WEBVTT 00:00:00.000 --> 00:00:04.519 You know, when you think about how a radical 00:00:04.519 --> 00:00:07.980 political militia funds its rise to power, your 00:00:07.980 --> 00:00:10.500 mind probably goes straight to like the obvious 00:00:10.500 --> 00:00:12.759 cinematic stuff. Right, like the movies. Exactly. 00:00:12.980 --> 00:00:16.519 You picture illicit weapons deals in dark alleys 00:00:16.519 --> 00:00:19.440 or secretive foreign backers funneling money 00:00:19.440 --> 00:00:21.719 through shell companies. Oh, yeah. Or maybe some 00:00:21.719 --> 00:00:24.300 high stakes bank robberies. Right. But what if 00:00:24.300 --> 00:00:27.359 I told you that one of the most notorious paramilitary 00:00:27.359 --> 00:00:30.719 groups in history actually funded a massive chunk 00:00:30.719 --> 00:00:33.979 of their violent street campaigns by doing something, 00:00:34.179 --> 00:00:37.960 well, Entirely mundane mundane. Yeah, they sold 00:00:37.960 --> 00:00:40.159 cigarettes It really does sound like a like a 00:00:40.159 --> 00:00:42.679 dark satirical comedy or something, but it is 00:00:42.679 --> 00:00:45.899 a very real very unsettling piece of economic 00:00:45.899 --> 00:00:47.960 and political history Yeah, it really is. It 00:00:47.960 --> 00:00:50.560 is essentially a story about how everyday consumer 00:00:50.560 --> 00:00:54.259 habits can be Literally weaponized. So today 00:00:54.259 --> 00:00:56.899 we are taking a deep dive into the Sturm cigarette 00:00:56.899 --> 00:01:00.170 company and Our source material for this is a 00:01:00.170 --> 00:01:02.530 really comprehensive Wikipedia article on the 00:01:02.530 --> 00:01:05.010 subject. It's quite the read. It is. And our 00:01:05.010 --> 00:01:08.230 mission today is to unpack this bizarre, terrifying 00:01:08.230 --> 00:01:13.030 intersection of consumer goods, corporate monopolies, 00:01:13.109 --> 00:01:16.430 and paramilitary funding in 1930s Germany. Which 00:01:16.430 --> 00:01:19.269 is just a wild combination. Truly wild. We're 00:01:19.269 --> 00:01:21.489 going to explore the actual mechanics of how 00:01:21.489 --> 00:01:24.549 an armed faction literally built a consumer brand 00:01:24.549 --> 00:01:28.120 from scratch. just to bankroll their ambitions. 00:01:28.359 --> 00:01:30.400 Yeah, and before we get into the actual mechanisms 00:01:30.400 --> 00:01:33.260 of how they pulled this off, there is an important 00:01:33.260 --> 00:01:35.319 note we really need to make regarding the nature 00:01:35.319 --> 00:01:37.819 of this history. Definitely. Because our source 00:01:37.819 --> 00:01:40.219 contains politically charged content regarding 00:01:40.219 --> 00:01:42.959 the Nazi party and its factions, we want to be 00:01:42.959 --> 00:01:45.459 clear that we are not taking any sides or endorsing 00:01:45.459 --> 00:01:47.420 the viewpoints of the content. We are simply 00:01:47.420 --> 00:01:49.760 reporting impartially on the historical ideas 00:01:49.760 --> 00:01:51.939 and facts contained in the original source material. 00:01:52.239 --> 00:01:55.340 Right. So to really understand how a militia 00:01:55.370 --> 00:01:57.969 of running a tobacco empire, you have to look 00:01:57.969 --> 00:02:00.609 at the landscape of the 1920s in the Weimar Republic. 00:02:00.730 --> 00:02:03.569 OK, set the scene for us. So the German tobacco 00:02:03.569 --> 00:02:05.890 industry at this time was undergoing massive, 00:02:05.890 --> 00:02:09.250 like, ruthless changes. A lot of smaller independent 00:02:09.250 --> 00:02:11.469 cigarette firms were shutting down. They were 00:02:11.469 --> 00:02:14.770 pushed out. Exactly. The market was rapidly consolidating. 00:02:14.810 --> 00:02:18.469 You had a few large, highly automated manufacturers 00:02:18.469 --> 00:02:21.469 stepping in, buying up the little guys, and just 00:02:21.469 --> 00:02:24.590 dominating the industry. Wow. And the Nazi Party. 00:02:24.590 --> 00:02:27.389 at this very time was aggressively attacking 00:02:27.389 --> 00:02:29.770 these large tobacco firms. They were out there 00:02:29.770 --> 00:02:32.090 publicly accusing them of having foreign and 00:02:32.090 --> 00:02:34.409 Jewish connections. So they're out in the streets 00:02:34.409 --> 00:02:37.189 publicly railing against these corporate monopolies. 