Hello Again Dear Reader,
This issue of my free newsletter I would like to devote to the process by which the so-called "East Coast Establishment," the bankers of Wall Street, their international oil companies and the web of corporate global holdings they controlled shaped what Time-Life magazine founder, Henry Luce, in a famous 1941 essay triumphantly named "The American Century."
In this selection from The Gods of Money: Wall Street and the Death of the American Century, one of my more important books for understanding how the United States devolved into the state it is in today, I outline the plans for world domination drafted by a top-secret group of geopolitical experts convened and financed by the Rockefeller Foundation from before the outbreak of world war in 1939. The group, known as The War & Peace Studies group, met clandestinely at the headquarters of the New York Council on Foreign Relations, the foreign policy think-tank founded by those same Wall Street bankers following the Versailles Peace Talks of 1919. What came out of their machinations shaped an American global hegemony that was fantastically successful until it began to crumble, for much the same reason as did the British Empire a century before, well before the financial crisis of 2007-2008. I want to share with you now Chapter Seven: Planning the American Century -- The Rockefeller War & Peace Studies, from my book, The Gods of Money. If it interests you, go to the title on Amazon and leaf through select pages for the learning more about the print or electronic kindle version.
I hope you enjoy your reading and I thank you for your interest,
-- F. William Engdahl
The Gods of Money © F. William Engdahl Chapter Seven: War and Conflicting Geopolitical Agendas
‘Who rules East Europe commands the Heartland; who rules the Heartland commands the World Island; who rules the World Island commands the entire World.’
—Sir Halford Mackinder, in 1919 1
Lessons of British Geopolitics IgnoredThe policy makers from the Council on Foreign Relations (CFR) and the internationalists around the Rockefeller group engaged in seemingly paradoxical and contradictory policies. They were simultaneously financing and staffing the CFR War & Peace Studies—intended to be a detailed blueprint for a postwar US global domination, an American Century—while at the same time they were going to extraordinary lengths supporting the Third Reich s war buildup, accruing huge profits from the sales to their enemy that soared far beyond anything normal. It appeared that Rockefellers Standard Oil and allied companies like Dow Chemical and DuPont went to extraordinary lengths to support Hitler s war machine.
The resolution to the paradox lay in appreciating American geopolitical strategy as formulated by people like Isaiah Bowman of the CFR and Yale University s geopolitical strategist, Nicholas Spykman. They had developed a uniquely American synthesis of Halford Mackinder s British geopolitics – identifying the most vital. pivotal nations needed for the support of an American postwar global domination, an American Empire.
For the influential US elites grouped around the CFR, war was merely an instrument through which to extend their financial power in the postwar world and create an American imperium, one displacing not only the British Empire, but also the German Reich and any other potential European competitor. They understood quite well, as Yale's Spykman put it, that wars enabled the conquering and subjugating of new markets, and, that what the world called peace was but a temporary armistice or ceasefire in the continual war process, until prospects for looting a given area had reached relative limits and a new war of conquest became necessary.2
In 1938, with great geopolitical prescience, Spykman wrote,
Unless the dreams of European Confederation should materialize, it may well be that fifty years from now the quadrumvirate of world powers will be China, India, the United States and the USSR. 3
That was how Spykman, Bowman and others around the Rockefeller dynasty understood international politics.
In many ways, the influential British Round Table circles failed to appreciate German fundamental geopolitical requirements, but the Germans as well, particularly Hitler appeared to misunderstand fundamental British geopolitics.
Contradictory geopolitical strategiesThe tragedy that became World War II was a titanic clash of mutually contradictory geopolitical strategies for world domination.
The British had their traditional geopolitical strategy of dividing Continental Europe and of controlling the seas. Churchill s unprecedented decision to ally with the United States, the stronger of its major adversaries, against Germany, the weaker adversary, was based on a calculation that such an alliance was the only possible means of preserving the British Empire as a dominant global power.
It marked the first time in the history of British Balance of Power diplomacy that she had sought an alliance with the stronger foe against the weaker. It was also fraught with risk. Churchill and his allies in and around the Round Table were, however, realists. They realized the Empire as such was at an end and that it could project its power only indirectly through a special relationship with Washington.
The emerging special relationship between Churchill and Roosevelt however, was made more complicated by the fact that the United States could emerge as the dominant global power.
American leading circles around the Rockefellers and Wall Street had resolved among themselves that all potential European rivals for power would have to grind themselves down in a mutual slaughter. The goal of these American elites was to eliminate, above all, the prospect of a German Reich that would fill the power vacuum in Central Europe left by the collapse of France and its allies.
In Washington FDR carried on a secret correspondence with Churchill well before US entry into the war in December 1941. Churchill for his part, being a shrewd champion of British Imperial interests, tried to play on his American ties to the President to gain as much as possible for England in the run up to open warfare on the Continent.
The internal opposition to Hitler within German big industry and finance, as well as leading circles in the military high command, had their own geopolitical agenda -- an economic imperialism rather than a military imperialism. They had their eyes on a penetration pacifique to the east of Europe, Drang nach Osten, including at a certain point even the possibility of a peaceful alliance with the Soviet Union. Hitler, on the other hand, had a geopolitical strategy of Lebensraum that called for brutal military subjugation of the Slavs, rather than big industry s attempt to gain the same territory through economic means instead of through war.4 The end game for both factions within the Third Reich was in effect the same—German domination of Eurasia, her Lebensraum.
The United States meanwhile developed its future war strategy within the internationalist circles around FDR, Rockefeller, Prescott Bush and the Council on Foreign Relations. Their geopolitical agenda, quite separate from Great Britains, was to supportand use Hitler in order to destroy Germany once and for all, eliminating the potential of a resurgent German challenge to their version of an American Lebensraum.
The goal of these circles in the United States was to realize a global American supremacy built on the war-ravaged ashes of Germany, of Britain and of Stalins Russia. The Rockefellers and their crowd were no more pro-Germanthan they were pro-British.
They were pro-American Century, and above all, pro-Rockefeller in an almost monarchical sense.
They formed tactical alliances with Nazi Germany one moment, and with Russia and Britain the next. These were simply matters of expediency—tactics in pursuit of their strategic end goal: global American hegemony, their American Manifest Destiny, their Lebensraum or Grand Area.
