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Review Essays / Notes Critiques
Profits über Alles! American Corporations and Hitler
Jacques R. Pauwels
Edwin Black, IBM and the Holocaust: The Strategic Alliance
between Nazi Germany and America's Most Powerful Corporation
(London: Crown Publishers, 2001)
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Walter Hofer and Herbert R. Reginbogin, Hitler, der Westen
und die Schweiz 19361945 (Zürich: NZZ
Publishing House, 2002)
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Reinhold Billstein, Karola Fings, Anita Kugler, and Nicholas
Levis, Working for the Enemy: Ford, General Motors, and Forced
Labor during the Second World War ( New York: Berghahn,
2000)
Research Findings About Ford-Werke Under the Nazi Regime
(Dearborn, MI: Ford Motor Company, 2001)
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IN THE UNITED STATES, World War II
is generally known as "the good war." In contrast to some of America's
admittedly bad wars, such as the near-genocidal Indian Wars and
the vicious conflict in Vietnam, World War II
is widely celebrated as a "crusade" in which the US
fought unreservedly on the side of democracy, freedom, and justice
against dictatorship. No wonder President George W. Bush likes
to compare his ongoing "war against terrorism" with World War
II, suggesting that America is once again
involved on the right side in an apocalyptic conflict between
good and evil. Wars, however, are never quite as black-and-white
as Mr. Bush would have us believe, and this also applies to World
War II. America certainly deserves credit
for its important contribution to the hard-fought victory that
was ultimately achieved by the Allies. But the role of corporate
America in the war is hardly synthesized by President Roosevelt's
claim that the US was the "arsenal of democracy."
When Americans landed in Normandy in June 1944 and captured their
first German trucks, they discovered that these vehicles were
powered by engines produced by American firms such as Ford and
General Motors.
1
Corporate America, it turned out, had also been serving as the
arsenal of Nazism. |
1 |
Fans of the Führer
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Mussolini enjoyed a great deal of admiration in corporate America
from the moment he came to power in a coup that was hailed stateside
as "a fine young revolution."
2
Hitler, on the other hand, sent mixed signals. Like their German
counterparts, American businessmen long worried about the intentions
and the methods of this plebeian upstart, whose ideology was called
National Socialism, whose party identified itself as a
workers' party, and who spoke ominously of bringing about
revolutionary change.
3
Some high-profile leaders of corporate America, however, such
as Henry Ford liked and admired the Führer at an early stage.
4
Other precocious Hitler-admirers were press lord Randolph Hearst
and Irénée Du Pont, head of the Du Pont trust, who according
to Charles Higham, had already "keenly followed the career of
the future Führer in the 1920s" and supported him financially.
5
Eventually, most American captains of industry learned to love
the Führer. |
2 |
It is often hinted that fascination
with Hitler was a matter of personalities, a matter of psychology.
Authoritarian personalities supposedly could not help but like
and admire a man who preached the virtues of the "leadership principle"
and practised what he preached first in his party and then in
Germany as a whole. Although he cites other factors as well, it
is essentially in such terms that Edwin Black, author of the otherwise
excellent book IBM and the Holocaust, explains the case
of IBM chairman Thomas J. Watson, who met
Hitler on a number of occasions in the 1930s and became fascinated
with Germany's authoritarian new ruler. But it is in the realm
of political economy, not psychology, that one can most profitably
understand why corporate America embraced Hitler. |
3 |
In the 1920s many big American corporations
enjoyed sizeable investments in Germany. IBM
established a German subsidiary, Dehomag, before World War I;
in the 1920s General Motors took over Germany's largest car manufacturer,
Adam Opel AG; and Ford founded a branch
plant, later known as the Ford-Werke, in Cologne. Other US
firms contracted strategic partnerships with German companies.
Standard Oil of New Jersey today's Exxon developed
intimate links with the German trust IG
Farben. By the early 1930s, an élite of about twenty of the
largest American corporations had a German connection including
Du Pont, Union Carbide, Westinghouse, General Electric, Gilette,
Goodrich, Singer, Eastman Kodak, Coca-Cola, IBM,
and ITT. Finally, many American law firms,
investment companies, and banks were deeply involved in America's
investment offensive in Germany, among them the renowned Wall
Street law firm Sullivan & Cromwell, and the banks J. P. Morgan
and Dillon, Read and Company, as well as the Union Bank of New
York, owned by Brown Brothers & Harriman. The Union Bank was intimately
linked with the financial and industrial empire of German steel
magnate Thyssen, whose financial support enabled Hitler to come
to power. This bank was managed by Prescott Bush, grandfather
of George W. Bush. Prescott Bush was allegedly also an eager supporter
of Hitler, funnelled money to him via Thyssen, and in return made
considerable profits by doing business with Nazi Germany; with
the profits he launched his son, the later president, in the oil
business.
6
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4 |
American overseas ventures fared
poorly in the early 1930s, as the Great Depression hit Germany
particularly hard. Production and profits dropped precipitously,
the political situation was extremely unstable, there were constant
strikes and street battles between Nazis and Communists, and many
feared that the country was ripe for a "red" revolution like the
one that had brought the Bolsheviks to power in Russia in 1917.
However, backed by the power and money of German industrialists
and bankers such as Thyssen, Krupp, and Schacht, Hitler came to
power in January 1933, and not only the political but also the
socio-economic situation changed drastically. Soon the German
subsidiaries of American corporations were profitable again. Why? |
5 |
After Hitler came to power American
business leaders with assets in Germany found to their immense
satisfaction that his so-called revolution respected the socio-economic
status quo. The Führer's Teutonic brand of fascism, like
every other variety of fascism, was reactionary in nature, and
extremely useful for capitalists' purposes. Brought to power by
Germany's leading businessmen and bankers, Hitler served the interests
of his "enablers." His first major initiative was to dissolve
the labour unions and to throw the Communists, and many militant
Socialists, into prisons and the first concentration camps, which
were specifically set up to accommodate the overabundance of left-wing
political prisoners. This ruthless measure not only removed the
threat of revolutionary change embodied by Germany's Communists
but also emasculated the German working class and transformed
it into a powerless "mass of followers" (Gefolgschaft),
to use Nazi terminology, which was unconditionally put at the
disposal of their employers, the Thyssens and Krupps. |
6 |
Most, if not all firms in Germany,
including American branch plants, eagerly took advantage of this
situation and cut labour costs drastically. The Ford-Werke, for
example, reduced labour costs from fifteen per cent of business
volume in 1933 to only eleven per cent in 1938. (Research Findings,
1356) Coca-Cola's bottling plant in Essen increased its
profitability considerably because, in Hitler's state, workers
"were little more than serfs forbidden not only to strike, but
to change jobs," driven "to work harder [and] faster" while their
wages "were deliberately set quite low."
7
In Nazi Germany, real wages indeed declined rapidly, while profits
increased correspondingly, but there were no labour problems worth
mentioning, for any attempt to organize a strike immediately triggered
an armed response by the Gestapo, resulting in arrests and dismissals.
This was the case in GM's Opel factory
in Rüsselsheim in June 1936. (Billstein et al., 25)
As the Thuringian teacher and anti-fascist resistance member Otto
Jenssen wrote after the war, Germany's corporate leaders were
happy "that fear for the concentration camp made the German workers
as meek as lapdogs."
8
The owners and managers of American corporations with investments
in Germany were no less enchanted, and if they openly expressed
their admiration or Hitler as did the chairman of General
Motors, William Knudsen, and ITT-boss Sosthenes
Behn it was undoubtedly because he had resolved Germany's
social problems in a manner that benefited their interests.
9
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7 |
Depression? What Depression?
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Hitler endeared himself to corporate America for another very
important reason: he conjured up a solution to the huge problem
of the Great Depression. His remedy proved to be a sort of Keynesian
stratagem, whereby state orders stimulated demand, got production
going again, and made it possible for firms in Germany
including foreign-owned firms to increase production levels
dramatically and to achieve an unprecedented level of profitability.
What the Nazi state ordered from German industry, however, was
war equipment, and it was soon clear that Hitler's rearmament
policy would lead inexorably to war, because only the spoils resulting
from a victorious war would enable the regime to pay the huge
bills presented by the suppliers. The Nazi rearmament program
revealed itself as a wonderful window of opportunity for the subsidiaries
of US corporations. Ford claims that its
Ford-Werke was discriminated against by the Nazi regime because
of its foreign ownership, but acknowledges that in the second
half of the 1930s its Cologne subsidiary was "formally certified
[by the Nazi authorities] ... as being of German origin" and therefore
"eligible to receive government contracts." (Research Findings,
21) Ford took advantage of this opportunity, though the government
orders were almost exclusively for military equipment. |
8 |
Ford's German branch plant had posted
heavy losses in the early 1930s, however, with lucrative government
contracts thanks to Hitler's rearmament drive, the Ford-Werke's
annual profits rose spectacularly from 63,000 Reichsmarks in 1935
to 1,287,800 RM in 1939. GM's
Opel factory in Rüsselsheim near Mainz fared even better.
