Ludwig Loewe, the Forgotten Pioneer Industrialist of Imperial Berlin

1. Introduction

The entrance to the building of the tramways board in the Rhenish city of Düsseldorf, until quite recently, was flanked by two life-size lions carved from stone. They looked incongruous outside a post-war modern building of straight lines and right angles since they obviously hailed from a different era. In 2013, enquiries were made into their provenance.¹ It turned out that four of these lions had once been mounted on massive stone brackets on the front of the Loewe Haus, not House of the Lion but Loewe House, the administrative building of Ludwig Loewe & Co K.G. of Berlin, one of the largest metal-working conglomerates in Germany, to oversee their operations in the Rhineland. After 1933, the building, together with all the holdings of the “Jewish company”, was confiscated and in 1938 the building was bought by the Rheinbahn, the Düsseldorf tramways. The lions were the last tangible witnesses to the embarrassing past and, over time, the connection was forgotten altogether.

The Loewe House, situated opposite Düsseldorf central railway station, survived the war and the heavy bombardment of the city because it was one of the first buildings made with reinforced concrete. Ludwig Loewe & Co. K.G. were innovators and pioneers in production technology since the company’s establishment in 1869.² The founder, Ludwig Loewe (1837–1886), a textile merchant by trade and only 27 years old, introduced what was then quaintly referred to as the ‘American Way of Manufacture’ to German mechanical engineering. Instead of hammering and filing each metal component separately, the ‘American Way of Manufacture’ employed machines to produce standardised elements which allowed not only quick and reliable assembly and exchange of parts for repairs, but more importantly, multiplied and improved output and lowered prices through mass production. In due course, the ‘American Way of Manufacture’ opened the way for precision engineering. The innovation was so successful that by 1913 the architect Walther Gropius could blithely refer to the U.S.A. as ‘the motherland of industry.’ Britain, for many decades known as ‘the workshop of the world’ and model for industrialisation, had clearly been superseded.

Loewe became an industrialist once he recognised the importance of innovative American precision machines, and after his 1870 study trip to the U.S.A., he was the first to furnish his factory in Berlin with such machinery to mass-produce first-class and affordable sewing machines, a plan that failed early on. Instead, Loewe K.G.’s industrial complex developed into a huge conglomerate for machine tools, turnkey workshops for factories, agricultural machinery, small-arms and ammunition, and later, electricity transmission. Loewe K.G. did not only equip numerous armies around the world with rifles and shot, but was also responsible for introducing electric tram services to Berlin, Hamburg, Munich, Brussels, Buenos Aires and many other cities.³ Loewe K.G. was one of the most modern and significant factory complexes of its time, an industrial giant like Werner Siemens’s plant, Emil Rathenau’s AEG, or August Borsig’s locomotive factory. But the memory of the far-sighted entrepreneur has sadly faded.

A measure of this loss is in Alexandra Richie’s monumental History of Berlin. She mentioned ‘Loewe’ once only as having ‘turned his small machine tool factory into an enormous concern for arms and ammunition which competed with Krupps [sic] in the Ruhr region.’⁴ But weapons constituted only one line of products among many others. More recent popular accounts of Berlin skip over Loewe and his ground-breaking work altogether. In 2014, Rory Maclean stated that [Emil Rathenau] ‘established –along with competitor Werner von Siemens, the fundamentals of mass production a decade before Henry Ford. He invented new forms of co-operation between banks and industry. His energy and example helped shape German industry.’⁵ As this book will show, this was Ludwig Loewe’s achievement and after him his brother Isidor’s (1848–1910). Siemens and Rathenau took some time to understand the importance of Loewe’s innovation before they followed suit. But it seems that Loewe’s industrial non-existence has now congealed into a new “fact.”