Hitler's military mistake
Fritz Hesse, Ribbentrop's expert adviser on England within the German Foreign Office, believed that Hitler's principal strategic military flaw was his fatal miscalculation of British geopolitical axioms. Hesse was in an unusually good position to understand British elite thinking as well as German. He had lived in England for years and served as press attache at the German Embassy in London from 1935-39. After 1939 he was called to become a special adviser on British affairs at Hitler's headquarters until the end of the war.
Hesse wrote in his memoirs after the war that Hitler had failed to realize why Churchill refused even to consider a deal with Germany over dividing the world, even at a time when the survival of Great Britain itself did not appear all that certain. Such a deal as Hitler even wrote about in years earlier in Mein Kampf,5 would allow both empires—the British and German—to divide up the world, without America.
What Hitler and his inner circle apparently did not grasp was the fact that no matter who ruled Germany, once Germany threatened to dominate the Eurasian land area, she would pose an ultimate threat to British supremacy, and had therefore to be ultimately crushed.
Hitler's decision in May 1940 to order a three-day cease fire just as his Wehrmacht had boldly and brilliantly driven British, Canadian, Polish and French allied forces to the sea at Dunkirk in France, astonished Hitler s military command every bit as much as it did Churchill. 6 The reason was simple according to Hesse. Hitler wanted to give the British the chance to cut a deal before the German war machine launched its fateful war against the Soviet Union. It was an ill-conceived attempt to try to avoid another devastating two-front war as in 1914.
In an extraordinary gesture towards England, Hitler allowed the escape of 338,000 allied troops over the Channel to England. That miracle of Dunkirk as British propaganda dubbed it for the British population, was in reality no miracle.
Equally naive as geopolitical strategists, however, were Hitler's high-level German internal opposition circles. Fritz Hesse was an intimate of most of the leading anti-Hitler factions as they turned to him to facilitate their own contacts in England.
Hesse realized that Hitler s opposition within the German establishment—inside the German Foreign Ministry, the Wehrmacht General Staff, leading layers of German banking and industry—were unwilling to grasp the importance of British geopolitical axioms. 7 That failure doomed the efforts of those forces within Germany to execute a coup against Hitler and come to a modus vivendi with England in 1940.
Chamberlain's Time was OverBritish Prime Minister Neville Chamberlain s infamous Munich appeasement agreement in September 1938 was a last calculated attempt by England to entice Germany eastwards rather than westwards. The Four Power conference in Munich—with Hitler of Germany, Chamberlain of Britain, Daladier of France and Mussolini of Italy—was ostensibly to decide the fate of Sudetenland, a region bordering Germany and containing a large German- speaking population. Sudetenland was then part of Czechoslovakia and Hitler threatened to annex it by force. The talks in Munich excluded both Czechoslovakia and the Soviet Union, therefore making an agreement possible.
Chamberlain and France's Edouard Daladier agreed that Germany could have the Sudetenland. In return, Hitler promised not to make any further territorial demands in Europe, signing the infamous Munich Agreement that transferred the Sudetenland to Germany.
When Eduard Benes, Czechoslovakia's head of state, protested the decision, Chamberlain told him that Britain would be unwilling to go to war over the issue of the Sudetenland. The Munich Agreement was popular in Britain because it appeared to have prevented a war with Germany.
Then in March 1939, the German Wehrmacht, its Army, took the rest of Czechoslovakia by point of bayonet. At that point, at the highest level, British policy shifted swiftly from appeasant to preparation for a war against Germany, with Churchill as anti-German Prime Minister, a man chosen partly for his ability to cultivate his American ties.
As Churchill took residence at Ten Downing Street in May 1940, the German Wehrmacht had already occupied Poland, the greatest part of Czechoslovakia, Austria, Denmark, Norway, Belgium, Holland, Luxembourg, and most of France. Hitler was in a strategic military alliance with Italy. He had cooperative relations with Franco s neutral Spain.
In addition, Germany soon had a strategic agreement with Stalin s Soviet Union on the division of the rest of Continental Europe, the Molotov-Ribbentrop Non-Aggression Pact of August 1939—the so-called Hitler-Stalin Pact. That left Germany s eastern flank protected, at least for the time being, to free the Wehrmacht forces to launch an attack on Great Britain. The German General Staff was determined never again to face a two-front war as it had in 1914.
From Hitler s perspective, his pact with Stalin was a cynical matter of buying time before his ultimate final military assault on the Soviet Union. For Stalin, it was an equally cynical and pragmatic pact to buy time to rearm and prepare Russia for that looming conflict. For Britain, it was a geopolitical setback, however temporary.
England found herself completely isolated and cut off from any Continental allies who might have been able to do the bulk of the fighting against a German foe. There was no candidate to do battle in alliance with Britain, such as France had done during the Great War in 1914. Churchill also knew that the United States was far from ready to commit its young men to die for yet another European war.
Why, then, did Winston Churchill, when he came to power as British Prime Minister in May 1940, do nothing to support the German anti-Hitler opposition? Churchill had been, after all, the most outspoken opponent in Britain of Chamberlain's appeasement policy. Such support from Britain s new Prime Minister to the nascent Hitler opposition at that early stage of the war in Europe could have decisively weakened, if not entirely defused, Hitler s military threat to Western Europe, and most directly to England herself by engulfing the German Reich in damaging internal power struggles.
Churchill knew very well the importance of the German opposition. Even before he had come into Chamberlain s War Government in September 1939 as First Lord of the Admiralty, Churchill had been aware of the seriousness and the extent of the high-level forces inside Germany trying to avoid a new war. Had Churchill aggressively and secretly attempted to support the Hitler opposition either covertly or otherwise, he might have seriously weakened the inevitable assault on England. In fact, the opposite was Churchill s policy.
Churchill had met the most senior representatives within the elite ranks of that Hitler opposition, including Ewalt von Kleist-Schmenzin, the Pomeranian Junker aristocrat who was cousin and collaborator of General Erwin von Kleist.
Churchill had invited von Kleist to his Chartwell estate south of London as early as the summer of 1938 to discuss the German situation. One year later, in August 1939, on the eve of Hitler's invasion of Poland, Churchill also had held a meeting in London, arranged by the head of German Military Counter-intelligence, Admiral Wilhelm Canaris, with von Kleist's close friend in the Hitler opposition, Fabian von Schlabrendorff. Churchill knew just how senior and how influential the institutional opposition to Hitler was. 8
Churchill's cold calculationWhy the British Prime Minister refused to support or even to encourage that anti-Hitler opposition was one of the major paradoxes of the war.
