Pretext for British Appeasement of Nazi Germany – 4
Social Experimentation without Endangering the Economic Elite
Dr. Walter Matthews, the Dean of Exeter, was one of several British intellectuals who admired the Nazi regime for its determination to turn Germany into a laboratory for testing new ruthless measures to purify the human species. “They have introduced a very interesting experiment,” commented the Dean in August 1934, “and one of the most interesting features in that experiment is the sterilisation law. From a biological point of view it is a most remarkable experiment and it will be most interesting to see how it works out.”
Dr. Matthews was commenting on a law passed in July the previous year allowing an “hereditary court” to determine whether anyone specified as a “genetic risk” should be compulsorily sterilized. Over the following twelve years, Nazi doctors sterilized an estimated 400,000 Germans including those with epilepsy, schizophrenia and congenital blindness as well as Romani people, “Rhineland bastards” (the children of German women and colonial African soldiers who participated in the 1923 French occupation of the Rhineland) and those merely deemed to be “feeble minded.”
In 1943 sterilization was sanctioned by the Nazi administration in the Netherlands against Jews married to non-Jewish wives in exchange for a promise of immunity from the deportations. Those who refused, along with with millions of other Jews across occupied Europe, were transported to concentration camps. Here among those surviving the initial selections for the gas chambers, tens of thousands were also subjected to forced sterilization administered by the most merciless of Nazi doctors who had been offered the prospect of advancing their own medical careers by experimenting with previously untried and dangerous methods including high dose hidden x-ray devices. The reproductive organs of the victims were then surgically removed to examine the damage. Otherwise, the main concern was how quickly “assembly line” sterilization methods could work. 
Another of the many enthusiasts for Nazi social experimentation was the Reverend E. A. Armstrong of Leeds Parish Church. Writing in September 1933, he eagerly informed readers of the Yorkshire Post that “the most radical alterations are taking in place in all sections of society and are being welcomed.” He was particularly gratified to discover that the Nazis had introduced a compulsory work programme ( Arbeitsdienst ) for young men
“In Germany today,” he informed his readers, “you see the sort of men who in England spend their time lounging dispiritedly at street corners marching vigorously to their work and singing heartily. The compulsory year’s service in a labour corps for both men and women which is being introduced is an indication of the radical reconstruction of social life… I asked the opinion on this Arbeitsdienst of many boys and girls of good family and considerable education, and practically without exception, they regarded it as an excellent thing.”
The compulsory labour camps were of only marginal economic or educational benefit. The true value of Arbeitsdienst to the Nazi party was as a method of indoctrination. Historian Klaus Fischer observes that “young people were exhorted endlessly to fall in for roll call (appell); they reported for duty like obedient soldiers. Their outings were semimilitary: marching, pitching tents in perfect order and symmetry, playing quasi-military games, singing ideologically tinged songs ( ‘Oh, Raise Our Flags,’ ‘Holy Fatherland,’ ‘Soldiers Carry Rifles,’ ‘Unroll the Blood-red Flags’), and chanting passwords and catchphrases (‘Heil Hitler,’ ‘Hitler is Germany and Germany is Hitler,’ ‘Blood,’ etc).”
One of the most influential enthusiasts of Hitler’s “great social experiment” was the last pre-war British ambassador to Germany, Sir Nevile Henderson. On 1st June 1937, just four days after his appointment, he accepted an invitation as a guest of honour to a dinner in Berlin hosted by the Anglo-German Association, where his words of support for the Nazi regime were warmly welcomed. “In England,” he asserted, “far too many people have an entirely erroneous conception of what the National-Socialist regime really stands for. Otherwise they would lay less stress on Nazi dictatorship and much more emphasis on the great social experiment which is being tried out in this country. Not only would they criticize less but they might learn some useful lessons.”
The following day the German Jewish academic Victor Klemperer noted in his diary that “probably no one expects war any more; people have got used to the foreign powers putting up with everything.” Although he is unlikely to have read about Henderson’s speech, his comments were to some extent perceptive, although he was overly generous in attributing British appeasement to a weary tolerance of Nazi atrocities, and he seems to have been unaware of the enthusiastic support of many in the elite for both Nazi eugenics and militarism.
Britain’s new ambassador also sympathised strongly with the Nazi aim of expansion in the east to obtain lebensraum (living-space) for the master race which had been inspired by British colonial imperialism in Africa and Asia . Henderson believed that it was right and proper for the superior German race to subjugate the Slavic states of Eastern Europe so long as this posed no threat to the British Empire. In a report he submitted to the Foreign Office in July 1937 he was forthright in expressing his opinions – confident no doubt that they would be favourably received. “To put it bluntly,” he wrote “Eastern Europe emphatically is neither definitely settled for all time nor is it a vital British interest and the German is certainly more civilized than the Slav, and in the end, if properly handled, also less potentially dangerous to British interests. One might even go so far as to assert that it is not even just to endeavour to prevent Germany from completing her unity or from being prepared for war against the Slav provided her preparations are such as to reassure the British Empire that they are not simultaneously designed against it.”
