CHAPTER
ELEVEN
Wall
Street-Nazi Collaboration in World War II
Behind the battle fronts in World War II, through intermediaries in Switzerland and North Africa, the New York financial elite collaborated with the Nazi regime, Captured files after the war yielded a mass of evidence demonstrating that for some elements of Big Business, the period 1941-5 was "business as usual." For instance, correspondence between U.S.
(1) the business of the Ford subsidiaries in France
substantially increased; (2) their production was solely for the benefit of the
Germans and the countries under its occupation; (3) the Germans have
"shown clearly their wish to protect the Ford interests" because of
the attitude of strict neutrality maintained by Henry Ford and the late Edsel
Ford; and (4) the increased activity of the French Ford subsidiaries on behalf
of the Germans received the commendation of the Ford family in America.1
Similarly, the Rockefeller Chase Bank was accused of
collaborating with the Nazis in World War II France, while Nelson Rockefeller
had a soft job in Washington D.C.:
Substantially the same pattern of behavior was pursued by
the Paris office of the Chase Bank during German occupation, An examination of
the correspondence between Chase, New York, and Chase, France, from the date of
the fall of France to May, 1942 discloses that: (1) the manager of the Paris
office appeased and collaborated with the Germans to place the Chase banks in a
"privileged position;" (2) the Germans held the Chase Bank in a very
special esteem — owing to the international activities of our (Chase) head
office and the pleasant relations which the Paris branch has been maintaining
with many of their (German) banks and their (German) local organizations and
higher officers; (3)the Paris manager was "very vigorous in enforcing
restrictions against Jewish property, even going so far as to refuse to release
funds belonging to Jews in anticipation that a decree with retroactive
provisions prohibiting such release might be published in the near future by
the occupying authorities;" (4)the New York office despite the above
information took no direct steps to remove the undesirable manager from the
Paris office since it "might react against our (Chase) interests as we are
dealing, not with a theory but with a situation."2
An official report to then-Secretary of the Treasury
Morgenthau concluded that:
These two situations [i.e., Ford and Chase Bank] convince us
that it is imperative to investigate immediately on the spot the activities of
subsidiaries of at least some of the larger American firms which were operating
in France during German occupation ....3
Treasury officials urged that an investigation be started
with the French subsidiaries of several American banks — that is, Chase,
Morgan, National City, Guaranty, Bankers Trust, and American Express. Although
Chase and Morgan were the only two banks to maintain French
offices
throughout the Nazi occupation, in September 1944 all the major New York banks
were pressing the U.S. Government for permission to re-open pre-war branches.
Subsequent Treasury investigation produced documentary evidence of collaboration
between both Chase Bank and J.P. Morgan with the Nazis in World War II. The
recommendation for a full investigation is cited in full as follows:
TREASURY DEPARTMENT
INTER-OFFICE COMMUNICATION
Date: December 20, 1944
To: Secretary Morgenthau From: Mr. Saxon
Examination of the records of the Chase Bank, Paris, and of Morgan and Company, France, have progressed only far enough to permit tentative conclusions and the revelation of a few interesting facts:
To: Secretary Morgenthau From: Mr. Saxon
Examination of the records of the Chase Bank, Paris, and of Morgan and Company, France, have progressed only far enough to permit tentative conclusions and the revelation of a few interesting facts:
CHASE BANK, PARIS
a. Niederman, of Swiss nationality, manager of Chase, Paris,
was unquestionably a collaborator;
b. The Chase Head Office in New York was informed of
Niederman's collaborationist policy but took no steps to remove him. Indeed
there is ample evidence to show that the Head Office in New York viewed
Niederman's good relations with the Germans as an excellent means of
preserving, unimpaired, the position of the Chase Bank in France;
c. The German authorities were anxious to keep the Chase
open and indeed took exceptional measures to provide sources of revenue;
d. The German authorities desired "to be friends" with the important American banks because
they expected that these banks would be useful after the war as an instrument
of German policy in the United States;
e. The Chase, Paris showed itself most anxious to please the
German authorities in every possible way. For example, the Chase zealously
maintained the account of the German Embassy in Paris, "as every little
thing helps" (to maintain the excellent relations between Chase and the
German authorities);
f. The whole objective of the Chase policy and operation was
to maintain the position of the bank at any cost.
