Chapter 21 The Aegean Consortium

The collapse of the New York Stock Exchange in 1929 marked the onset of the global economic crisis. Although many initially viewed it as just another ordinary stock market fluctuation, day by day, stock prices slid into an abyss with no bottom in sight. Soon, the first wave of bankruptcies emerged—those who had entered the stock market relying on loans found themselves unable to repay their loans or the interest, while others, including companies that had entered the financial markets through loans and bond issuance, faced financial crises. Even individuals and companies that had entered the stock market with their own funds were not optimistic; their fortunes dwindled significantly as stock prices continued to fall.

As autumn set in, the chain reaction of the stock market disaster gradually manifested nationwide in the United States. After the first wave of bankruptcies applied for liquidation and bankruptcy protection, the losses incurred by banks, companies, and individuals that had lent them money were irreparable. This led to a second wave of entities encountering financial crises or declaring bankruptcy, resembling a domino effect where more and more people and companies fell.

As the wave of bankruptcies spread nationwide, All-American Coffee, the largest coffee company in the United States, managed to avoid the crisis successfully. Before the crisis struck, the company reduced its receivables to a minimum and significantly increased its liquid assets. By the time the crisis erupted, All-American Coffee had deposits totaling $6.7 million in large banks such as the Federal Reserve Bank of New York, First National Bank, New York National Bank, and Hanover Bank. In addition, it had acquired a large amount of gold and US government-issued bonds. Because this economic crisis originated from the financial markets, the US dollar did not experience significant depreciation, and the impact on gold and government bonds was minimal. Therefore, many large financial consortia adopted similar measures to evade this terrible economic storm.

Although the stock price of All-American Coffee fell by thirty percent in the New York Stock Exchange, and the company incurred approximately $120,000 in unrecoverable receivables due to debtor bankruptcies, the losses for the three major shareholders, Zhang Hainuo, Barbas, and Calaiber, were minimal. With the advantage of holding a large amount of liquid assets, All-American Coffee began acquiring bankrupt or near-bankrupt companies from the spring of 1930, with coffee companies and chemical enterprises being the primary targets.

Initially, when Zhang Hainuo and other major investors jointly requested to withdraw nearly $25 million of their funds from the stock market in three batches and adopt a conservative strategy similar to that of All-American Coffee, the operators of Graham-Newman Company were very annoyed. This action actually violated the initial agreement of investors not to interfere in operational details. However, the abnormal signs before the stock market crash led them to convert eighty percent of the fund company's assets into cash, government bonds, and less volatile gold and silver futures by April. Therefore, when the stock market disaster struck, they became one of the least affected among the fund companies in New York. Nevertheless, the operators were still regretful for not completely withdrawing from the stock market. Anticipating the lack of operability in the financial markets in the short term, at the end of 1929, twelve investors led by Zhang Hainuo withdrew more than $21 million from the fund company. They would consider reinvestment after the stock market stabilized.

To better utilize this massive capital of $21 million, Zhang Hainuo and eleven other investors—representatives of the ten crew members such as Hessen, Otto, Wolf, Gissel, and Edniya, the daughter of Carter Danaman—decided to establish a new investment company for operation. Considering their previous experience in hiding submarines and discovering shipwreck treasures in the Aegean Sea, Hessen proposed naming the new company after the Aegean Sea. The proposal was unanimously approved, and the company was officially named Aegean Investment Limited, internally referred to as the Aegean Consortium. Alrad, who previously served as the chief financial advisor of All-American Coffee, was appointed as the first general manager of the consortium, and Otto von Glenbrook was appointed as the executive president of the consortium.

Zhang Hainuo and Alrad unanimously believed that the companies that collapsed first in the economic crisis often did not have acquisition value. Therefore, after the establishment of the new consortium, they were not eager to acquire those bankrupt or near-bankrupt companies in the United States. To better collect information, they publicly recruited more than 300 professional researchers in New York, Philadelphia, Boston, and other places. The task of these researchers was to gather information on the scale, business, characteristics, and other aspects of companies facing liquidation, auction, or already in financial crisis, and compile these data to the operational headquarters of the Aegean Consortium located in the Manhattan business district of New York.

