Wall Street and the Rise of Hitler (21 page)

"Sidney Warburg" book has been promoted by various parties both as a forgery and as a genuine document. The Warburg family itself has gone to some pains to substantiate its falsity.

What does the book report? What does the book claim happened in Germany in the early 1930s? And do these events have any resemblance to facts we know to be true from other evidence?

From the viewpoint of research methodology it is much more preferable to assume that the

"Sidney Warburg" book
is
a forgery, unless we can prove the contrary. This is the procedure we shall adopt. The reader may well ask — then why bother to look closely at a possible forgery? There are at least two good reasons, apart from academic curiosity.

First, the Warburg claim that the book is a forgery has a curious and vital flaw. The Warburgs deny as false a book they admit not to have read t nor even seen. The Warburg denial is limited specifically to non-authorship by a Warburg. This denial is acceptable; but it does not deny or reject the validity of the
contents.
The denial merely repudiates authorship.

Second, we have already identified I.G. Farben as a key financier and backer of Hitler. We have provided photographic evidence (page 64) of the bank transfer slip for 400,000 marks from I.G. Farben to Hitler's
"Nationale
Treuhand" political slush fund account administered by Rudolf Hess. Now it is probable, almost certain, that "Sidney Warburg" did not exist. On the other hand, it
is
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CHAPTER TEN: The Myth of "Sidney Warburg"

I.G. Farben in Germany and the United States. In Germany Max Warburg was a director of I.G. Farben and in the United States brother Paul Warburg (father of James Paul Warburg) was a director of American I.G. Farben. In brief, we have incontrovertible evidence that
some
Warburgs, including the father of James Paul, the denouncer of the "Sidney Warburg"

book,
were
directors of I.G. Farben. And I.G. Farben is known to have financed Hitler.

"Sidney
Warburg" was a myth, but I.G. Farben directors Max Warburg and Paul Warburg were not myths. This is reason enough to push further.

Let us first summarize the book which James Paul Warburg claims is a forgery.

A Synopsis of the Suppressed "Sidney Warburg" Book
The Financial Sources of National Socialism
opens with an alleged conversation between

"Sidney Warburg" and joint author/translator I. G. Shoup. "Warburg" relates why he was handing Shoup an English language manuscript for translation into Dutch and publication in Holland In the words of the mythical "Sidney Warburg":
There are moments when I want to turn away from a world of such intrigue,
trickery, swindling and tampering with the stock exchange .... Do you know
what I can never under stand? How it is possible that people of good and
honest character — for which I have ample proof — participate in swindling
and fraud, knowing full well that it will affect thousands.

Shoup then describes "Sidney Warburg" as "son of one of the largest bankers in the United States, member of the banking firm Kuhn, Loeb & Co., New York." "Sidney Warburg" then tells Shoup that he ("Warburg") wants to record for history how national socialism was financed by New York financiers.

The first section of the book is entitled simply
"1929."
It relates that in 1929 Wall Street had enormous credits outstanding in Germany and Austria, and that these claims had, for the most part, been frozen. While France was economically weak and feared Germany, France was also getting the "lion's share" of reparations funds which were actually financed from the United States. In June 1929, a meeting took place between the members of the Federal Reserve Bank and leading American bankers to decide what to do about France, and particularly to cheek her call on German reparations. This meeting was attended (according to the "Warburg" book) by the directors of Guaranty Trust Company, the "Presidents" of the Federal Reserve Banks, in addition to five independent bankers, "young Rockefeller," and Glean from Royal Dutch Shell. Carter and Rockefeller according to the text "dominated the proceedings. The others listened and nodded their heads."

The general consensus at the bankers' meeting was that the only way to free Germany from French financial clutches was by revolution, either Communist or German Nationalist. At an earlier meeting it had previously been agreed to contact Hitler to "try to find out if he were amenable to American financial support." Now Rockefeller reportedly had more recently seen a German-American leaflet about the Hitler national socialist movement and the purpose of this second meeting was to determine if "Sidney Warburg" was prepared to go to Germany as a courier to make personal contact with Hitler.

