The Plot Against The Peace

by Michael Sayers and Albert E. Kahn

The Secret Plan: 1915-1945

The German General Staff has always regarded military defeat as merely a temporary phase of war. The war goes on. Battle strategy becomes underground conspiracy; artillery is replaced by propaganda; wartime espionage becomes post-war political intrigue, terror, assassination, and secret preparation for new military attack.

It should be remembered that throughout this article the phrase German General Staff does not mean the German military leadership alone, but describes the entire political, economic, and military leadership of imperialist Germany.

"Even the final decision of war is not to be regarded as absolute," wrote Germany's former military theorist, General Karl von Clausewitz, in his celebrated treatise Vom Kriege (On War). "The conquered nation often sees it only as a passing phase, to be repaired in after times by political combinations."

These words have been deeply pondered by the German General Staff–the cabal of army officers, Junkers, and industrialists who are the real rulers of Germany.* They provided the German General Staff with the basis of a secret plan by which it successfully operated after the First World War. Today Germany's rulers are again operating on the basis of this secret plan in Germany and throughout the world. . . .

The original form of this secret plan of the German General Staff was discovered in 1915 by William Seamen Bainbridge, an American representative in Berlin. After the First World War, seeking to warn America, Bainbridge wrote a detailed report on Germany for the United States Government. It appears as Document No. 26, Official Senate Documents, First Session of the 68th Congress of the United States. This little-known American document contains the most sensational forecast ever made regarding German policy.

Here is the five-point secret German General Staff plan as revealed to Bainbridge in 1915, three years before the end of the last war, by a German officer in a room in the Hotel Adlon, Berlin:

(1)  An armistice will come before any hostile army crosses Germany's frontier.
(2)  There will be no scars on the Fatherland after this war.
(3)  The immediate competitors in the economic and commercial world will be so crippled that, when it is all over, the Germans will be    outselling them in the markets of the world long before they can get on their feet.
(4)   Following the war, there will be economic hell, industrial revolution. We will set class against class, individual against individual, until the nations will have pretty much all they can attend to at home and not bother with us.
(5)   If need be, the Fatherland may dissemble into component parts and reassemble at the strategic time.|
  
In concluding this extraordinary revelation, the German officer turned to Bainbridge and said with deliberate emphasis:

The greatest struggle will come after the war. The weapon will be propaganda, the value of which we know. The Allies will be torn asunder, each will be put at the others' throats like a lot of howling gnashing hounds. And when they are all separated from France, Germany will deal with her alone.

This German postwar plan was successfully carried out by the German General Staff after the First World War. The Armistice came before any hostile army could cross Germany's frontier. The war left Germany's economic might unimpaired, and Germany's plants, mills, and mines unscathed. In the years following the war, Germany was able the challenge America, Britain, and France for the markets of the world. German intrigue and propaganda set Britain against France, America against Europe, and all the countries against Soviet Russia. . . .

In the Second World War the German General Staff has been unable to prevent the invasion of Germany's home territory. But the German plan today is otherwise almost identical with the plan it carried out with such amazing success following the last German debacle. As Marshal Stalin pointed out in 1942, the German General Staff is methodical and efficient; but it is not very imaginative. Once it has conceived a plan, it follows it step by step, again and again and again, no matter what happens. Like burglars who continually leave their "signatures" behind them at the scene of their robberies, the German General Staff conducts its conspiracy today precisely as it did thirty years ago.

The Nazis recognized that Germany's assets would fall into the hands of the rapidly approaching enemy if they were not transferred and hidden. The nation's wealth, much of it acquired through the plunder of the nations it invaded and the people the Nazis murdered, had to be transferred so they would be out of judicial reach, but accessible to fund a future movement to resurrect the party and build a new Reich. Leading Nazi officials also feared retribution from the Allies and, rather than face likely punishment for their war crimes, they decided to seek safe havens outside Germany, and beyond the reach of justice. According to the protocol from a 1944 meeting in Strasbourg :   The party leadership is aware that, following the defeat of Germany, some of her best-known leaders may have to face trial as war criminals. Steps have therefore been taken to lodge the less prominent party leaders as "technical experts" in various German enterprises. The party is prepared to lend large sums of money to industrialists to enable every one of them to set up a secret post-war organization abroad, but as collateral it demands that the industrialists make available to it existing resources abroad, so that a strong German Reich may re-emerge after the defeat.....   The outcome was the genesis of an organization; one well-financed and well-organised, with the express purpose of helping fleeing Nazis escape justice. This organization was called the "Organization Der Ehemaligen SS-Angehörigen" ("The Organization of former SS members) — better known as Odessa.   Wiesenthal learned of Odessa accidentally during conversations with a former member of German counter-espionage who he met during the Nuremberg trials.The source said the organization was set up in 1946 after many Nazis already had been imprisoned. Those in jail contacted friends and aid committees that had been established to promote the welfare of prisoners. The assistance often went beyond humanitarian aid to abetting their escape.   In short order, Odessa, built a large and reliable network geared to achieve its ends, and began operations. Routes were mapped and contacts were established. Influential Nazis vanished as they were secretly ushered out of Germany and assisted in starting new lives under false names in foreign countries. At the end of the war, only a handful of high-ranking Nazi officials stood trial. Many who were guilty of war crimes escaped with the help of Odessa.   Some war criminals remained in Germany and took on new identities, managing to get themselves smuggled out of Germany and to freedom during the chaos at the end of hostilities. An underground network called "Die Spinne" (The Spider) supplied false papers and passports, safe houses, and contacts that could smuggle war criminals across the un-patrolled Swiss borders. Once into Switzerland, they moved on quickly to Italy, using what some called "The Monastery Route." Roman Catholic priests, especially Franciscans, helped Odessa move fugitives from one monastery to the next until they reached Rome. According to Wiesenthal, one Franciscan monastery, Via Sicilia in Rome, was virtually a transit station for Nazis, an arrangement made possible by a bishop from Graz named Alois Hudal. Wiesenthal speculated that the motive for most of the priests was what he viewed as a misguided notion of Christian charity. Once in Italy, the fugitives were out of danger, and many then dispersed around the globe.   Some countries may not have known about their new immigrants' pasts, but many did and chose to look the other way. Others, including the United States, looked to exploit the knowledge of Nazis. Fascist countries, such as Spain under Franco, as well as those in South America, became safe havens. The establishment of the state of Israel after World War II led some Arab nations to welcome Nazis who shared their hatred of the Jews in the hope they would use their experience in areas such as rocketry to tilt the balance in the Arab-Israeli conflict.   Adolf Eichmann was one of the most notorious of the Nazis to escape Germany thanks to ODESSA, but he was eventually captured in South America by Israeli Intelligence agents and brought back to Israel to stand trial for his crimes against the Jewish people.

On Februiary 26, 1945, one of the most remarkable exposés of the Second World War appeared in the Soviet newspaper Pravda. It was an article revealing in full detail the plans of the German General Staff for converting the Nazi Party into an underground apparatus which would continue functioning after the military defeat of Nazi Germany and would carry on systematic preparations for a third world war.

Pravda reported that the German General Staff had already taken the following measures:

(1)  Creation of a powerful financial base for extensive subsidizing of underground work.
(2)   Preservation of the main cadres of the party.
(3)   Preservation of the economic base of the German war machine.
(4)   The political preparation of revenge.

The article in Pravda stated that these activities were being carried on "both within and outside Germany," and that within Germany the Nazis were preparing to conduct their underground work chiefly along three lines: organization of sabotage and terrorist bands; setting up of a widely ramified clandestine fascist organization; and sabotage of peace terms between Germany and the United Nations.

The article continued:

At the present time, the German General Staff feverishly prepares plans for the operations of the fascist underground army, which must be centered chiefly in the hilly and wooded terrain of East Prussia, southern and southwestern Germany, in Tyrol and in Austria.

A special secret staff had already been selected to direct the operations of the Nazi underground machine. Pravda revealed the names of the men on the staff:

To direct these operations, a special headquarters has been set up in Munich under Wilhelm Schepmann–one of the organizers of anti-Allied sabotage in the Ruhr in 1923. The members of Schepmann's staff are Ernst Kaltenbrunner, Gestapo chief and chief of the Military Intelligence Service; Hitler’s personal friend, Werner von Alwensleben; senior officers of the Security Service and Obergruppenführer Schellenberg [previously active as a secret Nazi agent in the United States]  and Melle.

The terrorist detachments of the Nazi underground army, stated the Soviet newspaper, "will consist of picked fascist cutthroats from SS units," which "at present . . . are studying future theatres of operations in the areas assigned to them."

Pravda went on to give a detailed description of the vast and intricate apparatus that had already been organized by the German General Staff:

|Simultaneously a ramified network of secret caches of arms, ammunition, clothing, provisions, secret signals, and communication lines is being laid out.

Along with the preparation of terrorist bands, a huge underground apparatus is being set up to conduct various underground work and fascist propaganda–the so-called sixth column.

