Wall Street and the Rise of Hitler (11 page)

(1) Above all, improvement of fuels through the addition of
tetraethyl-lead
and
the manufacture of this product. It need not be especially mentioned that
without tetraethl-lead the present methods of warfare would be impossible. The
fact that since the beginning of the war we could produce tetraethyl-lead is
entirely due to the circumstances that, shortly before, the Americans had
presented us with the production plans, complete with their know-how. It was,
moreover, the first time that the Americans decided to give a license on this
process in a foreign country (besides communication of unprotected secrets)
and this only on our urgent requests to Standard Oil to fulfill our wish.

Contractually we could not demand it,
and we found out later that the War
Department in Washington gave its permission only after long deliberation.

(2) Conversion of low-molecular unsaturates into usable gasoline
(polymerization).
Much work in this field has been done here as well as in
America. But the Americans were the first to carry the process through on a
large scale, which suggested to us also to develop the process on a large
technical scale. But above and beyond that, plants built according to American
processes are functioning in Germany.

(3) In the field of
lubricating oils as
well, Germany through the contract with
America, learned of experience which is extraordinarily important for present
day warfare.

In this connection, we obtained not only the experience of Standard, but,
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CHAPTER FOUR: Standard Oil Fuels World War II

through Standard, the experiences of General Motors and other large
American motor companies as well.

(4) As a further remarkable example of advantageous effect for us of the
contract between IG and Standard Oil, the following should be mentioned: in
the years 1934 / 1935 our government had the greatest interest in gathering
from abroad a stock of especially valuable mineral oil products (in particular,
aviation gasoline and aviation lubricating oil), and holding it in reserve to an
amount approximately equal to 20 million dollars at market value. The German
Government asked IG if it were not possible, on the basis o fits friendly
relations with Standard Oil, to buy this amount in Farben's name; actually,
however, as trustee of the German Government. The fact that we actually
succeeded by means of the most difficult negotiations in buying the quantity
desired by our government from the American Standard Oil Company and the
Dutch — English Royal — Dutch — Shell group and in transporting it to
Germany, was made possible only through the aid of the Standard Oil Co.

Ethyl Lead for the Wehrmacht

Another prominent example of Standard Oil assistance to Nazi Germany — in cooperation with General Motors — was in supplying ethyl lead. Ethyl fluid is an anti-knock compound used in both aviation and automobile fuels to eliminate knocking, and so improve engine efficiency; without such anti-knocking compounds modern mobile warfare would be impractical.

In 1924 the Ethyl Gasoline Corporation was formed in New York City, jointly owned by the Standard Oil Company of New Jersey and General Motors Corporation, to control and utilize U.S. patents for the manufacture and distribution of tetraethyl lead and ethyl fluid in the U.S. and abroad. Up to 1935 manufacture of these products was undertaken
only
in the United States. In 1935 Ethyl Gasoline Corporation transferred its know-how to Germany for use in the Nazi rearmament program. This transfer was undertaken over the protests of the U.S. Government.

Ethyl's intention to transfer its anti-knock technology to Nazi Germany came to the attention of the Army Air Corps in Washington, D.C. On December 15, 1934 E. W. Webb, president of Ethyl Gasoline, was advised that Washington had learned of the intention of "forming a German company with the I.G. to manufacture ethyl lead in that country." The War Department indicated that there was considerable criticism of this technological transfer, which might "have the gravest repercussions" for the U.S.; that the commercial demand for ethyl lead in Germany was too small to be of interest; and,

... it has been claimed that Germany is secretly arming [and] ethyl lead would
doubtless be a valuable aid to military aeroplanes.
10

The Ethyl Company was then advised by the Army Air Corps that "under no conditions should you or the Board of Directors of the Ethyl Gasoline Corporation disclose any secrets or 'know-how' in connection with the manufacture of tetraethyl lead to Germany.
11

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CHAPTER FOUR: Standard Oil Fuels World War II

On January 12, 1935 Webb mailed to the Chief of the Army Air Corps a "Statement of Facts," which was in effect a denial that any such technical knowledge would be transmitted; he offered to insert such a clause in the contract to guard against any such transfer. However, contrary to its pledge to the Army Air Corps, Ethyl subsequently signed a joint production agreement with I.G. Farben in Germany to form Ethyl G.m.b.H. and with Montecatini in fascist Italy for the same purpose.

