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A series of failed operations after that point, particularly the Battle of the Barents Sea — combined with the outstanding success of the U-boat fleet under the command of Karl Dönitz — led to his eventual demotion to the rank of Admiral Inspector of the Kriegsmarine in January 1943.
At a meeting on 6 January 1943 Hitler savaged Raeder, complaining that he had spent millions of Reichsmarks in the 1930s building a fleet that proved useless when war came, instead of spending the money on building U-boats, which had proven far more useful in the war.
Hitler went on to castigate the Navy, saying that Navy had done nothing in the wars of unification, that the High Seas Fleet " played no important role in the World War " and lacked "... men of action who were determined to fight with or without the Kaiser ", that the Navy were a nest of traitors whose only contribution to World War I was the High Seas Fleet mutiny of 1918, and that given this history, it was no surprise that the Navy's record in World War Two with the notable exception of the U-boats was one of failure after failure.
Raeder, who had always taken great pride in the history of the Navy, was very hurt by Hitler's account of German naval history, which was almost certainly Hitler's intention.
Hitler offered up the recent Battle of the Barents Sea as just one more example of how the Navy except for the U-boats failed him time after time.
Hitler went on to accuse naval officers of being cowards not fully committed to victory, and offered a contrast with the Army, which Hitler claimed was run by brave men unafraid of death in their quest for total victory.
Finally, Hitler announced that since Germany's capital ships had proven so useless, he was planning to scrap all of the capital ships and use their guns for coastal defence.
The gun crews would be assigned to coastal defence, while the rest of their crews would be redeployed to the U-boats and the E-boats or re-trained and sent to the Eastern Front as infantry.
Raeder left the meeting of 6 January very depressed, especially over the prospect of seeing his beloved capital ships scrapped and of Hitler's criticism of his leadership.
Raeder told Hitler on 14 January 1943 that he could not preside over the scrapping of the capital ships, and informed the Führer of his wish to resign as of 30 January 1943 rather than carry out a policy that he did not believe in.

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