HITLER AND WALL STREET
FUNDING THE NAZI MACHINE
Banking Elite Funded Both Sides of WW2
Wall Street Paves the Way for Hitler
The Dawes Plan, adopted in August 1924, fitted perfectly into the plans of the German General Staffs military economists. (Testimony before United States Senate, Committee on Military Affairs, 1946.)
The post-World War II Kilgore Committee of the United States Senate heard detailed evidence from government officials to the effect that, …when the Nazis came to power in 1933, they found that long strides had been made since 1918 in preparing Germany for war from an economic and industrial point of view.1
This build-up for European war both before and after 1933 was in great part due to Wall Street financial assistance in the 1920s to create the German cartel system, and to technical assistance from well-known American firms which will be identified later, to build the German Wehrmacht. Whereas this financial and technical assistance is referred to as ”accidental” or due to the “short-sightedness” of American businessmen, the evidence presented below strongly suggests some degree of premeditation on the part of these American financiers. Similar and unacceptable pleas of “accident” were made on behalf of American financiers and industrialists in the parallel example of building the military power of the Soviet Union from 1917 onwards. Yet these American capitalists were willing to finance and subsidize the Soviet Union while the Vietnam war was underway, knowing that the Soviets were supplying the other side.
The contribution made by American capitalism to German war preparations before 1940 can only be described as phenomenal. It was certainly crucial to German militarycapabilities. For instance, in 1934 Germany produced domestically only 300,000 tons of
natural petroleum products and less than 800,000 tons of synthetic gasoline; the balance was imported. Yet, ten years later in World War II, after transfer of the Standard Oil of New Jersey hydrogenation patents and technology to I. G. Farben (used to produce synthetic gasoline from coal), Germany produced about 6 1/2 million tons of oil — of which 85 percent (5 1/2 million tons) was synthetic oil using the Standard Oil hydrogenation process. Moreover, the control of synthetic oil output in Germany was held by the I. G. Farben subsidiary, Braunkohle-Benzin A. G., and this Farben cartel itself was created in 1926 with Wall Street financial assistance.
On the other hand, the general impression left with the reader by modern historians is that this American technical assistance was accidental and that American industrialists were innocent of wrongdoing. For example, the Kilgore Committee stated:
The United States accidentally played an important role in the technical arming of Germany. Although the German military planners had ordered and persuaded manufacturing corporations to install modern equipment for mass production, neither the military economists nor the corporations seem to have realized to the full extent what that meant. Their eyes were opened when two of the chief American automobile companies built plants in Germany in order to sell in the European market, without the handicap of ocean freight charges and high German tariffs. Germans were brought to Detroit to learn the techniques of specialized production of components, and of straight-line assembly. What they saw caused further reorganization and refitting of other key German war
plants. The techniques learned in Detroit were eventually used to construct the dive-bombing Stukas …. At a later period I. G. Farben representatives in this country enabled a stream of German engineers to visit not only plane plants but others of military importance, in which they learned a great deal that was eventually used against the United States
Following these observations, which emphasize the “accidental” nature of the assistance, it has been concluded by such academic writers as Gabriel Kolko, who is not usually a supporter of big business, that:
It is almost superfluous to point out that the motives of the American firms bound to contracts with German concerns Were not pro. Nazi, whatever else they may have been. Yet, Kolko to the contrary, analyses of the contemporary American business press confirm that business journals and newspapers were fully aware of the Nazi threat and its nature, while warning their business readers of German war preparations. And even Kolko admits that:
The business press [in the United States] was aware, from 1935 on, that German prosperity was based on war preparations. More important, it was conscious of the fact that German industry was under the control of the Nazis and was being directed to serve Germany’s rearmament, and the firm mentioned most frequently in this context was the giant chemical empire, I. G. Farben.
Further, the evidence presented below suggests that not only was an influential sector of American business aware of the nature of Naziism, but for its own purposes aided Naziism wherever possible (and profitable) —with full knowledge that the probable outcome would be war involving Europe and the United States. As we shall see, the pleas of innocence do not accord with the facts.
1924: The Dawes Plan
The Treaty of Versailles after World War I imposed a heavy reparations burden on defeated Germany. This financial burden — a real cause of the German discontent that led to acceptance of Hitlerism — was utilized by the international bankers for their own benefit.
The opportunity to float profitable loans for German cartels in the United States was presented by the Dawes Plan and later the Young Plan. Both plans were engineered by these central bankers, who manned the committees for their own pecuniary advantages, and although technically the committees were not appointed by the U.S. Government, the plans were in fact approved and sponsored by the Government. Post-war haggling by financiers and politicians fixed German reparations at an annual fee of
132 billion gold marks. This was about one quarter of Germany’s total 1921 exports. When Germany was unable to make these crushing payments, France and Belgium occupied the Ruhr to take by force what could not be obtained voluntarily.
In 1924 the Allies appointed a committee of bankers (headed by American banker Charles G. Dawes) to develop a program of reparations payments. The resulting Dawes Plan was, according to Georgetown University Professor of International Relations Carroll Quigley, “largely a J.P. Morgan production.”5 The Dawes Plan arranged a series of foreign loans totaling $800 million with their proceeds flowing to Germany. These loans are important for our story because the proceeds, raised for the greater part in the United States from dollar investors, were utilized in the mid-1920s to create and consolidate the gigantic chemical and steel combinations of I. G. Farben and Vereinigte Stahlwerke, respectively. These cartels not only helped Hitler to power in 1933; they also produced the bulk of key German war materials used in World War II.
