Dieter Ziegler
The 'Germanisation' and 'Aryanization' of the Vienna branches of the Banque des Pays de l'Europe Centrale and of the Živnostenská banka, 1938
Paper
9th EBHA-Conference “Corporate Images – Images of the Corporation”
Frankfurt 01-03 September 2005
Session 3 B ‘Aryanization Contracts’ Revisited
Prof. Dr. Dieter Ziegler Lehrstuhl für Wirtschafts- und Unternehmensgeschichte Fakultät für Geschichtswissenschaft Ruhr-Universität D-44780 Bochum Email: [email protected] When Germany started its military expansion in Central Europe in 1938 the “Aryanization” of business property in the Old Reich had reached its climax, before it came to an end by the end of the year, when Jews were no longer entitled to carry on any business. In the occupied areas the problem of business property was even greater for the national socialists than in the Old Reich, because in addition to the Jews who were to be immediately ousted from the economy, armaments and other relevant industries, banks, insurance companies etc. had to be transferred to proprietors and managers who were regarded as reliable as Germans. These industries and businesses had to be “Germanized”. That meant that foreigners, whether Jews or non-Jews, as well as local industrialists and bankers, who were not regarded as ethnic Germans were also to be expelled from leading positions in the economy. In the final stage of the “Aryanization” process in the Old Reich the authorities had already realized that although the chaotic and mainly unregulated “Aryanizations” of the past years had been effective from the point of view of “Judenpolitik”, that is, to deprive the German Jews’ capability of economic survival, from the point of view of the economy, especially of the emerging war economy, it was counterproductive. Already in 1936, when the extraordinarily expensive Four-Year-Plan was started, Göring and Hitler were convinced that Jewish property was urgently needed to fund their war efforts. Up to now it was “German” private business and individuals that got the booty of the rape of “Jewish” business property, not the state. However, it was very difficult to start an organised overall expropriation of the German Jews as long as Germany was both militarily and economically vulnerable. In 1938 this situation had changed. While in the Old Reich it was too late to change “Aryanization” practices, the occupied areas, Austria in the first place, became a testing ground for a more state-regulated expropriation process. Often “Germanisation” and “Aryanization” efforts overlapped. This is shown by the following second case study of this panel, the “Germanisation” of the branches of two foreign banks, the French Banque des Pays de l‘Europe Centrale (Zentraleuropäische Länderbank) and the Czechoslovakian Živnostenská banka. While the “Germanisation” mainly affected the business property, which belonged to foreign proprietors, the “Aryanization” affected the staff, which was in both cases and in the case of the French bank particularly in the higher ranks “non Aryan”. In order to create an overall ethnic “German” bank, which was strong enough to support the Reich efforts to rebuild the Austrian economy, the interaction between private business and the authorities had to reach an intensity that was as yet unknown in the Old Reich.
1. The reorganisation of Austrian banking in spring 1938
Already several months before Hitler made it at the Berchtesgaden Conference quite clear, that Austria had no future as an independent state, the Viennese Mercurbank took the initiative to form a large German-controlled bank in Vienna. In October 1937 the Jewish executive of the supervisory board, the Hungarian citizen Gabor (Gabriel) Neumann, asked the Dresdner Bank as the parent company of the Mercurbank for authorization to negotiate with the Banque des Pays de l‘Europe Centrale in Paris for the takeover of its Vienna branch. The Dresdner Bank executive board member and chairman of the supervisory board of the Mercurbank Hans Pilder realized the necessity to provide for the case of the Austrian “Anschluss”, especially since he expected that the Dresdner’s biggest rival, the Deutsche Bank, took over the largest Austrian bank, the Credit-Anstalt, with which it cultivated a long- lasting friendly relationship. The major shareholder of the Credit-Anstalt was the Austrian state, so that after the annexation the Deutsche Bank could easily buy the shares. In this case Pilder did not expect any trouble from the German Government. With the Credit-Anstalt as Daughter Company the Deutsche Bank did not only have an advantage over the Dresdner Bank in Austria, but it had also the best starting position to expand its concern into the southeast of Europe.1 In early march 1938, only a few days before the German troops invaded into Austria, Neumann started his talks with the general manager of the Banque des Pays de l‘Europe Centrale, Henry Reuter. The Dresdner Bank, however, did not only rely on the negotiations with Paris, but examined the possibilities of taking over the Credit-Anstalt with the Foreign Office. A few days later the reorganisation of Austrian banking became definite as the German troops invaded Austria. The Dresdner Bank had organised Neumann’s flight to Paris, where he immediately contacted Reuter. For Reuter the situation had also changed completely, since he did not expect the new German administration tolerating a bank, which was in French possession and under a mainly Jewish administration. In addition, the situation in Vienna had become extremely dangerous, because large parts of the staff prepared for leaving the country whether they were French citizens or Austrian. With the exception of Baron Victor von der Lippe the whole executive management, and on the second level of the hierarchy 25 out of 31 members, were Jewish. Therefore, the Vienna branch was described as being in dissolution. For this reason the Banque des Pays de l‘Europe