Its share of the German automobile market grew from 35 per cent
in 1933 to more than 50 per cent in 1935, and the GM
subsidiary, which had lost money in the early 1930s, became extremely
profitable thanks to the economic boom caused by Hitler's rearmament
program. Earnings of 35 million RM
almost 14 million dollars (US) were
recorded in 1938. (Research Findings, 1356; and Billstein
et al., 24)
10
In 1939, on the eve of the war, the chairman of GM,
Alfred P. Sloan, publicly justified doing business in Hitler's
Germany by pointing to the highly profitable nature of GM's
operations under the Third Reich.
11
Yet another American corporation that enjoyed a bonanza in Hitler's
Third Reich was IBM. Its German subsidiary,
Dehomag, provided the Nazis with the punch-card machine
forerunner of the computer required to automate production
in the country, and in doing so IBM-Germany
made plenty of money. In 1933, the year Hitler came to power,
Dehomag made a profit of one million dollars, and during the early
Hitler years the German branch plant paid IBM
in the US some 4.5 million dollars in dividends.
By 1938, still in full Depression, "annual earnings were about
2.3 million RM, a 16 per cent return on
net assets," writes Edwin Black. In 1939 Dehomag's profits increased
spectacularly again to about four million RM.
(Black, 767, 867, 98, 119, 1201, 164, 198, and
222) |
9 |
American firms with branch plants
in Germany were not the only ones to earn windfalls from Hitler's
rearmament drive. Germany was stockpiling oil in preparation for
war, and much of this oil was supplied by American corporations.
Texaco profited greatly from sales to Nazi Germany, and not surprisingly
its chairman, Torkild Rieber, became yet another powerful American
entrepreneur who admired Hitler. A member of the German secret
service reported that he was "absolutely pro-German" and "a sincere
admirer of the Führer." Rieber also became a personal friend
of Göring, Hitler's economic czar.
12
As for Ford, that corporation not only produced for the Nazis
in Germany itself, but also exported partially assembled trucks
directly from the US to Germany. These
vehicles were assembled in the Ford-Werke in Cologne and were
ready just in time to be used in the spring of 1939, in Hitler's
occupation of the part of Czechoslovakia that had not been ceded
to him in the infamous Munich Agreement of the previous year.
In addition, in the late 1930s, Ford shipped strategic raw materials
to Germany, sometimes via subsidiaries in third countries; in
early 1937 alone, these shipments included almost 2 million pounds
of rubber and 130,000 pounds of copper. (Research Findings,
24, and 28) |
10 |
American corporations made a lot
of money in Hitler's Germany; this, and not the Führer's
alleged charisma, is the reason why the owners and managers of
these corporations adored him. Conversely, Hitler and his cronies
were most pleased with the performance of American capital in
the Nazi state. Indeed, the American subsidiaries' production
of war equipment met and even surpassed the expectations of the
Nazi leadership. Berlin promptly paid the bills and Hitler personally
showed his appreciation by awarding prestigious decorations to
the likes of Henry Ford, IBM's Thomas Watson,
and GM's export director, James D. Mooney. |
11 |
The stock of American investments
in Germany increased considerably after Hitler came to power in
1933. The major reason for this was that the Nazi regime did not
allow profits made by foreign firms to be repatriated, at least
not in theory. In reality, corporate headquarters could circumvent
this embargo by means of stratagems such as billing the German
subsidiary for "royalties" and all sorts of "fees." Still, the
restriction meant that profits were largely reinvested within
the land of opportunity that Germany revealed itself to be at
the time, for example in the modernization of existing facilities,
in the construction or acquisition of new factories, and in the
purchase of Reich bonds and real estate. IBM
thus reinvested its considerable earnings in a new factory in
Berlin-Lichterfelde, in an expansion of its facilities at Sindelfingen
near Stuttgart, in numerous branch offices throughout the Reich,
and in the purchase of rental properties in Berlin and other real
estate and tangible assets. (Black, 60, 99, 116, and 1223)
Under these circumstances, the value of IBM's
German venture increased considerably, by late 1938 the net worth
of Dehomag had doubled from 7.7 million RM
in 1934 to over 14 million RM. (Black,
767, 867, 98, 11921, 164, 198, and 222) The
value of the total assets of the Ford-Werke likewise mushroomed
in the 1930s, from 25.8 million RM in 1933
to 60.4 million RM in 1939. (Research
Findings, 133) American investment in Germany thus continued
to expand under Hitler, and amounted to about 475 million dollars
by the time of Pearl Harbor. (Research Findings, 6)
13
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12 |
Better Hitler than "Rosenfeld"
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Throughout the "dirty thirties," corporate profits in the US
remained depressed, at home firms like GM
and Ford could only dream of the kind of riches their branch plants
in Germany were accumulating thanks to Hitler. In addition, at
home corporate America experienced problems with labour activists,
Communists, and other radicals. What about the vicious trademarks
of the Führer's personality and regime? Did they not disturb
the leaders of corporate America? Apparently not much, if at all.
The racial hatred propagated by Hitler, for example, did not overly
offend their sensibilities. After all, racism against non-Whites
remained systemic throughout the US and
anti-Semitism was rife in the corporate class. In the exclusive
clubs and fine hotels patronized by the captains of industry,
Jews were rarely admitted; and some leaders of corporate America
were outspoken anti-Semites.
14
In the early 1920s, Henry Ford cranked out a vehemently anti-Semitic
book, The International Jew, which was translated into
many languages; Hitler read the German version and acknowledged
later that it provided him with inspiration and encouragement.
Another notoriously anti-Semitic American tycoon was Irénée
Du Pont, even though the Du Pont family had Jewish antecedents.
15
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13 |
Corporate America's anti-Semitism
strongly resembled that of Hitler, whose view of Judaism was intimately
interwoven with his view of Marxism, as Arno J. Mayer has convincingly
argued in his book Why Did the Heavens not Darken?
16
Hitler claimed to be a socialist, but his was supposed to be a
"national" socialism, a socialism for racially pure Germans only.
As for genuine socialism, which preached international working-class
solidarity and found its inspiration in the work of Karl Marx,
it was despised by Hitler as a Jewish ideology that purported
to enslave or even destroy Germans and other "Aryans." Hitler
loathed as "Jewish" all forms of Marxism, but none more so than
communism (or "Bolshevism") and he denounced the Soviet Union
as the homeland of "Jewish" international socialism. |
14 |
In the 1930s, the anti-Semitism
of corporate America likewise revealed itself to be the other
side of the coin of anti-socialism, anti-Marxism, and red-baiting.
Most American businessmen denounced Roosevelt's New Deal as a
"socialistic" meddling in the economy. The anti-Semites of corporate
America considered Roosevelt to be a crypto-Communist and an agent
of Jewish interests, if not a Jew himself; he was routinely referred
to as "Rosenfeld," and his New Deal was vilified as the "Jew Deal."
17
In his book The Flivver King, Upton Sinclair described
the notoriously anti-Semitic Henry Ford dreaming of an American
fascist movement that "pledged to put down the Reds and preserve
the property interests of the country; to oust the Bolshevik [Roosevelt]
from the White House and all his pink professors from the government
services ... [and] to make it a shooting offense to talk communism
or to call a strike."
18
Other American tycoons also yearned for a fascist saviour who
might rid America of its "reds" and thus restore prosperity and
profitability. Du Pont provided generous financial support to
America's own fascist organizations, such as the infamous "Black
Legion," and was even involved in plans for a fascist coup d'état
in Washington. (Hofer and Reginbogin, 5856)
19
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15 |
Why Worry about the Coming War?
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It was quite obvious that Hitler, who was rearming Germany to
the teeth, was going to unleash a major war sooner or later. Whatever
misgivings America's captains of industry may initially have had
in this respect soon dissipated, because the cognoscenti
of international diplomacy and business in the 1930s widely expected
that Hitler would spare western countries, instead attacking and
destroying the Soviet Union as promised in Mein Kampf.
To encourage and assist him in the task that he considered his
great mission in life,
20
was the hidden objective of the infamous appeasement policy pursued
by London and Paris, and tacitly approved by Washington.
21
Corporate leaders in all western countries, including most emphatically
the US, loathed the Soviet Union because
that state was the cradle of the communist "counter system" to
the international capitalist order of things, and a source of
inspiration to America's own "reds." Furthermore, they found particularly
offensive that the homeland of communism did not fall prey to
the Great Depression, but experienced an industrial revolution
that has been favourably compared by American historian, John
H. Backer with the widely celebrated "economic miracle" of West
Germany after World War II.
