Wezel & Naumann A.-G.,

Leipzig, Saxony, Germany

• Druck u, Verlag v Wezel & Naumann A.-G., Leipzig.

Franz Julius Wezel and Johann Friedrich Paul Naumann founded this printing and publishing company in 1872 in Leipzig-Reudnitz under the name “Kunstdruck- und Verlagsanstalt Wezel & Naumann”. Leipzig is the most populous city in the German state of Saxony and Reudnitz is now a district not far from the city centre.

In 1900, the company was converted into a stock corporation. Wezel & Naumann produced calendars, postcards, promotional items, and folding boxes for food and medicines. In 1920 they produced posters by the graphic artist Fritz Rehm.In 1954, Wezel & Naumann became a limited partnership with state participation, Leipzig then being in East Germany. In 1970, the company was incorporated into the VEB Verpackungsmittelwerke.

1917 to 1942 year by year

The company’s annual reports and accounts for the years 1917 to 1942 are available online (DFG Viewer) They provide a detailed history of the business during those years and a glimpse into the history of Germany during that turbulent quarter century.

In 1917 the company’s equipment was fully occupied and the business in a satisfactory financial situation despite the war; claims in hostile countries had been fully written off. They managed to achieve a satisfactory result in 1918 despite a complete upheaval of all economic conditions at the end of 1917. The recently-ordered war payment of 80 percent of profits significantly reduced the dividend.

The German revolution of 1918–1919, also known as the November Revolution, was an uprising started by workers and soldiers in the final days of World War I. It quickly and almost bloodlessly brought down the German Empire, then, in its more violent second stage, the supporters of a parliamentary republic were victorious over those who wanted a Soviet-style council republic. The defeat of the forces of the far left cleared the way for the establishment of the Weimar Republic. The key factors leading to the revolution were the extreme burdens suffered by the German people during the war, the economic and psychological impacts of the Empire’s defeat, and the social tensions between the general populace and the aristocratic and bourgeois elite.

The Company’s 1919 financial year suffered from the influence of conditions created by the revolution. Things improved in the second half of the year after a bad start; “… the more sensible workers have recognised that increasing production is in their own interest and that only they can save the shattered situation of the German economy which was close to the abyss.”

The Treaty of Versailles signed on 28 June 1919 established an Allied “Reparation Commission” to determine the exact amount which Germany would pay and the form that such payment would take. The Commission was required to “give to the German Government a just opportunity to be heard”, and to submit its conclusions by 1 May 1921. In the interim, the Treaty required Germany to pay an equivalent of 20 billion gold marks ($5 billion) in gold, commodities, ships, securities or other forms. The money would help to pay for Allied occupation costs and buy food and raw materials for Germany.

The Board reported that a favourable situation in 1920 was by reason of favourable purchases, the overseas connections they maintained and working with the best customers. “Further development will depend entirely on the general economic and political conditions. It is therefore not possible to predict anything precise at the moment.” The fiscal situation at the end of 1921 was satisfactory with a good order book.

At the end of 1922 the Board warned shareholders that the “extraordinary devaluation of money” had made it impossible to maintain their previous practice of adjusting fire insurance to the valued of their systems machines and goods. However, employment and production had significantly increased.

At the end of 1923 the Board reported: “Rampant inflation made every economic calculation in the past financial year illusory.” Gold featured in information about insurance and income.

At the end of 1924 the complaint was high taxes: “No economic entity can endure such severe blood withdrawal without permanent disadvantage. It prevents the necessary price reductions, without which economic development is impossible, and has the effect of making exports impossible because production costs are too high.”

In 1925 it took enormous efforts to compensate for the poor prices that had unfortunately become common country through increased production. 1925 was characterised by instability but 8% dividends were paid in 1924, 1925 and 1926.

The business year 1927 was hailed as a milestone in the development of the company. It bought the newly-constructed building at 69 Täubchenweg as a second Leipzig factory. An increased number of modern machines allowed them to achieve an excellent performance. However, this took a toll in 1928 which was a year of consolidation.

Although 1929 was described as a year of economic crisis, the company managed to keep their plants fully occupied and achieve satisfactory results until a production standstill occurred at the end of September 1929 as a result of a fire that destroyed their printing press room. This had a significant impact on the operating result for 1929, restricting the dividend to 4%. The settlement of the fire damage was delayed by legal action against the insurance companies in which the directors were confident of obtaining a successful judgment.

As 1930 progressed, business was severely hampered by price reductions forced by competitors lowering their prices and the increasingly acute general crisis of confidence associated with domestic political uncertainty and the ongoing severe economic depression. The lawsuit against the insurance companies and a case against an American company for patent infringement were still pending.

In the Spring of 1931, the Austrian Creditanstalt , which had overextended itself in taking over the Bodenkreditanstalt, ran into difficulties. The French government may have been behind this, seeking to torpedo the plan for a German-Austrian customs union. Creditanstalt declared insolvency on 11 May 1931. This marked the beginning of a financial crisis for all of central Europe.

There were fears that this would spread to Germany. In June 1931, Reich Chancellor Brüning declared the reparations imposed after WWI to be “unbearable”. He did this for domestic political reasons – he hoped for the support of the right wing and the National Socialists in the Reichstag for a new package of austerity measures. But his statement seemed to indicate an impending insolvency of the Reich and permanently undermined the confidence of foreign creditors. Foreign currency worth several billion Reichsmarks was withdrawn and, after one of Berlin’s major banks became illiquid in July 1931, there was a mass run on the banks by the population.

The banks were forced to suspend payments on 13 July 1931. Creditor balances fell by 21.4% in June/July. To overcome the banking crisis, the banks were closed for several days and placed under government control. The Berlin Stock Exchange also remained closed until September 1931, and was closed again shortly thereafter when the United Kingdom left the gold standard. Loans and new investments were thus impossible for a long time.

