The Vampire Economy

Chapter IV

THE CONTACT MAN

“A curious new business aide … is now all-important.”

THE business organization of private enterprise has had to be reorganized in accordance with the new state of things. Departments which previously were the heart of a firm have become of minor importance. Other departments which either did not exist or which had only auxiliary functions have become dominant and have usurped the real functions of management.

Formerly the purchasing agent and the salesmanager were among the most important members of a business organization. Today the emphasis has shifted and a curious new business aide, a sort of combination “go-between” and public relations counsel, is now all-important. His job—not the least interesting outgrowth of the Nazi economic system—is to maintain good personal relations with officials in the Economic Ministry, where he is an almost daily caller; he studies all the new regulations and decrees, knows how to interpret them in relation to his particular firm and is able to guess at what may be permitted or forbidden. In other words, it is his business to know how far one can go without being caught. He also develops special knowledge on how to camouflage private interests so that they appear to be “interests of the community” or of the State. He knows how urgent the demand of a State department or institution for a certain article may be and the effect of possible delays in delivery, and, therefore, whether it will be possible to obtain a higher price or a bonus for speedy delivery. Such a contact man knows whether, when and how it is possible to obtain a special urgency certificate for a certain article and when to complain about the refusal of such a certificate. He also knows when to be satisfied with an ordinary certificate.

Just what can be done about all this does not merely depend on decrees and official policies. Many other factors of a personal nature are important, factors which only an expert in this field understands. It is not always a question of bribery or corruption. The contact man must know, for example, whether the head of a certain raw material department is a Party man, an army man or just an “old conservative.” Different arguments and facts must be used in each case. When he deals with a Party man, it is advisable to show letters and recommendations from local Party chiefs, receipts showing contributions to Party funds, or Labor Front certificates on National Socialist party activities in the factory. This may, however, have the reverse effect if the department head is by chance one of the “old conservatives” who have not yet completely disappeared. An official of the latter type is very correct, sticks to the letter of the law and cannot be bribed. It might be advisable to enter his office with the old greeting Guten Morgen whereas his secretary perhaps had better be addressed with a strict Heil Hitler. The army man, on the other hand, might be more impressed if the military aspect of the matter were stressed. Such small particulars might seem unimportant to the outsider; a contact man, however, knows that these small details sometimes have miraculous effects, assisting him and the firm he represents to obtain an urgently needed raw material, supply certificate or a price increase for an article ordered by some government department.

A large part of the advertising section in German newspapers is filled with advertisements in which the applicant emphasizes his “skill,” “special ability,” “good connections,” or “experience” in negotiations with the authorities.

In almost every issue of the Frankfurter Zeitung, for example, there appear advertisements like the following:

“Corporation lawyer, Dr. pol econ., 35 years old. Party member, at present actively engaged in diversified work for a number of associations and banks, willing to assume further responsibilities for trade associations or in industry…” 1

“Special tasks for a limited period performed by an economic adviser. Negotiations and inquiries at Government offices in Berlin, advice and research, organization of sales. Supply complete information, fully documented.”2

“Technician and businessman, Party member, former officer in the air force, good contacts with State offices and authorities, etc., wants employment, if possible partnership in industrial enterprise…”3

The businessman who is in need of a “contact man” will not find it difficult to get the right person if he is willing to pay the price.

Any firm wishing to remain in business must have such a contact man, who, if possible, should be personally acquainted with some high official. If a firm cannot find a man with such qualifications, it will have to content itself with a man having contact with a lesser official, who in turn can promote the firm’s interests with his superiors and inform the firm of how the wind is blowing. Should a firm fail to find a satisfactory contact man and otherwise have bad luck in establishing good working relations with officialdom, purest “Aryan” though its members be, it is likely to be forced out of business. Therefore one of the effects of the State regimentation of foreign trade is the rise of a few big concerns superseding all other competitions. According to a statement of Dr. Max Ilgner, director of the I. G. Farbenindustrie, in a lecture on January 28, 1938,4 one-third of the German export business is in the hands of only twenty firms.

In no field of business is the contact man more important than in Germany’s import and export trade. The early morning train from Hamburg to Berlin is so full every day of Hamburg import and export agents or their contact men going to Berlin for permits and authorizations of various kinds that it has come to be known locally as the “Permit Express.” You have only to take a seat in a compartment of this train to hear, in the three and a half hours of the journey, a fair cross-section of the story of German foreign trade under the Nazis.

