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Approved For Release 2000/08/23 : CIA-RDP67-00059A000500020006-8 G14 W ITZ (I'M Approved For Release 2000/08/23 : CIA-RDP67-00059AO00500020006-8 Approved For Release 2000/08/23 : CIA-RDP67-00059A000500020006-8 CIVIL AVIATION IN PRE-WAR G f Id' The olla'ing report on pre-war civil aviation in Germany is condensed from a study specially prepared ;or this series by the Aeronautics Division of the Library of Congress. The full re- port covers the subject in very much more detail and includes charts and a cc ?ate list of references. It is avail blo to anyone desiring to carry out further research. -- 00000 Approved For Release 2000/08/23 : CIA-RDP67-00059AO00500020006-8 Approved For Release 2000/08/23 : CIA-RDP67-00059AO00500020006-8 UNCLASSIFIED CIVIL AVIATION - PRE-UAR GERMANY A. CIVIL AIR POLICIES 1. German civil aviation was an instrument of national aggrandize- ment, created by a totalitarian state to forward its idoologr, and completely dominated by that state in policy and procedures. Air commerce, air sport and the aircraft industry existed to feed each other and the Luftwaffe. "Today's air pourer is not contained only in the air forces of a nation; it includes -- and this is the meaning of Goring's proclamation of a 'nation of flyers' -- the air force, industry, and civil aviation. Civil aviation has a front line soldier's position equally with the Air Force, for it defends the position of a nation in the air through its technique, transport, sport, and research func- tions". Adolf Baumker, Managing Director of the German Acadei r of Aero- nautical Research in 19l3, indicated the German approach to the study of air power as early as five years after the Treaty of Versailles: "We must in investigating the bases (of air power) distinguish three factors: the aircraft industry, air transpor- tation, and air sport, in addition to military aviation". Blum- ker's analysis on Deutsche Lufthansa, the aircraft industry and air sport, forces the conclusion that each of the three compo- nents of German civil aviation was an instrument of national and party policy in exactly the sense of the Luftwaffe. 2. (a) The first German government following World War I had & centralized all internal scheduled and unscheduled air (b) transport into the hands of one company; the second govern- ment extended that company around the world as a weapon in its geopolitical warfare. The identification of government and airline was so complete that one man Erhard Milch, was from 1933 to 1945 both State Secretary of Aviation and Executive Director of Deutsch Lufthansa. Government con- trol came about through capital ownership and was imple- mented by subsidies. After the Nazi advent to power, Lufthansa placed principal emphasis on the international field, inter-European and inter-continental., with particular attention in the latter respect paid to South America. within Europe, Lufthansa worked out, usually within the framework of the Interna- tional Air Transport Association, reciprocal agreements with Sweden, Holland, France, England, Switzerland, and Italy, which permitted joint operations betwoen the vari- ous countries involved. During the war, Denmark, Hungary, Rumania and Bulgaria were forced to join in this sphere of influence. "It was quite evident that the National Air Ministry, acting through the Lufthansa, was very willies to offer strenuous competition in all phases of commercial air transportation, regardless of expense". (c) Because the expense was too much for the ordinary pocket- book, the German authorities made no special efforts to promote private flying or the personal plane. In 1938, for example, there were only 152 private aircraft owners. However, the schools, clubs, and sport organizations en- couraged by the government owned approximately 600 planes, Approved For Release 2000/081j P67-00059A000500020006-8 Approved For Release 2000/08/23 : CIA-RDP67-00059AO00500020006-8 UPNCLASSIZIED and thousands learned to fly with them. A brief history of government sponsorship of private IL,, ng clubs and or- ganizations follows: Air sport in pre-war Germany had been centralized in the Deutsche Luftrat (German Air Advisory Board) since 1924. This organization worked through the Deutsche Luftfabrt- Verband (German Aviation Union), a private organization founded in 1902, to avoid the provisions of the Treaty of Versailles which banned public support of air sport. The German Aviation Union in 1929 headed 2119 clubs, or- ganized into 12 groups. Germany's international repre- sentation, particularly with the Federation Aeronautique Internationale, was undertaken by the Aero Club of Germany. The success of the German Aviation Union was extraordinary, considering that it was granted ostensibly a yearly sub- sidy of only 250,00 RM., to be devoted to the purchase of gliders. Somewhere contributions were obtained to finance the expansion of membership from 19,300 in 1926 to 15,000 in 1929. The number of planes owned by local clubs in- creased from 18 in 1926 to 64 in 1929, and the number of gliders from 125 to 643 in the same period. The Union owned about 60 balloons, which probably represented an. investment of 600,000 marks. Possibly the source sub- sidizing this growth was the secret funds of the iteichs- wehr. The Union's analysis of the social origins of the 6,400 members it described as "youths" will show how deeply the air sport movement had taken roots in every social class: 25% were said to be from the lowest financial olass; 27% from the lovier middle class; 39% from the upper middle class, and 9% from the professional class. It is signifi- cant of the conservative nature of the Union that the Com- munists were forced into their own air sport club, the "Storm Bird". Probably the most striking single feature of the sport movement was the mushroom growth of gliding and soaring. In 1920 about 50 enthusiasts gathered at the tlasserkuppe in the Rhbn mountains to'begi.n an annual contest that attracted tens of thousands by 1933. Newspapers offered prizes of from 3 to 5 thousand marks; villages banded together to send their champion to the -7asserkuppe; and several flourishing magazines publicized the exploits of the winners. A society, the Rhbn-Rossiten Gesellschaft, was founded by private interests not related to the Ger- man Aviation Union to advance the theory of gliding and soaring. The Union maintained, in addition, training schools for gliders at Grunau, Schwarzenberg in Saxony, Doernberg, the Nasserkuppe, Rossiten, and aangen. The Union's greatest contribution to the later history of aeronautics in Germany was probably this creation of air consciousness in the youth of Germany. Approved For Release 200Q/fu-RDP67-00059A000500020006-8 Approved For Release 2000/08/23 CIA-RDP67-00059AO00500020006-8 UNCLASSIFIED When the Nazis assumed power, the German Aviation Union and the Aero Club were in the process of a voluntary mer?. ger. Glbring halted this combination. The Aero Club re- tained its identity, but, all other flying clubs in German,-, including GESring's own National Socialist Flying Corps, were incorporated into a new organization, the German Air Sport Union. The Rh8n Rossiten society was renamed, and made a state institution. At the same time, aeronautics was introduced as a subject into the public school curriculum by a decree of the Min- ister of Education. The aecree prescribed such educational devices as "aeronautics in moaern languages", "aeronautics in physical education", and "aeronautics in history". The Hitler Youth leaaer and the Air Sport Union leader par- titioned between them the spare time of German youth. "Recruits for the Luftwaffe", said the agreement, were to come only from the Hitler Youth, but they were to be chosen by the Air Sport Union. The 10 to 14-year oldera would be tested as potential aeronautical material in the so-called "model plane building work associations". Those selected would spend their llLth to 18th birthdays in the air sport squadrons of the Hitler Youth, but be subject for their purely aeronautical education to the Air Sport Union. The Hitler Youth in the flight squadron underwent this program from 14 to 18: Time Course Agency 1 afternoon World Outlook Hitler Youth each week 1 afternoon Workshop Service Air Sport Union each week 2 Saturdays in Physical Training Hitler Youth the month 2 Saturdays In Flight or Workshop Air Sport Union the month Service 1 Sunday in Small Arms and Hitler Youth the month Terrain Sport 1 Sunday in Flight Service Air Sport Union the month It is of this period that the Nazi publicist for air sport was thinking when he mote in 1942 "everywhere animated activity set in, of which the public knew nothing. It did not lay in the interests of the Reich to publicize openly this air sport." On the November 9th after his 18th birth- day, the Hitler Youth grauuate would become a member of the Party, and on the Sunday after that a member of the Air Sport Union. By attaining his I6th birthday, the youth also became subject to the six months labor service .3o, UNCLASSIFIED Approved For Release 2000/08/23 : CIA-RDP67-00059AO00500020006-8 Approved For Release 2000/08/23 : CIA-RDP67-00059A000500020006-8 UNCLASSIFIED requirement, followed by his two years of military service in the Luftwaffe. The replacement of the Air Sport Union by the National Socialist Flying Corps (usually abbreviated NSFK) in April 17, 1937 was a change of name rather than of func- tion*, The NSFK assumed the duties of supplying rein- forcements for the Luftwaffe, and developing national air consciousness. The division of labor between the Hitler Youth and the Air Sport Union was carried on by the NSFK. The only difference was that the NSFK, unlike the Air Sport Union, was a recognized party organization, and could walk shoulder to shoulder with the SA and the SS in party parades. The NSFK was divided into 16 groups, corresponding geo- graphically with the districts ("Gaue'') of the Hitler Youth and the Party. Each group was subdivided into regiments ("Standarten") and companies ("StRrme"). The terminoloa- is that of the SS. By 1938 the situation was thist 150,000 11 to 13 year old boys have one afternnon a week and one Sunday a month to devote to model flying. Eighty thousand from 114 to 18 were in the air squadrons of the Hitler Youth, and 60,000 young men were members of the NSFK. The NSFK had the added feature of non-flying, but contributing mem- bers (the "Fbrderer" or sponsor), who numbered 230,000 in 1939, and were allowed to pay a mark a month. The Air Ministry, for example, sugested in 1938 that it would be well for its employees to join the NS 'K. With this sort of financial support, the NSFK in 1938 could boast 23 soaring schools, 5,000 gliders, 7 schools for motor flight, and 600 planes. Major General Christiansen, leader of the NSFK, had ordered 2,000 more planes of the type of the light Siebel."Hummel" for 19140, and was talk- ing in terms of muscular flight. In a total of 125 summer camps, 7,500 Hitler Youth annually underwent flying train- ing at the hands of the NSFK. The NSFK instructors them- selves had been indocrinated with the proper political ideology at the Berlin-DalheLn school of the party's offi- cial political philosopher, Alfred Rosenberg. Christiansen could boast that "in close cooperation with the Main Educa- tion Office of the Party and the FUhrer's delegate for the entire spiritual and philosophical education, Rosenberg, the NSFK guarantees the systematic development of the youth in a uniform spiritual and character-moulding education". Fees for training and instruction were, surprisingly enough, rather high. Christiansen in 1938 established five groups of fees for "everything included" rates for 22 flying les- sons of one hour each, which reveal the military influence behind German air sport. Group A: Members of the NSFK of less than 23 years, fully suite Ie for flying services, holders of the glider license second stage, who had not yet done any military duty. Cost: RU 200, each additional hour RH 12. -1{- UNCLASS IFIED Approved For Release 2000/08/23 : CIA-RDP67-00059A000500020006-8 Approved For Release 2000/08/23 : CIA-RDP67-00059AO00500020006-8 Gro m Bs Similar regulations, but in place of the stage glider certificate, a service period of at least two years with the NSFK or with the "Flieger?4T.S" (F]vrSng Hltl3r Youth). Cost: BY 2y00s each additional hour HU 21, Grou C: Members of the NSFK aged up to 35 years with at igast two years' activity in the PUSFKs the C glider flying.cortificate was desirable and the instruction had to be undergone in the interest of military serviced Costs Rid 600, each additional hour RM 2i Grou Ds Members and male sponsors of the NSFK of up to years of age with a membership or sponsoring activity of at least 2 years. Costs RM 8000 each additional hour RM 36. Group Ss - All other protagonists of the NSFK, including women* Costs RM 1,000, each additional hour Eli 42. The whole German air sport movement can be judged on the basis of the failure or success of the NSFK in fulfilling its functions of creating suitable replacements for the Luftwaffe, and generating national interest in aeronautics. For, as Christiansen said, "As the Luftwaffe is the veal heart of military aviation, the Lufthansa of con, rcial aviation, so is the NSFK the real moaning of the entire German air sport movement." The opinion of the expert seems to be that the NSFK failed the Luftwaffe. Asher Lee says: In spite of Christiansen's best :ndeavors, the general opinion anong the older hands of the Luftwaffe was that pre-training with the National Socialist Flying Corps did not make any real contribution-to the breeding of a better race of German ?.ir Force pilots. # t the beginning of the training course, at the r!gular German Air Force flying training schools, the young Hitlir embryo pilots held a certain slight advantage over the others in theoretical knowledge of aircraft, but more particularly in political prestige. As the young aspirant pilots reached the later stages of flying training, the effects of the National Socialist Flying Corps training-were progressively thinner up to the time the average pilot received his wings. It seems that, on the whole, most very good pilots are born and not made, and that most average pilots have to fly- In order to become pilots. A few hours of flying National Socialist gliders was worth little more than training on a bicycle would be for a professional racing motorist, On the whole the National Socialist Flying Corps remained full of budding promise but never blossomed. (d) Government promotion of aircraft manufacturing and the reasons therefor, are presented in the following sub-. study which for purposes of clarity is divided into three sections. Due to the important influence of the war years on the industry, they have been included In the study. UNCL4SSIFT'.D Approved For Release -200 -RDP67-00059A000500020006-8 Approved For Release 2000/08/23 : CIA-RDP67-00059AO00500020006-8 i3l)S j &D t:i. Before 1933, Ger:mny can be said to have had no aircraft industry. Tier total output in.1931 was 13 planes, and in the year it was only three tires that number. Tho companies which constituted the a' r fra io section of the National Union of Garman " irci'af t Industry wore Arado, Dormer, 6rlas, i'i,~ses_er, F ocke-:. ulf, heinkel, Junkers, Klemm Ues3evocb: mitt and Rohrbacho Their products ware;uished for technical excellence, but their plants and equipra9nt were very small and their capital lnvaotnent comparatively insignificant. With Hitler's tassurnption of power, the creati.og of a sizeable air force became a primary goal. Goring began the expansion of the aircraft industry which was to build the Luftwaffe. He ordered the immediate increase in production of existing planes, and initiated the development of new military types. The purpose of the first action was to provide companies with manufacturing experience, and to have something to flay to impress the German people. The second action involved two basic steps: (1) design and development and (2) the expansion of the manufacturing capacity. The design and development of high preformance military aircraft were undertaken by engineers in r Q~rrch institutions and in industry along lines laid down by ,he National Air Ministry, The Measersehraitt 109 and 110, the Junkers 52 and 87, and the Iieinksl III are p trhaps the most success- ful risults of this research. These planes were combat-tested in the Spanish Civil Air. The expansion a# the industry was accompanied by (1) extension if existing aircraft plants, (2) by bringing conearns engaged in other industries into aircraft manufacturing by converting some of their plants, and (3) by constructing new plants. Some of the concerns from other industries which took on t h man of ac turn of aircraft before the war ngagsd in conpfmy Location Manufacture of Al.ldemeine Transport- Leipzig Cranes, mining and erlagen transportation equipment t3lohm & Voss Hamburg Shipbuilding Gothaer i'Jaggonfabrik Gotha Railroad cars Henschel Flugzeugwerke Berlin Locomotives "Weser" Flug$eugbau Bremen Shipbuilding We 6- UNCL.SSIi I'3D Approved For Release 2000/08/23 : CIA-RDP67-00059AO00500020006-8 Approved For Release 2000/08/23 : CIA-RDP67-00059AO00500020006-8 Funds for the expinsLon aere provided principally by the ii:ir directly Lhrou;;h the Sank der dcutschen Luft::whrt ir:corporatcd in 1938 4th a capital of 70 Pillion 141-, or through bank credits ;;uar4nteed by the Air :.,in1Gtry, lio.. - ever, Lhe company r:wra;;errcent, t cnerally 3peakin. , crt.i-4 ie d on o; )cra t ions with little intcrfe rence fro,u the ~;overnru:nt . The arrangemcnts :.ere liberal enough so that by cloue coo-)eration bet:?:ecn the ;overnrre:nt and Lhe aLrcra.ft iwius- try it .;?~ :a po:,s1ble to repay loans (_uuick1 and thus Lo build up LYc(: owners'lair) of exr-landed f,-c i.lities." The J,ir ,','.1ni:;try 1L3elf owned Junkers and i rado, and the Sa:;ony $LGte Sank controlled rr?la. The i,cichsbank voted 50 ncr(ccnt of the :;ii fires in the Lwo aero-en,:fine CUlii~)L.nics, Bair.ler-Bonz and in estimate of 150 million X,-L in v,ar loans from the :ceichsbank alone to t?T. aircraft industry is probably' an under ;;ta.te.:rent, in vier': of Li,e 20 ,a.i111on .W." _;iven to only one rcl tively small aircraft accessory co;:.piny. As for private industry, lt11 ;er.:eirie ,1c :Lriziwa:,s Gesellschaft controlled Focke- ulf, Li.ttel-UeuLsche atGhl controlled ATG, and Krupp stood behind :.escr. The aircr?~jft, aircraft accessory, and aircraft engine industries .-.ere set up in the form of liiAted liability companies. rather than as corporations, to avoid the nece;;oity of reporting; on the volume and nature of output.;. Until 1934, the 71, ices paid to the aircraft industry irir- ner'.iately on receipt ere "calculated" or esLim ted Burrs. Final prices ..cre a:'reed upon annually, after the udiLing of the Co: panyts books, on the basis of Life Principle of as:;uring the industry 6 to 8 percent interest on capital invested. The industry's profits, therefore,, did not de- pend on volume or quality of output, but only on the -:r::ount of capital on -inally invested. This principle ewers aban- doned in 1934. apparently proved uneconomic to support rrar;71na1 fir nu. Payment before the aa- Lt as CO r r ut(ld on the basis of an eutirna'.tion of the total value of orders received after exasaination of the company's books, Prices determined in this way seemed to have .uaranteed to the manufacturer his cost price of production plus 6 to S n,~r- cent. The cost price fi,,,ure included all expenses avid all taxes, so that the 6 to 8 percent (;ranted was net profit,. From the first, the keynote of the or,;anizaLion of the Ger- r:Lan aircraft industry was "ra.LionalIzation". Compct Ltion was discarded as a matter of policy. Patents and dcsi~;ns were pooled. Only a few of the more co,.,petcnt groups w,,re encoura ed to carry on enf;ineerin development. 5everL:i cor.i )anies ,mere reg;~_arded as satellite or "shadow- plants" nor concerns v:ith a strong design or4niza.tion, such as Jur'cers and i,:esserschriitt. henac::el entered the aircraft .LniusLry of its on accord in 1933 and r,iacle a substantial lnvcsti.iunt of Its own funds. Henschel developed several ne- desi.,;ns, but its principal contribution ..a.s the production of air- planes dc:sit;ned by other com~;ranies. By the "1'icensin..;" -7- Approved For Release 2000/0L4 P67-00059A000500020006-8 Approved For Release 2000/08/23 : CIA-RDP67-00059AO00500020006-8 i i-LI AS 1FIED device, new concerns could be nuipped with maG*ines and could acquire experience. Junkers, for example, gave li- censes to Mitteldeutache Motorenwerke and Pommersche Motor- enwerke, and Dalmler Benz licensed Henschel and Bussing NAG shortly before the war. The outlines of the peace-time Nazi aircraft industry had been definitely fixed by the middle of 1936. Despite the increase in potential aircraft, production between 1936 and 1938 showed virtually no increase, with the annual out- put in the latter year at 5,235 planes. Historically, no important step-up in production was to occur until the sec- ond part of 1939. The growth of German aircraft production during t... pre-war years is shown in the following table, taken from US Strategic Bombing Survey, Overall Report LE_hwoRgan War). Washington, 1945, p. lls Year Combat Types All Other Tvnea Total 1931 0 33 13 1932 0 36 36 1933 0 368 368 1934 840 1,128 06 1935 1,823 1,360 3 183 1936 2,530 2,582 5,112 1937 2,651 2,955 5,606 1938 3,350 1,885 5,235 1939 4,733 3,562 8,295 Total 15,927 33,889 29,816 On the authority of a report prepared for Goring, the characteristics of the aircraft industry in 1936 can be summarized as: Rabidity of Growths In 1933, the net production of the aircraft industry was worth 37-1/2 million RM, or 0.2 percent of the total of German production. The automobile industry was seven times as large. In 1936, the aircraft industry ranked fourteenth amor the 279 #ndu tries, studied a total net production of 527 million W a or 1.6 percent of German indilstrial production. t3hile the aura of Gerran production had increased 190 percezit, the production of the aircraft industry had increased 1500 per- cent. Erip1avees of the aircraft induct-y rnimbered 3240878 in 1936, those of the automobile industry only 11OjWtS. Dive- rsity in Sires In 1936, the aircraft industry comprised 74 geographically distinct factories, that is, 53 air frame factories, 16 engine factories, and 5 repair establishments. Eight factories paid out in salaries over 10 million R&! each, or 41 percent of the total of salaries in the industry. Fifteen factories paid out over 33 percent of the total, 28 factories 23 percent, and the last 23 factories only 3 per- cento 0f the 8 largest factories, 5 produced airframes, and 3 produced aero engines. The production of these 5 air frame factories amounted to 39 percent of the whole, and that of the engine factories to 50 percent. -8- UN LA.SSIFIED Approved For Release 2000/08/ : cTA- DP67-00059A000500020006-8 Approved For Release 2000/08/23 : CIA-RDP67-00059AO00500020006-8 UNCLASSIFIr,D Em nlovmrnt: Two per cent of all German industrial workers were employed in the aircraft industry in 1936, By 1936, the structure of the German aircraft industry had been planned in terms of its wartime potential, The rela-, tionship of the peace and war-time aircraft industries can be expressed in this manners The aircraft industry built by Germany in the years immedi- ately preceding the war worked on a single-shift basis to supply military aviation, If undisturbed, Germany?s peace- time plant capacity could have produced the peak war time quantities by the single device of introducing the three shift system. German manufacturers by application of "series" or produc- tion line methods and by extensive production tooling, had reached a stage far more advanced than actually needed for 1938 or 1939 operations. Germany fought the war with the peace-time products of the factories, The Me 109, Mello, Ju 87, and the He 111 were in substantial production before the war, and the Ju 88 and the FAY 190 were beginning to come off the lines in 1939 and 1940. Tho He 177 and the Me 262, projected for 1944, never actually got into the volume production stage. Goyernm nt Panng In his capacity as Air ?Minister, Goring appointed a Director of Aircraft Supplies, who was charged with the procurement of aircraft. Udet occupied this position until his death by sui- cide in 1941, and carried on direct negotiations with the in- dustry as to production plans. When &!ilch took tldet?s place in 1941, he set up an organization in the Air Ministry whose sole function it