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 the 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. The agrarian lobbyists were enraged that the government had not tried to cover up the scandal. Since some of the Reich President's close friends and fellow landowners were implicated, the ire directed at the Chancellor could be transmitted directly through the former. Furthermore, in the wake of the scandal, it was revealed that Hindenburg's property at Neudeck had been registered in his son's name to avoid death-duties, Schleicher was held responsible by the President for allowing his name to be tarnished. Some historians[who?] believe that the scandal was instrumental in weakening Hindenburg's position to the point where he caved in to industrialist pressure to appoint Adolf Hitler as chancellor at the end of January 1933.
- The Rise and Fall of the Third Reich, William Schirer, pp. 180-181.
- 'German Big Business & The Rise of Hitler', Henry Ashby Turner,pp.324. 'Hitler: 1889-1936. Hubris', Ian Kershaw, pp.417, Chapter 10
- Otto Meissner, Nuremberg testimony.
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