AN ANALYSIS OF CHILDREN’S  & YOUTH LITERATURE IN VIENNA DURING THE AUSTRO-FASCIST, THE NATIONAL SOCIALIST PERIOD AND THE POST-WORLD WAR II YEARS: SURPRISING CONTINUITY & DEALING WITH PAINFUL HISTORY

Fairy tales were much promoted before, during and after the National Socialist period in Vienna and in the whole of Austria and Germany

Children’s and youth literature was regarded as an important tool for influencing young people and inoculating them with the National Socialist ideology by the  NS leaders, but they were not the first ones. The Austro-Fascists, who took power in Austria in 1933 by ousting the democratically elected Austrian parliament of the First Republic, cleansed the libraries and schools of “unwanted” children’s and youth literature and promoted a limited selection of pedagogically backward books to entice the young for their nationalistic, fundamentalist Roman Catholic view of the world. Fairy tales and legends, especially Germanic and Nordic myths, were considered appropriate topics for young people by Austro-Fascists as well as by National Socialists in Vienna. Yet the Austro-Fascists were not well-organised enough to come up with a coherent pedagogical concept of creating Austro-Fascist children’s and youth literature. Despite their tightly-knit party structure the National Socialists, who represented a strong underground power in Austria during their time of illegality in the Austro-Fascist period between 1933 and 1938, had no clear-cut view of what a National Socialist children’s and youth literature had to look like as well, when they took power in Austria in March 1938. The only consensual aim was to serve the NS ideology, but the NS representatives of various institutions and authorities followed different strategies to reach this common goal. It is surprising that too blunt propaganda of NS ideology in children’s books, which was for instance offered by fervent former illegal Austrian National Socialist writers, was rejected by the “Reichsschrifttumskammer” (NS Chamber of Writers). Their aim was to influence the young subconsciously via sentiment and emotions without making the intended manipulations too visible. So, in a nutshell, children’s books were to be sophisticated indoctrination tools.

In fact, most skilled and well-known authors of German-language children’s books had fled Austria, were persecuted, or were not prepared to be abused by the regime for its ideological purposes. Consequently, the NS regime lacked gifted writers of children’s literature. The majority of the material produced for the young in this period constituted of easy poems, rhymes and lyrics for patriotic songs and marches, which could be publicly recited and sung individually or in groups at youth camps, party celebrations and in schools. Another important category were handbooks for organising group events, camps, and meetings of the HJ (obligatory membership of all boys in the NS “Hitlerjugend”) or BdM (obligatory membership of all girls in the NS “Bund deutscher Mädchen”), filled with appropriate National Socialist games, poems, songs, sports events, and activities in preparation for war. An important requirement for children’s and youth literature was its facility to be read in public and not alone. Reading material was supposed to promote NS group activities; stories and rhymes were supposed to be read out loud by mothers, teachers, youth leaders to enthuse the young for the ideas of National Socialism. Book worms were not appreciated, on the contrary, reading alone in your room was seen as dangerous subversive treason. Jews, who the Nazis staged in their xenophobic propaganda as the worst enemies of Hitler’s “Third Reich”, were characterised as bookish, learned, reading alone in their study rooms; all negative characteristics for the Nazis, who promoted a fit, sporty and outdoors group spirit of the “young German”.

Herta on her third birthday on 24 November 1936 – she was an avid reader of picture books already then (left), and hiking in the Vienna Wood with her mother, Lola (right)

Herta Kainz, my mother, was exactly such a bookworm; a shy withdrawn little girl who was born in Vienna on 24 November 1933 and started school in September 1940 in the midst of NS terror in Vienna. Her mother, Lola Kainz, was a born Jew who had converted to Roman Catholicism when she married Herta’s father, Toni Kainz. Herta was an only child who was much loved and cared for by her parents and her family, but she had to live under very precarious conditions because of the Jewish origin of her mother and her mother’s family. Herta was brandished a “Mischling 1. Grades” (a first degree mixed-race child) and excluded from all activities “Aryan” children were supposed to participate in. Her father Toni, who stood by his wife and daughter during these trying times, had been dispossessed by his family, innkeepers in the bourgeois Viennese district of Währing, and was working as a fishmonger. He was drafted by the Nazis and participated as a sapper in the German military campaigns Of World War II in France and Poland before he was considered “unreliable” by the Nazis, because he refused to divorce his Jewish wife and was transferred to the home front working as a fishmonger in war food supply.

