Hindenburg Program Militarizes the German Economy

Date August, 1916

The Hindenburg Program of 1916 attempted to organize the German economy more effectively for war once it became clear that a quick victory was not in sight.

Locale Germany

Key Figures

• Paul von Hindenburg (1847-1934), German general
• Erich Ludendorff (1865-1937), German general
• William II (1859-1941), emperor of Germany, r. 1888-1918
• Theobald von Bethmann Hollweg (1856-1921), chancellor of Germany, 1909-1917
• Erich von Falkenhayn (1861-1922), Prussian general and minister of war
• Max Bauer (1869-1929), German colonel and artillery expert
• Wilhelm Groener (1867-1939), German general

Summary of Event

The Hindenburg Program is the name given to a series of initiatives that attempted to reorganize Germany’s war effort during World War I around the concept of total war. The program reversed previous policies regarding munitions and manpower, seeking to produce a vastly increased amount of weapons and munitions in a fixed amount of time. The results were mixed. Some increase in weapons production was achieved, but at the expense of major disruptions in coal production and transportation, accompanied by heightened social tensions and strikes.

For all of its aggressive activity and rhetoric prior to 1914, Germany entered World War I only minimally prepared to mobilize its enormous industrial potential behind the war effort. This lack of preparation was the result of German military planners’ belief that any war would be short. On August 13, 1914, the War Raw Materials Department (Kriegsrohstoffabteilung, or KRA) was established within the Prussian War Ministry. The KRA fixed maximum prices, allocated raw materials, and was charged with developing substitutes for scarce materials. Special, privately held, war raw materials corporations under business leadership were set up to control the acquisition and distribution of individual strategic materials. The War Ministry and the KRA centered all war production goals on the production of powder, based on the appreciation that weapons required munitions and munitions required powder. They also held war materials producers to higher standards and lower profit margins than those producers desired.

An importer of food, industrial raw materials, and labor, the German economy was peculiarly dependent on international markets and could ill afford a long war. When the Schlieffen Plan went awry in September, 1914, the German war economy was left in a perilous situation. Any policies carried out by Chief of Staff Erich von Falkenhayn, the War Ministry, and the KRA were sure to come under criticism. Businesspeople claimed that they could produce more and better weapons if the War Ministry would get out of the way. They were supported and urged on by individuals on the general staff such as Colonel Max Bauer, who wanted to wrest power from the War Ministry. Other staffers, such as General Wilhelm Groener, head of the railways section of the general staff at the beginning of the war, thought that a more efficient mechanism than the KRA could be found. These individuals found an ally in General Erich Ludendorff, who advocated an all-out offensive on “his” front, that in Russia.

All agreed for their own reasons that some sort of dictator or strongman was necessary. Chancellor Theobald von Bethmann Hollweg wanted to use the prestige of the hero of the East, General Paul von Hindenburg, as a shield behind which he could negotiate a compromise peace. Only in August, 1916, did this strange, divided coalition succeed in convincing Emperor William II to replace Falkenhayn with Hindenburg. William was reluctant to make this move because he knew that the lionized Hindenburg could easily eclipse him in popularity. Moreover, he despised Ludendorff, the true genius behind Hindenburg’s success. As little as William cared for civilian servants such as Bethmann Hollweg, he reasoned that although they shared some power with the military, he as emperor was not out of the picture.

The Hindenburg Program developed in stages. In November, the Supreme War Office (Oberstes Kriegsamt, or OK) was created under the leadership of Groener. Theoretically, the OK functioned as part of the War Ministry, but in reality it was the domain of the army high command. It was put in charge of both the KRA and the Arms and Munitions Procurement Office, both formerly the province of the War Ministry. The OK set new, high goals for the production of weapons and munitions. Price and quality became less significant, and waves of high-priced contracts were let out. Transportation bottlenecks developed. Coal production failed to keep pace with industry’s increased demand, which incidentally diverted warmth from people’s homes. Their coffers overflowing with marks fresh off the government’s printing presses, industrialists competed to attract skilled workers who had returned from the war or were exempt from service.

This latter development led to the second aspect of the Hindenburg Program, an attempt to mobilize and control labor resources known as the Auxiliary Service Law of December 5, 1916. Before 1914, Germany had been a labor-importing country. With traditional supplies of foreign labor disrupted and several million men in service at the front, the labor shortage had become acute by the second year of the war. Workers in the weapons industry had responded by exercising greater mobility in search of higher wages or better conditions. The Auxiliary Service Law mandated that all men between seventeen and sixty years of age be drafted into work deemed necessary to the war economy. At the same time, the law placed restrictions on their mobility. In return, workers’ committees were introduced in all firms with more than fifty employees. These committees, elected by and representative of the workers, were legally recognized as equal partners with the employers in negotiations over wages and working conditions.

