Reemtsma scandal
The Reemtsma scandal in 1929 was one of the most obvious scandals of the 1920s and shook the Republic of Baden and the Weimar Republic . A generous tax policy of the German Reich granted the cigarette industry tax privileges on a large scale. This and the fierce competition in the cigarette industry were the starting points for the Batschari-Reemtsma affair . Even the 1929 state election campaign was not unaffected by the long-range effects of the scandal. Abuses in politics and economics were exposed, which had traits of high-grade corruption. As a consequence, the citizens questioned the legitimacy of the republic.
prehistory
The Batschari cigarette factory was founded in Baden-Baden in 1899 , and it became one of the best-known brand names in the industry and during the Weimar Republic. As the largest employer in the city of Baden-Baden , the company was important for an entire region. Batschari sold the brands Mercedes , Tufuma , Sleipner and others under the ABC logo (derived from August Batschari cigarettes) . After the end of the First World War , the company fell into a crisis in 1923. The ownership structure after the death of the company founder was confusing due to several stock companies . Inflation and the occupation of the Ruhr hit the company considerably. Business policy suffered from a lack of transparency. The onset of the crisis was also masked by generous subsidies and repeated deferrals of the so-called band tax (consumption tax, which is levied on a packaged consumer good (e.g. tobacco) as a strip or symbol tax by using banderoles (paper strips)). The increasing demand for cigarette products intensified competition. Profit-oriented industrialists looked for speculative objects and focused on a. also on Batschari. The Hamburg company Reemtsma was also among those interested . Martin Brinkmann AG was a big competitor . In 1929, some of the Batschari companies had to be liquidated, which led to a political debate about the unemployment that had triggered. Shortly before the final collapse, the Reemtsma Group bought parts of the Baden-Baden company in spring 1929.
Causes of the Political Scandal
The Batschari scandal escalated in the spring of 1929 because Reemtsma, the largest producer in the industry at the time, had bought the company shortly before it was liquidated. What at first appeared to be an economically nonsensical business transaction, because after all, 12 million Reichsmark tax debt had to be paid, turned out to be quite sensible on closer inspection. Reemtsma not only wanted to eliminate a weighty competitor, but also to assert itself in the market expansionistically and also speculated on tax debt relief if the Baden-Baden location were given up. This resulted in the compromise that Reemtsma - with tax debt waiver - should (continue) at least one cardboard box factory for partial job retention. The announcement of this agreement in turn aroused enormous outrage and sparked weighty political debates that sought to prevent an impending economic debacle. In view of the upcoming state elections in 1929, the Baden Justice Minister Gustav Trunk tried to appease the situation. Although he succeeded in persuading Reemtsma to continue cigarette production in Baden-Baden, the company demanded that the Reich Ministry of Finance waive the tax liability that was then due again in return. The Reich Finance Minister Rudolf Hilferding granted this request . After this assurance, the factory was modernized. Batschari produced as a branch of the Reemtsma Group until 1948, in 1962 Batschari was transferred to the Haus Neuerburg company , which shut down operations in the same year.
The public controversy
Rumors and speculations about the reasons for the extraordinary tax gift to Reemtsma made the rounds. The official reason given by the Reich Ministry to counter the economic hardship of Baden by keeping jobs was met with suspicion, because fraud, corruption in the civil service and bribery on the part of Reemtsma were seen as the real causes. Small and medium-sized industry campaigns carried out through journalist T.H. Tetens , which acted as an efficient mouthpiece in highly regarded articles (for example in the magazine Die Weltbühne published by Carl von Ossietzky ), did the rest. Former Batschari employee Harry Levita wrote diatribes against the Reemtsma group and only refrained from doing so after paying a substantial fine following a ransom for extortion in 1931. The rumors about dubious business practices in the cigarette industry did not silence this. The financial administration and the judiciary found themselves exposed to suspicion of corruption and untrustworthiness.
Web links
- Karlsruhe: Culture and Education Presents: The Batschari Reemtsma Scandal of 1929 by Dr. Monika Pohl
- TH Tetens: The Reemtsma Scandal