See articles: http://centraleuropeaneconomicandsocialhistory.com/personal-experiences-of-a-viennese-soldier-in-a-sappers-division-of-the-german-wehrmacht-during-the-military-

http://centraleuropeaneconomicandsocialhistory.com/personal-experiences-of-a-viennese-soldier-in-a-sappers-division-of-the-german-wehrmacht-during-the-military-campaign-in-occupation-of-poland-1940-41-part2

Herta’s mother, Lola, was constricted to do forced labour in the war industry. Herta as a small child had to watch the deportation of her beloved grandparents, Ignaz and Josefine Sobotka, and the exclusion, stigmatisation, and discrimination of her mother. Lola was for instance not allowed to go to a doctor or hospital or to enter the school building, where Herta started primary school. Herta was supposed to sit separately in the last row to mark her out as an “inferior mixed-race child”, who was not allowed to participate in any school festivities. Only thanks to the altruistic commitment of her young teacher, Helene Pfleger, who ignored the NS regulations risking her own career and life, the needs of the children, including Herta’s, were put first in Ms Pfleger’s classroom and not NS ideology. Herta and her teacher stayed in contact all their lives and Herta was for ever thankful to Ms. Pfleger for the love and care she had given to her. At home Herta was in constant fear of a knock at the door of their small two-room flat in Mariahilferstrasse, because that could mean that SS men were coming for her mother. Already as a small girl she knew she had to run for help to her father’s fish shop as soon as her mother was deported by the Nazis. This threat and this fear remained deep in her psyche for a long time. As a result, stories and books became her rescue haven; a dream world she could withdraw to from the terror of the real world around her. Her books and the diary she started to write after the war are the primary sources of this analysis of children’s and youth literature during the Austro-Fascist, National Socialist and post-war years in Vienna. As her family was poor, she owned very few books and those were second-hand books. What is more, buying at an antiquarian’s was the only chance to acquire books which were not on the NS lists of recommended books.

The main source of reading material for poorer children were public libraries, where the lending of books was usually free of charge for pupils. In 1878 the first two public libraries were opened in Vienna, followed by several workers’ libraries before and after World War I, which were founded by workers’ associations that wanted to promote the education of the Viennese working class. The Austro-Fascists closed the workers’ libraries in 1934 and after eliminating “unwanted” books from these libraries, reopened them. In 1938 the Nazis cleansed the libraries of all Jewish and politically ostracised authors, who had not already been eliminated by the Austro-Fascists, and renamed them “City Libraries”. Immediately after World War II the Viennese public libraries were opened again in 1945 and stocked with books, some of which provided by the Allied liberators, mostly by the Americans. But many of the old books remained on stock or were re-edited with slight alterations omitting crass racist passages and blunt Nazi ideology.

Herta during her first school year 1940 and after the war on the balcony of the family’s new flat on Lerchenfeldergürtel in the workers’ district of Ottakring

Second-hand bookstores, where Herta’s parents bought the few books for her they could afford during and after World War II

NAZI COLLECTIVE CAMPS (“SAMMELLAGER” ) AND LIFE IN HIDING AS A SO-CALLED „U-BOOT“ (“SUBMARINE”) IN VIENNA 1938-1945 AND THE SURVIVAL STRATEGIES OF THE PERSECUTED


Memorial for the victims of deportation 1941/1942 at the location of the former train station “Aspangbahnhof” in the 3rd district of Vienna

This map shows the ghettos and concentration camps the Nazis deported the Jewish population to from the collection camps in Vienna via the “Aspang” train station

The list with the dates and destinations of the 47 transports from the Aspang train station to ghettos and concentration camps 1939, 1941/1942. My great-grandparents Ignaz and Rudolfine Sobotka were to be deported on the 28 July 1942 to Theresienstadt, but then their transport was postponed to 13 August1942

