The Alchemy of War


Occult rituals, racial theories and esoteric knowledge were all very important psychological aspects of the Nazi-German ideology. Yet they were not the key to Hitler's future military success. The key laid in the secret alliance between the German banking and industrial elites and the merchant elites of the City of London and Washington D.C. In the United States the bankers associated with the U.S. Federal Reserve, planned to make the United States new balancing power in the world. War had thus far proved the best way to change the global status quo through the application of Hegelian dialectic – that is the financing of the conflicting regimes in order to achieve the desired outcome. The Federal Reserve bankers planned to act in three-fold way: first by floating loans to Germany, officially to assist in its heavy reparations burden but unofficially with an aim to rebuild German military-industrial complex; secondly by financing National Socialist German Worker's Party (NSDAP), commonly known as Nazi Party, which wanted to challenge the terms of the Versailles Treaty; and thirdly by financing Nazis' rival communist regime, the Soviet Union, to counterbalance the threat posed by Germany. The financing of the two opposing regimes would lead to their clash giving an opportunity for the U.S. government to step in and emerge as the new balancing power in the world.

The credit plan for Germany was conceived after an economic crisis occurred in post-war Germany. The massive hyperinflation of Deutchemark made Germany defaulting on reparation payments to Belgium and France which resulted in the French invading the Ruhr area, the heart of the German steel industry. To solve the international crisis, in 1924, the international bankers and experts from Belgium, France, and Britain and United States set up a joint committee to reconsider the repayment plan for Germany. The committee was led by Charles Dawes, an American banker and a politician who facilitated the $500 million Anglo-French loan from the Morgan Bank during the First World War. Charles Dawes was accompanied by Owen Young, an American businessman, lawyer and President of General Electric, a company owned by J.P. Morgan. German delegates included German Jewish banker Carl Melchior, partner in the Hamburg banking house of Max Warburg and Company and Hjalmar Schacht, president of the Reichsbank, a Freemason with powerful Wall Street Connections.233 THE DAWES PLAN proposed by the committee offered to assist Germany by reducing its reparation payments, taking German Central Bank, the Reichsbank, under Allied supervision and most importantly lending German industry millions of dollars. Major role in designing of the Dawes Plan was played by Foster Dulles of the international New York law firm, Sullivan & Cromwell, the biggest and most powerful law firm in America that served J. P. Morgan and other corporate giants, specialising in mergers and acquisitions. This was the same firm that created General Electric Company in 1882 and seven years later, with financier J.P. Morgan as its client, facilitated creation of U.S. Steel, capitalizing at more than one billion dollars. It had among its clients Edward H. Harriman, the director of Union Pacific Railroad, the largest transportation company in America. Sullivan & Cromwell helped to stage revolution in Panama to wrestle it from Columbia in 1903 and joined J.P. Morgan and General Electric in financing of the presidential campaign of Theodore Roosevelt.234

Foster Dulles joined Sullivan & Cromwell in 1911 and attended the Versailles Conference as part of Bernard Baruch’s Reparations Commission and Economic Council. In 1920s, Sullivan and Cromwell worked for major American banks including Brown Brothers, Lazard Freres and Goldman Sachs arranging loans to Latin American countries and China from J.P. Morgan whilst Foster's younger brother Allen, future head of Central Intelligence Agency (CIA) was promoting Rockefeller's Standard Oil's interests in the Middle East.235 Foster Dulles was also involved in the work on the Dawes Plan. He knew personally and consulted Hjalmar Schacht, President of the Reichsbank. When in 1927, Foster Dulles became the head of Sullivan and Cromwell he shifted his focus to Germany, which he admired for its industrial achievements. He started to advise his clients to invest in Germany and began to make money building and advising international cartels including its German subsidiaries. Foster Dulles consequently assisted in floating loans from American banking houses to the three key cartels which ultimately helped to rebuild German military capacity. The banks which issued loans included Dillon, Read & Co., Harris, Forbes & Co., National City Company, Speyer & co., Lee, Higginson & Co., Guaranty Co. of New York, Kuhn, Loeb & Co., Equitable Trust Co.236 The three major cartels that benefited from these loans were Allgemeine Elektrizitats-Gesellschaft (A.E.G.) (German General Electric), Vereinigte Stahlwerke (United Steelworks) and American IG Farben.237

German General Electric (A.E.G.) was funded in 1880s by a German Jew, Emil Rathenau, who purchased patents of Thomas Edison. His son, Walther Rathenau, took over the business in 1915 and played a key role in supplying vital raw materials to the German War ministry during the First World War. He was in favour of corporate socialism and believed that power of the State was to be made available to private firms. He was also one of the founders of the Germans Democratic Party (DDP) and in his capacity of a German Foreign Minister in new Weimar Republic he negotiated with the Bolsheviks the Treaty of Rapallo in April 1922 establishing a new base for secret cooperation between Germany and the Soviet Union. His company A.E.G. benefited from this cooperation by electrifying the Soviet Union in 1920s and 1930s. By 1930s, International General Electric associated with J.P. Morgan acquired 30 percent of A.E.G. Its president Gerard Swope, who came from a family of German-Jewish immigrants, was also a director of Rockefellercontrolled National City Bank of New York (present-day Citibank), which floated loans to German General Electric. Gerard Swope was believer in corporate socialism and took lectures on business law by Louis D. Brandeis, prominent Zionist and later Justice of the U.S. Supreme Court.238 A.E.G. directly financed the Nazi Party and had interlocking directorships with corporations that also financed Hitler and which too received loans from Wall Street. This included two corporate giants I.G. Farben and Vereinigte Stahlwerke.

Vereinigte Stahlwerke (United Steelworks) became Germany's largest steel conglomerate in 1926 by fusion of most German iron, steel and coal producers, including Thyssen AG, the firm owned by Fritz Thyssen, one of the early backers of Hitler. The firm was named the United Steel Works after the American company, U.S. Steel, hoping it would become an oligopoly like U.S. Steel and effectively manage the entire competition in the steel industry.239 Vereinigte Stahlwerke was chaired by Albert Vögler, a German industrialist and politician who financed Hitler in his early days. On foundation of the firm, Thyssen and Vögler stated: “Our model was the shining example of America. The riches of its natural world, and its large market have promoted there the development of the most economically advantageous mass production. On this favourable basis, American scientists have made outstanding achievements. We first had to artificially create a foundation for such concentrated mass production by our own means”.240 Vereinigte Stahlwerke licensed American technologies and was one of the first German firms to revamp its accounting system along the American lines and introduce mechanise punch-card methods of record keeping using Hollerih (IBM machines).241 By 1930s, Vereinigte Stahlwerke came under control of a shrewd industrialist Friedrich Flick.

For further reading please purchase an eBook

233 Kershaw, Hitler, p. 356 »

234 Ed Vulliamy, 'How a US President JP Morgan made Panama: and turned it into a tax haven', The Guardian, 10 April 2016 »

235 Stephen Kinzer, The Brothers: John Foster Dulles, Allen Dulles and Their secret World War (New York, 2013), p. 18 »

236 Sutton, Wall Street and the Rise of Hitler, p. 29 »

237 Ibid. »

238 Ibid., pp. 52-53 »

239 Jeffrey R. Fear, Organizing Control: August Thyssen and the Construction of German Corporate Management (Cambridge, Massachusetts and London, England: Harvard University Press, 2005), p. 520 »

240 Ibid., p. 520 »

241 Ibid. »