Introduction

Summary

This book on Berlin’s grand hotels is a cultural and business history of the fate of liberalism in Germany. Board members of the corporations that owned the grand hotels, as well as hotel managers and hotel experts, through their daily efforts to keep the industry afloat amid the vicissitudes of modern German history, ultimately abandoned liberalism and acquiesced to Nazi rule. Their correspondence among each other and with staff, the authorities, and the public, reveal how and why this multi-generational group of German businessmen, many of them involved in heavy industry and finance, too, embraced and then rejected liberal politics and culture in Germany. Weaknesses in the business model, present since the 1870s, had converged with a tendency toward anti-republicanism after the hyperinflation of 1923, resulting in the belief among most hoteliers that democracy was bad for business.

Before taking the chancellery in January 1933, Adolf Hitler had no formal headquarters in the German capital. On earlier campaign trips, he had opted for the Hotel Sanssouci, a middling concession near Potsdamer Platz. But in February 1931, electoral successes mounting, he transferred to a suite at a grand hotel, the Kaiserhof, that overlooked the chancellery – his goal – across the square. The hotel became Hitler’s Berlin home. It swarmed with his hangers-on, who changed the face of the clientele almost overnight. The Jewish custom evaporated; business suffered. By the fall of 1932, the board of the Kaiserhof’s parent company would need to decide whom to favor: Hitler and his men or Jews and other anti-Nazis.

A member of the hotel’s managerial staff raised this issue in person with the corporate board of directors on September 15, 1932: “Hitler has been in residence at the Kaiserhof for some time,” he said, and “the Stahlhelm have commandeered the house for use as a headquarters.” As a result, “too much of the clientele has been lost,” because “the whole Jewish clientele has stayed away.” Profits, and the Kaiserhof itself, would have to be “won back” – and soon, he warned.

The board pushed discussion of the problem to the meeting’s end, when, finally, the chairman, William Meinhardt, a leading industrialist, weighed in: “As a hotel company, we must remain neutral on matters of religion and politics. Our houses must remain open to all. Surely the situation as it has developed is no fun for any of the interested parties, but we, the directors, cannot do anything about it.”¹ Next spoke Wilhelm Kleemann, member of the parent company’s board, managing director of Dresdner Bank, and head of the Jewish Community of Berlin.² “I know for certain,” he said, “that Jewish guests no longer stay at the Kaiserhof and no longer visit the restaurant, either.” In response, Meinhardt conceded, “I know how hard it is for the house’s restaurant manager to exercise the requisite tact in face of these difficult questions.”³ Most remarkable about this preemptive capitulation to the Nazis is that Meinhardt himself was Jewish, and so were most of the board members in attendance. Here was a group of Jews in 1932 grappling with whether to evict Hitler.

These men were also industrialists, financiers, and liberals – National Liberals before World War I and members of the Weimar coalition parties thereafter. Meinhardt, a member of the German Democratic Party (Deutsche Demokratische Partei), had been born to Jewish parents in Schwedt, a small city on the Oder River, in 1872.⁴ In 1914, he became managing director of one of the world’s great manufacturers of metal filaments for incandescent lamps, a concern he transformed, in 1919, into the new conglomerate OSRAM, which dominated the German market in light bulbs. As chairman of OSRAM’s board and architect of the legal maneuvers that allowed his monopoly to form and flourish, Meinhardt, through speeches and the publication of two books, became a “recognized authority on the subject of the electrical industry,” according to a study published in Britain in 1935.⁵ Yet it would be in his capacity as chairman of the board of the Kaiserhof’s parent company, the Hotel Management Corporation (Hotelbetriebs-Aktiengesellschaft), that Meinhardt came face-to-face with the Nazi menace.

Meinhardt’s interlocutor at the September 15 meeting, Kleemann, was himself one of Germany’s most prominent financiers. Other Jewish board members present included Eugen Landau, a diplomat and board member of the Schultheiß-Patzenhofer brewing concern as well as of two banks, and Walter Sobernheim, Landau’s stepson, also a diplomat and director of Schultheiß-Patzenhofer.⁶ Sobernheim, Landau, Kleemann, and Meinhardt were industrial and financial elites first, and hoteliers second, with liberal-democratic affiliations and tendencies.⁷

The term “liberal” here connotes three political orientations at once. The first is party-political and places these hoteliers as businessmen in the National Liberal tradition. Still intent on lowering taxes, freeing trade, and defanging labor unions, they had come around to a more democratic liberalism by the 1920s.⁸ Second, with their manifold forays into civic altruism, these hoteliers expounded a liberal urbanism characteristic of European bourgeoisies.⁹ Third, like their British counterparts, Berlin’s grand hoteliers used regulation, infrastructure, and technologies of surveillance to maintain a balance between freedom and order in the metropolis.¹⁰ In Germany, none of these liberalisms survived the Weimar period. The economic chaos of 1919–23 instilled in their adherents an incorrigible pessimism which, at the advent of the next crisis, in 1929, became a precondition for conservative elites to sabotage the economy and dismantle liberal republican institutions from within. This they did with impunity as the liberals looked on.

