Georg Karg

Georg Karg (August 2, 1888 - November 27, 1972 in Bad Homburg vor der Höhe) was a German businessman in the department store industry.[1] After rising in the employ of the Hermann Tietz Department Stores,[2][3] Karg took over the company when it was Aryanized, that is forcibly transferred to non-Jewish owners under the Nazis. After the Jewish owners were forced out, Karg was appointed managing director, running the stores under the name Hertie.[4]

Life

Born on August 2, 1888, in Friedeberg in der Neumark, Karg was the seventh child of ten siblings of the small cloth manufacturer and later textile retailer Karl Karg and his wife Luise. After an apprenticeship in the textile department store F. R. Knothe in the neighboring district town of Meseritz, Karg began working in 1908 as a simple textile salesman in a department store of Adolf Jandorf's Berlin department store chain. Thanks to his diligence and near-photographic memory, Jandorf promoted him to textile buyer after just one year. In 1913, Jandorf appointed him general manager of the second largest Jandorf department store on Wilmersdorfer Strasse with 600 employees.

After the sale of the Jandorf chain to the Hermann Tietz Group at the end of 1926, Karg became head of central textile purchasing at Hermann Tietz OHG. This made him "one of the best-paid department store managers in Germany" and in 1931 he could afford to turn down a lucrative offer from the Karstadt Group of 500,000 Reichsmarks in annual salary.[3]

Nazi era

The takeover of the Tietz stores by the non-Jewish Georg Karg is considered an example of the role of banks and private businessmen in the Aryanization of Jewish-owned business under the Nazis.[5][6]

The Jewish-owned Tietz Group was, like the Wertheims and several other department stores, targeted by the Nazis. The Nazi-organized boycotts hurt business.[7] A promised loan of 14.5 million Reichsmarks by the semi-public Akzept- und Garantiebank at the beginning of 1933 was canceled after Hitler came to power in February 1933.[8] Dresdner Bank, which had been nationalized in 1932, Deutsche Bank and others took advantage of the company's liquidity crisis to expel the Jewish shareholders of Hermann Tietz OHG ("Aryanization").[9][10][11]

Jews working at the store were fired. Creditor banks founded Hertie Kaufhaus-Beteiligungs-Gesellschaft m.b.H. (Hertie GmbH for short) shortly thereafter in July 1933.[9] On July 29, 1933, the banking consortium forced Hugo Zwillenberg's resignation from the management, and his replacement by the non-Jewish Karg. On August 18, 1934, Georg and Martin Tietz were removed from the management and ownership of the company. The Jewish shareholders had to surrender their shares to Hertie GmbH and were paid less than 10%:[12] 1.5 million Reichsmarks for their severely undervalued company assets with an actual value of 21.5 million Reichsmarks.

Karg introduced a new accounting system and slashed salaries. Karg later bought out the banking group's shares in Hertie GmbH in two installments, in 1936 against payment of 2.5 million Reichsmarks partly on credit and another 50 percent in June 1940; at the same time, Karg took over the Tietz Group's debts of 129 million Reichsmarks. Despite this amount of debt, Ladwig-Winters did not consider the Tietz Group to be a "bankrupt company" at that time, but rather as "economically extremely resilient".

In 1939, Josef Neckermann and Georg Karg founded the Zentrallagergemeinschaft für Bekleidung GmbH (ZLG), which produced and supplied textiles and clothing initially for German construction workers as well as for forced laborers, and later also for the Wehrmacht.

Reconstruction after 1945

At the end of the war, most of the Hertie Group's stores were in the Soviet occupation zone while many of those in the west had been destroyed. Karg nevertheless decided to continue running the stores.

In 1949, Karg reached a settlement concerning the Nazi-era expropriation of the Jewish Tietz family.[13]

In 1953, Karg established the Hertie Foundation with the entire department store assets of more than DM 1 billion as a contribution. After the fall of the Berlin Wall, the foundation participated in the then current trend of founding private universities with the Hertie School of Governance.