22
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16 |
The appeasement policy was a devious
scheme, whose real objective had to be concealed from the British
and French publics. It backfired spectacularly because its contortions
eventually made Hitler suspicious about the real intentions of
London and Paris, which caused him to make a deal with Stalin,
and thus led to Germany's war against France and Great Britain
rather than the Soviet Union. Nevertheless, the dream of a German
crusade against the communist Soviet Union on behalf of the capitalist
West refused to die. London and Paris merely launched a "Phoney
War" against Germany, hoping that Hitler would eventually turn
against the Soviet Union after all. This was also the idea behind
quasi-official missions to London and Berlin, undertaken by GM's
James D. Mooney, who tried very hard as did the US
ambassador in London, Joseph Kennedy, father of John F. Kennedy
to persuade German and British leaders to resolve their
inconvenient conflict, so that Hitler could devote his undivided
attention to his great eastern project. In a meeting with Hitler
in March 1940, Mooney made a plea for peace in western Europe,
suggesting "that Americans had understanding for Germany's standpoint
with respect to the question of living space" in other
words, that they had nothing against his territorial claims in
the East. (Billstein et al., 3744)
23
These American initiatives, however, did not produce the hoped-for
results. The owners and managers of American corporations with
subsidiaries in Germany undoubtedly regretted that the war Hitler
had unleashed in 1939 was a war against the West, but in the final
analysis it did not matter all that much. What did matter was
this: helping Hitler to prepare for war had been good business
and the war itself opened up even more extravagant prospects for
doing business and making profits. |
17 |
Putting the Blitz in the Blitzkrieg
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Germany's military successes of 1939 and 1940 were based on a
new and extremely mobile form of warfare, the Blitzkrieg, consisting
of extremely swift and highly synchronized attacks by air and
land. To wage "lightning war," Hitler needed engines, tanks, trucks,
planes, motor oil, gasoline, rubber, and sophisticated communication
systems to insure that the Stukas struck in tandem with the Panzers.
Much of that equipment was supplied by American firms, mainly
German subsidiaries of big American corporations, but some was
exported from the US, albeit usually via
third countries. Without this kind of American support, the Führer
could only have dreamed of "lightning wars," followed by "lightning
victories," in 1939 and 1940. |
18 |
Many of Hitler's wheels and wings
were produced in the German subsidiaries of GM
and Ford. By the end of the 1930s these enterprises had phased
out civilian production to focus exclusively on the development
of military hardware for the German army and air force. This switch,
requested if not ordered by the Nazi authorities,
had not only been approved, but even actively encouraged by the
corporate headquarters in the US. The Ford-Werke
in Cologne proceeded to build not only countless trucks and personnel
carriers, but also engines and spare parts for the Wehrmacht.
GM's new Opel factory in Brandenburg cranked
out "Blitz" trucks for the Wehrmacht, while the main factory in
Rüsselsheim produced primarily for the Luftwaffe, assembling
planes such as the JU-88, the workhorse
of Germany's fleet of bombers. At one point, GM
and Ford together reportedly accounted for no less than half of
Germany's entire production of tanks. (Billstein et al.,
25,)
24
Meanwhile ITT had acquired a quarter of
the shares of airplane manufacturer Focke-Wulf, and so helped
to construct fighter planes.
25
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19 |
Perhaps the Germans could have assembled
vehicles and airplanes without American assistance. But Germany
desperately lacked strategic raw materials, such as rubber and
oil, which were needed to fight a war predicated on mobility and
speed. American corporations came to the rescue. As mentioned
earlier, Texaco helped the Nazis stockpile fuel. In addition,
as the war in Europe got underway, large quantities of diesel
fuel, lubricating oil, and other petroleum products were shipped
to Germany not only by Texaco but also by Standard Oil, mostly
via Spanish ports. (The German Navy, incidentally, was provided
with fuel by the Texas oilman William Rhodes Davis.)
26
In the 1930s Standard Oil had helped IG
Farben develop synthetic fuel as an alternative to regular oil,
of which Germany had to import every single drop. (Hofer and Reginbogin,
5889) Albert Speer, Hitler's architect and wartime armament
minister, stated after the war that without certain kinds of synthetic
fuel made available by American firms, Hitler "would never have
considered invading Poland."
27
As for the Focke-Wulfs and other fast German fighter planes, they
could not have achieved their deadly speed without a component
in their fuel known as synthetic tetraethyl; the Germans themselves
later admitted that without tetraethyl the entire Blitzkrieg concept
of warfare would have been unthinkable. This magic ingredient
was produced by an enterprise named Ethyl GmbH, a daughter firm
of a trio formed by Standard Oil, Standard's German partner IG
Farben, and GM. (Hofer and Reginbogin,
589)
28
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20 |
Blitzkrieg warfare involved perfectly
synchronized attacks by land and by air, and this required highly
sophisticated communications equipment. ITT's
German subsidiary supplied most of that apparatus, while other
state-of-the-art technology useful for Blitzkrieg purposes came
compliments of IBM, via its German branch
plant, Dehomag. According to Edwin Black, IBM's
know-how enabled the Nazi war machine to "achieve scale, velocity,
efficiency"; IBM, he concludes, "put the
'blitz' in the krieg for Nazi Germany." (Black, 208) |
21 |
From the perspective of corporate
America it was no catastrophe that Germany had established its
mastery over the European continent by the summer of 1940. Some
German subsidiaries of American corporations for example
the Ford-Werke and Coca-Cola's bottling plant in Essen
were expanding into the occupied countries, riding the coat-tails
of the victorious Wehrmacht. IBM's president,
Thomas Watson, was confident that his German branch plant would
gain advantage from Hitler's triumphs. Black writes: "Like many
[other US businessmen], Watson expected"
that Germany would remain master of Europe, and that IBM
would benefit from this by "[ruling] the data domain," that is,
by providing Germany with the technological tools for total control.
(Black, 212) |
22 |
On 26 June 1940 a German commercial
delegate organized a dinner at the Waldorf-Astoria hotel in New
York to cheer the victories of the Wehrmacht in western Europe.
Many leading industrialists attended, including James D. Mooney,
the executive in charge of GM's German
operations. Five days later, the German victories were again celebrated
in New York, this time at a party hosted by the philo-fascist
Rieber, boss of Texaco. Among the leaders of corporate America
present were James D. Mooney and Henry Ford's son, Edsel.
29
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23 |
What a Wonderful War!
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Nineteen proved an exceptionally good year for corporate America.
Not only did the subsidiaries in Germany share in the spoils of
Hitler's triumphs, but the European conflict was generating other
wonderful opportunities. America herself was now preparing for
a possible war, and from Washington orders for trucks, tanks,
planes, and ships started rolling in. Moreover, initially on a
strict "cash-and-carry" basis and then through "Lend-Lease," President
Roosevelt allowed American industry to supply Great Britain with
military hardware and other equipment, thus enabling brave little
Albion to continue the war against Hitler indefinitely. By the
end of 1940, all belligerent countries as well as armed neutrals
like the US itself were being girded with
weaponry cranked out by corporate America's factories, whether
stateside, in Great Britain (where Ford et al., also had
branch plants), or in Germany. |
24 |
It was a wonderful war indeed, and
the longer it lasted, the better from a corporate point
of view. Corporate America neither wanted Hitler to lose this
war nor to win it; instead they wanted this war to go on as long
as possible. Henry Ford had initially refused to produce weapons
for Great Britain, but now he changed his tune. According to his
biographer, David Lanier Lewis, he "expressed the hope that neither
the Allies nor the Axis would win [the war]," and he suggested
that the US should supply both the Allies
and the Axis powers with "the tools to keep on fighting until
they both collapse."
30
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25 |
On 22 June 1941 the Wehrmact rolled
across the Soviet border, powered by Ford and GM
engines and equipped with the tools produced in Germany by American
capital and know-how. While many leaders of corporate America
hoped that the Nazis and the Soviets would remain locked for as
long as possible in a war that would debilitate them both,
31
thus prolonging the European war that was proving to be so profitable,
the experts in Washington and London predicted that the Soviets
would be crushed, "like an egg" by the Wehrmacht.
32
The USSR, however, became the first country
to fight the Blitzkrieg to a standstill. And on 5 December 1941,
the Red Army even launched a counter-offensive.
33
It was henceforth evident that the Germans would be preoccupied
for quite some time on the Eastern Front, that this would also
permit the British to continue to wage war, and that the profitable
Lend-Lease business would therefore continue indefinitely. The
situation became even more advantageous to corporate America when
it appeared that business could henceforth also be done with the
Soviets. Indeed, in November 1941, when it had already become
clear that the Soviet Union was not about to collapse, Washington
agreed to extend credit to Moscow, and concluded a Lend-Lease
agreement with the USSR, thus providing
the big American corporations with yet another market for their
products. |
26 |
American Aid to the Soviets...and to the
Nazis
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After the war, it would become customary in the West to claim
that the unexpected Soviet success against Nazi Germany had been
made possible because of massive American assistance, provided
under the terms of a Lend-Lease agreement between Washington and
Moscow, and that without this aid the Soviet Union would not have
survived the Nazi attack. This claim is doubtful. First, American
material assistance did not become meaningful before 1942, that
is, long after the Soviets had single-handedly put an end to the
progress made by the Wehrmacht and had launched their first counteroffensive.
Second, American aid never represented more than four to five
per cent of total Soviet wartime production, although it must
be admitted that even such a slim margin may possibly prove crucial
in a crisis situation. Third, the Soviets themselves cranked out
all of the light and heavy high-quality weapons such as
the T-34 tank, probably the best tank of World War II
that made their success against the Wehrmacht possible.
