PART ONE
THE HIDDEN HISTORY OF THE THIRD REICH
CHAPTER 1
A NEW REICH BEGINS
CHAPTER 1
HITLERâS SUPPORT GROUP
FOLLOWING THE ARMISTICE OF 1918, WHICH ENDED WORLD WAR I, German soldiers returned home, to a country economically devastated by the war. The Bavarian city of Munich was hit particularly hard, with jobless ex-soldiers wandering the streets and a number of splinter political parties vying for membership.
It was in this setting that Hitler, a twenty-nine-year-old veteran, came into contact with members of the Thule Gesellschaft, or Thule Society, ostensibly an innocent reading group dedicated to the study and promotion of older German literature. But the society, composed mostly of wealthy conservatives, ardent nationalists, and anti-Semites, actually delved into radical politics, race mysticism, and the occult under its emblemâa swastika superimposed over a sword.
The society also served as a front for the even more secretive Germanenorden, or German Order, a reincarnation of the old Teutonic Knights, which had branches throughout Germany patterned after Masonic lodges. It is believed that these lodges carried on the agenda of the outlawed Bavarian Illuminati, with its fundamental maxim that âthe end justifies the means.â In other words, members should pretend to be anything or anybody, adopt any philosophy, tell any lie, steal, cheat, even kill as long as it accomplishes the societyâs objectives.
Members of the Thule Society encouraged a Munich locksmith and toolmaker named Anton Drexler to bring workers into the political process. The unassuming Drexler founded the Deutsche Arbeiterpartei, or German Workers Party, which was guided to prominence by covert aid from conservative elements within industry and the military.
Hitler, unable to make a living as an artist, turned to earning extra money by serving as an army intelligence agent reporting to a Captain Karl Mayr. âOne day I received orders from my headquarters to find out what was behind an apparently political society which, under the name of âGerman Workers Party,â intended to hold a meetingâŚ. I was to go there and look at the society and to report upon it,â Hitler recalled in Mein Kampf. Arriving at the Sterneckerbrau beer hall, he was not overly impressed. âI met there about 20 to 25 people, chiefly from among the lower walks of life,â wrote Hitler. However, the young military agent stood and âastonishedâ the small gathering by arguing against a proposal that Bavaria break ties with Prussia. Impressed with the nationalistic and anti-Semitic views of the fledgling party, military authorities allowed Hitler to join and began funding the partyâs work. He became the partyâs seventh registered member.
Hitlerâs work in the party was initially supported both by funds from Captain Mayrâs army intelligence unit and the dedicated anticommunists and occultists of the Thule Society. Funding was passed through the publisher of occult literature, Dietrich Eckart, whom Hitler called the âspiritual founder of National Socialism.â Eckart was soon introducing the new member to the right social circles in Munich and his intellectual friends in the Thule Society. The editors of Time-Life Books noted, âDietrich Eckart took over as editor of the Volkischer Beobachter, the renamed Munchener Beobachter, which the party had purchased from the Thule Society with money supplied partly by Mayrâs secret army account.â
Author Joseph P. Farrell stated that the covert connections of Eckart and future deputy fuehrer Martin Bormann support the idea âthat Hitler was deliberately manipulated and placed into power, and secretly manipulated behind the scenes by more powerful forces than even he wielded, and, when he had served his purpose, was deliberately sabotaged and cast aside.â The forceful Hitler, armed with adequate funds, quickly gained control of the German Workers Party, which soon claimed three thousand members. In April 1920, Hitler changed the partyâs name to the Nationalsozialistiche Deutsche Arbeiterpartei, the National Socialist German Workers Party, abbreviated to Nazi.
Following an ill-fated attempt to take control of the government in 1923, known as the Beer-hall Putsch, Hitler and his lieutenants were imprisoned and the Nazi Party languished. Upon his release after only nine months, Hitler began to direct the Nazi Party into more effective, and legal, activities, which resulted in the Nazis becoming the largest political party in Germany by July 1932.
