. Millions of Germans were ruined.

Stocks, however, floated somewhere between tangible and liquid, in a financial no-man’s-land where only the most audacious speculators dared tread. Günther Quandt was one of those speculators. In search of an opportunity to diversify the money he had made during the war, Günther turned to currency trading and stock market speculation. As prices fell, small investors began to sell off their shares, leaving those few firms backed by tangible assets to trade at bargain prices. It was a speculator’s dream — but a dangerous one. The unsteady German currency made for volatile price swings, and a rookie trader could easily get caught out, betting against big investors who were trying to snap up large packages of shares and using cheap debt to speculate.

After a particularly risky trade on a wool firm netted Günther forty-five million marks in fall 1921, he commissioned a dozen banks to buy up shares in a dozen industrial companies. One firm he invested in was Germany’s massive producer of potash, Wintershall. Although Günther had already joined its mining board, he lacked overall control. This bothered him deeply. “I had nothing to say anywhere,” he later recalled. It was an unpleasant and unfamiliar role for the textile mogul, who, while leading his family factories from a distance, was determined to become a major player in a different industry. He had just turned forty, and time was ticking by. The prospect of using his fortune solely to speculate on stocks during “the evil period of inflation” repulsed him, Günther wrote. Yet for someone who proclaimed to have such an aversion to speculation, he was managing to overcome his professed disgust with great success. Even after his stock-buying spree, he still had thirty-five million marks left. He was ready to buy a firm of his own.

In spring 1922, Günther identified his prey: the Berlin-based business Accumulatoren-Fabrik AG (AFA). This company had become one of the world’s biggest producers of batteries. When Günther set his sights on AFA, electrification was in full swing around the globe. The firm also had deep ties to the ar...