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1920-1933 - Evading Versailles

The provisions of the Treaty of Versailles and the implementation of these provisions through the Inter-Allied Commission of Control presented the Krupp managers with a very fundamental problem of policy relating to the future of the Krupp firm. The Treaty of Versailles has been made valid as a law in Germany. These conclusions were reinforced when the German Reichstag enacted the "Law on implements of war" on 27 July 1927.

Gustav Krupp and the other Krupp managers decided, after the Treaty of Versailles, that they would maintain Krupp's potential as an armament factory by retaining their skilled personnel, and utilizing these workers for "a new program of manufacture in which the personnel could obtain and improve their experience in the processing and-refining of material." This was merely one of a number of stratagems which Krupp adopted to frustrate the purpose of the disarmament provisions of the Versailles Treaty, in preparation for the day when "Germany must again fight to rise."

In spite of numerous doubts and contrary to the advice of outside experts, Krupp decided, as "trustee of a historical inheritance, to safeguard the valuable experiences, irreplaceable for the armed strength of our nation, and through constant close ties with the works members to keep up the shops and personnel in readiness, if the occasion should arise, for armament orders later on." With this view in mind, Krupp chose objects for the new program of manufacture on which the personnel could obtain and improve their experience in the processing and refining of material, even though the manufacture and sale of these products partly entailed big losses. Thus to the surprise of many people, Krupp began to manufacture products which really appeared to be far distant from the previous work of an armament plant. Even the Allied snooping commissions were duped. Padlocks, milk cans, cash registers, track repair machines, trash carts and similar 'small junk' appeared really unsuspicious and even locomotives and automobiles made an entirely 'civilian' impression. The change-over was made more difficult by the occupation of the Ruhr and its effects. But, after the inflation, the reserves built up by the very cautious evaluation of the property in the Goldmark balance, the proceeds from the coal mines, the Essen steel works and the foundry in Rheinhausen, as well as the renunciation of the payment of dividends, made it possible to overcome the difficulties of this period of time so full of losses.

Without government orders, and merely out of the conviction that "one day Germany must again fight to rise", the Krupp firm from the years 1918 to 1933, maintained employees and workshops and preserved their experience in the manufacture of war materials at their own cost, although great damage was done to their workshops through the Versailles Treaty, and employees and machines had in part to be dispersed. The conversion of the workshops to peacetime production involved losses, and as at the same time, the basic plan of a reconversion to war production was retained, a heterogeneous program was the result, the economic outcome of which was necessarily of little value; but only this procedure made it possible at the beginning of the rearmament period to produce straight away heavy artillery, armor plates, tanks, and such like in large quantities. The material losses which the Krupp firm amounted to several hundred millions of marks.

When, in 1933, Krupp was again called upon to manufacture war material in large quantities, Krupp was immediately ready to do so, and in addition, Krupp was able to let other firms profit from its' experiences, safeguarded and newly acquired by the use of Krupp capital. Workshops which had not been in operation for years or had only been operating on an insufficient scale were again put into operation, and after a short preliminary stage, were working at capacity.

With the end of the business year 1937-1938, 20 years had passed since the World >War. Its ending had fateful effects for Krupp. The 'dictates' of Versailles prohibited Krupp from manufacturing armaments and army equipment almost completely and demanded the destruction of machines and installations necessary for their manufacture. Under the supervision of the Inter-Allied Control Commission, approximately 10,000 machines, presses, furnaces, cranes, and assembly shafts, over 800,000 gauges, die blocks, devices, and special work tools, as well as the installations of the firing ranges in Essen and Meppen, were destroyed. Krupp had to decide whether it wanted to renounce, for all time, the production of war material and continue the enterprise on the basis of the coal mines, the refined steel works in Essen and the foundry in Rheinhausen, while discharging all superfluous workers and employees, or whether it would continue employing its personnel with a new production program and keep the shops operating with the production of peacetime products.

The restrictions which the Versailles Treaty placed upon the armament of Germany were systematically circumvented and violated by Krupp. As the Krupp Vorstand, which at that time included Alfried Krupp, said in 1938, of the post-Versailles period (NIK-1284, Pros. Ex. 125) "Our company decided to preserve the precious experience irreplaceable for the war potential of our people. This we did as the trustee of an historical heritage *** in order to be ready to execute armament orders when the time came." And Gustav Krupp von Bohlen said (D-94, Pros. Ex. 124) "Even the Allied snoop commissioners were duped." In March 1941, Gustav Krupp von Bohlen wrote, "Through years of secret work, scientific and basic groundwork was laid in order to be ready again to work for the German armed forces at the appointed hour without loss of time or experience." Manufacture of tanks started in 1926. Research and experimental work was done on naval armament, including work on submarines, warships, armor plating, and fire control. Remote control of naval fire was demonstrated in 1929. Experimental work on rocket designing was started in 1930.

One can for convenience divide German history into the period of the Weimar Republic and of the Third Reich. But there was no impermeable barrier between the two; the one flows into the other, and Hitler's dictatorship was conditioned by the history of the preceding Republic. Weimar Republic and Third Reich had many common denominators, and one of them was the Krupp firm. What the Krupp firm accomplished under the Republic was a vitally important part of the process of German rearmament for aggressive war. The seeds planted during the Republic came to flower under the Third Reich.