The famous Viennese artist, the painter Arik Brauer, reported in an interview that a school mate and friend of his had come running to his flat in the 16th district of Vienna, Ottakring, when they were both around 13 years old, telling Arik that the next day he and his family had to report to the Nazi authorities in a collection camp in the 2nd district. He wanted his friend to have his collection of books by Karl May, a very popular adventure book writer of the time, because he was not allowed to take the books with him and he wanted to say good bye to Arik, too. Arik asked him why he did not run away and his friend answered, “Where shall I run to?” At that time no one believed that this transfer to the collective camps (“Sammellager”) in Vienna, also euphemistically called “collective flats” (“Sammelwohnungen”), led straight to the extermination camps of the Nazis. The former chief rabbi of Vienna, Chaim Eisenberg, told the story of his father who had survived in hiding as a “U-Boot”: he had never laughed so much in his life as during these terribly trying times. Jewish humour kept them alive and helped them not to give up hope. But many could not bear the humiliation and terror and committed suicide. More than 130,000 people could flee before the complete ban of emigration of Jews in October 1941. Yet around 17,000 of those were caught up by the Nazi terror machine in their countries of refuge, such as France, the Netherlands and Belgium. In the years 1941/1942 45,527 persons were hauled from the Viennese collective camps via the “Aspang” train station in 47 transports to ghettos and concentration camps in the “East” (as the Nazis called the occupied territories in Central and Eastern Europe), among them my great-grandparents, Ignaz and Rudolfine Sobotka. They were interned in a collective camp in Krumbaumgasse 6/14 in the 2nd district of Vienna on 9 July 1942 before they were deported to the ghetto Theresienstadt (today Terezin) on 13 August 1942. They were liberated after three years of imprisonment by the Allied Forces on 7 July 1945. Of the 1,634 people who are recorded as “U-Boote” in Vienna 1,000 survived more than one year in hiding, more than 400 attempted to survive in hiding, but were discovered before disappearing successfully and were deported. All in all 66,000 Austrian Jews were murdered in the Shoah and Vienna became a model for the organisation of Nazi terror and the extermination of the Jewish population, which was later copied in the rest of the German “Third Reich”.


The postcard my grandmother Lola Kainz sent to her parents in the collective camp from their mountaineering holidays in the Großglockner region in Salzburg
“Dearest parents, We are great. Herterl (my mother) is a sweet and good girl and looks great. The food is wonderful here. Unfortunately the weather is not too good. Herterl has just written to her teacher. Hopefully everything is ok. Many kisses Herta. Thousand kisses Lola and Toni”

The postcard my grandfather Toni sent them from the same holiday from Zell am See
“We are already far away from Zell am See. At the moment we are in Salzburg in the region where I worked three years ago; refreshing memories; most of all we are looking for warmer weather. In Krimml we already had 10 cm of snow. Otherwise we are doing fine; we are shovelling food from morning till evening. Herta has put on weight and eats a lot. Greetings and kisses Toni. Many kisses, yours Lola. Many kisses, yours, Herta.”

The content of the two postcards, which were sent to Ignaz and Ritschi in the collective camp by their daughter Lola and their son-in-law Toni, support the statement of Arik Brauer that the families were not aware of the deadly seriousness of the GESTAPO orders to report at the collective camps and that the stay there was just a transition to the deportation to ghettos and concentration camps. But the banality of the reports about holiday experiences, food and weather in Salzburg might also have been intended to boost the morale of the parents and to sound positive, optimistic and hopeful. Ignaz and Ritschi never talked about their experiences during the time of imprisonment from 9 July 19242 until 7 July 1945. That’s why it is so important to research this dark period of Viennese history now in times of rising anti-Semitism in an attempt to prevent similar disasters in future, because as the writer William Faulkner once said, “The past is never dead. It’s not even past.”…

VIENNA 1945: THE END OF WORLD WAR II: LIFE IN THE LIBERATED AND OCCUPIED CITY & HOW DID RESTITUTION WORK FOR THE NON-ELITE

