The story [in
brief] of American businessmen and government officials who dealt
with the Nazis for profit or through conviction throughout the Second
World War. At its centre is ‘The Fraternity’, an influential
international group associated with the Rockefeller or Morgan banks.
From
the “Trading With the Enemy” cover blurb:
 Cover
via Amazon
“Here is the
extraordinary true story of the American businessmen and government
officials who dealt with the Nazis for profit or through conviction
throughout the Second World War: Ford. Standard Oil, Chase Bank and
members of the State Department were among those who shared in the
spoils. Meticulously documented and dispassionately told, this is an
alarming story. At its centre is ‘The Fraternity’, an influential
international group associated with the Rockefeller or Morgan banks
and linked by the ideology of Business as Usual.
Higham starts
with an account of the Bank for International Settlements in Basel,
Switzerland – a Nazi-controlled bank presided over by an American,
Thomas H. McKittrick, even in 1944. While Americans were dying in the
war, McKittrick sat down with his German, Japanese, Italian, British
and American executive staff to discuss the gold bars that had been
sent to the Bank earlier that year by the Nazi government for use by
its leaders after the war. This was gold that had been looted from
the banks of Austria, Belgium, and Czechoslovakia or melted down from
teeth fillings, eyeglass frames, and wedding rings of millions of
murdered Jews.
But that is only
one of the cases detailed in this book. We have Standard Oil shipping
enemy fuel through Switzerland for the Nazi occupation forces in
France; Ford trucks transporting German troops; I.T.T. helping supply
the rocket bombs that marauded much of London ; and I.T.T. building
the Focke-Wulfs that dropped those bombs. Long and shocking is the
list of diplomats and businessmen alike who had their own ways of
profiting from the war.”
==============
Preface to the
book TRADING WITH THE ENEMY: An Exposé of The Nazi-American
Money-Plot 1933-1949 by Charles Higham; Hale, London, 1983.
Preface
It would be
comforting to believe that the financial Establishment of the United
States and the leaders of American industry were united in a common
purpose following the Day of Infamy, the Japanese attack on Pearl
Harbor on December 7, 1941. Certainly, the American public was
assured that Big Business along with all of the officials of
government ceased from the moment the war began to have any dealings
whatsoever with the enemy. That assurance sustained the morale of
millions of Americans who bore arms in World War II and their kinfolk
who stayed at home and suffered the anguish of separation.
But the
heartbreaking truth is that a number of financial and industrial
figures of World War II and several members of the government served
the cause of money before the cause of patriotism. While aiding the
United States’ war effort, they also aided Nazi Germany’s.
I first came
across this fact in 1978 when I was declassifying documents in the
course of writing a biography that dealt with motion picture star
Errol Flynn’s Nazi associations. In the National Archives Diplomatic
Records Room I found numerous cross-references to prominent figures
who, I had always assumed, were entirely committed to the American
cause, yet who had been marked down for suspected subversive
activities.
I had heard over
the years about a general agreement of certain major figures of
American, British, and German commerce to continue their relations
and associations after Pearl Harbor. I had also heard that certain
figures of the warring governments had arranged to assist in this.
But I had never seen any documentary evidence of it. Now, pieces of
information began to surface. I started to locate documents and have
them declassified under the Freedom of Information Act—a painfully
slow and exhausting process that lasted two and a half years. What I
found out was very disturbing.
I had been born
to a patriotic British family. My father had raised the first
battalions of volunteers against Germany in World War I, and had
built the Star and Garter Hospital at Richmond, Surrey, for
ex-servicemen. He had been knighted by King George V for his services
to the Crown and had been a member of Parliament and a Cabinet
member. I feel a strong sense of loyalty to Britain, as well as to my
adopted country, the United States of America. Moreover, I am part
Jewish. Auschwitz is a word stamped on my heart forever.
It thus came as a
severe shock to learn that several of the greatest American corporate
leaders were in league with Nazi corporations before and after Pearl
Harbor, including I.G. Farben, the colossal Nazi industrial trust
that created Auschwitz. Those leaders interlocked through an
association I have dubbed The Fraternity. Each of these business leaders
was entangled with the others through interlocking directorates or
financial sources. All were represented internationally by the
National City Bank or by the Chase National Bank and by the Nazi
attorneys Gerhardt Westrick and Dr. Heinrich Albert. All had
connections to that crucial Nazi economist, Emil Puhl, of Hitler’s
Reichsbank and the Bank for International Settlements.
The tycoons were
linked by an ideology: the ideology of Business as Usual. Bound by
identical reactionary ideas, the members sought a common future in
fascist domination, regardless of which world leader might further
that ambition.
Several members
not only sought a continuing alliance of interests for the duration
of World War II but supported the idea of a negotiated peace with Germany
that would bar any reorganization of Europe along liberal lines. It
would leave as its residue a police state that would place The
Fraternity in postwar possession of financial, industrial, and
political autonomy. When it was clear that Germany was losing the war
the businessmen became notably more “loyal.” Then, when war was over,
the survivors pushed into Germany, protected their assets, restored
Nazi friends to high office, helped provoke the Cold War, and insured
the permanent future of The Fraternity.
From the outset I
realized that in researching the subject I would have to carve
through an ice cream mountain of public relations. I searched in vain
through books about the corporations and their histories to find any
reference to questionable activities in World War II. It was clear
that the authors of those volumes, granted the cooperation of the
businesses concerned, predictably backed off from disclosing anything
that would be revealing. To this day the bulk of Americans do not
suspect The Fraternity. The government smothered everything, during
and even (inexcusably) after the war. What would have happened if
millions of American and British people, struggling with coupons and
lines at the gas stations, had learned that in 1942 Standard Oil of New
Jersey managers shipped the enemy’s fuel through neutral Switzerland
and that the enemy was shipping Allied fuel? Suppose the public had
discovered that the Chase Bank in Nazi-occupied Paris after Pearl
Harbor was doing millions of dollars’ worth of business with the
enemy with the full knowledge of the head office in Manhattan? Or
that Ford trucks were being built for the German occupation troops in
France with authorization from Dearborn, Michigan? Or that Colonel
Sosthenes Behn, the head of the international American telephone
conglomerate ITT, flew from New York to Madrid to Berne during the
war to help improve Hitler’s communications systems and improve the
robot bombs that devastated London? Or that ITT built the Focke-Wulfs
that dropped bombs on British and American troops? Or that crucial
ball bearings were shipped to Nazi-associated customers in Latin
America with the collusion of the vice-chairman of the U.S. War
Production Board in partnership with Göring’s cousin in Philadelphia
when American forces were desperately short of them? Or that such
arrangements were known about in Washington and either sanctioned or
deliberately ignored?