00:02:37.210 --> 00:02:40.379 Right. Here is the massive pivot that we really 00:02:40.379 --> 00:02:43.259 need to figure out. How does an unfunded paramilitary 00:02:43.259 --> 00:02:45.280 group, specifically the SA, right, the storm 00:02:45.280 --> 00:02:47.699 of Thailand transition from just complaining 00:02:47.699 --> 00:02:50.400 about these tobacco monopolies to actually launching 00:02:50.400 --> 00:02:53.099 a massive, highly structured corporate enterprise 00:02:53.099 --> 00:02:56.479 of their own? The short answer. sheer unadulterated 00:02:56.479 --> 00:02:59.379 desperation. Desperation. Oh, yeah. By 1929, 00:02:59.539 --> 00:03:01.960 the SA had a major, major cash flow problem. 00:03:02.000 --> 00:03:04.379 They were expanding rapidly, but they charged 00:03:04.379 --> 00:03:06.659 no membership fees to join their ranks. Wait, 00:03:06.840 --> 00:03:09.960 none at all? None. So financially, they were 00:03:09.960 --> 00:03:12.360 entirely dependent on handouts from the Nazi 00:03:12.360 --> 00:03:14.740 Party leadership. Oh, wow. Yeah. If the party 00:03:14.740 --> 00:03:16.639 didn't cut them a check, they literally couldn't 00:03:16.639 --> 00:03:19.120 operate. They desperately needed an independent 00:03:19.120 --> 00:03:22.039 income source just to fund their day -to -day 00:03:22.039 --> 00:03:24.740 operations and expand their grip. on the streets. 00:03:25.379 --> 00:03:27.639 Okay, let's unpack this. You have a militia that 00:03:27.639 --> 00:03:30.400 needs cash. They have zero dues coming in and 00:03:30.400 --> 00:03:33.419 they have this massive growing restless membership 00:03:33.419 --> 00:03:36.080 base. Yep, exactly. Enter a man named Arthur 00:03:36.080 --> 00:03:41.699 Dressler. So in 1929, Dressler pitches what is 00:03:41.699 --> 00:03:44.099 essentially like a venture capital deal to the 00:03:44.099 --> 00:03:46.199 SA. That's a great way to put it. Says let's 00:03:46.199 --> 00:03:49.280 found a cigarette manufacturer together. The 00:03:49.280 --> 00:03:51.479 SA members will agree to smoke our cigarettes 00:03:51.479 --> 00:03:55.759 exclusively and in return, the SA as an organization 00:03:55.759 --> 00:03:58.819 gets a royalty. A very specific royalty too. 00:03:59.080 --> 00:04:01.560 Right, specifically 15 to 20 fennig for every 00:04:01.560 --> 00:04:03.439 thousand cigarettes sold. Yeah. They actually 00:04:03.439 --> 00:04:05.539 register the operation as the cigarette fabric 00:04:05.539 --> 00:04:08.180 dressler, but the actual consumer brand they 00:04:08.180 --> 00:04:09.939 were building was called the Zygret and Firma 00:04:09.939 --> 00:04:12.699 Sturm. And, you know, To put that royalty into 00:04:12.699 --> 00:04:15.180 perspective, it was about half a percent of the 00:04:15.180 --> 00:04:17.579 sales price, considering most of these cigarettes 00:04:17.579 --> 00:04:19.959 sold at roughly three and a third Fennig. Which 00:04:19.959 --> 00:04:22.360 doesn't sound like much. No, it sounds like pennies. 00:04:22.839 --> 00:04:25.959 But in volume, it was exactly the independent 00:04:25.959 --> 00:04:28.379 revenue stream the SA leadership was hunting 00:04:28.379 --> 00:04:31.779 for. It is wildly comparable to what we see today 00:04:31.779 --> 00:04:36.160 with modern influencer marketing. Oh, totally. 00:04:36.439 --> 00:04:38.949 Think about it. You have a massive internet personality 00:04:38.949 --> 00:04:41.750 with millions of followers. They launch a snack 00:04:41.750 --> 00:04:45.170 brand or like a hydration drink to monetize their 00:04:45.170 --> 00:04:46.730 dedicated audience. Right, because they know 00:04:46.730 --> 00:04:48.810 their fans will buy it just to support the brand. 00:04:49.050 --> 00:04:52.990 Exactly. Except in this 1929 version, the audience 00:04:52.990 --> 00:04:55.810 is an armed political militia. The influencer 00:04:55.810 --> 00:04:58.730 is the SA leadership. And the stakes aren't just 00:04:58.730 --> 00:05:01.310 grocery store market share, they're total national 00:05:01.310 --> 00:05:04.170 dominance. That is a chilling parallel, honestly. 00:05:04.370 --> 00:05:06.839 But structurally, it's exactly how mechanism 00:05:06.839 --> 00:05:09.339 function. They realized they had a captive consumer 00:05:09.339 --> 00:05:12.259 base. But having a loyal base and having a functional 00:05:12.259 --> 00:05:15.560 mass producing factory are two very different 00:05:15.560 --> 00:05:18.060 things. Right, you need actual machines and facilities. 