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April/May 1998
The Historic Athenaeum:
100 Years of German Americans in Indianapolis
By Susan McKee
It's a warm spring evening in Indianapolis, and the century-old German Renaissance Revival building on the edge of downtown is packed. Downstairs the Rathskeller is serving classic
German fare to early arrivals, while others down steins of Bavarian beer in the Kellerbar. Outside under the stars a band practices on the Biergarten stage, while inside the cast of the American Cabaret Theatre
prepares for another performance of its current musical revue. There's a wedding reception underway in the Kellersaal, a choral group rehearsing in the auditorium, and a corporate party arriving for dinner in
the Kniepe Room. The staff finishes cleaning up after a gathering of the Indianapolis Eric M. Warburg Chapter of the American Council on Germany and puts away chairs used during a committee meeting of the
Indiana German Heritage Society. Researchers close up shop at the Max Kade German-American Center in the Gartenhaus as aerobics class participants arrive at the YMCA, located in and around the gymnasium.
These days, that's a typical night at the Athenaeum, a building with as much activity now as on a typical weekend when it was completed in 1898. A combination of renewed interest in
ethnic history and historic preservation has once again brought life to a building whose story reflects in many ways the complex history of German Americans in Indianapolis.
The Athenaeum was constructed for the Sozialer Turnverein Aktien- Gesellschaft, as it was called when founded in 1892 to raise money to build a home for the Sozialer Turnverein and
other liberal German societies of Indianapolis. Originally called Das Deutsche Haus, the building was constructed in two phases—the east wing in 1893-1894 and the west wing in 1897-1898. It was renamed in
response to anti-German sentiment during World War I.
In the late 19th century German influence was strong in central Indiana. Reflecting this, there were some 56 German Mutual Aid Societies (modeled on their Old World antecedents) that
connected immigrant families along region-of-origin lines. The city was brimming with musical groups and social clubs promoting German language and culture. The Männerchor (men's choir), Musikverein (music
society), Sängerchor (choir), and Liederkranz (singing circle) presented regular concerts for members and the public. Beginning in 1859 the Deutsch-Englischer Schulverein (German-English School Society) offered
bilingual education to children. One of its first teachers was Theodore Heilscher, who was also editor of the Freie Presse, the Free Press, a liberal newspaper that was one of as many as 26 competing
German-language publications in the area. German was the most popular foreign language in Indiana public schools.
Immigrants from German-speaking countries had long been residents of what became the state of Indiana. Coming from Switzerland, Prussia, Austria, and other German-speaking territories
the earlier waves settled among the rolling hills of Southern Indiana (which reminded many of Bavaria), cleared farmland on the glacial plains of central Indiana, or began businesses in the cities and towns.
Later immigrants would be drawn to the burgeoning factories in the industrialized northern part of the state. Those most influential in developing the German-American institutions of the state's capital came to
Indiana following the 1848 revolutions. One of the Forty- eighters—as these immigrants were called—August Hoffmeister, who had been a Turner (gymnast) in Germany, gathered friends to form the city's first
Turngemeinde (gymnast society) in 1851. A few years later, a merger with a rival group, the Socialist Turnverein, created a group which eventually built Das Deutsche Haus as a center for German culture.
The founders of the Athenaeum, sociopolitical activists who considered themselves the heirs of the liberal tradition of Immanuel Kant, Johann Gottlieb Fichte, Friedrich von Schiller,
and others, were young and idealistic—dedicated to establishing in their new homeland the unity, justice, and liberty they had been unable to find in Germany. They were avid proponents of the ideals of Friedrich
Jahn (1778-1852), a political liberal and founder of the Turner movement. From the beginning, the Athenaeum was designed to include a gymnasium, locker rooms, and bowling alleys as well as meeting rooms, a
restaurant, auditorium, ballroom, and outdoor beer garden with concert pavilion.
The Sozialer Turnverein joined forces with the Southside Turnverein to host a "national" Turnfest—it was held under national auspices but included overseas' teams—in 1905,
which included numerous gymnastic teams from the United States and Germany. Two years later, Das Deutsche Haus became the home of the oldest American institution for the training of physical education teachers
when the Normal College of the North American Gymnastic Union (NAGC)—founded in 1866—moved there from Milwaukee, Wisconsin. In 1941 NAGC became part of Indiana University's School of Physical Education; it
remained at the Athenaeum until 1970, when it moved a mile or so west to the new campus of Indiana University-Purdue University in Indianapolis. The Athenaeum hosted the 48th national festival of the American
Turners in 1991 and became the location for a new YMCA branch the following year.
Past and present are connected also in the architecture of the place. Das Deutsche Haus was the first major commission for architects Bernard Vonnegut and Arthur Bohn, both the
American-born sons of German immigrants. Bernard's father, Clemens Vonnegut, was one of the half-dozen who joined Hoffmeister to found the first Turner organization and later helped raise money for the building.
The architect's grandson, author Kurt Vonnegut, Jr., serves on the Athenaeum Foundation's advisory board and in October 1996 spoke at the dedication of the 1894 Society.
The German Renaissance Revival building, with its decorated gables, steeply pitched massive roof, facade sculpture, limestone banding, and art-glass windows reflects the inevitable
Jugenstil influence of men who had studied architecture in Germany. Vonnegut and Bohn met in 1884 when both were teaching in an industrial training school backed by the German-English Society. They incorporated
in 1888 and went on to design many notable buildings in and around Indianapolis, including buildings for the campuses of both Indiana and Purdue Universities. The Athenaeum was listed on the National Register of
Historic Places in 1973.
