Alfred Hugenberg

Chairman at Krupp Steel

He subsequently left the public sector to pursue a career in business, and in 1909 he was appointed chairman of the supervisory board of Krupp Steel where he built up a close personal and political relationship with Baron Gustav Krupp von Bohlen und Halbach, the CEO of Krupp AG. Krupp had been "in search of a man of really superior intelligence" to run the finance department of Krupp AG and found that man in Hugenberg, with his "extraordinary" intelligence and work ethic. In 1902, Friedrich Alfred Krupp's homosexuality was revealed to the public. He killed himself or died from illness shortly after the Social Democratic newspaper Vorwärts published love letters he had written to his Italian male lovers. After Krupp's death, the entire firm of Krupp AG was left to his eldest daughter, Bertha Krupp. As Krupp AG was one of the world's largest arms manufacturers and the chief supplier of weapons to the German state, the management of Krupp AG was of some interest to the state, and Emperor Wilhelm II did not believe that a woman was capable of running a business. To solve this perceived problem, the Emperor had Bertha marry a career diplomat, Gustav von Bohlen und Halbach, who was regarded by the Emperor as a safe man to run Krupp AG. Gustav Krupp, as he was renamed by Wilhelm, knew little about running a business and so depended on his board to assist him. Hugenberg's role in the management of Krupp AG was thus considerably larger than would be indicated by his title of director of finance; in many ways, he was the man who effectively ran the Krupp corporation during his ten years at the firm between 1908 and 1918.

During his time at Krupp AG, Hugenberg was known for his "inflexibility", "stubbornness", and "self-righteousness" as he constantly fought with the two unions representing the workers, one allied with the Social Democrats (SPD) and the other with the Centre Party. Hugenberg did not approve of either union and instead sponsored a "yellow" union representing the management, making his tenure a time of endless disputes with the workers. Hugenberg favoured the idea of a Werksgemeinschaft (transl. economic community), where the Krupp family would act as the patriarchal authority to their workers, granting them higher wages and even junior shares in Krupp AG, in exchange for which the workers would be subservient and loyal to die Firma ("the Firm") as Krupp AG was always called. Very little came of his plans for a Werksgemeinschaft, and living conditions and wages for the workers at die Firma did not change very much during Hugenberg's time. Hugenberg's interest in having the workers own their own houses stemmed only from his interest in stopping demands for democracy and socialism. His strong social Darwinist views led him to argue that the problem of poverty was a genetic problem, with the poor inheriting bad genes that made them unsuccessful in life. Improving their living standards for him was only necessary to halt demands for political and social change, as opposed to a positive goal in and of itself.

At the time, Krupp AG was Europe's largest corporation and one of the largest corporations in the world, and Hugenberg's success in raising annual dividends from 8% in 1908 to 14% in 1913 won him much admiration in the world of German business. A more unwelcome appearance in the limelight occurred with the Kornwalzer affair, in which the Social Democrat Reichstag member Karl Liebknecht exposed industrial espionage by Hugenberg. The management of Krupp AG did not even try to deny the allegations of bribery and industrial espionage, with Krupp arguing in a press article that any attack on the firm of Krupp AG was an attack on the ability of the German state to wage war by the socialist-pacifist SPD, and although several junior employees of Krupp AG were convicted of corruption, Hugenberg and the rest of the Krupp board were never indicted. In 1912, Emperor Wilhelm II personally awarded Hugenberg the Order of the Red Eagle for his success at Krupp AG, saying that Germany needed more businessmen like Hugenberg. At the ceremony, Hugenberg praised the Emperor in his acceptance speech and went on to say that democracy would not improve the condition of the German working class, but only a "very much richer, very much greater and very much more powerful Germany" would solve its problems. After the Social Democrats won the largest number of seats in the Reichstag in the 1912 elections, Hugenberg first became interested in the media. He believed that centre-right and right-wing parties such as the National Liberals and the Conservatives needed more newspapers to champion their views.