Between 1924 and 1931, under the Dawes Plan and the Young Plan, Germany paid out to the Allies about 86 billion marks in reparations. At the same time Germany borrowed abroad, mainly in the U.S., about 138 billion marks — thus making a net German payment of only three billion marks for reparations. Consequently, the burden of German monetary reparations to the Allies was actually carried by foreign subscribers to German bonds issued by Wall Street financial houses — at significant profits for themselves, of course. And, let it be noted, these firms were owned by the same financiers who periodically took off their banker hats and donned new ones to become “statesmen.” As “statesmen” they formulated the Dawes and Young Plans to “solve” the “problem” of reparations. As bankers, they floated the loans. As Carroll Quigley points out, It is worthy of note that this system was set up by the inter. national bankers and that the subsequent lending of other people’s money to Germany was very
profitable to these bankers.6
Who were the New York international bankers who formed these reparations commissions?
The 1924 Dawes Plan experts from the United States were banker Charles Dawes and Morgan representative Owen Young, who was president of the General Electric Company. Dawes was chairman of the Allied Committee of Experts in 1924. In 1929 Owen Young
became chairman of the Committee of Experts, supported by J.P. Morgan himself, with alternates T. W. Lamont, a Morgan partner, and T. N. Perkins, a banker with Morgan associations. In other words, the U.S. delegations were purely and simply, as Quigley has
pointed out, J. P. Morgan delegations using the authority and seal of the United States to promote financial plans for their own pecuniary advantage. As a result, as Quigley puts it, the “international bankers sat in heaven, under a rain of fees and commissions.”
The German members of the Committee of Experts were equally interesting. In 1924 Hjalmar Schacht was president of the Reichsbank and had taken a prominent role in organization work for the Dawes Plan; so did German banker Carl Melchior. One of the 1928 German delegates was A. Voegler of the German steel cartel Stahlwerke Vereinigte. In brief, the two significant countries involved — the United States and Germany —were represented by the Morgan bankers on one side and Schacht and Voegler on the other, both
of whom were key characters in the rise of Hitler’s Germany and subsequent German
Finally, the members and advisors of the Dawes and Young Commissions were not only
associated with New York financial houses but, as we shall later see, were directors of firms within the German cartels which aided Hitler to power.
1928: The Young Plan
According to Hitler’s financial genie, Hjalmar Horace Greeley Schacht, and Nazi industrialist Fritz Thyssen, it was the 1928 Young Plan (the successor to the Dawes Plan), formulated by Morgan agent Owen D. Young, that brought Hitler to power in 1933. Fritz Thyssen claims that, I turned to the National Socialist Party only after I became convinced that the fight against the Young Plan was unavoidable if complete collapse of Germany was to be prevented.8
The difference between the Young Plan and the Dawes Plan was that, while the Young Plan required payments in goods produced in Germany financed by foreign loans, the Young Plan required monetary payments and “In my judgment [wrote Thyssen] the financial debt thus created was bound to disrupt the entire economy of the Reich.”
The Young Plan was assertedly a device to occupy Germany with American capital and pledge German real assets for a gigantic mortgage held in the United States. It is noteworthy that German firms with U.S. affiliations evaded the Plan by the device of temporary foreign ownership. For instance, A.E.G. (German General Electric), affiliated with General Electric in the U.S., was sold to a Franco-Belgian holding company and evaded the conditions of the Young Plan. It should be noted in passing that Owen Young was the major financial backer for Franklin D. Roosevelt in the United European venture when FDR, as a budding Wall Street financier, endeavoured to take advantage of Germany’s 1925 hyperinflation. The United European venture was a vehicle to speculate and to profit upon the imposition of the Dawes Plan, and is clear evidence of private financiers (including Franklin D. Roosevelt) using the power of the state to advance their own interests by manipulating foreign policy.
Schacht’s parallel charge that Owen Young was responsible for the rise of Hitler, while obviously self-serving, is recorded in a U.S. Government Intelligence report relating the interrogation of Dr. Fritz Thyssen in September , 1945:
The acceptance of the Young Plan and its financial principles increased unemployment more and more, until about one million were unemployed. People were desperate. Hitler said he would do away with unemployment. The government in power at that time was very bad, and the situation of the people was getting worse. That really was the reason of the enormous success Hitler
had in the election. When the last election came, he got about 40%.9
However, it was Schacht, not Owen Young, who conceived the idea which later became the Bank for International Settlements. The actual details were worked out at a conference presided over by Jackson Reynolds, “one of the leading New York bankers,” together with Melvin Traylor of the First National Bank of Chicago, Sir Charles Addis, formerly of the Hong Kong and Shanghai Banking Corporation, and various French and German bankers.10 The B.I.S. was essential under the Young Plan as a means to afford a ready instrument for promoting international financial relations. According to his own statements, Schacht also gave Owen Young the idea that later became the post-World War II International Bank for Reconstruction and Development:
“A bank of this kind will demand financial co-operation be, tween vanquished and victors that will lead to community of interests which in turn will give rise to mutual confidence and understanding and thus promote and ensure peace.” I can still vividly recall the setting in which this conversation took place. Owen Young was seated in his armchair puffing away at his pipe, his legs
outstretched, his keen eyes fixed unswervingly on me. As is my habit when propounding such arguments I was doing a quiet steady “quarter-deck” up and down the room. When I had finished there was a brief pause. Then his whole face lighted up and his resolve found utterance in the words:
“Dr. Schacht, you gave me a wonderful idea and I am going to sell it to the world”
Building the German Cartels
A practical example of international finance operating behind the scenes to build and manipulate politico-economic systems is found in the German cartel system. The three largest loans handled by the Wall Street international bankers for German borrowers in the 1920s under the Dawes Plan were for the benefit of three German cartels which a few years later aided Hitler and the Nazis to power. American financiers were directly represented on the boards of two of these three German cartels. This American assistance to German cartels has been described by James Martin as follows: “These loans for reconstruction became a vehicle for arrangements that did more to promote World War II than to establish peace after World War I.15
The three dominant cartels, the amounts borrowed and the Wall Street floating syndicate
were as follows:
Looking at all the loans issued, it appears that only a handful of New York financial houses handled the German reparations financing. Three houses — Dillon, Read Co.; Harris, Forbes & Co.; and National City Company — issued almost three-quarters of the total face amount of the loans and reaped most of the profits:
Moreover, American assistance to Nazi war efforts extended into other areas.17 The two largest tank producers in Hitler’s Germany were Opel, a wholly owned subsidiary of General Motors (controlled by the J.P. Morgan firm), and the Ford A. G. subsidiary of the
Ford Motor Company of Detroit. The Nazis granted tax-exempt status to Opel in 1936, to enable General Motors to expand its production facilities. General Motors obligingly reinvested the resulting profits into German industry. Henry Ford was decorated by the Nazis for his services to Naziism. (See p. 93.) Alcoa and Dow Chemical worked closely with Nazi industry with numerous transfers of their domestic U.S. technology. Bendix Aviation, in which the J.P. Morgan-controlled General Motors firm had a major stock interest, supplied Siemens & Halske A. G. in Germany with data on automatic pilots and aircraft instruments. As late as 1940, in the “unofficial war,” Bendix Aviation supplied complete technical data to Robert Bosch for aircraft and diesel engine starters and received royalty payments in return.