MORGAN AND COMPANY, FRANCE
a. Morgan and Company regarded itself as a French bank, and
therefore obligated to observe French banking laws and regulations, whether
Nazi-inspired or not; and did actually do so;
b. Morgan and Company was most anxious to preserve the
continuity of its house in France, and, in order to achieve this security,
worked out a modus vivendi with the German authorities;
c. Morgan and Company had tremendous prestige with the
German authorities, and the Germans boasted of the splendid cooperation of
Morgan and Company;
d. Morgan continued its prewar relations with the great
French industrial and commercial concerns which were working for Germany,
including the Renault Works, since confiscated by the French Government,
Puegeqt [sic], Citroen, and many others.
e. The power of Morgan and Company in France bears no
relation to the small financial resources of the firm, and the enquiry now in
progress will be of real value in allowing us for the first time to study the
Morgan pattern in Europe and the manner in which Morgan has used its great
power;
f. Morgan and Company constantly sought its ends by playing
one government against another in the coldest and most unscrupulous manner.
Mr. Jefferson Caffery, U.S. Ambassador to France, has been
kept informed of the progress of this investigation and at all times gave me
full support and encouragement, in principle and in fact. Indeed, it was Mr.
Caffery himself who asked me how the Ford and General Motors subsidiaries in
France had acted during the occupation, and expressed the desire that we should
look into these companies after the bank investigation was completed.
RECOMMENDATION
I recommend that this investigation, which, for unavoidable
reasons, has progressed slowly up to this time, should now be pressed urgently
and that additional needed personnel be sent to Paris as soon as possible.4
The full investigation was never undertaken, and no
investigation has been made of this presumably treasonable activity down to the
present day.
Collaboration between American businessmen and Nazis in Axis
Europe was paralleled by protection of Nazi interests in the United States. In
1939 American I.G. was renamed General Aniline & Film, with General
Dyestuffs acting as its exclusive sales agent in the U.S. These names
effectively disguised the fact that American I.G. (or General Aniline &
Film) was an important producer of major war materials, including atabrine,
magnesium, and synthetic rubber. Restrictive agreements with its German parent
I.G. Farben reduced American supplies of these military products during World
War II.
An American citizen, Halbach, became president of General
Dyestuffs in 1930 and acquired majority control in 1939 from Dietrich A.
Schmitz, a director of American I.G. and brother of Hermann Schmitz, director
of I.G. Farben in Germany and chairman of the board of American I.G. until the
outbreak of war in 1939. After Pearl Harbor, the U.S. Treasury blocked
Halbach's bank accounts. In June 1942 the Alien Property Custodian seized Halbach's
stock in General Dyestuffs and took over the firm as an enemy corporation under
the Trading with the Enemy Act. Subsequently, the Alien Property Custodian
appointed a new board of directors to act as trustee for the duration of the
war. These actions were reasonable and usual practice, but when we probe under
the surface another and quite abnormal story emerges.
Between 1942 and 1945 Halbach was nominally a consultant to
General Dyestuffs. In fact Halbach ran the company, at $82,000 per year, Louis
Johnson, former Assistant Secretary of War, was appointed president of General
Dyestuffs by the 'U.S. Government, for which he received $75,000 a year. Louis
Johnson attempted to bring pressure to bear on the U.S. Treasury to unblock
Halbach's blocked funds and allow Halbach to develop policies contrary to the
interests of the U.S., then at war with Germany. The argument used to get
Halbach's bank accounts unblocked was that Halbach was running the company and
that the Government-appointed board of directors "would have been lost
without Mr. Halbach's knowledge."
During the war Halbach filed suit against the Alien Property
Custodian, through the Establishment law firm of Sullivan and Cromwell, to oust
the U.S. Government from its control of I.G. Farben companies. These suits were
unsuccessful, but Halbach was successful in keeping the Farben cartel
agreements intact throughout World War II; the Alien Property Custodian never
did go into court during World War II on the pending anti-trust suits. Why not?
Leo T. Crowley, head of the Alien Property Custodian's office, had John Foster
Dulles as his advisor, and John Foster Dulles was a partner in the
above-mentioned Sullivan and Cromwell firm, which was acting on behalf of
Halbach in its suit against the Alien Property Custodian.
There were other conflict of interest situations we should
note. Leo T. Crowley, the Alien Property Custodian, appointed Victor Emanuel to
the boards of both General Aniline & Film and General Dyestuffs. Before the
war Victor Emanuel was director of the J. Schroder Banking Corporation.
