WALL STREET AND
THE RISE OF HITLER
By
Antony C. Sutton
TABLE OF CONTENTS
Preface
Introduction Unexplored Facets of Nazism
PART ONE: Wall Street Builds Nazi Industry
Chapter One Wall Street Paves the Way for Hitler 1924: The Dawes Plan 1928: The Young Plan B.I.S. — The Apex of Control Building the German Cartels
Chapter Two The Empire of I.G. Farben The Economic Power of I.G. Farben Polishing I.G. Farben's Image The American I.G. Farben
Chapter Three General Electric Funds Hitler General Electric in Weimar, Germany General Electric & the Financing of Hitler Technical Cooperation with Krupp A.E.G. Avoids the Bombs in World War II
Chapter Four Standard Oil Duels World War II Ethyl Lead for the Wehrmacht Standard Oil and Synthetic Rubber The Deutsche-Amerikanische Petroleum A.G.
Chapter Five I.T.T. Works Both Sides of the War Baron Kurt von Schröder and I.T.T. Westrick, Texaco, and I.T.T. I.T.T. in Wartime Germany
PART TWO: Wall Street and Funds for Hitler
Chapter Six Henry Ford and the Nazis Henry Ford: Hitler's First Foreign Banker Henry Ford Receives a Nazi Medal Ford Assists the German War Effort
Chapter Seven Who Financed Adolf Hitler? Some Early Hitler Backers Fritz Thyssen and W.A. Harriman Company Financing Hitler in the March 1933 Elections The 1933 Political Contributions
Chapter Eight Putzi: Friend of Hitler and Roosevelt Putzi's Role in the Reichstag Fire Roosevelt's New Deal and Hitler's New Order
Chapter Nine Wall Street and the Nazi Inner Circle The S.S. Circle of Friends I.G. Farben and the Keppler Circle Wall Street and the S.S. Circle
Chapter Ten The Myth of "Sidney Warburg" Who Was "Sidney Warburg"? Synopsis of the Suppressed "Warburg" Book James Paul Warburg’s Affidavit Some Conclusions from the "Warburg" Story
Chapter Eleven Wall Street-Nazi Collaboration in World War II American I.G. in World War II Were American Industrialists and Financiers Guilty of War Crimes?
Chapter Twelve Conclusions The Pervasive Influence of International Bankers Is the United States Ruled by a Dictatorial Elite? The New York Elite as a Subversive Force The Slowly Emerging Revisionist Truth
Appendix A Program of the National Socialist GermanWorkers Party
Appendix B Affidavit of Hjalmar Schacht
Appendix C Entries in the "National Trusteeship" Account
Appendix D Letter from the U.S. War Department toEthyl Corporation
Appendix E Extract from Morgenthau Diary (Germany)
Footnotes
Bibliography
Index
*****
Dedicated to the memory of Floyd Paxton — entrepreneur, inventor, writer, and American, who believed in and worked for individual rights in a free society under the Constitution
*****
Copyright 2000
This work was created with the permission of Antony C. Sutton.
All rights reserved. No portion of this book may be reproduced without written permission from the author, except by a reviewer who may quote brief passages in connection with a review.
PREFACE
This is the third and final volume of a trilogy describing the role of the American corporate socialists, otherwise known as the Wall Street financial elite or the Eastern Liberal Establishment, in three significant twentieth-century historical events: the 1917 Lenin-Trotsky Revolution in Russia, the 1933 election of Franklin D. Roosevelt in the United States, and the 1933 seizure of power by Adolf Hitler in Germany.
Each of these events introduced some variant of socialism into a major country — i.e., Bolshevik socialism in Russia, New Deal socialism in the United States, and National socialism in Germany.
Contemporary academic histories, with perhaps the sole exception of Carroll Quigley's Tragedy And Hope, ignore this evidence. On the other hand, it is understandable that universities and research organizations, dependent on financial aid from foundations that are controlled by this same New York financial elite, would hardly want to support and to publish research on these aspects of international politics. The bravest of trustees is unlikely to bite the hand that feeds his organization.
It is also eminently clear from the evidence in this trilogy that "public-spirited businessmen" do not journey to Washington as lobbyists and administrators in order to serve the United States. They are in Washington to serve their own profit-maximizing interests. Their purpose is not to further a competitive, free-market economy, but to manipulate a politicized regime, call it what you will, to their own advantage.
It is business manipulation of Hitler's accession to power in March 1933 that is the topic of Wall Street and the Rise of Hitler.
ANTONY C. SUTTON
July, 1976
INTRODUCTION
Unexplored Facets of Nazism
Since the early 1920s unsubstantiated reports have circulated to the effect that not only German industrialists, but also Wall Street financiers, had some role — possibly a substantial role — in the rise of Hitler and Nazism. This book presents previously unpublished evidence, a great deal from files of the Nuremburg Military Tribunals, to support this hypothesis. However, the full impact and suggestiveness of the evidence cannot be found from reading this volume alone. Two previous books in this series, Wall Street and the Bolshevik Revolution1 and Wall Street and FDR,2 described the roles of the same firms, and often the same individuals and their fellow directors, hard at work manipulating and assisting the Bolshevik revolution in Russia in 1917, backing Franklin D. Roosevelt for President in the United States in 1933, as well as aiding the rise of Hitler in pre-war Germany. in brief, this book is part of a more extensive study of the rise of modern socialism and the corporate socialists.
This politically active Wall Street group is more or less the same elitist circle known generally among Conservatives as the "Liberal Establishment," by liberals (for instance G. William Domhoff) as "the ruling class,"3 and by conspiratorial theorists Gary Allen4 and Dan Smoot5 as the "Insiders." But whatever we call this self-perpetuating elitist group, it is apparently fundamentally significant in the determination of world affairs, at a level far behind and above that of the elected politicians.