Loewe was also a leading liberal politician, a foundation member of the Progressive Party (Fortschrittspartei) as well as its more radical offshoot, the Freisinnige Partei (Free-Thinking Party). He became a city councillor at age 26, and singlehandedly revamped and modernised the city council’s accounting system by introducing American accounting standards to make the city council independent of the Prussian authorities and their unwillingness to invest in necessary infrastructure projects such as clean water. He was elected to the Prussian Lower House, the Landtag, in 1877, and the Reichstag, the German parliament, a year later. He held these public offices all his life and never lost an election in his voting district in central Berlin. He saw the potential of liberalism’s promising route to economic and political reform by asserting the dignity of the individual through the legal, moral and civil equality of all. When, after 1873, anti-Semitism became rife in public life and was used by Bismarck for his own cynical purposes, Loewe and his Party colleagues took on the great man – and lost.

In 1884, a book was published in Leipzig entitled: The German Reichstag: Its Political Parties and Outstanding Leaders: The German Freisinnige: Eugen Richter, Heinrich Rickert, Prof. Hänel, Prof. Virchow, Max von Forckenbeck, Freiherr Schenk von Stauffenberg, Ludwig Bamberger, Ludwig Loewe, Prof. Mommsen.⁶ Each one of these names of party leaders can be found in histories of the Bismarck era. But Loewe, the politician, is not mentioned. Only a few brief articles and book chapters, all written long after the Second World War, on the industrial development of Berlin describe some of his contributions. Loewe’s trip to oblivion would have appeared a major triumph to those who sent him and his “Jewish enterprise” there.⁷ One of them was Günter Quandt, ex-husband of Magda Goebbels, who gained full control of Loewe K.G. through his Nazi Party friends and managed to keep it even after 1945.⁸ The destruction of Berlin did the rest.⁹

There do not seem to be any photographic images of Ludwig Loewe. Only three black -and -white drawings are readily accessible: one shows a young man who had just been elected alderman to the city council of Berlin, adorned with the gold chain of his office.¹⁰ The second shows him somewhat later in life, already wearing the pince-nez which would become one of his distinguishing marks. The third picture, and probably the best known, shows him among four of his political friends, each of them wearing the then fashionable full beard to give the impression of distinguished patriarchs. Only Loewe is clean shaven and his thick, unruly dark hair is cut short.¹¹ These older men recognised his extraordinary talents and qualities and guided the young man into the standard career of a liberal politician through public office.¹² But what is left today in Berlin to remind us of this versatile and gifted man amounts to very little: there is a Ludwig Loewe Hall and the Loewe Courtyards, both post-war reconstructions, which bear no testimony to the person. The originals were not even built by him but by his brother Isidor after Ludwig’s death. On the website of his hometown, Heiligenstadt in Thuringia, he is now briefly listed as a politician but he never made the list of honorary citizens.¹³

At a time when England was still the Mecca of rising industrialists and engineers in Germany,¹⁴ Ludwig Loewe understood that Britain was in the process of being overtaken by its ex-colony in industrial production. So he went to study American manufacturing methods on the coal face, as it were, and initiated a technology transfer on which we still depend today. Loewe’s factory was responsible for the Rationalisation of the Industry of Tool Making Machines¹⁵ without which there would be no mass production with precision-engineered and interchangeable parts. The rapid rise of Germany to a position of one of the leading industrial nations of the world owed much to this innovation. By the end of the century, Loewe K.G. had even become competition to American machine-tool manufacturers. The American Machinist reported: ‘It is probable that no workshops have been erected anywhere in the world at any time that have aroused more interest in the minds of Americans than those of Ludwig Loewe & Co, Berlin, Germany.’¹⁶ Still, we know next to nothing about the life of the man who brought this advance to German industry.

