In the early 1930s, if you wanted to fund the
most violent paramilitary group in Germany, 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 betting
account or, you know, smuggle gold across a border.
You just had to walk into a corner store and
buy a cheap pack of cigarettes. A brand called
Trommler specifically. Exactly. And it completely
upends our standard perception of how extremist
movements build their war chests. Oh, absolutely.
I mean, we are so conditioned to look for grand
dramatic villainy 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.
And 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 SA. The Sturmabteilung, 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 listeners. Very important
point here. Right. Because our source deals with
the Nazi party and the SA. We are explicitly
stating that our goal today is absolutely not
to endorse or validate or make 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.
So 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 bake
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 funding.
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
were they surviving? I mean, if you have thousands
of men marching around, you have to feed them.
You have to clothe them. Right. And house 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. OK, 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? Because they were
actively attacking this consolidated tobacco
industry in their propaganda. They 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 He says your SA members
will exclusively smoke our product and in exchange
the SA 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 cigarettes
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 Drethler, though it became known as
Zigaret and Firma Sturm. The Sturm Cigarette
Company. Yeah. So the Nazi Party leadership offered
30 ,000 Reichsmarks in startup money. Which,
for setting up an automated manufacturing operation
to compete with corporate giants, 30 ,000 marks
is practically an insult. Oh, it wouldn't even
cover the cost of the industrial rolling machinery.
Let alone 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 Bettenhausen. had to
step in. He injected a staggering 500 ,000 Reichsmarks.
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
Bettenhausen's capital, the Sturm Cigarette Company
would never have existed. Right. He bankrolled
the infrastructure necessary to actually monetize
the SA's base. But I have to push back here because
this underlying business strategy still seems
fundamentally flawed to me. How so? Well 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 SA specifically
recruited heavily from these unemployed desperate
young men. They 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 wasn't optional. No. A typical
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. Ten percent. Ten
percent. I mean, let that sink in for a moment
for you listening right now. Imagine taking ten
percent 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. It's terrifying,
but it illustrates the raw power of the addiction
model. Yeah. For the essay. Nicotine edition
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 essay
still had to convince or I guess more accurately,
force the population to abandon their preferred
brands and buy Sturm 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 their impoverished
base. OK, 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 six fenig a cigarette. Right. Then you had
Sturm, meaning storm, at five fenig, alarm at
four fenig, and at the very bottom, Trommler,
or Drummer, which was the absolute cheapest at
three and a third Fennig. And the sales data
perfectly reflects the crushing reality of the
Great Depression, the premium brands. They were
essentially window dressing. Nobody was buying
the six Fennig ones. Exactly. The source notes
that in 1932, a massive 80 % of all Sturm cigarettes
sold were the dirt cheap Trommler brand. Fee
percent. Yeah. And as the economy worsened into
1933, that jumped to 95%. So they were running
a volume business on the absolute poorest segment
of society. But they didn't just rely on cheap
prices. The marketing machine they built around
Trommler and the other brands was incredibly
aggressive. Oh, yeah. The source talks about
how they had dedicated sound trucks driving through
neighborhoods just blaring advertisements. It
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. Their early advertising heavily featured
the slogan, against the trust and the combine.
Directly attacking those established corporate
monopolies we discussed earlier. Exactly. During
the worst of the economic crash, between 1930
and 1932, their print ads 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 uniforms.
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. The SA used it
to avoid being banned by the government. Right.
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, Fracor Malicious.
Yes. What exactly were the Fracor, and why does
putting their uniforms on collectible cigarette
cards actually matter. So the Freikorps were
rogue right wing paramilitary units composed
of bitter veterans that formed immediately after
Germany lost the First World War. 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 Freikorps uniforms
the SA was psychologically grooming its consumers.
Normalizing the violence. Right. They were making
the prospect of militarization and 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, but 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. SA members were compelled to smoke Sturm
cigarettes under threat of physical and financial
punishment. It was an internal mandate, enforced
through systematic humiliation and penalization.