The influence and work of this same group in the rise of Hitler and Nazi Germany is the topic of this book. This is an area of historical research almost totally unexplored by the academic world. It is an historical minefield for the unwary and the careless not aware of the intricacies of research procedures. The Soviets have long accused Wall Street bankers of backing international fascism, but their own record of historical accuracy hardly lends their accusations much credence in the West, and they do not of course criticize support of their own brand of fascism.
This author falls into a different camp. Previously accused of being overly critical of Sovietism and domestic socialism, while ignoring Wall Street and the rise of Hitler, this book hopefully will redress an assumed and quite inaccurate philosophical imbalance and emphasize the real point at issue: Whatever you call the collectivist system — Soviet socialism, New Deal socialism, corporate socialism, or National socialism — it is the average citizen, the guy in the street, that ultimately loses out to the boys running the operation at the top. Each system in its own way is a system of plunder, an organizational device to get everyone living (or attempting to live) at the expense of everyone else, while the elitist leaders, the rulers and the politicians, scalp the cream off the top.
The role of this American power elite in the rise of Hitler should also be viewed in conjunction with a little-known aspect of Hitlerism only now being explored: the mystical origins of Nazism, and its relations with the Thule Society and with other conspiratorial groups. This author is no expert on occultism or conspiracy, but it is obvious that the mystical origins, the neo-pagan historical roots of Nazism, the Bavarian Illuminati and the Thule Society, are relatively unknown areas yet to be explored by technically competent researchers. Some research is already recorded in French; probably the best introduction in English is a translation of Hitler et la Tradition Cathare by Jean Michel Angebert.6
Angebert reveals the 1933 crusade of Schutzstaffel member Otto Rahn in search of the Holy Grail, which was supposedly located in the Cathar stronghold in Southern France. The early Nazi hierarchy (Hitler and Himmler, as well as Rudolph Hess and Rosenberg) was steeped in a neo-pagan theology, in part associated with the Thule Society, whose ideals were close to those of the Bavarian Illuminati. This was a submerged driving force behind Nazism, with a powerful mystical hold over the hard-core S.S. faithful. Our contemporary establishment historians barely mention, let alone explore, these occult origins; consequently, they miss an element equally as important as the financial origins of National Socialism.
In 1950 James Stewart Martin published a very readable book, All Honorable Men7 describing his experiences as Chief of the Economic Warfare Section of the Department of Justice investigating the structure of Nazi industry. Martin asserts that American and British businessmen got themselves appointed to key positions in this post-war investigation to divert, stifle and muffle investigation of Nazi industrialists and so keep hidden their own involvement. One British officer was sentenced by court martial to two years in jail for protecting a Nazi, and several American officials were removed from their positions. Why would American and British businessmen want to protect Nazi businessmen? In public they argued that these were merely German businessmen who had nothing to do with the Nazi regime and were innocent of complicity in Nazi conspiracies. Martin does not explore this explanation in depth, but he is obviously unhappy and skeptical about it. The evidence suggests there was a concerted effort not only to protect Nazi businessmen, but also to protect the collaborating elements from American and British business.
The German businessmen could have disclosed a lot of uncomfortable facts: In return for protection, they told very little. It is undoubtedly not coincidental that the Hitler industrialists on trial at Nuremburg received less than a slap on the wrist. We raise the question of whether the Nuremburg trials should not have been held in Washington — with a few prominent U.S. businessmen as well as Nazi businessmen in the dock!
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. 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 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 Nazism 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.
Footnotes:
1(New York: Arlington House Publishers, 1974)
2(New York: Arlington House Publishers, 1975)
3The Higher Circles: The Governing Class in America, (New York: Vintage, 1970)
4None 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)
5The 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.
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 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:
The business press [in the United States] was aware, from 1935 on, that German prosperity was based on war preparations. More important, it was conscious of the fact that German industry was under the control of the Nazis and was being directed to serve Germany's rearmament, and the firm mentioned most frequently in this context was the giant chemical empire, I. G. Farben.4
Further, the evidence presented below suggests that not only was an influential sector of American business aware of the nature of Nazism, but for its own purposes aided Nazism wherever possible (and profitable) —with full knowledge that the probable outcome would be war involving Europe and the United States. As we shall see, the pleas of innocence do not accord with the facts.
1924: The Dawes Plan
The Treaty of Versailles after World War I imposed a heavy reparations burden on defeated Germany. This financial burden — a real cause of the German discontent that led to acceptance of Hitlerism — was utilized by the international bankers for their own benefit. The opportunity to float profitable loans for German cartels in the United States was presented by the Dawes Plan and later the Young Plan. Both plans were engineered by these central bankers, who manned the committees for their own pecuniary advantages, and although technically the committees were not appointed by the U.S. Government, the plans were in fact approved and sponsored by the Government.
Post-war haggling by financiers and politicians fixed German reparations at an annual fee of 132 billion gold marks. This was about one quarter of Germany's total 1921 exports. When Germany was unable to make these crushing payments, France and Belgium occupied the Ruhr to take by force what could not be obtained voluntarily. In 1924 the Allies appointed a committee of bankers (headed by American banker Charles G. Dawes) to develop a program of reparations payments. The resulting Dawes Plan was, according to Georgetown University Professor of International Relations Carroll Quigley, "largely a J.P. Morgan production."5 The Dawes Plan arranged a series of foreign loans totaling $800 million with their proceeds flowing to Germany. These loans are important for our story because the proceeds, raised for the greater part in the United States from dollar investors, were utilized in the mid-1920s to create and consolidate the gigantic chemical and steel combinations of I. G. Farben and Vereinigte Stahlwerke, respectively. These cartels not only helped Hitler to power in 1933; they also produced the bulk of key German war materials used in World War II.
