Blood Money: American Business and Nazi Collaboration

The story of the United States and its relationship to the Second World War is often presented as a tale of epic triumph, the one monumental conflict in which truly we stood as the defenders of good against the forces of evil; one nation united in the fight against fascism. And yet the mural we paint of the “Greatest Generation” often overlooks our own relationship with virulent antisemitism, racism, and eugenics that did, in fact, inspire Hitler’s own monstrous regime. While the public at large might have rejected fascism, prominent celebrities, politicians, and businessmen had sympathies and even in some cases ties to the Third Reich. This piece will be one in an ongoing series that reviews the connections between Fascism and America, both before, during, and after the second world war.

 I feel it is worth revisiting this facet of American history through the story of Prescott Bush, father and grandfather to future presidents George HW and George W respectively; and the family patriarch whose fortunes would aid in building the foundation for his successor’s political future. The argument being made is not to try and throw the legacy of the Bush family into the shame through ad-hominem attacks and conspiracy theories; quite the opposite, their numerous policy decisions and blunders have cemented their place in history. As a trove of declassified evidence from the National Archive has demonstrated over the last 20 years, Prescott Bush’s auspicious ties to Hitler’s Germany are much more grounded in reality than previously understood. Using a combination of primary sources via documents available to the public in the National Archives, as well as secondary sources providing the historical framework that explains how and why America’s moguls collaborated with the Reich, we begin to form a picture of greed, virulent anti-communism, and at times genuine Nazi sympathies. The “Good War”, it seems, was far from it.

An Air of Resentment

With an economy in ruins and a society in political upheaval, the newly formed Weimar Republic found itself indebted to various western financial institutions, primarily out of the United States and Great Britain. The Bank for International Settlements (BIS) in Switzerland was established after the first World War to channel war reparations between the US and Germany. Over time, banks like BIS would function for more than debt payment and the gradual transfer of US treasury bonds between the two nations throughout the 1920s and ’30s. As the Weimar Republic fell and the Third Reich rose, the bank continued to offer financial services to support their regime. Germany would not only receive an unabated flow of cash but an atmosphere of tolerance over the Nazi party’s programs of racial purity and discrimination.

The conditions for Nazi sympathies were ripe in Post-WWI America. Antisemitism had festered, with some associating Jews with communism and radical ideologies, while others believed that they exerted too much influence in entertainment, business, and academia. Harvard responded by cutting admission of freshmen Jews from 28% in 1925 to 12% in 1933. Beyond crude racism was the country’s growing acceptance of eugenics, evidenced by then-Governor of New Jersey Woodrow Wilson’s adoption of a law that sterilized convicts, epileptics, and the ‘feeble-minded’. Some 60,000 Americans would be sterilized by similar programs across the US. The programs, of course, had a reciprocal effect on the ideas of Adolf Hitler, who admired the country’s stance towards biological and racial purity but saw these as only half-measures. Hatred of the Soviet Union also extended into perceptions of politicians at home as “socialistic”, with most America businessmen denouncing Roosevelt’s New Deal as an authoritarian seizure of the economy. Corporate Anti-Semites smeared Roosevelt as a crypto-Communist and an agent of Jewish interests; they would refer to him as “Rosenfeld”, and vilified the New Deal as the “Jew Deal”. In Upton Sinclair’s novel The Flivver King, he describes the notorious anti-semite Henry Ford as dreaming of:

An American fascist movement 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.

Motivated by hatred of communism, fascist sympathies, or simply greed, the upper echelons of American society would protect their wealth and status at any cost, even if it meant collaborating with the enemy.

The Fascist Connection

Prescott Bush’s foray into the banking sector began shortly after World War I, when he married the daughter of wealthy business magnate George Herbert Walker in 1921. Walker’s background in investment banking led him into a partnership with Averill and Roland Harriman, sons of railroad tycoon E H Harriman, in New York. Bringing on Bush as a founding member, the group established the Union Banking Corporation (UBC) in 1924. By 1931 Bush and the Harrimans would start the Brown Brothers Harriman (BBH) firm to oversee the UBC and their holdings in other German industries. The bank’s foremost client starting at its inception and continuing well into the war years would be Fritz Thyssen, heir to the most prominent industrial fortune in Germany. His father August had been a major contributor to the country’s first war effort, and by the 1920’s his sons Fritz and Heinrich had devised an interweaving web of offshore companies and banks so that their assets could be moved overseas if they were ever threatened. Fritz had inherited his father’s empire by 1926, at a time when the German economy was in the midst of collapse.

Thyssen’s influence on the success of Adolf Hitler cannot be understated. On the advice of former General Eric Ludendorff, he attended a speech given Hitler and his fledgling Nazi Party in 1923. Impressed, Thyssen became one of the early financial backers of the Nazis, claiming to have donated 1 million Reichsmarks to various right-wing parties. His contributions would bail out the struggling movement in its early years, helping to finance their future headquarters in Briennerstrasse, Munich, and even co-authoring a letter with Nazi Finance Minister Hjalmar Schacht, urging President Paul von Hindenburg to appoint Hitler as Chancellor. Thyssen’s monied contributions and political maneuvering would prove crucial, and for his assistance, he was elected a Nazi member of the Reichstag and appointed to the Council of State of Prussia. It could be argued that the UBC was unaware of Thyssen’s actions, his aid to the Nazis not revealed until he himself had fled the country in 1939, shortly after the invasion of Poland. But through a combination of Thyssen’s own testimony in his autobiography, I Paid Hitler and a trove of documentation uncovered in the last 60 years, the knowledge of a fascist alliance may have been a key component in concealing the funds.

