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TRADING WITH THE ENEMY:  AN EXPOSE OF THE NAZI-AMERICAN MONEY PLOT 1933-1949

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Preface

It would be comforting to believe that the financial Establishment of the United States and the leaders of American industry were united in a common purpose following the Day of Infamy, the Japanese attack on Pearl Harbor on December 7, 1941. Certainly, the American public was assured that Big Business along with all of of the officials of government ceased from the moment the war began to have any dealings whatsoever with the enemy. That assurance sustained the morale of millions of Americans who bore arms in World War II and their kinfolk who stayed at home and suffered the anguish of separation.

But the heartbreaking truth is that a number of financial and industrial figures of World War II and several members of the government served the cause of money before the cause of patriotism. While aiding the United States' war effort, they also aided Nazi Germany's.

I first came across this fact in 1978 when I was declassifying documents in the course of writing a biography that dealt with motion picture star Errol Flynn's Nazi associations. In the National Archives Diplomatic Records Room I found numerous cross-references to prominent figures who, I had always assumed, were entirely committed to the American cause, yet who had been marked down for suspected subversive activities.

I had heard over the years about a general agreement of certain major figures of American, British, and German commerce to continue their relations and associations after Pearl Harbor. I had also heard that certain figures of the warring governments had arranged to assist in this. But I had never seen any documentary evidence of it.  Now, pieces of information began to surface. I started to locate documents and have them declassified under the Freedom of Information Act -- a painfully slow and exhausting process that lasted two and a half years. What I found out was very disturbing. 

I had been born to a patriotic British family. My father had raised the first battalions of volunteers against Germany in World War I, and had built the Star and Garter Hospital at Richmond, Surrey, for ex-servicemen. He had been knighted by King George V for his services to the Crown and had been a member of Parliament and a Cabinet member. I feel a strong sense of loyalty to Britain, as well as to my adopted country, the United States of America. Moreover, I am part Jewish. Auschwitz is a word stamped on my heart forever.

It thus came as a severe shock to learn that several of the greatest American corporate leaders were in league with Nazi corporations before and after Pearl Harbor, including I.G. Farben, the colossal Nazi industrial trust that created Auschwitz. Those leaders interlocked through an association I have dubbed The Fraternity. Each of these business leaders was entangled with the others through interlocking directorates or financial sources. All were represented internationally by the National City Bank or by the Chase National Bank and by the Nazi attorneys Gerhardt Westrick and Dr. Heinrich Albert. All had connections to that crucial Nazi economist, Emil Puhl, of Hitler's Reichsbank and the Bank for International Settlements.

The tycoons were linked by an ideology: the ideology of Business as Usual. Bound by identical reactionary ideas, the members sought a common future in fascist domination, regardless of which world leader might further that ambition.

Several members not only sought a continuing alliance of interests for the duration of World War II but supported the idea of a negotiated peace with Germany that would bar any reorganization of Europe along liberal lines. It would leave as its residue a police state that would place The Fraternity in postwar possession of financial, industrial, and political autonomy. When it was clear that Germany was losing the war the businessmen became notably more "loyal."  Then, when war was over, the survivors pushed into Germany, protected their assets, restored Nazi friends to high office, helped provoke the Cold War, and insured the permanent future of The Fraternity.

From the outset I realized that in researching the subject I would have to carve through an ice cream mountain of public relations. I searched in vain through books about the corporations and their histories to find any reference to questionable activities in World War II. It was clear that the authors of those volumes, granted the cooperation of the businesses concerned, predictably backed off from disclosing anything that would be revealing. To this day the bulk of Americans do not suspect The Fraternity. The government smothered  everything, during and even (inexcusably) after the war. What would have happened if millions of American and British people, struggling with coupons and lines at the gas stations, had learned that in 1942 Standard Oil of New Jersey managers shipped the enemy's fuel through neutral Switzerland and that the enemy was shipping Allied fuel? Suppose the public had discovered that the Chase Bank in Nazi-occupied Paris after Pearl Harbor was doing millions of dollars' worth of business with the enemy with the full knowledge of the head office in Manhattan? Or that Ford trucks were being built for the German occupation troops in France with authorization from Dearborn, Michigan? Or that Colonel Sosthenes Behn, the head of the international  American telephone conglomerate ITT, flew from New York to Madrid to Berne during the war to help improve Hitler's communications systems and improve the robot bombs that devastated London? Or that ITT built the Focke Wulfs that dropped bombs on British and American troops? Or that crucial ball bearings were shipped to Nazi-associated customers in Latin America with the collusion of the vice-chairman of the U.S. War Production Board in partnership with Goring's cousin in Philadelphia when American forces were desperately short of them? Or that such arrangements were known about in Washington and either sanctioned or deliberately ignored?

