To what extent did the US 'fund' Nazi rearmament?

[Carl Schwamberger]

Higham 'Trading with the Enemy' outlines the major US business involvement with Germany. A difficult to read book.

It identifies Standard Oil as a major violator of the Brit blockade 1940-41.

Chase Bank, another Rockafeller holding, had a long ongoing formal relationship with the Reichsbank.

Dupont continued it's partnership with IG Farben, Amaline Dye the jointly owned subsidiary continued operations into 1941.

Henry Ford Admired the Nazis, for cleaning up Germany. He also despised the English.
In 1942 he tried to refuse contracts that would benefit Britain. Edsel cut Henry out of the decision loop

 

[marathag]

Well to use your analogy, how does that compare to all the companies that removed their facilities and business from the USSR pre-War? When the “red scare” took hold and American companies ceased trading in Russia on “moral grounds”?

In the Late '20s, US businesses were falling over each other for contracts in the USSR, even Ford.

Ford boasted in 1927 that 85 percent of the trucks and tractors in the Soviet Union were from FMC built plants in the USSR and from direct sales

 

[sloreck]

“After all, the chief business of the American people is business..." (Calvin Coolidge)

The purpose of business is to make money for the owners/shareholders. Only relatively recently have issues about the morality of the product or customer been so much of anything, and then usually wither because of consumer backlash or the particular beliefs of the owners. Don't forget that American businesses did business with Japan right up to the time various sanctions/embargoes were imposed, with sales continuing even as the legislation was going through Congress to earn the last few bucks before the door slammed, and in the late 1930s the American public was more concerned with the threat from Japan than that from Germany. remember, all this took place during the Depression, and making money selling/licensing to Germany meant American jobs.

While all sorts of antisemitism was going on in Europe before Hitler, the reality is that after 1933 Germany led the way in anti-Jewish measures, and other countries followed along when they saw this behavior was tolerated/ignored. Many of the American businesses that did significant business/licensing in Germany were run by folks who were anywhere from social antisemites (not in my club or neighborhood) to raving antisemites like Ford.(1) Most of the senior executives and boards of directors of major US companies (not all but most) at best thought the Nazi actions were distasteful, and at worst celebrated them. Certainly there were very few companies who prior to August, 1939 were going to turn down profits from Germany to protest the treatment of Jews.

While the argument can be made that any of the US economic plans for Germany helped rearmament because they helped the German economy overall, it is important to note that these plans (Dawes and other) were put in to place to help German payment of reparations and to stabilize Germany so it did not suffer a Bolshevik revolution - which the US and others were afraid of (with good reason). When Hitler denounced and stopped reparations, all of this came to a halt, so all of the financing for German rearmament was generated internally not via external support. To the extent US, and other foreign companies invested in German facilities and left money in Germany and did not repatriate so it was available for further expansion, that did contribute to rearmament.

(1) The role of Ford in antisemitism in the USA cannot be underplayed. His newspaper, the Dearborn Independent was shut down in the late 1920s as the result of a lawsuit about defamation brought by Jewish groups. His pamphlets "The International Jew" were as virulent as anything published by Julius Streicher in "Die Stürmer". Streicher was convicted and executed at Nurnberg in 1946.

 

[Deleted member 94680]

No they didn't. NO ONE did. The Nazis did not appear to be that different from other totalitarians of their time.

That’s just untrue.

No need for the caps lock either.

- - - - - - - -

Anyway, there seems to be strong differences of opinion on the morality of support (of any stripe) of the Nazis in this thread. It’s a view which I, for one, will not change my stance on.

As such, I’m bowing out of this thread as I don’t need the agro.

 

[fscott]

Well to use your analogy, how does that compare to all the companies that removed their facilities and business from the USSR pre-War? When the “red scare” took hold and American companies ceased trading in Russia on “moral grounds”?

I think for the most part with the early Red Scare the moral grounds worm or profit-oriented. And with the USSR the United States facilitated some of the financial transactions regarding Imports of say wheat.

 

[Christopher Marcus]

Thanks so far for all the knowledge - I am grateful. I've been on the board since 2011 and it always amazes me how much collective know there is here. I really wish I could just have said yesterday: "You know, buddy, let's take this discussion after I have consulted AH.com". Not sure it would have helped that much, because, well, we were not in a good place that evening for discussing anything with particular respect for each other - for reasons that are not entirely clear to me yet. It just sorta blew up. Maybe there were bad vibes in the air, or something.

Anyway, he mailed me today and said he is no longer interested in debating this, and I can kind of understand it, so I'll let it go as well. But for me it was important to get some kind of confirmation here that things aren't as black or white as he would have it. I knew that. But I did not know why. So my arguments were not particularly precise. For what it's worth they could be so another time now.

One big take-away for me here is that there was some relatively prominent 'profiteering' going on with regard to US firms and Nazi Germany, even after the US DoW it appears. It had sort of lingered at the periphery of my knowledge about the war (like most here, I suspect, I'm just for whatever reasons an enthusiastic hobby historian - I do webdesign and communications for a living). However, many of the examples here were new to me - including the one about Fanta. Not really sure I'm going to be able to make myself drink that again with hearing the distant echo of marching boots ... sigh :-/

 

[Anarch King of Dipsodes]

Anyway, there seems to be strong differences of opinion on the morality of support (of any stripe) of the Nazis in this thread. It’s a view which I, for one, will not change my stance on.