00:05:18.540 --> 00:05:21.480 Exactly. So Dressler approached a Saxon Nazi 00:05:21.480 --> 00:05:24.439 party leader and eventually the SA chief of staff 00:05:24.439 --> 00:05:28.339 Otto Wagner showed interest. But here's the big 00:05:28.339 --> 00:05:31.860 hurdle. The Nazi party itself only offered 30 00:05:31.860 --> 00:05:35.000 ,000 Reichsmarks in startup money. Which, if 00:05:35.000 --> 00:05:37.019 you were trying to build an automated manufacturing 00:05:37.019 --> 00:05:39.819 operation to take on national monopolies, it's 00:05:39.819 --> 00:05:42.120 a complete drop in the bucket. You can't build 00:05:42.120 --> 00:05:44.660 an empire on 30 ,000 marks. Not even close. It 00:05:44.660 --> 00:05:47.360 actually took a wealthy, independent party supporter 00:05:47.360 --> 00:05:50.199 named Jacques Bettenhausen stepping in. OK, who's 00:05:50.199 --> 00:05:53.100 that? He was a businessman who ended up injecting 00:05:53.100 --> 00:05:57.170 a massive 500 ,000 Reichs marks of seed money 00:05:57.170 --> 00:05:59.649 just to get the factory infrastructure up and 00:05:59.649 --> 00:06:01.569 running. Half a million. Yeah, half a million 00:06:01.569 --> 00:06:04.829 marks. That sudden influx of capital was the 00:06:04.829 --> 00:06:06.930 real catalyst. So they get this massive seed 00:06:06.930 --> 00:06:09.730 money and they build the infrastructure. But 00:06:09.730 --> 00:06:12.410 creating a product is one thing, right? Actually 00:06:12.410 --> 00:06:14.870 convincing people to buy your product, especially 00:06:14.870 --> 00:06:17.810 in an economy completely devastated by the Great 00:06:17.810 --> 00:06:20.230 Depression that requires a highly calculated 00:06:20.230 --> 00:06:23.189 strategy. Oh, absolutely. And their product line 00:06:23.189 --> 00:06:26.569 was meticulously calculated to reflect the crushing 00:06:26.569 --> 00:06:29.569 economic reality of the 1930s. They produced 00:06:29.569 --> 00:06:32.009 four main brands. Right. You had the premium 00:06:32.009 --> 00:06:34.290 brand, New Front or New Front, which cost six 00:06:34.290 --> 00:06:37.189 fenig. Then you had Sturm at five and Alarm at 00:06:37.189 --> 00:06:40.029 four. But the real moneymaker, the one that completely 00:06:40.029 --> 00:06:42.569 took over the market, was their absolute cheapest 00:06:42.569 --> 00:06:45.990 brand, right? Trommler or the drummer. Yep, Trommler. 00:06:46.149 --> 00:06:49.579 It cost just three and a third fenig. And because 00:06:49.579 --> 00:06:52.000 the Great Depression had wiped out so much wealth, 00:06:52.459 --> 00:06:56.399 Trommler was a runaway hit. In 1932, 80 % of 00:06:56.399 --> 00:06:58.379 all their cigarettes sold were Trommler. And 00:06:58.379 --> 00:07:01.699 it gets crazier. Yeah, by 1933, that number skyrocketed 00:07:01.699 --> 00:07:05.339 to an incredible 95%. And they backed this cheap 00:07:05.339 --> 00:07:09.399 product with surprisingly sophisticated traditional 00:07:09.399 --> 00:07:11.339 marketing. They rolled out sound trucks in the 00:07:11.339 --> 00:07:13.379 streets. They even hired advertising airplanes 00:07:13.379 --> 00:07:16.220 to fly over cities. Wait, hold on. Airplanes. 00:07:16.439 --> 00:07:18.839 You just said a minute ago that the SA was begging 00:07:18.839 --> 00:07:21.759 for scraps, relying on party handouts, and couldn't 00:07:21.759 --> 00:07:23.420 even afford to start a factory. How are they 00:07:23.420 --> 00:07:26.040 suddenly funding a literal aerial ad campaign? 00:07:26.250 --> 00:07:29.529 Well, that is exactly where Jacques Bettenhausen's 00:07:29.529 --> 00:07:32.069 five hundred thousand mark seed money came into 00:07:32.069 --> 00:07:35.509 play. Right. The seed money. Exactly. Once they 00:07:35.509 --> 00:07:38.050 had that initial massive capital injection, they 00:07:38.050 --> 00:07:40.689 didn't just build the factory. They aggressively 00:07:40.689 --> 00:07:43.829 scaled their marketing apparatus. They had the 00:07:43.829 --> 00:07:46.250 budget to operate like a modern corporation. 00:07:46.389 --> 00:07:48.910 That makes sense. In their early print ads, they 00:07:48.910 --> 00:07:52.269 heavily used Nazi party imagery and an explicitly 00:07:52.269 --> 00:07:55.860 anti -monopoly political slogan. It was a against 00:07:55.860 --> 00:08:04.879 the trust and the combine. corporate monopolies 00:08:04.879 --> 00:08:07.040 and cartels of the era. Precisely. They are playing 00:08:07.040 --> 00:08:09.519 the populist card hard, telling the average struggling 00:08:09.519 --> 00:08:12.160 German worker, we are fighting the greedy mega 00:08:12.160 --> 00:08:14.459 corporations. And what's fascinating here is 00:08:14.459 --> 00:08:16.639 the underlying psychology of how they leverage 00:08:16.639 --> 00:08:19.939 the anxieties of that exact moment. Between 1930 00:08:19.939 --> 00:08:22.720 and 1932, during the absolute worst depths of 00:08:22.720 --> 00:08:25.500 the economic crash, their advertisements frequently 00:08:25.500 --> 00:08:27.980 depicted catastrophic situations. Really? Like 00:08:27.980 --> 00:08:31.449 what? Like