Centrale was forced to come to terms with any interested party. The Dresdner Bank was not the first choice of Reuter and his deputy in Vienna Joseph Chappey, but the Munich private bank Merck, Finck & Co. Even a merger with the Credit-Anstalt was taken into account, but the general manager of the latter suspected that the authorities would approve no arrangement as long as the Dresdner Bank was interested. This estimation was certainly correct. The Dresdner Bank’s initiative to merge the Vienna branch of the Banque des Pays de l‘Europe Centrale with the Mercurbank gained the support not only of the Reich Economics Ministry and the Reichsbank but also by Wilhelm Keppler, Hitler’s economic advisor and the Reich plenipotentiary for Austrian Affairs. While Neumann and Pilder negotiated with Reuter, Karl Rasche, the member of the Dresdner Bank’s executive board with the closest ties to the authorities in Austria, looked after the head of the Reich Economics Ministry’s task force in Vienna, Hermann Göring’s right-hand man Hans Kehrl, and Keppler’s chief of staff Edmund Veesenmayer. Immediately after the invasion Rasche had contacted Kehrl, who had just arrived in Vienna, with a proposal for the reorganisation of Austrian banking. The truth in this proposal was the merger of the Mercurbank with the Vienna branch of the Banque des Pays de l‘Europe Centrale and four provincial banks belonging to the concern of the Credit-Anstalt: the Bank für Oberösterreich und Salzburg in Linz, the Bank für Kärnten in Klagenfurt, the
1 Historisches Archiv der Dresdner Bank (HADrB), Bestand 87, Konsortial-Abteilung, File 29961-2001.BE, Steiermärkische Escompte-Bank in Graz and the Hauptbank für Tirol und Vorarlberg in Innsbruck. Kehrl and the Austrian Economics Minister Hans Fischböck not only agreed with Rasche, but went even a step further and proposed to include the Government-owned Austrian Kreditanstalt für öffentliche Unternehmungen und Arbeiten. The condition was to elect several persons with close ties to the Austrian Government and the Reich administration onto the supervisory board of the new bank. In addition the Dresdner Bank had to abstain from opening branches in Austria and to keep the Mercurbank as a formally independent institution. Finally, the Mercurbank had to close its branches at those places where those provincial banks were situated, which were part of the merger plan. 2 Rasche agreed to Kehrl’s plan but maintained that the business of the Banque des Pays de l‘Europe Centrale was “overloaded by pensions”, by which he probably meant the employees who had already left the bank’s service and who were expected to do so in the near future, that is, the clerks of Jewish origin. In addition he mentioned Reuter’s claim for a goodwill compensation, which was usually not granted when a business in Germany came to be aryanized. In order to strengthen the position of the Dresdner Bank in its negotiations with Reuter Rasche suggested putting pressure on both the bank’s administration in Paris and the only remaining manager in Vienna, Baron von der Lippe.3 In early April Neumann and Pilder met Reuter in Basle and started their official negotiations about a merger between the Mercurbank and the Vienna branch of the Banque des Pays de l‘Europe Centrale. The strategy pursued by Pilder was different from Rasche’s. While the latter trusted in the support of the political authorities, which in any case had to agree to the contract, Pilder was concerned about the international reputation of both the Dresdner Bank as parent company and the newly created daughter in Vienna. Even after the War Neumann described Pilder as a fair business partner during the negotiations. The goodwill question and the problem of the “non-Aryan” bank clerks indeed developed into the most difficult topics on the agenda. The French emphasized the importance of the Vienna branch on the Austrian finance market and the high reputation of the company name. The Banque des Pays de l‘Europe Centrale was founded in 1880 under the German company name Österreichische Länderbank. Before the First World War the Länderbank had been one of the eight great banks in the Austro-Hungarian Empire. After the War and after the split of the Empire the Viennese finance market had become too big for the small country of Austria and it was decided to transfer the headquarters of some Austrian banks into Western European capitals, which was also part of an agreement for the settlement of Austrian pre-war debts. Therefore in 1921 the Länderbank was newly founded in Paris under the French company name. The main emphasis of the business, however, was still the Austrian market, so that the Vienna branch had already 60m Franc of the bank’s share capital at its disposal while the Paris headquarter had to manage its business with 40m Franc. Throughout the whole period of its existence about 75% of all assets were engaged in the Austrian business.4
Arisierungen Österreich 1938, Pilder to Busch, Letter 1 February 1938. 2 Ibid., Kehrl to Rasche, Letter 28 March 1938. 3 Ibid., Rasche to Kehrl, Letter 30 March 1938. 4 National Archives and Records Administration, College Park, Maryland (NARA), Record Group (RG) 260, US Allied Command Austria (USACA) German External Asset Branch, Box 21, Exposé about Länderbank Wien AG by H. Kreis (not dated), p. 3. The number of Jewish employees at the Vienna branch was estimated at 260 persons. For them Henry Reuter claimed either a guaranteed pension or a compensation for those who had only been a few years in the bank’s service. Reuter and Pilder estimated the burden derived from the additional pensions at 700,000 to 800,000 Schillings per year. The Banque des Pays de l‘Europe Centrale had no pension fund so that the pensions would have to be paid out of the proceeds from the current business. Pilder was, however, confident that the rationalization gain derived from the merger could compensate for this additional burden.