34
Finally, the much-publicized Lend-Lease aid to the USSR
was to a large extent neutralized and arguably dwarfed
by the unofficial, discreet, but very important assistance
provided by American corporate sources to the German enemies of
the Soviets. In 1940 and 1941 American oil trusts increased the
lucrative oil exports to Germany; large amounts delivered to Nazi
Germany via neutral states. The American share of Germany's imports
of vitally important oil for engine lubrication (Motorenöl)
increased rapidly, from 44 per cent in July 1941 to 94 per cent
in September 1941. Without US-supplied fuel, the German attack
on the Soviet Union would not have been possible, according to
the German historian Tobias Jersak, an authority in the field
of American "fuel for the Führer."
35
|
27 |
Hitler was still ruminating the
catastrophic news of the Soviet counter-offensive and the failure
of the Blitzkrieg in the East, when he learned that the Japanese
had launched a surprise attack on Pearl Harbor on 7 December 1941.
The US were now at war with Japan, but
Washington made no move to declare war on Germany. Hitler had
no obligation to rush to the aid of his Japanese friends, but
on 11 December 1941, he declared war on the US,
probably expecting vainly as it turned out that
Japan would reciprocate by declaring war on the Soviet Union.
Hitler's needless declaration of war, accompanied by a similarly
frivolous Italian declaration of war, made the US
an active participant in the war in Europe. How did this affect
the German assets of the big American corporations?
36
|
28 |
Business as Usual
|
|
The German subsidiaries of American corporations were not ruthlessly
confiscated by the Nazis and removed entirely from the control
of stateside corporate headquarters until the defeat of Germany
in 1945, as parent companies would claim after the war. Regarding
the assets of Ford and GM, for example,
the German expert Hans Helms states, "not even once during their
terror regime did the Nazis undertake the slightest attempt to
change the ownership status of Ford [i.e. the Ford-Werke] or Opel."
37
Even after Pearl Harbor, Ford retained its 52 per cent of the
shares of Ford-Werke in Cologne, and GM
remained Opel's sole proprietor. (Billstein et al., 74,
and 141) |
29 |
Moreover, the American owners and
managers maintained a sometimes considerable measure of control
over their branch plants in Germany after the German declaration
of war on the US. There is evidence that
the corporate headquarters in the US and
the branch plants in Germany stayed in contact with each other,
either indirectly, via subsidiaries in neutral Switzerland, or
directly by means of modern worldwide systems of communications.
The latter was supplied by ITT in collaboration
with Transradio, a joint venture of ITT
itself, RCA (another American corporation),
and the German firms Siemens and Telefunken.
38
In its recent report on its activities in Nazi Germany, Ford claims
that its corporate headquarters in Dearborn had no direct contact
with the German subsidiary after Pearl Harbor. As for the possibility
of communications via branch plants in neutral countries, the
report states that "there is no indication of communication with
each other through these subsidiaries." (Research Findings,
88) However, the lack of such "indication" may simply mean that
any evidence of contacts may have been lost or destroyed before
the authors of the report were allowed access to the relevant
archives; after all, this archival access was only granted more
than 50 years after the facts. Moreover, the report itself acknowledges
somewhat contradictorily that an executive of the Ford-Werke did
travel to Lisbon in 1943 for a visit to the Portuguese Ford subsidiary,
and it is extremely unlikely that Dearborn would have been unaware
of this. |
30 |
As for IBM,
Edwin Black writes that during the war its general manager for
Europe, Dutchman Jurriaan W. Schotte, was stationed in the corporate
headquarters in New York, where he "continued to regularly maintain
communication with IBM subsidiaries in
Nazi territory, such as his native Holland and Belgium." IBM
could also "monitor events and exercise authority in Europe through
neutral country subsidiaries," and especially through its Swiss
branch in Geneva, whose director, a Swiss national, "freely travelled
to and from Germany, occupied territories, and neutral countries."
Finally, like many other large US corporations,
IBM could also rely on American diplomats
stationed in occupied and neutral countries to forward messages
via diplomatic pouches. (Black, 339, 376, and 3925) |
31 |
The Nazis not only allowed the American
owners to retain possession and a certain amount of administrative
control over their German assets and subsidiaries, but their own
intervention in the management of Opel and the Ford-Werke, for
example, remained minimal. After the German declaration of war
against the US, the American staff members
admittedly disappeared from the scene, but the existing German
managers confidants of the bosses in the US
generally retained their positions of authority and continued
to run the businesses, thereby keeping in mind the interests of
the corporate headquarters and the shareholders in America. For
Opel, GM's headquarters in the US
retained virtually total control over the managers in Rüsselsheim;
so writes American historian Bradford Snell, who devoted attention
to this theme in the 1970s, but whose findings were contested
by GM. A recent study by German researcher
Anita Kugler confirms Snell's account while providing a more detailed
and more nuanced picture. After the German declaration of war
on the US, she writes the Nazis initially
did not bother the management of Opel at all. Only on 25 November
1942 did Berlin appoint an "enemy assets' custodian," but the
significance of this move turned out to be merely symbolic. The
Nazis simply wanted to create a German image for an enterprise
that was owned 100 per cent by GM throughout
the war. (Billstein et al., 61) |
32 |
In the Ford-Werke, Robert Schmidt,
allegedly an ardent Nazi, served as general manager during the
war, and his performance greatly satisfied both the authorities
in Berlin and the Ford managers in America. Messages of approval
and even congratulations signed by Edsel Ford were
regularly forthcoming from Ford's corporate headquarters in Dearborn.
The Nazis too were delighted with Schmidt's work; in due course
they awarded him the title, "leader in the field of the military
economy." Even when, months after Pearl Harbor, a custodian was
appointed to oversee the Ford plant in Cologne, Schmidt retained
his prerogatives and his freedom of action.
39
IBM's wartime experience with Axis custodians
in Germany, France, Belgium, and other countries was likewise
far from traumatic. According to Black, "they zealously protected
the assets, extended productivity, and increased profits"; moreover,
"existing IBM managers were kept in place
as day-to-day managers and, in some cases, even appointed deputy
enemy custodians." (Black, 376, 4002, 405, and 415) |
33 |
The Nazis were far less interested
in the nationality of the owners or the identity of the managers
than in production, because after the failure of their Blitzkrieg
strategy in the Soviet Union they experienced an ever-growing
need for mass-produced airplanes and trucks. Ever since Henry
Ford had pioneered the use of the assembly line and other "Fordist"
techniques, American firms had been the leaders in the field of
industrial mass production, and the American branch plants in
Germany, including GM's Opel subsidiary,
were no exception to this general rule. Nazi planners like Göring
and Speer understood that radical changes in Opel's management
might hinder production in Brandenburg and Rüsselsheim. To
maintain Opel's output at high levels, the managers in charge
were allowed to carry on because they were familiar with the particularly
efficient American methods of production. Anita Kugler concludes
that Opel, "made its entire production and research available
to the Nazis and thus objectively speaking contributed
to enhance their long-term capability to wage war." (Billstein
et al., 81)
40
|
34 |
Experts believe that GM's
and Ford's best wartime technological innovations primarily benefitted
their branch plants in Nazi Germany. As examples they cite all-wheel-drive
Opel trucks, which proved eminently useful to the Germans in the
mud of the Eastern Front and in the desert of North Africa, as
well as the engines for the brand new ME-262,
the first jet fighter, were also assembled by Opel in Rüsselsheim.
41
As for the Ford-Werke, in 1939 this firm also developed a state-of-the-art
truck the Maultier ("mule") that had wheels
on the front and a track on the back end. The Ford-Werke also
created a "cloak company," Arendt GmbH, to produce war equipment
other than vehicles, specifically machining parts for airplanes.
But Ford claims that this was done without Dearborn's knowledge
or approval. Towards the end of the war this factory was involved
in the top-secret development of turbines for the infamous V-2
rockets that wreaked devastation on London and Antwerp. (Research
Findings, 412) |
35 |
ITT continued
to supply Germany with advanced communication systems after Pearl
Harbor, to the detriment of the Americans themselves, whose diplomatic
code was broken by the Nazis with the help of such equipment.
42
Until the very end of the war, ITT's production
facilities in Germany as well as in neutral countries such as
Sweden, Switzerland, and Spain provided the German armed forces
with state-of-the-art martial toys. Charles Higham offers specifics: |
36 |
After Pearl Harbor the German army, navy, and air
force contracted with ITT for the manufacture
of switchboards, telephones, alarm gongs, buoys, air raid warning
devices, radar equipment, and thirty thousand fuses per month
for artillery shells ... This was to increase to fifty thousand
per month by 1944. In addition, ITT supplied
ingredients for the rocket bombs that fell on London, selenium
cells for dry rectifiers, high-frequency radio equipment, and
fortification and field communication sets. Without this supply
of crucial materials it would have been impossible for the German
air force to kill American and British troops, for the German
army to fight the Allies, for England to have been bombed, or
for Allied ships to have been attacked at sea.
43
|
|
No surprise then that the German subsidiaries of American enterprises
were regarded as "pioneers of technological development" by the
planners in Germany's Reich Economics Ministry and other Nazi
authorities involved in the war effort.
