The Expropriation of the Princes (German: Fürstenenteignung) was the proposed seizure of the dynastic properties of the former ruling houses of the German Empire during the period of the Weimar Republic. The princes had been deposed in the German Revolution of 1918–19. Dispute over the proposed expropriation began in the months of revolution and continued in the following years in the form of negotiations or litigation between individual royal houses and the states (Länder) of the German Reich. The climactic points of the conflict were a successful petition for a referendum in the first half of 1926, followed by the actual referendum for expropriation without compensation, which failed.
The petition was initiated by the German Communist Party (KPD), who were then joined, with some reluctance, by the Social Democrats (SPD). It was not only the KPD and SPD voters who supported expropriation without compensation. Many supporters of the Centre Party and the liberal German Democratic Party (DDP) were also in favour. In some regions voters of conservative national parties also supported expropriation. Associations of the aristocracy, the churches of the two major denominations, large-scale farming and industrial interest groups as well as right-wing parties and associations supported the dynastic houses. Their calls for a boycott finally brought about the failure of the referendum. Expropriation without compensation was replaced by individual compensation agreements, which regulated the distribution of the estates among the states and the former ruling families.
Politicians and historians have differing interpretations of the events. While the official East German version of history stressed the actions of the Communist Party of the time, West German historians pointed to the substantial burdens that the referendum initiatives put on the cooperation between the SPD and the republican parties of the bourgeoisie. Attention is also drawn to the generational conflicts that emerged in this political dispute. The campaign for expropriation without compensation is also sometimes seen as a positive example of direct democracy.
Developments up to the end of 1925 The 1918 November Revolution ended the reign of the ruling dynasties in Germany. These found themselves in a position of having to abdicate power and, given the new overall political situation, did this voluntarily or were deposed. Their property was seized, but they were not immediately dispossessed, in contrast to the situation in Austria. There were no seizures of assets at the national level because there was no corresponding property. The national authorities did not implement a nationwide policy but left it up to the individual states. In addition the Council of the People's Deputies was concerned that any such seizures of property might encourage the victors to lay claim to the confiscated estates for reparations.
Article 153 of the Weimar Constitution of 1919 guaranteed property, but the article also provided for the possibility of seizure of assets in the public interest. Such a seizure of assets was permitted only on the basis of a law and the dispossessed were entitled to "reasonable" compensation. The article provided for recourse to the courts in case of disputes.
The negotiations between the governments of each state and the royal houses were protracted because of the differing views on the level of compensation. The negotiating parties often struggled with the question of what the former rulers were entitled to as private property, as opposed to those possessions which they held only in their capacity as sovereign. On the basis of Article 153 of the Constitution, some royal houses demanded the return of all their former property and compensation for lost income. The situation was complicated by the decreasing value of money as a result of inflation, which reduced the value of compensation payments. For this reason, some of the royal families subsequently contested agreements that they had previously concluded with the states.
The properties concerned were of considerable significance to the economy. The smaller states, especially, depended for their existence on being able to get control of the major assets. In Mecklenburg-Strelitz, for example, the disputed land alone represented 55 per cent of the area of the state. In other, smaller, states the figure was 20 per cent to 30 per cent of the area. In larger states like Prussia or Bavaria, however, the percentage of disputed land was of little significance, but the absolute sizes involved were equivalent to duchies elsewhere.See Kluck 1996 p. 29 and Jung 1996, p. 19f. The demands of the royal houses totalled 2.6 billion marks.Headword Fürstenabfindung [Compensation of the Princes] in: Sachwörterbuch der Geschichte Deutschlands und der deutschen Arbeiterbewegung [Lexicon of the History of Germany and the German Labour Movement], Volume 1, A–K, Dietz, Berlin (East), 1969, pp. 651–653. The article on Fürstenabfindung in the Prussian Lexicon at Preussen.de names a figure of 2.6 billion gold marks, not including palaces and land.
In the courts, the mostly conservative and monarchist judges repeatedly decided in favour of the royal houses. A Reichsgericht judgment of 18 June 1925, in particular, was the cause of public resentment. It struck down a law which the USPD-dominated parliament of Saxe-Gotha had passed on 31 July 1919Joachim Bergmann: Die innenpolitische Entwicklung Thüringens von 1918 bis 1932 [Domestic political developments in Thuringia from 1918 to 1932]. Edited by Dietrich and Herbert Hömig Grille. (published on behalf of the trustees of the Thuringia (Mainz / Gotha) Foundation), Europaforum-Verlag, Lauf an der Pegnitz 2001, , p. 347: (document) letter dated 11 January 1925 from the Thuringian Ministry of Finance to the Reich Minister of the Interior concerning the financial dispute with the former ruling royal houses. for the purpose of the confiscation of all the demesne land of the Dukes of Saxe-Coburg and Gotha. The judges held this state law to be unconstitutional. They returned all the land and forest to the former ruling house. The total value of the assets returned amounted to 37.2 million gold marks.Jung 1996, p. 234. At the time, the head of the dynastic house was Charles Edward, Duke of Saxe-Coburg and Gotha, an avowed enemy of the Republic.
