German rearmament
German rearmament began not with the noise of a thousand factories or the roar of engines overhead, but with a whisper. From the moment the Treaty of Versailles was signed after the First World War, German military leaders began quietly working around it. The treaty had reduced the German army to 100,000 men, banned poison gas and tanks and an air force entirely, and stripped Germany of its ships. But within months, secret funds were flowing, paramilitary groups were drilling, and clandestine agreements were being struck with the Soviet Union. By 1935, when Adolf Hitler stood before the world and announced what he had done, the program had been running for over a decade. How did a disarmed nation secretly rebuild one of the most powerful military machines in modern history? Who knew, who looked away, and who profited? The answers stretch from the corridors of the Weimar Republic to the boardrooms of American corporations.
The Treaty of Versailles did not merely shrink the German military. It was designed to make the German army incapable of offensive action altogether. The army was capped at 100,000 men and 4,000 officers. The navy could have at most 15,000 men and 1,500 officers. Germany was forbidden from maintaining any air force. Tanks, poison gas, heavy artillery, submarines, and dreadnoughts were all prohibited. A large number of German ships and all air-related armaments were to be surrendered to the Allied powers.
German military leaders did not accept this as a permanent condition. They saw the greatly reduced army as an interim stage, a starting point rather than a final state. The Reichswehr leadership was prepared from early on to violate the treaty, which was also a law of the Republic. Their methods ranged from the creative to the clearly criminal. They created secret funds, some of which were later exposed in what became known as the Lohmann Affair. They disguised state intervention in the armaments industry. They continued the banned general staff under a cover name, calling it the Truppenamt. The prohibited air force would eventually be prepared by training pilots through civilian channels and through the flag carrier Deutsche Luft Hansa, which was founded in 1926 using planes similar to military models.
Gustav Noske, the first Defense minister of the Weimar Republic, provided early and open support to the paramilitary Freikorps, which grew rapidly in the early years of the Republic. These units were deployed against communist uprisings, often in place of or to supplement regular army forces. The Freikorps represented a form of military capacity that existed outside the Versailles limits.
Hans von Seeckt became Chief of the Army Command in March 1920 and viewed the Freikorps as a sign of rebellion. He moved to limit the support they received. Under pressure from France, which feared the emergence of an unofficial army, the Freikorps were officially banned in May 1921. Seeckt then concluded that the Reichswehr no longer had enough men to guard Germany's borders and created a new formation called the Black Reichswehr. It was an extra-legal paramilitary secretly integrated into the German military and had the backing of Chancellor Joseph Wirth. Its strength grew to an estimated 50,000 to 80,000 men, though it never went into action. The Black Reichswehr was disbanded in late 1923 following the failed Küstrin Putsch, in which some of its members were involved.
A parallel formation called the Citizens' Defense had been organized from early 1919 to provide rapid reinforcements against leftist uprisings. The government, the Reichswehr, and the Freikorps all supplied and supported it. The Inter-Allied Military Commission of Control repeatedly demanded its elimination, and the government banned it on the 24th of May 1921. Many of its former members went on to join what contemporaries described as proto-Nazi groups.
Germany's secret rearmament program in the Soviet Union began in 1921 when the Ministry of Defence, with the approval of General Seeckt and the knowledge of Chancellor Joseph Wirth, established a body called Special Section R. The initial work involved armaments ventures and camps inside the USSR where German soldiers trained in weapons that Versailles had forbidden them to use at home.
In November 1922, not long after the Treaty of Rapallo between Germany and Soviet Russia was signed, the Soviet government and the Junkers Aircraft Company began working together to build aircraft for Germany. Starting in 1924, German pilots were secretly trained at the Lipetsk fighter-pilot school on Junkers, Heinkel, and Dornier aircraft. By 1926, the cooperation had expanded to include the manufacture of poison gas and the establishment of a tank training school near Kazan. German companies were hesitant to invest in projects on Soviet soil, so these new ventures did not progress as far as planned.
In 1930, Walter Dornberger was separately tasked with developing liquid fuel rockets for military purposes. Rockets were a technology not mentioned anywhere in the Versailles Treaty, leaving a legal gap the German military was ready to exploit. Under the Nazi regime, Dornberger would go on to become involved in the V2 rocket program.
When Seeckt was dismissed as Chief of the Army High Command in October 1926, the new leadership under General Wilhelm Heye decided that continued secrecy from the civilian government was no longer sustainable. On the 29th of November 1926, Defense Minister Otto Gessler, accompanied by the heads of both the army and the navy, appeared before the cabinet of Chancellor Wilhelm Marx to announce a change of course. He told the cabinet that the army must always be in a position to provide the core of a modern army and that certain security measures going beyond the peace treaty were needed. He promised that the Reichswehr would follow whatever program the cabinet decided on.
On the 6th of December, the leadership of the Social Democratic Party met with Marx, Gessler, and Foreign Minister Gustav Stresemann to protest the secret rearmament and demand it be stopped. The SPD had gathered their own materials documenting the cooperation with the Soviet army and the network of secret weapons caches and military sports training organized through the Reichswehr's district officers. On the 16th of December 1926, Philipp Scheidemann of the SPD delivered a speech in the Reichstag condemning the secret cooperation with both domestic right-wing groups and the Soviet army. The reaction outside the SPD was overwhelmingly negative. The political fallout was modest: Marx's cabinet shifted to the right, and Gessler kept his position as Defense minister.
The First Armament Program was formally approved on the 29th of September 1928 by the Chief of Army Command and adopted by the Müller cabinet on the 18th of October. It aimed to build a 16-division army with a limited weapons stockpile at a total cost of 350 million Reichsmarks, with the goal set for 1932. Results were modest. By the spring of 1931, the army had only ten tanks, all still in testing, and no anti-tank guns or two-centimeter machine guns that had progressed past the development phase.
