[Authors Note: I would like to extend a special thanks specifically to Ned Comstock, Michael Mann, Edwin Black, and Jack Pauwels for their help with this project – you have all been indispensable and your assistance and insight is greatly appreciated.]

Following the Money: An Exploration of the Relationship between American Finance and Nazi Germany

“Human memory is a marvelous but fallacious instrument. The memories which lie within us are not carved in stone; not only do they tend to become erased as the years go by, but often they change, or even increase by incorporating extraneous features.”

– Primo Levi, The Drowned and the Saved

Although many writers, historians, and politicians generally commend the United States as an instrumental force behind the undoing of Hitler’s Nazi regime, many prominent American companies and citizens knowingly aided the Third Reich. Scholars have exposed numerous instances of collaboration between institutions and individuals in the two countries.[1] Nevertheless, the dualistic narrative of the United States vs. Nazi Germany portrayed as Good vs. Evil is still frequently espoused by U.S. politicians and reflected in American popular culture. Thus, the purpose of this essay is to continue to flesh out this countervailing story and fill in the gaps on a central, yet underdeveloped topic of economic collaboration between U.S. and Nazi financial institutions. It will argue that that these activities included facilitating financial transactions for the purposes of paying for war material, transferring capital out of blocked Nazi accounts, including large amounts of looted gold from European central banks and Jewish citizens, making loans for the Nazi military, and funneling money raised in the U.S. to the Nazi party directly. Through the brief case studies of four major financial institutions, the Chase Bank, J.P. Morgan & Co., Union Banking Corporation, and the Bank of International Settlements, this essay will demonstrate that the organizations involved maintained American managerial control of their foreign subsidiaries, attempted to obfuscate their collaboration with the Nazis, and continued to do business after formal hostilities commenced between the U.S. and Germany.[2] The purpose of this essay is not meant to address the motivations of these corporations and individuals; however, it is written with the understanding that such a question is a natural outgrowth of this field of inquiry and is worth further consideration.

Due to an expanding body of archival documentation, research on this topic has been growing steadily since the war’s end, particularly in the last three decades. The historiography of corporate complicity and collaboration with the Nazis could be grouped into four interrelated categories delineating military, political, ideological, and economic support, with some overlap considering the extensive scope of some of the organizations involved.[3] The essential argument underpinning this research is that U.S. businesses that cooperated with the Third Reich did so purposefully, and despite their excuses of the loss of control of various European subsidiaries to Nazi officials, manufacturing, financial transactions, and business services were invariably managed by Americans or those loyal to the American parent companies. In reaction to this indictment, a fifth “category” of historiography has more recently emerged, commissioned by some of the organizations accused of collaboration in order to defend their past business practices.

Military aid is perhaps the most concrete category to begin a discussion of the historiography relevant to this topic. Research on this topic detailed the cooperation of U.S. corporations with German war production in the form of building tanks, warplanes, munitions, poison gas, and research and development of new military technology.[4] Another thread of inquiry related to this subject matter regards the business activity of the sprawling chemical company, I.G. Farben, which was critical to the Nazi war effort and built the infamous Auschwitz concentration camp.[5] As more information became available during and directly after the war’s end, a handful of historians investigated this corporation’s connections to American firms.[6] A third line of inquiry into the topic of military collaboration between U.S. and German institutions involves the role that information technology played in harnessing the power of the Third Reich’s military and industrial capacity.[7]

Researchers in the category of American political support for the Nazis have noted that the leaders of many corporations held various amounts of power and influence, which they utilized to provide political cover for their activities and for their control over the lucrative German market.[8] Several historians have argued that prominent corporate managers pressed for peaceful relations with Germany, despite its aggressive posture.[9] Other studies have involved Americans who worked with the Nazi party in its beginning stages.[10]

Differing from the other categories of collaboration listed above, research on ideological support is situated more widely within the context of American culture. Many historians have explored the currents of racist thought, which were present in many circles of American life in the 1930s.[11] Additionally, the role of American eugenics pseudo-scientists in the development and implementation of Nazi genocidal goals has been well documented.[12] Documentation on ideological sympathy for the Nazis would not be complete with out including Henry Ford, who was virulently anti-Semitic, and harnessed the significant resources at his disposal to publish his views widely.[13]

Before turning to a background in the study of economic support for the Third Reich originating in America, it is important to consider how businesses responded to indictments of collaboration. This literature differs from the other categories detailed above in that it involves research directly sponsored by the companies accused of dealing with the Nazis.[14] Each organization exhibited a different response to the various accusations against them. For instance, Ford was fairly candid about its involvement, opening its archives to a team of researchers and publishing the findings on their website.[15] GM, on the other hand, hired the business historian, Henry Ashby Turner, who wrote several defenses of U.S. subsidiaries in Germany, including the widely cited German Big Business and the Rise of Hitler.[16] According to journalist Edwin Black, Turner was given exclusive access to GM archives, which he then restricted in his own collection at Yale.[17] I.G. Farben also retained a historian, Peter Hayes, who was paid directly by the corporation to argue that the company’s American managers lost control to Nazi officials, which directly contradicts the previous research detailed above.[18]

Access to archival sources is a central problem for the economic historiography on this topic. Because financial institutions tend to be more protective of their information, there are still spaces to be filled in the story of their role in Nazi Germany.[19] Contemporary research has revolved around Holocaust restitution, which focuses almost solely on looted Jewish assets.[20] Much of the work that has attempted to reach beyond this subject into a more broad view of economic collaboration with the Nazis has drawn upon Anthony Sutton’s book, Wall Street and the Rise of Hitler. Sutton argues that many U.S. corporations “…aided Nazism wherever possible (and profitable) – with full knowledge that the probable outcome would be war involving Europe and the United States.”[21] Charles Higham drew similar conclusions in Trading with the Enemy, in which he contends that several American financial institutions were responsible for financing various war production activities. Higham’s work is controversial due to its relationship with its archival sources, which are not referenced within his text.[22] However, I have established after an inspection of his sources, which Higham was responsible, as he states in his book, for declassifying a large number of archival materials on U.S. firms and individuals collaborating with the Third Reich.[23] These documents, which mainly involve internal investigations by the U.S. Department of Treasury, provide the bulk of the source material for this essay. Although Higham and Sutton have been cited elsewhere, there has been sparse recent academic analysis of their sources. Therefore, the job of detailing exactly what constituted the relationship between some U.S. financial institutions and the Nazis remains an unfinished task.[24]

It is important to note that prior to Germany declaring war on the U.S. and the subsequent American implementation of the Trading with the Enemy Act, business with the Third Reich was considered morally reprehensible, but not illegal.[25] Therefore, the group of case studies detailed here is divided into two sections: Business conducted between U.S. and Nazi financial institutions before Germany and the U.S. were officially at war, and the business activities afterwards. Each case will present evidence that the banks in question retained U.S. managerial direction and control over their foreign subsidiaries, made attempts to hide their involvement with the Nazis, provided financial services that helped the Third Reich pay for war materials and avoid blocked accounts, and in some cases, helped transfer political donations directly to the Nazi party.

A snapshot of four banks during the early Nazi regime 1933-1941

This study begins with the intersection between U.S. financial institutions and the Third Reich within the Bank of International Settlements (BIS) in Basel, Switzerland. In the years following World War I, the Allied Reparations Committee commissioned lawyer and diplomat Owen D. Young to formulate a plan to deal with the economic impact of the war’s devastation in Europe. Basically, these were agreements among Allied central bankers to reorganize the financial system of Germany to facilitate reparations payments and increase foreign investment.[26] Among other things, the Young Plan called for the creation of an international bank to handle such transactions. This recommendation led directly to an agreement among Allied finance ministers to create the BIS in 1930.[27] In short, the BIS was designed to collect, administer, and distribute reparations payments between Germany and the Allied powers. The secondary purpose of the BIS was to promote cooperation between central bankers, and assist in large cross-border capital flows, such as international currency trades and large scale investment.

The BIS presidency was occupied primarily by Americans through the 1930s and 40s beginning with Gates McGarrah, who was the former Chairman of the Federal Reserve Bank of New York.[28] During this time, several prominent Nazi financial managers also held positions on the board of directors of the BIS, such as Kurt von Shröder, Walther Funk, Hjalmar Schacht, and Emil Phul.[29] In addition to private bankers, the U.S. Treasury and State department also sent representatives to Basel, in the form of Merle Cochran and William Bullitt, whose function was to report back to Secretary of State Cordell Hull and Secretary of Treasury Henry Morgenthau regular updates on the BIS.[30] Problematically, these representatives showed themselves to be less than neutral, giving positive reports on their Nazi counterparts even as Hitler annexed various European territories and looted gold from their central banks.[31] When questioned by the Morgenthau on this situation Bullitt responded, “There was an entirely cordial atmosphere at Basel; most of the central bankers have known each other for many years and these reunions are enjoyable and profitable to them.”[32] Essentially, while Nazi officials lied to or won over the trust of the likes of Bullitt and Cochran, they utilized the opacity of BIS capital transfers, which were not subject to oversight by U.S. authorities. This became a chief mechanism to keep these activities secret and safe from outside intervention.[33]