Schroder, as we have already seen, was a prominent financier of Hitler and the
Nazi party — and at that very time was a member of Himmler's Circle of Friends,
making substantial contributions to S.S. organizations in Germany.
In turn Victor Emanuel appointed Leo Crowley head of
Standard Gas & Electric (controlled by Emanuel) at $75,000 per annum. This
sum was in addition to Crowley's salary from the Alien Property Custodian and
$10,000 a year as head of the U.S. Government Federal Deposit Insurance
Corporation. By 1945 James E. Markham had replaced Crowley as A.P.C. and was
also appointed by Emanuel as a director of Standard Gas at $4,850 per year, in
addition to the $10,000 he drew as Alien Property Custodian.
The wartime influence of General Dyestuffs and this cozy
government-business coterie on behalf of I.G. Farben is exemplified in the ease
of American Cyanamid. Before the war I.G. Farben controlled the drug, chemical,
and dyestuffs industries in Mexico. During World War II it was proposed to
Washington that American Cyanamid take over this Mexican industry and develop
an "independent" chemical industry with the old I.G. Farben firms
seized by the Mexican Alien Property Custodian.
As hired hands of Schroder banker Victor Emanuel, Crowley
and Markham, who were also employees of the U.S. Government, attempted to deal
with the question of these I.G. Farben interests in the United States and
Mexico. On April 13, 1943 James Markham sent a letter to Secretary of State
Cordell Hull objecting to the proposed Cyanamid deal on the grounds it was
contrary to the Atlantic Charter and would interfere with the aim of
establishing independent firms in Latin America. The Markham position was
supported by Henry A. Wallace and Attorney General Francis Biddle.
The forces aligned against the Cyanamid deal were Sterling
Drug, Inc. and Winthrop. Both Sterling and Winthrop stood to lose their drug
market in Mexico if the Cyanamid deal went through. Also hostile to the
Cyanamid deal of course was I.G. Farben's General Aniline and General
Dyestuffs, dominated by Victor Emanuel, banker Schroder's former associate.
On the other hand, the State Department and the Office of
the Coordinator of Inter-American affairs — which happened to be Nelson
Rockefeller's wartime baby — supported the
proposed Cyanamid deal. The Rockefellers are, of course, also interested in the
drug and chemical industries in Latin America. In brief, an American monopoly
under influence of Rockefeller would have replaced a Nazi I.G. Farben monopoly.
I.G. Farben won this round in Washington, but more ominous
questions are raised when we look at the bombing of Germany in wartime by the
U.S.A.F. It has long been rumored, but never proven, that Farben received
favored treatment — i.e., that it was not bombed. James Stewart Martin comments
as follows on favored treatment received by I.G. Farben in the bombing of
Germany:
Shortly after the armies reached the Rhine at Cologne, we
were driving along the west bank within sight of the undamaged I.G. Farben
plant at Leverkusen across the river. Without knowing anything about me or my
business he (the jeep driver) began to give me a lecture about I.G. Farben and
to point at the contrast between the bombed-out city of Cologne and the trio of
untouched plants on the fringe: the Ford works and the United Rayon works on
the west bank, and the Farben works on the east bank..5
While this accusation is very much of an open question,
requiring a great deal of skilled research into the U.S.A.F. bombing records,
other aspects of favoritism for the Nazis are well recorded.
At the end of World War II, Wall Street moved into Germany
through the Control Council to protect their old cartel friends and limit the
extent to which the denazification fervor would damage old business
relationships. General Lucius Clay, the deputy military governor for Germany,
appointed businessmen who opposed denazification to positions of control over
the denazification proceeds. William H. Draper of Dill. on, Read, the firm
which financed the German cartels back in the 1920s, became General Clay's
deputy.
Banker William Draper, as Brigadier General William Draper,
put his control team together from businessmen who had represented American
business in pre-war Germany. The General Motors representation in-eluded Louis
Douglas, a former director of G.M., and Edward S. Zdunke, a pre-war head of
General Motors in Antwerp, appointed to supervise the Engineering Section of
the Control Council. Peter Hoglund, an expert on German auto industry, was
given leave from General Motors. The personnel selection for the Council was
undertaken by Colonel Graeme K. Howard — former G,M. representative in Germany
and author of a book which "praises totalitarian practices [and] justifies
German aggression .... "6
Treasury Secretary Morgenthau was deeply disturbed at the
implications of this Wall Street monopoly of the fate of Nazi Germany and prepared
a memorandum to present to President Roosevelt. The complete Morgenthau
memorandum, dated May 29, 1945, reads as follows:
MEMORANDUM
May 29, 1945
Lieutenant-General
Lucius D. Clay, as Deputy to General Eisenhower, actively runs the American
element of the Control Council for Germany. General Clay's three principal
advisers on the Control Council staff are.