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CHAPTER TEN: The Myth of "Sidney Warburg"

In return for proferred financial support, Hitler would be expected to conduct an "aggressive foreign policy and stir up the idea of revenge against France." This policy, it was anticipated, would result in a French appeal to the United States and England for assistance in "international questions involving the eventual German aggression." Hitler was not to know about the purpose of Wall Street's assistance. It would be left
"
to his reason and resourcefulness to discover the motives behind the proposal." "Warburg" accepted the proposed mission and left New York for Cherbourg on the
Ile de France,
"with a diplomatic passport and letters of recommendation from Carter, Tommy Walker, Rockefeller, Glean and Herbert Hoover."

Apparently, "Sidney Warburg" had some difficulty in meeting Hitler. The American Consul in Munich did not succeed in making contact with the Nazis, and finally Warburg went directly to Mayor Deutzberg of Munich, "with a recommendation from the American Consul," and a plea to guide Warburg to Hitler. Shoup then presents extracts from Hitler's statements at this initial meeting. These extracts include the usual Hitlerian anti-Semitic rantings, and it should be noted that all the anti, Semitic parts in the "Sidney Warburg" book are spoken by Hitler. (This is important because James Paul Warburg claims the Shoup book is totally anti-Semitic.) Funding of the Nazis was discussed at this meeting and Hitler is reported to insist that funds could not be deposited in a German bank but only in a foreign bank at his disposal. Hitler asked for 100 million marks and suggested that "Sidney

Warburg" report on the Wall Street reaction through von Heydt at Lutzowufer, 18 Berlin.5

After reporting back to Wall Street, Warburg learned that $24 million was too much for the American bankers; they offered $10 million. Warburg contacted von Heydt and a further meeting was arranged, this time with an
"undistinguished
looking man, introduced to me under the name Frey." Instructions were given to make $10 million available at the Mendelsohn & Co. Bank in Amsterdam, Holland. Warburg was to ask the Mendelsohn Bank to make out checks in marks payable to named Nazis in ten German cities.

Subsequently, Warburg travelled to Amsterdam, completed his mission with Mendelsohn & Co., then went to Southampton, England and took the
Olympia
back to New York where he reported to Carter at Guaranty Trust Company. Two days later Warburg gave his report to the entire Wall Street group, but "this time an English representative was there sitting next to Glean from Royal Dutch, a man named Angell, one of the heads of the Asiatic Petroleum Co." Warburg was questioned about Hitler, and "Rockefeller showed unusual interest in Hitler's statements about the Communists."

A few weeks after Warburg's return from Europe the Hearst newspapers showed "unusual interest" in the new German Nazi Party and even the
New York Times
carried regular short reports of Hitler's speeches. Previously these newspapers had not shown too much interest,

but that now changed.6 Also, in December 1929 a long study of the German National

Socialist movement appeared
"in
a monthly publication at Harvard University."

Part II of the suppressed "Financial Sources of National Socialism" is entitled "1931" and opens with a discussion of French influence on international politics. It avers that Herbert Hoover promised Pierre Laval of France not to resolve the debt question without first consulting the French government and [writes Shoup]:

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CHAPTER TEN: The Myth of "Sidney Warburg"

When Wall Street found out about this Hoover lost the respect of this circle at
one blow. Even the subsequent elections were affected — many believed that

Hoover's failure to get reelected can be traced back to the issue.
7

In October 19
3
1, Warburg received a letter from Hitler which he passed on to Carter at Guaranty Trust Company, and subsequently another bankers' meeting was called at the Guaranty Trust Company of-rices. Opinions at this meeting were divided. "Sidney Warburg" reported that Rockefeller, Carter, and McBean were for Hitler, while the other financiers were uncertain. Montague Norman of the Bank of England and Glean of Royal Dutch Shell argued that the $10 million already spent on Hitler was too much, that Hitler would never act. The meeting finally agreed in principle to assist Hitler further, and Warburg again undertook a courier assignment and went back to Germany.