2. The creation of the Länderbank Wien
In mid-April the Reich Economics Ministry had officially given permission to start negotiations between the Dresdner Bank and the Banque des Pays de l‘Europe Centrale about the selling price. Both sides agreed to transfer the Vienna branch of the Banque des Pays de l‘Europe Centrale to the Mercurbank by an asset deal, including all investments, bank buildings and pension obligations, with effect from January 1938. Assets worth 13.5m Schillings were excluded from the takeover, because they were nominated in foreign exchange, which could be realized by the Banque des Pays de l‘Europe Centrale. The book value of these assets was almost equal to the liabilities owed by the branch to the Paris headquarter. This transaction enabled the transfer of the capital of the French bank invested in its Viennese branch without transferring foreign exchange. All assets and liabilities were to be accepted by its book value provided that the Mercurbank auditing of the books, which took place during the first eight weeks after the signing of the contract, confirmed the books. The qualifying date for the book value was March 11th, so that reserves could to be avoided for those assets, which had been impaired after the invasion, that is, mainly credits to Jewish businessmen and investments in companies that were said to be “Jewified”. Although the final contract did not include any payment for goodwill, it differed substantially from the “Aryanization” contracts, as they were common in Germany by that time: the Mercurbank was bound to continue all contracts with employees including existing pension agreements. It was laid down that the “non-Aryan” employees including those who had already fled in a foreign country must not be treated differently from the “non-Aryan” employees of the Credit-Anstalt in a similar social position. These obligations were estimated worth 22.6m RM.5 This concession can be interpreted as a hidden goodwill payment by the Dresdner Bank and the Mercurbank respectively, but the consignee was not the French bank and its proprietors but the Austrian bank clerks, and this included the Jewish employees and pensioners. As a countermove to this concession the Viennese employees of the Banque des Pays de l‘Europe Centrale had to relinquish any further claim against their former employer. At the same time when the Dresdner Bank concluded this contract with its French business partner it became interested in the Viennese branch of the Živnostenská banka, too.6 Again
5 NARA, RG 260, Office of Military Government for Germany, United States (OMGUS), Office of the Finance Division and Financial Advisor, Box 49, draft contract (not dated); ibid., USACA, German External Asset Branch, Box 20, Report Länderbank Wien 20 November 1946. 6 HADrB, Bestand 96, Auslandssekretariat, File 5462-2000, Memo 4 April 1938. the Dresdner Bank started negotiations on two levels, with the representatives of the bank and with the authorities. The contract, which was concluded only a few days after the takeover of the French bank, was seemingly similar to the latter. But a closer look clearly shows that the Dresdner Bank had been able to push its interests much more forcefully through than during the negotiations with the French. Two major points were different in the contract with the Czechoslovakian bank. The Živnostenská banka employed 121 clerks in Vienna. Only one clerk was Jewish, but 55 were Czechoslovakian citizens.7 The problem of “non-Aryan” employees was indeed also pressing, since the Mercurbank was only prepared to take on German Austrians. Regulations concerning compensations and pensions were, however, not included in the contract with the Živnostenská banka. Contrary to the dismissed employees of the French bank employees of the Czechoslovakian bank were only entitled to a pension, if they continued working in Vienna. In this case their period of service at the branch was charged to them by the Mercurbank. The former employees, who were already pensioned off, had to be taken care of by the Živnostenská banka. The active “non-Aryans”, that is, Czechoslovakian citizens, were either to be transferred to Prague or pensioned off at the expense of the Živnostenská banka. If the Czechoslovakian pensioners stayed in Greater Germany they were entitled to receive their pension denominated in Reichsmark. For this reason the Živnostenská banka had to keep Reichsmark-securities worth 500,000 RM in safe custody in Vienna in order to guarantee the payments. The second major difference between the two contracts affected the transfer of assets. The Mercurbank was entitled to reject those credits, which were no longer sufficiently covered. This meant that those credits were left to the Prague bank, the cover of which had been depreciated after the invasion. A maximum figure for such assets was not fixed. In June 1938, that is before the auditing of the books, the amount of rejected assets was estimated 3m RM. Since the total amount of assets which were kept in the books of the Viennese branch of the Živnostenská banka did not exceed 22.2m RM, the share of rejected assets was much higher than 10%, which is a usual figure in asset deals.8 While the fact that the Dresdner Bank accepted the assets with their book value dating March 11 is seen as a hidden goodwill payment in favour of the French bank, the fact that the Mercurbank was entitled to reject assets, which were depreciated later, can only be interpreted that the Dresdner Bank did not compensate the Czechoslovakian Bank for any goodwill, neither open nor hidden. The reason for this difference is not clear. It is conspicuous, however, that the negotiations with the French were conducted by Pilder under the mediation of the Hungarian Jew Gabor Neumann, while the delegation from the Prague head-office of the Živnostenská banka was confronted with the notorious Nazi Karl Rasche. The basis for negotiation was almost equal in both cases. The only difference was the size of the respective candidate for takeover. The Živnostenská banka branch was much smaller than the branch of the Banque des Pays de l‘Europe Centrale. Its share in total assets of the merged bank was not