It was, in fact, wealthy businessmen in Western industrial and banking circles who guaranteed Hitlerâs success. After Hitler lost a popular election to Hindenburg in 1932, thirty-nine business leaders, with familiar names like Krupp, Siemens, Thyssen, and Bosch, signed a petition urging the aged president Paul von Hindenburg to name Hitler chancellor. In January 1933, through a compromise with German aristocrats, industrialists, and army officers, brokered by banker Baron Kurt Freiherr von Schroeder, Hitler was appointed chancellor of Germany. The deal to name Hitler chancellor of Germany was cut at von Schroederâs home on January 4, 1933. On hand were prominent industrialists, at least one director of the giant Deutsche Bank as well as I. G. Farbenâs Hermann Schmitz and Dr. Georg von Schnitzler representing Farbenâs board of directors. According to author Eustace Mullins, also attending this meeting were John Foster Dulles and Allen Dulles of the New York law firm Sullivan and Cromwell, which represented the Schroeder bank. This claim has been disputed by other researchers.
At that time, Germany was a free republic with one of the most educated and cultured populations in the world. The country was at peace and enjoying a blossoming of democratic freedom under a coalition government of the Weimar Republic.
Oddly, Hitler went against tradition by choosing not to work out of an office in the German Reichstag, or parliament building, and on February 27, 1933, the Reichstag was gutted by fire. In those slower, gentler times, this act was as great a shock to the German people as the destruction of the World Trade Center towers was to Americans in 2001. Hitler blamed the destruction on communist terrorists. Inside the building, police arrested an incoherent, half-naked retarded Dutch youth named Marinus van der Lubbe. They said he was carrying a Dutch Communist Party card. After some time in custody, the youth confessed to being the arsonist. However, later investigation found that one person could not have started the mammoth blaze and that incendiary devices had been carried into the building through a tunnel that led to the offices of Hitlerâs closest partner, Hermann Goering.
Despite misgivings in many quarters about the official explanation of the fire, it was announced that âthe government is of the opinion that the situation is such that a danger to the state and nation existed and still exists.â Law enforcement agencies quickly moved against not only the communists but also pacifists, liberals, and democrats. Less than a month later, on March 24, 1933, at Hitlerâs urging, a panicky German Parliament voted 441 to 94 to pass an âEnabling Act,â which became the starting point for Hitlerâs dictatorship.
As a result of the Enabling Act, the Nazi government required national identity cards, racial profiling, the equivalent of a national homeland security chief (SS Reichsfuehrer Heinrich Himmler), gun confiscation, and, later, mass murders and incarcerations in concentration camps. âWhen Germany awoke,â wrote British reporter Douglas Reed, âa manâs home was no longer his castle. He could be seized by private individuals, could claim no protection from the police, could be indefinitely detained without preferment of charge; his property could be seized, his verbal and written communications overheard and perused; he no longer had the right to foregather with his fellow countrymen, and his newspapers might no longer freely express their opinions.â
Hitlerâs financiers and especially Prussian military officers were becoming alarmed over Hitlerâs growing power, especially with some three million Sturmabteilung (SA) or Storm Detachment Brown Shirts under the command of Hitlerâs SA chief Ernst Roehm awaiting orders. The army proposed a dealâif the power of the SA was broken, the military would pledge loyalty to Hitler. Hitler agreed, and on June 30, 1934, trumped-up charges of plotting a revolution caused Roehm and hundreds of Brown Shirts to be fatally purged and the SA quietly faded away. The German military began pledging their allegiance not to their nation but to Hitler. With the German population firmly under control due to massive propaganda and fear of government retaliation, Hitler was free to launch invasions into former German territories as well as Poland.
It is instructive that Hitler did not invade Poland without pretext. A âfalse-flagâ operation was accomplished first. SS men dressed in Polish uniforms fabricated an attack on a German radio station at Gleiwitz, which allowed Hitler to announce that a counterattack had been launched against Polish soldiers who had invaded German territory. Germany was simply making the world safe for National Socialism. World War II ensued.
WITH THE DEATH of the eighty-seven-year-old Hindenburg on August 2, 1934, Hitler merged the offices of president and chancellor and proclaimed himself commander in chief of the armed forces, the absolute leaderâfuehrerâof all Germany.
