EDITOR'S NOTE: This brilliant book is based on a point of error easily corrected: Fascism is NOT a REACTION to liberalism or communism, it actually PRE-DATES those movements. Fascism is corporatism which grew from enslaving people to work in factories during the industrial age manufacturing myriad widgets. Before the industrial age, we had slaves working for the rich in corporations just with less powerful machinery...and before that...serfs working for the monarchy on farms around their castles in Feudalism. Its all the same thing; the 25% of mankind born without any conscience--as Ponerologists conclude--abusing human society's governing systems to enslave the middle 40%--if the 35% with social responsibility and empathy don't prevent them and create a just way of life. These evil rulers of the world, today's Rockefeller and Rothschild Illuminati families, their bankers and their intelligence agencies actually reside on top of the nation-state governmental level Yeady concentrates on in his book--though he mentions the secret elites perverting this level. For a detailed understanding of the RACKET THEORY behind human behavior that the secret elites exploit:





The Nazi Hydra In America is a currently an ongoing work in progress of the White Rose. The Nazi Hydra was conceived to fill a gap in the literature by providing a detailed overview of the influence of fascism within the United States. The intent and motivation for such a project was twofold: to sound an ominous warning as to the direction this country is taking at the hands of the right-wing and to provide a convenient all encompassing source on fascism in the United States for the reader. In this regards the chapters are heavily documented. When complete the book is projected to span sixteen chapters. Chapters will be made available on this web site as they are completed.

After over five years into this project I now understand why such a book was never attempted before. Such a detailed accounting of fascism with the Untied States would literally fill volumes. Since this is an overview many of the details had to be omitted. Hence, throughout the book I urge the reader to read the sources for further details.

Beginning the project, I naively thought I had a good understanding of the scope of problem and that I could complete the entire book in two years. Before a year had past I found that many of my assumptions were incorrect and the project would last much longer. In fact, nothing from the original outline remains unchanged. Even the title was changed to better describe the book. New chapters were added and old ones deleted. But then such changes are the hallmark of good research.

The real danger from fascism is that it is so insidious that it can creep into every aspect of our daily lives unnoticed, including religious groups. In fact many religious groups were founded by fascists in the 1930s and played a large role in propagating fascism throughout the country. For the reader looking for a quick definition of fascism the slippery slope to fascism begins when the government puts the interests of corporations ahead of the rights of the people and their interest. Remember only people have rights; paper institutions created by society have no rights; they only have an obligation to serve the public. When they fail at that they have lost the right to exist.

Some readers will undoubtedly find the Nazi Hydra disturbing. They shudder at reports of another Nazi war criminal being deported and the crimes against humanity that he inflicted onto others. They fear to ask the question how such a person could slip into the country or how many more are present. Others may be livid with anger as the Nazi Hydra details the associations of the Republican Party and past presidents: Nixon, Ford, Bush and Reagan with Nazi war criminals. But history cannot be rewritten and it's a story that must be told. Those that supported Hitler and the Nazis during the 1930s and 1940s are no less guilty of war crimes and crimes against humanity than the Nazi war criminals and should have suffered the same fate at the end of the hangman's rope at Nuremberg.

In tracing the roots of fascism from the 1920s to the present the one aspect that I find the most amazing is how small the click of hard-core Nazis supporters is. The truth is fascism in America revolves around a handful of Wall Street firms and leading American families. One name above all others in steering the country towards full-blown fascism stands out above all others: Bush. For over seventy years and three generations the Bush family has been hard core supporters and advocates of fascism.

With the record of the current Bush regime a short excerpt from the first leaflet of the White Rose Society, a small group of students who dared to oppose Hitler and the Nazis  bears repeating.

"Nothing is so unworthy of a civilized nation as allowing itself to be governed without opposition by an irresponsible clique that has yielded to base instinct. Who among us has any conception of the dimensions of shame that will befall us and our children when one day the veil has fallen from our eyes and the most horrible of crimes - crimes that infinitely out-distance every human measure - reach the light of day?"

Who will survive to bear witness this time?



Before diving into the subject mater at hand a note is in order concerning the documentation. This writer would have preferred to use references entirely from hard copy works over web site urls. Hard copy references are permanent as opposed to the more fleeting nature of the web. In this regard this writer has tried to limit web references to those of organizations only rather than to personnel pages that may be here today and gone tomorrow.

But the web is a wonderful research tool, yes the web has a lot of junk as well but so does any library. It's up to the researcher to sort out the reliable information in both and to discard the junk. Secondly information on the web is more current than what you can find in any library. With that said the writer has made heavy use of web references. Yes, they may be fleeting in nature, and yes the information may be updated in the future but that is a hazard of any research source. With that said the web references found within this book do what any references do and that is to give credit to the original writer after all you are reading this book on line. For this reason no attempt to update the html links will be made.

This book addresses the topic of creeping fascism in America. Before proceeding we need to carefully define what is meant by creeping fascism. Fascism itself will be defined in the first chapter. Creeping fascism refers to events themselves that may not be truly fascist in nature but when viewed in the context of a greater movement they can indeed be seen as part of a fascist movement or contributed to the rise of fascism. Events of creeping fascism will all have one thing in common they will represent a lost of freedoms for the average citizen. Indeed if any single event in the U. S. short of the suspension of the constitution could be properly labeled as fascist or in any other country for that matter.

Much of what this writer labels as creeping fascism could be properly termed Neo-fascism. Another author who has struggled with what constitutes fascism and neo-fascism is Eatwell.3 The precise definition is all but impossible. Nor does this writer really like the term neo-fascist or neo-nazi. It tends to somehow lend some creditability to them. It's like putting a happy face on a Nazi; rip the mask off and you still have a stark raving lunatic. For the purpose of this book creeping fascism will be defined as any measure that lends support to the elite or takes freedoms away from the greater masses. The danger with such a definition is that's it's a little too broad if used indiscriminately as will be shown shortly but neither the less it's the best definition available to define creeping fascism, which in the remainder of the book will simply be referred to as fascism.

It is the inherent nature of fascism that a revolution is not needed for the fascist to gain power. Indeed the only shooting revolution of the three classical fascist countries was in Franco's Spain. Both the Nazis and Mussolini rose to power in what could be more properly called a noisy protest. This is what makes fascism so dangerous and insidious. It can result from a natural decay of a democratic capitalistic society. Certainly economic troubles aid the fascist, as does the lack of strong leadership, it was precisely such conditions and the resulting chaos that allowed the Nazis to seize power in Germany.

This then is the basis and justification of the term creeping fascism. It refers directly to the decay of a democratic society and the gradual erosion of liberties and freedom leading to an authoritarian state. Thus when the writer labels an event as fascism he is looking at that event in the context of a larger movement in which individual freedoms and liberties are being gradually washed away. Once again the same type of events are easy to spot looking at the history of Germany now, but without the benefit of hindsight the imagines are indeed blurry. For one America may reverse this slide into the dark side. We still have the ability to counteract those that wish to revoke our freedoms. In the final chapter the writer will present definite steps that can be taken to regain our freedoms. Failure to include such solutions is fatalistic and the outcome far too dark to contemplate without their inclusion.

In the second chapter it will be shown that how fascism is unique in not requiring a shooting revolution and can arise out of a nature degenerative process of a democratic capitalistic society. Since fascism is a top down movement all that is required is that the elite of that society begin to concentrate their power without regards to the masses. Thus all fascist need do is to corrupt the political and economic processes to begin their march to a totalitarian state. They can do so with spreading forth propaganda to discredit the government, the schools, the media, the scientists, the courts and the remainder of the very institutions that have made America great. Once they have created a critical mass of distrust in the public then they are free to begin the process of concentration of power. This is the approach that the hard right and Republican Party has followed since the election of Reagan in 1980. It is a gradual process that can easily be cloaked until it's too late. The purveyors of fascism are free to mask much of the concentration under the banner of capitalism. Such as the consolidation of the media, which is today nothing more than the mouth-piece for corporate America.

The writer is not being an alarmist when he labels an event that seems almost harmless as fascism. It's the inherent nature of creeping fascism that masks the true significance of these events until it's too late. Freedom is a precious commodity nor is there any shortage of thugs that will do anything to kill it; it requires a constant vigil. These events leading to fascism may appear to be innocuous by themselves, certainly there were many such events in Germany prior to the rise of the Nazis. Its only after we have seen the nasty outcome of Nazi Germany that we can see that these events were not innocuous that they contributed directly to the rise of the Nazis. But at the time of their occurrence the average German citizen would have dismissed them without any further thought as harmless. But that's the benefit of hindsight.

To expound further on how these events can appear harmless at the time of the event, a brief look at the reaction to the appointment of Hitler will provide the ideal example. Considering the enormity of the event with the benefit of hindsight one would except the reaction to have been a loud and bloody protest, but instead the reaction was muted indifference. In a newsreel that was widely shown in movie houses throughout Germany, Hitler's appointment as chancellor was the last of six events. It followed such newsworthy items as a report on ski jumping, a horse race and a horse show. Editor of Vorwarts, Fredric Stampfer recalled that most people had no idea what had befallen them. Foreign reactions were restrained. A Czech diplomat in Berlin saw nothing significant in the new cabinet. The British ambassador informed England that the appointment of the cabinet marked the end of the presidential governments.1 Other members of the German press reported that it was Hugenberg who was the power behind the new cabinet. Indeed some of the leaders of big business expressed more concern over Hugenberg as economic minister than of Hitler.2

To further complicate maters these events need not have been supported by the Nazis, they may have been supported by well meaning government officials or others while the Nazis were still viewed as nothing more than a noisy bunch of thugs led by a little guy with a funny mustache. One such example would be the flaw in the German constitution that made no allowances for a negative parliament. It was a defect that Hitler successfully exploited in his quest for power. Following the war the flaw was corrected and the German parliamentary system has performed admirably. Another example would be the lack of comprising among the various parties to form a parliamentary president starting around 1930. This was another large factor in the rise to power of the Nazis, there was an acute power vacuum; there was no strong leadership. The electorate was simply too fractured or polarized for a strong leader that was responsible to the people to arise. Yes, much of that polarization was the direct cause of the Nazis, but the other parties likewise contributed to it, including the centralist parties.

Another example would be the practice of big businesses forming cartels dating all the way back into the monarchy. How much these cartels contributed to the economic problems of the 1920s can only be estimated, but it certainly added to the economic woes of Germany. Further the various fractions of businesses sought out conflicting goals from the government contributing to the general government instability. The Ruhr industrial sought to promote free trade while the agribusiness's sought out higher tariffs on grain imports to protect their livelihood.

Additionally we have already hinted that some of these events even proceeded the formation of the Nazi party. Indeed the best example of this is the prevalence of anti-Semitic feelings in Germany dating all the way back to the time of Martin Luther. Hitler exploited the underlying anti-Semitism to divide the electorate in order to gain power. Is racism in America part of a fascist movement? In the book that follows it will indeed be treated and labeled simply as fascist. Again we don't have the benefit of hindsight at the moment to know. We do know from looking at the history of fascism that racism is indeed a characteristic of fascism, as is any method that can divide the electorate.

This writer feels that divisionism is another trait of fascism that is always present just as is authoritarian and extreme nationalism is. The writer acknowledges that any political party in a democracy uses some form of divisionism in order to win elections. But there is a difference here, when this writer refers to divisionism as a trait of fascism he is referring to destructive divisionism that serves only but one purpose and that is to solely further the aims of the user.

A good example of this destructive divisionism was after first being appointed chancellor Hitler immediately set about destroying any chance at forming a parliamentary majority. This will be gone into more depth in the first chapter. Likewise, the Republican led government shut down over the budget in 1997 was simply labeled a fascist move on the part of the Republicans in an analogy in the same chapter. Clearly this writer means it to be an example of creeping fascism and not out right fascism, the writer chooses not to insult his readers' intelligence by repeating the exact phrase. Throughout the remainder of this book the writer will label such events as fascism rather than creeping fascism. Likewise this writer will simply label an event as divisionism rather than destructive divisionism. One final example of divisionism that has already been mentioned is racism. Certainly it serves no constructive purpose and it certainly fractures the electorate.

This particular rise of the hard right in America is unique and poses a dangerous threat to our liberties and freedoms. Like the period between wars this rise in fascism is global in nature not confined to one country or one area of the world. The author does recognize that there have been times in the past of widespread repression such as the rise of the Klan in the 1920s, the prosecution of the Wobblies in the same time period, McCarthyism in the 1950s and even COINTELPRO in the 1960s. What then makes this time particularly dangerous and unique? The second chapter explores the 3Ms needed for a revolution to succeed. Those are the media, the military and the money. The hard right today have taken on the aspects of Social Darwinism and at no time in the past has the wealth of the country been controlled by so few. The media has consolidated until only seven companies now control the airwaves and the press. . In essence it is now a reality that big money now owns the media, the only exception to that is the net. But even here consolidation is already beginning to occur.

It should be noted that a similar consolidation of the press occurred in Germany during the late 1920s. Indeed there are many parallels and analogies between the present time and Nazi Germany. Other writers have also noted a "hauntingly similarity" to Nazi Germany.4 In this case the writer attributes the sudden shift to the right in America to five factors: conservative religious revitalization, economic contraction and restructuring, racism, social stress and backlash, and a well-funded network. In past times, not all of these root causes have occurred simultaneously. This writer concurs with such an analysis and those topics will be explored later in detail.

Indeed this shift to the hard right would not have happened without the excesses from the 1960s. The '60s was the period in which the religious right laid the ground work for their movement. The Goldwater campaign provided a pivotal role for the formation of today's hard right. Not only did it provide fertile ground for the organizers but it also lent some sort of legitimacy to their radical extremist views and served to desensitize us.

The primary focus of this book will be the times following 1980. As hinted to already in order to understand the shift and the danger it presents background material from earlier times is needed. The chapters from the first section will lay the groundwork for the background needed to fully understand the 1980s and the hard right movement. The second part will deal with the 1980s and more recent times. In any book such as this, which is primarily a survey of the subject, the various topics are numerous and a full discussion of any single topic is beyond the scope of this book. Indeed books have been written on the topics or even of subdivisions of a topic. The writer is not going to bore you with over repetitious examples and analysis. Rather the writer will present various examples that serve to make the point before moving on. The objective here is to stimulate the reader into thinking for himself not to provide exhaustive analysis and examples.


1. Thirty Days to Power, Henry Ashby Turner, Addison-Wesley Publishing, 1996, page 159.

2. German Big Business and the Rise of Hitler, Henry Ashby Turner, Oxford Press, 1985, page 326.

3. Fascism, Roger Eatwell, Penguin, 1996.

4. www.publiceye.org/magazine/whynow.html


Chapter 1

What Fascism Is & Isn't

No other word causes so much misunderstanding, confusion, and heated debate in politics than fascism. The term has been applied to many individuals such as McCarthy, Hoover, and others. It is frequently used to describe government policies and government themselves, often incorrectly. What then is fascism exactly? Webster's Dictionary defines it as: "A government system marked by a centralized dictatorship, stringent socioeconomic controls and belligerent nationalism." But the author takes exception with that definition. At best, the definition is vague and abstract. Nor does the definition seem capable of taking into all forms of fascism.

There is a resurgent, widespread attempt by the far right to label fascism as a form of socialism. Fredrick von Hayek was the first to attempt labeling the Nazis as socialists in his book The Road to Serfdom published in 1944.70 The hard right quickly adopted it, as it allowed the hard right to escape the charges that they had much in common with the Nazis.2 Such endeavors are not only silly, but dishonest as well and represent an attempt by the far right to distance themselves for their earlier support of Hitler.

Hayek's book is based on two erroneous assumptions from the very beginning. He first assumes that fascism and communism are one and the same, as they are both totalitarian systems. This makes about as much sense as calling a maple tree a pine tree--because both are trees. His second erroneous assumption lays in his belief that only socialism or liberalism leads to totalitarian systems. In fact, all political systems can lead to totalitarian systems and all political systems are inherently unstable, as is any system created by man.

From there, Hayek takes severe liberties with history. For instance, he goes on to claim that by deliberate policy the United States allowed the growth of cartels and syndicates after 1878.71 Indeed this date and time period is significant, but not for a move towards socialism or liberalism. Rather, it's the opposite--a move towards fascism and corporate rule. Even a reader with a rudimentary knowledge of American history would recognize this time frame as the beginning of the robber baron era and laissez faire economics, precisely the type of economic policy Hayek holds in utmost esteem.

Hayek offers little proof to support his conclusions; in fact the book is devoid of any proof or even examples to support his findings. The book degenerates into an argument based upon unsubstantiated assertion. He argues against the nation-state and proposes a supernational authority or world federation made up of the financial elite. In essence, Hayek proposes a world made up of sovereign corporations accountable to no one. Not only did Hayek take severe liberties with American history, he ignored the very nature of fascism in Germany and Italy.

In various speeches made shortly after the March on Rome, Mussolini stated, "We must take from state authority those functions for which it is incompetent and which it performs badly... I believe the state should renounce its economic functions, especially those carried out through monopolies, because the state is incompetent in such matters... We must put an end to state railways, state postal service and state insurance." The state returned large monopolies to the private sector after returning them to profitability such as the Consortium of Match Manufactures, privatized the insurance system in 1923, the telephone system in 1925, and many of the public works.

In Germany the Nazis announced they would end nationalization of private industries when they seized power. In 1932, Hitler returned control of the Gelsenkirhen company to private hands and in 1936 returned the stock of "United Steel" to private hands. Throughout 1933-1936, the Nazi returned to private hands the control of several banks: Dresdner, Danat, Commerz and Privatbank, the Deutsche Bank, and several others. In 1936, the steamship company Deutcher Schiff and Maschinenbau was returned to the private sector. In 1934, Dr. Schacht, the Nazi Minister of Economy, gave instructions to hasten the privatization of municipal enterprises. These enterprises were especially coveted by the rich industrialists, as they had been prosperous even during the depression.

Both in fascist Italy and Nazi Germany, the tax system was changed to one favoring business and the wealthy. The Nazis allowed industries to deduct from their taxable income all sums used to purchase new equipment. Rich families employing a maid were allowed to count the maid as a dependent child and reap the tax benefit. In Italy, the Minister of Finance stated: "We have broken with the practice of persecuting capital."73

Such programs, catering to big business and the rich elite, are more akin to the policies of the Reagan Administration--than it is to any liberal administration including FDR's. Likewise, it was the rich industrialists that were behind the fascist movement in the United States during the 1930s. Thus, it is no surprise that the right-wing attempts to try and label fascism as "socialism"--in trying to distance themselves from their previous support of fascism.

Perhaps the only redeeming feature in Hayek's book is his acknowledgement of environmental problems.72 Indeed, this is significant, considering the book was first published in the 1940s, long before the birth of the environmental movement. Hayek readily acknowledges the problem of industrial pollution and the harmful effects of deforestation, yet he stops short of any meaningful solution. Instead of offering a viable solution, Hayek condemns government regulation and would allow market forces to somehow provide the solution. However, it was these same market forces that produced the problem. We have plenty of proof of such a fool-hearty approach both here and globally. As late as the 1970s, rivers caught fire in the United States, cities were smog stricken and harmful pollutants were damaging the environment world-wide. Today, we face the problems of global warming and ozone depletion, and the problem of environmental estrogens, which has the potential of being even more threatening than both global warming and ozone depletion.

But perhaps the most damning of all evidence that Hayek was dead wrong comes from the implementation of an economic system based on his beliefs. Hayek later taught at the University of Chicago, the same university that trained the "Boys from Chicago" who were the economic brains behind the fascist regime of Pinochet in Chile. There is no question in the matter that under Pinochet, Chile was indeed fascist. More alarming, Hayek is an idol to several top-level officials in the George W. Bush administration. They are dangerous close to imposing a fascist-style economy on the United States.

In order to dispel the myth of the Nazis being "socialists" we need to first define socialism. Socialism is rigidly defined as an economic system in which the workers own the means of production and distribution of goods. A more relaxed definition would be simply that the workers maintain political control over the production and distribution of goods. Even using the more relaxed definition of socialism, the Nazis can not be labeled as socialists as there simply was no worker control over the production or distribution of goods in Nazi Germany. In fact, the Nazis outlawed legitimate labor unions. In place of the original unions, the Nazis implemented quasi-like unions that were controlled by the industrialists. In a déjà vu manner, the Republican Party has recently tried to enact a similar measure, conferring legal status on worker groups controlled by corporations. Some writers and historians have argued that you cannot have fascism without corporatism, as the corporate power structure has much in common with fascism. During the period preceding the outbreak of WWII it was common to refer to fascism as corporatism in polite English society.

More recently others have tried to define fascism as the "Third Way", in the sense that it borrowed ideas from both capitalism and socialism. The basic philosophy behind the "Third Way" incorrectly labels any regulations or government controls over businesses as "socialism"; essentially it's just a restatement of syndicalism. Such nonsense should be rejected whole heartily. It again represents an attempt to distance the right from their support of Hitler in the 1930s and ignores that the basis of the German economy under Hitler was a capitalist system where the means of production remained in private hands. Further, following the logic of the "Third Way," one would have to label all capitalistic systems as "Third Way," for throughout history there has never been a pure capitalistic system. A pure capitalist economy is so inherently and fatally flawed that it's never even been tried. But that is to be expected for any system that awards the winner with all the eggs. Nor has there been a pure socialistic system. Human greed simply prevents it.

The dangers of such nonsense can be illustrated with the following quote taken from a Baptists fundamentalist's web page in their labeling of the Japanese economy as fascist: However, Fascism is an economic term, denoting the type of economy where the Means of Production [factories, companies] and the ownership of raw materials [mines, oil wells] remains in the hands of private individuals, but where the government intervenes to determine how many competitors will be allowed to produce the same thing, how much is produced, and what prices may be charged.1

Here it can be seen that the term fascism has been clearly misapplied. This description could pass for the economic theory of the fascist philosopher George Sorel. This is a description of syndicalism; it was the economic model of fascist Italy and Nazi Germany to a large extent. Syndicalism does draw some aspects from socialism, but the system is still a capitalistic system as ownership of the means of production and distribution of goods remain in private hands. It is no more socialism than the conclusion of the Robber Barons and the corrupt politicians of Tammany Hall. The only difference between this example of syndicalism is that the government participation is open--versus the backroom corruption of politicians in Tammany Hall.

Not only did Japan invoke syndicalism, but almost all the Pacific Rim nations do, to some extent. These are the same nations that the hard-right has held up in the past as darlings of "capitalism and free enterprise". Yet these are precisely the same economic policies of the Nazis that they have tried to foist off as socialism. The key distinction here is the means of production still remains in private hands, just as it did in Nazi Germany. No capitalistic society has ever existed without some form of syndicalism or government control over the economy. The closest America came to an entirely capitalistic system was either the 1890s and the Robber Barons or the laissez faire policies of Herbert Hoover, and as we all know, that didn't end too well in the Great Depression of the 1930s.

No where does the quote above refer to totalitarian control or extreme nationalism. In fact, they have tried to define fascism in strictly economic terms for their own purposes. But it does serve to point out the dangers of inventing the "Third Way" or the use of syndicalism in an attempt to label the Nazis. The problem here is determining where syndicalism ends and capitalism begins. Is the trading of pollution credits a form of syndicalism or is it free enterprise? In America today, the hard-right would attempt to label it as "socialism", as they try to do with any laws or regulations of business. In fact, the past laws regulating corporations were much more severe and restrictive in the 1800s than today. One could argue that it was through syndicalism that the power elite and corporations gradually eroded those laws until corporations now enjoy more freedoms than what an individual enjoys. This is precisely what has happened in America.

But environmental and labor laws are not socialism. They are in fact nothing more than an attempt to bring an out-of-control system hell-bent on exploitation of the environment and labor back to order. No labor law or environment law was ever passed in a vacuum. All of these laws were brought about by a need to correct an unhealthy or unsafe situation. While there are some corporations that strive to provide a clean and safe workplace, there are many whose only concern is the bottom line and they turn a blind eye towards safety and view their employees as expendable commodities.

Regulation of businesses or corporations by itself is not socialism. A business entity such as a corporation has no rights other than what privileges a society wishes to grant it. People have rights; a paper creation of a society such as a corporation has no inherent rights. Business entities such as corporations only have conditional privileges based upon providing for the common good of the society, which granted the charter. All such paper creations have an obligation to serve the society, which created it. Failing to perform that obligation, it loses any right for its continuing existence. Its the obligation of that society to restrict the rights of such entities to promote equality for all--and to prevent a ruling aristocracy from developing. This view is hardly socialism or even radical, unless one wishes to label Thomas Jefferson as a radical socialist as he more eloquently stated it:

"I hope we shall take warning from the example of England and crush in its birth the aristocracy of our moneyed corporations which dare already to challenge our Government to trial, and bid defiance to the laws of our country."3

Perhaps one of the better definitions of fascism comes from Heywood Broun, a noted American columnist in the 1930s:

"Fascism, is a dictatorship from the extreme right or to put it a little more closely into our local idiom, a government which is run by a small group of large industrialists and financial lords...I think it is not unfair to say that any businessman in America, or public leader, who goes out to break unions is laying the foundations for fascism"75


A definitive definition of fascism is a totalitarian government with extreme nationalist tendencies in which the government is controlled and operated for the benefit of a few elite. However, it should be noted that an all-encompassing definition of a complex system cannot be simply stated. Such simple definitions undoubtedly fail in time. A caveat to the above definition would be anytime the government places the rights of corporations or the elite above the rights of the citizens, it represents a step towards fascism. A better insight into what fascism is can be obtained by listing the traits that are common to the classical fascist states of Franco's Spain, Nazi Germany and fascist Italy. A list of traits of fascism is presented below. Note that the first two are the two most defining traits, obviously many of the others can be applied to many other social-political systems as one moves down the list.

1. Totalitarian
2. Extreme nationalism
3. Top-down revolution or movement
4. Destructive divisionism such as racism and class warfare
5. Extreme anti-communism, anti socialism, and anti-liberal views
6. Extreme exploitation
7. Opportunistic ideology lacking in consistency as a means to grab power
8. Unbridled Corporatism
9. Reactionary
10. The use of violence and terror to attain and maintain power
11. Cult-like figurehead
12. The expounding of mysticism or religious beliefs

Not all fascists need exhibit all of the traits; once again it should be emphasized that all fascist states will exhibit a totalitarian view. Most fascist states will have an extreme nationalism policy. However, extreme nationalism is not mandatory. States such as Spain under Franco and Chile under Pinochet were indeed fascist states, but they could hardly be described as having a policy of extreme nationalism.

A brief look at the above traits and how they relate to fascism will convey a better understanding of what fascism really is, using Nazi Germany as an example. First, because it was undisputedly fascist and secondly because there is more literature available on the Nazis than on either fascist Italy or Franco's Spain. Moreover, the use of the Nazi's as an example is closer to the focus of this book, which is creeping fascism in America.

Creeping fascism is the gradual lost of freedoms of the masses to the power elite. Full-blown fascism has never appeared all at once. The Nazis took several years to reach the final state of full-blown fascism. It took the Nazis five years before Kristallnacht, which marks the beginning of the "Final Solution." The Nazis gradually took away the freedoms of the citizens of Germany until they were able to launch the Holocaust. This was the reason for including the caveat in the definition of fascism above, "Any action taken by the government that places the rights of the elites and corporations above the citizens is a step towards fascism."

Such actions will not look like fascism--some may even appear to be reasonable. Its only when the summation of many such actions ends in a fascist state that such actions can be seen as a step towards fascism.

Make no mistake in understanding that the power elite, those that own and run America's corporations, are fascist. They have forced war on this country to protect their assets, they have over-exploited their employees, they have used violence to bust unions, and they rely on divisionist policies such as racism and class warfare to maintain their power. [EDITOR: Like the "Tea Party" whining about lazy people getting welfare and health care benefits"--to keep us divided and unable to challenge THEM]

The erosion of our freedoms in the United States was prolonged by our constitution. Nevertheless, over time the lost of freedoms has left America at the edge of a chasm. Any further loss of freedoms and America will begin an irreversible slide into the deep abyss of fascism.

Before looking at the traits of fascism, a brief review of the history of fascism and its roots in modern philosophy is needed. By looking at the roots of fascism in philosophy, we can gain an understanding why fascism is often described as reactionary. By looking at the various philosophers that have come to be associated with fascism, we will be able to see that many of these traits come directly from fascism's roots in philosophy. In that way, we can then see how some of these traits that can be applied to other social-political system are central to fascism.

Many writers have assumed that fascism has no intellectual or philosophical roots due to its lack of a consistent ideology. But such views are incorrect; the roots of fascism extend back to the French Revolution. The French Revolution is one of those landmark events in the history of Europe marking the beginning of a major shift in European culture and governments. In essence, fascism was a reaction to the French revolution. It was a reaction particularly to the slogan of the revolution of "Liberty, Equality, Fraternity" that was hated the most.

The concept of liberty from oppressive regimes in the daily lives of the citizens, including forced religious values, and the concept of voting and majority rule where the minority still retained a set of inalienable rights, incensed the early philosophers of fascism. Such a concept was a direct threat to the kings and nobles of the time, as well as to the church. Remember this was a time for debtor's prisons, indentured servants, and vassal states. [EDITOR: fascists are uber SNOBS]

Equality, in the eyes of the law, was unspeakable. How could a mere peasant have the same rights under the law as the kings, nobles, and merchants? This was the time when the king's word was the law. Rights were based on the social standing of one's birth. The only rights a person had at the time were the rights that the king was willing to extend--and they could be withdrawn at any moment.

Fraternity, in the sense that all men and women shared humanity was considered heresy. It was a time when slaves were still considered and treated as animals and women were considered property, and not part of a greater humanity that needed to be shared.

All three terms meant a loss in power and control by those in power. But, this is exactly what the philosophers that have come to be associated with fascism were reacting to and rejecting. The period following the French Revolution produced a virtual intellectual stew of various philosophies, including those of Marx and Engels. A brief look at some of the major philosophers of fascism will show how they relate to the traits listed early, and how they were a reaction to the French Revolution. This list of philosophers is by no means complete, but it will suffice to show that many of the traits attributed to fascism above have roots going back as far as the French Revolution.

Arthur Schopenhauer (1788-1860) was a German philosopher perhaps best known for his The World as Will and Representation.4 His beliefs held that the will is the underlying and ultimate reality. The whole phenomenal world was only the expression of will. Individuals have free will only in the sense that everyone is an expression of a will. Thus, we are not authors of our own destiny, character, or behavior, according to Schopenhauer. His views parallel the development of relativistic physics that came a century later. His views were influential on Nietzche, among others.

Herr Hegel

Georg Hegel (1770-1831), a German philosopher held pantheism as the heart of his beliefs. The Phenomenology of Spirit and Science of Logic are two of his better-known works. He viewed that all existence and all history was divine and that nature was sacred. He viewed God as an absolute spirit that also manifested itself in material things and individuals. He believed God acted through humans and embodied himself first in nature, then in the rising stages of human consciousness and civilization. He also had an ethnocentric and egocentric view. He maintained that the German nation was the highest carrier of the wave of God's development. He believed that the bureaucratic monarchy of Prussia was the highest form of state. These later views were certainly manifested in the Nazi's view of the Aryan race, as shown in the following quote.

"Thus, the highest purpose of the folkish state is concern for the preservation of those original racial elements which bestow culture and create the beauty and dignity of a higher mankind. We, as Aryans, can conceive of the state only as the living organism of a nationality which not only assures the preservation of this nationality, but by the development of its spiritual and ideal abilities leads it to the highest freedoms."8

Mr. Overman

Fredrich Nietzche (1844-1900), also a German philosopher was best known for his work Thus Spake Zarathustra.5 Hitler liked to be photographed staring at a bust of Nietzche. Nietzche theorized two sets of morals, one for the ruling class and another for the slave class. Nietzche viewed that ancient empires grew out of the ruling class and that religions arose out of the slave classes, (which denigrates the rich, the powerful, rationalism, and sexuality.) He developed a concept of an "overman," a superhuman, which symbolized man at his most creative and highest intellectual development. Obviously, the "overman" was manifested in the Nazi's view of the Aryan race. He suffered a mental break-down, most likely from the advances of syphilis, and was cared for by his mother and later his sister, Elisabeth. His sister painstakingly gathered his notes to publish his latter works. However, she was active in the rising anti-Semitic movement at the time and may have tainted his later work with her views. From time-to-time, Nietzsche enjoys a rebirth of popularity. Today is one such rebirth, fitting in well with the unmitigated greed and corporatism of today's hard-right. Nietzsche's connection to the Nazis is obvious, as shown by the following quotation.

"with satanic joy in his face, the black-haired Jewish youth lurks in wait for the unsuspecting girl whom he defiles with his blood, thus stealing her from her people. With every means he tries to destroy the racial foundations of the people he has set out to subjugate. Just as he himself systematically ruins women and girls, he does not shrink back from pulling down the blood barriers for others, even on a large-scale. It was and it is Jews who bring Negroes into the Rhineland, always with the same secret thought and clear aim of ruining the hated white race by necessarily resulting bastardization, throwing it down from its culture and political height, and himself rising to be master."9

Notice the similarity in this passage and the Council of Conservative Citizens that Senator Lott and representative Barr supported before becoming embroiled in the resulting scandal in late 1998.10 The web site for this white supremacist group described interracial marriage to the mixing of chocolate milk with plain milk, and labeled it as a path to racial extinction. They also described [President Abraham] Lincoln as a communist.11


Bergson Later on Rejected Nazi Fascism and Embraced Catholicism

Henri Bergson (1859-1941) was a French philosopher with a Jewish father and an English mother. He was the winner of the Nobel Prize for literature in 1927. He rejected the idea that scientific principles could explain all existence. He was a promoter of what has become known as Social Darwinism.6 Perhaps one of his better known works was Time and Free Will. He was also a believer in pantheism. Once again, we see the obvious connection with the Nazis of a master race in the following quote concerning the Nazi's euthanasia program:

"...a secret circular went out from the Reich interior Ministry which marked the beginning of a programme of euthanasia for mentally ill or deformed children up to three years old. Doctors would be required to report all such cases to the health authority on special forms; the forms would then be forwarded to a panel of three medical assessors who would adjudicate over life or death by appending "-" or "+." Should all three place a "+", a euthanasia warrant would be issued, signed by the Reichsleiter Philipp Bouhler of the Fuhrer's Chancellery or SS Oberfuhrer Dr Viktor Brack, head of the Chancellery's Euthanasia Department II. And so it happened: infants marked for death were transferred to what were referred to as Children's Special Departments in political reliable clinics, there to be given a 'mercy death' by injection or in one institution at Eglfing-Haar simply starved by a progressive reduction of diet."7

George Sorel (1847-1922) was a French philosopher who had considerable influence on Mussolini. His writings promoted an economic model based on syndicalism. He also believed in the degeneration of societies and believed that social decay could only be delayed by idealists who were willing to use violence to obtain power. His views were extremely anti-democratic and anti-liberal.

With this very brief review of philosophy has shown that the fascist traits of nationalism, totalitarian, racist, violence, unbridled corporatism, reactionary, and the top-down nature of fascism all are grounded in the works of past philosophers.

A totalitarian government is one that seeks to maintain control over all aspects of public and private life by using propaganda, terror, and technology. Totalitarian regimes seek control over political, social, and the culture. However, economic control is left in the hands of a few elites in the fascist state. While the means of economic control is left in the private hands of a few elites, this same group controls the government. In essence, the government becomes the tool by which the rich and the corporations maintain control. The distinction is important to note as it separates communism from fascism. In a communist state, the control over the economy moves to the inside of government, while in the fascist state it remains in private hands. Dictatorships differ in seeking only limited control over the political environment of a society.

There was only limited government ownership under the Nazis. Prior to the Nazi take over, the German governments took over failing businesses and continued to operate them. When the Nazis took over the government already owned a large number of enterprises. When the Nazis took over they began to privatize many of these businesses, especially the ones that had remained profitable during the depression like the electric utilities.

Once Hitler assured big business that they would be free to continue to operate, they failed to raise any further objections to the Nazis. The large German steel and coal industries especially welcomed the Nazis. Hitler's plans for rearmament meant large contracts for new ships, tanks, etc. Later during the war when a labor shortage appeared, it was Krupp from the German steel industry that first raised the question of using slave labor from the concentration camps. At first the Nazis were reluctant to allow the inmates to be used as slaves as it would slow the progress of the "final solution." However, once Krupp offered to pay for the slaves, the Nazis readily agreed and soon there was no shortage of companies seeking slaves.


Evil Personified

What is less understood about the totalitarian power Hitler achieved was the path he took to obtain that power. There never has been totalitarian regime that gained instant total control. Such a sudden change would spawn sudden revolutions. Mussolini took three years before consolidating his power in Italy. In case of the Nazis, it took even longer. Nor did the path to totalitarian Nazi state start with the elevation of Hitler to the position of chancellor. Some historians trace the roots of the path all the way back into the 1800s. A complete analysis of German history from the time of the monarchy to the seating of Hitler is beyond the scope of this book, if not beyond the scope of any single book, as volumes could be written. What follows is a very brief look at the slow erosion of freedom and the concentration of power as it relates to the final totalitarian state.

For the most part, the period following WWI was a period dominated by raucous politics and a series of crisis in Germany. The two periods in which the Nazis gained the most strength was the early 1920s, during the hyper inflationary period, culminating with the Beer Hall Putsch and the depression of 1929-1931. There is little need to examine the raucous politics of that period, everyone is well aware of Hitler's SA thugs breaking up political rallies of other parties which also resorted to the same tactics. It would not be untrue to describe many political rallies of the time as ending in brawls.

Hitler and the Nazis were extremists, and mostly rejected by the German voters during the good economic times of the 1920s. For example, in 1928 they only polled 2.6 percent of the vote, gaining just 14 seats out of the 491 seats in the Reichstag by virtue of the republic's proportional representation. By 1930 and the start of the depression, the Nazis had increased their seats to 107 out of 577 seats in the Reichstag. In the July 1932 election, at the height of the depression, the Nazis polled 37.4 percent of the vote winning 230 seats in the Reichstag, becoming Germany's largest party.13 In the November 1932 election, they only won 196 seats as an anemic economic recovery was already underway, the people began rejecting the Nazis and their radical views and actions.

Germany's plunge into a totalitarian state began before the Nazis took over. It was as much a result of a lack of a strong leadership as anything else. For the first eleven years of the German Republic, there had been seventeen cabinets headed by nine different chancellors.12 Undoubtedly, the country faced grave crisis in this period such as hyperinflation, but the lack of strong leadership and an increased polarization was readily apparent. The Nazis were the most notorious radicals unwilling to compromise, but the other parties have to share some of the blame for this polarization as well. The blame can be extended beyond the parties to the vested interests behind each party, including that of big businesses. Fracturing the electorate by polarization was playing right into the divisionist character of the Nazis, whose radical program lacked a broad base of support as the election results from 1928 showed.

The policies of the German governments during the 1920s inadvertently aided the rise of the Nazis. Throughout the 1920s the government arrested many of the leaders from the left. It would not be unfair to term these arrests as purges. The arrest of any strong leaders emerging from the left only served to further polarize the country by creating a vacuum on the left that was only filled with the more radical communists. A similar situation is emerging in the United States, throughout this century the United States has conducted purges of the left: the Great Red Scare of 1919, McCarthyism of the 1950s, and COINTELPRO operations during the sixties. Without the voices from the left to moderate policy, the political center in the United States has shifted to the hard right.

The immediate result in the lack of strong leadership is frequent chances in government, which only lead to more instability and chaos. An ideal parallel is the long string one-term Presidents ending with Lincoln and the Civil War. The polarization of the Unite States gradually increased from about 1820 on resulting in one-term presidents. Another string of one-term Presidents ended with the election of Roosevelt in the middle of the Great Depression. In both U.S. cases, the ending result was not pleasant: a civil war and a depression.

Such frequent change in government does not allow businesses to make long-range plans, nor does it allow for enough to time for programs enacted by a government to work. These effects then act as negative feedback, further increasing the polarization and the resulting chaos.

Additionally, the German constitution was flawed and did not account for a negative parliament. Power in Germany was concentrated in the office of the president, headed by Hindenburg, who initially had been elected by conservatives and reactionary rightists. He was a member of the aristocratics from the Junker class and had been a war hero; he likewise held sentiments for the monarchy. The president had the power to appoint cabinets and chancellors. Beginning in 1930, Hindenburg began the practice of appointing chancellors of his choice that were not beholding to the parliament. To allow the chancellors to circumvent parliament, he granted these chancellors emergency powers that had been given to the president by the constitution. Starting in 1930, almost all national laws, including the power to tax, were enacted by presidential decrees--and not by the parliament. Such presidential decrees would be similar to the executive orders in the United States.

Hence, even before Hitler was appointed to the chancellor position, power was being concentrated into the two offices of the chancellor and the president. At least twice before appointing Hitler as chancellor, Hindenburg entertained ideas of violating the constitution by not holding elections within the sixty days as required by the constitution.

Hindenburg had also avoided appointing Hitler as chancellor twice before January 1933. Even with the support of big business, Hindenburg failed to appoint Hitler when the Nazis held more seats in the Reichstag than any other party.

It wasn't until after Hitler met in secret with von Pappen at the Cologne home of Baron Kurt von Schroder that Hindenburg would relent and appoint Hitler chancellor. The baron was the head of the international Schroder banking empire and had previously raised funds to pay off the Nazi's debt.

The secret meeting on January 4, 1933 allowed Hitler and von Pappen to work out their differences and to agree to a new cabinet under the direction of both. This secret meeting was the birthplace of the Third Reich.

However, there were two Americans that also were in attendance: John Foster Dulles and his brother Allen. The Dulles brothers were there as legal representatives for Kuhn Loeb Company, which had extended large short-term credits to Germany. Their presence was to secure a guarantee of repayment from Hitler.

Moreover, Kurt von Schroder had extensive financial contacts in New York and London. He was a co-director of Thyssen foundry along with Johann Groeninger, Prescott Bush's New York bank partner. Schroeder was also the vice president and director of the Hamburg-Amerika Line, the same shipping line seized from Prescott Bush for trading with the enemy.

Throughout 1932, actions taken by the Bush-Harriman shipping line were directly responsible for bringing Hitler to power. The constitutional government tried to disarm the Nazi Brown Shirts to stop the mad election melees and murders. The U.S. embassy in Berlin reported:

" Hamburg-Amerika Line was purchasing and distributing propaganda attacks against the German government, for attempting this last-minute crackdown on Hitler's forces."

During 1932, Hitler's thugs murdered thousands of Germans. Arms for Hitler were shipped to Germany aboard the Hamburg-Amerika Line. They were transferred to river barges before reaching Antwerp and then transported across Holland freely. Samuel Pryor, founder of Union Bank and a partner in the Hamburg-America Line was also executive committee chairman of Remington Arms. Hitler's Brown Shirts were armed primarily with Remington arms and Thompson submachine guns. A Senate investigation of Remington concluded that all of the political factions in Germany were armed with mostly American-made guns.

Once Hitler and von Pappen had reached an agreement on their future course of actions, Pappen pressured Hindenburg to appoint Hitler as chancellor. The success of the meeting was recorded in Goebbels. On January 5, 1933 Goebbels wrote in his diary "If this coup succeeds, we are not far from power. . . . Our finances have suddenly improved."

Hindenburg appointed Hitler, as chancellor with the understanding Hitler would be a parliamentary--rather than a presidential chancellor. Hitler immediately set about sabotaging the efforts to from a parliamentary majority. Here is one of the first examples of fascism and divisionism.

On February 1, 1933 the German parliament was dissolved and new elections were scheduled for early March. Using his henchmen, Hitler had the Reichstag building burnt. The fire was blamed on the communists, his main rivals. Using the fire as an excuse, Hitler banned the communists from the upcoming election. Additionally, Goering deputized his stormtroopers to harass any political opposition from his position in the cabinet; but even then, the Nazis could not achieve a majority in parliament as they polled only 43.9 votes.14 By summer, all political parties except the Nazis had been dissolved. On the death of Hindenburg in 1934, Hitler assumed the office of president and further consolidated his grip on power, but it would take a couple of additional years before Hitler was a true totalitarian. He purged the justice system of judges with adverse views, appointing rabid Nazis in their place, and the stormtroopers were given police powers. Justice was now the Nazi party line.

One does not need to expound upon the extreme nationalism of the fascist. The history of their invasion in a quest for world dominion is well known. Mussolini turned his attention to Ethiopia and North Africa; Hitler first to Austria, then Czechoslovakia, followed by Western Europe and later to Norway and the east.

Hitler had left a blueprint for his extreme nationalism and the quest for lebensraum in Mien Kampf as shown by the quote below.

"If the National Socialist movement really wants to be consecrated by history with a great mission for our nation, it must be permeated by knowledge and filled with pain at our true situation in this world; boldly and conscious of its goal, it must take up the struggle against the aimlessness and incompetence which have hitherto guided our German nation in the line of foreign affairs. Then without consideration of traditions and prejudices it must find the courage to gather our people and their strength for an advance along the road that will lead this people from its present restricted living space to new land and soil; and hence also free it from danger of vanishing from the earth or of serving others as a slave nation.
The Nationalist Socialist movement must strive to eliminate the disproportion between our population and our area-viewing this later as a source of food as well as a basis for power politics---between our historical past and the helplessness of our present impotence."15

The third trait of fascism is that it consists of a top-down revolution or movement. It is becoming more accepted today that the Nazis drew support from all classes. Indeed, this seems a reasonable assumption when looking at all of the evidence. The stormtroopers for the most part drew their numbers from the lower and middle classes. They were typically were unemployed laborers, inept middle management, or failed businessmen. Likewise, given the vote tally of over 30% in the 1932 elections, the Nazis had to have drawn votes from all social classes. But this has no bearing on who controlled the direction of the party. Control of the party rested solely with Hitler--and whom he allied with. He chose to ally with the upper class and big business as borne out by his policies after gaining power. There is little controversy over the considerable support Hitler drew from the aristocrats, the military, or the Junkers.

Telltale signs forewarning of the elite control was evident from the very formation of the party until the final days before gaining power. A brief look at those that financed the Nazis rise to power will reveal the real support behind Hitler. This is becoming an increasing issue of contention as the American hard right tries to distance themselves from the similarities of their policies with fascism.

Hitler himself did not form the Nazi party initially. He joined an existing party and then molded it according to his wishes. In fact, his [Army Secret Service] company commander had ordered him to attend a meeting of what was the German Workers Party. Here was Hitler's initial reaction to the party.

"My impression was neither good or bad; a new organization like so many others. This was the time in which anyone who was not satisfied with developments and no longer had confidence in the existing parties felt called upon to found a new party. Everywhere these organizations sprang from the ground, only to vanish silently after a time. The founders for the most part had no idea what it means to make a party---let alone a movement---out of a club. And so these organizations nearly always stifle automatically in their absurd phillistinism."16

The order from his company commander provides the first evidence that the elite backed Hitler from the very beginning. At any point from this date the German military could have withdrawn its support of Hitler and disbanded the Nazi party

Hitler was a good orator by all reports, as well as an astute political observer. He knew how to motivate the masses in his name and how to sustain a movement. Someone once remarked recently that you needed only gain control of the 3Ms to gain power. The three "Ms" are the military, media, and money. Hitler had all three behind him. As shown by the passage from Mein Kampf, Hitler started with the blessing of the military. The military, as well as big business, played a behind the scenes role in the appointment of Hitler as chancellor. It's the last of the 3Ms where much confusion and debate arise, Hitler's source of funds or money.

Big business likewise had a large hand in bringing down Bruning in 1930. In a large part, it was the constant bickering by special interest groups that led to the falling of Bruning's cabinet. Big business was urging the following demands on the Bruning government:

1. The government must take steps to lower the cost of production and widen the profit margin.
2. Lower taxes
3. Reduce the size of government.
4. Lower unemployment insurance benefit
5. The government must allow wages to progress to lower levels, by voiding labor contracts and binding arbitration.26

If these demands from the business community seem familiar to the reader, it's because in a large part they are the same policies that the Republican Party has been advocating for the last twenty years.

Throughout the 1920s and up until Hitler was appointed chancellor, the Nazi party was plagued with a shortage of money. After release for prison for the failed Beer Hall Putsch, Hitler's only known source of income was from the sale of Mein Kampf and fees for newspaper articles he would write. The first edition of Mein Kampf was published July 18, 1925 in an edition of 10,000 copies selling for 12 marks. By the end of the year, almost all copies had been sold. A new edition was printed, but sales in the following year plummeted.

Nevertheless, almost immediately after being pardoned, he bought a new super-charged Mercedes-Benz for 28,000 marks.17 Additionally, Hitler did not drive, so he had the additional expense of a chauffeur. Likewise, from 1925 until his appointment as chancellor in 1933, Hitler lived in increasing comforts, if not outright lavishness for the times. Certainly, the royalties from Mein Kampf and fees for his other writings were insufficient to cover even his living expenses--not to mention the party's expenses.

Also, the funding for an ever-increasing number of SA troopers (many of which were unemployed) had to be secured. Turner has suggested that the Nazis were self-sufficient from dues, speaker's fees, and donations at rallies. However, this seems almost improbable looking at the numbers from 1930. In 1930 there were about 100,000 stormtroopers that had to be fed, housed and otherwise supported. Additionally there were 15,000 in the SS. Nazi membership at the beginning of 1931 was only 389,000.18 Thus it seems very reasonable, that outside sources of funding was needed to maintain the SA and SS, as well as the ever increasing lifestyle of Hitler. Membership fees in the Nazi party started at a mark per month, non-paying members were quickly dropped from the party.

From the very beginning of the Nazi party, Hitler showed a knack for obtaining funding from the more privileged members of German society. For instance, everyone is well aware of the trial following the Beer Hall Putsch, but less well known was a secondary trial following the putsch. In the secondary trial, several businessmen that had donated money or other support for Hitler were put on trial. Some have attributed much of this early funding of the Nazis to the secret Thule Society.19 Another early source of funds in the early '20s came from the efforts of Scheubner-Richter, who was adept at gaining funds from Bavarian aristocrats, big businessmen, bankers, and leaders of heavy industry.20 Another source of early funds came indirectly from Fritz Thyssen. Henry Ford also exerted a considerable influence over Hitler in the early 1920s, as well as money. Some passages from Ford's International Jew are nearly identical to passages in Mein Kampf. Ford's book is reported to have had a large effect on many of the school children of the time that were suffering through hyperinflation and economic hard times while reading a book written by the world's foremost capitalist.


Car Maker Henry Ford: AmeroNazi

Henry Ford's reward from Hitler finally came in July 1938, when on his seventy-fifth birthday he was awarded the Grand Cross of the Supreme Order of the German Eagle. Ford was the first American and the fourth person in the world to receive this medal, which was the highest decoration that could be given to any non-German citizen. Benito Mussolini, another of Hitler's financiers, had been decorated with the same honor earlier that year.

The extent of Ford's financial donations to Hitler still remains a mystery. The U. S. ambassador to Germany, William Dodd, was quoted saying "certain American industrialists had a great deal to do with bringing fascist regimes into being in both Germany and Italy."21 The extent of corporate America's collaboration with the Nazis before the war and even during the war, in some cases, is not fully known. However, as time goes by and more information becomes available, the collaboration begins to appear significant, as shown in the following article.

"Bernd Greiner said 26 of the top 100 U.S. companies in the 1930s collaborated to some degree with the Nazis before, and in some cases after, Hitler declared war on the United States in December 1941. Company headquarters in the U.S. have denied they knew what was going on in Germany, but there is evidence to suggest they knew their German subsidiaries used slave labor, tolerated it and in some cases were actively involved, Greiner said.
Greiner confirmed a report in the newspaper Die Zeit, based on his findings of U.S. corporate involvement in Nazi Germany. The findings went beyond allegations of U.S. lawyers and historians last year that automakers General Motors and Ford collaborated with the Nazi regime."22

One of the more historically accurate, but shamefully apologetic to big business sources is the book, German Big Business and the Rise of Hitler by Turner.23 Turner does a good job in detailing the extensive participation of the leaders of business with the Nazis. However, he reaches the conclusion that big business did not support Hitler with a rather contrived definition of what "big business" is. He based his definition on the value of the float of stock on the market. His definition limited the number of companies that he would classify as "big business"--to only 14 companies in the Ruhr industrial area and a smattering of companies located elsewhere. Essentially, his definition would be the equivalent of saying that only the Dow 30 companies in the U. S. could truly be called "big business". This of course is nonsense. The majority of people would certainly consider Chrysler, Texas Instruments, Hewitt Packard, John Deere and Chase Manhattan Bank to be "big business"--but according to Turner's book they are not. It is from this group of second and third-tier businesses (in keeping with Turner's definition) that provided the most help and support for Hitler. Furthermore, Turner neglects the effect of cartel agreements as well as subsidiaries in his analysis. Many of these second and third-tier corporations were owned and controlled by the 14 corporations, he considered to be "big business".

Secondly, Turner focuses much of his attention on the period of 1920-1928, when the Nazis were at best a minor noisy party. During this time, the Nazis were lucky to poll more than 3% of the vote. Yet Turner tries to use this as proof that big business did not support Hitler's rise to power, although he does admit that Fritz Thyssen and Kirdolf were supporters of the Nazis during this time. An equivalent situation would be today's Libertarian Party, a party that draws support from Koch, head of Koch refinery (a second-tier company by Turner's reasoning). But no one is rushing to fund the Libertarians today when they cannot even poll 5% of the vote.

Finally, when the source of funds were unquestionably from big business, Turner attempts to discredit them by claiming "the source of the funds was a junior level executive that couldn't be responsible for overall company policy". Or he attempts to say they were given to an individual Nazi. In one shameful passage Turner attempts to discredit the funds given to Nazi fund-raiser Walther Funk by claiming they were not a donation to the party as they may have been spent by Funk for entertainment. Turner describes a particular drunken binge across town by Funk in which he passed out some rather large tips and then draws the conclusion that perhaps none of the funds given Funk ever reached the Nazis.24 This is not the work of a historian, as Turner claims to be. This is nothing more than conjecture by a propagandist. There is also one other speculative conclusion one could draw from this passage, and that is that the amount of money Funk was receiving was so enormous that it permitted such behavior.

Turner does a good job in showing that it was those second and third-tier businesses that supported the Nazis. In Duren, a Rhenish manufacturing town, the Nazis received considerable support from local industrialists such as the millionaire dynasties (a term in use from the 1820s in describing these two families) of the Schoellers and the Schulls. Another area in which the Nazis received broad support from businesses was Solingen, an industrial town.25 Overall, Turner documents the participation of business leaders and their support for the Nazis, leaving no question in the reader's mind that business leaders exerted a considerable influence on the Nazis. Unfortunately, he ends his study just as the Nazis seize power.

Many businesses chose to align with and support the Nazis after they gained power. Krupp and I.G. Farben were both executors' of Goering's Four-Year Plan to make Germany militarily self-sufficient by 1940. One can view the details of Krupp's involvement and support for the Nazis after March 1933 in the documents from the War Crimes Tribunal at Nuremberg.31 The full set of available documents from Nuremberg is also available on the Internet.32 By 1939, I.G. Farben provided the Nazis with 90 percent of their foreign exchange, 95 percent of imports, and 85 percent of all military and commercial goods. In 1932, Hermann Schmitz Farben's joint chairman joined forces with Kurt von Schroder, director of a wealthy private bank. Schroder was a fanatical Nazi, often times dressed in his black SS uniform. Schroder is the man that is closely linked with Chase Bank, Standard Oil and William Teagle, and ITT. In 1932, Schroder and Wilhelm Keppler formed the group known as "The Fraternity." This group guaranteed a source of money to the Gestapo. Members agreed to contribute an average of one million marks a year to Himmler's personally marked "S" account and the transferable secret "R" account of the Gestapo.27

In April of 1933, Gustav Krupp sought out a private meeting with Hitler. Krupp agreed to become Hitler's chief fundraiser and chairman of the Adolf Hitler Fund. In return Hitler promised to appoint Krupp as the Fuehrer of Germany industry. Over the years, Krupp contributed over six million marks of his own money to the Nazis, and his correspondence shows that he truly enjoyed his job as chairman.28 Likewise, it is common knowledge that after Hitler was appointed chancellor, Krupp greeted people cheerfully with the Heil Hitler! salutation.

Schirer writes that in 1931, when Hitler decided to cultivate relationships between influential industrial leaders, he kept their identity a secret.

"The party still had to play both sides of the tracks. The party had to allow Strasser, Goebbels and Feder to beguile the masses with socialist talk and denigrating the industrial magnates."
Some of the meetings were so secretive that they were held in forest glades."29

Further proof of the industrialist involvement and support of the Nazis comes from the testimony of Funk at Nuremberg. The entire list implicated by Funk is far too long to reproduce here, but besides Thyssen and Krupp it included Georg von Schnitzler-I.G. Farben, August Rosterg and August Diehn of the potash industry, Cuno of the Hamburg Amerika Line, Otto Wolf, Kurt von Schroder, and many other wealthy industrialists30

On May 2, 1933, the Nazis raided and occupied all trade union headquarters. The leaders were beaten and arrested; some were placed in the concentration camps. Union funds were confiscated and the unions were dissolved. Members of the communist party and the social democrats had already been arrested. On June 20, 1934, in what has become known as the Night of Long Knifes, Hitler purged the socialists within the Nazi party, chief among them Roehm.

With the broad financial support from the leaders of the business community as well as from the military leaders and aristocrats, the Nazis were truly a top-down organization, while the Nazis used the lower class as foot-soldiers to gain power. They did so in a deceiving manner, and once in power, immediately set about betraying the lower classes

We have already shown one example of divisionism by the Nazis in their rise to power. But what sets fascist divisionism apart from the ordinary divisionism of any other political ideology? Certainly any politician in a democracy appeals to some sort of divisionism, as he is fully aware that he can not possibly appeal to the entire electorate. The difference lies in the fact that divisionism is always destructive in fascism and serves only as a means to gain and maintain power. [EDITOR: like the "Tea Party" rants] Even after gaining power, Hitler went to great pains in dividing power, playing one follower against another, creating rivalries in the party in the process. In short, Hitler kept the Nazi party divided as if it was a set of small fiefdoms. One of the biggest myths about the Nazis is that they were a single unit, when in fact they were a conglomeration of various fractured parts. Eatwell states the paradox within Hitler's power structure as: "because the party was so divided that he had power and in turn the party was divided from other key centers of power such as the army." 47 In other ideologies, the divisionism is not inherently destructive. Rather, it's based on differing approaches coming together to reach an equable solution to a problem. In his rise to power, Hitler had no intention of compromising with the other parties to form a parliamentary president. His moves were calculated to destroy any chance of that.

A couple of examples from the present can further delineate the difference between the two. Certainly many of the tax proposals coming from the Republican party today could be classed as divisionism as they favor the upper income earners over the lower income groups. While the measures are divisive they can hardly be labeled as destructive divisionism. They are more a reflection of difference in opinion.

However, an example of an act that could be termed a fascist divisionism was the Republican caused shut-down of the government in November 1995 after Clinton vetoed the budget bill. Clinton had previously warned Congress that unless changes were made in the budget he would veto the bill. Members of the hard-right Council for National Policy and many of their Republican members openly had declared they would shut down the government. In essence, the Republicans adopted the same policy that Hitler had in his bid to dismiss parliament; they refused to negotiate honorably.

Just as Hitler had taken a position to subvert democracy, so had the Republicans, led by Gingrich. The constitution defines the passing of the budget in detail. The spending bills originate in the House after passage by both the House and the Senate. It is then sent to the President, who may either veto it or sign it. If the bill is vetoed, it is up to Congress and the President to reach a compromise bill. Otherwise, Congress must pass a bill with a two-thirds majority. The failure of Congress to pass a bill to advert a government shutdown was a dereliction of their constitutional duty. Fortunately, the outrage coming from the general public forced the Republicans back to the negotiation table. The point to be made is the only difference between the two events---the Republicans feared the wrath of the people and capitulated, Hitler had no such fear and parliament was dismissed.

The Republican shut-down of the government also serves to point out a flaw in our constitution, just as there was a flaw in the German constitution. In the case of the U. S. constitution, there is no other mechanism other than shutting down the government if Congress fails to pass a budget. If the fascists in America can be successful in polarizing American politics to such an extent that the public, or at least a considerable portion of it, tolerates a government shut-down, then the entire budget process becomes a fracas. And after observing the behavior of the Republicans in their ill-fated attempt to impeach Clinton such a possibility does not appear so remote.

Another example of divisionism that is solely destructive that is not based on racism or class warfare was the impeachment of Bill Clinton. It served no purpose other than to smear the president, the articles of impeachment fell far short of what the founding fathers had defined in the phrase "high crimes and misdemeanors." That phrase refers back to the misuse of offices in England under the king. Additionally, the investigation of Ken Starr has been plagued by civil rights abuse and possible criminal action by Starr himself. It resembles a coup headed by the multi-millionaire [EDITOR: AmeroNazi] Scaife with the aid of the religious right, more than it resembled a justified impeachment.

But perhaps, the greatest illustration of the divisionism was seeing support for the impeachment evaporate like rain on hot pavement in the Senate following the State of the Union address and a thorough defense of the charges by Clinton's legal team. The House prosecutors with the conclusion of Ken Starr questioned Monica Lewinsky further in secret. This single action by the House Republicans invoked criticism from even members of their own party in the Senate. It was conducted against the agreed upon rules, and it was unconstitutional in that the power of investigation is delegated to the Senate. Likewise, it is against the statute of the Independent Council. It served no purpose other than to further divide and disgust the country. In short, it is nothing but an attempt at a power play.


Often times, this divisionism takes the form of racism or class warfare. It is often stated that Mussolini tried to eliminate class distinctions in fascist Italy. But the reality is that he only reinforced those distinctions. Certainly the Nazis practiced racism in an outrageous manner, ending in the Holocaust. On the other hand, fascist Italy was not racist in nature until after Mussolini adopted Hitler's Jewish solution. Fascism doesn't necessary have to be racist in nature, but racism is often used to divide the citizens, as their radical platform isn't appealing to the broad masses. In addition, racism is violent in nature and the resulting chaos from the violence serves to further divide the masses. Whether or not a fascist state is racist seems to depend more upon the culture of the society in which it arises. Before fascism, Italy had a long history of generally equable racial relationships, going all the way back to the old Roman Empire. For instance, even the slaves were eventually given full rights in Rome. However, the roots of anti-Semitism goes back much further in Germany as shown in the following quote.

"This is a good month to reflect on the toxicity of words meant to kill. Nov. 9 marks the 60th anniversary of Kristallnacht, the 1938 'Night of Shattered Glass' unleashed by the Nazis to terrorize Germany's Jews. The date was chosen specially by Josef Goebbels, Hitler's propagandist, to honor the birthday of Martin Luther, the 16th century monk who was a father of the protestant Reformation and the founder of what became the Lutheran church.
Hitler greatly admired Luther: "He saw the Jew as we are only beginning to see him today." Indeed. Luther saw the Jews as 'hopeless, wicked, venomous, and devilish... our pest, torment, and misfortune."
Initially, certain that his version of Christianity would appeal to Jews, he expected large numbers of them to covert. When that failed to happen, he turned violently against them. In 1543, Luther Published "On the Jews and Their Lies," a work that would become known throughout Germany, perhaps the most widely disseminated work of anti-Semitism by a German until the rise of the Nazis 400, years later.
"What then shall we Christians do with this damned, rejected race of Jews?" Luther asked.
"First, their synagogues should be set on fire, and whatever does not burn up should be covered or spread over with dirt, so that no one may ever be able to see a cinder or stone of it...
Secondly, their homes should likewise be broken down and destroyed...
Thirdly, they should be deprived of their prayer books and Talmuds, in which such idolatry, lies, cursing, and blasphemy are taught.
Fourthly, their rabbis must be forbidden under threat of death to teach any more...
Fifthly, passports and traveling privileges should be absolutely forbidden to the Jews...
Sixthly, I advise that...all cash and treasure of silver and gold be taken from them...
Burn down their synagogues, forbid all that I enumerated earlier, force them to work, and deal harshly with them... If this does not help we must drive them out like mad dogs, so we do not become partakers of their abominable blasphemy and all their other vices. I have done my duty. Now let everyone see to his."
This is hate speech.
Sixty years ago next Monday on the night of Luther's birthday, Nazi gangs rampaged across Germany. In every Jewish neighborhood, windows were smashed and buildings were torched. All told, 101 synagogues were destroyed, and nearly 7,500 Jewish-owned businesses were demolished. On that night, 91 Jews were murdered; 26,000 were rounded up and sent to concentration camps. It was the greatest pogrom in history. And it was nothing compared with what was to come."33

The question then remains whether the fascism in America can be considered racist or not. The past history of racism in the United States would tend to support such. As a nation, we were one of the last industrial nations to allow slavery, and it took the Civil War to end slavery. It has been less than fifty years since "separate but equal" was the rule of the land. It's only been sixty years since Japanese citizens and immigrants were interred in camps following the bombing of Pearl Harbor. The Rosewood incident happened less than a hundred years ago, and lynching of blacks was common well into the 20th century. This country has had a long, incredulous history of bigotry and even genocide. There is no question of the genocide of Native Americans in the efforts of the U. S. Army in passing out blankets infected with small pox, or the slaughter of the Plains Indian's primary source of food, the buffalo. Then there was the Trail of Tears, as well. The Irish immigrants, following the potato famine, were greeted by the Know Nothings, a party that based its support on the hate of Catholics.

All of the hard-right groups are racist, although more than one tries to play their racism down or to hide it, such as the John Birch Society and some of the various militia groups. Others are openly racists, such as the Klan, the Nazis and the skinheads. The great unifier of the far right, the Identity religion, links many of the hard-right groups. The Identity religion is based on anti-Semitic belief that the true followers of Jesus immigrated to Britain and northern Europe, that today's Jews are the descendents of Satan. It's the mainstay religion among the militias, the Posse Comitatus, and even among some of the Klan groups.

Besides the normal hate groups based on racism or anti-Semitism. the religious right has emerged in the 1990s as a venomous hate group basing their hate on gays and abortion. Abortion clinics increasingly are becoming targets of bombings, arson, and vandalism. Late in 1998, Matthew Shepard was murdered in Wyoming after being tie to a fence and then pistol-whipped, for being gay. Below are some quotes about gays from one of the leaders of the religious right, Pat Robertson.