For the government did sanction such dubious transactions -- both before and after Pearl Harbor. A presidential edict, issued six days after December 7, 1941, actually set up the legislation whereby licensing arrangements for trading with the enemy could officially be granted. Often during the years after Pearl Harbor the government  permitted such trading. For example, ITT was allowed to continue its relations with the Axis and Japan until 1945, even though that conglomerate was regarded as an official instrument of United States Intelligence. No attempt was made to prevent Ford from retaining its interests for the Germans in Occupied France, nor were the Chase Bank or the Morgan Bank expressly forbidden to keep open their branches in Occupied Paris. It is indicated that the Reichsbank and Nazi Ministry of Economics made promises to certain U.S. corporate leaders that their properties would not be injured after the Fuhrer was victorious. Thus, the bosses of the multinationals as we know them today had a six-spot on every side of the dice cube. Whichever side won the war, the powers that really ran nations would not be adversely affected.

And it is important to consider the size of American investments in Nazi Germany at the time of Pearl Harbor. These amounted to an estimated total of $475 million. Standard Oil of New Jersey had $120 million invested there; General Motors had $35 million; ITT had $30 million; and Ford had $17.5 million. Though it would have been more patriotic to have allowed Nazi Germany to confiscate these companies for the duration -- to nationalize them or to absorb them into Hermann Goring's industrial empire -- it was clearly more practical to insure them protection from seizure by allowing them to remain in special holding companies, the money accumulating until war's end. It is interesting that whereas there is no evidence of any serious attempt by Roosevelt to impeach the guilty in the United States, there is evidence that Hitler strove to punish certain German Fraternity associates on the grounds of treason to the Nazi state. Indeed, in the case of ITT, perhaps the most flagrant of the corporations in its outright dealings with the enemy, Hitler and his postmaster general, the venerable Wilhelm Ohnesorge, strove to impound the German end of the business. But even they were powerless in such a situation: the Gestapo leader of counterintelligence, Walter Schellenberg, was a prominent director and shareholder of ITT by arrangement with New York -- and even Hitler dared not cross the Gestapo.

As for Roosevelt, the Sphinx still keeps his secrets. That supreme politician held all of the forces of collusion and betrayal in balance, publicly praising those executives whom he knew to be questionable.  Before Pearl Harbor, he allowed such egregious executives as James  D. Mooney of General Motors and William Rhodes Davis of the Davis Oil Company to enjoy pleasant tete-a-tetes with Hitler and Goring, while maintaining a careful record of what they were doing.  During the war, J. Edgar Hoover, Adolf A. Berle, Henry Morgenthau, and Harold Ickes kept the President fully advised of all internal and external transgressions. With great skill, he never let the executives concerned know that he was on to them. By using the corporate leaders for his own war purposes as dollar-a-year men, keeping an eye on them and allowing them to indulge, under license or not, in their international tradings, he at once made winning the war a certainty and kept the public from knowing what it should not know.

Because of the secrecy with which the matter has been blanketed, researching it presented me with a nightmare that preceded the greater nightmare of discovery. I embarked upon a voyage that resembled nothing so much as a descent into poisoned waters in a diving bell. 

Why did even the loyal figures of the American government allow these transactions to continue after Pearl Harbor? A logical deduction would be that not to have done so would have involved public disclosure: the procedure of legally disconnecting these alliances under the antitrust laws would have resulted in a public scandal that would have drastically affected public morale, caused widespread strikes, and perhaps provoked mutinies in the armed services. Moreover, as some corporate executives were never tired of reminding the government, their trial and imprisonment would have made it impossible for the corporate boards to help the American war effort. Therefore, the government was powerless to intervene. After 1945, the Cold War, which the executives had done so much to provoke, made it even more necessary that the truth of The Fraternity agreements should not be revealed.

I began with the conveniently multinational Bank for International Settlements in Basle, Switzerland. The activities of this anomalous institution in wartime are contained in Treasury Secretary Henry Morgenthau's official diaries at the Roosevelt Memorial Library at Hyde Park, New York. Other details are contained in reports by the estimable Lauchlin Currie, of Roosevelt's White House Economics Staff, whom I interviewed at length by telephone at his home in Bogota, Colombia, to which city he had been banished, his citizenship  stripped from him in 1956 for exposing American-Nazi connections.  Another source lay in reports by the late Orvis Schmidt of Treasury Foreign Funds Control. German records were a useful source: Emil Puhl, vice- president and real power of the Reichsbank, a most crucial  figure in The Fraternity's dealings, had sent reports to his nominal superior, Dr. Walther Funk, from Switzerland to Berlin late in the war.

