How Cigarettes Funded the Nazi SA

0:00You're listening to a podcast right now, driving, working out, walking the dog. If you're into podcasts, chances are you have something to say too. With RSS.com, starting your own is free and easy. Upload an episode, and we distribute it to Apple podcasts, Spotify, Amazon Music, and hundreds more. Track your listeners, see where they're from, and start earning from ads like this. Even with just 10 listeners a month. If you've been thinking about starting a podcast, this is your sign. Start free at RSS.com. In the early 1930s, if you wanted to fund the most violent paramilitary group in journey, you didn't actually have to buy a weapon. Right. No black market deals required. Yeah. You didn't have to launder money through a Swiss beddock account or smuggle gold across a border. You just had to walk into a corner store and buy a cheap pack of cigarettes. A brand called Traumler, specifically. Exactly. And it completely upends our standard perception of how extremist movements build their war

1:01chests. Oh, absolutely. I mean, we are so conditioned to look for grand, dramatic, velony in the ledger books. Yeah. But we rarely look at the mundane, everyday habits of the standard consumer, which is exactly why today's source material is so fascinating. We are taking a deep dive into an excerpted Wikipedia article about a defunct company from 1920s and 30s Germany, the Sturm cigarette company. Right. Our mission for this deep dive is to explore how a completely ordinary, everyday consumer good was literally weaponized, basically used to fund and fuel a paramilitary organization. Specifically the essay, the Sturm of Tiling, which was the original paramilitary wing of the Nazi party. Yeah. And before we get into the actual mechanics of this, I want to make something very, very clear to you. Our list. You're an important point here. Right. Our source deals with the Nazi party and the essay. We are explicitly stating that our goal today is absolutely not to endorse or validate or

2:02make light of any viewpoints or ideologies of these historical figures. Definitely not. Our purpose is purely to impartially analyze the historical mechanics detailed in the source material. We want to understand how politics and consumerism violently intersected. Right. We can recognize the architecture of coercion, but without in any way endorsing the actors involved. Exactly. Okay, let's unpack this. If we think about how this actually functioned, it wasn't like a voluntary political fundraiser. No, not at all. Imagine a violent political militia launching a consumer lifestyle brand just to keep the lights on. It's almost like, I don't know, like a street gang running a hyper aggressive branded big sale. That is a wild image, but it's incredibly apt. Yeah. Yeah. But to really understand how a political militia ended up in the tobacco manufacturing business, we first have to look at the sheer economic desperation of late 1920s Germany. Right. The context is everything here. Exactly. The essay was essentially the muscle of the Nazi party, but, you know, muscle requires

3:04funding. It always does. And at this specific point in time, the essay actually charged no membership fees to its recruits. Wait, no fees at all. So how are they surviving? I mean, if you have thousands of men marching around, you have to feed them. You have to clothe them. Right. And how's them? They were entirely dependent on handouts. From the party. Yeah. Structural donations from the Nazi party leadership. But the party itself was constantly stretched thin. They were essentially broke. Wow. Okay. So where do cigarettes come in? Well, meanwhile, you have the broader German cigarette market. Following the First World War, a lot of the smaller independent cigarette firms had totally collapsed. It was basically a monopoly. Pretty much. The market had become heavily consolidated. It was dominated by a few massive, highly automated corporate monopolies. At the time, they were known as the concern or the combine. Right. The trust. And the Nazi party was already leveraging that economic anxiety, right? Right. Because they were actively attacking this consolidated tobacco industry in their propaganda.