He found a huge and powerful industrial base geared for war production already in place and awaiting his command. It had been put in place at the end of World War I thanks to an influx of Western capital investment. âThis build-up for European war both before and after 1933 was in great part due to Wall Street financial assistance in the 1920s to create the German cartel system and to technical assistance from well-known American firmsâŚto build the German Wehrmacht,â noted financial investigator and author Antony C. Sutton, who added, âThe contribution made by American capitalism to German war preparations before 1940 can only be described as phenomenal.â (For example, in 1934 Germany produced only 300,000 tons of natural petroleum products and synthetic gasoline. In 1944, thanks to the transfer of hydrogenation technology from Standard Oil of New Jersey to I. G. Farben, Germany produced 6,500,000 tons of oil, 85 percent of which was synthetic.)
The intertwining of American capitalism with German corporations began following World War I, with two programs: the Dawes Plan (1924) and the Young Plan (1928). Both plans, engineered in America, virtually guaranteed success for the fledgling Nazi Party. The Dawes Plan, designed to restructure German war reparations, was named for chairman of the Allied Reparations Committee Charles G. Dawes and described by historian Carroll Quigley as âlargely a J. P. Morgan production.â This plan used American loans to create and consolidate the German steel and chemical giants, Vereinigte Stahlwerke and I. G. Farben, both major supporters of Hitler. It caused anger and frustration among the Germans, because it meant foreign control of Germanyâs financesâa fact constantly pointed out by Hitler in his speechesâand appeared open-ended, as no final reparation amount was ever announced. Its successor, the Young Plan, named for J. P. Morgan agent Owen D. Young, required burdensome monetary payments from Germany. It, too, led to support within Germany for Hitler and his Nazis.
Financing the rearmament of Germany in violation of the Versailles Treaty proved as profitable as it was dangerous to European peace. German steel magnate Fritz Thyssen, a major financial contributor to Hitler, stated, âI turned to the National Socialist Party only after I became convinced that the fight against the Young Plan was unavoidable if complete collapse of Germany was to be prevented.â
Finance between Germany and the Allied nations was controlled by the Bank of International Settlements (BIS), headquartered in Basel, Switzerland. It was the brainchild of Hjalmar Horace Greeley Schacht, president of the Reichsbank (in 1930, he resigned in protest to the Young Plan but was reappointed by Hitler in 1933) and the financial genius behind Germanyâs economic revival. Although his father was an American citizen, Hjalmar was born in Germany during his motherâs return there and named after the famous American editor and politician. It was Schacht who provided an ongoing link between Hitler and Germanyâs industrialists.
The BIS was administered by a multinational staff, which historian Quigley called the âapex of the systemâ of bankers, to secretly exchange information and plan for the coming war. One of the corporate giants created in postâWorld War I Germany with assistance from American capital was Internationale Gesellschaft Farbenindustrie A. G., better known in its shortened version as I. G. Farben. Created in 1926 by combining six existing chemical companies, it was the brainchild of Hermann Schmitz, who became the firmâs president. Under his guidance, I. G. Farben became the largest chemical manufacturing enterprise in the world. It was so powerful during the Nazi regime that the firm became known as a âstate within a state.â
Farben had subsidiaries, offices, and representatives in ninety-three countries, including the United States. Paul Manning, a CBS news correspondent in Europe during World War II, explained Schmitzâs connections by pointing out that the Farben chief once âheld as much stock in Standard Oil of New Jersey as did the Rockefellers.â By the time war began in 1939, I. G. Farben had doubled in size, gaining participation and managerial control over 380 other German companies as well as more than 500 foreign firms. This growth was made possible by bond sales in America, including one for $30 million offered by National City Bank, a forerunner of todayâs Citibank.
It was I. G. Farbenâs patented Zyklon-B, a prussic acid poison gas, that was used to kill victims in the âshower bathsâ of Auschwitz, Maidanek, and Treblinka. Previously, the firm had received a contract to produce carbon monoxide, used to gas the sick and mentally deficient under Germanyâs euthanasia program.
One example of the close business ties between the United States and Nazi Germany was Walter C. Teagle, chairman of Standard Oil of New Jersey, which was owned by Rockefellerâs Chase Bank. Teagle also was a director of American I. G. Chemical Corporation, one of the subsidiaries of I. G. Farben, which changed its name to General Aniline and Film (GAF) in an effort to distance itself from its German owners.
