Tower of Basel: The Shadowy History of the Secret Bank That Runs the World (43 page)

13.
John Weitz,
Hitler’s Banker
(London: Warner Books, 1999), 110.

14.
Nancy Lisagor and Frank Lipsius,
A Law Unto Itself: The Untold Story of Sullivan and Cromwell
(NY: William Morrow and Company, 1988), 120.

15.
Gates McGarrah to George Harrison, September 22, 1930. BIS archive, File 7.18 (2) MCG, 6/48.

16.
Op cit.

17.
BIS,
First Annual Report
(Basel: 1931), 1.

CHAPTER THREE: A MOST USEFUL BANK

1.
Quoted in Toniolo,
Central Bank Co-operation at the Bank for International Settlements 1930–1973
, 59.

2.
Op. cit., 58.

3.
Ibid., 59.

4.
Ibid., 59.

5.
Ibid., 106.

6.
Hew Strachan,
Financing the First World War
(NY: Oxford University Press, 2004), 28.

7.
Niall Ferguson,
Paper and Iron: Hamburg Business and German Politics in the Era of Inflation, 1897–1927
(London: Cambridge University Press, 2002), 117.

8.
Pierre Mendes-France,
La BRI Son rôle dans la vie économique mondiale
, published in
L’Espirit International
, July 1, 1930, 362.

9.
Ibid.

10.
Toniolo, 46.

11.
Gates McGarrah to John Foster Dulles, October 14, 1930. BIS archive, File 7.18 (2) MCG, 7/53.

12.
Eleanor Dulles,
The BIS at Work
(NY: Macmillan, 1932), 480.

13.
Weitz,
Hitler’s Banker
, 106.

14.
Gates McGarrah to Leon Fraser, BIS archive, File 7.18 (2) MCG, 12/20a.

15.
Interrogation of Kurt Freiherr von Schröder, November 13, 1945. Charles Higham collection, “Trading with the Enemy” Collection, Box 3, Folder 6, University of Southern California Cinematic Arts Library.

16.
Op cit.

17.
This document, in German, can be accessed at
http://www.ns-archiv.de/krieg/1933/04-01-1933
.

18.
Donald MacLaren, British intelligence dossier on Hermann Schmitz, part of “Brief for the De-Nazification of the German Chemical Industry,” December 1, 1945. Author’s collection.

19.
Joseph Borkin,
The Crime and Punishment of IG Farben
(New York: The Free Press, 1978), 51.

20.
Ronald W. Pruessen,
John Foster Dulles
(New York: The Free Press, 1982), 129.

21.
Toniolo, 154.

22.
Gates McGarrah to Johan Willem Beyen, June 27, 1935. BIS archive, 7.18 (2) MCG, 12/79a.

23.
Op. cit.

24.
Ibid.

CHAPTER FOUR: MR. NORMAN TAKES A TRAIN

1.
Paraphrase of telegram received, from Cochran, American Embassy, Paris, May 9, 1939, no. 907. Franklin D. Roosevelt Presidential Library, Hyde Park, NY. Henry Morgenthau Papers. Book 189, 1–3.

2.
Toniolo,
Central Bank Co-operation at the Bank for International Settlements 1930–1973
, 131.

3.
Gates McGarrah, “A Balance Wheel of World Credit,”
Nation’s Business
, March 1931, 24. BIS archive, File 7.18 (2), MCG8/55.

4.
Henry M. Christman, editor,
Essential Works of Lenin: “What Is to Be Done?” and Other Writings
(NY: Dover Publications, 1987), 202–203.

5.
“Watch Mr. Norman,”
News Chronicle
, January 5, 1939. Press cuttings file, Bank of England Archives.

6.
“Public Should Know What He Is Doing There,”
Daily Herald
, January 6, 1939.

7.
Frederick T. Birchall, “Schacht Honored on Sixtieth Birthday,”
New York Times
, January 23 1937.

8.
The Nikor Project, “Nazi Conspiracy and Aggression: Individual Responsibility of Defendants, Hjalmar Schacht,” part three of thirteen, accessed at
http://www.nizkor.org/hweb/imt/nca/nca-02/nca-02-16-responsibility-12-03-01.html
.