In brief, American companies associated with the Morgan-Rockefeller international investment bankers — not, it should be noted, the vast bulk of independent American industrialists — were intimately related to the growth of Nazi industry. It is important to note as we develop our story that General Motors, Ford, General Electric, DuPont and the handful of U.S. companies intimately involved with the development of Nazi Germany were — except for the Ford Motor Company — controlled by the Wall Street elite — the
J.P. Morgan firm, the Rockefeller Chase Bank and to a lesser extent the Warburg Manhattan bank.18 This book is not an indictment of all American industry and finance. It is an indictment of the “apex” — those firms controlled through the handful of financial houses, the Federal Reserve Bank system, the Bank for International Settlements, and their continuing international cooperative arrangements and cartels which attempt to control the course of world politics and economics.
General Electric Funds Hitler
Among the early Roosevelt fascist measures was the National Industry Recovery Act (NRA) of June 16, 1933. The origins of this scheme are worth repeating. These ideas were first suggested by Gerard Swope of the General Electric Company … following this they were adopted by the United States Chamber of Commerce …. (Herbert Hoover, The Memoirs of Herbert Hoover:
The Great Depression, 1929-1941, New York: The Macmillan Company, 1952,
The multi-national giant General Electric has an unparalleled role in twentieth-century history. The General Electric Company electrified the Soviet Union in the 1920s and 1930s, and fulfilled for the Soviets Lenin’s dictum that “Socialism = electrification.”1 The Swope Plan, created by General Electric’s one-time president Gerard Swope, became Franklin D. Roosevelt’s New Deal, by a process deplored by one-time President Herbert Hoover and described in Wall Street and FDR.2 There was a long-lasting, intimate relationship between Swope and Young of General Electric Company and the Roosevelt family, as there was between General Electric and the Soviet Union. In 1936 Senator James A. Reed of Missouri, an early Roosevelt supporter, became aware of Roosevelt’s betrayal of liberal ideas and attacked the Roosevelt New Deal program as a “tyrannical” measure “leading to despotism, [and] sought by its sponsors under the communistic cry of ‘Social Justice.’” Senator Reed further charged on the floor of the Senate that Franklin D. Roosevelt was a “hired man for the economic royalists” in Wall Street and that the Roosevelt family “is one of the largest stockholders in the General Electric Company.”
As we probe into behind-the-scenes German interwar history and the story of Hitler and Naziism, we find both Owen D. Young and Gerard Swope of General Electric tied to the rise of Hitlerism and the suppression of German democracy. That General Electric directors are to be found in each of these three distinct historical categories — i.e., the development of the Soviet Union, the creation of Roosevelt’s New Deal, and the rise of Hitlerism — suggests how elements of Big Business are keenly interested in the socialization of the world, for their own purposes and objectives, rather than the maintenance of the impartial market place in a free society. General Electric profited handsomely from Bolshevism, from Roosevelt’s New Deal socialism, and, as we shall see below, from national socialism in Hitler’s Germany.
General Electric in Weimar Germany
Walter Rathenau was, until his assassination in 1922, managing director of Allgemeine Elekrizitats Gesellschaft (A.E.G,), or German General Electric, and like Owen Young and Gerard Swope, his counterparts in the U.S., he was a prominent advocate of corporate
socialism. Walter Rathenau spoke out publicly against competition and free enterprise, Why? Because both Rathanau and Swope wanted the protection and cooperation of the state for their own corporate objectives and profit. (But not of course for anybody else’s objectives and profits.) Rathanau expressed their plea in The New Political Economy:
The new economy will, as we have seen, be no state or governmental economy but a private economy committed to a civic power of resolution which certainly will require state cooperation for organic consolidation to overcome inner
friction and increase production and endurance.5
When we disentangle the turgid Rathenau prose, this means that the power of the State was to be made available to private firms for their own corporate purposes, i.e., what is popularly known as national socialism. Rathenau spoke out publicly against competition
and free enterprise. inheritance.”6 Not their own wealth, so far as can be determined, but the wealth of others who lacked political pull in the State apparatus.
Owen D. Young of General Electric was one of the three U.S. delegates to the 1923 Dawes Plan meeting which established the German reparations program. And in the Dawes and Young Plans we can see how some private firms were able to benefit from the power of the State. The largest single loans from Wall Street to Germany during the 1920s were reparations loans; it was ultimately the U.S. investor who paid for German reparations. The cartelization of the German electrical industry under A.E.G. (as well as the steel and chemical industries discussed in Chapters One and Two) was made possible with these Wall Street loans:
In 1928, at the Young Plan reparations meetings, we find General Electric president Owen D. Young in the chair as the chief U.S. delegate, appointed by the U.S. government to useU.S. government power and prestige to decide international financial matters enhancing Wall Street and General Electric profits. In 1930 Owen D. Young, after whom the Young Plan for German reparations was named, became chairman of the Board of General Electric Company in New York City. Young was also chairman of the Executive Committee of Radio Corporation of America and a director of both German General Electric (A.E.G.) and Osram in Germany. Young also served on the boards of other major U.S. corporations, including General Motors, NBC, and RKO; he was a councilor of the National Industrial Conference Board, a director of the International Chamber of Commerce, and deputy chairman of the board of the Federal Reserve Bank of New York. Gerard Swope was president and director of General Electric Company as well as French and German associated companies, including A.E.G. and Osram in Germany. Swope was also a director of RCA, NBC, and the National City Bank of New York. Other directors of International General Electric at this time reflect Morgan control of the company, and both Young and Swope were generally known as the Morgan representatives on the G.E. board, which included Thomas Cochran, another partner in the J.P. Morgan firm. General Electric director Clark Haynes Minor was president of International General Electric in the 1920s. Another director was Victor M. Cutter of the First National Bank of Boston and a figure in the “Banana Revolutions” in Central America.