"This conduct [homosexuality] is anti-social, and it is a pathology. It is a sickness, and it needs to be treated. It doesn't need to be taught in the classroom as a preferred way of life..." - 700 Club, 3-7-90
"...the acceptance of homosexuality is the last step in the decline of Gentile civilization." --Pat Robertson, of the Christian Broadcasting Network, warned that hurricanes could hit Orlando, Fla., because of gay events there. Time magazine, Oct 26, 1998
"If the world accepts homosexuality as its norm and if it moves the entire world in that regard, the whole world is then going to be sitting like Sodom and Gomorrah before a Holy God. And when the wrath of God comes on this earth, we will all be guilty and we will all suffer for it." - 700 Club, 9-6-9534

[EDITOR: I think homosexuality should not be allowed in society categorizing it as a crime like murder is--but of course, not as severe. Society must have some standards of morality or else we just have hedonistic anarchy. Fascism and Communism are totalitarian mentalities that do not stop at criminal behaviors like murder and homosexuality, they continue to pry into individual lives without pause seeking the complete roboticization of every individual.]

Compare that last quote of Robertson's to the following quote of Hitler on syphilis.

"...they speak of this whole field as if it were a great sin, and above all express their profound indignation against every sinner caught in the act, then close their eyes in pious horror to this godless plague and pray God to let sulfur and brimstone preferably after their own death rain down on this Sodom and Gomorrah, thus once making an instructive example of this shameless humanity."39

Such evidence, as Robertson's words, abounds that they would persecute gays, it abounds in the numerous ballot measures in various states that would deny gays their civil rights. Such a measure passed in Colorado, only to be overturned by the Supreme Court. Another measure, led by Lon Mabon in Oregon failed state-wide, but was reintroduced on local ballots in the following election. Mabon has also led ballot measures to limit the concept of a family and limiting abortions to only the first trimester. The first was another attempt to limit the rights of gays.

In June 1998, near Jasper, Texas a black man named James Byrd was dragged behind a pickup. Body parts were found over a two-mile length of the roadway.35 It is too early for trends in hate crimes to emerge, as the FBI only began tracking hate crimes in 1991. The one trend that does seem to be emerging is the hate crimes are becoming increasingly violent as evident from the murders of Shepard and Byrd. The real danger of these two murders is they serve to desensitize us, leading to more numerous and increasing levels of violence, just as the Nazis used increasing levels of violence against the Jews.

Racism is reemerging in various forms in the 1990s in political issues and in the Republican Party. "English only" laws are being promoted with increasing frequency by various Republican candidates, including Robert Dole, and have even appeared on some ballot measures such as California Prop 187. The obvious targets are immigrants from Mexico. In effect, it's nothing more than the reemergence of nativism. Other forms of nativism have appeared, such as denying immigrants access to welfare and the school system for children of immigrants. Nativism is also behind various immigration bills and the increasing efforts directed at illegals.

Perhaps the most dangerous form of racism to emerge has been the Republican efforts to "monitor" the polls. And videotape those leaving. Cases have arisen in the 1998 election in North Carolina, Georgia, Michigan, Maryland, Kentucky, Texas and Maine. The efforts are directed primarily at districts in which have a high percentage of minorities. Such efforts serve no useful purpose and do constitute a violation of the Voting Rights Act.36 More disturbing is the Chief Justice of the Supreme Court, William Rehnquist, served as the director of Republican 'ballot security' in the poor areas of Phoenix, Arizona between 1958-1962.37 He likewise wrote a pro separate but equal memo as a law clerk for Justice Robert Jackson. All of which was brought out in his confirmation hearings.

An even more subtle effort on the part of Republicans in denying votes to the minorities and the poor is centered on the debate to allow a statistical correction to the 2000 census. Such effort on the part of the Republicans goes far beyond the election of 2000. The census will be used to reapportionment of the congressional districts for the decade. Thus, by denying the correction, they in effect are perpetuating their power to 2010 by undercounting groups that historically vote for Democrats

In Dec 1998, Republican House member Bob Barr and Senator Trent Lott were exposed as keynote speakers before the Council of Conservative Citizens, a racist organization. Lott was later determined to have been an honorary member and had written several articles for their paper dating back to the early 1990s. In January, Republican National Chairman, Jim Nicholson asked members to dissociate themselves from this group and directly appealed to national committee member Buddy Witherspoon from South Carolina to resign. The request was refused.38 Once before, the Republicans were asked to denounce the radical John Birch Society at their National Convention in the early 1960s. Moderate members such as the former President Jerry Ford, did so. However the measure failed.

Another Republican that deserves mention here is Pat Buchanan and his anti-Semitic views. Buchanan has opposed virtually all civil rights bills and favorable court decisions; he has supported apartheid in South Africa; he has spewed forth views of Holocaust denial; he has called fascists such as Franco and Pinochet soldier-patriots. And Buchanan was a key figure in urging Reagan to visit the SS cemetery in Bitburg.40

Thus as we prepare to enter a new century, the Republican Party has adopted racism as a divisionist tool to divide the electorate in an attempt to maintain power and enact their extremist agenda. Not all members of the Republican Party are racist, but many of the members from the hard right that controls the party are racists. There are honorable members of the party, but they are being forced into lesser and lesser roles. The extremists have gained control. It is the burden of those honorable members to take back control of their party and denounce the extremist before it becomes too late.

Perhaps the best assessment of the use of destructive divisionism by fascist in the United States comes from a 1945 War department publication:

"Three Ways to Spot U.S. Fascists.
Fascists in America may differ slightly from fascists in other countries, but there are a number of attitudes and practices that they have in common. Following are three. Every person who has one of them is not necessarily a fascist. But he is in a mental state that lends itself to the acceptance of fascist aims.
1.Pitting religion, racial, and economic groups against one another in order to break down the national unity is a device of the divide and conquer technique used by Hitler to gain power in Germany and in other countries. With slight variations, to suit local conditions, fascists everywhere have used this Hitler method. In many countries, anti-Semitism is a dominant devise of fascism. In the United States native fascists have often been anti-Catholic, anti-Jew, anti-Negro, anti-Labor and anti-foreign born. In South America, native fascists use the same scapegoats except that they substitute anti-Protestantism for anti-Catholicism.
Interwoven with the master race theory of fascism is a well-planned hate campaign against minority races, religions, and other groups. To suit their particular needs and aims, fascists will use any one or a combination of such groups as a convenient scapegoat.
2. Fascism cannot tolerate such religious and ethical concepts as the brotherhood of man. Fascists deny the need for international cooperation. These ideas contradict the fascist theory of the master race. The color, race, creed or nationality-have rights. International cooperation, as expressed in the Dumbarton Oaks proposals, run counter to the fascist program of war and world domination. Right now our native fascists are spreading anti-British, anti-Soviet, anti-French and anti-United Nations propaganda.
3. It is accurate to call a member of a communist party a communist. For short, he is often called a Red. Indiscriminate pinning of the label "Red" on people and proposals which one opposes is a common political device. It is a favorite trick of native as well as foreign fascists.
Many fascists make the spurious claim that the world has but two choices---either fascism or communism--and they label as "communist" everyone who refuses to support them. By attacking our free enterprise, capitalist democracy and by denying the effectiveness of our way of life they hope to trap many people."74


The extreme anti-communism and anti-socialism stance of the fascist is beyond dispute among honest historians. Both communists and socialists were the first to enter the concentration camps in Nazi Germany. Both Mussolini and Franco fought against communist influence. From the brief survey of the fascist philosophers and extreme anti-liberal stance has been a factor in fascism from the beginning. The Nazi used socialism as a ruse to gain power, but once in power, they purged the socialists within their party. The following quotes taken from Mein Kampf will illuminate the anti-communism, anti-parliamentary democracy, and the social Darwinism of Hitler.

"Just as in 1918 we paid with our blood for the fact that in 1914 and 1915 we did not proceed to trample the head of Marxist serpent once and for all, we would have to pay most catastrophically if in the spring of 1923 we did not avail ourselves of the opportunity to halt the activity of the Marist traitors and murders of the nation for good"41 >
"As regards the possibility of putting these ideas into practice, I beg you not to forget that the parliamentary principle of democratic majority rule has by no means always dominated mankind, but to the contrary is to be found only in brief periods of history, which are always epochs of decay of peoples and states."42
"The best state constitution and state form is that which, with the most unquestioned certainty, raises the best minds in the national community to leading position and leading influence.
But as in economic life, the able men cannot be appointed from above, but must struggle through for themselves,..."43

The second quote certainly is anti-liberal as it shows Hitler's contempt for the democratic process. The last quote reveals Hitler as a social Darwinist of which Turner makes the point in several places in his book.44 Social Darwinism runs counter to the aims of socialism. In fact it is the antithesis. It allows the elite to gain further power, it willingly discards the poor and the weak as expendables.

With the anti-communism stance and Social Darwinism character of Hitler, it is not surprising that the fascist in America would come from the extreme right. The United States was right in opposing communism. But to what links? As with anything else moderation is an admirable quality, excesses of any nature are damaging. Truman or Eisenhower were not fascists for their anti-communism actions. However, Tail Gunner Joe was either a fascist or a willing dupe of fascists. The type of anti-communism of McCarthy served no other purpose than to further his political career. He openly violated the right to free speech and assembly of his victims. His aim was to destroy them with out any regard to the evidence.

The social Darwinism as initiated by Reagan and his attacks on the poor, and the dismantling of the welfare program led by Newt Gingrich will also be labeled as examples of creeping fascism. Throwing people into the streets arbitrarily to fend for themselves is destructive; it is social Darwinism at its worst. Forcing them to except wages below the minimum wage law is denying them their equal rights. But it was precisely the economic woes of Germany that allowed the Nazis to rise to power. Currently America is enjoying good economic times, but when the economy takes a turn to the south the full impact of the lack of a social safety net is going to be felt hard.

The next trait of fascism, extreme exploitation, is a direct result of one of the primary traits of fascism, extreme nationalism. The form of nationalism promoted by fascism not only concerns the standing in the world but also applies to the sacrifices that are expected of citizens. In short, the fascist state reigns supreme while the individuals are subordinate to the state. The subordination of individuals to the state is the antithesis of liberalism. Once again some quotes from Mein Kampf will suffice.

"Since for us the state as such is the only form, but the essential is its content, the nation, the people, it is clear that everything else must be subordinated to its sovereign interests."45
"a peace, supported not by the palm branches of tearful, pacifist female mourners, but based on the victorious sword of a master people, putting the world into the service of a higher culture."46

Certainly from those two quotes there can be no question of the subordination of individuals as practiced under the Nazis or to any limits short of world domination by the Nazis. It is often stated that Hitler left a road map to his future goals in Mein Kampf. There is no greater evidence of that than in the last quote. How then did he rise to power? The problem was nobody was listening. Nobody challenged his aggressive views toward war, or at best they believed that they could control or contain him. Only later did they find out the errors of that false assumption.

This writer can find only two instances of this extreme exploitation in America. Thanks to the efforts of CBS 60 Minutes and Evening News, the story broke about the Tomb of the Unknown and how the Reagan White House pressured the military to find an unknown to bury on Memorial Day 1984. Turns out that in their haste to respond to the pressure coming from the White House, they deliberately buried a fallen Soldier that wasn't so unknown. The unknown was Michael Bassie. This man had given everything to his country except for his name. And the low-life filth occupying the White House had that stripped from him so he could have a photo op on Memorial Day in an election year. This writer can think of no other action that is more despicable; it's unforgivable. Of course Reagan made sure he was the star of this photo op and used it to promote and build support for his extremist military agenda.

The second instance comes at the hands of Newt Gingrich and the Republicans of the 104th and 105th Congress. They have stripped the rights of welfare recipients and required that they participate in workfare. The problem comes in that these poor souls are not even entitled to be paid the minimum wage or the right to unionize in some cases. In other words, the Republican's answer to the poor is to force them to work in perpetual slavery with no chance of ever breaking out of poverty.

But this event is much more dangerous and goes much further than it appears. The danger here lies in the suspension of the constitutional equality under the eyes of the law. The Republicans have in effect created a sub-class in which one of the very fundamental tenets of our constitution, equality under the eyes of the law was ignored and thrown out the window. Nor is this the only example of unequal treatment of the poor at the hands of the Republicans. They also have advocated cut backs in the budget for the public defender's office. The Republicans have been very successful in their propaganda in demonizing the poor. There seems to be an almost gutter-level hatred of the poor and any aid to assist them. Instead of reaching out a compassionate helping hand towards the poor, the Republicans have adopted a mean-spirited Social Darwinist view.

This brings us to the trait of opportunistic ideology of fascism. It is perhaps one of the more confusing aspects of fascism. Mussolini appears to have been indeed a socialist before founding the fascist party. Mussolini likewise went from a pacifist to a rabid warmonger. Clearly such dramatic changes in ideology could only be based in an opportunistic grab for power. Mussolini started supporting a syndicalism economy, but by 1923, with clear objections from business leaders, he concluded the Palazzo Chigi Pact. This pact's main intent was to simplify business relations by making the fascist the sole representative of labor. In 1925, the Plazzo Vidoni agreement was signed. This agreement made Rossoni's union the sole representative of labor. It likewise prohibited the challenging of factory management. By the close of the year, the grateful employer's federation publicly announced adherence to the fascist regime.48 Such transformations illustrate the opportunistic ideology present in fascism or is it a lack of ideology, as well as further dispelling the myth that fascism is another form of socialism.

Part of the problem with the ever-changing ideology of fascism arises from the divisionism. Strasser was a socialist and it seems that Goebbels was a Marxist. Both were allowed almost free reign in promoting their own economic views--as long as it gathered more support of serve Hitler's purpose. But once their views failed to serve Hitler, they were then brow-beaten severely. An example of such reversal in party ideology of the Nazis occurred on February 14, 1926. Prior to this date, both Strasser and Goebbels had approved of a plebiscite campaign to deprive former royalty of their possessions, a measure, that was popular with the common citizens. On the given date, Hitler summoned both men to a meeting in Bamberg. Before those gathered, Hitler forced both to capitulate and abandon the program.49 Similar events have already been given, in which various Nazis were initially allowed to promote socialism in efforts to appease the lower classes in an effort to gain their support.

Examples abound throughout the history of the Nazis where they adopted their ideology to suit the audience. In October 1932, Strasser announced a new program that was a stark reversal of the program the Nazis had advocated in July. Higher taxes on the rich had been replaced with a general reduction of taxes, instead of price controls it centered on freeing prices. Instead of protectionism trade policy, export and global trade was now promoted. Likewise, much of the inflammatory rhetoric had been dropped.50

Hitler seems to have sensed the explosive nature of economics and tried to avoid the subject both publicly and within the party. From all indications, he was dissatisfied with the party planks on economic matters. The only official stance on economic matters was the 1920 twenty-five point program. However, he only referred to this policy document disparagingly in Mein Kampf and distanced himself from the document.51 Likewise Hitler would never take an aggressive stance on minor issues, he played to his audience to win their support.

[EDITOR: this by definition is a demagogue; telling the people what they want to hear to manipulate them to gain power over them]

Perhaps the most dramatic evidence of the opportunistic character of the Nazis is illustrated by the actions of thirty-nine businessmen in November 1932. The group contained such notables as Krupp, Thyssen, Bosch, Siemens, and others. In a signed letter to Hindenburg, they urged him to appoint Hitler as chancellor. In essence, they were placing a bet that the socialism ideology was a fraud and that once in power, he would be a tool of capitalist.52

The only other reversal in policy that could rival the bet that the leaders of big business made was Hitler's writings. In the first part of Mein Kampf he argued that France was the sworn and greater enemy of Germany. However, in the second part to Mein Kampf he reversed course and argued that Russia was the enemy as opposed to the first book, in which he proposed an alliance with Russia.53 This was a complete change in his foreign policy. One can only speculate as to the reasons behind such a switch.

Many writers have tried to label the Nazis as "socialists" in a folly to distance themselves from fascist theory. They are quick to point to the syndicalism policy as proof of socialist regulation of business. They are in error, of course. Syndicalism is neither left nor right in itself. It can be either, depending upon the political structure. Syndicalism with labor groups or consumers dominating the issues would indeed be socialistic in nature. On the other hand, syndicalism with only industry or business groups dominating is certainly from the right-wing of the political spectrum. The issuing of controls or goals over the production of war material by the government in a syndicalism system is neither left nor right, it's simply self-preservation. The goals and controls, including the 4-Year Plan issued by Goering, were nothing more than gearing the economy up for war-time production. In essence, they were merely self-preservation measures.

http://www.spiritone.com/~gdy52150/chpt1.htm, Part 6

Secondly, they will point toward many of the public works projects that were implemented under the Nazis as examples of socialism. An example of this, is the construction of the autobahn, a project that had been planned by previous governments, as were many of the public work projects. They likewise forget, that the Nazis took over at the bottom of an economic depression, public work projects were enacted not only in Germany, but in the U.S. as well as a means to end the depression. Many of those projects in the U.S. were the construction of useful infrastructure, such as the building of the high school in New Ulm, Minnesota. Others had a definite commercialism bent to them, such as the construction of Timberline Lodge on Mount Hood in Oregon. Labeling the construction of a facility for a commercial business as "socialism" is simply fool's folly. The same applies to many of the public works projects that were implemented under the Nazis.

Labeling such programs as "socialism" would be the same as labeling the construction of the interstate highway system as "socialism". If the Eisenhower administration had one shining moment, it was his support for the construction of the freeway system. For those that are silly enough to label such work as socialism, let them be reminded that no other single event, other than the construction of the cross-continental railroad aided the development of business. Besides the obvious advantage to shippers, the interstate highway system has spawned many new businesses. Think of the number of motels/hotels as well as the tourist traps, service stations, and others that have grown up along the freeway system. The same applies to Germany and the autobahn.

[EDITOR: I violently disagree with Yeady that the highway system that murders 50, 000 Americans each year is morally or functionally good. America would be better off with a high speed train system, but this would harm Rockefeller Illuminati oil profits.]

Finally, the same writers that label fascism as "socialism" would like their readers to believe that these government regulations and bureaucratic offices held ultimate power. Failure to comply would result in the owners being shot. Nothing could be further from the truth. The Nazis for a large part lived in fear of the leaders of big business. They were aware that they had no comprehensive economic plan and would defer to the judgement of the business leaders.

This point can be driven home with one simple example. Goering was one of the Nazis that had little economic knowledge, but harbored some of the more radical economic ideas and was fond of using regulatory offices. Goering tried first to persuade the steel industry, both the smelters and miners, to use low-grade German ore as opposed to the high-grade Swedish ore. Importation of ore from Sweden would use up precious foreign currency, as well as being a less reliable source in the event of war. The invasions of Denmark and Norway were conducted solely to protect the Nazis shipping routes for the Swedish ore. Most of the industrialists politely refused Goering's request; even under threats of arrest for sabotage, they still declined.54 None were arrested for refusal. Instead Goering formed the Herman Goering Works to take on the task. By the time of the outbreak of the war it had evolved to be one of the largest companies in Germany.

Farben is another example of the Nazis bowing to the expertise of leading corporations. With the advent of the first 4-Year Plan, they realized they needed the cooperation of business leadership in order to achieve self-sufficiency in a series of raw materials and finished products. Most of which were items would be crucial to wartime production. By the end of the war Farben, had a series of factories around concentration camps, were major users of slave labor, along with Krupp and many other corporations.

But the most damning evidence of the Nazi's unbridled corporatism was evident shortly after passage of the Enabling Act, when Hjalmar Schacht was appointed president of the Reichsbank. Schacht was a brilliant financier who helped negotiate the Dawes Plan and was largely responsible for stabilizing the currency in 1923; he also detested democracy and parliamentarianism. His first official act was the creation of Metall-Forschungsgesellschaft A.G. (Mefo), a dummy corporation of four armament firms. The state assumed the liability for their debts. The Mefo bills were not unlike promissory notes, they were issued to government contractors and could be extended to five years.55 Such favoritism of business is certainly not socialism. Today in America, such corporate aid is labeled as "corporate welfare". Note the similarity here not only to the present corporate welfare that's being doled out, but also to Eisenhower's warning of the military-industrial complex. The American military-industrial complex didn't need to invent a new plan, they were simply free to follow the example the Nazis used. In fact, fascism is inseparable from corporatism. You simply cannot have a fascist government without corporations and a capitalistic economy.

Schacht was later appointed to minister of economics in 1934, a post he retained until he resigned in 1937 over policy disputes. He was not an anti-Semitic and was conscious of the negative aspects of the takeover of Jewish business on both the economy and world opinion. By 1936, he was advocating slowing down the rearmament program, fearing the return of inflation.56 The return of inflation dispenses with the myths that the Nazis maintained strict control of corporations and the prices of goods in short order. In effect, such controls were non-existent. It should also be pointed out here that the economy at this time had taken on considerable shades of a consumer economy.

Italy used their form of syndicalism to eliminate labor unions; the Nazis followed a similar path. The workers benefited little from this unbridled corporatism. Unemployment went from an official figure of six million unemployed in 1933, to 2.7 million in 1937, and by the time of the outbreak of war there was a serious shortage of workers. But growth in wages was far less spectacular, real wages rose only sparingly. The index of wages rose from 92.5 in 1933 to 103 in 1937, an increase of a meager eleven-percent.57 Much of the increase in wages was achieved only from working longer hours. The only real increases in the plight of the workers came with more unpaid leave. Many of the other benefits produced no real benefits to the worker, such as the factory beautification program.

From looking at the philosophers of fascism, it was revealed that fascism was a reactionary movement. What then was the fascist reacting to that led to the rise of Mussolini and Hitler? Many people responding to the question would simply answer the Treaty of Versailles. But such an answer is only partially correct. It doesn't account for the widespread rise of fascism in many European countries following WWI. In fact, during the period between the two world wars, every government from the Rhine to the Pacific underwent drastic changes. In many of those, fascism had ample support but in the end was rejected. Some of the problem can be laid to the beginning dissolution of the British Empire and the arbitrary way in which maps were redrawn following WWI without regard to ethnic or natural barriers. An example would be the cobbled mess of ethnic groups that formed the former republic of Yugoslavia, an area that remains a hot spot today.

Britain and the United States were about the only two governments that did not undergo a major change during the period between the wars. However, neither was immune to the rise of fascism. The U. S. saw a rise of a great many fascist groups and groups closely aligned with the fascist in the period between the wars. The German Bund, the Silver Shirts and the mother's movement were all aligned closely with fascism. It was also this period that seen the greatest membership in the Ku Klux Klan.

The United States avoided full-blown fascism by essentially adopting fascist methods on a milder scale. This was a shameful period in the history of America. The infamous Palmer raids rounded up those with communist connections. The I.W.W was harassed constantly by Hoover and the FBI. In short, only those with non-approved political beliefs would be prosecuted. This suppression of liberty had actually begun around 1900. At the turn of the century, both conservative and liberal elements combined to pass a blizzard of new laws. This effort aimed at curbing lawless quickly became dominated by conservative elements and evolved in a tool for the right-wing for the remainder of the century. As head of the FBI, Hoover quickly targeted the leaders of the left for prosecution, ignoring the criminal actions of the hard-right groups. This has left the United States without any noticeable left wing compared to the rest of the industrial world.

Perhaps one of the first and most notable events was the trial of Sacco and Vanzetti, two immigrants charged with murder in Massachusetts. They were found guilty more on their political beliefs than on evidence. They were anarchists, atheists, and reportedly draft dodgers, beliefs that threatened the industrialists of the time.64 Both were executed after considerable protest. Their trial set a dangerous standard that people could be prosecuted for their political beliefs. The inclusion of this trial here is to serve as a reminder of a new problem that is emerging to confront the hard-right, jury nullification. Today, there is considerable debate from both sides of the political spectrum on jury nullification arising in death penalty and drug cases. It warrants close observation. If the public becomes too polarized, it could spell the end to the trial by jury system, which has served admirably for over 200 years.

Various members of the right-wing are now using this as an issue in another attempt to polarize the electorate for their own selfish purposes. These members of the right-wing are promoting a system of justice backed by mob or vigilante justice. Essentially, it's a system backed by violence--that is not unlike the tactics used by the Posse Comitatus, the Freemen, or various militias to corrupt the justice system.

The first example of political repression came in Minnesota. The then Republican Governor Burnquist used the newly created Minnesota Commission of Public Safety to suspend New Ulm's Mayor Fritsche and City Attorney Pfaender for their pacifist views after war had been declared on Germany in 1917. The following quote details some of the shameful actions taken by the commission and its connection to the hard-right.

In April 1917, soon after America declared war on Germany, the Minnesota Legislature, following ferocious debate, created the Minnesota Commission of Public Safety. This remarkable body, chaired and appointed by the governor, was given "all necessary power" to maintain order and enhance Minnesota's contribution to the war effort.
Technically limited by the state and federal constitutions, the commission essentially wielded all the authority of state government during the 18 months of its active existence.
The commission came to be dominated by representatives of the Twin Cities business community. It used its sweeping authority with gusto, not only to root out ``disloyalty'' but to combat labor unionism and agrarian activism as well.
The commission dispatched detectives throughout Minnesota to investigate people and organizations suspected of disloyalty. It regulated food prices and the liquor trade, imposing prohibition in some parts of the state. It banned union organizing and intervened on the side of management in a bitter Twin Cities streetcar strike. It created a ``Home Guard'' of some 8,000 troops to back up its decrees.
The commission served as a virtual campaign committee for Republican Gov. Joseph Burnquist in his 1918 re-election bid. It turned a blind eye toward frequent mob harassment of his opponents. It interrogated and intimidated Minnesotans who declined to purchase Liberty Bonds to finance the war effort.63

Nor was such action confined to just Minnesota, many states set up similar commissions. State sponsored-violence against leaders from the left was common place. One group that suffered immeasurably was the I.W.W, the Wobblies. On Nov 5, 1916, Washington State suffered its bloodiest labor battle of all time. The resulting carnage between a local sheriff and the Wobblies left seven dead and over fifty wounded in the city of Everett.65

All three of these events illustrate that the United States repressed those with radical ideas in the time period of WWI and immediately thereafter. Pacifist, labor leaders, and leftist political leaders were all prosecuted with equal zeal. Remember, this was the time period of the Rosewood incident and other atrocities. The prosecution was lead by the hard-right and business leaders.

But the real answer to the question is that fascism following WWI was a reaction to the Bolshevik revolution and the rise of liberalism ideals. Up until the Russian revolution, the only economic system was capitalism. Communism was a new revolutionary system. It threatened the power elite directly and gave way to a rise not only in communism--but socialism and liberalism as well. It was no accident that fascism arose first in Italy, where in the period of 1919-1922, socialists ruled in many localities. Here fascism arose in the countryside were old practices such as sharecropping were giving way to new methods. In 1920, the largest strike in Italian agriculture ever was settled when the landowners capitulated. Elsewhere, unions were wringing out concessions from the owners through strikes and boycotts.58

http://www.spiritone.com/~gdy52150/chpt1.htm - Part 7

The real appeal of European fascism was the protection it afforded against working class movements, socialism, and communism.59 Hobsbawm states it even more forcefully in claiming that without the October revolution and Leninism there would have been no need for fascism. For up until that time, the demagogic right, although politically active and noisy in many countries, had been kept in check.60 The entire Nazi movement was a reactionary movement. The reaction to the Treaty of Versailles is well known and needs no further comment, as is the opposition of fascism to liberalism, socialism and communism. Rather, the following quote will show how complete the reaction was to the events of the time.

"Today Christians... stand at the head of Germany... I pledge that I never will tie myself to parties who want to destroy Christianity...We want to fill our culture again with the Christian spirit... We want to burn out all the recent immoral developments in literature, in the theater, and in the press- in short, we want to burn out the poison of immorality which has entered into our whole life and culture as a result of liberal excess during the past...few years."61

The quote above was taken from a speech delivered by Hitler. It provides the illustration that the Nazi movement was completely a reactionary movement, reacting not only to global power politics and the rise of the left, but also to the changes in arts and culture of the time. It also provides the link to demonstrate that today's hard-right movement in the U. S. is equally reactionary, in particular, the element of the so-called religious right. Contrast it with the quote by Pat Robertson below.

"The Constitution of the United States, for instance, is a marvelous document for self-government by Christian people. But the minute you turn the document into the hands of non-Christian and atheistic people they can use it to destroy the very foundation of our society."
--Pat Robertson (The 700 Club, Dec. 30, 1981)62

Apparently, Robertson is under the impression that the Constitution applies to only those he chooses and is null and void for the rest of us. Hitler held a similar contempt for democracy. However, the point that the Nazis were reactionary has been established beyond any doubt. The reaction was not just confined to the global political scene or economic conditions, but extended into the very roots of the culture.

Starting around 1980, fascism reared its ugly head globally. Unlike the rise of fascism in the 1920s, this time the Reagan administration embraced it. The administration openly promoted class warfare, allowed the LaRocuchians access to security and intelligence agencies, filled the EPA with Coor's lackeys, and openly supported none but the elite. In essence, the Reagan administration was the American equivalent of the passage of the Enabling Act.

There is no need to expand on the violent behavior of the Nazis or fascists, as there is no dispute of their long history of violence. Instead, the violence of various groups in the United States will be explored. Many readers will immediately think of the violence that arose in the '60s during the war protests. In fact, that is the great illusion of the media. The truth is that little violence was directly attributed to war protestors. In fact, much of the violence that did come out of the war protests was the work of the FBI.

The real story of violence in the '60s was the violence inflicted upon the civil rights workers by the Klan. The early part of the '60s was marred by violence, inspired by the Klan and racial hatred of right-wing groups. Eisenhower had to use National Guards to integrate the Little Rock school system. Kennedy had to use federal marshals to integrate Old Miss. When the Supreme Court order that busing was to be used as a tool for integration, the violence spread nationally. The Klan burnt school busses in Michigan to prevent integration.

Since 1980, right-wing groups such as the Order, which murdered the Denver talk show host, Berg, likewise have dominated the violence. The leader of the Order was killed in a shoot out with law enforcement. Another right-wing group, the Posse Comitatus became a household word only after the Kahl shoot out with law enforcement in North Dakota. And of course there was the bombing of the Oklahoma federal building by the right-winger McVeigh.

[EDITOR: USG conspiracy did OKC]

Perhaps the greatest widespread use of violence since the Klan has been the bombing and violence directed against abortion clinics by members of the religious right.

Violence has been the hallmark of the hard-right in America dating back at least as far as the Know Nothing Party in the 1800s and their hatred of Catholics. It was business leaders that hired Pinkertons to murder union organizers in earlier times. Yet there is relatively little in the way to support that left-wing groups were equally violent.

[EDITOR: when left-wingers are in power, they use the USG to terrorize others re: the Clinton years, Waco etc.]

Groups like the Weathermen were violent, but the group was never more than a small fringe group. Its extremely small size limited the extent of its violence. One of the reasons for the lack of widespread violence from leftist groups has already been mentioned, the suppression of left-wing groups by the FBI.

Roman Catholic Church & Nazis: Made for Eachother


Compiled by Jim Walker

The following photos provide a pictorial glimpse of Hitler, how his Nazis mixed religion with government, and the support for Hitler by the Protestant and Catholic Churches in Germany. In, no way, does this gallery of photos intend to support Nazism or anti-Semitism, but instead, intends to warn against them.

The last two traits of fascism will be explored together, as they are related by an underlying use of symbols and the inseparable nature of cults and religions. There is no doubt that both Hitler and Mussolini were in effect leaders of a cult. Their extremist views would rule out a major following otherwise. In fact, both promoted imagines consistent with cults. Both chose to use propaganda to promote larger than life imagines of themselves. Both Hitler and Mussolini were Catholics; neither appeared to be particularly active members of the church. Hitler referred to Christianity throughout Mein Kampf, as already shown by quotes of which a few more will be included here.

"The sword will become our plow, and from the tears of war the daily bread of future generations will grow."
"The more the linguistic Babel corroded and disorganized parliament, the closer drew the inevitable hour of the disintegration of this Babylonian Empire and with it the hour of freedom for my German-Austria people."
" the Lord's grace smiled on his ungrateful children."

Officially, the Nazis were a Christian group, if one can assign a religion to the group by the public policies they enacted. In this case, the assignment is based on the following prayer that the Nazis required to be recited in all public schools.

"Almighty God, dear heavenly Father. In Thy name let us now, in pious spirit, begin our instruction. Enlighten us, teach us all truth, strengthen us in all that is good, lead us not into temptation, deliver us from all evil in order that, as good human beings, we may faithfully perform our duties and thereby, in time and eternity, be made truly happy. Amen."67

It is also true that the Nazis dabbled in mysticism as well. Certainly some of the philosophers were pantheistic. But what really underlies both the religious and mysticism aspects of the Nazis is the symbolism buried underneath. In fact, one follower of fascism believed that the masses were unable to understand anything other than mere slogans. From Mein Kampf the following quote concerns the symbolism hidden behind the Nazi flag.

"Not only that the unique colors, which all of us so passionately love and which once won so much honor for the German people, attest our veneration for the past; they were also the best embodiment of the movement's will. As National Socialists, we see our program in our flag. In red we see the social idea of the movement, in white the nationalistic idea, in the swastika the mission of the struggle for victory of the Aryan man, and by the same token, the victory of the idea of creative work, which as such always has been and always will be anti-Semitic."66

At first in the quote above, Hitler is referring to the old flag of Germany. The choice of red was based on stealing from the communists and was chosen deliberately to enflame the Marxists. Throughout Mein Kampf, Hitler refers to the value of propaganda and made extensive use of symbols to convene a subtle message of hatred.

The similarities to the right-wing in America is seen. The Republicans have introduced a flag desecration amendment to protect their symbolism. Even more revealing was the letter Newt Gingrich distributed to members of GOPAC. In this letter, members were to use the following words to impart a negative image: decay, failure, sick, liberal, unionized, welfare, corrupt, greed and intolerant. The following words were to impart a positive imagine: share, legacy, control, truth, and courage.68

Cults are inherently fascist in nature. The leader demands total submersion into the cult. America today has seen far too many examples of cults and cult behavior. A recent example, would be the Waco incident that ended badly. However, there are several right-wing groups that do exhibit cult behavior besides the religious groups; the LaRouchians, many of the militias, and the Order would all qualify as cults. In addition, much of the hard-right inside the Republican Party has taken on a cult-like behavior in their idolizing Reagan. The 105th Congress renamed the Washington airport after him. In the present Congress Congressman Matt Salmmon of Arizona has introduced a bill to deface Mt Rushmore by adding Reagan's imagine to the monument.69

It has been shown beyond any reasonable doubt that Hitler and the Nazis were right-wing extremists best described as Social Darwinists, the antithesis of socialism. It was showed that the Nazis were best described by syndicalism model and that syndicalism is neither socialistic nor capitalistic, inherently. Syndicalism can be either depending upon the makeup; the Nazis were definitely capitalists in that there was no input from labor. All input was reserved for the industrialist. Further, it was shown that the industrialists openly defied Nazi desires in the case of the use of low-grade ores. It was also shown that many of the businesses that was government owned were taken over by the government prior to the Nazis, some dating all the way from the monarchy. Likewise, it was shown that many of the Nazi programs would be classified as corporate welfare today. And it was shown that the real power behind the Nazi movement was the top elitist. This should be sufficient for anyone to dispel the myth that the Nazis were socialist, when in fact they were capitalistic extremists.

In defining fascism, three traits stand above all others, totalitarian, nationalism, and extreme corporatism. In fact, one can not have fascism without corporatism. Other traits of fascism, such as destructive divisionism and the use of violence are secondary. As fascist ideology evolved in the later half of the 20th Century, a happy face was put on fascism by its leaders as they down played the violence and racism. This can be seen best in the far right-wing extremist groups currently active in the United States.

Additionally, there is one fact that absolutely places the Nazis and fascism in the extreme right-wing portion of the political spectrum, and not the left. No one disputes that a communist revolution attacks the ruling elite of a country. Similarly, socialism and liberalism also attacks the same ruling elite, but the right-wing extremists try to claim the opposite. In reality, these systems merely seek methods to ease the burden and allow the lower classes to prosper rather than attacking the elite. The Nazis, on the other hand, did not attack the ruling elite of Germany. The rich industrialists were allowed to continue their ways, eased by laws that the Nazis enacted for their benefit. Likewise, the nobility of Germany was supported by the Nazis. In short, the Nazis adopted the ruling elite in Germany and supported them, the exact opposite of what a left-leaning political ideology would support.

There is no better proof of the Nazi support for the ruling elite than looking at who supported Hitler in the 1930s in America. Granted, many lower class people were involved in the pro-Hitler movement just as in Germany. But like Germany, it was the rich industrialists that funded these groups. Hearst ordered his newspapers to print pro-Nazi articles. In fact, he had them print the Nazi propaganda directly from Gobbels. Irenee du Pont funded several pro-fascist groups. Henry Ford was well known for his praise of Hitler and funded many pro-Nazis in the 30s. Andrew Mellon and John D. Rockefeller were supporters of Hitler as well. No one is foolish enough to argue that these men were not part of the ruling elite or rich industrialists in America at the time. In fact, support for Hitler among the rich industrialists was rampant.

The continued propagation of such nonsense by the present right-wing is nothing short of propaganda. It fits closely with the Nazis' use of propaganda and the symbolism proposed by Gingrich and his negative words. Nor will it change the history of the right-wing support of the Nazis.

http://www.spiritone.com/~gdy52150/chpt1.htm - top

1. http://www.cuttingedge.org/news/n1124.cfm

2. Why Americans Hate Politics, E. J. Dionne, Touchstone, 1991, p152-154.

3. Thomas Jefferson: In his Own Words, Maureen Harrison & Steve Gilbert, Barnes & Noble, 1996, p369.

4. http://www.friesian.com/arthur.htm

5. http://www.miami.edu/phi/schonp.htm




< http://www.us.itd.umich.edu/~alexboko/zar/



6. http://www.kirjasto.sci.fi/bergson.htm

7. Himmler, Peter Padfield, MJF books,1990, p260.

8. Mein Kampf, Adolf Hitler, Houghton Mifflin, 1971, p 394.

9. Mein Kampf, p325.

< 10. Lott renounces White Racialist Group He praised in 1992, Thomas Edsell, Washington Post, Dec 16,1998.

11. http://www.cofcc.org/

12. Thirty Days, Henry Ashby Turner, Addison-Welsey, 1996, p5.

13. Thirty Days, page 9-15.

14. Thirty Days, page 164.

15. Mein Kampf, pages 645-646.<

16. Mein Kampf, page 218.

17. Adolf Hitler, Robert Payne, Barnes & Noble,1995, page 213.

18. Adolf Hitler, page 237

19. Who Financed Hitler, James Pool, Pocket Books, 1997, page 11.

20. Who Financed Hitler, page 45

21. Who Financed Hitler, page 83.<

22. U. S. Firms' Connections to Nazis Detailed, Reuters, 1/14/1999. Appeared in Boston Globe of same date

23. German Big Business and the Rise of Hitler, Henry Ashby Turner, Oxford University Press, 1985.

24. German Big Business, pages 151-152.

25. German Big Business, pages 198-200.

26. German Big Business, page 159.

27. Trading with the Enemy, Charles Higham, Barnes & Noble, 1983,pages 131-132.

28. Hitler and His secret Partners, James Pool, Pocket Books,1997, p52-53

29. The Rise and Fall of the Third Reich, William Schirer, Fawcett, 1992, page 202.

30.The Rise and Fall, page 203.

31. http://www.nizkor.org/hweb/imt/nca/nca-02-16-13-index.html

32. http://www.nizkor.org/hweb/imt/nca/

33. What Real Hate Speech Sounds Like, Jeff Jacony, Boston Globe, 11, 2, 1998.

34. http://www.tialliance.org/tia/page4.htm

35. A Trial of Alleged hate to Begin in Texas, AP wire, Boston Globe, 1, 24, 1999 .

36. Minority Voter Intimidation Becomes election Eve Issue, AP wire, 11, 3, 1998.

37. Quite and Odd Couple to Sit in Judgement, Jim Dwyer, New York Daily news, 1, 7, 1999.

38. RNC Chairman Urges Party Member to Leave Conservative Group, Glen Johnson, AP wire, Boston Globe, 1, 19, 1999.

39. Mein Kampf, page 248.

40. http://www.fair.org/current/buchanan-bigot.html<

41. Mein Kampf, page 678.

42. Mein Kampf, page 651.

43. Mein Kampf, page 449.

44. Big Business &

45. Mein Kampf, page 575.

46. Mein Kampf, page 396.

47. Fascism, Roger Eatwell, Penguin, 1995, page 149.

48. >Fascism, p77.

49. The Rise and Fall, page 181. <

50. Big Business, page 288.

51. Big Business, page 81

52. Hitler, John Toland, Doubleday, 1976, page 276.<

53. Hitler, page 221.

54. Fascism, page 156.

55.Hitler, page 308.

56. Fascism, page 155.

57. Fascism, page 160.

58. Fascism, page 53-54.

59. The Age of Extremes, Eric Hobsbawm, Vintage Books, 1996, page 175.

60. The Age of Extremes, page 124.

61. www.isrp.org/

62. www.tialliance.org/tia/page6.htm

63. www.pioneerplanet.com/archive/cent/dox/cent13.htm

64. www.english.upenn.edu/~afries/88/sacvan.html

65. www.ac.wwu.edu/~n9517146/everettmassacre.html

66. Mein Kampf, pages 498-499.

67. http://w3.trib.com/FACT/1st.religion.alert.html

68. www.fair.org/extra/9502/language-control.html

69. Reagan Wanted on Mt. Rushmore, Rueters wire appearing in the 2/2/99 Boston Globe

70. The Road To Serfdom, F.A. Hayek, University of Chicago Press, 1994, Fiftieth Anniversary Edition.

71. The Road to Serfdom, page 52.

72. The Road to Serfdom, page 44. <

73. Fascism and Big Business, Daniel Guerin, Pathfinder, 1973, pages 208-213

74. Time Bomb, E.A. Piller, Arco Publishing, 1945, p13-14.

75. Southern Exposure, Stetson Kennedy, DoubleDay, 1946, page 189

Chapter 2



Chapter 3: Corporate Law: A History



Part 1: Constitutional Law


Lets begin this chapter with a few items from the news. First, another twenty-nine deaths have been attributed to Firestone tires. In particular, these deaths are linked to tires that the government wanted to include in the first recall, but relented under assurances and pressure from corporate management. The second item on the news was the shortage of electric capacity in California. California had just deregulated the electric utilities this year and consumers' bills skyrocketed. People in California have been asked to turn off the lights on the Christmas decorations or possibly face a blackout. However, there was more to the story. It seems that the shortage was at least partially self made by the utilities themselves.

In the early 1990s, the local media in Portland, Oregon, carried several stories about a poor lad who had developed leukemia and, without a life saving bone marrow transplant, would die. The family's health insurance refused to pay for the transplant. The family was given a quote of the cost by a Seattle hospital. The family was fortunate enough to raise the required amount through community car washes and bake sales and promptly returned to the Seattle hospital seeking treatment for their son. However, even with a certified check for the amount they had been quoted, the hospital refused, saying that the cost of such a transplant operation was almost double the price previously quoted. Dejected, the family grimly returned home to Portland. The local media then picked the story up as a cause célèbre. The community was outraged and within two weeks, the Seattle hospital relented to do the transplant for the original price. In short, the hospital was not basing the cost of the transplant on actual cost; rather it was basing the cost on the highest dollar figure they could extract from that family.

Nor is this the only case of such price gouging in the mid-1990s, it was reported that the supply of interferon was being hoarded by the producers in an attempt to drive up the price. After the Valdez ran aground all of the oil companies raised their prices by one-third, claiming a shortage of crude.

In Kentucky, a mine explosion killed seven miners. The corporation was cited for gross violations of safety regulations; no fans to draw out methane gas were even present. Many of the widows of this explosion ended up on welfare when their husbands were killed. More than 6,000 people, annually, roughly 17 a day, are killed on the job, yet we never hear of an operating officer of a corporation being brought to trial for murder or manslaughter. That number omits the thousands who have died as a direct result of exposure to toxic substances or disease causing agents in the work place.

It's now common place to hear news of managers altering employees' time cards, requiring them to work after punching them out. Or to hear of yet another sweatshop in operation, not in a third-world banana republic but in our own large cities, where employees were held as virtual slaves.

Corporate welfare now totals more than $167 billion dollars annually. For the average taxpayer that means paying out $1400 a year in taxes to support corporations. Meanwhile social welfare costs are less than one-third of the cost of corporate welfare.

By 1990, ten corporations accounted for 22% of all profits in the United States. Only 400 corporations controlled 80% of all capitalist assets in the non-socialist world. 49 American banks hold controlling interest in 500 large corporations. 10 corporations own the 3 largest television networks and 62 [radio] networks.

Are these crimes by corporate America just another product of the greed and immorality of the Reagan administration and its agenda of "free enterprise"? Or are these symptoms of a much deeper problem? It should be readily apparent that fascism was a top-down revolution of the elite. It was the large industrialists that brought Hitler to power in a backroom deal, almost an exact parallel to the candidacy of George W. Bush in 2000 and the special interest money behind him.

Before considering fascism within the United States, an understanding of corporations and how they have evolved to become a menace to our freedoms is needed. Make no mistake that the danger posed by corporations and the almost inherent fascism that accompanies a capitalistic economy poses the greatest threat to the liberty that anyone will ever face in their lifetime. However, most Americans understand little about how corporations became so powerful. They are largely unaware of the past restrictions on corporations that served the nation in good stead. A brief look at past state constitutions and court cases will provide the reader with a background in understanding how corporations were kept in check in the 1800s. It wasn't until after the Civil War that corporations became so prominent and powerful.

In the past, corporate laws held corporations in check up until the later part of the 1800s with the rise of the silver and railroad barons. In fact, corporate law evolved along with the emergence of a wealthy elite class. The first large change in corporate law came in the 1880s when corporations were given the rights of personhood. A case dating in the first half of the 1920s required the government to obtain search warrants to obtain corporate files. A decision that no doubt saved more than one profit monger supplying arms in WWI and hindered the prosecution of corporations that traded with the Nazis during WWII.

The old adage that "you can't fight city hall" applies in spades to corporations. Almost everyone has experienced changes corporations made without permission to personnel insurance policies, banking accounts and mutual fund accounts. In effect, corporations control virtually every aspect of life today, including the news.

Today, many senior citizens make monthly pilgrimages to Canada to refill their prescription drugs. Maine has even adopted a law requiring future drug prices must be comparative to those in Canada. Even an Internet site exists to help seniors to obtain their prescriptions through mail from Canada. Because American drug companies were losing millions in these cross-border sales, the George W. Bush administration banned such sales.

So what is the difference between Canada's healthcare system and that of the United States? If one was to listen to the extreme right and the Republican Party, they are screaming that Canada's healthcare system is "socialistic". Balderdash! The same prescription drugs that can be obtained in Canada for a fraction of the price they sell for in the United States are produced by the very same corporations that are gouging American citizens. If those corporations were owned and run by the government, then it would truly be a socialistic system. But, why the lie? It is simple. Canada chooses to regulate its corporations. We have the same choice--but the right-wing politicians are shills bought and paid for by the very corporations that they are in charge of regulating. Its simply a diversion and scare tactic perfected by the Republicans to scream "communism" or "socialism" whenever anything should threaten their meal ticket.

A good example was the Republican response to President Clinton's proposal to expand Medicare. The Republicans chose Senator Bill Frist of Tennessee to deliver their response. Frist pretended to be just an "old country doctor overwhelmed by regulations". Frist's performance was truly deserving of an Academy Award for best actor as the quote below exemplifies.

"You know, my father was a family doctor for 55 years. As a young boy making housecalls with him, I remember his stethoscope, his doctor's bag, and best of all his wonderful and compassionate heart."

However, the facts from Roll Call reveal a different picture.14 While Bill Frist is indeed a doctor, he is hardly a simple country doctor. In 1968, Frist's father and brother help launched the Hospital Corporation of America. Frist's wealth comes from his stock holdings in this giant healthcare unit. In 1996, Frist disclosed a minimum of $13.7 million in assets; $8 million of which was in Hospital Corporation of America. Of course, Senator Frist omitted his holdings in this healthcare giant in his response, just as he omitted the fact that Hospital Corporation of America faced a Justice Department probe into charges of widespread fraudulent Medicare billing schemes. In other words, the ones writing the laws and regulations are the corporations.

Here we have the crux of the problem, regulation. Regulation of corporations is not socialism; when done to promote the common good, it is liberalism at its finest hour. As paper entities, corporations have no rights--only people have rights. Corporations only have conditional obligations to fulfill for the society that created them. It is the obligation of that society in creating a corporation to ensure that it works to the common good and welfare of the society and not just to the benefit of a few moneyed interests. That is liberalism, not socialism. Perhaps, George Soros stated the problem best by saying one cannot have a global economy without first having a global society. By "society," he means a government or other regulatory mechanism.1 The same applies equally well within a nation. This does not imply that corporations are necessarily bad or evil; they are just a tool for any society to better itself. However, left unregulated, corporations can and do acquire absolute power, which leads directly to the fascist state of corporate rule.

Before proceeding further, one needs to understand how corporate law and regulations have evolved. In doing so, many myths commonly held by the hard right today about the founding fathers will be dispelled. The founding fathers were indeed liberals and did believe in a capitalistic economy. However, they also believed strongly in regulating trade. So much so, that one of the enumerated powers in the constitution granted the federal government is the power to regulate interstate commerce. It is a bald-faced-lie to assume that the enumerated power concerning the regulation of commerce between states only applied to tariffs between the thirteen colonies or that the founders were supportive of corporations.

Corporations first came about in the middle of the 1600s in England when the crown vested governmental authority to certain commerce groups. The royal charters regulated the trading company or corporations, since only the Crown had the right to govern trade. The right of the Crown to regulate or control corporations largely went unused, leading to much abuse and monopolistic power. Some royal charters had their own governors and armies such as the East India Company.

In fact, it was the East India Company that led to the Boston Tea Party. At the time, the colonies were boycotting tea, which was controlled almost solely by the East India Company. In an effort to prop up sagging profits from the boycott, the British cut taxes on tea. This in turn cut into the profit of a group of Americans smuggling tea into the colonies. Seeing their profits eroded by the tax cut, they raided the English ships in the harbor. While the classical story of the Boston Tea Party being a protest over "rising taxes and tax without representation" makes for good patriotic propaganda, it is patently false and has taken on mythical proportions.

This was but one of the many abuses the colonies suffered at the hands of English corporations. For instance, American colonial settlements often were patents granted to English corporations by the Crown. South and North Virginia were two such patents. These corporations obtained their labor supply with indentured slaves. Typically, after seven years of labor, the indentured slave would be given one hundred acres. Astoundingly, two-thirds of the colonists at the time of the revolution were estimated to have been indentured slaves. Virginia, Maryland and Pennsylvania all began as commercial enterprises ran by chartered corporations.

A full listing of such abuses is beyond the scope of this book. However, the examples provided are sufficient to illustrate the contempt many of the founders had for corporations, as well as the need to regulate them. Perhaps the eloquent words of Thomas Jefferson best sum up the founding fathers' outlook toward corporations.

"I hope we shall take warning from the example of England and crush in its birth the aristocracy of our moneyed corporations which dare already to challenge our Government to trial, and bid defiance to the laws of our country "

The concept of granting a charter as a privilege and not a right carried over into early American corporate law. Thus, the present view that corporations hold a property right is based on another myth. In fact, the view of this property right did not come about until after the Civil War. Before this time, the concept of a corporate charter as a privilege was the commonly held view. The present view of a corporate charter having property rights only came about through judicial activism and through various state legislators.

The concept of corporate charters as a privilege was clearly carried forward into the Articles of Confederation, when in 1781 Congress granted a national charter to the Bank of North America. Likewise, this concept of a privilege was carried into the Constitutional Convention of 1787. During the convention, James Madison twice proposed that Congress be given the power to grant charters. Both proposals were met with failure, although no formal vote on either measure was ever taken. Various members opposed such proposals as unnecessary or feared that they would lead to monopolies. Based on his fears of a national bank, Jefferson opposed the idea of federal charters fearing they would create monopolies. Jefferson was to lose on both views when Congress later granted a federal charter for the National Bank. One can hardly blame the delegates to the convention for believing that there was no need for proposals regulating corporations since there were less than 40 corporations in 1787. That number rose to 334 by 1800.

Thus, the Constitution of the United States was left with only two clauses to regulate corporations: the commerce clause in Article I Section VIII and the obligation of contract clause in Article I Section X. The regulation and granting of corporate charters was left to the various states. The states continued to treat a corporate charter as a privilege granted only under special acts of their legislators. However, the process of hearings and petitioning the state legislators was plagued with delays, favoritism and outright corruption.

What many people fail to understand is the Bill of Rights originally consisted of twelve rights. On December 20th, 1787, Jefferson wrote to James Madison about his concerns regarding the Constitution. He listed what he did not like in the new constitution in the excerpt below.

"First, the omission of a bill of rights, providing clearly, and without the aid of sophism, for freedom of religion, freedom of the press, protection against standing armies, restriction of monopolies, the eternal and unremitting force of the habeas corpus laws, and trials by jury in all matters of fact triable by the laws of the land, and not by the laws of nations."

Besides noting the many freedoms that now compose the Bill of Rights, Jefferson also noted the lack of restriction on monopolies. Many of the revolutionaries of 1776 believed any institution made up by and of humans-from governments to churches to corporations-must be subordinate to individual people in terms of the rights and powers held by the institution. This is perhaps best stated by Thomas Paine in The Rights of Man as the example below illustrates.

"that government is a compact between those who govern and those who are governed; but this cannot be true, because it is putting the effect before the cause; for as man must have existed before governments existed, there necessarily was a time when governments did not exist, and consequently there could originally exist no governors to form such a compact with. The fact therefore must be, that the individuals themselves, each in his own personal and sovereign right, entered into a compact with each other to produce a government: and this is the only mode in which governments have a right to arise, and the only principle on which they have a right to exist."

Jefferson received a good response in ten of the measures comprising the original bill of rights. The two issues of banning a standing army and blocking corporations from gaining monopolistic control over industries, were meeting with resistance and failed to pass. The Federalist were in power, a group Jefferson referred to as "the rich and the well born." The following quote from James Madison confirms the distrust of corporations held by the founding fathers.

"There is an evil, which ought to be guarded against in the indefinite accumulation of property from the capacity of holding it in perpetuity by ... corporations. The power of all corporations ought to be limited in this respect. The growing wealth acquired by them never fails to be a source of abuses."

Sub-Section 1

The first blow to increasing corporate power came in 1795 as the pace of incorporations continued to expand. There was a movement to grant general charters to alleviate the problems with hearings and petitions. North Carolina was the first state in 1795 to enact a general incorporation law, followed by Massachusetts in 1799, New York in 1811 and Connecticut in 1837.2 However, some states required more than a simple majority for granting, renewing or altering a corporate charter. In 1840s, citizens in New York, Delaware, Michigan and Florida required a two-thirds vote of their state legislatures to do so. In Wisconsin and four other states every bank charter had to first be approved by the voters within the state and then the charter was recommended by their legislatures.

Nevertheless, even under a general incorporation law, states still treated the corporate charters as a privilege and restricted the activities of corporations to a great extent. The following comprises some of the limitations placed on corporations by various states.

Limited Duration: Charters were granted only for a period of 10, 20 or 30 years after which the corporation had to be liquidated and the proceeds distributed among the shareholders.
Limited Land Holdings: Many states imposed limitations on the amount of land a corporation could own. Most often, the amount of land was limited to that required for the factory or mill site.
Limited Capital Holdings: Once again, many states limited the amount of money or financial assets a corporation could possess. Some states banned corporations from owning other corporations or stock in them. Once a corporation exceeded the limit, it had to be either dissolved or split.
Specific Purpose Charters: This was perhaps the most common of all restrictions in the early years of this country. Corporations were chartered only for a specific purpose such as the building of a canal or road. Once the stated purpose was completed, the corporation was dissolved. Now charters are issued that enable a corporation to engage in any type of business.
No Limitations on Liability: Directors, managers and shareholders were held to be fully liable for any debts or damages. In some cases, the lender or injured party was entitled to double or triple the damages. Other states imposed extremely high interest rates until the debt was fully paid.
Restrictive Shareholder Rights: The internal governance of corporations was much more restrictive than it is today. Shareholders had more rights. In case of mergers, some states required a unanimous vote of shareholders.
Restrictions on Pricing: Some states maintained the right to set prices on corporate products. Wisconsin, for one, gave the state legislature the power to set prices on products after reviewing the corporations' expenses.
Revocable Charters: States maintained the right to revoke or change a charter at the will of the its legislature. Almost all of the states adopted this clause after 1820.

Before continuing to look at various state constitutions of the early 1800s a brief review of a couple of early Supreme Court cases is needed. One of the cases led to most states including a clause allowing for the modification or annulment of any charters the state may grant. Perhaps one of the best Chief Justices of the Supreme Court of all time was John Marshall, appointed by John Adams in 1801. It was Marshall who shaped the Supreme Court into being a full third branch of government and strengthened the federal system.

Marshall presided over several landmark cases with a pro-business outcome. Four cases are notable. In Fletcher v. Peck, the sanctity of a written contract was upheld. In Gibbons v. Ogden the court established the power of Congress to regulate interstate commerce to avoid a monopoly. In McCullough v. Maryland, the court ruled that the state had no right to tax the federal bank. However, it was in Dartmouth v. Woodward, which exerted the most influence in later years. Daniel Webster argued the case for Dartmouth before the court and implied that there was a property right. The Dartmouth case was the first case, which tried to attach a property right to a corporate charter.

Marshall was well-known for his opinions and choosing his words with the precision of a surgeon's scalpel. However, Marshall's opinion granted no property rights to a corporation. Rather, in the Dartmouth case, he extended the Fletcher case and the principle of the sanctity of a written contract to include states as well as corporations as the excerpt below shows.

"A corporation is an artificial being, invisible, intangible and existing only in the contemplation of the law.... It possesses only those properties which the charter of its creation confers upon it....The opinion of the Court after mature deliberation, is that this is a contract, the obligation of which cannot be impaired without violating the Constitution of the United States."3

Marshall defined this case very narrowly. There was no mention of any property rights in his decision. It was simply a decision based on the sanctity of contracts. However, this was perhaps the first and most important pro-business case that has led to corporate abuse. Marshall correctly ruled in defining the case narrowly to contract law.

However, later pro-corporate judicial activists would use this decision to confer the rights of a person onto corporations, a decision that Marshall obviously did not share because he defined a corporation very narrowly as an artificial being that only had the properties, which its charter granted it. Marshall clearly stated that the only "rights" a corporate has comes from its charter--and not from the Constitution. Again, a corporate charter is a privilege--and not a property rights issue. Thus, the present-day view of corporations having property rights and the rights of a person only came about through perversion of the law and the Constitution.

However, it was this case in 1819 that led to the almost universal inclusion of states to contain language to amend and revoke charters into both state laws and state constitutions. Because the states included such language, it shows that the granting of a charter was a privilege that carried no rights and could be revoked whenever corporate activities were not in the general interests of the state or the people.

A brief look at various state constitutions of the 1800s will further emphasize the point that a corporate charter is a privilege. A look at the Constitution of Pennsylvania (1838) reveals the clause for revocation and establishes a time limit of 20 years for all corporate charters in Article I Section 25 as follows:

"No corporate body shall be hereafter created, renewed, or extended, with banking or discounting privileges, without six months' previous public notice of the intended application for the same in such manner as shall be prescribed by law. Nor shall any charter for the purposes aforesaid be granted for a longer time than twenty years; and every such charter shall contain a clause reserving to the legislature the power to alter, revoke, or annul the same, whenever in their opinion it may be injurious to the citizens of the commonwealth, in such manner, however, that no injustice shall be done to the corporators. No law hereafter enacted shall create, renew, or extend the charter of more than one corporation."4

Nor was Pennsylvania the only state to limit corporations to a set time limit. Maryland legislators restricted manufacturing charters to forty years, mining charters to fifty, and most others to thirty years. Several other states included time limits in corporate charters, including Louisiana, Michigan.

The revocation clause was initially written into the Pennsylvanian Constitution in 1784. Clauses of revocation were first commonly found in insurance and banking charters. Further, the revocation clause was broadened and strengthened from 1784 to 1857 when the legislature became required to revoke charters whenever corporate activities were deemed injurious to the community. Notice the specific mention of corporations engaged in banking. Private banking corporations were banned altogether by the Indiana Constitution in 1816, and by the Illinois Constitution in 1818. Ohio, Pennsylvania and Mississippi revoked charters throughout the early 1800s of banks that engaged in activities that would leave them insolvent or in a financially unsound condition. Limitations on railroads were another common feature in many state constitutions. New York, Ohio, Michigan and Nebraska successfully revoked charters from a wide range of businesses including matches, oil, sugar and whiskey. By 1870, 19 states included a revocation clause (presently 49 of the 50 states have a revocation clause). In 1857, Pennsylvania amended its constitution with Article XI, Section 6 with the following clause is found.

"The commonwealth shall not assume the debt, or any part thereof, of any county, city, borough, or township, or of any corporation or association, unless such debt shall have been contracted to enable the State to repel invasion, suppress domestic insurrection, defend itself in time of war, or to assist the State in the discharge of any portion of its present indebtedness."

Again, such a clause was commonplace in the early 1800s. The Alabama Constitution of 1875 can be used to illustrate two of the other common restrictions. In Article XIV Sections 5 and 9 respectively.

No corporation shall engage in any business other than that expressly authorized in its charter.
No corporation shall issue preferred stock without the consent of the owners of two-thirds of the stock of said corporation.5

The concept of a corporate charter as a privilege can best be illustrated by the Wyoming Constitution of 1889. Although the Wyoming Constitution allows for the creation of corporations under general law, it contains many restrictions on corporations, as follow.

The legislature shall provide for the organization of corporations by general law. All laws relating to corporations may be altered, amended or repealed by the legislature at any time when necessary for the public good and general welfare, and all corporations doing business in this state may as to such business be regulated, limited or restrained by law not in conflict with the constitution of the United States.
All powers and franchises of corporations are derived from the people and are granted by their agent, the government, for the public good and general welfare, and the right and duty of the state to control and regulate them for these purposes is hereby declared. The power, rights and privileges of any and all corporations may be forfeited by willful neglect or abuse thereof. The police power of the state is supreme over all corporations as well as individuals.6

In the second paragraph above, it is clearly stated that a corporation's powers come only from the people and that it is subservient to the people for the public good and general welfare. Wyoming's Constitution is also the source of the following strong anti-trust language:

There shall be no consolidation or combination of corporations of any kind whatever to prevent competition, to control or influence productions or prices thereof, or in any other manner to interfere with the public good and general welfare.

California's Constitution of 1849 as amended by Article XII in 1879 has perhaps the longest listing of restrictions on corporations with a total of 24 sections.7 Sadly, 20 of the 24 sections have already been repealed. In Section 3, the state holds all shareholders responsible for the debt of the corporation. Once again another myth, the myth of limited liability, is destroyed. Notice in the text that follows of Section 3 that the shareholder need not be a present owner, he only had to be a shareholder at the time the debt was incurred. In Ohio, Missouri and Arkansas, stockholders were liable over and above the stock they actually owned. In the 1870s, seven state constitutions made bank shareholders doubly liable for any debts.

Each stockholder of a corporation. or joint stock association, shall be individually and personally liable for such proportion of all its debts and liabilities contracted or incurred, during the time he was a stockholder, as the amount of stock or shares owned by him bears to the whole of the subscribed capital stock, or shares of the corporation or association. The directors or trustees of corporations and joint-stock associations shall be jointly and severally liable to the creditors and stockholders for all moneys embezzled or misappropriated by the officers of such corporation or joint stock association during the term of office of such director or trustee.

Section 8 prohibits corporations from infringing upon the rights of individuals:

The exercise of the right of eminent domain shall never be so abridged or construed as to prevent the Legislature from taking the property and franchises of incorporated companies and subjecting them to public use the same as the property of individuals, and the exercise of the police power of the State shall never be so abridged or construed as to permit corporations to conduct their business in such manner as to infringe the rights of individuals or the general well-being of the State.

Section 9 limits the activities of corporations to those that are defined in their charters.

No corporation shall engage in any business other than that expressly authorized in its charter, or the law under which it may have been or may hereafter be organized; nor shall it hold for a longer period than five years any real estate except such as may be necessary for carrying on its business.

By looking at several different state constitutions from the 1800s, it is clearly apparent that in times gone by severe restrictions were placed on corporate activities. In the process, many of the current myths concerning corporations have been destroyed, such as that of limited liability. Even more remarkably, this quick look at state constitutions has revealed that the granting of a charter as a privilege--and not a right survived at least up until 1889 when the Wyoming Constitution was adopted; the phrase, for the public good and general welfare is unmistakable in its intent.

Unfortunately, the extent of regulating corporations cannot be revealed by just looking at the state constitutions. One would need to review all state laws to get a full understanding of the extent of regulation. Such a review would be a daunting task and beyond the scope of even a book let alone a single chapter. However, one can glean a glimpse of it by looking at a list of the more important Supreme Court cases.

The first important case following the Marshall court came in 1839 in Bank of Augusta v. Earle.8 The court ruled that corporations were "persons" in the state of their charter, but were free to do business in other states. However, the court stopped short of declaring corporations as citizens protected from state laws, which violated the federal constitution.

In 1844, the court expanded the power of corporations and struck a blow against local control in Louisville, Cincinnati & Charleston Railroad v. Letson. In this case, the court ruled that corporations are citizens of the chartering state, and further added that the Constitution's diversity clause (Article. III Section. 2) allows corporate cases to be heard in federal court. As more and more corporations were chartered, their power increased at a quickening pace. The increases in power still came about through judicial activism. With the increase in number and increases in corporate power, wealth became concentrated into the hands of the few. After becoming president, Lincoln lamented:

"I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country....corporations have been enthroned and an era of corruption in high places will follow, and the money of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed."


