Wall Street and the Rise of Hitler (24 page)

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 Nieder-man'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.

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CHAPTER ELEVEN: Wall Street-Nazi Collaboration in World War II
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.

American I.G. in World War II

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 & http://reformed-theology.org/html/books/wall_street/chapter_11.htm (3 of 10) [8/4/2001 9:44:20 PM]

CHAPTER ELEVEN: Wall Street-Nazi Collaboration in World War II 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, http://reformed-theology.org/html/books/wall_street/chapter_11.htm (4 of 10) [8/4/2001 9:44:20 PM]

CHAPTER ELEVEN: Wall Street-Nazi Collaboration in World War II 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 Sehroder'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.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
con. trast 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.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 http://reformed-theology.org/html/books/wall_street/chapter_11.htm (5 of 10) [8/4/2001 9:44:20 PM]

CHAPTER ELEVEN: Wall Street-Nazi Collaboration in World War II 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.

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CHAPTER ELEVEN: Wall Street-Nazi Collaboration in World War II 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.