44
|
37 |
Edwin Black also claims that IBM's
advanced punch card technology, precursor to the computer, enabled
the Nazis to automate persecution. IBM
allegedly put the fantastical numbers in the Holocaust, because
it supplied the Hitler regime with the Hollerith calculating machines
and other tools that were used to "generate lists of Jews and
other victims, who were then targeted for deportation" and to
"register inmates [of concentration camps] and track slave labor."
(Black, xx) However, critics of Black's study maintain that the
Nazis could and would have achieved their deadly efficiency without
the benefit of IBM's technology. In any
event, the case of IBM provides yet another
example of how US corporations supplied
state-of-the-art technology to the Nazis and obviously did not
care too much for what evil purposes this technology would be
used. |
38 |
Profits über Alles!
|
|
The owners and managers of the parent firms in the US
cared little what products were developed and rolled off the German
assembly lines. What counted for them and for the shareholders
were only the profits. Branch plants of American corporations
in Germany achieved considerable earnings during the war, and
this money was not pocketed by the Nazis. For the Ford-Werke precise
figures are available. The profits of Dearborn's German subsidiary
rose from 1.2 million RM in 1939 to 1.7
million RM in 1940, 1.8 million RM
in 1941, 2.0 million RM in 1942, and 2.1
million RM in 1943. (Research Findings,
136).
45
The Ford subsidiaries in occupied France, Holland, and Belgium,
where the American corporate giant also made an industrial contribution
to the Nazi war effort, were likewise extraordinarily successful.
Ford-France, for example not a flourishing firm before
the war became very profitable after 1940 thanks to its
unconditional collaboration with the Germans; in 1941 it registered
earnings of 58 million francs, an achievement for which it was
warmly congratulated by Edsel Ford. (Billstein et al, 106;
and Research Findings, 735)
46
As for Opel, that firm's profits skyrocketed to the point where
the Nazi Ministry of Economics banned their publication to avoid
bad blood on the part of the German population, which was increasingly
being asked to tighten its collective belt. (Billstein et al,
73)
47
|
39 |
IBM not only
experienced soaring profits in its German branch plant, but, like
Ford, also saw its profits in occupied France jump primarily because
of business generated through eager collaboration with the German
occupation authorities. It was soon necessary to build new factories.
Above all, however, IBM prospered in Germany
and in the occupied countries because it sold the Nazis the technological
tools required for identifying, deporting, ghettoizing, enslaving,
and ultimately exterminating millions of European Jews, in other
words, for organizing the Holocaust. (Black, 212, 253, and 2979) |
40 |
It is far from clear what happened
to the profits made in Germany during the war by American subsidiaries,
but some tantalizing tidbits of information have nevertheless
emerged. In the 1930s American corporations had developed various
strategies to circumvent the Nazis' embargo on profit repatriation.
IBM's head office in New York, for example,
regularly billed Dehomag for royalties due to the parent firm,
for repayment of contrived loans, and for other fees and expenses;
this practice and other byzantine inter-company transactions minimized
profits in Germany and thus simultaneously functioned as an effective
tax-avoidance scheme. In addition, there were other ways of handling
the embargo on profit repatriation, such as reinvestment within
Germany, but after 1939 this option was no longer permitted, at
least not in theory. In practice, the American subsidiaries did
manage to quite considerably increase their assets that way. Opel,
for example, took over a foundry in Leipzig in 1942.
48
It also remained possible to use earnings in order to improve
and modernize the branch plant's own infrastructure, that too,
happened in the case of Opel. There also existed opportunities
for expansion in the occupied countries of Europe. Ford's subsidiary
in France used its profits in 1941 to build a tank factory in
Oran, Algeria; this plant allegedly provided Rommel's Africa Corps
with the hardware needed to advance all the way to El Alamein
in Egypt. In 1943 the Ford-Werke also established a foundry not
far from Cologne, just across the Belgian border near Liège,
to produce spare parts. (Research Findings, 133) |
41 |
It is likely, furthermore, that
a portion of the lucre amassed in the Third Reich was transferred
back to the US in some way, for example,
by way of neutral Switzerland. Many US
corporations maintained offices there that served as intermediaries
between stateside headquarters and their subsidiaries in enemy
or occupied countries, and that were also involved in "profit
funnelling," as Edwin Black writes in connection with the Swiss
branch of IBM. (Black, 73)
49
For the purpose of profit repatriation, corporations could also
call on the experienced services of the Paris branches of some
American banks, such as Chase Manhattan and J.P. Morgan, and of
a number of Swiss banks. Chase Manhattan was part of the Rockefeller
empire, as was Standard Oil, IG Farben's
American partner; its branch in German-occupied Paris remained
open throughout the war and profited handsomely from close collaboration
with the German authorities. |
42 |
On the Swiss side there also happened
to be some financial institutions involved that without
asking difficult questions took care of the gold robbed
by the Nazis from their Jewish victims. An important role was
played in this respect by the Bank for International Settlements
(BIS) in Basel, a presumably international
bank that had been founded in 1930 within the framework of the
Young Plan for the purpose of facilitating German reparation payments
after World War I. American and German bankers (such as Schacht)
dominated the BIS from the start and collaborated
cozily in this financial venture. During the war, a German and
a member of the Nazi Party, Paul Hechler, functioned as director
of the BIS, while an American, Thomas H.
McKittrick, served as president. McKittrick was a good friend
of the American ambassador in Berne and American secret service
[OSS, forerunner of the CIA]
agent in Switzerland, Allen Dulles. Before the war, Allen Dulles
and his brother John Foster Dulles had been partners in the New
York law firm of Sullivan & Cromwell, and had specialized in the
very profitable business of handling American investments in Germany.
They had excellent connections with the owners and top managers
of American corporations and with bankers, businessmen, and government
officials including Nazi bigwigs in Germany. After
the outbreak of war, John Foster became the corporate lawyer for
the BIS in New York, while Allen joined
the OSS and took up a post in Switzerland,
where he happened to befriend McKittrick. It is widely known that
during the war the BIS handled enormous
amounts of money and gold originating in Nazi Germany.
50
Is it unreasonable to suspect that these transfers might have
involved US-bound profits of American branch
plants, in other words, money hoarded by clients and associates
of the ubiquitous Dulles brothers? |
43 |
Bring on the Slave Labour!
|
|
Before the war, German corporations had eagerly taken advantage
of the big favour done for them by the Nazis, namely the elimination
of the labour unions and the resulting transformation of the formerly
militant German working class into a meek "mass of followers."
Not surprisingly, in Nazi Germany real wages declined rapidly
while profits increased correspondingly. During the war prices
continued to rise, while wages were gradually eroded and working
hours were increased.
51
This was also the experience of the labour force of the American
subsidiaries. |
44 |
In order to combat the labour shortages
in the factories, the Nazis relied increasingly on foreign labourers
who were put to work in Germany under frequently inhuman conditions.
Together with hundreds of thousands of Soviet and other POWs
as well as inmates of concentration camps, these Fremdarbeiter
(forced labourers) formed a gigantic pool of workers that could
be exploited at will by whomever recruited them, in return for
a modest remuneration paid to the SS. The
SS, moreover, also maintained the required
discipline and order with an iron hand. Wage costs thus sank to
a level of which today's downsizers can only dream, and the corporate
profits augmented correspondingly. |
45 |
The German branch plants of American
corporations also made eager use of slave labour supplied by the
Nazis, not only Fremdarbeiter, but also POWs
and even concentration camp inmates. For example, the Yale & Towne
Manufacturing Company based in Velbert in the Rhineland reportedly
relied on "the aid of labourers from Eastern Europe" to make "considerable
profits,"
52
and Coca-Cola is also noted to have benefitted from the use of
foreign workers, as well as prisoners of war in its Fanta plants.
53
The most spectacular examples of the use of forced labour by American
subsidiaries, however, appear to have been provided by Ford and
GM, two cases that were recently the subject
of a thorough investigation. Of the Ford-Werke it is alleged that
starting in 1942 this firm "zealously, aggressively, and successfully"
pursued the use of foreign workers and POWs
from the Soviet Union, France, Belgium, and other occupied countries
apparently with the knowledge of corporate headquarters
in the US.
54
Karola Fings, a German researcher who has carefully studied the
wartime activities of the Ford-Werke, writes: |
46 |
[Ford] did wonderful business with the Nazis. Because
the acceleration of production during the war opened up totally
new opportunities to keep the level of wage costs low. A general
freeze on wage increases was in effect in the Ford-Werke from
1941 on. However, the biggest profit margins could be achieved
by means of the use of so-called Ostarbeiter [forced
workers from Eastern Europe].
55
|
|
The thousands of foreign forced labourers put to work in the Ford-Werke
were forced to slave away every day except Sunday for twelve hours,
and for this they received no wage whatsoever. Presumably even
worse was the treatment reserved for the relatively small number
of inmates of the concentration camp of Buchenwald, who were made
available to the Ford-Werke in the summer of 1944. (Research
Findings, 4572) |
47 |
In contrast to the Ford-Werke, Opel
never used concentration camp inmates, at least not in the firm's
main plants in Rüsselsheim and Brandenburg. The German subsidiary
of GM, however, did have an insatiable
appetite for other types of forced labour, such as POWs.