Corporate Law: A History
Part 2: Supreme Court Cases

The three decades following the Civil War saw further increases in the number of corporations and a much more rapid pace of favorable court rulings. Part of the increasing numbers of corporations no doubt came from the great give-away of public lands to some 61 railroad companies. However, even with the huge land grants, the railroads could not live within the conditions set forth by the grants and more than one-third of the land, a total of 190 million acres, was forfeited. Even today, the terms of those grants are being disputed in court cases, most notably in the clear cutting of timber from and the shipping of the raw logs to Asia.

In 1868, the Supreme Court ruled that corporations were not citizens within the context of Article IV Section 2 of the Constitution. Elaborating, the court defined a citizen to apply only to natural persons, members of the body politic, and those owing allegiance to the state. Corporations only had the properties conferred on it by the legislature. Citizenship incurred an obligation of allegiance to the state. The many cartel agreements that American corporations willingly signed with German corporations granted allegiance to the German corporations and hindered both world wars immensely.

In 1876, the Supreme Court ruled in Munn v. Illinois that corporations with a public interest (in this case, the rate grain elevators charged farmers for shipping) were subject to state regulation. The court further ruled that what constituted a reasonable rate was a legislative and not a judicial question. This case is also very similar to a case settled before the Wisconsin Supreme Court. In Attorney General v. Northwestern Railroad, the court ruled that the state could set maximum fares on classes of rail transportation.9

It is important to note here, that Justice Stephen J. Field dissented in Munn. Lincoln appointed Field in 1863 to the Supreme Court in a move that brought the number of justices to ten. Field would serve for another 34 years. It is equally import to note that Field's opinions were more often at odds with the majority. He had just three concepts of government. One, he felt it was not a function of the government to protect individual liberty. Two, government should be limited (and this fit with his laissez faire economic views). Three, only the U.S. government should have the right to interact with foreign governments. Field first expressed his view that the 14th amendment protected private businesses from government regulation in the Munn case.

In 1879, Judge Lorenzo Sawyer of the Ninth Circuit Court ruled in the Orton case that the federal government had control over the railroad land grants. However, he further restricted state regulation in controlling ulra vires acts of corporations. Stated otherwise, it means that corporate actions go beyond the powers actually granted to corporations. The ruling of the court led directly to settlers being evicted forcibly in the Mussel Slough battle of 1880, in which five settlers were killed. Sawyer is best described as a flatterer of Field, and Field was also involved in this case. Sawyer was involved in several railroad cases that will shortly follow.

In 1882, Sawyer ruled in the San Mateo Railroad case in the Ninth Circuit Court that corporations were persons. Field was likewise involved. However, it is a matter of record that Sawyer owned stocked in the Central Pacific Railroad. Additionally, both Sawyer and Field were close friends of Leland Stanford and other parties involved in the rail cases. Sawyer was uniquely placed to expand the powers of corporations and used unorthodox interpretations of statues and judicial review to do so.

In 1886, the Illinois Supreme Court struck down state Granger laws regulating railroad rates in Wabash v. Illinois. The high point of pro-business judicial activism occurred in 1886. In this year alone, the court struck down 230 state laws passed to regulate corporations. It was also the year of the most grievous act of all in furthering corporate power. This was the year that the court handed down the ruling in Santa Clara County v. Southern Pacific Railroad declaring that corporations were persons under the 15th Amendment. At the very outset of the case Chief Justice, Morrison R. Waite stated:

"The Court does not wish to hear argument on the question whether the provision in the Fourteenth Amendment to the Constitution, which forbids a state to deny to any person the equal protection of the laws, applies to these corporations. We are all of the opinion that it does."

This outrageous ruling has done more to damage our liberty and freedoms than any other single ruling in the history of the country. It in effect gave corporations the same rights as persons, but with none of the obligations and social responsibility carried with those rights. It paved the way for rendering the people subservient to corporations. It is important to note the year this ruling came down corresponds to the height of the robber barons.

Before proceeding further, a closer look at the members of this Supreme Court is needed. This court was undoubtedly the court that was the most agonistic court toward individual freedom and liberty than any other court, with the possible exception of the Rehnquist court of today. Just as the Rehnquist court voided the results of the 2000 election and appointed George W. Bush president, Associate Justice Joseph Bradley of this court cased the deciding vote in giving Rutherford B. Hayes the presidency.

This was the same court that rendered the Civil Rights Act of 1875 invalid in Plessy v. Ferguson. In essence, the court threw out the 14th Amendment in their ruling in applying the amendment to individuals as it was intended. Even more telling of the abusive nature of the court on civil rights was that number of fourteenth amendment cases between 1890 and 1910 only 19 dealt with the Negro while 288 dealt with corporations.

Nor was this court any more friendly to women's suffrage. In Bradwell v. Illinois, the court upheld an Illinois ruling that denied women a license to practice law as a host of women suffrage and women rights cases followed the passage of the 14th Amendment. In 1886, the Supreme Court Justices were Samuel F. Miller, Stephen J. Field, Joseph P. Bradley, John M. Harlan, Stanley Matthews, William B. Woods, Samuel Blatchford, Horace Gray, and Chief Justice Morrison. R. Waite. The Chief Justice, Waite shared similar views with Field. Waite believed that the first ten amendments applied only to the federal government and were not intended to limit the powers of the various states. Samuel Miller declared that any taxation was robbery in 1874.

The invoking of the 14th Amendment in the Santa Clara case has been ridiculed by later justices. Seventy year later in Connecticut General Life Insurance Company v. Johnson Justice Hugo Black wrote.

"Certainly when the fourteenth amendment was submitted for approval, the people were not told that ratifying an amendment granting new and revolutionary rights to corporations...and were not told that it was intended to remove corporations in any fashion from the control of the state governments. The fourteenth followed the freedom of a race from slavery...Corporations have neither race or color."

William Douglas was another later justice who ridiculed the decision.

In 1890, the Sherman Antitrust Act was passed outlawing contract, combinations, trust or conspiracies, which restrained or monopolized trade. Following passage, the largest wave of corporate mergers yet swept across the country. Section 6 of the act required the forfeiture of any property transported across state lines that fell under the act. Sections 7 and 8 both defined corporations as persons.

In 1890, in Chicago, Milwaukee & St. Paul Railway v. Minnesota the court began retreating from its earlier ruling in Munn. The court now amended its earlier ruling by stating that rail rates were subject to judicial review and due process if set by a commission. A series of cases followed, all with the court favoring a pro-railroad or corporate rulings. In Smythe v. Ames in 1898, the court further extended the ruling to allow for judicial review even if the rates were set by legislature.

In addition, in 1890, New Jersey intensified the race to the bottom by relaxing its general corporate laws. After this time, New Jersey would allow corporate charters for holding companies, which permitted corporations to trade stock of other corporations and to issue their own stock as payment. In 1892, New Jersey went further by repealing its antitrust law. In 1896, New Jersey allowed charters to be granted for any legal purpose and removed any restrictions on mergers. Likewise the 50-year limit on corporate life was removed, and for the first time, New Jersey would now grant charters to corporations operating outside its boarders. Shareholders' rights received a blow as well. Under the new laws of the state, directors were allowed to amend bylaws without shareholder approval, and could now rely on proxy voting with all shareholder meetings held in New Jersey. The new laws were so popular that between 1897-1904, corporations chartered in New Jersey with a net worth of $20 million or more increased to 104 from a mere 15 in 1896. Enough revenue from the filing fees and franchise taxes was generated to allow the state to abolish property taxes.

Sub-Section 1

In response, Delaware passed a General Corporation Law in 1899 that allowed corporations to write any provisions they wished in creating, defining, limiting and regulating the power of the corporations. This change in Delaware law figures prominently as the reason the du Ponts reincorporated in Delaware.

In 1893, the court issued perhaps its first anti-union ruling in U.S. v. Workingmen's Amalgamated Council. The court upheld an injunction against a union on grounds that the Interstate Commerce Act required carriers to accept freight without discrimination. Also in 1893, corporations were first given the protection of the Bill of Rights in Noble v. Union River Logging Railroad with the ruling that the railroad was denied its 5th Amendment protection when the Department of Interior attempted to remove its approval of a right-of-way over federal lands.

Between 1894 and 1905, a host of anti-labor rulings were issued by the court. Before this time, it was common under state law for the state to limit the number of hours a person was allowed to work. In 1894, the court struck down the eight-hour shift for mechanics and labor in Low v. Rees Printing. Colorado eliminated its eight-hour day for mining and manufacturing by House Bill 203. In 1895, in Ritchie v. People, the eight-hour day was removed for women garment workers. Lochner v. New York eliminated the ten-hour day for bakers in New York in 1905. In 1895, the court ruled that the Sherman Antitrust Act could be used against interstate labor strikes because such strikes were a restraint on trade.

In 1895, the court upheld a monopoly of 98 percent of the country's sugar protection in U.S. v. E.C. Knight Company ruling that the Sherman Antitrust Act applied only to commerce and not to production. In a dissenting opinion, Justice Harlan wrote that the ruling placed the Constitution in " a condition of helplessness... while capital combines...to destroy competition."

In Hale v. Henkel the court ruled against the corporation's attempt to use the 5th Amendment, but ruled that overly broad subpoenas for corporate documents could be a violation of the 4th Amendment.

In 1911, the court broke Standard Oil into 33 corporations in Standard Oil of New Jersey v. United States. This case basically ended a short period of generally fair rulings against monopolies and trusts. It was for the most part the climax of the antitrust sentiment started by Teddy Roosevelt. The Clayton Act of 1914 legislated price discrimination within the same industry and further stipulated that labor unions were not trusts.

In 1917, Idaho became the first state to enact criminal syndicalism laws; twenty-three other states soon followed. The laws were used to suppress labor organizers, political activists and foreigners.

The Keating-Owen Child Labor Act was struck down in 1918 by the Supreme Court which ruled that goods produced by child labor did not fall under the Sherman Anti-Trust Act because it only applied to commerce.

Between 1920 and 1924, the court granted corporations the protection of the 4th Amendment ruling that government officers seizing corporate documents violated the provisions against unreasonable searches in Silverthorne Lumber v. U.S and FTC v. American Tobacco. This decision came just as investigations into profit mongering by arms makers during WWI were heating up. Likewise, the decision provided protection for those corporations that signed cartel agreements with I.G. Farben and other German corporations during WWII.

In 1937, the court ruled that Congress could protect interstate commerce from labor organizing in National Labor Relations Board v. Jones & Laughlin Steel Corp.

In the 1938, in the Subcommittee of Federal Licensing of Corporations hearing on Senate Bill 3072 sponsored by Senator Joseph O'Mahoney of Wyoming and William Borah, O'Mahoney argued that "a corporation has no rights; it has only privileges."

In 1947, the anti-union Taft-Hartley Act was passed over the veto of President Truman. The act declared the closed shop to be illegal, outlawed secondary strikes and boycotts, allowed employers to exempt themselves from bargaining with unions if they wished to, forbade the unions from contributing to political campaigns, and required unions and their officers to confirm that they were not supporters of the Communist Party.

The Celler-Kefauver Act of 1950 amended Section 7 of the Clayton Act to include the lessening of competition through the acquisition of another company's assets.

In 1969, the Newspaper Preservation Act was passed. The act specifically exempts newspapers from the antitrust laws. Wholesale consolidation of newspapers followed until only a handful of corporations owned all the major newspapers

In 1976, the second most grievous extension to corporate power was granted to corporations by the court. In Buckley v. Valeo corporations were granted freedom of speech and corporations were now free to contribute unlimited funds to election in effect buying the candidate of their choice. The year 1976 marks the beginning of another long period of pro-corporate rulings, as Republicans were once again able to stack the court with extremely conservative justices.

In U.S. v. Martin Linen Supply Co., a case heard in 1976, the court ruled that corporations may use the 5th Amendment to protect themselves from double jeopardy to avoid a retrial of an antitrust suit. In addition, in 1976 the court ruled that advertising was free speech in Virginia Board of Pharmacy v. Virginia Citizens Consumer Council. In 1977, the court allowed corporations the protection of the 4th Amendment to thwart the efforts of OSHA inspectors in Marshall v. Barlow. In 1977, the court overturned state restrictions on corporate spending on political referendums under 1st Amendment protections in First National Bank v. Bellotti ruling that money was free speech.

After this brief review, it's clear that the founders had just as much fear and loathing of big money (read corporations) as they did of big government. As the state constitutions showed, they chose to restrict corporate activities sharply. The founders certainly believed that a corporate charter was a privilege and conferred no property rights onto the owners of the corporations. In fact, many of the state constitutions granted only charters that were limited by a time duration, after which the corporation would have to be dissolved. Almost all states gave their legislatures the power to revoke a charter if the corporations failed to live within their charter or when their activities were viewed as harmful to the general welfare of the state.

Most states, through general law, further restricted the activities of corporations limiting the amount of wealth or land they could accumulate. It was liberalism is its finest hour protecting the rights of the common man against the plutocrats.

It was only through judicial activism and corruption, along with some state legislatures that eroded most of the laws governing corporations in the 19th Century. This erosion of the law paralleled the rise of a rich elite within our society and also the corporatization of America. Prior to the Civil War, most corporations consisted of railroads or banks. It was only after the Civil War that corporations began significant expansion into other businesses. This is the primary reason why so many of the early court decisions and clauses within state constitutions were specific to banks and railroads---other types of corporations were simply insignificant. [EDITOR: industrialization: the manufacture of widgets created thousands of factories and corporations]

It should be clear that the rich elite as a class didn't begin to emerge until after the Civil War, which paralleled with the court's pro-business rulings that reached a climax with the robber barons of the 1880s. By the end of the 1880s, corporations were granted the rights of personhood by the Waite court. In effect, the judicial system conferred citizenship on corporations without any of the obligations and responsibilities that go with individual citizenship. It leaves us in the precarious position of capital (money) having more rights than that of the owner of the capital.

One good example of corporations having the rights of a person without the obligations was during WWII when individuals could be drafted and forced to serve their country. Initially after the bombing of Pearl Harbor the army was overwhelmed with volunteers. However, throughout five long years, the army relied on the draft to maintain the army's strength, but the critical factor was a shortage of supplies. Moreover, the supplies and orders for munitions and armaments were slow to come. Corporations refused to produce war munitions in favor of consumer goods. In effect, corporations engaged in a sit-down strike until they had obtained outrageously beneficial terms. America faced corporations that openly violated the law, corporations that blackmailed the government with threats of an interruption of the supply of gasoline and corporations that conspired to price fixing. Finally, America faced the armies of the Third Reich supplied by products built by American corporations. No corporation ever faced charges of price fixing, war profiteering and treason with supplying the enemy with munitions. Yet more than 300 corporations did business with the Third Reich during the war.

Certainly, the record of the Waite court with its many antagonistic rulings toward the civil rights of individuals and their liberties, along with an extremely pro-business agenda spanning a period of almost 30 years should give us pause today---especially with the present Rehnquist court quietly chipping away at the Miranda ruling and other civil rights rulings. Likewise, it was the Rehnquist court that ruled that some ballots in Florida were more equal than others and need not be counted, thereby throwing the 2000 election to George W. Bush just as justices from the Waite court installed Rutherford B. Hayes as president earlier. Such outrageous rulings should call into question the confirmation procedure used in the Senate for court appointments. All too often justices are chosen for their political ideology rather than their judicial abilities.

The erosion of protections from corporations built into the various state constitutions has led to the present problems we are facing. Our government is for sale to the highest bidder. The erroneous decision of the court in 1976 equating money with free speech has left us with unequal rights. A citizen's voice is not equal to that of a multinational corporation simply because the corporation has unlimited financial resources to apply. Further, the court has allowed corporations to grow to gargantuan proportions, precisely the fear Jefferson expressed in his opposition to national charters.

Sub-Section 2

In 1996, 51 of the world's largest economies were corporations with General Motors larger than Denmark, and Wal-Mart, the twelfth corporation larger than 161 countries. The top 200 corporations in the world have sales equivalent to 28.3% of the world's GDP. The combined sales of these top 200 corporations are larger than the GDP of all but the world's nine largest countries. These top 200 corporations employ just 18.8 million people--or less than 1/3 of 1% of the world's population. The world's top five employers are General Motors, Wal-Mart, PepsiCo, Ford and Siemens.

Domestically, the top 1% of Americans owns 40% of all U.S. assets. The corporate share of income taxes has fallen from roughly 40% in the 1940s to less than 15% today. While corporate profits rose an astounding 130% from 1980 to 1995, the average family saw a net decrease in their real wage. The problem was first detailed in America: What Went Wrong? written by Barlett and Steele for the Philadelphia Inquirer in 1992 and now available in paperback.

In the abbreviated list of court rulings and acts of Congress above, the list stopped at 1987. For one, the focus of corporate regulation changed; an era of extreme conservatism gripped the nation. Carter began deregulation of a few industries to prop up a sagging economy feeling the after-effects of OPEC. In the 1980 presidential race, Reagan ran on a platform of deregulation. If Carter began limited deregulation, the Reagan administration threw open the flood gates. The last dying gasp in favor of regulation of corporations came in 1984 when the judge ordered AT&T to be broken into eight Regional Bells in an ongoing monopoly case.

Coupled with the earlier grievous court ruling of equating money as free speech and the reduction in the top tax rates for individuals and corporation, corporations were free to buy the politicians of their choice. The results have been a host of new bills enacted by Congress granting corporations more corporate welfare, fewer regulations, more power and more rights. With the top tax rates reduced to a mere 31%, corporate executives soon reaped the benefits of exorbitant salaries and benefits at the expense of the employees. Employees became expendable and a new industry was born overnight: the temporary employment firms. Meanwhile, the CEOs of corporations sought control of corporate boards, further increasing their empire and concentrating their power.

The result of the deregulation of the 1980s and 1990s is literally punctuated with dismal failures. The era is marked in the beginning by a multi-billion dollar taxpayer bailout of the savings and loan industry. For much of the 1980s, the savings and loan bailout was a black hole for taxpayers' hard earned dollars. The industry had been deregulated and had gambled on high-interest junk bonds and foreign loans. When the junk bond market collapsed along with the foreign loans the industry was devastated. Fallout from the resulting carnage lead to the Keating Five and the Michael Milken trials. Keating lobbied Congress heavily promoting deregulation of the savings and loan--but in the end Lincoln Savings and Loan went bankrupt, as did the reputation of the five congressmen most heavily involved with Keating. Milken, the junk bond king faced a 98-count indictment.

The end result of the savings and loan scandal and the junk bond scandal went far beyond the taxpayer bailout. The junk bonds were used to finance leveraged buyouts, further concentrating power in fewer hands. In addition, many investors in junk bonds found themselves empty-handed with worthless paper or, if they were lucky perhaps saw their investment reduced to $.015 (fifteen cents) for every $1 (dollar) invested. In the end, none of the perpetrators of the failed savings and loans faced serious sentencing. Milken was fined heavily and sentenced to a short prison term. His fortune was somewhat reduced, but he was still a multi-millionaire.

Evidence exists that in 1988, presidential candidate George Bush was implicated in delaying the closure of Silverado Savings and Loan until after the election, because his son Neil was on the board.10

Perhaps the most damaging aspect of the junk bond fiasco was the spawning of a mania of mergers. Even more than a decade later, mergers are continuing unabated. Just as Barlett and Steele detailed in 1992, mergers have continued. The large corporations that received tax bonanzas from the Reagan administration under the disguise that lower taxes would spur growth didn't invest their newfound wealth in research--instead they bought out smaller corporations. Moreover, with each new merger and buyout, power and wealth was concentrated. For the employees, it meant massive layoffs. Congress and the Justice Department have both been comfortably asleep-at-the-wheel, allowing corporations broken apart to re-merge together as in the case of a couple of the "Baby Bells" and Exxon and Mobil.

Another of the first industries to be deregulated was the airlines. Deregulation of the airlines has only been marginally successful, if at all. Yes, fares did come down, but at the very high price of safety. Delays are more likely than on-time departures and arrivals. Luggage is lost or damaged all too frequently. It is now commonplace to hear of another airline crash with possibly a hundred or more deaths resulting. Yet studies of airplane crashes reveal that most deaths are not the result of the impact. Rather most of the deaths are the result of excessively weak seats. On impact, the seats tear loose and the passenger is propelled forward at 120 mph. The lucky ones may indeed be those killed when they are thrown against the bulkhead. More often than not limbs or spines are shattered and unable to move they perish in the flames or from the toxic fumes. The FFA has known for years of the weak seat design. In fact, the seats in a Honda Civic or Yugo are stronger. Car seats generally are capable of standing up under the strain of 20-G forces; those on the airlines are only 9-Gs.11 Now how is that for deregulation?

However, the FAA was hobbled from the very beginning by Congress with a dual mandate, one to regulate the industry and two to promote the industry. Only after the crash of Valu Jet did congress change this dual mandate. Nor is it proper to place the blame on the FAA alone for air safety problems. The real problem lies with a Congress that creates a toothless agency to placate the public. Why does the agency need a Congressional bill to require stronger seats? A regulatory agency should be allowed to implement reasonable controls over its charges. However, time and again, Congress will create an agency as a response to a problem with little or no authority to complete its mission.

Two other examples are the EPA and OSHA, where in recent years Congress has blocked planned implementation of stronger new standards. In the case of the EPA, it was the fine particulates. In the case of OSHA, it was new standards for repetitive motion. In short, these two agencies have been used by the Republicans for political football. Nixon used both against his political enemies. The Reagan administration made a mockery of the EPA by appointing a former employee of the Coor's family, as well as that of the entire Department of Interior headed by James Watt.

The Reagan transition team in 1980 went far beyond the normal bounds of corruption. Reagan turned a blind eye toward ethics when it concerned his transition team. By far, Reagan assembled the largest transition team of any president thus far. Many had obvious conflicts of interests, nor did the requests from various members of Reagan's team stop within prescribed guidelines. Carter appointees refused to turn over lists of prospective enforcement cases to a member of the transition team (who just happened to be an independent oil producer) and his deputy (whose firm represented Standard Oil of California). At the Labor Department Reagan's deputy team leader had filled a friend of the court brief with the Supreme Court challenging the enforcement of OSHA laws. Such confrontations were visible in every department. In short, Reagan's transition team was given a license to loot on behalf of their corporate benefcators.12

Ever since the erroneous Supreme Court decision to equate money with free speech, politicians have been placed in the pocket of corporate America. Campaign finance was an issue in the 2000 elections and remains an issue in Congress despite the best efforts of George W. Bush and the leaders of the Republican Party to kill campaign finance reform. The Bush administration is rabidly pro-business as evident from his appointment of Gale Norton to head of the Interior Department. Norton was a protegee of none other than James Watt. Additionally, Bush has shown his allegiance to corporate America in the California electrical power shortage.

This leaves the American citizen as a pawn of corporate America. While the corporate media blares report after report of crime in the streets the real crime story of corporate fraud goes unreported. In 1998, the FBI estimated the annual cost of robberies and burglaries at $3.8 billion. The annual cost of corporate or white-collar fraud has been placed in the hundred billion dollar range (note the FBI does not estimate corporate or white-collar fraud). The estimates of healthcare fraud alone was placed at between $100-$400 billion dollars. Securities fraud is in the minor leagues at only $15 billion dollars.13 The two figures point out one glaring and unmistakable fact: regulation works. The securities market is tightly regulated, while healthcare field is wide-open with little effective regulation and what does exist, exists primarily on the state and local levels. The Savings and Loan scandal alone cost U.S. taxpayers between $300 to $500 billion dollars.

The FBI also reported in 1998 that 19,000 Americans were murdered. In contrast, 56,000 Americans died from job-related diseases such as black lung. No estimate is even available for the number of Americans whose lives were cut short from cancer due to environmental pollution or workplace exposure. Federal contractors routinely violate the Wagner Act and other laws, but are still allowed to continue to provide government services.

Sub-Section 3

However, Americans (and indeed all of the world's people) face and even greater threat to their freedoms. The threat comes from the attempt to take fascism world-wide through the WTO and so-called "free trade agreements". Free trade between nations is beneficial to all. However, free trade means one thing and one thing only: a reduction in or elimination of tariffs. Any trade agreement that goes beyond those boundaries is just another step towards global fascism and corporate rule.

In free countries, the laws are determined by the people or representatives of the people--they are not set by some corporate fiat. However, that is not the case with the recent trade agreements such as GATT, NAFTA, the now defeated MAI or the present negotiations on GATS. All of these so-called trade agreements contain provisions that either overwrite exiting labor and environmental laws or mandate payment to any corporation that perceives itself to be injured by public policy, the laws of a sovereign nation or both. Further, these so called "free trade treaties" set up corporate tribunals as the final arbitrator in any disputes rendering the court system and national sovereignty mute. In essence, these free trade agreement confer sovereign status onto corporations.

For instance under GATT, the United States was forced to accept shrimp imports from Thailand. The imports had been banned under U.S. law because Thailand law did not require shrimpers to use protective nets for sea turtles.

Presently, the U.S. is bound by NAFTA to begin allowing Mexican tractor-trailer rigs to enter the country unrestricted. At best, the only protection ensuring these rigs to be up to U.S. safety standards comes from state highway patrols.

However, under these so-called free trade agreements Canada and Mexico have both suffered more grievous blows. Under NAFTA, Canada was forced to pay a multimillion dollar ransom to U.S.-based Ethyl Corporation. In 1997, Ethyl sued Canada under the provisions in Chapter 11 of NAFTA. Canada had the foresight to ban the hazardous and toxic MMT gasoline additive. Ethyl claimed that such a ban on MMT constituted an expropriation of its assets in Canada and sought $250 million dollars in damages. In 1998, the Canada government under extreme pressure removed the ban on MMT and settled the suit with Ethyl for $13 million dollars.14

Mexico suffered a similar indignity in 1996. The Mexican state of San Luis Potosi refused to give U.S. based Metalclad Corporation a permit to reopen its waste disposal site. The state governor ordered the site to be closed after a geological survey showed that the site would contaminate the local water supply. The governor then went further by declaring the site part of a 600,000 acre ecological zone to protect the water supply. Metalclad sued under Chapter 11 of NAFTA, seeking $90 million in compensation. Eventually the case was settled with an award to Metalclad for $17 million dollars. Under GATS, Mexico would have faced additional trade sanctions.

Both the Canadian and Mexican cases demonstrate the awards were granted under a tribunal set up under NAFTA. The tribunal is, of course, beholding only to the multi-national corporations. Canadian or Mexican courts and laws were voided in both cases.

Incredibly, under the rules of the current talks on GATS, (General Agreement on Trade in Services) injustices such as the two cases listed above would expand. GATS could prevent Canada from expanding its Medicare program to include national drug or home care program.15 Such expansion of Canada's healthcare system could trigger suits such like the Ethyl or Metalclad suits discussed above.

GATS defines services very broadly. Under GATS, the following would be classified as services:

business services, communication services, construction services, distribution services, financial services, recreation, tourism and travel, transport services, education, health services, water supply, electricity supply, waste disposal16

Under the terms of GATS any expansion of the National Park System could trigger a lawsuit forcing the taxpayer to pay some multinational corporation millions. Likewise, any expansion of a city's public water supply or waste disposal would likewise trigger lawsuits, as would cities that chose to implement a light rail system to ease traffic congestion. Further, under the current rules of GATS, any increase in funding or expansion of additional programs in our public schools would trigger lawsuits. Under all cases, the suits would be brought before a tribunal established by GATS without regard to the U.S. court system.

Presently, even in the current slump in the U.S. economy over one trillion dollars was invested in other countries. The danger posed by the multinational corporations is immense and very real. The present trade agreements have little to do with increasing trade. In fact, the trade agreements' sole purpose is aimed at eliminating any risk of capital by including provisions requiring compensation for government actions to protect the public and enhance public policy. They are, in effect, the first steps to establishing global fascism by overwriting the laws of sovereign countries to establish a corporate-ruled world.

The proposed MAI treaty was killed and is effectively dead for now. However, the WTO is still active and MAI has now been replaced with a treaty that is just as dangerous, GATS. Calling such treaties free trade agreements is nothing more than using a feel-good euphemism keyed to generating support and cloaking the real danger hidden in these agreements. There is only one sure method of ensuring that such agreements are killed for all time, a constitutional amendment that restricts the activities of all corporations. Under our present constitution, Congress has been given the sole authority in regulating interstate commerce. Such authority could be used to require any corporation to obtain a corporate charter that would be limited by the proposed amendment found in the last chapter.

The erosion of laws governing corporations and the new rounds of trade talks have placed the people of the United States and the entire world in jeopardy of losing their freedoms to global fascism of corporate rule. Franklin Roosevelt described fascism best.

"The liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic State itself. That, in its essence, is Fascism -- ownership of government by an individual, by a group or by any controlling private power."


Corporate Law: A History Bibliography


1. The Crisis of Global Capitalism, George Soros, Public Affairs, 1998, page102.
2. Corporate Power In America, Ralph Nader & Mark Green, Brossman, 1973, page 68.
3. John Marshall, Jean Edward Smith, Henry Holt & Co, 1996, page 436.
4. www.constitution.by.net/Pa/PaConst38.html
5. www.legislature.state.al.us/misc/history/constitutions/1875/1875_14.html
6 http://legisweb.state.wy.us/titles/98titles/title97.htm
7. www.ratical.com/corporations/CAconstArt12.html
8. The source for this case and all the ones following comes from the same source. http://www.endgame.org/primer-history.html
9. www.courts.state.wi.us/history/famous_cases.htm
10. www.kings.edu/twsawyer/frankly/SS1.html
11. The Buying of Congress, Charles Lewis, Avon, 1998, pages 184-198.
12. When the Pentagon was for Sale, Andy Pasztor, Scribner, 1995, pages 41-72.
13. www.tompaine.com/features/2000/05/15/
14. www.rollcall.com/
15. www.wtoaction.org/greenfield2.phtml
16. www.theglobeandmail.com, Mark MacKinnon, 2/19/01
17. www.heureka.clara.net/gaia/gats.htm

Chapter 4: The Roaring 20s and The Roots of Fascism in America


Part 1: I.G. Farben

Most Americans view the Roaring 1920s as a decade of speakeasies, bootleg liquor, flapper girls, and the Charleston. Without a doubt, the 1920s was the most repressive decade of the 20th Century. It was a decade marked in the beginning by the Palmer Raids of 1919 and at the end with the massacre of the Bonus Marchers in the midst of the Great Depression.

Perhaps the misunderstanding about the 1920s is because the American psyche recalls only the "apple pie" culture of repressive times. As a society, Americans fail to recall the brutal repression unleashed on the labor movement or the many race riots of the decade. America's collective view of the 1950s, another decade of repression, is much the same and consists of images of "Leave It to Beaver" and "Ozzie and Harriet". Few recall the madness of McCarthyism or images of the developing Cold War.

As a society, Americans are led to overlook great threats to our freedoms that took place during repressive times. If the Palmer Raids or McCarthyism had taken place in any country behind the Iron Curtain, Americans would have been quick to condemn the actions as massive purges of dissidents.

The 1920s held a bountiful promise of progress at WW1's end. The United States could have seized the chance to become a world power and leader. Instead, the nation retreated into itself and rejected President Wilson's League of Nations in favor of isolationism. [EDITOR: disagree; taking part in the Illuminati schemes for world war racketeering is an example of left-wing corruption we thankfully avoided]

New technologies and industries were busting down the doors. Autos were replacing the horse-and-buggy. Telephones were replacing Telegraphs. Electric lights were replacing the kerosene lamp. Air travel was now a reality. However, it was a decade that didn't live up to its promise. The decade ended in a spectacular failure of laissez-faire economics, the stock market crash of 1929. The resulting depression was so severe, it left an indelible mark on those that lived through it for the rest of their lives.

A period of repression has followed every major war this country has fought. The aftermath of the Civil War fits the pattern. McCarthyism followed WW II and coincided with the Korean War. Even with Vietnam, the phenomenon was observed, although in this case the repression was split. In one part, the repression occurred during the war with the exposure of COINTELPRO, and the other part followed in the 1980s with the coming of the Reagan administration. The infamous Palmer Raids followed the heels of World War I.

The repression that followed was directed at the perceived threats of the time and can best be summarized by the 4 prime targets of the U.S. Army Intelligence Network lead by Lt. Col. Ralph Van Deman: the Industrial Workers of the World (the IWW union), opponents of the draft, socialists and blacks. These groups were brutally repressed throughout the 1920s. The decade, in fact, is punctuated with massacres and race riots. In 1917, even before the war's end, Van Deman had already opened a file on Martin Luther King's maternal grandfather.7

Van Deman was an anti-Semite and is credited with establishing military intelligence as part of the modern U.S. Army. Most officers within the Military Intelligence Division (MID) at the time were also virulently anti-Semitic. MID officers promoted every anti-Jewish publication, including the Protocols of the Elders of Zion, as fact. It was commonly accepted within the MID that communism and Jews were one and the same. The anti-Semitic aspect of military officers extended beyond the MID and was due substantially to West Point's teaching of eugenics and anti-Semitism.

The almost universal anti-Semitism and racism of military officers allowed them to overlook the pogroms of the 1920s in Poland and other countries. Such beliefs were also a contributing cause to the passage of the 1924 bill that restricted immigration of "undesirables." Indeed, the anti-Semitism of military officers would last until well after WWII. It was a deciding reason in the failure of the United States to offer sanctuary to Jewish refugees in the late 1930s. It was also a contributing reason to the poor treatment of Jewish survivors of Nazi concentration camps.

During WWI, fear the Germans would exploit Negro unrest left Van Deman preoccupied with black churches as centers of sedition.

However, the most sinister aspect of Van Deman's network was the encroachment of the military into civilian affairs. During the 1920s, federal troops were activated several times to intercede in civilian events; for example, federal troops were used to break a Seattle strike. As late as 1947, military intelligence was still being directed at the same targets listed by Van Deman, evidenced by the inclusion of Martin Luther King, Jr. in the 111th Military Intelligence Group's files.

These post-war periods of repression are the very times our freedoms are most imperiled. Such repressive times are only a natural extension of the war, as deactivated troops return home, the former Soldiers seek work in an economy that is shifting from war to peace. Unemployment usually rises since, many of the deactivated troops have little or no peacetime skills. Additionally, after WWI, inflation ravaged the nation as wartime controls were lifted, adding to the economic woes of returning veterans.

However, the real danger comes from troops formerly engaged in intelligence. These former spies seek to ply their trade in the government or private sector. For instance, following the Civil War, many Union spies went to work in the private sector as union busters. After WWI, the newly formed American Legion was deployed in union busting, but even more sinister, went much further seeking to destroy political dissent and anyone left of center. The end of WWII ushered in the McCarthy era of wild witch-hunts for suspected communists.

There is little doubt that, after the Untied States entered the Great War, German agents were actively engaged in sabotage in the United States. The Kingsland fire of Jan 11, 1917 was traced to a German agent, Fiodore Wozniak, the "Firebug." In that one act of sabotage, 275,000 artillery shells and huge stores of TNT and other munitions valued at more than $17 million dollars were destroyed.1

Although destruction of war plants and munitions hindered the war effort, these acts paled in comparison to the economic sabotage by the corporate warlords of I.G. Farben. The cartel agreements that American corporations had with I.G. Farben preserved a stranglehold on munitions production, as well as many consumer items.

Before looking at the cartel agreements and how they hindered both wars, some brief history is required. Often, rather obscure events determine future world peace and war. Discoveries in chemistry labs have played enormous roles leading up to both world wars.

First, Germany has always been a country short of natural resources. Although it has ample supplies of coal, Germany lacks high-grade iron ore and other minerals. The soil is not particularly fertile, and Germany has traditionally been unable to feed its people without importing food. This reason alone played a dominant role in Hitler's quest for living space to the east.

The second factor that comes into play is Germany's geographical location. Its only access to the world's oceans is through the North Sea. The lord and master of the high seas, England, could easily blockade this route. Therefore, any factor that decreased Germany's dependence on imports increased its ability to wage war and to challenge England's dominance over all of Europe.

Germany's chemical industry developed in the 19th Century. English chemists were the first to discover that pigments could be produced from coal tar, but they failed to recognize the significance of the discovery. German industry was quick to capitalize on the development and soon dominated the world's pigment production. The work of German chemists on coal tar launched a new branch of chemistry, organic chemistry. Along with pigments, a host of new products came gushing forth: the first sulfa drugs, plastics and, by the advent of the Second World War, even rubber.

Along with the many useful and beneficial products that could be developed from this new branch of chemistry, a sinister side arose as well. One of the developments that had a direct impact on WWI was the Haber process of producing nitrates. Prior to Germany perfecting this process, Germany was dependent on Chile's nitrate deposits. With the Haber process, nitrates could be produced from nitrogen in the air. Germany's war machine was no longer dependent on shipments from Chile that could be blockaded by the British Navy. As war approached, an even more sinister side of the new chemistry was developed poison gas.

WWI was the first war in which technology overpowered the frontline Soldier. The chemistry labs of Germany played a pivotal role in its ability to wage war on its neighbors. These labs would play an even larger role in WWII with the development of producing both gasoline and synthetic rubber from coal.

At the center of the chemical arms production was I.G. Farben. I.G. Farben was a product of cartelization formed from six dye companies: Badische Anilin & Soda Fabrik (BASF), Farbenfabriken vorm (Bayer), Farbwerke vorm (Hoechst), Aktiengesellschaft fur Anilinfabrikaten, Leopold Cassela, and Kalle & Co. The big six were completely merged into I.G. Farben in 1916.2 In the ten years preceding WWI, I.G Farben relentlessly followed a path that enhanced Germany's ability to wage war.

When WWI broke out, I.G. Farben controlled the new worldwide chemical industry with cartel agreements and patents. Germany, particularly through I.G. Farben, aggressively sought patents in foreign countries, then refused to grant licenses to corporations in those countries. This shifted all aspects of the industry to the German homeland.

In light of recent court decisions allowing corporations to patent genes and the resulting genetically engineered food crops, it would be a worthwhile effort to study how Germany used patents to gain worldwide control over the fledgling organic chemical industry.

Sub-Section 1

Joseph Chamberlain summed up England's loss of the coal tar industry in 1883:

"It has been pointed out especially in an interesting memorial presented on behalf of the chemical industry that under the present law it would have been possible, for instance, for the German inventor of the hot blast furnace, if he had chosen to refuse a license in England, to have destroyed almost the whole iron industry of this country and to carry the business bodily over to Germany. Although that did not happen in the case of the hot blast industry, it had actually happened in the manufacture of artificial colors connected with the coal products, and the whole of that had gone to Germany because the patentees would not grant license in this country."3

Lloyd George reiterated Chamberlain's view in 1907:

"Big foreign syndicates have one very effective way of destroying British industry. They first of all apply for patents on a very considerable scale. They suggest every possible combination, for instance, in chemicals, which human ingenuity can possibly think of. These combinations the syndicates have not tried themselves. They are not in operation, say, in Germany or elsewhere, but the syndicates put them in their patents in obscure and vague terms so as to cover any possible invention that may be discovered afterward in this country."4

These quotes leave no doubt about the destructive nature of the cartel agreements and the patents sought by I.G. Farben in England. Nor is there any doubt over how such cartel agreements hindered U.S. war efforts during WWI. During the war, numerous I.G. Farben front corporations were seized under the Trading with the Enemy Act. Cartel agreements between American corporations and I.G. Farben created monopolies and spheres of influence, eliminating any competition. In effect, the cartel agreements were a second wave of robber barons. This time, however, the robber barons resided in Germany and structured the agreements to keep control over American corporations, even to the extent of limiting production of war material. In effect, the cartel agreements were nothing short of an attempt to put corporate rule ahead of government.

Recent trade agreements such as NAFTA, GATT, the failed MAI and GATS (all are proposed under the banner of free trade agreements) have placed the rights of corporations above and beyond the reach of the government. The inherent danger of allowing corporations to rule will be readily apparent in such a study. Furthermore, all these agreements contain clauses that set up tribunals as the final arbitrator in disputes, bypassing the court systems of the signatory countries which in effect allows the corporations setting on the tribunals to establish law by decree.

Even before the Nazis came to power, the cartel agreements formed a vital part of Germany's plan to wage war and extract revenge for the Treaty of Versailles. The willingness of corporate America's leaders to reestablish cartel agreements with I.G. Farben during the 1920s, and their subsequent support for fascist groups in the 1930s, forms the base of fascism in the United States.

Although, there were literally dozens of companies seized during WWI for trading with the enemy, the focus is not on those seized. Rather, the focus is on the ease and speed with which I.G Farben was able to reform its cartels, aided by the laissez faire economic policies of Harding, Coolidge and Hoover.

During the war, corporations reaped fat profits. With the lifting of wartime controls in 1919, business leaders craved a chance to get back to normal. Prices had been frozen during the war and before the war, Teddy Roosevelt had followed a policy of breaking up monopolies. The only threat to reestablishing their monopolies and domination of the economy came from the new labor movement and communism. In the aftermath of the Red Scare of 1919, the pro-business candidate, Warren Harding, was elected president, setting the stage for the rebuilding of the cartels.

WW I should have taught the Allied nations that Germany used international cartels as its spearhead of aggression. The German military mind had long understood the concept of total war. The father of modern German militarism, Karl von Clausewitz, best summarized the concept:

"War is no independent thing, the main lineaments of all strategic plans are of a political nature, the more so the more they include the totality of War and State. Disarm your enemy in peace by diplomacy and trade if you would conquer him more readily on the field of battle."5

This philosophy of war and peace became a cornerstone of Germany's political and economic interactions with other nations. The history of I.G. Farben in the twentieth century is one of support for German military adventurism. It consistently advanced German military plans and subordinated its own financial interests to German nationalistic aims.

With the ink hardly dry on the armistice agreement, the New York Times received a dispatch from its Berlin correspondent on December 1, 1919:

"The firms composing the German dye trust have decided to increase their capital to the extent without parallel, I believe, in the history of German industry. The trust which consists of three great and four minor concerns in the industry, valued at, roughly, 15,000,000,000 marks, is extending for two reasons: It is determined to reassert German supremacy in the dye industry; in the second place, there is the question of nitrate, so important for the agricultural life in the country.

The trust is aiming at making the fatherland independent of foreign supplies and to increase production so it will be able to export large quantities."6

The first World War pointed out deficiencies in Germany's armor. I.G. Farben's activities in the inter-war period must be understood to understand how U.S. corporations willingly hampered the war effort in the 1940s. From 1919 onward, I.G. Farben pursued a path of reestablishing its dominance. I.G. Farben continued to use the same methods it had used successfully in the first war as well as newer forms of the cartel. Several I.G. Farben developments in the inter-war period3/4 such as Buna rubber, the production of gasoline from coal, as well as aluminum and tungsten carbide production3/4 would figure prominently in WWII.

Sub-Section 2

The mind-set of I.G. Farben, and its use of patents and cartels to establish a German empire, is best illustrated with the example of Bayer 205. Bayer 205, or Germanin, was announced in 1920 as a cure for sleeping sickness. Through indirect channels, I.G. Farben made an offer to the British government: to exchange the secret of Germanin for the return of German colonies in Africa lost in WWI. The British government refused the exchange. However, a British medical journal in 1922 preserved the resourcefulness of I.G. Farben as follows:

"A curious illustration of German desire, not unnatural in itself, to regain the tropical colonies lost by the folly of the rulers of the German Empire, is afforded by a discussion which took place at a meeting of the German Association of Tropical Medicine at Hamburg. The Times correspondent in Hamburg reports that one of the speakers said that Bayer 205 is the key to tropical Africa, and consequently the key to all the colonies. The German government must, therefore, be required to safeguard this discovery for Germany. Its value is such that any privilege of a share in it granted to other nations must be made conditional upon the restoration to Germany of her colonial empire."7

The intent of I.G. Farben and Germany could hardly be masked by such a report. An even more ominous warning appeared in 1925:

"In open violation of the Treaty of Versailles the Germans shipped munitions to the Argentines. Rottweil (I.G's wholly owned subsidiary) still makes and sells excellent military powders, and German factories for munitions have been built or openly offered to build in Spain, Argentina, Mexico, etc."8

Article 170 of the treaty specifically forbade German export or import of armaments or munitions. Both the British and American state departments were aware of the violation. British Imperial Chemical Industries refrained from lodging any protest because it was locked into a cartel agreement with I.G. Farben. America, locked-in the grip of isolationism, simply ignored the violation.

In 1926, the German army formed the Economic High Command. Robert Strausz-Hupe summed up its express purpose as follows:

"Studying the deficiencies of German economy and laying plans for transforming it into Wehrwirt-schaft. Rapid conquests alone could provide new resources before Germany's reserves, accumulated by barter, ruthless rationing, and synthetic chemistry, had been exhausted in the initial war effort.
These new resources could then be poured into the war machine, rolling on to ever larger territorial conquests, and as long as it kept on rolling, the economy of greater space need never fear a crisis."9

I.G. Farben had direct and indirect communication channels with the Economic High Command. I.G. Farben policies were adjusted to accommodate the High Command's plans. In 1932, Colonel Taylor of du Pont reported:

"One of the motives back of the French proposal, that all countries should establish a conscription, is to upset the present German system of handling their Reichswehr. The Reichswehr is limited to 100,000 men of 12 year enlistment, and it would appear reasonable to suppose that there should be at present a number of soldiers around the age of 33 or 34; the fact is that when one meets a soldier of the Reichswehr he is a young man in the early twenties, and it is pretty well accepted that there are several men available under the same name and hence training much larger number of men than permitted."10

During the 1920's there were more than a hundred secret treason trials in Germany of journalists and others who revealed the truth. Quoting Dr. H.C. Englebrecht and F.C. Hanighen:

"It would seem then that despite the Versailles treaty that Germany is again a manufacturer and exporter of arms. This interference is confirmed by various incidents from the past ten years. There was the Bullerjahn case of 1925. On December 11, 1925 Walter Bullerjahn was sentenced to 15 years in prison for treason. The trial was held in secret and the public was excluded. Both the crime with which the condemned was charged and the name of the accuser were kept deep and dark secrets. After years of agitation by Dr. Paul Levi and the League for Human Rights, the facts were finally disclosed. The accuser was Paul von Gontard, general director of the Berlin-Karlsruhe Industriewerke, the same man who used the French press in 1907 in order to increase his machine gun business. Gontard had been establishing secret arsenals, contrary to treaty provisions, and this fact was discovered by the Allies. Gontard disliked Bullerjahn and had serious disagreements with him. In order to get rid of him he charged him with revealing to the Allies the fact that Gontard was secretly arming Germany. This was termed treason by the court and Bullerjahn was condemned, although not a shred of evidence was ever produced to show his connection with the Allies. The exposure of the facts in the case finally brought the release of Bullerjahn."
A little later Carl von Ossietzky, the courageous editor of the Weltbuehme, was convicted by a German court of treason because he had revealed military secrets in his journal. The secrets he had published were closely related to the secret rearming of Germany contrary to treaty provisions.
There is also some evidence that Germany is importing arms and munitions from other countries. In a confidential report of the exports of Skoda for 1930 and 1931, classified by countries, Germany appears as importer of comparatively large amounts of rifles, portable firearms, aero engines, nitrocellulose, dynamite and other explosives."11

The previous quotes focused on one simple fact that has been blurred by time: Hitler had the support of the ruling class as early as 1923. Hitler's entry into politics was the result of his commanding officer's order to attend a meeting of what evolved into the Nazi party.

Hitler, in fact, was found guilty of a far more serious crime, armed rebellion, but received a much lighter sentence than Bullerjahn. Hitler served less than two years in prison. Nor was Hitler's imprisonment particularly harsh. A more fitting description of his prison accommodations would be that of a hotel with room service. No amount of propaganda can cover up the difference in fate of Hitler and Bullerjahn. Without the support of the elite in Germany, Hitler would have suffered the same fate as Bullerjahn.

At the time of the Beer Hall Putsch, the Nazis were only a minor party. In fact, the reason the putsch failed was because Hitler lacked the popular support he had counted on. There were hundreds of trials for treason in which the defendants received harsh sentences. None were released from prison early without the special assistance of outside world opinion. Few people outside Germany had ever heard of Hitler in 1923.

In a memo dated March 22, 1932 a full year before Hitler assumed power the files of J.K. Jenny, of du Pont's Foreign Relations Department, reveals that I.G. and other German industrialists financed Hitler:

"It is a matter of common gossip in Germany that I.G. is financing Hitler. Other German firms who are also supposed to be doing so are Krupp and Thiessen. How much truth there is in the gossip we are unable to state, but there seems to be no doubt whatever that Dr. Schmitz (director-general of I.G.) is at least a large contributor to the Nazi Party."12

The previous series of quotes clearly establishes the complacency of the three American administrations of the 1920s towards German violations of the Treaty of Versailles.

The quotes also establish the ever-increasing role of I.G. Farben as an agent of the German government, culminating with I.G. Farben's support of the Nazis. Further, the quotes leave no doubt that the Republican administrations of the 1920s were aware of the violations, as well as the intent of I.G. Farben to reestablish its supremacy.

Isolationist policies of the 1920s Republican administrations were clearly a dismal failure that provided a fertile environment for rebuilding Germany's war machine. I.G. Farben was a supporter of the Nazis at least a full year before Hitler seized power. One can only speculate of when I.G. Farben began to support Hitler. Moreover, I.G. Farben had a long history of supporting German nationalism. Perhaps the most alarming feature of the quotes is I.G. Farben's increasing boldness and aggressiveness in violating the treaty. By the mid-1920s there were clear signs that Germany was preparing for another war.

Even more grievously than the complacency towards the violations of the Treaty of Versailles was the complacency of Republicans to the rebuilding of I.G. Farben's domestic cartels. To grasp the full extent of this, a brief look at the economic environment following WWI is needed.

The war's end saw a U.S. pullback into Fortress America, and the imposition of a strict right-wing isolationist policy, despite the best efforts of an ailing President Wilson to bring the United States into the League of Nations. The United States had the opportunity to seize a leadership role in the world, but instead retreated.

Compared to the European countries, the war for the United States was short, and as a result the United States didn't suffer the staggering number of causalities that the European countries did. The resulting isolationism was far too widespread to have been caused solely by war losses. Although, it went hand-in-hand with the policies of the extreme nativist groups, the resulting isolationism went far beyond fringe groups. It would be more fitting to describe it as mass psychosis. This was as much a product of nativism as it was a product of media manipulation by corporate America.

From 1900 until the end of the war in 1918, big business took several blows. First and foremost during this time was the trust-busting administration of Teddy Roosevelt. Second, price controls passed during the war restricted corporate profits. Senate investigations into war profiteering would extend into the 1930s. Finally, unionism was perceived as a threat by big business, and largely portrayed as either communism or the product of dirty foreigners.

To the business leaders of the time, getting back to normal meant nothing more than getting back to the days of robber barons, trusts, and cartels free from government intrusion and unionism. Corporate America was seeking the laissez faire economics of the three 1920s Republican administrations.

The cartel agreements with I.G. Farben were anti-competitive, and used to establish monopolies. In essence, anti-competitive agreements were used to increase profits of larger firms at the expense of smaller firms and consumers. Such agreements were the antithesis of Teddy Roosevelt's trust-busting days and a free enterprise system.

However, to the business leaders of the 1920s, "competition" was a foul word. Competition had to be avoided as much as unionism. In the view of leading industrialists of the time, competition was destructive. Thus the empire builders of the 1920s were eager to sign such agreements, and the policies of successive Republican administrations willingly turned a blind eye towards anti-competitive practices.


Part 2: Economic Warfare & Traitors in High Places

The full extent of I.G. Farben's disruption of the war effort during the First World War can be understood by examining the number of patents seized during the war. After U.S. entry into the war, the Alien Property Custodian (APC) was established. The APC seized a total of 12,300 patents 5,000 of which covered chemicals, pharmaceuticals and munitions.

Without a doubt, the most crucial problem facing the United States during WW1 was the U.S. dependence on Chile for nitrates. Nitrates are essential for manufacturing TNT, picric acid and other explosives. The dependence on a limited supply of Chilean nitrates was detailed in the 1915 annual report of the Chief of Ordnance. Not only were the shipments vulnerable to German submarine attacks, but many of the Chilean companies were controlled by German interests.

The Germans had eliminated their dependence on Chilean nitrates. With the development of the Haber process, nitrates could be made from atmospheric nitrogen, and by 1913 Germany had a 10,000-ton capacity plant at Oppau. In 1916, Congress appropriated money for the construction of four large synthetic nitrate plants. At the time, there were 250 patents on synthetic nitrogen, all German owned. These patents became subject to license under wartime legislation. A nitrate plant was constructed at Sheffield, Alabama, costing $13 million dollars. This plant had an annual projected capacity of 9,000 tons of ammonia and 14,000 tons of nitric acid. The plant proved useless, because the German patents did not contain the composition and preparation of the catalyst.13

The importance of nitrate production during WW1 is comparable to the importance of synthetic rubber production in the Second World War. In both cases, the Germans controlled the process through patents and cartel agreements.

Perhaps one of the more illuminating cases of how I.G. Farben hindered the war effort is the case of Dr. Hugo Schweitzer. Schweitzer was an American citizen and head of the Bayer Company. He also became head of German espionage in America and was known in Berlin as No. 963,192,637. Schweitzer was interned after America's entry into the war, but was able to conduct a highly effective industrial espionage campaign before that. The words of his superior, Dr. Albert, sums up Schweitzer's efforts best:

"The breadth of high-mindedness with which you at that time immediately entered into the plan has borne fruit as follows: One and a half million pounds of carbolic acid have been kept from the Allies. Out of this one and a half million pounds of carbolic acid, four and one-half million pounds of picric acid can be produced. This tremendous quantity of explosive stuffs has been withheld from the Allies by your contract. In order to give one an idea of this enormous quantity the following figures are of interest:
Four million five hundred thousand pounds equals 2,250 tons of explosives. A railroad freight car is loaded with 20 tons of explosives. The 2,250 tons would, therefore, fill 112 railway cars. A freight train with explosives consist chiefly of 40 freight cars, so that 4,500,00 pounds of explosives would fill three railroad trains with 40 cars each.
Of still greater and more beneficial effect is the support which you have afforded to the purchase of bromine. We have a well-founded hope that, with the exclusion of perhaps small quantities, we shall be in a position to buy up the total production of the country. Bromine, together with chloral, is used in making nitric gases, which are of such great importance in trench warfare. Without bromine these nitric gases are of slight effect; in connection with bromine, they are of terrible effect. Bromine is only produced in the United States and Germany. While therefore, the material is on hand in satisfactory quantities for the Germans, the Allies are entirely dependent upon importation from America." 14

Schweitzer's work not only shows how I.G. Farben was an integral part of the German war machine, but also illustrates that German espionage was centered around German immigrants. This doesn't imply that all German immigrants were traitors, as the vast majority were citizens loyal to their adopted country. However, during both wars, German espionage relied heavily on German immigrants. As an example, the German spies apprehended landing on Long Island during WW II had all previously lived in the United States. As the quote above shows, immigrants who chose to remain loyal to their fatherland had a considerable impact hindering the war effort.

Upon Schweitzer's death, government agents searching his apartment found an unpublished article entitled "The Chemist War." In this document, Schweitzer detailed Germany's plan for self-sufficiency and foretells the importance of its scientific advances for the next war. These excerpts from the article shows that Schweitzer was fully aware of the importance of Germany's scientific advances to German empire building.

"Next to steel and iron, aluminum and magnesium play a prominent part as substitutes for copper. It has been found that an aluminum-magnesium alloy possesses great advantage over the latter as an electrical conductor. Magnesium is said to be useful for many purposes for which aluminum is being employed today. This is a very important discovery, because Germany has enormous supplies of magnesium chloride, a by-product of the potash industry, which has been worthless up to now.
That this new scientific achievement will prove of momentous importance appears from the fact that the great chemical works which supply the world with dyestuffs, synthetic remedies, photographic developments, artificial perfume, etc., have entered the field and have become important factors in the artificial fertilizer industry of Germany. The peace negotiations will undoubtedly culminate in the conclusion of commercial treaties between nations.
"What enormous power will be exercised by the nation when possessing such universal fertilizer and practically world-wide monopoly of potash slats will have something to sell that every farmer in the civilized world absolutely requires." 15

Once again, the close association of I.G. Farben with Germany's war machine is apparent, along with the intention of I.G. Farben officials to use Germany's monopoly of the emerging organic chemistry field for world domination. Shortages during the first war created by various cartel agreements involved other companies besides I.G Farben . Zeiss and its American partner, Bausch and Lomb, controlled production of military optics through a cartel agreement. German firms owned by Krupp controlled production of ordnance in many cases.

Before U.S. entry into the First World War, American aircraft production for the Allies was held up by the practices of Bosch. It was not until the United States entered the war that any action could be taken against Bosch. The same tactics were common before the United States entered WWII.

Domestically, cartel agreements created acute shortages in the medical field. Prior to the war, more than eighty percent of surgical instruments were imported from Germany. Additionally, many medicines were under complete German control, particularly salvarsan, luminal and Novocain. Salvarsan was used at the time to treat syphilis, and luminal was used to prevent epileptic seizures. There were no replacements for these drugs and patients went untreated. The shortage of Novocain forced American surgeons to revert to operating without anesthesia.

No better summation of the dangers cartel agreements posed to the United States exists than the State of the Union address by President Wilson on May 20, 1919:

"Nevertheless, there are parts of our tariff system which need prompt attention. The experiences of the war have made it plain in some cases that too great a reliance on foreign supply is dangerous, and that in determining certain parts of our tariff policy domestic considerations must be borne in mind which are political as well as economic.
Among the industries to which special consideration should be given is that of the manufacture of dyestuffs and related chemicals. Our complete dependence upon German supplies before the war made the interruption of trade a cause of exceptional economic disturbance. The close relation between the manufacture of dyestuff on the one hand and of explosives and poisonous gases on the other, moreover, has given the industry an exceptional significance and value.
Although, the United States will gladly and unhesitatingly join in a program of international disarmament, it will nevertheless, be a policy of obvious prudence to make certain of the successful maintenance of many strong and well equipped chemical plants. German chemical industry, with which we will be brought into competition, was and may well be again a thoroughly knit monopoly, capable of exercising a competition of a peculiarly insidious and dangerous kind." 19

It is obvious from this quote that the danger posed by cartels and their monopoly agreements was well-known at the highest levels of government. The most stunning aspect of the aftermath of WWI was the speed at which I.G. Farben reestablished its cartel agreements. These re-establishments could only have occurred with the full cooperation of Republican administrations and the leaders of corporate America.

Even during the peace conference, there were those in this country whose actions were fraudulent, if not treasonous. Throughout the war, lawyer John Foster Dulles sought to protect the assets of the Kaiser from seizure by the Alien Property Custodian Act. Dulles sought to derail the peace conference by looking for bribes and misdirecting clients. As a member of the post war U.S. War Trade Board, Dulles had good information for sale. He was well aware that German bribes went all the way to the Harding administration's crooked Attorney General, Harry Daugherty. In a later corruption trial, Daugherty's defense counsel pointed out there was a bigger crook behind the bribery scandal, John Foster Dulles:

"[Dulles] who strutted about the Peace Conference promoting himself as (Secretary of State) Lansing's nephew while carrying a bag3/4 looking for a bribe3/4 misdirecting his clients and comporting himself as a man who should be disbarred."20

The importance of the quote cannot be underestimated. It clearly establishes a right-wing element at the peace conference who was willing to sabotage the interest of the American people for personal, private gain. Dulles continued to work his mischief in the corrupt Harding administration and had access to its highest levels of power. Later, as WWII approached, he and his brother Allen helped conceal Nazi ownership of, and involvement in, American corporations from the U.S. government.

Daugherty was not the only Harding administration member seeking to form alliances and cartel agreements with I.G. Farben. Prior to becoming Secretary of the Treasury, Andrew Mellon controlled interests such as Alcoa, and formed several cartel agreements with I.G. Farben. Mellon's support of fascism went further than just cartel agreements with German firms. Mellon was a supporter of several pro-fascist groups in the 1930s, and part of the fascist plot against FDR in 1934.

One must keep in mind the links between top Republican administration officials of the 1920s if one is to understand the roots of American fascism. Mellon and Daugherty were not the only officials sympathetic toward I.G. Farben and Germany. There were many more, some of whom became Nazi supporters in the 1930s.

In addition to supporters within the government, I.G. Farben found a multitude of support on Wall Street. Many from Wall Street would later rise to high positions within the government, particularly in the OSS during the war, and as economic advisors during the post-war denazification period.

By the end of the first war, it was quite obvious as to all how dangerous cartel agreements with I.G. Farben were and how such agreements had hindered the U.S. war effort. These agreements were anti-competitive and a violation of trust and monopoly laws. They also violated numerous sections of the Alien Property Custodian Act. However, during the Harding administration, individuals openly sympathetic to I.G. Farben and German interests headed the two cabinet positions charged with enforcing these laws, the Departments of Justice and the Treasury. Mellon was Secretary of the Treasury throughout the Harding and Coolidge administrations, and most of the Hoover administration.

Holding his position throughout the 1920s, Mellon was able to quash almost all investigations into reforming cartels. Thus, by the end of the 1920s, I.G. Farben had regained control over all its assets seized by the Alien Property Custodian Act. In fact, the Mellon-owned Alcoa Corporation signed a cartel agreement with I.G. Farben while Mellon was still in the government.

The full ramifications of actions by top 1920s Republican administration officials, and the resulting hindrance of WWII, is immeasurable. Because of cartel agreements signed in the 1920s, the supply of many vital materials was hindered, causing shortages and production delays of munitions during WWII. Particularly damaging was a shortage of aluminum due to the cartel agreement entered into by Alcoa. Only recently has information became available that sheds light on how damaging agreements signed in the 1920s were to the war effort in the 1940s as the quote from a recent article on Newsweek.com shows below.

The fresh look at wartime culpability may extend to other American icons. In 1940 one of the nation's most prestigious law firms, Sullivan & Cromwell, joined together with the Wallenberg family of Sweden--famed for producing Raoul, a Holocaust martyr who saved Jews in Budapest--to represent Nazi German interests, says Abe Weissbrodt, a former Treasury Department lawyer who prosecuted the case in 1946. The scam? Sullivan & Cromwell drafted a voting trust agreement making the Wallenbergs' Enskilda Bank a dummy owner of the U.S. subsidiary of Bosch, a German engine-parts maker, so the Nazis could retain control. The papers were drawn up by John Foster Dulles, a Germanophile who later became secretary of State and whose name today graces Washington's international airport. (The scheme worked during the war, but in 1948 Bosch was finally auctioned to a U.S. buyer.) The record is compelling in terms of warranting questions about Dulles's motives and his own allegiances," says historian Masurovsky. "One might say about him what Treasury said about Chase and J.P. Morgan, that they had allegiance to their own corporate interests and not to their country."112

Due to the prominence of Sullivan & Cromwell in aiding the Nazis a brief look at the background of the firm and the role the Dulles brothers played in it is needed. The firm was initially established by Algernon Sullivan in New York following the economic panic of 1857. The economic panic had bankrupted his practice in Indiana. The young Sullivan had just married a descendent of George Washington from Virginia. Before the outbreak of the Civil War, Sullivan relied on and built his firm on his wife's southern contacts. These southern connections of Sullivan and Cromwell also play an important role in the last two decades of the 20th Century in moving industry from the Rust Belt to the South. Moreover, they play a particularly important role in the financial shenanigans of the Bush family.

With the advent of the Civil War, Sullivan once again saw his practice virtually destroyed. In June 1861, the confederate warship, Savannah disguised itself as a northern vessel in an effort to capture the USS Perry. However, the Perry captured the Savannah and delivered the crew to New York. Because the United States did not recognize the Confederacy as a nation, the prisoners were treated like pirates who if convicted of piracy, would have been hanged. Sullivan took it upon himself to defend the prisoners, arguing that they were prisoners of war. Against all odds, Sullivan won the case.77

In 1870, Sullivan went back to private practice in the firm of Sullivan, Kobbe and Fowler. Here Sullivan met Cromwell, who was employed as a bookkeeper. Recognizing Cromwell's talents Sullivan offered to send Cromwell to Columbia's Law School. Cromwell accepted the offer and after Kobbe and Flower left, Sullivan formed Sullivan and Cromwell. The firm soon flourished. After the death of Sullivan, Cromwell hired William Curtis as a partner and began focusing the firm on business law.

The year after Sullivan's death, Cromwell had Curtis, a New Jersey resident, work behind the scenes to change New Jersey's laws of incorporation. Cromwell's package of changes in the incorporation gave much more to the corporations than to the state and lowered incorporation fees and taxes. Additionally, it prevented shareholders from inspecting a corporation's books and interfering in corporate management. Most importantly though, Cromwell's package allowed corporations to hold shares of other corporations. It was a package designed to sidestep the Sherman Antitrust Act of 1890.78 In essence, Cromwell's package was a wholesale assault on the laws that held corporations in check. Only the disastrous Supreme Court ruling giving corporations the rights of a person was more important in the creation of the corporate state.

The first two companies to take advantage of the changes in New Jersey corporate law were Sullivan & Cromwell clients, the Southern Cotton Oil Company and the North America Company. The way a firm manipulates and follows the law says a lot about the firm's honesty and integrity. The way Sullivan and Cromwell handled the 1889 Louisiana Supreme Court decision outlawing the American Cotton Trust exposes how Sullivan & Cromwell viewed the law 3/4 as just a tool to be manipulated for the benefit of the wealthy. The Louisiana Court had ruled the American Cotton Trust to be an illegal association, guilty of usurping, intruding into and unlawfully holding and exercising the franchise and privilege of a corporate without being duly incorporated.79

Cromwell went to Louisiana and hired the best local lawyers to argue the appeal, who assured him they could win. Cromwell then toured the state urging members of the trusts to sell their shares to the Rhode Island Company. The Rhode Island Company was exactly like the American Cotton Trust but incorporated in Rhode Island--which tolerated trusts. The day the appeal was to be heard, Cromwell walked into court and informed the court that the company had been dissolved. Local officials were outraged at Cromwell's action and threatened to jail him. Cromwell wisely left town that afternoon. Cromwell then had Curtis do the same thing in Texas for the local cotton oil trust.