For the
government did sanction dubious transactions—both before and after
Pearl Harbor. A presidential edict, issued six days after December 7,
1941, actually set up the legislation whereby licensing arrangements
for trading with the enemy could officially be granted. Often during
the years after Pearl Harbor the government permitted such trading.
For example, ITT was allowed to continue its relations with the Axis
and Japan until 1945, even though that conglomerate was regarded as
an official instrument of United States Intelligence. No attempt was
made to prevent Ford from retaining its interests for the Germans in Occupied
France, nor were the Chase Bank or the Morgan Bank expressly
forbidden to keep open their branches in Occupied Paris. It is
indicated that the Reichsbank and Nazi Ministry of Economics made
promises to certain U.S. corporate leaders that their properties
would not be injured after the Führer was victorious. Thus, the
bosses of the multinationals as we know them today had a six-spot on
every side of the dice cube. Whichever side won the war, the powers
that really ran nations would not be adversely affected.
And it is
important to consider the size of American investments in Nazi
Germany at the time of Pearl Harbor. These amounted to an estimated
total of $475 million. Standard Oil of New Jersey had $120 million
invested there; General Motors had $35 million; ITT had $30 million;
and Ford had $17.5 million. Though it would have been more patriotic
to have allowed Nazi Germany to confiscate these companies for the
duration—to nationalize them or to absorb them into Hermann Göring’s
industrial empire—it was clearly more practical to insure them
protection from seizure by allowing them to remain in special holding
companies, the money accumulating until war’s end. It is interesting
that whereas there is no evidence of any serious attempt by Roosevelt
to impeach the guilty in the United States, there is evidence that
Hitler strove to punish certain German Fraternity associates on the
grounds of treason to the Nazi state. Indeed, in the case of ITT,
perhaps the most flagrant of the corporations in its outright
dealings with the enemy, Hitler and his postmaster general, the
venerable Wilhelm Ohnesorge, strove to impound the German end of the
business. But even they were powerless in such a situation: the
Gestapo leader of counterintelligence, Walter Schellenberg, was a
prominent director and shareholder of ITT by arrangement with New
York—and even Hitler dared not cross the Gestapo.
As for Roosevelt,
the Sphinx still keeps his secrets. That supreme politician held all
of the forces of collusion and betrayal in balance, publicly praising
those executives whom he knew to be questionable. Before Pearl
Harbor, he allowed such egregious executives as James D. Mooney of
General Motors and William Rhodes Davis of the Davis Oil Company to
enjoy pleasant tête-à-têtes with Hitler and Göring, while maintaining
a careful record of what they were doing. During the war, J. Edgar
Hoover, Adolf A. Berle, Henry Morgenthau, and Harold Ickes kept the
President fully advised of all internal and external transgressions.
With great skill, he never let the executives concerned know that he
was on to them. By using the corporate leaders for his own war
purposes as dollar-a-year men, keeping an eye on them and allowing
them to indulge, under license or not, in their international
tradings, he at once made winning the war a certainty and kept the
public from knowing what it should not know.
Because of the
secrecy with which the matter has been blanketed, researching it
presented me with a nightmare that preceded the greater nightmare of
discovery. I embarked upon a voyage that resembled nothing so much as
a descent into poisoned waters in a diving bell.
Why did even the
loyal figures of the American government allow these transactions to
continue after Pearl Harbor? A logical deduction would be that not to
have done so would have involved public disclosure: the procedure of
legally disconnecting these alliances under the antitrust laws would
have resulted in a public scandal that would have drastically
affected public morale, caused widespread strikes, and perhaps
provoked mutinies in the armed services. Moreover, as some corporate
executives were never tired of reminding the government, their trial
and imprisonment would have made it impossible for the corporate
boards to help the American war effort. Therefore, the government was
powerless to intervene. After 1945, the Cold War, which the
executives had done so much to provoke, made it even more necessary
that the truth of The Fraternity agreements should not be revealed.
I began with the
conveniently multinational Bank for International Settlements in
Basle, Switzerland. The activities of this anomalous institution in
wartime are contained in Treasury Secretary Henry Morgenthau’s
official diaries at the Roosevelt Memorial Library at Hyde Park, New
York. Other details are contained in reports by the estimable
Lauchlin Currie, of Roosevelt’s White House Economics Staff, whom I
interviewed at length by telephone at his home in Bogotá, Colombia,
to which city he had been banished, his citizenship stripped from him
in 1956 for exposing American-Nazi connections. Another source lay in
reports by the late Orvis Schmidt of Treasury Foreign Funds Control.
German records were a useful source: Emil Puhl, vice-president and
real power of the Reichsbank, a most crucial figure in The
Fraternity’s dealings, had sent reports to his nominal superior, Dr.
Walther Funk, from Switzerland to Berlin late in the war.
I turned to the
matter of the Rockefeller-controlled Chase National Bank, which had
conducted its business for the Nazi High Command in Paris until the
war’s end. Evidently realizing that future historians might want to
examine the highly secret Chase Bank files, Morgenthau had left
subtle cross-references at Hyde Park that could lead future
investigators to Treasury itself. I asked Ralph V. Korp of Treasury
for access to the sealed Chase boxes, which had been under lock and
key since 1945. Under the Freedom of Information Act, Mr. Korp
obtained permission from his superiors to unseal the boxes and to
declassify the large number of documents contained therein.
From the Chase
Bank it was a natural progression to Standard Oil of New Jersey, the
chief jewel in the crown of the Rockefeller empire. Records of
Standard’s dealings with the Axis were contained in the Records Rooms
of the Diplomatic Branch of the National Archives were specially
declassified. There, too, I found records of Sterling Products,
General Aniline and Film, and William Rhodes Davis, whose FBI files
were also most revealing. Documents on ITT and RCA were declassified.