4:04They were claiming it had, you know, foreign and Jewish connections. Yes. They are loudly denouncing the very concept of these corporate monopolies. Right. Making them the bad guys. Exactly. But simultaneously, they're staring at an empty bank account. They realize they desperately need an independent, massive income source, which brings a very opportunistic entrepreneur out of the woodwork. Yes. Arthur Dressler. Right. So in 1929, this guy Dressler approaches the essay with a pitch. He essentially says, look, you have tens of thousands of loyal men. Let's found a cigarette manufacturer together. A joint venture. Yeah. Your essay members will exclusively smoke our product. In an exchange, the essay gets a royalty on every single pack sold. Dressler was basically proposing a captive market. A completely captive market. And the specific royalty rate he pitched was between 15 and 20 fennig for every thousand cigarettes sold. Wait, wait, let's look at that math for a second. If cigarettes are selling for just a few fennigs each, a 15, 20 fennig return on a thousand

5:08cigarettes is, I mean, it's microscopic. It is. It's fractions of a percent. So how does that possibly fund a paramilitary army? If we connect this to the bigger picture, it relies entirely on staggering volume. Volume. Yeah. Dressler understood that if you mandate consumption across a rapidly growing, fanatic base, those fractions of a penny accumulate into millions of marks. That makes sense. But I mean, an idea doesn't build an industrial factory. It certainly doesn't. You can't manufacture billions of cigarettes with just a handshake agreement. You need heavy industrial capital, which the essay absolutely did not have. Right. Our source details the initial financials for this venture. They officially registered it as the cigarette and fabric Dressler, though it became known as cigarette and firm as Sturm. The Sturm cigarette company. Yeah. So the Nazi party leadership offered 30,000 rake marks and start up money, which for setting up an automated manufacturing operation to compete with corporate giants, 30,000 marks is practically an insult.

6:08Oh, it wouldn't even cover the cost of the industrial rolling machinery. Little owned the raw tobacco leaf. Exactly. Or the warehouse space or the distribution network, it was nothing. So they needed a massive bailout on day one. They really did. And a Nazi party supporter named Jacques Betenhausen had a step in. He injected a staggering 500,000 rake marks. Half a million marks. Yeah. That injection wasn't just a friendly donation. It was the heavy industrial capital that actually took this from a theoretical grift to a viable factory. Completely. Without Betenhausen's capital, the Sturm cigarette company would never have existed. Right. He bankrolled the infrastructure necessary to actually monetize the essay's base. But I have to push back here because this underlying business strategy still seems fundamentally flawed to me. How so? While we're talking about the late 1920s and early 1930s, the great depression is ravaging the globe. True. Unemployment in Germany was skyrocketing. It eventually peaked over 30%. And the essay specifically recruited heavily from these unemployed, desperate young men.

7:12They did. So if your entire consumer base is flat broke, why are you trying to sell them a consumer product like cigarettes? Well, again, if we connect this to the bigger picture, we really have to shed our modern perception of cigarettes as a discretionary luxury. In the culture of 1920s Germany, tobacco was a heavily ingrained, almost physiological necessity for these men. It was an optional. No. The German smoker at the time consumed about 15 cigarettes a day. Wow. So it isn't a treat they buy when they have extra cash. It's a baseline daily requirement. Precisely. And the economic data from the period is staggering. Even an average intensity smoker buying the absolute cheapest brand available would spend about one-tenth of their entire gross income on cigarettes. 10%. 10%. I mean, you'll let that sink in for a moment for you, listening right now. Imagine taking 10% of your gross monthly paycheck before taxes, before rent, before groceries, and being chemically and politically compelled to spend it on a single consumable product.

8:14It's terrifying, but it illustrates the raw power of the addiction model. Yeah. For the SA, nicotine addition provided a guaranteed recurring revenue stream. They didn't even have to ask for donations. Exactly. It bypassed the need for voluntary donations. It extracted a tiny, non-negotiable tax from hundreds of thousands of men day after day. But having an addictive product in a factory doesn't automatically equal market dominance. The SA still had to convince, or I guess more accurately, force a population to abandon their preferred brands and buy storm cigarettes instead. Right. And they were going up against huge, established brands. So how did they actually structure this product line to capture a totally destitute market? They utilized a highly calculated psychological and economic market segmentation. Meaning they didn't just sell one type. Exactly. The factory didn't just produce one generic cigarette. They produced four main brands, tiered by price, to capture every possible sliver of