In the late 1920s Young, Swope, and Minor of International General Electric moved into the German electrical industry and gained, if not control as some have reported, then at least a substantial say in the internal affairs of both A.E.G. and Osram. In July 1929 an agreement was reached between General Electric and three German firms — A.E.G., Siemens & Halske, and Koppel and Company — which between them owned all the shares in Osram, the electric bulb manufacturer. General Electric purchased 16% percent of Osram stock and reached a joint agreement for international control of electric bulbs production and marketing. Clark Minor and Gerard Swope became directors of Osram.7
In July 1929 great interest was shown in rumors circulating in German financial circles that General Electric was also buying into A.E.G. and that talks to this end were in progress between A.E.G. and G.E.8 In August it was confirmed that 14 million marks of common A.E.G. stock were to be issued to General Electric.
These shares, added to shares bought on the open market, gave General Electric a 25-percent interest in A.E.G. A closer working agreement was signed between the two companies, providing the German company U.S. technology and patents. It was emphasized in the news reports that A.E.G. would not have participation in G.E., but that on the other hand G.E. would finance expansion of A.E.G. in Germany.9 The German financial press also noted that there was no A.E.G. representation on the board of G.E. in the United States but that five Americans were now on the board of A.E.G. The Vossische Zeitung recorded,
The American electrical industry has conquered the worM, and only a few of the remaining opposing bastions have been able to withstand the onslaught…10
By 1930, unknown to the German financial press, General Electric had similarly gained an effective technical monopoly of the Soviet electrical industry and was soon to penetrate even the remaining bastions in Germany, particularly the Siemens group. In January 1930 three G.E. men were elected to the board of A.E.G. — Clark H. Minor, Gerard Swope, and E. H. Baldwin — and International General Electric (I.G.E.) continued its moves to merge the world electrical industry into a giant cartel under Wall Street control.
There is no evidence that Siemens, either through Siemens & Halske or Siemens-Schukert, participated directly in the financing of Hitler. Siemens contributed to Hitler only slightly and indirectly through a share participation in Osram. On the other hand, both A.E.G. and Osram directly financed Hitler through the Nationale Treuhand in substantial ways. Siemens retained its independence in the early 1930s while both A.E.G. and Osram were under American dominance and with American directors. There is no evidence that Siemens, without American directors, financed Hitler. On the other hand, we have irrefutable documentary evidence (see page 56) that both German General Electric and Osram, both with American directors, financed Hitler.
In the months following the attempted Wall Street take over of Siemens, the pattern of a developing world trust in the electrical industry clarified; there was an end to international patent fights and the G.E. interest in A.E.G. increased to nearly 30 percent.13
Consequently, in the early 1930s, as Hitler prepared to grab dictatorial power in Germany — backed by some, but by no means all, German and American industrialists — the German General Electric (A.E.G.) was owned by International General Electric (about 30
percent), the Gesellschaft für Electrische Unternemungen (25 percent), and Ludwig Lowe (25 percent). International General Electric also had an interest of about 16 2/3rds percent in Osram, and an additional indirect influence in
General Electric and the Financing of Hitler The tap root of modern corporate socialism runs deep into the management of two affiliated multi-national corporations: General Electric Company in the United States and its foreign associates, including German General Electric (A.E.G.), and Osram in Germany. We have noted that Gerard Swope, second president and chairman of General Electric, and Walter Rathanau of A.E.G. promoted radical ideas for control of the State by private business interests.
From 1915 onwards International General Electric (I.G.E.), located at 120 Broadway in New York City, acted as the foreign investment, manufacturing, and selling organization for the General Electric Company. I.G.E. held interests in overseas manufacturing companies including a 25 to 30-percent holding in German General Electric (A.E.G.), plus holdings in Osram G.m.b.H. Kommanditgesellschaft, also in Berlin. These holdings gave International General Electric four directors on the board of A.E.G., and another director at Osram, and significant influence in the internal domestic policies of these German companies. Thesignificance of this General Electric ownership is that A.E.G. and Osram were prominent suppliers of funds for Hitler in his rise to power in Germany in 1933. A bank transfer slip dated March 2, 1933 from A.E.G. to Delbruck Schickler & Co. in Berlin requests that 60,000 Reichsmark be deposited in the “Nationale Treuhand” (National Trusteeship)account for Hitler’s use. This slip is reproduced on page 56.
I.G. Farben was the most important of the domestic financial backers of Hitler, and (as noted elsewhere) I.G. Farben controlled American I.G. Moreover, several directors of A.E.G. were also on the board of I.G. Farben — i.e., Hermann Bucher, chairman of A.E.G. was on the I.G. Farben board; so were A.E.G. directors Julius Flechtheim and Walter von Rath. I.G. Farben contributed 30 percent of the 1933 Hitler National Trusteeship (or takeover) fund.