The Athenaeum continued as a membership organization until the late 1980s, when numbers fell below the level needed to keep the building in good repair. Drastic changes were needed.
When the Athenaeum Foundation took over the ownership and management of the building from the Turners on January 1, 1992, they inherited a developer's nightmare. They found more than 1,000 linear feet of pipe
wrapped in asbestos; a leaky, antiquated steam-heat system; broken toilets and clogged drains; ungrounded electrical outlets; and trash stuffed in dark corners. The turnaround, however, has been swift. The
foundation has raised (and spent) millions for not only structural repairs but a cosmetic makeover. Through a complex series of grants, donations, contributions, tax credits, and "sweat equity,"
hardwood paneling has been refinished, elaborate plaster decoration repainted, and the massive slate roof repaired. Air conditioning has been added, and wiring updated. The band shell in the Biergarten is ready
for outdoor parties. The City of Indianapolis gave the Athenaeum an elevator (its first), and a Lilly Endowment grant helped retire the mortgage.
As a result, the Athenaeum is once again a center of activity. The city's oldest restaurant (since 1894), gymnasium (1894), theater space (1898), and orchestra (1883) are being
revitalized and attracting new audiences. A grant from the Clowes Foundation allowed for new hoods and venting equipment in the Rathskeller's kitchen. The restaurant's energetic new managers, Dan and Heather
McMichael, who earned a five-star rating from a local reviewer, donated 40 new picnic tables for the Biergarten. New flooring and tile in locker areas helped attract a new YMCA branch to the gymnasium. The all-
volunteer orchestra recently recruited Peter Heins as conductor. The Indiana Cabaret Theater, occupying the west end of the Athenaeum, continues to upgrade its space and expand its offerings.
On October 23, 1998 the Athenaeum will celebrate the beginning of its second century with a gala dinner featuring another Indianapolis author, Dan Wakefield. Although not of German
descent, he has many connections with the place. The building's Biergarten was one of the sets used in the 1996 filming of his novel, Going All the Way (set in 1950s Indianapolis), his parents loved to dine in
the Rathskeller, and one of his favorite high school teachers also was a gymnastics instructor at the Athenaeum.
Susan McKee is a writer and historian whose personal connection to the Athenaeum includes her husband's great-grandfather, who was mayor of Indianapolis in 1894 and spoke at the
building's dedication.
The Athenaeum, the Athenaeum Foundation (a nonprofit organization dedicated to rebuilding and operating the "new" Athenaeum), and the Rathskeller restaurant can be reached at
401 East Michigan Street, Indianapolis, IN 46204; Tel.: (317) 630-4569.
* "The 1848 Revolution—150 Years: The German-American Dimension" is the title of the 22nd annual symposium of the Society for German- American
Studies, which will be held at the Athenaeum April 23­26, 1998. For details contact Ruth Reichmann, Max Kade German-American Center, Athenaeum, 401 East Michigan Street, Indianapolis, IN 46204; Tel.:
(812) 988-2866; Email: reichman@ucs.indiana.edu
The Indiana German Heritage Society (IGHS) is open to all interested in German culture. For more information, write the IGHS Membership Secretary, Athenaeum, 401 East Michigan Street,
Indianapolis, IN 46204.
The IGHS hosts a Stammtisch on the second Wednesday of each month in the Max Kade Seminar Room of the Athenaeum. Those interested in German culture (whether or not they are fluent in
German) are invited. For more information, call Sandra Henselmeier (317) 251-8658 or Ernestine Dillon at (317) 681-5831.
Although the Rathskeller at the Athenaeum is the oldest continuously operating restaurant in town, there are other places to find authentic German cuisine: Cafe Europa (4709 North
Shadeland Avenue, Indianapolis, Tel.: (317) 547-4474), offers Wiener schnitzel, a variety of sausage dinners, spaetzle, red cabbage, and sauerkraut. Gisela's Kaffeekränzchen (112 South Main Street, Zionsville,
Tel.: (317) 873-5523) serves especially wonderful pastries and desserts, as does Cafe Heidelberg (7625 Pendleton Pike, Indianapolis, Tel.: (317) 547-1230). There's more German food on the southside at Anna's (67
North Madison, Greenwood; (317) 887-0439).
It's possible to stay in a guest room in a house built for a German brewer within "European" walking distance of the Athenaeum (about one mile north). Once the home of the
Schmidt family, it's now the Propylaeum Club (1410 North Delaware Street, Indianapolis, Tel.: (317) 638-7881). There are seven guest rooms, five of which have private baths, with prices ranging from $59 per
night (including continental breakfast) to $75. Be sure to call for reservations in advance and ask for Linda Carlen, the club manager.
A Journey Along the Inn River from Rosenheim to Passau
By John Dornberg
Of all the many rivers on the map of Germany, the Inn is one of the least known—perhaps because its path through the country is so short. It rises high above St. Moritz among
snow-capped peaks in Switzerland's Grisons canton, winds its way generally northeastward through the Engadine Valley, Austria's Tyrol, where the most famous city on its banks is Innsbruck, and enters Germany at
Kiefersfelden, south of Munich. It then continues its swift, convoluted, chalky- green course through Upper and Lower Bavaria to spill into the Danube River at Passau on the Austro-German border.
It cuts a glisteningly verdant—and often turbulently flooding—swath through southern Bavaria for only 90 miles, a run so short that you could drive it in a couple of hours. But what a
shame if you did, for along the Inn are some of Bavaria's oldest, most picturesque towns, each unique in its architecture, and with enough to see and do to keep you busy for a day or two.
