Es Geht Wohl Anders (Things Turn Out Differently): The Unexpected Life of Walter Arlen

Goebbels and the Nazi Attack on Jewish-owned Department Stores

Goebbels begins his propaganda campaign
Propagandist Joseph Goebbels published this cartoon in the fifth issue of Der Angriff (The Attack), a paper he founded after he became the leader of the Nazi Party’s Berlin branch. The paper attacked the Weimar Republic and Jews, often drawing links between the two. As seen in this cartoon, Jewish-owned department stores were a favorite target of his ire. Here he lampoons two Jewish-owned department store chains, Tietz and Wertheim, and the Aryan Germans who supported them, portraying a fat Jewish owner sitting atop an emporium advertising an end-of-season sale to suggest that the Jewish owners had both the capital to invest in advertising and lacked moral consciousness to publish indecent notices in newspapers. On the right side of the image, the truly “patriotic” German populace streams into an Aryan middle-class shop next door.
In December 1927, Goebbels published his first of five special editions dedicated to opposing the Jewish-owned department stores. No other theme of Nazi propaganda was blazoned across the masthead of the newspaper so frequently. Under the front-page headline, “Berlin Department Stores Tax Evasion,” the article read:

plans to spread a network of department and junk stores across Berlin have expanded. Karstadt is building an enormous department store ‘palace’ in the middle of the Communist section of Berlin, Neukölln.
The Jewish-owned Karstadt chain, with capital of nearly a quarter billion Marks and ninety stores, has flourished due to the stupidity of the masses and the interests of Social-Democratic newspapers. However, the growth has ruined innumerable small and mid-sized businessmen through the power of department stores’ capital and their unscrupulous business practices.
… But already in 1903, the three owners of the Karstadt Department Stores were sentenced to the fantastically high fine of 20,000 Marks for tax evasion, since they had reported only 22,000 Marks of their 120,000 Marks income.
According to expert estimates, the annual income of all department stores in Germany is 1 ½ billion Marks, which is three times as much as before the War. Of this sum, approximately 1 billion may be apportioned to the five largest Jewish department stores: Hermann Tietz, Wertheim, Karstadt, Wronker in Frankfurt am Main, and Leonhard Tietz headquartered in Cologne.

Even though he viewed himself as the editor of a major “metropolitan tabloid,” Goebbels' shrill and aggressive tone towards Jews was early evident in his targeting of the Jewish-owned department stores. But his expanded diatribes about the Jewish responsibility for the failures of the Weimar Republic broadly, may have masking his frustrations about the insufficiencies of the National Socialists' program. His efforts at the newspaper led to victories at the polls, but Goebbels’s efforts were not immediately rewarded by Hitler. During the months from 1929 until September 1930, Hitler fluctuated between giving Strasser and Goebbels support for a Nazi newspaper in Berlin, at which time Goebbels made an agreement with Max Amann of the Eher Publishing House. The Party intrigues with Strasser in 1930, and then with Stennes in 1931, only increased Goebbels’s exasperation with National Socialists, which reached their peak in March 1931 when Otto Wagener’s economic platform envisioned a pro-business perspective, supported by Göring, which excluded all Goebbels’s pro-Socialism views. The years of political infighting only ended in June 1932 when Goebbels realized that his radical backing of SA violence, in contrast with Hitler’s pursuit of apparent legal means to power, were detrimental to both the Party and his own propaganda career.[1] His attacks on German Jews and Jewish-owned department stores, however, continued throughout, fueling anti-Semitism among Berliners and National Socialists throughout Europe. 
German Businessmen’s Hostile Takeovers of Department Stores
After the National Socialists took power in Germany, they developed a wide variety of legal and extra-legal strategies aimed at removing Jews from economic life entirely. This Aryanization process included new laws that prevented Jews from operating businesses, participating in trades, and from selling goods and services, and ones that restricted their access to savings and bank accounts, as well as extrajudicial murders and deportations. Subsequent laws required the registration of Jewish businesses and empowered the state to set the sales value of Jewish firms at a fraction of their market worth, enabling non-Jews to purchase businesses at far below their value from Jews desperate to flee the country. Finally, in November, 1938, the Nazi regime passed new regulations that forced the sale of all Jewish-owned businesses, stocks, and property, with the proceeds to go directly to the state.  

Many of Germany's largest Jewish-owned department stores were Aryanized when Germany's two biggest banks, Deutsche Bank and the Dresdner Bank, suddenly recalled loans. Department store owners often relied on loans to acquire new merchandise, as most adopted the tactic of selling their entire inventories several times a year and reinvesting the profits into expanding their chains. That meant very few retained large amounts of Marks in cash, and so when the loans were recalled, most found it impossible to pay. Non-Jews, using various degrees of coercion, would then acquire the companies at massively reduced costs, using the patently unjust Nazi legal system to their advantage.