Walter Fahrenhorst of A.E.G. was also on the board of Phoenix A-G, Thyssen A-G and Demag A-G — and all were contributors to Hitler’s fund. Demag A-G contributed 50,000 RM to Hitler’s fund and had a director with A.E.G.— the notorious Friedrich Flick, and early Hitler supporter, who was later convicted at the Nuremberg Trials. Accumulatoren Fabrik A-G was a Hitler contributor (25,000 RM, see page 60) with two directors on the A.E.G. board, August Pfeffer and Gunther Quandt. Quandt personally owned 75 percent of Accumulatoren Fabrik.
Osram Gesellschaft, in which International General Electric had a 16 2/3rds direct interest, also had two directors on the A.E.G. board: Paul Mamroth and Heinrich Pferls. Osram contributed 40,000 RM directly to the Hitler fund. The Otto Wolff concern, Vereinigte Stahlwerke A-G, recipient of substantial New York loans in the 1920s, had three directors on the A.E.G. board: Otto Wolff, Henry Nathan and Jakob Goldschmidt. Alfred Krupp yon Bohlen, sole owner of the Krupp organization and an early supporter of Hitler, was a member of the Aufsichsrat of A.E.G. Robert Pferdmenges, a member of Himmler’s Circle of Friends, was also a director of A, E.G.
In other words, almost all of the German directors of German General Electric were financial supporters of Hitler and associated not only with A.E.G. but with other companies financing Hitler.
Walter Rathenau14 became a director of A,E.G. in 1899 and by the early twentieth century was a director of more than 100 corporations. Rathenau was also author of the” Rathenau Plan,” which bears a remarkable resemblance to the “Swope Plan” — i.e., FDR’s New Deal but written by Swope of G.E. In other words, we have the extraordinay coincidence that the authors of New Deal-tike plans in the U.S. and Germany were also prime backers of their implementers: Hitler in Germany and Roosevelt in the U.S.
Standard Oil Fuels World War II
In two gears Germany will be manufacturing oil and gas enough out of soft coal for a long war. The Standard Oil of New York is furnishing millions of dollars to help. (Report from the Commercial Attaché, U.S. Embassy in Berlin, Germany, January 1933, to State Department in Washington, D.C,)
The Standard Oil group of companies, in which the Rockefeller family owned a one-quarter (and controlling) interest,1 was of critical assistance in helping Nazi Germany prepare for World War II. This assistance in military preparation came about because Germany’s relatively insignificant supplies of crude petroleum were quite insufficient for modern mechanized warfare; in 1934 for instance about 85 percent of German finished petroleum products were imported. The solution adopted by Nazi Germany was to manufacture synthetic gasoline from its plentiful domestic coal supplies. It was the hydrogenation process of producing synthetic gasoline and iso-octane properties in gasoline that enabled Germany to go to war in 1940 — and this hydrogenation process was developed and financed by the Standard Oil laboratories in the United States in partnership with I.G. Farben.
Evidence presented to the Truman, Bone, and Kilgore Committees after World War II confirmed that Standard Oil had at the same time “seriously imperiled the war preparations of the United States.”2 Documentary evidence was presented to all three Congressional committees that before World War II Standard Oil had agreed with I.G. Farben, in the socalled Jasco agreement, that synthetic rubber was within Farben’s sphere of influence, while Standard Oil was to have an absolute monopoly in the U.S. only if and when Farben allowed development of synthetic rubber to take place in the U.S.: Accordingly [concluded the Kilgore Committee] Standard fully accomplished I.G.’s purpose of preventing United States production by dissuading American
rubber companies from undertaking independent research in developing synthetic rubber processes.3
Regrettably, the Congressional committees did not explore an even more ominous aspect of this Standard Oil — I.G. Farben collusion: that at this time directors of Standard Oil of New Jersey had not only strategic warfare affiliations to I.G. Farben, but had other links with Hitler’s Germany — even to the extent of contributing, through German subsidiary companies, to Heinrich Himmler’s personal fund and with membership in Himmler’s Circle of Friends as late as 1944. During World War II Standard Oil of New Jersey was accused of treason for this pre-war alliance with Farben, even while its continuing wartime activities within Himmler’s Circle of Friends were unknown. The accusations of treason were vehemently denied by Standard Oil. One of the more prominent of these defenses was published by R.T. Haslam, a director of Standard Oil of New Jersey, in The Petroleum Times (December 25, 1943), and entitled “Secrets Turned into Mighty War Weapons Through I.G. Farben Agreement.”4 This was an attempt to turn the tables and present the pre-war collusion as advantageous to the United States.
Whatever may have been Standard Oil’s wartime recollections and hasty defense, the 1929 negotiations and contracts between Standard and I.G. Farben were recorded in the contemporary press and describe the agreements between Standard Oil of New Jersey and I.G. Farben and their intent. In April 1929 Walter C. Teagle, president of Standard Oil of New Jersey, became a director of the newly organized American I.G. Farben. Not because Teagle was interested in the chemical industry but because, It has for some years past enjoyed a very close relationship with certain branches of the research work of the I.G. Farbenin-dustrie which bear closely upon the oil industry.5
It was announced by Teagle that joint research work on production of oil from coal had been carried on for some time and that a research laboratory for this work was to be established in the United States.6 In November 1929 this jointly owned Standard — Farben research company was established under the management of the Standard Oil Company of New Jersey, and all research and patents relating to production of oil from coal held by both I.G. and Standard were pooled. Previously, during the period 1926-1929, the two companies had cooperated in development of the hydrogenation process, and experimental plants had been placed in operation in both the U.S. and Germany.
It was now proposed to erect new plants in the U.S. at Bayway, New Jersey and Baytown, Texas, in addition to expansion of the earlier experimental plant at Baton Rouge. Standard announced:
… the importance of the new contract as applied to this country lay in the fact that it made certain that the hydrogenation process would be developed commercially in this country under the guidance of American oil interests.7 In December 1929 the new company, Standard I.G. Company, was organized. F.A. Howard was named president, and its German and American directors were announced as follows:
E.M. Clark, Walter Duisberg, Peter Hurll, R.A. Reidemann, H.G. Seidel, Otto von Schenck, and Guy Wellman.