Rosenheim, population 57,000, some 35 miles southeast of Munich, is the place to start. Its history goes back to the Romans, who built the first bridge across the Inn there, linking the
roads between Salzburg and Augsburg, and from Regensburg to the Brenner Pass. The area was first mentioned in 1234 as the site of a Bavarian ducal castle, around which a market town grew. From the 13th to the
15th century it flourished from the salt trade. The "white gold," so called because it was the main means of preserving food, was shipped through Rosenheim by oxcarts and barges on the Inn.
Max-Josefs-Platz, more a street than a square, is a reminder of those times. It is lined by patrician merchants' houses, their facades richly decorated with intricate stucco work. One
of the most lavish is now the Gasthaus Stockhammer, and the oldest, dating back to the 13th century, is the Weinschenke Zum Santa, a historic wine tavern where you can dine in a vaulted cellar.
Be sure to visit the Inn Museum at the bridge across the river. This is a fascinating collection on the history of shipping on the river. The Lokschuppen is a mid-19th-century
locomotive roundhouse that has been completely renovated and made into a venue for traveling art exhibitions.
A drive about 10 miles north and downstream will take you to the village of Rott-am-Inn, renowned for its Benedictine abbey as well as the tomb of Franz-Josef-Strauss, the powerhouse
politician who served as West Germany's minister of defense and minister of finance, and was Bavaria's prime minister when he died in 1988. He had married the daughter of a local businessman and brewer. Both the
abbey and the tomb draw weekend crowds.
Though the abbey dates back to the 11th century and was one of the major centers of culture and learning in Bavaria until it was secularized in 1803, its Church of Sts. Marinus and
Anianus is a masterpiece of the 18th century. It is the work of Johann Michael Fischer, one of the most famous and imaginative architects of the 1700s. The foundation stone was laid in 1759 and work was
completed in 1767. In addition to Fischer the best artists of the period contributed to the decoration: the stucco master Franz Xaver Feuchtmayer, the Augsburg painter Matthäus Günther, and Munich sculptor Ignaz
Günther.
The church, plain on the outside, is an eye-popping example of late- Baroque style on the inside. The central feature is the massive dome with an enormous fresco depicting the saints of
the Benedictine order by Matthäus Günther. Ignaz Günther designed the high altar, and several others, and sculpted most of the statues in the church, including the figures of Holy Roman Emperor Henry II and his
wife Kunigunde, both of whom were strong supporters of the Benedictines. No matter how many Baroque churches you have already seen or intend to visit, this one at Rott-am-Inn is worth not only a detour but a
special trip.
The Inn Valley is at its most beautiful, breathtaking, and dramatic about nine miles downstream from Rott at Wasserburg, where the river makes a hairpin bend so sharp that this
850-year-old town appears to be a fortified island. In a sense it was and is, for the name—Wasserburg—means water fortress. The river is like a moat surrounding it on three sides.
The little city of 10,000 ironically owes its perfect medieval appearance to its economic decline. Founded in 1137, it became fabulously rich and powerful as a central junction on the
vital salt- trade routes from the mines in the Bavarian and Tyrolean Alps to Bohemia and northern Germany. But in the 16th century the main salt road was shifted south to Rosenheim, and Wasserburg went into a
recession that lasted for hundreds of years. Lack of money prevented burghers from redecorating their houses, public buildings, and churches into later architectural styles, especially Baroque and Rococo. Though
lively and prosperous enough today, you will find Wasserburg preserved like Sleeping Beauty with only weekend and summer-season tourist princes to kiss it awake.
Wasserburg's Stadtpfarrkirche St. Jakob (City Parish Church of St. James) was built mainly by Hans von Burghausen, a master architect who is best known for his work on St. Martin's in
the city of Landshut, the only brick Gothic church in Bavaria and renowned for having the tallest brick church tower in the world. St. James's in Wasserburg is a classical example of 15th-century Gothic
architecture, begun in 1410 and completed in 1445, with a spire added in 1478. The interiors were redecorated in Baroque style in the early 17th century.
In part to compensate Wasserburg for its economic troubles, Bavaria's Duke William IV rebuilt its 12th-century fortress, turning it into an occasional residence. This Burg, a
late-Gothic ensemble, now used as an old-age home, is notable for its finely decorated reception hall.
The Rathaus (City Hall) on Marienplatz will give you an idea of Wasserburg's pride and wealth in the 14th and 15th centuries. A common practice then was to put the town council, a
public ballroom, and a granary under one roof, and this curious trinity of purpose has been preserved. Be sure to see the council chamber, richly decorated with intricately carved oak ceiling panels and
allegorical murals.
One of Wasserburg's most unusual attractions is the First Imaginary Museum in 17 rooms of the 14th-century former Holy Ghost Hospital on Bruckgasse. This is a collection of some 500
masterworks from the 11th century to the present. Practically every great painter is represented: from Raffael and the Brueghels to Cezanne and Monet, from Rembrandt and Rubens to Chagall, Kandinsky, and even
Richard Hamilton and Friedensreich Hundertwasser. But all are replicas. They are the work of the late Günter Dietz, an art printer who in the 1950s invented a highly-complex silk-screen process for making exact
three-dimensional reproductions of paintings, using the original materials and colors. They are so perfect that Pablo Picasso and Marino Marini, with whom Dietz collaborated, could not distinguish between their
originals and the copies.
The Dietz process entails photographing the originals with a stereoscopic camera, then making matrixes for each layer of paint—sometimes as many as 300—in order to build up the
reproductions with the same impasto the artist used. They are made in limited editions of 950 that sell from $125 to $750. To prevent their being sold on the art market as originals, each copy has a metallic
Dietz Replica logo, visible by x-ray, implanted between one of the layers.