The territory of Germany, divided into sectors and areas, is being covered with a dense network of clandestine Nazi party organizations, consisting of many thousands of secret cells. . . .

This clandestine organization will serve to build up cadres for the future German Army.

The overall postwar strategy and tactics of this elaborate Nazi underground organization, concluded Pravda, were to be supervised from abroad by a "special General Staff" residing "in one of the neutral countries."

Conspiracies and Confessions

 In the spring of 1943 the German General Staff started its contemporary application of the secret German postwar plan. Nazi Germany was face to face with catastrophe. The entire German Sixth Army under General von Paulus had been surrounded and annihilated by the Red Army at Stalingrad. That was the historic turning point of the Second World War.

In November 1943 the French resistance weekly, Combat, published in Algiers, printed the text of a secret German General Staff memorandum which had fallen into Allied hands after the German debacle in North Africa. The author of the memorandum was General Otto von Stülpnagel who ruled France forHitler from 1940 to 1944.

This is what the German General wrote:

What does a provisional defeat matter to us if because of the destruction of manpower and material which we will have been able to inflict on our enemies and neighboring territories, we have obtained a margin of economic and demographic superiority greater than before 1939? The conquest of the world will require numerous stages, but the essential is that the end of each stage brings us an economic and industrial essential greater than that of our enemies. With war booty which we have accumulated, the enfeebling of two generations of the manpower, the destruction of the industries of our neighbors and that which we can save of our own, we shall be better placed to conquer in twenty-five years than we were in 1939. The interval of twenty-five years is a limited interval, for that is the time which will be required for Russia to repair the destruction we have visited on her.

The memorandum mentioned some of the elaborate devices by which the rulers of Germany would seek to evade a just peace:

We do not have to fear peace conditions analogous to those which we would have imposed because our adversaries will always be divided and disunited. Our enemies recognize already that the 1919 formula, 'Germany will pay,' lacked sense and worth. We will furnish them some brigades of workers, we will restore some art objects or out-of-date machines, and we can always say that those which we do not restore were destroyed by enemy bombardments. We should immediately prepare as camouflage a list of such objects destroyed by Anglo-American bombs.

The basic aim of the German plan, now as in 1918, is to secure a final peace settlement, no matter how severe it may appear on the surface, or how hard on the German people, which will leave German economic power intact.

With amazing consistency Germany's rulers are repeating the same strategy they employed in the past to obtain the kind of peace settlement suitable to their aims. In both instances, this strategy was mapped out long in advance. . . .

In his war memoirs, General Erich Ludendorff revealed that as early as 1916 the German General Staff decided that it could not win the First World War and that it then began its campaign for a negotiated peace. The peace intrigues went on steadily throughout 1916, 1917, and were intensified after the failure of Ludendorff's spring offensive in 1918.

Ludendorff tells of the hopes he placed in the Vatican as an intermediary for a negotiated peace. "I also entertained some hopes," continued Ludendorff, "of the efforts being made by the representative of the Foreign Office in Brussels, Herr von der Lancken, who sought to get in touch with French statesmen. He went to Switzerland, but the gentlemen from France stayed away."

Ludendorff reveals that the German General Staff was confident it could divide the Allied nations, play one against the other, and so secure the kind of final peace settlement that Germany wanted.

In August 1918, Ludendorff told the Kaiser: "The war must be ended."

But the Kaiser, like Hitler twenty years later, was unwilling to surrender his power and demanded the continuation of the hostilities.

At this juncture, when the German General Staff was frantically seeking peace so as to forestall complete Allied victory, the famous German steel magnate, August Thyssen, published an extraordinary "Confession" for all the world to read. It was the most sensational document of the last war.

August Thyssen, stating that German industrialists were prepared to sacrifice the Kaiser in return for peace, wrote:

In 1912 the Hohenzollerns saw that the war had become a necessity to the preservation of the military system upon which their power depends . . . they, therefore, in 1912, decided to embark on a great war of conquest.

But to do this they had to get the commercial community to support them in their aims. They did this by holding out to them hopes of great personal gain as a result of the war. . . .
 
I was personally promised a free grant of 30,000 acres in Australia and a loan from a Deutsche Bank of £150,000 at 3 per cent . . . to enable me to develop my business in Australia. Several other firms were promised special trading facilities in India, which was to be conquered by Germany . . . a syndicate was formed for the exploitation of Canada. This syndicate consisted of the heads of twelve great firms; the working capital being fixed at £20,000,000, half of which was to be found by the German government.

There were, I have heard, promises made of a more personal character . . .

This astonishing document reached the United States in the early spring of 1918. It was published as a pamphlet entitled The Hohenzollern Plot by August Thyssen. It was reprinted many times, quoted in newspapers, inserted into the Congressional Record, and publicized especially in American business circles. It did much towards convincing American public opinion that peace could be made with the "sound, business interests" in Germany.

Meanwhile, although Thyssen's "Confession" had openly called for the removal of the Kaiser and the conclusion of the war, nothing was done by the Kaiser's Government to arrest Thyssen or stop the publication of his document. The steel magnate continued to live in Germany, unmolested and in full control of his vast industrial interests.

After the war, August Thyssen died, and the famous "Confession" was forgotten.

But the German plan had worked. The peace left German industry intact and in the hands of Fritz Thyssen, Krupp, Kirdorff, Stinnes, and their associates, the industrial representatives of the German General staff.

Twenty years later, in the summer of 1940, another astonishing and sensational "Confession" was made public by a German industrialist. With Poland conquered and France in its last throes, the German General Staff was again ready for peace in the West, so that it could prepare the next stage of the war: the invasion of Soviet Russia. This time the German "Confession" denounced Hitler and stated that German industry was prepared to sacrifice Hitler in return for a favorable peace with the nations of the West.

The 1940 "Confession" was written by Fritz Thyssen, son of August Thyssen, and inheritor of his father's steel trust.

Fritz Thyssen wrote:

I undertook to finance the N.S.D.A.P. (Nazi Party), together with von Papen, von Schroeder, Kirdorff, Krupp von Bohlen und Halbach. We are, so to speak, the guarantors to Germany and the world for Hitler’s good conduct . . .

Hitler promised us the things we most wanted: to von Papen, power and honor; to Krupp, commissions and money, mountains of money; and to me, in particular, a peaceful period of German politics at home and abroad; and understanding with England; and understanding with the working classes who, through far-reaching social reforms, should be compensated for the loss of all political rights; the abolition of trade unions and the appropriation of their property. He promised us a sort of Christian state whose authority should be supported by the Church. . .

This second Thyssen "Confession" which burst like a bombshell in the summer of 1940 was immediately circulated throughout Europe and America, just as the first Thyssen "Confession" had been in 1918. The words of Fritz Thyssen were printed in various forms in the United States by Life, the New York Times, the American magazine, Time, Newsweek, were quoted on the radio, referred to in Congress, and, in general, given the widest possible publicity. Fritz Thyssen was reported to be a fugitive from the Gestapo, hiding somewhere as a miserable refugee in southern France.

Thyssen was actually living in a luxurious private villa at Cannes. On one side of his villa was the home of Pierre Etienne Flandin, the notorious French pro-Nazi politician and advocate of a Franco-German alliance against Soviet Russia. Flanking Thyssen's villa on the other side was the prewar residence of Sir Neville Henderson, former British Ambassador to Berlin, one-time friend of Goering and Ribbentrop, and ardent member of the British Cliveden Set.

After the Nazi occupation of France, Fritz Thyssen continued to live in his luxurious villa at Cannes surrounded on all sides by Nazi officials and high-ranking Nazi generals.

In 1943, as Hitler’s armies faced disaster in Russia, Fritz Thyssen returned to Germany. He was last seen by a Swedish correspondent early in 1944 residing at the Hotel Adlon in Berlin, still ready to make peace with Britain and America "to save Europe from Bolshevism."

Fritz Thyssen wrote in his famous "Confession":

Peace is to be had. The price is not high. It is easy to arrange. . . . We still have men who hold the reins.

In January 1945, when the Red Army smashed through the crucial German defenses east of Berlin, German peace emissaries rushed frantically into Sweden, Switzerland, Spain, and Portugal. Edmund Hugo Stinnes showed up in Stockholm. Franz von Papen appeared in Madrid. Dr. Hjalmar Schacht was in Switzerland. The Vatican was besieged by German couriers. In every case the reported peace offers were identical: Germany would get rid of Hitler; Germany would repay what she had stolen; Germany would disarm; Germany would disband the Nazi organizations and abolish the Nazi laws; Germany would transform herself, just as Thyssen had promised in 1940, into a "Christian state." So long as Germany could keep her economic power intact, Germany's rulers were ready to come to almost any terms with their enemies.

But precautionary steps had already been taken by the German General Staff and its Nazi and industrialist representatives to build hidden reserves of capital, cash, and investments in foreign countries.

