Covert Nationalization


Covert Nationalization

"Reichification" and "The Push for Happiness"

Quelle: DIF
Joseph Goebbels, Hans Steinhoff, Claus Clausen, Emil Jannings (v.l.n.r.)

The Nazis' plan to control the entire German film industry did not come to end there. The year 1937 was a significant year in this regard, as the economist Daniel Otto explains: "Considering the Reich's principal role in the film business, it would be fair to say that by this point almost nothing was possible without the state. The Film Credit Bank financed the greater part of productions, the Reich Chamber of Film controlled ticket prices, film rentals, and movie houses; the number of foreign productions permitted for distribution was determined centrally. In spite of this, and hence symptomatic of the state's limited range of influence in the Reich, the film industry was still in private hands and was directed by personal goals and the avarice of individuals. An overarching, long-term plan for the benefit of the "Greater German film industry", as the National-Socialists imagined it, was of little interest to the industry's individual actors.

In contrast to the intermittent, as-needed interventionism practiced previously, the government now changed course in favor of precisely such an overarching, long-term, and methodically executed plan (…). The "push for happiness", as Goebbels conceived it, was to be conducted through "deprivatization" by "imperialization" or "Reichification". The aim was to become each firm's largest shareholder without claiming a seat on its board of directors or advisory board. Rather than representation, the state's attention was focused on decision making powers in hiring and production, the right to inspect accounts and finances, legal advice and tax advice, and the appointment of supervisory board panels. Such influence brought the state even closer to total monopoly control."

Invisible Enemies: The Cautio Takeover

Source: DIF
The Tobis-Logo

Once the model for covert corporate takeover by means of a middleman for the Reich had proven successful in other areas of the economy, it was time to implement it in the film business. According to the plan, entry into the film industry had to take place unnoticed. It was for this reason that the state secured the services of a middleman who had already proved himself before 1933: the experienced financial expert and long-standing fiduciary agent of the Reich, Mayor Emeritus Dr. Max Winkler.

The National-Socialists thus became the twentieth government administration in a row for which Winkler worked during his illustrious career. Winkler and his ten employees made up the film section of the Cautio Trust, Ltd., which had been founded in 1929 with 20,000 Reich Marks, and set about organizing the desired "Reichification" in agreement with Goebbels and the Reich Ministry for Popular Enlightenment and Propaganda. In 1937 he was named "Reich Representative for the German Film Economy."

With Tobis, the second-largest film company after Ufa, Winkler landed his first covert buyout coup. Due to Tobis's complex ownership structure and the fact that the government's key role in the proceedings had to be kept secret at any price, this was the litmus test, an "enemy takeover without anyone knowing who the enemy was", according to Daniel Otto. The plan consisted in gradually bringing into "German hands" those shares of the parent company Intertobis that were owned by three Dutch banks. Winkler used another Dutch bank, the Hollandsche Buitenbank, as a cover; and between 1934 and 1939, Intertobis was delivered piecemeal into the Reich's possession through the Hollandsche Buitenbank. This case of "nationalization by stealth" in the mid-1930s was a successful dress rehearsal for the consolidation of the entire German film industry.

To be Continued: Winkler's Career With and After the Nazis

Source: DIF
Max Winkler (to the right), Generaldirektor Dr. Klitzsch (second on the right), Horst von Hartlieb (second on the left) in the year of 1942

Between 1936 and 1939, Goebbels' Ministry allocated sixty-five million Reich Marks for the buyout of company shares, and another one-hundred-twenty million Reich Marks from 1940 to 1944. The investment was expected to pay off. Thanks to these enormous sums and Winkler's skill and enterprise, the Cautio Trust had by the end of fiscal year 1940/41 fourteen film companies under its control: Tobis Tonbil Syndikat, Ufa, Film-Finany GmbH, Terra Filmkunst, Tobis Filmkunst, Wien-Film, Bavaria, Ostmärkische Filmtheater Betriebe, Deutsche Lichtspielbau, Tobis Sascha Filmverleih, AB-Film, AG in Prague, Elektafilm Prag, Continental Paris, and N.V. Internationale Tobiscinema Amsterdam. The Nazis had achieved their aim, and on January 10, 1942 came finally the consolidation of all film companies directly and indirectly owned by the state into a single holding: Ufa Film, Ltd., known as UFI.

UFI, according to Daniel Otto, was the crowning achievement and the end of Winkler's reorganization of the film economy on behalf of the Nazi state. "Winkler's UFI had no chance of survival in any case. There were hardly three years left after its completion until the end of the Third Reich. After 1945, UFI was dismantled: deconstructing and selling off. And who better to disentangle this complicated concoction than its concocter, Mayor Emeritus Dr. Max Winkler? The new Federal Republic thus became the twenty-first government to which this model civil servant dutifully served."