It was a paradox only for those ignorant of the axioms of British geopolitics. Chamberlain and Churchill agreed on the most fundamental strategic point: British geopolitical interests were threatened as much, if not more, by Hitler's opposition within the German military, the civil service bureaucracy, and industry, as they were from Hitler himself. That was simply because Germany would have averted a destructive war and emerged as the dominant economic power on the European Continent as Churchill reasoned.
As German Foreign Minister Ribbentrop s British advisor, Fritz Hesse had argued, so long as Germany threatened to dominate the Eurasian landmass, Germany remained the prime strategic opponent for British geopolitics. Preventing such a Eurasian domination by any Continental power, whether achieved through military or economic means, had been basic British geopolitical balance of power doctrine since well before the time of Sir Halford Mackinder s 1904 elaboration of his Heartland thesis.9
As Churchill and the British High Command saw it, the German opposition within the Wehrmacht and within big industry such as Krupp, Thyssen, and the German banks led by Deutsche Bank, represented for England merely a softer version of the same geopolitical reality: a German domination of the Central European Lebensraum through their economic penetration pacifique.
From the perspective of British circles around Churchill, a good Germany dominating the Eurasian economic space was far more a threat to British imperial power than a Nazi Germany. British geopolitics was never sentimental. As Lord Palmerston had declared a century or so earlier in a debate in the British Parliament, We have no eternal allies, and we have no perpetual enemies. Our interests are eternal and perpetual, and those interests it is our duty to follow. Britain has no friends, only interests. 10
Hesse was familiar with Mackinder s geopolitical ideas and even cited Mackinder to back his argument. He had understood the driving motives of both Anglo-Saxon and American geopolitics as outlined by Mackinder.
The German Foreign Ministry s Fritz Hesse noted that the utter lack of such understanding by the Continental European powers, above all by Germany, over the previous century had caused wars by miscalculation. The fact was that neither Britain, nor later America, would allow any European Continental power to dominate the Eurasian Continent. Full stop.
As Mackinder had put it in his 1919 essay,
Who rules East Europe commands the Heartland; who rules the Heartland commands the World Island; who rules the world island commands the entire world. 11
British policy—to prevent a German domination of the Eurasian Heartland landmass via its construction of the Baghdad-Berlin rail link with Ottoman Turkey—dictated its precipitating the European Great War in August 1914. In 1939, the same policy, outlined in Mackinder s geopolitical axioms, guided England s fateful decision to go to war against Hitler s Germany.
Fritz Hesse during the early 1930s had headed the German Middle East Institute (Deutsche Orient-Verein), an important faction within a German industrial association known as the Mitteleuropaeischen Wirtschaftstag or MWT (Central European Economic Council), essentially a private industry lobbying organization. Hesse had been in the middle of German big industry s strategic geopolitical operations to realize a German Grossraum, the
Lebensraum, since 1934.12 German big industry had reshaped the MWT to their purposes back in 1931, two years before they made the fateful agreement to bring Hitler to the Chancellery.
Third Reich s Grossraum MitteleuropaThe pivotal figures of the later Hitler opposition came from the highest ranks of the same conservative families and institutions that had offered Hitler the Chancellery in January 1933. They had backed Hitler at that time as the only figure able to realize their own agenda for recovering or rolling back the losses of Versailles, and establishing Germany at the heart of their planned New European Order.
Everything in Germany s foreign, military and economic policy since Versailles had been oriented to that institutional goal of a revived German power. After 1930, the strategy for reviving German power centered on establishing hegemony in Mitteleuropa—Central Europe, the territory of eastern Europe from Poland and Czechoslovakia to Romania, Bulgaria, the Balkans, Greece, and Turkey.
Following their devastating 1918 defeat in the First World War, leading circles of Germany— the high-level Reichswehr military command, influential Junker agrarian nobility of the large Prussian landed estates, influential mandarins of the German Beamtentum or civil service, and key industry and banking leaders—indeed, all major pillars of Germany s permanent institutional power, had reached a consensus on a long-term, secret strategy. They were determined to regain Germany's destined role as an economic and political Great Power in world affairs.
Reichspresident von Hindenburg had summed it up in remarks to an audience of German youth at one point during the 1920s: Was deutsch war, muss wieder deutsch werden” – What was German once, must again be German.
Carl Duisberg of I.G. Farben, the chemicals cartel that enjoyed strategic agreements with Rockefeller s Standard Oil, as well as DuPont and other leading US companies, had outlined the German industry elites' strategic economic aims in 1931, two years before Hitler took office.
MWT and Penetration Pacifique
Duisberg had declared that Germany must create, a closed, self-contained economic bloc from Bordeaux to Odessa, as the backbone of Europe. He spoke not only as head of the I.G. Farben chemicals trust—which during the 1920s as noted earlier, had begun secret arrangements with Rockefeller s Standard Oil—but also as chairman of the powerful Reichsverband der Deutschen Industrie (Imperial Association of German Industry).
Duisberg's economic bloc from Bordeaux to Odessa would be a German-dominated region straddling the heart of Europe, or what the Hitler Nazi Party propaganda called German Lebensraum. Such an economic domain was indispensable, if Germany were to be able to launch a competitive challenge to the other rival world powers, most especially to Britain,
France, and, ultimately, to the most formidable rival economic power in the world, the United States of America.
To create that Mitteleuropa economic domain to Germany's east and southeast, leading industry figures used the little-known private lobby organization known as the MWT, Mitteleuropaeischen Wirtschaftstag or Central European Economic Council, noted earlier.
In August 1931, in the midst of the deepening world economic crisis, the large German steel cartel companies made the MWT into a vehicle to advance their expansionist plans through economic means. They saw the international economic crisis as an opportunity to launch international initiatives that earlier had been unthinkable.
Co-opting the MWT, the steel cartel took over its finances, and moved its headquarters to Berlin. They brought in Tilo Baron von Wilmowsky, as chief executive of the MWT. Von Wilmowsky, board member of the steel and munitions giant, Krupp AG, had run Krupp's operations in Russia during the 1920s. He was brother-in-law of influential German industry leader, Gustav Krupp von Bohlen und Halbach, who succeeded Carl Duisberg in September 1931 as head of the Reichsverband der Deutschen Industrie (RDI), the central organization of German big industry.