Prussia also negotiated for a long time with the House of Hohenzollern. The first attempt to reach agreement failed in 1920 against the resistance of the Social Democrats in the Prussian parliament; a second attempt failed in 1924 because of opposition from the House of Hohenzollern.For details, see Schüren 1978, pp. 32 ff and 39 ff. On 12 October 1925, the Prussian Ministry of Finance submitted a new draft agreement, which was heavily criticized by the public, however, because it provided for about three-quarters of the disputed real estate to be returned to the princely house. This settlement was opposed not only by the SPD but also by the DDP, turning against its own finance minister Hermann Hoepker-Aschoff. In this situation, the DDP submitted a bill to the Reichstag on 23 November 1925. This would empower the states to pass state laws regulating property disputes with the former princely houses, against which there would be no legal recourse. The SPD had few objections to this, having previously drafted a similar bill itself.Schüren 1978 pp. 48–49
Initiative for a petition for a referendum
Two days later, on 25 November 1925, the Communist Party also initiated a bill. This did not provide for any balancing of interests between the states and the royal houses, but instead specified expropriation without compensation. The land was to be handed over to farmers and tenants; palaces were to be converted into convalescent homes or used to alleviate the housing shortage; and the cash was to go to disabled war veterans and surviving dependants of those who had fallen in the War. The bill was addressed less to the parliament, where it was unlikely to gain a majority, as to the populace. The petition for a referendum was meant to allow the people to express its will for a radical change in the ownership of property, first of all with respect to the seized property of the ruling houses.
The Communists realised that such a legislative initiative was attractive at a time of rising unemployment, mainly due to the sharp economic downturn since November 1925, as well as what was known as the "rationalisation crisis". Also, the recent hyperinflation was still in people's minds. This had shown the value of real estate, which is what was available for distribution. In line with the united front policy, the Communist Party initiative aimed at regaining lost voters and possibly also appealing to the middle classes, who were among the losers of inflation. As part of this strategy, on 2 December 1925, the Communist Party invited the SPD, the Allgemeiner Deutscher Gewerkschaftsbund; ADGB; General German Trade Union Federation, the Allgemeiner freier Angestelltenbund (English: General Free Federation of Employees), the German Civil Service Federation, the Reichsbanner Schwarz-Rot-Gold and the Rotfrontkämpferbund (Red Front League) to join in starting a petition for a referendum.
At first, the SPD reacted negatively. The Communist Party's efforts to drive a wedge between the social-democratic "masses" and the SPD "fat cat" leaders was too transparent. In addition, the SPD leadership still saw the possibility of resolving the disputed issues by parliamentary means. Another reason for reservations about the initiative was the prospect of failure. More than half of all eligible voters in Germany, nearly 20 million voters, would have to vote yes in a referendum if the law had the effect of amending the constitution.Whether such a law would constitute an amendment to the constitution was contentious, but most lawyers thought it would. See Huber 1984, p. 591. Carl Schmitt was the constitutional lawyer who formulated the theory that the planned expropriation would not be compliant with the constitution. See also Mommsen 1989, p. 248. However, in the preceding national election of 7 December 1924, the KPD and the SPD had achieved only about 10.6 million votes.Figures according to Kolb 1988, p. 258.
In early 1926, the mood within the SPD changed. Discussions on the inclusion of social democrats in the national government finally broke down in January, so the SPD was then able to concentrate more on opposition politics. This was also the reason for rejecting another bill that had been drawn up by the second cabinet of Hans Luther. This bill, which was finally presented on 2 February, provided for a new legal construction to handle the issue. A special court under the chairmanship of the Supreme Court President Walter Simons would have sole responsibility for the assets disputes. There was no provision for review of existing agreements between the states and the former ruling houses. Compared with the parliamentary initiative of the DDP from November 1925, this was a development that was favourable to the former ruling houses. For the SPD leadership, these factors were important but secondary; the main reason for the change of mood in the SPD leadership was something else: at the base of the SPD, there was a clear support for the legislative initiative of the Communist Party, and the party leadership feared significant loss of influence, members and voters if they ignored this sentiment.