In the first half of 1930, under the decisions of Zhang Hainuo, Alrad, and Otto, the Aegean Consortium completed three acquisitions, including an electronics factory, a factory previously engaged in rubber processing, and a radio station in the Brooklyn area, with a total expenditure of only $360,000.

In the summer of 1930, due to the need for Schneider Shipyard to expand its submarine construction facilities, the Aegean Consortium invested $2 million in this shipyard. This fund immediately solved the financial problems faced by the shipyard—affected by the economic crisis, a 10,000-ton freighter and two medium-sized freighters that Schneider Shipyard had started building in 1929 were purchased by the shipyard itself because the buyers were unable to pay the follow-up funds, which temporarily tied up a large amount of the shipyard's liquid funds. After the new capital was in place, Schneider Shipyard immediately started the expansion project of the military shipbuilding area. The project was expected to take sixteen months to complete. After completion, the shipyard could simultaneously start construction of five light military vessels and four submarines, in addition to four secret submarine production lines. The branch factory invested and built in Chile would also be completed within the year. Apart from being able to repair medium-sized ships, it could simultaneously start construction of two small warships and two medium-sized submarines.

Starting from the autumn of 1930, Zhang Hainuo delegated the daily affairs of the Aegean Consortium to Executive President Otto and General Manager Alrad, while he himself became more involved in domestic affairs in Germany. The influence of Little Mustache and his National Socialist Party in politics was rapidly expanding. However, without Goering, who was well-connected in high society, Hitler's further attempts in politics were facing unprecedented obstacles. Popularity and funds were the primary issues he faced.

After returning to Berlin, Zhang Hainuo reported the recent progress of the overseas project department to Lederle— the U-1 project was progressing very smoothly, and the later outfitting would be completed by the end of January. Regular submarine crews from the German Navy were training and familiarizing themselves with the new submarines in Salvador, replacing those of the Brazilian Navy. Lederle originally wanted to appoint Zhang Hainuo as the commander of this secret submarine unit, but he politely declined and recommended Hessen for the position. Shortly afterward, Roderick von Hessen, who had been "under a special mission lurking in Brazil at the end of the war," rejoined the German Navy. Because this "special mission" involved confidentiality, even the so-called investigation committee was exempted. To commend Hessen's "dedicated work for twelve years," the Navy Department officially promoted him to the rank of lieutenant commander the day after he returned to the navy. Before the submarine unit was formally established, his duty was "Director of the Underwater Technology Department of the General Staff of the Navy."

Next, Zhang Hainuo began actively arranging the first informal meeting between Hitler and Lederle. Lederle had no interest in getting involved in politics, but as history has recorded, he had a favorable view of the National Socialist movement. Therefore, he agreed to meet the future political star in a private capacity in Berlin. At this time, Hitler's application to renounce Austrian citizenship had been approved by the Austrian government. However, he had not yet obtained German citizenship, placing him in a peculiar state of statelessness, preventing him from participating in parliamentary elections in Germany. However, this did not prevent him from becoming the spiritual leader of the National Socialist Party in political activities. Before the presidential election in 1932, with the help of friends, Hitler obtained German citizenship from Brunswick and quickly became a state legislator. He then announced his candidacy for the presidency, only to lose to Hindenburg in the final showdown. But these were stories for another time.

Zhang Hainuo soon brought news to Hitler that Lederle was willing to engage in private contact. Little Mustache was very excited, telling his confidants, "We will get the support of the navy! Those wealthy shipyard owners will soon lend us a helping hand!"