Camouflaged Capital

In the fall of 1918, within a few months of the General Staff's decision to sue for peace, billions of marks had been smuggled out of Germany to Sweden, Holland, Switzerland, Spain, Argentina, Brazil, and other foreign centers of German commercial activity. The Neue Züricher Zeitung in June 1919, estimated the figure of "emigrated capital" which German interests had cached in Switzerland at 35 billion marks. The Dutch aviation designer, Fokker, describes in his memoirs The Flying Dutchman how an entire military aviation plant in Germany was dismembered and secretly transported to Holland. The Dornier Airplane Company, with headquarters in Friedrichshafen, was moved across Lake Constance to Switzerland. The Rohrbach plant was transferred to Denmark; Heinkel and Junkers established themselves in Sweden. All these transfers were done at the request of the General Staff and accomplished with the aid of the German Army.

Admiral Canaris, of the Imperial Naval Intelligence, and subsequently of the Nazi Naval Intelligence, went to Spain to supervise German-controlled shipyards and submarine plants at Vigo.

Baron Manfred von Killinger, Imperial Army officer and subsequent Nazi Consul in the United States, established a company in Echevarria, Spain, to experiment with new types of submarines for Krupp.

The same thing is happening today.
 
A dispatch from Stockholm, Sweden, to the New York Times, January 30, 1945, revealed that German industrialists were placing huge capital foundations in Sweden by registering their patents at the Swedish State Patent Office to elude seizure by the United Nations. The Times dispatch read:

A perusal of patent applications, which must be recorded in the Swedish Official Journal, reveals that a good 50 per cent of all patent applications hail from German firms. The latest ones come from such major German concerns as I.G. Farben, Zeiss-Ikon, Boch, and the Daimler-Bainz companies, besides the A.E.G. and Siemens.

This flight of German capital into neutral Sweden represents only a fraction of the capital investments which Germany had already secreted abroad.

As of February 1945 there were no less than 987 joint stock companies in Spain controlled completely by German capital. Two thousand Spanish companies, many of them with branches and affiliates in North and South America, have German directors on their boards.

As late as the summer of 1944, as the American journalist Ted Allan revealed in Collier's Magazine on February 3, 1945, the international German trust, I.G. Farben, built four new chemical plants in Madrid. In March 1944, I.G. Farben completed a synthetic oil plant in Pueblonuevo del Terrible near Córdoba. This plant had a Spanish name, Calvo Sotelo, and was supposedly controlled by Spaniards. It was owned completely by I.G. Farben. Also in the summer of 1944, I.G. Farben built a magnesium plant in Santander, Spanish northern port. Other German plants, steel, textile, munitions, and mines, exist in Catalonia, the Asturias, the Basque country, and in Galicia.

The Spanish multi-millionaire Juan March, who financed Franco's Fascist Falange to the tune of $60,000,000, was a German spy in the First World War, a Krupp agent and collaborator with Admiral Canaris, chief of the German Naval Intelligence. Today, March is providing commercial fronts for German capital smuggled into Spain and, through Spanish outlets, into South America.

Portugal is another center of German financial and industrial activity. An uncensored report printed in the New York Times on January 12, 1944, disclosed: "Like Spain, Portugal teems with German agents and in Lisbon they are as ubiquitous as bootleggers were during prohibition in America. Their red necks gleam in every bar and fine restaurant . . ." Through Portuguese commercial fronts, the Germans have also been able to penetrate South America.

Throughout the Americas, especially in Argentina, German agents have built important new plants, and gained control of mines, banks, railroads, aviation lines, chemicals, and steel works. Fritz Mandl virtually controlled the munitions industry in Argentina on behalf of I.G. Farben. Axel Wenner-Gren, the Swedish multi-millionaire adventurer, and intimate friend of Marshal Hermann Goering, has set up Krupp and I.G. Farben fronts throughout South America, and especially in Argentina. Alfredo Moll, who has been described as the "gray eminence" of the Nazis in Buenos Aires, is the son-in-law of the president of the Central Bank of Argentina. Moll is director of the firm of Anilinas Alemenas, branch of the I.G. Garben trust in Argentina.

Testifying before the Kilgore Committee on September 12, 1944, Sims Carter, Assistant Chief of the Economic Warfare Section of the U.S. Department of Justice, revealed:

When the German guns are silenced in Europe, the principal German industrial combines plan renewed activity from bases in Argentina. Organizations and outlets of distribution have been maintained. Profits from sales at wartime prices made ample means available. All the machinery is ready for safeguarding German supremacy in the steadily expanding South American market.

The plan by which the German General Staff has operated in South America was drawn up many years before Hitler took power in Germany. If the German plan prevails, it will continue to operate many years after the smashing of the Hitler regime. This plan is directly aimed at the eventual German conquest of the United States.

The Underground Nazi Invasion of the United States

Immediately after the First World War, the German secret infiltration of the Latin American countries by economic, political, and military agents went into high gear in preparation for the Second World War. Captain Ernst Röhm, organizer of the Nazi Storm Troops, showed up in Bolivia in 1925 as "special advisor" to the Bolivian Army. The German aviation officer Fritz Hammer went to Colombia, where he later organized Nazi espionage and economic infiltration under cover of Nazi aviation concerns. General Bohnstedt became head of the military academy in Salvador and official instructor to the Salvadorean Army. General Reinecke, General Kundt, and many other officer-agents of the German General Staff became active in Chile, Paraguay, and Peru, where they sought to influence the officers' corps and spread hatred of the United States.

THE NAZI UNDERGROUND

"Universal Chaos"

 The Nazi Party, as the chief political instrument of the German General Staff, has the task of fulfilling the political phase of the secret German postwar plan to sabotage United Nations' victory and peace.

In 1915, Point Four of the German General Staff's secret plan called for the stirring up of postwar international political and economic "hell," so that "the nations will have pretty much all they can attend to at home and not bother with us."

On January 30, 1945, in his speech commemorating the twelfth anniversary of the Nazi power, Adolf Hitler prophesied that after the Second World War "universal chaos" will consume the world.

The Nazi task is to set individual against individual, class against class, nation against nation, and thus to make impossible the consolidation of Allied victory and give the German General Staff an opportunity to rise again as a military threat to the world for a third time in this century.

On November 6, 1944 Marshal Josef Stalin warned the Soviet people and the world:

After the defeat of Germany she will, of course, be disarmed, both in the economic and military-political respects. However, it would be naive to think that she will not attempt to restore her power and develop new aggression. It is known to all that the German leaders are already now preparing for a new war . . .

Like German industry, the Nazi Party also has its hidden economic and political reserves for the postwar struggle against the peace. Statistics recently issued by the British Ministry of Economic Warfare estimate that the Nazis looted close to $27,000,000,000 from the conquered European nations. Most of this loot was appropriated by the Nazi Party, providing a massive secret fund for the financing of international Nazi underground activities for years to come. Besides this, the Nazi leaders have their personal financial caches. Since 1943, Nazi money, jewels, and other valuables have been streaming across the Reich frontiers and finding their way by clandestine channels into Spain, Switzerland, Sweden, and North and South America. In Switzerland alone, more than 300,000,000 gold francs, or approximately sixty million dollars, are known to have been banked to the private accounts of Nazi leaders. . . .

The Nazi Spoils of War

With these vast hidden sums at their disposal, the Nazis have already reconstituted and reorganized their wartime international Fifth Columns and set up new propaganda agencies and terrorist leagues for the postwar period. Already, in all countries of the United Nations, Nazi-financed and Nazi-inspired agitators are at work seeking to create the "chaos" which Hitler called for in January 1945. Terrorist attempts have been made on the lives of General de Gaulle of France, Marshal Tito of Yugoslavia, and other United Nations leaders. Race riots, separatist movements, wildcat strikes, putsches and political disorders of every kind are being deliberately incited by Nazi Fifth Column agents in an attempt to break the national and world unity of the United Nations.

In France, Paul Ghali revealed in a European dispatch to the Chicago Daily News on September 28, 1944, Joseph Darnand's notorious Militia and other French fascist organizations have been "reconstructed and rearmed" under the personal supervision of Heinrich Himmler to carry on underground "terrorism and fifth column activities in France after the war."

In Italy, former agents of the Fascist OVRA, trained by the Nazis, have been smuggled back into the liberated areas to build propaganda and terrorist agencies, to plot assassinations of anti-fascist Italian leaders and to spread anti-United Nations and other Nazi propaganda. A Rome dispatch to the New York Herald Tribune on February 10, 1945, by John Chabot Smith, warned of "the alarming degree of Fascist sympathy and Fascist underground which still exists in liberated Rome."

In Greece, Leland Stowe reported in February 1945, certain Nazi agents and Greek Fifth Columnists posing as "anti-Communists" and Greek "nationalists" had taken advantage of the confusion following the campaign against the Elas resistance movements to penetrate the Intelligence services, special police units, and even Greek government offices, and to carry on widespread terrorism and Nazi-fascist agitation.

