In Germany 1935, what happened to the Jews in the armed forces?

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There is apparently a serious misconception present in the question, namely that from 1919–1935 there were a great number of Jews enlisted in the German army.

With two new laws of the programme "Wiedererlangung der Wehrhoheit", "Gesetz zur Wiedereinführung der Wehrpflicht" and "Reichsbürgergesetz" in 1935, the Reichswehr was transformed into the Wehrmacht and conscription re-implemented, in parallel with the racial laws of Nuremberg.

This meant that the very few people over all in the Reichswehr, restricted until 1935 by treaty of Versailles to 115000 men, were never meant to expand with any Jews present.

Most explicitly, the already antisemitic for a long time generality of the Reichswehr issued without Nazi orders but on the personal initiative of Blomberg in February 1934, that all of the men considered to be Jews serving in the Reichswehr be given an automatic and immediate dishonorable discharge. At that time this prolepting obedience affected 74 soldiers.
src: Jürgen Förster: "Complicity or Entanglement? The Wehrmacht, the War and the Holocaust", in: Michael Berenbaum & Abraham Peck (Eds): "The Holocaust and History: The Known, the Unknown, the Disputed and the Reexamined", Bloomington: Indian University Press, 1998, p. 268.

During World War One, 2000 Jews of 'all those serving' were allowed to become officers up to the rank of captain. During the time of the Reichswehr no Jews became senior officers at all.(Penslaw: Jews and the Military )

The strange thing then is that the Nuremberg laws of 1935 defined Jews to be excluded from the German nation, and consequently the army, but in the end 150000 people classified somehow as 'Jews' under those laws did serve in the Wehrmacht during the course of the war (cf Rigg). Some with falsified documents, some with official Nazi approvals, some with German Blood Certificates, some as "mixed-breeds" (Mischlinge), some as "honorary Aryans". Not every 'Mischling' by law was known to be of some Jewish descent. For example Helmut Schmidt who was deemed to be of "Nationalsozialistische Haltung tadelfrei" (blameless national-socialist disposition) on 18. September 1944.

Bryan Mark Rigg: "Hitler’s Jewish Soldiers: The Untold Story of Nazi Racial Laws and Men of Jewish Descent in the German Military", University Press of Kansas: Lawrence, 2002.

Most famous is probably the case of Werner Goldberg:

Shortly after the beginning of the war, Goldberg's photograph appeared in the Sunday edition of the Berliner Tagesblatt newspaper with the caption "The Ideal German Soldier"; the photograph had been sold to the newspaper by the official army photographer. It was later used on recruitment posters.

In 1940, following the Armistice with France, Goldberg was expelled from the army under Hitler's order of April 8, 1940, which stated that all first-degree Mischlinge were to be discharged from the military.

Note that this decree was not followed through to the letter and Hitler himself liked to intervene in individual cases, with varying outcomes. Some were sent home, some fought to the end, some were imprisoned or sent to camps. "Quarter-Jews" were generally left in the army and just prohibited to become officers.

Another case would be Melitta Schenk Gräfin von Stauffenberg. Being a first degree "Mischling" and an experienced pilot, she(!) was to be discharged as well. But she simply applied for Geltungsjude status ("Gleichstellung mit arischen Personen"), was judged to be important for the war effort and granted this status in 1941.

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