The financial backers of MWT included the largest German industrial groups. In addition to Krupp and the steel cartel, it included Duisberg's I.G. Farben, as well as the Ruhr coal mining syndicate, the potash cartel, the large East Prussian Junker agriculture interests, the German Machinery Building Association, and the powerful RDI, the Imperial Association of German Industry. Dresdner Bank board director Carl Goetz and Deutsche Bank's Hermann Abs also played prominent roles in the MWT.
Within the German state bureaucracy, Baron von Wilmowsky's MWT enjoyed extremely close ties to Colonel Georg Thomas, Chief of the War Economy Office of the War Ministry, whom von Wilmowsky referred to as, our patron.
As pressure grew from Hitler to step up arms production, Colonel Thomas played the key role as liaison between the War Ministry, the military command, and private industry groups tied to MWT. Thomas became increasingly responsible for deciding the entire war sector of the Reich economy up until 1942. He determined what was required and which company would fill the orders.
Through this process, the industry backers in the MWT—Krupp, I.G. Farben and others— played a commanding role in the buildup of the war economy, especially after 1934.13 Their secret agreements with Rockefellers Standard Oil, Chase Bank, DuPont and other major US industries were intended to allow Germany to produce its own synthetic rubber and synthetic gasoline for the coming war. Economic autarky, as it was called, was vital to their plans.
I.G. Farben and the Third Reich would spend staggering sums for the construction of the special Leunawerk facility, at the time Europe s largest chemical facility, to produce the synthetic gasoline. 14
During the Nazi years of the 1930s Hjalmar Schacht, a close friend of von Wilmowsky, worked closely with the MWT when Schacht was Economics Minister and Reichsbank President, to advance the economic expansion agenda of the MWT. It was a well-oiled machine they had constructed.
In October 1932, months before Hitler took the Chancellor's office, the MWT, in a project developed with the Foreign Ministry and the Reichswehr, went on a secret mission to Rome to meet Italian fascist dictator Benito Mussolini. The purpose of the visit was to present Mussolini a confidential Memorandum proposing a joint German-Italian carving up of Mitteleuropa, of all Central Europe.
The unofficial MWT Memorandum outlined an Italian sphere of economic interest in Southeast Europe ceding to Mussolini a major part of Rumania, as well as Serbia, Bulgaria, Albania and Greece. Germany would take Poland and Czechoslovakia as her principle sphere of interest, as well as re-establishing and expanding the 1931 Customs Union with Austria, which Austria had been forced to annul under enormous French pressure. That would give Germany direct access to the Hungarian economy. 15
A Donau Federation consisting of Hungary, Croatia-Slovenia and the Transylvanian part of Rumania, would enter into preferential tariff and trade agreements with Germany and Italy. Yugoslavia would be dismembered with the help of German and Italian money, and with arms supplied to the forces of Yugoslav ultra-nationalist Ante Pavelic, then battling King Alexander I. The division of that rich and pivotal Balkan country would then proceed along the lines of the MWT Memorandum, a return to pre-Versailles status, with Slovenia and Croatia going to Germany's economic domain, and Serbia to Mussolini.
In its internal discussions, the MWT was clear that the proposed German-Italian division of Mitteleuropa would later be entirely German-dominated. The economically and militarily weaker Italians were to be gradually pushed into the background by more adroit German firms as the MWT industry barons envisioned it.
Seducing FranceThe division proposed to Mussolini was naturally a direct challenge to France, which had supported what was called the Little Entente alliance of Czechoslovakia, Yugoslavia and Rumania, as part of France s continuing attempt to contain any and all German expansionist threats.
An internal memo from the MWT representative of Deutsche Bank in the early 1930's stated that the goal of the MWT was, to develop and nurture the relationship to the Donau countries; to disrupt the dependence of each country with France; to create cooperative relations with Germany through practical, purely economic definition of their problems. The memo stressed that all this would only be possible if Germany gained political as well as economic influence over the space of Mitteleuropa. 16
Since 1921 France, acting through the League of Nations, had built up the dominant financial and economic ties with Czechoslovakia, Rumania and Yugoslavia, through credits and financial flows organized by the large French steel industry's Banque de l'Union Parisienne. In Austria, through the French Rothschild family links with the Vienna Creditanstalt, France had in effect created the Little Entente to block any effort to rebuild an Austro-Hungarian economic sphere with Germany, as well as to create a buffer of states between the Soviet Union and Western Europe. 17
The economic goal of the MWT in the early 1930's was to entice the Balkans and neighboring countries of Central Europe into full economic dependence on Germany. The relatively backward, agrarian Balkan lands would export agriculture products and industrial raw materials to Germany. The exports would, in turn, pay for imported German engineering goods, farm equipment, machinery and such, for mechanization of agriculture into large industry-like combines, and to build up related small industry in the region.
Within Germany, MWT policy had the politically important backing in the Reichstag or Parliament of the large Junker landowners whose interests would be protected with high import tariffs on grain, part of the quid pro quo for their political backing of MWT's Mitteleuropa industrial project. The alliance between German heavy industry and the reactionary Junker aristocracy of East Prussia had been a leitmotif of the development of German industry since Bismark's time, a phenomenon sometimes referred to as the feudalization of German industry. 18
Under the MWT plan, German small family farmers would be sacrificed in return for a protective tariff and subsidy to the large grain-producing Junker nobility. German large industry would secure an invaluable new economic sphere of control to get raw materials and cheap agriculture products that would more than replace the loss of colonies in Africa Germany had lost in 1919 under the Versailles Treaty.
By 1935, on orders from Colonel Thomas at the German Office of War Economy, Krupp and I.G. Farben were able to buy a controlling majority of stock in select copper, zinc and bauxite mines in Yugoslavia, their purchases hidden via a Belgian shell company.
The Reichswehr also asked I.G. Farben to establish large agriculture enterprises in Rumania, Bulgaria and Hungary, to make Germany essentially self sufficient in the important animal feed grains in the event of a future war. I.G. Farben was also commissioned to work with Dresdner Bank to secure the large oil fields of Rumania, then being operated by Rockefeller s Standard Oil. These fields were essential for a future Germany at war, as she was completely dependent on oil imports. 19
At the same time as German trade began displacing existing French trade relations in Eastern Europe, the Ruhr steel and coal cartel interests of the MWT pursued a policy of reasonableness with the French iron and steel industry, which culminated in a politically significant series of trade agreements.