At Karg's death in 1972, the department store group consisted of 72 Hertie department stores and 29 branches of the Bilka department stores, with sales of DM 5.1 billion and around 60,000 employees. His son Hans-Georg Karg took over the management of the company in 1972. Karg junior sold Hertie to Karstadt in 1994.[14]

Literature
  • Hans Otto Eglau: Georg Karg. Der Herr von Hertie. In: Ders.: Die Kasse muß stimmen. So hatten sie Erfolg im Handel. Econ, Düsseldorf 1972, ISBN 3-430-12325-9, S. 33–49.
  • Friedrich W. Köhler: Zur Geschichte der Warenhäuser. Seenot und Untergang des Hertie-Konzerns. Haag + Herchen, Frankfurt am Main 1997, ISBN 3-86137-544-3.
  • Simone Ladwig-Winters: Wertheim – ein Warenhausunternehmen und seine Eigentümer. Ein Beispiel der Entwicklung der Berliner Warenhäuser bis zur „Arisierung“. Lit-Verlag, Münster 1997, ISBN 3-8258-3062-4, zu Tietz siehe S. 149–158 und 176–189, Inhaltsverzeichnis.

References
  1. Biographie, Deutsche. "Karg, Georg - Deutsche Biographie". www.deutsche-biographie.de (in German). Retrieved 2022-02-23.
  2. "History of the Hertie Foundation". www.ghst.de. Retrieved 2022-02-23.
  3. "Der Herr von Hertie". 2018-03-31. Archived from the original on 2018-03-31. Retrieved 2022-02-23.
  4. "Holocaust Victim Assets Litigation Case No. CV96-4849" (PDF). The Claimant stated that after the Nazis came to power in early 1933, they sought to gain control of the Hermann Tietz company; the Nazi regime dictated that only two of the three main partners could remain in control of the company, and that a third partner appointed by the Nazis would be installed. The Claimant stated that the third partner who was ultimately installed in the company by the Nazis was Georg Karg.
  5. Katin, William Maurice. "A Re-Assessment of Aryanization of Large Jewish Companies in Hitler's Reich, 1933 1935: The Role of Conservative, Non-Nazi Businessmen" (PDF). Bank commissions and higher interest rates provided much of the motivation for Germany's largest financial institutions to participate in the takeover of Jewish-owned businesses. A prominent example was the inexpensive acquisition of the Hermann Tietz department store chain by means of Georg Karg's 14 million RM Akzeptbank-guaranteed loan through the Dresdner Bank consortium. This crucial illustration of how banks made Aryanizations possible will be discussed in Chapter IV.
  6. Katin, William M. Hostile takeovers of large Jewish companies, 1933-1935 reassessing aryanization of Jewish-owned firms. ISBN 978-1-7936-0682-2. OCLC 1244475405.
  7. "Es Geht Wohl Anders (Things Turn Out Differently): The Unexpected Life of Walter Arlen: SA Members in front of the Tietz Department Store in Berlin, 1933". Es Geht Wohl Anders (Things Turn Out Differently): The Unexpected Life of Walter Arlen. Retrieved 2022-02-23.
  8. "Die Vorgängerin der "Bad Bank": Die "Akzept- und Garantiebank"" (PDF).
  9. "Holocaust Victim Assets Litigation Case No. CV96-4849" (PDF). In July 1933, the creditor banks formed a second company, Hertie Waren und Kaufhaus GmbH, which would subsequently participate in the management of Hermann Tietz. The Nazi financial officials appointed Georg Karg, previously the director of textile purchasing for Hermann Tietz, and Helmut Friedel, as Hertie s representatives in the management of Hermann Tietz
  10. "A Re-Assessment of Aryanization of Large Jewish Companies in Hitler's Reich, 1933 1935: The Role of Conservative, Non-Nazi Businessmen" (PDF). Chapter IV will expand upon the theme of the interdependency of banks and department stores by detailing how an individual such as Georg Karg was able to enlist the support of a banking consortium to recall a loan, enabling him to purchase the Hermann Tietz conglomerate for a pittance.
  11. "Goebbels and the Nazi Attack on Jewish-owned Department Stores". Es Geht Wohl Anders (Things Turn Out Differently): The Unexpected Life of Walter Arlen. Retrieved 2022-02-23.
  12. "The Story of a Name – Talking about Hertie's Darker Past - The Governance Post". Hertie School. 2020-11-01. Archived from the original on 2020-11-01. Retrieved 2022-02-23. On the 31st of March 1933, the board cleared the way for Aryanization and the Tietz brothers were forced to sell their shares in the company. Historians estimate that the banks got a hold of the company at less than 10% of its actual value. The Tietz family fled Germany for the US, surviving the war but losing their livelihood.
  13. "The Hertie Foundation". Hertie School. Retrieved 2022-10-02.
  14. "Die Stifter | Karg-Stiftung". www.karg-stiftung.de. Retrieved 2022-02-23.
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