On this trip Warburg reportedly discussed German affairs with "a Jewish banker" in Hamburg, with an industrial magnate, and other Hitler supporters. One meeting was with banker von Heydt and a "Luetgebrunn." The latter stated that the Nazi storm troopers were incompletely equipped and the S.S. badly needed machine guns, revolvers, and carbines.

In the next Warburg-Hitler meeting, Hitler argued that "the Soviets cannot miss our industrial products yet. We will give credit, and if I am not able to deflate France myself, then the Soviets will help me." Hitler said he had two plans for takeover in Germany: (a) the revolution plan, and (b), the legal takeover plan. The first plan would be a matter of three months, the second plan a matter of three years. Hitler was quoted as saying, "revolution costs five hundred million marks, legal takeover costs two hundred million marks — what will your bankers decide?" After five days a cable from Guaranty Trust arrived for Warburg and is cited in the book as follows:

Suggested amounts are out of the question. We don't want to and cannot.

Explain to man that such a transfer to Europe will shatter financial market.

Absolutely unknown on international territory. Expect long report, before
decision is made. Stay there. Continue investigation. Persuade man of
impossible demands. Don't forget to include in report own opinion of
possibilities for future of man.

Warburg cabled his report back to New York and three days later received a second cablegram reading:

Report received. Prepare to deliver ten, maximum fifteen million dollars.

Advise man necessity of aggression against foreign danger.

The $15 million was accepted for the legal takeover road, not for the revolutionary plan. The money was transferred from Wall Street to Hitler via Warburg as follows — $5 million to be paid at Mendelsohn & Company, Amsterdam; $5 million at the Rotterdamsehe Bankvereinigung in Rotterdam; and $5 million at "Banca Italiana."

Warburg travelled to each of these banks, where he reportedly met Heydt, Strasser and Hermann Goering. The groups arranged for cheeks to be made out to different names in various towns in Germany. In other words, the funds were "laundered" in the modern http://reformed-theology.org/html/books/wall_street/chapter_10.htm (5 of 14) [8/4/2001 9:44:19 PM]

CHAPTER TEN: The Myth of "Sidney Warburg"

tradition to disguise their Wall Street origins. In Italy the payment group was reportedly received at the main building of the bank by its president and while waiting in his office two Italian fascists, Rossi and Balbo, were introduced to Warburg, Heydt, Strasser, and Goering.

Three days after payment, Warburg returned to New York from Genoa on the
Savoya.

Again, he reported to Carter, Rockefeller, and the other bankers.

The third section of "Financial Sources of National Soeialism" is entitled simply "1933."

The section records "Sidney Warburg's" third and last meeting with Hitler — on the night the Reichstag was burned. (We noted in Chapter Eight the presence of Roosevelt's friend Putzi Hanfstaengl in the Reichstag.) At this meeting Hitler informed Warburg of Nazi progress towards legal takeover. Since 1931 the Nationalist Socialist party had tripled in size. Massive deposits of weapons had been made near the German border in Belgium, Holland, and Austria — but these weapons required cash payments before delivery. Hitler asked for a minimum of 100 million marks to take care of the final step in the takeover program. Guaranty Trust wired Warburg offering $7 million at most, to be paid as follows

— $2 million to the Renania Joint Stock Company in Dusseldorf (the German branch of Royal Dutch), and $5 million to other banks. Warburg reported this offer to Hitler, who requested the $5 million should be sent to the Banca Italiana in Rome and (although the report does not say so) presumably the other $2 million was paid to Dusseldorf. The book concludes with the following statement from Warburg:

I carried out my assignment strictly down to the last detail. Hitler is dictator of
the largest European country. The world has now observed him at work for
several months. My opinion of him means nothing now. His actions will prove
if he is bad, which I believe he is. For the sake of the German people I hope in
my heart that I am wrong. The world continues to suffer under a system that
has to bow to a Hitler to keep itself on its feet. Poor world, poor humanity.