Between 1924 and 1931, under the Dawes Plan and the Young Plan, Germany paid out to the Allies about 86 billion marks in reparations. At the same time Germany borrowed abroad, mainly in the U.S., about 138 billion marks — thus making a net German payment of only three billion marks for reparations. Consequently, the burden of German monetary reparations to the Allies was actually carried by foreign subscribers to German bonds issued by Wall Street financial houses — at significant profits for themselves, of course. And, let it be noted, these firms were owned by the same financiers who periodically took off their banker hats and donned new ones to become "statesmen." As "statesmen" they formulated the Dawes and Young Plans to "solve" the "problem" of reparations. As bankers, they floated the loans. As Carroll Quigley points out,
It is worthy of note that this system was set up by the inter. national bankers and that the subsequent lending of other people's money to Germany was very profitable to these bankers.6
Who were the New York international bankers who formed these reparations commissions?
The 1924 Dawes Plan experts from the United States were banker Charles Dawes and Morgan representative Owen Young, who was president of the General Electric Company. Dawes was chairman of the Allied Committee of Experts in 1924. In 1929 Owen Young became chairman of the Committee of Experts, supported by J.P. Morgan himself, with alternates T. W. Lamont, a Morgan partner, and T. N. Perkins, a banker with Morgan associations. In other words, the U.S. delegations were purely and simply, as Quigley has pointed out, J. P. Morgan delegations using the authority and seal of the United States to promote financial plans for their own pecuniary advantage. As a result, as Quigley puts it, the "international bankers sat in heaven, under a rain of fees and commissions."7
The German members of the Committee of Experts were equally interesting. In 1924 Hjalmar Schacht was president of the Reichsbank and had taken a prominent role in organization work for the Dawes Plan; so did German banker Carl Melchior. One of the 1928 German delegates was A. Voegler of the German steel cartel Stahlwerke Vereinigte. In brief, the two significant countries involved — the United States and Germany —were represented by the Morgan bankers on one side and Schacht and Voegler on the other, both of whom were key characters in the rise of Hitler's Germany and subsequent German rearmament.
Finally, the members and advisors of the Dawes and Young Commissions were not only associated with New York financial houses but, as we shall later see, were directors of firms within the German cartels which aided Hitler to power.
1928: The Young Plan
According to Hitler's financial genie, Hjalmar Horace Greeley Schacht, and Nazi industrialist Fritz Thyssen, it was the 1928 Young Plan (the successor to the Dawes Plan), formulated by Morgan agent Owen D. Young, that brought Hitler to power in 1933.
Fritz Thyssen claims that,
I turned to the National Socialist Party only after I became convinced that the fight against the Young Plan was unavoidable if complete collapse of Germany was to be prevented.8
The difference between the Young Plan and the Dawes Plan was that, while the Young Plan required payments in goods produced in Germany financed by foreign loans, the Young Plan required monetary payments and "In my judgment [wrote Thyssen] the financial debt thus created was bound to disrupt the entire economy of the Reich."
The Young Plan was assertedly a device to occupy Germany with American capital and pledge German real assets for a gigantic mortgage held in the United States. It is noteworthy that German firms with U.S. affiliations evaded the Plan by the device of temporary foreign ownership. For instance, A.E.G. (German General Electric), affiliated with General Electric in the U.S., was sold to a Franco-Belgian holding company and evaded the conditions of the Young Plan. It should be noted in passing that Owen Young was the major financial backer for Franklin D. Roosevelt in the United European venture when FDR, as a budding Wall Street financier, endeavored to take advantage of Germany's 1925 hyperinflation. The United European venture was a vehicle to speculate and to profit upon the imposition of the Dawes Plan, and is clear evidence of private financiers (including Franklin D. Roosevelt) using the power of the state to advance their own interests by manipulating foreign policy.
Schacht's parallel charge that Owen Young was responsible for the rise of Hitler, while obviously self-serving, is recorded in a U.S. Government Intelligence report relating the interrogation of Dr. Fritz Thyssen in September, 1945:
The acceptance of the Young Plan and its financial principles increased unemployment more and more, until about one million were unemployed. People were desperate. Hitler said he would do away with unemployment. The government in power at that time was very bad, and the situation of the people was getting worse. That really was the reason of the enormous success Hitler had in the election. When the last election came, he got about 40%.9
However, it was Schacht, not Owen Young, who conceived the idea which later became the Bank for International Settlements. The actual details were worked out at a conference presided over by Jackson Reynolds, "one of the leading New York bankers," together with Melvin Traylor of the First National Bank of Chicago, Sir Charles Addis, formerly of the Hong Kong and Shanghai Banking Corporation, and various French and German bankers.10 The B.I.S. was essential under the Young Plan as a means to afford a ready instrument for promoting international financial relations. According to his own statements, Schacht also gave Owen Young the idea that later became the post-World War II International Bank for Reconstruction and Development:
"A bank of this kind will demand financial co-operation be, tween vanquished and victors that will lead to community of interests which in turn will give rise to mutual confidence and understanding and thus promote and ensure peace."