Typical of the use of slave labour in the Opel factories, particularly
when it involved Russians, writes historian Anita Kugler, were
"maximum exploitation, the worst possible treatment, and...capital
punishment even in the case of minor offences." The Gestapo was
in charge of supervising the foreign labourers.
56
|
48 |
A Licence to Work for the Enemy
|
|
In the US, the parent corporations of German
subsidiaries worked very hard to convince the American public
of their patriotism, so that no ordinary American would have thought
that GM, for example, which financed anti-German
posters at home, was involved on the distant banks of the Rhine
in activities that amounted to treason.
57
|
49 |
Washington was far better informed
than John Doe, but the American government observed the unwritten
rule stipulating that "what is good for General Motors is good
for America," and turned a blind eye to the fact that American
corporations accumulated riches through their investments in,
or trade with, a country with which the US
was at war. This had a lot to do with the fact that corporate
America became even more influential in Washington during the
war than it had been before; indeed, after Pearl Harbor representatives
of "big business" flocked to the capital in order to take over
many important government posts. Supposedly they were motivated
by sterling patriotism and offered their services for a pittance,
and they became known as "dollar-a-year men." Many, however, appeared
to be there in order to protect their German assets. Former GM
president William S. Knudsen, an outspoken admirer of Hitler since
1933 and friend of Göring, became director of the Office
of Production Management. Another GM executive,
Edward Stettinius Jr., became Secretary of State, and Charles
E. Wilson, president of General Electric, became "the powerful
number-two man at the War Production Board."
58
Under these circumstances, is it any wonder that the American
government preferred to look the other way while the country's
big corporations squirreled in the land of the German enemy? In
fact, Washington virtually legitimated these activities. Barely
one week after the Japanese attack on Pearl Harbor, on 13 December
1941, President Roosevelt himself discreetly issued an edict allowing
American corporations to do business with enemy countries
or with neutral countries that were friendly with enemies
by means of a special authorization.
59
This order clearly contravened the supposedly strict laws against
all forms of "trading with the enemy." |
50 |
Presumably, Washington could not
afford to offend the country's big corporations, whose expertise
was needed in order to bring the war to a successful end. As Charles
Higham has written, Roosevelt's administration "had to get into
bed with the oil companies [and with the other big corporations]
in order to win the war." Consequently, government officials systematically
turned a blind eye to the unpatriotic conduct of American investment
capital abroad, but there were some exceptions to this general
rule. "In order to satisfy public opinion," writes Higham, token
legal action was taken in 1942 against the best-known violator
of the "trading with the enemy" legislation, Standard Oil. But
Standard pointed out that it "was fueling a high percentage of
the Army, Navy, and Air Force, [thus] making it possible for America
to win the war." The Rockefeller enterprise eventually agreed
to pay a minor fine "for having betrayed America" but was allowed
to continue its profitable commerce with the enemies of the United
States.
60
A tentative investigation into IBM's arguably
treasonous activities in the land of the Nazi enemy was similarly
aborted because the US needed IBM
technology as much as the Nazis did. Edwin Black writes: "IBM
was in some ways bigger than the war." Both sides could not afford
to proceed without the company's all-important technology. "Hitler
needed IBM. So did the Allies." (Black,
333, and 348) Uncle Sam briefly wagged a finger at Standard Oil
and IBM, but most owners and managers of
corporations who did business with Hitler were never bothered
at all. The connections of ITT's Sosthenes
Behn with Nazi Germany, for example, were a public secret in Washington,
but he never experienced any difficulties as a result of them. |
51 |
Meanwhile, it would appear that
the headquarters of the Western Allies were keen to go as easy
as possible on the American-owned enterprises in Germany. According
to German expert Hans G. Helms, Bernard Baruch, a high-level advisor
to President Roosevelt, had given the order not to bomb certain
factories in Germany, or to bomb them only lightly; it is hardly
surprising that the branch plants of American corporations fell
into this category. And indeed, while Cologne's historical city
centre was flattened in repeated bombing raids, the large Ford
factory on the outskirts of the city enjoyed the reputation of
being the safest place in town during air attacks, although some
bombs did of course occasionally fall on its properties. (Billstein
et al, 98-100)
61
|
52 |
After the war GM
and the other American corporations that had done business in
Germany were not only not punished, but even compensated for damages
suffered by their German subsidiaries as a result of Anglo-American
bombing raids. General Motors received 33 million dollars and
ITT 27 million dollars from the American
government as indemnification. The Ford-Werke had suffered relatively
little damage during the war, and had received more than 100,000
dollars in compensation from the Nazi regime itself; Ford's branch
plant in France, meanwhile, had managed to wrest an indemnification
of 38 million francs from the Vichy Regime. Ford nevertheless
applied in Washington for 7 million dollars worth of damages,
and after much wrangling received a total of 785,321 dollars "for
its share of allowable losses sustained by Ford-Werke and Ford
of Austria during the war," which the company has acknowledged
in its recently published report. (Research Findings, 109) |
53 |
Corporate America and Post-War Germany
|
|
When the war in Europe ended, corporate America was well positioned
to help determine what would happen to defeated Germany in general,
and to their German assets in particular. Long before the guns
fell silent, Allan Dulles from his observation post in Berne,
Switzerland, established contact with the German associates of
the American corporations he had earlier served as a lawyer in
Sullivan & Cromwell, and as Patton's tanks pushed deep into the
Reich in the spring of 1945, ITT boss Sosthenes
Behn donned the uniform of an American officer and rode into defeated
Germany to personally inspect his subsidiaries there. More importantly
the administration in the US occupation
zone of Germany teemed with representatives of firms such as GM
and ITT.
62
They were there, of course, to ensure that Corporate America would
continue to enjoy the full usufruct of its profitable investments
in defeated and occupied Germany. |
54 |
One of their first concerns was
to prevent the implementation of the Morgenthau Plan. Henry Morgenthau
was Roosevelt's secretary of the Treasury, who had proposed to
dismantle German industry, thereby transforming Germany into a
backward, poor, and therefore harmless agrarian state. The owners
and managers of corporations with German assets were keenly aware
that implementation of the Morgenthau Plan meant the financial
death knell for their German subsidiaries; so they fought it tooth
and nail. A particularly outspoken opponent of the plan was Alfred
P. Sloan, the influential chairman of the board of GM.
Sloan, other captains of industry, and their representatives and
contacts in Washington and within the American occupation authorities
in Germany, favoured an alternative option: the economic reconstruction
of Germany, so that they would be able to do business and make
money in Germany, and eventually they got what they wanted. After
the death of Roosevelt, the Morgenthau Plan was quietly shelved,
and Morgenthau himself would be dismissed from his high-ranking
government position on 5 July 1945 by President Harry Truman.
Germany or at least the western part of Germany
would be economically reconstructed, and US
subsidiaries would turn out to be major beneficiaries of this
development.
63
|
55 |
The American occupation authorities
in Germany in general, and the agents of American parent companies
of German subsidiaries within this administration in particular,
faced another problem. After the demise of Nazism and of European
fascism in general, the general mood in Europe was and
would remain for a few short years decidedly anti-fascist
and simultaneously more or less anti-capitalist, because it was
widely understood at that time that fascism had been a manifestation
of capitalism. Almost everywhere in Europe, and particularly in
Germany, radical grassroots associations, such as the German anti-fascist
groups or Antifas, sprang up spontaneously and became influential.
Labour unions and left-wing political parties also experienced
successful comebacks; they enjoyed wide popular support when they
denounced Germany's bankers and industrialists for bringing Hitler
to power and for collaborating closely with his regime, and when
they proposed more or less radical anti-capitalist reforms such
as the socialization of certain firms and industry sectors. Such
reform plans, however, violated American dogmas regarding the
inviolability of private property and free enterprise, and were
obviously a major source of concern to American industrialists
with assets in Germany.
64
|
56 |
The latter were also aghast at the
emergence in Germany of democratically elected "works' councils"
that demanded input into the affairs of firms. To make matters
worse, the workers frequently elected Communists to these councils.
This happened in the most important American branch plants, Ford-Werke
and Opel. The Communists played an important role in Opel's work's
council until 1948, when GM officially
resumed Opel's management and promptly put an end to the experiment. |
57 |
The American authorities systematically
opposed the anti-fascists and sabotaged their schemes for social
and economic reform at all levels of public administration as
well as in private business. In the Opel plant in Rüsselsheim,
for example, the American authorities collaborated only reluctantly
with the anti-fascists, while doing everything in their power
to prevent the establishment of new labour unions and to deny
the works' councils any say in the firm's management. Instead
of allowing the planned democratic "bottom-up" reforms to blossom,
the Americans proceeded to restore authoritarian "top-down" structures
wherever possible. They pushed the anti-fascists aside in favour
of conservative, authoritarian, right-wing personalities, including
many former Nazis. At the Ford-Werke in Cologne, anti-fascist
pressure forced the Americans to dismiss the Nazi general manager
Robert Schmidt, but thanks to Dearborn and the American occupation
authorities he and many other Nazi managers were soon firmly back
in the saddle.