Most notable was a July 1937 Franco-German treaty, signed by Schacht as Economics Minister on behalf of the Third Reich, in which German coking coal would become the major source of coal for the French steel industry. In return, the French cartel of steel companies (Comite des Forges) agreed to export French iron ore to German steel companies, in effect binding the fate of French heavy industry to the German.
The Comite des Forges, the French steel cartel controlled by two wealthy families of the Lorraine, became the center of a powerful pro-German industrial faction inside France, increasingly isolating the anti-Hitler Paribas industrial group, which had argued instead for closer ties with the Soviet Union in an effort to contain Germany. Andre Francois-Poncet, France's Ambassador to Berlin until 1938, had personal ties to the French steel industry. He openly represented the interests of the Comite des Forges in seeking closer economic cooperation with German steel. For that reason, Francois-Poncet was known in Berlin as Hitler's favorite ambassador.
Further cartel price-fixing agreements between the French and German steel industries helped to stabilize the French steel industry during the world economic depression. Similar agreements between I.G. Farben and French chemical companies were also concluded and later expanded.
Earlier, in September 1931, French Prime Minister Pierre Laval and his business partner, chemical industrialist Albert Buisson, had been invited to Berlin where they negotiated a cartel agreement with I.G. Farben. They also established a Comite Franco-Allemand, an alliance of leading French and German industrialists, to encourage French investment in German industry in return for German patent rights.
Step-by-step during the critical pre-war period of 1936-1939, French heavy industry had been enmeshed in a policy of economic collaboration with their German industry counterparts. And step-by-step, a powerful axis of pro-German sentiment and shared interests built up within French industrial groups during the late 1930s, centered roughly along a line from Lyons in the south, to Lille in the northeast of France.
By early 1939, in the wake of the Munich appeasement talks, French Foreign Minister Georges Bonnet, supported by France s biggest industries, had consolidated this process into an official foreign policy of industrial cooperation with Germany, replacing the prior policy of military containment. The large French industrial groups calling for German cooperation saturated French media with their point of view. They owned four large Paris dailies, Le Temps, Le Journal des Debats, L'Information and La Journee Industrielle, and heavily financed ten more, giving them significant power in shaping public opinion in favor of their pro-German economic strategy. 20
In all important respects, after 1936, the French arm of the MWT and Karl Duisberg's economic space from Bordeaux to Odessa were advancing to fruition just as hoped. Indeed, France s extensive industrial agreements with German industry during the late 1930s played a decisive role in building a large appeasement faction inside France around Laval and Petain, which resisted any fight to the bitter end with Germany in May 1940.
The only component of the MWT's economic expansion, the peaceful penetration strategy of Duisberg and Krupp, which was not making progress was with Stalin's Soviet Union. In the mid-1930s, Stalin regarded Nazi Germany as the Soviet Union s major strategic threat.
As noted by a German economist, Alfred Sohn-Rethel, an official of the MWT, the German Reich had secretly been preparing since 1935 for the necessity of taking the Soviet Union by war. 21
A Eurasian Economic SpaceDespite impressive progress on most major fronts, the largest obstacle to the MWT s consolidation of its strategy for peaceful economic penetration in eastern and southeastern Europe, was increasingly centered on one man, Der Fuehrer. Hitler, whom big industry and finance had initially backed and put into the Chancellery to realize their agenda of restoring or rolling back the losses of Versailles, had become obsessed with a war to the death to destroy Bolshevism and the inferior Slavic race, as he had stated more than a decade before in Mein Kampf.
As early as October 1935, months before German troops had marched into the Rhineland, Hitler had convened his so-called inner cabinet to discuss preparations needed for launching a war against the Soviet Union by the Spring of 1939. This was a full year earlier than his February 1934 timetable, which had called for a Russian war by 1940.
Present at that October 1935 meeting and at subsequent planning sessions, in addition to Hitler, were Hitler s deputy, Rudolf Hess; Admiral Erich Raeder of the Navy; Minister of War General Werner von Blomberg; Hermann Goering for the Air Force; Konstantin von Neurath as Foreign Minister; Count Schwerin von Krosigk as Finance Minister; and Hjalmar Schacht in his new dual role not only as Reichsbank President, but also as Reich Economics Minister.
Schacht in Cabinet discussions argued for the agenda of banking and large industry, as embodied in the MWT policy of peaceful penetration. Arguing forcefully against a direct military occupation of central and Eastern Europe, Schacht tried to convince Hitler of Germany's lack of in-depth economic preparation for what would become a full-scale war, a war likely involving France and the Entente powers against Germany. Chief of the General Staff General Ludwig Beck also argued that the military lacked in-depth readiness for war.
Schacht fought against Goering's, and ultimately, Hitler's demands for huge deficit financing of military spending, insisting it threatened new inflation and would destabilize the entire economy.
Above all, as Schacht and his industry backers at the MWT knew, the best prospect for their strategy of economic domination of Central Europe and other eastern lands of Continental Europe lay in Germany's pursuing Carl Duisberg's original strategy of a penetration pacifique -- economic domination of neighboring lands, without a forced military occupation of the conquered territories.
When Hitler demanded in November 1935 that Germany prepare to launch full-scale war against Russia by 1939, Beck and his General Staff, in concert with General Thomas and the MWT circles of industry, drew up a list of four essential preconditions for success of such a war. 22
The prerequisite was that Germany must first have established a firm economic domination of the Mitteleuropa region. That, they argued, must be done not through military conquest and occupation, which would overextend the Wehrmacht. Rather it must be accomplished through economic, political and other controls, which would guarantee the raw materials, agriculture products, energy, transport, post and administration infrastructure necessary to support a major war with the Soviet Union. In effect, they demanded that their MWT Mitteleuropa agenda be made Third Reich State policy. Krupp, I.G. Farben and the steel cartel stood behind the General Staff on that crucial point.
The second pre-condition of the General Staff was that the Polish military, if it were to be used as a future German ally against Russia, must be brought up to German battle standards and discipline. This, they suggested, should be done through a Polish-German Mutual Defense Treaty, something previously proposed by Germany in late 1934 and rejected by Poland.
The third condition was that Hitler create a mutual alliance with Japan against Russia, in which Japan would agree simultaneously to invade Siberia in Russia's Far East, as German forces struck at Russia's western borders.
Finally, the General Staff demanded assurance of England's strict neutrality in any such German strike eastwards in order to avoid a repeat of a catastrophic two-front war as in 1914.