The obscuring of gold theft from European banks continued as the Third Reich annexed more territory.[34] To assist with this process, BIS board members elected American lawyer Thomas McKittrick, who allowed this process to continue.[35] While hiding the transfer of gold, top Nazi financial managers, such as Emil Puhl, utilized their privilege as BIS board members to keep this money available for the Third Reich, even as Allied authorities attempted to block accounts to stop them.[36] Once the Nazis had capital safely protected in Switzerland, they were able to use this money to purchase war materials for Hitler’s crash rearmament program from 1936-40.[37] For example, IBM, which was in the indispensable position of organizing everything from train schedules – including those sending prisoners to concentration camps – to raw materials inventory for the Third Reich, set up offices in Geneva not long after this process of capital accumulation in Switzerland began.[38] Ford and GM also used this mechanism throughout the 1930s to secure payment for the military vehicles it was building for the Nazis and sent corporate officers from their home offices to the country to reinvest in their plants and communicate with local managers.[39] Although Morgenthau had more than an inkling of what was happening in Switzerland, he was powerless to do anything. Even when war broke out, and the Trading with the Enemy Act was firmly in place for all Axis controlled territories in 1941, a U.S. ambassador reported, “The business affairs of the bank, which are run on a greatly reduced scale, virtually rest in the hands of Mr. McKittrick, the President of the Bank.”[40]

The BIS was not the only large financial institution to both facilitate and obscure financial transactions for the Third Reich. The Chase Bank was also a participant in Nazi banking activity. Due to the removal of banking regulation blocking the opening of international branches, Chase Bank opened and acquired many branches around the world, and it was the largest bank by assets and deposits at the beginning of the 1930s.[41] Chase’s main European hub at this time was its Paris branch, which was not a major institution, but had the advantage of being connected to the parent company’s worldwide network.[42] When the Nazis rode triumphantly into Paris they found that Chase Bank was prepared to open their doors to a substantial new business partner. According to the corporate analysis unit of the U.S. Treasury, which investigated the role of Chase in the overall Nazi financial structure:

Investigations conducted at the Paris Branch and at the Home Office in New York of Chase Bank disclosed that the bank operated in Paris throughout German occupation and engaged in sundry activities indicate an over-riding desire to continue operating even though this required a close collaboration with the German authorities. There is evidence that the Home Office in New York was fully informed of these activities, at least until late in 1942, but took no steps to discourage them, at the same time withholding pertinent information from United States Governmental authorities.[43]

Chase, like a few other financial institutions, opened up a branch in unoccupied France within months after the Nazi occupation began. This allowed the Chase headquarters to more easily remain in contact and also to obscure direct cooperation with Nazi officials through an implied separation with its main branch in Paris.[44] Just prior to the Nazi victory, French officials had ordered all bank branches to shut down and liquidate, or sell all available assets, so that currency, gold, and other property could be transferred and protected abroad.[45] However, Carlos Niedermann, the manager of Chase’s French branches, ignored this order and instead only adjusted his balance sheets to make it appear that business was being reduced.[46] In reality, accounts were set up at the new branch in Vichy France specifically for use by the Reichsbank to convert German Reichmarks into U.S. dollars to pay for the services of other corporations. Many of these business shared accounts and legal representation with Chase, such as Standard Oil of New Jersey, ITT, General Analine and Film, and Sterling Products.[47] Additionally, Niedermann also assisted Nazi authorities in blocking Jewish deposits, confiscating Jewish accounts, and transferring the funds to the newly created Nazi accounts.[48]

The importance of American bank branches in France to the Nazis cannot be fully understood without a treatment of J.P. Morgan & Co.’s Morgan & Cie Bank, which was also located in Paris.[49] As with Chase, J.P. Morgan opened a branch in the unoccupied area of France, in this case to Chatel-Guyon, and moved most of its main operations there.[50] Meanwhile, J.P. Morgan left the Paris branch in legal limbo, so that it could maintain its foreign currency accounts used by its business partners in unblocked accounts in Vichy France.[51] French central banking authorities had also ordered the liquidation of all their accounts, as they had done with Chase, so the Nazis would not be able to utilize them. However, the U.S. Treasury investigation of Morgan & Cie determined that this branch took orders exclusively from its parent company J.P. Morgan & Co. The report states:

The primary loyalty of the Morgan partners was not to the US or France, but to the firm. Regardless of national considerations, they invariably acted in what they deemed to be the best interests of Morgan et Cie. Thus, when the Germans were approaching Paris in 1940, the Morgan officials failed to destroy their stocks of banknotes on hand despite the requests of the Governor of the Bank of France that they do so. This failure to obey instructions placed Morgan et Cie in the enviable position of being able to supply its ‘best clients’ with small amounts of cash immediately after the occupation at a time when the majority of other Paris banks which had complied with the Bank of France’s orders, including Chase, were apparently unable to do so.[52]

Through Morgan & Cie’s policies, the corporation clearly sent a message to the Nazis that it wanted to preserve their business without putting any capital, particularly in America, at risk. Both in practice and ideologically speaking, J.P. Morgan’s French managers aligned themselves with Third Reich; thus, when top manager, M. Pesson-Didion met with Hans J. Caesar, the Reichsbank director put in charge of French banks, he stated proudly, “Following in that the traditions of his father, Mr. Morgan has never accepted Jews as partners or associates.”[53]

Meanwhile, behind the scenes, Morgan & Cie helped to assist the substantial Nazi military manufacturing quotas. In early 1941, through the lobbying of J.P. Morgan’s American partners and the New York Banking Department, Morgan & Cie was granted permission to facilitate payments from Nazi accounts directly to the U.S European subsidiaries that were building armaments for Nazis.[54] This was perfect timing for GM’s German subsidiary, Opel, which was struggling with money problems due to a shortage of workers, a highly ambitious production schedule for the JU-88, the workhorse of the German Luftwaffe, and investment problems due to funds trapped in blocked accounts.[55] American legal counsel for Morgan & Cie cabled their French managers on June 6, 1941:

I think you and the rest of the staff should know that we are constantly receiving compliments on this side over the way Morgan et Cie has looked after the interests of their clients, commercial and private, during the past year. These reports came to us from most unexpected places, and encourage us to wish to carry on the business as long as conditions will permit us to do so. The office at Chatel-Guyon has proven to be of great practical utility; without it we could not have carried on any business with the outside world. I hope the staff there realize how much we appreciate their untiring and devoted efforts.[56]

The final financial institution to be discussed in this section is the Union Banking Corporation (UBC). Although its market share was significantly smaller than the other banks in this series of case studies, its utility to the Nazi party was significant, particularly in its early years. The UBC was set up by the large finance and investment organization, Brown Brothers Harriman (BBH), as a holding company for all the shares in a bank in the Netherlands, called the Bank voor Handel en Scheepvaart, N.V. [57] This bank was founded by the Thyssen family, who invested in heavy industry, particularly in Germany’s Ruhr valley. According to Fritz Thyssen, who was chairman of the Bank voor Handel, said he became interested in Hitler’s fledgling Nazi party after being introduced to him by General Erich von Ludendorf and agreed to credit the party 250,000 marks.[58]

There is no doubt that Thyssen’s bank was well positioned in terms of capitalization and legal protection. It was represented by the same firm that provided legal services to Chase and J.P. Morgan, Sullivan & Cromwell.[59] The financial connections between this bank and others were also in the process of being investigated by the U.S. Treasury department when war broke out. For instance, the Division of Monetary research reported in December of 1941 that the Worms bank of Paris had invested over 1 million dollars in the UBC.[60] Ostensibly, this capitalization allowed the UBC via Thyssen’s Bank vor Handel to donate money to Hitler’s 1933 election campaign, by which time donations to the Nazi party exceeded over 1 million marks.[61]

Business cooperation with Nazis after the U.S. and Germany were at war 1942-1945

After Japan’s attack on the U.S. at Pearl Harbor, Hitler made the reluctant decision on December 11th, 1941 to declare war on the U.S., as promised in Germany’s military agreement with Japan.[62] This allowed the U.S. Treasury department to block and/or seize the assets of any entity it found to be doing business with Germany via the Trading with the Enemy Act.[63] Despite the passage of this legislation, all four entities discussed in this brief set of case studies continued their collaborative financial operations. According to U.S. Treasury investigations of these institutions, each bank sought to avoid detection, continue their business, provide financial services that specifically facilitated the Nazi military, and avoid prosecution when the war ended.