I turned to the matter of the Rockefeller-controlled Chase National Bank, which had conducted its business for the Nazi High Command in Paris until the war's end. Evidently realizing that future historians might want to examine the highly secret Chase Bank files, Morgenthau had left subtle cross-references at Hyde Park that could lead future investigators to Treasury itself. I asked Ralph V. Korp of Treasury for access to the sealed Chase boxes, which had been under lock and key since 1945. Under the Freedom of Information Act, Mr.  Korp obtained permission from his superiors to unseal the boxes and to declassify the large number of documents contained therein.  From the Chase Bank it was a natural progression to Standard Oil of New Jersey, the chief jewel in the crown of the Rockefeller empire. Records of Standard's dealings with the Axis were contained in the Records Rooms of the Diplomatic Branch of the National Archives and were specially declassified. There, too, I found records of Sterling Products, General Aniline and Film, and William Rhodes  Davis, whose FBI files were also most revealing. Documents on ITT and RCA were classified. After waiting out the better part of the year, I was able to obtain them from the National Archives. Classified SKF Industries files are held in the Suitland, Maryland, annex of the Archives. General Motors matters are covered in the James D. Mooney public access collection of Georgetown University, Washington, D.C. The unpublished post-Pearl Harbor diaries of Harold Ickes were invaluable; they are to be found in the manuscript room of the Library of Congress.

The most elusive files were those on Ford in Occupied France. I could find no reference to them in the Treasury documentary listings.  I knew that a Treasury team had investigated the company. I wondered if any member of the team could be alive.

Something jolted my memory. I remembered that a book entitled The Devil's Chemists had appeared after World War II, written by Josiah DuBois, an attorney who had been part of the Treasury team at Nuremberg. The book was a harrowing account of the trial of the executives of I.G. Farben, the Nazi industrial trust, that showed Farben's links to Wall Street.

I reread the book's pages, looking for a clue. In it DuBois mentioned that he came from Camden, New Jersey. I decided to call information in the Camden area because I had a theory that, embittered by his experience in Germany and Washington, DuBois might have returned to live there after the war. It was only a hunch, but it  paid off. In fact, it turned out that DuBois had gone back to his family law firm in Camden. I wrote to him, asking if he had records of the Ford matter. I figured that these might have been so important that he would have been given personal custody of them; that Secretary Morgenthau might not even have risked leaving them at Treasury.

DuBois replied that he believed he still had the documents, including the letters of Edsel Ford to his managers in Nazi-occupied France after Pearl Harbor, authorizing improvements in automobile and truck supplies to the Germans. After several weeks, DuBois wrote to say that he had searched his attic to no avail. The documents were missing. However, he would keep looking.

He was admitted to a hospital where he underwent major surgery. Although enfeebled, he returned to the attic and began searching again.  Compelled by a desire to disclose the truth, he pursued his task whenever he could find the strength. At last, when he was about to give up hope, he uncovered the documents.

However, he explained that the main file was so incendiary that he would not send it by mail or even by messenger -- I was at liberty to examine it in his office. I was faced with a new dilemma. Since I was expecting delivery of an important set of documents, I couldn't risk an absence from my house for a prolonged journey to the East.  I said I would call him back.

I knew that Rutgers University was close to DuBois's offices. I called the Law department and asked for a student researcher. Within an hour I received a call from a young man who needed work. I contacted DuBois's secretary and arranged for the student to copy the documents on the premises. He did so; I sent an air courier to his home to pick them up. As I read the documents, the last details of the puzzle fell into place.

I have tried to write this book as dispassionately as possible, without attempting a moral commentary, and without, of course, intending implication of present corporations and their executive boards. It will be claimed that the people in this book, since they are dead, cannot answer and therefore should not be criticized. To that I would  reply: Millions died in World War II. They, too, cannot answer. 

***

GENERAL LICENSE UNDER SECTION 3(a) OF THE TRADING WITH THE ENEMY ACT

By virtue of and pursuant to the authority vested in me by sections 3 and 5 of The Trading with the Enemy Act as amended, and by virtue of all other authority vested in me, I, Franklin D. Roosevelt, President of the United States of America, do prescribe the following:

A general license is hereby granted, licensing any transaction or act proscribed by section 3(a) of The Trading with the Enemy Act, as amended, provided, however, that such transaction or act is authorized by the Secretary of the Treasury by means of regulations, rulings, instructions, licenses or otherwise, pursuant to the Executive Order No. 8389, as amended.

FRANKLIN D. ROOSEVELT
THE WHITE HOUSE,
December 13, 1941
H. MORGENTHAU, JR.
Secretary of the Treasury
FRANCIS BIDDLE
Attorney General of the United States

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