was to plan the aircraft program., The plan- ning work on programs was carried on vith the advice of the Main Committees for Airframes, Supplies, and Accessories, These committees were formed by Speer when he became Minister of Armaments and Eunitions in 1942, and were outgrowths of the Industry Advisory Council formed by Udet in May 1941. The Main Committees were made up from industry, and represented a definite industry point of view. The function of these com- mittees in the aircraft industry was to advise the Director of Aircraft Procurement and the Air Vinistry on production matters. In addition, there were Special Committees for most of the prim cipal aircraft companies, with offices at the main office of the company, and Special Rings for each of the industries which supplied the aircraft industry, The Special Comrittees.were especially important in the cases of the principal "complexes", Junkers, Messerachritt, and FockopMulfo They funneled the re- quirements of the member firms of the "complex" as to materi- als, facilities, and workers. In 1943 the pain Committee for Airframes was made into the t :ain Committee for Aircraft and centralized the requirements and facilities of the entire in- dustry, In X944, the Air Ministry was formally dissolved and g Approved For Release 2=MBi23 CIA-RDP67-00059A000500020006-8 Approved For Release 2000/08/23 : CIA-RDP67-00069AO00500020006-8 I3NG SSI?"Ir,~1 its procurement facilities taken over by the Speer 1in? lstry, working through and with the Committees, The procedure for program planning, while it was still undertaken by the Air 3:inistry, was as follows: 1) the General Staff of the Air Forces originated the require- ments for aircraft by type, approximate numbers and de- livery schedules, 2) the Air Linistry received the request from the General Staff and the planning group in the Prom curement Division undertook the preparation of studies aimed at the fufillnent of the requirements; 3) the plan- ning group consulted the Main Committees for airframes, en- gines, and accessories, and the divisions of the Speer Min- istry which had jurisdiction over materials, machine tools, and other matters which were basic to the proposed aircraft plan; 4) the planning group set itR completed study to the German Staff of the Air Forces. Goring personally ap- proved each official program, presumably after consulta- tion with Hitler. After the Air Ministry was transferred to the Speer Ministry, the procedure remained substantial- ly the same, Comparison A discussion of the relationships between the aircraft in- dustry and the government would inevitably infringe on the story of military aviation, since the story of the aircraft industry is inseparable from that of the Luftwaffe. How- ever, a comparison of the German and American war-time air- craft industry would stress the following differences: The complete integration of all German aircraft, industry, experimental engineering, production and operation, under one central directing organizations The complete regimentation of all German labor, and the re- tention in the industry of engineering, supervisory, and mechanical skills under a policy which made them ineligible for combat service until proved otherwise. The German policy, plus the use of slave labor, plus the rigid mili- tary control over migration of labor, left to all Ger- man establishments stable seasoned staffs of managements, engineering, tooling, supervisory, and mechanical skills which permitted rapidity of evolution in experimental en- gineering and productive efficiency, The lavish variety of German experimentation on all manner of highly speculative devices in a large number of highly specialized and elaborately equipped individual labora- tories. This provided an integrated but highly diversi- fied program of specialized experimentation, which, in combination with (1) and (2), gave to the German aircraft industry a rapidity of technical evolution9 and a degree of flexibility and adaptability in rapidly changing tactical situations. 10 Approved For Release 206 A-RDP67-00059A000500020006-8 Approved For Release 2000/08/23 : CIA-RDP67-00059AO00500020006-8 CLASSIFIED (e) The marked emphasis on internal combustion turbines and jet and rocket propulsion, and on development and application of self directing ("robot") control devices, which in Ger- many at wares and were distinctly in advance of the United States developments in similar lines. The elaborate underground laboratory and factory instal- lations in Germany which, aside from their bomb-proof char. acteristics, greatly facilitated preservation of secrecy. The much longer period of continuous German concentration on war production under compulsory government control which conditioned the individual German establishment to far greater dependence on centralized government planning,. and made it far more amenable to government control than the individual United States establishments Government promotion of aeronautical research is presented in the following -sub study, Changes duo to the war are also included, The Air T,;inistry, asset up in 1933, placed a Technical Office, headed by General Udet, at the apex of the re- search system. The difference between research and devel- opment was recognized by the creation of two different departments headed by the Technical Office, and thus respon- sible to one man, Udet, who was also the procurement officer. The Development Department was broken down into 9 divisions, with.coiplementing testing stations: air frames, motors, apparatus, and radio, all tested at Rechlin; weapons, tested at Tarnowitz; bombs, ground organization, torpedo:, and long distance steering apparatus, tested at Udetfeldt; jets and guided missles tested at Peenemunde; fighter planes and tac- tics, tested at Diepensee. The leaders of the divisions were Air Force Officers, usually with the rank of colonel, and generally selected for their engineering background.. Each division had a dual responsibility; development and production, It is estimated that perhaps 10 percent of the developmental work was actually done by the Air Force, and 90 percent by the research institutes of the large com- mercial firms. There were a large number of such institutes, since industrial research in Germany has always been well advanced. However, the research institutions frequently became service units because of their close association with aircraft manufacturers, Aeronautical research, specifically, was the responbilility of the ex..Ueimar official, Adolf Baumker. He apparently re- garded the institute as the fundamental unit in research; by "institute" he meant a unit small enough to be adminis- tered effectively by leaders only one echelon removed from wcf,ItSSIFIED Approved For Release 2000/08/23 : CIA-RDP67-00059AO00500020006-8 Approved For Release 2000/08/23 : CIA-RDP67-00059AO00500020006-8 1l!:CLLS33 rFIED the workers themselves. In practice, this meant about 300 scientists. The institute leader .liras reciuired to know each member of his staff :)ersonally, and to be thoroughly con- versant with the technical aspects of the i,rork. The izotitute had to be almost autonomous in scientific research, evert though a number of institutes might be grouped under the administrative or fiscal management of one establishment. The director of an establishment coordinated the work of his institutes, provided heat, light, power, guards, and draft deferments, but did not attempt to direct their scientific activities. The institute leader received research pro- jects directly from the Air Ministry, or originated pro- jects himself. His reimbursement was determined by the Minister of Education, and -was ec ual to that of a professor at the technical colleges. The group leaders at Luftfahrtforschunganstalt, Braunschweig, received an annual salary of 11,000 mc:rks, which was equivalent to as many dollars in war-time Germany. The institute leader received somewhat more, and the staff workers somewhat less, but salary was not dependent on im. ediate performance. Lost important, the institute leader reported directly to Btumker, and was immune from other pres3ure. The "fixed" plants: buildings and real estate - were owned by the government, and assigned to the establishment without cost. The "novables", apparatus, instruments and furniture - belonged to the establishment. The aeronautics Research Estab- lishment at Braunschweig (LFA) had 70 buildings and 5 major wind tu.,nela. One firing range alone had cost 4 million murks. The Luftv:affe was equally lavish with its oven testing stations: Peenumunde represented an investment of 4120,000,000; the Otztal extension was planned to cost `$0,004,000 to "'75,000,000. Ju- ridically the institutes ere corporations under public law, and rnai.nta- necl their civilian character throughout the war, Operating expenses came from to sources, the Air '.t]tiistzy and the industrial firms, who were charged for work done. All woney received :,as accountable, and the ?ir b:inistry would decrease its ;ra.nts if in any period the money derived from industry was considerable. Btumker adopted the policy of refusing to accept industry corc?nis.ions since too many ad hoc tests prevented proper calibration of equipment. Parallel to the research establishments, but without actual physical facilities, were the two honorary organizations - the'German Academy of Aeronautical Research and the Lilienthal Society. t,embership in the Academy was the result of election, and yeas a high distinction. The Academy is perhaps comparable to the National Academy of Sciences, though restricted to aeronautics. G8ring was President, and Baumker Lanaging Chancellor. The exchange of ideas between the science and industry was the task of the Lilienthal Society, also presided UN'CL:;SIFTLD Approved For Release 2000/08/2 : UA-KUVb7-00059AO00500020006-8 Approved For Release 2000/08/23 : CIA-RDP67-00059AO00500020006-8 UNCIASSIFI D over by BAumker. The Central Office for Scientific Aeronau- tical Publications, which published and distributed all clas- sified aeronautical research, was a part of the Lilenthal Society. A change in the organizational structure of aeronautical re- search in 1941 occurred as the result of three events: the death of Udet, and his replacement in the Technical Office by Milch; Baumker's illness and semi-retirement and the'reorgan- ization of the dormant national research institute, the "RFR". One of Mi].ch'a first acts Was to detach the research function from the Technical Office, and to make it personally subor- dinate to him, Due to Baumker's state of health, it was nec- essary to substitute for him a four man Aeronautical Research Direction, the "Forschungefuhrung der Luftfahrt". The position of the RFR in aeronautical research needs special clarification. Its theoretical assignment was to govern the research work of the technical schools and colleges, but it had been inactive during the early years of the war. In July 1943, GBring revived its pours and placed Ozenberg in charge. The latter made vigorous efforts to build a powerful agency to coor- dinate research in all its phases, to protect scientists from the draft, and to accelerate the release of those already in the services. His relationship to aeronautical research was there- fore twofolds 1) as a sourca of material and personnel, 2) as the director of an university and technical college research work. Ozenberg's final plan was never carried out, but, is presented hero as an example of German thinking on the organization of research in the last desperate phases of the war. In October 1944, he succeeded in getting GBring and Hitler to sign an order creating a Military Research ]'association, an over-all body to include the Army, Navy, Air Force, and the universities and technical colleges. The order creating the Military Re- search Association assigned to it these tasks. The control and intensification of all research dic?sated by war developments, Examining basic research results to determine what development work would be most fruitful. Securing the necessary research staff and materials to produce the results required. The R'FR was subdivided into fifteen branch directories, and twenty plenipotentiaries. The branch directors were repre- sentatives of each of the important fields of science, en- gineering, and industry. The