From the progression of events, Little Mustache's assertion was correct. Shortly thereafter, Zhang Hainuo found a well-located and luxuriously decorated mansion in the suburbs of Berlin, which was then purchased in the name of the Aegean Consortium. The first meeting between Hitler and Lederle was arranged there.

In addition, Zhang Hainuo deliberately sent a telegram inviting Otto, the president of the consortium, and Schneider Sr. to come from the Americas to Berlin to attend this historically significant meeting.

One evening in January 1931, Lederle's luxurious Maybach and Hitler's red Mercedes arrived successively at this mansion in the suburbs of Berlin. In the elegantly decorated study of the host, Lederle and Hitler talked alone for over an hour. When they emerged from the study, both wore relaxed and pleasant expressions. Afterwards, a group of people dined together in the mansion. Originally, Lederle intended to meet Hitler and leave, but evidently, certain factors made him change his mind.

After dinner, including Lederle, the "guests" gathered in the living room, sipping coffee and chatting. Despite the current economic challenges, Hitler took a surprisingly moderate approach, refraining from criticizing big capitalists or Jewish businessmen as he often did in public speeches. Instead, he proposed peaceful measures such as establishing a road network, mass-producing small economic cars, expanding overseas trade, and revitalizing the arms industry to improve the current situation. These measures seemed tailored to cater to the identities and positions of the attendees, effectively winning over the naval commander, the consortium president, and the shipyard owners in one fell swoop, showcasing his political acumen.

However, when it came to reorganizing military armaments, Hitler demonstrated his usual boldness and determination. Expressions like "break the shackles," "restore Germany to its former glory as a leading nation," and "rebuild a formidable military force that not only defends Germany but also terrifies all enemies" were boldly spoken, reflecting the sentiments of military personnel, including Lederle. As the current commander of the German Navy, Lederle's primary task was to ensure that the navy did not cause trouble for Germany by violating treaties. Thus, when Hitler's rhetoric became too radical, Lederle politely interjected to provide reminders during the conversation. However, with Hitler's eloquence leaving little room for others to speak, he almost became the master of the living room.

At 9 PM, Lederle bid farewell, and Hitler even personally escorted him to the garage, exchanging polite farewells. Before parting, Lederle did not express much about their conversation that evening, but his final words, "looking forward to the next meeting with you," gave a glimpse of his mindset at the time.

As the "host" of the estate, Otto extended a warm invitation for Hitler and his entourage to stay longer, while Zhang Hainuo and Schneider Sr. stayed as guests. That night, the group conversed until nearly midnight, and as arranged by Zhang Hainuo, Otto and Schneider Sr. each provided donations of $150,000 and $120,000 to the National Socialist Party, respectively. In 1930, the economic crisis in Germany surpassed that of the United States, with financial markets collapsing rapidly and numerous companies going bankrupt due to the inability to repay foreign loans. Even established companies like Dornier faced severe financial crises. $270,000 was a substantial contribution to the National Socialist Party.

With cash checks from the Hanover Bank, Hitler once again demonstrated his remarkable performance. To the young Otto, he promised great convenience to him and his consortium once he gained power. To the 60-year-old Schneider Sr., he expressed sincere gratitude on behalf of Germany, promising that once Germany revived its former vast merchant fleet, orders would continuously flow to the Schneider Shipyard.

The next morning, after breakfast, the group bid farewell one by one. Zhang Hainuo and Hitler traveled together in a car to Munich. During the journey, Zhang Hainuo introduced Schneider Sr. as the owner of the shipyard where he had worked in Brazil, who had previously made several donations to the National Socialist Party through him. He portrayed Schneider Sr. as a pure "Aryan" who wholeheartedly supported Germany's revival, which pleased Hitler greatly, who gave Schneider Sr. high praise. As for the Aegean Consortium, Zhang Hainuo assured Hitler that its members were pure Germans, with no Jews among them, and that the young consortium president, Von Glenncourt, came from a prestigious noble family in Baden.

