‘Of all the names which have become associated with the Nuremberg Trials,’ declared the prosecutor at the proceedings intended to bring the surviving Nazi leaders to justice at the end of the Second World War, ‘I suppose that none has been a household name for so many decades – indeed for nearly a century – as that of Krupp.’ Its history, the indictment continued, had made the firm ‘the focus, the symbol and the beneficiary of the most sinister forces engaged in menacing the peace of Europe’. Krupp was very much a family enterprise: ‘Four generations of the Krupp family,’ the indictment noted, ‘have owned and operated the great armament and munitions plants which have been the chief source of Germany’s war supplies.’ The tradition of the Krupp firm, and the ‘social-political’ attitude for which it stood, were exactly suited to the moral climate of the Third Reich. There was no crime such a state could commit – whether war, plunder or slavery – in which this firm would not participate. Long before the Nazis came to power, Krupp was a ‘National Socialist model plant’.
At the Nuremberg trials, and at the subsequent trials of leading industrialists held in 1947-48, ‘Krupp’ came to stand not so much for Nazism as for the economic impulse behind the deeper forces of militarism which the Allies were equally determined to drive out of German politics, culture and society. Given the sinister international reputation of the firm, as the arms manufacturer behind Germany’s military aggression from Bismarck’s wars of unification through two world wars, it’s not surprising that it has attracted the attention of many historians writing from different points of view. The most widely read study was The Arms of Krupp, a thousand-page epic published in 1968 by William Manchester, better known for his account of the assassination of his wartime friend, John F. Kennedy, Death of a President. Written in a racy, sometimes sensational style, the book was full of sweeping generalisations about Germany and the Germans, whom Manchester, not least because of his war experiences, clearly did not like. The Krupps were demonised from start to finish, and there was more than a whiff of muck-raking about Manchester’s whole approach. The book got a mixed reception even in the popular press; reviewers were unhappy with its sarcastic style and Time magazine referred to the ‘swarms of errors’ that littered its pages. Nevertheless, with his customary thoroughness, Manchester had worked hard in the Krupp company and other archives, on the Nuremberg trial documents and on many other sources, and he had interviewed a substantial number of people. He unearthed a huge mass of material, much of it previously unknown, and on particular issues, such as the question of Krupp’s attitude to Hitler in 1932-33, before the Nazis seized power, he stuck to the documentary record and did not make claims that went beyond it.
Manchester was not an economic historian, and he was more interested in the personalities than in the business. Before he published there had been hardly any historical studies of major German companies and their role in the Third Reich, and his book was not only pioneering in this respect but held the field for many years, until other studies began to appear in the 1990s. (One of the reasons for the delay was that German companies, including Krupp, were so incensed by Manchester’s book that they made it very difficult for some time after its publication for historians to gain access to their archives.) In the last few years, however, serious accounts of the firm’s history have begun to appear, and now they have been joined by a chronological overview from Harold James, a British economic historian who teaches at Princeton. The sober style of his book could not be more different from Manchester’s, and its focus on the technological and economic history of the business is a world away from Manchester’s relentless exposure of the personal foibles and misdemeanours of the company’s successive owners.
Like Manchester, James begins at the beginning, though his coverage is roughly even across time, where The Arms of Krupp focused heavily on the Nazi years. As James notes, the company’s beginnings could hardly have been more inauspicious. Its founder, Friedrich Krupp, was a risk-taker of no mean proportions, and most of his industrial gambles ended in abject failure. His grandmother, Helene Amalie Krupp, the first in a series of powerful women who would play a pivotal role in the dynasty’s history, left him a fortune based on her canny investments in retail, trade and property. Her business interests included a small but unprofitable ironworks, in which Friedrich had gained some of his earliest experience, and though it had been sold off, Friedrich was left with a strong desire to produce steel and steel products ‘in the English manner’, combining toughness and malleability.
Friedrich squandered his grandmother’s inheritance in pursuit of his obsession. He experimented with different raw materials, different locations and different techniques. Debts piled up; he was crossed off the official list of local businessmen in 1824, and in 1826 he died, exhausted, at the age of 39. His widow, Therese, however, continued to have faith, and carried on the business, assisted by their 14-year-old son, Alfried, who anglicised his name to Alfred in homage to England’s domination of industry and technology at the time. In 1838, he travelled to England (incognito, as ‘Herr Schropp’), returning in 1843 but continuing to send agents there to inspect the latest factory designs and pick up the latest industrial techniques, to win new customers and to further his reputation in what was then the world’s richest country.
