German economic power in Southeastern Europe: The case of Reemtsma and the Greek tobacco merchants (1923-1939)

ABSTRACT

This article explains how the firms involved in tobacco trade between the largest producer and consumer of Oriental-type tobacco (Greece and Germany) adapted their strategies in response to the economic environment of the interwar period, which was characterised by increased economic étatism, high barriers to trade, and generalised economic depression. The leading firm of Germany’s cigarette industry Reemtsma adopted innovative strategies for sourcing its raw material, while Greek leaf merchants turned to collective action and political advocacy in response to international competition and labour activism. The history of these strategies exemplify the interplay between politics and business decisions. It also provides a concrete example of how German economic power over southeastern Europe in the interwar period manifested itself in a specific industry.

KEYWORDS:

• Tobacco
• interwar
• Greece
• Germany
• business interest associations
• international trade
• cartels
• business strategy

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1 For a study on the growing influence of the German business cycle on the economies of southeastern Europe, see Morys and Ivanov (2015). On the history of Greece’s agriculture from the point of view of its integration into the global economy, see Petmezas (2013).

2 Manuscript ‘Der Rohtabak’ [Raw tobacco] by Kurt E. Heldern, PFR Reemtsma, Philipp F./Reemtsma Cigarettenfabriken [Reemtsma Cigarette Factories], folder 115/52, pages 4-8, Hamburg Institute for Social Research (HISR).

3 There are records of purchases made by Zellermeyer from merchant N. Kougioumtzoglou between August and October of 1930 on Reemtsma’s account. Deltion tou Grapheiou Prostasías Ellēnikou Kapnou Kavallas Aug. 1930; Sep. 1930; Oct. 1930.

4 A large purchase made by Zellermeyer is recorded in Efēmerís tēs Kyvernēseōs, 4 June 1935, vol. 1, item 14.

5 Letter to Special Court for Collaborators, 1945, JUS-013 Eidiko Dikastērio Dosilogōn [Special Court for Collaborators], folder 871, item 8, Historical Archives of Macedonia.

6 Schröter discusses the strategies that German firms followed in order to secure the supply of raw materials from Scandinavia in ‘Risk and Control’. On the contract that IG Farben signed with the Canadian firm INCO in 1934, see Plumpe (1990, pp. 426-429).

7 After the high prices of 1935, for instance, the Ministry of Agriculture bargained with the Association of Greek Banks so that they would reduce the amount of credit allocated for tobacco production that season. Limiting the credit supply was expected to limit the uncontrolled expansion of tobacco production in the new season. Circular letter from ABG’s central offices, 1936, Konstantinos Karavidas papers, box 43, folder 2, Archives of the Gennadius Library at the American School of Classical Studies at Athens.

8 Manuscript ‘Der Rohtabak’ by Kurt E. Heldern, PFR Reemtsma, Philipp F./Reemtsma Cigarettenfabriken, folder 115/52, pages 4-8, HISR.

9 Jacques Saporta to Central Committee for Tobacco Purchasing and Administration, 1932, A1S28Y1F17 Kentrikē Epitropē Agoras kai Diacheiriseōs Kapnōn [Central Committee for the Purchasing and Administration of Tobacco], items 39/156 and 39/157, Archives of the National Bank of Greece (NBG).

10 Manuscript ‘Der Rohtabak’ by Kurt E. Heldern, PFR Reemtsma, Philipp F./Reemtsma Cigarettenfabriken, folder 115/52, pages 4-8, HISR.

11 Transactions of this kind are documented in Kiehl to Hermann Reemtsma, 1935 and 1936, as well as in Wenkel to Kiehl, 1936 (R/8119F Deutsche Bank, folder 4747, Federal Archive Berlin-Lichterfelde).

12 Two such instances are documented in letters that Deutsche Bank director Kiehl addressed to Philipp Reemtsma on 30 August 1935 and 7 January 1936 (R/8119F Deutsche Bank, folder 4747, Federal Archive Berlin-Lichterfelde).

13 Minutes of the 29th meeting of the Central Committee for Tobacco Purchasing and Administration, A1S28Y1F19 Kentrikē Epitropē Agoras kai Diacheiriseōs Kapnōn, items 20/66-20/67, Archives of the NBG.

14 The cases of two merchants that defaulted in their debt with the Deutsche Bank are documented in Internal Deutsche Bank correspondence, 1931-1933, 13131 Deutsche Bank, Filiale Dresden [Dresden Branch], folder 225, Central State Archives Dresden (CSAD); Internal Deutsche Bank correspondence, 1930-1932, 13131 Deutsche Bank, Filiale Dresden, folder 388, CSAD.