plenipotentiaries represented sub-classes of those fields of industrial production or of research of special importance in war. For example, there were branch chiefs for physics, iron and steel, and organic chemistry, and plenipotentiaries for explosive physics, plas- ?tics, jet propulsion, and remoie steering research. The -13- Approved For Release 2000/~DP67-00059A000500020006-8 Approved For Release 2000/08/23 : CIA-RDP67-00059AO00500020006-8 UNCMASSIFIFB plenipotentiaries determined the research institutes and testing stations to which research and development projects would be assigned, The branch chiefs supported the pleni- potentiaries in their smaller fields, and saw to it that all available facilities and man power were fully utilized. In addition to the technical staff, there were special commis- sions who effected liaison with the commissions of the Speer' Ministry for Armament and 17ar production. However., the burden of aeronautical research throughout the war rested with the Aeronautical Research Direction, whose focus was the Managing Office. The Managing Office was charged with (1) the allocation of research orders, (2) the supervision of research commissions once allocated, (3) the supply of mate- riel and personnel, (4) liaison between the Research direr- Lion and the appropriate officials in the service ministries. To accomplish these functions, the Managing Office was sub- divided into one department, the Research Department, and two main groups, Supply of Material, and Operations and Adminis- tration. The group Supply of Material provided the establishments with the apparatus and instruments they themselves could not procure. A "Central Managing Depot for Aeronautical Apparatus" was es- 1 hl 5_ghnd to s a.pcr-+rise the storage,,, me-1-ntenance and overhaul- ing of the material used by the research institutions. since part of its supply function was to keep scientific person- nel out of the draft, this group worked closely with the 14RFR". The Operation group provided and assigned the funds and ex4 amined the books of the member establishments. The money came from the office of the General Managing Aircraft Supplies, through the Economic Board of the Air Ministry. One of the four members of the Research Direction was the head of the Board of Directors of every establishment. The annual busi- ness account was checked initially at the research Institution, and finally by the Air Ministry's Economic Board. The Research Department's sole function was to order the ree- search project. The problem, as the Managing Director described it, was that there was no central plan coordinating the re- search programs of the services. Research requests night ori- ginate in the Research Division itself, in the Development Office, in the aircraft industry, or be suggested by the re- search institute itself. When Georgii assumed office in November 1943, he found 2,200 unfulfilled research orders on hand. About 600 of these were farmed out to the universities and technical colleges, 300 to industry, and the remainder to the aeronautical research establishments. Georgii's solution was to withdraw less important problems and cancel those investigated over a long period of time without ucceos. In addition, he attained a more systematic subdivis- ion of the program by differentiating between research commis- sions; requiring about a year, and those demanding immediate solution. Approved For Release 2000/08/29k7-00059A000500020006-8 Approved For Release 2000/08/23 : CIA-RDP67-00059AO00500020006-8 MCLASSIFIED (f) More promising, he states, was the practice gradually evolved of joining research institutions and industry into joint permanent conferences on broad problems. For ex- ample, the Aerodynamics Committee, composed of leading experts of research and industry, established the priority for problems involving the use of wind tunnels, The ac. celeratinn of the power increase of the Argus-Schmidt jet pipe for "V-I" was a problem for which industry vol- untarily called in the research institutes9 New develop- ments like the Me 163, the Natter, the Enzian, and the {'asserfall were the result of industry-research coopera- tioh. The following sub-study summarizes the extent of govern. ment promotion of aeronautical education and evaluates the results, There were in pre-war Germany for aeronautical engine- ering, as for all other branches of engineering, two al- ternative courses of study: 1) entry to an engineering school after technical continuation school (or from a secondary school with a first or second-rate certificate) after two yearsO workshop experience; 2) entry to a tech- nical college after graduation from a technical school and one year?s workshop experience. The first course gave a certificate in aeronautical engineering, the second course a diploma. The Air ?inistry and the Aircraft Industry Economic Group promoted aeronautical engineering education by means of grants in aid for living expenses, tuition, and examina- tion fees, and even full-time scholarships. It is estima. ted that 30 percent of all aeronautical students received financial aid from the Government. These aids were not restricted to the aeronautical engineer; they were avail- able in all branches of engineering. Theoretically, the courses had different aims. The cer- tificate course was designed to produce the practical engineer, sufficiently grounded in theory for general engineering duties, perhaps best qualified for design and production work, The "diploma engineer" was the highly trained scientific engineer, able to direct tech- nical development, to engage in research, and to discern fundamental laws. In practice, the certificate engineer often stepped over the lines set up by this demarcation, but government agencies and the military held fast to the distinction uxrtil 1938, UN 0 T a S P 1 F. Approved For Release 2000/08/23 : CIA-RDP67-00059AO00500020006-8 Approved For Release 2000/08/23 : CIA-RDP67-00059AO00500020006-8 u.RC The period of time given to these courses was the same as for other branches of engineering; five half-yearly terms for the certificate course, and seven half-yearly. terms for the dip- loma course. At the schools of engineering, certificate ex- aminations were held at the conclusion of the school term; at the nn1.i- ges, the graduate examination could not be .-e en before seven full terms were completed. At the technical colleges the course of studies for the "Junior division" (the first three or four terms) did not differ mate- rially from that in mechanical engineering. The senior divi- sion, entered after successful completion of an over-all ex- amination, was divided into the three departments: airframe construction, aero-engine construction, and aircraft operation (that is, equipment, armament, and maintenance). Airframe construction included the aerodynamics of design, testing, research, strength of structures, unit construction, and mate- rials; aero-engine study embraced the design and construction of aero-engines, materials, altitude performance, fuels and storage, and propeller problems; the aircraft operation course included radio engineering for communication and navigation and control in flight. Not all engineering schools or colleges could offer these special courses. The National Ministry of Science and educa- tion, as the responsible authority in matters of education, had set up courses in "light construction" (aircraft construc- tion) at the following engineering. schools: Berlin-Beuth, Bremen, Essen, Esslingen, Hamrnzrg, Constance, Magdeburg, Stettin, Wismar, and at the seven-term State Technical Academy of Chemnitz. The Air ministry maintained a school of aeronautical engineering at Thorn, which trained suitable candidates from industry, with- out cost. The technical colleges were of two types: The "Lehrzentren" (Instructional centers) giving instruction in all three-special- ized sections, and the "LehrstAtten" (Instructional Establish- ments), instructing only in general aircraft construction. In the first category were the colleges at Berlin, Brunswick, and Munich; in the second, Aachen, Darmstadt, Stuttgart, Vienna, and Danzig (after 1938 and 1939). After 1939, it was also poss- ible to acquire the degree of Doctor of Physics from the Chair of Applied Mechanics of the University cf'G&ttingen. The certificate engineer had to show two yeears$ trractical work- shop experience before starting his studies. These two years were made up of one year's general engineering practice, and one year's special experience. Graduate engineers had to com- plete at least six months' general workshop experience before starting the course. However, the aeronautical engineer was the special concern of a central directing body: the Engineering Recruiting Section of the German Aeronautical Research Institute of Berlin Adlershof. This office supervised and.assisted engineering stu. dents, starting with the preliminary workshop training until their transfer into professional employment, The departmennt allotted the workshop posts for the second section off the -16- UNCWS IFIED Approved For Release 2000/08/23 : CIA-RDP67-00059AO00500020006-8 Approved For Release 2000/08/23 : CIA-RDP67-00059AO00500020006-8 Ur QL_t4 FIFILZ .practical training, tho course in the manufacturing plants, in collaboration i .th the Reich student organization. It allocated funds for the promotion of aeronautical studies, and directed the activities of the student flying groups and study groups. A'.dmission to the higher technical grades of the government service eras conditional upon passing a state examination. The examination gave the title of "Flugbaumeister" (Aircraft Construc- tor) and was preceded by three years` probation as an Assistant Aircraft Constructor, Training and examination were subdivided into the following sections: airframe constructions aero-engine construction, aircraft armament, aircraft equipment, operational administration. The probationary constructor could select one of these sections, but was required to study armaments and aero- engine construction. Flight training was taken in addition to professional instruction. At least one year of practical work in the aircraft, industry eras insisted upon, plus two years of train- ing in the testing establishments of the Luftwaffe or in the Re- search Institutes, The Air Force itself was active in the education of its officers and enlisted personnel. Four air-war colleges, situated at Gatow, Dresden, Furstenfeldbruck and :"erden, were training 800 active officers annually by 1938, The technical schools at Adlershof, Juterbog, Halle, and Gottingen produced about 7,000 specialists in that year. In cooperation with industry, a four year course in metal aircraft working and aero-engine mechanics was provided at the larger factories. On completing their training, the pupils 'ere required to begin a long-term enlistment with the Luftwaffe. The practical training was divided into two sectionss two years in the training r:orkshops, followed by two years in the assembly and repair shops. At the same time, ',he apprentice was required to attend the training schools of the factories, and devote two hours a week of his time to glider construction. In 1938, Dr. Otto Fuchs, the official charged with the government survey of aeronautical engineering education, reportea on the results of his study. His prime conclusion was that German aeronautics suffered from a lack not so much of aeronautical engineers as from the general dearth of engineers of all categories. The decline in the amount of general technical education particu- larly affected aviation, because German aviation was built on the mechanical rather than the aeronautical engineer. At the date of his report, there were in Germany 220,000 graduates of the mechanical branches of engineering, of whom one-tenth (22,000) were engaged in aeronautics. A yearly increment of 500 graduate engineers and 2500 certificate engineers could be axpeced. Of that total, even a peace time atria tion erould need 1,400 engineers as replacements. If the 1 to 10 ration were maintained, only 50 graduate engineers and 250 certificate graduates would turn to 17- Approved For Release 2000/08/23 : CIA-RDP67-00059AO00500020006-8 Approved For Release 2000/08/23 : CIA-RDP67-00059AO00500020006-8 U14CLASSIFJ F,D aviation; if special circumstances diverted