In Finland, a few weeks after the German Army withdrew and the Finnish government signed peace with Soviet Russia, two Red Army officers were assassinated in a Helsinki park. Investigation by the Allied Control Commission revealed, according to a statement by Soviet officials in January 1945, that Nazi agents and Finnish Lappo fascists were spreading their propaganda throughout Finland and fomenting widespread underground "opposition to the United Nations and particularly the Soviet Union."

In Norway, in February 1945, Nazi leaders and Quislingites prepared for future underground struggle by destroying all records of their past activities and concealing their identities with false birth certificates. Lord Vansittart, spokesman for the British Intelligence Service, told the House of Lords on February 7, 1945, that he knew "the names of a good few of the worst Gestapo butchers and torturers in Norway who have their false papers ready," and who were planning to go underground in Norway after the Allied armies liberated that country "to organize sabotage and political assassination."

Similar Nazi-fascist terrorist and propaganda activities, or preparations for underground struggle, were going on in Bulgaria, Yugoslavia, Rumania, Sweden, Denmark, Belgium, Holland, Czechoslovakia, and elsewhere.

On February 24, 1945, at a session of the Egyptian Chamber of Deputies, during which Egypt declared war on the Axis, four fascist terrorists fired ten shots at Premier Ahmed Maher Pasha, fatally wounding the Egyptian leader. One of the assassins, Mahmond Essawy, had been previously interned for pro-Nazi activities.

In Spain, the Soviet newspaper Red Fleet revealed on February 7, 1945, German planes from Stuttgart and other German airports were arriving "every day in Barcelona with Hitlerites." From Spain, the Nazi agents were moving on to other countries in Europe and especially to South America, bringing with them funds and instructions for the potent Nazi Fifth Columns already operating in the Western Hemisphere.

In January 1945, J. Edgar Hoover, Director of the U.S. Federal Bureau of Investigation, sent out a nationwide alarm for three key German agents believed to have been secretly landed in the United States to make contacts with other agents already operating in the country. Each of these three German agents had previously been active in South America. Here are their records:

Max Christian Johannes Schneeman: forty-four years old; former resident of Pereira, Colombia, South America, born in Höchst, Germany; expert linguist, fluent in French, Portuguese, Spanish, and German; agent of the Nazi SS (Schutz Staffel or Elite Guards).

Hans Rudolf Zühlsdorff: twenty-five years old; former resident of Bogotá, Columbia, where he was a commercial advertiser and sales representative for a German firm; born in Güstrov, Meke, Germany; expert linguist, fluent in German, English, and Spanish; described by the FBI as being "more American than German in his mannerisms"; agent of the Nazi Propaganda Ministry.

Oscar Max Wilms: thirty-seven years old; former resident of Managua, Nicaragua; fluent in Spanish, German, and English; born in Hamburg, Germany; former partner in a German export-import firm at Managua; agent of Nazi Propaganda Ministry.

The most important of all the German agents in South America has been General Wilhelm von Faupel, the German General Staff's leading expert on Argentina.

Faupel's work in the Americas has not been interrupted as a result of the defeat of the German Army in Europe. In fact, Faupel's work was specially designed by the General Staff to continue long after the end of the present war. Faupel's task has been to prepare the ground in South America for a third world war. If Germany's plans succeed, next time the United States will not be able to fight Germany in Europe; it will be fighting for its own existence in the Western Hemisphere.

Faupel's entire career as an agent of the German General Staff is in itself a revelation of the long-range planning of Germany's rulers. Before the First World War, from 1911-1913, Faupel was active in Argentina as a "professor" at the Military Academy in Buenos Aires. Thoroughly familiar with Latin American and Spanish affairs, he was recalled at the outbreak of war and sent into Spain to become chief of the German espionage and sabotage activities in the Mediterranean area. Then, immediately after Germany's defeat in 1918, Faupel was sent back to Argentina. Until 1927, he held the post of "chief adviser" to the Argentine General Staff. On the eve of the Nazi seizure of power, Faupel returned to Germany. He next appeared to public view as Director of the Nazi Ibero-American Institute, central clearing-house for German espionage and conspiracy in the Western Hemisphere.

Under Faupel's command, at the headquarters of the Ibero-American Institute, which Hitler housed in an imposing mansion at Number 7 Fürenstrasse, Zehlendorff, Berlin, hundreds of German agents and American, Canadian, and South American fifth columnists were trained for work. The Spanish Fascist Falange was born in Faupel's headquarters, and Faupel personally organized the Nazi Condor Division which invaded Spain to suppress the Republican Government and help put Generalissimo Franco in power. In 1938, with Falangist Spain as a springboard, Faupel began his final preparations for the German conquest of South America.

The plan by which Faupel operated was not new. It had been the dream of the General Staff for generations to establish Pan-German hegemony over the South American republics as a prelude to the invasion and conquest of the United States. As far back as 1904, Ernst Hasse, precursor of Hitler, and President of the notorious Pan-German League in Berlin, wrote in a widely-publicized article:

The Argentine and Brazilian republics and all the other seedy South American states will accept our advice and listen to reason, voluntarily or under coercion. In a hundred years, both South and North America will be conquered by the German Geist, and the German Emperor will perhaps transfer his residence to New York.

Like his successor, Hitker, Hasse was at first regarded outside of Germany as a crackpot. But the German General Staff, whose agent he was, considered Hasse a leading authority on German world policy, and soon acted directly on his advice regarding South America. At the outbreak of the First World War, all of Central and Souyh America was infiltrated by German agents inciting hatred against the United States. German activities in the United States were chiefly designed to keep America out of the war, but in the event that effort failed the German General Staff had another plan.

In 1917 the German General Staff sought to involve Latin America, especially Mexico, in a secret military pact with Germany and Japan aimed at the invasion and conquest of the United States. At 3 A.M., Berlin time, on January 19, 1917, the following secret message was sent by wireless to Count von Bernstorff, German Ambassador in Washington, from the German Foreign Office in Berlin:

Berlin, January 19, 1917

On the first of February we intend to begin submarine warfare unrestricted. In spite of this it is our endeavor to keep neutral the United States of America. If this is not successful we propose an alliance on the following basis with Mexico: That we shall make war together and together shall make peace. We shall give general financial support and it is understood that Mexico is to recover the lost territory in New Mexico, Texas, and Arizona. The details are left to you for settlement. You are also instructed to inform the President of Mexico of the above in the greatest confidence as soon as it is certain that there will be an outbreak of war with the United States and suggest that the President of Mexico on his own initiative should communicate with Japan suggesting adherence at once to this plan; at the same time offer to mediate between Germany and Japan.

Please call to the attention of the President of Mexico that the employment of ruthless submarine warfare now promises to compel England to make peace in a few months.

(signed) Zimmerman.

Today, the German intrigue in Mexico goes on under cover of the Nazi-inspired Sinarquist movement which, intimately related to the Falange, has been devised by the German General Staff as a means of continuing German political influence in Mexico after this war. But the chief focus of German intrigue in South America today is in Argentina. Under German influence, Argentina has become a source of continuous unrest and anti-United States conspiracy in the Western Hemisphere.

In concentrating on Argentina, the German General Staff has again followed a plan which it elaborated many years ago. Before the First World War, Otto Tannenberg, the famous Pan-German propagandist and agent of the General Staff, wrote:

Germany will take under its protection the republics of Argentina, Chile, Paraguay, and Uruguay; furthermore, the southern third of Bolivia and the southern portion of Brazil.

On March 26, 1944, in his personal publication Das Reich, the Nazi Propaganda Minister Dr. Paul Josef Göbbels wrote:

Argentina will one day be at the head of a tariff union comprising the nations in the southern half of South America. Such a focus of  opposition against the United States of America will, together with Bolivia, Chile, Paraguay, and Uruguay, form a powerful economic bloc; and eventually, by way of Peru, it will spread northward to place the dollar colony of Brazil in a difficult position..

On June 10, 1944, ten weeks after Göbbel's pronouncement, Colonel Juan Peron, Vice-President and War Minister of Argentina, delivered his pro-Nazi speech which led to the breaking off of relations between the United States and Argentina. Here is what the Argentine War Minister said:

In South America, it is our mission to make the leadership of Argentina not only possible but indisputable. . . . Hitler’s fight in peace and war will guide us. Alliances will be the next step. We will get Bolivia and Chile. Then it will be easy to exert pressure on Uruguay. These five nations will attract Brazil, due to its type of government and its important group of Germans. Once Brazil has fallen, the South American continent will be ours. Following the German example, we will inculcate the masses with the necessary military spirit.

The voice was the voice of Colonel Peron, but the plan was that of the German General Staff. . . .