Such was the case with the hostile takeover of Hermann Tietz's Department Store chain, a process engineered by one of their own employees, Georg Karg. Karg had been a salesman for the Jewish-owned Jandorf Department Stores in 1908 and eventually became the business manager for the Wilmersdorfer Straβe branch. In 1926, the Tietz company purchased all of the Jandorf stores, and Karg became the director for all textile purchasing in the larger chain. In 1933, Tietz' lenders recalled their loans, and the company found itself desperate for cash. Karg worked with Baron von der Tann to secure a new 14 million Marks loan from a consortium including the prior lenders but used it to force a restructuring of the company. Hermann Tietz' sons, Georg and Martin, were removed from their positions as private owners of the company and instead placed in positions on the Board of Directors alongside Tann and Karg who claimed they would only assume decisive power in case of split decisions. But the Tietz brothers maintained responsibility for all liabilities and by 1934, Georg and Martin were forced to relinquish their entire financial investment in the Hermann Tietz department store chain.

Similar methods were used by Josef Neckermann to acquire Siegmund Ruschkewitz’s department store in Wurzburg. Ruschkewitz owned both the department store and a single-price store in Wurzburg, but in 1935, when he attempted to obtain new funding for more merchandise, the Dresdner Bank recalled all loans. Josef Neckermann, a coal supplier had been on the lookout to buy a Jewish firm at a depressed price. He seized the opportunity and obtained an early inheritance of 200,000 Marks (RM) from his mother. He then claimed that the inventory of the two stores consisted of scraps, using the pretense to push the price down even further to 100,000 RM. His assertion about the merchandise clearly had no basis, since he later maintained that he earned his first million in Wurzburg. Not satisfied with taking over just one Jewish-owned company, Neckermann took control of Karl Amson Joel’s mail order business in 1937. Although the price had been set at 2.3 million RM, Neckermann only paid 1.14 million from his trust account.[2]
These families used what compensation they did receive to flee the country. Georg and Martin Tietz escaped with their mother Betty to Lichtenstein and then traveled through Switzerland to Cuba, eventually reaching the United States. Georg and his mother eventually died in New York, while Martin returned to Germany after the War’s end, dying there in 1965. The Ruschkewitz family was not as lucky. While son Hans escaped to South Africa in 1936, Sigmund and his wife Mina died of typhus en route to Palestine when their entry to the country was delayed by the British government. Son Ernst was murdered at Buchenwald, along with his wife Ruth and son Jan.  Of the over 500,000 Jews who lived in Germany in 1933, only 37,000 remained in 1950. 

Meanwhile, Aryanizers like Georg Karg survived largely unscathed. After they were Aryanized, the Tietz stores took on a new name, "Hertie" (a contraction of Hermann Tietz) to mask their ties to their Jewish founders, and while only three of the large “palaces of consumption” Karg acquired in Berlin were still standing after the war, stores in Hamburg, Munich, Stuttgart and Karlsruhe survived.  In a private restitution settlement after the war, Karz was forced to pay rent for the Munich, Stuttgart and Karlsruhe facilities to the Tietz family. But by then he had expanded his retail empire: having purchased several more department stores in Austria, by 1960, Karg had 35 branches in operation. West Germans viewed him as an economic hero, since 83% of his pre-war realm would lie in East Germany after the wall was built.[3]


[1] Peter Longerich, Goebbels; A Biography (New York: Random House, 2015): 88-92, 121-126, 139-146, 199. 

[2] Hans Steidle, Neckermann & Co. Die Ausplünderung der Würzburger Judn im Dritten Reich (Wurburg: Echter Verlag GmbH, 2014): 81. Thomas Veszelits, Die Neckermanns; Licht und Schatten einer deutschen Unternehmerfamilie (Bergisch Gladbach: Verlagsgruppe Lübbe GmbH, 2008): 27, 75, 80-83. Toni Pierenkemper, “Josef Neckermann (1912-1992) – Anmerkungen zur Autobiographie,” Jahrbuch für Wirtschaftsgeschichte, Vol 2 (1996): 237-238.
[3] Friedrich W. Köhler, Zur Geschichte der Warenhäuser. Seenot und Untergang des Hertie-Konzerns (Frankfurt am Main: Haag und Herchen, 1997): 26-29. Peterle, Op. Cit., 195.

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