The “Viennese Diary of 1944/1945” by Josef Schöner (1904-1978) offers a personal impression of the life in the city of Vienna during the last days of the war and the months after the liberation of the city by the Soviet Red Army. Schöner was an Austrian diplomat who had been dispatched to the United States and was forcibly retired by the Nazis in 1939 after the “Anschluss” (the Nazi takeover of Austria). During the war he worked in the restaurant business of his parents and was called back to diplomatic service after the end of the war. The experiences of my grandparents, Lola and Toni Kainz, and their daughter, Herta, my mother, are an important source of information about life in Vienna during the last months of the 2nd World War and the time after liberation. My great-grandparents, Ignaz and Rudolfine Sobotka, in the photo below with Lola, their daughter and Herta, their granddaughter, returned from the Nazi concentration camp Theresienstadt to Vienna in the summer of 1945, but they never talked about their experiences during their imprisonment.


Ignaz and Rudolfine Sobotka with their daughter Lola (left) and their granddaughter Herta (right) after their return from the KZ Theresienstadt in the small flat of Lola and Toni in Mariahilferstrasse 41

This article furthermore deals with the way restitution worked for the victims of Nazi persecution after the war, focussing on the non-elite who had survived Nazi concentration camps and the ordinary Viennese citizens of Jewish descent who returned from exile. The overall number of those who came back to settle in Austria again was embarrassingly small: only 6 per cent. This can be explained by the fact that they were not at all welcome in post-war Austria.

The decision of the Allied Forces in 1943 to insist on “unconditional surrender” of Germany implied that Germany would have no say at all in the new world order after the end of the 2nd World War. The Allies then started to discuss the destiny of the many small states which had been incorporated into the Nazi “Third Reich”. Austria was just one of them and certainly not the most important one. A new order in Central Europe was considered important because it had become apparent that the Western inter-war policy of the 1920s and 1930s had failed in the region. The British were the first to weigh the pros and cons of four different options for Austria after the end of the war.  First, Austria could become an independent state as between 1918 and 1938; second, it could remain in a union with Germany; third, Austria could be part of a new, not yet clearly defined “Danube Confederation” or fourth, Austria could be split up and the western part would join Germany or Switzerland and the eastern part the “Danube Confederation”. But the Soviet Union had its own interests in the Central European region and Stalin insisted on the restoration of an independent Austrian Republic. The British wanted to boost the resistance among the Austrians against the Nazis and made that a condition for a preferential treatment of Austria after the victory over Nazi Germany. They were certain that Austria had to rely on massive foreign aid to survive as an independent state and that’s why they preferred a “Danube Confederation”. But the Soviets were strictly against any form of a Central European confederation of states. At the same time there was no clear strategy visible in the USA and the British did not want to alienate either the Americans or the Soviets. In a draft of July 1943 Austria was declared the first free country which had been a victim of Nazi aggression and the decision how Austria would be treated in future would depend on the behaviour of the Austrian people, who were responsible for the war, too. The “Anschluss” was imposed on Austria and was therefore null and void. In order not to become a basis for German aggression again in future Austria was to be restored as an independent state. Already in this draft the responsibility of the Austrians for the war was deliberately expressed in an ambiguous way. At that point in time also the governments of the Commonwealth countries discussed the destiny of small European states like Austria and the South-African Prime Minister Jan Smuts vehemently opposed a promise to Austria that it could expect preferential treatment to Germany and he further rejected the idea of promising independence to small states which were economically too weak to survive. He pleaded for a South German state, which would achieve two goals, namely a breaking up of Germany and the integration of Austria in a state with Bavaria. This was a solution which did not please the British Foreign Office under Anthony Eden who preferred a Central European Confederation and refused to offer preferential treatment to Bavaria, the region of origin of National Socialism. The Soviet Union pleaded for the Austrian independence and stated that they would not expect Austria to come under the Soviet sphere of influence.  Interestingly, the Soviets did not want to stress Austria’s responsibility for the war.