Alfred was a workaholic, who later reminded people that in the early days ‘I was the chief executive, clerk, treasurer, smith, smelter, coke beater, nightwatchman at the cement oven, as well as much else, and one run-down horse served our transportation needs.’ His father’s one indisputable success had been in developing a process for casting steel for the manufacture of steel stamps used in the production of coins. Soon Alfred was supplying coining rolls to the Austrian mint, and branching out into the production of rolls for the manufacture of spoons, which he marketed in France, Russia, England and even Brazil. His real breakthrough came with the railway boom of the 1840s, when he began supplying axles and crankshafts to the Prussian state railway. Further technical innovations made it possible for him to produce cast steel rings for use on railway wheels – three intertwined rings became what is still the company logo – then rails, as well as steel plates and propellers and shafts for steamships. All this allowed Krupp to buy up other firms and acquire iron ore mines, while the introduction of the Bessemer and Siemens-Martin processes allowed him to make more and bigger steel products. By 1874 he employed 12,000 workers on a 35-hectare site in Essen, three times the size it had been a decade earlier.
Alfred Krupp was well aware that skilled and reliable workers were often hard to come by in the conditions of rapid industrial growth that characterised the Ruhr in his time. They frequently changed jobs in order to get better wages or conditions. They needed to be disciplined and organised if they were to carry out the dangerous process of casting steel with the precision it required. Yet Krupp wanted ‘loyal workers … who are grateful in heart and deed for the fact that we offer them bread’. In order to induce them to work for him and to stay once they arrived, he set up a health and pension fund for his employees, built housing blocks in which more than 25,000 people were living by the end of the century, opened 55 company stores and canteens, set up schools and eventually provided a hospital, a convalescent home and a library.
There was a flipside to this paternalism, however. Alfred declared that ‘nobody shall dare to rise up against a benevolent rule; I’d rather it was all blown up.’ To enforce discipline, he declared in 1871: ‘I wish to introduce for ever the practice of photographing workers, and a much stricter control of the workforce, of their past, their impulses, their life. We must have a private police that is better informed than the municipal service.’ Photography was indeed used to identify those whom James calls ‘troublemakers’. Krupp told his staff that ‘the best and most skilled worker or master is removed as soon as possible if he even appears to incite opposition or to belong to an association’ – by which he meant a trade union.
The workers were Kruppianer, and Alfred wanted to oversee even their morals. ‘Morality,’ the Krupp General Regulation of 1872 declared, ‘allied to order and loyalty, has a beneficial effect – without it there will be deceit, disorder, depravity, disloyalty with ruin in its train.’ In 1877, before a national election, as Manchester noted, Krupp posted notices in all his shops telling his workers to leave politics to their betters: ‘Issues of high policy require more time and knowledge than the workman has at his command.’ After the elections he summarily dismissed thirty employees for allegedly spreading socialist propaganda. He required his workers to swear an oath of loyalty and was dissuaded from issuing them with uniforms with gold braid for good service only by the argument that the foul factory air would quickly ruin them. His private police force was larger than the municipal one, and was used to levy fines for lateness, insolence towards superiors and much else besides. Its officers were instructed to ransack the rubbish bins outside Krupp shops and housing blocks for socialist literature and ‘used toilet paper’ with seditious text printed on it. He even told his employees to marry and have lots of children ‘to provide the state with plenty of loyal subjects and to develop a special breed of workers for the factory’. This neo-feudal management style did indeed foreshadow the later development of the ‘Nazi model plant’, with its ‘leaders’ and their ‘retinue’, and its combination of welfare provision and authoritarianism.
James says far too little about this aspect of the Krupp enterprise, which is covered in detail by Manchester; indeed, the workers barely get a mention, and where they do, it’s to emphasise the company’s paternalism, not its almost totalitarian regimentation. This is emphatically a top-down history of the company. James is at pains to stress too that armaments made up only a part of its production, except in time of war. Yet even if Krupp did not begin as an arms manufacturer, there was, as James notes, ‘a synergy between military and nonmilitary production’ that now underpinned the company’s rapid expansion through the economic vagaries of the coming decades. As the railway boom began to fade, growing international tension caused European countries to arm, and Krupp was well placed to take advantage of this new development.