Chase Bank attempted to hide its involvement with the Nazis in France through accounting fraud. Essentially, they falsified their balance sheets to reflect that business was shrinking, when it was actually growing drastically.[64] Although Chase headquarters sent responses to requests for further instructions that it could no longer direct the branch after February 1942, it took no steps to stop any transactions from occurring.[65] U.S. Treasury officials contacted the Chase home office to find out why these business transactions were continuing to occur. According to assistant Treasury director Harry White, in his communications with Chase Bank directors Joseph Larkin and Winthrop Aldrich, claimed that they were attempting to remove French managers who were collaborating with the Nazis, but were having difficulty maintaining control over their French operations.[66] Chase managers claimed they were dealing, “not with a theory, but a situation.”[67] White eventually determined that there was no evidence that instructions to block these business transactions were ever issued, and that Chase headquarters in New York was kept informed of all business transactions at least through May of 1942.[68] In fact, White and his team discovered that in that month, instructions had been issued that all French operations “…are at your [Hans Caesar’s] disposal to continue to undertake the execution of banking affairs in France.”[69]

Chase banking business continued throughout the war. Deposits in accounts set up for German business virtually doubled.[70] While Chase France was acting as a “drop” for German banks, providing access to capital for military operations, Chase was also facilitating funds transfers to South America where other businesses, such as Standard Oil of New Jersey, had set up subsidiaries specifically to secretly trade badly needed fuel to the Nazis.[71] In the end, Chase Bank operations continued throughout the war and its headquarters in New York failed to provide the U.S. Treasury department with information regarding its French activities.[72] A case was brought against Chase by U.S. Attorney John McGohey in the spring of 1945 for Trading with the Enemy Act violations, but no substantive effort was made to prosecute the organization for any of the activities that are explained in this essay. This was due to what became the narrow focus of the court proceedings: the prosecution of one diamond smuggler, Leonard Smit, who had no connection to any of the other business transactions detailed above.[73] McGohey, for his part, was attempting to use Smit as an example to prove that Chase had disobeyed orders to freeze overseas accounts subject to Nazi seizure; however, this quickly became a moot point as Chase was cleared of all charges less than a month later.[74] There is relative silence from all the banks covered in this essay on the culpability of their actions, although Chase representatives did provide some defense for their actions. In his summation, John Cahill, legal representative for the bank, said that Chase’s oversight was, “…a mistake of the head and not of the heart.”[75] Chase was silent on the issue; however, the New York Times produced its own defense for the bank four days later:

Now, as witnesses for the Chase Bank pointed out, it would not have been difficult for an “enemy” account here and there to slip by…As every effort would naturally be made to conceal the real ownership of the funds ordered to be frozen, it would be no simple task for any bank to be sure that it had achieved a 100 per cent record…It was on its face incredible that a great institution like the Chase Bank would with the knowledge of its officers connive in a conspiracy of this sort.[76]

Chase was sued in 1998 by Holocaust survivors requesting the funds left in blocked accounts from this era. Chase opted to settle the class action lawsuit. It issued a brief statement saying that it was disappointed that the suit had been filed and, “We understand the seriousness of the issue and certainly look into these allegations with care,” but contended that it was “…an unnecessary lawsuit.”[77]

J.P. Morgan, in turn, was also able to successfully continue its business operations in France after Germany and the U.S. were at war. Mathew Marks, the U.S. Treasury investigator assigned to the case, noted that despite direct orders to sever communications and freeze accounts with Morgan & Cie, documents he discovered showed that this order had been violated, and business activity continued.[78] For example, an internal communication from Morgan & Cie noted,

…the parent concern [is] requesting that we be contacted in connection with the investment in the unoccupied zone of ten million francs in securities, particularly of industrial securities. If I understand correctly, the parent concern places complete reliance on us…Please send us as soon as possible your [JP Morgan headquarters] suggestions regarding investment of the money…I think we shall have to contact the parent concern through the intermediary of our New York friends in order to handle the deal satisfactorily.[79]

What the U.S. Treasury department eventually determined was that U.S. citizens were able to make free withdrawals from the Morgan & Cie branch network, while payments into the network would be allowed only in the form of patent royalties, or money for sales or usage of an asset, in order to obscure the actual volume of money changing hands.[80] With a total value of 1 billion dollars worth of assets in blocked accounts, 87 percent of which were in U.S. dollars, this was an effective method of transferring payment to and from various American industrial concerns within Nazi occupied countries.[81]

J.P. Morgan was not prosecuted during the aftermath of World War II for the activities of Morgan & Cie, despite the detailed reports showing clear collaboration with the Nazis. Further litigation against J.P. Morgan was not revisited until 1998-2001, when the institution was sued by Jewish customers who had lost their accounts to the French Morgan et Cie subsidiary.[82]

Compared to Chase and J.P. Morgan, the Union Banking Corporation was less immune to prosecution, though it also made efforts both to continue and to conceal its business after war broke out. During interrogations with Nazi banker Kurt von Shröder, who was captured in Germany at the end of the war, he explained the process in which the bank’s Dutch subsidiary, Bank voor Handel en Scheepvart, hid its participation in Nazi banking networks:

…for show purposes they [Bank voor Handel and a few other Dutch banks, such as Dutchmen van Vlissingen, and von Schaik] were separated, but for practical purposes the management worked together as before, except that no more meetings of the board were held…As I remember, there was a big agreement between the German and the Dutch group. After this agreement the members of the boards from both companies should be returned to their position at the end of the war. That in the meantime the collaboration between the companies should go forward as far as possible, in the same way as before.[83]

For its part, the UBC continued to hold shares and currency reserves for Bank voor Handel so that it could be used by the Nazi war apparatus.[84] The UBC’s investment in United Steel Works Inc., in Dusseldorf, Germany, (Vereinigte Stahlwerke A.G.) was particularly critical to Third Reich military production.[85]

The UBC came under the investigation of the U.S. Treasury department after investigative journalist M.J. Recunin published an article about the institution entitled, “Hitler’s Angel Has 3 Millions in N.Y. Bank” in the summer of 1941.[86] This prompted the Alien Property Commission to examine, and then seize all the shares of the UBC in October of 1941. Thus, its wartime activity in Germany was cut short compared to the other banks detailed in this study. However, just like the other institutions in this case study, no other criminal proceedings occurred due to the corporation’s collaborative relationship with the Nazis.[87]

Like the other institutions in this essay, the Bank of International Settlements also continued to offer financial services to the Third Reich after December of 1941. It is important to note that while this organization was technically considered a Swiss bank, Thomas McKittrick, an American, presided over it until the end of the war. During this period, the board of the BIS contained several Nazis who favored McKittrick’s supportive stance toward Germany. When the bank’s documents were finally seized and several BIS board members, including Reichsbank director Emil Puhl, were interrogated, Morgenthau’s team concluded:

It is clear both from correspondence and from testimony that the management of the B.I.S during the war was ‘in the hand of the Administration Council, in which the Axis representatives have an authoritative influence’, and that in 1942 the Germans favored the reelection of President McKittrick whose ‘personal opinions’ they characterized as ‘safely known.’[88]

In an even more egregious allegation, Puhl also noted that McKittrick was allegedly providing economic intelligence to the other Nazi BIS board members.[89]

Ultimately, the BIS was situated in the center of the Nazi financial structure. A majority of all gold looted during Nazi conquests of Belgium, France, Austria, Czechoslovakia, Poland, Romania, Lithuania, Latvia, and Estonia ended up in the BIS vaults.[90] This transfer of capital allowed the Nazis access to money that would have been trapped in blocked accounts, as the Trading with the Enemy act applied to all Nazi occupied countries after December, 1941. After the Nazis were defeated, the U.S. Treasury investigators examining this structure in Germany noted, “…looted gold accepted by the B.I.S from the Reichsbank is dependent upon access to the Swiss national Bank’s records concerning the Reichsbank’s gold depot which was maintained there and through which nearly all these gold shipments were washed.”[91]

Within the group of individuals that managed finance capital for Third Reich military production was the Baron Kurt Freiherr von Schröder, who was in a core position for the Nazis, straddling the world of international banking and Hitler’s inner circle. Long before Hitler took power, Schröder was a respected name in the major banking industries of London, New York, and Berlin.[92] Schröder positioned himself as an indispensable part of the Nazi political machine first by brokering the political deal that led directly to Hitler’s chancellorship, and then rising to a high position within the Schutzstaffel, or SS, the feared and highly influential police unit within the Nazi government.[93] Utilizing his exclusive access to the Nazi party and international business, Schröder was able to set up highly profitable arrangements as a board member of organizations intimately involved with Third Reich military production, such as I.G. Farben and Krupp.[94] Schröder noted that during the course of his interrogations after being captured by Allied officials in 1945, he was given these and other responsibilities, “I represented one of the leading private banks formed on a partnership basis, and because I was considered politically reliable.”[95]

It was through these connections that Schröder was able to utilize his board position on the BIS to gain access to enormous amounts of capital for his business interests. McKittrick defended this activity by stating that the BIS was a neutral organization and operated on trust between himself and the Nazi bankers.[96] McKittrick went on to state that all transferred gold was “…carefully segregated and documented so that any of it that may have been looted could be readily identified…and let the Germans keep it for other uses.”[97] Although McKittrick is vague, the research presented here suggests available capital could be utilized to finance military enterprises. McKittrick noted that after the war he intended to “…throw open the books,” and that the United Nations and the U.S. “…would appreciate and approve of the role he and the BIS had played during the war.”[98]

As the war drew to a close, it became obvious that full disclosure was not on the agenda for the BIS. Knowing that this organization was at the apex of the Nazi finance structure, Treasury Secretary Morgenthau threatened to hold up the Bretton Woods Conference, an Allied meeting critical to deciding the postwar financial order, until the BIS collaboration issue was addressed.[99] Morgenthau’s wishes were sidelined in favor of a settlement with the BIS – they would trade a fixed amount of gold in exchange to keep their books secret.[100] This issue was revisited in 1996, when Holocaust victims sued several Swiss banks that were depositories for the BIS.[101] A few of the cases were successfully settled, and the resulting creation of the Bergier commission to investigate Swiss-Nazi business collaboration was a welcome development; however, further restitution cases have been blocked by American judges and the U.S. Department of Justice.[102]