Dietz, who was committed to the idea that people in small provincial towns should also have the opportunity to view and enjoy great art, set up the museum a few years before his death
in 1995. His son Dieter and daughter Petra continue to operate the printing plant in Soyen, a hamlet near Wasserburg.
Though Wasserburg abounds with beautiful old buildings and has other museums to see, the greatest appeal is the totality of its cityscape. Give yourself time to just walk around, ogle,
and soak up the atmosphere. It's a stroll back into the Middle Ages.
Mühldorf, 28 miles downstream, is the embodiment of an Inn River town with its unbroken front of Gothic, Renaissance, and Baroque burgher and patrician houses along the Stadtplatz, as
its main street is called. Moreover, no other town—and that is its charm—seems more southerly, almost Austrian and Italian in character. Indeed, for almost 900 years it was Austrian: a political and cultural
enclave of the powerful and independent prince-bishopric of Salzburg in the heart of Bavaria, to which it was not ceded until 1802.
First mentioned in documents in 935, Mühldorf was deeded to the Salzburg prince-bishops in 1190 by Holy Roman Emperor Henry VI and became one of their most lucrative salt trade centers.
Its burghers and merchants, who were given municipal rights and limited autonomy in 1239, became rich and affluent, as all those pastel-colored houses along the Stadtplatz and side streets of the Altstadt (old
quarter) attest. They are unusual in two respects—false fronts to make them look even taller, with the "windows" on the top "floors" fake, and connecting arcades so that you can walk the
length of the street without getting wet when it rains.
Two of the medieval city gates still stand, as does part of the old town wall. The 15th-century Rathaus's council chamber features a magnificently carved coffered ceiling. In the cellar
there is the blood-chilling Hexenkammerl, a "witches' dungeon," unchanged since the last Mühldorf witch trial in 1750.
The Heimatmuseum (Local Museum) in the Lodronhaus, a 15th-century granary, has a vast collection of fine art, applied art, artifacts, and documents covering Mühldorf's history from
prehistoric times to the present. One section deals objectively and didactically with the Third Reich and World War II periods in Mühldorf, site of a forced- labor section of Dachau concentration camp: an epoch
in history that most local museums avoid.
Altötting, eight miles from Mühldorf, is a world unto itself, because of its centuries-old role as a kind of German Lourdes. Its Heilige Kapelle (Holy Chapel) in the center of town,
draws more than a half million pilgrims each year. First mentioned in 877, the little Carolingian-style church may well have existed before then, and one legend has it that a 7th-century Bavarian count was
baptized in it by St. Rupert, a missionary monk. In 1491 it became the repository of a Black Madonna, so named because it is blackened with soot. The two- foot 13th-century carving of Mary, thought to have come
from Alsace, is believed to have all kinds of miraculous powers. The figure has been kept in a richly decorated silver tabernacle since the 17th century. An almost life-size solid silver sculpture of Bavaria's
Duke Max III Joseph, depicted as a 10-year-old child, kneels praying before the shrine. It was an offering by his father Elector Karl Albrecht for the youngster's recovery from a serious illness in 1737.
The exterior and interior walls of the chapel, as well as the sacristy of the adjacent 16th-century Stiftskirche St. Philipp und St. Jakob (Collegiate Church of Sts. Philip and James)
are covered with offerings of thanks for deliverance from sickness and danger. Among them are hundreds of painted wood Votiftafeln (votive tablets), some of them five centuries old, which are fine examples of
folk and peasant art.
Bavaria's Wittelsbach rulers have long been associated with the Holy Chapel and the Black Madonna, and it is in effect a national shrine. The hearts of six Bavarian dukes and kings, two
queens, two electors, and that of Field Marshall Johannes Tilly, the Bavarian hero of the Thirty Years War, are kept in silver urns in wall compartments opposite the shrine. The most famous pilgrim of modern
times was Pope John Paul II who visited Altötting in 1980.
Given its role as a pilgrimage center, Altötting abounds with hotels, inns, restaurants, and cafes, the best of which are on Kapellplatz, the square around the Holy Chapel.
Though situated off the main route, Burghausen, 10 miles southeast of Altötting, is in its own spectacular way as picturesque and photogenic as Wasserburg. It is located on the left
bank of the little Salzach river, a tributary to the Inn River, which rises in the Austrian Alps south of Salzburg. In Burghausen it forms the border with Austria, and a popular pastime is to stroll from one
country to the other over the bridge across the stream. The 1,000- year-old town is crowned on the cliff above it by the largest medieval fortress complex in Germany.
The Burg, almost a town in itself, extends for more than a kilometer atop a ridge between the Salzach and the Wöhrsee, a small lake. It was started as a frontier fortification in the
11th century and served a succession of Bavarian rulers who at one time or another held court and resided there. The tradition began with Holy Roman Emperor Henry II, who was also Duke of Bavaria. The vast
complex is protected by medieval walls, towers, and battlements and is divided into sections by moats and a narrow gorge. Most of the present buildings date from the 13th to 15th centuries, and those that are
open to the public feature vaulted Gothic ceilings. The Burg chapel was completed in 1255 and is a transition from Romanesque to Gothic architecture. The second floor of the castle's main residential building,
the Fürstenbau, features the original coffered wood ceiling, wooden pillars, and vaulted oriels and has furniture, paintings, sculptures, tapestries, and armor from the 15th and 16th centuries. Eight rooms on
the hird floor are a gallery of the Bavarian State Pictures Collections with a permanent exhibition of late-Gothic Old Master panel paintings, including works by Gabriel Maleskircher, Melchior Feselen, Jan
Polack, and Peter de Witte.