In 1901, J. P. Morgan used Sullivan & Cromwell to organize U.S. Steel, the first American corporation with more than one billion dollars capitalized. Previously, Sullivan & Cromwell had organized National Tube Company for Morgan. In 1906, Harriman sought help from Sullivan & Cromwell in gaining control over the Illinois Central Railroad. The president of Illinois Central realized the value of the north-south route of his railroad in adding to Harriman's holdings of major east-west routes and had gave the governor of Illinois a seat on the board and organized small shareholders against a Harriman takeover. In the mounting proxy fight, Cromwell forged alliances with two board members, leaving Cromwell short one vote short for a board majority. He then offered another board member the job of president of the company--if he would help oust the current president. In the vote of proxies, Cromwell shouted from the floor and demanded that the current president cast his votes in favor of the Harriman takeover. In news that made the front page of The New York Times, Cromwell made a spectacle of the meeting after being attacked by the small shareholders against the takeover. After the meeting, Cromwell announced that there would be a board meeting in November to elect officers of the railroad and that anyone could draw his own conclusions. Cromwell and Harriman nursed their wounds for three weeks. The board meeting was set in New York on election day to deliberately deter the governor of Illinois from attending. The governor reluctantly attended the meeting to no avail; Cromwell and Harriman controlled the board. Sullivan and Cromwell worked against the majority of small holders manipulating the system to the benefit of one of the most notorious robber barons.80

Sullivan & Cromwell was instrumental in helping to manipulate utility owners by placing rising profits in holding companies that, by the 1920s, had given the control of three-fourths of the nation's electric business to just ten companies. For the firm's client, Union Electric, Sullivan and Cromwell created more than 1000 subsidiaries. The subsidiaries were in turn controlled by one or two individuals. Instead of issuing common stock, the subsidiaries issued only bonds and preferred stock that didn't carry any voting rights.81

Using the tricks developed for the utilities, Sullivan & Cromwell applied them to the National Diary Products Company. National Dairy had acquired a string of regional diaries across the country, and in 1930 acquired Kraft-Phoenix Cheese Company. Through the manipulative efforts of Sullivan and Cromwell, a localized industry was transformed into the multi-national conglomerate known as Kraft.

By 1900, Sullivan & Cromwell had emerged as the law firm of the robber barons. In the examples already given, it is clear Cromwell was willing to use unethical means to achieve victory for any client that could afford his fees. Additionally, Cromwell worked behind the scenes to weaken corporate laws. It was at this time, Cromwell developed an interest in the Panama Canal. It was also around this time, in 1911 that Dulles' grandfather, John Watson Foster, a former Secretary of State, urged Cromwell to hire his grandson. The elder Foster had known both founding partners and had clerked for Sullivan when he was in Ohio. Cromwell complied with Foster's request and hired John Foster Dulles.

By writing a pamphlet urging that American ships passing through the canal should have free passage, the young Dulles attracted the attention of Cromwell. The firm was impressed with his contacts. Sullivan and Cromwell was Panama's fiscal agent at the time.

WWI broke out during John Foster Dulles' third year at Sullivan & Cromwell. To take advantage of the war, Dulles volunteered to travel to Europe to sell risk insurance for American Cotton Oil Company's European shipments.

In 1915, Dulles' uncle, Robert Lansing, was appointed Secretary of State. Lansing recruited his nephew to go to Nicaragua, Costa Rica and Panama on the pretext of company business, but in reality to sound out the Latin Americans on aiding the U.S. war effort. Costa Rica was led by the vicious dictator Federico Tinoco. Dulles advised Washington to support the dictator because he was anti-German. Dulles also encouraged the Nicaraguan dictator Emianiano Camorro to issue a proclamation suspending diplomatic relations with Germany. In Panama, Dulles offered to waive the tax on Panama's annual canal fee as long as the country would declare war on Germany.

With his success in Central America, Dulles was commissioned as a captain for a position in military intelligence working for the war trade board. While on the trade board, Dulles recommended installing a new leader in Cuba and voiding the recent election. Dulles' concern was not for the welfare of the citizens of Cuba, but for the thirteen Sullivan & Cromwell clients that held huge sugar interest there. President Wilson refused to unseat the current government of Cuba but did send 1,600 marines to protect American sugar interests.

During the war, Cromwell had lived in Paris. John Foster Dulles' dealings during the peace negotiations cause him to rise in stature in the eyes of Cromwell. Cromwell was impressed with Dulles' work on the behalf of Germany. While in Europe after the war, Dulles met with the Merton brothers in Frankfurt. The Mertons need copper for their Metallgesellschaft business. Dulles arranged a large loan through Goldman Sachs for the Mertons to import American copper. It was this deal that lead to charges against Attornery General Harry Daugherty. Dulles was forced to testify at the trial. He could plead innocent because Goldman Sachs backed out of the deal.

However, the real story of treason by the Dulles brothers (John Foster and Allen) and Sullivan and Cromwell begins with the ending of the First World War. Cromwell would remain in Paris and John Foster Dulles, while not formally in charge of the New York office, would be the force to be reckoned with in New York. In 1926, Allen Dulles resigned his position with the State Department and went into private practice at Sullivan & Chromwell law firm where his brother John Foster also worked. Several Wall Street firms figured prominently in guiding investments into Germany, in the 1920s as well as in the 1930s. However, almost all deals would involve the services of Sullivan and Cromwell.

Coinciding with the Dawes Plan, John Foster Dulles arranged a large loan for Krupp. To obtain the loan Dulles had called Leland Harrison, Assistant Secretary of State to soft-pedal the item in the news. Harrison was infuriated because the department had issued a circular asking to see foreign loans before American funds were exported. Dulles knew, however, that Harrison had no authority to stop the loan. Dulles wanted to avoid the State Department's scrutiny as to whether German factories were producing military hardware. To avoid any scrutiny, Dulles chose a Saturday to call Harrison. Sullivan and Cromwell, at Dulles behest accepted the assurances of Krupp that all military hardware had been destroyed.

[EDITOR: Notice that Allen Dulles was "away" from his office during the weekend the Bay of Pigs invasion was launched in 1961]

The Krupp loan opened a new era at Sullivan & Cromwell. It was the start of a massive investment in Germany by U.S. banks. Banks competed with each other for the services of the firm in arranging German loans. Within a year America, had lent Germany $150 million dollars. Such massive lending worried both German and United States governments. The State Department privately warned bankers and lawyers of the growing indebtedness of Germany. Dulles actively promoted the loans, and Sullivan & Cromwell supervised an endless stream of German bonds. Many of the prospectuses contained errors and had never been proofread due to the frantic pace; others were deliberately deceptive. A Bavarian bond prospectus began "Bavaria has an excellent credit history"; however, Bavaria had defaulted on its debt the year before.82 Almost 70% of the money flowing into Germany during the 1930s came from U.S. investors.

Dulles derived much of his profits and his clients' profits from investments in Nazi Germany. In the 1930s Dulles set about creating an incredible interlocking financial network between Nazi corporations, American Oil and Saudi Arabia. Here Allen had help from his brother Foster. Perhaps the best-known deal arranged by Dulles was between I.G. Farben and Standard Oil of New Jersey. What is generally not known Farben was the second largest shareholder in standard Oil of New Jersey, second to only John D. Rockefeller himself.113 Another Rockefeller-controlled corporation that Dulles worked to protect was the Rockefeller corporation United Fruit, both United Fruit and Standard Oil of New Jersey continued to trade with the Nazis after the out break of war.

In the 1930s, Dulles arranged for the wealthy Czech family, the Petscheks, to sell their interest in Silesian Coal to George Mernane. Mernane was used merely to hide the Petscheks' interest. Dulles then sold the shares to his friend Schacht, the Nazi economic minister. After the sale, Dulles became director of Consolidated Silesian Steel Company. Its sole asset was a one-third interest in Upper Silesian Coal and Steel Company. The remainder of the shares were controlled by Fredrich Flick.83 This was one of the companies seized from Prescott Bush for trading with the enemy.

Allen Dulles' role at Sullivan & Cromwell soon developed into that of a fixer. The Mellons hired him to convince the Colombian government not to confiscate its investments in Colombian's rich oil and mineral fields. He did so by rigging the 1932 Colombian presidential election.

By 1934, John Foster Dulles was publicly supporting Nazi philosophy. In 1935, he wrote a long article for the Atlantic Monthly entitled "The Road to Peace." He excused Germany's secret rearmament as an action to take back their freedom. Knowing what he did about Inco and Germany's munitions industry, Dulles mislead the readers in asserting Germany's, Italy's, and Japan's desires for peace. Later in the 1930s, Dulles helped organize the American First group. A month before Pearl Harbor, he donated $500 to the group. Later, he would claim no association with the group.84 Dulles continued his support of the Nazi line right up to the time Germany invaded Poland. Dulles' excuse for the Poland invasion was much like blaming the victim for the crime.

After the bombing of Pearl Harbor, John Foster Dulles wrote the company policy for Sullivan & Cromwell on the rehiring of those who had join the army to fight. This policy refused to guarantee that employees could return to their former positions. Nonetheless, more than half of the firm enlisted including four partners and thirty-five associates. Many of the enlistees were assigned top-level positions in the OSS. In an act of poetic justice, Dulles' policy to refuse to guarantee the enlistees' jobs upon their return from service came back to haunt him in his 1950 race for the Senate and figured prominently in his defeat.85

With the outbreak of WWII, John Foster Dulles' image was severely tarnished by his praise of Nazi Germany. Throughout the war, he stayed home and used sanctimonious pronouncements to rebuild his image. However, he did not give up his secret Nazi ties.

The most significant action of Dulles took during the war crippled America's war effort severely. The military depended upon diesel motors for trucks, tanks, submarines, ships, and aircraft. There was no substitute for the direct fuel injection in diesel engines. While the United States plotted to bomb Nazi diesel plants in Germany, the legal maneuvers of John Foster prevented America from manufacturing more efficient diesel engines at home.

In 1934, Dulles handled the legal end and George Murnane handled the operational end. Together they fabricated a deal in which Bosch sold its international interests to the Mendelssohm company of Amsterdam with a right to repurchase them at a later date. In 1935, Murnane joined the board of directors of the American Bosch Company. Fritz Mannheimer, the head of Mendelssohn, was a German agent. In 1937, Murnane became chairman of the board at American Bosch. Through this period, the American Bosch Company tried to get the German company to reduce the five-percent royalty it paid. To induce the German company to agree, American Bosch volunteered information about costs, selling prices and other competitive data. The Nazi government was delighted in the exchange of data because it provided them with a blueprint of American war production prior to the United States' entry into the war. As war approached, the Nazis sought to further camouflage the true owner of American Bosch and another sale was arranged by Dulles and Murnane to the Wallenbergs of Sweden. Besides the critical fuel injectors, Bosch also produced walkie-talkies for the Third Reich.

To further conceal German ownership, Dulles fabricated a maze of corporations that seemed American without transferring power outside of Germany. He had the Wallenbergs put their shares in Providentia, a Delaware corporation. Dulles was the sole voting trustee of the corporation and had full authority to dispose of the shares.

In July 1941, the Navy Department approached American Bosch on behalf of Caterpillar with the intention of manufacturing diesel equipment. American Bosch responded that it was willing to modify its exclusive rights; however, the corporation's rights were indivisible and thus the company was unable to grant the request.

In May 1942, American Bosch was confiscated under the Alien Property Custodian Act. A secret government document dated October 11, 1944, concluded that Dulles must have certainly known that American Bosch was German own.86 Nevertheless, Dulles was successful in delaying the widespread manufacturing of diesel engines for five years during the critical period when America sought to rebuild its military might.

The Justice Department's antitrust lawyers found that other Sullivan & Cromwell clients were prominent causes of bottlenecks in war production. Prosecution, however, had to be delayed until the end of the war; otherwise war production would have suffered adversely. In 1946, the chemical companies signed a consent decree paying a minimal fine of five thousand dollars. A list of those who faced or signed consent decrees reads like a list of Fortune 500 corporations, including Allied Chemical, American Agricultural Chemical, and Merck.

The question of how extensive the work of John Foster Dulles acting, as a middleman in setting up deals between the rich and the Nazis cannot be answered with any great certainty. However, Ronald Pruessen assembled documents from the State Department, in which Dulles acted as a fixer or middle man that indicates the total was more than one billion dollars. It is important to note that the total is only for deals, which Prussen uncovered and that it is a floor value. The total is mostly likely greater as it is unlikely that the State Department would have been aware of all of Dulles's deals.114

While today a single B-2 bomber costs more than one billion dollars, it is important to put the value of a billion dollars in the 1930s into context. The table below list the gross domestic product and the gross domestic private investments throughout the 1930s.








































GDP= Gross Domestic Product, GPDI= Gross Private Domestic Investment
Numbers given in Billions

One billion dollars during the 1930s ranged from ten percent to a high of two percent. Moreover, it ranges from ten percent to one hundred percent of the money domestically invested in the United States by the private sector. The money Dulles siphoned from the American economy to invest in Nazi Germany undoubtedly prolonged and deepened the depression. To put it onto another perspective, in 1940 the Nazi war machine's budget was about five billion marks, in effect the amount of money Dulles had invested would have been enough for almost an entire year for the Nazi war machine.

Likewise, Commerce Department records shows that investments in Germany increased 48.5% from 1929 to 1940.17 Additionally many U.S. firms bought direct interest in German firms and in turn plowed the profits back into the Aryanization (seizing of Jewish firms) or arms production. Among those firms are International Harvester, Ford, GM, Standard Oil of New Jersey and du Pont.

In the 1944 election campaign, Dulles advised Dewey to reject the issue of deploying U.S. troops under the command of the United Nations (note this does not refer to the present UN, but refers to the nations united in the war) causing a break in allied relations. Dulles was also responsible for the extremist remark in Dewey's campaign that FDR had weakened the Democratic Party so badly that it was readily subject to capture by communist forces. Dulles also wanted to charge FDR with un-preparedness in the bombing of Pearl Harbor. However, cooler heads prevailed with George Marshall contacting Dewey and advising him on not revealing the secret of Magic.87

Besides his close ties with Dewey, John Foster Dulles wormed his way into Republican politics by befriending Arthur Vandenberg, a staunch isolationist from Michigan. Vandenberg collaborated with Dulles on the foreign policy portion of the Republican platform in 1944. It was at Vandenberg's insistence that Dulles accompanied him to the San Francisco organizing meeting for the United Nations. Dulles promptly leaked information to the press on the bipartisan agreement poisoning the agreement and negotiations.

In the 1950s, John Foster Dulles testified at the first Hiss trial that he had asked Hiss to accept the position of president of the Carnegie Endowment for Peace. However, in the second Hiss trial, Dulles denied his previous testimony. Instead of Dulles being charged with perjury for the inconsistency of his testimony in the two trials, the inconsistency was blamed on Hiss.

Dulles was also instrumental in getting Eisenhower to run on the Republican ticket for president at the urging of General Clay. Dulles had lost his earlier chance to become secretary of state in Dewey's lost and was eager for a second chance. Before leaving for Europe to meet with Eisenhower, Dulles studied Eisenhower's background carefully. He learned that Ike was extremely popular with the public and was well known for his aversion to American casualties but was viewed as weak on foreign policy. Dulles flew to Europe to meet with Eisenhower. Dulles played on Eisenhower's aversion to American casualties during the Paris meeting by claiming that the modern strategy of maintaining peace was through massive retaliation with nuclear warheads to frighten enemies from attacking and keeping American boys from dying. Eisenhower was impressed with Dulles views and foreign policy was never discussed.88 The meeting cinched Dulles appointment as secretary of state in the Eisenhower administration.

In essence, the person who arranged more deals with the Nazis than any other person had hand-selected the next American President and appointed himself as secretary of state.

In 1951, the Federal Trade Commission produced a 400-page secret report which detailed the history of collusion in the oil market and exposed its cartel agreements around the globe. However, it wasn't until 1952 that an internal Justice Department memo noted the existence of cartel agreements that violated U.S. anti-trust laws among the seven largest oil companies. The delay was beneficial to the oil companies since the incoming Eisenhower administration was friendlier to business than the Truman administration.

On January 11, 1953, the Justice Department offered to drop criminal charges and only press a civil suit if the oil companies would produce the documents requested for the criminal case. Arthur Dean, the attorney for the oil companies refused the offer. Dean was another Sullivan and Cromwell lawyer.89 It was imperative that the oil companies avoided the court. Once in court, the Nazi dealings of Standard Oil of New Jersey and other oil companies during the war would have been exposed. Later in the Eisenhower administration, Dean was chosen to negotiate the return of POWs in Korea.

Both Dulles brothers played a role in obstructing the Standard case before the courts. Using the National Security Council, John Foster Dulles used the agency to screen evidence and segregate from public disclosure evidence that he viewed as having national security implications.

The Eisenhower administration was packed with Sullivan & Cromwell employees. Another Sullivan & Cromwell lawyer, Norris Darrell wrote the Internal Revenue Code of 1954.

As Secretary of State, Dulles used Sullivan & Cromwell to help carry on his support for former Nazi businessmen. He supported, the Republican Senate leader Everett Dirksen's bill to return all property held by the Alien Property Custodian to its previous owners. The value of the property confiscated was worth up to $200 million dollars. The former allies were horrified of the proposal. Releasing the property would have returned the property to the Nazis and their collaborators. Holland held $100 million dollars confiscated from the Nazis, a small fraction of the damage they had done.

Dulles tried to get the attorney general to postpone the sale of the Hugo Stinnes Corporation, which held assets of the coal king of the Rhur. Since, anyone legally could bid on the property, Dulles the bidding in such a way only Germans could bid arranged through Arthur Dean. There was only one bidder, the Deutsche Bank of Frankfurt. The role that Dean and Dulles performed in the sale still remains classified.90

The Dulles brothers used their positions at Sullivan & Cromwell to rise not only to prominent positions inside the United States, but also to key positions that aided their financing of Hitler's war machine. John Foster Dulles became a director of I.G., while his brother Allen was of the board of a leading German bank that became closely associated with the Nazis. Both were masters at drawing up arrangements to conceal the involvement of American corporations with the Nazis. Following WWII, as head of the CIA, Allen Dulles was in an ideal position to continue the cover-up of American corporate involvement with the Nazis, as well as helping scores of Nazi war criminals escape justice.

Following the first war, many large American investment firms and corporations invested heavily in Germany. In return for their dollars, they received bonds backed by shares in a Swiss holding company that owned shares in German banks. The banks in turn held shares in major German corporations that owned some of the world's most valuable patents. The German banks in effect held a world-wide monopoly on high-technology. (Note high-technology is used in the context of the time and refers to the chemical industry.) There was even talk of setting up a world-wide patent cartel in Germany so American investors could escape U.S. anti-trust laws.

The Dulles brothers were also the masterminds behind the Dawes Plan, which had the support and backing of J. P. Morgan. Under the Dawes Plan, the United States lent Germany money to pay its international reparations to England and France. In turn, England and France repaid the United States. For a while this financial merry-go-round was successful and the Dulles brothers' clients reaped a financial windfall. From 1924 to 1931, Germany paid the Allies about 36 billion marks in reparations, but received about 33 billion marks borrowed under the Dawes and Young Plans. This resulted in the burden of German reparations being shifted to the buyers of German bonds sold by Wall Street firms at hefty commissions.

Besides the significant involvement of the Dulles brothers and J.P. Morgan, the General Electric corporation played a tremendous role in the Dawes Plan and the Young Plan. Owen Young, author of the Young Plan, was a member of GE's board and part of the brain trust behind the Dawes Plan. General Electric had considerable investments in Germany and benefited immensely from the Young Plan.

To fully understand its involvement in both ill-conceived German bailout plans, one must look at GE's management. Gerard Swope, president of General Electric, and Walter Rathenau, a managing director of GE's German subsidiary, opposed free enterprise. Rathenau's view of the inter-war period's new political economy are summed up in this quote:

"The new economy will, as we have seen, be no state or governmental economy but a private economy committed to a civic power of resolution which certainly will require state cooperation for organic consolidation to overcome inner friction and increase production and endurance."72

It is obvious from the quote that Rathenau believed that the ultimate power should be held by corporations and that the government's only function was to pave the way for corporate rule.

Swope's held similar beliefs. He called for an anti-trust law exemption for the electrical manufacturing industry. In 1931, Swope proposed the formation of trade associations resembling cartels governed by a central quasi-governmental agency. Such laws would only serve to limit competition, as did the cartels and trade associations of Nazi Germany.

Between the cartel agreements of I.G. and the monopolistic behavior of our own robber barons, the Dulles brothers had no shortage of investors willing to invest in Germany. In 1940, Professor Gaetano Salvemini of Harvard was quoted as saying that 100 percent of American big business was sympathetic towards fascism. Corporate America's support for fascism was so great that U.S. Ambassador to Germany William Dodd proclaimed:

"A clique of U.S. industrialists is hell-bent to bring a fascist state to supplant our democratic government and is working closely with the fascist regime in Germany and Italy." 21

Americans have never been told the truth about the extent of corporate America's involvement with the Nazis. The media has spoon-fed Americans into believing that only a handful of companies traded with the Nazis. Nothing could be further from the truth. In reality, well over 300 American corporations were arming Nazi Germany during the war in violation of the law.

Many of these corporations took extraordinary steps to maintain communication with their German offices and to conceal their Nazi involvement from the U.S. government. They could have severed all links with Nazi Germany, but instead chose to continue support a regime at war with their own country. In doing so, these corporations became willing accomplices to the Holocaust, traitors to their country and guilty of war crimes. Those responsible for such actions and crimes should have received justice at the end of a hangman's noose. Sadly, none were even charged.

Even the bluest of the "blue chips," IBM, actively sought business with the Nazis during the war. Dehomag, IBM's German subsidiary, supplied the Hollerith machines that played a prominent role in the Holocaust. Without Hollerith machines the efficiency with which the Holocaust was carried out would have been impossible. The roundup of the Jews would have been slowed to a snail's pace by forcing the Nazis to divert additional manpower to the task of locating their Jewish victims. Hollerith machines were located in every concentration camp and were serviced by Dehomag representatives under the full appraisal of the New York office.

The inclusion of IBM provides a look at the mindset of corporate America. Edwin Black's IBM and the Holocaust details the ruthlessness of corporate America in its pursuit of profits. 22 When the Nazis came to power, IBM was under the direction of Thomas Watson, who actively sought out a contract to provide the equipment for the Nazi census.

Up until then, Watson's career had been less than ethically stellar. Watson learned his business skills from John Patterson, the ruthless founder of the National Cash Register (NCR). Watson rose quickly in the ranks of NCR, learning to use frivolous lawsuits against competitors, as well as the threat of lawsuits against competitors' customers. At NCR, Watson was placed in charge of driving out competitors selling used equipment. He quickly adopted the tactics of the robber barons to establish a monopoly by using predatory pricing, threats of lawsuits, bribes and even smashed storefronts. On February 22, 1912, Watson was indicted for criminal conspiracy to restrain trade and found guilty. 23

The criminal behavior and lack of ethics illustrated by Watson's early career was pervasive between the wars. When the Nazis seized power, Watson saw an opportunity to expand in Germany. In the depths of the Great Depression, Watson increased IBM's investment in Germany by nearly a million dollars. Even more gratifying was the secret pact Watson concluded in October, 1933 which gave Dehomag commercial powers beyond the German borders. Previously, all IBM subsidiaries had been confined to a single country. With Dehomag now established as the defacto "IBM Europe," the Nazis were able to conduct statistical services throughout Europe. In effect, Watson had established a cartel much like I.G. Farben's.

In an attempt to justify Watson's, and IBM's dealings with the Nazis, many suggest that Watson was not a fascist, but simply a ruthless businessman. Evidence, however, suggests that if Watson was not a fascist, he was at the very least a great admirer of fascism. At a 1937 sales convention Watson said:

"I want to pay tribute(to the) great leader, Benito Mussolini. I have followed the details of his work very carefully since he assumed leadership. Evidence of his leadership can be seen on all sides. Mussolini is a pioneer.... Italy is going to benefit greatly."26

This is not the only evidence of Watson's support and admiration for fascism. He also had an autographed picture of Mussolini hanging in his living room for years. Watson was quoted saying:

"we should pay tribute to Mussolini for establishing this spirit of loyal support." 26

In a private letter to Reich Economic Minister, Hjalmar Schacht, Watson wrote:

"the necessity of extending a sympathetic understanding to the German people and their aims under the leadership of Adolf Hitler. 26

Watson wrote the letter years after Hitler seized power, and described Nazi aggression toward neighboring countries as a dynamic policy. The letter ended with:

"an expression of my highest esteem for himself (Hitler), his country and his people." 26

While Watson's praise for Hitler and Mussolini do not supply definitive proof that Watson was a fascist, it certainly confirms the conclusion of Harvard professor, Gaetano Salvemini, that corporate America was in sympathy with fascism.

Before the ink was dry on the Treaty of Versailles, American corporations were rushing to invest and support Germany. The first to support what became the Nazi line was Henry Ford. In the early 1920s, Ford began publishing an anti-Semitic newspaper. Ford was also an early financial supporter of Hitler at a time when the Nazis were virtually unknown.

Another early backer of Hitler and the Nazis were the du Ponts. The power behind the du Pont throne in the 1920s was Irenee du Pont who, like Ford, was a supporter of Hitler before he was known outside Munich. Irenee du Pont followed Hitler's career avidly from the early 1920s on. Du Pont representatives traveled to Germany almost immediately after the armistice to renew their alliance with I.G.

In November 1919, mere months after the armistice was signed, representatives of du Pont and the Badische Company, the principal corporate identity of I.G. Farben in Switzerland, worked out a tentative agreement for the organization of a global corporation to exploit the Haber process for ammonia and nitrate production. Du Pont also sought technical help in the dyestuffs industry. Although a complete agreement was never reached on a grand alliance, the relationship between du Pont, Verinigte Koln-Rottweiler Pulverfabriken (VKR) and Dynamit Aktiengesellschaft (DAG) became closer. At one point, du Pont had roughly three million dollars invested directly in I.G. Farben 24

The most notable aspect of the November 1919 meeting and tentative agreement was the lightning speed with which the German cartels reestablished control over the all-important Haber process for ammonia and nitrate production. All parties had a stake in completing the agreement behind closed doors, since the very nature of the agreement was in violation of the armistice. For Germany, it meant control over explosives and fertilizer production, freeing the country from dependence on Chilean nitrates. For du Pont, it was a matter of profits. Before WW II, one of the most profitable periods for du Pont was WW I. During that war, du Pont's profits rose to $230,000,000. The profits from the war were used to buy a controlling share of General Motors. 27

On January 1, 1926, an agreement between du Pont, VCR and DAG was consummated, and was similar to the agreement of the same date between du Pont and Imperial Chemical Industries of Britain. This agreement, debated at length in the 1934 Nye Committee hearings, was found unsigned in du Pont files. It was a gentlemen's agreement detailing exchanges of patents and technical information that could be denied if discovered. In defiance of the Treaty of Versailles banning German companies from selling military explosives, the agreement provided a means by which du Pont could sell German produced explosives. The Nye report provides the best summary of the agreement:

"In other words, though German munitions companies cannot sell abroad, American companies can sell for them, and to our own government at that." 25

In effect, the agreement between du Pont, DAG and VCR reestablished the pre-war cartel between du Pont, Koln-Rottweiler Pulverfabriken and the British Nobel Dynamite Trust. Under the pre-war agreement, du Pont agreed not to erect any powder works in Europe, and the other signers agreed not to erect powder works in the United States. Technical information was exchanged among the signatories, and du Pont agreed to inform the others of the quantity, quality and requirements of all powder sales to the United States government. In 1910, the Justice Department found the agreement to be a violation of anti-trust laws, resulting in the breakup of du Pont powder works and the formation of Atlas Powder and Hercules Powder. Within a few years of the 1910 ruling, du Pont reorganized in Delaware because to the state's lax regulations of corporations.

An agreement between du Pont and Dynamit in 1929 controlled the production of tetrazine, a substance for greatly improved ammunition primers. When WWII began in 1939, Remington (controlled by du Pont) received huge British ammunition orders. Because of a clause in the agreement with I.G. Farben the British received an inferior cartridge lacking tetrazine. 34


Part 3: The Great Paper Shuffle & The Cartels

The Germans reestablished control over dyestuffs and pharmaceuticals with almost the same lightning speed with which they regained control over the Haber process. Under the Alien Property Custodian Act, Bayer's operating units and patents were sold to Sterling Products. Sterling later sold the dyestuff business to Grasselli Chemical Company. Such a transfer of ownership would have been a move in the right direction if it had not been for one disturbing factor: Grasselli Chemical Company employed many former Bayer personnel who supported Germany during the war. For instance, Rudolph Hutz, the former manager of Bayer interned during the war, became general manager at Grasselli.

In 1920, Bayer made an agreement with Sterling covering patents and trademarks. Then, in 1923, Bayer entered into an agreement to control Grasselli although Grasselli still held 51 percent of the stock. On March 23, 1925, Grasselli and Bayer entered into an agreement with Hoechst Company in which Grasselli's ownership was reduced to 35 percent. On October 20, 1928, Grasselli sold its dyestuff business to I.G. Farben. Three days later, du Pont bought out Grasselli Chemical.

The example of Grasselli Chemical illustrates some of the tactics employed by I.G. Farben. An endless paper shuffle resulting in the transfer of ownership (in name only) while retaining the same personnel was common to many post-WWI deals. Deals where the American firm retained 51 percent ownership made it appear to regulators that the American firm was in control. In reality, I.G. Farben retained ultimate control over pricing, plant expansion and export policies.

The paper shuffle of Grasselli Chemical's dyestuff business did not end with the 1928 sale to I.G. Farben. In 1929, I.G.Farben merged the majority of its interests in the United States into an umbrella company, American I.G. Under this umbrella corporation were Grasselli Dyestuffs, General Aniline, Agfa-Ansco, Winthrop Chemical, Magnesium Development and others. In April 1929, $30 million dollars of American I.G. debentures were offered to investors; within an hour of their release, the offering was oversubscribed. The agreement between Magnesium Development and I.G. Farben would figure prominently at the onset of WWII in delaying the production of aircraft.

Sterling Drug was part of the maze of front companies that I.G. Farben and Bayer used to regain control over assets seized during the war. In 1918, the Alien Property Custodian sold Bayer at a public auction. Sterling was the winning bidder at $5.31 million dollars. Earl McClintock, a staff attorney for the Alien Property Custodian, arranged the details of the sale. One of the first acts of Sterling was to hire McClintock at more than three times his government salary.

Law governing sales by the Alien Property Custodian penalized a purchaser acting for an undisclosed principal or reselling to or for the benefit of a non-U.S. citizen with a $10,000 fine, 10 years imprisonment, or both. The purchaser would also forfeit the property to the United States government.31 The sale of Bayer to Sterling clearly fell within the scope of the law.

The original contact between Sterling and Bayer remains secret. It is, however, well-established that months after the purchase, Sterling president William Weiss met with Bayer executives in Baden Baden. An informal agreement of cooperation was reachedand shortly afterwards Sterling formed Winthrop Chemical. In 1923, Winthrop entered into a cartel agreement assigning itself all of Bayer's patents. Once again, the familiar 50-50 split was part of the agreement.

In 1925, I.G. Farben and Sterling-Winthrop brought Metz into the Sterling orbit. The result of all of the stock transfers and paper shuffling was that I.G. Farben regained control of the U.S. pharmaceutical business for a mere two million dollars.

The Hoechst-Metz Company was also seized by the Alien Property Custodian. Metz claimed that he had bought back the assets of the company, but it was commonly believed to have been a dubious stock transaction. In 1921, a court ruled in favor of Metz. In his bizarre rambling ruling, Judge Julius M. Mayer said:

"As seizure by the Alien Property Custodian is likely to carry the suggestion to those not informed in respect of the controversy, that the demandee (Metz) in some manner may have been improperly associated with the enemy, it is desirable at the outset to state that no such situation exists here. The Transactions here took place long before our entry into the war and indeed before the European war started and had no relations to either. That Metz should deliberately by his testimony falsify the true transaction is not to be thought of. Stock ownership would not affect the apportionment of profits. This testimony of Hauser can only be rejected upon the theory that both Hauser and Metz have willfully deceived the court by false testimony."35

Shortly after the ruling, the Harding administration appointed Judge Mayer to the Federal Circuit Court. What Mayer lacked in legal acumen was offset by his political correctness for the time. Mayer ordered the deportation of Emma Goldman, ruling that aliens had no rights under the Constitution. In another ruling, Mayer found Scott Nearing innocent of obstructing the war. Nearing had written a pamphlet about the relationship between big business and war. However, Mayer found the American Socialist Party, which had published the pamphlet guilty of the obstructing the war. Such a ruling was a slight of hand by the judge. If he had found Nearing guilty, it would have constituted a violation of his free speech rights. On the other hand, as an organization the American Socialist Party lacked free speech rights. Other victims of the good judge were IWW members, who could expect to receive the harshest sentences possible in Mayer's courtroom.

Judge Julius Mayer's rulings were a reflection of the prevailing attitudes and beliefs of the days' business leaders. His rulings were extremely pro-business and anti-union. He showed no tolerance for those that held political beliefs different from his.

George Sylvester Viereck and his Burgerbund campaigned extensively for the election of Harding. Following the election Viereck demanded a political payoff. Harding was noncommittal.91Viereck would become the man behind the notorious Nazi publisher Flanders Hall and would be indicted for sedition.

By 1925, I.G. Farben had established powerful allies inside the Republican administration. The then Secretary of Commerce, Herbert Hoover, appointed a nine-member board, Hoover's Chemical Advisory Committee. Seated on the committee were Walter Teagle (Standard Oil of New Jersey), Lammot du Pont, Frank Blair (president of Sterling Drug) and Henry Howard (vice-president of Grasselli). Despite the extensive ties these four had with I.G. Farben they sat on a committee whose role was to help America's chemical industry fight off the I.G. Farben cartel.37

In 1928, Weiss brought the entire drug industry together in one giant cartel. With Louis Liggett, he put together Drug, Inc., a holding company for Sterling-Winthrop. Drug's properties included United Drug, Ligget, Bristol Myers, Vick Chemical and Life Savers. The Vick Chemical company was controlled by the Richardson family. The Richardson Foundation is one of the many hard-right foundations that promoted the impeachment of President Clinton.32

Liggett was the Republican National Committeeman from Massachusetts and had made the false claim that, under President Coolidge, the Department of Justice had approved the creation of Drug, Inc. It wasn't until 1933, after Hoover was booted out of office, that Drug, Inc. was dissolved.

Also tied to the illegal cartel of Drug, Inc. was the notorious Dr. Edward Rumely. Rumely was imprisoned for pro-German activities during the war and was released from prison by Coolidge. He then went on to become director of Vehex Inc., another corporation formed by Weiss.

Throughout the maze of paper shuffling and stock transfers, the accounting firm of Price Waterhouse collected fat fees for auditing the books of two of I.G. Farben's American affiliates, Sterling and Standard Oil of New Jersey.33 Audits from Price Waterhouse helped sanitize the records of Drug, Inc. and other IG Farben front companies

Ted Clark was vice president for government relations of Drug, Inc. from 1929 until it was dismantled. Clark was President Coolidge's private secretary. While on Drug, Inc.'s payroll, Clark also served a short time as Hoover's secretary, during an absence of Hoover's regular secretary. In 1942, Clark's files were suddenly withdrawn from auction and donated as a sealed gift to the Library of Congress. Those who had seen the files prior to their sealing noted correspondence with Col. William Donovan, Coolidge's assistant attorney general, and Charles Hilles, former chairman of the Republican National Committee and close associate of the Morgans.

The timing of the file withdrawal appears highly suspicious. Donovan was closely involved with both Drug, Inc. and I.G. Farben. He became director of the OSS in June 1942 about the time the files were sealed.36 Donovan spoke patronizingly towards I.G. Farben at Hoover's second conference on the chemical industry:

"So far as it presently appears, the so-called chemical entente and Franco-German dyestuff agreement appear to involve no attempt to exploit this market. In fact, we have authentic assurances that these arrangements are not directed against the market."38.

I.G. Farben had learned its lessons well during the first war. Its American interests were vulnerable to seizure at wartime. In a move that should have set off an alarm about Germany's intentions towards war, I.G. Farben made an effort to conceal its ownership of American I.G. further. Even with Walter Teagle, president of Standard Oil of New Jersey, and Edsel Ford on its board of directors, American I.G. was vulnerable to seizure if war broke out. With a sleight of hand, American I.G. assets were transferred to a German-controlled corporation based in Switzerland, Internationale Gesellschaft fur Chemische Unternehmungen (I.G. Chemie). It was loudly proclaimed from then on that American I.G. was Swiss-controlled, and free from German interests, even though, until 1940, the president of I.G. Farben, Herman Schmitz, was also president of I.G. Chemie.28

The ruse of concealing German control through various Swiss concerns soon became a favorite tactic of I.G. Farben. With the storm clouds of war on the horizon by the late 1930s, it also became a favorite tactic of the Dulles brothers in helping American investors conceal their dealings with the Nazis.

Another German firm seized during WWI was Rohm & Hass, which was sold to Tanner's Products. The tanning industry at the time played an important role in support of war-related chemical facilities. In 1924, the original German owners regained control. Technically, Rohm & Hass of Philadelphia was independent of Rohm &Hass of Germany; they were merely owned by the same stockholders. In 1927, the two firms reached an agreement regarding the division of territories. The agreement was typical of German cartel arrangements in that it restricted American companies from South America and Europe, granting those areas to the German corporation.

During the 1920s and 1930s, Rohm and Haas' primary business was producing general chemicals, in particular methyl methacrylate, Plexiglas. By 1934, Plexiglas reached commercial practicability and a new agreement was reached between I.G. Farben, Rohm and Hass of Philadelphia, and Rohm and Hass of Germany . Rohm and Haas of Philadelphia's territory was further restricted, and it was prohibited from entering six business areas: photography, dyestuffs, artificial rubber, pharmaceuticals, abrasives and celluloid masses.

In 1939, Rohm & Haas cross-licensed its process for making cast sheets of methyl methacrylate to du Pont. However, under the terms of the license, du Pont's production would be limited to half of Rohm & Haas' production. By 1940, the market for methyl methacrylate had exploded because of wartime applications. Du Pont was receiving enormous orders for Lucite and Plexiglas that far outstripped the restricted production agreement. On August 10, 1942, a grand jury indicted both Rohm & Hass and du Pont for restricting the production of war munitions.

Besides producing methyl methacrylate for airplane canopies, Rohm and Haas also produced Tego glue film. Tego glue film was needed to produce the plywood used for aircraft and marine vessels such as PT boats. Once again, Rohm and Haas had a production agreement with a German firm covering Tego, Theo Goldschmidt.

There are literally thousands of examples of I.G. Farben and other German firms regaining control over vital industrial processes in the 1920s. Among the most startling were two areas in which American industry dominated: aluminum and magnesium.

In 1907, the Pittsburgh Reduction Company reorganized as Alcoa. Alcoa was closely held by the Mellons, the Davises and the Hunts. Alcoa held two patents for the production of aluminum: the Hall Patent, which expired in 1906, and the Bradley Patent, which expired in 1909. Theoretically, the expiration of the patents would have allowed others to enter the aluminum business. In order to retain its monopoly after 1909, Alcoa took steps to ensure its control over the aluminum market by buying up the raw bauxite supply. Until 1915, Alcoa was a member of every world aluminum cartel.

By 1928, Alcoa owned 32 subsidiaries including railroads, bauxite mines, fabricators, and power companies both in and out of the United States such as Duke Power of Canada. Additionally, Alcoa controlled more than 20 other companies.

Alcoa created the Aluminum Company, Ltd. of Canada (Alted) in 1928. In this move Alcoa sold its subsidiaries all its foreign properties with the exception of its Dutch Guiana bauxite mines. The controlling interest of Alted remained the same, and E.K. Davis was appointed president. The creation of Alted was a ruse used by Alcoa to retain its monopoly. It also freed Alcoa to enter into additional European cartel agreements through its Alted subsidiary. When the war clouds appeared and the United States began a defense build up, the end result of Alted's creation became apparent: the United States was no longer the world's largest aluminum producer; Germany was now number one.29

Intertwined with Germany gaining control over the aluminum industry was its control over magnesium, another industry in which America was either dominant or competitive with Germany by the end of WWI. Magnesium is vital to munitions and is used in tracer bullets, flares and incendiary bombs. Also, magnesium alloys are indispensable in aircraft production. During the first war, eight American companies produced magnesium.

With the end of the war and the reduction in magnesium demand, only two companies stayed in the business: Dow Chemical and American Magnesium Company (AMC). AMC was a wholly owned subsidiary of Alcoa. In 1931, Alcoa and I.G. Farben penned the Alig Agreement, which became the charter of the magnesium industry. Once again, the agreement formed a joint company with each firm holding a 50 percent share. In addition, the shareholders of I.G. Farben held the right to limit the production capacity of any producing company in the U.S. and restrict total U.S. production to 4,000 tons per year.

In 1933, after continued pressure from AMC, Dow affirmed AMC as its preferred customer. In 1934, I.G. Farben entered into an agreement with Dow to purchase 600 tons of magnesium in 1935, with options for the same amount in 1936 and 1937. Under the agreement, Dow was restricted from selling in Europe with the exception of sales to I.G. Farben and British Maxium. Under this arrangement, Dow sold magnesium to I.G Farben at 20 cents per pound, 30 percent less than it charged American companies.30

The above cartel agreements are only a few examples. A complete accounting of all cartel agreements and how they hindered the war effort, would fill volumes. More than one hundred American corporations had cartel agreements with I.G. Farben. None of the agreements were legal under US trust laws, as all monopolized or restricted trade. Additionally, many were illegal under Alien Property Custodian laws since they transferred control to I.G Farben and other German corporations seized during WWI.

Besides hindering the war effort at home, once war broke out in Europe, cartel agreements had an enormous impact on global geopolitics. Almost all cartel agreements banned American corporations from South America. Germany didn't need to fight for South American markets; American businesses willingly handed them over to I.G. Farben when they signed the cartel agreements. It was only after war broke out that American corporations were allowed to expand their markets into South America, and then often only to German firms already there.40

It was through these South American outlets that American corporations continued to supply Nazi Germany during the war. They served as the method of choice to circumvent the British blockade. By using a South American firm, either under the control of I.G. Farben or one of its American cartel partners shipments to Germany were first exported to a so-called neutral country such as Spain or Switzerland and then on to Germany. It was through a South American subsidiary that Standard Oil of New Jersey continued to supply Nazi Germany with oil and munitions. Standard Oil of New Jersey also distributed pro-Nazi propaganda throughout South America during the war.

Corporate apologists try to dismiss these cartel agreements simply as good business practices. However, legal documents from I.G. Farben suggest they were an integral part of Germany's war plan. The following excerpts from its legal department leave no doubt as to I.G. Farben's plans:

...After the first war we came more and more to the decision to tarn (German for hood or camouflage) our foreign companies in such a way that participation of I.G. in these firms was not shown. In the course of time the system became more and more perfect."
...If the shares or similar interests are actually held by a neutral who resides in a neutral country, enemy economic warfare measures are ineffectual; even an option in favor of I.G. will remain unaffected."
...Protective measures to be taken by I.G. for the eventuality of war should not substantially interfere with the conduct of business in normal times. For a variety of reasons it is of the utmost importance that the officials heading the agent firms, which are particularly well qualified to serve as cloaks, should be citizens of the countries where they reside."
...In practice, a foreign patent holding company could conduct its business only by maintaining the closest possible relations with I.G., with regard to applications, processing and exploitation of patents it is sufficient to refer to experience."

The adoption of these measures would offer protection against seizure in the event of war.

...In the case of winning this war the mightful situation of the Reich will make it necessary to re-examine the system of Tarnung. Politically seen, it will often be wished that the German character of our foreign companies is openly shown."

After the outbreak of war, I.G. legal department continued discussing tarnung.

...Only about 1937 when a new conflict became apparent did we take pains to improve our camouflage in endangered countries in a way that they should, even under wartime difficulties, at least prevent immediate seizure."
...Camouflage measures taken by us have stood us in good stead, and in numerous cases have even exceeded our expectations."41

The excerpts above leave little doubt as to the intentions of I.G. Farben and the central role it played in Germany's quest for world domination. A Treasury report on espionage and saboteurs made in 1941-1942 is equally vivid:

"In the twenty year period between 1919-1939, German interests succeeded in organizing within the United States another industrial and commercial network centered in the chemical industry. It is unnecessary to point out that these business enterprises constituted a base of operations to carry out the Axis plans to control production, to hold markets in this Hemisphere, to support fifth column movements, and to mold our postwar economy according to Axis plans. This problem with which we are now faced is more difficult than, although somewhat similar to, the problem faced by us in 1917. The background is vastly different from that which existed in 1917.
Certain individuals who occupied a dominant place in business enterprises owed all of their success to their business contacts in the past with I.G. Farben."42

The Treasury report went on to discuss I.G. Farben's the practice of sending spies and agents into the United States to become citizens. The report also discusses the necessity of dismissing, as spies or agents of the Nazis, one hundred American citizens from General Aniline, including five key executives .

I.G. Farben's employment of spies, and its relationship to the Gestapo, were made vividly clear to Congress months before the bombing of Pearl Harbor. Richard Krebs, former Gestapo agent, testified before the Dies Committee on Un-American Activities. Later chapters will discuss how the Dies Committee subverted the investigation of Nazis.

Krebs testified at length, from his personal knowledge of German cartels, about the organization of Nazi propaganda, espionage and sabotage in the Western Hemisphere. In his testimony, Krebs stated that Hamburg-American Lines and Zapp Transocean News Services were nothing more than appendages of the Gestapo. Krebs detailed how businesses in the Untied States employed Gestapo agents, and how those agents were placed in other firms that were not a part of pro-Nazi cartels.

Krebs' testimony revealed that the Gestapo's Industrial Reports Department had special schools to train Germans and Americans of German descent to work in America as mechanics, engineers, draftsmen, newsmen and even teachers. Krebs specifically stated the relationship of I.G to the Gestapo was to obtain information. An excerpt of Kreb's testimony follows:

"to obtain information about our security program and to produce choke points, or to sabotage our war efforts.
The I.G. Farbenundustrie, I know from personal experience, was already in 1934 completely in the hands of the Gestapo. They went so far as to have their own Gestapo prison on the factory grounds of their large works at Leuna, and began, particularly after Hitler's ascent to power, to branch out in the foreign field through subsidiary factories. It is the greatest poison gas industry in the world, concentrated under the title of I.G. Farbenindustrie."43

While there was less sabotage during WWII than during WWI, the new tactics were just as useful in delaying the production of war equipment and munitions. As an example, Standard Oil of New Jersey managed to delay any increase in the production of toluol until 1941 out of deference to I.G. Farben. Toluol is the vital starting material for producing both TNT and butadiene, the feedstock for the production of synthetic rubber.

There is at least one report that Standard Oil of New Jersey intended to resume its cartel link with I.G. Farben following WWII. In May 1942, Walter Winchell stated that a news broadcaster for CBS had been effectively silenced when reporting on both the Truman and Boone Committees. This broadcaster had included in his script reports that Standard Oil of New Jersey intended to resume ties with I.G. when the war ended. A CBS censor killed the item and was reported to have told the broadcaster to "go easy on Standard, you know we carry plenty of their business."44

By the time Pearl Harbor was bombed, support for fascism was widespread, especially within large corporations Some of this was the direct result of IBM President Tom Watson's tenure as president of the International Chamber of Commerce (ICC). The ICC enthusiastically promoted trade with Nazi Germany. In 1937, the International Chamber of Commerce held its world congress in Berlin, during which Schacht presented Watson with Hitler's medal. Watson later returned the medal, but only after it was clear that war was imminent.

Throughout the 1930s, several large newspaper chains were openly pro-Nazi, as were many Congressmen. By the end of 1942, the proclaimed list of blacklisted companies (Nazi front corporations in Europe and South America) grew to over 5,000.45 In the process, many American corporations were shown to be still trading with the Nazis. None of these companies would ever face charges, because by 1942 support for fascism and the corporate state was thoroughly entrenched in American corporate culture.

Support for fascism within the corporate community can be traced back to the period immediately following WWI into the 1920s. None of the cartel agreements would have been possible without the voluntary cooperation of America's corporate leaders. Many, such as du Pont, actively sought out cartel agreements following the first world war, while others, such as Standard Oil Of New Jersey, were willing to reach new cartel agreements with I.G Farben and Germany once the second world war ended. The widespread enthusiasm to enter into such agreements can only be understood by exploring the attitudes of America's corporate leaders following WWI.


Part 4: The Red Scare of 1919

The war had been good for American corporations' bottom lines, many reaped fat profits. Prices had been frozen during the war, and businesses were eager to raise prices once controls were lifted. In effect, the leaders of corporate America saw themselves as victims of the political atmosphere of the previous 20 years.

First, prices had been frozen during the war. Second, many corporations had been seized because of their illegal, trade-restricting cartel agreements with I.G. Moreover, prior to the war, corporations had suffered under the great trustbuster, Teddy Roosevelt.

In fact, leaders of corporate America were spoiling for a fight. The liberal and progressive movements that had ushered in the new century were fueled largely by the muckrakers. The press had exposed the robber barons and their practices for all to see. The attack on organized capital and the rich elite (such as Rockefeller, Morgan and Mellon) was fully justified. Their policies were universally detested and resented by the public. Naturally, corporate America resented the attacks and sought to resume business-as-usual.

However, to the leaders of corporate America, business-as-usual meant recreating the huge trusts and reestablishing their monopolies. Inking new cartel agreements with I.G. Farben was merely re-instituting their perceived right to rule the world. The similarity of the cartel agreements to the behavior of the robber barons cannot be underestimated.

At the end of WWI, the leaders of corporate America saw two threats to their dreams of grandeur looming on the horizon: organized labor and the Bolshevik Revolution. Out of these threats, the most shameful period of political repression was launched, the infamous Red Scare of 1919. Having experienced first-hand the power of the press, corporate America employed the media in a full-scale assault to regain their stature. They used the three most successful propaganda elements ever devised: patriotism, religion and communism.

Fanning Red Scare flames required the employment of every possible asset to destroy unions and the threats of both communism and socialism. The groundwork for this assault had been laid before the end of the war. J.P Morgan, according to Congressman Oscar Callaway, had purchased control over the media. Callaway inserted the following into the Congressional Record:

"In March, 1915, the J.P. Morgan interests, the steel, shipbuilding, and powder interests, and their subsidiary organizations, got together 12 men high up in the newspaper world, and employed them to select the most influential newspapers in the United States and sufficient number of them to control generally the policy of the daily press of the United States. These 12 men worked the problem out by selecting 179 newspapers, and then began, by an elimination process, to retain only those necessary for the purpose of controlling the general policy of the daily press throughout the country. They found it was only necessary to purchase the control of 25 of the greatest papers. The 25 papers were agreed upon; emissaries were sent to purchase the policy, national and international, of these papers; an agreement was reached; the policy of the papers was bought, to be paid for by the month; an editor was furnished for each paper to properly supervise and edit information regarding the questions of preparedness, militarism, financial policies, and other things of national and international nature considered vital to the interests of the purchasers... This policy also included the suppression of everything in opposition to the wishes of the interests served."73

The Morgan family, along with its allies, also bankrolled the formation of the American Legion in 1919 and crafted it into a union-busting organization of thugs. The initial operating officers of the Legion were bankers, stockbrokers and the like.

The Legion took on a fascist character almost from its birth, and would play a prominent role in the fascist plot against Roosevelt in the 1930s. In 1923, the Legion's Commander of Alvin Owsley, openly embraced Mussolini, and endorsed fascism as a viable policy for the United States. As quoted in the Journal of the National Education Association, Owsley equated the Legion in America with the Fascisti in Italy.

"...the American Legion stands ready to protect our country's institutions and ideals as the Fascisti dealt with the destructionists who menaced Italy... The American Legion is fighting every element that threatens our democratic government - soviets, anarchists, I.W.W., revolutionary socialists and every other red... Do not forget that the Fascisti are to Italy what the American Legion is to the United States."16

Additionally, the Legion took on a racist character through the 1920s and 1930s, and served as a recruiting base for the rebirth of the Ku Klux Klan. In the south, many Legion posts ran and operated as Klan cells.

This should not be taken as a besmirching of those who have honorably served their country . In fact, the disgust of many disgruntled veterans, who resented being used as cannon fodder by the wealthy elite, led to the formation of the Veterans of Foreign Wars (VFW). It was the VFW that led the fight for early payment of veterans' bonuses after the 1929 stock market crash. The American Legion stood idly by, supporting the failed policies of Wall Street and the Hoover administration.

The importance of the anti-union aspects of the Legion is apparent in the events leading up to 1919 Red Scare. By the end of 1919, the purchasing power of the 1913 dollar had shrunk to 45 cents. Food costs had increased by 84 percent, clothing 114.5 percent and furniture 125 percent. By the end of 1919, the cost of living had risen 99 percent in the preceding five years. 46 Wages during this time had risen, at most, five to ten percent for salaried employees. In fact, workers such as salaried clerks, police and others in similar positions were worse off than at any time since the Civil War.

Organized labor made substantial gains during the earlier, more liberal times with such labor-friendly bills as the Clayton Act, Seamen's Law and the Adamson Act. Membership in the American Federation of Labor had increased from approximately 500,000 in 1900 to more than four million by 1919. Unions had maintained an effective truce with management during the war, but with the war's end, unions took the offensive. Many employers were willing to grant moderate wage increases, but absolutely refused to negotiate or even acknowledge workers' rights to join unions.

President Wilson had foreseen the coming struggle of unions as evidenced in his remark to Secretary of the Navy, Josephus Daniels in 1917, just prior to the United States intervention in the war in Europe:

"Every reform we have won will be lost if we go into this war. We have been making a fight on special privilege. War means autocracy. The people we have unhorsed will inevitably come into control of the country for we shall be dependent upon steel, ore and financial magnates. They will ruin the nation."47

By late 1919, Wilson would be bedridden due to a stroke and remain ineffective for the last year of his term.

The industrialists and leaders of corporate America, however, wanted a return to "normalcy," meaning freedom from government regulation, freedom from unions and freedom from public responsibility. Thus, the stage was set for a full-scale assault against organized labor. Major strikes were frequent in 1919, with a total of 3,600 strikes involving more than four million workers. Strikers were only occasionally successful, with most ending with no concessions to labor or the unions.

Secondary to the plight of organized labor, but central to the 1919 Red Scare, were various espionage laws enacted during the war aimed at German agents and cartels. These laws would now be used against the leaders of the labor movement, and those on the left side of the political spectrum.

During the war, hysteria was whipped into a frenzy by independent agencies such as the National Security League, the American Defense Society and the government-sponsored American Protective League. These organizations converted otherwise sane Americans into raging superpatriots. More often than not, these superpatriots and their organizations were a blight on freedom, and were used by the right wing to gain and maintain power.

These superpatriot groups gathered their strength from the right-wing, not the general public, their financial support coming directly from corporations and the rich elite. The National Civic Federation received most of its support from V. Everit Macy, August Belmont and Elbert Gary. Likewise, the National Protective League was supported by T. Coleman du Pont, Henry Frick, J.P. Morgan and John D. Rockefeller.50 While the National Civic Federation was under the direction of Matthew Woll as acting president, it collaborated closely with Nazi agents in this country.62 Another group from the 1920s that underwent the transformation from a nativist group to fascism was Harry Jung's American Vigilant Intelligence Federation.67

[EDITOR: sounds like today's BS "Tea Party" Astroturf fraud]

In effect, these superpatriot groups, along with the American Legion, were bridging the chasm between the rich elite and the general population. These groups were fashioned in such a way as to appeal to a large segment of the population by invoking a false sense of patriotism, while the directors and operating officers remained fully under the control of the elite. Secondary to the patriotism of these groups was a very conservative economic agenda. With the exception of the National Civic Federation, all of these groups were virulently anti-union. The National Civic Federation included a few trade unionists on its board of directors, but still maintained an aggressive open shop policy.

In the post-war period, the membership of these patriot groups was relatively small. However, they exerted an influence that far outstripped their numbers. Their propaganda efforts were well-funded and well-organized. The National Security League sent pamphlets to schoolteachers, clergy, businessmen and government workers. In every major city, they formed a flying squadron of speakers to whip up public sentiment against radicalism. At the time unionism was regarded by these groups as radicalism.

Central to the hysteria were three federal acts. The first was the 1917 Espionage Act. This act made it illegal to convey false reports with the intent to interfere with the operation or success of the military forces of the United States, to promote the success of its enemies or to attempt to cause insubordination, disloyalty and mutiny. The second was the Sedition Act of 1918. Under the Sedition Act it was illegal to utter, print, write or publish any disloyal, profane or abusive language about the form of the U.S. government, the Constitution or the military. The third act, passed in October 1918, decreed that all aliens who were anarchists or advocated the assassination of public officials were to be excluded from admission to the United States.

While only a handful of pro-Nazis would ever face charges under these laws during WWII, thousands of individuals would be rounded up under these laws in 1919. These laws, and the plight of labor, would now play a central role in the events leading up to the mass hysteria of the Red scare of 1919 initiated by the Palmer Raids.

One of the first victims of the espionage laws was Victor Berger, one of the founders of the Socialist Party. The Socialists opposed the war, as did Berger. In 1918, Berger was arrested under the Espionage Act for his statements, some of which follows below:

"Personally, I was against the war before war was declared. But now since we are in the war, I want to win this war for democracy. Let us hope we will win the war quickly. The war of the United States against Germany cannot be justified. The blood of American boys is being coined into swollen profits for American plutocrats.48

Berger was arrested for the part of his statement that threatened the leaders of corporate America. While awaiting trial, Berger ran for his old seat in the House of Representatives, winning it back on a peace platform. In January 1919, Berger was found guilty of conspiracy to violate the Espionage Act and sentenced to 20 years at Leavenworth. His conviction was only the beginning of the destruction of the Socialist Party. Party Secretary Charles Schenck, who had ordered the printing of leaflets that discouraged enlistment, was convicted shortly after Berger of violating the Espionage Act.

Many other prominent members of the Socialist Party were arrested for violations of the Espionage Act. In June 1918, Eugene Debs delivered a scathing speech denouncing the arrests of such prominent Socialists as Charles Ruthenberg, Alfred Wagenknecht, Kate Richards O'Hare and Rose Pastor Stokes. Shortly thereafter, Debs was arrested.

The arrests of prominent Socialists were systematic, and before the hysteria of the 1919 Red Scare was over the party would be destroyed, but the war profiteers would be protected.

Closely associated with the Socialist Party in the minds of the public were members of the International Workers of the World, or the Wobblies. Founded in 1905 as a protest over the conservative American Federation of Labor, the Wobblies were aggressive in both demands and actions. Like the Socialists, the Wobblies would be singled out during the Red Scare for destruction.

Before the war's end, corporate America enlisted the press in its defense using perhaps the most effective propaganda tool available, communism. The Bolsheviks were now attacked for the Brest-Litovsk Treaty, as well as their views on capitalism. Using the wild claims of the superpatriots groups, church magazines, business and financial journals, the general press struck out against Bolshevism. The term "Bolsheviks" soon became interchangeable with criminals, German agents, anarchists, Wobblies, Socialists and economic imbeciles. In the eyes of the press, there was no difference between a Wobblie and a Bolshevik. Both were tantamount to treason.

Claims made in the press about the Bolsheviks were ludicrous. One particular horror story made the staggering claim that in Petrograd the Bolshevik had an electric guillotine that could behead five hundred people an hour. Bolsheviks were portrayed as wild, bloodthirsty murderers, and analogous to Wobblies.

Perhaps the most astounding aspect of the press' bloodletting of Bolsheviks was in supporting a U.S. intervention force in Russia. Many of the same right-wing forces within the United States that had opposed entry into a war with Germany now supported intervention in Russia. While the overwhelming majority of Americans were isolationists, right-wing pressure was strong enough that President Wilson sent a small contingent of forces into Russia with the limitation that they could not intervene in Russian domestic affairs.49 Tagging along with this contingent of U.S. troops as a missionary was William Dudley Pelly. Pelly would later found the Silver Shirts, a pro-Nazi group.

Combining propaganda from the nations' news media with the dismal plight of labor, the nation was primed for trouble. Three events; the Seattle general strike, the bombings and the Boston police strike triggered the epidemic proportions of hysteria in late 1919.

The first of these events was the Seattle general strike. Pacific Northwest workers had been hit particularly hard by inflation. Seattle had been a hub of wartime shipbuilding, causing a severe dislocation of peacetime industries, housing shortages and extreme inflation. As a result, the Pacific Northwest was a hotbed of activity for the IWW. Even before the shipyard workers walked off the job, area newspapers were busy fielding articles asking whether strikes were for wages or Bolshevism. On January 21, 1919, 35,000 shipyard workers struck in violation of their contract, which had two months to run. The director of the Emergency Fleet Corporation, General Charles Piez, refused to discuss any matters relating to conditions of employment.

On February 3, the Seattle Central Labor Council announced that a general strike in support of the shipyard workers was to begin on February 6. Consequently, Seattle was gripped by mass hysteria. The public, fearful of shortages from the strike, went on a buying frenzy. Drug, department and grocery stores were swamped with customers stockpiling goods. Hardware stores had more orders for guns than they could fill. The Labor Council promptly ran an editorial to calm the hysteria, stating that the Strike Committee would run all industry necessary to the public health and welfare and that law and order would be preserved.

The remaining days until February 6 saw scores of articles in the local media comparing the strike to Bolshevism, further inflaming the public. On the morning of the 6th, 60,000 workmen went out on strike. The unions granted exemptions to garbage trucks, milk trucks and even laundry trucks. At no time during the strike was Seattle left without food, coal, water, heat or light. Even more remarkable was that no violence marred the strike.

Among Seattle's alarmists was its mayor, Ole Hanson. Hanson had been defeated in his Senate race in 1918 and then had ran for mayor. Originally a Republican, Hanson switched to the Progressive Party in 1916 and had supported Wilson. He harbored an intense hatred of the IWW, believing they were at the root of all labor unrest. Hanson's fear reached a fever pitch when the general strike was called. He had no doubt that it signaled the beginning of an attempted revolution which "wanted to take possession of our American government and try to duplicate the anarchy of Russia." Hanson also had no doubt that the man who end this anarchy would have a very promising political career.

At Hanson's request, federal troops from Fort Lewis were dispatched to Seattle on the morning of February 6. Ever the ambitious politician, Hanson personally led the troops into the city with a huge American flag draped over his car. The following day Hanson declared that unless the strike was ended, he would use the troops to crush the strike and operate all the essential enterprises. Hanson's words would frame the hysteria to come later in the year.

"The time has come for the people in Seattle to show their Americanism. The anarchists in this community shall not rule its affairs."51

Seattle's papers continued a barrage of condemnation against the strikers, and called for "no compromise now or ever."51 Facing a wrath of criticism conditioned by the fear of revolution, the strike ended on February 11th with Hanson proclaiming: "The rebellion is quelled, the test came and was met by Seattle unflinchingly."52

For a week, the nation had focused on the Seattle strike with the media inciting the hysteria that would soon erupt. Banner headlines and editorials across the nation labeled the strikers as Reds. The Chicago Tribune warned its readers that "it's only a middling step from Petrograd to Seattle."53

Hanson was not the only politician who saw a bright future in denouncing unionism and strikes as Bolshevism. Minnesota Senator Knute Nelson declared that the Seattle strike posed a greater danger than strikes during the war. Utah Senator William King stated that strike instigators were confirmed Bolsheviks. Washington Representative William King said: "From Russia they came, and to Russia they should be made to go."53

Within a few months of the strike, Ole Hanson resigned as mayor of Seattle and toured the country lecturing on the danger of domestic Bolshevism. The lecture circuit proved financially rewarding; in seven months Hanson netted $38,000, compared to his annual mayoral salary of $7,500.

The Seattle general strike was a fundamental cause of Red Scare hysteria, because it focused America's attention solely on what became to be called radicalism. The media successfully depicted the strikers as Reds. Any strike after Seattle would be framed the same, each with ever increasing hysteria. The most successful propaganda ploy of the right-wing in America had been successfully launched .

Both foreign and domestic events kept the fear of Bolshevism alive for the remainder of February 1919. On February 20, it was reported that French Premier Clemenceau was wounded by a Bolshevik agent. Four days later, Secret Service agents arrested four Wobblies in New York City. The press immediately seized upon the arrests, alleging they were part of a world-wide plot to kill American and Allied officials.

The next month, the Chicago Tribune reported that a plan for planting bombs in Chicago had been uncovered. The following month, the U.S. Department of Justice announced the uncovering of a conspiracy by anarchists in Pittsburgh to seize the arsenal and use the explosives to lay the city in ruins.

It wasn't until April 28 that proof of any bomb plots emerged. On that day Hanson's office in Seattle received a package. Hanson was in Colorado on a Victory Loan tour, and the package was left unopened on a table. The wrapping was torn in transit, and liquid leaked onto the table and caused severe damage. The liquid was an acid, and the package contained a home-made bomb.

The following day, Thomas Hardwick's maid lost both hands when she opened a similar package that exploded. Hardwick was a former senator from Georgia. An alert postal clerk who read of the bombings remembered setting aside 16 similar packages for insufficient postage just days earlier. He located the packages, and notified authorities. All 16 were the same type of bomb that injured Hardwick's maid. An additional 18 bombs were later found in transit. The packages were addressed to, among others, Attorney General Palmer, the Secretary of Labor, Chief Justice Holmes, John D. Rockefeller, J.P. Morgan, and several senators and immigration officials.

The timing of the mailings made it obvious that the bombs were targeted for May Day. The nation was now primed for May Day violence. In Boston, 116 Socialists were arrested when violence erupted during a May Day parade. Not a single non-Socialist was arrested. In New York, riot Soldiers raided the Russian People's House and the offices of The Call, a liberal magazine. Other cities saw similar events. Cleveland erupted in an orgy of violence, with more than 40 socialists injured and another 106 arrested.