Unlike his father, Alfred was a skilled promoter of his own products, a showman who believed publicity could win him customers. He used multiple crucibles simultaneously to case a 4300-pound steel block which he showed at the Great Exhibition in 1851, winning a medal for it. But he also exhibited a shiny steel cannon, undermining the claim advanced in the exhibition catalogue that ‘the Palace of Industry was a Temple of Peace.’ ‘The English will have their eyes opened,’ he claimed exultantly. (Subsequently, the firm produced the Paris Gun, which bombarded Paris with 94-kilogram shells fired through a barrel 34 metres long to a distance of 120 kilometres in the final months of the First World War, and an 80cm cannon called Dora, mounted on a huge railway chassis, in the Second. These gigantic weapons made little impact, but they served their purpose in keeping the firm in the public eye.)
In the 1870s, Alfred began building a grandiose villa on a hill eight kilometres from the factory, overlooking the Ruhr Valley: the Villa Hügel, built to his own design and using large amounts of Krupp iron in its construction. It was not so much a home as a place for customers and visiting dignitaries to stay, keeping them away from the technical secrets of the factory. ‘The commercial manufacturer,’ Alfred declared, ‘must be a waster of money in the eyes of the world.’ To underscore the point he even employed the composer Engelbert Humperdinck to play the piano for the amusement of his visitors. At the Chicago World’s Fair of 1893, Krupp spent $1.5 million on creating a replica of the Villa Hügel with his name on the façade; inside, visitors could inspect a cannon capable of firing a shell at a target 13 miles away.
Visitors came to Essen from all over the world, including China and Japan. Krupp sold arms to the Russians, incorporating innovations suggested by their military technicians, as well as railway equipment to Brazil. He invited representatives of 18 states to a gunnery demonstration in 1879 and circulated advertisements for his products to British MPs. His vision encompassed the supply of railway equipment to the whole world; he imagined railway lines, he said in 1875, ‘linking and crossing the great continents of Africa, America and Asia so that they will come to the status of civilised countries and with connecting and branch lines will keep industry busy until the end of the world – as long as some windbag does not destroy this expectation by developing air transport.’
Yet for all the global reach of his enterprise, repeatedly underscored by James, Krupp ultimately hitched his fortunes to those of the Prussian state, first to the booming railways, then to the army, the institution that played a central role in Bismarck’s wars of unification in 1864, 1866 and 1870. Krupp lobbied hard to get orders for weaponry, and built four new production halls for cannon between 1861 and 1870 to meet the growing demand. James describes Krupp himself as an ‘unpolitical German’, but he cultivated close relations with Kaiser Wilhelm I and told his son Friedrich Alfred: ‘You must be to the future kaiser what I am to the present one, then no swindler can damage the factory.’ In 1871, Alfred declared: ‘My achievement will stand and fall with Prussia’s greatness and military supremacy.’
Friedrich Alfred, who took over the business on his father’s death in 1887, was an enthusiastic moderniser under whose influence nickel steel armour plating, electrical detonators and much more besides came into production. He conducted mergers and acquisitions at a frenetic pace and oversaw a major increase in the size of the factory, whose workforce grew from 13,000 in 1887 to 25,000 in 1899. Friedrich Alfred had no qualms about using the new mass press and popular political mobilisation to further his business interests. A major opportunity came at the end of the century, with Kaiser Wilhelm II’s decision to build a large new navy. Krupp not only acquired a major shipyard, trebling its workforce in a few years, but also hired a journalist, Victor Schweinburg, to publish articles favourable to his business. Schweinburg founded the popular Navy League to whip up pressure for the construction of a battle fleet. Within a year it had nearly a quarter of a million members. Krupp’s links with Schweinburg, as well as his presence on the league’s executive board, did not go unnoticed, and both were forced to resign under heavy political pressure. It was discovered that the firm was making a profit of 60 per cent on the armoured plating for the new fleet – Krupp was the only supplier. Never very healthy (he suffered badly from asthma as a child), Friedrich Alfred spent increasing amounts of time on Capri, where he dabbled in marine zoology and distributed his largesse to the locals.