7 Eduard Kubu and Gudrun Exner, Tschechen und Tschechinnen, Vermögensentzug und Restitution, Veröffentlichungen der Österreichischen Historikerkommission, Bd. 23/3, München/Wien 2004, p. 71. 8 Österreichisches Staatsarchiv (ÖstA), Archiv der Republik (AdR), Gruppe 06, Dept. 15, Index 694 (1938), Nr. 47016, draft contract (not dated). higher than 6%. Investments in Austrian business did not exist in its portfolio. Thus the Mercurbank did not rely on the Živnostenská banka branch. The merger with the Banque des Pays de l‘Europe Centrale branch on the other hand meant that the medium-sized Mercurbank became the second largest Viennese bank – even without the Živnostenská banka branch -, because two thirds of the total assets of the merged bank originated from the branch of the French bank.9 In both cases, however, the negotiating partners of the Dresdner Bank were no equal partners. Both the Živnostenská banka and the Banque des Pays de l‘Europe Centrale had to sell, as a continuation of business in Vienna after the annexation of Austria by the German Reich was pointless. In addition, the new authority prohibited any attempt to find a competing applicant. Their negotiating position was so weak, that the size of the business was a mere nuance, which cannot explain the different outcome. It was in fact the different motivation of the Dresdner Bank’s representatives that made the difference. While Pilder was keen to keep up the Dresdner Bank’s image outside Germany as a serious business partner, Rasche had no scruples to exploit the emergency of the Prague bank to extremes. Rasche’s strategy was even supported by the rising “Sudeten crisis” which might have panicked the Czechoslovakian delegation. In July 1938, only about three months after the invasion, an “economically new banking corporation” had been created, which, as the Dresdner Bank had put it in the licence request to the Reich Economics Ministry, intended to serve the special needs of Austria, especially as regards the Four-Year-Plan and the penetration of the European Southeast. 10 The Dresdner Bank maintained that it had always been the aim of the Mercurbank to become a strong great bank as soon as the national social movement in Austria had achieved its target of reuniting Greater Germany. The greater Mercurbank was no end in itself, but had the duty to ease the economic consequences of the reunification. In this respect the “restructuring of property by eradication of the non-Aryan element” was seen as a job of particular importance.11 In order to prepare for this business the share capital of the new bank, which had become a regional great bank under the company name “Länderbank Wien” by July 1938, was doubled to 20m RM. In Vienna the situation had become even better compared with the reorganisation scheme of April 1938. By that time the takeover of the Živnostenská banka had not yet been on the agenda. In the provinces, however, the situation did not turn out to be as positive as suggested by Kehrl and Rasche. The Mercurbank had branches in Bregenz, Bludenz, Klosterneuburg and Wiener-Neustadt. In addition the Länderbank Wien was entitled to continue business of the former branches of the Banque des Pays de l‘Europe Centrale in Innsbruck, Linz, Salzburg, Baden near Vienna and Graz, because the takeover of the provincial banks belonging to the concern of the Credit-Anstalt was impossible to push through. First, the Credit-Anstalt was not prepared to sacrifice its daughter banks to a substantially strengthened competitor. The Credit-Anstalt’s position was supported by the Austrian Economics and Finance Minister Hans Fischböck, who had earlier been a director of
9 NARA, RG 260, USACA, German External Asset Branch, Box 20, Länderbank Wien AG, Report 17 July 1947. 10 Ibid., Letter 2 June 1938 (copy). 11 HADrB, Bestand 96, Auslandssekretariat, File 5458-2000, Memo (not dated, July 1938), pp. 1-3. the Credit-Anstalt’s department of industrial affairs. Secondly, the Party District Leaders of the affected provinces opposed to any plan that strengthened Vienna at the expense of their district.12 As compensation the Länderbank Wien now claimed to get licences for opening additional branches in six provincial towns. The Reich Commissar for Banking and Finance was very reluctant to approve, however, because Austria was seen as already overbanked, and the Party District Leaders opposed to this plan on principle. In the end only one additional branch was permitted in St. Pölten, where the Banque des Pays de l‘Europe Centrale had already been present in the 1920s.13 Contrary to the Austrian provinces the Länderbank Wien was most successful in the annexed Czechoslovakian provinces in Southern Moravia, where it was allowed to take over three branches of the Bohemian Escomptebank and Creditanstalt (Bebca).14 In 1939 the Hungarian „Hermes“ Ungarische Allgemeine Wechselstuben AG offered its Vienna branch to the Länderbank on the only condition that the latter agreed to employ the bank clerks who were said to be exclusively „Aryan“. Only a few weeks later the Länderbank Wien finally took over the Vienna branch of the Sociétà Italiana di Credito. Both businesses were, however, quantitatively to be neglected.