The name of Ludwig Loewe A.G., once in Nazi hands, was quickly wiped out and the company’s correspondence vanished along with the name. Because of Ludwig Loewe’s early and unexpected death at age 48, he left no memoirs, nor did his brother Isidor who took over the factory. He also died suddenly at age 62 in 1910 and left no biographical material for later historians. A few pieces of Ludwig’s writing have been preserved by accident. Among the collected correspondence of Ferdinand Lassalle, his close friend, some of his early letters can be found.¹⁷ The first Annual Report of Loewe K.G. of 1870 was reprinted before the wholesale document destruction began.¹⁸ It throws some light on the trip to the U.S.A. earlier that year. Brief extracts from later Reports of 1876 and 1880 are also available.¹⁹ One as yet mostly untapped source is his speeches in the Landtag and the Reichstag. However, Loewe, a good speaker, did not publish his views in essays and articles like many of his political colleagues did.²⁰ Therefore, James Sheehan’s ground-breaking study of German liberalism in the 19th century, for instance, does not mention Loewe at all.²¹ Managing two demanding careers in tandem was enough for one man.

If Ludwig Loewe is remembered at all today, it is as a weapons manufacturer. But he would have resented this. He saw his main achievements not on the industrial but on the political front. He was proud that, as an alderman in Berlin, he saw to it that schools in the inner city charged no fees, provided poor children with books and even meals, introduced physical exercise, and would cater to all confessions, including the Jewish one, equally. These measures – which amounted to a type of school years ahead of its time – were achieved without extra funds and wholly paid for by the city council. But the credit for this innovation is given to Max von Forckenbeck, the then mayor of Berlin and a close political associate.²²

The credit for the creation of the largest handgun and ammunitions cartel in the world should go to Ludwig’s brother Isidor, when he took over the management of Loewe K.G. in 1886.²³ Ludwig’s plan to make superior sewing machines led him to discover the ‘American Way of Manufacture’ as the best and most economical way to render sewing machines reliable and repairable. But he ended up making gun components because he was the sole owner in Berlin of the requisite American machinery for precision mass production. Ludwig Loewe’s vision for his sewing machine factory as ‘the best equipped in the world as well as an exemplary mechanical workshop’ as he wrote in his first Annual Report of 1870,²⁴ has to be pieced together from the few available data of his life. But if they are examined in the historical context of their time, a more detailed and coherent picture of Ludwig Loewe emerges, sometimes as proof and sometimes only as tantalising probabilities.

Loewe’s independent vision, especially of the U.S.A., can be better appreciated when held against that of fellow-Germans, older and younger than himself. Georg Friedrich Wilhelm Hegel (1770–1831) whose books are still read and appreciated today, opined that ‘America will have to wait for its further Europeanisation until it is fit to participate in world history.’²⁵ The romantic poet Nikolaus Lenau (1802–1850) believed that Americans could only think in mercantile or technical terms. ‘Here you can see the practical human being in all his awful rationality.’²⁶ Even Alexis de Tocqueville (1805-1859) grudgingly admitted: ‘These very Americans who have not discovered one of the general laws of mechanics, have introduced into navigation an engine which changes the aspect of the world.’²⁷ By adopting British railroad technology the Americans managed to open up their vast continent and grow into a country to be reckoned with.

Even after Loewe’s death in 1886, the lesson that technological advances translate into military and economic power had not been learnt at the highest level in Germany. The Kaiser, Wilhelm II, who came to the throne in 1888, laid three separate plans to invade the U.S.A. after the Spanish American War of 1898, in order to curb what he saw as rising American power²⁸ despite having witnessed a display of American naval capability and technical prowess in 1891 at Kiel.²⁹ Lucky for him, his grandiose plans came to nothing. Ludwig Loewe would not have agreed with any one of these critics, nor with the common mocking description of the quintessential Yankee who could not look upon Niagara Falls without calculating how many wheels their power could drive. He would have regarded it as a progressive way of seeing the world.