Scandal ensued as rumours of wild homosexual orgies with under-age Italian boys began to reach Berlin. Accusations and counter-accusations flew in the press and in the Reichstag. The storm of publicity reflected a widespread horror at homosexuality, which was illegal according to the German Criminal Code; it was portrayed by the strait-laced Social Democrats in particular as evidence of the deep moral turpitude of the ruling capitalist elite. Friedrich Alfred’s marriage broke down under the strain. He had his wife confined to a mental hospital and shortly afterwards, on 22 November 1902, he died, killed by a stroke according to his doctors, by his own hand according to rumour.
James dismisses the allegations of Friedrich Alfred’s pederasty as the product of political opposition to him on Capri and ‘a sustained and vicious attack that used all the instruments of the new politics of scandal and sensation’ in Germany itself, but Manchester provides a great deal of circumstantial evidence, including Krupp’s habit of inviting Italian boys to stay with him at the Hotel Bristol when he was in Berlin. Manchester has no doubt that Krupp committed suicide, noting that there was no official postmortem and that the doctors placed the corpse immediately in a sealed casket that not even relatives were allowed to open. Whatever the truth, James puts the most favourable gloss on events and glides smoothly over the controversy, attaching any opprobrium to Krupp’s socialist critics.
With the death of the last male Krupp, the family firm was turned into a joint-stock company, though one in which all but four of the 160,000 shares were owned by Friedrich Alfred’s 16-year-old daughter, Bertha. Managers moved in to take over the firm, which continued to innovate and expand, achieving a particular triumph with the patenting of a new kind of non-rusting steel (4500 plates of which covered the top of New York’s Chrysler Building from 1929 onwards). In 1906, the situation changed again when Bertha married the diplomat Gustav von Bohlen und Halbach. Delighted, the kaiser issued a royal patent allowing him to take the name Krupp. By 1909, Gustav Krupp von Bohlen und Halbach had become chairman of the supervisory board. In the same year, the Pan-German businessman and media mogul Alfred Hugenberg, who was to become Hitler’s main coalition partner in 1933, became chairman of the executive board. This was the team that led the firm into the First World War.
Krupp soon adjusted to the new situation in 1914. The company’s shipyard went over to making U-boats and, assisted by large subsidies under the Hindenburg Programme of 1916, undertook a dramatic expansion of arms production. ‘The company,’ James remarks, ‘had become in practice part of the German state.’ The workforce grew rapidly, reaching almost 170,000 by the middle of 1918. By this time, worker discontent was also growing. As the Allied blockade throttled the country’s food supplies, prices began to rocket and a vast black market in food emerged. Workers began to agitate for wage increases in order to feed their families, and Gustav began to worry about ‘the sliding of our monarchical and state authority down the slippery road to democracy’. Anxious to stop the rot, the kaiser visited the factory and delivered a characteristically bombastic speech to the workers. But it was too late.
In November 1918, the kaiser was overthrown and Germany became a republic. The newly powerful trade unions negotiated agreements with the firm that established a works council. A slimmed-down workforce went back to producing for the state railways. Meanwhile, in an attempt to enforce the demilitarisation policies of the Treaty of Versailles, a posse of British and French officers descended on the Essen factory and ordered the destruction of ten thousand machines used for producing military hardware. Not only did Krupp manage to evade these controls but the firm also began making weapons in secret with the encouragement of the German army, the Reichswehr, and the collaboration of the Swedish arms company Bofors. From 1926 it beganbuilding tanks (‘tractors’) and had them tested in the Soviet Union by the Red Army.
Meanwhile, Krupp was profiting from the hyperinflation that overtook Germany in the early 1920s. In the summer of 1922, for instance, it borrowed a billion marks from the banks, worth 1,140,000 marks in gold; when the firm repaid the sum in October 1923, its value had sunk to a mere 53,000 gold marks. When the French occupied the Ruhr after Germany fell behind in reparation payments, production ground to a halt; Gustav was arrested for organising resistance to the occupation and jailed for seven months. In the final stages of the inflationary period the economy all but collapsed and Krupp made major losses. It had to negotiate a large American credit line and obtain further help from the German government.