Teagle, through Rockefeller banking and oil interests, made his superiors a handsome profit just prior to the war. â[Teagle] remained in partnership with Farben in the matter of tetraethyl lead, an additive used in aviation gasoline,â wrote author Charles Higham. â[German Luftwaffe chief Hermann] Goeringâs air force couldnât fly without it. Only Standard, Du Pont and General Motors had the rights to it. Teagle helped organize a sale of the precious substance to [Farben president] Schmitz, who in 1938 traveled to London and âborrowedâ 500 tons from Ethyl, the British Standard subsidiary. Next year, Schmitz and his partners returned to London and obtained $15 million worth. The result was that Hitlerâs air force was rendered capable of bombing London, the city that had provided the supplies. Also, by supplying Japan with tetraethyl, Teagle helped make it possible for the Japanese to wage World War II.â
Following negative publicity regarding these tetraethyl transactions in 1938, Teagle resigned from the board of GAF, to be replaced by future Secretary of Defense James V. Forrestal. Curiously, it was this same Walter Teagle who helped create the National Recovery Administration, one of President Rooseveltâs New Deal agencies designed to regulate American business. This was an odd choice if the captains of American industry were as opposed to socialism as they publicly claimed.
By the mid-1930s, with the government, military, and the German cartels now firmly in hand, Hitler knew it was time to strengthen his influence over international bankers and businessmen. Despite his declared intentions to nationalize German businesses and curtail the power of international business and finance, Hitler initially had little trouble getting funds from corporate sponsors who saw his National Socialism as a necessary alternative to worldwide communism.
â[H]is appeal to the common people offered a chance to win the working class away from communism,â noted James Pool, author of Who Financed Hitler.
In America, efforts were under way to market Nazism to the public while concurrently practicing economic espionage. Teagle, together with Farben chief Schmitz, hired famed New York publicist Ivy Lee to pass proprietary information on American companies to Germany and to spin news stories so as to gloss over the darker side of Nazism. By the late 1930s, Lee was being paid $25,000 a year for disseminating pro-Nazi propaganda in America. Payments to Lee came from a Farben U.S. subsidiary, American I. G., and moved through Leeâs company account with Chase Bank and his personal account at New York Trust Company. âThey were American funds earned in the U.S. and under control of American directors, although used for Nazi propaganda in the United States,â stated author Sutton.
Another solid conduit for Nazi propaganda and intelligence activities was the Hamburg-Amerika shipping line. Max Warburg, a leader of Deutsche Bank, sat on the board of Hamburg-Amerika Steamship Line along with Prescott Bush, father and grandfather of two future U.S. presidents. Max Warburg was the brother of Paul Warburg, Americaâs first chairman of the Federal Reserve System and the man in charge of U.S. finances in World War I.
American I. G. Chemical Corporation was more than just a source of funds. It provided important intelligence to the Nazis throughout the war as noted by I. G. Farben director Max Ilgner, the nephew of Farbenâs chairman Schmitz. He wrote, âExtensive information which we receive continuously from [American I. G.] is indispensable for our observations of American conditionsâŚ[and] is, since the beginning of the war, an important source of information for governmental, economic and military offices.â
âThe full story of I. G. Farben and its worldwide activities before World War II can never be known,â noted author Sutton, âas key German records were destroyed in 1945 in anticipation of Allied victory.â
The banking industry, including foreign financial houses, provided Hitler and his Nazis with the funds to both consolidate and spread their National Socialist doctrine. Throughout World War II, the bank of Baron von Schroeder acted as financial agents for Germany in both Britain and the United States. Antony C. Sutton described how John Foster Dulles handled Schroeder bank loans in the USA. In fact, Dulles, in addition to providing legal services to a joint Rockefeller-Schroeder investment firm, the Schroeder-Rockefeller Company, also sat on the board of directors of General Aniline and Film (GAF) from 1927 to 1934. GAF, as it was known during the war, remained a subsidiary of I. G. Farben. Schroeder, the powerful head of the J. H. Stein & Company banking house of Cologne, had long provided financial support ...