After waiting out the better part of the year, I was able to obtain
them from the National Archives. Classified SKF Industries files are
held in the Suitland, Maryland, annex of the Archives. General Motors
matters are covered in the James D. Mooney public access collection
of Georgetown University, Washington, D.C. The unpublished post–Pear
Harbor diaries of Harold Ickes were invaluable; they are to be found
in the manuscript room of the Library of Congress.
The most elusive
files were those on Ford in Occupied France. I could find no
reference to them in the Treasury documentary listings. I knew that a
Treasury team had investigated the company. I wondered if any member
of the team could be alive.
Something jolted
my memory. I remembered that a book entitled The Devil’s Chemists had
appeared after World War II, written by Josiah DuBois, an attorney
who had been part of the Treasury team at Nuremberg. The book was a
harrowing account of the trial of the executives of I.G. Farben, the
Nazi industrial trust, that showed Farben’s links to Wall Street.
I reread the
book’s pages, looking for a clue. In it DuBois mentioned that he came
from Camden, New Jersey. I decided to call information in the Camden
area because I had a theory that, embittered by his experience in
Germany and Washington, DeBois might have returned to live there
after the war. It was only a hunch, but it paid off. In fact, it
turned out that DuBois had gone back to his family law firm in
Camden. I wrote to him, asking if he had records of the Ford matter.
I figured that these might have been so important that he would have
been given personal custody of them; that Secretary Morgenthau might
not even have risked leaving them at Treasury.
DuBois replied
that he believed he still had the documents, including the letters of
Edsel Ford to his managers in Nazi-occupied France after Pearl
Harbor, authorizing improvements in automobile and truck supplies to
the Germans. After several weeks, DuBois wrote to say that he had
searched his attic to no avail. The documents were missing. However,
he would keep looking.
He was admitted
to a hospital where he underwent major surgery. Although enfeebled,
he returned to the attic and began searching again. Compelled by a
desire to disclose the truth, he pursued his task whenever he could
find the strength. At last, when he was about to give up hope, he
uncovered the documents.
However, he
explained that the main files was so incendiary that he would not
send it by mail or even by messenger—I was at liberty to examine it
in his office. I was faced with a new dilemma. Since I was expecting
delivery of an important set of documents, I couldn’t risk an absence
from my house for a prolonged journey to the East. I said I would
call him back.
I knew that
Rutgers University was close to DuBois’s offices. I called the Law
department and asked for a student researcher. Within an hour I
received a call from a young man who needed work. I contacted
DuBois’s secretary and arranged for the student to copy the documents
on the premises. He did so; I sent an air courier to his home to pick
them up. As I read the documents, the last details of the puzzle fell
into place.
I have tried to
write this book as dispassionately as possible, without attempting a
moral commentary, and without, of course, intending implication of
present corporations and their executive boards. It will be claimed
that the people in this book, since they are dead, cannot answer and
therefore should not be criticized. To that I would reply: Millions
died in World War II. They, too, cannot answer.
==============
Excerpted from
the book “Trading with the Enemy – The Nazi – American Money Plot
1933-1949″ by Charles Higham.
A Bank for All
Reasons
p1
On a bright May
morning in 1944, while young Americans were dying on the Italian
beachheads, Thomas Harrington McKittrick, American president of the
Nazi-controlled Bank for International Settlements in Basle,
Switzerland, arrived at his office to preside over a fourth annual
meeting in time of war. This polished American gentleman sat down
with his German, Japanese, Italian, British, and American executive
staff to discuss such important matters as the $378 million in gold
that had been sent to the Bank by the Nazi government after Pearl
Harbor for use by its leaders after the war. Gold that had been
looted from the national banks of Austria, Holland, Belgium, and
Czechoslovakia, or melted down from the Reichsbank holdings of the
teeth fillings, spectacle frames, cigarette cases and lighters, and
wedding rings of the murdered Jews.
The Bank for
International Settlements was a joint creation in 1930 of the world’s
central banks, including the Federal Reserve Bank of New York. Its
existence was inspired by Hjalmar Horace Greeley Schacht, Nazi
Minister of Economics and president of the Reichsbank, part of whose
early upbringing was in Brooklyn, and who had powerful Wall Street
connections. He was seconded by the all-important banker Emil Puhl,
who continued under the regime of Schacht’s successor, Dr. Walther
Funk.
Sensing Adolf
Hitler’s lust for war and conquest, Schacht, even before Hitler rose
to power in the Reichstag, pushed for an institution that would
retain channels of communication and collusion between the world’s
financial leaders even in the event of an international conflict. It
was written into the Bank’s charter, concurred in by the respective
governments, that the BIS should be immune from seizure, closure, or
censure, whether or not its owners were at war. These owners included
the Morgan-affiliated First National Bank of New York (among whose
directors were Harold S. Vanderbilt and Wendell Willkie), the Bank of
England, the Reichsbank, the Bank of Italy, the Bank of France, and
other central banks. Established under the Morgan banker Owen D.
Young’s so-called Young Plan, the BIS’s ostensible purpose was to
provide the Allies with reparations to be paid by Germany for World
War I. The Bank soon turned out to be the instrument of an opposite
function. It was to be a money funnel for American and British funds
to flow into Hitler’s coffers and to help Hitler build up his war
machine.
p7
By 1939, the BIS
had invested millions in Germany while Kurt von Schroder and Emil
Puhl deposited large sums in looted gold in the Bank. The BIS was an
instrument of Hitler, but its continuing existence was approved by
Great Britain even after that country went to war with Germany …
===========
The Chase Nazi
Account
p20
The Rockefellers’
Chase National Bank (later the Chase Manhattan) was the richest and
most powerful financial institution in the United States at the time
of Pearl Harbor. The Rockefellers owned Standard Oil of New Jersey,
the German accounts of which were siphoned through their own bank,
the Chase, as well as through the independent National City Bank of
New York, which also handled Standard, Sterling Products, General
Aniline and Film, SKF, and ITT, whose chief, Sosthenes Behn, was a
director of the N.C.B. Two executives of Standard Oil’s German
subsidiary were Karl Lindemann and Emil Helfferich, prominent figures
in Himmler’s Circle of Friends of the Gestapo-its chief
financiers-and close friends and colleagues of the BIS’s Baron von
Schroder.
p21
In 1942,
introducing a book entitled Patents for Hitler by Gunther Reimannthe,
the lawyer Creekmore Fath wrote:
“Since the middle
thirties, whenever a German business group wanted to make an agreement
with any business concern beyond the borders of Germany, it was
required first to submit a full text of the proposed agreement to the
Reichsbank. The Reichsbank rejected or rewrote until \ the agreement
met its approval. The Reichsbank approved no agreement which did not
fit into the plans of the Nazi State and carry that state another
step toward its goal of world domination. In other words, any
American firm which reached an agreement or dealt with a German firm
. . . was dealing … with Hitler himself.