"Everywhere, in both Americas," reported the well-known American foreign correspondent, Sigrid Schultz, in 1944 in her significantly titled book Germany Will Try It Again, "they [the Nazis] have incited racial groups, anti-Semitic groups, university professors and students, and the numberless, formless, frustrated people who hope for advancement with Nazi help. American newspapers have recorded case after case of arrests of Nazi and Japanese sympathizers in this country–air-raid wardens, professors' wives, heads of manufacturing concerns. But these were simply the individuals who were careless or reckless. We must anticipate that they are only a small part of the big whole. The Germans confidently count on their political influence increasing in the United States . . . Thus, the total-war strategists of Germany plan ahead not only for tomorrow but for generations to come.

”The Nazi Fifth Column in the Americas remains a powerful, active, and lavishly financed instrument of the German General Staff's postwar conspiracy against the peace."

From: 'Trading With The Enemy, How the Allied multinationals supplied Nazi Germany throughout World War Two' - By Charles Higham - pub. Robert Hale, London - 1983 - ISBN 0 7090 10230   On a bright May morning in 1944, while young Americans were dying on the Italian beachheads, Thomas Harrington McKittrick, American president of the Nazi-controlled Bank for International Settlements in Basle, Switzerland, arrived at his office to preside over a fourth annual meeting in time of war. This polished American gentleman sat down with his German, Japanese, Italian, British, and American executive staff to discuss such important matters as the $378 million in gold that had been sent to the Bank by the Nazi government after Pearl Harbor for use by its leaders after the war. Gold that had been looted from the national banks of Austria, Holland, Belgium, and Czechoslovakia, or melted down from the Reichsbank holding of the teeth fillings, spectacle frames, cigarette cases and lighters, and wedding rings of the murdered Jews.   The Bank for International Settlements was a joint creation in 1930 of the world's central banks, including the Federal Reserve Bank of New York. Its existence was inspired by Hjalmar Horace Greeley Schacht, Nazi Minister of Economics and president of the Reichsbank, part of whose early upbringing was in Brooklyn, and who had powerful Wall Street connections. He was seconded by the all important banker Emil Puhl, who continued under the regime of Schacht's successor, Dr. Walther Funk.   Sensing Adolf Hitler's lust for war and conquest, Schacht, even before Hitler rose to power in the Reichstag, pushed for an institution that would retain channels of communication and collusion between the world's financial leaders even in the event of an international conflict. It was written into the Bank's charter, concurred in by the respective governments, that the BIS should be immune from seizure, closure or censure, whether or not its owners were at war. These owners included the Morgan-affiliated First National Bank of New York (among whose directors were Harold S. Vanderbilt and Wendell Willkie), the Bank of England, the Reichsbank, the Bank of Italy, the Bank of France, and other central banks. Established under the Morgan banker Owen D. Young's so-called Young Plan, the BIS's ostensible purpose was to provide the Allies with reparations to be paid by Germany for World War I. The Bank soon turned out to be the instrument of an opposite function. It was to be a money funnel for American and British funds to flow into Hitler's coffers and to help Hitler build up his machine.   The BIS was completely under Hitler's control by the outbreak of World War II. Among the directors under Thomas H. McKittrick were Hermann Schmitz, head of the colossal Nazi industrial trust I.G. Farben, Baron Kurt von Schroder, head of the J.H. Stein Bank of Cologne and a leading officer and financier of the Gestapo; Dr. Walther Funk of the Reichsbank, and, of course, Emil Puhl. These last two figures were Hitler's personal appointees to the board.   The BIS's first president was the smooth old Rockefeller banker, Gates W. McGarrah, formerly of the Chase National Bank and the Federal Reserve Bank, who retired in 1933. His successor was the forty-three-year-old Leon Fraser, a colorful former newspaper reporter on the muckraking NewYork World, a street-corner soapbox orator, straw-hat company director, and performer in drag in stage comedies. Fraser had little or no background in finance or economics, but he had numerous contacts in high business circles and a passionate dedication to the world of money that acknowledged no loyalties or frontiers. In the first two years of Hitler's assumption of power, Fraser was influential in financing the Nazis through the BIS. When he took over the position of president of the First National Bank at its Manhattan headquarters in 1935, he continued to exercise a subtle influence over the BIS's activities that continued until the 1940s.   Other directors of the Bank added to the powerful financial group. Vincenzo Azzolini was the accomplished governor of the Bank of Italy. Yves Breart de Boisanger was the ruthlessly ambitious governor of the Bank of France; Alexandre Galopin of the Belgian banking fraternity was to be murdered in 1944 by the Underground as a Nazi collaborator.   The BIS became a bête noire of U.S. Secretary of the Treasury Henry Morgenthau, a deliberate, thorough, slow-speaking Jewish farmer who, despite, his origins of wealth, mistrusted big money and power. A model of integrity obsessed with work, Morgenthau considered it his duty to expose corruption wherever he found it. Tall and a trifle ungainly, with a balding high-domed head, a high-pitched, intense voice, small, probing eyes, pince-nez, and a nervous, hesitant smile, Morgenthau was the son of Woodrow Wilson's ambassador to Turkey in World War I. He learned early in life that the land was his answer to the quest for a decent life in a corrupt society. He became obsessed with farming and, at the age of twenty-two, in 1913, borrowed money form his father to buy a thousand acres at East Fishkill, Dutchess County, New York, in the Hudson Valley, where he became Franklin D. Rossevelt's neighbor. During World War I he and Roosevelt formed an intimate friendship. Elinor Morgenthau became very close to her near namesake, Eleanor Roosevelt. While Roosevelt soared in the political stratosphere, Morgenthau remained rooted in his property. In the early 1920s he published a newspaper called The American Agriculturist that pushed for government credits for farmers. When Roosevelt became governor of New York in 1928, he appointed Morgenthau chairman of the Agricultural Advisory Commission. Morgenthau showed great flair and a passionate commitment to the cause of the sharecropper.   Legend has it that on a freezing winter day in 1933, FDR and Morgenthau met and talked on the borderline of their two farms. Morgenthau is supposed to have said to Roosevelt, "Life is getting slow around here". And FDR replied, "Henry, how would you like to be Secretary of the Treasury?"   What he lacked in knowledge of economics, Morgenthau rapidly made up in his Jeffersonian principles and role as keeper of the public conscience. Close to a thousand volumes of his official diaries in the Roosevelt Memorial Library at Hyde Park give a vivid portrait of his inspired conducting of his high office. He was aided by an able staff, which he ran with benign but military precision. His most trusted aide was his Assistant Secretary, Harry Dexter White. Unlike Morgenthau, White came form humble origins. Jewish also, he was the child of penniless Russian immigrant parents who were consumed with a hatred of the czarist regime. White's early life was a struggle: this short, energetic, keen-faced man fought to help his father's hardware business succeed, finally forging as an economist with the aid of a Harvard scholarship and a professorship at Lawrence College, Wisconsin. He was opinionated and self-confident to a degree. Although he was frequently accused of being a communist sympathizer, he was in fact simply an old-fashioned liberal driven by his ancestral memories of Russian imperialism.   It is unfortunate that Morgenthau did not appoint White as his representative at BIS meetings, but White was too valuable in Washington. Instead, Morgenthau sent the more questionable Merle Cochran to investigate the BIS. Cochran was on loan to Treasury from the State Department; he represented the State Department's sophisticated neutralism before (and during) the war. Cochran became Secretary of the American Embassy in Paris, working directly under Roosevelt's friend the duplicitous, Talleyrand-like Ambassador William Bullitt. Cochran spent most of his time in Basle conveying to both Morgenthau and Cordell Hull details of what the BIS was up. Very much opposed to White- indeed, violently so- Cochran was sympathetic with the BIS and to the Nazis, as his various memoranda made clear. Morgenthau took Cochran's political judgements with a degree of skepticism, but continued to use him over White's objections because he knew the Germans would trust Cochran and confide much in him. Day after day, Cochran lunched with Schmitz, Shroder, Funk, Emil Puhl, and the other Germans on the BIS board, obtaining a clear picture of the BIS's plans for the future.   In March 1938, when the Nazis marched into Vienna, much of the gold of Austria was looted and packed into vaults controlled by the Bank for International Settlements. The Nazi board members forbade any discussion of the transaction at the BIS summit meetings in Basle. Cochran, in his memoranda to Morgenthau, failed to score this outrageous act of theft. The gold flowed into the Reichsbank under Funk, in the special charge of Reichsbank vice-president and BIS director, Emil Puhl. On March 14, 1939, Cochran wrote to Morgenthau, "I have known Puhl for several years, and he is a veteran and efficient officer." He also praised Walther Funk.   His timing was not good. One day later, Hitler followed his forces into Prague. The storm troops arrested the directors of the Czech National Bank and held them gunpoint, demanding that they yield up $48 million gold reserve that represented the national treasure nounced that they had already shifted the gold to the BIS with instructions that it be forwarded to the Bank of England. This was an act of great naiveté. Montagu Norma, the eccentric, Vandykebearded governor of the Bank of England, who liked to travel the world disguised as Professor Skinner in a black opera cloak, was a rabid supporter of Hitler.   