Finally on 1 November 1943 the “Moscow Declaration” confirmed that Austria was the first victim of Nazi Germany and would be restored as an independent republic once Hitler was defeated. At that point in time it was not to be predicted of how great the importance of this document would be for the future of Austria in 1945. Despite its ambiguity this declaration is the most important document for Austria before the State Treaty of 1955. The “Moscow Declaration” must have been known in Austria in November 1943 because the Nazi newspaper, the “Völkischer Beobachter”, reported about it. In conclusion it can be said that the British had invested much more thought in the future of Austria than any other of the Allied partners. They now started to plan the zones of occupation after the war and were prepared to offer the whole of Austria to the United States because their projected zone of occupation in southern Germany was rather small. But the Soviets insisted on a joint occupation of Austria by the Soviets, the Americans and the British. During this time of strategic planning, the war continued and the destruction of the German and Austrian cities and infrastructure was stepped up by Allied bombardments. In the spring of 1944 the south of Austria had come under attack of Tito’s Communist Partisans from the south. In September 1944 Churchill and Roosevelt agreed on the zones of occupation for Germany and the Soviet, British and American diplomats came to an understanding that the one who reached Vienna first, would invite the other two Allies to join in. On 31 October 1944 the British stipulated what should happen in case Austria was reached by the Allied troops before the unconditional surrender of Germany. Most importantly these directives included a warning that Austria could not escape its responsibility for the participation in the war and that it would be held accountable. Yet the degree to which Austrians contributed to the liberation of their own country would be taken into account. This proclamation stated that the British considered Austria an enemy state because Austria was waging a war against the Allies and that’s why the British considered themselves as victors and not liberators. The Soviets wanted to occupy the Burgenland and the eastern parts of Lower Austria and Styria and a third of the city of Vienna. The Americans expected that their zone of occupation in Vienna included an airfield. Basically, the Americans and the French had no special interest in occupying parts of Austria. Their focus was on Germany, but they accepted the British invitation to participate in the occupation of Austria.

THE VIENNESE‘ENTHUSIASM FOR CLASSICAL MUSIC: THE VIENNA OPERA’S STANDING ROOM AUDIENCE IN THE FIRST HALF OF THE 20th CENTURY

My grandmother Lola – second from the left – with her sisters Käthe – left – and Agi with little Mitzi on the right

My grandmother Flora Kainz, née Sobotka, who everybody called “Lola” grew up with her three sisters, Käthe, Agi and Mitzi, in Kaiser Ebersorf near Vienna in a bourgeois family. Her father, Ignaz Sobotka, was the manager of the brewery in Kaiser Ebersdorf (see article on beer brewing in Vienna). She was born in 1902 and received the standard education of a middle class girl of the time. In the course of the musical education that all girls of her class underwent at that time, it was discovered that she had some talent for the piano. Lola showed an intense interest for the opera and regularly went to see performances at the Vienna Opera in the standing room area, which was extremely popular among the young in those days. Lola was a very charming happy-go-lucky girl who loved all kinds of entertainment and went out a lot, much to the regret of her father. She even had her cut, which was a sacrilege for a young bourgeois woman in the early 1920s. When she came home after her visit to the hair dresser she hid her hair under a funny hat and with jokes made her father laugh out loud and finally went unpunished. None of her sisters would have dared to challenge their father’s rules in the way she did. She liked dressing up, going to parties and going out with groups of young men and women for sports and entertainment – and the opera’s standing room. She adored tenors such as Leo Slezak, Joseph Schmidt and Richard Tauber and waited for the adored singers after the performance in front of the stage door or watched their films in the cinema.