a larger num- ber to aviation, other industries would feel the want. A cursory examination of the "help wanted" advertisements in war time issues of magazines like the Zciitscr hrift dig Vereine_s Deutsch-c Ipge~nieeurr_a will reveal the truth of this prediction. Others of his observations on the state of German aero- nautical engineering merit repetition here., Dr. Fuchs? position gave him definite information, and the occasion of his lecture assures the objectivity of his judgments: The workshop training of the future graduate engineer was seldom forwarded by industry, which concentrated on its own apprentices. In general, the graduate engineer was less competent that the certificate engineer. "Industry complains about the long period of time necessary to work him into the factory . ., research complains about his deficient physical and mathematical knowledge". Proof of this incompetency was the number who failed the Flugbaumeister examination, even after a three year probationary period. The university teacher was overworked, and sometimes in- connetent, Of the 19 institutions giving aeronautical en- gineering courses, some had two or three instructors and a few only one. The average teaching load throughout the' universities was 20 to 24 hours a week. Of 21 instructors queried, 15 had acquired their special aeronenitical knowl- edge in a one year course given in 1934/19350 The cost of an engineering education, plus the lack of social prestige as compared with the officer of the Army or Air Force, caused fathers to influence their sons to 'turn their attention away from engineering. An officer with the rank of cP.otain had received an income of 32,000 H1, by his 2'th birthday; his graduate engineer counterpart had cost the family 2,500 R13 at the same age, and was just beginning in his profession. The social inferiority of the graduate engineer was evidenced by the special formation of an Engineer Corps in the Luftwaffe, which set the engineer socially distinct from the officer,, likC;LASSIFIk:~ Approved For Release 2000/08/23 CIA-RDP67-00059AO00500020006-8 Approved For Release 2000/08/23 : CIA-RDP67-00059AO00500020006-8 CLSSl'FIED (g) Lufthansa trained its own pilots at the German Traffic Pilots School, subsized by the Air Ministry on a non- t, t basis. Lufthansa formula-,ed educational pclicy, and provided the teaching staff, while the Air Ministry supplied the equipnento Most of the trainees were Lufthansa employees, although somo foreigners were admit- ted as a propaganda measure. (h) The only reliable statistical information on Lerman ex- ports and imports of aeronautical. equipment predates Sep- tember 1931, After that date statistics the ex- ports and imports of aircraft and automobiles, were com- bined with aircraft and automotive parts. For the exporter of aircraft or aircraft equipment to Nazi Germany, the market was to all intents a military and governmental one. There were no private companies with real independence of action, Germany bought aircraft equipment, particularly British engines,-and was eager for mrrnufvoturing licenses. The Hamilton propellor, for ex- ample, was licensed for Orman manufacture. The whole, ,_procedure required preliminary approval by the, Air Ministry, if difficulties in payment in foreign exchange or transfer of license fees were to be avoided, Germanys own exports wero included in the lijalmar Schacht manipulation of "blocked marks" and harter agreements. The market there- fore was primarily in the German satellite countries, Turkey, Riiisie., and Soiith America, and the method of sales- manship was diplomatic pressure.. (i) The German airport system assumed its first struetaral organization in the period of free competition before the formation of Deutsche-Lufthansa. More 1926, states] cities and smaller political units created "regional associations" first to build airports, and then, (with the bait of local subsidy), to induce airlines to use their facilities. For example, the largest airport, that at Berlin.-??Adlershof, was owned in 1928 jointly by the City of Berlin, the Statte of Prussia, and the Reich,, The Reich was financially interested in 15 airports; approximately 70 other commercial airports were creatures of the local governments. In 1936 the Reich assumed full title and control of the airports used in regular air transportation through the device of a National Union of German Airports, The purpose of this organization was, according to paragraph III of its constitution, the promotion of the common interest and prosperity -.f German airports. The Union took the orders of the Airport Department of the Air Ministry bargained with Deutsche Lufthansa, apportioned lump sun profits to its members, and issued.unofficial directives and advice. Its main purpose was the establishment of uniform airport fees, in the form of the"General Conditions for. the Rent of Airport Facilities", Lufthansa went through the formality of paying the Union the fees which its finan- cial reports show were annually returned to it b;r,the, Reich. -19m- UNCLASSIFIED Approved For Release 2000/08/23 : CIA-RDP67-00059A000500020006-8 Approved For Release 2000/08/23 : CIA-RDP67-00059AO00500020006-8 (J) 3. (a) Visitors t., pre yr r Gerr.iany c::.r,ented on the diopropor Lion bet:.cen the elaborateness of airport facilities and build- ini e, and the paucity of actual air traffic. Obviously part of the: intention .as to create visible a bols of German air poti:er, and for this mason many party gather- ings were held in the Local airport. Local pride perhaps explained viuch of the Gerrmm airport system, but .4e have the v:or:il of Heinz ticn~;ux?tz, Lufth:.nsa e s public r?l,:~tions director.9 that "certain it iu - :,hat every airport installa- tion grill, in case of t:ar ; oe of use to iu lit cry aircraft" Administration of the exclusive control of aerial naviga- tion granted to the nation by the act of December 15,1933 was delegated to the local Air Boards and their field stations at the airports. The Air i4.nistry insured the competency of air navigation personnel by tm.inLq; can- didates at the navigation school in ildpark near Potsdam. i~:_p1oyr:icnt was on a civil service basis. ':'hare wu.a some effort made to distinguish bets;oen the faci- lities provided by the ;~,overnnent as part of its civil airways system and those furnished by Deutsche Lufha:nsa. Lufthwnsa opcrGtcd its own i:,cs:~ar.~e service ari the :.A-hort wave radio stations on its international routes. Since the ~;overnrtcnt operated the lon ; wave .,:round installations, any t;:cssat;,e to or from aircraft had to clear through overn- r.cnt facilities. The ground station also furnished direc- tion finding service in close cooperation with similar stations at other airports through a systeri of direct telephone connections. Because there little ni~ht flying, ::.nd the actual volume of ~rr4fflc .,as si:rill, Ger- r.~Lny +s air;;u.tion 6 uterd:, %v:.ile ude,.uute, ;;t:.s never ,pe,rrLicula rly pror. oted. t're::ar sc:r.4n ;ove:rnuterrt olicy ., Lth re,;-4rd to oti,nersi?rip of air ::wrriers is discussed in the follo-An; sub-study: 1911) 1926 The first iprea.ceti ie Germain airline be ;&n operations in 1915, but wz;s actually incorporated as c.~.r1y au 1917, signif- icaritly under the aua,,Lces of the National Tr.irw2ort .iniu- try and the ii.eichsbs.nk. Official encourc. ;eraGnt acs imr;ze- diate, 1.r ely bccause of: (1) the c1a is German econ- omic philosophy of state p t'ticipation in ;sublic Lrans- ?or?t it.ion, (2) the clamor of a ;;reavt.l y e.xp4naed :,ar-ttne aircraft industry for a coriie:;tic i.,Lrket, (3) tiie poltLtca:l p rt.ic.ulari5r:t of Lhc various c?r;ivn cities, cai:e;.urrities, and states, and (4) the ,prc:;cncc at hand of lv.r-e rnr,,bcrs of wt r-Li?.:ined 2ersonnel e:..; cr to return to aviation. The first nutioncl subsidy .:r:.s ;riven in 1920. The floc., of subsidies from the nation And the smaller units tiros so treat that in 1921 there ::ere 42 airlinc:s, all cor:r- petine for su'as:idies. In 1922 the Gem,a.n-;cusuian Air i'rans.:)ort 1,sLioci&.tion ("Deruluft") ?,.L5 form;:e.d a.s Approved For Release 2000/08/23 ?'=M-00059A000500020006-8 Approved For Release 2000/08/23 : CIA-RDP67-00059AO00500020006-8 I1NCCLLA8 S rm- a joint German-Russian enterprise. By 1925 two interest groups -- Deutsche Aero-Lloyd and the Junkers Luftwerkehrs- Gesellachaft -- had assimilated all others. These two organizations had built up a structure of 23 local associa- tions -- the so-called "regional" n&r transport companies to tap the local sub idy-givers. The largest shareholder in Deutsche Aero-Lloyd was the Reichsbank; Junkers represented the aircraft industry and other private investors. .Aero-Lloyd had affiliated itself with the International Air Transport Association (IATA); Junkers worked out "union" agreements with the airlines of other countries, pooling planes, research and facilities. The "union" agreement principle, if properly implemented, would have meant an extra-national enterprise conducted by one private company in agreement with foreign companies, without state control. Pressure from the National Ministry of Transport was exercised in favor of a merger of all airlines. Junkers refused, but Brandenburg and Fish of the government cap- italized on Junkerst financial difficulties to force through this merger in 1926. The Deutsche Lufthansa was the result of the combination of Aero-Lloyd and Junkers. The stock in the new company supposedly assigned to Junkers was actually retained by the Reich. The financial organization of the Deutsche Lufthansa at its founding mass Nation .......... 6,500,000 Rk .......... 6% States ........., 4,750,000 RM .......... 19 % Cities o....oe..? 6,875,000 Rid oo.......? 27.5 % Junkers and Aero- Lloyd '........ 6i tRM ......... ? % 25,000,000 RU 1 The Deutsche Lufthansa assumed the international and important internal routes of its predecessors. In theory the Deutsche Lufthansa did not constitute a monopoly, but in practice the Reich expressly withheld the granting of national subsidies to any other lines. The Deruluft line could be left undisturbed because all its German capital was held by the Deutsche Lufthansa. Throughout the Nazi regime, the Deutsche Lufthansa retained the forms of pri- vate economic enterprise, but was a state subsidized complete monopoly in all essentials. U MLASSIFIED Approved For Release 2000/08/23 : CIA-RDP67-00059AO00500020006-8 Approved For Release 2000/08/23 : CIA-RDP67-00059AO00500020006-8 t LA?sI E2 There is considerable unanimity on the larger goals of the Deutsche L1afthanss. German plibli9ists present they as: "Creation-of quicker and more frequent air connections between all important eeonomie and cultural German cities under consideration of their utility in the German folk econoay-, in which the most important depots shall also receive a night traffic for post and freight. "Extension of the inner+Eutopean German air transportation net to all important centers of urope, placing particular voight on a service as frequent as possible. nBuilding of the Planned longIrange airwuya to the U.S.A., South .America: and the Far East." The story of Lufthansa*3 owngroth and the development of its subsidiarjes will Illustrate jeer fully it realized these aims. In 1926 Deutsche Lufthansa accumulated a total of 3,710,814 plane-miles, It operated nine foreign routes in cooperation with foreigh airlines and had opened night services from Berlin to Koenigsberg dnd o Paris. A survey flight with Wo Jluukers, 0.24's was nade to China by ray of Siberia. This expedition ]aid the groundwork for the Eurasia Aviation Corporation, which was founded in 1930 under Chineae'.Gernats auspjcess the Chinese Ministry of Comnnmications holdin*; two-thirds of' he stock, A Dornier "?al" Flying Boat was dispatched to Brazil to survey the possibilities of a South Atlantic route, Trial flights were made over the Alps. The nwdy established lines, Geneva-Marseilles and BorlitrOslo,, point- ed the tray for later important lines. Condor., a Luf the iea subsidiary in South America, received the a ncession for service on the Rio de Janeiro-Porto Alegre coastal route, paving the way for the subsequent German penetration of Brazil. - A regular service was established betaven Berlin and Madrid. Routes from Berlin to Zurich, Vienna and Leningrad, as well as from Munich to