Up to July 1931, the company had a quite satisfactory order intake at reasonable prices. Having adapted to the changed economic conditions through appropriate downsizing and cost-cutting measures, they expected a satisfactory business result. However, this was frustrated in July by the banking crisis and the emergency decree policy of the following months, which were of “drastic significance for economic life”.

Business stagnation in the industry resulted in price undercutting on a previously unknown scale. But the company refrained from loss-making transactions and succeeded recording almost no losses on outstanding accounts.

1932 was even more heavily impacted by the economic crisis than the previous year. Export business was most severely affected by foreign exchange devaluations, restrictions and quota measures, and the constant unrest in the political situation. This increased domestic competition in the German market at the expense of prices. To maintain employment for their machines, the company were now selling at less than cost price.

The Board of Directors reported 1933, the year Hitler came to power, as a struggle against difficult conditions made particularly difficult by the decrees from the Office of the Advertising Council, “…some of which were misunderstood by our customers”; During the Third Reich, all German media, including advertising, were placed under the direction and control of the regime. In September 1933 the regime established the Werberat der Deutsches Wirtschafts (Advertising Council of the German Economy), composed of about eighty representatives from a range of branches of industry and the advertising business. The Council, which answered to Josef Goebbels’s Ministry of Propaganda and Public Enlightenment, carried out the Aryanisation of the advertising industry by purging it of Jews. It also oversaw advertisements to ensure that they reflected proper German thought and ideals and that they used German words rather than foreign alternatives. Through its policy of Gleichschaltung (coordination) of advertising, the Nazi regime eliminated the difference between advertising and political propaganda as many advertisers were put to work generating state propaganda. In addition, the suppression of hundreds of newspapers and magazines, limitations on billboard space, and the growing state control of the economy rendered advertising both increasingly difficult and unnecessary. Firms spent more of their advertising budgets in state-sponsored media, such as the Nazi newspaper Völkischer Beobachter.

In light of the 9th Announcement of the Advertising Council, which was significant for all manufacturers of branded goods and intended to cover outdoor advertising, such as billboards and open air posters, clients were exercising “noticeable restraint” in making orders, since its full effects could not yet be foreseen.

These circumstances made the manufacture of posters and advertising very difficult and they turned increasingly to the manufacture of consumer goods, such as folding boxes and packaging materials.

“Last but not least, the foreign boycott is partly responsible for the shortage of orders.” The anti-Nazi boycott was an international boycott of German products in response to violence and harassment by members of the Nazi Party against Jews after Hitler’s appointment as Chancellor on 30 January 1933.

Increased tariffs, currency reductions, and foreign exchange restrictions made things even more difficult. The company settled the patent case won in America but with the depreciation of the dollar, the settlement didn’t cover their legal costs. For the first time in these accounts, they reported a trading loss.

The state of the graphic arts industry resulted in further operating losses in 1934. When the adverse appeal judgment in the fire insurance case became known in October, their suppliers became concerned; they had to settle with the insurers and then restructure the company.

Having never previously belonged to any trade association, the company was now a member of the Reich Chamber of Fine Arts (Reichskammer der bildenden Künste). The Reichskunstkammer was an institution tasked with promoting fine art that corresponded to the ideology of the Third Reich and suppressing movements that contradicted it. German art in the sense of National Socialism was contrasted with degenerate art. In this way, the Reichskunstkammer contributed to the Gleichschaltung of culture and society during the National Socialist era . Gleichschaltung (coordination) in this context was the process of abolishing by 1934 federalism and standardising all social and political life during the Nazi seizure of power phase. The goal was to abolish pluralism in state and society which was seen as disunity. Only members were allowed practice art as a profession or to exhibit. Those with a Jewish or communist background were excluded.

A resolution of the Annual General Meeting of 23 August 1935 facilitated settlement with the company creditors and the continuation of the company. The year saw no significant improvement in the graphic arts industry aggravated by customers’reluctance to place orders until the settlement with the insurance companies and creditors was concluded.

1936 saw the closure of Mülfort plant they had acquired in 1920 with the intention of selling the factory. They returned to profitability by merging the Mülfort operation with the main plant in Leipzig and installing a new diesel power plant and other mechanical upgrades. Short-time working was discontinued.

Increased demand for printed advertising materials and packaging brought good employment to the company in 1937. Profits allowed a 6% dividend, a further contribution to the employee hardship fund and Christmas bonuses.

That year’s sales could not quite be achieved in 1938 which saw a certain reluctance in advertising and packaging orders. When they reported in May 1939, based on the early part of that year, the directors hoped for a satisfactory result for 1939 as well. While that year saw an increase in sales volume and value, the advertising business experienced a further decline with the outbreak of the war due to the measures taken by the Reich government to control and restrict consumption. However, the company was able to consolidate its shift from advertising to packaging and return a profit.

The directors recognised those who were having to work harder because of the call-up of skilled workers; “We maintain close contact with our comrades who are currently serving under the colours and have … taken out life insurance for them.”

The war caused a reduction in sales in 1940; The shift from promotional items to packages continued, resulting in an increase of quantity but not value of sales. Increased performance and machine improvements boosted sales in 1941. When the directors reported in May 1942, that year had been satisfactory so far but:”Due to wartime economic measures, the effects of which cannot yet be foreseen, no prediction can be made.” However, in 1942 the business was able to meet all the demands placed it by the war and the resulting tasks with sale levels maintained.

Sources: Selling the Economic Miracle Mark E Spicka, Berghahn Books Chapter 4:Public Relations for the Social Market Economy: Die Waage; RTH; DFG Viewer