Hjalmar Schacht, who had previously served as president of the Reichsbank from 1923 to 1930, became the financial architect of Nazi rearmament. Hitler replaced the sitting Reichsbank president, Hans Luther, who would only extend credit of one hundred million Reichsmarks to rearmament, with Schacht, who was willing to go much further. Schacht created the Metallurgische Forschungs-G.m.b.H., a shell company that issued short-term treasury notes described as functioning as a concealed form of money. By 1938, this company had sold over 12 billion Reichsmarks worth of these instruments, all of it channeled into the rearmament program.
Schacht also manipulated the American international exchange system to generate foreign currency for Germany. After becoming Reichsbank president in 1933, he told the American government that German corporations, government, and municipalities could not pay interest on their American-denominated debt, citing a lack of foreign exchange. In practice, Germany was not short enough on foreign exchange to justify stopping payments entirely. The actual goal was to redirect that foreign exchange toward rearmament and foreign propaganda support, including the backing of Konrad Henlein and the Sudeten German Party.
By defaulting on the debt, Germany drove down the value of those bonds on American markets. German agents then repurchased the bonds at a fraction of their face value using the supposedly nonexistent foreign exchange and sold them back to the issuer in exchange for Reichsmarks. The foreign exchange recovered from this scheme was used to purchase rearmament materials abroad, including American plane parts bought with US dollars. German exporters were also allowed to participate, subsidising their export activities at the expense of American bondholders.
Around 150 American corporations took part in German rearmament, supplying German companies with raw materials, technology, and patent knowledge. Their participation ran through a complex network of joint ventures, cooperation agreements, and cross-ownership between American and German firms and their subsidiaries.
The list of resources and companies involved is extensive. Standard Oil of New Jersey and DuPont supplied synthetic rubber production technology. ITT provided communication equipment. IBM supplied computing and tabulation machines. Ford and General Motors provided military vehicles. Standard Oil of New Jersey and Standard Oil of California supplied fuel. Banks including the Union Banking Corporation provided funding through investment, brokering, and loans. Aviation technology supplied through these channels was used in developing the Junkers Ju 87 bomber.
DuPont's entanglement extended further than most. The company held stock in IG Farben and Degussa AG, which together controlled Degesch, the producer of Zyklon B. Irénée du Pont, director and former president of DuPont, was a supporter of Nazi racial theory and a proponent of eugenics. For some of the companies involved, the motivations were purely financial. For others, ideology played a role as well.
On the 16th of March 1935, Hitler announced German rearmament openly and simultaneously reintroduced conscription. The European states that had fought Germany in the First World War responded primarily through appeasement rather than confrontation. On the 26th of September 1938, Hitler boasted from the Berlin Sportpalast that after giving orders to rearm the Wehrmacht he could openly admit: "we rearmed to an extent the like of which the world has not yet seen".
The Spanish Civil War, which ran from 1936 to 1939, gave Germany a testing ground for its newly built weapons. The Condor Legion, a German expeditionary force, deployed against the Republican government in Spain with the permission of Francisco Franco, using the conflict to test aeronautical bombing techniques including dive bombing. The rearmament years also produced competing theories about how to prepare the German economy for total war. Georg Thomas argued for what he called defence in depth, urging autarky, with IG Farben as a central proponent. Hitler rejected that approach and pursued defence in breadth, expanding the armed forces in all areas without focusing on economic self-sufficiency.
George F. Kennan later assessed that firmness from the Allied powers at the time of the reoccupation of the Rhineland on the 7th of March 1936 would probably have yielded better results than the eventual firmness at Munich. The rearmament program had by that point built an officer corps large enough that, as Count Johann von Kielmansegg recalled, the sheer administrative task of outfitting 36 divisions consumed his and his colleagues' attention until the beginning of World War II on the 1st of September 1939.
Common questions
When did German rearmament begin after World War I?
German rearmament began in 1921 on a secret and informal basis, less than two years after the Treaty of Versailles was signed. The German Ministry of Defence established Special Section R that year to run clandestine armaments programs in cooperation with the Soviet Union.
What were Mefo bills and how did they fund German rearmament?
Mefo bills were short-term treasury notes issued by the Metallurgische Forschungs-G.m.b.H., a shell company created by Reichsbank president Hjalmar Schacht. The company sold over 12 billion Reichsmarks worth of these instruments by 1938, with all proceeds channeled into the rearmament program while concealing the accumulation of government debt from the international community.
How many American corporations were involved in German rearmament?
Around 150 American corporations took part in German rearmament. They supplied German companies with synthetic rubber technology, communication equipment, computing machines, aviation technology, fuel, military vehicles, and funding through a complex network of joint ventures and cross-ownership arrangements.
What was the Black Reichswehr in Germany?
The Black Reichswehr was an extra-legal paramilitary formation created by Hans von Seeckt after the Freikorps were banned in May 1921. It was secretly integrated into the German military and had the backing of Chancellor Joseph Wirth. Its strength grew to an estimated 50,000 to 80,000 men before it was disbanded in late 1923 following the failed Küstrin Putsch.
When did Hitler publicly announce German rearmament?
Hitler publicly announced German rearmament on the 16th of March 1935, simultaneously reintroducing conscription. On the 26th of September 1938 at the Berlin Sportpalast, he boasted that Germany had rearmed to an extent the like of which the world has not yet seen.
Where did Germany secretly train pilots and tank crews during the Weimar Republic?
Germany secretly trained pilots at the Lipetsk fighter-pilot school in the Soviet Union starting in 1924, using Junkers, Heinkel, and Dornier aircraft. A tank training school was established near Kazan in 1926 as part of the military cooperation program with the Soviet government.
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