1. Ambassador
Robert D. Murphy, who is in charge of the Political Division.
2. Louis
Douglas, whom General Clay describes as my personal adviser on economical,
financial and governmental matters." Douglas resigned as Director of the
Budget in 1934; and for the following eight years he attacked the government's
fiscal policies. Since 1940, Douglas has been president of the Mutual Life
Insurance Company, and since December 1944, he has been a director of the
General Motors Corporation.
3.
Brigadier-General William Draper, who is the director of the Economics Division
of the Control Council. General Draper is a partner of the banking firm of
Dillon, Read and Company,
Sunday's New York Times contained the
announcement of key personnel who have been appointed by General Clay and
General Draper to the Economic Division of the Control Council. The
appointments include the following:
1. R.J. Wysor
is to be in charge of the metallurgical matters. Wysor was president of the
Republic Steel Corporation from 1937 until a recent date, and prior thereto, he
was associated with the Bethlehem Steel, Jones and Laughlin Steel Corporation
and the Republic Steel Corporation.
2. Edward X.
Zdunke is to supervise the engineering section. Prior to the war, Mr. Zdunke
was head of General Motors at Antwerp.
3. Philip
Gaethke is to be in charge of mining operations. Gaethke was formerly connected
with Anaconda Copper and was manager of its smelters and mines in Upper Silesia
before the war.
4. Philip P.
Clover is to be in charge of handling oil matters. He was formerly a
representative of the Socony Vacuum Oil Company in Germany.
5. Peter
Hoglund is to deal with industrial production problems. Hoglund is on leave
from General Motors and is said to be an expert on German production.
6. Calvin B.
Hoover is to be in charge of the Intelligence Group on the Control Council and
is also to be a special advisor to General Draper. In a letter to the Editor of
the New York Times on October 9,
1944, Hoover wrote as follows:
The
publication of Secretary Morgenthau's plan for dealing with Germany has
disturbed me deeply ... such a Carthaginian peace would leave a legacy of hate
to poison international relations for generations to come... the void in the
economy of Europe which would exist through the destruction of all German
industry is something which is difficult to contemplate.
7. Laird Bell
is to be Chief Counsel of the Economic Division. He is a well-known Chicago
lawyer and in May 1944, was elected the president of the Chicago Daily News, after the death of Frank Knox.
One of the men
who helped General Draper in the selection of personnel for the Economics
Division was Colonel Graeme Howard, a vice-president of General Motors, who was
in charge of their overseas business and who was a leading representative of
General Motors in Germany prior to the war. Howard is the author of a book in
which he praises totalitarian practices, justifies German aggression and the
Munich policy of appeasement, and blames Roosevelt for precipitating the war.
So when we
examine the Control Council for Germany under General Lucius D. Clay we find
that the head of the finance division was Louis Douglas, director of the
Morgan-controlled General Motors and president of Mutual Life Insurance. (Opel,
the General Motors German subsidiary, had been Hitler's biggest tank producer.)
The head of the Control Council's Economics Division was William Draper, a
partner in the Dillon, Read firm that had so much to do with building Nazi
Germany in the first place. All three men were, not surprisingly in the light
of more recent findings, members of the Council on Foreign Relations.
The Nuremberg
War Crimes Trials proposed to select those responsible for World War II
preparations and atrocities and place them on trial. Whether. such a procedure
is morally justifiable is a debatable matter; there is some justification for
holding that Nuremberg was a political farce far removed from legal principle.7 However, if we assume that there is such legal and moral justification, then surely any such trial
should apply to all, irrespective of
nationality. What for example should exempt Franklin D. Roosevelt and Winston
Churchill, but not exempt Adolf Hitler and Goering? If the offense is
preparation for war, and not blind vengeance, then justice should be impartial.
The directives
prepared by the U.S. Control Council in Germany for the arrest and detention of
war criminals refers to "Nazis" and "Nazi sympathizers,"
not "Germans." The relevant extracts are as follows:
a. You will search out, arrest, and hold, pending receipt by
you of further instructions as to their disposition, Adolph Hitler, his chief
Nazi associates, other war criminals and all persons who have participated in
planning or carrying out Nazi enterprises involving or resulting in atrocities
or war crimes.