The castle alone could keep you busy for at least an entire day, but there is even more to see and do in Burghausen's Altstadt. Be sure to see the 14th-century Rathaus, Pfarrkirche St.
Jakob (St. James Parish Church), and the Spitalkirche Heilig Geist (Holy Cross Hospital Church), and also amble along the narrow, winding cobblestone streets lined by arcades and 16th- to 17th-century burgher
houses.
Thanks to the modern world of microelectronics and its own nearby resources of silicon, Burghausen has become a major chip-making center and is enjoying a period of prosperity that, in
turn, benefits its old architecture with costly renovation and upkeep. The old quarter looks the way it must have centuries ago.
From Burghausen it is about a 45-mile-drive northeast to Passau, which has a history going back some 2,500 years to Celtic times. The little city of 50,000 is on a tongue of land
between the Inn and the Danube, and the two rivers—the Inn still chalky green, the Danube usually quite brown—meet at the eastern tip of Passau's Altstadt in a display of nature that draws visitors by the
thousands.
The Celts called their settlement Boiodurum; the Romans, who occupied the region and built a fort there in 15 B.C., called it Castra Batava, or just Batavis, for the IXth Batavian
Cohort, stationed here. Then came the Baiuoarri in the 5th century A.D., who named it Bazzawa, which eventually became Passau.
Some 1,400 years later the German naturalist Alexander von Humboldt arrived on the scene, took one look, and called Passau "one of the seven most beautiful cities in the
world." His description still applies and explains why tourists converge on the town.
It was St. Boniface who established Passau as a bishopric in 739, though there is evidence that the first Christian church had been built in A.D. 460. The bishops were also princes,
that is both ecclesiastical and temporal rulers, and made Passau into one of the most powerful church city-states of southern Germany.
Among the prince-bishops there were also many learned men. One was Bishop Pilgrim, who ruled from 970 to 991 and had the Nibelungenlied, the Song of the Nibelungs, one of the old German
sagas, set down on parchment in Middle High German. A monumental mural in the Grosse Saal (Great Hall) of the 14th-century Rathaus depicts the arrival of the Nibelungs in Passau. It took Richard Wagner in the
1800s to move the whole Nibelung legend from the confluence of the Inn and Danube to the Rhine, turning what must have been originally "Inn" or "Danube" into "Rhine" maidens.
Passau is dominated by its 15th- to 18th-century Dom St. Stephan (St. Stephen's Cathedral), situated on the highest point of the inner city, and the most visible feature of the church
is its immense octagonal dome, built over the transept. St. Stephen's was begun in rich late-Gothic style in 1407 and not completed until 1530, when Renaissance elements were added. In the late 17th and early
18th centuries, after a devastating fire, extensive additions in Italian Baroque were made. The church is overwhelming, not only in its size but in the richness of its decoration, and downright overpowering
acoustically, for it contains the world's largest organ. The instrument, with a front in gleaming gold-leaf, has 17,388 pipes and 231 registers.
The bishops built several palaces in and about town. Adjacent to the cathedral, on Residenzplatz, are the Alte and Neue Residenz (Old and New Residences), the former largely Renaissance
in style, the latter Baroque. More important were their two castles, the Veste Oberhaus and Veste Niederhaus (Upper and Lower Citadels) on a cliff above the confluence of the rivers.
The Upper Citadel, built in the 13th century, though expanded and added to for the next few hundred years, was virtually impregnable and designed to keep the bishops in control of
Passau's burghers. The Lower Citadel dates from the 14th century and had pretty much the same purpose. The Upper Citadel complex today houses the Historische Stadtmuseum (City Historical Museum) and a section of
the Bavarian State Pictures Collections.
Above all, Passau is a town for walking and soaking up medieval atmosphere. Its Altstadt, flanked by the Inn and Danube, is a maze of narrow, winding cobblestone streets lined by
perfectly preserved burgher and patrician houses and many other old churches. To really see and explore the city you should spend at least a couple of days there.
It is also the gateway to the Bayerischer Wald (Bavarian Forest), neighboring Austria, and the Czech Republic. Moreover, Passau is the main passenger port for Danube cruises. During the
summer months its quays are lined end to end with German, Austrian, Hungarian, Romanian, and Russian river boats that start their week-long trips from here to the Black Sea.
A perfect place from which to watch all the traffic is that narrow tip of the tongue, where the chalky waters of the Inn end their convoluted journey from Switzerland to vanish in the
Danube.
Contributing editor John Dornberg writes from Munich.
TOURIST INFORMATION:
Passau Tourism Bahnhofstrasse 36 94032 Passau, Germany Tel.: 011.49.851.955980
HOTELS: Wasserburg Hotel Fletzinger: An old inn, modernized and renovated in 1987, in the heart of the Altstadt. Doubles DM 135 to DM 170 ($75 to $94). At Fletzingerstr. 1, 83512
Wasserburg am Inn; Tel.: 011.49.8071.90890; Fax: 011.49.8071.9089177.
Altötting Hotel zur Post: An 18th-century inn, directly across the square from the Holy Chapel. Doubles DM 200 to DM 290 ($111 to $161). At Kapellplatz 2, 84503 Altötting; Tel.:
011.49.8671.5040; Fax: 011.49. 8671.6214.
Hotel Zwölf Apostel: Conveniently located in the old quarter. Doubles DM 100 to DM 130 ($55 to $72). At Bruder-Konrad-Platz 3, 84503 Altötting; Tel.: 011.49.8671.5922; Fax:
011.49.8671.84371.