9:14their impoverished base. Okay. Let's break down that pricing tier, because it reveals exactly how bad the economic crisis was. You had their premium brand called New Front, or New Front, which was the most expensive at Sixth Fennec a cigarette. Right. Then you had Sturm, meaning Storm, at Fiveth Fennec, Alarm at Fourth Fennec, and at the very bottom, Traumler, or Drummer, which was the absolute cheapest at three and a third Fennec. And the sales data perfectly reflects the crushing reality of the Great Depression, the premium brands. They were essentially window dressing. Nobody was buying this Sixth Fennec ones. Exactly. The source notes that in 1932, a massive 80% of all-Sturm cigarettes sold were the dirt-cheap Traumler brand. Yeah. And as the economy worsened into 1933, that jumped to 95%. So they were running a volume business on the absolute porous segment of society. Entirely. But they didn't just rely on cheap prices. The marketing machine they built around Traumler and the other brands was incredibly aggressive. Oh, yeah.

10:15The source talks about how they had dedicated sound trucks driving through neighborhoods, just blaring advertisements. They was inescapable. They even hired planes to drop leaflets or fly banners overhead. And the messaging itself was pure, concentrated political reasons. They explicitly weaponized the economic anxiety of the era. They're early advertising heavily featured the slogan against the trust and the combine. Directly attacking those established corporate novelies we discussed earlier. Exactly. During the worst of the economic crash, between 1930 and 1932, their print adds frequently depicted catastrophic situations. They were visually linking the failure of the German economy to the rival tobacco corporations. And then there was the physical packaging itself. Inside the cigarette packs, they included collectible sets of images featuring historical German military uniform. Right. Like baseball cards, but for militarism. Which seems like a strange prize for a political party's quote-unquote sports and gymnastics division. Well, the sports and gymnastics label was a very thin legal fiction.

11:18The essay used it to avoid being banned by the government. In reality, they were actively promoting themselves as a massive shadow military training program. Now, the source mentions the essay framed themselves as the successor to the band Freikor Militius. Yes. What exactly were the Freikor? And why does putting their uniforms on collectible cigarette cards actually matter? So the Freikor's were rogue, right-wing, paramilitary units composed of bitter veterans that formed immediately after Germany lost the First World War. Right. They were notoriously violent and eventually they were banned by the Weimar Republic. So they were basically violent outlaws? Yes. And by including collectible cards of historical military and Freikor's uniforms, the essay was psychologically grooming its consumers. Normalizing the violence. Right. They were making the prospect of militarization and serving in a violent street army look glorious and historically validated. Here's where it gets really interesting. They are building this brand loyalty through psychological grooming.

12:20But they didn't actually trust their members to willingly buy the product. No, trust was not part of the equation. This wasn't just a marketing campaign. It was literal mafia-style racketeering. The source makes it abundantly clear. essay members were compelled to smoke stern cigarettes under threat of physical and financial punishment. It was an internal mandate enforced through systematic humiliation and penalization. Exactly. If you were a member of the essay, your superiors would conduct unannounced bag and pocket searches. Wow. And if they found a rival brand of cigarettes on you, you weren't just scolded. You were hit with a stripped financial fine. I mean, imagine your employer demanding to search your pockets to ensure you're only consuming the company's proprietary product and then docking your pay if you bought a competitor's brand. It's unbelievable. It is a closed loop of extortion. But the coercion didn't stay internal, did it? They took this violent enforcement out into the public market. They really treated the free market as a literal battlefield.

13:21The essay actively agitated against the use of other brands by the general public, and they reserved a special targeted hostility for the actual market leader. A massive tobacco corporation called Riemsma. Yes. Riemsma. And they didn't just write angry op-eds about Riemsma. The essay men physically attacked the retail shops that dared to stock Riemsma products. Physical violence. These smashed storefront windows, they dragged shop workers out and physically beat them in the streets. This is violent market monopolization disguised as a grassroots political boycott. They were using paramilitary street violence to artificially inflate their own market share. And to terrorize their corporate rivals into submission. Exactly. Okay, I have to stop us here for a second. Because anyone who knows even a little bit about this era is probably screaming at their audio player right now. I know exactly what you're going to say. Right. There is a massive historical contradiction staring us right in the face. It is heavily documented that Adolf Hitler was famously, rabidly anti-smoking.

