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. firms and their French subsidiaries reveals the aid given to the Axis military machine — while the United States was at war with Germany and Italy. Letters
(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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