3. The Nazification of the Länderbank Wien
Although more than 50% of the assets of the Länderbank Wien originated from the Banque des Pays de l‘Europe Centrale, its leading personnel did not play any important role in the merged bank.15 Its “non-Aryan” managers had already left the country and the others were no longer employed. The only exception was Baron Victor von der Lippe, who was designed for a leading position in order to ease the organisational transfer. Yet he was not appointed to the executive board, because even after the signing of the merger contract he was still loyal to his former employer, the Banque des Pays de l‘Europe Centrale, as he blocked an attempt of the Dresdner Bank to get rid of certain formerly accepted obligations.16 The leading personnel of the Živnostenská banka was equally unsuited for a post at the executive board of the Länderbank Wien, because, as Pilder pointed out, they were either “non-Aryan” (that is, they were Slavs) or they were not suitable “for other reasons”. 17 This meant that almost the whole leading staff of the Mercurbank was transferred to the
12 Rossiskij Gosudarstvennyj Voennij Archiv v Moskve (RGVA) Moscow, Fond 1458, Findbuch 2, File 305, Memo Riehle (Reich Economics Ministry) 30 May 1938; ibid., File 103, Eigruber to Riehle, Letter 16 April 1938. 13 Ibid., File 83, Memo Reich Commissar for Banking and Finance, Friedrich Ernst, 10 January 1939; ÖStA, AdR, Bürckel Materie, Karton 92, Mappe 2/65/2/1, Letters 3 February 1939 and 16 February 1939; ibid. Gruppe 06, Dept.15, Index 697 (1939), Nr. 32240, Letter 14 March 1939; ibid., Index 697 (1939), Nr. 33666, Letter 18 May 1939. 14 Harald Wixforth, Auftakt zur Ostexpansion. Die Dresdner Bank und die Umgestaltung des Bankwesens im Sudetenland 1938/39, Dresden 2001, pp. 112-113. 15 The management is listed in Peter Eigner u. Peter Melichar, Enteignungen und Säuberungen. Die österreichischen Banken im Nationalsozialismus, in: Dieter Ziegler (Hg.), Banken und „Arisierungen“ in Mitteleuropa während des Nationalsozialismus. Geld und Kapital, 5/2001, Stuttgart 2002, pp. 106-108. 16 HADrB, Bestand 96, Auslandssekretariat, File 5460-2000, Personnel Committee Minutes 12 July 1938, p. 5; ibid., Memo Pilder 2 August.1938. As regards the role of Baron von der Lippe see below. management of the Länderbank Wien. This even included the member of the executive board Alois Hitschfeld, who was married to a Jew – a fact, which would have made him unsuitable, too, if the circumstances had been different. Hitschfeld was, however, indispensable, because he was the only experienced banker of the board with a long-lasting service in the Mercurbank. On the other hand, from the point of view of a national socialist Hitschfeld was certainly seen as an unreliable person, so that he was not at all qualified to keep contact with the authorities. In order to demonstrate the promised national socialist orientation of the new bank the Dresdner Bank had to appoint at least one party member onto the board. The only candidate was the former branch manager of the Mercurbank Adolf Warnecke, although Pilder regarded him as a suitable candidate only in view of his “Aryan origin and his Reich citizenship”. As a banker of limited qualification he was appointed Plant Leader, that is, he was responsible for personnel matters. Hitschfeld was the only board member, who was highly qualified for this position, and given the increased workload of the merged bank and the expulsion of the “non-Aryan” managers of the Mercurbank, including Gabriel Neumann, the Dresdner Bank had to look for other candidates to supplement the board. In spring 1938 the Dresdner Bank had sent two young managers, Hermann Richter and Georg Rienecker, to Vienna, who had to support the Dresdner Bank representative at the Mercurbank, Leonhard Wolzt. These three men had de facto headed the Mercurbank during the three months between the invasion and the merger. While Rienecker and Richter were indispensable at the parent company, Wolzt became the third person that was appointed onto the executive board.18 The NSDAP in Vienna was not pleased with Warnecke being the only party member on the board. Therefore, the Commissar for the Private Economy, Walter Rafelsberger, “suggested” the born Austrian Josef Ritter von Paic. Paic was an “Old Fighter” and a trained banker, but the Dresdner Bank regarded him too young to be appointed on the board right from the start. Similar to the other “Old Fighters” from both the Mercurbank and the Banque des Pays de l‘Europe Centrale he was appointed director. Rafelsberger accepted this counterproposal, but with this strong backing it was clear that Paic was to be appointed as soon as he had completed his “apprenticeship”. However, only a few weeks later Paic was offered a leading position at the Österreichischen Kontrollbank für Industrie und Handel, which played an important role in the “Aryanization” of the Austrian economy. So he left the Bank’s service.19 Rafelsberger was not the only party mandarin in Vienna who demanded a representative at the Länderbank Wien. His adversary inside the party, the Reich Commissar for the Reunification Josef Bürckel, also made a proposal. His candidate was the director of the Orientbank branch in Alexandria, Karl Wilhelm Lehr. Again Pilder was not enthusiastic about this candidate, but the Dresdner Bank was not in the position to reject Lehr, because the Orientbank belonged to its concern. 20 Including Lehr, the executive board comprised of four persons, two highly qualified bankers and two party candidates. Although the portion of party candidates in the Länderbank Wien was higher than on any other German bank board, the Austrian NSDAP
17 HADrB, Bestand 96, Auslandssekretariat, File 5458-2000, Memo (not dated, July 1938), p. 3. 18 Ibid., File 5460-2000, Supervisory Board Minutes 17 April 1939. 19 HADrB, Bestand 137, Personalbüro Berlin, File E.4874, Personal File Josef von Paic. was anything but pleased, because only one member of the board was a born Austrian, and this person was “Jewish interrelated”. The political influence was even stronger when it came to the arrangement of the supervisory board. Again, any representative of both the Banque des Pays de l‘Europe Centrale and the Živnostenská banka was out of question. They were either Jews or foreigners and the “Aryan” former Austrian citizens were regarded as still loyal to the Parisian and Prague bank respectively. The majority of the supervisory board came thus from the Mercurbank board, which had already been nazified before the annexation, because the Mercurbank had been regarded as a Reich outpost in Austria.21 At least three members of the board were national socialists and the former chairman, the most prominent Austrian national socialist industrialist Anton Apold, had involuntarily left the Mercurbank board in 1936, because the Austrian government had put enormous pressure on the Dresdner Bank to withdraw Apold. After the annexation Apold was of course the first candidate not only for the supervisory board, but also for the chairmanship. Other politically motivated appointments were Edmund Veesenmayer, the representative of Hitler’s economic advisor Wilhelm Keppler, and the Party District Leader of Lower Danube Heinz Birthelmer. In addition to the Dresdner Bank representatives Pilder and Rasche three industrialists were appointed, who had been illegal national socialist during the Austrian Republic.22 The result was the most nazified board in the private economy in Germany, but this was the price for the Dresdner Bank’s influence on the reorganisation of Austrian banking, which had been granted by the new administration in Vienna.