Impressed by Zhang Hainuo's ability to forge such powerful friendships, Hitler expressed his admiration and hoped that he would continue to act as a liaison between the National Socialist Party and the big businessmen. This was the role Hermann Göring played in history before the National Socialist Party came to power, excelling particularly in garnering support from industrial giants such as Krupp and Thyssen, greatly benefiting the party and Hitler in the elections.

In Munich, the party headquarters of the National Socialist Party had been relocated to the newly completed "Brown House." This building, purchased and renovated with special donations, Hitler's rally income, gifts, and party fees, represented the physical and moral obligations of the Nazi Party.

Hitler, Hess, Goebbels, Strasser, and "Hans Lomaster" had their offices on the second floor. Except for Hitler, these four were all elected as members of the German parliament in the summer elections of 1930. It's worth mentioning that with Parzich's promotion to head of naval intelligence before the year's end, Zhang Hainuo covertly "cleared" Eduin's false identity, altering photos and physical characteristics in official records, and dispersing Hans Lomaster's former acquaintances: those willing to immigrate to the Americas were given resettlement fees, while those unwilling to leave vanished in various ways. Finally, all the spies involved in the mission were recalled to Brazil, with their families also immigrating to the Americas.

Thus, the likelihood of the true identity of a parliamentarian and the leader of the SS being exposed was greatly reduced, but to ensure an extra layer of security, the Prussian secret police department was the best target known to Zhang Hainuo as a later person. With the current strength and position of the National Socialist Party as the second-largest party in parliament, this target was not far away.

The leader's office in the "Brown House" was spacious, probably the most comfortable office he had ever used. The entire room was reddish-brown, with many details such as carpets, chandeliers, and sofas in Hitler's favorite theatrical style. The windows here extended to the ceiling, providing a view of Konigsplatz. There was a half-body statue of Mussolini in the office, and many paintings hung on the walls, including one of Frederick the Great and another depicting the first attack of the unit where the leader was stationed in Flanders.

With the substantial funds obtained from the Aegean Consortium and the Schneider Shipyard, Hitler wasted no time in summoning Hess, Goebbels, Röhm, and "Hans Lomaster" to his office to outline his grand plans. Although not explicitly stated, those not present at this meeting were evidently excluded from the core of the National Socialist Party, including the main leader of the party in the northern region, Gregor Strasser. Historians have varying opinions about him; some believe that he was led astray by the military cabinet prime minister Schleicher in 1932, causing the National Socialist Party to split dangerously, ultimately leading to his expulsion from the party by Hitler, while others believe that he was content to let the National Socialist Party play a supportive role in the government and voluntarily left the party after his personal failure.

Furthermore, Gregor had a brother, Otto Strasser, who was a "heretic" in the National Socialist Party. His socialist beliefs often contradicted Hitler's theories; he advocated for the abolition of idolatry, while Hitler emphasized himself as the sole leader within the party, the spiritual symbol of the National Socialist Party. In early 1930, Otto and his followers were expelled from the party, while his brother Gregor remained a loyal follower of Hitler.

Another disgruntled figure was Heinrich Himmler, the national deputy leader of the SS. When he first joined the SS, this organization had only 300 members, but by 1930, it had exceeded 3,000, operating much more efficiently than Röhm's SA - it had already become an independent force from the SA. Trusting his contributions to the SS, Himmler began to be uneasy in his position as deputy leader. He secretly incited the Berlin Brownshirts' revolt to weaken Hans Lomaster's position as the national leader of the SS, hoping to seize the opportunity to replace him.