On orders from their German captors, the Czech directors asked the Dutch BIS president, J.W. Beyen, to return the gold to Basle. Beyen held an anxious discussion with BIS general manager Roger Auboin of the Bank of France. The result was that Beyen called London and instructed Norman to return the gold. Norman instantly obliged. The gold flowed into Berlin for use in buying essential strategic materials toward a future war.   There the matter might have been buried had it not been for a young , very bright, and idealistic London journalist and economist named Paul Einzig, who had been tipped off to the transaction by a contact at the Bank of England. He published the story in the Financial News. The story caused a sensation in London. Einzig held a hasty meeting with maverick Labour Member of Parliament George Strauss. Strauss through Einzing began investigating the matter.   Henry Morgenthau telephoned Sir John Simon, British Chancellor of the Exchequer, on a Sunday night in an effort to determine what was going on. Merle Cochran had telegraphed him with a characteristic whitewash of the BIS and an outright dismissal of Einzig's charges that the BIS was a Nazi outfit. Sir John said icily on the transatlantic wire, "I'm in the country, Mr. Secretary. We are enjoying our dinner. It is not our custom to do business by telephone."   "Well, Sir John," Morgenthau replied, "we've been doing business by telephone over here for almost forty year!"   Sir John Simon continued to dodge Morgenthau's questions. On May 15, George Strauss asked Prime Minister Neville Chamberlain, "It is true, sir, that the nation treasure of Czechoslovakia is being given to Germany?" "It is not," the Prime Minister replied. Chamberlain was a major shareholder in Imperial Chemical Industries, partner of I.G. Farben whose Hermann Shcmitz was on the board of the BIS. Chamberlain's reply threw the Commons into an uproar Einzig refused to let go. He was convinced that Norman had transferred the money illegally in collusion with Sir John Simon. Simon, in answer to a question from Strauss, denied any knowledge of the matter.   Next day, Einzing tackled Sir Henry Strakosch, a prominent political figure. Strakosch refused to disclose the details of the conversation he had had with Simon. But Strakosch finally cracked and admitted that Simon had discussed the transfer of the Czech gold.   Einzig was jubilant. He called Strauss with the news. Strauss put a further question to Sir John Simon in a debate on May 26. Once again, Simon hedged. Winston Churchill was the leader of a violent onslaught on the unfortunate Chancellor of the Exchequer.   Morgenthau demanded to know more. Cochran's letter from Basle dated May 9 and received May 17 brushed over the issue once more. Cochran wrote,   There is an entirely cordial atmosphere at Basle; most of the central bankers have known each other for many years, and these reunions are enjoyable as well as profitable to them. I have had talks with all of them. The wish was expressed by some of them that their respective statesmen might quit hurling invectives at each other, get together on a fishing trip with President Roosevelt or to the World's Fair, overcome their various prides and complexes, and enter into a mood that would make comparatively simple the solution of many of the present political problems. This picture of good cheer scarcely convinced Morgenthau. On May 31, Associated Press reported from Switzerland that transactions were completed between the BIS and the Bank of England and the Czech gold was now firmly in Berlin.   During World War II, Einzig, who had never forgotten the Czech gold affair, ran into J.W. Beyen in London and asked him if he would now admit what had taken place. Beyen said smoothly, "It is all technical. The gold never left London." Einzig was amazed. He wrote an apology to Beyen in his book of memoirs, In the Center of the Things.   The truth was that the gold had not had to leave London in order to be available in Berlin. The arrangement between the BIS an its member banks was that transactions were not normally made by shipments would show up counts. Thus, all Montagu Norman had to do was to authorize Beven and replace the same amount from the Czech National Bank holdings in London.   By 1939, the BIS had invested millions in Germany, while Kurt von Schroder and Emil Puhl deposited large sums in looted gold in the Bank. The BIS was an instrument of Hitler, but its continuing existence was approved by Great Britain even after that country went to war with Germany, and the British director Sir Otto Niemeyer, and chairman Montagu Norman, remained in office throughout the war.   In the middle of the Czech gold controversy, Thomas Harrington McKittrick was appointed president of the Bank, with Emil Meyer of the Swiss National Bank as chairman. White-haired, pink-cheeked, smooth and soft-spoken, McKittrick was a perfect front man for The Fraternity, an associate of the Morgans and an able member of the Wall Street establishment. Born in St. Louis, he went to Harvard, where he edited the Crimson, graduating as bachelor of arts in 1911. He worked his way up to become chairman of the British-American Chamber of Commerce, which numbered among its members several Nazi sympathizers. He was a director of Lee, Higginson and Co., and made substantial loans to Germany. He was fluent in German, French and Italian. Though he spent all of his career inland, he wrote learned papers on the life and habits of seabirds. His wife, Marjorie, and his four pretty daughters, one of whom was at Vassar and a liberal enemy of the BIS, were popular on both sides of the Atlantic.   Early in 1940, McKittrick traveled to Berlin and held a meeting at the Reichsbank with Kurt von Schröder of the BIS and the Gestapo. They discussed doing business with each other's countries if war between them should come.   Morgenthau grew more aggravated by McKittrick and the BIS as the war in Europe continued, but did not insist he be withdrawn. He was forced to reply upon Treasury Secret Service reports rather than upon Cochran for information on the BIS's doings. He learned that in June 1940, Belgian BIS director Alexandre Galopin had intercepted £228 million in gold sent by the Belgian government to the Bank of France and had shifted it to Dakar in North Africa and thence the Reichsbank and Emil Puhl.   The Bank of Belgium's exiled representatives in New York sued the Bank of France, represented by New York State Senator Frederic Coudert, to recover their gold. Ironically, they were represented by John Foster Dulles, whose law firm, Sullivan and Cromwell, had represented I.G. Farber. The Supreme Court ruled in favor of the Bank of Belgium, ordering the Bank of France to pay out from its holdings in the Federal Reserve Bank.   But when Hitler occupied all of France in November 1942, State Senator Coudert stepped in with the excuse that since Germany had absorbed the Bank of France, that bank no longer had any power of appeal against the verdict. He pretended that contact with France was no longer possible, while fully aware of the fact that he himself was still retained by the Bank of France. He claimed that only a Bank of France representative could allow the release of funds from the Federal Reserve Bank. As a result, the gold remained in Nazi hands.   On May 27, 1941, Secretary of State Cordell Hull, at Morgenthau's suggestion, telegraphed U.S. Ambassador John G. Winant in London asking for a report on the continuing relationship between the BIS and the British government. It infuriated Morgenthau that Britain remained a member of a Nazi-controlled financial institution: Montagu Norman and Sir Otto Niemeyer of the Bank of England were still firmly on the board. Winant had lunch with Niemeyer of the Bank He gave an approving report of the meeting on June 1.   Niemeyer had said that the BIS, "guaranteed immunity from constraint in time of war" , was still "legal and intact." He admitted that Britain retained an interest in the Bank through McKittrick twenty-one months after war had broken out. He said that he was in touch with the Bank through the British Treasury and that British Censorship examined all of the mail by his own wish. Asked about the issue of the Czechoslovakian gold, Niemeyer admitted, "Yes, it had a bad public press. However, that was due to the mishandling of the question in Parliament." He further admitted that the government of Great Britain was still a client of the Bank and had accepted a dividend from it. The dividend, it scarcely needs adding, came largely from Nazi sources. Niemeyer said that he believed the British should continue the association for the duration as well as lend the Bank their tacit approval, "If only for the reason that a useful role in post-war settlements might later have an effect."   Niemeyer went on, "It would be of no use at this time of raise difficult legal questions with respect to the relationship of the various countries overrun by the Germans.... McKittrick should stay in Switzerland because he is ... guardian of the Bank against any danger that might occur... McKittrick might want to get in touch with the American Minister in Switzerland and explain his problem to him."   On July 13, 1941, Ivar Rooth, governor of the Bank of Sweden, wrote to his friend Merle Cochran- who had returned to Washington- about the latest general meeting of the Bank and the luncheon at the Basle restaurant Les Trois Rois afterward. He said that it was agreed at lunch that McKittrick should soon travel to the United State to explain BIS's position to "your American friends ...[in the] very correct and neutral way." Rooth continued, "I hope that our friends abroad will understand the political necessity of committing the Germans to send a division to Finland by railway through Sweden."   On February 5, 1942, almost two months after Pearl Harbour, the Reichsbank and the German and Italian governments approved the orders that permitted Thomas H. McKittrick to remain in charge of the BIS until the end of the war. One document of authorisation included the significant statement, "McKittrick's opinions are safely known to us." McKittrick gratefully arranged a loan of several million Swiss gold francs to the Nazi government of Poland and the collaborative government of Hungary. Most of the board's members travelled freely across frontiers throughout the war for meetings in Paris, Berlin, Rome or (though this was denied) Basle. Hjalmar Schacht spent much of the war in Geneva and Basle pulling strings behind the scenes. However, Hitler correctly suspected him of intriguing for the overthrow of the present regime in favour of the Fraternity imprisoned him late in the war. From Pearl Harbour on, the BIS remained listed in Rand McNally's directory as Correspondent Bank for the Federal Reserve Bank in Washington.   