riots or economic ruin. They weren't 00:08:31.449 --> 00:08:34.309 selling glamour. They were using the very real 00:08:34.309 --> 00:08:36.789 economic terror people were feeling to sell a 00:08:36.789 --> 00:08:39.889 vice. Why does that work, though? I mean, if 00:08:39.889 --> 00:08:42.509 I'm terrified about losing my job or starving, 00:08:43.250 --> 00:08:45.409 why would seeing a catastrophe in the newspaper 00:08:45.409 --> 00:08:47.929 make me buy a cigarette? Because nicotine is 00:08:47.929 --> 00:08:51.169 a stress reliever. And in a time of profound 00:08:51.169 --> 00:08:54.889 societal trauma, a cigarette is a tiny, affordable 00:08:54.889 --> 00:08:58.169 moment of relief. Oh, wow. That is dark. Very. 00:08:58.289 --> 00:09:00.169 They were signaling to a desperate population, 00:09:00.370 --> 00:09:02.149 the world is collapsing, everything is terrible, 00:09:02.350 --> 00:09:05.350 but you can afford a three -feneg moment of peace. 00:09:05.809 --> 00:09:08.509 And they tied that relief directly into military 00:09:08.509 --> 00:09:11.629 glorification. The SAA promoted themselves as 00:09:11.629 --> 00:09:13.809 a military training program, essentially the 00:09:13.809 --> 00:09:15.710 successors to the band Freikorps. And for anyone 00:09:15.710 --> 00:09:18.029 unfamiliar, the Freikorps were these rogue right 00:09:18.029 --> 00:09:20.690 -wing mercenary groups made up of angry World 00:09:20.690 --> 00:09:22.789 War I veterans that formed after Germany lost 00:09:22.789 --> 00:09:25.129 the war. Exactly. So the SAA is tapping into 00:09:25.129 --> 00:09:28.059 that aggressive militarist nostalgia. They sold 00:09:28.059 --> 00:09:30.059 these cigarettes with collectible sets of images 00:09:30.059 --> 00:09:32.940 featuring historical German military uniforms. 00:09:33.059 --> 00:09:35.700 Like trading cards. Right. They were making the 00:09:35.700 --> 00:09:38.179 prospect of serving in the army look incredibly 00:09:38.179 --> 00:09:41.820 appealing, tying patriotism and like masculine 00:09:41.820 --> 00:09:45.539 duty directly to smoking their specific brand. 00:09:45.659 --> 00:09:48.440 It was a brilliantly closed ecosystem of branding. 00:09:49.059 --> 00:09:51.320 You smoke our cheap brand to cope with the depression. 00:09:51.440 --> 00:09:53.159 You collect our patriotic trading cards. You 00:09:53.159 --> 00:09:56.210 support the political movement. But I have to 00:09:56.210 --> 00:09:57.950 stop you there because something in this narrative 00:09:57.950 --> 00:10:00.610 doesn't quite add up. Okay, what's up? If the 00:10:00.610 --> 00:10:02.769 marketing was so brilliant, if they had the airplanes, 00:10:03.029 --> 00:10:04.889 the sound trucks, the cool collectible cards, 00:10:04.950 --> 00:10:08.450 and the Trommler cigarettes were literally the 00:10:08.450 --> 00:10:11.250 cheapest option available during a massive economic 00:10:11.250 --> 00:10:15.110 depression, why did they need to resort to physical 00:10:15.110 --> 00:10:17.570 violence to sell them? That's a very good point. 00:10:17.750 --> 00:10:19.570 I mean, if the product is that well positioned, 00:10:20.230 --> 00:10:22.220 it should sell itself, shouldn't it? You'd think 00:10:22.220 --> 00:10:24.460 so. Yeah. But that is the crucial contradiction 00:10:24.460 --> 00:10:28.159 of the Sturm brand. And it reveals the dark underlying 00:10:28.159 --> 00:10:30.860 reality of this entire operation, because at 00:10:30.860 --> 00:10:32.539 the end of the day, they weren't relying on the 00:10:32.539 --> 00:10:37.940 free market. No, it was raw mafia style coercion. 00:10:38.299 --> 00:10:40.899 SA members weren't merely expected or encouraged 00:10:40.899 --> 00:10:43.039 to smoke Sturm cigarettes out of brand loyalty. 00:10:43.519 --> 00:10:46.100 They were violently compelled to. The source 00:10:46.100 --> 00:10:48.299 actually notes that there were literal bag searches. 00:10:48.720 --> 00:10:51.419 If an SA member was caught with a rival brand 00:10:51.419 --> 00:10:53.759 of cigarettes in their pocket, they were formally 00:10:53.759 --> 00:10:56.659 fined by their own unit. Exactly. And that coercion 00:10:56.659 --> 00:10:58.960 didn't stay internal. It spilled out into the 00:10:58.960 --> 00:11:01.860 streets, targeting the wider public and specifically 00:11:01.860 --> 00:11:05.440 the dominant market leader, this massive tobacco 00:11:05.440 --> 00:11:07.700 monopoly called re -UMSMA. But the big guys. 00:11:07.919 --> 00:11:10.879 The essay didn't just agitate with boycotts. 