It is worth noting the directors of Ethyl Gasoline Corporation at the time of this transfer:
12

E.W. Webb, president and director; C.F. Kettering; R.P. Russell; W.C. Teagle, Standard Oil of New Jersey and trustee of FDR's Georgia Warm Springs Foundation; F. A. Howard; E.

M. Clark, Standard Oil of New Jersey; A. P. Sloan, Jr.; D. Brown; J. T. Smith; and W.S.

Parish of Standard Oil of New Jersey.

The I.G. Farben files captured at the end of the war confirm the importance of this particular technical transfer for the German Wehrmacht:

Since the beginning of the war we have been in a position. to produce lead
tetraethyl solely because, a short time before the outbreak of the war, the
Americans had established plants for us ready for production and supplied us
with all available experience. In this manner we did not need to perform the
difficult work of development because we could start production right away on

the basis of all the experience that the Americans had had for years.
13

In 1938, just before the outbreak of war in Europe, the German Luftwaffe had an urgent requirement for 500 tons of tetraethyl lead. Ethyl was advised by an official of DuPont that

such quantities of ethyl would be used by Germany for military purposes.14
This 500 tons was loaned by the Ethyl Export Corporation of New York to Ethyl G.m.b.H. of Germany, in a transaction arranged by the Reich Air Ministry with I.G. Farben director Mueller-Cunradi.

The collateral security was arranged in a letter dated September 21, 1938
15
through Brown Brothers, Harriman & Co. of New York.

Standard Oil of New Jersey and Synthetic Rubber

The transfer of ethyl technology for the Nazi war machine was repeated in the case of synthetic rubber. There is no question that the ability of the German Wehrmacht to fight World War II depended on synthetic rubber — as well as on synthetic petroleum — because Germany has no natural rubber, and war would have been impossible without Farben's synthetic rubber production. Farben had a virtual monopoly of this field and the program to produce the large quantities necessary was financed by the Reich:
The volume of planned production in this field was far beyond the needs of
peacetime economy. The huge costs involved were consistent only with military
considerations in which the need for self-sufficiency without regard to cost was
decisive.
16

As in the ethyl technology transfers, Standard Oil of New Jersey was intimately associated with I.G. Farben's synthetic rubber. A series of joint cartel agreements were made in the late http://reformed-theology.org/html/books/wall_street/chapter_04.htm (6 of 8) [8/4/2001 9:44:14 PM]

CHAPTER FOUR: Standard Oil Fuels World War II

1920s aimed at a joint world monopoly of synthetic rubber. Hitler's Four Year Plan went into effect in 1937 and in 1938 Standard provided I.G. Farben with its new butyl rubber process. On the other hand Standard kept the German buna process secret within the United States and it was not until June 1940 that Firestone and U.S. Rubber were allowed to participate in testing butyl and granted the buna manufacturing licenses. Even then Standard tried to get the U.S. Government to finance a large-scale buna program — reserving its own

funds for the more promising butyl process.17

Consequently, Standard assistance in Nazi Germany was not limited to oil from coal, although this was the most important transfer. Not only was the process for tetraethyl transferred to I.G. Farben and a plant built in Germany owned jointly by I.G., General Motors, and Standard subsidiaries; but as late as 1939 Standard's German subsidiary designed a German plant for aviation gas. Tetraethyl was shipped on an emergency basis for the Wehrmacht and major assistance was given in production of butyl rubber, while holding secret in the U.S. the Farben process for buna. In other words, Standard Oil of New Jersey (first under president W.C. Teagle and then under W..S. Farish) consistently aided the Nazi war machine while refusing to aid the United States.

This sequence of events was not an accident. President W.S. Farish argued that not to have granted such technical assistance to the Wehrmacht
"...
would have been unwarranted."18

The assistance was knowledgeable, ranged over more than a decade, and was so substantive that without it the Wehrmacht could not have gone to war in 1939.