Henry Ford and the Nazis
I would like to outline the importance attached by high [Nazi] officials to respect the desire and maintain the good will of “Ford,” and by “Ford” I mean your father, yourself, and the Ford Motor Company, Dearborn. (Josiah E. Dubois, Jr, Generals in Grey Suits, London: The Bodley Head, 1953, p. 250.)
Henry Ford is often seen to be something of an enigma among the Wall Street elite. For many years in the 20s and 30s Ford was popularly known as an enemy of the financial establishment. Ford accused Morgan and others of using war and revolution as a road to profit and their influence in social systems as a means of personal advancement. By 1938 Henry Ford, in his public statements, had divided financiers into two classes: those who profited from war and used their influence to bring about war for profit, and the
“constructive” financiers. Among the latter group he now included the House of Morgan. During a 1938 New York Times interview1 Ford averred that:
Somebody once said that sixty families have directed the destinies of the nation. It might well be said that if somebody would focus the spotlight on twenty-five persons who handle the nation’s finances, the world’s real warmakers would be
brought into bold relief. The Times reporter asked Ford how he equated this assessment with his long-standing
criticism of the House of Morgan, to which Ford replied:
There is a constructive and a destructive Wall Street. The House of Morgan represents the constructive. I have known Mr. Morgan for many years. He backed and supported Thomas Edison, who was also my good friend ….
After expounding on the evils of limited agricultural production — allegedly brought about by Wall Street — Ford continued,
… if these financiers had their way we’d be in a war now. They want war because they make money out of such conflict — out of the human misery that wars bring.
On the other hand, when we probe behind these public statements we find that Henry Ford and son Edsel Ford have been in the forefront of American businessmen who try to walk both sides of every ideological fence in search of profit. Using Ford’s own criteria, the Fords are among the “destructive” elements.
It was Henry Ford who in the 1930s built the Soviet Union’s first modern automobile plant (located at Gorki) and which in the 50s and 60s produced the trucks used by the North Vietnamese to carry weapons and munitions for use against Americans.2 At about the same time, Henry Ford was also the most famous of Hitler’s foreign backers, and he was rewarded in the 1930s for this long-lasting support with the highest Nazi decoration for foreigners.
This Nazi favor aroused a storm of controversy in the United States and ultimately degenerated into an exchange of diplomatic notes between the German Government and the State Department. While Ford publicly protested that he did not like totalitarian governments, we find in practice that Ford knowingly profited from both sides of World War II — from French and German plants producing vehicles at a profit for the Wehrmacht, and from U.S. plants building vehicles at a profit for the U.S. Army.
Henry Ford’s protestations of innocence suggest, as we shall see in this chapter, that he did not approve of Jewish financiers profiting from war (as some have), but if anti-Semitic Morgan and Ford profited from war that was acceptable, moral and “constructive.”
Henry Ford: Hitler’s First Foreign Backer
On December 20, 1922 the New York Times reported that automobile manufacturer Henry Ford was financing Adolph Hitler’s nationalist and anti-Semitic movements in Munich. Simultaneously, the Berlin newspaper Berliner Tageblatt appealed to the American Ambassador in Berlin to investigate and halt Henry Ford’s intervention into German domestic affairs. It was reported that Hitler’s foreign backers had furnished a “spacious headquarters” with a “host of highly paid lieutenants and officials.” Henry Ford’s portrait was prominently displayed on the walls of Hitler’s personal office:
The wall behind his desk in Hitler’s private office is decorated with a large picture of Henry Ford. In the antechamber there is a large table covered with books, nearly all of which are a translation of a book written and published by Henry Ford.
The same New York Times report commented that the previous Sunday Hitler had reviewed, The so-called Storming Battalion.., 1,000 young men in brand new uniforms and armed with revolvers and blackjacks, while Hitler and his henchmen drove
around in two powerful brand-new autos.
The Times made a clear distinction between the German monarchist parties and Hitler’s anti-Semitic fascist party. Henry Ford, it was noted, ignored the Hohenzollern monarchists and put his money into the Hitlerite revolutionary movement.
These Ford funds were used by Hitler to foment the Bavarian rebellion. The rebellion failed, and Hitler was captured and subsequently brought to trial. In February 1923 at the trial, vice president Auer of the Bavarian Diet testified:
The Bavarian Diet has long had the information that the Hitler movement was partly financed by an American anti-Semitic chief, who is Henry Ford. Mr. Ford’s interest in the Bavarian anti-Semitic movement began a year ago when one of Mr. Ford’s agents, seeking to sell tractors, came in contact with Diedrich Eichart, the notorious Pan-German. Shortly after, Herr Eichart asked
Mr. Ford’s agent for financial aid. The agent returned to America and immediately Mr. Ford’s money began coming to Munich.
Herr Hitler openly boasts of Mr. Ford’s support and praises Mr. Ford as a great individualist and a great anti-Semite. A photograph of Mr. Ford hangs in Herr Hitler’s quarters, which is the center of monarchist movement.6
Hitler received a mild and comfortable prison sentence for his Bavarian revolutionary activities. The rest from more active pursuits enabled him to write Mein Kampf. Henry Ford’s book, The International Jew, earlier circulated by the Nazis, was translated by them
into a dozen languages, and Hitler utilized sections of the book verbatim in writing Mein Kampf.
Henry Ford Receives a Nazi Medal
A decade later, in August 1938 — after Hitler had achieved power with the aid of the cartels — Henry Ford received the Grand Cross of the German Eagle, a Nazi decoration for distinguished foreigners. The New York Times reported it was the first time the Grand Cross had been awarded in the United States and was to celebrate Henry Ford’s 75th birthday.8 The decoration raised a storm of criticism within Zionist circles in the U.S. Ford backed off to the extent of publicly meeting with Rabbi Leo Franklin of Detroit to express his sympathy for the plight of German Jews:
My acceptance of a medal from the German people [said Ford] does not, as some people seem to think, involve any sympathy on my part with naziism. Those who have known me for many years realize that anything that breeds hate is repulsive to me.