The experiences of Herr A. are typical. For a long time he has been the head of a wool-importing firm established for fifty-six years, with a good standing on the London Wool Exchange. Recently, after obtaining permission from the Administration for Wool Importation and Distribution, the supervisory board for his industry, and the Administration for Foreign Currency, he bought a quantity of wool from a London firm. The wool arrived in Hamburg, but the Reichsbank failed to release punctually the foreign currency to pay for it. The wool was, therefore, put in storage in the “free port,” where it piled up charges. When he finally received the money from the Reichsbank, the London firm naturally insisted that he pay the storage charges, in accordance with international usage. However, to get the relatively small additional amount of foreign exchange needed, Herr A. would once more have to apply to all these offices. His application would not be decided upon immediately; there would be numerous inquiries and considerable correspondence before he would know their decisions. In the meantime the wool would be accumulating further storage charges, and if he finally received the money, he still would not have enough. This is an endless process; he is caught in a vicious circle which seemingly offers no outlet. Any profit which he might have made on the deal has already been eaten up by the cost of correspondence and the running around from commissar to commissar. After thus spending a number of days fruitlessly and aggravatingly, all he has to show for his trouble is a thick bundle of letters, application forms and introductions. He has to make a supreme effort to cut through the entangling red tape; he must go to Berlin to see the leader of his business group to get a letter of introduction to an influential official of the Reichsbank, who has close relations with the Administration for Foreign Currency, who may perhaps overcome the obstacles and help him get his wool!

Herr B., a type very often encountered in trains going to Berlin, must deal with a violation of some decree in a barter contract made by his firm. He hopes to surmount his firm’s difficulties through a personal chat with an important personage in the Ministry of Economics, to whom he carries a letter of introduction from a friend in the Economic Section of the War Ministry. The ability to reach such people makes Herr B. a valuable—one might almost say, an indispensable—employee to his firm, and he knows it. Last week the simple intimation to his employer that a rival firm had offered him a higher salary was sufficient to secure him an immediate and most satisfactory salary increase.

Such is the life the Hamburg importer and exporter—formerly the most independent of German businessmen—now leads. In the old days he decided for himself what he should buy and where he would sell, without asking anybody for a permit—especially not someone residing in Berlin. Today he cannot move hand or foot without a permit or certificate, quota or allowance. He cannot make the smallest purchase abroad without first taking into account a hundred new decrees and laws and filling out a score of application forms and petitions. No longer is his the pleasure and profit of buying raw materials abroad when they are cheap; he can buy only when he can get foreign currency. If, while he is waiting for this, prices abroad go up, he must console himself with the hope that the Price Commissar might allow him to raise the price to the home consumer. Usually this authorization is forthcoming and, since there is never any difficulty in finding a buyer for imported raw materials—so scarce are they in Germany—in practice the importer who can obtain a grant of foreign currency has virtually insured himself of a profitable deal without any risk.

Turning to the wholesaler, we find a businessman whose calling appeared doomed at the time of the Nazis’ advent to power; for according to National-Socialist theory trading is unproductive and should be eliminated as far as possible. Yet there are still wholesale dealers in Germany who do a good business and make a handsome profit. Just as with those engaging in foreign trade, however, this is possible only through good relations with the State authorities.

A private banker who previously resided in Germany and now has his office in the capital of one of the small independent neighboring countries is often visited by German industrialists who are his personal friends or who want his advice and assistance. This banker—whom we shall call Herr X.—told of a typical conversation he had with a German business friend, Herr Y. Herr X. once said to Herr Y., rather provocatively:

“My dear friend Y., you must have a wonderful time. No more worries about sales; the customers are running after you. What a wonderful prosperity, to judge by production figures and other economic reports in your daily papers!”

Herr Y. (rather angrily): “You are talking nonsense. Never in my life have I had so many worries as today. What do you know of the terrible job I have trying to get the necessary raw materials for the following week? Daily I have to fill out an immense number of requests, questionnaires, complaints and so on. Yes, I can sell as much as I can produce, but I can never say when it will be ready or whether I will be able to deliver at all. For better or worse, the customer has to accept what he gets. He can’t blame me if I have to change production plans and produce something different from what he wanted; probably I have had to use a different raw material from the one provided for in the original sales contract. However, this is not my worst worry. How can I do anything without violating one of the thousands of new decrees dealing with prices, raw materials, preferential and non-preferential or forbidden supplies? Of course one doesn’t take certain decrees seriously, but this might change tomorrow and I might suddenly be penalized. A competitor might denounce me. Perhaps I may have sold a small quantity of raw materials for a hundred marks, forgetting all about some decree on restricted sales. Or I may have violated a foreign exchange decree, a still worse crime. On one occasion a foreign customer visited me, and I invited him to supper at a fashionable restaurant. He had forgotten his wallet, and I lent him a hundred marks. Of course this is forbidden; giving credit to a foreigner without having asked the Reichsbank for permission is a terrible crime. I could not sleep that night for fear that the waiter might have seen what I had done. He knows me and might denounce me. I have not dared to go to that restaurant since. When I enter my office in the morning, I can hear my heart pounding. Will there be a letter from the Commissar for Foreign Currency about this, or a letter from the tax office demanding an additional tax payment of 100,000 marks for the year 1936? Life is difficult in Germany these days. All of us in business are constantly in fear of being penalized for the violation of some decree or law.”

The tone of this conversation may sound exaggerated, yet it is typical of the experiences of the medium-sized independent manufacturer or dealer in Germany who does not happen to be connected with a high Party official.

It is the average businessman’s dream to find the perfect contact man who can solve all these difficulties for him.