Tower of Basel: The Shadowy History of the Secret Bank that Runs the World

by Adam LeBor

  2. McKittrick memo, Trip Basel to Lisbon (undated). BIS Archive, Thomas H. McKittrick Papers, Series 2 Business Papers, 2.2, Carton 9, journeys.

  3. Thomas McKittrick interview with R. R. Challener, July 1964. John Foster Dulles Oral History Collection at Seeley G. Mudd Manuscript Library, Princeton University Library, 24.

  4. McKittrick interview, 22.

  5. Choles to Huddle, February 17, 1943. NARA, RG 84, American Legation, Bern, General Records, 1936–1949. 1943: 850–851.6, Box 92.

  6. McKittrick to Harrison, November 15, 1943. NARA, RG 84, American Legation, Bern, General Records, 1936–1949. 1943: 850–851.6, Box 92.

  7. Foley to Morgenthau, June 2 1942. NARA Treasury Department. Author’s collection.

  8. McKittrick interview, 34.

  9. McKittrick interview, 31.

  10. McKittrick to Fraser, April 22, 1941. Thomas H. McKittrick Papers. Harvard Business School, Baker Library Series 2, Carton 8, Folder 18, Reel 18.

  11. McKittrick interview, 31.

  12. Osborne to Donovan, op cit.

  13. McKittrick memo on conversation with von Trott zu Solz, June 10, 1941. BISA Series 2.2 Business papers. Carton 9, confidential memoranda, f.19.

  14. Osborne to Donovan, ibid.

  15. Acceptances for Fraser Dinner for Mr. T. H. McKittrick at the University Club, December 17, 1942. Thomas H. McKittrick Papers. Harvard University Business School, Baker Library, Series 2, Carton 8, Folder 18, Reel 17. See also the work of Jason Weixelbaum, in particular “The Contradiction of Neutrality and International Finance: The Presidency of Thomas H. McKittrick at the Bank for International Settlements in Basel 1940–46,” May 2010, available at http://jasonweixelbaum.wordpress.com/tag/thomas-h-mckittrick, and “Following the Money: An Exploration of the Relationship between American Finance and Nazi Germany,” December 2009, available at http://jasonweixelbaum.wordpress.com/2009/12/21/following-the-money-an-exploration-of-the-relationship-between-american-finance-and-nazi-germany.

  16. William M. Tuttle Jr., “The Birth of an Industry: the Synthetic Rubber ‘Mess’ in World War II,” Technology and Culture, January 1981, 40.

  17. Ibid., 41.

  18. The United States of America vs. Carl Krauch et al (IG Farben trial). U.S. Military Tribunal, Nuremberg, July 30, 1948, 146. Available at http://www.werle.rewi.hu-berlin.de/IGFarbenCase.pdf.

  19. Donald MacLaren, “Description of Work,” undated, ca.1943–1944, author’s collection.

  20. Ibid.

  21. The Standard Oil Company of New Jersey renamed itself Exxon in 1972. Exxon merged with Mobil in 1999 to become Exxon Mobil. The firm’s international trade name is Esso—the phonetic transcribing of S-O, the initials of Standard Oil. Standard Oil’s archives are held at the Exxon Mobil Historical Collection at the Briscoe Center for American History at the University of Texas at Austin and doubtless contain much of interest.

  22. Rudy Kennedy interview with author, November 12, 1999.

  23. Ibid.

  24. “Rudy Kennedy: Holocaust Survivor, Scientist and Campaigner,” The Times (of London), March 3, 2009.

  25. Rudy Kennedy survived in Auschwitz for almost two years. In January 1945 he was moved to Dora-Mittelbau where V-1 and V-2 rockets were manufactured by Werner von Braun, the Nazi rocket scientist whom Allen Dulles later brought to the United States. Kennedy was then sent to Belsen where he was liberated by British troops in April 1945. After the war he settled in Britain and became a successful businessman and campaigner for justice for former slave laborers. Kennedy fought tirelessly for decades against IG Farben, its successor companies, and the German government, demanding that the company accept liability and pay adequate compensation. Under great pressure from the State Department, organizations representing slave laborers eventually signed an agreement in 2000 that paid around $7,000 to each victim. IG Farben’s successor companies contributed to the settlement. Those accepting the offer were forced to surrender any future claims. Kennedy refused to sign and carried on campaigning. He died in 2008 at the age of eighty-one.