00:11:11.059 --> 00:11:13.399 Essaymen would organize and physically attack 00:11:13.399 --> 00:11:15.960 independent shops that dared to sell Riemsma 00:11:15.960 --> 00:11:17.720 brands. Like actually attack them. Oh, yeah. 00:11:17.840 --> 00:11:21.500 They smashed shop windows. They physically assaulted 00:11:21.500 --> 00:11:23.399 the shop workers who were just, you know, trying 00:11:23.399 --> 00:11:25.139 to make a living. So it's not a business success 00:11:25.139 --> 00:11:27.159 story at all. It's an extortion racket. Completely. 00:11:27.399 --> 00:11:29.840 They created a monopoly inside their own ranks 00:11:29.840 --> 00:11:32.799 through fines and bag searches, and they suppressed 00:11:32.799 --> 00:11:34.820 the outside competition through broken glass 00:11:34.820 --> 00:11:37.379 and physical beatings. And the terrifying part 00:11:37.230 --> 00:11:41.710 is it worked perfectly. It really did. This brutal 00:11:41.710 --> 00:11:44.490 combination of cheap products, psychological 00:11:44.490 --> 00:11:48.070 catastrophe marketing, and literal street violence 00:11:48.070 --> 00:11:51.350 brought in rivers of cash. It did. And the immense 00:11:51.350 --> 00:11:54.029 scale of that newly acquired wealth completely 00:11:54.029 --> 00:11:56.830 transformed the SA while simultaneously creating 00:11:56.830 --> 00:11:59.750 a massive ideological contradiction at the very 00:11:59.750 --> 00:12:01.610 top of the German state. Let's break down the 00:12:01.610 --> 00:12:03.610 math on this because we really need to understand 00:12:03.610 --> 00:12:05.629 the sheer windfall we are talking about here. 00:12:05.909 --> 00:12:09.059 At the time, A typical German smoker went through 00:12:09.059 --> 00:12:12.100 about 15 cigarettes a day. Which is pretty standard. 00:12:12.320 --> 00:12:13.919 Right. The source points out that's actually 00:12:13.919 --> 00:12:17.220 fairly similar to modern smoking rates. But the 00:12:17.220 --> 00:12:19.000 financial burden on the individual was entirely 00:12:19.000 --> 00:12:22.100 different. An average intensity Trommler smoker, 00:12:22.320 --> 00:12:24.639 making an average wage, would spend roughly a 00:12:24.639 --> 00:12:27.240 tenth of their gross income just on cigarettes. 00:12:27.740 --> 00:12:29.159 Think about the psychological weight of that 00:12:29.159 --> 00:12:31.720 for a second. Ten percent of your pre -tax income. 00:12:31.919 --> 00:12:34.960 That's massive. And remember, this is the Great 00:12:34.960 --> 00:12:38.320 Depression. Unemployment had peaked at over 30 00:12:38.320 --> 00:12:41.159 percent. Many of the people joining the essay 00:12:41.159 --> 00:12:44.399 didn't even have a regular wage. The militia 00:12:44.399 --> 00:12:47.679 actively recruited among the desperate, the unemployed 00:12:47.679 --> 00:12:50.580 and the underemployed. So what does this all 00:12:50.580 --> 00:12:53.200 mean? Imagine looking at your paycheck today, 00:12:53.580 --> 00:12:56.179 whatever it is, and taking a full 10 percent 00:12:56.179 --> 00:12:59.659 of it before rent, before groceries and literally 00:12:59.659 --> 00:13:02.519 burning it on a coping mechanism. It's unbelievable. 00:13:02.820 --> 00:13:05.000 That is the level of addiction and brand loyalty 00:13:05.000 --> 00:13:07.519 we are talking about. And because the SA was 00:13:07.519 --> 00:13:10.919 getting a cut of 15 to 20 fennig for every thousand 00:13:10.919 --> 00:13:13.720 sold, the profits at the top were staggering. 00:13:13.980 --> 00:13:15.720 Yeah, the source breaks it down nicely. All right, 00:13:15.720 --> 00:13:17.620 it says 100 marks would be the earnings from 00:13:17.620 --> 00:13:20.700 500 ,000 cigarettes. Because the typical SA unit 00:13:20.700 --> 00:13:22.919 represented just over a thousand constant smokers, 00:13:23.159 --> 00:13:25.340 an average SA unit was suddenly pulling in hundreds 00:13:25.340 --> 00:13:27.860 of Reich's marks every single month just for 00:13:27.860 --> 00:13:30.850 smoking. By 1930, the firm was paying dividends 00:13:30.850 --> 00:13:34.049 directly to the SA. And by 1932, the annual turnover 00:13:34.049 --> 00:13:36.830 for the Sturm Cigarette Company was an eye -watering 00:13:36.830 --> 00:13:40.740 36 million Reichsmarks. 