14:23Oh, he despised the habit. So how does a violently enforced state-sponsored tobacco monopoly thrive under a dictator who actively hates the very product they are selling? It highlights the profound disconnect between a dictator's ideological purity and a state apparatus's pragmatic desperate need for revenue. Money talks. Always. You are entirely correct. Hitler detested smoking. He even ordered localized bands across party offices in certain public spaces. But the source explicitly notes those bands were widely ignored. How do you ignore a dictator's mandate in an authoritarian regime? Because the entity guarding the treasury, the finance ministry vetoed the ideology. The bean counters won. They did. The finance ministry absolutely loved the tax revenue that tobacco generated to understand the scale by 1941, roughly one-twelfth of the entire German state revenue came exclusively from tobacco taxes. Over 8% of the national budget. Exactly. You don't just turn off 8% of a nation's income because the leader finds the smell distasteful.

15:26Especially not when you're actively rearming for a global war. Furthermore, Joseph Goebbels, the propaganda minister, fundamentally disagreed with Hitler on this issue. And Goebbels' view ultimately dictated state policy. What did Goebbels think? He believed that cigarettes were absolutely essential to the psychological endurance of the war effort. They were deemed so vital for morale that they were distributed for free to soldiers as a designated part of their rations. Even to miners, right? Yes, even to miners serving in the military. The result of the state actively pushing this addictive substance is just staggering. The source says between 1930 and 1940, the per capita cigarette consumption in Germany literally doubled. Double in 10 years. It went from 500 cigarettes a year per person to 1000. They were selling tens of billions of cigarettes annually. And in the early 1930s, the S.A.'s Sturm cigarette company was riding the press of that wave. In 1932, Sturm had achieved a massive turnover of 36 million rikes marks. 36 million.

16:28Just to put that in perspective that is roughly equivalent to 148 million euros to it. It was a fortune. A typical S.A. local unit was earning hundreds of marks every single month just from their cut of the royalties. It was a massive financial triumph. Huge. But that exact success achieved by literally throwing bricks through their competitors' windows, put a giant target on the S.A.'s back. The corporate titans they were trying to destroy were paying attention. Right. Which introduces the pivotal figure of Philip Furkegaard Riemsma. The head of the rival tobacco combine that the S.A. had been physically terrorizing. Exactly. And Riemsma is a ruthless corporate pragmatist. He's watching his shop windows shatter. But maybe more importantly, he's watching his massive advertising campaigns get banned from all Nazi party publications by S.A. sympathizers. Right. They were freezing him out of the market. So what does a powerful corporate titan do when street thugs disrupt his monopoly? He goes over their heads and buys the politicians who hold the thugs leashes.

17:29A classic move. In June 1932, Riemsma secure a face-to-face meeting with Adolf Hitler, Rudolph has and Max Aiman, who is Hitler's secretary, and the head of the party's printing house. And the leverage in this meeting is purely financial. How so? The Nazi party's publications are hemorrhaging money because Riemsma's lucrative ads are banned. Right. The party is also desperate for immense amounts of cash for upcoming election campaigns. Riemsma conversely needs the street violence to end and his advertisements to run. It's a mutual need. But the source notes that Hitler reportedly scolded Riemsma during this meeting for having Jewish business partners. He did. Yet they still walk out with a deal. Theological grandstanding immediately yielded to capital. Despite the scolding, they struck an initial deal for half a million marks worth of advertising in party papers. Wow. Yeah, Riemsma essentially bought his way back into the market. But the payoffs escalated to an almost comical degree once the Nazis actually seized