Bag searches, right. Exactly. If you were a member
of the SA, 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. 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. Right. The SA 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, Riesmaes.
And they didn't just write angry op -eds about
Riemsma. SA men physically attacked the retail
shops that dared to stock Riemsma products. Physical
violence. They smashed storefront windows. They
drag 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. OK, 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 gonna say. Right. There is a massive
historical contradiction staring us right in
the face. Yeah. It is heavily documented that
Adolf Hitler was famously rabidly anti -smoking.
Oh, 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 bans across party offices
in certain public spaces. But the source explicitly
notes those bans 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?
especially 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 Goble
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 1 ,000. They
were selling tens of billions of cigarettes annually.
And in the early 1930s, the SA's Sturm Cigarette
Company was riding the crest of that wave. By
1932, Sturm had achieved a massive turnover of
36 million Reichsmarks. 36 million. Just to put
that in perspective, that is roughly equivalent
to 148 million euros today. It was a fortune.
A typical SA 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 Furkegot 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 essay 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.
What a classic move. In June 1932, Remembrance
was secured as a face -to -face meeting with
Adolf Hitler, Rudolf Hess, and Max Ehmann, 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 Remos'
lucrative ads are banned. Right. The party is
also desperate for immense amounts of cash for
upcoming election campaigns. Rinsma, 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.
Ideological 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 state power.
By 1933, Rimsma realizes he needs permanent protection.
So he goes straight to Herman Goering, who was
then the highest official in Prussia. Rimsma
complains about the ongoing SA Street violence
against his company, and he also mentions some
pesky corruption charges he's personally facing
from state prosecutors. And Goering's response
is a master class in autocratic corruption. Tell
me about it. He casually quashes the court cases
against Rimsma in early 1934. and the price for
that absolute legal immunity. 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 Riamsma, paying massive bribes directly
to the highest political elites, Hitler, Hasker,
But down on the street level, the paramilitary
grunts of the SA are still violently enforcing
their own competing Sturm 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 knives. Right. This was Hitler's massive,
bloody purge of the entire essay leadership.
Hitler viewed the essay's growing power and independence
as a direct threat to his consolidation of the
military and the state. So the top brass of the
SA is completely wiped out in a matter of days.
Yes. And crucially, the very SA leaders who had
profited the most from the Sturm cigarette royalties,
many of whom personally owned lucrative shares
in the company, were suddenly dead or imprisoned.
And with the old fiercely independent SA leadership
assassinated, the corporate takeover is completed
with basically zero resistance. The newly appointed
SA leader, a man named Victor Luzzi, steps in
and almost immediately cancels the SA's manufacturing
contract with Sturmcigarettes. Tears it up. 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 essay's independence.
What were the terms? Rimsma simply agrees to
pay a fixed lump sum to the essay, which was
250 ,000 Reichsmarks in 1934, to become the sole
official producer of the essay's cigarettes.
The layers of irony here are incredibly dark.
First, Rimsma's Jewish partners and employees,
the very people the essay uses ideological justification
for their violence, successfully emigrated. and
notably with Remesma's financial help. Right.
Second, the Sturm cigarette company suddenly
cut off from its captive audience of essay enforcers
and left with a warehouse full of unsellable
trauma cigarettes quietly files for bankruptcy
in 1935. The self -proclaimed anti -corporate
street warriors of the essay, who built a brand
screaming against the trust in the combine, were
ultimately swallowed whole by the exact corporate
combine they tried to beat in the streets. Big
tobacco won 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 won purely through grand historical
speeches, massive election campaigns, and high
-minded policy debates. Right. 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. It was
literally financed penny by penny, or fennig
by fennig, at the checkout counter, fueled by
physiological addiction and enforced by the threat
of violence. It really demands that we look critically
at the intersection of corporate monopolies,
state power, and the goods we consume blindly.
Absolutely. The 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. It's a chilling
thought. Something to think about the next time
you tap your card at the counter. Thank you for
joining us on this deep dive. We'll catch you
next time.