A call for further research

Considering the volume of evidence relative to the collaboration between the financial institutions featured here and the Third Reich, the lack of criminal proceedings against any of the firms or their directors is suspect. A significant possible reason for this was the destruction of Harry White’s career during the House Committee on Un-American Activities (HUAC) in 1946-48, when he was accused of being a Communist sympathizer and Soviet spy.[103] Because White had been in charge of all the investigations detailed in this essay, his involvement with HUAC (along with his sudden heart attack and death during the proceedings) halted his work. Coupled with the accelerating anti-communist hysteria of HUAC, White’s boss, Henry Morgenthau, held an increasingly punitive stance toward Germany, which put him at odds with the Truman administration. [104] This caused his direction of the U.S. Department of Treasury to be cast in an unfavorable light, decisively ending many of its pending investigations.[105]

Beyond what has been elucidated from the wartime research of the Treasury Department, other avenues of research have emerged that should be further developed. For instance, the law office of Sullivan & Cromwell provided legal representation for all the banks in this group of case studies. The business activities of the major personalities involved, Gerhard Westrick and Heinrich Albert in Berlin and John Foster and Allen Dulles in New York, deserve further historical analysis. Some details on Heinrich Albert have emerged in more contemporary work.[106] Westrick, on the other hand, needs to be studied more. The exception is Higham’s research, who obtained a number of classified documents on the individual.[107] According to the documentation Higham uncovered, Westrick was at the center of a significant portion of all the business activity detailed in this essay. Aside from his assertions of being close friends with Allen Dulles, Westrick noted some of the other American managers he worked with during the war years:

I saw the people of Sullivan & Cromwell, the people of ITT, people of other bankers like Brown Brothers, Harriman, Speyer. I saw some lawyers besides Sullivan & Cromwell, from White & Case, Davis-Polk and some special lawyers like Henry Uterhart, Fred Downey. I saw the people of Underwood-Fisher-Elliott, of the Ford Company, of the Kodak Company; Mr. Sloane-Colt’s president, Mr. Eric Archdeacon and a few others. I saw Mr. Addinsell from the Chase Bank, George Murmane, Capt. Rieber from the Texas Company, Bill Donovan and Joe Grazier..[also McKittrick] with International Bank Settlement and Schroeder Bank.[108]

Given what has been developed thus far on Albert, historical examination of the business relationships of Westrick should shed more light on the entire field.

Further research into the business relationships of the Dulles brothers is difficult, not only due to their extensive nature, as is the case with Westrick, but also particularly due to their governmental connections. Allen Dulles was a significant figure in the U.S intelligence community, becoming head of the CIA while his brother became Secretary of State.[109] The younger Allen Dulles was in Switzerland as the Office of Strategic Services (OSS) station chief throughout the war. Anything truly revealing may be difficult to come by, but it is worth noting that the Dulles brothers published many of their opinions themselves, which shed light on their motivations. For instance, Allen Dulles argued for peace with Germany and wanted an unrestrained regulatory environment for U.S. businesses with subsidiaries abroad; this makes perfect sense for a man who represented many such businesses.[110]

One vexing issue regarding Allen Dulles’ activity in Switzerland is that most information available came directly from him. What remains challenging about his generally self-aggrandizing reports is that he analyzed his own gathered intelligence, undermining the reliability of the information he presents.[111] According to a group of German historians studying resistance groups within the Third Reich, they determined that Dulles was surprised by the major coup attempt against the Nazis of July 20, 1944, that he takes credit for, calling into question what actual involvement he had in anti-Nazi activities.[112] Dulles has also received criticism for his direct intervention in pardoning Karl Wolff, a high ranking official in the SS responsible for numerous mass killings.[113] It is notable that Thomas McKittrick mirrored this type of “insider” support for resistance groups, which yielded little in substantive help in comparison to his potentially widespread collaboration with the Nazis.[114] More information needs to be uncovered about Dulles in particular to determine if his so-called “support” of anti-Nazi groups was a front, as it appears have been in the case of McKittrick. Further research on McKittrick would also be useful, as no biography yet exists to shed light on the personal opinion of this individual throughout the war years. An examination of the collection of his archival materials at Harvard University’s Baker Library may yield more information.

As evidenced by Westrick’s extensive contacts, there are many more business persons worth investigating for their alleged roles in the economic realm of the Third Reich. For instance, Montagu Norman, who was a significant personality in the interwar British government, and head of the British central bank, was also on the board of directors of the BIS throughout the war years. Higham notes that Norman was close with the Reichsbank minister Hjalmar Schacht, which should be examined further.[115] Also, extensive fundraising for U.S. groups sympathetic to the Nazis was occurring throughout the war years. Bringing this work, such as that by Donald Strong, into the context of the research presented here may provide a clearer picture of how U.S. based political donations made it to the Hitler regime.[116]

It is not surprising that corporations acted in their own best interests – which translated into a desire for profit above all things. The business activities reported here are not meant to be construed with official U.S. foreign policy, before or during the military conflict with Germany. The historian Hans Mommsen describes the Hitler regime as a chaotic mess of competing bureaucracies, which may be a useful explanation for the phenomenon of innocuous yet extensive penetration by U.S. corporations seeking profits within Nazi Germany.[117] Whatever the case may be, the purpose of this essay is not to argue that collaborative activities were meant to purposefully take advantage of this situation (though further investigation may reveal this), but to address the currently unanswerable question: Where does this information fit within the broader historical narrative of U.S. involvement in World War II?

This research, coupled with the revelations of Nazi era business with several other iconic American corporations, such as IBM, Ford, and GM, makes it more difficult to sustain the claim that instances of collaboration were isolated, small-scale affairs.

If the Dulles brothers’ names are beneath the redacted lines in the U.S. Department of Treasury investigative reports, or the names of any other well connected U.S. government officials, then the assertion that there was no favorable economic policy (unofficial or otherwise) toward the Hitler regime becomes more problematic. Therefore, it is imperative that clean copies of these documents be reviewed by historians to dispel any claims of U.S. government involvement with these collaborative activities. The banks, in turn, would also have a stronger argument for their innocence if they were to open up their own archives, so that independent historians can compare their records to the growing volume of declassified U.S. government documents about them.[118] Paying a small number of Holocaust survivors is not the same as coming clean, nor does it address other loss of life and property as the result of such actions.

Despite the existence of successful Holocaust restitution settlements, should these organizations be historically absolved for their cooperation with one of the most brutal regimes of the 20th century? In order to truly bring justice for the unimaginable losses, destruction, and sorrow caused by the Nazis, further research into exactly how these corporations assisted such a regime must be allowed to continue until its full dimensions are known, so that the mistakes of the past are never again repeated.

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[1] For a broad overviews of this topic see Edwin Black, Nazi Nexus (Washington D.C.: Dialog Press 2009), and Jacques R Pauwels, “Profits uber Alles! American Corporations and Hitler,” Labour/Le Trevail Vol. 51 (2003): 4-6. Accessed Nov. 14 2009. http://www.historycooperative.org/journals/llt/51/pauwels.html.

[2] This essay will focus primarily on American corporations, though there are connections between the four case studies and financial institutions in other countries, principally in England and France. Additionally, it should be noted that while the BIS was not an American bank in origin, U.S. citizens were instrumental in its creation and management during the war years.

[3] Sociologist and historian Michael Mann has used these categories to describe power dynamics within societies. This model was first propagated in the opening volume of his series of texts, A History of Power from the Beginning to A.D. 1760, vol. 1 of The Sources of Social Power (Cambridge: Cambridge University Press, 1986). More recently, he extended this model to a specific study of Nazis and other groups in his book, Fascists (Cambridge: Cambridge University Press, 2004). One of the focuses of Mann’s categories of power are the networks that “contain” them. This idea is elucidated well in the introductory piece, An Anatomy of Power: the Social Teory of Michael Mann, edited by John Hall and Ralph Shroeder. In essence, Mann’s model expresses the idea that all power can only be carried as far as the reach of the networks that they exist within. Therefore, the study of banks appears to be a starting point for a discussion on transnational economic power in relation to the Nazi state, which can then facilitate further business activity, such as the building of weapons, transport, communication, etc. In a conversation I had with Mann on October 13, 2009, he noted that this model is an appropriate construction for this topic.

[4] Bradford Snell, U.S. Congress Senate Committee on the Judiciary, American Ground Transport (1974), A-22. Much of the research done thus far on this topic has been recent, though its beginnings originate with work done by Bradford Snell, an attorney hired by the U.S. Senate in 1974, to inquire into anti-competitive practices of Ford and General Motors (GM). Surprisingly, this report contained new evidence that both of these organizations had also been an integral part of Nazi military production, in the lead up to and during the war, building a majority of the Third Reich’s planes, tanks, and trucks. Snell’s research was expanded upon by the team of researchers, Reinhold Billstein, Karola Fings, Anita Kugler, and Nicholas Levis Working for the Enemy: Ford, General Motors and Forced Labor in Germany During the Second World War (New York: Berghahn, 2000). The argument of this text revolves around the premise that Ford and GM controlled a majority of Third Reich War industries through their subsidiaries, Ford-Werke & Opel, and maintained in contact and control with them throughout the war via managers loyal to the company. For example, Ford produced 48% of all the 2-3 ton trucks in Nazi Germany, and an additional 90,000 civilian trucks were used by Nazi troops in occupied Europe, which were crucial to Nazi supply lines (115). Ford-Werke also helped develop the V-2 rocket for the Nazis through a separate company, Arendt GmbH, to obscure its involvement. (115-116) GM Opel owned a much larger market share in the Third Reich and also built engines for all types of military vehicles. One popular model with the Wehrmacht, or German military, was the “Blitz Truck” which was developed specifically for the Blitzkrieg in 1936 (21-24). Opel also took special pride in building armor for the Panzer tank model (82).