Significance

During the course of 1917, the goals of the Hindenburg Program had to be scaled back continually. The program experienced the sorts of bottlenecks and dislocations that Falkenhayn, the War Ministry, and the KRA had with some success managed to avoid before August, 1916. As a plan to concentrate on war production, the Hindenburg Program was partially successful. It is estimated that production in the consumer goods sector shrunk by half. The program, however, failed to produce weapons and munitions sufficient to turn the tide of the war in Germany’s favor.

Whatever increase in war production was realized, it was at the expense of social cohesion. The policy of financing the war by printing money, in tandem with the program’s weapons-at-any-price procurement policy, resulted in the creation of a wealthy class of “war profiteers” who were able to live extravagantly while others suffered from shortages and overwork. The government’s food policies, which favored producers to the detriment of consumers, heightened social tensions as well. Aware of growing disquiet among the population at large, the civilian government tried to offer the hope of future social reform as a means of staving off social unrest. In his Easter Speech of April, 1917, the emperor promised postwar political reform and the abolition of Prussia’s inequitable suffrage laws. None of this sat well with the militarists and expansionists coalesced around Ludendorff and the high command, nor was it sufficient to prevent the outbreak of strikes in Berlin and Leipzig the same month. These strikes at first concerned food and working hours, but later strikers began to issue political demands.

The immediate result of the Hindenburg Program was thus a minimal, strategically insufficient increase in war production achieved at high economic and social cost. The program failed to provide Germany with the weapons needed to win the war. Moreover, it helped to sharpen social and political antagonisms between interests and classes and, by doing so, ensured the fall of the monarchy, which occurred in November, 1918.

The Hindenburg Program had two important medium-term effects. The Auxiliary Service Law established the terrain on which many of the domestic political disputes of the 1920’s would be fought. The workers’ committees established under the law, for example, provided the basis for collective bargaining. The industrialists of the Weimar Republic bitterly resented the increased power of their workers, as represented by collective bargaining and the forty-hour week; they made a diminution of these workers’ gains a condition of their participation in government after 1923. Perhaps of even greater significance, the policy of purchasing war matériel with unsupported paper currency laid the groundwork for Germany’s postwar hyperinflation. The inflation, in turn, probably did more to discredit the new republican regime in the popular mind than any other factor.

The Hindenburg Program’s long-term effects were similarly pernicious. The program’s authors were never really brought to task for their role in unleashing social and political chaos or in losing the war. Instead, other scapegoats, including politicians, socialists, and the Jews, were found. Hindenburg’s popularity never diminished. In 1925, he was elected the second president of the republic by a coalition of conservative, nationalist, and monarchist parties. In 1930, he appointed a chancellor to rule without a parliamentary majority, and three years later he accepted Adolf Hitler as the last chancellor of the Weimar Republic. Hitler, for his part, learned little from the failure of Ludendorff’s eastern expansionism or from the failed experiment with “war socialism.” Although Hitler and his cronies would claim to enter World War II with a realistic economic plan in place, the competing fiefdoms made a full utilization of resources for the war effort impossible. The regime only opted for “total war” in 1942. If armaments czar Albert Speer did a better job than Ludendorff, Groener, and Bauer, it was not because he had learned from their mistakes.

Bibliography

Feldman, Gerald D. Army, Industry, and Labor in Germany, 1914-1918. Rev. ed. Princeton, N.J.: Princeton University Press, 1992. The standard text on the Hindenburg Program, first published in 1966. New preface in this edition describes the research done between 1964 and 1992 on German domestic policy during the war and suggests how the author’s views changed in the intervening years.

‗‗‗‗‗‗‗. The Great Disorder: Politics, Economics, and Society in the German Inflation, 1914-1924. New York: Oxford University Press, 1996. Comprehensive study of the German hyperinflation places that development within the context of broader issues. Includes tables, illustrations, and index.

Hardach, Gerd. The First World War, 1914-1918. Translated by Peter and Betty Ross. London: Allen Lane, 1977. A good overview text on the war, with attention to the German internal situation.

Kocka, Jürgen. Facing Total War: German Society, 1914-1918. Translated by Barbara Weinberger. Cambridge, Mass.: Harvard University Press, 1984. The standard text on the domestic policies of the German government during the war.

Vincent, C. Paul. The Politics of Hunger: The Allied Blockade of Germany, 1915-1919. Athens: Ohio University Press, 1985. Concerns how the nutritional requirements of Germans were met and the effects of the Hindenburg Program on provision of food.