9.
H. R. Trevor-Roper,
Hitler’s Secret Conversations, 1941–1944
(NY: Farrar, Straus and Young, 1953), 432–433.

10.
Hjalmar Schacht,
Confessions of the Old Wizard
(Boston: Houghton Mifflin, 1956), 356.

11.
Op. cit, 304.

12.
Ibid., 357, 358.

13.
Paraphrase of Sections Six and Seven, from Cochran, American Embassy, Paris, May 9, 1939, no 907. FDRPL. Henry Morgenthau Papers. Book 189, pp. 6-11.

14.
W. Randolph Burgess notes for meeting of the Federal Reserve Board, October 30, 1931. NARA, RG 82- FRS, NWCH.

15.
Andrew Boyle,
Montagu Norman
(London: Cassell, 1967), 281.

16.
Op. cit, 281.

17.
Diarmuid Jeffreys,
Hell’s Cartel: IG Farben and the Making of Hitler’s War Machine
(London: Bloomsbury, 2009), 210.

18.
Quoted in Toniolo, 195.

19.
Bretton Woods Conference, Reel 216, Book 755, page 117. FDRPL. Henry Morgenthau Papers.

20.
Tereixa Constenla, “How Franco Banked on Victory,”
El Pais
(English), June 13, 2012.

21.
Pablo Martín-Aceña, Elena Martínez Ruiz, and María A. Pons, “War and Economics: Spanish Civil War Finances Revisited,” Working papers on Economic History, Universidad de Alcala, in Madrid, WP-04-10, December 2010.

22.
BIS,
Seventh Annual Report
(BIS: Basel, 1937), 49.

23.
Constenla, “How Franco Banked on Victory.”

CHAPTER FIVE: AN AUTHORIZED PLUNDER

1.
Paul Elston, “Banking with Hitler,”
BBC Timewatch
documentary, 1998. Accessed online at
http://www.youtube.com/watch?v=YauM5dHLn1s
.

2.
Douglas Jay, “£10,000,000—And Norman’s Fault,”
Daily Herald
, June 21, 1939.
Press cuttings files, Bank of England Archives.

3.
Elston, “Banking with Hitler.”

4.
Toniolo,
Central Bank Co-operation at the Bank for International Settlements 1930–1973
, 209.

5.
Op. cit., 208.

6.
Ibid., 210.

7.
Montague Norman to Johan Beyen, May 25, 1939. BIS archive, File 2.22e, Vol 1.

8.
George Harrison to Marriner Eccles, April 6, 1939. Columbia University, Harrison, Volume 57. Miscellaneous letters and reports, Volume V, 1940.

9.
Op. cit.

10.
Ibid.

11.
Extract from the minutes of the ninety-third meeting of the Board of Directors held in Basel, June 12, 1939. BIS archive. File 2.22e, Vol. 1.

12.
Josef Malik to Thomas McKittrick, June 16, 1945. BIS archive, File 2.22, volume 1.

13.
“Sees British Hands Tied on Czech Gold,”
New York Times
, June 6, 1939.

14.
Toniolo, 187.

15.
Milton Friedman, “The Island of Stone Money,” Working Papers in Economics, E-91-3. The Hoover Institution, Stanford University, February 1991.

16.
Op. cit.

17.
John Weitz,
Hitler’s Banker
(London: Time Warner, 1999), 244.

18.
Andrew Boyle,
Montagu Norman
(London: Cassell, 1967), 309.

CHAPTER SIX: HITLER’S AMERICAN BANKER

1.
Winant to State Department, July 10, 1941. Telegram 2939. NARA. Author’s collection.

2.
Cochran to the State Department, May 9, 1939. Telegram 907. FDRPL. Henry Morgenthau Papers, Book 189, 1–9 and 11–14.

3.
Thomas McKittrick interview with R. R. Challener, July 1964. John Foster Dulles Oral Collection at Seeley G. Mudd Manuscript Library, Princeton University Library, 7.

4.
Higginson & Co., Paris Office, Copies of Cable & Telegraphic Correspondence—German Gov’t Short Term Financing, September 19, 1930. Thomas H. McKittrick Papers. Harvard University Business School, Baker Library Series 2, Carton 6, Folder 13, Reel 10.

5.
Gates McGarrah to John Foster Dulles, October 14, 1930. BIS archive, File 7.18
(2) MCG, 7/53.

6.
McKittrick interview, 9, 10.

7.
McKittrick correspondence with Kenneth Brown Baker, September 25, 1939, and October 19, 1939. Thomas H. McKittrick Papers. HUBL, Baker Library, Series 2, sub-series 2.1, Carton 5, file 18.

