The Wages of Destruction: The Making and Breaking of the Nazi Economy

by Adam Tooze

By far the most troublesome part of the Krupp empire was the shipbuilding operation in Kiel, the Germaniawerft, which had been grossly unprofitable throughout the 1920s. The Germaniawerft was the home-base of German U-boat construction in World War I and it was only kept alive in the expectation of one day receiving new naval business. As we have seen, naval rearmament initially lagged behind that of both the army and the Luftwaffe. But by the autumn of 1933, Essen had at least extracted a promise that the navy had a ‘serious interest’ (ernstes Interesse) in the survival of the Germaniawerft. And in August 1934 Krupp’s patience was finally rewarded with the award of orders for 6 small U-boats, followed within a few months by a contract for 5 destroyers and the first series of U-VIIs, what was to become the standard U-boat of the German navy.78 With Gruson also having received notification of major orders for armoured plate, by the end of 1934 all branches of the Krupp business were at least within sight of profit.