I can still vividly recall the setting in which this conversation took place. Owen Young was seated in his armchair puffing away at his pipe, his legs outstretched, his keen eyes fixed unswervingly on me. As is my habit when propounding such arguments I was doing a quiet steady "quarter-deck" up and down the room. When I had finished there was a brief pause. Then his whole face lighted up and his resolve found utterance in the words:
"Dr. Schacht, you gave me a wonderful idea and I am going to sell it to the world.11
B.I.S. — The Apex of Control
This interplay of ideas and cooperation between Hjalmar Sehacht in Germany and, through Owen Young, the J.P. Morgan interests in New York, was only one facet of a vast and ambitious system of cooperation and international alliance for world control. As described by Carroll Quigley, this system was "... nothing less than to create a world system of financial control, in private hands, able to dominate the political system of each country and the economy of the world as a whole.12
This feudal system worked in the 1920s, as it works today, through the medium of the private central bankers in each country who control the national money supply of individual economies. In the 1920s and 1930s, the New York Federal Reserve System, the Bank of England, the Reichsbank in Germany, and the Banque de France also more or less influenced the political apparatus of their respective countries indirectly through control of the money supply and creation of the monetary environment. More direct influence was realized by supplying political funds to, or withdrawing support from, politicians and political parties. In the United States, for example, President Herbert Hoover blamed his 1932 defeat on withdrawal of support by Wall Street and the switch of Wall Street finance and influence to Franklin D. Roosevelt.
Politicians amenable to the objectives of financial capitalism, and academies prolific with ideas for world control useful to the international bankers, are kept in line with a system of rewards and penalties. In the early 1930s the guiding vehicle for this international system of financial and political control, called by Quigley the "apex of the system," was the Bank for International Settlements in Basle, Switzerland. The B.I.S. apex continued its work during World War II as the medium through which the bankers — who apparently were not at war with each other — continued a mutually beneficial exchange of ideas, information, and planning for the post-war world. As one writer has observed, war made no difference to the international bankers:
The fact that the Bank possessed a truly international staff did, of course, present a highly anomalous situation in time of war. An American President was transacting the daily business of the Bank through a French General Manager, who had a German Assistant General Manager, while the Secretary-General was an Italian subject. Other nationals occupied other posts. These men were, of course, in daily personal contact with each other. Except for Mr. McKittrick [see infra] theft were of course situated permanently in Switzerland during this period and were not supposed to be subject to orders of their government at any time. However, the directors of the Bank remained, of course, in their respective countries and had no direct contact with the personnel of the Bank. It is alleged, however, that H. Schacht, president of the Reichsbank, kept a personal representative in Basle during most of this time.13
It was such secret meetings, "... meetings more secret than any ever held by Royal Ark Masons or by any Rosicrucian Order..."14 between the central bankers at the "apex" of control that so intrigued contemporary journalists, although they only rarely and briefly penetrated behind the mask of secrecy.
Building the German Cartels
A practical example of international finance operating behind the scenes to build and manipulate politico-economic systems is found in the German cartel system. The three largest loans handled by the Wall Street international bankers for German borrowers in the 1920s under the Dawes Plan were for the benefit of three German cartels which a few years later aided Hitler and the Nazis to power. American financiers were directly represented on the boards of two of these three German cartels. This American assistance to German cartels has been described by James Martin as follows: "These loans for reconstruction became a vehicle for arrangements that did more to promote World War II than to establish peace after World War I.15
The three dominant cartels, the amounts borrowed and the Wall Street floating syndicate were as follows:
German Cartel Wall StreetSyndicate Amount Issued
Allgemeine Elektrizitats-Gesellschaft (A.E.G.)(German GeneralElectric) National CityCo. $35,000,000
Vereinigte Stahlwerke(United Steelworks) Dillon, Read &Co. $70,225,000
American I.G. Chemical (I.G. Farben) National CityCo. $30,000,000
Looking at all the loans issued, it appears that only a handful of New York financial houses handled the German reparations financing. Three houses — Dillon, Read Co.; Harris, Forbes & Co.; and National City Company — issued almost three-quarters of the total face amount of the loans and reaped most of the profits:
Wall StreetSyndicateManager Participation inGerman industrial issues in U.S.capital market Profits onGermanloans* Percentof total
Dillon, Read & Co. $241,325,000 $2.7 million 29.2
Harris, Forbes & Co. 186,500,000 1.4 million 22.6
National City Co. 173,000,000 5.0 million 20.9
Speyer & Co. 59,500,000 0.6 million 7.2
Lee, Higginson & Co. 53,000,000 n.a 6.4
Guaranty Co. of N.Y. 41,575,000 0.2 million 5.0
Kuhn, Loeb & Co. 37,500,000 0.2 million 4.5
Equitable Trust Co. 34,000,000 0.3 million 4.1
___________ ___________ _________
TOTAL $826,400,000 $10.4 million 99.9
Source: See Appendix A
*Robert R. Kuczynski, Bankers Profits from German Loans
(Washington, D.C.: Brookings Institution, 1932), p. 127.
After the mid-1920s the two major German combines of I.G. Farben and Vereinigte Stahlwerke dominated the chemical and steel cartel system created by these loans. Although these firms had a voting majority in the cartels for only two or three basic products, they were able — through control of these basics — to enforce their will throughout the cartel. I.G. Farben was the main producer of basic chemicals used by other combines making chemicals, so its economic power position cannot be measured only by its capacity to produce a few basic chemicals. Similarly, Vereinigte Stahlwerke, with a pig-iron capacity greater than that of all other German iron and steel producers combined, was able to exercise far more influence in the semi-finished iron and steel products cartel than its capacity for pig-iron production suggests. Even so the percentage output of these cartels for all products was significant:
Vereinigte Stahlwerkeproducts Percent of German totalproduction in 1938
Pig iron 50.8
Pipes and tubes 45.5
Heavy plate 36.0
Explosives 35.0
Coal tar 33.3
Bar steel 37.1
I.G. Farben Percent of German totalproduction in 1937
Synthetic methanol 100.0
Magnesium 100.0
Chemical nitrogen 70.0
Explosives 60.0
Synthetic gasoline(high octane) 46.0 (1945)
Brown coal 20.0
Among the products that brought I.G. Farben and Vereinigte Stahlwerke into mutual collaboration were coal tar and chemical nitrogen, both of prime importance for the manufacture of explosives. I. G. Farben had a cartel position that assured dominance in the manufacture and sale of chemical nitrogen, but had only about one percent of the cok-ing capacity of Germany. Hence an agreement was made under which Farben explosives subsidiaries obtained their benzol, toluol, and other primary coal-tar products on terms dictated by Vereinigte Stahlwerke, while Vereinigte Stahlwerke's explosives subsidiary was dependent for its nitrates on terms set by Farben. Under this system of mutual collaboration and inter-dependence, the two cartels, I.G. Farben and Vereinigte Stahlwerke, produced 95 percent of German .explosives in 1957-8 on the eve of World War II. This production was from capacity built by American loans and to some extent by American technology.