  26. See R. Billstein, Working for the Enemy: Ford, General Motors and Forced Labor in Germany During the Second World War (New York: Berghahn Books, 2000). In the late 1990s Ford opened its archives and commissioned archivists and historians to scrutinize its wartime record. Their findings are compiled in a 208-page report, published in 2001. “Research Findings About Ford-Werke Under the Nazi Regime,” is available at http://media.ford.com/article_display.cfm?article_id=10379. The report also notes that Ford and its subsidiaries in Allied countries made a crucial contribution to the Allied war effort, producing vast amounts of aircraft, military vehicles, engines, generators, tanks, and military ordinance.

  27. Michael Dobbs, “Ford and GM Scrutinized for Alleged Nazi Collaboration,” Washington Post, Nov 30, 1998. At this time General Motors opened its archives to the historian Henry Ashby Turner Jr., the author of German Big Business and the Rise of Hitler, which downplayed the role of the industrialists in supporting the Nazis. In 2005 Turner published General Motors and the Nazis: The Struggle for Control of Opel, Europe’s Biggest Carmaker. The book argued that by 1939 General Motors had lost control of its German subsidiary and so had no power over Opel’s military production or use of slave labor. This view is not universally accepted.

  28. Messersmith to Philips, November 16, 1934. Special Collections Department, University of Delaware Library. Available online at http://www.lib.udel.edu/ud/spec/findaids/html/mss0109.html.

  29. Op. cit.

  30. “Thomas J. Watson Is Decorated by Hitler,” New York Times, July 2, 1937.

  31. Christopher Simpson, The Splendid Blond Beast: Money, Law, And Genocide in the Twentieth Century (Monroe, ME: Common Courage Press, 1995), 73.

  32. Edwin Black, IBM and the Holocaust: The Strategic Alliance Between Nazi Germany and America’s Most Powerful Corporation (Westport, CT: Dialogue Press, 2008).

  33. Messersmith to Geist, December 8, 1938. Special Collections Department, University of Delaware Library. Available at http://www.lib.udel.edu/ud/spec/findaids/html/mss0109.html.

  34. Messersmith to Long, April 7, 1941. Special Collections Department, University of Delaware Library, April 7, 1941. Available at http://www.lib.udel.edu/ud/spec/findaids/html/mss0109.html.

  35. Nuremberg Trial Proceedings, May 6, 1946. William Dodd to Walter Funk. Available at http://avalon.law.yale.edu/imt/05-06-46.asp.

  36. Cochran to Morgenthau, October 3, 1940. NARA. US Department of Treasury. Author’s collection.

  37. Paul Gewirts, US Department of Treasury, Corporate Analysis Unit, “Report on the Activities of the Chase Bank Branches in France,” April 3, 1945, 1. University of Southern California Cinematic Arts Library. Charles Higham “Trading with the Enemy” Collection. Box 1, Folder 3.

  38. Op. cit.

  39. Ibid.

  40. Matthew J. Marks, Memorandum for Mr. Ball, US Department of Treasury, “Investigation of Morgan et Cie,” April 26, 1945. University of Southern California Cinematic Arts Library. Charles Higham “Trading with the Enemy” Collection, Box 1, Folder 3.