She was admitted to the Vienna Musical Academy in the piano class of Professor Manhart. Later on in her life she was still very proud of that achievement, but admitted that she had not been serious enough. She was not the hardworking studious type as she loved entertainment too much. She used the smallness of her hands and the narrow span between her fingers as an excuse and quitted the class to start work as a shop girl in a sweet shop, where she got to know her later husband, Anton Kainz, my grandfather. After Ignaz Sobotka had lost his job as the manager of the brewery in Kaiser Ebersdorf, the family moved to a small flat in Vienna, Mariahilferstrasse. Ignaz worked as a menial labourer for the construction company “Teerag-Asdag” and the family was no longer well-off. But Lola’s enthusiasm for classical music, especially the opera, never ceased and the standing tickets in the opera were very cheap. Yet despite her skills as a pianist she was always reluctant to play the piano at home. Her husband, Toni, was an amateur who loved the piano, but he always had to urge Lola and coax her into playing with him four-handed piano pieces. Nevertheless, the classical opera remained with her all her life and when I was a child we always had to listen to the one-hour radio programme after lunch the “Opera Concert”, when she told me about the greatest opera singers and her favourite arias. My parents, her daughter Herta and her husband Werner, carried on that tradition. During my whole childhood and youth we listened to records of classical music in the evening – there was no television set bought – and went to operas, classical concerts and operettas. At the reopening of the Vienna Opera house on the “Ring” in 1955, which was destroyed at the end of World War II, my parents acquired a subscription for the Vienna Opera, which they kept until just a few years before they died in 2016. My mother being a dressmaker and my father an electrician, they could only afford the cheapest category, which was the last row before the gallery standing room, but they loved it and were very proud of their subscription that dated back to the reopening of the opera. They knew the opera lovers sitting next to them and enjoyed the atmosphere of the standing room audience behind them without having to endure hours standing up while listening to Wagner, Verdi and Richard Strauss. They also saved up for tickets to see one of the first “New Year’s Concerts” in the now world-famous “Musikverein” after the war.

The Vienna State Opera was a court theatre at the time of the Habsburg Monarchy, financed by the state, just as the “Burgtheater”. After the end of the monarchy, the Austrian Republic took over the financing of the state operas and theatres. In 1870 the old court opera house, the “Kärntnertortheater” was demolished and a new building was erected at the Ringstrasse – today’s “Staatsoper”. The architects van der Nüll and Sicardsburg designed a building in the romantic- historical style. The new opera house was opened in 1869 with Mozart’s “Nozze di Figaro”. After an Allied bombing attack the opera was destroyed on 12 March 1945. Only the main walls, the great staircase and the Emperor’s tearoom survived. Soon after the end of the Second World War the reconstruction of the legendary monument to Vienna’s love for classical music started. The opening ceremony took place on 5 November 1955, when Karl Böhm directed Beethoven’s “Fidelio”.

The Vienna State Opera on the Ring

MAID SERVANTS IN ENGLAND: AUSTRIAN JEWISH WOMEN IN EMIGRATION 1938/39

Käthe as a young woman in Vienna

My great-aunt Käthe, born in 1901, was a bank clerk at the Wiener Bank Verein and had lost her first husband, Poldl Kluger, soon after the wedding, victim of a lung disease, in illness that was wide-spread in Vienna at that time. When she lost her job at the bank in 1924, being tall and slim, she made ends meet by accepting occasional jobs as a fashion model. After the civil war in 1934 and the coup d’état of the Austrian fascists, Käthe, an assimilated and agnostic Jewess and a socialist, realised that sooner or later she would have to flee Austria. Being single facilitated the decision-making process. She diligently prepared for her escape from the Nazis by learning English and acquiring cooking skills. She then applied for the position of cook in a wealthy English household and landed in Dover on the 7th of November 1938. Having arrived at a safe haven in England with a domestic permit, she tied to get out of Austria as many of her family as possible. She worked in 25, Warkworth Gardens in Isleworth in Middlesex and managed to convince her generous and understanding mistress to hire her younger sister, Agi, as a maid in the same household and by that offered her a last-minute escape from deportations from Viennese collection points in the 2nd district to the concentration camps of the Nazis. So let’s look at this special rescue model, a window of opportunity for young Jewish women from Austria in 1938, which was closed in 1939.