The commonly accepted trigger for the resulting mass hysteria was the June 2 bombing of Attorney General Palmer's home. A copy of the anarchist pamphlet, "Plain Words" was found near the doorsteps. Palmer himself was an ambitious politician with an eye on the 1920 presidential nomination. While President Wilson remained healthy, Palmer was held in check, but as the President's health deteriorated, Palmer began to assert more power. It wasn't until the president was bedridden that Palmer was able to unleash his assault on unions and Socialists. Meanwhile, the press was sensationalizing fears of a red scare with each strike.

Along with the bombing of Palmer's residence, the Winnipeg general strike in June further heightened tensions. Just like the Seattle strike, the Winnipeg strike was given the Bolshevik label. Newspapers ran exaggerated headlines to shock the public and harden the public opinion against unions. Further inflaming the public was labor's insistence on the Plumb Plan; a plan for government ownership of the railroads.

By late summer, the public was nearly hysterical with fear of Bolsheviks and unions. As 1919 progressed, each event led to greater anxiety and fear and ratcheted the hysteria level up further. Finally, in late summer, the Boston Police went on strike. Police in other cities had already unionized, but police commissioner and former mayor Edwin Curtis was virulently antiunion. He stated that a police officer could not simultaneously belong to a union and perform his sworn duties. Massachusetts's governor Calvin Coolidge backed Curtis. Coolidge took a hard line towards the striking police officers. Soldiers and volunteers took to the street to police Boston and it was announced that none of the strikers would be rehired. Coolidge's harsh approach to unions immediately placed him in the national spotlight.

In September, coal miners went on strike. With President Wilson's health failing at an alarming rate, Attorney General Palmer argued for invoking an injunction under the Lever Act. Organized labor had supported the Lever Act and its use of injunctions to stop strikes in the event of a war. Wilson had given labor the express promise that the act would never be used during peace. Labor was outraged at the betrayal. Without the approval of the entire cabinet, Palmer invoked the act, and an injunction was issued on October 30 by federal judge Albert Anderson.

With this background the Massachusetts governor's race took on national significance. Coolidge's hard stance in the Boston police strike was fresh in everyone's mind, and Coolidge became the unanimous choice of the Republican Party for reelection. The Boston police strike became the focal point of the race, with the press loudly framing the election as a battle between Bolshevism and law and order. Coolidge won reelection handily with his antiunion message, and would be selected as the vice presidential candidate the following year.

Antiunionism was reaching hysterical levels in the fall of 1919. Newspapers proclaimed that anything other than the open shop was un-American. The antiunion campaign of big business was bearing fruit. Clergymen such as David Burrell of Marble Collegiate Church in New York City claimed that the Bible not only proved that the closed shop was unpatriotic, but also un-christian.54

Clergy and churches that supported the rights of labor soon fell victim to attacks by the superpatriot groups. The National Welfare Council, the Federation for Social Service of the Methodist Church and the Commission on Church and Social Services were singled out for unusually harsh treatment by the superpatriots. Many clergymen supportive of labor came to be labeled "parlor pinks." This was the beginning of the radicalization of religion to the hard-right's viewpoint. Liberal and moderate church leaders were purged.

By the end of 1919, the Red Scare was reaching critical mass. Palmer, ever more confident of his future political achievements, believed the best solution was to deport radicals. Colluding with certain labor department and immigration officials, Palmer assured himself of ever greater success.

Palmer issued orders on December 27 for the FBI to arrange meetings of the groups they had infiltrated for the night of January 2, 1920. Field agents were to obtain all necessary documentation during the raids such as charters, meeting minutes, membership lists, and books. Additionally, no person arrested was to be allowed to communicate with any other person unless Palmer, William Flynn or J. Edgar Hoover granted permission. Palmer had appointed Flynn as the chief of the Bureau of Investigations, the forerunner of the FBI.

The results were spectacular. More than 4000 suspected radicals were arrested in thirty-three U.S. cities. Arrests were often made without warrants. The American citizens arrested were turned over to state authorities for prosecution under syndicalism laws. Prisoners were denied legal counsel and held under inhuman conditions. Brutality by arresting officers and jailers was widespread.

The mass hysteria even reached into the halls of congress where, at the urging of Palmer, seventy sedition bills were introduced. Eventually, cooler heads prevailed, and none of the peacetime sedition bills passed. Nevertheless, many states enacted sedition laws that facilitated the prosecution of the IWW. In New York State, five Socialist Party members of the state legislature were disbarred.

The full extent of the hysteria and the brutality prevalent can best be illustrated by the Centralia Massacre that followed the steel and coal strikes. In 1919, there were only two IWW halls open in the state of Washington; the others had been suppressed or closed by the police or local mobs. The Centralia IWW hall had just reopened after having been raided by a local mob during a Red Cross parade the year before.

On October 20, 1919, a group of local business leaders formed the Centralia Protective Association to safeguard the small town against undesirables. Rumors inside the IWW hall were rampant about the hall being a target for a raid on Armistice Day. On Armistice Day, the parade route led directly past the hall. The Wobblies, seeking to protect themselves from mob violence, stationed armed members inside the hall, across the street and on a hilltop overlooking the street. Parade marchers included the local post of the America Legion led by Warren Grimm, the leading figure in the Centralia Protective Association. At first, it appeared that violence would be averted as the marchers passed the IWW hall, but marchers turned back towards the hall. In the confusion, some Legion members moved towards the hall. In self-defense, the Wobblies opened fire and wounded several legionaries, including Grimm. Another was shot in the head as he burst through the door.

The Wobblies responsible for the shootings were quickly rounded up and placed in jail, with the exception of Wesley Everest, who escaped towards the Skookumchuck River. He was pursued by a posse that overtook him as he attempted to ford the river. Everest refused to surrender and soon emptied his revolver, killing another Legion member. With no ammunition Everest was soon overpowered, beaten and had his teeth knocked out with a rifle butt before being taken to jail.

That night the lights went out in Centralia. Under the cover of darkness, a mob broke into the jail and seized Everest. He was taken to the Chehalis River. En route, one of his captors castrated him. Upon reaching the river, he was dragged from the car pleading for the mob to shoot him. He was hung from the bridge. The rope, however, was too short and his captors hoisted him back up to hang him with a longer rope. Somehow, Everest remained alive through the two attempted hangings. He was hoisted back up a third time, only to be fitted with a still longer rope. The third time, after stomping on his fingers as he desperately clung to the bridge, Everest finally succumbed.

After making sure their work was done, the mob turned their headlights on the dangling body and riddled the corpse with bullets. After several days, Everest was cut down and brought back to town, only to be displayed in the jail as an example to other Wobblies. Since none of the town's undertakers would care for the body, four of Everest's fellow IWW members were forced to dig his grave in potter's field. No inquest was ever held for his death, which was ruled a suicide by the corner. In the end, eight Wobblies were found guilty of murder and imprisoned.

The Centralia Massacre followed a long string of attacks on strikers and unions dating back to at least the post-Civil War era. By 1914, the attacks had become commonplace. On April 20, 1914, in an effort to break a strike against the Rockefeller-owned Colorado Fuel and Iron Company, more than 40 striking miners and their families were murdered in Ludlow, Colorado by the Colorado National Guard and Rockefeller-hired thugs from the Baldwin-Felts detective agency.55 Another massacre of Wobblies occurred in Everett, Washington on November 5, 1916.56

Brutality such as the Centralia Massacre would reach epidemic proportions in 1919. The public had been whipped into a feverish frenzy by the media and superpatriot groups like the American Legion. Superpatriot groups would spring up like mushrooms after a rain and would continue distributing literature through the 1920s.

No group with liberal tendencies would remain untouched. The Lusk Committee branded The Survey, a national liberal oriented magazine, as having the endorsement of revolutionary groups. Other liberal magazines such as The Nation, New Republic, Dial and Public were the subject of similar attacks. The ACLU was condemned as a Bolshevik front. The National League of Women Voters was labeled a tool of radicals. Liberal clergymen were branded as "parlor pinks", as were many teachers with liberal leanings.

The infamous Lusk Committee followed on the heels of the report from the United States Senate Overman Committee. The Overman Committee began hearings on February 11, the day the Seattle general strike ended. The final report spanned 1200 pages and showed little evidence of communist propaganda in the U.S. and even less of an affect on American labor. The immediate cause for the Lusk Committee sprang from a report leaked to the public by prominent New York lawyer Archibald Stevenson. Stevenson was serving in the Military Intelligence division at the time and supplied a list of 62 individuals to the Overman Committee that he had branded as traitors. Stevenson's report on radicalism in New York City concluded that Bolshevism was rampant among New York workmen.

On March 26, the New York legislature appropriated $30,000 for the Lusk Committee and appointed Stevenson as assistant counsel. On June 12, the Justice Department raided the Russian Soviet Bureau. Two tons of propaganda material were hauled off to the Lusk Committee for review. Following the raid, New York State Senator Lusk declared that there were at least fifty radical publications in the city. At the same time New York State Attorney General Charles Newton claimed the Soviet Bureau was the clearing house for all radical activity in the United States.

On June 21, the Lusk Committee again struck again, this time raiding the Rand School and the local IWW office. All documents were seized, but despite vigorous denials from the committee little of value was found. There were no indications of a radical revolution. The committee claimed that documents from the Rand School showed that radicals were in control of at least 100 trade unions. Stevenson even claimed that the documents showed that the Rand School was propagandizing for Blacks.

With no substantiating evidence, Lusk charged that the Rand School was the actual headquarters for Bolshevik radicals and took immediate steps to close the school. The renewal of the school charter was delayed until July 30 when the Supreme Court Justice of New York threw out the case for lack of evidence.75


Part 5: Preachers & Klansmen

In 1924, the Hearst papers, the American Legion, and the Ku Klux Klan led the charge for the Americanization" of schoolbooks, loyalty oaths for teachers, and harsher immigration legislation. These three organizations would become deeply tied to fascism in the following decade. Several members of the American Legion were involved in the fascist plot of 1934 against FDR. The Hearst papers would become an open propaganda outlet for the Nazis and fascism. The Klan would go on to form an alliance with the American Bund.

W.J. Simmons, a former Methodist circuit rider from Atlanta, established the second Klan in 1915. The original Klan had died out and disbanded. The second Klan would be disbanded later on, only to be reborn again. In the first four years of rebirth, the Klan was relatively small. Not until 1920 did it grow to mammoth proportions.

Two factors with roots in the late 1800s set the stage for the rebirth of the Klan. The first was massive immigration from Europe. The American Protective Association, formed in 1887, was virulently anti-alien. The group was particularly strong in the Midwest, where the Klan became strong in the 1920s. The other factor was the populist movement of the 1890s which sought to unite blacks and poorer whites against mill owners and the conservative elite of the South.57

The Klan remained relatively small through 1919. It wasn't until Simmons met publicists Edward Young Clarke and Elizabeth Tyler in 1920 that the membership increased, peaking at around 4,500,000. The huge increase in Klan membership was largely a product of the Red Scare. Simmons had a contract with the two, giving them 80 percent of all membership dues. Clarke and Tyler promoted the Klan as rabidly pro-America, anti-black, anti-Jewish, antiunion, and most importantly, anti-Catholic.

The race riots in the summer of 1919 also contributed to the rapid growth of the Klan in 1920. In 1919, race riots occurred in Chicago, Washington DC, Elaine, Arkansas, Charleston, South Carolina, Knoxville and Nashville, Tennessee, Longview, Texas and Omaha, Nebraska. Through the first half of the decade, the Klan would be a serious force in both the North and South.

The message from the new Klan was that it meant business. Many people believe the Klan was just a bunch of racist, hooded night-riders. The reality is that the Klan has always been closely associated with religion. Besides blacks, Jews, and immigrants, the Klan attacked bootleggers, dope dealers, nightclubs and roadhouses, violations of the Sabbath, sex, and so-called scandalous behavior.

The early 1920s saw a rash of lynchings, shootings, and whippings; the victims were most often a Black, Jew, Catholic or immigrant. Additionally, women of scandalous behavior, as determined by the Klan, were subject to abuse. In Alabama, a divorcee was flogged for remarrying. In Georgia, the Klan, led by a minister, administered 60 lashes to a woman for the vague charge of immorality and failure to go to church. In Oklahoma, Klansmen whipped girls found riding in automobiles with young men. In the San Joaquin Valley of California, the Klan flogged and tortured women for morality charges.58

In Chicago, Miss Mildred Erick was beaten almost into unconsciousness, and had crosses carved on her arms, legs, and back by Klansmen. The Klansmen's attack was provoked by her conversion to Catholicism.59

In November, 1921, a case in Asheville, North Carolina became the focus of the national media. The Reverend Abernathy, of the First Christian Church, sent a letter to city officials calling for a purity campaign and the arrest of two women, Etyln Maurice and Helen Garlington, and two black men, Louis Sisney and Maurice Garlington. The women were charged with prostitution, fornication, and adultery. Both women received a sentence of one year in the county jail.59 The campaign was similar to an earlier one in Athens, Georgia launched by the Reverend M.B. Miller of the First Christian Church. Miller headed the Klan in Athens.

There are thousands of examples of women receiving much harsher treatment than the Asheville case. What brought Asheville to national attention is that Asheville was the home of William Dudley Pelly and the Silver Shirts. Many of the regions in which the Klan were strong in the 1920s later became centers of pro-fascist groups in the 1930s. Pelly would later move his Silver Shirt organization to Indiana, an area that had a strong Klan in the 1920s.

With its anti-black, anti-union, anti-communist, anti-socialist, anti-Jew, and extreme nationalist agenda, the Klan's platform was remarkably like that of the Nazis. By the 1930s, the Klan served as a bridge between nativist groups and fascists. On August 18, 1940, the Klan formalized an alliance with the American Bund at the Nazi encampment of Nordland, at Andover, New Jersey. Before this, a Nazi agent had offered former Klan Grand Wizard Hiram Evans $75,000 to control the Klan's voice. When James Colescott succeeded Evans, the Klan entered into its collaboration with the American Bund.

After the alliance with the Bund was formed, the Klan embarked on a plan to infiltrate unions in an effort to Americanize them. After Pearl Harbor, the Klan intensified these efforts, particularly in the Detroit area. Once inside the unions, Klansmen spread pro-fascist literature, and succeeded in provoking wildcat strikes to hinder the war effort. Their efforts went so far as to organize opposition to purchasing war bonds.

Probably the Klan's most successful effort to disrupt the war effort was the Detroit riot. This Klan-inspired riot was an attempt to prevent blacks from occupying their new homes in the Sojourner Truth Settlement, a housing project. The riot caused several deaths, and an interruption of war production. Amplifying its effect, the riot was of tremendous propaganda value to America's enemies. Germany and Japan seized on the riot, and aired lurid broadcasts of it to demoralize American troops.60

Today, one cannot understand the Detroit area without looking at the influence of fascism in the area. The riot was provoked by the Klan which was closely associated with fascism and the Bund at the time. However, there were many other fascist organizations active at the time within the Detroit area. The Black Legion, the Wolverine Republican League, Father Coughlin, and several other fundamentalist ministers of hate as will be shown later in this chapter. Michigan was one of the hot spots for fascism as several of the strongest supporters of fascism within the halls of Congress came from Michigan.

Detroit was not the only riot inspired by the Klan designed to stop war production. Another Klan-inspired race riot occurred on June 15, 1943 in Beaumont, Texas. A mob of over 4,000 attacked the black section of the city, looting stores and burning buildings. Twenty-one people were killed, and production in the area was slowed for months.

Today's modern, or the third Klan formed an alliance with neo-Nazis domestically, and in England, Sweden, Canada, and Australia. An American sergeant stationed in Bitburg served as the Klan's recruiting officer in Germany. Currently, much of the hate and pro-Nazi literature in Germany (where it is illegal) comes from the United States.61

Klan-inspired lynchings and riots were common in the 1920s. Over 450 people were lynched; almost all were black.63 Lynchings became so frequent that Representative L. C. Dyer of Missouri introduced a bill in 1921 to make lynching a federal crime. The bill passed the house but failed in the Senate, due to a filibuster by southern senators. Lynching was not the only method the Klan used to dispose of blacks. On December 9, 1922 a mob in Perry, Florida burnt a black man at the stake after he was accused of murder.64

The most noted act of Klan-inspired violence was in Rosewood, Florida, which was chronicled in a recent film. In January 1923, the tiny town of Rosewood came under attack by a white mob. The mob was incited by a report of a white woman having been assaulted by a black man in the nearby town of Summer. The riot resulted in several residents of Rosewood being murdered, and the black portion of town being burnt to the ground. The black residents, fearing for their lives, fled into the nearby swamps and relocated. No charges were ever filed against the mob, which was reported to have had several Klansmen from outside the area.

Although Rosewood is the most widely known race riot of the 1920s, it was not the bloodiest. The Tulsa, Oklahoma riot of 1920 was far more horrific. A mob of over 10,000, some wielding machine guns, attacked the black section of the city, destroying thirty-five square blocks, and leaving over 300 dead. The mob used at least eight airplanes to spy on the blacks and may have even used the planes to bomb some areas.65


The listing of all the race riots and lynchings of the 1920s would fill several volumes. Many, such as Rosewood, were reported nationally. The Nation reported that the state of Florida was unconcerned about the fate of Negroes. A few northern newspapers decried the massacre, but most adopted a more apologetic view of the Klan and its violence. The Tampa Times justified it by proclaiming that blacks "are anything but a Christian and civilized people." The Gainesville Sun went even further, stating that lynchings would prevail as long as criminal assaults continue on innocent women, and closed the editorial equating the massacre with the death of a dog.

Today, most peoples' image of the Klan is one of a violent gang of racists clothed in bed sheets, and view the Klan as a pariah of some sort. Even with the rise in membership since 1980, the Klan is still a shadow of its former self. However, the real legacy of the Klan is not related to hooded nightriders or cross burnings. Rather, the real legacy is the role the Klan played in developing what now constitutes the religious right.

It was common place in the 1920s for ministers to lead the local Kaverns. The same holds true today. One such example is the Reverend J.M. Drummond, who was the keynote speaker at a Klan rally near Estill Springs, Tennessee on July 7, 1979.66 Drummond is an Identity minister, as is Pete Peters, another minister closely associated with the Klan.

The Identity religion teaches that Aryans are the true Jews of the Bible, and that Jews, Blacks and other minorities are children of Satan. Two of the more influential developers of the Identity religion began their ministries in the 1920s.

The Red Scare of 1919 resulted in the purging of anyone holding even the mildest liberal views, clergy included. With few liberal clergymen remaining, the result was a gigantic chasm into which the Klan and the radical right moved, shifting the spectrum to the far right. The result can still be seen today in the linkage between racism and religion. A study conducted in the 1960s detailed this linkage, and will be presented in a later chapter. Since that study, the linkage has become even more pronounced, with the rise of the Identity religion in recent years.

The evolution of the present religious right from the 1920s Klan can best be shown by the careers of Gerald Winrod and Gerald Smith. In November, 1925 in Salina, Kansas, Winrod established the Defenders of the Christian Faith. The Defenders were extremely conservative, and in April, 1926 Winrod began publishing a monthly magazine, The Defender. Winrod supported prohibition, and was rabidly opposed to the theory of evolution.

The teaching of evolution, as well as the Scopes trial, was one of those issues that become a watershed event in shaping later movements. The teaching of evolution would define what has evolved into the religious right. Although there were fundamentalists before the 1920s, the fundamental religious movement was revitalized and defined by the Scopes trial. In fact, the term "fundamentalist" was coined in the 1920s. Many early fundamentalists, such as John Franklyn Norris, were openly supportive of the Klan. Norris was a Baptist preacher from Texas, and also had a parish in Detroit, flying between the two cities. Norris also ran a seminary, one notable graduate of which was John Birch. Birch's death at the hands of Chinese communist forces in the late 1940s spawned the formation of the John Birch Society in the 1950s.

In 1926, Winrod led a campaign to ban the teaching of evolution locally, as well as in California and Minnesota. He appointed a committee to examine textbooks, and in Minnesota he helped William Bell Riley draft the bill which was introduced in the Minnesota legislator.

[EDITOR: the hypocrisy here is self-evident. Author condemns Social Darwinism based on evolution theory then complains when those who oppose it happen to be hate-filled hypocrites who can't read the Bible correctly and conjure up lies about minorities to perpetuate racism. Reading the Bible wrong is just as wrong as evolution reading reality wrong.]

Riley was a force in the conservative wing of the Baptist Church during the 1920s. Like Winrod, Riley was rabidly opposed to the teaching of evolution, and was also extremely anti-Semitic. In 1934, he published the Protocols of the Elders of Zion, and an article on communism, attempting to show they were part of a conspiracy at work in Roosevelt's New Deal. Riley preached:

"Today in our land many of the biggest trusts, banks and manufacturing interests are controlled by Jews. Most of our department stores they own. The motion pictures, the most vicious of all immoral, educational and communistic influences, is their creation."68

The above quote, from one of Riley's sermons, is indistinguishable from Hitler's propaganda. It is a clue that, if Riley was not outright pro-Nazi, he certainly harbored sympathy for fascism.

Riley was not the first clergyman to tout the Protocols. On February 12, 1919, the Reverend George Simons testified in front of the Senate's Overman Committee, shocking listeners with the tale of a secret worldwide Jewish conspiracy. Simons cited the Protocols as evidence. It is generally assumed that Simons obtained his copy of the Protocols from Dr. Harris Houghton of military intelligence. Houghton had obtained his copy from the Czarist immigrant Boris Brasol.17

With his congregation of 3,500, Riley exerted tremendous influence in the upper Midwest. Jewish leaders regarded his church as the center of the area's anti-Semitism. However, Riley's influence extended far beyond his area and time. In 1902, Riley founded Northwestern Bible Training School, which in 1935 became the Northwestern Theological Seminary. He also assisted in the preparation of The Fundamentals, a statement of fundamentalist belief. Just before his death, Riley placed the leadership of Northwestern under the direction of Billy Graham.

On March 2, 2002, the ghost of fascism came home to roost on the head of Riley's chosen successor, Billy Graham. On that day, an additional 500 hours of Nixon tapes were released. In a 1972 conversation between Nixon and Graham, the preacher expressed his contempt for, as he saw it, Jewish domination of the media. Graham is heard on tape saying referring to a Jewish-owned newspaper:

"this stranglehold has got to be broken or this country is going down the drain."

Later in the conversation, Graham expresses further opinions about Jews:

"They swarm around me and are friendly to me. Because they know I am friendly to Israel and so forth. But they don't know how I really feel about what they are doing to this country, and I have no power and no way to control them."74

In response to the new revelations, Graham apologized profusely, claiming a lack of memory of the incident. This latest example of Billy Graham's anti-Semitism should come as no surprise to those that have followed his career. Graham's career has been marked with similar incidents.

In the 1950s, Graham was embroiled in an incident revealing his anti-Semitism. The incident stemmed from his portrait gracing the cover of the January 1957 issue of The American Mercury, and his friendship with the Mercury's owner, Russell Maguire. Maguire had acquired a huge fortune from oil and munitions. Maquire owned the company that made the Thompson submachine gun, and had acquired the Mercury in 1952.

In 1951, Maquire donated $75,000 to Billy Graham to produce a film extolling the virtues of free enterprise and the development of God-given natural resources. The film Graham produced was called Oiltown, USA. Graham continued his friendship with Maguire after producing Oiltown, and wrote several articles for the American Mercury. By the time Graham's portrait graced the Mercury's cover, the magazine had earned a reputation as overtly anti-Semitic and hard right. Maguire and the Mercury were ardently anti-communist, and also called for the abolition of the income tax, the UN, NATO, the ACLU and Zionism. Throughout the 1950s the Mercury, under the guidance of Maguire, supported Senator Joseph McCarthy.

Other writers for the Mercury included J. Edgar Hoover, Ralph de Toledano and George Lincoln Rockwell, founder of the American Nazi Party. De Toledano's resigned from the OSS after refusing to work with liberals. Maguire was an open backer of fascism and fascist organizations, and was an early supporter of Rockwell. Rockwell often complained about Maguire's miserly donations.

By January 1957, the Mercury was at loggerheads with the Anti-Defamation League over charges of anti-Semitism. Despite their public apologies, the religious right and Billy Graham cannot rid themselves of their past support of fascism and anti-Semitism any more than a leopard can change its spots.

Conservative theological circles today still regard Riley highly, carefully sweeping his collaboration with the Jayhawk Nazi, Winrod and his anti-Semitism, under the rug. Yet, anti-Semitism is still present in the Baptist church. Like many right-wing groups, today the Baptist church cloaks its anti-Semitism behind a thin veil. It comes bubbling to the surface in the position the Baptist church has adopted in recent years of reaching out to Jews so they may be converted to Christianity. Jewish leaders describe this program as condescending. It is also manifested in the strong support for Israel due to the misguided beliefs of many of the fundamentalists. The reconstructionists; a sub-branch of the religious right believe the end of the millennium marks the end times and the approaching battle of Armageddon with the conversion of Jews to Christianity.

Winrod's lingering influence and anti-Semitism were also readily apparent in the 1980s in Kansas. At that time, Kansas became a hotbed of support for the Posse Comitatus, a far right-wing, extremely anti-Semitic group. The Posse Comitatus, which was founded by a former Silver Shirt leader, subscribes to the Identity faith.

Nor is this the end of the Winrod continuing influence. In March 2001, Winrod's son Gordon, now age 74, was sentenced to 30 years in prison for kidnapping six of his grandchildren. The children had been living in North Dakota. Windrod's two daughters assisted in their kidnapping and were brought to trial separately. The children have received mental health treatment after being returned to their fathers.

The younger Winrod began buying land in Ozark County, Missouri in the 1960s and eventually opened a church he called Our Savior, in which he preached his hate of the Jews. Winrod's congregation consisted mostly of his adult children and a few followers. Two or three times a year he would mail every resident of the county his Winrod Letter, despite numerous complaints. During his trial he repeatedly referred to the proceeding as a "Jewdiciary."76

The Posse's rise to popularity in the Midwest, and in Kansas in particular, provides another example of how, old prejudices, hate and fascist leanings lingers on for generations. Indeed, racism in Kansas can be traced back prior to the Civil War. Further evidence of Winrod's lingering influence on Kansas is seen in the 1999 attempt by the Kansas Board of Education to ban the teaching of evolution.

Although Winrod claimed he was not a member of the Klan, he did nothing to oppose the group.69 During the 1920s an estimated 100,000 residents of Kansas were Klan members. In the 1924 race for governor, both Democratic and Republican candidates sought the Klan's support. There was a solid base of support in Kansas at the time for candidates that attacked Catholics and Jews. Winrod would depend on that base in his later run for senator.

It wasn't until the 1930s that Winrod adopted full-blown fascism as his ideology. After 1934, Winrod accepted the Nazi's justification for their anti-Semitic policies. His view was that the Nazis were only acting to save Germany from Jewish radicalism, economic exploitation and racial lust. In 1935, Winrod called Hitler a devout Catholic.69 Eventually, Winrod was indicted for sedition in the 1940s.

An even more direct link between the 1920s and today's far right groups can be established by tracing the origin of the Identity religion. The Identity religion is based on racial hatred, and has been adopted by many current far right groups including the Aryan Nations, the Posse Comitatus, various Klan klaverns and militias.

Reuben Sawyer, the pastor of Portland, Oregon's East Side Christian Church, was the first to combine the Klan with Identity religion. Sawyer was instrumental in the British Israel Federation, and during the 1920's was a popular speaker in the Pacific Northwest. It was out of the British Israel Federation that the Identity religion emerged. Sawyer was a leader of the Klan in Oregon, and the founder of its women's auxiliary. Besides being the first to combine the Klan and what was to become the Identity religion, Sawyer was the first to combine anti-Semitism with anti-communism, as the following quote illustrates:

"Jews are either Bolshevists, undermining our government, or are shylocks in finance or commerce who gain control and command of Christians as borrowers or employers. It is repugnant to a true American to be bossed by a sheenie. And in some parts of America the Kikes are so thick that a white man can hardly find room to walk on the sidewalk. And where they are so thick, it is Bolshevism they are talking. Bolshevism, and revolution"70

It was from such views that the Identity religion developed. Among those credited with its founding was a young minister, Gerald Smith. Smith began his ministries in Soldier's Grove, Wisconsin, by revitalizing a Disciples of Christ congregation. In 1923, Smith accepted a pulpit at the Seventh Christian Church in Indianapolis. He soon built the congregation to over 1,000. At the time, the Christian Evangelist noted that Smith a prominent figure among the Hoosier Disciples. As the 1920's progressed, he moved to other pulpits in the Indianapolis area. In 1929, he left Indiana for the Kings Road Christian Church in Shreveport, Louisiana.

While at the Kings Road church, he worked with the Klan, not against it. Smith's self-promotion and social activism soon alienated many of his wealthy backers. Soon, Smith aligned himself with one of the most notorious fascists of the time, Huey Long. In 1934, he resigned his pulpit at Kings Road to work with Long's Share the Wealth organization. In 1936, Smith endorsed Eugene Talmadge, the racist governor of Georgia, for reelection, and also aligned himself with another well-known fascist, Francis Townsend.

In 1939, Smith met Merwin Hart, head of Utica Mutual Life, and soon received support from the New York Economic Council. No doubt, Smith's campaign against the CIO figured prominently in the decision to support him. Living in Michigan at the time, Smith began broadcasting on WJR, a station owned by an enemy of Roosevelt. There he received further support from such leading industrialists as the Dodge and Olds brothers. In 1938, he supported the campaign of Arthur Vandenberg, a senator with fascist leanings. Smith also cultivated a friendship with Henry Ford.

In 1942, the FBI received a tip that Winrod helped Smith start The Cross and Flag, a notorious fascist publication that continued well into the 1960s. Following WWII, Smith moved to California, and founded what has become the Identity religion. In the 1960s, Smith moved to Arkansas, and started several grandiose projects, one of which, the Christ of the Ozarks, was completed in 1966. It was soon followed by a Bible museum.

Smith's legacy is his founding of the Identity religion, a religion based solely on hate, teaching that Aryans are the true Jews of the Bible, and that Jews and other minorities are children of Satan. The Identity religion has became almost universal among far right groups today. It acts as the glue holding the various factions of the far right together and to justify their hate.


Part 6: American Eugenics

There was a more sinister aspect that aroused alongside racism in the early part of the 20th Century, that of eugenics. Eugenics as it was applied in the 1920s can be defined as the creation of the prefect Aryan race and the elimination of all inferior individuals and races. Sometimes preceding racism, and at others lagging, eugenics generally paralleled the development of racism in the 1920s. Both are so intertwined in America that they are impossible to separate. The tentacles of eugenics were spread far and wide in the 1920s and 1930s. IQ tests were developed as an offshoot of the eugenics movement, as was Planned Parenthood. Moreover, eugenic laws passed in the United States served as model laws for the Nazi Nuremberg Laws. Most Americans have little understanding or an incorrect understanding of the eugenics movement. Indeed its association with the Nazis and the Holocaust has distorted the true nature of the movement as surviving groups sought to distance themselves from a movement associated with the Nazis. Almost all Americans incorrectly assume that the movement died beside the Third Reich. Such an assumption is not only wrong, but also dangerous, as the eugenics movement is still alive and well today.

Author Edwin Black has traced the origins of eugenics back to biblical times and the Judeo-Christian concept of charity. After the Roman Empire adopted Christianity, the Canones Arabicia Nicaeni mandated the expansion of hospitals and other institutions for the needy in 325 A.D. Such institutions were needed in England and the church supplied them. During the early 1500s, agriculture underwent a change in England from small estate farming to large expansive estate farming, idling thousands of small estate farmers and contributing their numbers to the masses of needy. In 1530, King Henry VIII seized church property for the church's refusal to allow his marriage to Catherine of Aragon. Charity had now become a state responsibility. Although tending to the needs of the poor was expensive, the alternative of riots and revolutions was less appealing to the nobility.

By the end of the century, a distinct pauper class had emerged in England. Compulsory poor law taxes were assessed to each community to pay for housing the poor. The pauper class was viewed largely as arrogant and ripe for riots or revolution. The problems of the pauper class were only compounded by the advancing Industrial Revolution. Along with the Industry Revolution, the poor became concentrated in urban slums. Sweatshops sprung up to exploit the cheap area. For three hundred years after King Henry, numerous reforms were made in England's poor laws. The ruling class became ever more resentful of being taxed to support the poor. By the 1800s, the ruling elite looked down on the poor as subhuman.

In 1798, Thomas Malthus, an English economist, published a watershed theory on the nature of poverty and the social economic system at play. Malthus concluded that while the population was growing at a geometric rate, the food supply was only increasing at a linear rate. As a result of his theory, he called for population control. Malthus continued that charity promoted generation to generation poverty. Many of those that supported Malthus ignored his complaints of an unjust social economic system and instead embraced the rejection of the value in helping the poor.

The same claim has been the mainstay of the Republican Party ever since the 1980s. Throughout the Great Depression of the 1930s there was no shortage of food, coal, or any of the necessities for a normal living standard for everybody. There wasn't even a money shortage. In short, the depression was the result of an inequitable distribution of wealth with no means of delivering the food to the hungry other than through private charity soup kitchens that were overwhelmed.

In the 1850s, Herbert Spencer published Social Statics. Spencer argued that man and society followed the laws of science and not the laws of a caring God. He popularized the familiar term: "survival of the fittest." He argued that the fittest would continue to prosper while the poor would become more impoverished until they died out naturally. Spencer denounced charity and aid to the poor. In 1859, Charles Darwin published Origin of Species. In 1863, Spencer published Principles of Biology in which he argued that heredity is under the control of physiological units. In 1886, Gregor Mendel published his classic experiments with peas from which he constructed a predictable heredity system.

The basis for eugenics was now firmly established. In 1869, Francis Galton, the father of eugenics, published Hereditary Genius. Galton had never finished his medical studies at London's King College, but instead had studied mathematics at Cambridge where he became a devotee of the emerging field of statistics. Galton distinguished himself by recognizing patterns. In his publication, Galton had studied the genealogies of eminent scholars, artists and military men. He found that many of them were descendents of the same family and concluded the frequency was too impressive to ignore. Galton then concluded that not only physical characteristics were hereditary, but mental, emotional and creative qualities were also hereditary. Further, Galton reasoned that talent and quality could be sharpened by judicious marriages in a few generations into a race of highly gifted individuals. Galton suggested that by selective breeding of the very best, mankind could evolve into a superlative species. Galton hoped to develop a regulated marriage process where members of the finest families were only married to carefully chosen spouses.

Galton had developed a protoscience in search of vindicating data. Galton's ideas of marriage became known as positive eugenics. However, by the time the 20th Century arrived, a new form of eugenics had developed. Called negative eugenics, it called for the sterilization of the unfit. The spotlight of eugenics was soon to shift from England to the United States, where it immediately took on a racist characteristic.

Breeding humans had been part of America from before colonial days, in the slave trade. Only the strongest could survive the journey from Africa. On their arrival the slaves would be paraded about on the auction block so they could be physically examined. Following the Civil War, America was primed for eugenics. In 1865, in upstate New York the utopian Onedia Community declared in a headline that human breeding should be the foremost question in that age. As news of Galton's work reached American shores a few years later, the Oneida community began its first human breeding experiment with fifty-three female and thirty-eight male volunteers.

As the number of emigrants from eastern and southern Europe increased, as the new century approached, eugenics became more popular as a means to purify American society. However, one would be amiss to blame the rise of eugenics in America solely on the massive immigration during the last half of the 19th Century. Contributing to its rise was a good deal of racism and group hatred. American Indians were being isolated on reservations. Such isolation of groups deemed as unfit became a cornerstone of negative eugenics. In the southwest, a great deal of race hatred stemmed from the Mexican-American war and the absorption of thousands of Mexicans in the territory ceded to the Untied States. On the west coast, the race hatred took the form of the Chinese Exclusion Act barring immigration from China and blocking naturalization of those already here. In the south, race hatred reached a feverish peak, and a network of Jim Crow laws were past to keep society pure.

In 1891, Victoria Woodhull, a leading feminist of the day, published a pamphlet, The Rapid Multiplication of the Unfit. The pamphlet called for both positive and negative eugenics. In 1896, former census director Francis Walker published the article, "Restriction of Immigration" in Atlantic Monthly, calling for restricted immigration before the nation committed racial suicide in response to the rising tide of immigration of non Anglo-Saxons. Roughly eighteen million immigrants arrived between 1890 and 1920.

By the turn of the century, women were still barred from voting. Racial hatred was the norm. Native Americans had been segregated on reservations Blacks and Asians were considered second class citizens and undesirables. Vigilantes often dispensed what passed for justice at the end of a hangman's rope. From 1889 until 1918, 3,224 people were lynched. More often than not, the victim was black although 702 of the victims were white. Moreover, the hangings were carried out for trivial reasons such as staring at a white girl, offensive language, or other such minor infractions.92

Eugenics would soon become a cure all for society's problems. Criminal analysis would move racial hatred and criminal behavior into the realm of heredity and eugenic cleaning. Disease and physical afflictions, such as tuberculosis and epilepsy, were also considered hereditary disorders.

One of the first benefactors of eugenics in the United States was the Carnegie Institute. Following an infusion of bonds and other assets totaling $14 million from the founder in 1901, the Institute was re-chartered by a special act of congress in 1904. Under the charter, the institute was established to be one of the premier scientific organizations of the world. Twenty-four eminent individuals from science, government and finance were selected as trustees including Elihu Root, Cleveland Dodge, and John Billings. John Merriam was appointed president of the institute. The institute soon added a new science to their principal areas of investigations, negative eugenics.

Charles Davenport would soon emerge as the driving force behind the American eugenics movement. Davenport was a sad character with a Harvard degree in zoology. He came from a long line of Congregational ministers. His father was a real estate man and had founded two churches and was a deacon in one and an elder in the other. He raised his family harshly, forcing family members into long hours of Bible study.

Davenport approached the Carnegie Institute in 1902 to fund a study of evolution at the biological experiment station at Cold Spring Harbor where he worked. In 1903, Davenport approached the American Breeders Association (ABA), a group created by the Association of Agricultural Colleges and Experimental Stations. He was elected to the five-person permanent oversight committee. Davenport was also successive in pushing the ABA into adopting the views of negative eugenics. In 1904, the Carnegie Institute formally inaugurated the evolution center at Cold Spring Harbor with Davenport as director.

Davenport's work impressed the wealthy elite of New England and soon attracted more funding from the Carnegie Institute and additional funding from Mary Harriman, the widowed heir to the railroad fortune of E.H. Harriman. Others that jumped aboard the movement included Henry Ford, John Kellogg, Clarence Gamble, J.P. Morgan, and E.B Scripps.

Davenport soon enlisted the help of Harry Laughlin, a schoolteacher from Missouri. Laughlin, like Davenport was a minister's son. Davenport structured the Eugenics Records Office to further enable Laughlin's career. Laughlin was soon at work at the eugenic records office at Cold Spring Harbor. He first set about to identify the most defective and undesirable Americans, which he estimated to be about ten percent of the population. He toured Sing Sing and obtained the records of the inmates to prove for all times criminal behavior was hereditary. After obtaining the records from Sing Sing, Loughlin proceeded to tour New York's State Asylum to obtain the records of those committed. He also toured the Connecticut school for the feeble minded for the records of their charges. Laughlin then set about training field workers to generate additional eugenics records. Besides targeting criminals and the feeble-minded, Laughlin targeted epileptics as well.

In early May 1911, the ABA created a special committee to study the best practical means of cutting off the defective germ-plasma of the American population. The stage was now set for removing the undesirables. Laughlin was appointed secretary of the committee. The advisory panel included Dr. Alexis Carrel of the Rockefeller Institute for Medical Research, the chief of the Bureau of Statistics, O. P. Austin, and immigration expert Robert DeCouncy Ward among other prominent advisors.

In mid July 1911, the special committee met in Manhattan and systematically plotted a campaign to purge the blood of American people of the deteriorating influence of these undesirable anti-social classes. Ten classes of the socially unfit were identified. The classes were as follows in the rank given by the committee: feeble minded, pauper, alcoholics, criminals including petty criminals, epileptics, the insane, the constitutionally weak, those predisposed to certain diseases, the deformed, and finally the blind and deaf. Not only did the ABA target the individuals afflicted, but also targeted their extended families as well. The group agreed that sterilization of the extended families was desirable.

The eugenic committee had endorsed a very ambitious plan. The plan prioritized the sterilization of those receiving custodial care, including those in poor houses, insane asylums, prisons, and any others under state care. This group contained approximately one million people. The plan called for the further sterilization of borderline cases of some seven million people deemed by the ABA to be totally unfit to become useful parents or citizens. The estimated eleven million people targeted for the first wave was more than ten percent of the population. After the first wave was completed, the plan called for the sterilization of the extended families of those deemed unfit.

Moreover, the committee sought to bypass the court system in ordering the sterilization. They attempted to define the sterilization as a police function. In their view, once a eugenic board had ordered the sterilization of an individual, the police would simply enforce the decision. Additionally, Laughlin and his committee suggested polygamy and systematic mating to increase the bloodline of the desirables and draconian laws preventing births from any deemed unfit. They called for restrictive marriage laws, forced segregation of undesirables, and compulsory birth control. Nor did they confine their views to just the United States; they envisioned a global movement.

It was only a short step from theory to implementing the plan. The sterilization of undesirables first occurred outside the law and paralleled the development of eugenics. The first cases of sterilization occurred in Kansas, where F. Hoyt Pitcher surgically asexualized fifty-eight children confined in the Kansas Home for the Feebleminded during the 1890s. Kansas's citizens denounced the doctor, and he was reluctantly removed by the board of trustees. The board staunchly defended Pitcher and defended his work. The doctor did not face any charges.

About the same time, Dr. Harry Clay Sharp was castrating inmates at the Indiana Reformatory to cure convicts of masturbation. Again, the procedure was conducted outside of the law. In 1899 Sharp read an article in the Journal of the American Medical Association (JAMA). The article, written by Dr. Albert Ochsner advocated the sterilization of all convicts with vasectomies. After reading the article, Sharp performed the procedure on scores of inmates without anesthetics.93

[EDITOR: Dr. Albert Ochnser was the fascist uncle who mentored Dr. Alton Ohsner


...who ran a CIA biowarfare lab in New Orleans connected to the JFK assassination.

www.spartacus.schoolnet.co.uk/JFKochsner.htm ]

By 1906, Sharp claimed to have performed 206 vasectomies, even though the procedure was still not legal. While Sharp was very influential in the passage of Indiana's sterilization law, he was by no means alone. Reverend Oscar McCulloch, the pastor of the Indianapolis's Plymouth Congregational Church, was a leading reformer and advocate of public charity while harboring a deep hate for the poor. Indiana law specified a compulsory servitude for its paupers. They could be farmed out to the highest bidder. MuCulloch performed his own genealogical survey of Indiana's wandering tribe of paupers called the Tribe of Ishmael. MuCulloch's survey of the Tribe of Ishmael quickly became a centerpiece of eugenics studies. MuCulloch preached to his congregation that the paupers were parasites and preordained to be nothing more.

The reader maybe wondering about a connection between religion and eugenics as three of the most influential people in the early development of eugenics came from deep religious backgrounds: Laughlin, Davenport, and MuCulloch. While there were a large number of evangelical ministers that served as officers in the eugenic movement, and more were members, the connection seems more informal than formal and dependent solely upon the individual minister involved. At the same time, few ministers spoke out against eugenics and those that did so waited until the 1930s, after eugenics had been discredited and associated with the Nazis. The connection between eugenics, the Klan, and religion is an area open to further research.

David Jordan, president of the University of Indiana, lectured his students that paupers were indeed parasites. In 1902, in his book Blood of a Nation he first proposed the concept of blood as the immutable basis for race. Jordan left Indiana to accept a position as the first president of Stanford University.94

In addition to Jordan and MuCulloch, Indiana's State Board of Health was headed by Dr. J. N. Hurty, a staunch believer in eugenics. Hurty would later rise to become head of the American Public Health Association. In 1907, at the repeated urging of Sharp and Hurty, Indiana became the first state to pass eugenic laws calling for the sterilization of undesirables. Indiana, however, was not the first state to have had eugenic sterilization laws introduced in the legislator. Sterilization laws were first introduced in the Michigan legislator in 1905, and again in Pennsylvania in 1906. Both measures failed, however, the Indiana law was modeled on the Pennsylvania bill. The bill passed the Indiana House by a margin of 59 to 22 and the Senate by 28 to 16 votes. The vote was proceeded by little debate in both chambers.

In 1909, Oregon's Governor George Chamberlain vetoed a sterilization bill noting that's it didn't require enough safeguards. Moreover, eugenic sterilization laws failed in several other states in 1909, including another attempt in Michigan and a first attempt in Wisconsin. However, sterilization laws did pass in three states in1909. Washington State passed a bill mandating sterilization of habitual criminals and rapists. Connecticut passed a law allowing the medical staff to examine patients of two asylums for the feebleminded and their family trees to determine if the patients should be sterilized. California enacted a bill that allowed castration or sterilization of convicts and residents of the state home for the feebleminded.

In the next two years, additional states passed eugenic sterilization laws. Iowa passed perhaps the most inclusive law, allowing the sterilization of criminals, idiots, feebleminded, imbeciles, drunkards, drug fiends, epileptics, and moral or sexual perverts. Nevada, New Jersey and New York were among the states to pass sterilization laws.

Nonetheless, the American Breeders Association and the Eugenic Record office remained frustrated with the progress of eliminating undesirables from the gene pool. Although several states now had laws allowing for forced sterilization, few people were ever sterilized. Only in California, where more than two hundred were sterilized, had the law been applied to more than a couple individuals. Moreover, public sentiment for the enforcement of the sterilization laws was lacking across the nation.

Following the death of Galton in 1911, the First Eugenic Conference was organized to be held in London. Winston Churchill was scheduled to introduce the king at the conference and was reportedly concerned about the rising number of people judged to be mental defects. The organizers wanted the Secretary of State, P.C. Knox to send an official delegation. However, the state department could not comply because the conference was a non-governmental meeting. However, Knox did send official invitations to prominent American leaders on official letterhead. Knox, who had been a former lawyer for Carnegie Steel, effectively used the state department as the eugenics post office. American racial theories dominated the conference held at the University of London.

The next big stride forward for the American eugenic movement came with the U.S. entry into WWI. Officials struggled with the task of classifying the three million draftees. Robert Yerkes, president of the American Psychological Association, gathered other eugenic activists around him and pleaded for intelligence testing of the new draftees. They developed two tests for the army, the beta test for those that could read and write English, and a pictorial alpha test for those that could not read. The questions centered largely on pop culture. Hence, urbanites could pass the exam easily, while draftees coming from rural population, and isolated from theaters and large cities with the newest consumer items, failed the test miserably. Even the questions in the pictorial tests were drawn from the latest pop culture. In the pictorial test, the subject was to draw in what was missing. One such question featured a picture of a bowling lane and the subject was expected to pencil in the missing bowling ball. America was still largely rural with many areas almost isolated as the only means of transportation at the time depended upon the railroads and horses. With such questions, one can easily see why a large number of rural recruits failed the exam. Predictably, the results were dismal: 47 percent of all whites failed and 89 percent of all Blacks failed. However, Yerkes claimed that feeblemindedness was the lowest in the following Anglo groups: 0.1 percent in the Dutch, 0.2 percent in Germans and less than 0.05 percent in Swedes.95


The war years proved fruitful for eugenics. During those years, eugenic groups proliferated in America. The Race Betterment Foundation, founded by Dr. John Kellogg, was organized in 1914. Kellogg was a member of the state board of health. The newly founded group attracted some of the most radical elements in the eugenic movement.

The next big advance for eugenics came on May 2, 1927, in a Supreme Court ruling of Buck v Bell. The case revolved around Carrie Buck and the sterilization law of Virginia.

Previously, Carrie's mother, Emma had been confined to the home for the feebleminded shortly after WWI. After the war, Virginia had a well establish program of sweeping social outcasts into homes for the feebleminded. Carrie's mother was a widow. She also was destitute and had been convicted of prostitution, making her an ideal candidate for the home of the feebleminded. She would remain in the home for the rest of her life.

Carrie had been her only child while she was married and was placed in another family. Her school records showed she was a good student. The Dobbses family, with whom she was living, withdrew her from school when she reached sixth grade. In 1923, Carrie became pregnant. She claimed it was rape, but the Dobbses would not listen to her explanations and filed commitment papers, declaring Carrie to be feebleminded.

In 1924, Virginia passed a sterilization law for the feebleminded. The case attracted the attention of Laughlin and other prominent individuals from the eugenic movement. To further their efforts and strengthen their court case, they had Carrie's child declared feebleminded at the age of three. Eventually, the case reached the Supreme Court with the Chief Justice being William Howard Taft. Only one justice ruled against sterilizing Carrie, Justice Pierce Butler. The opinion written by Justice Oliver Wendell Holmes Jr. concluded with words that still echo throughout time; "Three generations of imbeciles are enough."96

With the sterilization of Carrie Buck and the Supreme Court ruling upholding the decision, the eugenics movement had surpassed a milestone. From the passage of Indiana's sterilization law until the Buck ruling, many states that had passed sterilization laws refrained from using it. Of the twenty-three states that had passed sterilization laws, Maine, Minnesota, Nevada, New Jersey, South Dakota and Utah had recorded no sterilizations. Idaho and Washington State had recorded just one each. Delaware recorded five cases. Kansas had recorded 335, Nebraska 262, Oregon 313 and Wisconsin 144. California, however, recorded 4636 cases.

Many states had simply been waiting for the ruling in the Buck case before proceeding with sterilizations. From 1907 until 1940, the totals increased at a horrific rate. In North Carolina 1017 cases of forced sterilization were recorded. Michigan recorded 2145, Virginia recorded 3924, and California recorded 14568. In total, no less than 35878 people were sterilized, most of them after the 1927 court ruling.97

Throughout the 1920s the eugenics movement attracted people from diverse causes. The leading proponent of birth control, Marget Sanger, was committed to Social Darwinism and eugenics. Through her efforts, she turned her noble movement into a tool for the eugenic movement. Through her radical oratory and her publication, Birth Control Review, she help to legitimize the appeal of eugenics.

Another leading figure of the time, Lucien Howe, a pioneering ophthalmologist, was also attracted to the eugenic movement. Howe was one of the leading experts in blindness and was well aware that hereditary blindness was rare and not a leading cause of blindness. However, Howe advocated the sterilization of the blind and the banning of marriage of anyone blind. Moreover, Howe also lead the charge that the sterilizations should not be confined to just the blind person, but extended to their relatives.

With the gathering strength of the eugenic movement, Harry Laughlin sought to integrate the movement inside various government agencies. One long-standing target for Laughlin was the Census Bureau. The Bureau, however, would not cooperate with the eugenic movement. In the 1920s the bureau turned a blind eye towards Laughlin's suggestion that each person should be classified by race, such as German Jew or Dutch Jew. However, the Census Bureau did allow Laughlin to conduct a survey of those in state custodial and charitable facilities, as well as jails.

Unable to gain further inroads into the Census Bureau, Laughlin turned to other government agencies. He found ready acceptance in Virginia, largely due to Walter Plecker, the registrar of vital statistics. Plecker was an extreme racist. Plecker would soon use his hatred of race mixing, or mongrelization, of the white race by lesser races into one of the nation's most restrictive marriage laws. With the help of Anglo-Saxon clubs, the 1924 Virginia legislator passed the Racial Integrity Act, declaring anyone having blood that was more than one-sixteenth non-white as a non white. Originally, the act called for one sixty-fourth, but was amended in the legislator because too many of the leading families of Virginia boasted of having Indian blood. The penalty for falsely registering one's race was a year in jail.

Plecker was particularly incensed by the reduction of Indian blood. His fury was further inflamed when Congress granted citizenship to all Indians not already naturalized less than two weeks from the passage of Virginia's Racial Integrity Act. Plecker believed that the problem stemmed from Indians mixing with both whites and blacks and that under the act, they could then claim exemption based on their Indian blood. Most of Virginia's Indian population were poor and lived in rural areas, making them an easy target for reclassification as Negroid, despite vigorous protest. In one case, Plecker ruled that if a comb passed through the hair of an individual, that person would be classified as Indian if not as Negroid. The comb test was perhaps as good as any other method Plecker used in reclassifying Virginia's native Americans. He used his racist tactics to expunge the Indian as a racial classification in Virginia.

While for the most part the eugenic movement was unable to penetrate the federal government and affect policy decision, the most notable exception was the immigration law. Since 1890, the American eugenicists considered the immigrants arriving from Europe to be genetically inferior. Their fears were enhanced by the mass number of the people fleeing Europe. More than eight million immigrants arrived between 1900 and 1909. The newly arrived came mostly from southern and eastern Europe. A large number of them were Catholic and Jewish. The influx of immigrants contributed to the urbanization of the country. The 1920 census revealed for the first time that more people lived in urban rather than rural areas. The resulting reapportionment of the legislator would be hard fought. The House increased the number of representatives to 415 to preserve as much as possible the old districts and power structure. The Red Scare and the rise of the Klan added further fuel to the fury.

A key figure in the success of the eugenicists in changing immigration policy was Albert Johnson. Johnson had been raised at the northern edge of the Mason Dixon line in Illinois during the turbulent Reconstruction period. He later became a big city newspaperman before moving to the small town of Hoquiam, Washington. It was from here that Johnson ran for congress and was elected to the House in 1912. Johnson was a fanatic racist and eugenicist. In 1919, he began a twelve-year tenure as chairman of the Immigration and Naturalization subcommittee in the House.

While there had been restrictions in immigration prior to Johnson's chairmanship, the restrictions were reactionary in nature and not eugenically motivated. Johnson viewed any immigration as a negative factor. One of his first actions was to appoint Laughlin as his eugenic expert before his committee. Laughlin and other eugenicists had long urged the classification of immigrants along strict biological and racial lines, as well as advocating intelligence testing of immigrants before they left Europe. Their goal was to restrict immigration based on quotas before the mass arrivals started in 1890.

Laughlin's inflammatory rhetoric helped along by funding from the Carnegie Institute, began producing results in congress. Due to the political explosiveness of the issue, congress wavered back and forth. In 1923, Labor Secretary James Davis signaled a willingness to cooperate in setting up an overseas eugenic network. Laughlin then toured Europe as a special immigration agent. In 1924, President Calvin Coolidge signed the Immigration Act of 1924. The act called for vast changes in immigration. For instance, the Italian quota had been cut from 42,000 per year to just 4,000. The act limited immigration to just two percent of the reported national origin of the 1890s census. Thus the eugenicists were successful in rolling back immigration to the 1890. However, the act produced a firestorm in congress, as many argued the validity of the data used to set the quotas. Thus the act required that the Census Bureau report to a quota board their methodology in establishing the base figures. The quota board was made up of Secretary of Commerce Herbert Hoover, Secretary of State Frank Kellogg and Secretary of Labor, James Davis. In 1927, the quota board submitted a letter to President Coolidge, cautioning that the figures were not entirely satisfactory.

Laughlin was only partially successful in setting up his European testing centers. The system was installed in Belgium, England, Ireland, Holland, Poland, Italy, Czechoslovakia, Denmark, Germany, and Sweden. The system, on average, eugenically inspected roughly eighty percent of would-be immigrants from those countries and rejected about 88 applicants out of every 1000 as mentally or physically defective. However, Laughlin's inspections were short lived due to a shortage of funding and governmental objections from Europe.

Nevertheless, Laughlin's major achievement in establishing eugenics as part of immigration was the passage of the 1924 Immigration Act and the establishment of quotas. Both stood as national policy until 1952.98

The American Breeders and the Eugenic Society were not content with just sterilization and segregation methods as a means to eliminate the defective. By 1910, they were also proposing euthanasia using a lethal chamber. The so-called lethal chamber was the forerunner of the modern gas chamber and was believed to be humane. Euthanasia was listed as the eighth of nine methods of eliminating the defectives from society. While many prominent, professional people in both medicine and psychology came to advocate euthanasia, one noted exception was Margaret Sanger. Others within her birth control movement however, were advocates.

On November 12, 1915, euthanasia and eugenics became front-page news across the country. Dr. Harry Haiselden had refused to provide treatment for a newborn baby suffering from extreme intestinal and rectal abnormalities. There was a question if the baby could be saved. Nonetheless, the Dr. withheld treatment. Emboldened by some favorable press coverage, the Dr. admitted to previously to euthanizing others. Haiselden later brought to light the case of the Illinois Institution for the Feebleminded in Lincoln. Patients were fed milk from Lincoln's own herd of cows that were known to be harboring tuberculosis. Eugenicists believed death from tuberculosis was the result of defective genes.

However, the real story behind the gates of this home for the feebleminded was euthanasia by neglect and was repeated across the nation in hundreds of other such homes. The real story lies hidden in the records of Lincoln's staggering death rates. Between 1904 and 1909 the death rate of residents was as high as 12 percent. Often after being admitted as many as 30 percent of the epileptic children died within eighteen months. A large number of the residents of Lincoln died before reaching the age of ten. In 1930, the life expectancy of those judged to be feebleminded was just 18.5 years; today the rate for those that are mentally retarded is 66.2 years.100

This method of euthanasia through benign neglect was all too common throughout America during the 1920s and 1930s. In fact, it is still commonplace in America today where adequate health care has now became a luxury only affordable by the wealthy. An excellent example exists in the case of Legionnaire's disease. The discovery of the disease occurred in 1976, when an outbreak of the disease occurred among the attendees of an American Legion celebration of the bicentennial. The outbreak caused numerous deaths and a near panic. It took researchers over six months to determine the bacteria responsible for the outbreak. Nevertheless, further investigation of blood samples saved from other deaths by the researchers showed that a previous outbreak of the disease had occurred in 1965 at St. Elizabeth's Psychiatric Hospital in Washington when fourteen patients died.

The St. Elizabeth's case and the Legionnaire's convention in Philadelphia reveal what is all too commonplace throughout America, both in the past and present. The poor and weak are widely regarded as expendable. The Legionnaires were upright citizens and voters, while the residents of St Elizabeth were viewed as expendable. Thus, the deaths of the Legionnaires demanded an investigation, while the deaths at St. Elizabeth were checked off as routine.99

While the deaths at St. Elizabeth were not the result of a conscious decision to eliminate the inferior, the benign neglect present in today's society that is prevalent among the right-wing in America towards the poor and weak. It serves the same purpose as the eugenic euthanasia ideas of bygone days. Further, it provides society with a guiltless solution and the excuse of not being aware of what was going on, just like the German citizens living next to a concentration camp.

As mentioned earlier, the American eugenic movement began to attract global attention at the First Eugenic Conference in London. In fact, the conference was dominated by the American views of race and eugenics. Plans for further conferences had been made there. The second conference was held in Paris. Again, plans were made for another conference, but World War I interfered and the conference was postponed.

Following the war, Germany would not cooperate with the International Federation of Eugenic Organization because of bitter animosity remaining between Germany and England, France, and Belgium. However, German eugenicists' bonds with Davenport remained firm, due largely to the generous funding of German eugenic research by the Rockefeller Foundation and the Carnegie Institute. Both organizations lavished ample funds on the German eugenicists while Americans stood in bread lines. American laws soon became inspiration for the German racists. One of the German racist hate mongers that took note of the American laws was Adolf Hitler. While confined in prison for the Beer Hall Putsch, Hitler studiously read eugenic textbooks that quoted Davenport and other American eugenicists. Hitler's publisher was Germany's most prominent eugenic publisher. The president of the American Eugenic Society received a letter from Hitler praising the publishing of The Passing of the Great Race by Madison Grant. The book called for eliminating the unfit. In the letter, Hitler described the book as his Bible.101

While it would be unwise to attribute Hitler's extreme racist view towards Jews to the American eugenic movement, nonetheless by cloaking his racism under the disguise of science, Hitler was able to attract additional followers that would have otherwise remained neutral. The intellectual view of eugenics that Hitler adopted was strictly from the American eugenic movement. One of the books that Hitler studied was Foundation of Human Heredity and Race Hygiene, written by three American eugenicists. In Germany, the book was published by Julius Lehmann. Lehmann was at Hitler's side during the Beer Hall Putsch. It was also Lehmann's villa where Bavarian officials were held hostage in the immediate aftermath of the failed coup.

The influence of the American eugenic movement on Hitler can be seen in several quotes from Mein Kampf.

"The demand that defective people be prevented from propagating equally defective offspring is a demand of the clearest reason and if systematically executed, represents the most humane act of mankind."
"It must see to it that only the healthy beget children...."
"The prevention of procreative faculty in suffers from syphilis, tuberculosis, hereditary diseases, cripples, and cretins is a crime...A prevention of the faculty and opportunity to procreate on the part of the physically degenerate and mentally sick, over a period of only six hundred years, would not only free humanity from an immeasurable misfortune, but would lead to a recovery which today seems scarcely conceivable... The result will be a race which at least will have eliminated the germs of our present physical and hence spiritual decay."
"Speaking English wearing good clothes and going to school and to church do not transform a Negro into a white man. Nor was a Syrian or Egyptian freedman transformed into a Roman by wearing a toga and applauding his favorite gladiator in the amphitheater."
"since it restores that free play of forces which must lead to a continuous mutual higher breeding until at last the best of humanity, having achieved possession of this earth, will have a free path for activity in domains which lie partly above it and partly outside of it."
"that the state represents no end, but a means. It is, to be sure, the premise for the formation of a higher human culture, but not its cause, which lies exclusively in the existence of a race capable of culture."
"Every racial crossing leads inevitably sooner or later to the decline of the hybrid product as long as the higher element of this crossing is still existent in any kind of racial unity."102+

The first quote from Mein Kampf is an eerie echo of Justice Holmes majority opinion in the Buck.

"It is better for all the world if instead of waiting to execute degenerate offspring for crime, or to let them starve for their imbecility, society can prevent those who are manifestly unfit from continuing their kind. The principle that sustains compulsory vaccination is broad enough to cover cutting Fallopian tubes. Three generations of imbeciles are enough."103

There is no difference in substance in the two quotes. Hitler merely adopted the policies of the American eugenicists. In fact, Hitler was acutely aware of the progress of eugenics in the Untied States, as evident in Mein Kampf where he notes the passage of eugenic quotas for immigration. Hitler attributed the superior culture of the United States compared to South America to a large Germanic population who, unlike the Spanish in South America failed to interbreed with the lesser, native population. Throughout the pages of Mein Kampf one can note the similarity of Hitler's rantings to the policies of the American eugenicists. Perhaps the best means of summarizing Hitler's views comes from Mein Kampf when he states "The Germanic inhabitant of the American continent, who has remained racially pure and unmixed, rose to be master of the continent; he will remain the master as long as he does not fall victim to defilement of the blood."104

During the first two decades of the 20th Century, American eugenicists led the way. However, with the rise of Hitler in Europe, German eugenicists became a co-partner in eugenic research. Nevertheless, it was American money that kept eugenic research and German science alive during the hyperinflation of the early 1920s. One noted beneficiary of Rockefeller Foundation money was the Kaiser Wilhelm Institute for eugenic research. In all, three separate institutes of Kaiser Wilhelm fell under the eugenic classification: psychiatry, anthropology, and brain research. All of which owed their founding and good fortune to the Rockefeller Foundation.

Throughout the 1920s, German eugenicists continued to gain stature in the global eugenic movement. On January 30, 1933, Germany assumed the leading role in the eugenic movement with the rise to power of Hitler. It did not take Hitler long to implement his eugenic views. On July 14, 1933, Hitler issued the Reich Statute Part 1 No.86, the Law for the Prevention of Defective Progeny. The law called for compulsory sterilization of defectives. The nine categories listed were headed by feebleminded, schizophrenia, manic-depressive, Huntington's cholera, epilepsy, hereditary body deformities, deafness and hereditary blindness. Alcoholism, the last category on the list, was optional to avoid the confusion with ordinary drunkenness.

The Nazis announced that 400,000 Germans would be subjected to the law immediately. The program was to begin on January 1, 1934. A massive sterilization infrastructure was created to put the new law into effect. Over 205 local eugenic courts were created. In addition, twenty-six special eugenic appellate courts were also created. Physicians were required by law to report suspected patients and to provide their confidential patient records.105

The law was essentially the same law Davenport and Laughlin proposed for the United States and passed in the majority of states. While the rest of the world reacted in shock and horror of the inhumane regime of the Nazis, American eugenicists covered the eugenic developments in Germany with fascination and joy. The Journal of the American Medical Association reported on the Nazi law as if it were a routine health measure like vaccines. Money from the Rockefeller Foundation continued to finance additional Nazi eugenic studies. In fact, the foundation would continue to fund Nazi eugenic research up until the outbreak of war in Europe.

In 1933, after an aggressive campaign to secure a contract with Nazi Germany IBM designed the first Nazi census. It was the technology from IBM that aided the Nazis in carrying out the Holocaust. Without the use of IBM machines, the Nazis would have been forced to painstakingly analyze the genetic records of Europeans by hand, one-at-a-time. It would have taken an army of workers years to sort through all the records by hand, but with the IBM's Hollerith machines the same task could be completed in minutes and hours.

In 1935, after the passage of the Nueremberg Laws, the Nazis awarded Laughlin a special recognition for his contribution to the Reich's policy. Laughlin received an honorary degree from the University of Heidleberg.

It wasn't until 1936 that the eugenic movement would experience a decline due to the Nazi threat in Europe. By then Germany was considered a threat to the peace in Europe. Refugees from Germany were flooding the world.

Central to eugenic studies was research on twins. British and Americans long recognized the need for eugenic research studies on twins. Several small studies on twins were conducted in both England and the United States. However, with the rise of the Nazis, the lead in twin research would pass to Germany, just as the forefront of eugenic research did. Nevertheless, the seed money for German research on twins came from the Rockefeller Foundation, as the following telegram of May 13, 1932, from the Rockefeller Foundation's headquarters to its Paris office reveals.


The chief beneficiary of the Rockefeller seed money was Dr. Otmar Freiherr von Verschuer. Verschuer was a violent anti-Semitic and German Nationalist. He had participated in the Kapp Putsch in 1920.In 1922, he outlined his nationalistic eugenic position in a student article entitled Genetics and Race Science as the basis for Vokische. By the time of the Beer Hall Putsch, Verschuer was lecturing that fighting the Jews was integral to Germany's eugenic battle. In 1935, he left the Institute of Anthropology to found Frankfurt University's new Institute for Hereditary Biology and Racial Hygiene. By 1937, Verschuer had gained the trust of the Nazis and by 1939, Verschuer was describing his role as pivotal to Nazi supremacy.