The I. G. Farben-Standard Oil cooperation for production of synthetic oil from coal gave the I. G. Farben cartel a monopoly of German gasoline production during World War II. Just under one half of German high octane gasoline in 1945 was produced directly by I. G. Farben and most of the balance by its affiliated companies.
In brief, in synthetic gasoline and explosives (two of the very basic elements of modern warfare), the control of German World War II output was in the hands of two German combines created by Wall Street loans under the Dawes Plan.
Moreover, American assistance to Nazi war efforts extended into other areas.17 The two largest tank producers in Hitler's Germany were Opel, a wholly owned subsidiary of General Motors (controlled by the J.P. Morgan firm), and the Ford A. G. subsidiary of the Ford Motor Company of Detroit. The Nazis granted tax-exempt status to Opel in 1936, to enable General Motors to expand its production facilities. General Motors obligingly reinvested the resulting profits into German industry. Henry Ford was decorated by the Nazis for his services to Naziism. (See p. 93.) Alcoa and Dow Chemical worked closely with Nazi industry with numerous transfers of their domestic U.S. technology. Bendix Aviation, in which the J.P. Morgan-controlled General Motors firm had a major stock interest, supplied Siemens & Halske A. G. in Germany with data on automatic pilots and aircraft instruments. As late as 1940, in the "unofficial war," Bendix Aviation supplied complete technical data to Robert Bosch for aircraft and diesel engine starters and received royalty payments in return.
In brief, American companies associated with the Morgan-Rockefeller international investment bankers — not, it should be noted, the vast bulk of independent American industrialists — were intimately related to the growth of Nazi industry. It is important to note as we develop our story that General Motors, Ford, General Electric, DuPont and the handful of U.S. companies intimately involved with the development of Nazi Germany were — except for the Ford Motor Company — controlled by the Wall Street elite — the J.P. Morgan firm, the Rockefeller Chase Bank and to a lesser extent the Warburg Manhattan bank.18 This book is not an indictment of all American industry and finance. It is an indictment of the "apex" — those firms controlled through the handful of financial houses, the Federal Reserve Bank system, the Bank for International Settlements, and their continuing international cooperative arrangements and cartels which attempt to control the course of world politics and economics.
Footnotes:
1United States Congress. Senate. Hearings before a Subcommittee of the Committee on Military Affairs. Elimination of German Resources for War. Report pursuant to S. Res. 107 and 146, July 2, 1945, Part 7, (78th Congress and 79th Congress), (Washington: Government Printing Office, 1945), hereafter cited as Elimination of German Resources.
2Elimination of German Resources, p. 174.
3Gabriel Kolko, "American Business and Germany, 1930-1941," The Western Political Quarterly, Volume XV, 1962.
4Ibid, p. 715.
5Carroll Quigley, op. cit.
6Ibid, p. 308.
7Carroll Quigley, op. cit., p. 309.
8Fritz Thyssen, I Paid Hitler, (New York: Farrar & Rinehart, Inc., n.d.), p. 88.
9U.S. Group Control Council (Germany), Office of the Director of Intelligence, Intelligence Report No. EF/ME/1, 4 September 1945. Also see Hjalmar Schacht, Confessions of "the old Wizard", (Boston: Houghton Mifflin, 1956)
10Hjalmar Schacht, op cit., p. 18. Fritz Thyssen adds, "Even at the time Mr, Dillon, a New York Banker of Jewish origin whom I much admire told me 'In your place I would not sign the plan.'"
11Ibid, p. 282.
12Carroll Quigley, op. cit., p. 324.
13Henry H. Schloss, The Bank for International Settlements (Amsterdam,: North Holland Publishing Company, 1958)
14John Hargrave, Montagu Norman, (New York: The Greystone Press, n.d.). p. 108.
15James Stewart Martin, op. cit., p. 70.
16See Chapter Seven for more details of Wall Street loans to German industry.
17See Gabriel Kolko, op. cit., for numerous examples.
18In 1956 the Chase and Manhattan banks merged to become Chase Manhattan.
CHAPTER TWO
The Empire of I.G. Farben
Farben was Hitler and Hitler was Farben. (Senator Homer T. Bone to Senate Committee on Military Affairs, June 4, 1943.)
On the eve of World War II the German chemical complex of I.G. Farben was the largest chemical manufacturing enterprise in the world, with extraordinary political and economic power and influence within the Hitlerian Nazi state. I. G. has been aptly described as "a state within a state."