36 million. Yeah. To 00:13:40.740 --> 00:13:42.879 put that in a modern context, that's equivalent 00:13:42.879 --> 00:13:46.879 to roughly 148 million euros today. Wow. They 00:13:46.879 --> 00:13:49.940 use this massive influx of cash to buy new buildings, 00:13:50.399 --> 00:13:53.259 equip new factories and fund even more aggressive 00:13:53.259 --> 00:13:56.259 advertising. So we have an armed militia practically 00:13:56.259 --> 00:13:58.679 swimming in cigarette money, essentially running 00:13:58.679 --> 00:14:02.019 their own parallel economy. But here is the glaring 00:14:02.019 --> 00:14:04.820 hypocrisy in all of this. The leader of the Nazi 00:14:04.820 --> 00:14:08.899 Party, Adolf Hitler, was famously rabidly anti 00:14:08.899 --> 00:14:11.179 -smoking. Oh he despised it. He despised the 00:14:11.179 --> 00:14:13.679 habit. He even ordered localized smoking bans 00:14:13.679 --> 00:14:16.080 across the party. And this is where we see a 00:14:16.080 --> 00:14:18.480 fundamental truth about how totalitarian states 00:14:18.480 --> 00:14:21.279 operate. If we connect this to the bigger picture, 00:14:21.899 --> 00:14:24.799 ideology almost always bows to state revenue. 00:14:24.960 --> 00:14:27.759 Money talks. Always. Hitler's localized bans. 00:14:27.799 --> 00:14:30.779 They were widely ignored. Why? Because the finance 00:14:30.779 --> 00:14:33.559 ministry absolutely loved the taxes that the 00:14:33.559 --> 00:14:35.279 tobacco industry brought in. And it wasn't just 00:14:35.279 --> 00:14:37.539 pocket change either. The source notes that by 00:14:37.539 --> 00:14:41.480 1941, tobacco taxes made up about a 12th of all 00:14:41.480 --> 00:14:43.879 state revenues. The 12th? That's a massive chunk 00:14:43.879 --> 00:14:46.730 of budget. You cannot run a government, let alone 00:14:46.730 --> 00:14:49.669 a war machine, if you suddenly cut off 8 percent 00:14:49.669 --> 00:14:52.470 of your total national income. Furthermore, aside 00:14:52.470 --> 00:14:54.809 from the taxes, the advertising revenues, and 00:14:54.809 --> 00:14:58.009 the royalties Sturm was pulling in, Nazi organizations 00:14:58.009 --> 00:15:00.850 were accepting millions of Reichsmarks in donations 00:15:00.850 --> 00:15:03.970 and straight -up bribes from the wider traditional 00:15:03.970 --> 00:15:06.610 cigarette industry. The propaganda minister, 00:15:06.909 --> 00:15:08.970 Joseph Goebbels, ended up being the decisive 00:15:08.970 --> 00:15:11.490 voice on this, right? He did. He literally deemed 00:15:11.490 --> 00:15:14.649 cigarettes essential. to the war effort. Yeah. 00:15:15.370 --> 00:15:17.570 The state viewed the addictive properties as 00:15:17.570 --> 00:15:20.809 a necessary tool for morale. They were so essential 00:15:20.809 --> 00:15:23.029 that cigarettes were distributed for free to 00:15:23.029 --> 00:15:25.509 soldiers as part of their regular pay. Yeah. 00:15:25.509 --> 00:15:27.210 And that included minors who had been drafted 00:15:27.210 --> 00:15:29.649 into service. Unbelievable. The result of all 00:15:29.649 --> 00:15:32.990 this state sponsored top down addiction. Between 00:15:32.990 --> 00:15:36.590 1930 and 1940, the per capita cigarette consumption 00:15:36.590 --> 00:15:40.110 in Germany literally doubled from 500 to 1000 00:15:40.110 --> 00:15:42.429 cigarettes a year. Tens of billions were being 00:15:42.429 --> 00:15:45.309 sold annually. So you have this incredibly volatile 00:15:45.309 --> 00:15:47.610 environment. The S .A. is getting incredibly 00:15:47.610 --> 00:15:50.230 rich and powerful, operating almost as a state 00:15:50.230 --> 00:15:53.070 within a state, and causing massive economic 00:15:53.070 --> 00:15:56.230 disruption in the streets. Right. But the corporate 00:15:56.230 --> 00:15:58.570 giant they had been physically attacking Aramsma 00:15:58.570 --> 00:16:00.610 was not just going to sit back and watch their 00:16:00.610 --> 00:16:02.730 market share get beaten out of shopkeepers' hands. 00:16:02.750 --> 00:16:05.409 Right. Because if you are Philip Aramsma, the 00:16:05.409 --> 00:16:08.269 CEO of this massive monopoly, you are losing 00:16:08.269 --> 00:16:11.289 money every single day to street thugs breaking 00:16:11.289 --> 00:16:14.240 your shop windows. And you can't just call the 00:16:14.240 --> 00:16:16.799 police because the street thugs are quickly becoming 00:16:16.799 --> 00:16:19.279 the state apparatus. So what is your next move? 00:16:19.580 --> 00:16:21.899 You handle it the way massive corporations often 00:16:21.899 --> 00:16:23.840 handle existential threats. You buy your way 00:16:23.840 --> 00:16:26.700 out. Exactly. And this leads directly to the 00:16:26.700 --> 00:16:31.360 ultimate corporate coup. It is June 1932. Philip 00:16:31.360 --> 00:16:34.620 Rimsma manages to secure a direct face -to -face 00:16:34.620 --> 00:16:37.940 meeting with Adolf Hitler, Rudolf Hess, and Max 00:16:37.940 --> 00:16:40.490 Salmon. Now, Ammann is a crucial figure here. 00:16:40.850 --> 00:16:43.070 He was Hitler's secretary and the head of the 00:16:43.070 --> 00:16:46.230 party's