How bankers helped National Socialism

Editor’s note: For an excellent book which makes strong arguments against the big business funding National Socialism thesis in this article see Henry Ashby Turner, German Big Business and the Rise of Hitler.

Nazism would not have played a significant role in the XXth century without the bankers from New York and London. Financial elites executed the plan perfectly by taking over financial sector in Germany and consequentially political control over Central Europe.

National Socialism nazi photo

National Socialism

Photo by tgraham

How it all started?

After the end of the First World War, both France and the UK had a huge debt owned by the United States. This is why they decided to demand Germany to pay reparations after the War they lost. Germans turned to printing presses and soon after the hyperinflation in the Weimar Republic decimated the economy. In 1923 one USD was worth 4.2 trillion German marks.

Simultaneously, another plan was being created to lay foundations for American investments in Germany. The strategy authored by Hjalmar Schacht of Dresdner Bank was based on the instructions from the head of the Bank of England and JP Morgan financial help. John Foster Dulles, later the Secretary of State in Eisenhower administration, ordered to draft this policy. The plan took one year from inception to execution 1922-1923 and at the end of 1923 Schacht became a chairman of Reichsbank. This is how the Anglo-American financial system was fused with German equivalent.

Summer 1924, project resurfaced for the public as Dawes Plan, called after Morgan Group Director. It offered cutting German reparations in half and solved the problem of capital access for Germany. The priority was to stabilise currency smoothing out the process of investment in Germany.

The plan allocated 200 million USD of credit for Germany and half of this sum was coming from JP Morgan. The amount may sound innocently small but back then (1924) 200 million USD was equal to 2% of the overall revenues of the US government.

National Socialism  – German industry takeover

The payback of German, French and British debt happened through a very specific scheme – the Weimar Cycle. Gold used by Germany to pay war reparations was shipped to the US and ‘disappear’ soon after. Metal then returned to Germany in the form of an ‘aid plan’ and sent to France and Britain as a reparation instalment. Those countries used this money to pay their own debts to the US. Gold was sent back to Germany with an interest and this made the Central European country addicted to debt. Any possibility of cutting capital flows would definitely mean the bankruptcy for the country.

Formally, credit was given to secure payment. In reality, it led to rebuilding of German military industry. The true payment was conducted with stocks of German companies being transferred to American hands. Between 1924 and 1929 overall worth of foreign investment in German industry was worth 15 billion USD. In 1929 German industry was the second in the world but under a significant control of American financial sector.

Rockefeller Standard Oil took over IG Farben. This company played a crucial role in Nazi holocaust machine during the Second World War. In 1930 it covered 45% of all Hitler’s expenses regarding his campaign. There are more examples. General Electric acquired German radio and ITT Telecom Company gained control over Siemens. General Motors purchased Opel and Henry Ford owned 100% of shares in Volkswagen.

American-German cooperation was so close that even Deutsche Bank, Dresdner Bank or Donat Bank were controlled from across the Atlantic.

National Socialism  – Democracy chooses Hitler

Since 1923 Adolf Hitler was given considerable sums of money from Sweden and Switzerland. In the former country, Wallenberg family was the main source of financing. Political grooming of Hitler was the task of Ernst Franz Sedgwick Handstaengl, Harvard alumni.

After few years Hitler was ready to perform his role but due to the healthy economy, his party never led the political race. This is why the decision was made to initiate economic crisis on Wall Street. The FED and JP Morgan suspended credit for Germany and pushed Middle Europe into recession. The Great Britain abandoned the gold standard and the chaos in international financial system engulfed.

At the beginning of 1932, a meeting happened where the NSDAP financing plan was decided. A year later Hitler’s plan was accepted and in 1933 Adolf Hitler became the German chancellor. He did not need a coup. But a very bad economic situation during which millions of Germans trusted the National Socialist German Workers Party (NSDAP).

National Socialism  Summary

Events of 1919-1933 show, above all else, how the position of financial elite was strengthened. Influential people were able to appropriate one of the biggest economies in the world and then put their candidate as the head of the government.

One of the cruellest dictators in history was elected democratically. His chances skyrocketed when people were driven by emotions and not common sense. To make people do this an economic crisis was initiated which hurt German society very badly. Germans who wanted a return of good times trusted Hitler because he told them exactly what they wanted to hear.

What is crucial in this history lesson is the crisis of 1929 preceded by 8 year-long currency printing. Sounds familiar? Last crisis was 8 years ago. Central banks continuously print currency – first the FED, then the BOJ and now the ECB. Looking back at the history above we are ‘one decision away’ from a crisis much bigger than the one in 2008.

Today we see the chances of a global scale military conflict rising. During military actions, the atmosphere of hostility can easily spiral out of control and is correlated with an increase in the number of victims. It is often too late to realise that both sides of conflicts are financed from the same source. This happened during the Second World War.

After the Second World War, everyone focused on uniting Europe. The European Coal and Steel Community which turned into the European Union and later formation of the Eurozone. Today we see the Southern Europe Eurozone members heavily indebted. They first resigned from their currencies and now they fully depend on the whim of the ECB.

Independent Trader Team