As war
approached, the links between the Rockefellers and the Nazi
government became more and more firm. In 1936 the J. Henry Schroder
Bank of New York had entered into a partnership with the
Rockefellers. Schroder, Rockefeller and Company, Investment Bankers,
was formed as part of an overall company that Time magazine disclosed
as being “the economic booster of the Rome-Berlin Axis. ” The
partners in Schroder, Rockefeller and Company included Avery
Rockefeller, nephew of John D., Baron Bruno von Schroder in London,
and Kurt von Schroder of the BIS and the Gestapo in Cologne. Avery
Rockefeller owned 42 percent of Schroder, Rockefeller, and Baron
Bruno and his Nazi cousin 47 percent. Their lawyers were John Foster
Dulles and Allen Dulles of Sullivan and Cromwell. Allen Dulles (later
of the Office of Strategic Services) was on the board of Schroder.
Further connections linked the Paris branch of Chase to Schroder as
well as the pro-Nazi Worms Bank and Standard Oil of New Jersey in
France. Standard Oil’s Paris representatives were directors of the
Banque de Paris et des Pays-Bas, which had intricate connections to
the Nazis and to Chase.
Six months before
the war broke out in Europe, Joseph J. Larkin brought off his most
audacious scheme in the Nazi interest, acting in collusion with the
Schroder Bank. Aldrich and the Schroders secured no less than $25
million American for the use of Germany’s expanding war economy and
accompanied it with a detailed record (supplied direct to the Chase
Bank in Berlin for forwarding to the Nazi government) of the assets
and background of ten thousand Nazi sympathizers in the United
States. The negotiations were engineered with the help of Dr. Walther
Funk and Emil Puhl.
In essence, the
Nazi government through the Chase National Bank offered Nazis in
America the opportunity to buy marks with dollars at a discount. The
arrangement was open only to those who wished to return to Germany
and would use the marks in the interest of the Nazis. Before any
transaction could be made, such persons had to convince the Nazi
embassy in Washington that they were bona fide supporters of German
policy. They were told in pamphlets sent out by the Chase National
Bank in Manhattan that Germany could offer glorious opportunities to
them and that marks would provide a hedge against inflation and would
have much increased value after victo in the expected war.
As a result,
there was a rush on marks. On February 15, 1939, there was a summit
meeting at the Chase in New York of representatives of both Chase and
Schroder banks on what was known as the Ruckwanderer (Reimmigrant)
scheme. Alfred W. Barth was the personal representative of Winthrop
Aldrich and Joseph J. Larkin, while E. H. Meili of J. Henry Schroder
represented that side of the association. At the meeting the members
discussed a proposal that the Reichsbank should send a special
representative to the Nazi consulate in New York, which served as the
headquarters of the Gestapo and had its accounts at the Chase. The
American group decided that they should not take such a risk because
their importing such a person ` might reveal to the American public
that they were supporting Nazis. The minutes show that it was decided
to “let well enough alone and to conduct future business on behalf of
Berlin through ”the employment of numerous agents and sub-agents
who operate through the country. These agents and sub-agents in
cooperation with their respective principals, ourselves, can go a
long way towards educating Germans in exile and those sympathetic to
the Nazi cause through extensive newspaper advertising campaigns,
radio broadcasts, as well as through literature, etc. .It is
unanimously felt that it would be to the greatest advantage of
everyone concerned if . . . Berlin would instruct the various
consulates in the United States that all inquiries about . . .
transactions should be referred to ourselves, whose name should be
supplied not only to the various consular offices in the U.S. but
also to those who inquire at the consulates in respect to the
procedure.”
The bankers
agreed that special attention should be focused on shopkeepers,
factory workers, and others with little money but great potential for
Germany. They should be able-bodied young men and women of pure Aryan
stock. Above all, the present meeting must never come to the
attention of the American government. The minutes of the meeting
state:
“The ensuing
publicity and the agitation that has been furthered in certain
quarters of this country [against similar schemes] might possibly
compel our Department of State to enforce a clearing system between
Germany and America, under which monies due to American citizens such
as inheritances, etc., would have to be cleared. The results are too
obvious: firstly, no benefits are likely to accrue to Germany; secondly,
the final outcome might prove disadvantageous from Germany’s
standpoint.”
Thus, the Chase
directors and the barons von Schroder were afraid that if Morgenthau
discovered the true facts, the U.S. government might take measures
detrimental to the German government. It was an act of total
collaboration with the Nazis.
In May 1940 a
prominent diamond merchant in New York City, ~ Leonard Smit, began
smuggling commercial and industrial diamonds into Nazi Germany
through Panama. Smit’s company was theoretically Dutch, which placed
it under the provenance of the Nazis, but its stock was in fact owned
by the International Trading Company, which was located in Guernsey
in the Channel Islands. President Roosevelt had issued a freezing
order precluding the shipment of monies to Europe, especially if
these might seem to be to the advantage of the Axis. A few days after
the Smit account was frozen, Chase officials unblocked the funds at
Smit’s request. The funds flowed out to Panama, allowing diamonds to
be sent through the Canal Zone to Berlin.
On June 17, 1940,
when France was collapsing, Morgenthau via Roosevelt again blocked
the French account to prevent money going to the enemy. Within hours
of the blocking, somebody at Chase authorized the South American
branches of the Banque Francaise et Italienne pour l’Amerique du Sud
to transfer more than $1 million from New York to special accounts in
the Argentine and Uruguay. The Banque was 50 percent owned by the
Banque de Paris et des Pays-Bas (a Chase and Standard affiliate), and
50 percent owned by the Mussolini-controlled Banca Commerciale
Italiana. In South America, these banks were working partly for the
Axis. Larkin continued to permit free withdrawals from the special
accounts even though he knew perfectly well that such accounts were
cloaks for Banque Francaise et Italienne funds.