The Deutsche-Amerikanische Petroleum A.G. (DAPAG)

The Standard Oil subsidiary in Germany, Deutsche-Amerikanische Petroleum A.G.

(DAPAG), was 94-percent owned by Standard Oil of New Jersey. DAPAG had branches throughout Germany, a refinery at Bremen, and a head office in Hamburg. Through DAPAG, Standard Oil of New Jersey was represented in the inner circles of Naziism — the Keppler Circle and Himmler's Circle of Friends. A director of DAPAG was Karl Lindemann, also chairman of the International Chamber of Commerce in Germany, as well as director of several banks, including the Dresdner Bank, the Deutsche Reichsbank, and the private Nazi-oriented bank of C. Melchior & Company, and numerous corporations including the HAPAG (Hamburg-Amerika Line). Lindemann was a member of Keppler's Circle of Friends as late as 1944 and so gave Standard Oil of New Jersey a representative at the very core of Naziism. Another member of the board of DAPAG was Emil Helfrich, who was an original member of the Keppler Circle.

In sum, Standard Oil of New Jersey had two members of the Keppler Circle as directors of its German wholly owned subsidiary. Payments to the Circle from the Standard Oil subsidiary company, and from Lindemann and Helffrich as individual directors, continued

until 1944, the year before the end of World War II.19

Footnotes:

1In 1935, John D. Rockefeller, Jr. owned stock valued at $245 million in Stan http://reformed-theology.org/html/books/wall_street/chapter_04.htm (7 of 8) [8/4/2001 9:44:14 PM]

CHAPTER FOUR: Standard Oil Fuels World War II

dard Oil of New Jersey, Standard Oil of California, and Socony-Vacuun Company,
New York Times,
January 10, 1935.

2
Elimination of German Resources,
op cit., p. 1085.

3Ibid.

4
NMT,
I.G. Farben case, p. 1304.

5
New York Times,
April 28, 1929.

6Ibid.

7Ibid, November 24, 1929.

8
NMT,
I.G. Farben case, Volumes VII and VIII, pp. 1304-1311, 9See letter from U.S. War Department reproduced as Appendix D.

10United States Congress. Senate. Hearings before a subcommittee of the Committee on Military Affairs.
Scientific and Technical Mobilization,
(78th Congress, 1st session, S. 702), Part 16, (Washington: Government Printing Office, 1944), p. 939. Hereafter cited as
Scientific and Technical Mobilization.

11Ibid.

12
Oil and Petroleum Yearbook, 1938,
p. 89.

13
New York Times,
October 19, 1945, p. 9.

14George W. Stocking & Myron W. Watkins,
Cartels in Action,
(New York: The Twentieth Century Fund, 1946), p. 9.

15For original documents see
NMT,
I.G. Farben case, Volume VIII, pp.

1189-94.

16
NMT,
I.G. Farben case, Volume VIII, p. 1264-5.

17
Scientific and Technical Mobilization,
p. 543.

18Robert Engler,
The Politics of Oil,
(New York: The MacMillan Company, 1961), p. 102.

19See Chapter Nine for details.

BACK

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CHAPTER FIVE: I.T.T. Works Both Sides of the War

CHAPTER FIVE

I.T.T. Works Both Sides of the War

Thus while I.T.T. Focke-Wolfe planes were bombing Allied ships, and I. T. T.

lines were passing information to German submarines, I.T.T. direction .finders
were saving other ships from torpedoes.
(Anthony Sampson,
The Sovereign
State of I.T.T.,
New York: Stein & Day, 1973, p. 40.)

The multi-national giant International Telephone and Telegraph (I.T.T.)1 was founded in

1920 by Virgin Islands-born entrepreneur Sosthenes Behn. During his lifetime Behn was the epitome of the politicized businessman, earning his profits and building the I.T.T. empire through political maneuverings rather than in the competitive market place. In 1923, through political adroitness, Behn acquired the Spanish telephone monopoly, Compania Telefonica de Espana. In 1924 I.T.T., now backed by the J.P. Morgan firm, bought what later became the International Standard Electric group of manufacturing plants around the world.