With such firm principles, no doubt you are an ironclad supporter of the trade embargo on Cuba, and of US economic sanctions against Iran, and are disgusted that New York City would elect a mayor who honeymooned in Cuba, or that a US President would remove sanctions and ship hundreds of millions in cash to Iran.

But the missing question here is whether any country should have allowed Coca-Cola to do business there. Coca-Cola was based in Atlanta, Georgia, where racist oppression of black people was ubiquitous, open, even celebrated. (The infamous Stone Mountain memorial was only a few miles from Coca-Cola's headquarters.) Coca-Cola's management were all good white Southerners; AFAIK all Jim Crow rules were enforced in Coca-Cola's Georgia facilities.

/snark off

There are a lot of odd questions connected with this issue.

In 1938, Douglas Aircraft licensed the DC-3 design to Nakajima in Japan for $90,000. Nakajima and sub-licensee Showa subsequently built 487 DC-3s as L2D transports for the Japanese armed forces (Allied code name TABBY), with production continuing right through the Pacific War.

I don't know whether the license had a per-unit fee provision, but if it did, should Douglas have collected those fees for units built during the war for service against the US? The pre-war contract was entirely legal; and not collecting would just leave the money in Japan.

Another question raised is whether any firms based in Axis countries owned any US manufacturing businesses. (Bayer, perhaps, or Siemens?) If the US government required those businesses to participate in war production, would that make their home-country owners traitors?

 

[sloreck]

During WWI the US seized the assets, and the patents, of various German companies. Bayer being one example. These patents were NOT returned to the German companies following WWI. At the time of WWI the German chemical industry was the world leader, and the acquisition of those patents gave the US chemical industry a large boost. I don't know as a fact, but imagine that German/Italian/Japan assets, companies, and patents in the USA when the US entered WWII were similarly seized and not returned postwar. As far as any US owned factories in Germany, I expect that most of them were pretty wrecked by the end of the war. You can be sure that anything of value in these factories that were in the Soviet zone of occupation was packed up and returned to the USSR - art treasures looted by the Nazis either from individuals or museums that the Russians got their hands on never were returned.

Prewar doing business with Germany, Japan, the USSR, and others was perfectly legal. Depending on where you stood at the time (left, right whatever) the morality of doing so could be highly questionable. Doing so after embargoes were in place or the USA was at war was another issue. How Germany, Japan, or anyone else used stuff legally acquired before the war, even if it killed Americans can't really be totally on the heads of the companies that had legally sold whatever prewar. Again, legal is not necessarily moral, however one mans morality is another mans immorality.

This is my analysis of the situation, my own personal opinions are quite distinct but are not relevant to this analysis.

 

[PSL]

This is a good thread, but I must float something I heard from a sturdy source on vacation. He's Swiss and was relating , while on vacation there some time ago. He was shown a large building that some how was connected with operation Barbarossa in 1941. The narrative is that in the spring of 1941 the Reich bank held a secret conference in Switzerland raising funds for the upcoming invasion of Russia. Reportedly many bankers from all over the world attended including Americans like Rockefeller were mentioned.

Still curious if there is any more info on this?

 

[David T]

IMO the greatest contribution of the US to the German economy--and Germany's capacity to rearm--was not in the 1930's but the 1920's, when the US paid "reparations" to Germany: US banks lent money to Germany which used it to pay reparations to France and the UK, which used it to pay war debts to the US. The American loans to Germany were never paid back once the Great Depression hit, so the US in effect paid reparations to Germany.

"The 'reparations' to Germany allowed the maintenance of living standards in the Weimar Republic at a level appreciably higher than domestic productivity would have justified. Savings and investment remained notably low compared with either the prewar pattern or the long-term trend. The inflow of funds accommodated increased wages and salaries, even in sectors with lagging productivity gains, and despite the more precipitous decline in the length of the work week in Germany than elsewhere. These funds found reflection also in mounting government welfare expenditures before as well as after the onset of the Depression, in an uneconomic shift to white-collar employment in labor-force composition, and (although precise figures remain a
matter for conjecture) in the accretion of German assets abroad that would later help finance Nazi rearmament.." https://www.princeton.edu/~ies/IES_Studies/S61.pdf

 

[sloreck]

Nobody in the 1920s, either in Germany or out saw the Nazi rise to power and the policies it brought as a reality coming down the pike. The US efforts to stabilize the Weimar economy realistically saw an economically devastated Germany with a replay of the postwar inflation as ripe for a Bolshevik takeover which nobody wanted. It is worth noting that a significant part of the Nazi rise to power was facilitated by "traditional" conservative elements who saw the Nazis as a bulwark against the communist threat which in Germany, as elsewhere, had become stronger due to the Depression.

