American Business and Germany, 1930-1941

• Author: Gabriel Kolko
• Published date: 01 December 1962
• Date: 01 December 1962
• DOI: 10.1177/106591296201500411
• Subject Matter: Articles

AMERICAN BUSINESS AND GERMANY, 1930-1941
GABRIEL KOLKO
Harvard University
HE
QUESTION of the relationship of business to war has become a rela-
t
tively settled one for most students of recent American history. Even criti-
cal historians of the topic have made it abundantly clear that the once ac-
ceptable deductions from John Hobson, Rosa Luxemburg, or Lenin on the purpor-
tedly inexorable relationship between capitalism and war will not accomodate our
knowledge of actual business behavior. Less critical historians have gone so far as
to assert that the business position on foreign affairs has not been significantly dis-
tinguishable from that of a majority of the public at any time, save when it has
been anti-war and anti-imperialist.
Julius W. Pratt’s discussion in 1936 of business’ generally anti-imperialist and
anti-war attitude before the Spanish-American War was the first important cri-
tique of the then widely held opinion that recent United States wars were the re-
sult of business cupidity, economic expansion, and desire for arms profits. Indeed,
Pratt’s thesis was advocated at a time when even many businessmen accepted the
common public beliefs on the relationship of business to war and supported the
concrete expression of that sentiment in the form of Neutrality Laws. Harold C.
Syrett’s more critical study of the business press in 1914-17 also reveals that al-
though business decisions were made primarily on the basis of self-interest, busi-
nessmen were no more jingoist than the American population in general. Roland
N. Stromberg, in his study of business and the approach of World War II con-
cludes, &dquo;In the drift toward unneutrality and then war, business played no inde-
pendent role.... It was dragged along in the wake of circumstances, like everyone
else.&dquo;’ It is important to note that all of these studies depend almost wholly on
business publications, and that no attempt has been made to evaluate the correla-
tion between words and actions.
The notion that business behavior is merely an undistinctive reflection of the
norms and actions of the larger society has been reinforced by the functionalist
theory of &dquo;entrepreneurial historians&dquo; who have specialized in business history.
The actions of businessmen, according to the entrepreneurial historians, &dquo;needs to
be placed in the context of their culture and society, and more specifically in the
context of the social situations in which they played special roles These roles
determine the limits on the businessman’s behavior and sanction certain types of
action. What is of importance is that the businessman does not determine these
criteria for his actions, but reflects the larger &dquo;basic overriding implicit themes, as-
1
Roland N. Stromberg, "American Business and the Approach of War, 1935-1941," Journal of
Economic History, 13 (Winter 1953), 78; Julius W. Pratt, Expansionists of 1898 (Baltimore:
Johns Hopkins Press, 1936), chap. 7; Harold C. Syrett, "The Business Press and American
Neutrality, 1914-1917," Mississippi Valley Historical Review, 32 (September 1945), 215-30.
2
Leland H. Jenks, "The Role Structure of Entrepreneurial Personality," in Harvard University Re-
search Center in Entrepreneurial History, Change and the Entrepreneur: Postulates and Pat-
terns for Entrepreneurial History (Cambridge: Harvard University Press 1949), p. 132.
713