On June 23, 1941,
J. Edgar Hoover wrote to Morgenthau: “During the monitoring of
foreign funds at the Chase Bank, FBI discovered various payments to
oil companies in the United States. There are indications that the
Standard Oil Company of New Jersey has been receiving money from
German oil sales by order of the Reichsbank.”
p26
The Chase also
handled transactions for the Nazi Banco Aleman Transatlantico, which
was, according to a Uruguayan Embassy report dated August 18, 1943,
“No mere financial institution. It was in actuality treasurer or
comptroller of the Nazi Party in South America. It received local
party contributions, supervised and occasionally directed party
expenditures, received party funds from Germany under various guises
and juggled the deposits . . . all under the guidance of the German
Legations.” It was in fact a branch of the Deutsche Uberseeische Bank
of Berlin.
Most Nazi
businesses in South America handled their affairs through the Banco
Aleman. Thus, the German legations throughout Latin America possessed
channels for distribution and receipt of Nazi funds. The Paris Chase
received large amounts of money from Nazi sources through the medium
of the Bank.
Most important of
all, the Chase, with the full knowledge of Larkin, handled the
accounts of Otto Abetz, German ambassador to Paris, and the embassy
itself.
It is interesting
to consider what, among other things, Abetz and the German Embassy
dealt with during the war. They poured millions of francs into
various French companies that were collaborating with the Nazis. On
August 13, 1942, 5.5 million francs were passed through in one day to
help finance the military government and the Gestapo High Command.
This money helped to pay for radio propaganda and a campaign of
terror against the French people, including beatings, torture, and
brutal murder. Abetz paid 250,000 francs a month to fascist editors
and publishers in order to run their vicious anti-Semitic newspapers.
He financed the terrorist army known as the Mouvement Synarchique
Revolutionnaire, which flushed out anti-Nazi cells in Paris and saw
to it they were liquidated. In addition, Abetz used embassy funds to
trade in Jewish art treasures, including tapestries, paintings, and
ornaments, for the benefit of Goring, who wanted to get his hands on
every French artifact possible.
The Chase board
in New York could not claim that it was unfamiliar with these
activities on the ground that communication with Occupied France was
impossible. The purpose of retaining diplomatic relations with Vichy
was that the U.S. government could determine what was going on in
Occupied France. A constant flow of letters, telegrams, and phone
calls between Paris and the Vichy branch of Chase in
Chateauneuf-sur-Cher kept Albert Bertrand informed, and in return he
kept New York informed; Washington was advised by Larkin. Despite
some criticism by Nazi comptroller Hans-Joachim Caesar, Vichy had
under French law the power to close the Paris branch at any minute if
New York so instructed. No such instructions were ever received. .
===============
The Secrets of
Standard Oil
p32
In 1941, Standard
Oil of New Jersey was the largest petroleum corporation in the world.
Its bank was Chase, its owners the Rockefellers. Its chairman, Walter
C. Teagle, and its president, William S. Farish, matched Joseph J.
Larkin’s extensive connections with the Nazi government.
p33
From the 1920s on
Teagle showed a marked admiration for Germany’s enterprise in
overcoming the destructive terms of the Versailles Treaty. His
lumbering stride, booming tones, and clouds of cigar smoke became
widely and affectionately known in the circle that helped support the
rising Nazi party. He early established a friendship with the dour
and stubby Hermann Schmitz of I.G. Farben, entertaining him
frequently for lunch at the Cloud Room in the Chrysler Building,
Teagle’s favorite Manhattan haunt of the late 1920s and the 1930s.
Teagle also was friendly with the pro-Nazi Sir Henri Deterding of
Royal Dutch-Shell, who agreed with his views about capitalist
domination of Europe and the ultimate need to destroy Russia.
p33
Because of his
commercial and personal association with Herman Schmitz, and his
awareness that he must protect Standard’s interest in Nazi Germany,
Teagle made many visits to Berlin and the Standard tanks and tank
cars in Germany throughout the 1930s. He became director of American
I.G. Chemical Corp., the giant chemicals firm that was a subsidiary
of I.G. Farben. He invested heavily in American I.G. and American
I.G. invested heavily in Standard. He sat on the I.G. board with
Fraternity brothers Edsel Ford and William E. Weiss, chairman of
Sterling Products.
Following the
rise of Hitler to power, Teagle and Hermann Schmitz jointly gave a
special assignment to Ivy Lee, the notorious New York publicity man,
who had for some years worked for the Rockefellers. They engaged Lee
for the specific purpose of economic espionage. He was to supply I.G.
Farben, and through it the Nazi government, with intelligence on the
American reaction to such matters as the German armament program,
Germany’s treatment of the Church, and the organization of the
Gestapo. He was also to keep the American public bamboozled by
papering over the more evil aspects of Hitler’s regime. For this, Lee
was paid first $3,000 then $4,000 annually, the money paid to him
through the Bank for International Settlements in the name of I.G.
Chemie. The contract was for obvious reasons kept oral and the money
was transferred in cash. No entries were made in the books of the
employing companies or in those of Ivy Lee himself. After a short
period Lee’s salary was increased to $25,000 per year and he began
distributing inflammatory Nazi propaganda in the United States on
behalf of I.G. Farben, including virulent attacks on the Jews and the
Versailles Treaty.
p34
In February 1938
the Securities and Exchange Commission held a meeting to investigate
Nazi ownership of American I.G. through a Swiss subsidiary. The
commissioners grilled Teagle on the ownership of the Swiss company.
He pretended that he did not know the owners were I.G. Farben and the
Nazi government. The commissioners tried to make him admit that at
least American I.G. was “controlled by ‘European’ interests.” Teagle
replied dodgily, “Well, I think that would be a safe assumption.”
Asked who voted for him as a proxy at Swiss meetings, again he
asserted that he didn’t know. He also neglected to mention that
Schmitz and the Nazi government owned thousands of shares in American
I.G.