Henderson shared, with other enthusiasts for Hitler’s social and political experiments, the hope that in constructing a strong and highly militaristic society, the Nazis would stamp out any dangerous ideas of communist or socialist revolution in both Germany and Eastern Europe. As the historians Alvin Finkel and Clement Leibovitz observed “Henderson, like most of the British ruling class, preferred the Nazi experimentation to Bolshevism because the former did not threaten their property and privileges.” Naturally, the social and economic concentration of wealth and power was one issue with which the entire British establishment agreed there should be no experimentation. Whether among MPs or among the business elite, there was an almost complete unanimity there should be no attempt to weaken corporate power in Germany or any financial regulations that might hurt foreign investors.
By January 1933, there had already been some cautious optimism that a Hitler government would benefit big business and that therefore foreign bondholders might benefit too. On the morning after Hitler became chancellor several British newspapers carried a report that on the previous day “German bonds gave way sharply at first but after the announcement that Hitler had become chancellor there was a rally.”
Hitler understood that the most urgent message he needed to convey to the foreign media in order to win the support of British, French and American investors, was that that he had no plans to attack concentrated corporate power or to limit profiteering by investors. So it is not surprising that this was the first official announcement made by Hitler’s government and it was welcomed by the British press. News of street fighting and of thousands of Jews fleeing their homes to escape the country was considered relatively inconsequential.
The Aberdeen Press and Journal carried a banner headline “Hitler Regime Undertaking – No Wild Financial Experiments” with a secondary heading in much smaller print – “Uneasy Jews Making Rush to Leave Germany” while the Hull Daily Mail ran the reassuring “Germany to Attempt No Experimental Finance” as the banner headline across its front page with a secondary subheading of “Street Fight Deaths“. Similarly the Western Morning News ran with “Herr Hitler’s Assurance” as the main headline reporting that “Chancellor Hitler’s government, in its first official statement yesterday, gave an assurance that there would be no question of any kind of experiments in industry or finance and holders of German bonds need have no cause for anxiety,” and noted that “When the Berlin Bourse opened there was a boom in heavy industrials and motor shares.”
The Financial Times, also focused on the enthusiastic response by investors to the new regime’s promises. Under the headline “Berlin Buoyant – Official Assurances of No Experiments,” it reported that “chiefly owing to last night’s official statements, which were emphatically repeated today, that the new government will not resort to any experiments in finance and economics, the bourse today was buoyant.” Even the Daily Worker, which was owned by the British Communist Party, remarked on the enthusiasm, noting that “the reception of the new (Nazi) government by the boss-class of Germany is significant. The official statement that there would be no economic or currency experiments gave much satisfaction to the stock exchange… There was an all-round advance in share quotations by the average of three per cent.”
The city editor of the Daily Mirror held the same view, although he expressed it more positively without any reference to capitalists, plutocrats or the boss-class, observing that “On the the Berlin bourse… there was an all-round advance indicating that industrial circles feel confidence in the new regime.” The Times concurred, reporting that “the (Berlin) bourse has confidence in the economic future, for there was a general rise in market values today.”
This positive mood was quickly reflected in London. The Dundee Courier, under a page two headline “British Funds Regain Favour,” commented that the “greater cheerfulness” was due in part to the “stimulating influence” of the Berlin Bourse and similarly the city editor of the Sheffield Independent observed that “sentiment generally was to some extent influenced by the sensational political changes in Germany but the market was reassured when it became known that the Berlin Bourse was strong and a reduction in the Reichsbank rate was expected.”
The Manchester Guardian noted that Britain’s business elite was confident that the new regime would not stray too far from economic orthodoxy. The newspaper’s financial editor reported that “the most powerful personages in international finance seem to have decided that the Hitler chancellorship in Germany will bring no innovation in economic or financial policy,” and added that among the “controlling officials in the Bank of England… the German Finance Minister, Count Schwerin von Korsigk, is regarded as a thoroughly safe man, and his continuance in office is thought to promise continuity of policy.”
At the end of the week, the Church Times acknowledged that British investors, who had been extremely anxious about what new financial policies the Nazis might introduce, were now greatly relieved to discover that “there would be no attempt to put into practice the Nazi financial policy, which would probably upset the bourses of Europe quite as thoroughly as communism itself.” It seemed that, after some initial concerns, the British establishment had begun to feel relatively comfortable with the new Nazi regime.