65
|
58 |
Capitalism, Democracy, Fascism, and War
|
|
"About the things one cannot speak
about, one ought to remain silent," declared the famous philosopher
Wittgenstein, and a colleague, Max Horkheimer, paraphrased him
with regard to the phenomenon of fascism and its German variety,
Nazism, by emphasizing that if one wants to talk about fascism,
one cannot remain silent about capitalism. Hitler's Third
Reich was a monstrous system made possible by Germany's top business
leaders, and while it proved a catastophe for millions of people,
it functioned as a Nirvana for corporate Germany. Foreign-owned
enterprises were also allowed to enjoy the wonderful services
Hitler's regime rendered to das Kapital, such as the elimination
of all workers' parties and labour unions, a rearmament program
that brought them immense profits, and a war of conquest that
eliminated foreign competition and provided new markets, cheap
raw materials, and an unlimited supply of even cheaper labour
from POWs, foreign slave labourers, and
concentration camp inmates. |
59 |
The owners and managers of America's
leading corporations admired Hitler because in his Third Reich
they could make money like nowhere else, and because he stomped
on German labour and swore to destroy the Soviet Union, homeland
of international communism. Edwin Black wrongly believes that
IBM was atypical of American corporations
in flourishing from capitalism's great fascist feast on the banks
of the Rhine. Many, if not all of these corporations, took full
advantage of the elimination of labour unions and left-wing parties
and the orgy of orders and profits made possible by rearmament
and war. They betrayed their country by producing all sorts of
equipment for Hitler's war machine even after Pearl Harbor,
and they objectively helped the Nazis to commit horrible crimes.
These technicalities, however, did not seem to perturb the owners
and managers in Germany and even in the US,
who were aware of what was going on overseas. All that mattered
to them, clearly, was that unconditional collaboration with Hitler
allowed them to make profits like never before; their motto might
well have been: "profits über Alles." |
60 |
After the war, the capitalist masters
and associates of the fascist monster distanced themselves à
la Dr. Frankenstein from their creature, and loudly proclaimed
their preference for democratic forms of government. Today, most
of our political leaders and our media want us to believe that
"free markets" a euphemistic code word for capitalism
and democracy are Siamese twins. Even after World War II,
however, capitalism, and especially American capitalism, continued
to collaborate cozily with fascist regimes in countries such as
Spain, Portugal, Greece, and Chile, while supporting extreme-right
movements, including death squads and terrorists, in Latin America,
Africa, and elsewhere. One might say that in the headquarters
of the corporations, whose collective interest is clearly reflected
in American government policies, nostalgia has lingered on for
the good old days of Hitler's Third Reich, which was a paradise
for German as well as American and other foreign firms: no left-wing
parties, no unions, unlimited numbers of slave labourers, and
an authoritarian state that provided the necessary discipline
and arranged for an "armament boom" and eventually a war that
brought "horizonless profits," as Black writes, alluding to the
case of IBM. These benefits could more
readily be expected from a fascist dictatorship than from a genuine
democracy, hence the support for the Francos, Suhartos, and other
Pinochets of the post-war world. But even within democratic societies,
capitalism actively seeks the cheap and meek labour that Hitler's
regime served up on a silver platter, and recently it has been
by means of stealthy instruments such as downsizing and globalization,
rather than the medium of fascism, that American and international
capital have sought to achieve the corporate Nirvana of which
Hitler's Germany had provided a tantalizing foretaste. |
61 |
Notes
1 Michael Dobbs,
"US Automakers Fight Claims of Aiding Nazis," The International
Herald Tribune, 3 December 1998.
2 David F. Schmitz,
"'A Fine Young Revolution': The United States and the Fascist
Revolution in Italy, 19191925," Radical History Review,
33 (September 1985), 11738; and John P. Diggins, Mussolini
and Fascism: The View from America (Princeton 1972).
3 Gabriel Kolko,
"American Business and Germany, 19301941," The Western
Political Quarterly, 25 (December 1962), 714, refers to
the "'skepticism' displayed by the American business press with
respect to Hitler because he was 'a political and economic nonconformist.'"
4 Neil Baldwin,
Henry Ford and the Jews: The Mass Production of Hate
(New York 2001), especially 17291.
5 Charles Higham,
Trading with the Enemy: An Exposé of The Nazi-American
Money Plot 19331949 (New York 1983), 162.
6 Webster G. Tarpley
and Anton Chaitkin, "The Hitler Project," chapter 2 in George
Bush: The Unauthorized Biography (Washington 1991). Available
online at <
http://www.tarpley.net/bush2.htm>.
7 Mark Pendergrast,
For God, Country, and Coca-Cola: The Unauthorized History
of the Great American Soft Drink and the Company that Makes
It (New York 1993), 221.
8 Cited in Manfred
Overesch, Machtergreifung von links: Thüringen 1945/46
(Hildesheim Germany 1993), 64.
9 Knudsen described
Nazi Germany after a visit there in 1933 as "the miracle of
the twentieth century." Higham, Trading With the Enemy,
163.
10 Stephan H.
Lindner, Das Reichskommissariat für die Behandlung feindliches
Vermögens im Zweiten Weltkrieg: Eine Studie zur Verwaltungs-,
Rechts- and Wirtschaftsgeschichte des nationalsozialistischen
Deutschlands (Stuttgart 1991), 121; Simon Reich, The
Fruits of Fascism: Postwar Prosperity in Historical Perspective
(Ithaca, NY and London 1990), 109, 117, 247; and Ken Silverstein,
"Ford and the Führer," The Nation, 24 January 2000,
116.
11 Cited in Michael
Dobbs, "Ford and GM Scrutinized for Alleged Nazi Collaboration,"
The Washington Post, 12 December 1998.
12 Tobias Jersak,
"Öl für den Führer," Frankfurter Allgemeine
Zeitung, 11 February 1999.
13 Higham, Trading
With the Enemy, xvi.
14 The authors
of a recent book on the Holocaust even emphasize that "in 1930
anti-Semitism was much more visible and blatant in the United
States than in Germany." See Suzy Hansen's interview with Deborah
Dwork and Robert Jan Van Pelt, authors of Holocaust: a History,<
http:/salon.com/books/int/2002/10/02/dwork/index.html.>
15 Henry Ford,
The International Jew: The World's Foremost Problem (Dearborn,
MI n.d.); and Higham, Trading With the Enemy, 162.
16 Aino J. Mayer,
Why Did the Heavens not Darken? The Final Solution in History
(New York 1988).
17 Neil Baldwin,
Henry Ford and the Jews: The Mass Production of Hate,
279; and Higham, Trading With the Enemy, 161.
18 Upton Sinclair,
The Flivver King: A Story of Ford-America (Pasadena,
CA 1937), 236.
19 Higham, Trading
With the Enemy, 1624.
20 See Bernd Martin,
Friedensinitiativen und Machtpolitik im Zweiten Weltkrieg
19391942 (Düsseldorf 1974); and Richard Overy,
Russia's War (London 1998), 345.
21 See Clement
Leibovitz and Alvin Finkel, In Our Time: The Chamberlain-Hitler
Collusion (New York 1998).
22 John H. Backer,
"From Morgenthau Plan to Marshall Plan," in Robert Wolfe, ed.,
Americans as Proconsuls: United States Military Governments
in Germany and Japan, 19441952 (Carbondale and Edwardsville,
IL 1984), 162.
23 Mooney is cited
in Andreas Hillgruber, ed., Staatsmänner und Diplomaten
bei Hitler. Vertrauliche Aufzeichnungen über Unterredungen
mit Vertretern des Auslandes 19391941 (Frankfurt am
Main 1967), 85.
24 Anita Kugler,
"Das Opel-Management während des Zweiten Weltkrieges. Die
Behandlung 'feindlichen Vermögens' und die 'Selbstverantwortung'
der Rüstungsindustrie," in Bernd Heyl and Andrea Neugebauer,
ed., "... ohne Rücksicht auf die Verhältnisse":
Opel zwischen Weltwirtschaftskrise and Wiederaufbau, (Frankfurt
am Main 1997), 3568, and 401; "Flugzeuge für
den Führer. Deutsche 'Gefolgschaftsmitglieder' und ausländische
Zwangsarbeiter im Opel-Werk in Rüsselsheim 1940 bis 1945,"
in Heyl and Neugebauer, "... ohne Rücksicht auf die
Verhältnisse," 6992; and Hans G. Helms, "Ford
und die Nazis," in Komila Felinska, ed., Zwangsarbeit bei
Ford (Cologne 1996), 113.
25 Higham, Trading
With the Enemy, 93, and 95.
26 Jersak, "Öl
für den Fühier"; Bernd Martin, "Friedens-Planungen
der multinationalen Grossindustrie (19321940) als politische
Krisenstrategie," Geschichte und Gesellschaft, 2 (1976),
82.
27 Cited in Dobbs,
"U.S. Automakers."
28 Jamie Lincoln
Kitman, "The Secret History of Lead," The Nation, 20
March 2002.
29 Higham, Trading
With the Enemy, 97; Ed Cray, Chrome Colossus: General
Motors and its Times (New York 1980), 315; and Anthony Sampson,
The Seven Sisters: The Great Oil Companies and the World
They Made (New York 1975), 82.
30 David Lanier
Lewis, The Public Image of Henry Ford: an American Folk Hero
and His Company (Detroit 1976), 222, and 270.
31 Ralph B. Levering,
American Opinion and the Russian Alliance, 19391945
(Chapel Hill, NC 1976), 46; and Wayne S. Cole, Roosevelt
and the Isolationists, 193245 (Lincoln, NE 1983),
43334.
32 The hope for
a long, drawn-out conflict between Berlin and Moscow was reflected
in many newspaper articles and in the much-publicized remark
uttered by Senator Harry S. Truman on 24 June 1941, only two
days after the start of Operation Barbarossa, the Nazi attack
on the Soviet Union: "If we see that Germany is winning, we
should help Russia, and if Russia is winning, we should help
Germany, so that as many as possible perish on both sides ...."
Levering, American Opinion, 467.
33 Even as late
as 5 December 1941, just two days before the Japanese strike
against Pearl Harbor, a caricature in Hearst's Chicago Tribune
suggested that it would be ideal for "civilization" if these
"dangerous beasts," the Nazis and the Soviets, "destroyed each
other." The Chicago Tribune caricature is reproduced
in Roy Douglas, The World War 19391943: The Cartoonists'
Vision (London and New York 1990), 86.
34 Clive Ponting,
Armageddon: The Second World War (London 1995), 106;
and Stephen E. Ambrose, Americans at War (New York 1998),
7677.
35 Jersak, "Öl
fürden Führer." Jersak used a "top secret" document
produced by the Wehrmacht Reichsstelle für Mineralöl,
now in the military section of the Bundesarchiv (Federal
Archives), File RW 19/2694. See also Higham, Trading With
the Enemy, 5961.
36 James V. Compton,
"The Swastika and the Eagle," in Arnold A. Offner, ed., America
and the Origins of World War II, 19331941 (New York
1971), 17983; Melvin Small, "The 'Lessons' of the Past:
Second Thoughts about World War II," in Norman K. Risjord ,
ed., Insights on American History. Volume II (San Diego
1988), 20; and Andreas Hillgruber, ed., Der Zweite Weltkrieg
19391945: Kriegsziele und Strategie der Grossen Mächte,
5th ed., (Stuttgart 1989), 834.
37 Helms, "Ford
und die Nazis," 114.
38 Helms, "Ford
und die Nazis," 145; and Higham, Trading With the Enemy,
1045.
39 Silverstein,
"Ford and the Führer," 156; and Lindner, Das Reichskommüsariet,
121.
40 Kugler, "Das
Opel-Management," 52, 61 ff., and 67; and Kugler, "Flugzeuge,"
85.
41 Snell, "GM
and the Nazis," Ramparts, 12 (June 1974), 1415;
Kugler, "Das Opel-Management," 53, and 67; and Kugler, "Flugzeuge,"
89.
42 Higham, Trading
With the Enemy, 112.
43 Higham, Trading
With the Enemy, 99.
44 Lindner, Das
Reichskommissariet, 104.
45 Silverstein,
"Ford and the Führer," 12, and 14; Helms, "Ford und die
Nazis," 115; and Reich, The Fruits of Fascism, 121, and
123.
46 Silverstein,
"Ford and the Führer," 1516.
47 Kugler, "Das
Opel-Management," 55, and 67; and Kugler, "Flugzeuge," 85.
48 Communication
of A. Neugebauer of the city archives in Rüsselsheim to
the author, 4 February 2000; and Lindner, Das Reichskommissariat,
12627.
49 Helms, "Ford
und die Nazis," 115.
50 Gian Trepp,
"Kapital über alles: Zentralbankenkooperation bei der Bank
für Internationalen Zahlungsausgleich im Zweiten Weltkrieg,"
in Philipp Sarasin und Regina Wecker, eds., Raubgold, Reduit,
Flüchtlinge: Zur Geschichte der Schweiz im Zweiten Weltkrieg
(Zürich 1998), 7180; Higham, Trading With the
Enemy, 119 and 175; Anthony Sampson, The Sovereign
State of ITT (New York 1973), 47; "VS-Banken collaboreerden
met nazi's," Het Nieuwsblad, Brussels, 26 December 1998;
and William Clarke, "Nazi Gold: The Role of the Central Banks
Where Does the Blame Lie?," Central Banking, 8, (Summer
1997),<
http://www.centralbanking.co.uk/cbv8n11.html.>
51 Bernt Engelmann,
Einig and gegen Recht und Freiheit: Ein deutsches Anti-Geschichtsbuch
(München 1975), 2634; Marie-Luise Recker, "Zwischen
sozialer Befriedung und materieller Ausbeutung: Lohn- und Arbeitsbedingungen
im Zweiten Weltkrieg," in Wolfgang Michalka, ed., Der Zweite
Weltkrieg. Analysen, Grundzüge, Forschungsbilanz (Munich
and Zürich 1989), 43044, especially 436.
52 Lindner, Das
Reichkommissariat, 118.
53 Pendergrast,
For God, Country, and Coca-Cola, 228.
54 "Ford-Konzern
wegen Zwangsarbeit verklagt," Kölner Stadt-Anzeiger,
6 March 1998 as cited in Antifaschistisck Nochrichten,
6 (1998),<
http://www.antifaschistischenachricten.de/1998/06/010.htm.>
55 Karola Fings,
"Zwangsarbeit bei den Kölner Ford-Werken," in Felinska,
Zwangsarbeit bei Ford, (Cologne 1996), 108. See also
Silverstein, "Ford and the Führer," 14; and Billstein et
al., 535, 13556.
56 Kugler, "Das
Opel-Management," 57; Kugler, "Flugzeuge," 726, quotation
from 76; and Billstein et al., 535.
57 GM-financed
patriotic posters may be found in the Still Pictures Branch
of the National Archives in Washington, DC.
58 Michael S.
Sherry, In the Shadow of War:The United States Since the
1930s (New Haven and London 1995), 172.
59 Higham, Trading
With the Enemy, xv, and xxi.
60 Higham, Trading
With the Enemy, 446.
61 Helms, "Ford
und die Nazis," 1156; Reich, The Fruits of Fascism,
1245; and Mira Wilkins and Frank Ernest Hill, American
Business Abroad: Ford on Six Continents (Detroit 1964),
3446.
62 Higham, Trading
With the Enemy, 21223; Carolyn Woods Eisenberg, "U.S.
Policy in Post-war Germany: The Conservative Restoration," Science
and Society, 46 (Spring 1982), 29; Carolyn Woods Eisenberg,
"The Limits of Democracy: US Policy and the Rights of German
Labor, 19451949," in Michael Ermarth, ed., America
and the Shaping of German Society, 19451955 (Providence,
RI and Oxford 1993), 634; Billstein et al., 9697;
and Werner Link, Deutsche und amerikanische Gewerkschaften
und Geschäftsleute 19451975: Eine Studie über
transnationale Beziehungen (Düsseldorf 1978), 10006,
and 88.
63 Gabriel Kolko,
The Politics of War: The World and United States Foreign
Policy, 19431945 (New York 1968), 331, and 3489;
Wilfried Loth, Stalins ungeliebtes Kind: Warum Moskau die
DDR nicht wollte (Berlin 1994), 18; Wolfgang Krieger, "Die
American Deutschlandplanung, Hypotheken und Chancen für
einen Neuanfang," in Hans-Erich Volkmann, ed., Ende des Dritten
Reiches Ende des Zweiten Weltkriegs: Eine perspektivische
Rückschau (Munich and Zürich 1995), 36, and 401;
and Lloyd C. Gardner, Architects of Illusion: Men and Ideas
in American Foreign Policy 19411949 (Chicago 1970),
2501.
64 Kolko, The
Politics of War, 50711; Rolf Steininger, Deutsche
Geschichte 19451961: Darstellung und Dokumente in zwei
Bänden. Band 1 (Frankfurt am Main 1983), 1178;
Joyce and Gabriel Kolko, The Limits of Power: The World and
United States Foreign Policy, 19451954 (New York 1972),
1256; Reinhard Kühnl, Formen bürgerlicher
Herrschaft: Liberalismus Faschismus (Reinbek bei
Hamburg 1971), 71; Reinhard Kühnl, ed., Geschichte und
Ideologie: Kritische Analyse bundesdeutscher Geschichtsbücher,
second edition (Reinbek bei Hamburg 1973), 1389; Peter
Altmann, ed., Hauptsache Frieden. Kriegsende-Befreiung-Neubeginn
19451949: Vom antifaschistischen Konsens zum Grundgesetz
(Frankfurt-am-Main, 1985), 58 ff.; and Gerhard Stuby, "Die Verhinderung
der antifascistisch-demokratischen Umwälzung und die Restauration
in der BRD von 19451961," in Reinhard Kühnl, ed.,
Der bürgerliche Staat der Gegenwart: Formen bürgerlicher
Herrschaft II (Reinbek bei Hamburg 1972), 91101.
65 Silverstein,
"Ford and the Führer," 156; and Lindner, Das Reichskommissariat,
121.
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