The policy was implemented beginning in 1929–1930, in spite of the generally dire economic situation and the lack of government funds, because of the overwhelming need of the Government of the German Republic to retain the support of the influential Junker owners of these estates, although it was opposed by such important politicians as general and Chancellor of Germany Kurt von Schleicher.
This policy produced a major scandal in Germany in December 1932 and January 1933, the Osthilfeskandal. A considerable number of Junkers were found out to have wasted the money on what was considered to be luxury items, such as cars and vacations. The ensuing investigations into the scandal also implicated the President of the Republic, General Paul von Hindenburg. It came to light that the Hindenburg family's highly indebted estate in East Prussia at Neudeck (owned by the president's brother) had been clandestinely bought in 1927 by a number of industrialists and given to the president as a gift, seemingly in exchange for political influence, and that the property had been registered in Hindenburg's son's name, apparently to evade estate taxes. The recipients of the aid, including some of Hindenburg's close friends, were upset by the government's failure to cover up the scandal, as was Hindenburg himself, so that Chancellor Kurt von Schleicher lost influence on Hindenburg as a result.
After the donation of a further 5,000 acres (20 km2) to this property, and after the Nazis came to power, the matter ceased to command attention in the censored press of the Third Reich.[full citation needed]
- The Rise and Fall of the Third Reich, William Schirer, pp. 180–181.
- 'German Big Business & The Rise of Hitler', Henry Ashby Turner, p. 324.
Hitler: 1889–1936. Hubris, Ian Kershaw, p. 417, Chapter 10
- Ian Kershaw (2008), Hitler: A Biography, chapter 10, section IV, published by W. W. Norton & Company.
- Otto Meissner, Nuremberg testimony.