A report carried in the Morning Post and several regional newspapers including The Scotsman, The Yorkshire Post and the Western Daily Press concluded that “as the new (Nazi) government settles down in office it becomes more and more apparent that it has no desire whatever to embark on dangerous adventures in either internal or in foreign affairs“ Hitler’s well publicized plans to persecute Germany’s Jews were not, it seems, deemed to be a “dangerous adventure” in “internal” affairs. Further down the page, the same article in at least some of the newspapers also reported that “the Nazi journal Volkische Beobachter asserts that there has been a rush during the past few days for passports by German Jews who are anxious suddenly to take trips abroad.”
The overriding concern remained on any possible threat by “extremist elements” within the Nazi party to embark on any unorthodox regulation of big business or expansion of the role of government in the economy, automatically labelled “inflationary” by pro-business politicians and economists. Even the left leaning Daily Herald appeared greatly relieved when, in July 1933, an alleged attempt by “extremist elements of the Nazi party” to “force Hitler’s hand by arresting Dr. Schacht (the Reichsbank President)” was prevented only through Hitler’s personal intervention. Under the headline “Nazi Rebels’ Plot for Arrest of Dr. Schacht,” the newspaper disclosed the “sensational inside story” of a “second revolution” which had been only narrowly averted. A “secret battle between Capitalism” and “revolutionary elements in the storm troops” had reached a “critical point.” Dr. Hjalmar Schacht, however, had “succeeded in convincing Hitler that a new inflation would provoke a revolt of the middle classes, who would lose their savings, as they did ten years ago,” and the plot was foiled “just in time.”
The implication of labelling the opponents to Dr. Schacht “extremist” was that the Reichsbank President was thereby characterized as a “moderate” even though he was already known to be a devoted Hitler loyalist. As early as November 1932, two months before Hitler even became Chancellor, Goebbels had noted in his diary that “he (Schacht) absolutely represents our point of view. He is one of the few who accepts the Fuehrer’s position entirely.” The official organ of the Nazi party, the Voelkischer Beobachter, also lauded him for his crucial role in the January and March 1933 elections in Germany, declaring that he had “never failed to point at Adolf Hitler as the only possible leader of the Reich.”
Schacht was also dedicated to the pursuit of German rearmament and expansion, if necessary by force and later, in August 1935, he also acknowledged that he shared Hitler’s wish to purify the German race. “The Jew,” he told German businessmen at a speech in Koenigsberg, “must realize that their influence is gone for all times. We desire to keep our people and our culture pure and distinctive.” However, he felt that the “solution of these problems must be brought about under state leadership, and cannot be left to unregulated individual actions, which mean a disturbing influence on the national economy.” A lack of law and order could scare investors but as long as any radical measures to marginalize and persecute German Jews were done only under direct orders from the regime, he would fully support them. This was the “moderate” Reichsbank president that the Daily Herald was supporting.
He was also supported by the rest of the mainstream British press as a “stabilising force” who wished to keep Germany’s economic doors open to world trade. Three months earlier when Hitler had reinstated him as President of the Reichsbank, an editorial in The Times pointed out that he was not committed to a “narrow economic nationalism” and that “it is satisfactory that Dr. Schacht, an ardent National Socialist, and now once more president of the Reichsbank, has plainly pronounced the furtherance of international trade to be one of ‘the foremost duties of any central bank of issue.'” The paper also noted the euphoric reaction in the financial markets, commenting that his appointment “was followed by a general upward movement in values on the (Berlin) Bourse, which began with the stock market and then spread to shares of all descriptions.”
Other newspapers were even more forthright in their praise. The Morning Post commented that “it is generally agreed that in the hands of Dr. Schacht, who never put political reasons before financial ones, Germany’s currency will be kept inviolably steady“. Here “political reasons” would have been understood by its readers as code for “socialist interference with business” and did not refer to Schacht’s antisemitsm or his well known sympathy for Hitler’s rearmament programme. The Yorkshire Post was equally approving, declaring that “the appointment of Dr. Schacht to his former position as President of the Reichsbank means the return to power of the man who has brought order out of financial chaos in post war Germany,” and S.W. Alexander, City Editor of the Daily Express, also commended Schacht’s economic orthodoxy, observing that “all the steps that are being taken by Dr. Schacht and his colleagues are designed to give stability.” Stability for whom ? It was understood that the main benefactors would be business and the holders of German bonds. These interests, which were clearly reflected in the newspaper commentary, were not concerned that Schacht had already made it clear that he was dedicated to furthering Hitler’s goals of internal repression and preparing Germany for war, which they assumed would be directed against Moscow.