Then follows a list of the categories of persons to be
arrested, including:
(8) Nazis and Nazi sympathizers holding important and key
positions in (a) National and Gau Civic and economic organizations; (b )
corporations and other organizations in which the government has a major
financial interest; (c) industry, commerce, agriculture, and finance; (d)
education; (e) the judicial; and (f) the press, publishing houses and other
agencies disseminating news and propaganda.
Top American industrialists and financiers named in this
book are covered by the categories listed above. Henry Ford and Edsel Ford
respectively contributed money to Hitler and profited from German wartime
production. Standard Oil of New Jersey, General Electric, General Motors, and
I.T.T. certainly made financial or technical contributions which comprise prima
facie evidence of "participating in planning or carrying out Nazi
enterprises."
There is, in brief, evidence which suggests:
(a) cooperation with the Wehrmacht (Ford Motor Company,
Chase Bank, Morgan Bank);
(b) aid to the Nazi Four Year Plan and economic mobilization
for war (Standard Oil of New Jersey);
(c) creating and equipping the Nazi war machine (I.T.T.);
(d) stockpiling critical materials for the Nazis (Ethyl
Corporation);
(e) weakening the Nazis' potential enemies (American I.G.
Farben);
and,
(f) carrying on of propaganda, intelligence, and espionage
(American I.G. Farben and Rockefeller public-relations man Ivy Lee).
At the very least there is sufficient evidence to demand a
thorough and impartial investigation. However, as we have noted previously,
these same firms and financiers were prominent in the 1933 election of
Roosevelt and consequently had sufficient political pull to squelch threats of
investigation. Extracts from the Morgenthau diary demonstrate that Wall Street
political power was sufficient even to control the appointment of officers
responsible for the denazification and eventual government of post-war Germany.
Did these American firms know of their assistance to
Hitler's military machine? According to the firms themselves, emphatically not.
They claim innocence of any intent to aid Hitler's Germany. Witness a telegram
sent by the chairman of the board of Standard Oil of New Jersey to Secretary of
War Patterson after World War II, when preliminary investigation of Wall Street
assistance was under way:
During the entire period of our business contacts, we had no
inkling of Farben's conniving part in Hitler's brutal politics, We offer any
help we can give to see that complete truth is brought to light, and that rigid
justice is done.
F.W. Abrams,
Chairman of Board
Chairman of Board
Unfortunately, the evidence presented is contrary to Abrams'
telegraphed assertions. Standard Oil of New Jersey not only aided Hitler's war
machine, but had knowledge of this assistance. Emil Helfferich, the board
chairman of a Standard of New Jersey subsidiary, was a member of the Keppler
Circle before Hitler came to power; he continued to give financial
contributions to Himmler's Circle as late as 1944.
Accordingly, it is not at all difficult to visualize why
Nazi industrialists were puzzled by "investigation" and assumed at
the end of the war that their Wall Street friends would bail them out and
protect them from the wrath of those who had suffered. These attitudes were
presented to the Kilgore Committee in 1946:
You might also be interested in knowing, Mr. Chairman, that
the top I.G. Farben people and others, when we questioned them about these
activities, were inclined at times to be very indignant. Their general attitude
and expectation was that the war was over and we ought now to be assisting them
in helping to get I.G. Farben and German industry back on its feet. Some of
them have outwardly said that this questioning and investigation was, in their
estimation, only a phenomenon of short duration, because as soon as things got
a little settled they would expect their friends in the United States and in
England to be coming over. Their friends, so they said, would put a stop to
activities such as these investigations and would see that they got the
treatment which they regarded as proper and that assistance would be given to
them to help reestablish their industry.8
Footnotes:
1Morgenthau Diary (Germany).
2Ibid.
3Ibid.
4Ibid., pp. 800-2.
5James Stewart Martin, All Honorable Men, op. cit., p. 75.
6Morgenthau Diary (Germany), p. 1543. Colonel Graeme K.
Howard's book was entitled, America and a New World Order, (New York:
Scribners, 1940).
7The reader should examine the essay, "The Return to War
Crimes," in James J. Martin, Revisionist Viewpoints, (Colorado: Ralph
Mules, 1971).
8Elimination of German Resources, p. 652.
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