Teagle was
sufficiently embarrassed by the hearing to resign from the American
I.G. board, but he retained his connections with the company. He
remained in partnership with Farben in the matter of tetraethyl lead,
an additive used in aviation gasoline. Goring’s air force couldn’t
fly without it. Only Standard, Du Pont, and General Motors had the
rights to it. Teagle helped to organize a sale of the precious
substance to Schmitz, who in 1938 traveled to London and “borrowed”
500 tons from Ethyl, the British Standard subsidiary. Next year,
Schmitz and his partners returned to London and obtained $15 million
worth. The result was that Hitler’s air force was rendered capable of
bombing London, the city that had provided the supplies. Also, by
supplying Japan with tetraethyl, Teagle helped make it possible for
the Japanese to wage World War II.
p62
On September
22,1947, Judge Charles Clark delivered the final word on the subject.
He said, ”Standard Oil can be considered an enemy national in view of
its relationships with I.G. Farben-after the United States and
Germany had become active enemies.” The appeal was denied.
==================
The Mexican
Connection
p63
Even the supposed
enemies of The Fraternity were connected to it by almost invisible
threads. One of Jersey Standard’s most powerful rivals in the field
of petroleum supplies to Germany, William Rhodes Davis’s Davis Oil
Company, was connected to Goring and Himmler. Davis was linked to
Hermann Schmitz and I.G. Farben through the Americans Werner and Karl
von Clemm, New York diamond merchants (who were first cousins to Nazi
Foreign Minister Joachim von Ribbentrop by marriage), and through the
National City Bank.
The von Clemms
were fanatical devotees of Germany, even though both had become
American residents in 1932. They used a device typical in Nazi
circles: a device copied, ironically, from the Rothschilds. One
brother stayed in Berlin, the other remained in New York. They were
connected to the Schroder banks through interlocking directorships,
and on the board of a company that helped finance General Motors in
Germany along with I.G. Farben.
In 1931 they
financed the Gestapo with funds supplementing those supplied by
Schroder’s Stein Bank. Yet another Fraternity link was their involvement
with the First National Bank of Boston, an associate of the Bank for
International Settlements. They conceived the idea of unblocking
First National’s blocked German marks to build a vast oil refinery
for Goring’s air force and for Farben and Eurotank near Hamburg, with
Karl von Clemm in charge. This oil refinery would bypass the terms of
the Versailles Convention and supply Goring’s so-called Black
Luftwaffe, which was secretly being prepared for world conquest.
In order to
secure the oil for the refinery, the von Clemm brothers had to find
an American who would aid and abet them. The choice was easy. From
1926 to 1932, Werner von Clemm had financially sustained a largely
unsuccessful oil prospector and confidence trickster named William
Rhodes Davis.
Davis was on the
face of it unprepossessing. He was short, not much over five feet,
with a solid-gold left front molar and a badly bowed left leg that
contained a silver plate put there after he was injured in a train
wreck in 1918. His head was too large for his body, and his face
sported a broken nose. Yet despite his lack of good looks he had the
one indispensable quality needed for success. He had the gift of gab.
He was capable of talking anyone into the ground. He spoke in
superlatives. He never took no for an answer, and he would shaft
anyone when the chips were down.
Davis was born in
Montgomery, Alabama, in 1889. Poorly educated, he left school at
sixteen and jumped a freight car. A kindly porter gave him a job as
candy butcher, selling chocolate and ice cream from a tray. Railroad
crazy, he graduated to brakeman, fireman, and engineer in the
Southwestern states until the collision put him out of commission.
Emerging from the hospital with a gimpy leg, he used his plight to
his own advantage by working as a comedian on the Keith vaudeville
circuit, making audiences laugh as he wiggled his distorted member in
a dance. When his popularity ran out, he shipped off on tramp
steamers as stoker, fireman, and engineer.
Back in the
United States, he dabbled in the oil business but consistently went
broke. He was under frequent investigation for a variety of swindles.
People were fascinated, even hypnotized, by him; but disillusionment
would always set in, followed by the inevitable lawsuit. He sold dry
wells, manipulated stocks, and set up and collapsed small companies,
carrying the shareholders with him.
In 1926 he was
penniless. The von Clemm twins stepped into the picture in 1933.
Their support of him saved him from ruin and imprisonment. As a
result of this he became deeply committed to Nazism. He was
fascinated by the opulence of a Germany heavily financed by American
bank loans, the handsome, healthy men in black uniforms, the pretty
blond women. It all seemed a far cry from the bread lines and pinched
faces of America in the Depression.
After the deal
with the German government over Eurotank, Davis saw the way to make
his fortune at last. He owned a few wells through the von Clemms’
good graces. With German money he could certainly start pumping.
He traveled to
Berlin in 1933. He had to have the personal approval of Hitler before
he could go ahead. He arrived at the Adlon Hotel, where Karl von
Clemm arranged a reception for him to meet Hermann Schmitz of Farben,
Kurt von Schroder, and other German members of The Fraternity. He was
welcome at once when he gave the group the Nazi salute as he entered
the room.
Next morning, two
Gestapo officers delegated by Himmler arrived at the door of his
suite. They carried with them a letter from the Fuhrer. The former
brakeman and candy butcher was overwhelmed. He could not believe he
had received so signal an honor. The letter asked him to meet with
Finance Minister Hjalmar Schacht at the Reichsbank. When he arrived,
Schacht seemed cold and uninterested and brushed the whole matter
aside. Schacht already had deals going with Walter Teagle and Sir
Henri Deterding of Shell. What did he want with this small fry?
Furious, Davis
returned to the Adlon empty-handed. He wrote to Hitler, insisting
upon better treatment. Hitler replied immediately in person, asking
him to return to the Reichsbank the following morning for another
meeting.
Davis arrived in
the boardroom at 11 A.M. As FBI records show, Schacht smiled faintly
in a corner, obviously in no mood to talk. But a door flew open and
thirty directors of the bank appeared, to greet Davis with warm
handshakes. Hitler strode in. Everyone jumped to attention and gave
the Nazi salute. Hitler said, “Gentlemen, I have reviewed Mr. Davis’s
proposition and it sounds feasible. I want the bank to finance it.”
Then he walked out.
It was clear to
Davis that the directors of I.G. Farben, along with Kurt von
Schroder, had exercised influence over the Fuhrer.
Davis traveled to
England, where he resumed an earlier business relationship with Lord
Inverforth’s oil company. He obtained major concessions in Ireland
and Mexico. He traded Mexican oil for German machinery when it proved
impossible to export marks. Eurotank was built. By 1935, Davis was
shipping thousands of barrels of oil a week from his wells in Texas
and eastern Mexico.