[5] Theodore J. Kreps. “The Political Economy of International Cartels: Cartels, A Phase of Business Haute Politique,” The American Economic Review, 35, No. 2, Papers and Proceedings of the Fifty-seventh Annual Meeting of the American Economic Association (May, 1945), 297-311. This article demonstrates that many American institutions involved in Nazi war production, including Standard Oil of New Jersey, DuPont, Ford, and General Motors, had a substantial interest in I.G. Farben. All had members on I.G. Farben’s board of directors. Kreps describes that formal inquiry into the organization started near the war’s end with a congressional investigation into the relationship of monopolies and international chemical cartels under a committee established by U.S. Senator Harley Kilgore to oversee war production efforts. This committee reported that patent agreements between American and German firms to produce materials essential to building armaments such as synthetic rubber, beryllium, tungsten carbide, optical glass and plastics were monopolistic in nature and designed to keep all competitors out of the market.

[6] The revelations of the Kilgore committee prompted the historians Joseph Borkin, Charles A. Welsh, Richard Sasuly, and Josiah DuBois to argue that these business relationships were essential to Nazi war production both before and after the U.S. and Germany were at war. Richard Sasuly, IG Farben (New York: Boni & Gaer Press, 1947). Joseph Borkin and Charles A. Welsh, Germany’s Master Plan: The Story of the Industrial Offensive (New York: Duell, Sloan and Pearce, 1943), Josiah E. DuBois, The Devil’s Chemists (Boston: The Beacon Press, 1952).

[7] Edwin Black, IBM and the Holocaust: The Strategic Alliance between Nazi Germany and America’s Most Powerful Corporation (New York: Crown Publishing, 2001) Edwin Black argued in his exhaustively sourced monograph that International Business Machines (IBM) played a crucial role in Nazi war production by organizing inventories, production schedules, combat records, and census data – specifically for concentration camp slave labor and genocide. Additionally, Charles Higham argued that International Telephone and Telegraph (ITT) also assisted Nazi information needs by supplying phones, radios, and telegraph technology, in Trading with the Enemy: An Expose of the Nazi-American Money Plot 1933-1949. (New York: Delacorte Press 1983, 2007). Higham contends that ITT was not only a willing participant in Nazi military goals, but that the CEO Col. Sosthenes Behn, utilizing his freedom of movement as a high ranking U.S. military officer, personally flew to Europe to renegotiate conditions of his company’s contract with the Nazis while America was at war with Germany.

[8] Black, IBM and the Holocaust 37, 41-42, 148,333. Thomas J. Watson of IBM was one of the most influential CEO’s of his generation. According to Edwin Black, “Watson had cultivated a loyal following of employees throughout the IBM empire, as well as a nation of admiring executives, a fascinated American public, and enamored officials throughout the U.S. government.” Watson was elected chairman of the American Section of the International Chamber of Commerce in 1935. In many capacities, this role made him the official representative of all U.S. business abroad. Two years later, Watson personally traveled to Germany to receive a medal from Hitler himself for his efforts in organizing Nazi aims.

[9] Snell. American Ground Transport. A-22, Pauwels. Profit Über Alles 17, Billstein et. al. Working for the Enemy 37-44, Higham. Trading with the Enemy. 166. These historians focus on James Mooney of GM as a case study, who also received the same medal from Hitler as well, and was known in American diplomatic circles as a strong supporter of the Nazi regime.

[10] Stephen H. Norwood, “Legitimating Nazism: Harvard University and the Hitler Regime,

1933-1937,” American Jewish History, Vol. 92, no. 2 (June, 2004), 193-199. Some personalities to exert political influence such as Ernst Hanfstaengl were less well known; but as historian Stephen Norwood argued, their influence was crucial to shoring up political support for the Hitler regime early on. Norwood explains some political connections of this figure, “…Scion of a wealthy Munich family, Hanfstaengl had been one of Hitler’s earliest backers, joining his Nazi movement in 1922 largely because he shared Hitler’s virulent anti-Semitism. After the abortive beer hall putsch in 1923, Hitler had taken refuge at Hanfstaengl’s country villa outside Munich, where he was arrested. Hanfstaengl provided important financial assistance to the Nazi party when it was first establishing itself in the early 1920s.”

[11] Donald Warren, Radio Priest: Charles Coughlin, The Father of Hate Radio. (New York: The Free Press/Simon & Schuster, 1996), 1-2, 115. 129-160. Donald Warren argued that the American radio evangelist Charles Coughlin purposefully fanned the flames of racial hatred over the airwaves. Aligning himself with the Nazi cause, he often praised German actions and is alleged to have received translated propaganda from Nazi officials to read on the radio.

[12] Edwin Black, War Against the Weak: Eugenics and America’s Campaign to Create a

Master Race (New York: Four Walls Eight Windows, 2003). Black argues that Nazi eugenics programs received funding and advisors from their American counterparts. One of the chief institutional supporters of this program was the Carnegie corporation, which Black contends provided operational guidance, as well as millions of dollars in financial support. Black also includes Ford’s influence on Nazi ideology, demonstrating that his publication was not only a direct inspiration to Hitler, but was actually plagiarized and reproduced in Mein Kampf.

[13] Victoria S. Woeste, “Insecure Equality: Louis Marshall, Henry Ford, and the Problem of Defamatory Antisemitism, 1920-1929,” The Journal of American History, Vol. 91, No. 3 (Dec., 2004): 905. Woeste argues that Ford was able to use his enormous political influence to both project his racist opinions and shield himself from lawsuits generated by it. Woeste surmises that, “[Henry] Ford gained as much fame for his anti-Semitic views as his cars. His Dearborn Independent, published dozens of articles between 1920 and 1925…the accusations in the Dearborn Independent, represented the broadest, most sustained published attack on individual Jews and Jews as a group in the nation’s history.” In War Against the Weak, Black demonstrates that these articles were reprinted widely in Germany. See also Black, Nazi Nexus, 2-15.

[14] Barry Meier, “Chroniclers of Collaboration; Historians Are in Demand to Study Corporate Ties to Nazis,” The New York Times, Feb 18, 1999, C1. In the late 1990s many corporations ramped up their legal and historical defenses against accusations, creating a market for researchers willing to work with these institutions.

[15] Ford Motor Company, Research Findings About Ford-Werke Under the Nazi Regime (Dearborn, MI: Ford Motor Company, 2001) Section 2 Historical Background of Ford Motor Company and Ford-Werke, 2. This source is made possible due to the first group of slave labor related lawsuits, starting with Iwanowa vs. Ford, which is still in appeal. Although Ford claims it lost control of its German plant, its own report seems to contradict this by showing that the corporation installed loyal managers as caretakers of the subsidiary to safeguard assets until after the war.

[16]Henry A. Turner, “German Big Business and the Rise of Hitler,” The American Historical Review, Vol. 75, No. 1 (Oct., 1969): 56-70. Turner argues that most businesses lost their autonomy and were under complete control of Nazi authorities. Turner came to focus on GM in particular to illustrate this thesis.

[17] Black, Nazi Nexus 123-25. Black recounts the story of how Turner used his access to GM’s files to restrict their right of use by other historians, Black in particular, who was also researching GM’s involvement with Nazis at the time for his book Internal Combustion (Washington D.C.: Dialog Press 2006). In a phone conversation with Edwin Black on September 26, 2009, Black stated he had to threaten to sue to get access to Turner’s archives.

[18] Peter Hayes, Industry and Ideology, IG Farben in the Nazi era (Cambridge: Cambridge University Press, 1987), xxx. In the acknowledgements Hayes states plainly that he received financial support from I.G. Farben to produce the book. The text itself resembles a legal defense for its American business partners.

[19] See Sébastien Guex, “The Origins of the Swiss Banking Secrecy Law and Its Repercussions for Swiss Federal Policy,” The Business History Review, Vol. 74, No. 2. (Summer, 2000): 237-266. Guex states that Swiss banking secrecy law was promoted and fiercely defended as a method of attracting foreign capital. This capital, Guex contends, was often precisely for illegal, immoral, and illicit purposes precisely because of the enforced opacity by Swiss financial institutions. Guex argues that this was the rule for large banks such as the Bank of International Settlements, as well as smaller financial institutions.

[20] Michael J. Bazyler and Roger Alford, ed., Holocaust Restitution: Perspectives on the Litigation and Its Legacy (New York: New York University, 2006).

[21] Anthony C. Sutton, Wall Street and the Rise of Hitler. (Los Angeles: ’76 Press, 1976).

[22]Jason Weixelbaum, “Trading with the Enemy: A Review of the Shocking Revelations of U.S. Corporate Collaboration with Nazi Germany,” History News Network (July 9, 2009) http://hnn.us/roundup/entries/98124.html (accessed November 30, 2009) and The Cutting Edge News (June 15, 2009) http://www.thecuttingedgenews.com/index.php?article=11392&pageid=&pagename (accessed November 30, 2009). My determination at the time of this article’s publication was that although there were a lack of footnotes, a limited bibliography, and tabloid writing style; however, some allegations, such as those regarding Ford and GM, had been provided further credibility by more academically written sources. Thus, Higham’s work was difficult to classify.

[23]Given the breadth of these sources, they are given limited treatment by Higham and have potential to yield further details.