Recovery had barely begun when the Wall Street crash of 1929 plunged the German economy into the Depression. Krupp had not solved the problem of overcapacity that had plagued it during the 1920s. Wages and salaries were repeatedly cut, hours of work reduced, and between 1928 and 1932 the workforce halved. In 1928, Krupp had joined his fellow steelmakers in an unprovoked lockout of workers in the Ruhr in an attempt to cut wages still further; characteristically, James devotes most of his coverage of this event to stressing Gustav’s reservations about it, though the fact is that he participated fully and a quarter of a million men had to suffer the loss of their jobs at a time when they could ill afford it.
Despite his new role as chairman of the Reich Association of German Industry, Gustav, as James points out, played little part in the complex behind-the-scenes negotiations that led to Hitler’s appointment as Reich Chancellor on 30 January 1933. He even declined to meet Hitler, and did not put money into his election coffers when asked to. While Manchester agrees with this, he points out that Gustav thought the political parties incapable of solving Germany’s problems and that he wanted Hindenburg to appoint a government to do the job. Krupp, along with a group of industrialists, signed a petition submitted to Hindenburg by the Nazi banker Kurt von Schröder in November 1932 urging him to appoint Hitler. And he welcomed the suppression of the unions and the attacks on communism that followed Hitler’s appointment.
Krupp gave in easily enough to Nazi pressure to dismiss Jewish employees, and his firm benefited almost immediately from the new regime’s drive to rearm. ‘The next five years,’ Hitler told his cabinet on 8 February 1933, ‘must be dedicated to the rearmament of the German people.’ The orders began to flow in. By 1934-35 the company was making heavy artillery again. Its shipyard, which had been struggling for a long time, launched its first new submarine in 1935. The outbreak of the Second World War in September 1939 increased the pressure on arms manufacturers. James argues strongly that far from driving the Third Reich to war, Krupp was pulled along by the regime. Certainly the regime was making the running, but nevertheless, the Nazi state afforded excellent opportunities for Krupp to expand, and the firm made substantial profits from rearmament.
The Krupp tradition of a family firm run by a single person rather than a board of directors fitted in well with Nazi ideas of leadership (Führerschaft) and heredity. On 12 November 1943, Hitler decreed that ‘the owner of the Krupp family wealth is empowered to create a family enterprise with a particular regulation of succession.’ Bertha signed her shares over to her eldest son, Alfried, who had taken up a management role a few years before; now he took over the reins from an ailing Gustav. Alfried had joined the SS in 1931 as a ‘patron’ – an early indication of his political sympathies – and the Nazi Party in 1938. He eased out the managing director, Ewald Löser (an old-style nationalist who had been deputy mayor of Leipzig under Carl Goerdeler, a central figure in the conservative resistance to Hitler), and devoted himself to serving the regime. Characteristically, James underscores his relative lack of dynamism and commitment, and the growing government interference in production, especially after Albert Speer became minister of munitions. But the fact remains that Alfried Krupp was chairman of the executive board and so bore the major responsibility for the firm’s actions.
The most controversial of these in retrospect was the company’s increasing use of forced foreign labour. The Krupp concern no more remained a passive agent of government policy in this field than it did in any other. From the autumn of 1941 onwards, as German workers were drafted to the front in growing numbers, the firm lobbied energetically for an allocation of labourers from the prison camps of the Reich and its satellites; indeed, the firm was criticised by the regime for what it saw as excessive demands. James says that it had no alternative but to use forced labour, but Krupp’s demands went far beyond what was necessary. ‘Krupp placed orders for workers speculatively, without always being sure they were actually needed,’ Ulrich Herbert noted in Hitler’s Foreign Workers (1997), while its demands met with a positive response mainly because the firm ‘traditionally enjoyed excellent relations with the Berlin central authorities’.
Companies were supposed to guarantee food and accommodation before any allocation was agreed, but the numbers demanded by Krupp far outran the firm’s capacity to cater for them. The company’s agents picked suitable workers from camps in Holland and made sure French workers were well cared for, but the many Soviet labourers were kept behind barbed wire and fed rations so meagre that their health rapidly deteriorated. Local managers sometimes tried to improve things to get better performance, but in one instance Krupp’s head office declared that ‘Russian prisoners of war must not be permitted to become accustomed to West European food.’
