On this day in history in 1914, barely a week after the start of WW I. German Minister of War Erich von Falkenhayn appoints the German industrialist Walter Rathenau of AEG, a large electronics firms in charge of organizing all the raw materials for Germany’s war production. This was very important for Germany. It knew that the country would be blockaded by the British navy and they would not be able to import valuable supplies into Germany. The country was dependent on foreign imports for many of its raw materials.
The need to efficiently use raw materials was vital. If the Germans could not find certain supplies such as rubber and chemicals then they would be defeated. they did not have the resources of Britain and France. Berlin knew that if its armies were to be victorious they needed to have the appropriate materials for their armaments industry in particular.Rathenau, the son of AEG’s founder, had approached the German War Department with the idea of centralizing the management of the war production process under a single body. This would mean that there was a rational and efficient way of sourcing and storing resources that were needed for the armaments industry. He had the idea later of extending the body to all the occupied territories. This was to prove to be a brilliant idea. Each commodity used in war production would have its own raw materials company, with a board of directors drawn from the firms that used the given commodity.Rathenau convinced Falkenhayn, that he could combine the free market approach with state control to ensure that Germany had an effective war production process. Falkenhayn was convinced and made Rathenau the head of what became the KRA.This was the German war production body and as a result one of the most important men in Germany. This was extraordinary for the time as Rathenau was a Jew and the German military was anti-Semitic. However, Rathenau did not serve in the position long as many refused to serve under a Jew. He was forced to resign and rejoined AEG, the firm that his father had found.
Rathenau remained active in politics, and supported the virtual military dictatorship of Paul von Hindenburg and Erich Ludendorff, in August 1916. However, he began to oppose some of the duo’s policies such as the unrestricted submarine warfare. After the German Revolution, he served as minister for reconstruction from 1919 to 1921 and became foreign minister in 1922 in the Weimar Republic. Ratheneau was a brilliant figure and helped to steer the Weimar Republic through its various crises. He became a hated figure because of his policies, especially with the right, after signing the controversial Treaty of Rapallo with the Soviet Union. the Treaty established diplomatic relations between the two countries. Rathenau was assassinated in Berlin by right wing terrorists.