[24] One of the most detailed documents to date is the Bergier Commission, also known as the Independent Commission of Experts Switzerland – Second World War (Zürich: Pendo Verlag GmbH 2002), whose task, mandated by the Swiss government, was to investigate Nazi era confiscated and stolen assets that were transferred through, or deposited in Swiss banks. In the report’s conclusion, (523) it states that analysis of declassified material in the U.S. and other places – precisely like the documentation Higham located – is needed to further the development of this research. http://www.uek.ch/en/schlussbericht/synthesis/ueke.pdf

(accessed November, 30 2009).

[25] United States Treasury, Trading with the Enemy Act (TWEA) http://www.treas.gov/offices/enforcement/ofac/legal/statutes/twea.pdf. (accessed on November. 30, 2009). An unofficial compilation of laws specific to banking in TWEA is available through the Cornell Law School at http://www.law.cornell.edu/uscode/pdf/uscode12/lii_usc_TI_12_CH_2_SC_IV_SE_95a.pdf. (accessed on Nov. 30, 2009). TWEA was first enacted in 1917 to outlaw any business transaction with a country in which the U.S. was at war. It was updated several times between 1940-41 to include several European countries. For the purposes of this paper, implementation of TWEA occurred for France, the Netherlands, Belgium and Luxembourg on June 17, 1940, Hungary on March 13, 1941, and Germany, Switzerland, Italy, Sweden, and Poland on June 14, 1941.

[26] Eberhard Kolb, The Weimar Republic. (New York: Routledge, 2005), 60-62. The Young plan built on the earlier Dawes Plan, named after Vice President Charles G. Dawes, which was set up for the same reasons, but was unsuccessful due to severe financial and political problems in Germany. The Young Plan scaled back reparations payments significantly, in order to provide some stability for the German economy.

[27] The BIS continues to act as a forum for international bankers to discuss global monetary issues. A short history written by the organization can be found at http://www.bis.org/about/history.htm. For a useful overview of the BIS see Gianni Toniolo, Central Bank Cooperation at the Bank for International Settlements (Cambridge: Cambridge University Press, 2005). One of the central features of Toniolo’s thesis is that the English central banker, Montagu Norman, along with his American counterpart, Gates McGarrah, desired a smooth functioning international central bank to handle the transfer of transnational capital in the wake of early 20th century international financial confrontations, particularly over various central banks adherence to (and rejection of) the gold standard. Norman, who was known for his close friendship with Reichsbank president Hjalmar Schacht, was said to have supported a pro-German banking policy even when it went against his own national interests. See Neil Forbes, Doing Business with Hitler: Britain’s Economic and Financial Relations with Germany 1931-1939 (London: Frank Cass Publishers, 2000), 72, 90-91.

[28] Gates W. McGarrah, “The First Six Months of the Bank for International Settlements,” Proceedings of the Academy of Political Science, Vol. 14, No. 2, (Jan., 1931), 25-36. McGarrah states the main function of the BIS should be matched to that of U.S. central banks: “An examination is being made of the possibilities of the organization of a system of international clearing through the B.I.S., so that central banks may have facilities for clearing international movements of capital, just as in the United States…” Additionally, a chronology of presidents of the BIS following McGarrah can be found on the BIS website at http://www.bis.org/about/chronology/1929-1939.htm (accessed November 30, 2009). These Americans include Leon Fraser of the First National Bank of New York, and Thomas McKittrick of Chase Bank, who represented three out of the five presidents of the BIS in the period spanning 1930-1950. The other two presidents, Leonardus Trip and William Beyen oversaw the BIS from 1935-39.

[29] Bank of International Settlements – Board of Directors – 1933 to 1940. Kurt von Shröder was president of the J.H. Stein Bank, Walter Funk, Hjalmar Schact, and Emil Phul were all former presidents of the Reichsbank, Germany’s central bank.

[30] Higham, Trading with the Enemy, 4. Higham’s sources are several telegrams between Cochran, Bullitt, Hull, and Morgenthau in May of 1939.

[31] Telegram No. 890, May 5, 1939 and Telegram No. 907, May 9, 1939, Bullitt to Morgenthau. In the aftermath of the Anschluss, or annexation of Austria, Treasury Sec. Moganthau was aware that the Nazis had transferred the gold reserves of the Austrian central bank. Instead of addressing such allegations, Bullitt obscured the Nazi theft by stating, “…an alignment of axis and anti-axis powers was completely absurd.” Bullitt goes on to state that Walther Funk, then president of the Reichsbank, had convinced him that “…he did not want the Reichsbank to have any more voting BIS rights than any one of the other founding banks had.” Bullitt acknowledged that Germany had taken over the Austrian banking system but never addressed the stolen gold directly. Technically, in the case of annexation, it could be construed that the gold was not actually stolen, however the U.S. Treasury Department did not share this view.

[32] Telegram No. 907, May 9, 1939, Bullitt to Morgenthau.

[33] Toniolo, Central Bank Cooperation, 203-4. In order for Allied Central Bankers to finalize negotiations on forming the BIS, Swiss authorities were vehement in insisting that the bank be subject to Swiss banking secrecy laws – which continues to be a central tenet of Swiss financial policy. To be fair about the situation in Switzerland, Toniolo argues that it was not only Switzerland’s desire for secrecy in its financial sector that motivated them to promote a policy that hid Nazi financial crimes, but later the pressure to be “neutral” on the side of the Hitler built as their country became surrounded on all sides by the Axis.

[34] A significant amount of information on the Nazi theft of gold comes from the investigation and subsequent reports by Colonel Bernstein, who was Morgenthau’s operative in liberated Europe in 1945. One such report, “Preliminary Survey of the War-Time Activities of the Bank for International Settlements.” TWX Conversation between Washington and Berlin, Col. Bernstein, Miss Mayer, Mr. Ritchin and Mr. Nixon and Thorson, Capt. Zap: Investigation by Bernstein’s associates, Donald W. Curtis and William V. Dunkel of the External Assets Census Branch December 5, 1945. Charles Higham “Trading with the Enemy” Collection. Box 1, Folder 1. University of Southern California Cinematic Arts Library. The report states, “Substantial quantities of gold looted by the B.IS. either after processing of such gold in Berlin by the Reichsbank or, in one case by direct delivery from the country from which it was looted.” It should be noted that the copy of this declassified document received by Higham from the U.S. National Archives is moderately redacted, with many names, and sometimes whole passages, blacked out.

[35] The BIS “Preliminary Survey” report continues: “The B.I.S. continued to accept this gold when President McKittrick and Webber, as Chairman of the Administrative Council, were fully aware that German gold shipments to Switzerland during the war had far exceeded the Reichsbank’s published reserves of legitimately acquired gold; the records show that such shipments to the [emphasis added] Swiss National Bank during the period from March 1940 to the end of the war alone totaled $378 million worth of gold compared with the Reichsbank’s published gold reserves of 29 million.” The report goes on to detail the looting of gold in, Czech, Lithuanian, Estonian, and Latvian banks. The report indicates that the Nazis were aware McKittrick was sympathetic to their national goals.

[36] For the BIS “Preliminary Survey” report, Bernstein also interviewed Emil Puhl who was captured by the Allies. Bernstein reports, “Puhl has explained in some detail how the facilities of the B.I.S were used to withdraw Reichsbank assets from various neutral countries just prior to blocking in those countries, by book transfer balances in the B.I.S and that the B.I.S in many cases was the party with whom the Germans were able to dispose of the balances so withdrawn.”

[37] For the conclusion of the BIS “Preliminary Survey” report, Col. Bernstein’s associates, Curtis and Dunkel stated that “…evidence of the Reichsbank’s remarkably close and solicitous relationship with the Bank for International Settlements throughout the war, which raised strong suspicion of sill unrevealed war-time advantages to the Reichsbank and to the German Reich in general from their relationship with the B.I.S.” 3.

[38] Black, IBM and the Holocaust, 391-97.

[39] Billstein, et. al., Working for the Enemy, 39-40, 118, 141.

[40] American Embassy telegram July 10, 1941 9pm no. 2939, U.S. Ambassador to the Britain John Winant to Secretary of State Cordell Hull. According to Higham, this communication was made because of a lack of information regarding the position of British central bankers on the BIS. Morgenthau was reported to be frustrated by the fact that Montagu Norman was continuing to support BIS policy. See Higham, Trading with the Enemy, 8.

[41] J.P. Morgan Chase & Co., “The History of JP Morgan Chase & Co.: 200 Years of Leadership in Banking.” http://www.jpmorgan.com/pdfdoc/jpmc/about/history/shorthistory.pdf (accessed November 30, 2009). J.P. Morgan and Chase Bank combined in 2000. Chase was then known as Chase Manhattan bank at that time, as it had merged with the Bank of Manhattan Co. in 1955.

[42] Paul Gewirts, U.S. Department of Treasury, Corporate Analysis Unit, “Report on the Activities of The Chase Bank Branches in France,” April 3, 1945, 1. Charles Higham “Trading with the Enemy” Collection. Box 1, Folder 3. University of Southern California Cinematic Arts Library. The report argues that Nazi authorities were interested in this institution after their conquest of France in the spring of 1940. It states, “The Chase Bank, like the other American banks in France, operated on a relatively small scale. The attitude of the Germans, however, when they came into France, indicates that they looked beyond the activities in France, and were more interested in the international character of an organization like Chase with its established branches throughout the world and its history in international banking which included a friendly intercourse with the Germans.”

[43] Ibid., Summary.