15 Nikolaos Anastasiadēs had been a prominent merchant of Ottoman Macedonian tobaco in Dresden before World War I (Verband deutscher Zigarettentabakhändler [Association of German Cigarette Tobacco Merchants] to German Ministry of the Interior, 1915, 10736 Ministerium des Innern [German Ministry of the Interior], folder 7126, items 88-91, CSAD. Members of the Anastasiadēs family remained involved in tobacco trade and cigarete manufacturing throughout the interwar period (Deutsche Bank internal correspondence, 1938, 13131 Deutsche Bank, Filiale Dresden, folder 1226, CSAD. Information about the Gavriēloglous is available in Bibliographical note, registry no. 28/2010, file 31766, Archive of the Tobacco Museum of Kavala.

16 German consulate in Salonika to German Foreign Ministry, 1925, R Auswärtiges Amt des Deutschen Reiches, folder 242106, items 181-182, Political Archive of the German Foreign Ministry.

17 The report on the first year of the TMFG’s activities makes a specific reference to this law as the main motivation for the creation of the association. Report ‘Ē drasis tēs kata to prōton estos tēs idryseōs tēs’ [Its activity during the first year since its establishment], 1925, registry no. 26/2006, item 1692, Archive of the Tobacco Museum of Kavala.

18 Ibid.

19 Ibid.

20 Minutes of governing board meeting, 7/11/1930, Archeio Agrotikēs Trapezas tēs Ellados, Seira Praktika Dioikētikou Symvouliou [Archive of the Agricultural Bank of Greece, Collection of Minutes of the Governing Board], Historical Archive of the Piraeus Group Cultural Foundation (PGCF); High Economic Council of Greece (1937, III).

21 Department of International Operations to Legal Department, 1932, A1S8Y7 Ypēresia Eneggyōn Pistōseōn kai Eggyiseōn [Department of Letters of Credit and Security Deposits], folder 21, Archives of the NBG.

22 Photo of Greek Pavillion, 1927, 20202 Leipziger Messeamt [Leipzig Fair Office] (I), file F3711, Saxonian State Archive Leipzig.

23 Manuscript ‘Der Rohtabak’ by Kurt E. Heldern, PFR Reemtsma, Philipp F./Reemtsma Cigarettenfabriken, folder 115/52, pages 4-8, HISR.

24 Ibid., p. 7.

25 Ibid., p. 4.

26 Ibid., p. 7.

27 In 1933, the Bulgarian Agricultural Bank opened a sales office in Dresden with the purpose of selling tobacco leaves directly to manufacturers. German Embassy in Sofia to Auswärtiges Amt, 1933, R Auswärtiges Amt des Deutschen Reiches, folder 88864, item 167, Political Archive of the German Foreign Ministry.

28 The state company that had the monopoly over the domestic tobacco market in Turkey opened opened cigarette factories in Switzerland and Germany as a direct outlet for the crop. Zeitschrift der Türkischen Handelskammer für Deutschland 1 no. 5 (15 November 1928), 24. Also Mantzarēs (1929, p. 101).

29 In agriculture, the term primary processing refers to value-adding procedures performed upon a product as preparation for its storage, and/or further processing downstream the value chain (Fellows, 2011).

30 Decree on the processing of tobacco and the insurance of tobacco workers. Government Gazette, 15 July 1925. Decree on the modification of the decree of 11 July 1925 ‘on the processing…’, Efēmerís tēs Kyvernēseōs, 31 October 1927, vol. 1.

31 Circular letters, 10 September 1936 and 21 October 1939, Archeio Agrotikēs Trapezas tēs Ellados, Seira Engyklioi kai Diatagai [Collection of Circular Letters and Ordinances], Historical Archive of the PGCF.

32 Andreadēs to League of Offices for the Protection of Greek Tobacco, 1937, 262 Dioik. 18.01 Archeio tou Kapnologikou Institoutou Nomou Dramas [Archive of the Tobacco Research Institute of Drama], folder 1700, General State Archives Drama.

33 Representatives of the tobacco merchants Petridēs and Spyrantēs voiced their support for the prohibition of the seira pastal method, one of the most simple, in a government-sponsored congress in Kavala. See Kapnikē Syskepsis Kavállas (1937, pp. 163-170).

34 These were the concerns, for instance, of peasant cooperativist leader Petalōtēs, as expressed in Kapnikē Syskepsis Kavállas (1937, pp. 163-170).