  41. Ibid. In December 1998 lawyers acting on behalf of Holocaust victims and their families filed a class action lawsuit in New York against Chase Manhattan bank, J. P. Morgan, and seven French banks, alleging that the US banks’ French subsidiaries were complicit in the seizure of the wealth of French Jews who were deported to concentration camps. Chase Manhattan said the suit was “unnecessary” as it was working with Jewish organizations to examine its historical records to identify former customers or their heirs, and pay the customers, or their heirs, with interest. J. P. Morgan soon agreed to settle for $2.75 million. Much of this remained unclaimed and those monies were donated in 2003 to Yeshiva University in New York to endow a center for Holocaust studies. J. P. Morgan and Chase Manhattan merged in 2002 to become J. P. Morgan, Chase & Co. The claims against Chase Manhattan were dealt with by the Drai Commission, a French government organization, which oversaw restituti
on claims against French banks. The class action lawsuit was one of several targeting American, Swiss, British, and other European banks over their wartime records. Swiss banks eventually agreed to pay restitution of around $1.25 billion. Barclays Bank, in Britain, agreed to pay out $3.6 million to compensate families who had lost assets in France during the Nazi occupation. See: Michael J. Bazyler, Holocaust Justice: The Battle for Restitution in America’s Courts (New York: New York University Press, 2005).

  42. McKittrick to Weber, January 12, 1943. Thomas H. McKittrick Papers. Harvard Business School, Baker Library. Series 2, Carton 8, Folder 18, Reel 17.

  43. McKittrick interview, 32.

  44. Op cit., 35, 36.

  CHAPTER EIGHT: AN ARRANGEMENT WITH THE ENEMY

  1. Col. Edward Gamble, Office of Strategic Services, European Theater of Operations, United States Army (Forward), June 15 1945. BIS Archive. Thomas H. McKittrick Papers. Series 2.2, Carton 9, Journeys.

  2. Thomas McKittrick interview with R. R. Challener, July 1964. John Foster Dulles Oral History Collection at Seeley G. Mudd Manuscript Library, Princeton University Library, 22.

  3. Ibid., 40.

  4. Cable from US Legation in Bern, June 23, 1943. NARA. RG 84, American Legation, Bern, General Records. 1943: 850–851.6, Box 92.

  5. Neal H. Petersen, From Hitler’s Doorstep: The Wartime Intelligence Reports of Allen Dulles 1942–1945 (University Park, PA: Penn State Press, 1996), 294–295.

  6. Ibid., 287.

  7. McKittrick to Wallenberg, June 9, 1943. BIS Archive. Thomas H. McKittrick Papers. Series 2.1, Carton 6, f.2.

  8. Hewitt report on the Wallenbergs, undated. US National Archives and Records Administration. RG 226, Entry A1-210, Box 345.

  9. Ibid.

  10. Morgenthau to Grew, “A Summary of Some Information with Respect to the Wallenbergs and the Enskilda Bank,” February 7, 1945. NARA. Author’s collection.

  11. Ibid.

  12. Richard Breitman, “A Deal with the Nazi Dictatorship: Hitler’s Alleged Emissaries in Autumn 1943,” Journal of Contemporary History, vol. 30., no. 3, July 1995.

  13. Williamson to Dulles, February 1, 1945. NARA. RG 226 OSS, Entry 190, Box 31.

  14. Op. cit.

  15. Henry Morgenthau diaries, Franklin D. Roosevelt Memorial Library. Book 755, Reel 216, 175.

  16. Playfair to Niemeyer, December 6, 1943. Bank of England Archives.

  17. Morgenthau diaries, FDRML. July 19, 1944, 9:30 p.m. Book 756, 54.

  18. Morgenthau diaries, FDRML. Book 755, Reel 216, 178.

  19. Op. cit., 183.

  20. Keynes to Morgenthau, July 19, 1944. FRDML. Author’s collection.

  21. Henry Morgenthau diaries, FRDML, Book 756, July 19, 1944, 7:25 p.m., 134.

  22. Toniolo, 271.

  23. Ibid., 272.

  24. Orvis Schmidt to Henry Morgenthau, March 23, 1945, FDRML. Reel 241, Book 831, 328–333.

  25. Op. cit.

  26. Ibid.

  27. “Survey of the War-Time Activities of the Bank for International Settlements,” TWX Conversation between Washington and Berlin, Col. Bernstein, Miss Mayer, Mr. Ritchin, and Mr. Nixon; and Thorson, “Capt. Zap: Investigation by Bernstein’s Associates,” Donald W. Curtis and William V. Dunkel, December 5, 1945. University of Southern California Cinematic Arts Library. Charles Higham “Trading with the Enemy,” Collection. Box 1, Folder 1.

