In February 1931, two years before he became chancellor, Adolf Hitler checked in to Berlin’s Hotel Kaiserhof and made it his headquarters in the capital. The building soon swarmed with Nazis, who transformed the clientele overnight. Jewish custom evaporated. Business suffered. A year and a half later, with revenues in freefall, the hotel’s parent company needed to act. Its board, majority Jewish, took up the issue at a meeting on September 15, 1932. The question facing them: What are we going to do about Hitler?
And in this case Hitler didn’t stand in for Nazism more generally. No, these Jewish Germans were discussing what to do with the physical, living, embodied Hitler. Should they kick him out and face the consequences? Should they let him stay and face the consequences?
The chairman, William Meinhardt, a leading industrialist, weighed in first: “As a hotel company, we must remain neutral on matters of religion and politics. Our houses must remain open to all.” Another board member, Wilhelm Kleemann, managing director of Dresdner Bank and head of the Jewish Community of Berlin, now protested: “I know for certain that Jewish guests no longer stay at the Kaiserhof and no longer visit the restaurant, either.”
But Meinhardt had decided, and enough board members agreed: Hitler could stay.
Meinhardt’s argument had been a liberal one – and it’s true, he was a committed liberal. It nodded toward such liberal ideals as freedom of religion, freedom of thought and action, a hands-off approach to the management of conflict. “Neutral” and “open” were Meinhardt’s chosen terms, the watchwords of his libera creed. Yet, this liberalism was of no help against the Nazis, who were adept at using the precepts of free speech, free political association, and equal access to gain entry to liberal institutions only for the purpose of destroying them.
In all their fragility, grand hotels were liberal institutions par excellence. They depended on the free movement of goods and people as well as the self-regulatory capacity of guests and staff. And yet, at the heart of the thing lay a dark irony. The grand hotel as a liberal institution, much like the era’s liberal constitutions, disenfranchised the majority for the benefit and prestige of the minority.
Grand hotels in Berlin had never been reliably profitable because they were too expensive to run. From 1875 to 1914, staff outnumbered guests, at some properties by a ratio of 2:1. Such a labor-intensive business model hobbled grand hotels from the start and became their core weakness. Even a modest increase in wages would bring the enterprise to its knees. But instead of reconsidering their business model, hoteliers blamed the state and the workers for the shortfalls. Then, from 1914 to 1919, war, defeat, and revolution transformed the relationship among workers, employers, and the state. Hotel staff, their exploitation crucial to the survival of the enterprise, now refused to submit. And as international hostilities continued past the peace treaties of 1919, guests, too, became restive. They seethed with resentments and assaulted one another in dining rooms. With animosities out in the open, hoteliers saw no way back to the relative stability of the old regime.
From 1919 to 1923, Berlin’s hoteliers were ambivalent about Germany’s new republic. But after the hyperinflation of 1923, when the German economy collapsed, that ambivalence turned to antipathy. They never forgave the republic and refused to acknowledge publicly its successes after 1923. Instead, the hoteliers continued to heap scorn on the Weimar Republic, using it as the scapegoat for their own failures of judgment and accounting. The scapegoating intensified at the advent of the next crisis, the Great Depression. The republic all but written off, Hitler looked like the future – a future that might be better for business.
And yet, there was more to it. Hitler’s corner suite lay across the square from the chancellery, his goal. Behind his attainment of it loomed the Kaiserhof, a venue for the backroom negotiations with chancellery officials. Meinhardt and the others, in full knowledge of their hotel’s role in events, had facilitated everything, deciding to keep the Kaiserhof available to Hitler all the way down to his assumption of power on January 30, 1933. What’s more still, this story of the failure of liberal hoteliers is in microcosm the story of the failure of German liberalism, a catastrophe that expanded from the Kaiserhof to the chancellery to the rest of Europe and then the world. The decisions of liberal businessmen mattered. Faced with their nemesis in flesh and blood, they turned to liberal argumentation for support. It didn’t work.
Their dilemma has become a perennial one. What should a corporate board of directors do when the interests of democracy and the interests of their business don’t seem to align? Favor the latter was the answer in 1932. Is it still?
For the full story, plus dozens of pictures, check out my book, Big Business and the Crisis of German Democracy: Liberalism and the Grand Hotels of Berlin, 1875–1933, available for purchase and for free as an Open Access title, thanks to the generous support of the German Historical Institute DC.