However, there were people in Germany, full of ‘awful rationality’, who were aware of and could appreciate developments on the other side of the Atlantic: they were engineers and technicians. Modern American machine tools were shown during the Great Exhibition in London in 1851; again in 1862 and at the Paris World Exhibition of 1867. Invariably, they aroused great interest. In the same year of 1867, the Association of German Engineers met in Berlin and discussed the technological backwardness of Prussian armament production. The answer to this problem, they all agreed, was the ‘American way of manufacture,’³⁰ but they had no suggestion of how to introduce this novelty to Prussia.

The ‘American way of manufacture’ was not American at all to begin with. It was developed in pre-Revolutionary France where Thomas Jefferson attended a demonstration of interchangeable gun parts by a gun smith. He realised the potential of this technology, and reported home about the novelty. The gun smith’s workshop was destroyed during the Revolution and even after Napoleon came to power, the technology was not revived because, it was argued, too many highly skilled craftsmen would be put out of work.³¹ By 1815, armouries in New England were already experimenting with exchangeable parts.³² Hence, the new technology was simply called Armoury Practice. Germany was hopelessly behind in such developments, as Loewe pointed out in his first yearly business report of 1870. Nobody in Germany, he wrote, ever heard of ‘systematised equipment’ (systematische Einrichtung) without which there was no exchangeability of parts.³³ Germany was virgin territory for the ‘American Way of Manufacture’.

The American Civil War (1861–1864) gave a big boost to the new technology. The earlier investment in costly machines and lengthy experiments in the New England armouries were now paying off and allowed a high degree of standardisation of measurements and exchangeability of parts. Three million guns were used during the war, a figure that would have made Napoleon blanch with envy.³⁴ Such a number of guns would have been unachievable with traditional artisanal methods of producing and fitting each part separately. The generals of the North were delighted since repairs to guns could be easily and safely executed.

After the end of the war, Armoury Practice was transferred to civilian industry and clocks, sewing machines, typewriters, bicycles and agricultural machinery were produced with standardised and exchangeable parts in great numbers. However, the machines which were required to produce the parts of products other than guns had to be developed and refined first. Even the sewing machine factory of Isaac M. Singer in Elizabethport/New Jersey, the most famous factory of its kind in the world, had huge difficulties. No finished sewing machine was produced yet by a set of other machines. The individual parts which were churned out, still had to be adjusted and assembled by hand which precluded easy repairs through exchangeability of parts. But even that was sensational and the factory, the largest in the land because the entire production process took place under one roof, attracted plenty of industry tourists, mostly from England. It took another twenty years for Singer to fully master the technology.³⁵ It was this weakness in the Singer production process which Ludwig Loewe intended to target once he started his own sewing machine factory in Berlin.

The theoretical advantages of a division of labour and the use of standardised parts had already been recommended by Adam Smith, but the conversion to practice was a different problem altogether. It was not just vastly expensive but also fiendishly difficult, as Ludwig Loewe was to find out. Still, many who saw the spanking new American machines at the London and Paris Great Exhibitions would perhaps understand that production methods had been rethought and revolutionised in the U.S.A. which would shortly lead to the passing of the baton from the ‘workshop of the world’ in England to the U.S.A. These important developments were barely acknowledged in Germany.

Like France, Germany had an abundance of well trained workers and strong guild traditions. Neither existed in the U.S.A. and streamlining and rationalising industrial production was meant to compensate for this lack. In England, mechanisation of manufacturing processes was known and practised since the late 18th century, but did not become prevalent.³⁶ A worker from Sheffield, the heartland of England’s steel industry, who found employment in the 1860s in a cutlery factory in New England, wrote home that ‘men never learn to do a knife through, as they do in Sheffield. The knives go through thirty or forty hands…’³⁷ The same was true in other parts of Europe. Even in Liège in Belgium, the centre of the armaments industry of Europe, in 1869, a gun was still physically carried around the city from one specialist workshop to another until it was considered finished. The process took some sixty hours in total.³⁸ And then the gun had to be fully calibrated and tested for security. Here was a great deal of room for improvement for an imaginative and daring young man like Ludwig Loewe.