Davis knew
Senator Joseph F. Guffey of Pennsylvania, whose friend Pittsburgh
oilman Walter A. Jones had major contacts in Washington. Through
Guffey and Jones, Davis met with John L. Lewis, the labor leader of
the CIO. Davis worked hard on Lewis, convincing him that national
socialism was preferable to democracy and that the German worker far
exceeded in health, good humor and muscular prowess the American
equivalent. In 1936, Davis tried to influence Roosevelt by pouring
money into the election campaign. From then on he was always able to
telephone the Oval Office.
In 1937 he saw a
major opportunity in Mexico. He was convinced President Lazaro
Cardenas would nationalize the oil fields. He foresaw a way to corner
all the oil in Mexico. In February 1938 he started bribing
high-ranking officials in the Mexican government. He made a close
friend of Nazi Vice-Consul Gerard Meier in Cuernavaca, who was
allegedly encouraging Cardenas to invade and repossess California, Texas,
Arizona, and New Mexico.
Davis obtained
the Mexican government’s cooperation. He was promised all the oil in
Mexico when Cardenas expropriated it on March 18, 1938. Cardenas kept
his promise. On April 18, John L. Lewis telephoned Cardenas’s
right-hand man Alejandro Carrillo. Lewis told Carrillo that Davis
would be making a deal with Germany and Italy immediately and that
these two countries were the only two with which it would be safe for
Mexico to deal.
Why did America’s
most famous labor leader support the arming of the Nazi war machine?
Because Lewis had major territorial ambitions himself. He dreamed of
a Pan-American federation of labor of which he would be the
unchallenged leader. Through Davis, and through Cardenas, he would be
able to consolidate the unions north and south of the border. In this
he had the total collusion of Vincente Lombardo Toledano, head of the
Mexican labor force.
By June 1938,
Davis’s first tanker was steaming to Germany with thousands of tons
of Mexican oil. But by 1939 he was already running into trouble. On
May 31 his chief geologist, Nazi Otto Probst, was found murdered in
his hotel room in Mexico City. Probst had been strangled by a
clothesline that was tied to the head of his bed.
The German
Embassy intervened and prevented an autopsy. FBI investigators
determined Probst had been poisoned. It turned out he had bribed
government officials and stimulated action against communists. It was
almost certainly a communist killing.
Communist cells
infiltrated Davis’s growing oil empire. He used strikebreakers to
vanquish the opposition and shipped millions of barrels of oil until
after World War II broke out in Europe.
Meanwhile, the
von Clemm brothers profited enormously from his success. Goring gave
them the German franchise in hops, putting them in virtual control of
the beer business.
Along with Davis,
they became multimillionaires.
===============
The Telephone
Plot
p93
During the early
days of 1942, Karl Lindemann, the Rockefeller-Standard Oil
representative in Berlin, held a series of urgent meetings with two
directors of the American International Telephone and Telegraph
Corporation: Walter Schellenberg, head of the Gestapo’s
counterintelligence service (SD), and Baron Kurt von Schroder of the
BIS and the Stein Bank. The result of these meetings was that
Gerhardt Westrick, the crippled boss of ITT in Nazi Germany, got
aboard an ITT Focke-Wulf bomber and flew to Madrid for a meeting in
March with Sosthenes Behn, American ITT chief.
In the sumptuous
Royal Suite of Madrid’s Ritz Hotel, the tall, sharp-faced Behn and
the heavily limping Westrick sat down for lunch to discuss how best
they could improve ITT’s links with the Gestapo, and its improvement
of the whole Nazi system of telephones, teleprinters, aircraft
intercoms, submarine and ship phones, electric buoys, alarm systems,
radio and radar parts, and fuses for artillery shells, as well as the
Focke-Wulf bombers that were taking thousands of American lives.
Sosthenes Behn,
whose first name was Greek for “life strength,” was born in St.
Thomas, the Virgin Islands, on January 30, 1882. His father was
Danish and his mother French-Italian. He and his brother Hernand,
later his partner, were schooled in Corsica and Paris.
In 1906, Behn and
his brother took over a sugar business in Puerto Rico and snapped up
a small and primitive local telephone company by closing in on a
mortgage. Realizing the potential of the newfangled telephone, Behn
began to buy up more companies in the Caribbean. He became a U.S.
citizen in 1913. In World War I, Behn served in the Signal Corps as
chief of staff for General George Russell. He learned a great deal
about military communications systems, and his services to France
earned him the Legion d’Honneur. Back in the United States, Behn
became associated with AT&T, of which Winthrop Aldrich was later
a director. In 1920, Behn’s work in the field of cables enabled him
to set up the ITT with $6 million paid in capital. Gradually, he spun
out a web of communications that ran worldwide. He soon became the
telephone king of the world, making deals with AT&T and J. P.
Morgan that resulted in his running the entire telephone system of
Spain by 1923. His Spanish chairman was the Duke of Alba, later a
major supporter of Franco and Hitler. In 1930 Behn obtained the Rumanian
telephone industry, to which he later added the Hungarian, German,
and Swedish corporations. By 1931 his empire was worth over $64
million despite the Wall Street crash. He became a director
of-inevitably-the National City Bank, which financed him along with
the Morgans.
Behn was aided by
fascist governments, into which he rapidly interlocked his system by
assuring politicians promising places on his boards. He ran his
empire from 67 Broad Street, New York.
p95
When Hitler
invaded Poland, Behn and Schroder conferred with t: German alien
property custodian, H-J Caesar. The result was that the ITT Polish
companies were protected from seizure for the duration.
Another protector
of Behn’s in Germany was ITT’s colorful corporation chairman,
Gerhardt Westrick. Westrick was a skilled company lawyer, the German
counterpart and associate of John Foster Dulles. Westrick’s partner
until 1938, the equally brilliant Dr. Heinrich Albert, was head of
Ford in Germany until 1945. Both were crucially important to The
Fraternity.