Nevertheless, even after the Nazis seized power, the American eugenicists and medical media still praised Verschuer's work. His research was cited in such prestigious American medical journals as the Journal Of The American Medical Association. Moreover, Rockefeller money continued to flow to Verschuer. It wasn't until 1936, after Raymond Fosdick assumed the presidency of the Rockefeller Foundation, that funding for German eugenic research slowed. However, the funds were readily available if the research omitted the word "eugenics" and repackaged the research as "genetics, brain research, serology", etc. In June 1939, the Rockefeller Foundation tried to deny that it was funding Nazi science. Such denials were lies, as the Rockefeller trust was now sending money through the Emergency Fund for German Science. Such sleight-of-hand of course provided the foundation with a window of deniability.

Verschuer received funding from the Rockefeller Foundation in 1933, 1935, 1936 and 1937 for his research on twins. In fact, the funds to Verschuer continued right on through the war years, funding a number of concentration camp experiments. In 1943, he received funding from the German Research Society for experiments packaged under the label of serology. The experiments would require large volumes of blood. The blood would come from twins at Auschwitz.107

In one of the quirks of fate in history, most readers have probably never heard of Verschuer. Yet everyone would be aware of the horrendous and hideous experiments carried out on Auschwitz prisoners at his beckoning. The experiments were carried out by a former Ph.D. candidate of Verschuer who remained a collaborator with him throughout the war. That former student would provide the blood samples in the study mentioned above. His name was Dr. Joseph Mengele, the Angel of Death. Hence, the trail of Rockefeller money leads directly to the gates of Auschwitz and some of the most gruesome experiments ever carried out on humans.108

While Mengele escaped to South America to avoid war crimes charges and a sure date with the hangman, Verschuer was never charged with any war crimes. However, in 1946, the Die News Zeitung published an article listing all the doctors that had fled Germany. On May 3, the paper followed up the article with accusations made against Verschuer by Robert Havemann, a communist and chemist who had resisted the Nazis. He openly accused Verschuer of using Mengele to obtain eyeballs and blood from those murdered at Auschwitz. Verschuer dictated a sworn statement to the occupation-appointed administrator of the Kaiser Wilhelm Institute that he had always opposed racial concepts. He further swore that Mengele had been transferred to Auschwitz against his will. Mengele couldn't wait to get involved in the war and enlisted.

Havemann organized a committee of scientists at Kaiser Wilhelm Institute to examine the evidence against Vershchuer. The committee concluded that Verschuer had engaged in despicable acts in concert with Mengele. The report was sealed for the next fifteen years. A second board found Verschuer innocent of committing any crimes or transgressions against inmates of Auschwitz. Verschuer's record was expunged of any transgressions and he soon became a "respectable scientist" in Germany and the Untied States. In 1949, he became a member of the newly created American Society of Human Genetics, created by eugenicists. The first president of the new society was Hermann Muller of Texas, a former Rockefeller fellow who had worked at the Kaiser Wilhelm Institute in 1932. In 1960, under international pressure to continue the hunt for Nazis, an investigation opened to examine the connection between Verschuer and Mengele. The investigation concluded there was no connection between the two. Verschuer's record like so many other Nazis had been completely white-washed. In 1969, Verschuer was killed in a car accident; he never faced justice for his crimes.109

It wasn't until 1940 that the Carnegie Institute stopped funding Laughlin and the Cold Harbor center. In 1947, a Carnegie administrator overseeing the dismantling of Cold Spring contacted the Dight Institute, a independent eugenic research organization at the University of Minnesota. In 1948, the Dight Institute agreed to take the records concerning individual trait and family documents if Carnegie defrayed the shipping cost. Six months later, the Minnesota Historical Society agreed to take a half-ton of books and family genealogical books. The New York Public Library took in an additional 1000 volumes of family genealogical books.

In December 1946, the United Nations passed Resolution 96 (I), which embedded genocide into international law. The resolution reads as follows. "Genocide is a denial of the right of existence of entire human groups, as homicide is the denial of the right to live of individual human beings, such denial of the right of existence shocks the conscience of mankind, results in great losses to humanity in the form of cultural and other contributions represented by these human groups and is contrary to moral law and the spirit and aims of the United Nations."

Shortly after the passage of Resolution 96 the Treaty Against Genocide was ratified. The treaty delineated five categories of genocide as listed below.

    1. Killing members of the group.
    2. Causing serious bodily harm or mental harm to members of the group.
    3. Deliberately inflicting on the group conditions of life calculated to bring about its physical destruction in whole or in part.
    4. Imposing measures intended to prevent births within the group.
    5. Forcibly transferring children of the group to another group.110

Under the categories listed above aspects of the past and present policy of the United States and Canada towards the Native Americans is considered genocide under the international treaty. Also the policies of many international companies especially those engaged in oil exploration and mining are equally guilty of genocide in the remote areas of South America, Asia and Africa. However, the UN has failed to pursue a single case of genocide against any corporation.

Eugenics, like fascism, didn't die with the end of WWII. Rather, during the war it began to morph into more socially acceptable forms. In fact, one of the largest sterilization campaigns in the United States didn't take place until 1946-1947, in the Winston-Salem school district in North Carolina. The sterilization program evolved out of the Wake Forest Medical School. In 1941, the American Eugenic Society helped establish a Department of Medical Genetics at Wake Forest from money received from the Carnegie Institute. The eugenics Research Association's vice president, William Allan, chaired the new department. Following Allan's death in 1943, Dr. C. Nash Herndon took over the department. Herndon was an advocate of forced sterilization. By 1943, Herndon claimed to have sterilized about thirty individuals, mostly blacks.

In 1946, Gordon Gray founded the Bowman Gray (Memorial) Medical School in Winston-Salem. The school maintained extensive eugenic records of children with diseases believed to be inherited, which included low IQ children.

Herndon and Gray, with the help of Dr. Clarence Gamble, heir to the Proctor & Gamble soap fortune, began a program to administer an IQ test to all Winston-Salem school children. Below some arbitrary cut off point in the test scores, the child was selected for sterilization. The program was extended to nearby Orange County with money from James Gordon Hanes, a trustee of Bowman Gray Medical School and underwear mogul. Hundreds of children in North Carolina were sterilized in the program. Wake Forest is still uncovering its past association with the eugenics movement


Part 7: The Bush Family & Eugenics

The eugenics movement did not end with the program in Winston Salem. In 1950 and 1951, John Foster Dulles led John D. Rockefeller III on a world tour, focusing on the need to stop the expansion of the non-white populations. In the fall of 1952, Rockefeller and Dulles established the Population Council with money from the Rockefeller fortune. The American Eugenics Society soon moved its Yale University headquarters into the offices of the Population Council. The two groups then merged. Dr. Herndon became president of the American Eugenic Society in 1953, and its work continued to expand with money from the Rockefellers.

In the early 1950s, Gordon Gray, a close friend and frequent golfing partner of Prescott Bush was appointed as the first director of the Psychological Strategy Board under Eisenhower. Later in 1958, Gray became National Security Advisor to Eisenhower. Gray's son, C. Bowden served as George Bush's (Prescott's son) legal counsel throughout the evolving Iran-Contra scandal.

In 1958, William Draper was appointed to chair a committee which was advising President Dwight Eisenhower on the use of military aid to other countries. The appointment was made possible by Prescott Bush and Gordon Gray, both whom were frequent golfing partners of Eisenhower. Dillon and Reed employed Draper during the 1930s. It was with Draper's help that Prescott Bush was able to float the largest bond issue for Nazi Germany. Draper later served in post war Germany as the head of the economic unit in charge of dismantling the cartel system.

Draper was a racist and major funder of the eugenic movement. Draper used his position as committee chairman to direct the focus of the committee away from military aid to the danger of over-population in third world countries. His racist views were dismissed by the Eisenhower administration. Draper went on to fund the Population Crisis Committee with money from the Rockefellers and du Ponts. In the 1960s, Draper served as an advisor to LBJ. He was instrumental in getting the Johnson administration to use the overseas aid program to fund birth control in non-white countries.

The Bush-Rockefeller connection goes back to pre-WWI and Samuel Bush, president of Buckeye Casting. Samuel Bush was also director of several Ohio and Pennsylvania railroads. The railroads worked closely with the Ohio-bred Standard Oil. Standard held a minority interest in Buckeye Castings. In turn, railroads transporting Rockefeller oil were required to purchase all of their couplings and related railroad equipment from Buckeye.

George Bush, Prescott's son, was a vocal supporter of Draper's policies. In 1964, he campaigned in Texas against the Civil Rights Act. In 1969, as Congressman, Bush arranged hearings on the dangers posed by the birth of too many black babies.

In 1972, as ambassador to the United Nations, George Bush arranged the first official contract between the American government and the Sterilization League of America, which had, by then, changed its name, yet again, to the Association for Voluntary Surgical Contraception. Under this contract, the United States taxpayer was burdened with the cost of sterilization programs in the non white third world.

In the 1980s, as Vice President, George Bush urged Reagan to appoint Draper's son as administrator of the United Nations Development Program, an organization connected with the World Bank and charged with supervising population control. Bush was also instrumental in the appointment of Draper's son to the Export-Import bank. During the 1980s the Export-Import Bank with the urging of the Reagan administration served as a funnel for funds to provide Saddam Hussein with funds and credits during the Iran-Iraq war.111

The Bush and Draper families have shared close relationships since the 1920s. In 1980, Draper's son was co-chairman for finance and head of fundraising for the George Bush-for-President campaign in 1980.

Dr. Clarence Gamble later established the Pathfinder Fund. The prime objective of the Pathfinder fund is to break down the resistance to sterilization in third world countries.

The racist policies of the Bush family extends into the administration of George W. Bush. Charles Murray, the Pioneer Fund's best known expert, has served as advisor to many of George W's top advisors and is often quoted by them. (The Pioneer Fund was established by Wickliffe Draper, not to be confused with William Draper) Both Tommy Thompson's and NYC Mayor Giuliani's welfare programs are directly influenced by Murray. Murray was a consultant on the Wisconsin plan when Thompson changed the Wisconsin welfare system. Murray's books The Bell Curve and Losing Ground, both about the inferiority of Blacks, serve as bibles for the school privatization and anti-welfare movements in the U.S.

There are a several things to note in the last few paragraphs. The first notable aspect in post-war period is how small and tight this group of eugenics was. Throughout this book, this is a reoccurring theme. American fascism is not broadly based; it is concentrated into a few wealthy families. When it does extend to larger number of families, those families are linked together by inner marriages. American fascism, like the Nazis in Germany is a product of a few elite families. Another circumstance worth noting is the concentration of these people in the Eisenhower administration. Eisenhower was certainly no supporter of Nazi Germany. In fact, he expressed his hatred of the Nazis and Germans in general countless times in letters to his wife. However, his administration was littered with Nazi supporters. In essence, he was duped. However, the old general was not the complete fool. In his farewell address he forewarned us about the military-industrial complex, a polite description for post-war fascism.

It is undeniable that the tentacles of eugenics extend into such noble causes as birth control, population control and Planed Parenthood. When such organizations and policies are under democratic control they can do much to alleviate poverty, human misery and famine. It is only when such policies and organizations slip under the control of such families as the Bush and Rockefellers that they become modern day weapons of genocide.

Although it has been over seventy years, the legacy of the 1920's is not one of flappers and speakeasies. Its true legacy is one of brutal repression. The leaders of corporate America were successful in purging socialists and union organizers through a network of hard right "patriotic" groups. The seeds of fascism had been successfully sowed in the 1920s, and grew into full-blown fascist groups during the economic turmoil of the 1930s.

Before the end of the 1920's, the economy would sink into a deep depression; a fitting tribute to the failed laissez-faire economic policies of the decade's three Republican administrations. The decade would end much the same as it began. In one of the most shameful acts of all time, a hate-filled President Hoover ordered the army to remove Bonus Marchers from Washington, D.C.

In May, 1932, WWI veterans came to Washington DC, demanding payment of their deferred bonuses to help them survive the depression. On May 24, General Alfred Smith, chief of G2 (army intelligence), and General Douglas MacArthur met to consider implementing Emergency Plan White, a plan designed to suppress domestic unrest. Charged with preparation was General George Van Horn Moseley. Moseley and MacArthur were convinced that the Bonus Marchers had fallen under communist control. Moseley was insistent upon removing the marchers by force. Late in July, the army attacked the marchers using tear gas, cavalry, sabers and bayonets. Two officers involved in the attacks were George Patton and Dwight Eisenhower. Moseley held extreme views on eugenics and immigration, and following his retirement became a pro-Nazi figure.18

The Nazi's plan for world domination involved several facets, like a many-headed hydra. The cartel agreements went far beyond the establishment of monopolies, and, in fact, were a major part of the Nazi war plan, and were readily entered into by the leaders of corporate America. Along with fascism support for big business came extreme anti-unionism.

Cartel agreements had two effects on WWII. First, they hindered production of munitions. Second, they shifted the geopolitical balance in South America to the Nazis. American companies were excluded by these agreements from expanding into South America, while German firms were free to do so. Once the war started, these German firms in South America were used to circumvent the British blockade, prolonging the war.

Nazi influence in South America continued after the war, and the continent became a haven for Nazi war criminals. Once safely in South America, Nazi war criminals became military advisors, and trained their host country's security forces. The end result has been a series of coups overthrowing reformist governments, and the installation of brutal dictatorships with their accompanying death squads. The Nazi influence in Argentina was apparent as recently as the Falkland Islands War, in which the Argentine air force achieved some success. The Argentine aircraft industry is the direct product of ex-Nazi engineers.


The Roaring '20s and the Roots of American Fascism

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2. Germany's Master Plan, Joseph Borkin & Charles welsh, Duell, Sloan & Pearce, 1943, page 22.
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4. Germany's Master Plan, page 25.
5. Germany's Master Plan, page 16.
6. Germany's Master Plan, page 37.
7. Germany's Master plan, page 46.
8. Germany's Master Plan, page 54.
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13. Germany's Master Plan, pages 75-77.
14. Germany's Master Plan, pages 67-69.
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16. www.redthread.f2s.com/Quotations/Author/AlvinMOwsley.html
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97. War Against the Weak, pages 122-123.
98. War Against the Weak, pages 185-206.
99. The Coming Plague,
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102. Mein Kampf,
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104. War Against the Weak, page 275.
105. War Against the Weak, pages 299-300.
106. War Against the Weak, page 297.
107. War Against the Weak, page 365.
108. War Against the Weak, pages 365-367.
109. War Against the Weak, pages 376-380.
110. War Against the Weak, pages 404-405.
111. www.gwu.edu/~nsarchiv/NSAEBB/NSAEBB82/
112. Newsweek.COM, Dirty Business
113. The Secret War Against The Jews, John Loftus, Mark Aarons, St. Martin's Griffin, 1994, page 56.
114. The Splendid Blond Beast: Money, Law and Genocide in the Twentieth Century, Christopher Simpson, Grove Press, 1993,pages 46-48.
115. www.bea.gov

Chapter 5: The 1930s: Nazis Parading on Main Street


Part 1: The Plot Against Roosevelt

One cannot hope to gain an understanding of fascism in America without first looking at its roots in the 1930s. For most readers, the 1930s evoke images of the Great Depression and Dust Bowl. However, this wrenching decade of world economic turmoil involved far more serious events. From the beginning of the decade, events were conspiring to unleash on an unsuspecting world the horrors of the Second World War and the unfathomable inhumanity of the Holocaust. The Second World War would go on to shape the geopolitical scene for the remainder of the century. Claims arising from the Holocaust would still be front-page headlines as the world entered the 21st century.

The '30s were a decade in which Nazis openly paraded, unopposed, in the streets of America and were supported by many. Much of the details of 1930's fascism are still shrouded in secrecy. It has been over a half-century since the end of the war, yet news is still surfacing of corporate America's dealings with the Nazis. As of yet, no one has exposed, in a comprehensive manner, the connections between the 1930's fascists and today's American right-wing. Many of the events of the decade have been quietly swept under the rug, such as the plot against Roosevelt. The press downplayed the assassination attempt at the time and even today, most people are still unaware of it.

Just as economic hardships in Germany led to the rise of Hitler, many Americans hit by the depression joined the fascist ranks. Likewise, it was the long and deep recession of the 1980s that lead to a reemergence of fascism, not only in the United States but worldwide, as the world transformed from the industrial age to the information age.

In the 1930s membership in fascist groups expanded, with some groups claiming over a million members. This influence extended to the very end of the twentieth century. Many of today's far right extremist groups were founded by former pro-Nazis, an example being the Posse Comitatus founded by former Silver Shirt leader, Henry Lamont Beach. Other far right extremist groups, such as the World Anti-Communist League, are rife with former pro-Nazis and even Nazi war criminals. The Republican Party has been infested with Nazi war criminals. Many of the ethnic heritage groups the Republican Party set up under Nixon are nothing short of havens for former Nazi war criminals. The American Security Council founded in the 1950s was formed by elements from three pro-Nazi groups of the 30s, and exerted a serious influence on the Reagan administration, as did the LaRouche fascist group.

The rhetoric of today's right-wing extremists is telling evidence of their connection to the fascists of the '30s. The current wild-eyed claim among many in militia groups about Russian or UN troops massing on the Canadian border is nothing but recycled rhetoric from the fascists of the '30s. The 1960s right-wing group, the Minutemen, made a similar claim. Their version had the Red Chinese massing along the Mexican border for an invasion. This too, can be traced back to the '30s, when fascists claimed Jews were massing along the Mexican border for an invasion.

With the exception of Russia, Hitler never invaded a country without first unleashing his agents to create domestic unrest. The United States was no exception. The Nazi's web of intrigue in the United States extended far beyond the use of spies and noisy street agitators such as the Silver Shirts. The Nazis found willing accompanists in the media, the halls of Congress, as well as corporate boardrooms.

Fortunately, the fringe right has always been badly fragmented indeed; it would be cause for great concern to see a consolidation today among the various groups. However, the fragmentation of the '30s was even greater than it is today.1 There were well over 700 different fascist groups during the '30s. The American-National-Socialist Party, German-American Bund, Christian Front, the Silver Shirts, America First Committee, the Christian Mobilizer, National Worker's League and the Committee of One Million were some of the more prominent fascist groups at the time. In addition, many factions of the Mother's Movement were openly fascist.

There are numerous parallels between the fascist groups of the 1930s and the far right groups of today, they are as striking as they are disturbing, and should stand as a vanguard, warning of the hidden agenda of right-wing elements in this country. Among the many common elements between yesterday's fascists and today's far-right groups are the intense hatred of minorities and unions, isolationism, destructive divisionism, nationalism and religion. The Identity religion common to so many of today's far-right groups will be shown to have evolved directly from fascist groups of the '30s.

However, the real story of fascism from the '30s and '40s is one of traitors and seditionists escaping justice after the war's end. As the following quote taken from Facts and Fascism by George Seldes shows:

"Only the little seditionist and traitors have been rounded up by the FBI. The real Nazi Fifth Column in America remains immune. And yet there is evidence that those in both countries who place profits above patriotism---and fascism is based entirely on profits although all of its propaganda speaks of patriotism---have conspired to make America part of the Nazi Big Business system. Thurman Arnold, assistant district attorney of the United States, his assistant, Norman Littell, and several congressional investigations, have produced incontrovertible evidence that some of our biggest monopolies entered into secret agreements with the Nazi cartels and divided the world among them. Most notorious of all was Alcoa, the Mellon-Davis-Duke monopoly which is largely responsible for America not having sufficient aluminum with which to build airplanes before and after Pearl Harbor, while Germany had an unlimited supply. Of the Aluminum Corporation sabotage, and that of other leading companies, the press said very little, but several books have now been written out of the official record."2

It is this unbridled corporatism that is the very heart of fascism. Notice how the words of George Seldes written in 1943 are still true today about those that place profits above patriotism. The stated objective of the first Bush administration was to determine, which corporations were responsible for supplying Iraq with the equipment to produce chemical and biological weapons, and to bring them to justice. Ten years after the Gulf War, not a single corporation has been charged, and the media has quietly swept-that-pledge-under-the-rug. As Seldes stated, they are immune.

More odious is that Dick Cheney, Secretary of Defense in the first Bush administration and the current Vice-President, sold Iraq dual-use equipment during his tenure as CEO of Halliburton. Such equipment can be used to rebuild Iraq's weapons of mass destruction. As Secretary of Defense, Cheney awarded several contracts to Halliburton's subsidiary, Brown and Root Services, for reports as to how private companies could provide logistical support to troops in potential war zones. From 1992 to 1999, with Cheney at Halliburton's helm, Brown and Root was awarded a total of $1.2 billion in defense contracts. Here again is a revolving door between corporate America and government. A door leading only to servitude. Not one mention of these deals was made in the press during the 2000 election campaign. Nor was the failure to prosecute the companies that supplied Iraq with the weapons of mass destruction ever mentioned. While the press viciously accused President Clinton of "wagging the dog" after UN inspectors were forced to leave Iraq, they made no mention of Cheney selling dual-use equipment to Iraq.

Here we have the heart of the problem of the next century: corporate power. Corporations have acquired too much power. They have become so powerful they can openly flaunt our labor laws, our environmental laws and even sell materials for weapons of mass destruction without fear. The problem has become so widespread, and corporations have become so powerful, that society now serves the corporations rather than corporations serving society.

In short, as we progress into the new century, the right-wing issues at the forefront of today's political scene are nothing more than recycled pro-fascist issues of the '30s. It is an agenda of corporate rule. The GATS treaty currently being negotiated and the now-dead Multi-Lateral Investment Agreement, are nothing more than attempts to go global with fascist corporatism.

Due to the depths of the depression the early 1930s were rife with grandiose plots. In the fall of 1933, Americans learned of a sensational plot by General Art Smith and his Khaki Shirts. Smith, a soldier of fortunate had formed a tight-knit band of around thirty to one hundred followers. Smith was a raging anti-Semitic and the Khaki Shirts had killed a heckler in New York City in July. As his reputation grew, so did his ambitions. Smith's idol was Mussolini and he boasted that a million men would follow him and they would kill every damn Jew in the United States. He announced he would march on Washington and seize the government--much as Mussolini had done in Italy. Fortunately, Smith was arrested In Philadelphia on October 12 upon a tip police received about an arms cache.113

There is no better place to begin studying the fascism of the 1930s than to start with the one element that was common to all of these fascist groups, and at the heart of their ideology. Fortunately, such an element exists simply it was the visceral hatred of Roosevelt and liberalism by the native fascist. It would take until the 1990s before we would see such a vicious level of hate displayed in mainstream politics again, with the Republican attack on President Clinton. Both events show how far right-wing extremists will go to gain power and subvert democracy.

There is no better event to begin with than the attempted coup d'etat against Roosevelt financed by Irenee du Pont along with the Morgans and a few other wealthy industrialists of the time. Others involved with the plot were Robert Clark, heir to the Singer Sewing machine corporation, Grayson Murphy, Director of Goodyear, and the Pew family of Sun Oil. During the war, all three of these corporations were involved in aiding of the Nazi empire. Singer's plant located on the east side of the Elba was used to manufacture machine guns. Today, Singer has given up the sewing machine business and is now engaged in defense contracting.

Central to the plot were two groups: the American Legion and the Liberty League. The American Legion was formed and financed by the Morgans and Murphy in 1919 to be used primary to break strikes. Several high-ranking officials from the American Legion were associated with the plot: William Doyle, a former state commander of the American Legion and Gerald MacGuire, a former commander of the Connecticut American Legion.

Irenee, the power behind the du Pont throne at the time, held a controlling interest in General Motors. He was an avid fascist and supporter of Hitler, tracking Hitler's career closely from the 1920s. On September 7, 1926, du Pont gave a speech before the American Chemical Society, in which he advocated the creation of a race of supermen. Injecting special drugs into them during childhood would create these supermen. Not every child would receive such injections; du Pont insisted that only those of pure blood would get the injections.96

Throughout the 1930s, the du Ponts invested heavily in Hitler's Germany through their corporate empire. General Motors under the control of the du Pont family had invested thirty million dollars alone into I.G. Farben. Wendell Swint, du Pont's foreign relation's director knew that I.G. and Krupp had arranged to contribute one half of a percent of its payroll to the Nazi party. Swint testified before the 1934 Munitions Hearings that du Pont was fully aware that it was financing the Nazis through the Opal division of General Motors. Even more telling is the amount of financial backing the du Ponts provided pro-Hitler groups in the United States. Starting in 1933, du Pont provided financing for the American Liberty Lobby, Clark's Crusaders (who claimed 1,200,000 members) and the Liberty League.3

In 1934, Irenee du Pont and William Knudsen, the president of General Motors, along with friends of the Morgan Bank and others set into motion a plot to overthrow FDR. They provided three million in funding for an army of terrorists that was modeled after the French fascist group, Croix de Feu.4 The objective of the plot was to either force Roosevelt to take orders from this group of industrialists as part of a fascist-style government or to execute him if he chose not to cooperate.

The plotters selected General Smedley Butler, a WWI hero to head the plot. Butler was overtly opposed to fascism and had spoken out denouncing Mussolini as a murderer and thug in 1931. The Italian government demanded an apology and President Hoover complied along with placing Butler under arrest for court-martial proceedings. Roosevelt then governor of New York spoke out against the charges against Butler. Roosevelt had been responsible for awarding Butler's Second Medal of Honor for his service in Haiti. President Hoover then backed down, and Butler received a mild reprimand for refusing to retract his words.

The plotters had selected Butler because of his immense popularity among veterans. Butler had spoken words of encouragement to the Bonus Marchers and was relentless in his pursuit for better treatment of American veterans. Gerald MacGuire and Bill Doyle first approached Butler at his home. Both were wounded veterans of WWI. Both played on Butler's sympathy for veterans. However, Butler was not an easy man to fool. After pleasantries were exchanged, the men discussed each other's service in WWI. Then MacGuire worked up the nerve to present his plan to Butler.

According to MacGuire, they wanted Butler to attend an American Legion convention and give a speech in favor of the gold standard. Butler immediately asked about the bonus for the veterans. The best answer MacGuire could produce was that they wanted the veterans to be paid in gold and not "rubber" money. Butler was suspicious both MacGuire and Doyle were dressed in fancy tailored suits and they had pulled into his driveway with a chauffeured limousine. With his suspicions aroused, Butler refused to give them an affirmative reply, but he left the door open a crack to learn more.

Unbeknownst to the plotters however, Butler was a man of honor and believed in the Constitution and democracy. He had a reputation of absolute honesty and was careful in how his name was used and by whom his name was used by. Stringing MacGuire along, Butler attended several more meetings with MacGuire before the latter left for Europe.

MacGuire was a bond salesman for Clark and had been sent to Europe to study how fascist in Europe used veterans. Upon his return from Europe, MacGuire once again sought out Butler. Additional meetings followed, including one in which MacGuire laid out 18 thousand dollar bills to prove that he had enough funding and to alleviate any concerns Butler had. At the same meeting, MacGuire wanted Butler to attend an American Legion Convention with 200 hundred or so of Butler's friends. Butler refused to attend. Again he was suppose to give a speech in favor of the gold standard.

By insisting on an endorsement of the gold standard MacGuire aroused Butler's suspicions and concerns of an ulterior motive. In one meeting, MacGuire implied that they had men inside the Roosevelt Administration that kept them fully informed to convince the reluctant general to join his plot. Butler noted that McGuire had correctly predicted the dismissal of officials from the Roosevelt administration. He also noted that McGuire had correctly predicted that the American legion would endorse the gold standard. Additionally, Butler did observe that other events MacGuire predicted came true in several cases.

In another meeting, MacGuire threatened that if Butler did not accept leadership of the plot that General Douglas MacArthur would replace him. MacGuire claimed that the Morgans favored MacArthur but that he had held out for Butler. Another name mentioned, in case Butler refused to head the plot was former American Legion head Hanford MacNider of Iowa. MacArthur was very unpopular among the veterans for leading the charge against the bonus marchers. MacNider was also unpopular with veterans for opposing early payment of the bonus. MacGuire noted this and informed Butler that MacNider would soon switch his view on the bonus. Within a week Butler noted MacNider's switch.

There were other meetings with Butler, who eventually demanded to meet with the leaders of the plot. Clark then met with Butler and offered him a bribe to read a speech (once again favoring the gold standard) before the American Legion written by John W. Davis, a former Democratic presidential candidate, and chief counsel to J.P. Morgan. Butler bristled at being offered a bribe. Clark backed off, and announced that he was withdrawing his own support from the effort. In response, the plotters brought in Frank N. Belgrano JR, a senior vice president of the Gianinni's Bank of Italy that handled Mussolini's business accounts to head the American Legion. Giannini also founded the Bank of America. Belgrano remained an official of Bank of America until after the death of the founder, Giannini after which, Belgrano founded Transamerica.

Eventually MacGuire had to confess to Butler that the plot involved replacing Roosevelt. MacGuire suggested that Roosevelt was tired and needed an assistant to run the country while he attended to ceremonial activities much like the King of Italy, who had relinquished such power to Mussolini. Butler bristled at the idea.

In July, the Morgan-Mellon controlled press (including Henry Luce's Fortune magazine) unleashed a propaganda blitz extolling the virtues of fascism. In August, the American Liberty League appeared. Butler had been informed of the appearance of this group as part of the plot beforehand.

Morgan and du Pont cronies (including John J. Raskob) funded the League. Included in the League's advisory council were Dr. Samuel Hardin Church, who ran the Carnegie Institute in Pittsburgh, W.R. Perkins of National City Bank; Alfred Sloan, CEO of GM; Joseph M. Proskauer, former New York Supreme Court Justice and the general counsel to the Consolidated Gas Company; J. Howard Pew of Sun Oil and the financier of the openly fascist Sentinels of the Republic; and David Reed, the Republican Senator from Pennsylvania who remarked on the floor of the Senate in May 1932: "I do not often envy other countries and their governments, but I say that if this country ever needed a Mussolini, it needs one now."

Fearing the plot was about to climax with the appearance of the Liberty League, Butler wanted to go public with what he knew. However, he knew he would be ridiculed without someone else to collaborate his story. Seeking out help from a newspaper reporter that he trusted. Butler had Paul French interview MacGuire. In the interview with French, MacGuire confirmed what he had told Butler and also confirmed his ebullience for fascism as follows:

"We need a fascist government in this country... to save the nation from the communists who want to tear it down and wreck all that we have built in America. The only men who have the patriotism to do it are the Soldiers, and Smedley Butler is the ideal leader. He could organize a million men overnight."75

Once French had confirmed the plot, Butler informed the Roosevelt administration. Roosevelt realized that with the backing of such a plot from such powerful business leaders, that he could not dismiss the plot as a crackpot scheme. Yet, Roosevelt was also well aware that by arresting the leaders of such industrial powerhouses of the day; it could create a national crisis that could abort the fledgling economic recovery and perhaps trigger another Wall Street crash.

To foil the plot, FDR had news of the plot leaked to the press and formed a special House committee to investigate the matter. The McCormick-Dickstein Committee agreed to hear Butler's story in a secret session that met in New York City on November20, 1934. Over four days the committee heard Butler and French present the details of the plot and the testimony of MacGuire. Although, Butler did not testify that MacGuire had offered him $750 for each speech he delivered if he included a remark favorable to the gold standard, a secret report reached the White House from Val O'Farrell, a former New York City detective confirming it.

Both McCormick and Dickstein described MacGuire's testimony as imminently self-incriminating. MacGuire was caught lying several times. The committee determined that MacGuire did have in his possession the thousand dollar bills mentioned and was in the proper location although he claimed to have been elsewhere. George Seldes noted that all of the principals in the case were American Legion Officials and conservative financial backers. Other administration officials urged the committee to get to the bottom of the case. McCormick indicated that Butler's evidence was not the first of the plot that in fact the committee had been in possession of other evidence for five weeks.

With many of the country's leading papers openly pro-fascist, coverage of the plot was promptly buried or dismissed as the ravings of a mad man. On November 22, the Associated Press struck a low blow at Butler in the headline "'Cocktail Putsch'" Mayor Says."108 Mayor LaGuardia had came out against Butler.

Butler however, received fresh support from James Van Zandt, who revealed to the press that he also had been approached by the plotters. Van Zandt was the head of the VFW. Van Zandt claimed that besides himself, MacArthur, Theodore Roosevelt Jr. and MacNider had all been sounded out. After announcing that Clark would be subpoenaed to appear before the committee as soon as he returned from Europe, the committee quickly adjourned without calling additional witness. Not a single name mentioned in all of the testimony ever appeared before the committee. Writer John Spivak learned that Frank Belgrano had been called to testify but had returned home after never being called by the committee.

The committee was formally dissolved on January 3. No other witnesses ever appeared before the committee. Apparently when one is rich enough, one is immune from the laws of the country, regardless of how damning the evidence is. On February 15 the committee released its preliminary findings.

In the last few weeks of the committee's official life it received evidence showing that certain persons had made an attempt to establish a fascist organization in this country. No evidence was presented and this committee had none to show a connection between this effort and any fascist activity of any European country. There is no question that these attempts were discussed, were planned, and might have been placed in execution when and if the financial backers deemed it expedient. This committee received evidence from Maj. Gen. Smedley D. Butler (retired), twice decorated by the Congress of the United States. He testified before the committee as to conversations with one Gerald C. MacGuire in which the latter is alleged to have suggested the formation of a fascist army under the leadership of General Butler MacGuire denied these allegations under oath, but your committee was able to verify all the pertinent statements made by General Butler, with the exception of the direct statement suggesting the creation of the organization.
This, however, was corroborated in the correspondence of MacGuire with his principal, Robert Sterling Clark, of New York City, while MacGuire was abroad studying the various forms of veterans organizations of Fascist character This committee asserts that any efforts based on lines as suggested in the foregoing and leading off to the extreme right, are just as bad as efforts which would lead to the extreme left. Armed forces for the purpose of establishing a dictatorship by means of Fascism or a dictatorship through the' instrumentality of the proletariat, or a dictatorship predicated on racial and religious hatreds, have no place in this country. 109

The total vindication of Butler was muffled by the press. The New York Times failed to report the committee's findings on the plot. Instead it chose to report on the committee's recommendation of registering all foreign propagandists. Buried deeply in the pages of the Times was a brief acknowledgement that Butler's story had been proven to be true. Much the same held true for the rest of the nation's newspapers. The story would be killed by not reporting it. John Spivak had been tipped off that the committee findings were censored. A veteran Washington correspondent had told Spivak, a Cabinet member had made the decision. The implication was that the release of certain names would embarrass the Democratic Party. At least two prominent Democrats who had been presidential candidates had been involved: John Davis, who now was a lawyer for the Morgans, and Al Smith, now a crony of the du Ponts. About a week after receiving the tip Spivak accidentally stumbled across the uncensored report. Spivak copied the uncensored version and then compared it to the official version. The censored portions of the testimony given by Butler and French can be found in The Plot to Seize the White House.107

Even more curious is the fact not a single person ever faced charges. Spivak went to the Justice Department and was informed that the Justice Department had no plans to prosecute. The American Civil Liberties Union issued an angry statement on the lack of justice stemming from the committee's findings.

The congressional committee investigating un-American activities has just reported that the of a Fascist plot to seize the government. . . was proved; yet not single participant will be prosecuted under the perfectly plain language of the federal conspiracy act making this a high crime. Imagine the action if such a plot were discovered among Communists! Which is, of course, only to emphasize the nature of our government as representative of the interests of the controllers of property. Violence, even to the seizure of government, is excusable on the part of those whose lofty motive is to preserve the profit system. . . 110

Obviously powerful forces had been brought to bear on the committee. Forces more powerful than the government, forces immune from the country's laws. Perhaps, Spivak explains why the plot failed best.

The takeover plot failed because though those involved had astonishing talents for making breathtaking millions of dollars, they lacked an elementary understanding of people and the moral forces that activate them. In a money-standard civilization such as ours, the universal regard for anyone who is rich tends to persuade some millionaires that they are knowledgeable in fields other than the making of money. The conspirators went about the plot as if they were hiring an office manager; all they needed was to send a messenger to the man they had selected. 111

Four years after the formation of a congressional committee, the committee released a white paper concluding that certain persons had attempted to establish a fascist government. Further investigations disclosed that over a million people had contracted to join the terrorist army and that Remington, a du Pont subsidiary, would have supplied the arms and munitions5.

As the du Ponts saw their plot crashing in around them, they chose to work within the system to gain power just as Hitler did after the failed Beer Hall Putsch. In the 1936 presidential race, the du Ponts and the American Liberty League backed Alf Landon.

The fascist groups initially had agreed to back Father Coughlin's third party candidate, Bleakley. After agreeing to back Bleakley, Fritz Kuhn, the leader of the American Bund visited Nazi Germany ahead of the election and conferred with the leaders of the Nazi party. At the urging of Hitler's henchmen he returned backing Landon and urged other fascists to do the same.


Part 2: Republicans, Nazis & Elections

With its pro-business agenda, and the fascist views of the leaders of corporate America, the Republican Party soon became laden with fascists.

Even before Hitler and the Nazis seized power in Germany, the Nazis were already actively involved in American politics and elections. Shockingly, the Nazis did not have to infiltrate the party; many were already employed at high levels in the national or state Republican Party organizations.

In October 1928, Edmond Furholzer, a pro-Nazi publisher from Germantown, NY presented the New York State Republican Committee with an offer that for twenty thousand dollars he would deliver the German vote to Hoover. With Hoover's chances looking good, and it being late in the campaign, Furholzer's offer was turned down.

Furholzer was hardly an obscure Nazi, and was a leading figure in the hard-right of Yorkville, a heavily German neighborhood of Manhattan. The Republican State Committee adopted many of Furholzer's proposals in 1928, and four years later, when Hoover's chances were dismal; Furholzer's help was gladly accepted. In fact, during the 1932 campaign, Furholzer worked endlessly for the Republican National Committee, campaigning tirelessly for Hoover in New York State. He smeared Roosevelt as the new Wilson, the man that had destroyed Germany.92 In 1933, Furholzer returned to Germany.

By 1934, the Nazis had only been in power for less than a year, but already were active in placing their agents or pro-Nazis into positions of power. On February 22, 1934, the Republican Party merged their Senatorial and Congressional Campaign Committees into a single organization independent of the Republican National Committee.

Senator Daniel Hastings of Delaware and Representative Chester Bolton announced the merger. Just before the merger, the two campaign committees hired Sidney Brooks, the long-time head of research at International Telephone and Telegraph (ITT). ITT was one of many American corporations that went to extraordinary means to continue trading with the Nazis after war broke out.

Shortly after Brooks took charge, he made a frantic visit to New York. On March 4, 1934, he went to Room 830 of the Hotel Edison, a room rented to a Mr. William Goodales of Los Angles. Goodales was in fact William Dudley Pelly. The meeting concluded with an agreement to merge the Order of 76 with the Silver Shirts. Later Brooks would stop at 17 Battery Place, the address of the German Consulate General.

Brooks was a member of the Order of 76, a pro-fascist group. The Order of 76 application required the fingerprints of the proposed member, and certain details of their life. Brooks' application revealed that he was the son of Nazi agent Colonel Edwin Emerson and that he chose to use his mother's maiden name to conceal his father's identity.80 Emerson was a major financial backer of Furholzer and his paper.

Thus, as early as 1934, the Republican Party was collaborating with Nazis and pro-fascist groups at a high level. This would not be the last example of collaboration between high-level Republicans and Nazis, as the following headlines make clear.

On October 22, 1936, the New York Post broke the following story. Nazi Publicist On G.O.P. Payroll

To win votes for Landon and Bleakley, the Republican State Committee is employing on its payroll a staff of propagandists identified with local Nazi organizations, the Post learned today.78

On October 30, 1936, the New York World-Telegram revealed additional details. U.S. Nazi Attack on Jews Is Laid to Republicans

Anti-Semitic Radio Speeches by Griebl, Others sponsored by G.O.P

Fritz Kuhn Among Speakers in Regular Broadcasts over WWRL

The Republican Party had been sponsoring radio broadcasts by American Nazis to win German votes, it was disclosed today. One of the recent speakers was Dr. Ignatz T. Griebl a national Nazi leader and pronounced anti-semitic...79

The hiring of Brooks in 1934 to head up the joint election campaign committee, and the headlines from 1936 sets up a pattern of collaboration between elements of the Republican Party and the Nazis. While the use of a false name by Brooks provides some means of deniability, his pro-fascist views were hardly a secret. However, the earlier involvement of the Republican State Party with Furholzer would render any deniability moot. There is no deniability for the 1936 headlines, as all were well known Nazis.

The more damaging second quote provides proof that the Republican Party leadership was willing to promote Nazi racism. In fact, an integral part of the Nazi battle plan was the promotion of racial riots or division within the United States to weaken or prevent the U.S. from entering the war. Such collaboration with the Nazis was tantamount to treason. Hitler and his agents in the United States must have been very pleased that leaders of the Republican Party were willing to promote and incite civil unrest.

This example of vicious anti-Semitic campaigns by Republican leaders was not an isolated incident. In fact, it was commonplace. In the 1938 Minnesota governor's race, leading officials of the Republican Party conducted another vicious anti-Semitic campaign, this one to defeat Farmer-Labor Governor Elmer Benson.

Benson's inaugural address on January 5, 1937 placed him on the left end of the New Deal. FDR had endorsed Benson in 1936. The Republican Party considered it a declaration of war. Among the issues Benson supported were:

A two-year extension on the mortgage moratorium for farmers.
- A technical assistance program to assist and promote cooperatives.
- Union wages for state employees.
- The creation of a state commission on youth.
- Free transportation for rural high school students.
- Repeal of the criminal syndicalism laws (remember the Wobblies?)
- Creation of a state housing agency.
- The development of a state owned cement plant.
- Increased benefits for the disabled, people on relief, and the aged.
- A constitutional amendment enabling the state to produce and sell electrical power to municipalities.
- A state liquor dispensary.
- New provisions in the state's unemployment benefits--including benefits for striking workers.85

Few of Benson's proposals became law as his program was effectively blocked in the state senate. Central to Benson's programs was a restructuring of the tax code, which passed the state house of representatives intact. Some of the provisions were:

1. Complete removal of the state tax levy of homes and homesteads up to the value of $4,000.
2. Taxing of the net income of individuals and corporations on a graduated basis so that a large share of local school taxes would be replaced by state income tax revenues.
3. Increased taxes on accumulated wealth, including mining companies, so that the state budget could be balanced.
4. Increased taxes on chain stores.85

The conservatives in the Senate ignored the House tax bill until a few days before the legislative session closed, resulting in a special session. The Twin City press ran article after article denouncing the Farmer-Labor Party while citing such business leaders as Charles Fowler of Northern States Power, Mr. Montague representing the Steel Trust, Aleck Janes of Great Northern Railroad, and Aaron Youngquist of Minnesota Power and Light. With the press at the beck and call of business leaders clamoring that the Farmer-Labor Party was driving business out of the state, Benson's tax proposals failed to pass the Senate, but the stage was set for a bitter election campaign the following year.

In 1938, the Republican Party, with Harold Stassen heading the state ticket, ran two campaigns. One, a high road campaign by Stassen, the other a dirty campaign headed by the old guard within the Republican Party. Led by Ray P. Chase, this second campaign set new lows. Chase's vehicle for running this second campaign was the Ray P. Chase Research Bureau. Financing his efforts were some of Minnesota's business elite: George Gillette, President of Minneapolis Moline; J. C. Hormel, the meat packer; James Ford Bell, Northwestern Bank; Colonel Robert McCormick, owner of the Chicago Tribune; and George Belden of the Citizens Alliance.

To accomplish his goal, Chase used both legal and illegal methods. Files were stolen from the State Relief Department and Farmer-Labor members were scanned for communist activity. Dean Edward Nicholson supplied data about left wing student organizations on the University of Minnesota campus. One of the students labeled a dangerous radical was Eric Sevareid. Chase produced and distributed the red baiting pamphlet, Are They Communists or Catspaws. After the pamphlet's introduction, Chase launched into a vicious anti-Semitic attack about an alleged conspiracy, equating Judaism with communism, and Governor Benson's role in it.


Chase's attack did not stop inside Minnesota. Using the services of Cyrus McCormick, Chase managed to get U.S. Congressman Martin Dies to hold hearings in late October on communist influence in the Farmer-Labor Party.85

To understand how the Republican Party could run election campaigns based on intense and vicious racist platforms; one needs to understand the attitude of the country towards Jews at the time. A few days after Kristallnacht, Roosevelt spoke out publicly expressing his anger and horror. A Gallup poll that month revealed that 94% of the people disapproved of the Nazi treatment of Jews, but 97% of the people also disapproved of the way Nazis treated Catholics. A Roper poll that same month revealed the deep anti-Semitic views in America. The poll found that only 39% of the people believed that Jews should be treated as everyone else, 53% believed that Jews were different and should be restricted, and 10% believed Jews should be deported. In the winter of 1938-1939, many had denounced helping "refu-Jews." Polls revealed 71-85% opposed increasing immigration quotes; 67% opposed admitting any refugees and 67% opposed a one-time admission of 10,000 refugee children.

Turning away the refugees aboard the St. Louis was a low point in the Roosevelt administration and perhaps indefensible in light of the Holocaust, but Roosevelt hardly acted in a vacuum. The public opinion was decidedly against admitting Jews. One can only guess at how much of the anti-Semitism prevalent at the time, was the direct result of the various anti-Semitic campaigns conducted by the Republican Party. It could not be a minor factor, as many of these anti-Semitic campaigns ran by Republicans equated Judaism with communism, as in the example of the 1938 Minnesota election.

The pattern of collaboration between the Republican Party and the Nazis extends further. On November 23, 1937, executives of General Motors and other corporate and political leaders met with Baron Manfred von Killinger, and agreed to a total commitment towards the Nazi cause. The agreement also called for the replacement of Roosevelt---preferably with Burton Wheeler of Montana. The agreement was secret but leaked to George Seldes and published in In Fact. The entire text of the agreement can be found in Facts and Fascism, a portion of which appears below.9

"The substance of the German suggestion amounts to changing the spirit of our nation as expressed by recent elections. That is possible but by no means easy. The people must become aware of the disastrous economic effects of the policies of the present administration first. In the wake of reorientation of the public opinion a vigorous drive must start in the press and radio. Technically it remains a question as to whether this drive may center around the Republican National Committee.
Farsighted businessmen will welcome conferences of this kind. A tremendous inspiration might come out of them. There is no reason why we should not learn of emergencies similar to those prevailing in our own country and the methods by which farsighted governments were trying to overcome them. It is also clear that manufacturers, who usually contributed to the campaigns of all candidates must realize that their support must be reserved to one, in whose selection they must take an active hand."

Each section of the document was written by one of the participants. A member of the United States Senate wrote the first paragraph of the quote above, a representative of General Motors wrote the second. Once again, it is clear from the first paragraph that leaders of the Republican Party were collaborating with the Nazis. It further establishes this pattern of collaboration over a period of several years. Nor would this be the last involvement of Nazis within the Republican Party. In 1940, a group of Republican congressmen accepted money from Hitler for their election campaigns.

The second paragraph above is of paramount importance. The leaders of corporate America did follow the prescription above for subverting democracy.

After the failure of Landon in the presidential race, and in defiance of Roosevelt's desire to improve working conditions for the average man, Knudsen and du Pont launched a speed-up system at General Motors. The system forced men to work at horrifying speed and many line workers died from the heat and the pressure.

Irenee du Pont personally paid out almost one million dollars to hire armed storm troopers modeled after the Gestapo, and equipped them with gas to sweep through his plants and beat any rebellious workers. He also hired Pinkerton to look through his industrial empire to spy on left-wingers, "malcontents," or labor leaders. This was at the same time he started to finance the notorious Black Legion in the Detroit area. He encouraged foremen at General Motors to join this group of terrorists.

The prime purpose of the Black Legion was to fire bomb union meetings, murder union leaders and terrorize all workers to prevent unionization. The Black Legion was linked to the Klan, and to the even more terrifying Wolverine Republican League. Members of this later group included several big business leaders. The Black Legion murdered at least 50 people, many of them black .6

Just as the backers of Hitler's were rich industrialists, so were the backers of fascism in the United States. Corporate America willingly entered into cartel agreements, which, in effect, granted them a monopoly. A second aspect of fascism that appealed to big business was its extreme anti-unionism. Professor Gaetano Salvemini of Harvard was quoted in the undergraduate daily, that a new fascism threatened America, the fascism of corporate business enterprise in this country. He also believed that 100% of American big business was in sympathy with fascism .8 At the very least support, for fascism was widespread among industrialists in this country, as the following quote from The New York Times from the Ambassador to Germany, William Dodd shows:

"A clique of U.S. industrialists is hell-bent to bring a fascist state to supplant our democratic government and is working closely with the fascist regime in Germany and Italy. I have had plenty of opportunity in my post in Berlin to witness how close some of our American ruling families are to the Nazi regime. On (the ship) a fellow passenger, who is a prominent executive of one of the largest corporations, told me point blank that he would be ready to take definite action to bring fascism into America if President Roosevelt continued his progressive policies.
Certain American industrialist had a great deal to do with bringing fascist regimes into being in both Germany and Italy. They extended aid to help fascism occupy the seat of power, and they are helping to keep it there.
Propagandists for the fascist groups try to dismiss the fascist scare. We should be aware of the symptoms. When industrialists ignore laws designed for social and economic progress they will seek recourse to a fascist state when the institutions of our government compel them to comply with the provisions." 7

The collaboration between the Republican Party and the Nazis was an ongoing effort throughout the 1930s. However, it would not reach epidemic proportions until the 1940 election. With the European continent already embroiled in war, and President Roosevelt espousing pro-British views, the Nazis were desperate to keep the United States out of the war. In a bizarre plot full of intrigue involving Texas oilman William Rhodes Davis, labor leader John L. Lewis, and Mexico, Nazis provided extensive funding to the Republican Party for the 1940 election.

W.R. Davis of Texas Oil had been supplying the Germany navy with oil since 1936, and was the owner of Eurotanker, a huge German refinery. For the complete story of Davis, the reader should see Dale Harrington's Mystery Man.93 Davis had arranged a deal to supply the Nazis with oil from Mexico. Since Mexico had nationalized its oil fields, including some owned by Davis, the Mexican oil market was boycotted by big oil, led by Standard Oil of New Jersey. The deal, therefore, was vital for the Mexican economy.

The outbreak of war in Europe also jeopardized Davis' road to riches. Davis used his friendship with John L. Lewis to arrange a meeting with Roosevelt early in 1940 in which he proposed a wild peace plan to FDR. Roosevelt was cool to the plan and informed Davis that any peace plan would have to come through official channels. Davis rushed to Europe, arriving in Italy, and then traveling to Germany. There he met with Goering. Central to Davis' plan was the removal of Hitler; the Nazis would remain in power under Goering. Upon his return, Roosevelt refused to meet with Davis.

Besides the peace plan, talk between Goering and Davis centered on the upcoming presidential election. The Nazis were desperately seeking the defeat of Roosevelt, although they were less than enthusiastic with the Republican candidates. They agreed the best chance of defeating Roosevelt was to back the Republicans rather than run a third party. Davis knew that Lewis was opposed to war and had informed the Nazis that Lewis had control over the election with his large block of union voters. Lewis was not pro-fascism. Instead, he feared that a new war would lead to a dictatorship and the placing of the CIO under emergency laws. In light of the Red Scare of 1919 one can hardly fault Lewis for his fears.94 Talk soon settled on how much money would be needed to defeat Roosevelt, with the final sum settled at five million dollars.


Joachim Herslet of the Reich Foreign Economic Ministry carried the plan to the United States. To obtain dollars, Goering had persuaded the Italians to release money from their fund used to finance fascist propaganda and espionage. An Italian courier, Luigi Podesta delivered the money to the German consulate in New York. Herslet informed the charge d'affairs of the German Embassy in Washington of his mission, and that he had five million dollars at his disposal. Davis received some of the money from Herslet, then opened accounts in the Bank of Boston, Irving Trust, Bank of America and Banco Germany of Mexico City.

On the eve of the Republican National Convention, money from this Nazi slush fund was used in a propaganda blitz for the isolationists. One Republican congressman received $3,000 for heading up a contingent of fifty isolationists. The Nazi money was well spent, as the convention closed with a party platform plank firmly opposed to US involvement in the war. The Nazis were especially pleased to note that the platform plank was taken almost verbatim from the full-page German propaganda ads placed in the New York Times on June 25.35 Stephen Day had been paid thousands of dollars to form the committee publishing the ad. Day, a Republican congressman from Illinois, would be named as a fascist collaborator by Maloney. The ad was signed by Representatives Samuel Pettingill, Harold Knudsen, John O'Conner and Hamilton Fish, and Senators Edwin Johnson, Bennett Clark, David Walsh, Burton Wheeler and Rush Holt.101 Both Lewis and Democratic Senator Burton Wheeler, a leading isolationist, spoke before the convention.

With this success behind them, the Nazis then decided to spring a similar effort on the Democratic convention. Central to the scheme was Davis distributing $100,000 to buy forty delegates from Pennsylvania to vote against Roosevelt. The Nazi press agent Kurt Sell arranged for several other Democratic congressmen to attend the convention on German Embassy funds. Sell also funded a number of anti-war ads in the Chicago Tribune on July 15.

Although the Nazis were not enthused over Willkie's nomination, they thought any president would be better than Roosevelt. With their slush fund of five million dollars, the Nazis surreptitiously helped Willkie through secret donations to various pro-Willkie clubs. Thomsen, the charge d'affairs of the German embassy, destroyed all receipts, so it may never be known how much money the Nazis funneled into the Republican Party, or to whom. It is not clear if the entire five million was spent. Supposedly, $3 million dollars was found in the embassy when the FBI seized it in December 1941. Nevertheless, the embassy had other sources of funding other than Herslet's funds. In fact, Thomsen did not cooperate with Herslet and ran his own separate campaign.

Perhaps the best summary of this plot is a quote from a report to the German Foreign Ministry by the German Ambassador Thomsen.

"Roosevelt's prospects of being elected a third time have declined...3. The election campaign maneuvers of John L. Lewis, chief of the CIO, and Senator Wheeler... Regarding 3. At this juncture John L. Lewis enters the arena with approximately 8 to 10 million votes controlled by him. He is determined to make ruthless use of his influence, and will do so in favor of strict isolationism. Lewis is pursuing that policy not indeed because of any pro-German sentiments, but because he fears that America's involvement in a war would mean the establishment of an American dictatorship and the placing of his organization under emergency laws. He is negotiating with Republicans at present and will support them in the campaign if Willkie publicly declares himself for keeping America out of all European conflicts. Lewis can throw his strength at will to Republicans or the Democrats, but this much is certain that he surely will not use it for Roosevelt. He may even, as he has already threaten to do, organize a third party of disgruntled Democrats, the Peace party, and in the person of closely allied Senator Wheeler put up a suitable candidate."99

While $5 million dollars seems a trivial amount today in a presidential campaign, in 1940 the amount was significant as the total expenditures by the Republican Party was slightly less than $15 million.

Regardless of whether the Nazis spent only $2 million or the full $5 million dollars, they were a major source of campaign funds for the Republicans in 1940. While the total amount of Nazis funds spent on the Republican 1940 campaign may never be known with any certainty, from the funds recovered in the embassy raid it is clear that at least $2 million was spent from the slush fund alone. Therefore the lower limit is at least $2 million. In short, a major proportion ranging from 15% to over 33% of the Republican campaign funds in 1940 came directly from the Nazis. Considering the fact the major industrialists were active supporters of the Nazis and large donors to the Republican Party, well over 50% of the Republican campaign funding in 1940 came either directly from Nazis in Berlin or those within the United States.

Following the Nazis, Davis likewise donated at least $48,000 to Willkie, bypassing the $5,000 federal limit with several methods such as donating to individual state parties. Davis also bankrolled the radio address of Lewis on October 21 in which Lewis announced his support for Willkie. In late October, Davis forwarded copies of his documents pertaining to his proposed peace plan to leaders of the Republican Party including Willkie, former President Hoover, Sam Pryor and Verne Marshall. Willkie decided not to use the material, fearing it might backfire. In the end, labor chose to remain loyal to FDR and Roosevelt won the election with 27 million votes to Willkie's 22 million.95

Moreover, the involvement of the Nazis in the 1940 election extended beyond the monetary donations and the bizarre plot of Davis. Top Republican leaders, including former President Herbert Hoover closely collaborated with high-level Nazi officials in Berlin to bring about the defeat of Roosevelt. Hoover's conniving with the Nazis in the 1940 election was confirmed in post-war interviews of Goering and Rubbentrop. Furthermore, Hoover was a secret member of the fascist American First group, which was dedicated to bring about Roosevelt's defeat.

The close association of the Republican Party with the Nazis was confirmed in captured documents. In one captured document written in anticipation of defeat the Nazis expressed hope for a Republican victory so that they might achieve an "easy peace." A small excerpt from the document in the appendix follows:

Right now, the chances for a separate peace with the West are a little better, especially if we succeed, through our propaganda campaign and our confidential" channels, to convince the enemy that Roosevelt's policy of "unconditional surrender" drives the German people towards Communism.
There is great fear in the U.S.A. of Bolshevism. The opposition against Roosevelt's alliance with Stalin grows constantly. Our chances for success are good, if we succeed to stir up influential circles against Roosevelt's policy. This can be done through clever pieces of information, or by references to unsuspicious neutral ecclesiastical contact men.
We have at our command in the United States efficient contacts which have been carefully kept up even during the war. The campaign of hatred stirred up by Roosevelt and the Jews against everything German has temporarily silenced the pro-German bloc in the U.S.A. However, there is every hope that this situation will be completely changed within a few months. If the Republicans succeed in defeating Roosevelt in the coming presidential election, it would greatly influence the American conduct of war towards us.

With the Battle of the Bulge raging in Europe the Republican candidate, Dewey lashed out against Roosevelt, that his call for unconditional surrender was prolonging the war and costing American lives.

From the evidence above the Nazis were deeply involved in the political process within the United States from at least 1932. However, the extent of that involvement is still shrouded in fog. Somewhere in the vaults of the United State and England incriminating files lie hidden that will expose the collaboration of many more individuals and corporations with the Nazis



Part 3: Fascists & Unions


Wall Street and corporate America built Hitler's war machine. Once war was ominous and the Roosevelt administration started to build up American defense corporate America went on strike. Many of the deals arranged between corporate America and the Nazis, border on the line of treason. The majority of the deals between corporate America and the Nazis were the cartel-type agreements, not unlike the establishment of monopolies.

Prior to the U.S. entry into the war, the biggest scandal was in aviation. Contracts had been awarded for 4,000 planes in 1940 but by August 9, only 33 planes had been built. The truth was that the aviation industry was dominated in many cases by General Motors and thus under the control of the du Ponts. The press suppressed the real story of a "sit-down strike" by big business and distracted the public's attention by blaming labor. The truth was it a capitalist's strike, and until big business got special tax breaks it refused to produce planes. 36 For six months from May to October 1940 no planes were produced. Corporate America was using the aviation industry as a front to thwart President Roosevelt's plan.

Throughout this "sit-down strike" by corporate America, the press was busily attacking labor and failed to mention the refusal of General Motors to accept contracts already awarded for planes. This sit-down "strike" by corporate America had the support of the newspaper chains as well as the support of the War and Navy departments.

During WWI, the auto industry came close to committing treason. Throughout 1917, the auto companies refused to cut production by 25% in the second half of the year, thereby denying the defense industry much needed production space and a substantial amount of iron and coal that would have been better used for defense production. In the 1941, General Motors announced it would produce no new models until 1943. General Motors promptly broke that pledge and produced new models in 1942.

On March 26, 1942, Senator Truman accused Standard Oil of treason. Standard had delivered the new tetraethyl lead gas additive to both Germany and Japan. Standard was the major supplier of oil to both the Nazis and Japan. In his appearance before the Senate committee, Farish, the president of Standard, was asked if Standard had delivered the oil to Japan that made the attack on Pearl Harbor possible. He answered that Standard Oil was an international company. Standard's buffed its image with an advertising campaign that promoted the virtues of Standard products, and was helped along by the willingness of the major papers.37

Next to gasoline, steel is the element needed most in producing armaments. The record of big steel was one of sabotage. As some of the following quotes show pulled from Labor, a union publication by Seldes. 38

Sabotage of war program charged to Steel magnates: Labor July 7, 1942. Subtitle: More interested In keeping Monopoly than with beating Axis declares Senator O' Mahoney."
"Truman Accuses Steel Companies of Sabotage; PM, June 6, 1942 Subtitle Senator Black charges that big corporations hamstring production."
And from Labor April 28, 1942 the following quote. " It has become clear as the noonday sun that the vicious attack which has been made on the nation's workers in recent weeks was actually a red herring designed to divert attention from the treasonable sabotage of the nation's war program by Big Business, which is being exposed by congressional committees and defense agencies.
Proof of that statement may reasonably be drawn from the sensational and unbelievably shocking disclosures of a cold-blooded betrayal of national welfare by men whose only flag is the dollar sign.
One of the most shameful chapters in our history.
The Carnegie-Illinois Steel Corporation subsidiary of U.S. Steel and the Jones and Laughlin Steel Company were charged by the War Production Board with having refused to fill government armament orders while diverting iron and steel to favorite civilian customers for non-essential purposes. The result is that shipbuilding and other war construction have been held up.
The President directed the navy to take over three plants of the Brewster Aero Company, accused of sabotaging the aviation program.
< The United States faces a shortage of critical war materials because the outstanding industrial concerns have contracts with German monopolists restricting production here."

One of the necessary war materials needed that was hamstrung by these cartel agreements was carboloy or cemented tungsten carbide. Carboloy's abrasive properties were vital in the machining of hardened steel products. Without it, parts for tanks and other instruments of war were next to impossible to machine. General Electric held the patent along with a cartel agreement with Krupp that limited the production and restricted sales.

As soon as General Electric cemented its deal with Krupp the price of tungsten carbide jumped from $48 a pound to $453 a pound. With its cartel agreement in place with Krupp, General Electric used its position to buy out or cripple domestic competition in the abrasive market. General Electric paid royalties to Krupp on every pound of carboloy produced. Not only did this arrangement inform the Nazis of how much carboloy was being used during America's build up for war, but also the royalties, in effect ended up in Hitler's war chest.

In September 1940, the agreement came to a halt when two federal anti-trust indictments were returned against General Electric and Krupp subsequent to a complaint by the Firth-Sterling Steel Co. The Firth-Sterling Steel Co had run afoul of General Electric's price levels as it sought to sell shell turning blanks to the U.S. Army. The Senate Committee on Military Affairs was outraged at how the cartel agreement hindered war production. The General Electric-Krupp cartel had created a bottleneck in production. There was no domestic production since General Electric had driven them out of business. Even if sufficient quantities were available more time would be lost in retooling plants and training workmen to use the new tooling properly.

On January 26, 1947, the trial of General Electric resumed in New York City. Under indictment were GE Vice President Zay Jeffries, President W.G. Robbins of the Carboloy Co., and Walter M. Stearns, former GE trade manager and Gustav Krupp. Krupp was not present as he was being held in Germany for war crimes. Ironically during the trial Jeffries accused union leaders as having "un-American objectives" and denounced high wages.

Throughout the trial General Electric's lawyers fought bitterly against the introduction of captured Nazi documents. In one such document Walter Stearns was quoted as telling the Germans that while GE intended to fix prices, "this must never be expressed in the contract itself or in any correspondence which might come into the files of GE." Other documents quoted Jefferies threatening the president of a competitor: "We'll either buy you out or break you." The jury found that General Electric, its subsidiaries, and company officials were guilty on five counts of criminal conspiracy. Ironically, no further charges---such as sedition or hindering the war effort were leveled against the conspirators. Despite pleads from the Department of Justice for heavy sentences; Judge John C. Knox handed down only minor fines. Stearns and Jeffries were fined $2,500 each and Robbins $1,000. GE and Carboloy were fined $20,000 each and International General Electric only $10,000.

The fine for General Electric was particularly lax considering the firm had made millions on carboloy. In fact, in 1935 and 1936, General Electric's subsidiary that manufactured and sold carboloy made a profit of $694,000 in just those two years. The newspapers of the time failed to cover the trial and the convictions. Nevertheless, the newspapers found plenty of space on their front pages to cover General Electric's charges that UE members employed at atomic energy facilities were potential security risks. The union's UE News was the only paper to report on the trial and convictions. Once again the rich and powerful escaped from justice with a mere slap on the wrist.

The Aluminum Corporation had an agreement with I.G. Farben, which restricted production of aluminum and magnesium, which hindered the building of fighters and bombers. The record from that era makes it clear, corporate America was doing its damnest to sabotage the war effort. A recent article in the press now states that at least 300 corporations were doing business with the Nazis during the war.39

The following reactionaries among big business men were supporters of Merwin Hart's American Union for Nationalistic Spain, one of the many pro-fascist groups Hart formed and supported: James Rand of Remington-Rand, Lammont du Pont, A. W. Erickson, chairman of a New York advertising agency, Alfred Sloan president of General Motors and J. H Alstyne president of Otis Elevators. Hart supported the fascist line fully. He opposed the 44-hour week, fought against the Unemployment Act, fought against the Child Labor Act and, even more odiously, demanded that only those persons not on relief be allowed to vote. Hart was not much of a believer in democracy as the following quote shows.

"Democracy is the rallying cry under which the American system of government is being prepared for despotism. If you find any organization containing the word "democracy" it is probably directly or indirectly affiliated with the Communist Party." 40

Next to the du Ponts and their friends, Henry Ford was the most notorious pro-Hitler backer. In 1919, he first announced his anti-Semitic views when he stated.

"International financiers are behind all wars. They are what is called the International Jew; German-Jews, French-Jews, English-Jews, American-Jews...the Jew is the threat."10

Again, the same rhetoric is familiar today with many of the right wing groups particularly the Posse Comitatus. The quote above is almost unchanged from the rhetoric of the Posse in the 1980s. The Posse uses code words such as international bankers to mean Jews. Similarly, they and others are still promoting the Protocols of Zion, a malicious anti-Semitic book based on nothing more than outrageous lies first published in this country by Ford in his Dearborn Independent.