Milan, were put into operation, 1222. In spite of a 50 per cent reduction in subsidy, +,,be company kept expanding. In July, & seap1ane catapulted from the deck of the Bremen en route to New York initiated a regular shipe?to-.shore mail service. A similar catapult` ing took place off Cherbourg on the return trip, the Plane carrying the mail on ahead to Bremerhaven. LSIFI D Approved For Release 2000/08/23 : CIA-RDP67-00059AO00500020006-8 Approved For Release 2000/08/23 : CIA-RDP67-00059AO00500020006-8 : The dirigible Graf Zeppelin flew to South America to Icy the t~rounriwork- for a regular South Atlantic routed Aix- 'mail ser ces were increased and additional long-distance routes were planned. An expediticn was sent to Baghdad, and catapult ship-to-shore flights were extended. lq 2. A scheduled passenger service was opened over the A ps rom 1%unich to Venice. There was a 15 per cent reduction in raific in 1932 as a result of the world economic crisis, 'out the number of w^peciat flights increased. r cI . The character of the company was fundariaentally paltered ar, a result of the seizure of control In Germany by the Nazis. Fxom a conventions), airline, founded and subsidized with the usual, economic and political objectives, it changed into a direct instrucient of military pourer. The newly-created Air Ministry assumed jurisdiction over Lufthansa. Without re.1bquishing his business connections, shard lkilch, execu- tive director of the company, became Secretary of Civil Aviation wader Hermann Goring in the new Ministry. . Conaider?able equipment was added, notably Diesel- powered aircraft. The last independent internal air transport company expired and Lufthansa. became practically a monopoly. On February 3, 1934, Lufthansa began scheduled air-rnwil flights across. the South Atlantic to South America. A specially-converted steamship, the Kestfalen, served as a floating airbaae. Dornier Wal flying boats operated from 13athurst to Natal, refueling from the Westfalen in midocean. The aircraft was then catapulted from the ship, in order to attain take-off with the an.axitmua load. g9. The number of international routes was increased to e even; trans-!t1autic airmail service to South America was accelerated, and Condor extended its route to Santiago. The German Zeppelin-Reederei was formed to operate the Graf Zep elia on regular trips across the South Atlantic from Frankfurt to Recife (Pernambuco) to Rio de Janeiro.* Before 1935. French and German interests in South America had con- flicted, In May of that year Air France and Lufthansa agreed to technical cooperation and a division of schedules. This collaboration increased, and in July 1937 a new agreement provided for the pooling; of receipts on the South Aulerlca routes, and for technical cooperation on the projected services in the North Atlantic and to the FarLast, One of the objects of these agreements was, apparently, to Counter- act the growth of the Pan American system in South America. 23- Approved For Release 2000/O'&4^P67-00059A000500020006-8 Approved For Release 2000/08/23 : CIA-RDP67-00059AO00500020006-8 UNC1I- SIFTED 1936. Trial flights to New York were begun in 1936 vii tiro motored vornier i'7,ying bouts, Routes varied,, but rra at of the f light s were nwde by way o f Lisbon and the Azores. 1- 9 7. , great eacpmnsion of Luf`than~sa routes took place Tn 1.i37. New routes were operated from Copenhagen to Oslo,, London to Vienna, Berlin to Paris. Berlin to Stockholm, Berlin to Baghdad, and Buenos J 'Area to wit ritiugo. Early in 1937 the Deruluft servioes vivre sun- perided, anal the company was liquidated shortly thereafter. However, Lufthansa soon roopOned the Baltic routes former. ly operated by Deruluft. Or: the south Atlantic route the GrLf ~;ep;:alxn was replaced by Ion;;-range planes such as the Do 26. The al rbase vessels r'estfalen anxi Ostiark were stationed on this route. The ~;crfriabeal axial in the North j314 ritic r. as joined by the new motor-vessel Friesenlan d to refuel and. Catapalt four-motored Blohia and Voss flying boats on test f1i hts to New York. Condor, the large Germatl subsidiary in Brazil, extended its opcrati_ons, c iectin, v?ith other pro?Axi s airlinea in South .' mrioa. Sedta, a new subsidiary in Ecuador? been active operation. Independent companies also were aided, and planes wa: a nude available on generous financial tens i. However, when tieropostu Ar entinu, a bonaf iue independent airline, took advantage of this generosity, it had to agree to repair its planex in Coridot's shops, to purohase only Gcrrrtian parts and accessories, to buy only German aircraft for a period of five years, and to coordinate its schedules kith those of Condor and Lufthansa. Other companies, 111ke Varig, in .hich Condor had a large int$reste and subsequently Vasil, masqueraded as ntrtictruel airlines, They employed largely Gen2un or Brazilian-German persorir1X? were controlled by Ger:ian corp. ny officials, and received their oquipn-ent from Deutsche Lufthansa, The Latin Arlerican states were avaro of the subterfuges but were loathe to interfere with comparAes which m-o'vided trans- port into regions hitherto almost Inaccessible,. 1938. Luft}wunsa expended its eastern operrzt1ons into A g istan by exteriding its Baghdad line to Kabul. In the crest, Deutsche Lufthansa-Peru went into native ope aiion. ;; transcontinental route was established from Rio de Janeiro to Lima, with the collaboration of Lloyd Aereo ]3oliviano, a Junker a company. In late 1938, the routes mileaCe of Lufthansa, exclusive of sub- sidiaries,, was 32, 720, UNCU 8IFIi D Approved For Release 2000/08/23 -04A-RDP67-00059A000500020006-8 Approved For Release 2000/08/23 : CIA-RDP67-00059AO00500020006-8 I W% On January 1j 1939, the Austrian airline, Oesterreichische Luftverkehr A. 0., was taken over, completing the Lufthansa monopoly in the szpanded Third Reich. In addition, the airlines in the no- called Protectorate of Bohemia and Mor&Via were absorbed by the German air transport system. During the year Lufthansa acquired Condor's parallel route to Santiago. Trial and publicity flights across the North Atlantic were still continued, but Lufthansa never received the necessary permission to establish regular servioe, The flying-boat mail service to South America was maintained successfully up to this time. Thy. With the outbreak of War, Lufthansa was nation- alized and all commercial operations ceased, Later in the year a number of services were renewed# all on international routes. With rare exceptions, domestic operations were not reaumed. New lines were opened to Moscow in 1940, and to Rovaniemi, Finland, in 1942. The number of routes steadily decreased, however, as many of them did not serve military purposes. The Moscow route operated until Germanys attack m Russia in the summer of 1941. By an "agreement" early in 1943, all accessible equipment and facilities of Air France were transferred to Lufthansa, as were also some of the French flight and ground personnel. In effect, Air France was taken over by the German compatq. In the year before Hitler's advent to poser, Bley, the official apologist for Lufthansa, asserted that three great groups contending for world power - the British Empire, the United States and European Continent - came into conflict in air transport as in other fields. The only solution possible was a Pan-European combination of air transport companies under German direction. By 19!40 the geopolitical emphasis was even more pronounced. Bley stateds "Owing to the German air victories in East and West, air power is becoming a geopolitical factor. Its tremendous speed and radius of action make possible Winking in terms of continents; it in the means of traversing, covering and controlling great areas (Gross- ratmme) from one point. And since the New Order of Europe is already definitely .indicated as the next historical reality, air power can be considered In a double sense as the true bearer of this geopolitical event; firstly, because it has prepared the victory, and secondly, be- cause it is the on]y means of mastering and controlling this area." -29- D~ICI S3irID Approved For Release 2000/08/23 : CIA-RDP67-00059AO00500020006-8 Approved For Release 2000/08/23 : CIA-RDP67-00059AO00500020006-8 UvCLisS~;1F"i1r U South America Sindicato Condors Ltdae was founded at Rio de Janeiro on December 1, 1329. It was the euocsssor cat a lia?# known as Kondor Sindikat which had been operating between fort, Alegre and xio de .3aileir, since February 1927. The principal sponsors of the new line were J)r. Peter von Bauer and Cantiixa''rite Hamner, officials of the Gennen-Colombian airline, Seadta. After failing to attract American capital ,to the line, Condor secured Gertaan financial aid. partly from luf"thansa through Aftro??,loyd. partly from Sohlubaoho Thi.ei ter 6 Cor rang of flu-abur9, and partly. from the Rar:ibure-AraE rican Line. Additional capita, was furnished by Louth and (:entrul ittrerioan interests. Condor vas soon laying the Sound tion .t'or a tilc-ns.. Atlantic air sorvi oe in co pc r ui . on with .C+et aehe Lufthansa. To advance this plan, the company beeau a weekly service between Rio de Janeiro and aftl in February 1)30. This was later extended to Fernando de :4orotina, where mail for Isurape was handed over to u fwnburgm' imerican ship a.hieh subsequently transferred it at,the Canaries to a Lufthansa plane bound for the c itinent. In May 1330 the arrival of the Graf Zeppelin at Rio paved the way fora contract> with the Brazilian t overnrient in March i034, calling for a minimum u'.r 20 trips a years Condor bcoaity general represealm- tivo in south baerica for the i)eutsol-o Zeppelin Reederoi? wozi 1n- closely with it until 19879 when the Hindenburg disaster compelled cessation of operations. Condor also cooperated in the establish- n nt of trartsooeaniio rail service pith catapult planes, This replaced the i?&ail.ooarryin services or the dirigible. In 1932 Condor extericbd its route to Uru-,;atay and to Buenos Aires. Lufthansa also extended the routes from Natal to Rio do Janeiro and Buenos Aires. In October 1935, through the efforts of Captain Hammer, Condor received a four-yoar concession for a route to Santiago, Chile. In ),939, this contract was extended to 1942, but this time it .as cgmnted to Lufthansa, an indication of the interchangeability of Lufthansa and Condor activities In common with all the German-dominuted lines, Condor had little difficulty in securing exuellenb equipment and personnel, all of whom were German or "Heiman nationals". Condor's managing director, Ernesto Holeka was a Gern n; its 18 pilots included 10 Germans or naturalized Germans; and its planes were serti ced by 13 German mechanics. Condor acted as the feeder for planes and personnel for all other Lxis-affiliated airlines in South America, Do-spite the formality of Brazilian registry, Condor tIklELASSIFILD Approved For Release 2000/08/23 : CIA-RDP67-00059AO00500020006-8 Approved For Release 2000/08/23 : CIA-RDP67-00059AO00500020006-8 iraa a part of Deutsche Lufthansa, whose eeonomic, pe. litical, and military purposes it served. From a small begi.nn.ngv Cordcr Crew until it operated over 10,000 route miles, possessed one of the largest and most modern air fleets on the continent, and had the resources to undercut the tariffs of all its principal rivals. Cn Cay, 1941, Condor was fcrced to cease operations because of lack of gasoline,.its supply having been cub ,ff as a result of pressure by the American and Brazilian governments., The company was then purged of some, but not all, of its pro Axis elements, As a result, it was continued on the Proclaimed List,, Late in August 1942, its managing director and traffic manager were arrested, and the other German employees were dismissed. With the cooperation of the Defense Corporation, the cornany was turned over to native Brazilians and the name changed to Services Aes'e os Cruzeiro do Sul, Ltda, On Iioveriber 22, 1942, it was removed from the Proclaimed list, Sedta (S--cied&-d _~cliadoriana de Transportes Aereos) was founded in 1937 by a group of Ecuadorians and Germans, headed by Captain Fritz !r. Hamner. The contract with the Ecuadorian government provided for the opers.t_on -)fa mute between Guayaquil and Quito. Hammer was killed in an accident in 1938, end re. placed by Gustave Ap IYaehsmuth, who had