The Farben cartel dated from 1925, when organizing genius Hermann Schmitz (with Wall Street financial assistance) created the super-giant chemical enterprise out of six already giant German chemical companies — Badische Anilin, Bayer, Agfa, Hoechst, Weiler-ter-Meer, and Griesheim-Elektron. These companies were merged to become Internationale Gesellschaft Farbenindustrie A.G. — or I.G. Farben for short. Twenty years later the same Hermann Schmitz was put on trial at Nuremburg for war crimes committed by the I. G. cartel. Other I. G. Farben directors were placed on trial but the American affiliates of I. G. Farben and the American directors of I. G. itself were quietly forgotten; the truth was buried in the archives.
It is these U.S. connections in Wall Street that concern us. Without the capital supplied by Wall Street, there would have been no I. G. Farben in the first place and almost certainly no Adolf Hitler and World War II.
German bankers on the Farben Aufsichtsrat (the supervisory Board of Directors)1 in the late 1920s included the Hamburg banker Max War-burg, whose brother Paul Warburg was a founder of the Federal Reserve System in the United States. Not coincidentally, Paul Warburg was also on the board of American I. G., Farben's wholly owned U.S. subsidiary. In addition to Max Warburg and Hermann Schmitz, the guiding hand in the creation of the Farben empire, the early Farben Vorstand included Carl Bosch, Fritz ter Meer, Kurt Oppenheim and George von Schnitzler.2 All except Max Warburg were charged as "war criminals" after World War II.
In 1928 the American holdings of I. G. Farben (i.e., the Bayer Company, General Aniline Works, Agfa Ansco, and Winthrop Chemical Company) were organized into a Swiss holding company, I. G. Chemic (Internationale Gesellschaft fur Chemisehe Unternehmungen A. G.), controlled by I. G. Farben in Germany. In the following year these American firms merged to become American I. G. Chemical Corporation, later renamed General Aniline & Film. Hermann Schmitz, the organizer of I. G. Farben in 1925, became a prominent early Nazi and supporter of Hitler, as well as chairman of the Swiss I. G. Chemic and president of American I. G. The Farben complex both in Germany and the United States then developed into an integral part of the formation and operation of the Nazi state machine, the Wehrmacht and the S.S.
I. G. Farben is of peculiar interest in the formation of the Nazi state because Farben directors materially helped. Hitler and the Nazis to power in 1933. We have photographic evidence (see page 60) that I.G. Farben contributed 400,000 RM to Hitler's political "slush fund." It was this secret fund which financed the Nazi seizure of control in March 1933. Many years earlier Farben had obtained Wall Street funds for the 1925 cartelization and expansion in Germany and $30 million for American I. G. in 1929, and had Wall Street directors on the Farben board. It has to be noted that these funds were raised and directors appointed years before Hitler was promoted as the German dictator.
The Economic Power of I. G. Farben
Qualified observers have argued that Germany could not have gone to war in 1939 without I. G. Farben. Between 1927 and the beginning of World War II, I.G. Farben doubled in size, an expansion made possible in great part by American technical assistance and by American bond issues, such as the one for $30 million offered by National City Bank. By 1939 I. G. acquired a participation and managerial influence in some 380 other German firms and over 500 foreign firms. The Farben empire owned its own coal mines, its own electric power plants, iron and steel units, banks, research units, and numerous commercial enterprises. There were over 2,000 cartel agreements between I. G. and foreign firms — including Standard Oil of New Jersey, DuPont, Alcoa, Dow Chemical, and others in the United States, The full story of I,G, Farben and its world-wide activities before World War II can never be known, as key German records were destroyed in 1945 in anticipation of Allied victory. However, one post-war investigation by the U.S, War Department concluded that:
Without I. G.'s immense productive facilities, its intense re. search, and vast international affiliations, Germany's prosecution of the war would have been unthinkable and impossible; Farben not only directed its energies toward arming Germany, but concentrated on weakening her intended victims, and this double-barreled attempt to expand the German industrial potential for war and to restrict that of the rest of the world was not conceived and executed "in the normal course of business." The proof is overwhelming that I. G. Farben officials had full prior knowledge of Germany's plan for world conquest and of each specific aggressive act later undertaken ....3
Directors of Farben firms (i.e., the "I. G. Farben officials" referred to in the investigation) included not only Germans but also prominent American financiers. This 1945 U.S. War Department report concluded that I.G.'s assignment from Hitler in the prewar period was to make Germany self-sufficient in rubber, gasoline, lubricating oils, magnesium, fibers, tanning agents, fats, and explosives. To fulfill this critical assignment, vast sums were spent by I.G. on processes to extract these war materials from indigenous German raw materials - in particular the plentiful German coal resources. Where these processes could not be developed in Germany ,they were acquired from abroad under cartel arrangements. For example, the process for iso-octane, essential for aviation fuels, was obtained from the United States,
... in fact entirely [from] the Americans and has become known to us in detail in its separate stages through our agreements with them [Standard Oil of New Jersey] and is being used very extensively by us.4
The process for manufacturing tetra-ethyl lead? essential for aviation gasoline, was obtained by I. G. Farben from the United States, and in 1939 I.G. was sold $20 million of high-grade aviation gasoline by Standard Oil of New Jersey. Even before Germany manufactured tetra-ethyl lead by the American process it was able to "borrow" 500 tons from the Ethyl Corporation. This loan of vital tetra-ethyl lead was not repaid and I.G. forfeited the $1 million security. Further, I.G. purchased large stocks of magnesium from Dow Chemical for incendiary bombs and stockpiled explosives, stabilizers, phosphorus, and cyanides from the outside world.
In 1939, out of 43 major products manufactured by I.G., 28 were of "primary concern" to the German armed forces. Farben's ultimate control of the German war economy, acquired during the 1920s and 1930s with Wall Street assistance, can best be assessed by examining the percentage of German war material output produced by Farben plants in 1945. Farben at that time produced 100 percent of German synthetic rubber, 95 percent of German poison gas (including all the Zyklon B gas used in the concentration camps), 90 percent of German plastics, 88 percent of German magnesium, 84 percent of German explosives, 70 percent of German gunpowder, 46 percent of German high octane (aviation) gasoline, and 33 percent of German synthetic gasoline.5 (See Chart 2-1 and Table 2-1.)