Opposition to the Young Plan and work with the Nazis

Hugenberg had a grand strategy to bring down "the System" as enemies of the Weimar Republic always called it. Hugenberg believed in the politics of polarization under which German politics were to be divided into two blocs, the right-wing "national" bloc whose leader he envisioned as himself and the Marxist left consisting of the Social Democrats and the Communists. As part of his strategy of polarization, Hugenberg intended to seize upon wedge issues and present them in a highly inflammatory manner to create a situation where one could be either for or against the "national" bloc, which was intended to lead to the electoral decline of all centrist parties in Germany. Leopold noted that Hugenberg "debated political issues in terms of a simplistic, philosophic disjunction – a man was either for the nation or he was against it". Hugenberg wrote in 1929 in a memo outlining his planned politics of polarization that "fate is only for the weak and the sick. The strong, healthy man molds his fate and that of his nation with his own will." Hugenberg believed that the same skills that made a successful media magnate would bring down the Weimar Republic as he deliberately pursued his strategy of Sammlung (rallying together) as he called his polarizing strategy. As a part of this polarization, he planned to turn the DNVP from a party working within the Reichstag to advance its goals – which was what the DNVP had more or less become under Westarp – into a movement that would work for the destruction of "the System". Hugenberg had initially intended as his wedge issue the subject of constitutional reform, but he dropped it in the spring of 1929 as "too abstract" for most people in favour of opposing the Young Plan for reparations.

Taking advantage of a clause in the Weimar constitution that allowed a referendum to be called if enough people signed a petition demanding it, Hugenberg decided in June 1929 to collect signatures for a referendum on the Young Plan, which was intended to discredit the "grand coalition" government led by the Social Democratic chancellor Hermann Müller. Using highly emotional, visceral language, Hugenberg and his newspapers presented the Young Plan – which actually reduced reparations – in the starkest terms possible as a form of "financial slavery" for "our children's children" which would reduce living standards in Germany down to an "Asiatic" level of poverty (at the time, the term "Asiatic" poverty referred to what today would be called a Third World living standard). By pushing for a referendum on the Young Plan, Hugenberg as intended forced the Müller "grand coalition" government to defend the Young Plan while Hugenberg as an opposition leader felt free to make extravagant promises about what he would do if he was chancellor, claiming that the Reich would pay no reparations at all if he were in charge. Even at the time, it was widely recognized that Hugenberg's status as an opposition leader free from the burdens of office allowed him the luxury of not suggesting a "realistic alternative" to the Young Plan. This was especially the case as the French government had agreed that in exchange for German acceptance of the Young Plan, France would end its occupation of the Rhineland in the summer of 1930, which was five years earlier than the Treaty of Versailles had called for. At the time, Hugenberg's critics pointed out that if the Young Plan was rejected, then the French occupation of the Rhineland would continue until the summer of 1935, an aspect of Hugenberg's rejectionist strategy that he never dwelled on. Hugenberg's strategy was a negative one intended to create the "national bloc" that he envisioned meant there could be little discussion of what the "national bloc" intended to achieve, since there were too many divisions on the German right for a positive program, and instead the "national bloc" was to be united by what it was against instead of what it was for.

Hugenberg was vehemently opposed to the Young Plan, and he set up a "Reich Committee for the German People's Petition" to oppose it, featuring the likes of Franz Seldte, Heinrich Class, Theodor Duesterberg and Fritz Thyssen. On 9 July 1929, Hugenberg founded the Reich Committee on the German Initiative to campaign against the Young Plan, which the Hugenberg newspapers hailed as the most important political development. Hugenberg saw the referendum as the beginning of the counterrevolution, writing at the time that thanks to him "a front has arisen that knows only one goal: how the revolution [of 1918] can be overcome and a nation of free men can again be made from Germans". To achieve this goal, Hugenberg took 551,000 Reichsmarks from the Scherl corporation for discretionary spending and another 400,000 for "special purposes", all of which he spent on the referendum. However, he recognized that the DNVP and their elite band of allies did not have enough popular support to carry a rejection of the scheme through. As such, Hugenberg felt that he needed a nationalist with support amongst the working classes whom he could use to whip up popular sentiment against the Plan. Adolf Hitler was the only realistic candidate, and Hugenberg decided that he would use the Nazi Party leader to get his way. As a result, the Nazi Party soon became the recipients of Hugenberg's largesse, both in terms of monetary donations and of favourable coverage from the Hugenberg-owned press, which had previously largely ignored Hitler or denounced him as a socialist. Joseph Goebbels, who had a deep hatred of Hugenberg, initially spoke privately of breaking away from Hitler over the alliance, but he changed his mind when Hugenberg agreed that Goebbels should handle the propaganda for the campaign, giving the Nazi Party access to Hugenberg's media empire.