Burghausen Hotel zur Post: Picturesquely situated on the main street of the Altstadt. Doubles DM 135 to DM 155 ($75 to $86). At Stadtplatz 39, 84489 Burghausen; Tel.: 011.49.8677.3043;
Fax: 011.49.8677.62091.
Passau Hotel Wilder Mann: A beautifully restored patrician house near the Rathaus and Danube quays. Doubles DM 120 to DM 180 ($66 to $100). At Rathausplatz 1, 94032 Passau; Tel.:
011.49.851.35071; Fax: 011.49.851. 35075.
Hotel Passauer Wolf: Right in the Altstadt, two minutes walk from the cathedral. Doubles DM 180 to DM 160 ($100 to $144). At Rindermarkt 6, 94032 Passau; Tel.: 011.49.851.34046; Fax:
011.49.851.36757.
(Exchange rate used US$ 1.00 = DM 1.80)
Looking Toward the Future:
American Investment in Eastern Germany
By Regine Wosnitza
On November 12, 1989, Rolf Baustian went west. After crossing the newly opened German border, the manager of the Club Cola combine in the eastern German town of Wismar jotted down the
telephone number he saw on the back of a Coca-Cola truck. Back in his office the following day, Baustian telephoned the company and did not beat around the bush when his call was answered: Was the Coca-Cola
licensee in western Lübeck interested in a partnership?
Now the area manager of Coca-Cola Berlin-Brandenburg, Baustian recalls, "Due to lacking investment the combine was in a very poor state. The plant's technology was so obsolete that
we could not produce anything good." Because of this, "Colleagues used to bring Coca-Cola back from visits to the west. It was synonymous with freedom, just like brandy, Marlboro, and any technical
appliance."
In April 1990 Baustian and his colleagues at beverage companies in Weimar, Halle, Stendal, Berlin, and Dresden were the first managers to seal cooperating contracts with Coca-Cola. By
the end of that year Coca-Cola's Atlanta headquarters had agreed to pump a total of $450 million into new bottling plants in the then still-existing German Democratic Republic (GDR). The appealing notion of 17
million East Germans demanding refreshment overshadowed the uncertain political conditions. A year after the wall came down 262 million liters of Coca-Cola and related beverages had swished down thirsty German
throats in the former GDR. "We simply went for it and made the product available," explains Coca-Cola spokesman Kai Falk. "If we had waited for laws and official policies, everything would have
taken far longer."
Coca-Cola was among the forerunners of American investors in Germany' s newly opened east. At an investment level of DM 1,000 million and with 2,400 employees the company belongs to the
top U.S. investors in Germany's new Länder (the states Mecklenburg-Western Pomerania, Brandenburg, Saxony-Anhalt, Saxony, and Thuringia). On the whole, close to 300 American companies—among them General
Motors/Adam Opel AG, Philip Morris, and IBM—have pumped DM 13 billion (about $7. 28 billion) in the area, thus securing 60,000 jobs. These American companies comprise the largest group of foreign investors in
eastern Germany.
It was especially the economic whirlwind that picked up directly after unification that brought investors to the new Länder. In 1990 the Treuhandanstalt (Trust Agency)—a government
organization established specifically to aid in privatizing the numerous state- owned GDR enterprises—assumed responsibility for some 8,500 conglomerates and their 45,000 factories. Until it was closed at the
end of 1994, the Treuhand not only offered bargain prices but itself spent billions of deutsche marks on the redevelopment of companies under its responsibility and on job creation efforts. A heavy demand for
construction also promised investors enormous revenues.
Yet the radical political transformations in eastern Europe plunged the western world into recession soon after 1989, an effect that didn't ricochet back to Germany until 1992. Mass
redundancies of more than 2 million people and the closing of 3,000 factories, however, made the conversion of the former East German command economy into a functioning market-economy system look like a sell-out
rather than a bargain. West German investors were hesitant about eastern Germany, and foreign investors hardly showed any interest at all.
Describing common concerns about Germany's economy, Jean Ries, secretary general of Guardian Europe, a manufacturer of Flachglas (glass sheets) says, "When I told my bosses in the
United States I wanted to invest in eastern Germany rather than Poland, they maintained that Germany was an awful choice because workers are either on holiday or at a spa." Furthermore, "I wanted to
concentrate specifically on the state of Saxony-Anhalt, which is run by a Red/Green government. Try to explain that to a Detroit manager."
Speaking last November in Dessau (Saxony-Anhalt) at a U.S. investors conference jointly organized by the American Chamber of Commerce in Germany and the U.S. Embassy, Ries went on to
outline the advantages that ended up convincing the hesitant Detroit managers at Guardian International Corporation: Being fairly politically stable, eastern Germany formed the gateway to an unstable yet
alluring market of 400 million consumers in a larger eastern Europe; eager to obtain the few available jobs, eastern Germany's work force paid little attention to union leaders' demands; and authorities and
administrations promised simplified bureaucratic proceedings and ample incentives. For Guardian Flachglas these advantages meant that their DM 270 million (about $151.2 million) investment in Thalheim
(Saxony-Anhalt) was realized in just over a year's time.
Even before the economic downturn began, the German government had understood the crucial need for foreign investment. Prohibitive labor costs, powerful trade unions, utopian workers
benefits, and skyrocketing corporate taxes forced the government into actively enticing investors. The government decided to reduce heavy taxes on companies, to cut bureaucracy as much as possible, and to offer
generous subsidies, which can reduce investment costs by up to 35 percent for larger companies and up to 50 percent for small- and medium-sized companies. These subsidies include an investment bonus, a special
depreciation allowance, and investment grants, all aimed at balancing the still-existing production disadvantages in the "new" Länder.
