Wall Street and the Rise of Hitler (2 page)

Two extracts from contemporary sources will introduce and suggest the theme to be expanded. The first extract is from Roosevelt's own files. The U.S. Ambassador in Germany, William Dodd, wrote FDR from Berlin on October 19, 1936 (three years after Hitler came to power), concerning American industrialists and their aid to the Nazis:
Much as I believe in peace as our best policy, I cannot avoid the fears which
Wilson emphasized more than once in conversations with me, August 15, 1915

and later: the breakdown of democracy in all Europe will be a disaster to the
people. But what can you do? At the present moment more than a hundred
American corporations have subsidiaries here or cooperative understandings.

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INTRODUCTION: Unexplored Facets of Naziism

The DuPonts have three allies in Germany that are aiding in the armament
business. Their chief ally is the I. G. Farben Company, a part of the
Government which gives 200,000 marks a year to one propaganda
organization operating on American opinion. Standard Oil Company (New
York sub-company) sent $2,000,000 here in December 1933 and has made
$500,000 a year helping Germans make Ersatz gas for war purposes; but
Standard Oil cannot take any of its earnings out of the country except in goods.

They do little of this, report their earnings at home, but do not explain the facts.

The International Harvester Company president told me their business here
rose 33% a year (arms manufacture, I believe), but they could take nothing out.

Even our airplanes people have secret arrangement with Krupps. General
Motor Company and Ford do enormous businesses/sic] here through their
subsidiaries and take no profits out. I mention these facts because they
complicate things and add to war dangers.
8

Second, a quote from the diary of the same U.S. Ambassador in Germany. The reader should bear in mind that a representative of the cited Vacuum Oil Company — as well as representatives of other Nazi, supporting American firms — was appointed to the post-war Control Commission to de-Nazify the Nazis:

January 25. Thursday. Our Commercial Attache brought Dr. Engelbrecht,
chairman of the Vacuum Oil Company in Hamburg, to see me. Engelbrecht
repeated what he had said a year ago: "The Standard Oil Company of New
York, the parent company of the Vacuum, has spent 10,000,000 marks in
Germany trying to find oil resources and building a great refinery near the
Hamburg harbor." Engelbrecht is still boring wells and finding a good deal of
crude oil in the Hanover region, but he had no hope of great deposits. He
hopes Dr. Schacht will subsidize his company as he does some German
companies that have found no crude oil. The Vacuum spends all its earnings
here, employs 1,000 men and never sends any of its money home. I could give
him no encouragement.
9

And further:

These men were hardly out of the building before the lawyer came in again to
report his difficulties. I could not do anything. I asked him, however: Why did
the Standard Oil Company of New York send $1,000,000 over here in
December, 1933, to aid the Germans in making gasoline from soft coal for war
emergencies? Why do the International Harvester people continue to
manufacture in Germany when their company gets nothing out of the country
and when it has failed to collect its war losses? He saw my point and agreed
that it looked foolish and that it only means greater losses if another war
breaks loose.
10

The alliance between Nazi political power and American "Big Business" may well have looked foolish to Ambassador Dodd and the American attorney he questioned. In practice, of course, "Big Business" is anything but foolish when it comes to promoting its own http://reformed-theology.org/html/books/wall_street/introduction.htm (3 of 5) [8/4/2001 9:44:07 PM]

INTRODUCTION: Unexplored Facets of Naziism

self-interest. Investment in Nazi Germany (along with similar investments in the Soviet Union) was a reflection of higher policies, with much more than immediate profit at stake, even though profits could not be repatriated. To trace these "higher policies" one has to penetrate the financial control of multinational corporations, because those who control the flow of finance ultimately control the day-to-day policies.

Carroll Quigley11
has shown that the apex of this international financial control system before World War II was the Bank for International Settlements, with representatives from the international banking firms of Europe and the United States, in an arrangement that continued throughout World War II. During the Nazi period, Germany's representative at the Bank for International Settlements was Hitler's financial genius and president of the Reichsbank, Hjalmar Horace Greeley Schacht.