In London, Labour Member of Parliament George Strauss kept hammering away at the BIS. In May 1942 he challenged Sir John Simon's successor, Chancellor of the Exchequer Sir Kingsley Wood, on the matter. Wood replied, "This country has various rights and interests in the BIS under our international trust agreements between the various governments. It would not be in our best interest to sever connections with the Bank."   George Strauss and other Labour members of Parliament insisted upon Knowing why the Bank's dividend was still being divided equally in wartime among the British, German, Japanese, and America banks. It was not until 1944 that they discovered Germany was receiving most of the dividends.   On September 7, 1942, Thomas H. McKittrick issued the Bank's first annual report after Pearl Harbor. He went through the bizarre procedure of addressing an empty room with the report to be able to say to Washington that none of the Axis directors was present. In fact, all of the Axis directors received the report soon afterward and the mixed executive staff of warring nations discussed it through the rest of the day. The report was purely Nazi in content. It assumed an immediate peace in Germany's favour and a distribution of American gold to stabilise the currencies of the United States and Europe. This was a line peddled by every German leader starting with Schacht. When Strauss told the House of Commons on October 12 that the report had delighted Hitler and Göring, Sir Kingsley asserted that he had not seen it. Strauss went on, "It is clear some form of collaboration between the Nazis and the Allies exists and that appeasement still lives in time of war."   In the summer of 1942, Pierre Pucheu, French Cabinet member and director of the privately owned Worms Bank in Nazi-occupied Paris, had a meeting at the BIS with Yves Bréart de Boisanger. Pucheu told Boisanger that plans were afoot for General Dwight D. Eisenhower to invade North Africa. He had obtained this information through a friend of Robert Murphy, U.S. State Department representative in Vichy. Boisanger contacted Kurt von Schröder. Immediately, Shröder and other German bankers, along with their French correspondents, transferred 9 billion gold francs via the BIS to Algiers. Anticipating German defeat, they were seeking a killing in dollar exchange. The collaborationists boosted their holdings from £350 to £525 million almost overnight. The deal was made with the collusion of Thomas H. McKittrick, Hermann Schmitz, Emil Puhl, and the Japanese directors of the BIS. Another collaborator in the scheme was one of the Vatican's espionage group who leaked the secret to others in the Hitler High Command- according to a statement made under oath by Otto Abetz to American a officials on June 21, 1946.   In the spring of 1943, McKittrick, ignoring the normal restrictions of war, undertook a remarkable journey. Despite the fact he was neither Italian nor diplomat and that Italy was at war with the United States, he was issued an Italian diplomatic visa to travel by train and auto to Rome. At the border he was met by Himmler's special police, who gave him safe conduct. McKittrick proceeded to Lisbon, whence he with immunity with immunity from U-boats by Swedish ship to the United States. In Manhattan in April he had meetings with Leon Fraser, his old friend and BIS predecessor, and with the heads of the Federal Reserve Bank. Then McKittrick travelled to Berlin on a U.S. passport to provide Emil Puhl of the Reichsbank with secret intelligence on financial problems and high-level attitudes in the United States.   On March 26, 1943, liberal Congressman Jerry Voorhis of California entered a resolution in the House of Representatives calling for an investigation of the BIS, including "the reasons why an American retains the position as president of this Bank being used to further the designs and purpose of Axis powers." Randolph Paul, Treasury counsel, sent up the resolution to the Henry Morgenthau on April 1, 1943, saying, "I think you will be interested in reading the attached copy of [it]." Morgenthau was interested, but he made one of his few mistakes and did nothing. The matter was not even considered by Congress.   Washington State Congressman John M. Coffee objected and introduced a similar resolution in January 1944. He shouted, angrily, "The Nazi government has 85 million Swiss gold francs on deposit in the BIS. The majority of the board is made up of Nazi officials. Yet American money is being deposited in the Bank."   Coffee pointed out that the American and British shareholders were receiving dividends from Nazi Germany and Japan and that the Germans and Japanese wre receiving dividends from America. The resolution was tabled.   There the matter might have lain had it not been for an energetic Norwegian economist of part-German origin named Wilhelm Keilhau. He was infuriated by Washington's continuing refusal to break with the Bank and its acceptance of a flagrant alliance with its country's enemies.   Keilhau introduced a resolution at the International Monetary Conference at Bretton Woods, New Hampshire, on July 10, 1944. He called for the BIS to be dissolved "at the earliest possible moment." However, pressure was brought to bear on him to withdraw a second resolution, and he was forced to yield. The second resolution called for an investigation into the books and records of the Bank during the war. Had such an investigation taken place, the Nazi-American connection would undoubtedly have been exposed.   Bankers Winthrop Aldrich an Edward E. (Ned) Brown of the American delegation and the Chase and First National banks tried feebly to veto Keilhau's resolution. They were supported by the Dutch delegation and by J.W. Beyen of Holland, the former president of BIS and negotiator of the Czech gold transference, despite the fact that Holland's looted gold had gone to the BIS. Leon Fraser of the First National Bank of New York stood with them. So, alas, did the British delegation, strongly supported by Anthony Eden and the Foreign Office. After initial support, the distinguished economist Lord Keynes was swayed into confirming the British official opposition calling for a postponement of the Bank's dissolution until post-war- when the establishment of an international monetary fund would be completed. Keynes's wife, the former Lydia Lopokova, the great star of the Diaghilev Ballet who had made her debut opposite Nijinsky, was a member of wealthy czarist family who influenced her husband toward delaying the BIS's dissolution and a tabling of all discussion of looted gold- according to Harry Dexter White.   Dean Acheson, representing the State Department in the American delegation, was firmly in Winthrop Aldrich's camp as a former Standard Oil lawyer, smoothly using delaying tactics as the master of compromise he was. The minutes of the meetings between Morgenthau, Edward E. Brown, Acheson, and other members of the delegation on July 18-19, 1944, at the Mount Washington Hotel at Bretton Woods show Acheson arguing for retention of the BIS until after the war. He used the spurious argument that if McKittrick resigned and the Bank was declared illegal by the United States government, all of the gold holdings in it owned by American shareholders would go direct to Berlin, via a Nazi president. Acheson must surely have known that the gold was already deposited for the Axis via the BIS partner, the Swiss National Bank, which shared the same chairman. Acheson also argued that the Bank would help restore Germany post-war. That at least was true.   Senator Charles W. Tobey of New Hampshire emerges with great credit from the minutes of the meetings at the Mound Washington. At the July 18 meeting he said, savagely, to the company in general, "What you're doing by your silence and inaction is aiding and abetting the enemy". Morgenthau agreed. Acheson, rattled, said that the BIS must go on as "a matter of foreign policy." At least there was a degree of honesty in that. Morgenthau felt that the BIS "should be disbanded because to disband it would be good propaganda for the United States".   There were jocular moments during the discussion on July 19. Dr. Mabel Newcomer of Vassar said that she "would not dissolve the Bank." Morgenthau asked her cheerfully whether McKittrick's daughter was one of her students. She replied in the affirmative. Morgenthau said, "She has informed my daughter that she is against the Bank". Dr. Newcormer replied, "She didn't inform me, except that she wanted her father to come home- so she might favour the dissolution!"   Everyone laughed. Morgenthau said, "She is very cute. She has read this article in PM about it, and she said [referring to an attack on the BIS in that liberal publication] ' I think PM is right and father is wrong'." Morgenthau threw back his head and laughed again. "That is what Vassar does to those girls!"   Under pressures form Senator Tobey and form Harry Dexter White, Morgenthau stated that Leon Fraser, McKittrick, and Beyen all had sympathies "that run ther." In other words, in the direction of Germany. He said,   I think in the eyes of the Germans, they would consider this as the king of thing which can go on, and it holds out to them a hope, particularly to people like Dr. Schacht and Dr. Funk, that the same [associations] will continue [between American and Germany] after the war. It strengthens the position of people like Mr. Leon Fraser and some very important people like Mr. Winthrop Aldrich, who have openly opposed this dissolution. Dean Acheson, fighting hard with Edward E. Brown at his side, said he "would have to take the matter up with Cordell Hull." He was sure Hull would want the BIS retained the since Hull had approved its existence up till now. Morgenthau promised to call Hull, who had become acutely embarrassed by press criticism. After four years of tacitly approving the BIS, Hull told Morgenthau he called for its dissolution Morgenthau telephoned him and said, "What about McKittrick?" Hull replied icily, "Let him read about it in the papers!" Later, he repeated angrily to Acheson, "Let him read about it in the papers!"   Acheson went to see the British delegation on July 20. Closely connected to high-level politicians in England, he was well regarded in Whitehall. Lord Keynes felt that the BIS might be too quickly abolished if Acheson were beaten by the Morgenthau faction. Although Keynes was advanced in years and had a heart condition, he and his wife abruptly left a British summit meeting and, finding the elevator jammed with conferences, ran up three flights of stairs and knocked on the Morgenthaus' door. Elinor Morgenthau was astonished to see the normally imperturbable British economist trembling, red-faced, and sweating with rage.   