[44] Ibid., Adjustment of Chase to situation created by German Occupation, 1-5. The branch in question was opened in Chateauneuf.

[45] Treasury Department interoffice communication, Assistant to Treasury Sec. Harry White to Morgenthau, Feb 12, 1945. Charles Higham “Trading with the Enemy” Collection. Box 1, Folder 3. University of Southern California Cinematic Arts Library. White, who was investigating Chase in New York for Morgenthau, noted that in June of 1940, Chase France was run by a man named S.P. Bailey who attempted to comply with the French government demand to liquidate banks to keep assets out of Nazi hands. However, he was summarily dismissed from his post after the Chase home office discovered his activities.

[46] Gewirts, “Report on the Activities of The Chase Bank Branches in France,” Niedermann’s loyalty to Chase, Process of liquidation under Niedermann, 10-12. . Charles Higham “Trading with the Enemy” Collection. Box 1, Folder 3. University of Southern California Cinematic Arts Library. Also Morgenthau Papers. Central Files of the Office of the Secretary of Treasury (Entry 193). Box 60, France. Franklin D. Roosevelt Presidential Library at Hyde Park, New York. U.S. National Archives. The report states, “Through all of Niedermann’s activities related above there appears to be an underlying desire to further the interests of Chase at any cost.” Another central feature of the report is Niedermann’s collaboration with Reichsbank director Hans Caesar, who was in charge of administering the French banking system during the occupation.

[47] Ibid., “Period between occupation of Paris and Pearl Harbor,” 7-13. See also Higham, 20. Chase legal representation was facilitated through the law firm Sullivan and Cromwell, managed by John Foster and Allen Dulles in America and their branch office of Heinrich Albert and Gerhard Westrick in Berlin. See Nancy Lisagor and Frank Lipsius, A Law Unto Itself: The Untold Story of the Law Firm of Sullivan and Cromwell (New York: William Morrow & Co., 1988), 111, 132-6, 139. The sources on the Dulles brothers for this text are the archives of the two men, respectively. These documents are located at the John Foster Dulles and Allen Welsh Dulles archives at Princeton University. John Foster Dulles was personally involved with Chase during this period, helping to develop the corporation’s investment banking wing. J.F. Dulles was also personally representing General Ainiline and Film, the U.S. subsidiary of I.G. Farben, at this time. Additionally, Allen Dulles sat on the board of the Shröder bank, whose CEO Kurt Shröder, was a top Nazi official who was a director of the BIS and the Reichsbank.

[48] Gewirts, “Report on the Activities of The Chase Bank Branches in France,” Indications to Home Office of Niedermann’s attitude toward the Germans and German Policies, 9-10. The report shows that Niedermann went so far as to threaten local customers who rented to Jews that they would be reported to Nazi authorities if they released Jewish property.

[49] Matthew J. Marks, Memorandum for Mr. Ball, U.S. Department of Treasury, “Investigation of Morgan et Cie,” April 26, 1945, 5-6. The report opens with a brief background of the bank noting that only one of all the directors was actually French. The rest were American, including two ambassadors, John Ridgley Carter and Joseph Kennedy.

[50] Ibid., 11-12. J.P. Morgan also had the same legal counsel, that of John Foster Dulles at the Offices of Sullivan and Cromwell. See Lisagor pp. 34. In the Treasury investigation of Chase, any time legal counsel is mentioned, the names are redacted. However, Lisagor’s research establishes that Chase’s primary legal counsel is Sullivan and Cromwell. Here is a quote from such legal counsel relative in the Morgan report relative to their move to Chatel-Guyon on July 5, 1940, Quoted source redacted, “All [partners] expressed the desire to reestablish their services in Paris at the earliest possible date on a broad scale and to collaborate with the German authorities.”

[51] Ibid., 12-17. Letter from legal counsel to French banking authorities on July 23, 1940, “I haven’t been able to tell them the idea of two separate categories of accounts – Paris and Chatel-Guyon. [redacted – legal counsel] thinks it’s too soon to make such a distinction officially…we should try to ‘kiss along’ the present indeterminate situation until we see things clearer, with an attempt to keep our books mutually in closer contact…” An example of a business account to be maintained by the separate branch of Morgan et Cie in Chatel-Guyon cited in the report (in order to have access to unblocked foreign capital) is the Fadil company, owned by Joseph Kennedy. Fadil made brake linings for, private, commercial, and military vehicles. The report notes that after a brief closure due to the invasion of France by Germany, by August 1940 the plant was ready to take out new orders for Nazi vehicles.

[52] Ibid., 2.

[53] Ibid., 3. Pesson-Didion would make several statements about the anti-Semitic orientation of J.P. Morgan and Morgan et Cie. Although this report does not make mention of confiscated Jewish property, J.P. Morgan did eventually settle in a Holocaust restitution lawsuit in 2002. See Bazyler, Holocaust Justice, 187-88.

[54] Ibid., 19-20. Cable dated February 5, 1941 to [redacted – legal counsel] in New York, “giving amounts owed by the bank’s three principal debtors and requesting Morgan in New York to obtain satisfaction from the American principals of the debtors, as French subsidiaries were in no position to make payment.” The debtors in question were General Motors, France, Ingersoll Rand, and Frigidaire. Ingersoll Rand is yet unresearched company that specialized in building engines for submarines.

[55] Billstein et al., Working for the Enemy, chart 4, 52-4. The timing of the release of funds from J.P. Morgan is fortuitous, as GM was preparing to declare its subsidiary Opel “lost” to the Nazis, which meant that further funds would be have to be held in escrow or reinvested in Nazi plants in Germany and occupied countries instead of remitted to GM headquarters in America. Thus, GM was able to continue to amass profits while masking the parent company’s involvement. The release of funds in France also coincided with the mass hiring of French workers for Opel’s main plant in Russelheim.

[56] Marks, Investigation of Morgan et Cie, 21, 23. [redacted – legal counsel] in New York to Arragon. There is no doubt U.S. managers were pleased to see that profits had nearly tripled from the previous year reaching over 25 million francs by the end of 1941.

[57] Sutton, Wall Street and Hitler, 76-78. See also Ben Aris and Duncan Campbell, “How Bush’s grandfather helped Hitler’s rise to power.” The Gaurdian Unlimited, Sept 25, 2004, http://www.guardian.co.uk/world/2004/sep/25/usa.secondworldwar. (accessed November 30, 2009)

While much has been made of Prescott Bush, (father to president George H.W. Bush and grandfather to president George W. Bush) the important aspect of this point is that nearly all shares were owned by U.S. citizens.

[58] Fritz Thyssen, I Paid Hitler (New York: Farrar & Rinehart, Inc.) 158-9. Thyssen, like many industrialists of the Ruhr, were unhappy with the politically fragmented Weimar era governments in Germany and drifted toward right wing organizations such as the Nazis. This book is controversial in that Thyssen denied writing it after he fell out of favor with and was detained by the Nazis; however, he was unable to give an updated appraisal of the work after he was freed because he died shortly after the war ended in 1951. See also Kolb, The Weimar Republic, 114-115.

[59] Lisagor, A Law Unto Itself, 35,130-1.

[60] Harry White to Henry Morgenthau, Treasury Department Interoffice communication, December 29, 1941. A report on the UBC’s connections to other financial organizations was also reported under the Kilgore Commission, Report before Congress, Elimination of German Resources, p. 728-30.

[61] Thyssen, I Paid Hitler, 159.

[62] Jackson J. Spielvogel, Hitler and Nazi Germany: A History, fifth ed. (New Jersey: Pearson/Prentice Hall, 2005), 222, 230. Spielvogel argued that Hitler had hoped for peace with U.S., even to the end when he committed suicide.

[63] United States Treasury, Trading with the Enemy Act (TWEA). Title 12, Section 95a.

[64] Letter, Albert Bertrand to Hans Caesar, August 3, 1942. This letter, included with U.S. Treasury investigative report on Chase, shows that Bertrand, Chase French legal counsel, provided Hans Caesar with “special” balance sheets to show business contraction and a denial of Caesar, as a Reichsbank director, having involvement with its business operations.

[65] U.S. Treasury interoffice communication, White to Morgenthau, Feb 12, 1945.

[66] For a chronology of these communications, see U.S. Treasury Interim Report on the Chase Paris Branch, July 2, 1945. This report is a condensed version of the much longer report on Chase dated April 3, 1945 by Paul Gewirts. The assertions of both Larkin and Aldrich appear to be contradictory as they simultaneously claim to have possessed and lost managerial control of their subsidiary during the same period of time in 1942.

[67] Ibid., 2.

[68] Ibid., 3.

[69] Ibid., 3.

[70] Ibid., chart 3.

[71] Gewirts, 34. Also White to Morgenthau July 2, 1945. See also Higham, 39-62. Standard Oil of New Jersey skirted U.S. trade embargoes and shipped petroleum products to neutral countries, such as Sweden and Switzerland from South America.

[72] White to Morgenthau, Interim Report on the Chase Paris Branch, July 2, 1945.

[73] “Chase Bank Trial is Open Here,” New York Times, April 17, 1945, 25.

[74] “Chase Bank Acquitted – Federal Jury Finds Verdict in Trading with Enemy Case,” New York Times, May 5, 1945, 4. James Healy Jr., vice president of Chase bank defended his institution’s actions stating that Chase had obeyed the order to freeze all accounts in Axis occupied areas. The jury deliberated for 12 hours before handing Judge Simon H. Rifkind a verdict of not guilty. The institution was cleared of all counts.