Ford's involvement went much further than merely publishing anti-Semitic trash. He was one of the early financiers of Hitler. Obtaining hard evidence of funding for Hitler is a rarity but in the case of Ford, it is irrefutable. The most credible evidence comes from the Hitler's treason trial after the failed Beer Hall Putsch from the testimony of Herr Auer, vice president of the Bavarian Diet on February 7, 1923.11, 12


Ford like Hart supported the Nazi agenda, harboring a rabid hatred of Jews and unions. One of the myths that Ford successfully created was that he paid his workers more than other firms did. In fact he paid less; the United Autoworkers printed tables showing the wages for every category of worker was lower than the wages paid by Chrysler and Briggs (General Motors). The reality was that the maximum wage paid by Ford was below the minimum wage of the union. 13

Ford was not known to be generous or supportive of charities, he never contributed any large sum to anyone with one exception. The exception was the Moral Re-Armament Movement lead by Dr. Frank Buchman, a notorious fascist and a Lutheran minister.14

Buchman preached a philosophy of pacification of labor through the use of force. Followers of Buchman read like a whose who in the anti-union movement such as Harry Chandler, the reactionary publisher of the Los Angles Times and Louis B. Mayer. Along with his program for the pacification of labor, Buchman was rabidly opposed to communism and praised Hitler's opposition to communism as the following quote reveals.

"I thank heaven for a man like Adolf Hitler, who built a front line of defense against the anti-Christ of Communism."97

While many of Buchman's apologists claim Buchman later said he was deceived by Hitler, Buchman never renounced fascism or changed his fascist views towards labor. The primary reasons the Moral Re-Armament group has persisted to the present day, despite its controversial views, are the pro-business and anti-labor stance and the support it receives from such business leaders as Ford. Buchman was also the founder of Alcoholics Anonymous.

Ford employed Harry Bennett to deal with labor. Bennett had one of the largest spy and thug services in America at that time, which battered, killed and otherwise intimidated workers. Where ever a Ford plant was located there was a long record of murders and beatings of workers at the hands of Bennett's thugs. Ford even went so far as to fire workers who took part in the 1932 Ford hunger march. Bennett employed Father Coughlin, the rabid fascist radio priest to undermine the efforts to unionize Ford. In essence, Coughlin bribed Homer Martin into betraying the union in an effort to form a company union rather than to join the AFL or CIO.15

The plight of the American worker during the '30s is hardly imaginable today. In fact, the conditions under which labor worked were so intolerable that numerous congressional committees and hearings were held. Employers routinely used spies, and hired stool pigeons, thugs, gangsters and murders. They were well equipped with arms including Thompson machine guns and "poisonous gas," the term at the time for tear gas. This visceral hatred of labor and unions by employers is documented in the many volumes of the La Follette reports on corporate America. George Seldes lists the following seven facts from the La Follette reports:

"1. that American business employs a vast espionage system whose purpose is to fight labor.
2. that 200 agencies employ 40,000 to 50,000 spies in industry;
3. that $80,000,000 a year is spent by big corporations in fighting labor, employing spies, buying gas and guns, hiring gangs;
4. that almost all the great corporations are in the spy racket, including Ford, General Motors, U.S. Steel, Bethlehem Steel, Consolidated Edison, Weir, Frick Coke, etc
5. that 2,500 companies comprising what Senator La Follette called the 'Blue Book of American Industry' are part of the American Gestapo.
6. that the National Association of Manufactures, U.S. Chamber of Commerce, Merchants and Manufactures Association, National Metal Trades Association are the chief organizations engaged in native fascism
7. that the American press, which still gives its front pages and its approving editorials to smears, exaggerations and falsehoods of the Dies Committee. And similar committees, and which employ reporters to attack labor, and especially those labor unions which are progressive and militant and put up a strong fight for the rights of labor, suppressed almost all the hearings and findings of the La Follette Committee, which constituted an exposure of Fascism in American industry." 16

Here is the heart of fascist ideology of the 1930s and of the far right today, corporate rule. It is the basis for the visceral level of hate for unions, fueled by the corporate elite and their propaganda organizations. There is no better example to illustrate the power of the pro-fascists in the United States, than to compare the plight of the American worker with his counterpart in the rest of the industrial nations. In every category, the American worker comes up short when compared to the workers in other industrial nations. As an example the American worker earns 44% less than his German counterpart and 15% (1994 figures) less than his Japanese counterpart. 18

Despite this, the UAW has been one of the most successful unions in gaining workers benefits; non-union workers and members of other unions in America earn far less. While the average American worker is lucky to receive a two-week vacation his European counterpart enjoys a five-week vacation-- -or more--- and a list of benefits that the American worker can only dream about

Nor is the plight of the worker seeking to unionize much different today than it was in the 1930-40s. There are a myriad of companies today in the United States that provide security for corporate America. In reality, these companies are nothing more than hired thugs and union busters. While the muggings and factory death squads are not as great a threat today, the American worker is still being spied on. However, corporate America has no qualms about murdering union organizers in other countries. A recent report revealed that Coke Cola had hired right wing death squads to murder union organizers in Columbia.81 The United Steel workers union has filed suit in Miami alleging that Coca-Cola and Panamerican Beverages, its principal bottler in Latin America, waged what union leaders describe as a campaign of terror, using paramilitaries to kill, torture and kidnap union leaders in Columbia.

In fact, the level of spying today is greater than it was in the 1930 and 1940s. Workers and job applicants are routinely forced to take a drug tests. Their financial and medical records are open books to their employers. In a recent case that has surfaced, Burlington Northern Santa Fe Railway was found to have ordered genetic testing of an employee as a follow up to his surgery for carpal tunnel syndrome. There is no gene for carpal tunnel syndrome. The employee was not informed of the genetic testing nor had he given permission for such testing. Such information could be used to deny promotions or to trigger the firing of the employee because he had a predisposition to cancer or other inheritable disease.77

However, even more onerous are the private blacklists. The American Security Council 17 is a group that formed in the late 1950s, with the expressed purpose of providing to any member company a check on their employees or applicants for persons deemed to foster anti-free enterprise views. The American Security Council is directly linked with the pro-fascists of the 1930. Nor is the American Security Council unique. The Church League founded in the 1930s is another such group. Indeed almost every right wing group maintains some sort of blacklist. The express purpose of such blacklists is to deny employment to anyone holding non-acceptable views, such as union activism or leftist political views

In some regards labor has advanced but for the larger part labor has lost ground from the high ground of the 1950s coinciding with a peak in union membership. Today it is commonplace to hear of sweatshops being raided, places in which the workers were held virtually at gunpoint. Other workers are forced to work off the clock by managers, and child labor is now a larger problem than it was in 1900. In fact, the nations' largest retailer, Wal-Mart is notorious for requiring employees to work off-the-clock. Wal-Mart has also been found guilty of locking their evening employees in the store after the end of the their shifts if no supervisor was around to unlock the front door so the employees could leave.

Such wide differences in worker pay and benefits between the U.S. worker and his European counterpart not only reflect the greater unionization in European countries but also a political system that is more union-friendly. Many of the anti-union laws passed since the close of WWII were the products of fascist groups. A direct result of such anti-labor sentiment is the wide disparity in wealth in the U.S. There is no other major nation in the world with such a wide disparity than the current disparity in the United States.

The standard tactic of fascists like the du Ponts was to finance a legitimate group that would be widely accepted then use it to further their aims by focusing media attention on the group. A good example (from the previous chapter) was the American Legion. Another example is the American Security Council, which had a tremendous influence in the Reagan administration.

Corporations that reached agreement with Baron Manfred von Killinger were calling for a total commitment towards the Nazi cause. The portion of the agreement written by a General Motors executive went on:

"We must just as well recognize that business leaders of this country must get together in the present emergency. By now they must have realized that they cannot expect much from Washington. We will have to resort to concrete planning. We can agree that it is desirable to convince our business leaders that it is a good investment to embark on subsidizing our patriotic citizens' organization and secure their fusion for the common purpose. Unified leadership with one conspicuous leader will be a sound policy. We will be grateful for any service our German friends may give us in this respect."82

The du Pont family controlled General Motors at the time.

The words within this agreement calling for the subversion of democracy and the total commitment towards the Nazis are essentially a blueprint for the destruction of democracy. Note that the "patriotic organizations" the writer was referring to such as the Silver Shirts and Black Legion. As already noted, many of the pro-fascist groups received financial support from the backers of the plot against FDR. By 1942, the plan of corporate America was in full force.



Part 4: The Press Sells Out to the Nazis

Besides funding pro-fascists groups like the Silver Shirts, corporate America sponsored several other groups that maintained a speck of respectability. One such organization that figured prominently in spreading the propaganda was the National Association of Manufacturers (NAM). The first president of NAM was Samuel Bush, father of Prescott and grandfather of George H. W. Bush. Such organizations as NAM would serve as bridge groups between the rich corporate owners and the public.

NAM along with the National Industrial Information Committee picked up the banner of du Pont's free enterprise dogma. It was Fulton Lewis Jr. a former employee of NAM, who became the mouthpiece for NAM. Using his radio program on the Mutual Network, Lewis spread the NAM propaganda to roughly three million people daily. Lewis denied the truth put forth by the La Follette and the Truman committees and instead aired NAM's propaganda under the guise of "Your Defense Reporter."21 At their 1942 convention, NAM went on record of supporting du Pont's Free Enterprise fully. The convention adopted a plank of full support for free enterprise, even if it hindered the war effort. In contrast, the 1942 CIO convention went on record for winning the war first, ahead of any union issues. 24 In other words labor was willing to make the sacrifices needed to win the war, while big business wasn't, and put profits ahead of the war effort.

NAM was only one group of many that was used to propagandize America. Another was the Chamber of Commerce. Both the Chamber of Commerce and the American Legion served as bridge groups breaching the gap between the workers and the American elite during the 1920s . NAM served a similar role in the 1930s and into the 1950s. The top officials of the John Birch Society in the 1950s were all former officials of NAM. The Birch Society also acted as a bridge group.

The 1930s media was overtly pro-fascist, especially the major chains of newspapers. Hearst admired Mussolini and even paid him to write articles for his upstart United Press wire services. Mussolini was paid $1,750 per article an amount that would be the equivalent of about $17,000 today. The articles were poorly written by Margherita Sarfatti, Mussolini's mistress.

Hearst also sought out Hitler to write for him. According to the US ambassador to Germany, Dodd Hearst met with Hanfstangel and Rosenberg, two of Hitler's most trusted propagandists in September 1934 at Baden Baden. After leaving Baden Baden, Hearst traveled to Berlin where he met personally with Hitler. A deal was sealed between Hearst and Gobbels worth $400,000. After receiving the money, Hearst promptly ordered all of his writers for his International News Service to present all events in Germany in a friendly manner. Following the agreement Hearst papers printed uncensored propaganda from the Nazis throughout the 1930s.84 The Hearst press consisted of 25 daily newspapers, 24 weekly newspapers, 12 radio stations and 2 world news services.

The other major newspaper chains owned by McCormick and Scripps-Howard likewise presented a pro-fascist view.

Many of the members of the National Publishers Association were also members of NAM. William Warner publisher of McCall's and Redbook was the head of NAM. P.S. Collins represented the Curtis Publishing Company, publisher of the Saturday Evening Post and the Ladies Home Journal. Collins was also a spokesman for W.D Fuller the president of NAM. The Luce family publications of Time, Life and Fortune were also closely associated with NAM.

The majority of the people can reach informed and just decisions if they are provided with a balanced view. However, the media has always been biased to the right and openly fascist during the 1930s when Hearst among others had his papers publish Gobbels propaganda. Seldes pointed out that during the 1930s that with only three or four exceptions of all the large newspaper columnists and radio commentators were right wing reactionaries. 22

In their effort to propagandize the American people, press omissions were more important that the pro-fascist views it expressed. For example, no mention was made of the Senate report investigating air power. The reported concluded as follows:

"It is apparent that American aviation companies did their part to assist Germany's air armament. It seems apparent also that there was not an adequate check on the foreign shipments...86

Part of the evidence included a letter from the president of Curtiss-Wright to his salesmen as follows:

"We have been nosing around in the bureau in Washington and find that they hold as most strictly confidential their dive-bombing tactics and procedure, and they frown upon our even mentioning dive-bombing in connection with the Hawks, or any other airplanes to foreign powers.
It is also unwise and unethical at this time, and probably for some time to come, for us to indicate that we know anything about the technique and tactics of dive-bombing.
It may be alright...to put on a dive-bombing show to show the strength of the airplanes-but to refer in contracts to dive-bombing or endeavor to teach dive-bombing is what I am cautioning against doing...87

Curtiss-Wright did demonstrate their dive-bombing planes in air shows in Europe helping the Nazis to develop the Stuka. In the first six months of 1933, Pratt & Whitney's sales jumped to almost a million and half dollars as the Nye report exposed the company as one of the largest smugglers of planes to Hitler. Other suppliers of aircraft parts to Hitler in the early years included Curtiss-Wright and Douglas.

Another scandal left unreported was the sale of defective wire by Anaconda. One notable newscaster of the time who failed to report the story was Lowell Thomas. Thomas' broadcast was sponsored by the Pews and Thomas had done work for NAM.

The St Louis Star-Times accused the U.S. Cartridge Co of producing defective cartridges and had submitted their findings to the Office of Censorship receiving no objects. The AP wire failed to pick up the story and the story went unreported outside of the St Louis area.

The capitalist's strike to delay and reduce the production of war munitions was blamed on labor in the press. No mention was made in the press of the Tolan Committee. Testifying before the committee the United Autoworkers president stated that of 1577 machine tools 337 were idle and he urged coordination of the unused tools. The Autoworkers secretary reported 64% machine tool idleness and labeled it a crime against civilization and democracy. These idled tools could have been turning out war material. Any shortage of war material was not the result of a shortage in labor or equipment; rather it was the result of corporate fraud.

Nor did the press report on the profiteering by corporate America. James Hayes, general counsel for the ILWU Dispatcher testified before the Congressional Merchant Marine subcommittee giving proof of the obscene profiteering in shipping.

Due to the sit down strike by corporate America, the government was forced to lease private ships. The American Foreign Steamship Corp. made a profit of $895,974 on two trips. The American Export Line made a profit of $1,572,144 on ships worth only $232,350.The American President Line made a profit of $814,242 on ships worth $307,828 in three trips.

The situation remains unchanged in the 21st Century. The columnists and the radio mouthpieces are almost fully hard right in their views. The news fails to report on the health risks and costs of on the job injuries and disease. Whenever new regulations are proposed, the media coverage comes from the Chamber of Commerce or another pro-business organization. The only costs discussed are the costs to the corporation, and no mention is ever made of the costs to the worker.

Today, the media is even more consolidated than the media in the 1940s, less than ten corporations control over eighty percent of the airwaves and press. The Republicans have repeated the lie that the media is biased to the left so many times that many people buy into it---even though the reverse is true. The corporations in fact censor the media. Two thirds of the editors when questioned have reported that their advertisers have threatened to withdraw advertising because of the content of news stories. Seventy five percent report that large advertisers have tried to influence the content of news stories in a 1992 survey.

A Procter & Gamble executive testifying before a Federal Communications Commission in 1965, made it clear that his company would only sponsor programs meeting the companies strict standards.

"There will be no material in any of our programs which could in any way further the concept of business as cold, ruthless and lacking all sentiment or spiritual motivation." 23

The anti-union coverage of some of the major strikes in the late 1990s should come as no surprise. Coverage of the UPS strike only focused only on how the strike was hurting various businesses. No mention was made of the cause of the strike, the use of excess part-time workers and the attempted money grab of the union's pension fund. No mention was made of how corporations have raided pension funds and left retired workers holding an empty bag.

During the GM strike, coverage focused on how the strike was hurting car sales. No mention was made of the fact that GM had violated the terms of the union contract by sneaking the stamping dies out of the plant during the middle of the night over the Memorial Day holiday like a thief in the night.

It was because of the pro-fascist press and trade organizations that du Pont was successful in creating the illusion of free enterprise as a freedom to be upheld. Bennet and others within the Ford empire openly boasted to Rimar, a former member of the Ford Gestapo that no newspaper would print his version of the truth during his trial. Indeed none did and no publisher would publish his book "Heil Henry!-The Confession of a Ford Spy," which contained these statements.

"For years I have been one of the key men in the Ford Gestapo. Within the Ford's domain I soon found there was no liberty, no free speech, no human dignity... the vast power of Ford extended into the courts, schools, prisons, clubs, banks, even into the national capital, enveloping us all in a black cloud of suppression and fear.
Our Gestapo covered Dearborn with a thick web of corruption, intimidation and intrigue. The spy net was all embracing. My own agents reported back to me conversations in grocery stores, meat markets and restaurants, gambling joints, beer gardens, social groups, boys' clubs, and even churches." 20

The quote serves to point out the extent of Ford's anti-union activities and the willingness of corporations to use any means available to spy on and intimidate their workers.

Corporations are now privy to more information than ever about their employees. The information age has allowed for new means for corporations to pry into the private lives of their employees. In this country, corporations are allowed to read the private email of their employees and to search employee lockers. Some corporations even maintain the right to search employee's cars if they are parked in a company parking lot. In effect in America, workers must give up all of their constitutional rights including the right to privacy, free speech and the right to assemble the minute they walk though the corporate door seeking a job.

It is the media held subservient to their advertisers---or in some cases with defense contractors owning a media division outright---that has helped to promote public anti-union sentiment. This is readily apparent in the newscasts, as when OSHA sought to set new workplace standards to prevent repetitive stress injuries the media aired the views of the Camber of Commerce. No information from doctors or unions was presented on the topic. No union data was presented to reveal the extent of the problem or the debilitating effects of this menace to workers forced to work at ungodly speed.

In the sixty years that have followed WWII the Republican Party and the far right-wing extremists have adopted the philosophy at the heart of fascism, corporate rule. It is the basis for the intense hatred of unions and working people. In the entire eight years of the Reagan administration, the minimum wage was not raised once--although inflation still raged through the early '80s. Reagan himself sent a signal to corporate America that he would not seek prosecution of union busters when he fired the striking PATCO workers. The situation improved slightly under President Clinton. However, under the administration of George W. Bush the plight of workers has became acute. He has threatened injunctions against unions threatening to strike.

Perhaps the best way to convey to the reader the plight labor faced in the thirties is to present the data from the Robert La Follette committee.

"The committee found that purchasing and storing arsenals of firearms and tear- and sickening gas weapons is a common practice of large employers of labor who refuse to bargain collectively with legitimate labor unions and that their exists a large business of supplying gas weapons to industry... During the years 1933-through June 1937, $1,255,392.55 worth of tear and sickening gas was purchase by employers and law enforcement agencies, chiefly during or in anticipation of strikes...all of the largest individual purchasers are corporations and that their totals far surpass those of large law-enforcement purchases. In fact the largest purchaser of gas equipment in the country, the Republic Steel Corp, bought four times as much as the largest law-enforcement purchaser."61

Just to add some perspective to those figures, this was during the depression when a new car still sold for less than one thousand dollars and all the materials for a new catalogue home could be bought for less than ten thousand dollars.


Failing to physically beat labor into submission, the fascist turned to legal tactics such as the anti-union right to work law. Those laws are still highly regarded in right wing circles today, but few know that the fascist group, Christian America, first sponsored it in the early 1940s.69 The forces behind the Christian American group were wealthy Texans tied to the Kirby family. Vance Muse formed Christian America after the death of Kirby. Both Kirby and Muse had a long history of opposing the New Deal and supporting racism, Muse was an associate of Gerald Smith.

Another member of the Christian America was Lewis Ulrey who took over the distribution of Gerald Winrod's propaganda, in which he openly advocated a 12-hour workday. Ulrey penned the following quotation for Gerald Winrod's Defender.

"Into this bedlam and chaos in Germany Adolf Hitler injected himself as a new... messiah to lead ORDELY GERMAN from political confusion to
Hitler put it up to the Germans to decide between the Jewish ownership and domination of the country or DOMINATION AND OWNERSHIP BY

The Christian America group was the leading lobbyist for the right to work laws throughout the south and midwest in the early 1940s. Their organization was well funded and prone to use heavy handed lobbying tactics on members of the various state houses. Perhaps the best summery of their tactics comes from a remark by Arkansas Representative Chambers from Columbia Ark. On the day of voting for the right to work law in that state he turned to Val Sherman, the Associate Director of Christian America and pointed to him remarking.

"I'm not branding Mr. Sherman as a disciple of Hitler, but he's a graduate of his school. Hitler would be glad to charter a submarine to Texas and solicit his services." 71

The quotes above clearly provide a direct link between fascist and the anti-union right to work laws in this country. Others associated with the Christian America were Alfred Sloan, CEO of GM, the du Ponts, bankers George and Joseph Widener, and Wall Street lawyer Odgen Mills.

This visceral hatred of unions and support for corporate rule is but one of the common threads linking today's far right wing groups to those of the pro-fascist groups of the 1930s and illustrates the use of destructive divisiveness as a fascist trait.

It's a common misconception that after the bombing of Pearl harbor, that the pro-fascists folded their tent and went home quietly. Nothing could be further from the truth. They simply went underground. In fact, Archibald MacLeish, Librarian of Congress, accused the pro-fascist press represented primarily by Hearst, Scripts-Howard, McCormick and Patterson of treason in a speech before the American Society of newspapers. This speech was broadcast at the time. However, the newspapers failed to cover it or when they did, they censored it heavily. Although MacLeish did not name names he mentioned treason twice. Curiously in the follow up in TheNew York Times those two paragraphs were deleted, as was the case in many of the other follow-ups that were buried in the back pages.19

This was not the only charge of treason that some major newspapers faced. The 1942 American Newspaper Publishers Association's convention voted for a "second front now" and went on to denounce the fascist appeasement forces in America naming the McCormick-Patterson chain, The Chicago Tribune, The New York Daily News, The Washington Times-Herald and the Hearst chain. It accused the American press of an anti-unionism, suppressing and slanting the news to fit the publisher's views. 24 The following quote from William Green, president of the AFL confirms how deep this support for fascism was.

"Recently a bitter campaign of malicious propaganda to poison the public's mind against organized labor has been carried on by the subsidized press which is composed of reactionary daily newspapers controlled, through ownership and advertising, by exploiting profiteers and union haters. Together with the bourbon politicians, idle rich and anti-labor columnists, they are the real parasites of our country... By peddling falsehoods about labor, the subsidized press is creating factionalism, disunity and class hatred. If Hitler were not so busy running away from a victorious Russian army he would take time to pin medals on the editors and columnist who are misleading the public. The reactionary editors of the newspapers are doing just what Hitler predicted he could accomplish here through his agents." 25

The use of destructive divisiveness by the pro-fascist forces is again readily apparent in the quote. The character of the press has not changed.
In 1942, The Chicago Tribune and part of the McCormick chain was on trial for betraying secrets to the Japanese in publishing the names and location of the ships in the Battle of the Midway. McCormick was a vicious Roosevelt hater and sought out ways to embarrass or discredit him. The Chicago Tribune also published Rainbow 5, the top secret battle plans before the war had broken out. In the case of Midway, publishing the names and locations of the ships involved was clearly treasonous. The Tribune had obtained that information through one of its war correspondents, Stanley Johnson. Johnson was sailing aboard the USS New Orleans en route to Hawaii and had seen a JN25 decrypt (JN25 was a Japanese Naval code) on the captain's desk and stole a look. The decrypt revealed what the U.S. Navy knew of the Japanese fleet deployment and strategy. The Headline in the Chicago Tribune published three days after the battle read "Navy Had Word of Jap Plan to Strike at Sea."

The Tribune avoided convictions by claiming that part of the article was false and much of it had been faked. Roosevelt and the Justice department were hamstrung and could not prosecute the case fully. In a rigorous trial, the government would have had to reveal that it had broken the Japanese Naval code. Protecting that secret and protecting the lives of American G.I.s was worth far more than bringing the traitors to justice.112 This is the same Chicago Tribune that after the war began propagating the lie that Roosevelt had a forewarning of the attack on Pearl Harbor. 27

[EDITOR: it's not a pro-Nazi lie that FDR instigated the Japanese to attack Pearl Harbor. He had to in order to get the pro-German Americans to fight High-Technology Nazi Germany before it was too late and they had weapons of mass destruction. All criticism of the left/FDR is not right-wing pro-Nazi propaganda]

Congressmen, Elmer Holland of Pennsylvania went further in charging that Joseph Patterson owner of the New York Daily News and Eleanor Patterson owner of the Washington Times-Herald were America's number 1 and number 2 exponents of the Nazi propaganda line. 26

Perhaps one of the biggest misunderstandings about Roosevelt and the 1930s is the lack of knowledge about his opposition. Many Americans believe FDR stood virtually unopposed. Nothing could be further from the truth, while he enjoyed tremendous popularity among the electorate, he had many powerful and influential enemies both within and outside of the government.



Part 5: Congressmen & Seditionist


In regards to their enemies, the Roosevelt and Clinton administrations have several similarities. Clinton was plagued by the vicious smears inspired by Richard Mellon Scaife while it was Irene du Pont hatching the plots against FDR. Both Presidents faced a hostile press for the most part. Additionally, both faced bitter opposition from the Republicans. Neither enjoyed bipartisan support in any notable sense of the word. In fact, the Republicans many of whom were openly pro-fascist opposed every effort of Roosevelt to prepare for the coming war.

Roosevelt had numerous bitter enemies within Congress. Some were openly pro-fascist. The Nazis in Germany sought throughout the 1930s a cause by which they could ignite the native fascists in America and prevent the U.S. from entering the war. The American Bund was first proposed as such an element in which all Americans of German extraction would rally behind.

The relationship of the American Bund with the Nazis in Germany was more of a love/hate relationship of a jilted lover. Hitler's top priority was to keep the Untied States neutral and to maintain at least an amicable diplomatic relationship. The Bund's rallies with the bellicose speeches and storm troopers with swastika armbands attacking anyone that challenged the organization was seen as detrimental to these aims by the high officials in Berlin, especially since most Americans regarded the Bund as financed by and controlled by Berlin.

Hitler ordered that the Bund should receive no aid from Germany. Despite Hitler's ban, the Bund did receive aid from Germany as the Bundeslieter, Fritz Kuhn proved to be adept at pitting one Nazi organization against another to receive funds. Hans Dieckhoff the German ambassador to the United States was one of the Nazi who viewed the Bund as a hindrance to German-American relations. Dieckhoff was also the brother-in-law of von Ribbentrop. Acting on instructions from Berlin, Dieckhoff ordered all German citizens to withdraw from the Bund as a measure to improve diplomatic relations. He was infuriated to learn that Kuhn had obtained funds SS Lt Gen Werner Lorenz's organization, Volksdeutsche Mittelstelle. While the Bund remained a force it was largely ineffectual as a rallying point for German-Americans. Most German-Americans chose to be loyal to their adopted country.

Next, the Nazis thought with the great racial and ethnic differences in the U.S. could be exploited for the same purpose. Again it failed. This does not mean that the Nazis were not successful in provoking anti-Semitism and even race riots after the Bund and Klan united. However, it was a failure in generating a split wide enough to prevent the U.S. from entering the war.

At its peak the Bund probably consisted of no more than 6,500 activists and another 20,000 sympathizers. About 1,500,000 American were German born. The Bund was clearly a failure as a rallying point for German-Americans. The one thing the Nazis in Germany did find in which they could unify the opposition behind was "Get Roosevelt." 30

Opposition to Roosevelt does not necessary imply the congressman was a pro-fascist, but many in Congress were pro-fascist. The list of congressmen below should not be taken as an exhaustive list; there were others. Nor are exhaustive lists needed to reveal the amount of opposition to FDR or to record their sabotaging of both the war effort and investigations of the native fascists. However, some congressmen left little doubt of their support for fascism by their own actions.

Perhaps the two greatest enemies that Roosevelt faced in Congress were Republican Senator Gerald Nye from North Dakota and Democratic Congressmen Martin Dies from Texas. Both headed congressional committees vital to preparation for the war that was coming. Burton Wheeler of Montana would be a close third. Both had two traits in common with each other and the other pro-fascists members. All of these members of Congress would abuse their franking privileges, mailing propaganda opposing the war or even propaganda from pro-fascists groups to thousands of constituents. The second thing in common was their willful association with pro-fascists groups.

Nye's opposed all major defense measures in the Senate. He led the fight against Lend Lease and he openly collaborated with many groups seeking appeasement regardless of their political leanings. On the floor of the Senate he charged that the British and not German submarines had sunk the Robin Moor, only later did he withdraw the baseless charge. He initiated a probe of Hollywood, but the investigation failed after he admitted that he had not seen the movies that he had labeled as "war propaganda." He arranged for a Bund member to air his defeatist views before the Senate and later used his congressional frank to mail copies of the speech to thousands. As a member of Congress, he was perhaps the biggest booster for the American First Committee.28

Nye also praised the virulent anti-Semitic Gerald Smith for publishing "The Cross and the Flag."29

Dies was the first chairman for the new committee, that of Un-American Activities and he set about immediately to sabotage the intended use of the committee, to investigate the subversion activities of pro-fascist groups.

No better example of this act of sabotage of the Dies Committee can be found than in the appointment of its first chief investigator, Edward Sullivan. Sullivan was exchanging confidential messages with the German High Command in 1938, the year of his appointment. In fact, Sullivan was high in the ranks of the Ukrainian-American fascist groups. He greeted members of the Bund with a "Heil Hitler" and had denounced FDR's administration as a Jewish Communist plot. Sullivan had one other trait endearing him to the right wing extremists; he had been a former labor spy for the Railroad Audit and Inspection Company.

He was soon replaced with another right wing extremist, J. B. Matthews. Upon leaving the Dies committee, Sullivan immediately rejoined a fascist Ukrainian group.

Instead of investigating pro-Nazis, the committee set about investigating and compiling an extensive blacklist of liberals and anti-fascists. Throughout the war the committee carried on a vicious attack on the Roosevelt administration, charging that various agencies were packed with Reds and denouncing America's fighting allies.

No better example of the opposition Roosevelt faced can be found than in the fight over the establishment of the draft. Nye led the battle, and succeeded in greatly reducing what FDR had envisioned. Originally Roosevelt had planned on two years of universal service for all Americas, both men and women. Service would not have been necessary in the armed forces alone, but through a combination of all government agencies. To be fair, the support for the draft was bipartisan as was the opposition to it. The most opposition came from congressional members from the midwest and high plain states. The bill passed on September 16, 1940 authorizing the draft for one year only. The following year the bill to extend the draft passed the House by a one-vote margin. There were 182 Democrats and 21 Republicans voting in favor of extending the draft and 65 Democrats and 133 Republicans voting against the draft.

There is no better way to establish the fascist nature of many of these congressmen than quoting them. One such Congressman and Steuben Society member was Republican House member John Schafer from Wisconsin. His congressional record was one of complete opposition to any defense measure. In speaking with Carlson, investigative reporter posing as a pro-fascist, Schafer was quoted as follows talking about a revolution against democracy:

"The Bloody kind. There will be purges and Roosevelt will be cleaned right off the earth along with the Jews. We'll have a military dictatorship to save the country."31

Schafer leaves little doubt as to his feelings about democracy in the quote. Another Senator, Republican Rufus Holman from Oregon, openly praised Hitler on the floor of the Senate. The small excerpt below from the speech leaves no real doubt as to his pro-Nazi views.

"I doubt if the right is all on one side among the present belligerents. At Least Hitler has broken the control of the international bankers and traders over the rewards for the labor of the common people of Germany.
In my opinion it would be advantageous if the control of the international bankers and traders over the wages and savings and the manner of living of the people of England could be broken by the English people, and if the control of the international bankers and traders over the wages and savings and the manner of living of the people of the United States could be broken by the people of the United States."32

The code words of international bankers and traders meant Jews. Holman inserted several pro-Nazi propaganda pieces into the congressional record as well. Nor was this the only time Holman had praised Hitler. As Oregon's State Treasurer, he had praised Hitler's sterilization program resulting in the amendment of Oregon's sodomy law in 1935 to include all moral degenerates and sexual perverts whether, they had committed a crime or not. Oregon at the time used castration rather than vasectomy. 33


Republican Senator Thomas Schall from Minnesota placed material from James True in the Congressional Record. True was a notorious Jew baiter and inventor of the infamous Kike Killer, a nightstick.

Republican Representative Louis McFadden of Pennsylvania was another Congressman that supported True. McFadden believed in the international Jewish conspiracy. He believed the Jews were not suffering from persecution in Germany under Hitler. He was virulent in his opposition to Roosevelt's plan to allow 200,000 Jews to emigrate to the U.S. He believed those that supported such a plan, like Secretary of Labor, Frances Perkins were part of the conspiracy by the "Jewish-controlled administration." McFadden believed Perkins real name was that of a Russian Jewess, Matilda Wutski.115

Another of the pro fascist was Senator Robert Reynolds a Democrat from North Carolina, who also openly praised Hitler on the floor of the Senate. Reynolds was a resident of Asheville, the home of Pelly's Silver Shirts. Reynolds spoke glowingly about fascism as the following quote shows.

"The dictators are doing what is best for their people. I say it is high time we found out how they are doing it, and why they are progressing so rapidly.
Hitler has solved the unemployment problem. There is no unemployment in Italy. Hitler and Mussolini have a date with destiny. It is foolish to oppose them so why not play ball with them."35

Reynolds was friends with the American Nazi George Deatherage and Gerald Winrod. Reynolds with the backing of Burton Wheeler rose to become chairman of the Senate Committee of Military Affairs. In April 1940, Reynolds provided the Nazi agent, Simon Koedel with detailed confidential information about France's ports.76 The transfer of such information to Nazi agents was nothing short of treason.

Besides using the Senate floor as a sounding board for Falangist propaganda, he is perhaps better known for his anti-alien views. Reynolds believed that aliens was at the heart of all of America's problems and organized a posse of youths from age ten to eighteen called the Border patrol to catch alien crooks.

Reynolds maintained his position in the Senate until 1944. By then the Democratic Party by then had enough of the fascist infiltrator and chose another figure popular in North Carolina to seek Reynold's seat in the primary. Rather than face certain defeat Reynolds retired.

Another of the fascist supporters in congress was the Democrat Senator, Rush Holt from West Virginia. Holt was the youngest person ever elected to the senate. He had won election in 1934 as a backer of the common man and the New Deal. Shortly after being elected, Holt began criticizing the New Deal eventually becoming one of the harshest critics of FDR. By the end of his term, he was an outright advocate of fascism. In the 1940 primary, Holt faced two other challengers for his seat after losing support from the Democrat National Committee. He finished third in the primary.88

The two examples of Holt and Reynolds provide a stark difference between the Democratic and Republican parties. The Democratic Party would attempt to purge the fascist from their ranks in the primary, unlike the Republican Party, which made no such attempts, to purge fascist from their ranks, and even encouraged the Nazis with anti-Semitic campaigns.

Contrary to the popular belief the bombing of Pearl Harbor united the country fully, dissent can be found in the "Judas" speech of Clare Hoffman, Republican Congressman from Michigan. On January 27, 1942, with the memory of Pearl fresh in everyone's mind, Hoffman delivered an vicious attack on Roosevelt in an address to the House entitled "Don't Haul Down the Stars and Stripes" better known as "Roosevelt is Judas." Hoffman long an outspoken critic of Roosevelt and a member of the impeach Roosevelt committee ordered 145,000 copies of his speech and using his congressional frank mailed out 105,000 copies.34

The best evidence indicating that several members of congress had ties to the Nazis came from the investigation by the Department of Justice, which lead to the bungled sedition trial of 1944 stemming from the grand jury investigation. There is a fine line between free speech and sedition. Simple opposition to war is not sedition but accepting funds from the enemy to conduct espionage, or to distribute propaganda clearly steps over the line of free speech and becomes sedition.

The grand jury investigations conducted in 1940 produced an abundance of evidence that several congressmen received funds from Nazi sources. Most people today are still unaware that the sedition trial stemmed from three separate grand jury investigations. The special assistant to the Attorney General, William Maloney convened the first grand jury investigation. That investigation concluded on July 21, 1942, and indicted 28 individuals, and listed thirty publications and twenty-six organizations.

Under intense pressure from several sides including intense pressure from Senator Burton Wheeler, Maloney was eventually removed from the investigation. Wheeler used his position as chairman of the Senate Judiciary Committee to exert extreme pressures on Attorney General, Biddle for the removal of Maloney.

Several of the pro-Nazi congressmen were called to testify before Maloney's grand jury. One of the suspected congressmen was Ernest Lundeen, the populist Senator from Minnesota. Hoover had a FBI agent tailing Lundeen. On August 31, 1940, Lundeen and the FBI agent tailing him died in a plane crash. Lundeen's secretary, Harriet Johnson reported later that on the day of his death the congressman had arrived unusually early and was clearly distraught. She had asked the congressman what was troubling him and he had replied that he had gone too far and there was no turning back. She sensed he was referring to his Nazi connections. He also informed her that he had to fly back to Minneapolis at once to see his wife despite the storm.

Johnson then drove Lundeen to the airport, and reported that several times he began to cry. FBI agent J.J Pasci had followed the pair to the airport and boarded the same plane. Johnson reported that after Lundeen boarded the plane she saw several passengers in a struggle with Lundeen apparently also engaged in it. Shortly after takeoff the pilot lost control of the plane in the storm and crashed just thirty-six miles west of the capitol.

The day after his death Johnson opened the congressman's locked files and discovered many documents, which revealed that Lundeen was in the direct pay of the Nazis. The next day Lundeen's widow arrived and asked by name for the Viereck files. Harriet Johnson then reported it to the FBI and the FBI forwarded it to Maloney.

Maloney only had a partial view of the Nazi connections. He had determined that some seven senators and thirteen representatives had been bribed, or acted in collusion with Nazi Germany, aiding and abetting them, and that an additional four Congressmen were guilty of collaboration. These congressmen had used their franking privileges to distribute isolationist speeches many written or edited by Viereck.72 Those that Maloney listed as collaborators with Viereck were Stephen Day (Republican from Illinois), Hamilton Fish (Republican New York), Rush Holt (Democrat West Virginia) and Ernest Lundeen (Farmer-Labor Minnesota). The remaining twenty are listed below.

John Alexander Republican Minnesota

Philip Bennett Republican Missouri

Usher Burdick Republican North Dakota

Worth Clark Democrat Idaho

Cliff Clevenger Republican Ohio

Henry Dworshak Republican Idaho

Clare Hoffman Republican Michigan

Edwin Johnson Democrat Colorado

Bartell Jonlman Republican Michigan

Harold Knutson Republican Minnesota

Robert LaFollette Republican Wisconsin

Gerald Nye Republican North Dakota

Robert Reynolds Democrat North Carolina

Paul Shafer Republican Michigan

Henrik Shipstead Republican Minnesota

William Stratton Republican Illinois

Martin Sweeney Democrat Ohio

Jacob Thorkelson Republican Montana

George Tinkham Republican Massachusetts

Burton Wheeler Democrat Montana 102

The list of congressmen that Maloney listed as dupes of the Nazis has several interesting aspects. First, members of the Republican Party dominate the list. This should not be surprising in light of the evidence presented earlier of the Republican Party employing known Nazis in election campaigns. Two of the Democrats on the list, Holt and Reynolds were removed by the active campaigns against them launched by the Democratic Party leadership. Holt was defeated in his reelection primary campaign, while Reynolds facing certain defeat chose not to run.

Secondly, most of these congressmen came from the upper midwest particularly the states of Minnesota and Michigan. Both Minnesota and Michigan had strong anti-union movements and were home to several of ministries that preached the Nazi line of anti-Semitism. The Teutonia Association was founded in Detroit on October 12, 1924. The Teutonia Association was something of a forerunner of the American Bund


Viereck was the highest-ranking Nazi agent arrested during the war and had been arrested as a German agent during WWI. Viereck was a V-agent or "Vertauensleute" (confidential agent) for the Abwehr. Following the war, another of the Abwehr's V-agents exposed was William Rhodes Davis, the Texas oil man.100 Very little is known about Viereck and the network of V-agents as the Nazis destroyed their most of their files. Most known V-agents appeared engaged in spreading propaganda.

What is known with certainty is that Viereck received over a half million dollars from the charge d' affairs of the German embassy, Thomsen to bribe, corrupt and undermine members of Congress and to distribute propaganda.98 Viereck received additional funds from Hansen Sturm the chairman of the Romanoff Caviar Company and from General Aniline and Film. Thomsen had valuable friends in high places including Assistant Secretary of Sate, Breckingridge Long and Ambassador to France William Bullitt. Long had publicly endorsed Mussolini's invasion of Ethiopia.

Lundeen was secretly pro-Nazi and received money not only directly from Viereck but also from the German Board of Trade and the Steuben Society. Maloney had determined that other congressmen had accepted Nazi money in deals to publish books through the notorious Flanders Hall, a fascist publisher closely associated with Viereck. Among those that had made deals with Flanders Hall were Burton Wheeler of Montana, Gerald Nye of North Dakota, Jennings Randolph and Rush Holt of West Virginia and William Stratton of Illinois. On June 13, 1940, Thomsen reported to Germany that it was necessary to take literary countermeasures against Roosevelt. In this plan Thomsen made contact with New York literary agent William Lengel and proposed a series of five books. One by Theodore Dreiser warning of the dangers of intervention another by Sylvia Porter written from a woman's point of view as to what the war would mean. The other three were to be written by journalist, George Creel, novelist Kathleen Norris and publicist Burton Rascoe. Pearl Harbor preempted the deal before any of the books were written.

In September 1941, Maloney convened a grand jury to investigate the Congress-Nazi connections. The results of the grand jury were classified for years later. Viereck was indicted, as was George Hill, a mailroom aide to Hamilton Fish. Maloney was deeply annoyed that he couldn't get indictments against any of the Congressmen. Once again it was the small expendable people who were prosecuted while the powerful were protected.73 Many of the Congressmen that had been subpoenaed managed to avoid testifying until after Pearl Harbor. After the bombing of Pearl Harbor, public interest was directed towards the war efforts and prosecution of the pro-fascists suffered from neglect.

Maloney successfully prosecuted George Hill, the mail room aide to Congressman Fish and was in the process of preparing for Viereck's trial when he was suddenly summoned to the office of Judge Allen Goldsborough. Goldsborough informed Maloney he would be the presiding judge at the upcoming trial and Maloney would only have two weeks to prepare for the opening of the trial. Maloney was furious and protested over the lack of preparation time. Maloney also objected to Goldsborough's handling of the case, as Goldsborough was associated with the extreme elements of the right wing. Maloney was successful in his efforts to remove Goldsborough as the presiding judge after swearing out an affidavit giving details of both the meeting and how Viereck's attorney Daniel Colahan had constantly demanded that Goldsborough handle the case.

Maloney successfully prosecuted Viereck's case with Viereck receiving a prison term of two to six years. On March 20, Judge Letts, cut Hill's sentence in half. One year later Viereck's conviction was reversed by the Supreme Court. Both he and Hill were set free.

Although no charges were brought against the pro-Nazi congressmen. Their plot had been exposed. Even after being exposed they continued to use their franking privileges to distribute pro-Nazi propaganda. Although after Pearl Harbor it was not possible for them to do so directly, so they did so through such organizations as the Republican Nationalist Revival Committee and the National Economic Council. Another of their choices for distribution was Western Voice edited by a fundamentalist minister, Harvey Springer from Englewood Colorado. Springer, also known as the cowboy preacher praised the fascist Gerald Smith as a real man of Christ and denounced the Federal Council of Churches as being dominated by communists. Springer was also a vicious anti-Semitic, but is still highly regarded as a theologian in Baptist circles.

One of the more striking aspects of fascism in the United States, was the removal of such people as Maloney from office. Maloney was relentless in his pursuit of native fascists. After obtaining indictments on Jul 21, 1942 on 28 individuals, Maloney was depicted as a stooge of the International Jewish bankers by Joe Kamp, a pro-Nazi propagandist. Senator Burton Wheeler demanded that Attorney General Biddle remove Maloney. When Biddle objected to such pressure from the Senator, Wheeler announced he would blow the whistle on the Department of Justice. Its unknown what Wheeler had on the Department of Justice perhaps. Whatever it was, Biddle immediately dismissed Maloney and made it clear that he could not act even as a consultant to his successor.106

Without exception those that sought to expose the fascists and bring them to trial were forced from office or otherwise discredited. General Butler who exposed the fascist plot against Roosevelt, was mocked and laughed at in the press in a successful effort to discredit the good general and the plot. While those that stood firmly opposed to the fascists were removed many of the openly pro-fascists continued to rise in power. Maloney was ultimately removed from the case and replaced by John Rogge a capable and able prosecutor. Rogge would prosecute the sedition trial in 1944. Rogge would likewise, be abruptly removed from his office.

What many people even today are unaware of was there was three separate grand jury indictments. Although the third grand jury indictment listed more organizations and publications for sedition than the first two indictments, the significant factor was the names it dropped. The following is a list of the organizations dropped in the third indictment.

The American First Committee
National Committee to Keep America Out of Foreign Wars (a group associated with Fish)
Citizens Committee to Keep America Out of War
Make Europe Pay War Debts (a Viereck Committee)
War Debts Defense Committee (a Viereck Committee)
Coalition of Patriotic Societies
Crusading Mothers of America
Citizens No foreign War Coalition
Constitutional Education League
We, the Mothers United
We, the Mothers, Moblize for America 103


Additionally, those indicted by the three different grand juries differed significantly.

Indictments returned on


Indictments returned on

January 4, 1943

Indictments returned on

January 3, 1944

Court Asher

Court Asher


David J. Baxter

David J. Baxter

David J. Baxter

Otto Brennermann

Otto Brennermann


H.V. Broenstrupp

H.V. Broenstrupp

H.V. Broenstrupp

Oscar Brumback

Oscar Brumback


Prescott F. Dennett

Prescott F. Dennett

Prescott F. Dennett

C. Leon De Aryan

C. Leon De Aryan


Hudson de Priest

Hudson de Priest


Hans Diehel

Hans Diehel

Hans Diehel

Elizabeth Dilling

Elizabeth Dilling

Elizabeth Dilling

Robert E Edmondson

Robert E Edmondson

Robert E Edmondson

Elmer J. Garner

Elmer J. Garner

Elmer J. Garner

James F. Garner

James F. Garner


William Griffin

William Griffin


Charles R Hudson

Charles R Hudson

Charles R Hudson

Ellis O Jones

Ellis O Jones

Ellis O Jones

William Kullgren

William Kullgren


Wm R Lyman Jr

Wm R Lyman Jr

Wm R Lyman Jr

Donald McDaniel

Donald McDaniel


Robert Noble

Robert Noble

Robert Noble

William D. Pelly

William D. Pelly

William D. Pelly

Eugene Sanctuary

Eugene Sanctuary

Eugene Sanctuary

Herman M. Schwinn

Herman M. Schwinn

Herman M. Schwinn

Edward J. Smythe

Edward J. Smythe

Edward J. Smythe

Ralph Townsend

Ralph Townsend


James C. True

James C. True

James C. True

George S. Viereck

George S. Viereck

George S. Viereck

Gerald B. Winrod

Gerald B. Winrod

Gerald B. Winrod


Frank W. Clark

Frank W. Clark


G.E. Deatherage

G.E. Deatherage


Frank K. Fernenx

Frank K. Fernenx


New York Enquirer



P. de Shishmareff



Lois de Lafayette Washborn

Lois de Lafayette Washborn



Garland Alderman



Lawrence Dennis



Ernest F. Elmhurst



August Klapprott



Joe E. McWilliams



E.J. Parker Sage



Peter Sahrenberg103

The common thread among the organizations dropped was the association of certain Congressmen with those organizations or the publications.103 Several of the Congressmen listed above including Fish and Wheeler along with many prominent business leaders were closely associated with the American First Committee. The National Committee to Keep America Out of Foreign Wars was another group closely associated with Fish. The two groups associated with Viereck could have opened charges to many of the Congressmen listed above. Wheeler as chairman on the Senate Judiciary Committee was in a position to bring strong pressure on the Attorney General, Biddle. A trial would have exposed all those connected to additional charges of sedition. The big fascists had to be protected and as a result, certain organizations closely linked to many of the Congressmen were dropped.

The end to the prosecution of the seditionist and Nazi collaborators came with the death of Judge Eicher on Nov 30, 1944 in the midst of the sedition trial. The next morning the new judge declared a mistrial. The trial had begun in February with the defendants delaying and disrupting the trial from the very beginning.


Rogge like Maloney was relentless in his pursuit of Nazi supporters. In the spring of 1946 Rogge received information from U.S. Army Captain Sam Harris, a member of the prosecuting team at Nuremberg that there was indisputable evidence linking the former Nazi government and certain leading citizens of the United States. On April 4, Attorney General, Tom Clark allowed Rogge and four aides to fly to Germany. Over the course of eleven weeks Rogge and his team questioned sixty-six people including Goering and Rubbentrop. They also interrogated dozens of other top Nazi officials, including friends of William Davis. Rogge's findings were conclusive and explosive. Rogge's own words best sum up his findings.

"Our investigation showed us that we had completely underestimated the scope and scale of Nazi activities in the United States. When I went to Germany I felt that the biggest threat to American democracy emanated from the machinations of persons like the defendants in the sedition trial (i.e. the little fascist crackpots). I found that a far more dangerous threat lay in the inner-connection between German and American industrialists, and that some of the best known names in America were involved in Nazi intrigue."104

Upon returning to the United States Rogge started preparing a comprehensive report for Attorney General Clark. In July, Rogge submitted to Clark the first draft of his report. Clark was clearly distraught over the references linking business and political leaders with the disposed Nazi government. Clark specifically mentioned the links to Senator Burton Wheeler. Wheeler was a close friend of Clark. As Rogge continued to work on his report, he was approached by an aid of Clark, asking that he omit all the names of American politicians and businessmen. Rogge refused, knowing the report would never be published.

On September 17, 1946, Rogge submitted the final draft of his report. The explosive report recommended that the Department of Justice to open an investigation of collaboration between American and Nazi industrialists before the war. Not surprisingly, Clark refused to publish the report. However, to Rogge's surprise, within days portions of his report were reported in Drew Pearson's column.

Shortly after submitting his final report, Rogge was granted a two-week leave of absence to make a lecture tour on the fascist menace. Clark was adamant that Rogge should not mention his report. Speaking before an audience at Swartmore College, Rogge revealed some of his report's discoveries. He stated that Goering and Rubbentrop had told him that Joe L. Lewis, William Rhodes Davis, Senator Burton Wheeler, former vice president James Garner, former postmaster general James Farley and former president Herbert Hoover had all conspired with the Nazis to defeat Roosevelt in the 1940 election and to keep the United States out of the war.

On October 25, Rogge departed from New York on a flight bound for Seattle. Due to bad weather, the flight made an unscheduled stop at Spokane. A FBI agent met Rogge there by the name of Mr. Savage. He handed Rogge a terse letter from Tom Clark notifying Rogge that he had been dismissed. On October 24, the day before Rogge was fired, Senator Wheeler had met with President Truman demanding the dismissal of Rogge. Wheeler was concerned Rogge's charges would derail his hopes for an appointment to the federal bench.105 Wheeler never received the appointment to the federal bench.

Rogge like Maloney, suffered the same fate because of their staunch opposition to fascism. The fascists in the government were too strong to allow an investigation into their treasonous acts. Ironically at the time of Rogge's dismissal, FBI Director J. Edgar Hoover was stomping around the country giving speeches that denounced Americans for "being communist"--with little or no evidence to back the charges.


Sergeant Martin J. Monti During His Treason Arraignment
Original caption: New York: Ex-U. S. Flier Seized On Treason Charge. Sgt. Martin J. Monti, who has been stationed at the U. S. Air Force base at Mitchell Field, Long Island is shown resting his chin on his hand as he was arraigned today before U. S. Commissioner Edward Fay in Brooklyn Federal Court on charges of Treason. Monti, who hails from St. Louis, Missouri, and was originally an Air Force Lieutenant is accused of having made radio broadcasts for the Nazi Propaganda Ministry from Berlin which were beamed to U. S. troops during the invasion of Italy and France. The FBI disclosed that Monti deserted from the Army in 1944 while stationed in India, hitchhiked by Army plane to Italy, and then stole and Army P-38 in which he landed behind the German lines.
Image: © Bettmann/CORBIS
Photographer: Anthony Bernato
Date Photographed: January 26, 1948
Location Information: New York, USA
Source for photograph and quote: http://www.corbis.com


Martin J. Monti Leaving Courtroom

Original caption: Pilot-Traitor Given 25 Years. New York, New York: Martin J. Monti, 27, former Air Force pilot and self-confessed traitor, is led from Federal Court in Brooklyn after getting 25 years and a fine of $10,000. He pleaded guilty to 21 overt acts of treason, starting in 1944 when he deserted from India, hitch-hiked his way to Italy, where he stole a P'38 photo reconnaissance plane and went over to the Germans for whom he later did propaganda work. After Germany's surrender, he made his way back to the American Army where he was sentenced for desertion and theft of a plane and given 15 years, later remitted when he enlisted as a private. Four of his brothers served in the Navy during World War II and received honorable discharges.
Image: © Bettmann/CORBIS
Photographer: Jesse Strait
Date Photographed: January 17, 1949
Location Information: Brooklyn, New York, New York, USA

Perhaps the most brazen example of pro-fascists escaping justice came after the end of the war. There was little effort in prosecuting traitors or Nazi war criminals following the end of the war. Martin Monti, one of Father Coughlin's followers, was drafted and sent to Italy. On October 13, 1944, while serving in Italy he stole a P-38 aircraft and flew it across German lines landing in Milan. He gave himself up to the Germans and offered his assistance to them. The Germans transferred him to Berlin where he broadcasted pro-Nazi propaganda often quoting Father Coughlin or reading articles written by him. Following the end of the war, he was court-martialed for desertion and theft of the plane. The normal sentence in such cases would have been death. Monti however, received only a 15-year suspended sentence. Monti re-enlisted as a private and by 1946 he had risen to the rank of sergeant.74 The allied armies had won the war in Europe against fascism--but the U. S. was losing the war at home against fascism. In their rabid hatred of communism, the native fascists were now plotting the "Cold War" and everyone was needed to fight the "new menace" and justice could be sacrificed.


Part 6: The Pro-Nazis of the 1930s

After the fall of France, a speech by Lindbergh aroused the fiery Secretary of Interior, Harold Ickles to form his own investigation committee. Ickles coordinated a private investigation, exposing Nazi propaganda. This group was headed by T.H. Tetens, also the author of two of the books cited in the bibliography. The three-man task force soon presented Ickles with shocking evidence. The Nazis in Germany were spending money on behalf of far right groups within the United States. Recipients of the German funds included the Christian Mobilizers, the Silver Shirts, Father Coughlin and others. Ickles presented the evidence to the attorney general and in the next year such groups found themselves subjects of investigations. FDR knew of Ickles plan and encouraged selective leaks to the media and to the FBI.116

George Eggleston provides a good example of far right groups in America receiving aid from the Nazis. In 1941, Eggleston began publishing Scribner's Commentator, a mass circulated magazine. The magazine was secretly subsidized from the German Embassy.

Eggleston had access to laundered funds from the estate of the Charles Payson, a millionaire admirer of Lindbergh. Eggleston located his publishing headquarters at Lake Geneva, NY. There he received instructions from Germany via shortwave radio for a second publication he undertook, The Herald. The Herald was even more pro Nazi and smacked of Goebbels like propaganda. Thomsen, charge d affaires of the German Embassy was impressed with the Herald and strived to place it in the hands of American servicemen.118

Following the bombing of Pearl on December 12, 1941 the American First Committee officially disbanded. However, on December 17, 1941 meeting in the home of Sibley Webster, a wealthy Wall Street broker a number of key American First members including Charles Lindbergh reformed under the new name Americans for Peace. The following quote from that meeting came from Horace Haase a former American Firster leaves no doubt about the future activities of those gathered.

"It is obviously necessary for the leaders of the America First like Wood and Webster to keep quiet. But the organization should not be destroyed. I have never been in the limelight and have nothing to lose. I can remain active in a quiet way. I should like to offer to keep the files. We must get ready for the next attack which must be made upon this communistic administration." 41

Nor was Haase alone in his sentiments. Four days after the bombing of Pearl the National Copperheads a west coast group closely associated with the American First Committee met in Los Angles. Ellis Jones appearing before the meeting stated:

< "The Japanese have a right to Hawaii. I would rather be in this war on the side of Germany than on the side of the British."42

Thus, began the battle for the minds of the people as similar statements along with the often-repeated cry for the impeachment of Roosevelt were repeated across America. Many of the followers, sensibilities firmly offended, deserted the pro-fascist groups in droves. However, the hard core fascists and their leaders simply began a vicious whispering campaign meant to destroy the morale of both the soldiers and the public. Such comments as: " Our armed forces are weak, The cost of the war will bankrupt the nation, The Chinese and British will make a separate peace with Japan and Germany, Stalin is getting too strong, and Bolshevism will sweep over Europe" were often overheard and repeated in this campaign for the people's minds.

The pro-fascist newspaper chains went into overdrive after the bombing of Pearl as the following quotes indicate:

" This great war seems to be in the hands of inexperienced civilians who have proven uniformly unsuccessful in managing the country's affairs in time of
peace, and are now displaying a more dangerous incompetence in time of war" Hearst's New York Journal-American March 17, 1942.
"Of course Russia is not a full partner of the United Nations. She is a semi-partner of the Axis." Hearst's New York Journal-American March 17,1942"60

Starting in February 1942 the pro-Nazis had their hopes dashed. There was no panic in America just anger directed at the Axis nations and their conspirators and fifth column agents inside the country. Beginning in February several unregistered agents for Germany were arrested and sent to prison, the most notable being Laura Ingalls. By April, Father Coughlin's Social Justice and William Pelly's The Galilean newsletters were banned from the mail due to their seditious content. Special grand juries were being convened across America to investigate propaganda and seditious acts.

The leaders of many of the pro-fascist groups simply went underground and began a nasty whispering campaign in the hopes of destroying the morale of both the soldiers and the public. The whispering campaign was not unlike the one that the Republican leadership unleashed against Senator John McCain in his bid for the presidential nomination in 2000 at the urging of the George Bush Jr. campaign. The rumors viciously attacked McCain for a bad temper and suggested that the former war hero was mentally unfit due to his capture by North Vietnam. Some of the attacks went so far as to claim McCain was a Manchurian candidate of his former captors. The attack on McCain serves to remind us how effective these whispering campaigns can be.

The opposition to the war came to a climax on July 23, 1942 when the Department of Justice indicted twenty-seven men and one woman for sedition. 43 The entire legal process was poorly managed and badly bungled. Some were found guilty and sentenced to jail terms such as Pelly (in another trial) others such as Dilling were found innocent. 44 A review of the list of those indicted reveals that none of the real leaders or financial backers were indicted. Instead, those indicted were rather low level leaders or nothing more than noisy gadflies. The only trial that ever charged any of the real leaders was the previously mentioned trial of the Chicago Tribune. After sixty years only a few of the names of those indicted warrant more than a footnote in history.

One of those indicted, William Dudley Pelly and his group, the Silver Shirts warrants a closer look in studying the evolution of native fascism in the United States. Pelly founded the Silver Shirts on January 31, 1933 in Asheville, North Carolina the day Hitler took power in Germany describing the group as a Christian militia. Throughout the 30s and up until Pelly's indictment for sedition, the Silver Shirts were one of the largest pro-Nazi groups and one of the more violent. Pelly was the son of a Methodist minister who believed that Jews were the children of Satan.47 His intense hate of Jews came from when he was a missionary traveling with the American Expedition Force in Russia during the last phase of the WWI. There, he learned from the White Russians a bitter hatred for the Jews. This hatred was later reinforced when Pelly was fired as a screenwriter for Hollywood moguls.

Due to their extreme racist and anti-Semitic views, the Silver Shirts became popular in areas of the country where the Klan was strong in the 1920s. They were particularly strong in the Pacific Northwest and largely took over the void left after the Klan split apart in Oregon and Washington in the 1920s. The Silver Shirts were openly pro-Hitler and formed alliances with both the American Bund and the Klan.

If it were not for their lingering influence on the evolution of fascist groups in America, they would be as forgettable as any of the other 700 plus fascist groups from the 1930s. However, many of today's far right groups can trace their ancestry directly to the Silver Shirts. The Posse Comitatus' founder Henry Lamont Beach was a leader of the Silver Shirts in Oregon. Likewise, Richard Butler the founder of the Aryan Nations in Hayden Lake, Idaho was also a Silver Shirter as well as a former Klansmen. 45 Here we have direct links between today's right wing and the past fascists groups of the 30s. Butler still uses the Nazi salute at Hayden Lake years after the end of the war.55

Gerald L. K. Smith one of the founders of today's Christian Identity religion was perhaps the most influential former Silver Shirt member as the Identity religion provides the common bond among many of the right wing extremist groups today. 46 It is the religion that is common to the Posse, the Aryan nations and many of the militias and Klan groups.


It is the intolerant and blinding hatred of minorities among the religious fundamentalists that binds the fascists groups of the 1930s to today's right wing extremist groups. Much of the hate today can be directly traced back to those 1930's ministries of hate. The roots of today's tele-evangelists can be traced back to the 1930s. The media may have changed from radio to television but the format is unchanged from the style of format Father Coughlin used in the 1930s. His radio broadcasts reached millions, as did his followers in his organizations. His sermons were filled with virulent hate of Jews, communism and Roosevelt. Pat Robertson's, Jerry Falwell's or any of the other teleevangelists programs follow the same format today. Only today they carefully disguise their hate of Jews and substitute hate of gays, welfare (read that as the poor), abortion, unions or any other and liberal program designed to help the poor or working man and of course Clinton has replaced Roosevelt as an object for their scorn.

Coughlin was probably the most influential of all the preachers during the 30s. He certainly commanded the largest following, and was something of a central figure or unifier of the various groups. One such group of followers was the Christian Crusade which had as its goal the establishment of a so-called Christian government modeled upon the corporate-clerical state of Franco.48 Other groups associated with Coughlin were the Christian Front which was his primary group, many of the various mothers movement groups as well as the American First Committee. Politically Coughlin opposed any aid to Britain, the draft and any bill that would be a deterrent to Germany and Hitler. Often times his opposition bordered on sedition, although he was never charged with sedition. His ministry of hate, for the most part, ended with the bombing of Pearl Harbor.

Three other ministers of hate from this period deserve special mention before moving on Gerald Smith, Gerald Winrod and Wesley Swift. Swift had direct connections with the Nazis and is another who is credited with leading the Identity movement. He also was a member of the Klan. Billy Hargis, who later gained fame in the 1950s and early 60s, was an associate of Winrod.

Both Winrod and Smith were disciples of Coughlin. Winrod came close to winning election as a senator from Kansas and at the time was known as the Jayhawk Nazi. Smith was closely associated with Huey Long and after his death attempted to take over Long's political machine. Smith was also a member of Pelly's Silver Shirts.

Although Coughlin was the most widely recognized religious figure from the Nazi movement during the 30s, it is arguable that Gerald K. Smith was the most influential in the long term. Smith was well known in the 1930s, but he did not have as large of a following as Coughlin. However, Smith's influence can be seen in many of the right wing groups today. The great unifier among the right wing groups today is religion just as it was in the 30s. Many of today's right wing extremist groups believe in the Identity religion. A religion based on hate of Jews. Smith is largely credited in founding the Identity religion. Thus, Smith's influence extends to today while Coughlin's died with the bombing of Pearl even though Coughlin had more followers at the time.

Smith was an assistant in Coughlin's Christian Front and an associate of Henry Ford. He was an ordained minister in the Disciples of Christ Church and was a virulent anti-Semitic who gained notoriety by staging a Passion Play in Louisiana. But unlike Coughlin, who disappeared from the national scene by the end of the war, Smith went on to found the Christian Defense League (CDF), somewhat of an survivalist offshoot of the Klan. The CDF's publication "The Cross and the Flag" was among the first pamphlets to use the Identity religion.

One of Smith's assistants in his Christian Anti-Communist Crusade was Dr. Wesley Swift, who is widely regarded as one of the icons of the Identity religion today. Swift was one of the first to assert a need for paramilitary groups, and formed the racist California Rangers group, a core group from the Minutemen. Swift also founded the Church of Jesus Christ-Christian in 1946. Later after Butler and Swift had a falling out. Butler then moved his ministry of hate to Hayden Lake, Idaho where it is forms the basis of the many varied racist groups there such as the Aryan Nations and the former Order.

An associate of Swift's was Colonel William Gale. Gale ran for Governor of California in 1958 on a pro-segregation ticket and was a former aide to Douglas MacArthur. He also founded a church based on the Identity religion, the Ministry of Christ. Gale was also the founder of the Posse Comitatus. Both Swift and Gale recruited Richard Butler, the head of the Aryan Nations.49

This clear line of succession or evolution from Smith to the present day leaves Smith as more influential than Coughlin. This line of succession also establishes an irrefutable link between the pro-Nazis of the 1930s and the far right groups of today.

Least the reader assume that it was only the fringe religious hacks that were involved with the Nazis, there is the example of the Southern Baptist minister, M. E.Dodd. Dodd was a resident of Louisiana and made headlines for attending the 1934 Baptist World Convention in Berlin. Dodd was an extreme racist--- even more so than Smith--- and praised the Nazis. Dodd justified Hitler's gestapo tactics against the Jews by linking Jews with communism. 50 He considered the Jews in Germany to be outside agitators similar to the racial agitators in the south. To be fair some Baptists did denounce the Nazis, but the Alabama Baptists followed Dodd's views.