Keynes repeated, as calmly as he could, that what he was upset about was that he felt that the BIS should be kept going until a new world bank and an international monetary fund were set up. Lady Keynes also urged Morgenthau to let the Bank go on. Finally, Keynes, seeing that Morgenthau was under pressure to dissolve the BIS, shifted his ground and took the position that Britain was in the forefront of those who wanted the BIS to go- but only in good time. Morgenthau insisted the BIS must go "as soon as possible." At midnight an exhausted Keynes said he would go along with the decision.   Keynes returned to his rooms and contacted his fellow delegates from the Foreign Office. The result of this late-night meeting was that he largely compromised his original agreement and at 2 A.M. sent a letter by hand to the Morgenthaus' suite again calling for the BIS to go on for the duration.   Next day, over the objections of Edward E. Brown and the great irritation of Dean Acheson, Morgenthau's delegation approved the disposal of the BIS.   Immediately after the liquidation of the BIS was voted, McKittrick did everything possible to combat it. He sent letters to Morgenthau and the Chancellor of the Exchequer, Sir John Anderson in London. He stated that when the war ended, huge sums would have to be paid to Germany by the Allies and the BIS would have to siphon these through. There was no mention of the millions owed by Germany to the Allies and the conquered nations. Harry Dexter White sent a memorandum to Morgenthau dated March 22, 1945, saying, "McKittrick's letters are part of an obvious effort to stake out a claim for the BIS in the postwar world. As such, they are, in effect, a challenge to Bretton Woods....The other signatories to the Bretton Woods Act should be advised of the BIS action, should be reminded of Bretton Woods' resolution Number Five, and should be advised that we are not answering the letters."   The same day, Treasury's indispensable Orvis A. Schimdt held a meeting with McKittrick in Basle. His comment on McKittrick's remarks was sharp: "I was surprised that a voluntary recital intended as a defense of the BIS could be such an indictment of that institution." When Schmidt asked McKittrick the Germans had been willing to allow the BIS to be run as it had and had continued to make payments to the BIS, McKittrick replied, "In order to understand, one must first understand the strength of the confidence and trust that the central bankers had had in each other and the strength of their determination to play the game squarely. Secondly, one must realise that in the complicated German financial setup, certain men who have their central bankers' point of view are in very strategic positions and can influence the conduct of the German Government with respect to these matters."   McKittrick went on to say that there was a little group of financiers who had felt from the beginning that Germany would lose the war; that after defeat they might emerge to shape Germany's destiny. That they would "maintain their contracts and trust with other important banking elements so that they would be in a stronger position in the postwar period to negotiate loans for reconstruction of Germany."   McKittrick declined to name all save one of the little group, taking particular care to hide the name of Kurt von Schröder. Since he had to name someone, he selected Emil Puhl. Nevertheless, he pretended that Puhl "does not share the Nazi point of view." Orvis Schmidt was not deceived by this. He knew perfectly well that it was Puhl who had authorized the looting of Allied gold and its transferral to Switzerland and who had been talking to McKittrick the day before in Basle about that very subject.   Schmidt closed in. He asked McKittrick whether he Knew what had happened to the Belgian gold deposited in the Bank of France McKittrick replied: "I know where it is. I will tell you. But it is extremely important world does not leak out. It is in the vaults of the Reichsbank." Evidently he realized he had said too much: that he had let slip his own role in the transaction. He added hastily: "I'm sure it will be in Berlin when you get there. Puhl is holding it for return to the Belgians after the war." This barefaced lie scarcely impressed Schmidt. The gold was already in Switzerland.   McKittrick did not end there. He admitted that the Germans had sent gold to the BIS and said, "When the war is over you'll find it all carefully segregated and documented. Anything that’s been looted can be identified. When gold was offered to us, I thought it would be better to take it and hold it rather than to refuse it and let the Germans Keep it for other uses."   McKittrick continued, "I'm so sorry I can't ask you to take a look at the books and records of the Bank. When you do see them at the end of the war, you will appreciate and approve of the role that I and the BIS have played during the war." They were, of course, never released.   Orvis Schmidt went on to see the executives of the Swiss National Bank, which maintained its partnership in the BIS and shared the same chairman, Ernst Weber. Schmidt raised the question of the looted gold: the $378 million in gold of Belgium, Czechoslovakia, Holland, and other occupied countries, including the treasure of the Jews. He knew that by a technicality the BIS no longer siphoned the gold through directly but sent it to its associated earmarked account at the Swiss National Bank.   The Swiss National Bank officials told Schmidt that in order to be sure they were not obtaining looted gold, they had requested a member of the Reichsbank, whom they "regarded to be trustworthy," to certify that each parcel of gold that they purchased had not been prised when the directors of the Swiss National Bank informed him that that personage was none other than Emil Puhl, who had just left ahead of his arrival . At the Nuremberg Trials in May 1946, Walther Funk, still listed as a BIS director, testified that Puhl had American connections and had been offered a major post at Chase in New York shortly before Pearl Harbor. Funk admitted that Puhl was in charge of gold shipments. He admitted receiving the gold reserve of the Czech National Bank and the Belgian gold, and he added, "It was very difficult to pay [in foreign exchange] in gold .... Only in Switzerland could we still do business through changing gold into foreign currency." Funk said that Puhl had informed him in 1942 that the Gestapo had deposited gold coins, and other gold, from the concentration camps, in the Reichsbank. Puhl had been in charge of this. Jewels, monocles, spectacle frames, watches, cigarette cases, and gold dentures had flowed into the Reichsbank, supplied by Puhl from Heinrich Himmler's resources. They were melted down into gold bars; he did not add how many bars were marked for shipment to Switzerland. Each gold bar weighed 20 kilograms. An affidavit was read to Funk, signed by Puhl, confirming the facts. Puhl stated that Funk had made arrangements with Himmler to receive the gold.   Funk unsuccessfully sought to disclaim responsibility for the scheme. He dismissed Puhl's charges that the gold was plowed into a revolving fund. Faced with a film showing as many as seventy-seven shipments of gold teeth, wedding rings, and other loot at one time, he stuck his story. At one stage he said that the loot was brought to the Reichsbank by mistake! His lies became so absurd that they were laughable. When prosecutor Thomas E. Dodd said to him, "There was blood on this gold, was there not, and you knew this since 1942?" Funk replied weakly, "I did not understand."   On May 15, 1946, Puhl took the witness stank. Puhl claimed that he had objected to the shipments as "inconvenient" and "uncomfortable"- a curious description. He admitted that his "objections" were subordinated to the broader consideration of assisting the SS, all the more-and this must be emphasized- because these things were for the account of the Reich."   The prosecuting counsel read items from a report that included the statement, "One of the first hints of the sources of [the gold] occurred when it was noticed that a packet of bills was stamped with a rubber stamp, 'Lublin.' This occurred some time early in 1943. Another hint came when some items bore the stamp, 'Auschwitz.' We all knew that these places were the sites of concentrations camps. It was in the tenth delivery, in November 1942, that dental gold appeared. The quantity of the dental gold became unusually great."   In October 1945 the Senate Committee on Military Affairs produced further evidence of Puhl's activities. His letters to Funk from Switzerland in March 1945 were read out. They showed his desperate and successful efforts to overcome the effects of the mission that month headed by Lauchlin Currie and Orvis Schmidt. Puhl had constantly hammered away at McKittrick and the Swiss National Bank in order to secure the flow of the looted gold of Europe. McKittrick, brutally exposed by the Bretton Woods Conference's Norwegian delegation, had- the letters showed- panicked, seeking to avoid direct receipt of the gold. Instead, the Swiss National Bank, as BIB shareholder, would take it into its vaults. But in order to camouflage the receipt of it, since the Swiss National Bank had promised the Americans they would not receive it, the Swiss National Bank had disguised it as payments to the American Red Cross and the German legations in Switzerland. There was a starkly ironical humour in this. General Robert C. Davis, head of the New York chapter of the American Red Cross, was also chairman of the part- Nazi network Transradio. As late as 1943, the German Legation in Berne was buying Standard Oil for its heating and automobiles, which were supplied and repaired by U.S subsidiaries. Tons of gold, thus laundered, poured into the Swiss National Bank in those last months of the war.   In 1948, under great pressure from Treasury, the Bank for International Settlements was compelled to hand over a mere £4 million in looted gold to the Allies.   Despite the fact that the evidence of the Puhl-McKittrick conspiracy was overwhelming, McKittrick was given an important post by the Rockefellers and Winthrop Aldrich: vice-president of the Chase National Bank, a position he occupied successfully for several years after the war. In 1950 he invited Emil Puhl to the United States as his honoured guest. And the Bank for International Settlements, despite the Bretton Woods Resolutions, was not dissolved.