  28. Erin E. Jacobssen, A Life for Sound Money: Per Jacobssen (Oxford: Clarendon Press, 1979), 163–164.

  29. Ibid., 165.

  30. Ibid., 178.

  31. Ibid., 178.

  32. Ibid., 153.

  33. Heinz Pol, “IG Farben’s Peace Offer,” The Protestant, June–July 1943, 41.

  34. Ibid.

  35. Jacobssen, 170.

  36. McKittrick to Auboin, January 22, 1946. HUBL. Thomas H. McKittrick Papers. Series 2, Carton 8, Folder 4, Reel 17.

  37. McKittrick to Dulles, October 17, 1945.BIS Archive. Thomas H. McKittrick Papers. Series 2.1, Carton 6, f.3.

  CHAPTER NINE: UNITED STATES TO EUROPE: UNITE, OR ELSE

  1. Oral history interview with W. Averell Harriman, Washington, DC, 1971. Harry S. Truman Library and Museum. Available at http://www.trumanlibrary.org./oralhist/harriman.htm.

  2. Thomas McKittrick interview, July 1964. John Foster Dulles Oral History Collection at Seeley G. Mudd Manuscript Library, Princeton University Library, 45.

  3. McKittrick to Aldrich, Dec. 12, 1945. Thomas H. McKittrick Papers. Harvard University Business School, Baker Library Series 2, Carton 8, Folder 18, Reel 18.

  4. Allen Dulles, “The Future of Germany,” The Commercial & Financial Chronicle, vol. 163, no. 4458. Author’s collection, with thanks to Christopher Simpson.

  5. Accessed at http://www.oecd.org/general/organisationforeuropeaneconomicco-operation.htm.

  6. McKittrick interview, 45.

  7. James M. Boughton, “Harry Dexter White and the International Monetary Fund,” Finance and Development magazine, September 1998.

  8. R. Bruce Craig, Treasonable Doubt: The Harry Dexter White Spy Case (Lawrence, KS: University Press of Kansas, 2004).

  9. James C. Van Hook, “Review of Treasonable Doubt: The Harry Dexter White Spy Case by R. Bruce Craig,” Studies in Intelligence, vol. 49, no. 1, April 2007.

  10. Accessed at http://usa.usembassy.de/etexts/ga4-mccloy.htm.

  11. Robert Taylor Swaine, “The Cravath Firm and its Predecessors 1819–1947,” The Lawbook Exchange Ltd, New Jersey, 611.

  12. Ibid., 610–611.

  13. “Alkali Exporters Held Trade Cartel,” New York Times, August 13, 1949.

  14. Rudolf Vrba and Alfred Wexler, two Jewish inmates, escaped from Auschwitz in April 1944. They wrote a detailed, thirty-page report about conditions inside the camp, the operations of the gas chambers, and the preparations for the extermination of Hungarian Jewry. The document, known as the “Auschwitz Protocol,” was distributed to the Vatican, the International Committee of the Red Cross, Allied governments, and Jewish leaders. See Martin Gilbert, Auschwitz and the Allies (London: Michael Joseph, 1981).

  15. David S. Wyman, The Abandonment of the Jews (NY: Pantheon, 1948), 296.

  16. Harriman interview, ibid.

  17. May to J. W. Pehle, Treasury official, August 18, 1941; Examiner’s report, October 5, 1942. NARA. Author’s collection.

  18. Federal Register, Vesting Order 248, November 7, 1942, page 9097, author’s collection)

  CHAPTER TEN: ALL IS FORGIVEN

  1. Major Donald MacLaren, “Brief for the De-Nazification of the German Chemical Industry,” Part III, Dossiers of Principal IG Farben Officials, Hermann Schmitz. December 1, 1945. Author’s collection.