Käthe’s employment as a bank clerk at the “Wiener Bank Verein” 1924

Käthe’s passport stamped with a “J” for “Jude”

Detail of the passport

Around 20,000 Jewish women, three quarters from Austria, fled in 1938/39 to England with a so-called “domestic permit”. This was a work permit for foreign domestic staff which British employers could use since the 1920s to alleviate the chronic shortage of maid servants despite otherwise very strict immigration restrictions. A considerable percentage of these women were not actually domestics by trade, but had only been able to enter the UK on permits for domestic work. They found themselves in a relationship of dependency to their mistresses, but work as a maid guaranteed a livelihood because domestic servants were the only ones who had permission to legally work in England. Yet they were officially not allowed to leave the areas of these private households. The majority of male refugees with a permission to enter the UK needed an affidavit from an influential personality or an institution.

THE ROLE OF AUSTRIAN BANKS IN NAZI GERMANY’S EXPANSION TO CENTRAL, EASTERN & SOUTH-EASTERN EUROPE

Palais Ephrussi, Viennese Jewish banking Family (exiled): Edmund de Waal, “The Hare With Amber Eyes” describes the destiny of this banking family

The German state-owned VIAG (Vereinigte Industrieunternehmungen) and the Deutsche Bank gained control of the majority of shares of the Creditanstalt-Bankverein CA from the time of the “Anschluß” of Austria to the Nazi German “Third Reich” in 1938 onwards, originally by taking over the shares of the Austrian state. From the very beginning the German majority shareholders viewed the bank as an important tool for German penetration into South-Eastern Europe, not only because of the geographical position of Vienna, but also because the Viennese banks, many of which had merged with the Credit-Anstalt in the interwar years, had been very active in this area before 1918 and still had much experience in the region. Contrary to the image the CA wanted to create after 1945, the leadership of the CA, and especially its most important director, Josef Joham, viewed the German takeover of Austria as an opportunity to recover the position the CA had held in South-Eastern Europe before and to turn Vienna into the financial hub of the Nazis’ activities in Central Europe and the Balkans. In fact, the CA often took the initiative in expanding its banking activities in the German satellites and occupied territories. It constantly made reference to its historical role in the region and viewed its acquisitions as restitution and/or compensation for its losses and exclusion by the successor states after the collapse of the Austro-Hungarian Empire. The German control of Austria and the CA provided a welcome opportunity to restore the position Viennese banks had enjoyed during the Austro-Hungarian Empire. The close co-operation between the CA and the Deutsche Bank, namely between the two directors Josef Joham and Hermann Josef Abs, had already started before the “Anschluß”. As Joham had supported the old regime in Austria, but anticipated the “Anschluß” of March 1938, he sought protection for himself and the bank through the alliance with Abt and the Deutsche Bank. Yet first the German VIAG took over the majority of shares from the Austrian state and Deutsche Bank got hold of only 25 per cent of the shares of the CA, but in 1942 the Deutsche Bank finally acquired the majority of shares in the CA.…

INTERNATIONAL CAPITAL FLOW, BANKS AND INDUSTRIAL ENTERPRISES IN CEE IN THE INTERWAR YEARS

Former Länderbank (Vienna), founded 1880, architect Otto Wagner (built 1882-1884)

Central and South-Eastern Europe became one of the most important world markets for capital exports after the First World War. Foreign investors not only invested in the defeated countries, such as Germany, Austria, Hungary and Bulgaria, but also in Poland and Czechoslovakia. From 1919 till 1923 international capital from Britain, France, the USA, Belgium, the Netherlands, Italy and Switzerland acquired substantial shares in the main Viennese banks. The Länderbank and the Anglo-Austrian Bank were turned into totally foreign-owned banks, based in Paris and London. A similar development of Western European capital participation took place in all the joint-stock banks of the successor states of the Austro-Hungarian Empire with the exception of the Zivnobanka in Prague. This bank increased its investment in South-Eastern Europe, often together with Western European financial groups. As the governments of the successor states were in urgent need of foreign investment, they promoted the internationalisation of the banking systems there. So the governments paved the way for the access of international capital to industrial enterprises via the participation in the equity of the big commercial banks. This followed the traditional investment pattern of the region and through the internationalisation of the banks the whole area moved closer to international markets.…