Capitalism in Germany

Nazi industry, as everyone knows, retains the forms of free capitalism, but its controls are in Party hands. Salesmen of National Socialism claim that this system unifies the nation, puts an end to internal social war. But capitalism dies hard. Last week it regained limited control of the German coal industry, gave evidence that even in the socialized, militarized Reich, a social struggle still goes on.

When World War II began, management of the German coal industry was given to big, blond, blue-eyed Paul Walter, onetime lieutenant of Labor Front Leader Dr. Robert Ley. With the title of the Reich's Coal Kommissar, Herr Walter descended on the producers and retailers, organized them into State-operated syndicates, controlled coal from the mine to the consumer. It was not a successful arrangement. Producers resented State intrusion, labor kicked, consumers got more red tape than coal. Last winter while Berliners were shivering in their apartments, coal was sprinkled on the streets of other cities to prevent skidding.

Herr Walter's failure gave the private producers heart. Through their No. 1 friend at court, Goring Aide Dr. Helmuth Christian Wohlthat, they convinced the marshal that private industry, if given a free hand, could do the job. Last week Herr Goring gave them their chance, announced the resignation of Kommissar Walter. To replace the State syndicates, the producers formed the Reich Coal Association, modeled it along cartel lines, chose as its head Paul Pleiger, a businessman who is also general manager of the Hermann Goring Works. His first move was to create "coal shock reserves" strategically scattered throughout the Greater Reich, and intended to prevent shortages in case of "railroad congestion" (i.e., R.A.F. bombing). The Volkischer Beo-bachter gave Herr Pleiger its official Party blessing, called the new coal setup "an extension of initiative," declaimed: "The [German] entrepreneur today, in contrast to the time of democracy, no longer looks into an insecure future."

Coal is the biggest but not the first victory for the capitalists in Nazi Germany. For years broad-faced, quiet Herr Wohlthat has doggedly fought a rearguard action against the Party radicals. Born in Wismar (where his father ran a hat shop), Wohlthat got some of his education in the U. S. (New York University and Columbia) and his first real business experience in the Pennsylvania oil fields. In 1930 he married a Philadelphia schoolteacher who happened to be a poor relation of Dr. Hjalmar Horace Greeley Schacht.

When Hitler came to power, peripatetic Businessman Wohlthat returned to Germany and. started to work for In-law Schacht in the Ministry of Economics. He soon became Germany's No. 1 traveling salesman. Articulate in four languages, he drove hard trade bargains from Manchukuo to Iraq, Iran to Spain. In 1939 he was the storm centre of the London whaling conference at which, it was rumored, not whales but a $5,000,000,000 appeasement loan was the chief topic of conversation. He mapped the four-year plan, is today Goring's No. 1 economic adviser. Unlike most of his Nazi colleagues, he does not strut, prefers to operate be hind the scenes, avoids speechmaking. Last week, beaming over his coal victory, he said: "Anything I run will be on a sound business basis -- confidence is the thing. We are only trying to solve the problem Roosevelt tried to solve with the New Deal."

Against Ley, Goebbels and the other Party radicals, Wohlthat runs adroit interference for his capitalist friends, helps them gain a few yards from time to time. When the radicals complained about the high return on some stocks (running up to 12%), the directors obliged by issuing additional shares, thereby cutting the return on each share to 6%. Even in that juggernaut of statism, the Hermann Goring Works (TIME, Feb. 24), only the holding company is 100% State-controlled; many of the operating companies are privately run, partially owned by individuals.

Chief spokesman of the radicals is Labor Front Leader Ley, who believes the State should own everything. Last week, as though Wohlthat's triumph had made capitalism the new order of the day, even Dr. Ley began to show private initiative: it was rumored that he is now owner of Fromm's big German contraceptive factory.

Yet most entrepreneurs, German or not, know that Germany's is make-believe capitalism, that even their friend Wohlthat is fighting with a toy pistol. Few weeks ago thick-lipped Dr. Walther Funk, Reich Minister of Economic Affairs, told Nazi businessmen they would have to take more risks and expect less profits. Otherwise, said he, "we no longer need private enterprise." And always in businessmen's minds is the spectral case of Steelmaker Fritz Thyssen, the early Hitler backer who finally had to flee the Reich. Berlin says Thyssen is still on the Riviera, or else in South America. But last week his daughter in Argentina, Countess Anita Zichy, was sure the French had handed him over, that he was now in a "sanatorium" near Berlin.

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