4. The decline of business morals
At first sight the takeover of the Viennese branch of the Banque des Pays de l‘Europe Centrale was a fair transaction – under the given political circumstances and in respect of the hidden goodwill payment. This qualification was confirmed by the president of the Parisian bank, André Luquet, when he recommended the transaction to the shareholders at the general meeting in Paris in July 1938.23 After the signing of the contract, however, it turned out that Luquet’s judgement was rash. Similarly to the “Aryanization” case of Gebr. Arnhold the Dresdner Bank tried to change certain agreements one-sided in its favour. Parallel to the negotiations with Henry Reuter two member of the Dresdner Bank executive board, Emil Meyer and Alfred Busch, had secret contact with the Austrian Finance Ministry. Their correspondence clearly shows, why the Dresdner Bank was not prepared to fix any sum covering the claims of the Jewish employees and pensioners during Pilder’s negotiations with Reuter. Reuter had made it quite clear that he interpreted the clause, that the Jewish
20 ÖStA, AdR, Bürckel Materie, Karton 92, Mappe 2/65/2/1, Bürckel to Pilder, Letter 27 May 1938; HADrB, Bestand 96, Auslandssekretariat, File 5458-2000, Memo (not dated, July 1938), pp. 3-5. 21 Dieter Ziegler, Die „Germanisierung“ und „Arisierung“ der Mercurbank während der Ersten Republik Österreich, in: ders. (Hg.), Banken und „Arisie rung“ in Mitteleuropa während des Nationalsozialismus. Geld und Kapital 5/ 2001, Stuttgart 2002, pp. 22-27. 22 Ziegler, „Germanisierung“, pp. 26-28; Gerald D. Feldman, The Länderbank Wien AG in the National Socialist Period (Report of the independent Commission of the Bank Austria Creditanstalt), Vienna 2003, pp. 70-71. 23 NARA, RG 260, OMGUS Records of the Property Division, Box 539, Presidential Speech 18 July 1938. employees must not be treated differently from the employees of the Credit-Anstalt, as an agreement to fix pensions and compensations according to the current Austrian law. Pilder’s vague statements in this respect now became the starting-point for the interpretation of the clause. During the negotiations Reuter had believed that any fixed sum would have been a disadvantage to the Jewish employees, because in international comparison the Austrian regulations were fairly generous. In Germany, for example, during the banking crisis in the early 1930s, it had been usual, that a dismissed employee received one month’s salary for each year in service. In Austria a dismissed employee with less than five years in service was entitled to compensation which equalled a salary for one year, up to ten years in service a salary for one and a half year, up to 25 years in service a salary for two years and with more than 25 years in service a salary for three years. Before the contract was signed the Dresdner Bank calculated the pensions and the aggregate compensation for the Jewish employees and pensioners of the Banque des Pays de l‘Europe Centrale under Austrian law and found that in addition to the old-age pensions, which were calculated at 740,000 RM per year, he had to add about 400,000 RM per year for those employees who were to be pensioned off as “non-Aryans” in long service and a single payment for compensations of 450,000 RM. In their correspondence with the Austrian Finance Ministry Meyer and Busch marked this burden as “unreasonable” and suggested a reduction to be ordered by the authorities. A special remark was added, that the compensated employees were almost exclusively “non-Aryan”. 24 As it had become clear, that the merger between the Mercurbank and the Viennese branch of the Banque des Pays de l‘Europe Centrale was sanctioned by a special law, the Dresdner Bank proposed to include the clause that the Austrian regulations for compensations and pensions were explicitly suspended in this case. As compensation for the Banque des Pays de l‘Europe Centrale it should also be fixed that the Parisian bank was released from any obligation deriving from the contracts between it and their former employees. The Dresdner Bank obviously hoped to reach an agreement with the French at the detriment of the Jewish employees, so that resistance from Reuter and his delegation was not to be expected. However, in order to avoid any risk during the negotiations Pilder gave the impression that the Dresdner Bank accepted the valid regulation. 25 The same was true in the case of capitalisations of pension claims. In May 1938, before the contract was signed, Baron von der Lippe had suggested to Pilder that the Bank should grant a compensation, which equalled the pension for seven years. Pilder rejected the proposal, but reacted very carefully, so that Baron von der Lippe might have expected the German regulation. By that time the Dresdner Bank had compensated their emigrating pensioners by five-year-pensions. The special law in deed included the proposed clause that the Banque des Pays de l‘Europe Centrale was released from any obligation towards its Austrian employees. But it did not comprise anything about compensations and pensions. This was added by Bürckel in an unpublished decree. He ordered that the “non-Aryan” employees had to be dismissed by