been a pilot for Condor for ten years. Ecuador granted to Zachsmuth and 1.oosmsyer, head of Lufthansa in South America, an extension in Ecuuder of the Rio to Lima service. In 1940, the company sought permission to operate to the Galapagos Iolande, and proposed a line to Bogota to connect with the :>cadta system. These requests were refused, although a line from Guayaquil to Loja was approved, Luf thans i did not absorb Sedta directly, b-tt complete control was assured by an equipment sgreerent rnd a monthly subsidy of 32,'00. The company wa;: capitalized nominally at c12,000,- Passenger revenues were far below the efstablishea rates because. of Sedta's custom of. 1ibFr6l 1'scounts enr4 distr`.bution of free passes, In 1939 about half the passengers paid no fare. Sedtats personnel was almost without exception German, The line's turbulent history ended in Septemher 1=`41 when the i,c'.iad-' government expropriated the company and seized its" two Ju 521s. Lufthansa?Perrz was founded in !.:ay 19:8, as a German snnhs:'diiry, but was repistered as a Peruvian company, Until some expansion took place in 1S-409 its only route was Lima-Arequips.La Paz, with occasional stops at Tacna and Punoo its importance was more strategic UNCLi-S L D Approved For Release 2000/08/23 : CIA-RDP67-00059AO00500020006-8 Approved For Release 2000/08/23 : CIA-RDP67-00059AO00500020006-8 than economic, as it formed the western link of the transcontinental penetration by the Axia. At the height of its activity, it operated about 1,200 miles of route with its two Ju 520s. In 1940 it Carr-1ed 1,100 pa;,sengors and 3,400 pounds. of express. After ~.or2d War II began, it had considerable difficulty in obtaining supplies and capital, Repeated German violations of Peruvian--neutrality culminated in the scuttlins, of two ships in an attempt to block Callao Harbor. This resulted in the extrouriafi ion of the compat r and the inte ?runent of its: personnel on April 1,, 1941.1 '{; ith q.n Gerrraziz .ithin Germany Hansa Flugdienot was organized April 30, 1938, with a capital of 50,00 RU (iufthansa, 45,000 Iii; Hansa I ftbild, 5,000 RM), The company vas, established to take over the charter services and special flights operated in E rope by Lufthansa. The chief activities of Hansa Luftbild consisted of making aerial surveys and conducting special and scenic fl.i.ghts. Deutsche Zeppelin-Reederei was :i'ormed March 22, 1935. Its capital stock of 9,559,000 RM was o+.ned by Luftschiffbau Zeppelin and Deutsche Lufthansa. The line operated fortnightly services between Frankfurt, Pernambuco, and Rio de Janeiro in the summer, and had plans for increasing this to a Sleekly schedule in 1936. However, the destruction of the new dirigible, Hindenburg, forced a suspension of company activities. In Aurope Outside of Germany the Lufthansa's European plan was subordinated to its South american traffic. Services hereon Portugueses in Lisbon operated no air services of its own, but managed the Portuguese end of the Berl:in-;ituttoart-Geneva- tarseilles -ia_lamanca Lisbon line of Deutsche Lufthansa. The plan was apparently to make it possible for Deutsche Lufthansa to use l'ortujuese airfields for flights to the Azores and Cape Verde Islands, Franco's Spain, in 1938, agreed to the formation of an hicpano--Gc::rnan company, the Iberia Compania de Li.ncas Aereas, to operate airlines internally and between Spain, L'.oroceo, and the. Canary Irelands. The German interest in this company wua sold on nlkRust 7, 1943, to the state owned Institute Napional de Industria. Iufthansa monoply of Spanish internal traffic ryas justified-by the necesuit/y of flyirL:,,,. over ~panish territory hen operating routes to South America, u::Cr,LFrM Approved For Release 2000/08/23 : CIA-RDP67-00059AO00500020006-8 Approved For Release 2000/08/23 : CIA-RDP67-00059AO00500020006-8 w p The situation in two ether countries' Greece and Icelaund, is still unclear. The Icelandic Aviation Company (Flugfjelag Islands 0) had originally been founded by Finnish interests, to provide local, service within Iceland. Deutsche Lufthansa provided the aircraft and personnel. In addition to trans- pertation., the planes were used to search for shoals of herring for the Icelandic fisheries,, As a reward, Lufthansa received a note from the Premier of Iceland, which, according to the German interpretation, c+antalaad a promise to Lufthansa of flying rights equal to those granted any other nation until April Is, 1940. The American occupation of Iceland in 1941 prevented the completion of any arrangement. For Greece, we have only 7ronsky'a statement that Lufthansa owned 51 per cent of the stock of the Greek Aerial Communications Company (Societe Hellonique des Communications Aorienn?s)4 ` ar Flan In the Far cast, Deutsche Lufthansa's weapon was the Z'uraoia Cozpunr, formed in February 1930. Tworthirds Of the capital was advanced by the Chinese Transport- ation Ministry, one-third by Deutsche Lufthansa. Actva11y, however, half of the Chinese capital had been borrowed from Deutsche Lufthansa at seven per cent interest. E.sela flew the routes Shanghai- Lantschau, Peiping*Canton, Lantschau-Factau,. ,Sian- g, Equipment and peraonnel were almost entirely German. In 1939 seven flights to labul and a few test flights from Germ to Baghdad were carried out, The route GerXabul-Afghanistan was later covered once a week as part of a projected link with the Far East, (See A. 2(d)e) No competition existed since Lufthansa was a monopoly. By arrangements made under the auspices of the International Air Traffic Association, Air France was permitted to use the Ports at Berlin, Hamburg, Cologne, and Nuremburg; Imperial Airways yasod the Cologne Aerodrome; the Dutch ELM Jim used the ports of Hamburg, Berlin, and Frankfurt am Main; the Polish line "Lot" the Berli p Templehof airport; and the Belgian Sabena line, the ports at Berlin, Aamburg, and Cologne. Deutsche Lufthansa undertook the representation of those lines in Germany: and was accorded the same privilege's in the countries represented by these national airlines. 9CLAS;,IFIED Approved For Release 2000/08/23 : CIA-RDP67-00059AO00500020006-8 Approved FOr Release 2000/08/23 : CIA-RDP67-00059AO00500020006-8 U NNQL 81 I D (6) See A 2( b) On Deteraber 29, 19$9, tris iDeutsehe Lufthansa fl d a t4ta2 of 145 air transports. T1* B1oi t and Voss 222 and 220. '1yi boats cued the Jun1oers 290 were war time dow 1epd atnte. Now of these types saw extcusi're oomirrer.cjat saroiae. as during tho war produotion was concentrated on the more.oritioal milite.ry nudely. The backbone of the Lufthkifta Fleet remained the Junkara $20 which was first developed in 1028. In 1336, C. G. Gray, the English student of neroriautios, called the Ju 52'the best trtmport plane iu the world, vnd Prune sand Britain to- day are still using this model to sane extent on internal lines, The Cosh of aaernrtion o l' Ger*ncml air truneportutiod demanstrabiy in,srsased as tc result of teclunical develop-m meab, Over the period 1919 to LAO, Deittaohe Lufthansa used the follovin? earrlcnrrs in civil air transportation: Trans ert speed " Utility rro-n-rm soda l kza I:e r )u' o) Ue l Load per hr0) . F 13 1.85 003 66 M 20 170 O,9 la$ Ju t36 260 1.00 273 lie 111 294 1.03 288 Ju 52. 230 1050 345 kit 200 415 2,50 187 Ju 90 290 3,80 1,200 categories of routes we thia tuvult: Period W del Op eratioti Cost 1932-34 31 20 300 1y36-38 Jti 86 93.2 1936-38 He ill 8315 A direct comparison of planes having approximately the aww useful load capacity and flying over the same Lufthansags fleet in peaoo..time vas entirely. German, since part of its overall mission was to. demonstrate the worth of German industry. During the,war, so:i DC-20s aid DC-3'a were seized from the .latch and Belgians. By contract with neutral 3witasrland, the Lufthansa DC-2's and DC.34a were kept abreast or the latest CidL and 1)vugiaa faotory ohari es throughout the war. JUCI,AS S IF1 E;T). Approved For Release 2000/08/23 : CIA-RDP67-00059AO00500020066-8 Approved For Release 2000/08/23 : CIA-RDP67-00059A000500020006-8 U LSIFE (h) For Lafthanea and the Internatiork-A Air Transport Associe? tion aid 1azfthansa'S operations of foreign airlines, see A. 3 (a). Oermeny regulated its air traffic and commercial relations with other countries throes separate treaties. These so-willed Air Traffic Conventions were all praetim cally i tentic*1, and generally follotwed the C.I.I3.A. Con. veritian. Although Germmy, like the United States, was never a party to that convention, these separate treaties Yore often described as preliminary, anti were provided with eanc011at1oa clauses, S separate treaties were concluded by Gounany with Switzerland (September 14. 19M)- Denmark (April 25 i Austria (w4ey 19 , 1939) SWeden 4May 29 1925) i , . 4 . 22, 1926} , barium (May 29, 192 ) , CZ.~eohoslovskia (Jmm~aty 22, 1927) , Italy (F?Sr 20, 1927 , Great Britain (June 29, i2) 9 7 . SPa (December ., -._~27 , i'oland( ast 289 1929) TT 2 6?,.. era _ 8 _ _ A ? . _ _. .w Tugo 1a is (September 3, 1930 s Greece (November 9, 193 5. Porn (March 11, 1937), and the Union of South Africa (ch 17, 1937)? Of the varims international conventions sie#ed tr Germany the Wares Convention of October 12, 1929 is tin most im- portant. On January 12, 19379 the Second Convention of 29. 1935 (The > me Convention) regarding the Unifica. ti.on of u1 ]elating to the Precautionary Attachment of Aircraft came into force, together with the Act regarding the Inadmissibility of the Precautionary Attaclznent of Aircraft. Tae other Home Convention, relating to Damages caused by Aircraft to Third Parties on the Surface, was not ratified by Germany. The International Sanitary Convention for Aerial Navigation signed April 12, 1933 wag in force in Ge try. 4. The a inistration of both civil and military aviation by one ministry indicates how completely they were allied in the German point of view. Gorman civil aviation, strictly speaking, was not influenced by military aviation; it was merely mother aspect. The laafthanaa vas a secondary Air Transport Service for the L Ift!'affe; the aa.r sport movement was pre-rnilttaar training for thn Luft gaffe; th Via absence of pea anal flying or competitive air transport, the edreraft industry had no recour* but to the Luftwaffe. What will be said in this parch about civil aviation as a re? inforcem .t of tt military potential is not confined, to Get aav al . -T British Ga report Of 1939 states that the prob- ler;a of the air is one - two sides of a -single coin - aznd the military aspect of aviation cannot fundamentaUy be separated fran the civil aspect". The civil aviation of any count=y is eaa auxillary of the military in that: (1) it maintains a system of high speed cmmnmication for governaoent and industry, in both Pe= and war; (2) it justifies the existence of a system of lighted and radio equipped civil airways; and. (3) it creates an orgauizatioz of .highly trained personnel. - 31 Approved For Release 2000/091P67-00059A000500020006-8 Approved For Release 2000/08/23 : CIA-RDP67-00059AO00500020006-8 -who can be drawn upon for military use. The relationship be- tween the peace time maintenance of the aircraft industry and civil aviation is, of course, a fundamental one. It is not in- eluded here because German civil aviation after 1933 was not an important customer of the aircraft industry, although perhaps its best advertisement. Since the volume of transport operation determines the extent of the contribution civil aviation can make in any of these respects, it L doubtful if German civil aviation was regarded by the Nazis themselves primarily as a successful civilian counterpait of the Lu 'tu affe. Part of the answer is., probably, that Gormaty valued its civil aviation as an immediate political activity of great potential commercial value. German students of air transport repeated the elassie statement of the 1930 League of Nations report that state participation in E ropean civil aviation is an act of politics, rather than of economics. Indeed, Walter Pahl says that all trans- portiation is an act of politics, but that air transport, more than any other form, is an act of high politics. the-phrase, high pol- itica, had connotations for the Razi mind that require definition. It is, in essence, the politics that Clausewlts meant when he said war is the conK ation of politics by other means. The Nazi con- tribution vas to stress the converses "peace is the continuation of war by other nears". Gorman aviation certainly was not economic in what the Nazis called the "narrow" meaning of returning dividends on capital in- vested. There is no doubt, however, that the ultimate aims of Gorman expansion in South America, for example, were broadly eoon1b amio, with the pUrPo300 of attaining markets and raw materials. This trade campaign was also a political enterprise. For A.Btarden says, in his "Struff'le for Airway in Latin America", "under the Nazi regime, foreign trade became so regimented as to constitute for all practical purposes a part of government activity. The full force of the German government was consequently thrown behind the propaganda efforts designed to help the trade program and increase the prestige of the Reich". 