Table 2-1: German Army (Wehrmacht) Dependence on I.G. Farben Production (1943):
Product Total German Production Percent Produced byI.G. Farben
Synthetic Rubber 118,600 tons 100
Methanol 251,000 tons 100
Lubricating Oil 60,000 tons 100
Dyestuffs 31,670 tons 98
Poison Gas — 95
Nickel 2,000 tons 95
Plastics 57,000 tons 90
Magnesium 27,400 tons 88
Explosives 221,000 tons 84
Gunpowder 210,000 tons 70
High Octane (Aviation) Gasoline 650,000 tons 46
Sulfuric Acid 707,000 tons 35
Chart 2-1: German Army (Wehrmacht) Dependence on I.G. Farben Production (1943)
Dr. von Schnitzler, of the I.G. Farben Aufsichtsrat, made the following pertinent statement in 1943:
It is no exaggeration to say that without the services of German chemistry performed under the Four Year Plan the prosecution of modern war would have been unthinkable.6
Unfortunately, when we probe the technical origins of the more important of these military materials — quite apart from financial Support for Hitler — we find links to American industry and to American businessmen. There were numerous Farben arrangements with American firms, including cartel marketing arrangements, patent agreements, and technical exchanges as exemplified in the Standard Oil-Ethyl technology transfers mentioned above. These arrangements were used by I.G. to advance Nazi policy abroad, to collect strategic information, and to consolidate a world-wide chemical cartel.
One of the more horrifying aspects of I.G. Farben's cartel was the invention, production, and distribution of the Zyklon B gas, used in Nazi concentration camps. Zyklon B was pure Prussic acid, a lethal poison produced by I.G. Farben Leverkusen and sold from the Bayer sales office through Degesch, an independent license holder. Sales of Zyklon B amounted to almost three-quarters of Degesch business; enough gas to kill 200 million humans was produced and sold by I.G. Farben. The Kilgore Committee report of 1942 makes it clear that the I.G. Farben directors had precise knowledge of the Nazi concentration camps and the use of I.G. chemicals. This prior knowledge becomes significant when we later consider the role of the American directors in I.G.'s American subsidiary. The 1945 interrogation of I.G. Farben director yon Schnitzler reads:
Q. What did you do when they told you that I.G. chemicals was [sic] being used to kill, to murder people held in concentration camps?
A. I was horrified.
Q. Did you do anything about it?
A. I kept it for me [to myself] because it was too terrible .... I asked Muller-Cunradi is it known to you and Ambros and other directors in Auschwitz that the gases and chemicals are being used to murder people.
Q. What did he say?
A. Yes: it is known to all I.G. directors in Auschwitz.7
There was no attempt by I.G. Farben to halt production of the gases — a rather ineffective way for von Schnitzler to express any concern for human life, "because it was too terrible."
The Berlin N.W. 7 office of I.G. Farben was the key Nazi overseas espionage center. The unit operated under Farben director Max Ilgner, nephew of I.G. Farben president Hermann Schmitz. Max Ilgner and Hermann Schmitz were on the board of American I.G., with fellow directors Henry Ford of Ford Motor Company, Paul Warburg of Bank of Manhattan, and Charles E. Mitchell of the Federal Reserve Bank of New York.
At the outbreak o£ war in 1939 VOWI employees were ordered into the Wehrmacht but in fact continued to perform the same work as when nominally under I.G. Farben. One of the more prominent of these Farben intelligence workers in N.W. 7 was Prince Bernhard of the Netherlands, who joined Farben in the early 1930s after completion of an 18-month period of service in the black-uniformed S.S.8
The U.S. arm of the VOWI intelligence network was Chemnyco, Inc. According to the War Department,
Utilizing normal business contacts Chemnyco was able to transmit to Germany tremendous amounts of material ranging from photographs and blueprints to detailed descriptions of whole industrial plants.9
Chemnyco's vice president in New York was Rudolph Ilgner, an American citizen and brother of American I, G. Farben director Max Ilgner. In brief, Farben operated VOWI, the Nazi foreign intelligence operation, before World War II and the VOWI operation was associated with prominent members of the Wall Street Establishment through American I.G. and Chemnyco.
The U.S. War Department also accused I.G. Farben and its American associates of spearheading Nazi psychological and economic warfare programs through dissemination of propaganda via Farben agents abroad, and of providing foreign exchange for this Nazi propaganda. Farben's cartel arrangements promoted Nazi economic warfare — the outstanding example being the voluntary Standard Oil of New Jersey restriction on development of synthetic rubber in the United States at the behest of I. G. Farben. As the War Department report puts it:
The story in short is that because of Standard Oil's determination to maintain an absolute monopoly of synthetic rubber developments in the United States, it fully accomplished I.G.'s purpose of preventing United States production by dissuading American rubber companies from undertaking independent research in developing synthetic rubber processes.10
In 1945 Dr. Oskar Loehr, deputy head of the I.G. "Tea Buro," confirmed that I. G. Farben and Standard Oil of New Jersey operated a "preconceived plan" to suppress development of the synthetic rubber industry in the United States, to the advantage of the German Wehrmacht and to the disadvantage of the United States in World War II.
Dr. Loehr's testimony reads (in part) as follows:
Q. Is it true that while the delay in divulging the buna [synthetic rubber] processes to American rubber companies was taking place, Chemnyco and Jasco were in the meantime keeping I.G. well informed in regard to synthetic rubber development in the U.S.?