[75] “Chase Bank Cleared in Frozen Funds Case,” New York Times, May 6, 1945, 39.

[76] “The Chase Bank Acquitted,” New York Times, May 9, 1945, 22.

[77] Joseph Fried, “Chase and Morgan Sued Over Jewish Assets,” New York Times, Dec. 24, 1998, C16.

[78] Marks, Investigation of Morgan et Cie, April 28, 1945, 40.

[79] Ibid., 40. It is worth noting that this is one of the most heavily redacted sections of the report.

[80] Ibid., 27-28.

[81] Ibid., 27-28. Black describes in detail a similar method used by IBM’s subsidiary, Dehomag, to protect profits and reinvest funds in plants where it was desired by Nazi officials. See IBM and the Holocaust, 375-426.

[82] Bazyler, Holocaust Justice, 187-88. J.P. Morgan settled with claimants for approximately $2.75 million. Because Chase and J.P. Morgan had merged, they collectively paid out one settlement. In reference to banks in countries other than the U.S., Barclays of the U.K. was also named in the suit and also chose to enter into a separate settlement with the plaintiffs.

[83] Interrogation, Foster Adams and Baron Kurt von Schröder, December 15, 1945. Continued American management is also verified from the interrogation of Gerhard Westrick on October 16, 1945, legal representative of the Brown Brothers, Harriman, the parent company of the UBC.

[84] John Pehle, Esq., Assistant to Secretary of Treasury to Treasury Department, Report on Union Banking Corporation, Fritz Thyssen, etc. September 16, 1941, 1, 6-9.

[85] Records of the United States Nuremberg War Crimes Trials, United States of America v. Friedrich Flick, et. al., Case V, March 3, 1947 to December 22, 1947. The report states that Vereinigte Stahlwerke A.G engaged in the “…manufacture of such finished products as ammunition, armorplate, gun carriages, armored cars and trucks, and other Panzer materials; airplanes and airplane parts; and railroad cars, parts, and locomotives.”

[86] Pehle, Report on Union Banking Corporation, September 15, 1941, 1. See also Aris and Campbell.

[87] The one case in which Brown Brothers Harriman was mentioned was Julius Goldstein and Peter Gingold v. United States of America and The American Jewish Committee, claiming that BBH and other corporations pressured U.S. government officials into failing “to undertake a humanitarian Auschwitz intervention during World War II.” This case was thrown out by Judge Collyer, claiming that it was outside the court’s jurisdiction. See also Aris and Campbell.

[88] Col. Bernstein to Messers. Ritchen, Nixon, Thorson, and Capt. Zap, December 5, 1945, 2.

[89] Ibid., 3.

[90] Ibid., 1.

[91] Ibid., 3.

[92] For a detailed history on the Schröder banking empire, see Schroder: Merchants and Bankers (London: Macmillan Press, 1992), by Richard Roberts. Through its subsidiary commercial banks of the J.H. Schroder Banking Corporation in London and New York, Baron Kurt Schröder had well established ties other major banking houses such as J.P. Morgan & Chase (217-8) Additionally, in the interrogation of Schröder by Saul Kagan, Bill Lang, and Jules Schlezinger on Nov. 28, 1945, Schröder gives a detailed list of all the interests his banking network had in financial institutions in Nazi-occupied Europe.

[93] Treffen zwischen Hitler und von Papen im Haus des Bankiers Kurt Freiherr von Schröder in Köln (Auszug), Eidesstattliche Erklärung des Freiherrn Kurt von Schröder, Köln, 21. Juli 1947 Hauptarchiv Berlin-Dahlem (HAB) 335, 10, Nr. 173, Beweis-Dokument NI 7990. This source is an excerpt from a meeting between Fritz von Papen and Hitler on January 4, 1933 to assume the chancellorship, with the help of Schröder, who was a confidant of President Hindenburg. This document can be found at the NS archive online at http://www.ns-archiv.de/krieg/1933/04-01-1933.php (accessed November 28, 2009).

[94] Peter Padfield’s book, Himmler: Reichsfuhrer SS (New York: Sterling, 2001), provides a fairly comprehensive account of Schroder’s role within the SS and Nazi Party. See pages 115-17 for specific links to Nazi war industries. See also Sutton, Wall Street and Hitler, 123-28.

[95] Interrogation of Kurt Freiherr von Schröder by Foster Adams, Saul Kagan, and Emil Lang, Nov. 30, 1945.

[96] Treasury Department memorandum, Conversation between Mr. McKittrick and Orvis Schmidt, March 23, 1945.

[97] Ibid., 4.

[98] Ibid., 5.

[99] Bretton Woods July 20 1944 9:15 am Liquidation of BIS Commission. Morgenthau states, “…I am going to stop the whole Conference until this whole BIS thing is settled and settled the way I want it settled. I am going to stop the whole Conference. There aren’t going to be any two ways about it.” He continues, “…here are fourteen directors [of the BIS], twelve of which of these directors are Nazi or Nazi-controlled. Now this is up before forty-four United Nations and we have just got to grab this thing and meet it head-on.”

[100] McKittrick contacted other delegates on the BIS liquidation commission and convinced them to agree to a settlement. See Bretton Woods, July 18, 1944, 3:30pm, Conference on BIS Looted Property, attachments J-L, letters from Rene Pleven, John Anderson, and Arthur Souza de Costa. A decent summation of the situation is captured by journalist Heinz Pol in his article, “Nazis Run World Bank – But we pick up the crumbs,” May 11, 1944, published in The New York World-Telegram, 45. Essentially, the Swiss delegation was intractable in protecting the BIS’ secrecy. Their offer was to remit some looted gold in exchange for an end to any further investigation of the BIS. When Morgenthau pressed the issue, the Swiss diplomats threatened to leave the conference. Morgenthau was forced to relent.

[101] Bazyler and Alford, Holocaust Restitution, 103-6, 115-32.

[102] Ibid., 347-54. See Weisshaus v. Swiss Bankers Ass’n and Friedman v. Union Bank of Switzerland.

[103] Historians have disagreed on White’s alleged role in the Soviet espionage charges leveled by the HUAC. A contemporary, and generally well-received defense of White can be found in Bruce Craig’s Treasonable Doubt: The Harry Dexter White Spy Case (Kansas: Kansas University Press, 2004), 254.

[104] Morgenthau formulated what would be called the “Morgenthau Plan” for Germany, a postwar economic directive that would strip the country of all its industry and render it an agrarian economy. Truman and many of his advisors saw this plan as directly opposed to their own preparations to turn West Germany into a bulwark against the Soviet Union, by specifically building up industry and infrastructure in the region.

[105] Michael Beschloss, The Conquerors: Roosevelt, Truman and the Destruction of Hitler’s Germany, 1941-1945 (Simon & Schuster, 2002) 140-2, 249-50. Morgenthau was effectively ousted by Truman once his friend FDR died and he assumed the presidency, forcing Morgenthau to resign in mid 1945. Beschloss describes anti-Semitism and negative press in the business community as reasons for Morgenthau’s increasingly negative reputation.

[106] The legal assistance of Albert in securing corporate profits for his clients and cooperating with the Nazi regime appears in Black’s IBM and the Holocaust, 232-5, 251, 281-3, 418, as well as Billstein and Kugler’s Working for the Enemy, 106, 112, 120, 272. For the history of Albert’s work with Sullivan & Cromwell, see Lisagor, A Law Unto Itself, 95, 127, 133, 141.

[107] See Higham, Trading with the Enemy, 93-99,154-58, 215-216. Higham’s sources, which are the U.S. Counsel for the Prosecution of Axis Criminality, March 28, 1946 and Interrogations by Mr. Pajus of Westrick from October 9th to the 16th, 1945, show that Westrick provided legal representation for Chase, Ford, GM, IBM, ITT, Standard Oil, and numerous other companies, all while retaining his status as a senior official within the Nazi party. Westrick’s main function, according to the documents, was to facilitate cooperation between these corporations and the Nazi regime. His interrogations suggest an extensive business relationship with Col. Behn, who utilized his U.S. military rank to his advantage as the director of ITT. This partnership is Higham’s main focus on Westrick.

[108] Interrogation of Gerhard Westrick by Mr. Pajus, October 16, 1945, 62.

[109] For details on the life of Allen Dulles, see Peter Grose, Gentleman Spy: The Life of Allen Dulles (Boston: University of Massachusetts, 1996). Lisagor’s A Law Unto Itself , in turn, provides a detailed profile of John Foster Dulles’ political activity, particularly as it relates to his role as director of Sullivan & Cromwell.

[110] Allen Welch Dulles, “Economic Implications of American Neutrality Policy,” Annals of the American Academy of Political and Social Science, Vol. 186, The Attainment and Maintenance of World Peace (Jul., 1936), 41-47. Dulles states, “Until we have a clearer conception of how we wish to use our economic power in international relations, let us keep our hands free. It is a weak excuse for any self-respecting nation to make that because we might abuse our powers we will therefore deprive ourselves of them.”

[111] See Allen Welch Dulles, The Secret Surrender (New York: Harper & Row, 1966). Dulles attempted to broker a peace deal with the Nazis directly, a situation that caused significant suspicion on the part of the USSR.

[112] Jurgen Heideking and Christof Mauch, American Intelligence Warfare against Germany: Subversion, Propaganda, and Political Planni