Hjalmar Horace Greeley Schacht

Wall Street involvement with Hitler's Germany highlights two Germans with Wall Street connections — Hjalmar Schacht and "Putzi" Hanfstaengl. The latter was a friend of Hitler and Roosevelt who played a suspiciously prominent role in the incident that brought Hitler to the peak of dictatorial power — the Reichstag fire of 1933.
12

The early history of Hjalmar Schacht, and in particular his role in the Soviet Union after the Bolshevik Revolution of 1917, was described in my earlier book,
Wall Street and the
Bolshevik Revolution.
The elder Schacht had worked at the Berlin office of the Equitable Trust Company of New York in the early twentieth century. Hjalmar was born in Germany rather than New York only by the accident of his mother's illness, which required the family to return to Germany. Brother William Schacht was an American-born citizen. To record his American origins, Hjalmar's middle names were designated "Horace Greeley" after the well-know Democrat politician. Consequently, Hjalmar spoke fluent English and the post-war interrogation of Schacht in Project Dustbin was conducted in both German and English. The point to be made is that the Schacht family had its origins in New York, worked for the prominent Wall Street financial house of Equitable Trust (which was controlled by the Morgan firm), and throughout his life Hjalmar retained these Wall Street connections.
13
Newspapers and contemporary sources record repeated visits with Owen Young of General Electric; Farish, chairman of Standard Oil of New Jersey; and their banking counterparts. In brief, Schacht was a member of the international financial elite that wields its power behind the scenes through the political apparatus of a nation. He is a key link between the Wall Street elite and Hitler's inner circle.

This book is divided into two major parts. Part One records the buildup of German cartels through the Dawes and Young Plans in the 1920s. These cartels were the major supporters of Hitler and Naziism and were directly responsible for bringing the Nazis to power in 1933.

The roles of American I. G. Farben, General Electric, Standard Oil of New Jersey, Ford, and other U.S. firms is outlined. Part Two presents the known documentary evidence on the financing of Hitler, complete with photographic reproduction of the bank transfer slips used to transfer funds from Farben, General Electric, and other firms to Hitler, through Hjalmar Horace Greeley Schacht.

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INTRODUCTION: Unexplored Facets of Naziism

Footnotes:

1(New York: Arlington House Publishers, 1974)

2(New York: Arlington House Publishers, 1975)

3
The Higher Circles: The Governing Class in America,
(New York: Vintage, 1970)

4
None Dare Call It Conspiracy,
(Rossmoor: Concord Press, 1971). For another view based on
"inside"
documents, see Carroll Quigley,
Tragedy and Hope,
(New York: The Macmillan Company, 1966)

5
The Invisible Government,
(Boston: Western Islands, 1962) 6Published in English as
The Occult and the Third Reich,
(The mystical origins of Naziism and the search for the Holy Grail), (New York: The Macmillan Company, 1974). See also Reginald H. Phelps, " 'Before Hitler Came:' Thule Society and Germanen Orden" in the
Journal of Modern History,
September 1968, No. 3.

7(Boston: Little Brown and Company, 1950)

8Edgar B. Nixon, ed.,
Franklin D. Roosevelt and Foreign Affairs,
Volume III: September 1935-January 1937, (Cambridge: Belknap Press, 1969), p. 456.

9Edited by William E. Dodd Jr. and Martha Dodd,
Ambassador Dodd's Diary,
1933-1938,
(New York: Harcourt Brace and Company, 1941), p. 303.

10Ibid, p. 358.

11Quigley,
op. cit.

12For more information about "Putzi" Hanfstaengl, see Chapter Nine.

13See Sutton,
Wall Street and the Bolshevik Revolution, op. cit.,
for Sehacht's relations with Soviets and Wall Street, and his directorship of a Soviet bank.

BACK

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CHAPTER ONE: Wall Street Paves the Way for Hitler

CHAPTER ONE

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 military capabilities.

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
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CHAPTER ONE: Wall Street Paves the Way for Hitler

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.
2

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.
3

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: