In the 1930s, UK and US Business Ties to Nazi Germany. Churchill’s “Admiration” of Adolph Hitler

 

In the 1930s, UK and US Business Ties to Nazi Germany. Churchill’s “Admiration” of Adolph Hitler

Early this century Winston Churchill was voted “the greatest Briton of all time” in a nationwide British poll, which attracted more than a million votes, as he finished ahead of figures like the naturalist Charles Darwin.

It is little known, however, that Churchill had favourably viewed European fascism during the 1920s and 1930s; that is, before the expansionist policies of the fascist dictators began to affect British interests.

In October 1937, almost five years into Adolf Hitler’s dictatorship in Germany, Churchill wrote in the Evening Standard about, “The story of that struggle” regarding Hitler’s rise to power which

“cannot be read without admiration for the courage, the perseverance, and the vital force which enabled him [Hitler] to challenge, defy, conciliate or overcome, all the authority or resistances which barred his path”.

Churchill refused to criticise either Hitler’s brutal suppression of those who opposed him, nor his erecting of concentration camps, which by 1934 were under the direct control of the SS.

Churchill continued that “history is replete with examples of men who have risen to power by employing stern, grim and even frightful methods” but “when their life is revealed as a whole, have been regarded as great figures whose lives have enriched the story of mankind. So may it be with Hitler”.

Less than four years later, by June of 1941, Churchill was calling Hitler over the radio “a monster of wickedness, insatiable in his lust for blood and plunder”, because as can be safely assumed, Hitler was directly challenging Britain’s diminishing empire and her financial concerns.

Stalin, Roosevelt and Churchill in Tehran. (Public Domain)

Through the 1930s Churchill had wanted to accommodate Hitler, while forming a solid alliance between Britain, France, Belgium and the Netherlands, which he hoped would deter the Third Reich from advancing westwards. Churchill suggested as much in a May 1936 letter to Violet Bonham-Carter, daughter of former British prime minister Herbert Asquith. Churchill believed there was a good chance these policies would convince the Führer to, instead, turn his military might to the east: against the Soviet Union, a state which Churchill disliked and distrusted considerably more than Nazi Germany; while he professed that “Britain and France would maintain a heavily-armed neutrality”.

The English historian John Simkin wrote, “Churchill believed that the right strategy was to try and encourage Adolf Hitler to order the invasion of the Soviet Union… He expected that Hitler would turn eastwards and attack the Soviet Union, and he proposed that Britain should stand aside while his old enemy Bolshevism was destroyed”. Churchill was one of the few British politicians who had read Hitler’s 1925 book ‘Mein Kampf’, in which the Nazi leader outlined bluntly his aim to conquer vast territories in the east.

Churchill was an admirer of fascist leaders like Benito Mussolini, whom he praised for having “thought of nothing but the lasting good” regarding the Italian people. While visiting Rome in January 1927 Churchill wrote to his wife, “This country gives the impression of discipline, order, goodwill, smiling faces. A happy strict school… The Fascists have been saluting in their impressive manner all over the place”.

During the Spanish Civil War (1936-1939), Churchill’s support for fascism extended to General Franco’s forces, and he was firmly against the left-leaning Republican government. Churchill denounced the Republicans as “a poverty stricken and backward proletariat” that was resisting Franco’s “patriotic, religious and bourgeois forces” who were “marching to re-establish order by setting up a military dictatorship”.

David Lloyd George, a liberal and British prime minister from 1916 to 1922, felt it necessary to visit Nazi Germany in September 1936 to see Hitler. Lloyd George subsequently wrote about his meeting with the dictator in the Daily Express, and he enthused about Hitler being “a national hero who has saved his country from despondency and degradation” while he called him “the George Washington of Germany” and “a born leader of men” who possessed “a magnetic and dynamic personality”.

Admiration for Hitler even came through the British Labour Party, with plaudits pouring forth from George Lansbury, the Labour leader from 1932 to 1935. Like Lloyd George, Lansbury thought it apt to go and see Hitler in the flesh, which he did in April 1937. Lansbury said later, “I think history will regard Hitler as one of the great men of our time” and it was “sheer nonsensical folly” to suggest that he wanted a European war.

The Western corporate world had been enthralled at the investment potential European fascism presented, with its destruction of leftist parties, labour power and trade unions. British and American businessmen flocked at first to Mussolini’s Italy from the early 1920s, a regime that the Western powers would continue supporting, until the commencement of war.

By 1933 the human rights violations in the new Nazi Germany, growing in severity from the opening months of Hitler’s reign, were no obstacle either to Western elites. The Nazis wiped out the democratic threat in Germany, creating what was viewed as a perfect environment for big business to blossom in. Warm ties were developed between the UK’s Conservative-dominated governments and the Hitler dictatorship; particularly through the formation of Anglo-German commercial, industrial and financial relations. In the face of popular pressures in Europe, close links to Hitler’s regime allowed the British establishment a strategy of self-preservation.

On 4 July 1934, Britain’s government and the Third Reich signed the Anglo-German Trade Agreement, regarded as a cornerstone of British policy with the Nazis. Under this deal, the Germans were allowed to accumulate a considerable trade surplus with London – ensuring that Berlin could purchase commodities that would assist in building up its war machine, including the acquisition of mineral resources like rubber and copper, critical to a war industry.

In early December 1934 the influential governor of the Bank of England, Montagu Norman, advanced Hitler a £3 million loan to “facilitate the mobilisation of German commercial credits”. This was a nice gift which sent out another message of British support. The following year, 1935, the Anglo-German Fellowship was founded, through which large British corporations partook in, like Dunlop Rubber, Unilever and Price Waterhouse. The Anglo-German fellowship was an elitist organisation sympathetic to Nazism. Several British MPs, mostly Conservatives, joined this society such as the pro-Nazi Thomas Moore; rather revealingly, among its members too was the aforementioned Montagu Norman, Bank of England governor, and Frank Cyril Tiarks, a director at the Bank of England. The Anglo-German fellowship was forced to dissolve at the outbreak of war.

On 18 June 1935 the UK government, under its new Conservative prime minister Stanley Baldwin, concluded the Anglo-German Naval Agreement. For the time being, this ensured that Britain would retain a much larger navy than the Germans. US-born author Guido Giacomo Preparata, who has studied US-British connections to Hitler’s regime, wrote that with the payment from the Bank of England and the naval agreement secured, “Hitler won from Britain no less than her official and financial military support. The Führer was exultant”.

One of Britain’s foremost arms manufacturers, Vickers-Armstrong, was selling heavy weaponry to Nazi Germany. Herbert Lawrence, chairman of Vickers-Armstrong and a heavily decorated English general, was asked in 1934 to give an assurance that his company was not covertly helping to re-arm the Germans. General Lawrence failed to assuage fears by replying, “I cannot give you assurance in definite terms, but I can tell you that nothing is done without the complete sanction and approval of our own government”.

By 1937, the Third Reich was providing a bigger market for British goods than which existed between any two continents on earth. At the end of the 1930s, with Hitler set to initiate another European war, Britain’s principal trading partner was Nazi Germany. British investment with the Germans significantly rose from 1933, an indication that corporations fare best where the democratic threat is least. This may explain why Conservative governments, usually supportive of corporate investment, had persisted in appeasing Hitler for so long, through fear of losing their most lucrative client.

Churchill was undoubtedly aware of the British-Nazi business relations, and he had been an advocate of appeasement for years. In April 1936, with Hitler’s dictatorship consolidated, Churchill requested that the League of Nations invite Nazi Germany “to state her grievances and her legitimate aspirations” so that “justice may be done and peace preserved”.

This statement came a month after Hitler had invaded the demilitarised Rhineland, in March 1936, a stark violation of the Treaty of Versailles, unjust and all that it was. Shortly afterwards, writing in an article in the Evening Standard, Churchill praised France for not “retaliating with force of arms, as the previous generation would have”, after the Wehrmacht had marched through the Rhineland without a glove laid on it. The Nazis would have been dealt a serious blow, had France’s much larger army reacted with force, but the French government’s response was timid. This did not seem to bother Churchill, however.

Prime minister Baldwin gave a silent nod of approval to Hitler’s march on the Rhineland. London informed Paris that they would not back them militarily over an issue of no concern to them. The British Foreign Secretary Anthony Eden said, “Hitler was only going into his own back garden”, an irresponsible attitude which dismayed France. Baldwin’s successor as British leader, Neville Chamberlain, another Conservative, would in the autumn of 1938 willingly consent to the Munich Agreement – or Munich Betrayal – which dismembered Czechoslovakia and further strengthened the Nazi position in central Europe. Chamberlain thought the prospect of conflict with Germany unnecessary over “a quarrel in a far-away country between people of whom we know nothing”.

The Conservatives’ notorious appeasement of Hitler was backed by US president Franklin Roosevelt. His close adviser Sumner Welles said that the 1938 Munich Agreement provided an opportunity to establish “a new world order based upon justice and upon law”, in which the moderate Hitler, then stepping up his persecution of the Jews, would play a central role.

As with their British counterparts, American corporate leaders invested large sums in the Third Reich. US Secretary of the Navy Frank Knox remarked that, in 1934 and 1935, Hitler received hundreds of state-of-the-art aircraft engines from America. Preceding this in 1933 the US firm, United Aircraft and Transport Corporation, reportedly signed a secret deal with German airplane manufacturer, Junkers, through which $1,775,000 worth of aircraft engines and rifles were sent to Nazi Germany. This US arms deal with Junkers was highlighted on 14 August 1947, by Krasnaya Zvezda, the official newspaper of the Soviet Ministry of Defence; whose report seems plausible but has virtually disappeared from history.

Junkers would construct such military aircraft as the Junkers Ju 88, one of the Luftwaffe’s key fighter planes – while Junkers also built the feared Stuka dive-bomber, the design of which was made possible “with techniques learnt in Detroit”, as Preparata wrote, a senior lecturer in political economy and social sciences.

On 16 March 1935, the day that the Wehrmacht was formally established, Hitler announced that he was introducing conscription, and bolstering the size of his land forces to over half a million men. Nazi Germany was now publicly rearming, though in secret for months she had been gradually augmenting her fighting power, with assistance coming from the US and British centres of power. In July 1934, the Conservative leader Baldwin said of Germany in the House of Commons, “she has every argument in her favour, from her defenceless position in the air, to make herself secure”.

In October 1936 the US Ambassador to Nazi Germany, William Dodd, who was previously a history professor, wrote a letter to president Roosevelt elaborating on US-Nazi business collaboration. In the letter Ambassador Dodd revealed that “more than a hundred American corporations have subsidiaries here [Nazi Germany] or cooperative understandings”. Dodd noted that the US chemical corporation, DuPont, has links to German companies “that are aiding in the armament business”. DuPont’s chief partner was the German chemical corporation IG Farben, which was centrally involved in strengthening the Nazi war machine. IG Farben was later implicated in slave labour practices and the Holocaust.

According to US Ambassador Dodd, the Standard Oil Company (New Jersey sub-company) sent $2 million to Nazi Germany in December 1933. Standard Oil was also making $500,000 a year in helping the Germans to produce ersatz gas, that is synthetic fuel, an important substance for war purposes. Such dealings as this, we can presume, would not have been rebuked by the US State Department. They concluded in 1937 that European fascism was suitable to American economic needs. As early as 1933, the US chargé d’affaires in Berlin wired to Washington that US expectations lay in “the more moderate section” of the Nazi Party “headed by Hitler himself” which appeals “to all civilized and reasonable people” and that seems to have “the upper hand” on its extreme elements..

Ambassador Dodd wrote that US aircraft people had developed relations with the German steel corporation, Krupp; which, like IG Farben, ably supported the Nazi regime while Krupp played a decisive part in strengthening Hitler’s armed forces. The Krupp company was later incriminated in human rights abuses, such as pertaining to slave labour. A month after his ambassadorship in Nazi Germany ended, Dodd acknowledged in a January 1938 interview, “Certain American industrialists had a great deal to do with bringing fascist regimes into being in both Germany and Italy. They extended aid to help fascism occupy the seat of power, and they are helping to keep it there”. 

Moreover, the German business tycoon Gustav Krupp, owner of the company that bore his family’s name, had assisted in bringing Hitler to power in 1933 through his influence. Other powerful German industrialists and bankers had, likewise, performed a part in securing the chancellorship for Hitler, like the magnate Fritz Thyssen (of Thyssen AG steel company) and Hjalmar Schacht (Reichsbank president).

Image on the right: Prescott Bush (Public Domain)

Thyssen, born into one of Germany’s wealthiest families, was introduced to Hitler in 1923 by the country’s former dictator Erich Ludendorff, who persuaded the industrialist to attend a rally where Hitler was to speak. Later on, Thyssen became intimately linked with the New York-based Union Banking Corporation, managed by American banker Prescott Bush, who was also a director at this company which represented Thyssen’s US business interests. Prescott Bush was the father and grandfather of future presidents, George H. W. Bush and George W. Bush.

Prescott Bush, whose dealings with the Nazis lasted until 1942, was a shareholder at a number of other companies connected to Thyssen. Prescott Bush had links to a separate firm that was involved in Nazi slave labour, the Consolidated Silesian Steel Company (CSSC). He made substantial profits from his transactions through Thyssen, who had joined the Nazi Party in December 1931. Thyssen dispensed with hundreds of thousands of Reichsmarks to Hitler’s cause, while he encouraged other industrialists to bankroll the Nazis.

As a result of Prescott Bush’s extensive doings with Thyssen, and therefore the highest echelon of Nazi business, his name is closely linked with Hitler’s rise to power. The money accrued by him in these shady businesses assisted in setting up his son, George H. W. Bush, in the US oil industry from the late 1940s. Prescott Bush would become a senator by 1952.

Schacht, reinstated as Reichsbank president by Hitler and another who contributed financially to the Nazi Party, was a close friend of Montagu Norman, the long-time Bank of England governor. Norman, as stated, had in 1934 sent millions of pounds to the Nazis, and he was a godfather to one of Schacht’s grandchildren. In March and June 1939 the Bank of England, still under Norman’s guidance, helped to sell huge quantities of gold bars that the Nazis had stolen from occupied Czechoslovakia.

A major US manufacturer, the International Harvester Company (IHC), was investing in Germany through selling weaponry there. In the mid-1930s IHC’s dealings with the Nazis was growing by 33% each year, as divulged by IHC president Sydney G. McAllister to Ambassador Dodd.

Other big name US multinationals were profiteering in Nazi Germany, such as Coca-Cola, which had a bottling plant in the city of Essen. Coca-Cola sold 4.5 million cases of its beverage in Germany during 1939, a massive increase from 100,000 such cases in 1933. Coca-Cola was one of the main sponsors of the 1936 Olympic Games in Berlin, an event which aided in legitimising the Nazi state on the international stage. In the summer of 1940, as the Germans conquered most of western and northern Europe, Coca-Cola followed along with other corporations by expanding into Nazi-occupied countries.

General Motors (GM), the world’s largest auto maker and a US multinational, fully bought up an Opel factory in the German city of Rüsselsheim in 1931. General Motors’ dealings with Germany soared from 1933 with Hitler’s takeover – and the company’s president from 1937 to 1940, William S. Knudsen, was an outspoken admirer of Hitler; in September 1938 Knudsen met in person with Hermann Goering, the Luftwaffe commander. Furthermore, a General Motors senior executive, James D. Mooney, saw Hitler on a number of occasions, including after European hostilities began in September 1939. Hitler had awarded Mooney the Order of Merit of the Eagle in August 1938 for his “distinguished service to the Reich”.

Following the D-Day Landings of early June 1944 – with American soldiers capturing their first German vehicles in Normandy, France – they were bemused to discover that many of the Wehrmacht engines were produced by General Motors, along with the mighty Ford Motor Company , another US transnational, and also Opel, owned by General Motors. This might not have been so surprising. The American magnate Henry Ford, founder of the Ford Motor Company and a virulent anti-Semite, was an early fan of Hitler. Ford operations in Germany recorded booming profits, from 25.8 million Reichsmarks in 1933, to 60.4 million Reichsmarks in 1939.

In July 1938 a grateful Hitler awarded Ford the Order of the German Eagle, First Class, the most prestigious decoration that could be granted to a non-German. Hitler had read Ford’s anti-Semitic writings from the early 1920s, which may have had some influence on the Nazi leader.

The powerful US multinational, International Business Machines Corporation (IBM), undertook various deals with the Nazis, under IBM chairman Thomas J. Watson, a Nazi sympathiser. Watson, one of the world’s richest men, saw Hitler at separate times and wrote in a letter to Reichsbank president Schacht outlining “an expression of my highest esteem for himself [Hitler], his country, and his people”. As with Ford, IBM’s ventures in Germany increased sharply after 1933, especially under IBM’s German subsidiary, Dehomag. Having made a profit of $1 million in 1933, Dehomag’s net worth in Germany almost doubled from 7.7 million Reichsmarks in 1934, to 14 million Reichsmarks by late 1938. Dehomag provided the Nazis with the punch-card machine, which was needed to automate production.

Image below: Junkers Ju 87 Ds over the Eastern Front, winter 1943–44 (CC BY-SA 3.0 de)

ITT Corporation, a big US manufacturing firm, had initially secured a 25% share with Focke-Wulf, the German aircraft producer, which would rise to 29% by 1943 – and so ITT, with its main headquarters in New York, was helping to produce military aircraft for the Luftwaffe, even after Hitler had declared war on America in late 1941. Despite Germany now being an enemy of America, ITT was also continuing to provide the Nazis with high-tech communications systems. The ITT founder, US businessman Sosthenes Behn, had met Hitler as long ago as August 1933 – while the historian, Antony C. Sutton, claimed that ITT subsidiaries in Germany funnelled cash to SS chief Heinrich Himmler.

By 1939, at World War Two’s outset, Ford and General Motors’ subsidiaries controlled a remarkable 70% of the automobile market in Germany. That same year the General Motors chairman, Alfred P. Sloan, was forced to defend his business operations with the Nazis, by pointing to the profits that GM were amassing there. Albert Speer, Hitler’s armaments minister from 1942 to 1945, was reported to have admitted that Germany “could not have attempted its September 1939 Blitzkrieg of Poland, without the performance-boosting additive technology provided by Alfred P. Sloan and General Motors”.

In the late 1930s/early 1940s, the Germans were manufacturing arms at more than 60 factories in the Third Reich owned by American capital, according to Nikolay Inozemtsev, a respected Russian economist and journalist; Inozemtsev was later the director for over 15 years at the Institute of World Economy and International Relations, a leading independent research organisation based in Moscow.

The Nazi armaments program, meanwhile, was proving a boom to American corporations, a welcome remedy for unscrupulous businessmen not long after the Great Depression had first hit. A 1940 US Senate investigation revealed that American industrialists – belonging to manufacturers like Pratt & Whitney, Douglas and Bendix Aviation – were freely selling military patents to the Nazis, with the assent of Roosevelt’s government.

President Roosevelt’s position had been compromised. His administration was partly made up of high-level businessmen like Edward Stettinius Jr., a former vice-president at General Motors and chairman of US Steel. Stettinius, who first met Roosevelt in the early 1930s when he was at GM, quickly rose through the ranks of government, becoming Secretary of State before war’s end.

At the time of Japan’s attack on Pearl Harbour in December 1941, US corporate investment in Nazi Germany came to an estimated $475 million. By 1942, of the Wehrmacht’s 350,000 trucks in service, around 33% of them were produced at Ford factories in the Reich. Between 1942 and 1944 the Ford plant in Cologne, for example, constructed about 10,000 half-tracks for the German Army; half-tracks consist of large armoured vehicles, equipped with a mounted machine-gun or cannon, and a half-track can hold half a dozen soldiers at a time.

Many of the Ford-built trucks and half-tracks were being used by German troops on the Eastern front, against the USSR, America’s official ally in the war. Deep-seated ties between US business and the Third Reich can hardly have escaped the Soviets’ attention, as Red Army troops captured large caches of Wehrmacht weaponry from 1942. Newspaper reports connected to the Soviet Ministry of Defence, such as the one mentioned earlier from 1947, simply confirm what the Russians already knew.

Ford previously exported partially assembled trucks to Nazi Germany, which were shipped directly from the US. Construction of these vehicles was completed at the Ford plant in Cologne, and were ready just in time for Hitler’s invasion of Czechoslovakia in March 1939. A US Army report compiled by investigator Henry Schneider, on 5 September 1945, correctly accused Ford manufacturers in Germany of being “an arsenal of Nazism, at least for military vehicles”, having acted with the “consent” of the parent Ford company at headquarters in Dearborn, Michigan.