The Nazi medal issue was picked up in a Cleveland speech by Secretary of Interior Harold Ickes. Ickes criticized both Henry Ford and Colonel Charles A. Lindbergh for accepting Nazi medals. The curious part of the Ickes speech, made at a Cleveland Zionist Society banquet, was his criticism of “wealthy Jews” and their acquisition and use of wealth: A mistake made by a non-Jewish millionaire reflects upon him alone, but a false step made by a Jewish man of wealth reflects upon his whole race. This is
harsh and unjust, but it is a fact that must be faced.
Perhaps Ickes was tangentially referring to the roles of the Warburgs in the I.G. Farben cartel: Warburgs were on the board of I.G. Farben in the U.S. and Germany. In 1938 the Warburgs were being ejected by the Nazis from Germany. Other German Jews, such as the Oppenheim bankers, made their peace with the Nazis and were granted “honorary Aryan status.”
Ford Motor Company Assists the German War Effort A post-war Congressional subcommittee investigating American support for the Nazi military effort described the manner in which the Nazis succeeded in obtaining U.S. technical and financial assistance as “quite fantastic. Among other evidence the Committee was shown a memorandum prepared in the offices of Ford-Werke A.G. on
November 25, 1941, written by Dr. H. F. Albert to R. H. Schmidt, then president of the board of Ford-Werke A.G. The memo cited the advantages of having a majority of the German firm held by Ford Motor Company in Detroit. German Ford had been able to
exchange Ford parts for rubber and critical war materials needed in 1938 and 1939 “and they would not have been able to do that if Ford had not been owned by the United States.”
Further, with a majority American interest German Ford would “more easily be able to step in and dominate the Ford holdings throughout Europe.” It was even reported to the Committee that two top German Ford officials had been in a bitter personal feud about who was to control Ford of England, such “that one of them finally got up and left the room in disgust.” According to evidence presented to the Committee, Ford-Werke A.G. was technically transformed in the late 1930s into a German company. All vehicles and their parts were produced in Germany, by German workers using German materials under German direction and exported to European and overseas territories of the United States and Great Britain.
Any needed foreign raw materials, rubber and nonferrous metals, were obtained through the American Ford Company. American influence had been more or less converted into a supporting position (Hilfsstellung) for the German Ford plants. At the outbreak of the war Ford-Werke placed itself at the disposal of the Wehrmacht for armament production. It was assumed by the Nazis that as long as Ford-Werke A.G. had an American majority, it would be possible to bring the remaining European Ford companies
under German influence — i.e., that of Ford-Werke A.G. — and so execute Nazi “Greater European” policies in the Ford plants in Amsterdam, Antwerp, Paris, Budapest, Bucharest, and Copenhagen:
A majority, even if only a small one, of Americans is essential for the transmittal of the newest American models, as well as American production and sales methods. With the abolition of the American majority, this advantage, as well as the intervention of the Ford Motor Company to obtain raw materials and exports, would be lost, and the German plant would practically only be
worth its machine capacity. And, of course, this kind of strict neutrality, taking an international rather than a national viewpoint, had earlier paid off for Ford Motor Company in the Soviet Union, where Ford was held in high regard as the ultimate of technical and economic efficiency to be achieved by the Stak-hanovites.
Who Financed Adolf Hitler?
The funding of Hitler and the Nazi movement has yet to be explored in exhaustive depth. The only published examination of Hitler’s personal finances is an article by Oron James Hale, “Adolph Hitler: Taxpayer,1 which records Adolph’s brushes with the German tax authorities before he became Reichskanzler, In the 1920s Hitler presented himself to the German tax man as merely an impoverished writer living on bank loans, with an automobile .bought on credit. Unfortunately, the original records used by Hale do not yield the source of Hitler’s income, loans, or credit, and German law “did not require self employed or professional persons to disclose in detail the sources of income or the nature of services rendered.”2 Obviously the funds for the automobiles, private secretary Rudolf Hess, another assistant, a chauffeur, and expenses incurred by political activity, came from somewhere. But, like Leon Trotsky’s 1917 stay in New York, it is hard to reconcile Hitler’s known expenditures with the precise source of his income.
Some Early Hitler Backers We do know that prominent European and American industrialists were sponsoring all manner of totalitarian political groups at that time, including Communists and various Nazi groups.
The U.S. Kilgore Committee records that:
By 1919 Krupp was already giving financial aid to one of the reactionary political groups which sowed the seed of the present Nazi ideology. Hugo Stinnes was an early contributor to the Nazi Party (National Socialistische Deutsche Arbeiter Partei). By 1924 other prominent industrialists and financiers, among them Fritz Thyssen, Albert Voegler, Adolph [sic] Kirdorf, and Kurt von Schroder, were secretly giving substantial sums to the Nazis. In 1931 members of the coalowners’ association which Kirdorf headed pledged
themselves to pay 50 pfennigs for each ton of’ coal sold, the money to go to the organization which Hitler was building.
Hitler’s 1924 Munich trial yielded evidence that the Nazi Party received $20,000 from Nuremburg industrialists. The most interesting name from this period is that of Emil Kirdorf, who had earlier acted as conduit for financing German involvement in the Bolshevik Revolution. Kirdorfs role in financing Hitler was, in his own words:
In 1923 I came into contact for the first time with the National-Socialist movement …. I first heard the Fuehrer in the Essen Exhibition Hall. His clear exposition completely convinced and overwhelmed me. In 1927 I first met the Fuehrer personally. I travelled to Munich and there had a conversation with the Fuehrer in the Bruckmann home. During four and a half hours Adolf Hitler explained to me his programme in de tail. I then begged the Fuehrer to put together the lecture he had given me in the form of a pamphlet. I then distributed this pamphlet in my name in business and manufacturing circles.
