Wall Street and the Rise of Hitler (12 page)

The parent board of I.T.T. reflected the J.P. Morgan interests, with Morgan partners Arthur M. Anderson and Russell Leffingwell. The Establishment law firm of Davis, Polk, Wardwell, Gardiner & Reed was represented by the two junior partners, Gardiner & Reed.

DIRECTORS OF I.T.T. IN 1933:

Affiliation with other

Directors

Wall Street firms:

Arthur M. ANDERSON

Partner, J.P. MORGAN and

New York Trust Company

Hernand BEHN

Bank of America

Sosthenes BEHN

NATIONAL CITY BANK

F. Wilder BELLAMY

Partner in Dominick &

Dominicik

John W. CUTLER

GRACE NATIONAL BANK,

Lee Higginson

George H. GARDINER

Partner in Davis, Polk,

Wardwell, Gardiner & Reed

Allen G. HOYT

NATIONAL CITY BANK

Russell C. LEFFINGWELL

Partner J.P. MORGAN and

CARNEGIE CORP.

Bradley W. PALMER

Chairman, Executive

Committee, UNITED FRUIT

Lansing P. REED

Partner in Davis, Polk,

Wardwell, Gardiner & Reed

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

The National City Bank (NCB) in the Morgan group was represented by two directors, Sosthenes Behn and Allen G. Hoyt. In brief, I.T.T. was a Morgan-controlled company; and we have previously noted the interest of Morgan-controlled companies in war and revolution abroad and political maneuvering in the United States.
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In 1930 Behn acquired the German holding company of Standard Elekrizitäts A.G., controlled by I.T.T. (62.0 percent of the voting stock), A.E.G. (81.1 percent of the voting stock) and Felton & Guilleaume (six percent of the voting stock). In this deal Standard acquired two German manufacturing plants and a majority stock interest in Telefonfabrik Berliner A.G.I.T.T. also obtained the Standard subsidiaries in Germany, Ferdinand Schuchardt Berliner Fernsprech-und Telegraphenwerk A,G., as well as Mix & Genest in Berlin, and Suddeutsche Apparate Fabrik G,m.b.H. in Nuremburg.

It is interesting to note in passing that while Sosthenes Behn's I.T.T. controlled telephone companies and manufacturing plants in Germany, the cable traffic between the U.S. and Germany was under the control of Deutsch-Atlantische Telegraphengesellschaft (the German Atlantic Cable Company). This firm, together with the Commercial Cable Company and Western Union Telegraph Company, had a monopoly in transatlantic U.S.-German cable communications. W.A. Harriman & Company took over a block of 625,000 shares in Deutsch-Atlantische in 1925, and the firm's board of directors included an unusual array of characters, many of whom we have met elsewhere. It included, for example, H. F. Albert, the German espionage agent in the United States in World War I; Franklin D. Roosevelt's former business associate yon Berenberg-Gossler; and Dr. Cuno, a former German chancellor of the 1923 inflationary era. I.T.T. in the United States was represented on the board by yon Guilleaume and Max Warburg of the Warburg banking family

Baron Kurt von Schroder and the I.T.T.

There is no record that I.T.T. made direct payments to Hitler before the Nazi grab for power in 1933. On the other hand, numerous payments were made to Heinrich Himmler in the late 1930s and in World War II itself through I.T.T. German subsidiaries. The first meeting

between Hitler and I.T.T. officials — so far as we know — was reported in August 1933,3

when Sosthenes Behn and I.T.T. German representative Henry Manne met with Hitler in Berchesgaden. Subsequently, Behn made contact with the Keppler circle (see Chapter Nine) and, through Keppler's influence, Nazi Baron Kurt von Schröder became the guardian of I.T.T. interests in Germany. Schröder acted as the conduit for I.T.T. money funneled to Heinrich Himmler's S.S. organization in 1944,
while World War II was in progress, and the
United states was at war with Germany.
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Through Kurt Schröder, Behn and his I.T.T. gained access to the profitable German armaments industry and bought substantial interest in German armaments firms, including Focke-Wolfe aircraft. These armaments operations made handsome profits, which could have been repatriated to the United States parent company. But they were reinvested in German rearmament. This reinvestment of profits in German armament firms suggests that http://reformed-theology.org/html/books/wall_street/chapter_05.htm (2 of 9) [8/4/2001 9:44:14 PM]

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

Wall Street claims it was innocent of wrongdoing in German rearmament — and indeed did not even know of Hitler's intentions — are fraudulent. Specifically, I.T.T. purchase of a substantial interest in Focke-Wolfe meant, as Anthony Sampson has pointed out, that I.T.T.

was producing German planes used to kill Americans and their allies — and it made excellent profits out of the enterprise.