While there was nothing initially illegal in conducting business with the Thyssens, and indeed many American companies had German subsidiaries in the country throughout the 1930s, the United States’ neutrality would end by 1941 after the attack on Pearl Harbor. By July of 1942, the New York Herald-Tribune ran a piece titled “Hitler’s Angel has $3m in US Bank,” alluding to the UBC’s massive transfers of gold, fuel, steel and coal purchases to and from Germany. The newly minted Alien Property Commission (APC) would seize those assets the following fall under the Trading with the Enemy Act. In findings undertaken by Erwin May, an investigative officer for the APC, it was revealed that Harriman, Bush, and the other directors did not own shares of UBC but merely held them on the behalf of the Dutch Bank voor Handel. Equally curious was that the UBC’s Dutch President Cornelies Lievense repeatedly denied to U.S investigators any knowledge of the ownership of either the Netherlands Bank or the true owners of its American shell company. By the end of 1942 May had found a connection between Director Roland Harriman and HJ Kouwenhoven, who had consulted the former in 1924 to set up the Union Banking Corporation. Kouwenhoven also had several other assignments; he was the managing director of voor Handel, an August-Thyssen owned bank in Berlin, and the director of Fritz Thyssen’s Union Steel Works, the heart of the family’s industrial possessions. There was not only clear knowledge of this partnership among the founders of UBC but proof that the bank was, in reality, a clearinghouse that had partly ensured Germany would be financed for its war effort. A memo from Homer Jones, chief of the APC Investigation, outlines it in the following memo that recommends the seizure of UBC assets:

Said stock is held by the above named individuals, however, solely as nominees for the Bank voor Handel, Rotterdam, Holland, which is owned by one or more of the Thyssen family, nationals of Germany and Hungary. The 4,000 shares hereinbefore set out are therefore beneficially owned and help for the interests of enemy nationals, and are vestible by the APC (September 1942)

Despite Jones’ recommendation, UBC remained intact and the assets were returned to American shareholders by the end of the war. No further action was ever taken nor did the investigation continue, a shocking decision when it remains clear that the investigation had established a link between an American bank acting as an intermediary for the Thyssen family’s enterprises, eight months after America had entered the war. Further suspicions have been raised as a result of documents unveiled at the National Archives, on the connections between Prescott Bush, Thyssen, and the Consolidated Silesian Steel Company (CSSC), which played an integral role in the use of slave labor at Auschwitz. The Archives show that not only did the Brown Brothers Harriman firm own shares in the CSSC during the 1930s, but that fellow BBH partner Knight Wooley had recommended consulting the prestigious law firm Sullivan and Cromwell to “deal with the issue of Polish laborers” in their offshore business. In his letter, he says he’s consulted John Foster Dulles, a partner at S&C and future Secretary of State under Dwight Eisenhower. Beyond historians and journalists’ own speculation, no legal action would come of the ties between American financial and legal institutions in covering up their role in Nazi Germany.

Closing Thoughts

The story of George HW Bush’s grandfather is one that is far from atypical, in a larger pattern of US enterprises who took no issue in doing business after the Third Reich emerged.  Ford, GM, Alcoa, ITT, Standard Oil, General Electric, Dupont, Kodak, Pratt and Whitney, Douglas, Westinghouse, United Fruit Company, International Harvester, and Singer all traded with Germany up until 1941. The “Arsenal of Democracy” that Roosevelt would tout mysteriously found its way into the hands of the Wehrmacht, in no small part due to continued contributions from the German subsidiaries of Ford and GM. Other financial institutions, most notably the Swiss Bank for International Settlements, Morgan Bank, and Chase Bank would all cloak their dealings with Germany during this time, allowing continued access to wealth and assets that would’ve normally been in blocked accounts.

Collaboration with the Nazis is considered a taboo subject, often reserved for discussions on the fringes of historical discourse due to its unsettling implications, and embraced by conspiracy theorists that seek to discredit existing facts. Most recent stories regarding action against Germany’s financiers re-emerged in the late 1990s and early 2000s, when Holocaust survivors suing Swiss and American corporations for their complicity and the theft of Jewish wealth. A prominent case was renewed in 2001 by two Holocaust survivors, seeking to use the evidence of material benefit that American businesses gained from the Auschwitz labor camps in a class-action lawsuit. Curiously the case was thrown out by a judge on the grounds that the United States government could not be sued on the principle of “state sovereignty”; a concept that seems to benefit the US when held to account, but vanishing when interfering in another nation’s affairs. The discussion over collaboration with fascist governments is largely a relic of the past, few recognizing the present day parallels in neo-fascist governments that have taken hold, from Brazil to Turkey to the Philippines. History’s value as a tool of hindsight has been stated by more accredited scholars, so we must ask why our own memory of Nazi collaboration has been obfuscated. Despite the liberal values that America will profess, when our industrial class is confronted with a horrid regime that promises union-busting, privatization, and the unfettered flow of capital: Money will bleed for Fascism.


PS: Expect an audio version of this article up soon!

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