"The subsidies are a very important incentive, and nobody would invest here if they did not exist," asserts Wolfgang Schmidt, who rescued a flange-making factory (originally
founded in 1911) in the village of Bebitz south of Bernburg (Saxony-Anhalt). Otherwise, according to Schmidt, no investor would have been attracted to the dismal conditions: a low productivity rate; poor
infrastructure, which impeded transportation and logistics; and high expenditures necessary to clean environmental damages left over from GDR times.
When the Berlin wall fell, Schmidt—who had moved to Texas in the early 1960s to work for the mining corporation Hoesch (out of Dortmund) and had settled there permanently in the
1980s—was not in the least inclined to expand his business to Germany. Nevertheless, the Westphalian native and his wife, Angelika, from Leipzig, were intrigued by the fall of the wall and traveled through east
Germany in early 1990.
At the same time, Reiner Weilbeer, the last GDR manager of the factory in Bebitz, was traveling across Europe in an effort to save 1, 000 jobs. Lacking hard currency, Weilbeer would
sometimes load up his car with plenty of food and cans of gasoline and drive to Holland and back in one day to meet with potential customers. Weilbeer knew where to go. After all, under a West German label,
Bebitz products had been exported worldwide during GDR times. Why wouldn't people in Holland, Italy, Denmark, and Germany continue to buy the high-class products under their genuine name?
"The Wende [the turn—term used for the fall of the Berlin wall] was a hectic but good time because you could carry out your own ideas," says Weilbeer, who today is executive
partner of Flanschenwerk Bebitz. "But many people treated me like an exotic being. Some asked whether we had enough to eat in the GDR, and most of them believed we were 'kaputt' anyway."
Thinking back, Weilbeer smiles, proud that they survived the many obstacles following the collapse of the GDR. Their former partners in western Germany were not in the least inclined to
come to their help but were instead looking to eliminate the potent competitor. Thus, Weilbeer and production manager Manfred Siebert approached the Treuhand with their own privatization concept, to no avail.
"We were not successful because we were East Germans, and the Treuhand favored people with the know-how of the west-German market," says Siebert, today the second executive partner. "You could
write a book on the requirements for privatization and the fuss that was being made."
So when Siebert and Weilbeer heard about the two Texas investors, Wolfgang Schmidt and David N. Odom, they reacted with relief, figuring that the two Americans would surely not come all
the way to Bebitz—a village of 140 inhabitants—just to demolish the factory. "It was like an "open-Sesame"-effect when one mentioned 'Schmidt and Odom from Texas' anywhere," says Siebert, who
celebrated his 40th anniversary at the factory last September. "It made such a difference from the earlier concept of 'Weilbeer and Siebert from Bebitz.'"
For the first year Schmidt lived in the workers' lodgings and spent many an uncomfortable night wondering why he was not enjoying the comforts of Houston instead. "Until 1993 you
had to put out fires everywhere, to solve thousands of unpredictable problems simultaneously," Schmidt remembers. "Nobody could foresee the effects of unification, and you just have to think of the
chancellor's remarks about the blühenden Landschaften (blooming landscapes)."
In the euphoria immediately following unification Helmut Kohl had rather picturesquely vowed that within five years the standard of living for eastern Germans would catch up to western
standards. His remarks were soon proven to be hasty. Still, Flanschenwerk Bebitz is among those companies that can be certain to have made it. The company has crossed the threshold into the last phase of
investment and holds about 25 percent of Germany's flange market. At the beginning of this year, a new production line for flanges was installed. Schmidt claims proudly that his plant's ring-roll mill is the
most modern in the world.
The fate of BUNA—the GDR's nationally owned chemical combine with plants in the Saxony-Anhalt cities of Bitterfeld, Leuna, Buna, and Schkopau—also looks positive, although that was not
always the case. In Schkopau, for example, at BUNA's main production site, the carbide factory billowed stinking smoke and covered the surrounding neighborhood with 40,000 tons of gray chalk dust annually.
Everybody knew the Dreckschleuder (dirt extractors) would have to be demolished, and the collapse of the GDR presented the long-wished-for opportunity. Employees even dismantled the factory themselves. Yet they
did not do so out of ecological conviction but rather to stave off their pending unemployment.
"The workforce included a high percentage of women. Watching them carry heavy concrete blocks, steel pipes, and glass wool during the dismantling reminded me of the rubble women
after the war," says Jürgen Arbter, a former fitter at the factory and chair of the factory workers union today. "For three years [following unification] nobody knew what would happen, and for three
years there was nothing but closure, demolition, and grass-planting on the empty lots." Although conditions in the dark and hot factory halls had been miserable, most of the 1,300 workers had nevertheless
worked proudly. The carbide factory had been the lifeline of the BUNA combine, which in total employed 30,000 people, who produced more than 800 different products. With each plant closing, even the most
restrained people shed tears.
In 1994 the workforce—by then reduced to 6,000 people—knew they could not hold out much longer. Finally the Treuhand established contact with Dow Chemical, the world's fifth largest
chemical enterprise with annual returns of $20 billion and 100 production sites worldwide. As Claude R. Fussler, Dow's Vice President for Environment and Public Affairs in Europe, puts it, the company accepted
the challenge "to turn a dinosaur into a world-class tiger." The BUNA SOW Leuna Olefinverbund GmbH (BSL) was brought into being. It consisted of three sites (Böhlen, Schkopau, and Leuna) that
manufactured plastics and rubber and also produced polyethylene.