5. Germany's civil aviation was under the nominal supervision of the Council of Ambassadors from 1919 to 1926. From the Paris conven- tion of that date until Germany's withdrawal from the League of Nations, it is possible to say foreign powers exercised influence o`er German civil aviation In a negative sense. In March, 1935 with the public recognition of the Luftwaffe, all external re- straints were cast off. 6. The data to answer this question are still lacking. It Is pass- ible to estimate Germany's national income in this period ass 1932, 45 billion R1 ; 1934, 52 billion Rai; 1935, 57 billion R1[; 1938, 76 billion RN, and to guess that military expenditures con- sumed onv-eighth to one-ninth of the national Income. During the war years, aircraft, together with air force equipment, represented approx3mate]y 40 percent of total German production, and this per- centage may be applicable to the period of preparation before the war. No budget as such were published after 1934. The finances of the totalitarian state defy examination by orthodox standards, -32- Approved For Release 2dUb- P IA-RDP67-00059AO00500020006-8 Approved For Release 2000/08/23 : CIA-RDP67-00059A000500020006-8 UNCLJ1~;5IFI+!:D Probably the largest vested interest in Nazi Germany as the Nazi party itself. That group was split internally by clashes of tem- perament and the personal ambition of a few vigorous personalities .for flitler*s favor, but presented a united front to the rest of.(;er- m ny, Idilchs for e..uaple, Intensely disliked Willy i esserechrnitt; and the development of the Me.262 suffered in consequence; Wring and Schacht quarrelled over the conduct of the four year plans as they concerned aviation; Rust felt that education and research Were ,mope properly his provinces than Gdrirgrs. But G8ring remained, bore the war,-at least, Hitler's "truest paladin," and German aviation was safe from other influence. During the uar, Speer got Hitler's ear, and the result was the formal dissolution of the Air Ministry in 1944, Oa the whole, the wishes of the banking interests and the aircraft industry of Germany pdralled those of G8ring. The Reichabank headed by the confirmed Nazi, Georg von Stauss, the "=aviation banker" - had been behind the formation of Deutsche Lufthansa, and owned or con- trolled sort_a of the larger private aircraft and aero-engine commies. For purposes of representation in German's economic corporate struc- ture, the aircraft industry like 30 other branches of Industry, had been organized into an Economic Group: Main Corm tteea and Special Ring were expressly .'ounded to present the industry point, of view to S~s;e ~w Armaments )At.iistry, and Frydag, Speer's delegate for aircraft production, wL-s a ifieriber of the Board of Directors of both Henschel and Heinkel. Yet, it is altogether true to say that the final word rested always with the ovcrnmcnt of.icial and the party he rer)resented. The Nazi state prided itself on having achieved the "revolutionaryr solution of r? the entrepreneur in his functions and at the same time aon- verting him into the service of the state... Chambers and groups, main committees and rings, and economic Troupe all have one thing in con on - they reflect the tendency to place the relationship of state and industry more on the basis of commn trust and cooperation than on the basis of command." At the time, the industralist was reminded: ''Une thing will remain after the war and become more and more estab- 1 shed: the conviction that the State is the legitimate partner ("`Teilhaber") in every enterprise," and that "the partnership of the state is all-embracing." The industrialist already knew that for Hitler "the Party created the State." $o See A 2(f ) 9. Sre A 2(e) 10., aircraft development was forwarded in Germany by govern- ment initiative and supervision of a development contract. The head of one of the development divisions of the Technical Office would discuss the desired characteristics of a new weapon or device with industry representatives, and then issue development contracts to one or more firms. Often the idea originated with the firm, was suc- cessfully developed, and then presented to the Air Force for trial and acceptance. The costs of research and development to the firms were borne in their entirety by the Air Force, 33 - U.'CL $IFIED Approved For Release 2000/08/23 : CIA-RDP67-00059A000500020006-8 Approved For Release 2000/08/23 : CIA-RDP67-00059AO00500020006-8 B. CIVIL. AIR OU+Q NIZATIONS 1. The governmental structure of Nazi Gsrmaror differed so complete- ly from accepted standards that any direct description is not only extremely difficult, but of somewhat dubious value. The best sti of the German state (by F. Neumann, published in 19122) i prefaced by the remark that National Socialist Germany was a 'non-state, a chaos, a rule of lawlessness and anarchy." Essentially, the hierarchy of peacetime civil aviation was in- distinguishable from that of military aviation. Adolf Hitler, as rational Lee-der and Chancellor, and Commander of the Armed Farces, was also the supreme authority for civil air matters. Officials controlling aviation: Nationai M nister of Aviation--Hers Goring (also supreme C om ande in-.Ci:ie of the Air Force) State Secretary of Aviation-Erhard Mileh (also Inspector General of th Air Force) Under I lch? Chief of Air Defense General Aviation Office Air Traffic Air Police - Weather Service Flight Protection Supervision of Local Air Boards General Commanding Aircraft Supplies Research Institutes Development--the testing stations, the industry War EconoMr Industry Personnel-delegated to the German Aero- nautical Research Establishment, Berlin Adlershof Supply Outside of this orgnaization, but still subordinate to Hitler were the follaring organizations: The National Socialist Flying Corps Air Squadrons of the Hitler Youth--Reich Youth Leader Model Plans Building Associations Reich Youth Leader Scientific and Technical Associations: National Union'of German Airports German Academy ~f Aeronautical Research Lilienthal Society Standards Committee for Aviation--branch of the German Standards Committee - 34 4. UNCLtLSSIFIED Approved For Release 2000/08/23 : C1A-RDP67-00059A000500020006-8 Approved For Release 2000/08/23 : CIA-RDP67-00059AO00500020006-8 Industry Associations: Economic Group of the Aircraft Industry Research and Education: Schools and Colleges-Ministry of Science and Education National Research Council--GI!ring 2, (a) It is believed that the functions of prewar German Govern- (b) rent agencies concerned with civil aviation have been fully & covered in other sections of this report. (c) 3. In the absence of parliamentary debate or of a free press on the English or American model, an accurate documentation of German prewar public opinion is impossible. Hover, it can be taken for ,anted that the aviation interests, the armed forces, and the general public were satisfied with German civil aviation in direct .proportion to their contentr+ant with the ideology of the, Nazi party.. When Germany had political parties, none, with the exception of the Communists, objected to state subsidies. Since the most important competitive forte of transport were also either owned or controlled by the State, there was no overt act of resentment. At this tine it was stated, "The present friction- less cooperation of all branches of transportation with aviation ... is notowortly. The railroad and the automobile, which fight each other, work willingly with the airplane. In large degree this is brought about by the smallness of the part played by air transportation in the actual movemant of passengers and freight, and by the fact that the plane accomplishes functions, particu- larly in international transportation, in which the others are not interested." The position the State would ass'.e in the event of such a conflict was plainly indicated: "A preference of air transportation as against all other-branches of transporr- tat.on justifies itself through the national interest." The plan of authority of the Nazi state was: (1) the concentra- tion of all power into the hands of a Leader in whose person the means of governmental and extra-governmental adjustment were conf ed; (2) the deliberate elimination of any statutory confines qualifying that parmr. Under such a system, Hitler, or his crea- tures, controlled everything, made all decisions, and resolved all conflicts. G15ring, when in favor, exercised this unlimited power over al]. phases of aviation in Hitler's name. C. PROCEDURES AND REGULATIONS 1. Air Routes See A-3 (a). Since Deutsche Lufthansa was a member of the government, its over- all policy was controlled in its entirety by the Air Ministry. At the same time, Lufthansa made and enforced its corn operating policies and procedures. Under such-a system there could be no place for a Civil Aeronautics Administration or a Civil Aeronautics m35 UNCLASSIFIED Approved For Release 200070872'3""CTA-RDP67-00059A000500020006-8 Approved For Release 2000/08/23 : CIA-RDP67-00059A900500020006-8 Board. A member of the Lufthansa expressed his bewilderment at the American air transport industry, "shared in by many eoas- panies, suffering under rigid, all-inclusive laws, regulations and decrees, which in allegedly old and bureaucratic Europe are not thought of." 2. Rates Rates were fixed by Lufthansa on the basis of what the traffic would bear. In theory, Lufthansa attempted to bring its rates drama to the equivalent of prices for first class aceomodations or the railroad. Rates averaged about 8 cents a mile in July 1939. As propaganda, prices were lover on certain routes than first class railroad accomodationa, prices in winter were lower on all routes, rebates were given for the purchase of return tickets, and for special occasions like the Leipzig Fair. Lufthansa was responsible for conducting its own eperation as safely and efficiently as possible. There were actually no transport category regulations. For exampleg no landing speed limitation was imposed on aircraft. Lufthansa, hover, had an operations manual outlining'Its policies and procedures for all personnel. 4 . Iras ection There was no governmental regulatory body controlling in any way equipment, perdonne1, or aircraft maintenance. It must be re- peated that Lufthansa was a governmental agency as far as its operating policies and procedures were concerned. Lufthansa de- pended primarily on the knowledge and technique of the older maintenance men for the overhaul, maintenance, and inspection of aircraft. The usual procedure was to inspect and repair the air- plane and equipment more frequently than is the custom in this eo?set;ry. This practice was partly due to the operation schedule which consisted of short hops and low over-all time per month per airplane. 5. Airports and Communications See .1A-2 (i), All the log-books, archives, index cards, legal contracts, liter- ature and other files of the Company were destroyed or, lost in the course of the fighting is l pril and May 1945 both by fire and by other agencie:st D. 6. Keports and corms GENERAL EVALUATION 1. Considered only In terms of the Nazi frame of reference, German commercial aviation was sound, progressive, and well adapted to the country's political and economic wants.. Deutsche Lufthansa, for example, was described by a French student in 1939 as o36 Approved For Release 20GO 8M3F'.ICIIA-RDP67-00059AO00500020006-8 Approved For Release 2000/08/23 : CIA-RDP67-00059AO00500020006-8 "prosenting none of the iLc