---

714
sumptions, valuations of the culture of that society.&dquo;3 His position on foreign rela-
tions and all other vital matters will therefore be similar to that of the larger society.
In this paper I will deal with an instance -
the period preceding the second
world war - for which there is an extensive record both of American business’
words and actions. Business journals and public statements are of obvious impor-
tance, but they are not a sufficient source for an examination of the topic. I will
briefly outline the role of the business press, partially as a needed supplement to
Roland N. Stromberg’s survey of the business press from 1935 through 1941. But
I will also consider the concrete activities of large and important segments of busi-
ness during this period, primarily in the form of a descriptive survey of the various
links between strategic major American firms and German industry. Even if this
single but important exception is not disproof of recent generalizations on the rela-
tion of American business to foreign affairs, at least it suggests the need for a more
comprehensive approach to the problem in the future.
Irrespective of their stand on specific foreign policy issues during 1930-41, the
American business press was overwhelmingly opposed to fascism and nazism.
Above all, business publications after 1934 described the economic nature of these
movements in a fairly sophisticated manner which could hardly have enhanced
totalitarianism’s attractiveness to most businessmen. It is true, as James W. Prothro
shows in The Dollar Decade, that in the 1920’s a number of articulate leaders of
the Chamber of Commerce and National Association of Manufacturers thought
fascist Italy &dquo;the most creditable development in human history&dquo; and Mussolini
&dquo;a fine type of business executive,&dquo; but few such sentiments were publicly ex-
pressed in the business press in the 1930’s.4
When the Nazis took over Germany in 1933 their initial economic program
was kept deliberately vague in order to maintain internal party unity and appeal
to all classes of Germans. This vagueness was reported as a fact in the American
business press, and greeted with skepticism. Hitler was a political and economic
nonconformist, and this alone evoked caution from the business press.5 It took
little time for business journals to discover that nazism was alien to their interests.
At no point did any significant business journal attempt to glorify Hitler or even
to mitigate its critical view of him by explaining his assets as opposed to his liabili-
ties or the conditions which might have suggested reasons for the rise of Hitler and
our consequent need to understand rather than condemn him.
Roland N. Stromberg has suggested that &dquo;there was no basis for a crusade
against Hitlerism in the business mind prior to 1940&dquo; and that some business jour-
nals saw no difference between Hitler and Roosevelt until 1940.6 American busi-
ness journals, however, were generally much more aware of the nature of Hitler-
ism than many congressmen and certainly most isolationists, and their analogies
3

Ibid., 131; for a summary and critique of this entire viewpoint, see Gabriel Kolko, "The Premises
of Business Revisionism," Business History Review, 33 (Autumn 1959), 330-44.
4
Quoted in James W. Prothro, The Dollar Decade: Business Ideas in the 1920’s (Baton Rouge:
Louisiana State University Press, 1954), pp. 204-5.
5
See "Hitler’s Program is Vague," Business Week, May 10, 1933, p. 24, and "Germany," ibid., July
28, 1934, p. 29.
6
"American Business and Approach of War," Journal of Economic History, 13 (Winter 1953), 76.

---

715
between Hitler and Roosevelt must be taken with a grain of salt. Although they
may have conformed to dominant opinions in other respects, business journals
were by no means misinformed, no matter what their stand on interventionism,
Neutrality Laws, or Lend-Lease. By 1935, nearly every one of the frequent reports
on German economic affairs in Business Week, for example, was critical. German
economic activity, it reported, &dquo;is greatest in the so-called war industries.&dquo;7 The
free press had been eliminated and this alone created a grim dread of nazism.
The business press was aware, from 1935 on, that German prosperity was
based on war preparations. More important, it was conscious of the fact that Ger-
man industry was under the control of the Nazis and was being directed to serve
Germany’s rearmament, and the firm mentioned most frequently in this context
was the giant chemical empire, I.G. Farben. The establishment of the Four Year
Plan in late 1936, with its goal of complete German self-sufficiency, and the in-
creasingly bellicose speeches of Hitler only strengthened the hostility of the busi-
ness press toward nazism. &dquo;Foreign trade is on a controlled basis,&dquo; declared Busi-
ness Week in September 1936. &dquo;Industry accepts the bidding of the government.
German
...
industry is going to be circumscribed by government almost as rigidly
and as completely as in the country which it hates most -
the Soviet Union.&dquo;8
As the war drew closer, and more and more business publications removed
contingencies from their earlier noninterventionist sentiments, they still failed to
examine the larger political and social issues facing democracy or capitalism.
There was an occasional but isolated suggestion that war would result in the same
chaos of hunger and revolution that followed World War I, but the point was
never seriously explored.9 Some business publications were so convinced that the
origins of war were to be found mechanically in pure and simple economic con-
flicts that they effectively advocated a position of implicit moral neutrality. &dquo;The
political strains that have grown up between the nations have originated largely
from the depression of world business and trade,&dquo; stated the National City Bank
Monthly Letter in May 1939.1° The solution to the crisis, it suggested, would be
an economic revival at home which would allow America to purchase more for-
eign goods. In advocating that...