24 Ibid., Meyer to Reich Economics Ministry, Letter 24 May 1938. 25 NARA, RG 260, USACA, German External Asset Branch, Box 20, Busch to Reich Economics Ministry, Letter 2 June 1938. August 31 at the latest, while the compensation for the dismissed employees must not exceed salaries for 18 months.26 Bürckel’s decree changed the situation completely. The Dresdner Bank revised its calculations as follows: 39 Jewish employees had already left the Länderbank Wien. The compensation paid to them amounted to 350.000 RM. Three Jewish employees had died or had fled from the country without any compensation. The remaining 88 Jewish employees had to be dismissed. Only eight of them were entitled to a pension, the rest had to be compensated. The sum of money required in accordance with the Bürckel decree was calculated at 315,000 RM. The 220 Jewish pensioners (including widows) were entitled to an aggregate pension of 374,000 per year. Almost half of them had not yet reached the age of 65. These persons were put on duty again, but only in order to terminate the employment and dismiss them with compensation as prescribed by the Bürckel decree. The total amount of compensations for pensioners under 65 was calculated at 260,000 RM. This operation reduced the aggregate pension of the Jewish pensioner to 229,000 RM per year.27 Henry Reuter learned about the Dresdner Bank’s intention to limit compensations to an eighteen-month salary by Baron von der Lippe, who was informed by several affected employees. Reuter immediately required Pilder to pay compensations as the Austrian law prescribed, but Pilder reminded him that there was no regulation for pensions and compensations in the contract. The Dresdner Bank was only committed not to do the former Jewish employees wrong in comparison with the Credit-Anstalt employees.28 But the Credit- Anstalt had also to comply with the Bürckel decree. Formally Pilder’s argumentation was correct and Reuter had to pay for his trust in his business partner, who was obviously never prepared to fulfil Reuter’s expectations. Instead he had avoided fixing any sum in anticipation of new and more favourable regulations ordered by the authorities. Despite his weak position Reuter kept the negotiations up until October, when in a meeting of the supervisory board Pilder suggested to deal with the Länderbank pensioners in the same manner as the Dresdner Bank dealt with its Jewish pensioners in the Old Reich. In October 1938 the Dresdner Bank had arbitrarily cut the pensions by on average 25%. In order to obey the regulation of the contract with the Banque des Pays de l‘Europe Centrale Pilder made the condition that the Länderbank had to agree with the Credit-Anstalt about a common action. In addition the supervisory board decided to cut the compensations for those pensioners who wanted to capitalize their pension because were planned their emigration. These reductions had also been modelled after the example of the Dresdner Bank in the Old Reich. 29 The Reich Economics Ministry, which was asked for approval, was very reluctant and advised the Länderbank to be careful in circumventing the regulations of the contract with the Banque
26 Gesetz betreffend die Wiener Niederlassung der Zentraleuropäischen Länderbank, Paris, vom 6. Juli 1938, Gesetzblatt für das Land Österreich, Jg. 1938, 27. Stück, Nr. 233, p. 657; HADrB, Bestand 96, Auslandssekretariat, File 5460-2000, Memo Pilder 2 August 1938; NARA, RG 260, OMGUS Records of the Property Division, Box 539, Memo Leese 2 November 1938. 27 HADrB, Bestand 277, Revisionsabteilung, File 109350, Report on „die technische Übernahme und Revision der Zentral-Europäischen Länderbank“, Niederlassung Wien vom 30. Juni 1938, p. 14; ibid., File 109351, Report on „die Revision der Länderbank Wien 1939“, p. 13. 28 HADrB, Bestand 96, Auslandssekretariat, File 5460-2000, Memo Pilder 2 August 1938. 29 Ibid., Supervisory Board Minutes 2 October 1938. des Pays de l‘Europe Centrale. It maintained that the takeover of the business was a great advantage for the small Mercurbank, which had risen by that transaction to become a serious competitor to the Credit-Anstalt. Complaints about negative financial consequences of the takeover were without foundation. 30 The pensions were not reduced and the Länderbank agreed with the Credit-Anstalt to limit the capitalisation of pension claims to a three-year pension. Without the backing of the authorities the Dresdner Bank had to change its strategy in its negotiations with Reuter, too. In early December, in view of the agreement with the Credit- Anstalt, the supervisory board of the Länderbank Wien still rejected Reuter’s request to compensate pensioners by a five-year-pension, but it accepted Reuter’s minimum demand not to count the pensions for December and January. For Reuter this was only a drop in the ocean, so that in early January he lost his patience and gave Pilder the ultimatum of one week to declare whether or not he was prepared to “fulfil those obligations, which the Banque des Pays de l‘Europe Centrale, Vienna branch, is committed to take on towards its employees, Aryan or non-Aryan”? Pilder knew very well that there was a different understanding of these obligations. He replied seemingly naïve and stressed that “as a matter of course the Länderbank Wien was prepared to take on any obligations that were stipulated by the contract”, but added: “as far as the laws of the German Reich permitted”. On that occasion Pilder was given the permission to threaten Reuter with the termination of compensation payments for pensioners at all, if Reuter would not come to an agreement with him. In this case the emigrants would no longer be entitled to their pension as soon as they had crossed the border. This was certainly no deception, because the Dresdner Bank acted already in this manner in the Old Reich. 