A. Yes.
Q. So that at all times I.G. was fully aware of the state of the development of the American synthetic rubber industry?
A. Yes.
Q. Were you present at the Hague meeting when Mr. Howard [of Standard Oil] went there in 1939?
A. No.
Q. Who was present?
A. Mr. Ringer, who was accompanied by Dr. Brown of Ludwigshafen. Did they tell you about the negotiations?
A. Yes, as far as they were on the buna part of it.
Q. Is it true that Mr. Howard told I.G. at this meeting that the developments in the U.S. had reached such a stage that it would no longer be possible for him to keep the information in regard to the buna processes from the American companies?
A. Mr. Ringer reported it.
Q. Was it at that meeting that for the first time Mr. Howard told I.G. the American rubber companies might have to be informed of the processes and he assured I.G. that Standard Oil would control the synthetic rubber industry in the U.S.? Is that right?
A. That is right. That is the knowledge I got through Mr. Ringer.
Q. So that in all these arrangements since the beginning of the development of the synthetic rubber industry the suppression of the synthetic rubber industry in the U.S. was part of a preconceived plan between I.G. on the one hand and Mr. Howard of Standard Oil on the other?
A. That is a conclusion that must be drawn from the previous facts.11
I.G. Farben was pre-war Germany's largest earner of foreign exchange, and this foreign exchange enabled Germany to purchase strategic raw materials, military equipment, and technical processes, and to finance its overseas programs of espionage, propaganda, and varied military and political activities preceding World War II. Acting on behalf of the Nazi state, Farben broadened its own horizon to a world scale which maintained close relations with the Nazi regime and the Wehrmacht. A liaison office, the Vermittlungsstelle W, was established to maintain communications between I.G. Farben and the German Ministry of War:
The aim of this work is the building up o.[ a tight organization for armament in the I.G. which could be inserted without difficulty in the existing organization of the I.G. and the individual plants. In the case of war, I.G. will be treated by the authorities concerned with armament questions as one big plant which, in its task for the armament, as far as it is possible to do so from the technical point of view, will regulate itself without any organizational influence from outside (the work in this direction was in principle agreed upon with the Ministry of War Wehrwirtschaftsant) and from this office with the Ministry of Economy. To the field of the work of the Vermittlungsstelle W belongs, besides the organizational set-up and long-range planning, the continuous collaboration with regard to the armament and technical questions with the authorities of the Reich and with the plants of the I.G.12
Unfortunately the files of the Vermittlungsstelle offices were destroyed prior to the end of the war, although it is known from other sources that from 1934 onwards a complex network of transactions evolved between I.G. and the Wehrmacht. In 1934 I. G. Farben began to mobilize for war, and each I.G. plant prepared its war production plans and submitted the plans to the Ministries of War and Economics. By 1935-6 war games were being held at I.G. Farben plants and wartime technical procedures rehearsed.13 These war games were described by Dr. Struss, head of the Secretariat of I.G.'s Technical Committee:
It is true that since 1934 or 1935, soon after the establishment of the Vermittlungsstelle W in the different works, theoretical war plant games had been arranged to examine how the effect of bombing on certain factories would materialize. It was particularly taken into consideration what would happen if 100- or 500-kilogram bombs would fall on a certain factory and what would be the result of it. It is also right that the word Kriegsspiele was used for it.
The Kriegsspiele were prepared by Mr. Ritter and Dr. Eckell, later on partly by Dr. yon Brunning by personal order on Dr. Krauch's own initiative or by order of the Air Force, it is not known to me. The tasks were partly given by the Vermittlungsstelle W and partly by officers of the Air Force. A number of officers of all groups of the Wehrmacht (Navy, Air Force, and Army) participated in these Kriegsspiele.
The places which were hit by bombs were marked in a map of the plant so that it could be ascertained which parts of the plant were damaged, for example a gas meter or an important pipe line. As soon as the raid finished, the management of the plant ascertained the damages and reported which part of the plant had to stop working; they further reported what time would be required in order to repair the damages. In a following meeting the consequences of the Kriegsspiele were described and it was ascertained that in the case of Leuna [plant] the damages involved were considerably high; especially it was found out that alterations of the pipe lines were to be made at considerable cost.14
Consequently, throughout the 1930s I. G. Farben did more than just comply with orders from the Nazi regime. Farben was an initiator and operator for the Nazi plans for world conquest. Farben acted as a research and intelligence organization for the German Army and voluntarily initiated Wehrmacht projects. In fact the Army only rarely had to approach Farben; it is estimated that about 40 to 50 percent of Farben projects for the Army were initiated by Farben itself. In brief, in the words of Dr, von Schnitzler:
Thus, in acting as it had done, I.G. contracted a great responsibility and constituted a substantial aid in the chemical domain and decisive help to Hitler's foreign policy, which led to war and to the ruin of Germany. Thus, I must conclude that I.G. is largely responsible for Hitler's policy,
Polishing I. G. Farben's Public Image
This miserable picture of pre-war military preparation was known abroad and had to be sold — or disguised — to the American public in order to facilitate Wall Street fund-raising and technical assistance on behalf of I. G. Farben in the United States. A prominent New York public relations firm was chosen for the job of selling the I.G. Farben combine to America. The most notable public relations firm in the late 1920s and 1930s was Ivy Lee & T.J. Ross of New York. Ivy Lee had previously undertaken a public relations campaign for the Rockefellers, to spruce up the Rockefeller name among the American public. The firm had also produced a syncophantic book entitled USSR, undertaking the same clean-up task for the Soviet Union — even while Soviet labor camps were in full blast in the late 20s and early 30s.
From 1929 onwards Ivy