The demands were carefully formulated in order to try to preserve the core strategy of Mitteleuropa, while Beck, Schacht and others tried to steer Hitler into a course of gaining his demands on Austria, Sudetenland, and later Poland by threat of military force, but short of actual war.
By late 1936, Hitler had appointed Hermann Goering to administer the new Four-Year Plan that aimed to prepare Germany for war by building economic self-sufficiency or autarky in fuels, rubber and other necessities.
An unexpected geopolitical shiftAfter Hitler lost patience with Polish Foreign Minister Josef Beck, he had decided to accept Stalin's shrewd proposal for a Soviet-German dismemberment of Poland. On August 23 1939 in Moscow the Molotov-Ribbentrop Non-Aggression Pact was signed, resulting in the military occupation and dismemberment of Poland.
The German military non-aggression pact with the Soviet Union was accompanied by a far- reaching German-Soviet Trade and Credit Agreement that gave the USSR an immediate credit line to purchase up to 200 million Reichsmarks of industrial goods from Germany in return for vital oil and industrial raw materials from Russia.
The Agreement explicitly mandated construction of factories, delivery of every kind of machine and machine tool, equipment for building a naptha industry, essential for high octane gasoline, and a Soviet chemicals industry, equipment for an electro-technical industry, ships, vehicles, transport equipment, measuring instruments, laboratory equipment....
The 200 million Reichsmark credit for the initial Russian purchases of German industrial equipment would come from the Deutsche Golddiskontbank, Dego.
The trade and credit agreement with Stalin opened Germany s prospects, at least theoretically, for a far-reaching German economic penetration pacifique of the vast Soviet Union itself. Baron von Weizsaecker's Foreign Ministry was jubilant about the economic accords with Moscow. In a memorandum for Ribbentrop, Hitler and the cabinet, they wrote,
Both countries will economically enrich themselves in a most natural way: The
Soviet Union, the land of inexhaustible riches of raw materials, the land of
great, long-term investment planning, which into the far-distant future, has
need of the highest quality manufactured goods. Germany, the country with
the most specialized and highest quality industry, which is able, in respect to
the current partly developed state of industrialization of the Soviet Union, to
deliver the required factories and equipment to their industrial sector. 23.
Germany's goal of economic domination of the vast Eurasian landmass appeared suddenly within reach by the summer of 1940. That was not what London desired and it most certainly was not what the emerging power constellation around FDR and the Rockefeller interests in the East Coast Establishment desired.
Neue Ordnungin EuropeUnder the economic terms of the Hitler-Stalin pact, the role of Russia as the raw materials supplier and industrial export outlet for the German economy was finally being realized. The MWT working with Hermann Abs at Deutsche Bank, were intensively working out the blueprint for Hitler's proposed Neue Ordnung, a New Order in Europe—consolidation of a German-dominated Europe from Bordeaux to Odessa, and perhaps well beyond.
Schacht's successor at the Economics Ministry, Walther Funk, had been ordered by Goering to formulate plans for an economic consolidation of the areas occupied by or economically dependent on the Third Reich. On July 25 1940, Funk announced Hitler s New Order for Europe, promising an end to economic crises, unemployment and social chaos for the countries now within the sphere of Hitler's Germany. The promise was a calculated contrast to the economic chaos and depression of liberal economic orthodoxy.
Funk's assistant at the Reich s Economics Ministry was a protege of Schacht's named Karl Blessing who was responsible for consolidating Germany s banking and economic ties to the occupied parts of Europe. In 1941 on the eve of the invasion of Russia, Goering appointed Blessing to join Funk, Hermann Abs of Deutsche Bank and I.G. Farben's Carl Krauch, on the board of the state-controlled Kontinentale Oel, one of the companies secretly working with Rockefeller s Standard Oil through front companies to secure vital petroleum supplies for Germany s military effort, especially in Rumania. 24
Hitler s Neue Ordnung was intended to be a single European economic sphere, a European unified market, from Bordeaux to Odessa, and beyond. Economic relations between Germany and the nations of Eastern Europe, as well as the parts of Western Europe under the hegemony of Hitler's Reich, were to be fixed in national currencies that would in turn be pegged to the Reichsmark, much like America s postwar Bretton Woods system and the dollar.
Berlin was to become the financial center of the New European Order. Eventually all national exchange rates of New Europe were to be fixed to the Reichsmark, and maintained through rigid price controls by the various governments. Gold was to be rejected in favor of the peg to the Reichsmark – similar to the role of the US dollar after leaving the gold exchange standard in August 1971.
In explaining the currency system for the New European Order, Funk declared:
We shall never pursue a currency policy which makes us in any way dependent on gold, because we cannot tie ourselves to a medium of exchange, the value of which we are not in a position to determine. 25
Ultimately, the idea envisioned a four-power pact among Germany, Mussolini's Italy, Japan and Russia that would establish joint economic control over the entire Eurasian landmass stretching between the Atlantic and Pacific Oceans. Such a consolidated concentration of power over Eurasia was precisely what Mackinder had warned British elites to prevent at all costs, and precisely what their American cousins in and around the Rockefellers Council on Foreign Relations would not allow.
Central to the New European Order was the role of the Third Reich's large Berlin banks, most of all Deutsche Bank and Dresdner Bank. Within the directorate of Deutsche Bank, Germany's most powerful bank, Hermann Abs was the person responsible for all foreign banking matters. Abs came onto the management board of Deutsche Bank in 1937, recommended by fellow banker, Economics Minister Schacht.
Under the New European Order, the German banking model—direct ownership of key industry groups—was to be exported to the occupied parts of the New Europe, especially in the east. Deutsche Bank gained control of a major part of occupied Czechoslovakian banking by its purchase of the Boehmische Union-Bank, and of Austrian banking and industry through takeover of the large Vienna Creditanstalt-Bankverein. Dresdner Bank took over the Laenderbank Wien in Vienna, and the important Boehmische Escompte Bank in Prague.