18:29the power. By 1933, Riemsma realizes he needs permanent protection. So he goes straight to Herman Gurring, who was then the highest official in pressure. Riemsma complains about the ongoing essay street violent against his company. And he also mentions some pesky corruption charges he's personally facing from state prosecutors. And Gurring's response is a masterclass in autocratic corruption. Tell me about it. He casually quashes the court cases against Riemsma in early 1934. And the price for that absolute legal immunity. Riemsma pays Gurring a bribe of three million marks. Three million marks to make a federal investigation just disappear. Yes. Plus, an ongoing mandated bribe of one million marks every single year. It's breathtaking how cheaply the anti-corporate ideology of the party was bought out by the very corporations they claim to despise. Which creates this unsustainable explosive tension within the state. Right. You have the corporate elites like Riemsma paying massive bribes directly to the highest

19:30political elites, Hitler, Hess Gurring. Right. The street level, the paramilitary grunts of the S.A. are still violently enforcing their own competing, stern, cigarette monopoly, completely unaware that their bosses have already sold them out. So how does a political system resolve a contradiction that massive? What's fascinating here is how corporate monopolization aligns perfectly with violent political purges. Because in July 1934, we see the night of the Long Nives. This was Hitler's massive bloody purge of the entire S.A. leadership. Hitler viewed the S.A.'s growing power and independence as a direct threat to his consolidation of the military and the state. So the top brass of the S.A. is completely wiped out in a matter of days. And crucially, the very S.A. leaders who had profited the most from the stern, cigarette royalties, many of whom personally owned lucrative shares in the company, were suddenly dead or imprisoned. Starting with the old, fiercely independent S.A. leadership assassinated, the corporate

20:31takeover is completed with basically zero resistance. The newly appointed S.A. leader, a man named Victor Lutzie, steps in and almost immediately cancels the S.A.'s manufacturing contract with stern cigarettes instead of running their own anti-corporate brand, he makes a deal directly with Riemsma, the corporate giant. And the terms of the new deal reflect the total surrender of the S.A.'s independence. Where are the terms? Riemsma simply agrees to pay a fixed lump sum to the S.A. which was 250,000 rex marks in 1934 to become the sole official producer of the S.A. Syretz. The layers of irony here are incredibly dark. First, Riemsma's Jewish partners and employees, the very people the S.A. use is ideological justification for their violence, successfully emigrated. And notably with Riemsma's financial help. Right. The term cigarette company suddenly cut off from its captive audience of S.A. enforcers and left with a warehouse full of unsellable trauma cigarettes, quietly files for bankruptcy in 1935.

21:31The self-proclaimed anti-corporate street warriors of the S.A., who built a brand screaming against the trust and the combine, were ultimately swallowed whole by the exact corporate combine they tried to beat in the streets. Big tobacco, one by simply purchasing the political architecture that controlled the violence. So what does this all mean for you, the listener, navigating the complexities of the modern world? We're often taught to view political power as something one purely through grand historical speeches, massive election campaigns, and high-minded policy debates. But this source forces us to confront a much more uncomfortable reality. Authoritarian power and the violence required to sustain it is often built on the most mundane, everyday consumer habits. Yes. It really demands that we look critically at the intersection of corporate monopolies, state power, and the goods we consume blindly.

22:33The forces of coercion, whether they take the form of physical intimidation in the 1930s or systemic legalized corruption today, can easily hide behind something as simple and common as brand loyalty. It reminds us that a purchase is never just a neutral economic transaction when a political entity controls the factory floor, which leads us right back to that violently enforced subscription model we talked about at the beginning. If historical authoritarian regimes successfully used the everyday addictive habits of the masses to literally fund their violent rise to power, what seemingly innocent everyday purchases today might be silently funding the political movements of tomorrow. You're listening to a podcast right now. Driving, working out, walking the dog. If you're into podcasts, chances are you have something to say too. With RSS.com, starting your own is free and easy.

23:34We upload an episode and we distribute it to Apple podcasts, Spotify, Amazon Music, and hundreds more. Track your listeners, see where they're from, and start earning from ads like this. Even with just 10 listeners a month. If you've been thinking about starting a podcast, this is your sign. Start free at RSS.com.