massive printing house. At this point, 00:16:46.429 --> 00:16:48.830 Ramsma's advertisements had been completely banned 00:16:48.830 --> 00:16:51.370 from Nazi Party publications by the SA. Which 00:16:51.370 --> 00:16:53.830 was actually a massive tactical error by the 00:16:53.830 --> 00:16:56.769 SA because that ad ban was bleeding the Nazi 00:16:56.769 --> 00:16:59.419 Party dry. The party's publications were losing 00:16:59.419 --> 00:17:02.240 a fortune without Rimsma's ad money, and the 00:17:02.240 --> 00:17:04.440 party desperately needed cash for their upcoming 00:17:04.440 --> 00:17:07.119 election campaigns. Right. They needed that corporate 00:17:07.119 --> 00:17:10.339 money. So in this meeting, Hitler initially scolds 00:17:10.339 --> 00:17:13.460 Rimsma for having Jewish partners, but the sheer 00:17:13.460 --> 00:17:17.579 desperate need for cash wins out instantly. They 00:17:17.579 --> 00:17:20.200 agree to an initial deal where Rimsma simply 00:17:20.200 --> 00:17:22.640 buys half a million marks worth of advertising 00:17:22.640 --> 00:17:24.880 space. He literally just buys his way back into 00:17:24.880 --> 00:17:27.230 their good graces. It's that simple. But he knows 00:17:27.230 --> 00:17:29.349 that an ad buy isn't going to stop the SA from 00:17:29.349 --> 00:17:32.589 smashing his windows. So moving into 1933 and 00:17:32.589 --> 00:17:36.369 1934, as the Nazis cement their power, Riemsma 00:17:36.369 --> 00:17:38.950 escalates a strategy. He goes straight over the 00:17:38.950 --> 00:17:41.150 SA's head to Hermann Göring, who is the highest 00:17:41.150 --> 00:17:43.329 official in Prussia at the time. OK, taking it 00:17:43.329 --> 00:17:46.910 to the top. Exactly. Riemsma asks Göring to do 00:17:46.910 --> 00:17:49.130 something about the SA's street violence and 00:17:49.130 --> 00:17:51.329 the various corruption charges the SA has drummed 00:17:51.329 --> 00:17:54.109 up against his company. It is basically a high 00:17:54.109 --> 00:17:57.519 stakes mafia protection racket. Ramspa is paying 00:17:57.519 --> 00:18:00.299 the mob boss to call off his ankle breaker. That's 00:18:00.299 --> 00:18:02.940 exactly what it is. And Goering's response is 00:18:02.940 --> 00:18:07.299 purely transactional. In early 1934, Guring magically 00:18:07.299 --> 00:18:10.160 calls off the court cases against Riemsma, the 00:18:10.160 --> 00:18:13.660 price for the state protection. A massive three 00:18:13.660 --> 00:18:16.619 million mark bribe. Three million! And it wasn't 00:18:16.619 --> 00:18:19.119 a one -time fee. Riemsma subsequently paid Guring 00:18:19.119 --> 00:18:21.339 an additional one million marks every single 00:18:21.339 --> 00:18:24.019 year, on top of making substantial ongoing donations 00:18:24.019 --> 00:18:26.680 to the party. He essentially bought the protection 00:18:26.680 --> 00:18:29.180 of the state against the state's own paramilitary 00:18:29.180 --> 00:18:31.670 wing. And the timing of this corporate payoff 00:18:31.670 --> 00:18:34.490 perfectly aligns with one of the bloodiest political 00:18:34.490 --> 00:18:37.029 purges in history. Here's where it gets really 00:18:37.029 --> 00:18:40.230 interesting and incredibly violent. In July 1934, 00:18:40.349 --> 00:18:42.690 the regime executes the infamous Night of the 00:18:42.690 --> 00:18:45.470 Long Knives. Hitler and Goering purged their 00:18:45.470 --> 00:18:48.650 own ranks, specifically wiping out the entire 00:18:48.650 --> 00:18:51.630 leadership of the SA. These were the very men 00:18:51.630 --> 00:18:54.009 who had built the Sturm Cigarette Company, the 00:18:54.009 --> 00:18:56.109 ones who had profited off the royalties, the 00:18:56.109 --> 00:18:58.029 ones who owned shares in the factories. Guy. 00:18:58.329 --> 00:19:00.589 In the span of a few days, they were suddenly 00:19:00.589 --> 00:19:03.390 either dead or imprisoned. And with the old SA 00:19:03.390 --> 00:19:05.650 leadership entirely eliminated, the physical 00:19:05.650 --> 00:19:08.650 and economic threat to Riemsma evaporates overnight. 