German banks' control of the largest Austrian and Czechoslovakian banks greatly boosted the MWT strategy of economic development of trade with Southeastern Europe. Through Creditanstalt, Deutsche Bank extended its banking interests into the former Habsburg Empire—Zagreb, Budapest, Lvov and Belgrade. Through control of the Prague banks, German banks controlled or gained valuable footholds in Bratislava, Belgrade, Sofia and Bucharest. The banks in those countries—Yugoslavia, Hungary, Czechoslovakia, Bulgaria, Rumania and Poland, controlled the most important agriculture and industrial firms of those regions. Explaining the German policy of banking consolidation in the east, the Reich
Economics Ministry declared it was, necessary in order to secure the sources of the raw materials so essential for our economic welfare. 26
Operation Barbarossa is orderedThe expansive economic development of the Reich s big banks, major industry and the MWT in building the New Order for Europe began to run amok after November 12, 1940 when Soviet Foreign Minister V.M. Molotov visited Berlin. Molotov angrily confronted Hitler with allegations of German violations of the Molotov-Ribbentrop agreements of 1939, notably in Finland and Rumania.
In October, only days before Molotov's trip to Berlin, Rumanian dictator Ion Antonescu had allowed the German Wehrmacht to occupy his country to secure the invaluable strategic oil resources of the Ploesti complex for the Third Reich war machine. That did not go down well with Stalin who saw it as a direct threat.
At the Berlin talks with Hitler, Molotov forcefully restated Soviet demands on Finland and on the Balkans, with emphasis on Rumania, as a Soviet sphere of interest. In addition, Stalin demanded control of the Dardanelles, a move that threatened Germany's alliance with Mussolini's Italy.
Shortly after that confrontation with Molotov, Hitler resolved to exclude the Soviet Union from a planned Four-Power Pact with Italy and Japan. On December 18, 1940 Hitler ordered his military High Command to prepare for a full-scale war of destruction against the Soviet Union, under the code-name Operation Barbarossa, reviving the plans of 1935. 27
FDR s Geopolitical GameAt that point Roosevelt and the circles around Rockefeller s War & Peace Studies at the Council on Foreign Relations were certain that they would emerge the victors in the most costly war in history. They began a careful propaganda campaign to prepare public opinion to come into a war against Hitler Germany. The reason for the US entering the European war, at least from the side of the Rockefellers and their allies on Wall Street and in big industry, had nothing to do with Hitler s policies of final solution against Jews or other atrocities of the Third Reich.
Rather, the growing propaganda campaign to win American hearts to another war in Europe had to do with the need to destroy the most serious rival to a postwar American Century— the German Reich.
The US plan, as Stalin feared, was to delay launching the Anglo-American Second Front against Hitler long enough to let Russia and Germany bleed each other to death. Operation Barbarossa lasted from June through the brutally cold winter of December 1941. It involved the deployment of over 4.5 million German and Axis troops in the invasion of the Soviet Union. Barbarossa was the largest military operation in human history in terms of manpower, area traversed and human casualties.
At that juncture, the entire strategy and influence of von Wilmowsky's MWT collapsed. Their network within the industries and institutions of the Third Reich redefined their activities in what came to be known after the war as Der Widerstand, or The Resistance.
The curious ebbs and flows of their active opposition to Hitler's war agenda after 1939 -- through to the attempt on Hitler of July 20, 1944 by Colonel Claus von Stauffenberg --could be understood perhaps only from the perspective of the parallel ebbs and flows of the Middle European and Eurasian agenda of the German financial and industrial circles around Schacht, Krupp, General Thomas and von Wilmowsky's Mitteleuropaeische Wirtschaftstag.
As England s Prime Minister Churchill saw it, through the ice cold lens of British geopolitics, the Resistance to Hitler inside Germany was Churchill's more dangerous German opponent.
Churchill had been reading an inside account of the MWT s agenda of economic imperialism, written by Alfred Sohn-Rethel, who had left Germany in 1936 as the Gestapo became suspicious of his activities. From exile in France, Sohn-Rethel wrote detailed accounts of his experiences in the middle of the German industrialists at the MWT and he sent his writings to Wickham Steed, the influential Foreign Editor of the Round Table-owned London Times, and an intimate friend of Winston Churchill.28
By September 1945, the Tripartite Axis powers—Germany, Japan and Italy—had all been defeated. The cost of that victory in human terms had been staggering. The war had involved the mobilization of over 100 million military personnel, making it the most widespread war in history. In a state of total war, the major belligerants had placed their complete economic, industrial, and scientific capabilities at the service of the war effort, blurring the distinction between civilian and military resources. Over 70 million people, the majority of them civilians, had been killed, making it the deadliest conflict in human history.
At war s end, the United States of America, its landmass and infrastructure intact, stood as the unchallenged global power. Its industry had been upgraded with the most advanced technology then available, with taxpayer dollars, for the wartime production of planes, tanks, munitions, bombs and other explosives.
Roosevelt s New Deal and its vast public infrastructure projects—from the Hoover and Colorado dams to the Tennessee Valley Authority—provided abundant, cheap electricity to American aluminum and other war plants. Its chemical industry from DuPont to Dow Chemical and Hercules Powder had grown into giant corporations. And out of it all, one group had managed to emerge at the pinnacle of American power. By 1945 the four Rockefeller brothers were standing at the heart of the emerging global colossus called the American Century.
America s wealthiest and most powerful circles around the Council on Foreign Relations and Wall Street had created their new global Open Door or, in the words of the CFR s Isaiah Bowman, America s Grand Area. They were now ready to march through, victorious in a complex geopolitical play that had successfully shaped the American Century of Rockefeller and friends, and their vast industrial allies.
Cynically, the same industrialists and CFR policy makers who had secretly been active in aiding the war preparations of the Third Reich became, after the war, America s leading proponents of spreading democracy and the American free enterprise system around the world. It was nothing personal, merely business as usual for them. It was the birth of the American Century.
1 Halford J. Mackinder, Democratic Ideals and Reality, 1919, Henry Holt & Co., p. 150.
2 Nicholas J. Spykman, Geography and Foreign Policy: I, The American Political Science Review, Vol. XXXII, No. 1, February, 1938, pp. 28-50.
3 Ibid., p. 39.
4 Alfred Sohn-Rethel, Industrie und Nationalsozialismus: Aufzeichnungen aus dem 'Mitteleuropaeischen Wirtschaftstag (Berlin: Verlag Klaus Wagenbach, 1992), pp. 102-110.