31 During the following weeks talks between Reuter and Pilder continued, but nothing came out of it. After the War Reuter told the military government in Austria that the Länderbank Wien had indeed terminated payments in 1939. Later, however, it returned to its old practice because Reuter had informed the president of the Swiss National Bank that he wanted to initiate the arbitration proceedings as they were designed by the contract.32 The Dresdner Bank was obviously afraid of being branded as breaching the contract by a neutral authority. By that time the public outside Germany had already been aware of the Dresdner Bank’s behaviour towards the former Jewish employees of the Banque des Pays de l‘Europe Centrale and pressure was put on it in the USA. An Austrian emigrant who had received no compensation by the Länderbank Wien had managed to get all assets belonging to the Länderbank in the USA blocked until the compensation was paid. Although the Länderbank Wien eased the pressure by limiting the amount of blocked assets to the sum claimed by its former employee, even after the War had broken out, the Dresdner Bank was uncertain about the outcome of the pending courts proceedings.33
30 RGVA, Fond 1458, Findbuch 2, File 68, Dresdner Bank and Länderbank Wien to Reich Economics Ministry, Letter 1 November 1938; Reich Economics Ministry to Länderbank Wien, Letter 8. November 1938. 31 HADrB, Bestand 96, Auslandssekretariat, File 5460-2000, Personell Committee Minutes 2 and 17 December 1938; 32 NARA, RG 260, USACA German External Asset Branch, Box 21, Statement Reuter 12 June 1947. 33 HADrB, Bestand 277, Revisionsabteilung, File 109351, Bericht über die Revision der Länderbank Wien AG 1939, p. 17. The contrast with the Banque des Pays de l‘Europe Centrale could hardly have been greater. Despite the massive decline in business after the selling of its Austrian branches and despite the fact that the contract and the Greater German legislation had freed it from the obligations towards their former Austrian employees, the Banque des Pays de l‘Europe Centrale and Henry Reuter in particular were eagerly trying to improve the situation of the Jewish emigrants. Reuter got French visa for 22 former Austrian employees and employed them in Paris. He also utilized his international connections in order to find employments outside France. Finally, he even provided those former employees with foreign exchange who had not received compensation by the Länderbank Wien. 34
5. Concluding remarks
The first and most important conclusion that can be drawn from this example is the fact that the freedom of action of private business, in this case a German great bank, was substantial, even in 1938, even in the occupied areas and despite the much more important role that the authorities played in Austria in spring 1938 in comparison with the “Aryanization” process in the Old Reich until November of that year. The conduct of Henry Reuter and his bank towards their former employees clearly shows that the Dresdner Bank had options to treat both the proprietors of the overtaken businesses and the Jewish employees different from how it actually did. It is difficult to decide whether Pilder’s strategy of fair business negotiations with the delegation of the Banque des Pays de l‘Europe Centrale was serious at first or whether it was a ploy from the beginning. If it was meant serious by Pilder, in his negotiation with the delegation of the Živnostenská banka Rasche had shown that his strategy of extortion was more successful, since he had the backing of the authorities, including influencial party members. After the establishment of the Länderbank Wien with its strong party influence it could be expected that the authorities would support the Bank or at least act benevolently neutral, if the Länderbank Wien “interpreted” the imprecisely formulated clauses of the merger contract in a one-sided manner. It was thus an instance of deteriorated business morals that the Dresdner Bank utilized its scope at the detriment of their Jewish employees and not an inevitability prescribed by the authorities. On the contrary, the Bank instrumented the anti-Jewish legislation shamelessly to its own advantage so that even the Reich Economics Ministry reacted astonished. In this (admittedly extreme) case the anti-Jewish elements were included in the legislation on request of the Bank in order to hide the real intentions and to pretend a diminished room to manoeuvre. Secondly, the lesson that can be drawn from this example is the necessity to scrutinize “Aryanization” (and “Germanisation”) contracts carefully, because otherwise the differences between the takeovers of the Banque des Pays de l‘Europe Centrale branch and the Živnostenská banka branch would have been overlooked. In addition, the contract is not sufficient to judge the business morals of the buyer. It is also necessary to examine how the
34 Feldman, Länderbank, p. 65 contract was translated into action. Given the unfavourable circumstances, that prevented the French from continuing business in Austria, the “Aryanization” contract between the Mercurbank/Dresdner Bank and the Banque des Pays de l‘Europe Centrale is the document of a transaction that served the mutual interest on an equal basis. The reality was, however, different. The Dresdner Bank had expected, that the French bank accepted a one-sided interpretation of the compensation and pension clause in the Dresdner Bank’s favour as long as this interpretation did not put the proprietors of the Banque des Pays de l‘Europe Centrale at a disadvantage. But it was mistaken. It is to be feared that the Dresdner Bank did not often experience such situation – or even more general: an agreement to the mutual advantage and to the detriment of Jewish emigrants was probably not often rejected by business partners in the Third Reich.