In Kurt von Schröder, I.T.T. had access to the very heart of the Nazi power elite. Who was Schröder? Baron Kurt von Schröder was born in Hamburg in 1889 into an old, established German banking family. An earlier member of the Schröder family moved to London, changed his name to Schroder (without the dierisis) and organized the banking firm of J.

Henry Schroder in London and J. Henry Schroder Banking Corporation in New York. Kurt von Schröder also became a partner in the private Cologne Bankhaus, J. H. Stein & Company, founded in the late eighteenth century. Both Schröder and Stein had been promoters, in company with French financiers, of the 1919 German separatist movement which attempted to split the rich Rhineland away from Germany and its troubles. In this escapade prominent Rhineland industrialists met at J. H. Stein's house on January 7, 1919

and a few months later organized a meeting, with Stein as chairman, to develop public support for the separatist movement. The 1919 action failed. The group tried again in 1923

and spearheaded another movement to break the Rhineland away from Germany to come under the protection of France. This attempt also failed. Kurt yon Schrader then linked up with Hitler and the early Nazis, and as in the 1919 and 1923 Rhineland separatist movements, Schröder represented and worked for German industrialists and armaments manufacturers.

In exchange for financial and industrial support arranged by yon Schrader, he later gained political prestige. Immediately after the Nazis gained power in 1933 Schrader became the German representative at the Bank for International Settlements, which Quigley calls the apex of the international control system, as well as head of the private bankers group advising the German Reichsbank. Heinrich Himmler appointed Sehroder an S.S. Senior Group Leader, and in turn Himmler became a prominent member of Keppler's Circle. (See Chapter Nine.)

In 1938 the Schroder Bank in London became the German financial agent in Great Britain, represented at financial meetings by its Managing Director (and a director of the Bank of England), F.C. Tiarks. By World War II Baron Schrader had in this manner acquired an impressive list of political and banking connections reflecting a widespread influence; it was even reported to the U.S. Kilgore Committee that Schrader was influential enough in 1940

to bring Pierre Laval to power in France. As listed by the Kilgore Committee, Sehroder's political acquisitions in the early 1940s were as follows:

SS Senior Group Leader.

Trade Group for Wholesale

Iron Cross of First and

and Foreign Trade –

Second Class.

Manager.

Swedish Consul General.

Akademie fur Deutsches

Recht (Academy of

Germany Law) – Member

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

International Chamber of

City of Cologne –

Commerce – Member of

Councilor.

administrative committee.

Council of Reich Post Office

University of Cologne –

– Member of advisory board.

Member of board of trustees.

German Industrial and

Kaiser Wilhelm Foundation

Commerce Assembly –

– Senator.

Presiding member.

Reich Board of Economic

Advisory Council of

Affairs Member.

German-Albanians.

Deutsche Reichsbahn –

Goods Clearing Bureau –

President of administrative

Member.

board.

Working Committee of

Reich Group for Industry

and Commerce – Deputy

chairman.
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Schröder's banking connections were equally impressive and his business connections (not listed here) would take up two pages:

Bank for International

Deutsche

Settlement – Member of the

Verkehrs-Kredit-Bank,

directorate.

A.G., Berlin (Controlled by

Deutsche Reichsbank) –

Chairman of board of

directors.

J.H. Stein & Co, Cologne –

Deutsche Ueberseeische

Partner (Banque Worms was

Bank (Controlled by

French cortespondent).

Deutsche Bank, Berlin) –

Director.
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Deutsche Reichsbank, Berlin.

Adviser to board of

directors.

Wirtschaftsgruppe Private

Bankegewerbe – Leader.

This was the Schröder who, after 1933, represented Sosthenes Behn of I.T.T. and I.T.T.

interests in Nazi Germany. Precisely because Schröder had these excellent political connections with Hitler and the Nazi State, Behn appointed Schröder to the boards of all the I.T.T. German companies: Standard Electrizitatswerke A.G. in Berlin, C. Lorenz A.G. of Berlin, and Mix & Genest A.G. (in which Standard had a 94-percent participation).