8.
Mattuck to McKittrick, November 23, 1938. Thomas H. McKittrick Papers. HUBL, Baker Library, Series 2, sub-series 2.1, Carton 5, file 17.

9.
McKittrick to Harrison, August 28, 1942. Thomas H. McKittrick Papers. HUBL, Baker Library, Series 2, sub-series 2.1, Carton 6, file 1.

10.
McKittrick memo to staff, June 11, 1940. BIS archive, McKittrick papers. Series 2, Business papers 2.2, Carton 10, f.11 Neutrality file.

11.
McKittrick to Baranski, May 1, 1940. Thomas H. McKittrick Papers. HUBL, Baker Library, Series 2, Carton 6, Folder 20, Reel 12.

12.
McKittrick interview, 19.

13.
McKittrick to Cochran, September 2, 1940. FDRPL. Henry Morgenthau Papers. Reel 83, Books 302, 3–5.

14.
McKittrick interview, 13–15.

15.
Ibid.

16.
Winant to the State Department, telegram 2939, July 10, 1941. NARA. Author’s collection.

17.
Ibid.

18.
McKittrick interview, 37.

19.
Quoted in Toniolo, 225.

20.
Ibid., 229.

21.
Currently, there are no figures available for the total amount of foreign exchange bought and sold by the BIS to its various counterparties, including the Reichsbank, during the war years. The information is available in the BIS archives in the files dealing with BIS- Reichsbank transactions, and the BIS’s foreign exchange records, but has not been compiled. Most of the transactions involve the Reichsbank, selling Swiss francs to the BIS to cover the interest payments on the bank’s investments in Germany. These transactions were usually in the range of 200,000 to 300,000 Swiss Francs, but they ended in January 1943 when the Reichsbank began paying its obligations to the BIS in looted gold. The author is grateful to Piet Clements, the BIS historian, for this information.

22.
Erin E. Jacobssen,
A Life for Sound Money: Per Jacobssen, His Biography
(Oxford: Clarendon Press, 1979), 165.

23.
Toniolo, 227. Toniolo references the final report by the Swiss Independent Commission of Experts on Switzerland in the Second World War, published in 2002.

24.
Interrogation reports, Devisenschutzkommando, May 29, 1945. United Kingdom National Archives, London. FO 1046/763, German Loot.

25.
Op. cit.

26.
Lucas Delattre,
A Spy at the Heart of the Third Reich
(London: Grove Press/Atlantic Monthly Press 2006), 198.

27.
Elizabeth Olson, “Report Says Swiss Knew Some Nazi Gold Was Stolen,”
New York Times
, May 26, 1998.

28.
Schmitz to Thomas McMittrick, January 3, 1941. Thomas H. McKittrick Papers. HUBL, Baker Library, Series 2, Carton 5, Folder 25, Reel 9.

29.
Fraser to McKittrick, November 20, 1940. Thomas H. McKittrick Papers. HUBL, Baker Library, Series 2, Carton 8, Folder 18, Reel 18.

30.
Ibid.

31.
Ibid.

32.
Quoted in Toniolo, 227.

33.
Norman to McKittrick, June 12, 1942. Thomas H. McKittrick Papers, HUBL, series 2.2, carton 8, folder 1–2, Correspondence Bank of England 1939–1946.

34.
Ibid.

35.
Rooth to Norman, September 17, 1942. BIS archive, Thomas H. McKittrick Papers. Series 2, Business papers, 2.2 Carton 10, f.11 Neutrality file.

36.
McKittrick memorandum of conversation with President Weber at Swiss National Bank, in Bern, June 7, 1940. HUBL. Thomas H. McKittrick Papers Series 2, Carton 6, Folder 21, Reel 11.

37.
Quoted in Toniolo, 225.

38.
Ibid.

39.
Memorandum from Marcel Pilet-Golaz, October 2, 1942. BIS archive, McKittrick papers. Series 2.2, Business papers, Carton 10, f.11 Neutrality file.

40.
Op. cit.

41.
Ibid.

42.
Ibid.

43.
Ibid.

CHAPTER SEVEN: REASSURING WALL STREET

1.
Lithgow Osborne to William Donovan, Conversation with McKittrick. December 14, 1942, December 14 1942. NARA. RG 226 OSS records. Entry 92, box 168.

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