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1. Dean of Exeter interviewed in “Herr Hitler – Hero Worship in Germany. People Friendly Toward England” in the Devon and Exeter Express, 31 August 1934, p1.
2. Doris Bergen (2008) “The Holocaust: A New History“, Tempus, London p83, Saul Friedlander (1997), “Nazi Germany and the Jews: Volume 1 The Years of Persecution, 1933-1939,” Orion Books, London, p207-208 and Richard Overy (2010), “The Third Reich: A Chronicle“, Quercus, London p91 and p133.
3. Raul Hilberg (1993)”Perpetrators, Victims and Bystanders: The Jewish Catastrophe“, Lime Tree, London p68-69 and p132 and Klaus P. Fischer (1995) “Nazi Germany: A New History“, Constable, London, p490-491.
4. Rev. E. A. Armstrong, “Rebirth of A Nation – An Analysis of the Spirit Behind Hitlerism”, the Yorkshire Post, 6 September 1933 p8
5. Klaus P. Fischer (1995), “Nazi Germany: A New History“, Constable, London, p347
6. “Points of View: Letters From Readers – British Ambassador’s Speech in Berlin,” The Scotsman, 7 June 1937 p11.
7. Victor Klemperer (1999), “I Shall Bear Witness: The Diaries of Victor Klemperer, 1933-41,” Phoenix, London p275
8. Nevile Henderson’s report to the Foreign Office on 20 July 1937 quoted in Alvin Finkel and Clement Leibovitz (2011), “The Chamberlain-Hitler Collusion,” James Lorimer and Company Ltd., Toronto p106
9. Clement Leibovitz and Alvin Finkel (2011), “The Chamberlain-Hitler Collusion,” James Lorimer and Company Ltd., Toronto, p107
10. See for instance “The Money Market”, The Aberdeen Press and Journal, 31 January 1933 p10, “German Bonds Fall and Rally,” the Yorkshire Post, 31 January 1933 p12 and “Foreign Bonds Rally”, The Nottingham Journal, 31 January 1933 p6.
11. See “Herr Hitler’s Assurance”, the Western Morning News and Daily Gazette, 1 February 1933 and “Hitler Regime Undertaking – No Wild Financial Experiments”, the Aberdeen Press and Journal, 1 February 1933 p7 and “Germany to Attempt No Experimental Finance”, the Hull Daily Mail, 31 January 1933 p1.
12. “Berlin Buoyant,” the Financial Times, 1 February 1933, p3
13 “Shares Rise on German Stock Exchange and in Wall Street”, the Daily Worker, 1 February 1933, p2.
14. “Effects on Markets”, the Daily Mirror, 1 February 1933, p3
15. Our Own Correspondent, “Herr Hitler’s Policy,” The Times, 1 February 1933 p10 accessed online in the Times Digital Archive on 22 July 2017
16. “British Funds Regain Favour”, The Dundee Courier and Advertiser, 1 February 1933 p2 and “Stock Exchange – Germans and Hitler”, the Sheffield Independent, 1 February 1933.
17. “Money and Stocks: Hitler in German Finance,” the Manchester Guardian, 1 February 1933, p12
18. “Summary,” the Church Times, 3 February 1933, p127
19. See the Morning Post quoted in “No Financial Experiments”, The Scotsman, 1 February 1933 p11, “Hitler’s Assurances to Bondholders”, the Yorkshire Post, 1 February 1933 p9 and “Dangerous Adventures Not Contemplated” in the Western Daily Press and Daily Mirror, 1 February 1933 p12.
20. Subheading “Anxiety Among Jews” under “Hitler’s Assurances to Bondholders”, the Yorkshire Post, 1 February 1933, p9 and subheading “Jews Uneasy”, the Dundee Courier and Advertiser, 1 February 1933, p7.
21. “Nazi Rebels’ Plot for Arrest of Dr. Schacht,” the Daily Herald, 14 July 1933 p3
22. “In Depth Overview of Defendants and Crimes – Dr. Hjalmar Schacht,” accessed online at http://www.jewishvirtuallibrary.org/nuremberg-trial-defendants-hjalmar-schacht
23. “Herr Hitler’s Problem,” Editorial in The Times, 5 April 1933 p15 and “Nazis and the Reichstag,” The Times, 18 March 1933 p11 both accessed online in The Times Digital Archive on 14 October 2017.
24. Article by a Morning Post and Scotsman correspondent in “Dr. Luther Resigns,” The Scotsman, 17 March 1933 p9, “German Foreign Debt Warning,” the Yorkshire Post, 13 December 1933 p9 and S.W. Alexander, “Dr Schacht Attacks the Bankers,” the Daily Express, 08 April 1933 p11.
All text on this website is copyright Alisdare Hickson 2017. This is a first draft.