In the mid-1930s another link was forged between Wall Street and Schröder, this time through the Rockefellers. In 1936 the underwriting and general securities business handled http://reformed-theology.org/html/books/wall_street/chapter_05.htm (4 of 9) [8/4/2001 9:44:14 PM]

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

by J. Henry Schroder Banking Corporation in New York was merged into a new investment banking firm — Schroder, Rockefeller & Company, Inc. at 48 Wall Street. Carlton P. Fuller of Schroder Banking Corporation became president and Avery Rockefeller, son of Percy Rockefeller (brother of John D. Rockefeller) became vice president and director of the new firm. Previously, Avery Rockefeller had been associated behind the scenes with J. Henry

Schroder Banking Corporation; the new firm brought him out into the open.7

Westrick, Texaco, and I.T.T.

I.T.T. had yet another conduit to Nazi Germany, through German attorney Dr. Gerhard Westrick. Westrick was one of a select group of Germans who had conducted espionage in the United States during World War I. The group included not only Kurt von Schröder and Westrick but also Franz yon Papen — whom we shall meet in company with James Paul Warburg of the Bank of Manhattan in Chapter Ten — and Dr. Heinrich Albert. Albert, supposedly German commercial attache in the U.S. in World War I, was actually in charge of financing yon Papen's espionage program. After World War I Westrick and Albert formed the law firm of Albert & Westrick which specialized in, and profited heavily from, the Wall Street reparations loans. The Albert & Westrick firm handled the German end of the J Henry Schroder Banking loans, while the John Foster Dulles firm of Sullivan and Cromwell in New York handled the U.S. end of the Schroder loans.

Just prior to World War II the Albert-Papen-Westrick espionage operation in the United States began to repeat itself, only this time around the American authorities were more alert.

Westrick came to the U.S. in 1940, supposedly as a commercial attache but in fact as Ribbentrop's personal representative. A stream of visitors to the influential Westrick in-eluded prominent directors of U.S. petroleum and industrial firms, and this brought Westrick to the attention of the FBI.

Westrick at this time became a director of all I.T.T. operations in Germany, in order to

protect I.T.T. interests during the expected U.S. involvement in the European war.8 Among

his other enterprises Westrick attempted to persuade Henry Ford to cut off supplies to Britain, and the favored treatment given by the Nazis to Ford interests in France suggests that Westrick was partially successful in neutralizing U.S. aid to Britain.

Although Westrick's most important wartime business connection in the United States was with International Telephone and Telegraph, he also represented other U.S. firms, including Underwood Elliott Fisher, owner of the German company Mercedes Buromaschinen A.G.; Eastman Kodak, which had a Kodak subsidiary in Germany; and the International Milk Corporation, with a Hamburg subsidiary. Among Westrick's deals (and the one which received the most publicity) was a contract for Texaco to supply oil to the German Navy, which he arranged with Torkild Rieber, chairman of the board of Texaco Company.

In 1940 Rieber discussed an oil deal with Hermann Goering, and Westrick in the United States worked for Texas Oil Company. His automobile was bought with Texaco funds, and Westrick's driver's license application gave Texaco as his business address. These activities were publicized on August 12, 1940. Rieber subsequently resigned from Texaco and Westrick returned to Germany. Two years later Rieber was chairman of South Carolina http://reformed-theology.org/html/books/wall_street/chapter_05.htm (5 of 9) [8/4/2001 9:44:14 PM]

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

Shipbuilding and Dry Docks, supervising construction of more than $10 million of U.S.

Navy ships, and a director of the Guggenheim family's Barber Asphalt Corporation and

Seaboard Oil Company of Ohio.9

I.T.T. in Wartime Germany

In 1939 I.T.T. in the United States controlled Standard Elektrizitats in Germany, and in turn Standard Elektrizitats controlled 94 percent of Mix & Genest. On the board of Standard Elektrizitats was Baron Kurt yon Schrader, a Nazi banker at the core of Naziism, and Emil Heinrich Meyer, brother-in-law of Secretary of State Keppler (founder of the Keppler Circle) and a director of German General Electric. Schrader and Meyer were also directors of Mix & Genest and the other I.T.T. subsidiary, C. Lorenz Company; both of these I.T.T.