5 Adolf Hitler, Mein Kampf.
6 B. H. Liddel Hart, History of the Second World War (New York: G.P. Putnam, 1970), p. 46.
7 Fritz Hesse, Das Spiel um Deutschland (Munich: Paul List Verlag, 1953), p. 240. In a footnote referencing Mackinder’s 1919 work, Hesse noted, “The pre-existing conception of the British and the Americans I find especially clear in the book of Sir Halford Mackinder, Democratic Ideals and Reality (1919). Its lessons about the Heartland as well as the lessons of Admiral Mahan have led to a complete misunderstanding on the part of the Continental Powers, without which one cannot understand the political strategy of the English or the Americans. It was for these reasons that the Anglo-Saxons for reasons of her own security must destroy Germany.“ (footnote, p. 240.)
8 The discussions between German opposition leaders and Churchill are documented, among other places in Schlabrendorff, Fabian von, The Secret War Against Hitler (Boulder: Westview Press, 1994).
9 Ibid. p. 240.
10 Henry Temple, 3rd Viscount Palmerston, Speech to the House of Commons, Hansard (1 March 1848).
11 Fritz Hesse, op. cit.
12 Alfred Sohn-Rethel, op. cit., p. 12.
13 Ibid., p. 105.
14 Ibid., pp. 86-87.
15 Ibid., pp. 69-70.
16 The Deutsche Bank memo on the aims of MWT can be found in ZStA, Potsdam, Deutsche Bank AG, nr. 21 838, Bl.131. (cf. DDR Lexikon zur Parteigeschichte, Band 3, p. 370, Leipzig 1985).
17 Alfred Sohn-Rethel, op. cit., p. 81-82.
18 The ‘feudalization of industry’ in late 19th Century Germany has been described in Helmut Boehme, Deutschlands Weg zur Grossmacht (Cologne: Kiepenhheuer & Witsch, 1972). See also, Otto-Ernst Schueddekopf, Die deutsche Innenpolitik im letzten Jahrhundert und der konservative Gedanke (Braunschweig: Verlag Albert Limbach, 1951); and Klaus Epstein, Vom Kaiserreich zum Dritten Reich (Berlin: Ullstein Verlag, 1972). A detailed account of the Junker-industry symbiosis at the turn of the Century is found in Kurt Gossweiler, Grossbanken, Industriemonopole, Staat (Berlin: Deutscher Verlag der Wissenschaft, 1971).
19 Ibid., p. 105.
20 The role of major German industry and banking circles of the Langnamverein and Reichsverband der Deutschen Industrie, through the Mitteleuropaeische Wirtschaftstag (MWT) is found in the memoirs of MWT former director, the Krupp representative, Tilo Freiherr von Wilmowsky, Rueckblickend moechte ich sagen... (Oldenburg: Gerhard Stalling Verlag, 1961). See also, a useful account by one who worked with von Wilmowsky and Fritz Hesse in the Deutschen Orient-Verein within the MWT is Alfred Sohn-Rethel, Industrie und Nationalsozialismus: Aufzeichnungen aus dem 'Mitteleuropaeischen Wirtschaftstag (Berlin: Verlag Klaus Wagenbach, 1992). A published doctoral dissertation by Axel Schildt, Militaerdiktatur mit Massenbasis?: Die Querfrontkonzeption der Reichswehrfuehrung um General von Schleicher am Ende der Weimarer Republik (Frankfurt am Main: Campus Verlag, 1981), also has details on the relation of the MWT industry group in the end of the 1920's and early 1930's. John R. Gillingham, Industry & Politics in the Third Reich (New York: Columbia University Press, 1985), details the role of the Ruhr coal and steel industry and the agreements with French industry. A declassified US Government document, Report on the Banque Nationale pour le Commerce et l'Industrie: Laval's Bank by Alexander Sacks, Antitrust Division, Department of Justice, 225 Broadway, New York to Fowler Hamilton, Esq., Chief, Enemy Branch, OEWA, Board of Economic Warfare, Washington, D.C., dated April 21, 1943, contains the details of the role of Laval and Albert Buisson of Rhone-Poulenc in 1931 with I.G. Farben and German industry.
21 Alfred Sohn-Rethel, Industrie und Nationalsozialismus: Aufzeichnungen aus dem 'Mitteleuropaeischen Wirtschaftstag (Berlin: Verlag Klaus Wagenbach, 1992), pp. 103-110.
23 The German Foreign Office memorandum of 20 August 1939 is reproduced in full in Hass, Gerhard, 23.August 1939: Der Hitler-Stalin Pakt, Dokumentation (Berlin: Dietz Verlag, 1990).
24 Peter Hampe and Albrecht Ritschl, Neue Ergebnisse zum NS-Aufschwung:
Jahrbuch für Wirtschaftsgeschichte, Akademie Verlag, 2003, p. 196.
25 Walther Funk, cited in Patricia Harvey, "The Economic Structure of Hitler's Europe: The Planning of the New Order in 1940," in Royal Institute of International Affairs' Survey of International Affairs: 1939-1946: Hitler's Europe, Oxford, 1954.
26 Cited in Board of Governors of the Federal Reserve Internal Memorandum, German Banking Penetration in Continental Europe (Washington: September 1944).
27 Text of the Credit Agreement between German Reich and Soviet Union dated 19 August 1939 can be found in Akten zur Deutschen Auswaertigen Politik 1918-1945, aus dem Archiv des deutschen Auswaertigen Amtes (Baden-Baden: Imprimerie Nationale, 1956). The German Foreign Office memorandum of 20 August 1939 is reproduced in full in Hass, Gerhard, 23.August 1939: Der Hitler-Stalin Pakt, Dokumentation (Berlin: Dietz Verlag, 1990).
On the role of Hermann Abs' Deutsche Bank and other large Berlin banks in extending German influence into the Balkans and Eastern Europe in the period after 1936, a declassified internal Memorandum to the Board of Governors of the Federal Reserve System, Washington, German Banking Penetration in Continental Europe (Washington: September 1944), has valuable details, especially regarding the importance of Deutsche Bank acquisitions in Czechoslovakia and Austria after 1938. Patricia Harvey, op.cit. provides details of the Funk speeches on the New Order. Lothar Gall, et al, "Die Deutsche Bank: 1870-1995" (Munich: Verlag C.H. Beck,1995) details Abs' central role in trying to create the economic and banking framework for Die Neue Ordnung after 1940. The fateful November 1940 clash between Molotov and Hitler is detailed in many sources, though a useful eyewitness account is that of the Third Reich Finance Minister, von Krosigk, Lutz Graf Schwerin, Memoiren, (Stuttgart: Seewald Verlag, 1977)
28 Alfred Sohn-Rethel, op. cit., p. 23.