However, Himmler underestimated his opponents' strength and the leader's wisdom. The Berlin Brownshirts rebelled, citing hunger and excessive work burdens as reasons, often getting injured or arrested in clashes with the police and communist militants. They refused to simply stand guard at party rallies, and their demands for increased funding were reasonable but were rejected by superiors. Enraged, they attacked the local party headquarters guarded by the SS. After Hitler intervened personally, the rebellion was quickly quelled. Accompanied by armed SA members, he inspected various SS meeting points, calling for reconciliation. He pleaded, promised, and admonished like a patient and tolerant father. He rarely mentioned the Brownshirts' seven demands, treating it as a personal issue and calling for people's loyalty to him. Then he announced that he himself was the supreme commander of the SS. This announcement was met with loud cheers from the SS, symbolizing the end of the brief rebellion.

Despite the announcement, Hitler had no intention of actually commanding the SS. Hans Lomaster remained the highest commander of the organization. To avoid friction between the SA and the SS, Hitler explicitly stated that no SA leader had the right to issue orders to the SS. The SS abolished its original ten-man structure, establishing a structure similar to that of the SA, corresponding to military ranks. Hitler also specifically instructed that the SS should no longer recruit personnel from the SA but should select excellent personnel from the SA to transfer to the SS, with the number of transfers accounting for half of the planned SS personnel in each region.

Thus, the SS effectively gained a status equivalent to that of the SA. Seizing this opportunity of the Berlin Brownshirts' revolt, Eduin immediately launched a radical reform within the SS, removing a group of incompetent and disobedient middle-level commanders, and within a short period of two months, conducted a very strict disciplinary rectification of the SS, giving the reorganized SS a new look. Although Himmler still served as the national deputy leader of the SS, many of his trusted assistants were either kicked out of the SS or simply expelled from the party - the internal intelligence department of the SS, which was prominent in this operation, and was an organization Himmler had been coveting but couldn't touch.

After the reorganization, the SS performed remarkably in the summer elections of 1930 and a series of public activities in the second half of the year, receiving praise from Hitler on several occasions.

Not all members in Hitler's inner circle were trusted and supported by him, however, Ernst Röhm was such a figure. In Hitler's eyes, the SA was primarily a tool for protecting mass gatherings and propagating political loyalty, but Röhm and his SA leaders wanted to turn their organization into a real military force with sufficient weapons. Such differences almost existed from the establishment of the SA, and Röhm briefly left the National Socialist Party for Bolivia - assisting the Republic in fighting against Paraguay. Although his return was agreed upon by agreeing to keep the SA only as a disciplined marching force, this was only temporary.

One of Hitler's leadership arts was to frequently shift the center of political power among his close political allies to prevent power from being overly concentrated in one person and creating potential rivals. While he monopolized all power himself, he did not allow any political organization or legal institution to limit his arbitrary rule, and as the SA continued to grow and gradually clashed with various departments, Röhm would ultimately become the person threatening Hitler's dictatorial rule.

Zhang Hainuo stayed in Munich for a week this time, observing the party's administrative and operational methods and the situation and mentality of the German people during the economic crisis with his own eyes. As recorded in historical records, the economic depression caused millions of Germans to lose their jobs, with many impoverished people unable to even secure basic livelihoods. The catastrophic impact of this situation was greater than that of the 1921 currency collapse crisis, and it provided a broad market for Hitler and his National Socialist theories.

A month later, the Aegean Consortium launched its largest-scale acquisition operation in the United States since its establishment, targeting the Philadelphia William Krupp Shipyard, one of the top 20 shipyards in the American shipbuilding industry. This shipyard, which had been declining since the early 1920s, had finished all its upgrade and renovation projects using large amounts of funds borrowed from banks and financial institutions before the onset of the economic depression. However, due to the impact of the Great Depression, it had received only one insignificant small order since 1930, with no income to repay its high loans, and this centuries-old shipyard was on the verge of bankruptcy.

After two weeks of negotiations, the Aegean Consortium purchased 60% of the shares of the William Krupp Shipyard for $800,000 and injected $1.7 million to repay the shipyard's debts and maintain normal operations. Although nominally still an American shipyard, its experience in building large and medium-sized warships had begun to be used by the German Navy!