 

[Carl Schwamberger]

IMO the greatest contribution of the US to the German economy--and Germany's capacity to rearm--was not in the 1930's but the 1920's, when the US paid "reparations" to Germany: US banks lent money to Germany which used it to pay reparations to France and the UK, which used it to pay war debts to the US. The American loans to Germany were never paid back once the Great Depression hit, so the US in effect paid reparations to Germany. ...

... matter for conjecture) in the accretion of German assets abroad that would later help finance Nazi rearmament.." https://www.princeton.edu/~ies/IES_Studies/S61.pdf

Re: the Dawes & the Young Plans which I referred to in post #6.

To clarify, the loans were not specifically for making reparations payments, they were for reviving the German economy so reparations could be paid via skimming tax revenue off a stable & growing economy. Note that the US banks were doing similar credit moves in other nations, like Belgium, France, Poland, but without the formal government endorsed plans. The US banks understood they were not going to receive sufficient payment on war debt, & other post & prewar debt unless their clients business revived. In the case of Germany the problems were greater & required a more formal intervention and government insured plan to give any further credit a chance. In all the 1920s flow of credit from the US to Europe was a much more ad hoc and less effective version of the 1940s Marshal Plan.

 

[Garrison]

This is a good thread, but I must float something I heard from a sturdy source on vacation. He's Swiss and was relating , while on vacation there some time ago. He was shown a large building that some how was connected with operation Barbarossa in 1941. The narrative is that in the spring of 1941 the Reich bank held a secret conference in Switzerland raising funds for the upcoming invasion of Russia. Reportedly many bankers from all over the world attended including Americans like Rockefeller were mentioned.

Still curious if there is any more info on this?

Sorry but this sounds like classic conspiracy theory territory. The idea that there was some cabal of international bankers that could hand out vast sums of money at whim is a fantasy. Why would anyone want to lend large sums of money to Nazi Germany anyway? Their economic track record hardly inspired confidence and loans on the sort of scale Nazi Germany needed weren't going to happen without government approval. Add in the fact that Hitler and co. regarded 'international banking' and 'Jewish conspiracy' as one and the same thing they are not going to be beholden to them economically. There were occasions when the Nazi's tried to 'export' Jews in return for money or resources but all of these failed dismally and had nothing to do with arming for Barbarossa.

 

[Histor32]

Hell to what extent did the soviets help...

The question is mute . Nations trade at many levels .

 

[Alanith]

Splitting hairs. They carried on operating in Nazi Europe when they could (should?) have ceased operating.

So Max Keith should have shut down the plant, a move that would almost certainly have resulted in him and all his employees being drafted and killed on the Eastern Front? Good plan!

 

[PSL]

Sorry but this sounds like classic conspiracy theory territory. The idea that there was some cabal of international bankers that could hand out vast sums of money at whim is a fantasy. Why would anyone want to lend large sums of money to Nazi Germany anyway? Their economic track record hardly inspired confidence and loans on the sort of scale Nazi Germany needed weren't going to happen without government approval. Add in the fact that Hitler and co. regarded 'international banking' and 'Jewish conspiracy' as one and the same thing they are not going to be beholden to them economically. There were occasions when the Nazi's tried to 'export' Jews in return for money or resources but all of these failed dismally and had nothing to do with arming for Barbarossa.

In short you don't know....which is what I expected.

If I get a chance I will ask the guy next year when I'm off on vacation , but I have little doubt this kind of thing happens all the time.

Its more likely to be 'conspiracy territory' - if your a WALLIE.

 

[Carl Schwamberger]

In the Late '20s, US businesses were falling over each other for contracts in the USSR, even Ford.

Ford boasted in 1927 that 85 percent of the trucks and tractors in the Soviet Union were from FMC built plants in the USSR and from direct sales

Koch family fortune was started with Bolshie money. The elder Koch landed some lucrative engineering contracts in the 1920s, expanding oil production facilities in the USSR. He quit it in the late 1920s on witnessing the first Stalinist purge reach into oil industry management. I guess the earlier Lennin/Trotsky management methods weren't nasty enough for him?

 

[GDIS Pathe]

Koch family fortune was started with Bolshie money. The elder Koch landed some lucrative engineering contracts in the 1920s, expanding oil production facilities in the USSR. He quit it in the late 1920s on witnessing the first Stalinist purge reach into oil industry management. I guess the earlier Lennin/Trotsky management methods weren't nasty enough for him?

Green>Red I guess

 

[RightHoJeeves]

Koch family fortune was started with Bolshie money. The elder Koch landed some lucrative engineering contracts in the 1920s, expanding oil production facilities in the USSR. He quit it in the late 1920s on witnessing the first Stalinist purge reach into oil industry management. I guess the earlier Lennin/Trotsky management methods weren't nasty enough for him?

I believe it had more to do with the Soviet Union not recognizing intellectual property rights. At the time Koch was in a protracted legal battle with other oil companies over a refinery method he had invented so he took his business to the only country he could work in.

 

[wcv215]

In short you don't know....which is what I expected.

If I get a chance I will ask the guy next year when I'm off on vacation , but I have little doubt this kind of thing happens all the time.

Its more likely to be 'conspiracy territory' - if your a WALLIE.

Anything that starts with someone going “secret meeting” is automatically suspect and requires some kind of supporting source.