From the vantage of grand hotels, this book reveals the decision-making processes behind the failure of German liberalism in the 1920s and early 1930s and explains why businessmen, industrialists, and financiers let the institutions of Weimar culture, society, and politics collapse around them. As early as the winter of 1930/31, a fatalism seized the very liberals who would have resisted the forces arrayed against the Weimar Republic.¹¹ On September 15, 1932, the liberal board members of Berlin’s principal hotel corporation chose, to the detriment of their business, to let Hitler stay. The ultimate task of this book will be to connect this decision to the experience of dislocation in the interwar period. What was the logic that made acquiescence seem like the best option by 1932?

To answer this question, historians of Weimar Germany generally focus on the beginning and end of the republic. If it had not been doomed from the very start, then it was done in by the Great Depression. This book offers a different emphasis. The economic chaos of 1919–23 so discredited the republic that a representative sample of industrial and financial elites – in this case, the grand hoteliers of Berlin – made arguments in private and public that moved ever closer to the language and perspectives of the anti-republican right. The hoteliers’ pessimism regarding the republic reached a crescendo in the hyperinflation of 1923 and reverberated down to Hitler’s transfer, on January 30, 1933, from the Kaiserhof to the chancellery.

This history explains in material terms the increasing rightward list of German politics before 1933, by matching the ebb and flow of these hoteliers’ pessimism to certain quotidian difficulties in the management of Berlin’s grand hotels. Instead of pinning down these quotidian difficulties, I let them issue and recede in the text of this book, just as they do in the sources, just as they did for the hoteliers. In the prewar period, managers and owners worried most about hierarchies, trying to keep workers in place and control guests’ experiences according to distinctions of gender, class, and nationality. At other intervals, such as 1918–22, labor relations took priority. In 1924–29, the focus shifted to taxes. Each of these areas of concern helped shape hoteliers’ conception of the political – that is, what the state should do to stabilize the social and economic order. But complaints about policy quickly turned into indictments of the republic itself.¹² After 1923, Berlin’s grand hoteliers heaped scorn on Germany’s new democracy, blaming it for every threat to profitability.

This book uses traditional sources in business history to answer questions about politics, society, and culture.¹³ What do ways of running a business tell us about shifting relationships of power? Where in the accounts, reports, minutes, and correspondence do we see signs of political and cultural continuity and change? For answers, I read some of the sources against the grain to extrapolate the leadership’s strategies of social control. I also look for more explicit indications of political leanings. Berlin’s grand hoteliers in the interwar period tended, in spite of the evidence, to blame most of their difficulties on workers and taxes. In doing so, owners and managers deflected attention from the sum of their mistakes: the failure to helm such large, complex enterprises over the choppy waters of an increasingly competitive and increasingly global economy. They thereby also obfuscated their record of disadvantageous borrowing and poor accounting.¹⁴ While this sorry tableau reaches a vanishing point on September 15, 1932, it spans seven decades of German history, starting in the 1870s, when the Kaiserhof opened as Berlin’s first grand hotel.¹⁵

The book’s five chapters offer several overlapping episodes in chronological order: equipoise, exploitation, and heterogeneity in the imperial period (Chapters 1 and 2), the shortages and violent confrontations of World War I and its aftermath (Chapters 3 and 4), and finally the tumults of the 1920s and early 1930s (Chapters 4 and 5). Throughout, building on Habbo Knoch’s cultural history of grand hotels in New York, London, and Berlin, I foreground the business model and its dependence on modes of economic domination.¹⁶

The dark view of affairs that led Meinhardt to accommodate Hitler had taken form in years of difficulties resulting from weaknesses in the grand hotel business model and hotel workers’ newfound power to challenge it. World War I, defeat, and revolution exposed social and cultural cleavages that hoteliers had succeeded in concealing and managing during the old regime. After the war, Berlin’s grand hotels became crucibles of conflict.¹⁷ Hundreds of workers, their exploitation crucial to the survival of the enterprise, refused to submit. As international hostilities continued past the peace treaties of 1919, guests, too, became restive. They seethed with resentments and, in some cases, even assaulted one another in dining rooms. With animosities out in the open, hoteliers saw no way back to the prewar state of equipoise.¹⁸

They were initially ambivalent about the republic and its capacity to reconcile Germans with each other and with the rest of the world. After the hyperinflation of 1923, however, that ambivalence tipped into antipathy, and Berlin’s many hoteliers finally turned against the republic for good. Many of them branded the republic a failing, dangerous experiment and did not waver in their judgment, not even in the relatively stable period from 1924 to 1929. After the onset of the Great Depression in 1929, pessimism about the republic slipped into fatalism – the sense that the republic might or even should fail hardened into the certainty that it was a lost cause, indefensible at the very best. Recall Meinhardt’s words on September 15, 1932: “Surely the situation, as it has developed, is no fun for any of the interested parties, but we, the directors, cannot do anything about it.”

Rather than a comprehensive history, this book is a case study in the failure of liberalism and its institutions in pre-Nazi Germany. Responding to the economic chaos of 1919–23, the grand hoteliers of Berlin – a representative sample of economic elites – subscribed to, and even made, arguments in the public sphere that moved ever closer to the language and perspectives of the anti-republican right. In 1932 this case study and the grander historical narrative converge. Some of the infamous “backroom negotiations” that brought Hitler to power took place not only in back rooms but also in a corner suite at the Hotel Kaiserhof. Its owners, Meinhardt especially, kept that suite available all the way to Hitler’s assumption of power on January 30, 1933. No match for the fascists, these businessmen failed themselves, their industry, and the republic.