  2. Ron Chernow, The Warburgs (NY: Vintage, 1994), 501–502.

  3. Ibid., 583.

  4. David R. Henderson, “German Economic Miracle: The Concise Encyclopedia of Economics,” available at http://www.econlib.org/library/Enc/GermanEconomicMiracle.html.

  5. Author telephone interview with Dr. Adam Tooze, author of The Wages of Destruction: The Making and Breaking of the Nazi Economy (NY: Penguin, 2009), May 2009.

  6. Quoted in Weitz, 314.

  7. David Marsh, The Bundesbank (London: Heinemann, 1992), 19.

  8. Ibid., 137.

  9. Tom Bower, Blind Eye to Murder: Britain, America and the Purging of Nazi Germany (London: Andre Deutsch, 1981), 18. Bower’s information is based on his interview with Hermann Abs.

  10. Ibid., 15.

  11. Ibid.

  12. See Harold James: The Deutsche Bank and the Nazi Economic War Against the Jews. (London: Cambridge University Press, 1981).

  13. Alfred C. Mierzejewski, Ludwig Erhard (Chapel Hill: Univ. of North Carolina Press, 2006), 19–22.

  14. John Easton, Economic Warfare Division, to Secretary of State, London, November 27, 1944. NARA. Author’s collection.

  15. Henry Morgenthau diaries, Book 755, Bretton Woods, July 16–18, 1944, pages 9 and 21.

  16. Ibid.

&nbs
p; 17. Dulles cable, March 21, 1945. NARA. RG 226, Entry 134, Box 162.

  18. Donald MacLaren, Brief for the De-Nazification of the German Chemical Industry, Introduction, December 1, 1945. Author’s collection.

  19. Otto Ambros, Wollheim Memorial. Available at http://www.wollheim-memorial.de/en/otto_ambros_19011990.

  20. Kai Bird, The Chairman: John J. McCloy and the Making of the American Establishment (NY: Simon and Schuster, 1992), 369–371.

  21. Jeffreys, 346.

  22. Chernow, The Warburgs, 576–577.

  23. Simpson, 146–147.

  24. Ibid., 136–137.

  25. Murphy to Secretary of State, December 10, 1945. NARA. RG 59, Lot 61, D33, Box 1, file “War Crimes, International Military Tribunal folder A-1.”

  26. Harrison to Secretary of State, December 13, 1945. NARA. RG 59, Lot 61, D33, Box 1, file “War Crimes, International Military Tribunal folder A-1.”

  27. Simpson, 228–229.

  28. Ibid., 235.

  29. Bower, Blind Eye to Murder, 347.

  30. Priscilla Norman, letter to The Times (of London), July 17, 1981.

  31. Peregrine Worsthorne interview with Rosie Whitehouse for author, March 2012.

  32. Weitz, 333–334.

  CHAPTER ELEVEN: THE GERMAN PHOENIX ARISES

  1. Speech by John McCloy, “Germany in a United Europe,” Information Bulletin, May 1950. Available at http://digicoll.library.wisc.edu/cgi-bin/History/History-idx?type=turn&entity=History.omg1950May.p0041&id=History.omg1950May&isize=text.

  2. Paul Hoffman speech to OEEC Council, October 31, 1949. Available at www.let.leidenuniv.nl/pdf/geschiedenis/eu-history/EU_03.doc.

  3. Jacobssen, 401.

  4. Ibid., 157.

  5. David W. Ellwood, “The Propaganda of the Marshall Plan in Italy in a Cold War Context,” in Giles Scott-Smith and Hans Krabbendam, eds., The Cultural Cold War in Western Europe, 1945–1960 (Independence, KY: Frank Cass Publishing, 2004), 225.

  6. Author interview with Alexandre Lamfalussy, in Brussels, March 18, 2010. Available at http://www.cvce.eu/obj/interview_with_alexandre_lamfalussy_the_bis_the_committee_of_governors_of_the_central_banks_of_the_member_states_of_the_eec_and_the_delors_committee_brussels_18_march_2010-en-72964f36-a638-47c8-8af4-f40a938e7420.html.