In December 1994 more than 700 people tuned in when Dow managers publicly announced their investment plans for the Schkopau plant. Workers did not like what they heard about job
reductions and for weeks demonstrated in front of the factory gates. In April 1995 Dow agreed on what was termed a 3,000-plus plan: They would guarantee 2, 200 positions and bring in related business as well.
"These publicly made promises have not been kept yet," says Arbter. "But I will continue to remind management."
Yet the most important fact was that an investor had been found at all. On September 1, 1997, the privatization contract for 80 percent of the plant was signed. Redevelopment is
expected to be finished by the year 2000. The EU commission is currently investigating whether the German government was too generous with its subsidies. Dow received DM 9.5 billion (about $5.32 billion)—by far
the largest sum ever paid in the eastern part of Germany.
"The plant had a very interesting history in scientific research and there were fields like the India rubber production that were remarkable within world production and fitted well
into Dow's range of products," says managing director Heino Zell, explaining Dow's decision to take on the investment. "In addition, the know-how existed, and there were close links to local
universities. Although Dow concentrates 90 percent of its research in the United States, Schkopau will receive its own research center."
Like many foreign investors Dow decided to bring in as little outside personnel as possible and to strengthen the local work force instead. A team of 25 people was commissioned to
integrate BSL into the international Dow conglomerate. Following a practice applied at all production sites worldwide, some 200 engineers from West Germany, Holland, and the United States were brought in for a
limited period of time to introduce specific projects.
Meanwhile employees at all levels of production and administration are receiving technical and behavioral training in fields they did not have a chance to excel in before. Team work has
replaced hierarchical thinking; communication has improved; problem-solving takes place at ground level rather than by high-level management; and individual workers receive a broader array of duties. Press-
spokeswoman Astrid Molder says, "I appreciate taking on more responsibility because I get a different insight into the whole work process rather than doggedly doing one thing only."
Belying the widespread belief that Germany's new states are home to nothing but the remains of an old, dilapidated communist system and lazy workers, many investors have come to
appreciate the people's willingness to learn and the resulting entrepreneurial drive. Often east Germans throw themselves into their jobs to prove that they are just as good and competitive—if not more so—than
their west German countrymen.
Employers also find the lower wages appealing—60 percent of jobs in the new states are at lower levels than the fixed rates for salaries—even though the wage level correlates to a
slightly lower overall productivity rate. The productivity issue is dissolving as additional manufacturing plants are installed throughout the new Länder. Now a worker at the brand-new General Motors/Opel
production site in the Thuringian town of Eisenach, for example, can produce 72 cars a year—8 more than his colleague at a Fiat plant in Italy. In addition, due to arrangements like comp time accounts—allowing
workers to balance accumulated overtime by taking time off or getting paid—factories in the east have the capability to produce seven days a week. Such conditions remain unthinkable in western Germany, due
especially to the powerful reign of trade unions.
"There is a political consensus to reduce the cost of operation [in the east], make the whole process more flexible, and to aim for deregulation of facilities," explains
George Mori, General Manager of the European Films Center. The Avery Dennison subsidiary will soon open a plant in Gotha (Thuringia) for the production of self-adhesive foils. "The Germans still have to go
a long way in that area, but I think they are taking small steps in the right direction."
Yet, they do this now in the face of a dramatic drop of foreign investment in all of Germany—in 1996, for the first time in 50 years foreign direct investment was negative DM 4.9
billion (about $2.74 billion). "East Germans are more willing to work with other investors than west Germans," confirms John Zindar, director for International Strategy at the Industrial Investment
Council in Berlin. "They really like other choices."
This was certainly the case immediately after the wall came down. But in 1992 when people realized that factories were closing because their products were no longer in demand, a trend
known as Ostalgie (nostalgia for the east) replaced the initial euphoria.
"At first people bought Coca-Cola in large quantities, but then they began to question what this U.S. product really had to do with them," says Falk, a former east German
radio reporter and now press spokesman for Coca-Cola in Berlin. "On the one hand people wanted Coca-Cola's international reputation but, on the other hand, they did not want to lose touch with their earlier
selves." As a result the company started a campaign with the slogan "Produced Here—Consumed Here" to clarify that not only the bottling took place in Germany but other needed material like glass
bottles, crates, and sugar were purchased in Germany as well. Not only did this create additional jobs, ran the argument, but it turned Coca-Cola into a kind of east German product.
Whereas other companies do not necessarily put similar emphasis on an east German label, they still do not wave the all-American flag; instead, most opt for an international flair
closely tied with local engagement. "Bebitz is a company town, and we are the largest employer within the area," says Schmidt. "And it is my philosophy that a company has to be a good
citizen." When he first brought T- shirts from the States with "Bebitz" printed on them, several employees showed their identification with the new employer by immediately putting them on. Others
were not so eager and dyed the shirts a darker color so that the print was not easily detectable.
"We do not yet grasp the importance of companies and their contribution to society," admitted Hans-Olaf Henkel, president of the Federation of German Industries, at the
November investors' conference. The American concept of the "corporate citizen" could help to anchor companies in their east German surroundings and win over the last skeptics. "What Germany needs
is a good PR firm," suggested a participant in an open discussion. "There are success stories out here—if only American newspapers would not report so negatively all the time." Regine Wosnitza
writes from Berlin.
For information on investing in eastern Germany contact the Industrial Investment Council in Berlin: IIC, The New German Länder, Charlottenstrasse 57, 10104 Berlin, Germany; Tel.:
011.49.30. 2094- 5660; Fax: 011.49.30.2094-5666; Web: http://www.iic.de
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