00:19:09.369 --> 00:19:12.809 The new, significantly weaker leader of the SA, 00:19:13.069 --> 00:19:16.029 Viktor Lutsi, steps in. Yeah, one happens. Riemsma 00:19:16.029 --> 00:19:18.970 makes a few quiet inquiries, and almost immediately, 00:19:19.450 --> 00:19:22.230 Lutsi entirely cancels the Adar's manufacturing 00:19:22.230 --> 00:19:25.079 contract with Sturm Cigarettes. It is the ultimate 00:19:25.079 --> 00:19:27.740 cynical corporate irony. Truly. The SA, this 00:19:27.740 --> 00:19:30.220 once fearsome street militia that built a multi 00:19:30.220 --> 00:19:32.720 -million mark brand through broken windows, forced 00:19:32.720 --> 00:19:35.019 loyalty and aggressive catastrophe marketing 00:19:35.019 --> 00:19:38.880 strikes a new sanitized deal with the very corporate 00:19:38.880 --> 00:19:41.579 giant they used to attack. The new SA leadership 00:19:41.579 --> 00:19:45.079 agrees to let Riemsma produce the SA cigarettes 00:19:45.079 --> 00:19:48.759 in exchange for a fixed sum of 250 ,000 Reichsmarks 00:19:48.759 --> 00:19:51.220 paid annually. They went from being independent 00:19:51.220 --> 00:19:54.319 corporate raiders to being quiet. paid contractors 00:19:54.319 --> 00:19:56.759 for the monopoly. Meanwhile, the Ziegrand firm 00:19:56.759 --> 00:19:59.940 of Sturm is left with warehouses full of unsellable 00:19:59.940 --> 00:20:04.220 inventory. By 1935, the company that had effectively 00:20:04.220 --> 00:20:06.839 armed and funded a political movement quietly 00:20:06.839 --> 00:20:09.640 filed for bankruptcy. Wow. Corporate bribery 00:20:09.640 --> 00:20:12.059 and backroom deals had completely and utterly 00:20:12.059 --> 00:20:15.660 neutralized a paramilitary monopoly. So as we 00:20:15.660 --> 00:20:17.779 wrap up this deep dive, take a moment to really 00:20:17.779 --> 00:20:20.019 absorb the sheer whiplash of this historical 00:20:20.019 --> 00:20:23.869 arc. We watched a broke desperate militia create 00:20:23.869 --> 00:20:26.549 a consumer brand from scratch to solve a cash 00:20:26.549 --> 00:20:29.410 flow problem. We saw them use psychological manipulation, 00:20:29.869 --> 00:20:32.470 brute physical force, and extortion to enforce 00:20:32.470 --> 00:20:35.970 brand loyalty and rake in millions. And then, 00:20:36.329 --> 00:20:38.630 at the absolute height of their power, we watched 00:20:38.630 --> 00:20:41.829 a massive corporate monopoly use exorbitant bribes 00:20:41.829 --> 00:20:44.390 to buy the favor of the regime's elite, ultimately 00:20:44.390 --> 00:20:46.910 crushing the militia's business empire and buying 00:20:46.910 --> 00:20:48.849 their market shareback. It's a lot to take in. 00:20:49.009 --> 00:20:52.349 It is. The big takeaway for you here is to never 00:20:52.599 --> 00:20:55.940 ever underestimate how deeply everyday consumer 00:20:55.940 --> 00:20:58.980 goods, something as simple, cheap, and disposable 00:20:58.980 --> 00:21:01.359 as a pack of cigarettes, can be entangled in 00:21:01.359 --> 00:21:04.220 the massive funding of radical political movements 00:21:04.220 --> 00:21:07.140 and the brutal reality of crony capitalism. It 00:21:07.140 --> 00:21:09.920 is a stark reminder of how money, politics, and 00:21:09.920 --> 00:21:12.599 violence often balance on the exact same ledger. 00:21:12.720 --> 00:21:15.180 Definitely. And before we go, this raises an 00:21:15.180 --> 00:21:17.680 important question, one final deeply complex 00:21:17.680 --> 00:21:19.559 tension from the source material that is worth 00:21:19.559 --> 00:21:23.269 pondering on your own. Remenzma Company's Jewish 00:21:23.269 --> 00:21:26.130 partners and employees. The source explicitly 00:21:26.130 --> 00:21:28.690 notes that while Philipp Remenzma was actively 00:21:28.690 --> 00:21:31.049 funneling millions of marks in bribes to figures 00:21:31.049 --> 00:21:33.009 like Hitler and Goering to secure a corporate 00:21:33.009 --> 00:21:35.609 monopoly, the company was simultaneously using 00:21:35.609 --> 00:21:38.069 its vast resources to help its Jewish partners 00:21:38.069 --> 00:21:40.990 and many Jewish employees emigrate safely out 00:21:40.990 --> 00:21:44.599 of Germany. Wait, really? Yes. So how do we even 00:21:44.599 --> 00:21:47.920 begin to reconcile that mechanism? A corporation 00:21:47.920 --> 00:21:51.099 effectively funding a totalitarian regime's elite, 00:21:51.720 --> 00:21:54.359 ensuring the regime's financial survival while 00:21:54.359 --> 00:21:57.119 simultaneously using that exact same corporate 00:21:57.119 --> 00:22:00.160 power to rescue its own people from the terror 00:22:00.160 --> 00:22:03.200 of that very same regime. Wow. It is a profound, 00:22:03.480 --> 00:22:06.579 almost paralyzing contradiction, and it is exactly 00:22:06.579 --> 00:22:09.240 the kind of messy, uncomfortable reality that 00:22:09.240 --> 00:22:12.079 makes history so vital to study. I couldn't agree 00:22:12.079 --> 00:22:13.819 more. Thank you for taking the deep dive with 00:22:13.819 --> 00:22:15.880 us today. Keep questioning the unseen stories 00:22:15.880 --> 00:22:17.720 behind the everyday items you see on the shelves, 00:22:17.980 --> 00:22:19.119 and we will get you on the next one.