Since then I have placed myself completely at the disposition of his movement, Shortly after our Munich conversation, and as a result of the pamphlet which the Fuehrer composed and I distributed, a number of meetings took place between the Fuehrer and leading personalities in the field of indus. try. For the last time before the taking over of power, the leaders of industry met in my house together with Adolf Hitler, Rudolf Hess, Hermann Goering and other leading personalities of the party.
In 1925 the Hugo Stinnes family contributed funds to convert the Nazi weekly Volkischer Beobachter to a daily publication. Putzi Hanf-staengl, Franklin D. Roosevelt’s friend and protegé, provided the remaining funds.6 Table 7-1 summarizes presently known financial contributions and the business associations of contributors from the United States. Putzi is not listed in Table 7-1 as he was neither industrialist nor financier.
In the early 1930s financial assistance to Hitler began to flow more readily. There took place in Germany a series of meetings, irrefutably documented in several sources, between German industrialists, Hitler himself, and more often Hitler’s representatives Hjalmar Sehaeht and Rudolf Hess. The critical point is that the German industrialists financing Hitler were predominantly directors of cartels with American associations, ownership, participation, or some form of subsidiary connection. The Hitler backers were not, by and large, firms of purely German origin, or representative of German family business. Except for Thyssen and Kirdoff, in most cases they were the German multi-national firms — i.e., I.G. Farben, A.E.G., DAPAG, etc. These multi-nationals had been built up by American loans in the 1920s, and in the early 1930s had American directors and heavy American financial participation.
One flow of foreign political funds not considered here is that reported from the European based Royal Dutch Shell, Standard Oil’s great competitor in the 20s and 30s, and the giant brainchild of Anglo-Dutch businessman Sir Henri Deterding. It has been widely asserted that Henri Deterding personally financed Hitler. This argument is made, for instance, by biographer Glyn Roberts in The Most Powerful Man in the World. Roberts notes that Deterding was impressed with Hitler as early as 1921:
…and the Dutch press reported that, through the agent Georg Bell, he [Deterding] had placed at Hitler’s disposal, while the party was “still in long clothes,” no less than four million guilders.
It was reported (by Roberts) that in 1931 Georg Bell, Deterding’s agent, attended meetings of Ukrainian Patriots in Paris “as joint delegate of Hitler and Deterding.”
Roberts also reports:
Deterding was accused, as Edgar Ansell Mowrer testifies in his Germany Puts the Clock Back, of putting up a large sum of money for the Nazis on the understanding that success would give him a more favored position in the German oil market. On other occasions, figures as high as £55,000,000 were mentioned.
Financing Hitler in the March 1933 General Election
Putting the Georg Bell-Deterding and the Thyssen-Harriman cases to one side, we now examine the core of Hitler’s backing. In May 1932 the so-called “Kaiserhof Meeting” took place between Schmitz of I.G. Farben, Max Ilgner of American I.G. Farben, Kiep of
Hamburg-America Line, and Diem of the German Potash Trust. More than 500,000 marks was raised at this meeting and deposited to the credit of Rudolf Hess in the Deutsche Bank.
It is noteworthy, in light of the “Warburg myth” described in Chapter Ten that Max Ilgner of the American I.G. Farben contributed 100,000 RM, or one-fifth of the total. The “Sidney Warburg” book claims Warburg involvement in the funding of Hitler, and Paul Warburg was a director of American I.G. Farben22 while Max Warburg was a director of I.G. Farben. There exists irrefutable documentary evidence of a further role of. international bankers and industrialists in the financing of the Nazi Party and the Volkspartie for the March 1933 German election. A total of three million Reichmarks was subscribed by prominent firms and businessmen, suitably “washed” through an account at the Delbruck Schickler Bank, and then passed into the hands of Rudolf Hess for use by Hitler and the NSDAP. This transfer of funds was followed by the Reichstag fire, abrogation of constitutional rights, and consolidation of Nazi power. Access to the Reichstag by the arsonists was obtained through a tunnel from a house where Putzi Hanfstaengel was staying; the Reichstag fire itself was used by Hitler as a pretext to abolish constitutional rights. In brief, within a few weeks of the major funding of Hitler there was a linked sequence of major events: the financial contribution from prominent bankers and industrialists to the 1933 election, burning of the Reichstag, abrogation of constitutional rights, and subsequent seizure of power by the Nazi Party.
The fund-raising meeting was held February 20, 1933 in the home of Goering, who was then president of the Reichstag, with Hjalmar Horace Greeley Schacht acting as host. Among those present, according to I.G. Farben’s von Schnitzler, were:
Krupp von Bohlen, who, in the beginning of 1933, was president of the Reichsverband der Deutschen Industrie Reich Association of German Industry; Dr. Albert Voegler, the leading man of the Vereinigte Stahlwerke; Von Loewenfeld; Dr, Stein, head of the Gewerkschaft Auguste-Victoria, a mine which belongs to the IG.
Hitler expounded his political views to the assembled businessmen in a lengthy two-and one- half hour speech, using the threat of Communism and a Communist take-over to great effect:
It is not enough to say we do not want Communism in our economy. If we continue on our old political course, then we shall perish …. It is the noblest task of the leader to find ideals that are stronger than the factors that pull the people together. I recognized even while in the hospital that one had to search for new ideals conducive to reconstruction. I found them in nationalism, in the
value of personality, and in the denial of reconciliation between nations ….
Now we stand before the last election. Regardless of the outcome, there will be no retreat, even if the coming election does not bring about decision, one way or another. If the election does not decide, the decision must be brought about by other means. I have intervened in order to give the people once more the chance to decide their fate by themselves ….
There are only two possibilities, either to crowd back the opponent on constitutional grounds, and for this purpose once more this election; or a struggle will be conducted with other weapons, which may demand greater sacrifices. I hope the German people thus recognize the greatness of the hour.
After Hitler had spoken, Krupp von Bohlen expressed the support of the assembled industrialists and bankers in the concrete form of a three-million-mark political fund. It turned out to be more than enough to acquire power, because 600,000 marks remained
unexpended after the election.
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