James admits that the firm did ‘remarkably little’ to improve the dire conditions for forced labourers but the evidence shows its sins were not merely ones of omission. Eventually, he says, rations were increased and the barbed wire removed from the perimeter of the camps in which Soviet workers were housed. Yet according to Herbert, ‘the old barbed wire often remained in place,’ and bombing raids nullified the small attempts at improvement made by Krupp officials anxious not to lose the right to procure more foreign workers. Some of the camps in Essen became, Herbert says, ‘breeding grounds for corruption and petty crime’, including the misappropriation of food rations supposed to go to the inmates and the sexual exploitation of female workers.
The company security force, two thousand men armed with leather truncheons, administered savage beatings in the cellar of the main administration building to foreign workers who caused trouble. One Soviet prisoner caught trying to steal a loaf of bread was shot dead by a company guard, who received no punishment. Many were ‘beaten up simply because they were Eastern workers, and plant security had been given power over them’. Manchester provides page after page of evidence taken from Nuremberg trial papers documenting a regime of horrifying brutality exercised by Krupp’s security force.
At the end of the war, Gustav Krupp von Bohlen und Halbach was arraigned at Nuremberg, but by this time he had become senile following a series of strokes and proceedings against him were abandoned. Instead, Alfried and almost all the Krupp directors were charged in the industrialists’ trial in 1947-48. They were convicted of employing slave labour and plundering occupied Europe, and were sentenced to varying terms of imprisonment. Krupp’s fortune was confiscated. Some might think this was only just, but James waxes indignant about the trial. ‘There appears [sic] to have been many and in some instances multiple violations of standard judicial practice,’ he says. All he will concede is that the firm was ‘a participant in a massive web of ideologically driven immorality’ for which the regime bore the responsibility.
Other German industrialists, themselves of course deeply implicated in the crimes of Nazism, were predictably outraged by the trial. In January 1951, as the Cold War gathered pace, the Allied high commissioner, US General John McCloy, amnestied Alfried Krupp – who, he claimed, had ‘exerted very little if any influence in the management of the company’ – and revoked the confiscation of his property. He amnestied the other directors too, though they had, it seems reasonable to suppose, exercised a more considerable influence on the management of the company. This was part of a wider American policy of forgive and forget, given the perceived need to bolster West German morale in the face of the communist threat from the East. The recovery of the economy trumped the fading desire to settle accounts with war criminals.
Like many other German businesses, Krupp adapted seamlessly to the new world of the postwar economic miracle. As a symbol of German militarism, the firm was initially supposed to be broken up, but although a few parts were split off, the company basically remained intact. The young banker Berthold Beitz, appointed managing director not least because he had saved several hundred Jewish workers as manager of an oil extraction company near Lodz during the war, managed to secure delay after delay in the process of selling off the firm’s steel and coal holdings, while it expanded production in these areas and invested in new technology.
Now out of prison and back at the helm, Alfried began to think of the future. His son, Arndt, had no interest in the firm, preferring, as James says, ‘to cultivate an ostentatious and hedonistic life as a homosexual playboy’. In 1966, Alfried found a solution to the problem by converting the firm into a public company controlled by a charitable foundation. Arndt was bought out of his inheritance with an annual income of two million marks. This had the effect of keeping the firm intact and protecting it from corporate raids and takeovers. It also of course protected the family fortune. But this had little meaning any more, since the name Krupp, added by the kaiser’s proclamation of 1906 to the surnames solely of Gustav and his heir, Alfried, lapsed with the latter’s death in 1967. Beitz duly announced: ‘There is no Krupp family name any more.’ In due course, it merged with other companies, notably the Thyssen concern, though it has subsequently always remained conscious of its unique tradition.
It was to celebrate that tradition that the foundation commissioned James to write this book, which first appeared in German in a much larger format with lavish full-colour illustrations, in time to celebrate the firm’s 200th anniversary in 2011. Doubtless copies of the German edition now adorn coffee tables in the Villa Hügel and are given away to valued customers and prominent visitors. Although James thanks the foundation for its financial support, he does not reveal this background or the existence of the German commemorative version in his preface. He should have done. The book’s true nature as a celebratory official history is betrayed by the imprint page, which reveals that the copyright is held not by the author or publisher but by the Alfried Krupp von Bohlen und Halbach Foundation. James insists that all the views and interpretations in the book are his own, but at every juncture the book denies or passes too briefly over the dark side of the firm’s history. One is left with the impression that the author has taken much too seriously his brief of providing an official history that will not cause any upset at the Villa Hügel.