The infamous paragraph four in the proposed "Law Against the Enslavement of the German People" (more commonly known as the "Freedom Law") – as the proposed anti-Young Plan bill to be submitted in the referendum was called – stipulating that those Reichstag members who voted for the Young Plan and those civil servants who handed over reparations were to be imprisoned, was inserted by Hitler and accepted by Hugenberg, who believed it would attract voters. Paragraph four of the "Freedom Law" instead divided the DNVP. Westarp and several other DNVP Reichstag members came out in opposition, arguing that paragraph four was going too far, while the Reich Association of German Industry declared its neutrality, despite Hugenberg's efforts to have the association support him. Several industrialists such as Albert Vögler and Fritz Thyssen supported the "Freedom Law", but the majority were opposed, favouring the Young Plan since it promised economic stability; rather than risk a split, the association declared itself neutral at a meeting on 20 September 1929. On 24 September 1929, at a gigantic rally in the Berlin Sports Palace, the four leaders of the Reich Committee against the Enslavement of the German People, namely Hugenberg, Hitler, Seldte and Class, formally began the campaign for the "Law Against the Enslavement of the German People". On 30 November 1929, when the "Freedom Law" came up before the Reichstag, 14 DNVP representatives abstained from voting while 3 voted against the "Freedom Law", citing concerns about paragraph four. When Hugenberg tried to impose party discipline, 12 DNVP representatives left the party in protest over his leadership. The Hugenberg newspapers went all-out in support of the "Freedom Law", running glaring headlines in support, but when the referendum was held, only 5,538,000 Germans voted yes for the "Freedom Law", which was insufficient to for the law to pass.

Political philosophy

Born in Hanover to Carl Hugenberg, a royal Hanoverian official who in 1867 entered the Prussian Landtag as a member of the National Liberal Party, the young Hugenberg studied law in Göttingen, Heidelberg, and Berlin, as well as economics in Strassburg. As a child, he had a love of writing poetry, which was strongly discouraged by his father who instead raised Hugenberg to be a bureaucrat like himself. In 1891, Hugenberg was awarded a PhD at Strassburg for his dissertation Internal Colonization in Northwest Germany, in which he set out three ideas that guided his political thought for the rest of his life:

The necessity for statist economic policies to allow German farmers to be successful;

Despite the necessity for the state to assist farmers, the German farmer should be encouraged to act as an entrepreneur, thereby creating a class of successful farmers/small businessmen who would act as a bulwark against the appeal of the Marxist Social Democrats, whom Hugenberg viewed as a grave threat to the status quo;

Finally, allowing German farmers to be successful required a policy of imperialism, as Hugenberg argued on social Darwinist grounds that the "power and significance of the German race" could be secured if Germany colonized other nations. Hugenberg maintained that Germany's prosperity depended upon having a great empire, and argued that, in the coming 20th century, Germany would have to battle three great rivals, namely Britain, the United States and Russia, for world supremacy.

Later in 1891, Hugenberg co-founded, along with Karl Peters, the ultra-nationalist General German League, and in 1894 its successor movement, the Pan-German League (German: Alldeutscher Verband). From 1894 to 1899, Hugenberg worked as a Prussian civil servant in Posen (modern Poznań, Poland). In 1900, he married his second cousin, Gertrud Adickes (1868–1960), with whom he had four children. Gertrude was the daughter of Franz Burchard Adickes, Mayor of Frankfurt.

The son of an upper-middle class family, Hugenberg initially resented the Junkers (landed nobility), but over time, he came to accept the idea of "feudal-industrial control of Germany", believing in an alliance of Junkers and industrialists. Alongside these beliefs, Hugenberg maintained an ardent belief in imperialism and opposition to democracy and socialism.

At the same time, Hugenberg became involved in a scheme in the Province of Posen in which the Prussian Settlement Commission bought land from Poles to settle ethnic Germans there. In 1899, Hugenberg called for "annihilation of Polish population". Hugenberg was strongly anti-Polish, and criticized the Prussian government for its "inadequate" Polish policies, favouring a more vigorous policy of Germanization.

Hugenberg initially took a role organizing agricultural societies before entering the civil service in the Prussian Ministry of Finance in 1903. Hugenberg came into conflict with his superiors, who opposed his plans to confiscate all the non-productive estates of the Junkers to settle hundreds of thousands of ethnic Germans who would become his idealised farmer-small businessmen and "Germanise" the East.