At the beginning
of 1940, Behn decided to have Westrick go to the United States to
link up the corporate strands that would remain secure throughout
World War II. German Foreign Minister von Ribbentrop was equally
concerned that Westrick undertake the mission. Westrick represented
in Germany not only Ford but General Motors, Standard Oil, the Texas
Company, Sterling Products, and the Davis Oil Company.
p97
On June 26, 1940,
his Fraternity associates gave a party for Westrick at the
Waldorf-Astoria Hotel to celebrate the Nazi victory in France. This
was, of course, only appropriate. Fraternity guests at this
scorpions’ feast included Dietrich, brother of Hermann Schmitz of
General Aniline and Film; James D. Mooney of General Motors; Edsel
Ford of the Ford Motor Company; William Weiss of Sterling Products;
and Torkild Rieber of the Texas Company. These leaders of The
Fraternity agreed to help in the free-trade agreements that would
follow a negotiated peace with Germany.
Westrick leased a
large house in Scarsdale, New York, from one of Rieber’s Texas
Company lawyers. He was seen entering and leaving the house in the
company of prominent figures of the Nazi government and American
industry. The New York Daily News sent reporter George Dickson to
investigate the meaning of a big white placard with a large G on it
in a window of a front second-floor bedroom. The press generally was
suggesting this formed some kind of code for use by Nazi agents.
Dickson wrote in his column: ”Phantom-like men in white have been
responding by day and night to mysterious signaling from a secluded
Westchester mansion-now disclosed as the secret quarters of Dr.
Gerhardt A. Westrick-invariably they carry carefully wrapped packages
. . . they salute with all the precision of Storm Troopers, deliver
the packages, salute again- and silently depart . . . super-sleuthing
finally solved the mystery just before last midnight.” Then Dickson
delivered his death blow to the story: The G sign was an invitation
to the Good Humor man to deliver his famous ice cream on a stick!
J. Edgar Hoover
of the FBI determined that Westrick had illegally obtained his
driver’s license by lying that he had no infirmities. The purpose was
achieved: Walter Winchell, Drew Pearson, and other patriotic
columnists blew up Westrick’s Nazi connections out of all proportion,
and Westrick was asked by German Charge d’Affaires Hans Thomsen to
return to Germany at once.
But before he was
ordered home, Westrick had been extremely busy. He had gone to see
Edsel and Henry Ford at Dearborn on July 11 at the Fords’ urgent
invitation, conferring with the Grand Old Man and his son on the
matter of restricting shipment of important Rolls-Royce motors to a
beleaguered Britain that urgently needed them. He also visited with
Will Clayton, Jesse Jones’s associate in the Department of Commerce,
who went with Westrick to see Cordell Hull to plead for the
protection of German-American trade agreements on behalf of his
friends in the Texas cotton industry.
p98
Clayton was the
chairman of the U.S. Commercial Company, and he helped protect
Fraternity interests during World War II. Others of Westrick’s circle
included, interestingly enough, William Donovan, who became head of
the OSS (precursor of the CIA) on its formation in 1942. Westrick
also made significant contacts with good and true friends at Eastman
Kodak and Underwood before returning home via Japan and Russia.
After Pearl
Harbor, at meetings with Kurt von Schroder and Behn in Switzerland,
Westrick nervously admitted he had run into a problem. Wilhelm
Ohnesorge, the elderly minister in charge of post offices, who was
one of the first fifty Nazi party members, was strongly opposed to
ITT’s German companies continuing to function under New York management
in time of war. Behn told Westrick to use Schroder and the protection
of the Gestapo against Ohnesorge. In return, Behn guaranteed that ITT
would substantially increase its payments to the Gestapo through the
Circle of Friends.
A special board
of trustees was set up by the German government to cooperate with
Behn and his thirty thousand staff in Occupied Europe. Ohnesorge
savagely fought these arrangements and tried to obtain the support of
Himmler. However, Schroder had Himmler’s ear, and so, of course, did
his close friend and associate Walter Schellenberg. Ohnesorge
appealed directly to Hitler and condemned Westrick as an American
sympathizer. However, Hitler realized the importance of ITT to the
German economy and proved supportive of Behn.
The final
arrangement was that the Nazi government would not acquire the shares
of ITT but would confine itself to the administration of the shares.
Westrick would be chairman of the managing directors.
Thus, an American
corporation literally entered into partnership with the Nazi
government in time of war.
p101
Shortly after
Pearl Harbor, Roosevelt had asked Nelson Rockefeller to prepare a
study of the communications systems of South America. On May 4, 1942,
the President had sent a memorandum to Henry Wallace in his role as
chairman of the Board of Economic Warfare, ordering him to insure
disconnection of all enemy nationals in the radio, telephone, and
telegraph fields. He had urged Wallace to eliminate all Axis control
and influence in telecommunications in Latin America, acquire
hemisphere interests of all Axis companies, insure loyalty in
employees, and disrupt direct lines to the enemy. He had asked for a
corporation to be set up to handle the financial aspects of the
program with the assistance and advice of an advisory committee.
Wallace
approached Secretary of Commerce Jesse H. Jones to make the necessary
arrangements. Jones set up the U.S. Commercial Company to take charge
of the matter. It was a characteristic choice. The company’s
second-in-command was none other than Robert A. Gantt, vice-president
of ITT itself. Gantt continued to receive salary from ITT while
holding his position with the U.S. Commercial Company. The rest of
the board was largely composed of directors of ITT or RCA (also a
wartime partner in Nazi-American communications companies).
The Hemisphere
Communications Committee sat with a mixed Treasury, State, Army,
Navy, and U.S. Commercial Company board throughout World War II,
doing little more than discussing possible actions against Axis-connected
companies.
A pressing issue
from Pearl Harbor on was the matter of ITT amalgamating the telephone
companies of Mexico. One of these, Mexican Telephone and Telegraph,
was owned by Behn outright. The other was owned by the Ericsson
Company, of which Behn had a 35 percent share in Sweden. The Ericsson
Company was partly owned by Nazi collaborator Axel Wenner-Gren and by
Jacob Wallenberg, Swedish millionaire head of the ball bearings firm,
which played both sides of the war.
p104
In South America,
Sosthenes Behn was in partnership (as well as rivalry) with an even
more powerful organism: the giant Radio Corporation of America, which
owned the NBC radio network. RCA was in partnership before and after
Pearl Harbor with British Cable and Wireless; with Telefunken, the
Nazi company; with Italcable, wholly owned by the Mussolini
government; and with Vichy’s Compagnie Generale, in an organization
known as the Transradio Consortium, with General Robert C.
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