Dodd was not merely a minister in the Baptist church. He was one of the leaders of the Southern Baptists. He was also the first Baptist minister to deliver a sermon over the air waves on January 5, 1941.51 With people like Dodd holding leading positions of authority in the largest church in the south, it should not be surprising that until the 1960s the churches were just another instrument of segregation. Nor can one help but wonder how much of Dodd's anti-Semitism is still with the Southern Baptists especially in light of the number of Baptist that attended the Fourth Annual Super Conference of Christian Israel Churches in 1997. Pastor Everett Ramsey of the Faith Baptist Church of Houston, Missouri hosted this conference promoting the Identity religion.68 This close association of Southern Baptist with the Identity religion---with its roots grounded in fascism--- has led to the recent announcement of the Baptists to try and convert Jews to Christianity.52 Jewish leaders have described the proscribed guidelines of this Southern Baptist conversion as insulting and condescending.

Many of the far right groups today are trying to distance themselves from their racist roots or at least cloak them from public view in order to attract followers. However, the common bond between many of these far right groups remains the Identity religion.

There are other sources as well for today's racism, including the alliance between the Klan and the American Bund in the 1930s. Some have attributed this alliance with the increase in violence in the Identity movement. Nevertheless, for the most part the Klan is a mere shadow of its former self. One should not dismiss the threat posed by klansmen but from a political point of view, they remain ineffectual. A Galllup Poll released on July 27, 1970 showed that only 3% of the public viewed the Klan in a favorable light while 75% regarded the Klan in a highly unfavorable light. 53 The favorable number has probably risen slightly with the increase in right wing extremist groups during the 1980s but for most Americans the Klan is still a pariah.

A greater source of concern in the opinion of the writer is the Pioneer Fund, a group that had direct links with Hitler and the Nazis. Wickliffe Draper, an heir to the giant textile machinery manufacture, the Draper Corporation, established the Pioneer Fund in 1937. Draper was an extreme racist and a staunch anti-unionist as early as the days of the Sacco and Vanzetti trial. Other objects of his hatred were the United Nations, John Kennedy, anyone on the Nye committee and liberals. His hatred for those on the Nye committee for attempting to charge the du Ponts with war profiteering led to his deliberate persecution of Alger Hiss between 1948 and 1951.

Draper and his associate Harry Laughlin created "The Model Eugenics Laws in America" which Hitler used to write the Nuremberg Laws. Laughlin received an honorary degree from the University of Hiedelburg in 1936; both men had other direct ties to Hitler and Nazi Germany. Draper and Laughlin were the source of the laws in the United States for the involuntary sterilization of institutionalized Americans in 24 states that adopted such laws that led directly to the sterilization of over 75,000 Americans.54

However, the real danger of the Pioneer Fund is in the amount of political clout and financial backing it has to propagate racism ever since it was founded. Among the original directors of the Pioneer Fund who endorsed the policies of eugenics was John Marshall Harlan II, who was appointed to the Supreme Court in 1957.55

On September 12, 1963, the Mississippi State Sovereignty Commission received a notification from Morgan Guaranty Trust Co that an anonymous gift of one hundred thousand dollars had been granted with the condition that the source of the gift had to be kept confidential. The money was to be used in the fight against civil rights. Additional money was forth coming from the Pioneer Fund and was used in a broadside attack on civil rights. 55 The Pioneer Fund has also been linked as the source of funds for anti-bussing programs.58

After thirty years it is hard to find direct links in any political group, people die and ideology evolves, and at best, one can only show an evolving linkage. However, in this case, the linkage is direct with Draper still expounding his racist Nazi views. Once again, we see how the elite supported the fascist cause and can shape public opinion through propaganda.


The Pioneer Fund is also the source of much of the funding for book titles that like the Bell Curve is nothing more than racist drivel cloaked under the disguise of science. The Bell Curve is inherently false and used much of the work provided by the Pioneer Fund. One of the chief beneficiaries of the Pioneer Fund has been Roger Pearson, thereby linking the Liberty Lobby with the Pioneer Fund. The Pioneer Fund was also one of the driving forces behind Proposition 187 the anti-alien ballot measure on the 1994 California ballot. Presently the following noteworthy Republican politicians have been linked with the Pioneer Fund: Jesse Helms 56 and Steve Forbes.57

By using the Pioneer Fund as an example we have establish a direct link between a Nazi group of the thirties to both past and present political connections that have resulted in some dark moments for the nation and its legal system.

The Pioneer Fund was established on racial hate and it remains an institution based on hate. An example of the extreme hate of these groups from the 30s comes from a member of the Mother's Movement, Lucinda Benge. Benge charged that white sailors were given blood transfusions from Blacks and Orientals, making them ill and likely to father Black or Yellow children.59

Such a statement is ridiculous but it does reveal the rabid hate of these groups. For those readers that think we have moved beyond such rabid hate, the writer would like to remind the reader that he had a friend in college during the late 60s early 70s whose father was delaying an operation. The reason for the delay was that he had a previous operation and did not recover as quickly as he had thought he should and he blamed in on that nigger blood they had gave him. Such bigotry still remains strong throughout the midwest, in a later chapter the anti-Jewish sentiment will be detailed in the rise of the Posse Comitatus in the 1980s.

Perhaps, the most influential right wing political group today was formed from the remnants of three fascist groups of the 1930s. The American Security Council (ACS) was formed in 1955 from members of the pro fascists groups: the American First Committee, the American Vigilante Intelligence Federation, and the American Coalition of Patriotic Societies.62 The American Vigilante organization was the product of the notorious pro-fascist Harry Jung while the Coalition of Patriotic Societies was closely associated with eugenics and the previously mentioned Pioneer Fund. The American Vigilant Intelligence Foundation was founded in 1927. The foundation collected large sums of money from such corporate donors as Sears, A.B. Dick, International Harvester and First National Bank.114 The person most responsible for establishing both the American First Committee and the ACS was the reactionary head of Sears and Roebuck, retired General Robert Wood.

The American First Committee began as the idea of a young Yale College student, Douglas Stuart Jr. Stuart was the son of the first vice president of Quaker Oats. The reader should note the case of the nut never dropping far from the tree, as Quaker Oats was a later member of the ACS. Nor was the American First Committee the only group with connections to Quaker Oats. One of the founding members of the Church League was a vice president of Quaker Oats. Stuart attended the 1940 Republican Party Convention and consorted with the isolationists.

Charles Lindbergh had already shown and interest in Stuart's idea of uniting all opposition to the forth-coming war under one umbrella group. With Lindbergh's advice, the young Stuart sought out the aid of General Robert E. Wood. Wood was a strong isolationists and apologist for Hitler. Soon afterwards, the American First Committee was incorporated, with Wood at the helm. William H. Regnery was one of the signers of the incorporation. 63

The American First group was underwritten by business leaders. John Foster Dulles wrote the charter. Eight business leaders supplied over $100,000. Included in this list of business leaders was H. Smith Richardson. Both the Regnery Publishing Company and the Smith Richardson Foundation played prominent roles in the effort to derail the Clinton administration.

William R. Castle a former under secretary of state under Hoover was also instrumental in the launching of the American First Committee. Castle was a scion of a wealthy family from Hawaii. He believed that only the wealthy should be allowed to serve in the diplomat corp. Castle opposed sending any aid to China despite Japanese aggression in China. Former President Hoover remained a secret member of the committee.

The American First Committee was not founded originally to help the Nazis but under the direction of General Wood the American First Committee soon allowed admission of any pro-Nazi including Dudley's Silver Shirts and Klan members and became the mouth piece of pro-Nazi propaganda. Even Laura Ingalls the Nazi agent was a member. Ralph Townsend was another member and held a leadership role in San Francisco, he was also a paid agent of the Japanese government. Garland Alderman also held a leadership role in Michigan, and was a member of the Nazi inspired National Workers League. He was later indicted on sedition charges. Dellmore Lessard was the Oregon State Chairmen of the American First Committee but was forced to resigned after it was disclosed he had accepted funds from the Nazi controlled Kyffhaeuserbund.64 The American First Committee was successful in bringing many of the pro-fascist groups under one umbrella group.89

The American First group grew quickly thanks in part to the wealthy founders and slick promotion. The group quickly reached around 800,000 members. The group benefited from the publicity operations of Quaker Oats, Sears, and Hormel. Due to the ties of Hormel the large advertising firm of Batton, Barton, Durstine and Osborn also contributed to promoting the group. Former President Herbert Hoover was a secret member of the group. FDR had his own sources of intelligence about the American First group. One such source was Walter Winchell. From Winchell, Roosevelt learned that Thomas Dewey was negotiating to take over the group. However, with Dewey's presidential ambitions he backed off and distanced himself somewhat.117

With the following background on the American First Committee it would be surprising any knowledgeable person would defend it as a patriot organization. However, in a venom laced diatribe as a response to the former mayor of New York, Ed Koch perennial presidential candidate Pat Buchanan did just that. Buchanan has other embarrassing ties to fascism as well. In the response, Buchanan listed four names that had signed a recruiting poster for the American First at Yale Law School: Bob Stuart, Eugene Loche, Potter Stewart and Gerald Ford. He also listed three additional members Senator Peter Dominick, Sargent Shriver and Kingman Brewester.65 Brewester later became president of Yale, a university that has close ties with employing former Nazi war criminals. While president of Yale, Brewester appointed Tracy Barnes as a special assistant in charge of community relations. Barnes was an operations officer for the OSS during the war and resigned a high level CIA position to accept the offer. Barnes was the CIA officer that organized the overthrow of the Arbenz government of Guatemala and selected E. Howard Hunt as his political officer for the team.66

William Regnery was also one of the founders of the American Security Council, he was later replaced by his son Henry. Regnery and two other isolationists began broadcasting Human Events and in 1947 started the Regnery publishing business. Interesting enough the first two titles published by Regnery were critical of the Nuremberg Trials. The third book Regnery published was another pro-Nazi book attacking the allies air campaign. In 1954, Regnery published two books for the John Birch Society. He was also the publisher behind Buckley's God and Man at Yale. In light of the publishing of the pro-Nazi books, it is interesting to note that Regnery Publishing was subsidized by the CIA according to Howard Hunt. The reader is reminded to remember this point in a later chapter concerning the CIA and its involvement with Nazi war criminals.

Henry Regnery along with Bunker Hunt funded Western Goals an organization that is now dead. Western Goals was another group that reportedly compiled list of people they deemed subversive. In 1986, Reagan appointed Alfred Regnery to help dismantle the Justice Department's Office of Juvenile Justice.67 In the 1990s the Regnery publishing house has been the publisher of numerous venomous smears (I would use the word "books" but that would be a lie by any measure) attacking President Clinton. Once again, a direct linkage between the past pro-Nazi groups of the 1930s and today's right wing has been fully established.


The American Security Council had a large degree of influence on the Reagan administration as well as many of the more hotly debated issues between the 1950s and the 1980s. A more detailed look of the ACS will follow in later chapters. In the brief passages in this chapter it has been established that the ACS rose from the remnants of three pro-fascists groups of the thirties and pursued a path of promoting the fascist agenda of extreme anti-unionism and anti-liberalism which will be made clear in the later chapters.

It now has been over seventy years since 1930, yet few Americans know about the concerted effort of the Nazis to create domestic turmoil within the United States. Fewer Americans know about the fascist plot to overthrow Roosevelt. Even fewer Americans have an understanding how the indigenous fascist groups of the 1930s still exert a considerable effect on our daily life and the political atmosphere.

Hitler's dream of uniting all German-Americans under the fascist American Bund was a resounding failure as most German-Americans chose to remain loyal to their adopted country. Hitler's grandiose plan of creating widespread racial discord met with only limited success. Both the Detroit, Michigan and the Beaumont, Texas race riots were inflamed by the Nazi affiliated Klan and other fascist groups and caused considerable delay in the production of war material. Hitler must have been overjoyed upon seeing one of the major political parties, the Republicans to conduct vicious anti-Semitic campaigns in several states.

In this brief look at the fascists in the 1930s less than twenty of the over 700 fascist groups that were operative during the 30s have been covered in any depth. Many of these groups received money directly from Nazi Germany and from the same wealthy industrialists that were knowingly building the Third Reich's war machine. Yet, it has been clearly established that these groups exerted a large political influence during their brief existence.

An influence, that extends to this day in the form of anti-labor laws such as the right to work laws and the Taft-Hartley Act. Both have direct connections with fascism, the right to work laws were passed largely due to the lobbying efforts of the fascist group Christian American. Republican House member Fred Harley was an open advocate of Japan and Germany in the halls of congress right up to the moment Pearl Harbor was bombed. Today the United States is the only major western governments that outlaws a general strike and as such is in violation of UN policy on unions and labor. General strikes are commonplace in France and the rest of Europe. This extreme anti-labor agenda is still readily apparent today in the Republican Party.

Hitler's greatest success in creating domestic unrest came in the halls of congress. Many of the conservative members of congress from both parties hiding under the banner of isolationism or pacifism were openly pro-fascist and were influential in delaying war production and aid to the allies. Several of these pro-Nazi congressmen received funds directly from Nazi Germany others indirectly through Viereck and Flanders Hall, the notorious Nazi publishing house in the form of royalties for books.

Additionally clear evidence of collusion between the high-ranking officials of the Republican Party and known Nazi agitators in every election year throughout the 1930s has been established.

As John Rogge learned in Europe, the Nazi infiltration was much more extensive than he had believe as prosecuting attorney for the sedition trial. He learned that an ex-president, Herbert Hoover a former vice president of FDR, a United States Senator and other high ranking officials had conspired with the Nazis to prevent the election of Roosevelt in 1940.

As Rogge wrote his final report, he knew that the report would never be published. The fascist industrialists and politicians were too powerful to be exposed. They would be protected. Rogge continued writing his report not suspecting that his report would end his career. However, Rogge would suffer the same fate as the man he replaced in the sedition trials, William Maloney. He would be dismissed for uncovering the truth about American fascists. Only a few cries of protest were ever voiced in the press over the dismissal of Rogge. Even worst to further discredit the relentless Nazi hunter the fascist element sought to besmirch his brilliant and honorable career by labeling him as a communist.

The good General Smedley Butler suffered the same fate earlier in revealing the fascist plot against Roosevelt. The general was labeled a crackpot in the press for saving the country from fascism. This pattern of dismissal of those that opposed fascism strongly was repeated time and again. By 1943 with the Nazis clearly defeated on the battlefields of Europe, it would reach epidemic proportions. Meanwhile the careers of those that aided the Nazis steadily advanced. The following chapter will reveal how this was an integral part of the change in tactics of the native fascist once it was clearly the Nazis was loosing the war.

A further exhaustive review of all the fascist groups of the 1930s is beyond the scope of any single book let alone a single chapter. Further review of these groups would only confirm the findings so far, and exposed additional ones and will be left for other writers. In this brief chapter, several roots of the far right wing groups have been traced back to the fascist groups of the 1930s. Most notably the American Security Council, which exerted a large influence on the Reagan administration, was formed from the remnants of three pro-Nazi groups. Other groups such as the Aryan Nations and the Posse Comitatus likewise have their roots grounded in the fascist of the 1930s.

Some of the connections that have been exposed in this chapter maybe more embarrassing than an ideological tie. Such maybe the case with the link between Gerald Ford and the American First group. Others such as Regnery confirmed his fascist ideology by his subsequent actions. Nor does the inclusion of a group imply that all members of that group are fascist ideologues, it simply means that a significant element of that group are either fascist or predisposed to fascist ideology.

One of the greatest deterrents to expose other connections lies in the fact that much of the evidence still lies in government vaults classified as secret. The efforts of Congresswoman Elizabeth Holtzman to have all documents from that era open to public scrutiny should be applauded. As more and more of those documents are available it only confirms how vast the fascist network was and how justice was subverted. The Nazi War Crimes Disclosure Act was passed in 1998. In the three years since passage, some three million pages of previous classified documents have been released.

Among the documents released in April 2001 were those devoted to Emil Augsburg, a member of the Wannsee Institute, the former Nazi think tank that plotted the massacre of the Jews. Augsburg became part of the Gehlen network, a network of former Nazis employed by the CIA following the war. Augsburg should have been tried as a war criminal. With each release of additional files a clearer picture will emerge of the relationship between the CIA and the Nazis.90

As to what these documents may reveal is best summed up with the following quote from the Nazi War Criminals Interagency Working Group, a site maintained by the United States government.

"Clearly the information contained in these still classified files will prove to be embarrassing to our government. In the name of containing Soviet aggression, many hard-core, high ranking Nazis were welcomed into the camp of the Western Allies. Men like *General Adolf Heusinger,* who served as Deputy Chief of Operations and Planning for the entire German armed forces. A man so close to Hitler that he was literally standing next to him on July 20, 1944 when the room they were in blew up in what ultimately proved to be a failed assassination attempt. * Nevertheless, Heusinger was welcomed by the western allies after the surrender and rose to new heights in the postwar period when, on April 1, 1961, his appointment as Chairman of the Permanent Military Committee of "NATO" with an office in the Pentagon was announced by none other than President John F. Kennedy. "91

The second deterrent comes from the media itself both the popular broadcasting networks and the publishers and their lack of enthusiasm to out right sabotage of efforts to expose the connections. With the advent of the Internet the propaganda value of the popular media and press has been diminished. However, this is a two-edge sword the far right groups have been quick to adapt to new technologies. Nevertheless, even now there are those that advocate censorship of the net. Help fight to keep the net free of both government censorship and that of private censorship.

The reader should also keep in mind that Hitler didn't rise to power in a revolution. The notorious fascist Huey Long once remarked that the U. S. would be the only country that elected a fascist government. Many of the points established in this chapter will be expanded in later chapters detailing the gradual loss of freedoms in the ever relentless march of creeping fascism and corporate rule.


The 1930s: Nazis Parading on Main Street

Appendix 1: Big Donors to the Pro-Nazi Groups


The following table has been reproduced from 1000 Americans, George Seldes, Boni & Gaer, 1947, p292-298



Pro-Nazi Group

Amount in $

Addinsell, H.M.

President Chase Harris Forbes Corp

Director Cities Services, Philps Petroleum,

U.S Electric


American Liberty League



Allen, E. M.

President Mathieson Alkai Works

Director Austro-American Magnesite


American Liberty League



Armour, Lester




Ames, Thoedore

Partner Broody, McLellan Co.


American Liberty League



Avery, Sewell




Baker, George D.F.

First national Bank, AT&T,

U.S Steel

National Economic



Ball, George A.




Bamberger, Clarence




Brown, Donaldson

VP General Motors Dierctor E.I. duPont


American Liberty League




Carpenter, R.R.M

VP E.I. duPont Nemours

American Liberty League


Carpenter W.S. JR

VP E.I. duPont Nemours

American Liberty League

Economists National Committee



Chadbourne, T.L.

Director Zonite

American Liberty League


Chrysler, Wlater




Clayton, W. I.

Partner Anderson-Clayton

Chariman Export Insurance

Southern Committee to Uphold

the Constituion

American Liberty Lobby



Copeland, Charles C.

Secretary E.I. duPont Nemours

American Liberty League


du Pont, A.M. L

Trustee Wilmington Trust

American Liberty League


du Pont, Henry E.

Director Wilmington Trust

American Liberty League

Southern Committee to Uphold

the Constituion



du Pont, Irene

Vice Chairman E.I. duPont Nemours


Sentinels of the Republic

American Liberty League

Southern Committee to Uphold

the Constituion

Minute Men and Women of







du Pont, Lmmont

President E.I. duPont Nemours


American Liberty League

Economic National Committee

Southern Committee to Uphold

the Constituion

Farmers Indepence Council






du Pont, Piere S.

VP Wilmington Trust

Director General Motors

Southern Committee to Uphold

the Constituion

American Libertry League



du Pont, S. Hallock


American Libertry League


du Pont, William JR

President Delware Trust

American Libertry League


Erickson, A.W.

Chairman McCann-Erickson


American Liberty League



Echols, A. B.

VP E.I. duPont Nemours

Director Wilmington Trust , Grasselli Chemical


Sentinels of the Republic

American Liberty league

Farmers Indepence Council





Farish, W.S.

Standard Oil



Greef, Bernard

Partner PGreef & Co



Hawkes, A.W.

Congoleum, Senator

American Liberty League


Heinz, Howard

President Heinz

Director Mellon National Bank

American Liberty League




Houston, George H.

President Baldwin Locomotive

Director Standard Steel


American Liberty League



Hutton, Edward F.

Chariman General Foods, Zonite

Director Manufactors Trust, Chrysler


American Liberty League



Kemmerer, Prof E.W.


Southern Committe to Uphold

the Constitution

American Liberty League



Kent, A. Atwater


Sentinels of the Republic


Knudsen, William S.

General Motors

American Liberty League


Kroger, Bernard


Sentinels of the Republic


La Boyteaus, W.H

President Johnson & Higgins

Director Grace National Bank


American Liberety League



Lasker, Albert




Lloyd, Horatio

Morgan Parnter

Sentinels of the Republic


McCall S.T

VP American Brake Shoe, American

Mangese Steel


American Liberty League



Mellon, Andrew

Head of Mellon intrests

American Liberty League


Merrick, F.A.

President Westingtonhouse



Milbanks, Jeremiah




Moffett, George M.

Presidentcorn Products


American Liberty League



Montgomery E.W.

Director of 2 cotton mills


American Liberty League



Morris, E.M.

President Associated Investment


American Liberty League



Morris, John A.

Memeber Gude, Winmill


American Liberty League

Sentinels of the Republic




Pepper, Geo Wharton

ex Senator



Pew, J. Howard

President Sun Oil

Director Sun Shipbuilding

American Liberty League

Sentinels of the Republic





Pitcairn, H.F


Sentinels of the Republic


Pitcairn, Rev theo


Sentinels of the Republic


Pitcairn, Raymond


Sentinels of the Republic


Pratt, John L.

VP general Motors

American Liberty League


Raskob, John J.

VP E.I. duPont Nemours

Director General Motors, Bankers Trust

American Liberty League

Southern Committe to Uphold

the Constitution



Roosevelt, Nicholas


Sentinels of the Republic


Sanis. E.C.

President J.C. pennys


American Liberty League



Sloan, Alred P.

President General Motors

Director E.I. duPont Nemours


American Liberty League

Southern Committe to Uphold

the Constitution




Stotesbury, E.T.

Partner Morgan

Sentinels of the Republic


Strauus, Lionel f.

Director of 11 railroads


Sentinels of the Republic



Teagle, W.C.

Stnadard Oil



Van Alstyne J.H

President Oliver Elevator


American Liberty League



Wier, E.T.

Chairman National Steel, Wierton Steel,

Wierton Coal

American Liberty League




Widerner, Joseph E.

Director Baltimore & Ohio Railroad,


American Liberty League


Woodward, William

Hon Chairman Central Hanover Bank & Trust

American Liberty League


The table was originally prepared by Senator Black and is known as the 74th Congress 2nd Session Digest of Data, Special Committee to Investigate Lobby Activities. The reader is urge to remember that this list is not complete. It only represents what was known by the Senator.This table is provided to illustrate the simple fact that it was those from corporate America that sponsored the many pro-Nazi groups during the 1930s. Its also provided in hopes of aiding future researchers into fascism within the United States.To add some perspective to the dollar amounts given below; the Republican party spent roughly $15 million dollars on the presidential election of 1940. The figures in the table below total nearly five percent of that.



1. This writer believes that one of the reasons the far right wing has always been fractured in this country, is the intense hatred and intolerant views or tunnel vision of these groups and their members. The writer also believes one of the reasons for the greater factorization during the 30s compared to the present time was a product of both economic conditions and the technology of the times. The groups in the 30s had to rely on the US Postal system to exchange their pamphlets. Unlike the groups from the 1980s that were quick to develop mailing lists over faxes and the use of the internet to exchange their pamphlets in the 1990s.
2. Facts and Fasicsm, George Seldes, New Union Press, 1943, p68.
3. Trading with the Enemy, Charles Higham, Barnes & Noble, 1983, p162.
4. Trading with the Enemy, p163.
5. Trading with the Enemy, p163-165.
6. Trading with the Enemy, p165-167.
7. Trading with the Enemy, p167.
8. Facts and Fascism, p46.
9. Facts and Fascism, p70-75.
10. Trading with the Enemy, p154-155.
11. Facts and Fascism, p135-136.
12. Facts and Fascism, p137.
13. Facts and Fascism, p134.
14. Facts and Fascism, p134.
15. Facts and Fascism, p129-131.
16. Facts and Fascism, p 124-125.
17. Men of the Far Right, Richard Dudman, Pyramid, 1962, p126-128.
18. http://uaw.org/bargaining/barginfo.htm#japan
19. Facts and Fascism, p203-204.
20. Facts and Fascism, p126-127.
21. Facts and Fascism, p184-190.
22. Facts and Fascism, p184.
23. http://www.fair.org/extra/9707/ad-survey.html
24. Facts and Fascism, p213.
25. Facts and Fascism, p215.
26. Facts and Fascism, p220.
27. http://www.abbc.com/aaargh/engl/dl/denying2.html
28. Undercover, John Carlson, E.P. Dutton, 1943, p232-234.
29. Undercover, p293.
30. Sabotage, Albert Kahn, Harper & Brothers, 1942, p140.
31. Undercover, p235.
32. Undercover, p238.
33. http://www.teleport.com/~glapn/ar04001.html
34. Sabotage, p247-248.
35. http://www.mthololyoke.edu/acad/intrel/nazipol.htm
36. Facts and Fascism, p255.
37. Facts and fascism, p258-259.
38. Facts and Fascism, p261-262.
39. http://newsweek.washingtonpost.com/nw-srv/issue/24_98b/printed/int/eur/ovbz0324_2.htm
40. Undercover, p258.
41. Undercover, p241.
42. Undercover, p243.
43. List of those Indicted: Elizabeth Dilling, Howard Victor Broenstrupp, William Dudley Pelly, Prescot Freese Dennett, Charles B. Hudson, Court Asher,Eugene Nelson Sanctuary, James C. True, Oscar Brumback, Edward James Smythe, Gerald B. Winrod, Elmer J. Garner, David J. Baxter, William Kullgren, C Leon de Aryan, Robert Edwards Edmondson, Ellis O. Jones, William Robert Lyman, Jr, George Sylvester Viereck, William Griffin, Hans Diebel, Hudson de Priest, Robert Noble, Ralph Townsend, Donald McDaniel, James F. Garner, Otto Brennermann, Herman Max Schwinn
44. It is this writer's opinion that there is a very fine line between the crime of sedition and free speech. Overall the writer views the sedition trials negatively. The writer believes that some of those indicted were guilty of nothing more than exercising their right to free speech. Others were certainly guilty of sedition or even more serious crimes.
45. http://hatewatch.org/who/butler.html
46. http://www.hearnow.org/id.htm
47. http://www.detnet.com/wilke/antisem.htm
48. Under Cover, p55.
49. http://www.users.interport.net/~wovoka/aarlong.html
50. http://www.detnet.com/wilke/antisem.htm
51. http://www.uu.edu/unionite/winter99/chlife.htm
52. http://www.seattletimes.com/news/nation-world/html98/bapt_19990909.html
53. Power on the Right, William Turner, Ramparts Press, 1971, p15.
54. http://www.hartford-hwp.com/archives/45/022.html
55. http://www.ferris.edu/isar/Institut/pioneer/silent.htm
56. http://www.ferris.edu/isar/Institut/pioneer/helms.htm
57. http://www.ferris.edu/isar/Institut/pioneer/forbes.htm
58. http://www.ferris.edu/isar/Institut/pioneer/kaukas.htm
59. Women of the Far Right, Glen Jeansonne, University of Chicago Press, 1996, p105.
60. Sabotage, p245.
61. Facts and Fascism, p 281-282.
62. Old Nazis, the New Right and the Republican Party, Russ Bellant, South End Press, 1988, p31.
63. Sabotage, p200-202.
64. Sabotage, p215-216.
65. http://www.theamericancause.org/pjb-99-0108.html
66. Compromised Campus, Sigmund Diamond, Oxford University Press, 1992, p335.
67. http://www.weberman.com/monica.htm
68. Soldiers of God, Howard Bushart, John Craig, Myra Barnes, Pinnacle Books, 1998, p124-125.
69. Time Bomb, E.A. Piller, Arco Publishing, 1945, p43.
70. Time Bomb, p 52.
71. Time Bomb, p44.
72. American Swastka , Charles Higham, Doubleday, 1985, p38-39.
73. America Swastika, p45-47.
74. American Swastika, p78.
75. http://www.korpios.org/resurgent/Coup.htm
76. Hitler's Undercover War, William Breur, St. Martin's Press, 1989, pp. 138-139.
77. http://dailynews.yahoo.com/h/wews/20010710/lo/852857_1.html
78. I Find Treason, Richard Rollins, William Morrow & Co, 1941, p80.
79. I Find Treason, p 81.
80. Secret Armies, John Spivak, Modern Age Books, 1939,p75-77.
81. http://www.indymedia.org/front.php3?article_id=54014&group=webcast
82. Facts and Fascism. p 73.
84. http://sites.netscape.net/admin55/openletter3
85. http://freenet.msp.mn.us/people/fholson/fla3hist.htm
86. Facts and Fascism, p257.
87. Facts and Fascism, p256.
88. http://www.wvculture.org/history/journal_wvh/wvh51-1.html
89. The following pro-fascist groups were aligned with the American First Committee:German American Bund, Silver Shirts, Christian Front, Ku Klux Klan, American Destiny Party, American Guards, American White Guards, Blackshirts and Italian Fascist Clubs, Christian Mobilizers, Ethiopian-Pacific League, Falangists, Gray Shirts Kyffhaeuser Bund, National Copperheads, National Workers League, Patriots of the Republic, Save America First, Save Our American Clubs, Social Justice Clubs, White Russian Fascist, and many elements of the mothers movement including Dilling. Source Sabotage, p208.
90. CIA opens its Files on Third Reich Figures, Mark Fritz, Boston Globe, 4,27,01.
91. http://www.nara.gov/iwg/papers.html
92. The Nazi Movement in the Unitied States 1924-1941, Sander Diamond, Cornell University Press, p1974, p89 &102.
93. Mystery Man, Dale Harrington, Brassey, 1999.
94. . http://newsweek.washingtonpost.com/nw- srv/issue/24_98b/printed/int/eur/ovbz0324_2.htm
95. Mystery Man, p 137-161.
96. Trading With the Enemy, Charles Higham, Barnes & Noble, 1983, p162-166.
97. http://www.bartleby.com/66/96/8996.html
98. American Swastika, p40.
99. The Official German Report, O John Rogge, A.S. Burnes, 1961, p254-255.
100. Mystery Man, p118.
101. America Swastiza, p45.
102. The Official German Report, p170-171.
103. It's a Secret, Henry Hoke, Pamphlet Press, 1946, p14-15.
104. Mystery Man, p206.
105. Mystery Man, p205-208.
106. American Swastika, p57.
107. The Plot to Seize the White House, Jules Archer, Hawthorn.
108. The Plot, p175.
109. The Plot, p193.
110. The Plot, p197.
111. The Plot, p198.
112. Roosevelt's Secret War,
Joseph Persico, Random House, 2001, p 189.
113. Roosevelt and Hitler; Prelude to War, Robert Herzstein, Paragon, 1989, p153.
114. Roosevelt and Hitler, p154.
115. Roosevelt and Hitler, p173.
116. Roosevelt and Hitler, p328.
117. Roosevelt and Hitler, p386-394.
118. Roosevelt and Hitler, p 392-393.

Chapter 6: The War Years


Part 1:The Failure of the FBI


The day Hitler unleashed his Panzer forces against Poland marked the formal beginning of World War II: September 1, 1939. War would lash across the European continent for another 6 years---a new war so horrific millions would perish as a result. It was a brutally savage war; over six million Jews perished in the Holocaust alone. For the first time in history an entire civilian population could be targeted for destruction, a feat made possible by new technology. War would spread into North Africa, China and engulf the South Pacific.

No single event of the twentieth century brought forth more geopolitical changes than WWII. Virtually every country of Europe saw a change in government during or after the close of the war. Nor was the change in governments confined to Europe. New governments and nations were born worldwide as the British Empire dissolved away. The United States was propelled from the position of a second tier nation to that of one of the two super powers and a world leader.

Domestically it brought forth a sea of changes. For the first time in the history, the United States would maintain a large standing army. As the only allied country to escape large-scale damage, it catapulted the U.S into an economic powerhouse. Moreover, with the fears of the red menace re-ignited, the United States bid farewell to an isolationist policy, choosing a proactive interventionist policy verging on imperialism.

For America, the war did not begin until Dec 7, 1941, the "day of infamy." For Americans it was a two front war perhaps, best symbolized by the Marines raising the flag on Mount Suribachi and GIs wading ashore at Normandy. For those Americans that lived through the war it meant ration cards, collection drives for scrap metal and other materials in short supply and images of Rosie, the Riveter.

It is this home front of the war that is grossly misunderstood by Americans today. Most Americans believe incorrectly that the country was totally united in its war efforts, yet nothing could be further from the truth. The native fascist remained active and considerable opposition to war existed in the halls of Congress. The war effort was hindered by the numerous cartel agreements between American corporations and I.G. Farben. Although the native fascists were unable to create widespread racial strife, they were successful in creating enough turmoil domestically to hinder the war effort.

In order to understand the many events of WWII both on the battlefield and on the home front a brief look at the Allies' deadliest weapon is needed. The marks of this weapon were behind every headline throughout the war and traces of its presence can even be found in domestic events on the home front. This remarkable weapon fired no and dropped no bombs; it simply was our ability to break the Japanese code. Nevertheless, wrapped behind a shroud of secrecy Magic was undoubtedly the Allies' ultimate weapon.

Although every student of WWII knows of the importance of Magic, few know of the bizarre and childish manner in which the military branches handled the information it yielded. Frank Rowlett of the Signal Intelligence Service broke the Japanese code on September 20, 1940. The rivalry between the army and navy led to a bizarre routine in which the information was passed onto Roosevelt. The traffic over Magic was too great for the army cryptanalysts to handle alone. Thus, the naval code breakers shared in the task of decrypting the messages. Each service had an officer, who decided which messages were passed onto the administration. This task fell to the army's Colonel Rufus Bratton and the Alwin Kramer of the navy. Distribution was limited to the president, secretaries of state, war and navy, the Army Chief of Staff, the directors of military intelligence and naval intelligence and the chiefs of naval operations and war plans.

The bizarre nature in which the decrypts were delivered to FDR arose from the intense rivalry between the navy and army. After a prolonged dogfight between the two branches of the military a solution of sorts was reached. On odd-numbered months the decrypts would be delivered to the president by an army courier; on even-numbered months a naval courier would deliver them.

The level of absurdity would soon increase in July 1941. During June of 1940, Colonel Bratton noticed a decrypt of magic in Pa Watson's wastebasket. Watson was FDR's military aide and was in charge of appointments. He alone determined who would see the president. Watson had indeed been careless with the decrypt, and was not on the list of those approved to see Magic decrypts. The overzealous colonel reported Watson's carelessness to his superior General Sherman Miles. The general then determined that the White House could no longer be entrusted with the decrypts. For the remainder of June FDR received the decrypts from the naval courier. However, starting in July the army delivered no decrypts to the White House. By August, the navy had managed to work out a new agreement with the army. The naval courier would read the decrypts to the President and then summarize them, however he was prohibited from showing the actual decrypt to the President.

A more serious leak arose inside the State Department. According to the Magic distribution scheme only the Secretary of State Cordell Hull was to receive the intercepts. Hull however, distributed copies to six of his top aides. One of whom shared the decrypts with four additional members in the Far Eastern Division. With so many copies to be distributed inside the State Department, multiple copies were mimeographed. Joseph Dugan was the man in charge of the mimeograph room and was a strict isolationist opposed to FDR. Dugan would discuss and even show the decrypts to a friend of his inside the State Department. Dugan's friend however, was in the pay of Hans Thomsen, the German chargé ď' affaires in Washington and had conspired to fix the election in 1940. Thomsen reported to Berlin that the Americans had broken the Japanese code.

Remarkably, on May 6, Magic code breakers decrypted a message from Oshima in Berlin relaying Thomsen's report of the broken code to Tokyo. Even more remarkable after a nonchalant investigation, the Japanese determined their code to be unbreakable and continued to use the broken code. In November, Roosevelt had tired of the psychotic manner in which the Magic decrypts were delivered to him. He demanded to see the full text of the messages and ordered that they were to be delivered to him only by the naval courier. 101

The breaking of the Magic and Ultra codes lead directly to one of the most controversial aspects of WWII, "did Roosevelt have a forewarning of the attack on Pearl Harbor?" The controversy has raged for over 60 years. The first to level such a charge was the Chicago Tribune. This was the same anti-Roosevelt paper that published the secret Rainbow 5 war plans, the same paper that was charged with treason in revealing the location and names of the ships involved in the battle at Midway and the same paper that scuttled the plans for making the OSS a permanent agency at the end of the war. The best evidence to date suggests there was no such warning. Right up to the hour of the bombing of Pearl, the White House and the military planners expected the attack to occur elsewhere in the Pacific.

Writers after the war concocted a similar story on the other side of the Atlantic. According to British writers, the Allies were willing to go to extreme ends in protecting the secret of Magic and Ultra. The British writers claimed Churchill had foreknowledge of the attack on Coventry. According to the over-active imagination of these writers Churchill was willing to allow the destruction of the city rather than tip off the Germans that their code had been broken. Ultra did yield that a massive attack was planned but the intercept was not translated until three days after the attack, and even then, the location of the attack was not mentioned. The Japanese's final message also failed to name the location of the attack.

While there is more than enough blame to go around, General Shorts and Admiral Kimmel must share the bulk of the blame. It was their command and they failed to take appropriate actions following the war-warning message. Such a message should have alerted both officers of the need to take full defensive measures such as manning anti-aircraft guns, have scout planes in the air at all times, and to rotate and separate the fleet. Washington shares some of the blame in failing to follow up on the war-warning message to insure appropriate actions had been taken. Additionally a large proportion of the blame can be placed on the insane rivalry between the army and navy in the way they handled Magic. December 6 was an army day to decrypt, and time was wasted by the navy, sending the intercept to the army. Additional time was wasted since the army decoders had already left for the weekend. Further delay was added as the intercept was returned to the navy to be decoded.

Finally, much of the blame can simply be placed on old-fashioned American arrogance. No one from the President on down believed Japan could attack American soil. No one believed that torpedo bombs could be used at Pearl Harbor. Naval experts simply dismissed the idea because they believed that the harbor was too shallow. No nets were ever deployed before the bombing to protect the ships from torpedo bombs. Yet of all the bombs dropped at Pearl the torpedo bombs probably were responsible for more damage than the conventional bombs.


In November 1941, in an attempt to strengthen security Roosevelt had dispatched his own man to the West Coast to assess the loyalty of the Japanese residents on the West Coast. John Carter selected Curtis Munson, a Chicago businessman for this assignment. Carter was a news reporter that Roosevelt had employed as essentially a spy and had set up a small special intelligence unit under him. Munson reported that 90 to 98 percent of the Japanese were loyal. However, Munson's report alerted FDR to the dangers of dams, bridges, power stations and other such targets which were unguarded. Roosevelt spent a large amount of time worrying over the possibility of espionage such as had occurred during the first war. He could not shake the image of another Black Tom sabotaging the war effort.

In the period immediately following the bombing of Pearl, Donovan contributed to Roosevelt's fears of a fifth column. He reported to the president that German saboteurs were about to descend on America's shores supported and aided by U.S. bands of storm troopers. Donovan also forwarded a report to FDR claiming Japanese soldiers disguised as civilians were mobilizing to attack San Diego. Additionally Donovan reported that Los Angles was in danger of an imminent Japanese air strike. Perhaps the most damning statement of Japanese loyalty came from Naval Secretary Frank Knox. On December 15, Knox was quoted claiming: "I think the most effective fifth column work of the entire war was done in Hawaii."102

Immediately following the bombing of Pearl Harbor, the West Coast was gripped in panic. Local civilians formed coast watcher groups up and down the coast from San Diego to Seattle. The army also put in place armed coast watchers. Both the army and civilian coast watchers were prone to shoot first. The worsening news contributed further to the near-hysteric conditions along the coast. On December 23, a Japanese submarine sank an oil tanker just six miles offshore after leaving the port of San Luis. The Philippines had fallen and the Japanese were now in firm control of the south Pacific. Additional Japanese submarine sightings were made particularly off the Oregon Coast. On Feb 23, 1942, a Japanese submarine surfaced a mile offshore and shelled the Richfield Oil Company. The following night the skies of Los Angeles resembled a Fourth of July celebration as they were lit up with searchlights, trace bullets and antiaircraft fire, as an uncontrolled fear gripped the city fearing it was under attack. There was no attack.

Further north in Washington State, a power line from one of the dams suddenly went dead. The gun shops and hardware stores in the towns affected by the power outage had a bonanza day in selling ammunition. Their streets were soon empty of adult males as everyone was in the backwoods hunting Japs. With the power soon restored, these patriotic Jap hunters came straggling back home. Miraculously none of them suffered any injuries greater than a severely bruised ego. The power company had located the problem and repaired the damage. The power line ran through a rather boggy area, which was used as pasture by the landowner. Apparently, the cows had found one of the power poles to be a convenient scratching post. In the soft wet ground the pole sound had started to lean and finally toppled over.

As tension and fear continued to mount on the West Coast, Roosevelt was soon under intense pressure to do something about the perceived problem of Japanese living on the West Coast. The call for internment was led by General DeWitt, the West Coast Army Chief, Culbert Olson, California's governor and Earl Warren, California's attorney general. The governors of Washington and Oregon were squarely behind internment. Both of these states were hotbeds of support for the Klan during the 1920s. Only a single state west of the Mississippi, Colorado would accept the Japanese freely. With political pressure reaching a feverish pitch, Roosevelt signed executive order 9066 on February 19, 1942 starting one of America's grievous sagas, the internment of Japanese citizens.

While many people like to place the blame solely on Roosevelt in an effort to discredit him, he hardly acted in a vacuum. The political pressures were immense but the real roots for this sad saga lie deeper in the roots of American racism. The roots of Japanese racism can be traced to a 1924 report prepared by the Labor Department during the Coolidge administration, which had remained secret until the outbreak of war. At the time, the Oriental Exclusion Act was pending in Congress and the report was suppressed. Tennessee Democrat Senator Thomas Stewart, the prosecutor in the Scopes trial, released the report. The report was a study conducted of the strike against the sugar planters in Hawaii. The report noted that the Japanese in Hawaii were settling near strategic military areas and otherwise imperiling national defense. Senators Stewart, Maybank of South Carolina and Rufus Holman of Oregon stated the report should have been publicized at the time and the nation put on guard concerning the compromised defenses of Hawaii.

The roots of Asian racism can be traced back further than the 1924 Exclusion Act to 1882. In that year, President Chester A. Arthur signed the Chinese Exclusion Act, which barred the immigration of Chinese for ten years. In 1892, the law was extended another ten years and in 1902, it was made permanent. In 1907, The U.S. struck a deal with Japan to limit Japanese immigration and prevented the Japanese immigrants from ever gaining citizenship. Without citizenship, the immigrants could not legally own land.

While ultimately the burden for issuing the executive order must be placed squarely on Roosevelt's shoulders, the roots for such action came from America's sordid past of racism.

Politically the war years were the beginning of the transformation and polarization of both major political parties. Prior to the war, both parties had had conservative and liberal wings. By the end of the 1960s both parties had been fully polarized, the Republican became the party of conservatives the Democrats became a party of liberals. In addition, just as both major parties started evolving during this time so did the fascists.

During the war years the native fascist were forced to change their tactics twice. The first change came with the bombing of Pearl Harbor. The second change began when everyone realized Nazi Germany was defeated and it would be only a mater of time before they were forced to surrender. This second change began around mid-1943.

The bombing of Pearl forced the native fascist to abruptly change their tactics to preserve their ideology. America was fighting back; it wasn't giving up. Open rallies and parades were now out of the question for the pro-fascists. Membership in such groups quickly dwindled leaving only the hard core fascists. The hard core fascist would go underground. It would be an all-out propaganda war. The fascist agenda would be cloaked under a false banner of patriotism with a new goddess for America to worship. Lady Liberty, the symbol of American freedom since colonial times would be savagely brutalized in the process.

Before looking at this transformation of fascism, one needs an understanding of the extent of the fascist infiltration into American society of the time. In November 1940, FDR set aside one week as National Bible Week. The National Bible Association organized the celebrations and the event has continued ever since. Such a group would appear to be rather innocuous and wholesome, but all is not what it appears to be. The National Bible Association had an elitist agenda and was rooted in the National Committee for Religious Recovery founded in 1940 by New York business interests. Newsweek described the National Committee as a group of "a few Wall Streeters." In 1941, the National Committee changed its name to The Laymen's National Committee.

The first chairman of the National Committee for Religious Recovery was Lambert Fairchild. His following words can describe the agenda of the National Committee best.

"For God and Country you're going to see religion and business formed into a solid phalanx. Let no rabble-rousing communist tell you anything else, you security-holders who want security for your holdings."15

Fairchild was attempting to fuse business interests with religion interests in those words. It provides a common theme with the conversion of nativist groups to groups that adopted fascism at the heart of their ideology. Although similar to the participation of religious groups in the Red Scare of 1919, it is much broader. During the Red Scare the nativist religious elements remained largely independent from corporate funding. This conversion from nativism to fascist involved a direct link between business funding and fascists.


Fairchild had close ties with several fascist organizations including the American Bund, the Christian Mobilizers and the Christian Front. After Newsweek exposed Fairchild's pro-Nazi associations he was replaced with Howard Kiroack, who also had several ties with pro-fascist groups. The full extent of both individuals involvement can be found in Carlson's book.16 In 1945, the group presented an Annual Award of Merit to the pro-fascist newspaperman William Randolph Hearst.

The National Bible Association has maintained close ties with the elitist as evidenced from its list of chairmen over the years. Past chairmen have included: Wlliam Grede (Grede Foundation), Charles Hook (Armco Steel), Edward Werle (New York Stock Exchange), J. Peter Grace (W. R. Grace & Co) C. Fred Fetterolf (Alcoa) and Richard DeVos (Amway) among others. In other words, most of the past directors were CEOs of large corporations rather than prominent religious leaders.

This example of fascist founding a religious group is indicative of the extent of the fascist influence within the United States at the time. No organization or institution was free from fascist infiltration. In an environment based on capitalism, fascism is insidious, its tentacles reach out an infect all organizations and groups. After the Klan formed an alliance with the American Bund, the Klan urged its members to join unions in an effort to instigate strikes that would stop war production. The press and even Congress had their share of native fascists.

As the real power of the fascist movement in the United States was the leaders of corporate America and their Wall Street cronies the evolution of fascism took two predictable forms. One form became virulently anti-union; the other became fanatically anticommunist. This transformation of fascism came about largely through various groups financed by the leaders of corporate America. Financial support from corporate America was provided to all types of fascist groups ranging from the extremely violent Black Legion to the more subdued American First group.

Most of the various fascist groups remained active during the war and continued to receive funding from the leaders of corporate America. They found many allies in their struggle to further the fascist cause within America in the press, in Congress and in various government agencies, including Hoover's FBI.

To understand this transformation of fascism into the mainstream of America society a brief look at the background of anti-unionism is needed. Both anti-unionism and anti-communism go back to the end of WWI and are probably uniquely American as they are grounded in nativism and emigration. Donner describes this transformation of the anti-union movement as follows.

"The root of the anti-subversive impulse was fed by the menace. Its power strengthened with the passage of time, by the late twenties its influence had become pervasive and folkish. Bolshevism came over wide areas of the country by God-fearing Americans as the Antichrist come to do eschatological battle with the children of light. A slightly secularized version, widely shared in rural and small-town America, postulated a doomsday conflict between decent upright folk and radicalism-alien, satanic, immorally incarnate. The enemy was perceived with the kind of retching horror evoked by the biblical cry "Unclean." 2

Unionism came to be regarded in the same form. It was an alien concept imported by lazy and unclean aliens. The trial of Sacco and Vanzetti came in 1920. Despite strong alibis from witnesses placing Vanzetti at a location other than the robbery location both men were found guilty and sentenced to death. One overriding factor the jury could not overlook was the political views of Vaneztti.3 The trial was essentially a crystallization of the views expressed in the quote above.

The roots of anti-unionism can be traced back to the Civil War and the Pinkerton Agency. Following the Civil War employers used the agency as a weapon against the labor unions.1 Pinkerton had the most success in the 1870s when it smashed the Molly Maguires for the Reading Railroad. It was a short step from labor intervention to labor espionage. Agencies such as Pinkerton were transformed into an institutionalized tool for class warfare. Since unionism was involved in political events of the time, surveillance of union activity would invariably embrace political targets as well. It became fashionable and politically expedient for pro-business politicians to associate labor with violence, conspiracy and the communist revolution.

Much of the violence was not the result of the unions but that of the employers. It was the employers that stockpiled tear gas and Thompson submachine guns, it was employers that urged the local sheriff into murdering the IWW members in Everett, Washington, and it was the employers that instigated the violence in Lawrence, Massachusetts.

It was during the 1930s that religious fundamentalist and anti-communist groups began to take on a fascist flavor. The transformation of these nativist groups to fascism was often times subtle. For instance, anti-union groups went from mere opposition of unions to promoting and protecting corporations, monopolies and cartels. The transformation of fundamentalist religious groups was marked by an increased anti-Semitic view. In almost all nativist groups the transformation was marked from a shift from isolationism to global intervention.

There were powerful forces at work behind the scenes that protected the fascists. Like Germany in which the leaders of the large corporations in a backroom deal placed Hitler in the chancellery office, it was the leaders of corporate America who wielded such unbridled power that they could attempt a plot against FDR in an effort to install a fascist government. Although the participants were known and the evidence damning Roosevelt was left virtually powerless to bring the plotters to justice and in the end no arrests were made.

Moreover, the government was ill prepared to deal with fascism and the threat it posed. Congress made a feeble attempt to come to the grips of the threat posed by fascism in establishing a committee to investigate fascism. The committee was promptly seized by Martin Dies and converted into a red-baiting committee. Any efforts of investigating fascism were promptly sabotage. Unlike communism, fascism posed no threat to corporate America. In fact fascism was corporate friendly and would be protected.

The only other government agency with a role in domestic investigations was the FBI. Lead by the patron saint of the right wing, J. Edgar Hoover. Enough ink has been used already in detailing the racist and anti-Semitic views of Hoover so his racism will not be discussed further. Nevertheless, much mystery still surrounds Hoover and his role in fascism during the war years. Hoover was always known to be very politically ambitious about seeking power and control. His first real experience came with the forerunner of the present day FBI in the repressive Palmer Raids of the early 1920s. Evidence showed Hoover was an overly-enthusiastic participant and that he perceived anti-communism and anti-unionism as a means of furthering his career and increasing his power. Donner sums up Hoover's true legacy as follows.

"Out of nativism, anti-communism, super-patriotism, religion and political conservatism, he forged an ideology of capitalism in the American grain, a blueprint for American fascism."4

There is abundant evidence of Hoover's sympathy for fascism. Hoover's most open political ties were with "respectable" super patriotic conservative groups including various veteran organizations, the Daughters of the American Revolution, the American Security Council (a group formed in the mid-1950s from members of three pro-Nazi groups of the 1930s) and the Freedom Foundation. Hoover also maintained links with various right wing or conservative churches.5

Up until the 1940 election Hoover spent more time spying on British agents and communists than spying on Nazi agents. As early as 1939, Roosevelt allowed British agents to wiretap Americans who were believed to be aiding the Nazi cause. Master spy Sir William Stephenson, better known as Intrepid headed the British operation. By the time the United States had entered the war, Stephenson had uncovered a web of Nazi-American financial ties.

The wiretaps were of course illegal and evidence gathered from the wiretaps was not allowable in court, but they provided the British with a means to stop the flow of American support to Hitler. In most cases, this meant intercepting vital shipments of war materials to Germany. However, there is evidence that in some cases in which the damage to the British war effort was acute, Intrepid's agents murdered fascist agents within the United States. Some evidence suggests William Rhodes Davis; a Texas oilman may have been poisoned by Intrepid's operation.

Roosevelt however, planned to leak the information gahered by the British operation to the media after the war to generate a public uproar over treason. Due to the resulting public out cry, Roosevelt then could launch a full investigation safetly without harming the war effort. As part of this secret scheme between Roosevelt and British intelligence, Roosevelt deliberately placed, suspected individuals in positions in which they could easily be monitored. It was no accident that after his appointment to the OSS that Allen Dulles' office in New York was one floor directly below the British wiretapping office. Dulles's appointment was a deliberate setup. It placed him in a position in which he would be tempted the most to continue aiding the Nazis. Following the war Roosevelt planned on using this information to help prosecute Dulles. Two unforeseen events occurred to scuttle FDRs plan, one someone tipped Dulles off. The leak is commonly attributed to Vice President Henry Wallace and this was the motivation for dumping him from the ticket in 1944. Secondly the death of Roosevelt killed the plan entirely, as Truman was never informed over it. Dulles likewise was not Roosevelt's only target, many other wealthy Wall Street investors were also targets reportedly also including Joseph Kennedy. Former Supreme Court Justice Arthur Goldberg confirmed Dulles was being set up before his death.106

While Roosevelt's relationship with J. Edgar Hoover was reportedly harmonious, Roosevelt's scheme with British intelligence betrays a telltale hint that Roosevelt did not trust the Hoover fully and may have even suspected his loyalties.


In addition to the British import/export office in 30 Rockefeller Plaza was the offices of Western Continents Corporation. Western Continents had been established by George Muhle on August 14, 1941. The firm described itself as a "research and analyzation work and export and import." Dun and Bradstreet report carried a brief synopsis of Muhle's life. It also listed Council of Foreign Relations member, William Diebold Jr. as treasurer.

What the Dun and Bradstreet report failed to note was that George Muhle was a fictitious name. George Muhle was in fact George Muhle Mertens. A significant part of Mertens' life had been omitted in the otherwise correct synopsis of the Dun and Bradstreet report. From 1926 to 1927, Mertens had been the head of Germany's Bureau of Investigations for Anti-Democratic Activities. The bureau was a government intelligence organization formed to counter leftist and rightist organizations in Germany. Mertens had been dismissed from all his posts in the Nazi government by Goering and charged with high treason.

For a while in 1936 Mertens had worked for the Commerz Bank in Berlin. Mertens entry into the United States was aided by the counselor of the American Embassy in Berlin, Prentiss Gilbert. Gilbert had joined the Schering Corporation believing that the Nazis had sold it to legitimate owners, only to find that it was merely a front for continued Nazi activity.

Mertens had contacted the Roosevelt administration through Adolf Berle who passed him along to Francis McNamara of the Alien Property division of the Department of Justice. McNamara, feeling legally bound, finally put Mertens in contact with Donovan and William Stephenson. It was Stephenson's organization that put up the front money to form Western Continents.

In 1942, control of Western Continents was passed from Stephenson to Donovan. However, by that time Mertens had been able to map out the Nazi commercial structure within the United States and its relationship with the Sichereitsdienst (SD). Additionally, Mertens exposed the Nazi front companies in South America and how they interacted with their North American cousins. Moreover, Mertens presented a detailed exposure of the SD and the personal financial arrangements of the fascist French prime minister Pierre Laval and his associates including the Bank of Worms. 103

The information gained from Mertens proves that Stephenson's operation was not only successful, but also its reached extended very far, including into the top levels of foreign governments friendly to the Nazis.

Arthur Goldberg confirmed before his death that Roosevelt had Allen Dulles under surveillance. During the war, Goldberg served in the labor division of the OSS. Thus it seems likely that the OSS or at least one of its branches was involved with Roosevelt's secret plan of placing people suspected of aiding the Nazi cause under surveillance. The involvement of the OSS in the plot would have been illegal as its charter banned the OSS from spying within the United States. The evidence would have been inadmissible in courts, but was in keeping with Roosevelt's plan to leak the information to the press and use the public uproar to call for a full investigation. The involvement of the OSS would indicate that the plot was much more far reaching and that many more Nazi sympathizers were under a careful watch.

However, this scheme with the British was only one of many in which Roosevelt relied on others for intelligence. Roosevelt often asked his friends to take on special missions for him. Many of these missions by friends ended in failure, such as Vincent Astor's voyage in the South Pacific. Another recruit into FDR's private spy network was John Carter a writer for the fledging Time magazine.

Joseph Kennedy was another individual like Dulles that was placed in a position where he could be watched carefully. Roosevelt had dispatched the Irishman to England as an ambassador. Churchill's son, Randolph, confirmed Kennedy was under electronic surveillance. The surveillance revealed that a lowly code clerk named Tyler Kent had passed secret documents to Anna Wolkoff. Wolkoff then passed the information on to the Italian foreign minister who would forward it on to the Nazi foreign office. Kent, an American citizen, was tried in secret in the Old Bailey on October 23, 1940. He was sentenced to seven years.100

Roosevelt abruptly terminated Kennedy's ambassadorship, during a weekend visit to FDR's estate at Hyde Park. The termination was very uncharacteristic of Roosevelt and centered about differences in the opinion of the two men. It is highly unlikely that FDR would have dismissed Kennedy if the monitoring operation had revealed any link to the Nazis by that time. Roosevelt would simply have waited until after the war when Kennedy and the rest of the Nazi sympathizers would have to face justice.

Hoover's spying on the British was more of a fence-sitting maneuver on his part. It was a position that left him largely neutral in favor of the Nazis. This fence-sitting by Hoover was due to his overly-ambitious aspirations. Loftus claims that the fascist forces within the Republican Party had offered Hoover the position of Attorney General, a position he coveted, if Roosevelt was defeated in the 1940 election.71

With Roosevelt's reelection Hoover had to hurry to mend fences with the White House by offering files on Nazi sympathizers. However, Hoover had spent so much time spying on the British and chasing suspected communists that he had no central index of suspected pro-Nazis. Hoover then went begging to the Anti-Defamation League for their records. The British of course had better files but refused to share them with Hoover and the FBI, fearing that the right-wing elements within the bureau would leak information of their wiretap operation. Hence, it is clear MI6, the top intelligence service of the world at the time, believed the FBI was infested with Nazis or Nazi sympathizers.

Many have attributed Hoover's opposition and refusal to cooperate with the OSS to his over-ambitious aims for the FBI. In reality, it was Hoover's thin skin of and his tendency to hold a grudge. Rather Hoover's opposition to the OSS stems from the 1920s. During the 1920s, Coolidge appointed William Donovan to the position of assistant attorney general. During his tenure in the Department of Justice, Donovan became aware of Hoover's wiretapping of politicians' telephones and hauled the young Hoover before Attorney General Stone. Hoover was nearly fired over the incident and never forgot who embarrassed him.85

However, even more damaging was Hoover's sabotage and obstruction of the fledging intelligence network prior to and during the war, much of which was corroborated by Dusko Popov. Polov a British master spy, who had earned the confidence of the Nazis and was playing the role of a double agent. In 1941, the Germans dispatched him to the United States to reorganize and run their spy network. For a double agent it was the chance of a lifetime to deceive the Nazis on a grand scale. However, Hoover disapproved of Polov's playboy lifestyle and refused to help maintain Polov's cover.

Even more damning, Polov had brought with him important intelligence from Germany, intelligence that included the Japanese interest in the defenses and fortifications of Pearl Harbor. This information was received just four months before the bombing of Pearl Harbor. Hoover was hardly equipped to understand the importance of the information nor could he find a publicity use for it. With no personal use for the information, he promptly buried the report without forwarding it to the War Department or the White House.6

Included within Polov's documents was information about the German microdot. This information was useful for publicity and in April 1946, Hoover published an article in the Reader's Digest claiming credit for capturing the secret of the microdot from an enemy spy. Hoover lied, a British agent gave it to him, but more damning, the article contained a diagram that exposed Popov's source, a Brazilian diplomat. While the war was over in 1946, South America was the destination of many of the Nazi war criminals. In his effort to seek the spotlight, Hoover had exposed a useful source of information that could have provided information on war criminals in South America.


Reader's Digest has always held an extreme right wing bias. So much so that George Seldes in Facts and Fascism devoted an entire chapter to the Reader's Digest.7 Seldes charged that Dewitt Wallace, the owner of the Reader's Digest, told his staff that he did not want Hitler defeated, that the editor was a pro-Hitlerite from the Hearst papers and that the Reader's Digest had consistently published anti-union and fascist propaganda. 8 The following quote from Facts and Fascism sums up Seldes' opinion of the Reader's Digest and its owner.

"It pretends to be an impartial reprint magazine, selecting the best items from all others, but it is in fact a skillfully manipulated publication spreading the reactionary views of a powerful nobody named DeWitt Wallace...DeWitt Wallace is either a knave or a fool. Either he is so stupid that he doesn't know that he is spreading fascism, or he is a Machiavellian knave who has devised a wonderful and sinister method , far superior to any known to Herr Goebbels." 9

Hoover apparently saw nothing wrong with the Nazis either politically or morally. He Only three days before the bombing of Pearl Harbor, December 4, 1940, Hoover finally broke relations with Interpol, an agency that was controlled at the time by the Nazis and then only at the urging of other top FBI executives broke the association.

In short, the top echelon of the FBI saw no danger from fascism but maintained a visceral hatred of communism and Russia as well as that of FDR, the New Deal and liberalism. The FBI's top intelligence officer during the war and up until 1954 was D. Milton Ladd, who in all seriousness claimed FDR was a Comintern agent.10

The FBI's policy under Hoover during the war years was openly antagonistic of our Russian ally, and liberalism in general including the New Deal. No attempt was made by the Attorney General or anyone else from the Department of Justice to muzzle Hoover. Hoover's propensity for maintaining files on his enemies in Congress and throughout the entire federal bureaucracy was well known. It seems certain that Hoover was taping his enemies and potential enemies to a far greater extent than is known. As an example, Hoover maintained a file on Frank Murphy over a ten-year period that contained derogatory items from his private life, even after Murphy was appointed Attorney General in 1938.

This vast cache of secret files enabled Hoover to transform the FBI into a huge propaganda machine. Even more iniquitously, Hoover was solely responsible for transforming the crime-fighting agency into a domestic intelligence operation with a gut level hate of the left. From 1940 to 1945, Hoover gave some fifty speeches on the dangers of communism many of them openly critical of his superiors and their values. In effect, he was able to transform the FBI into a vast system of public opinion formation.11

Throughout his lifetime Hoover's favorite whipping boys were communists. He supported Joe McCarthy's witch-hunts of the early 1950s. Likewise, Hoover desperately tried to associate the civil rights leaders of the 1960s and the Vietnam War protestors with communism. The FBI's persecution of the left in the 60s through its COINTELPRO operation was a grave injustice. However, just like the Palmer Raids the effect of such operations depleted the left of leadership and left a vacuum of moderating forces allowing fascism to rise up in the 1930s and again in the 1980s. In any other country of the world the Palmer Raids, the McCarthy witch-hunts and COINTELPRO would be condemned as purges.

Nor can the role of the media be ignored in any of these purges. The media killed the story of COINTELPRO by a lack of reporting. Even today, the media is still content to cast McCarthy in a role of a patriot instead of a power mad tyrant. The end results have led to wasted decades of political repression and the growth of corporate power.

With such antagonistic views of the director and the top echelon of the FBI, the pursuit of fascists and seditionists suffered immensely. With the Department of Justice handicapped by the FBI's lack of interest in fascists, most of those brought to trial for sedition went free. In any case, those were just the little guys, the power and money behind them was never exposed nor did the FBI have any interest in investigating the leaders and money used to support the fascist groups. There would be no mass arrest of fascists during the war, unlike the mass arrests of the Palmer Raids following WWI or in the following McCarthism era.

Hoover's efforts to spread propaganda extended beyond the FBI. In the 1940s, Hoover fed information to Father John F. Cronin. During the 1940s, Cronin was the assistant director of the Social Action Department of the National Catholic Welfare Conference. With Hoover's aid, Cronin became an expert on communism and later close associate of Richard Nixon. Cronin was secretly retained by the Chamber of Commerce to write and distribute pamphlets critical of unions, communism and liberalism in general. The 1947 pamphlet, Communism Within the Labor Movement led to the drive to require union leaders to sign a non-Communist affidavit.12 No one should harbor the mistaken belief that the FBI is a crime-fighting agency. It is not nor has it ever been such. It has always been America's gestapo with a mission to destroy the left. That record extends from the Palmer Raids to COINTELPRO of the 1960s and even up to the present day.

Another individual in aiding the fascists was H. Ralph Burton, chief counsel to the House's Military Affairs Committee. Burton was a racist and an anti-Semite with a long history of associations with fascists. At one point he was the lawyer for William Ludecke who bragged he was Hitler's number two Nazi in the United States. Burton was also special counsel to DAR during their flagrant red-baiting days, and a close associate of Walter Steele, editor of the fascist National Republic.

In the mid 1930s, Burton was general counsel for Father Coughlin's National Union of Social Justice in Maryland. Burton's son likewise had close associations with fascists. His son Robert was a frequent guest at the Japanese Embassy and was often observed in the company of other Nazis under surveillance. In 1939, Burton was an investigator for the WPA subcommittee and was determined to show that the WPA was controlled by and run for the benefit of the Jews.

How a man like Burton with known Nazi sympathies was able to maintain a sensitive position such as Burton held, when the country was at war with Nazi Germany is mysterious. Moreover, there were hundreds of others like Burton. However, anyone with the slightest tinge of socialism or communism was rapidly removed from any position within the government.

While he served in the Military Affairs Committee Burton proceeded to make himself a thorn in the side of Army officials. He would scan lists of draft deferments, skipping over ethnic surnames of Irish and other European surnames looking for the Jewish ones. Burton then called the local draft board demanding that these Jews be drafted.

Burton's most damaging role was in the wrecking of the Army's Orientation Course after the issue of Program #64. The Orientation Course was set up to teach recruits what they were fighting for and to counteract the fascist propaganda circulating at the time. At first, the Orientation Course was general in nature but as more and more recruits demanded more definitive information, it became specialized. Program #64 contained the following definition of fascism:

"If we don't understand fascism and recognize when we see it, it might crop up again---under another label---and cause another war.
Fascism is a way to run a country---it's the way Italy was run, and the way Germany and Japan are run. Fascism is the precise opposite of democracy. The people run democratic governments, but fascists governments run the people.
Fascism is government by the few and for the few. The objective is seizure and control of the economic, political, social, and cultural life of the state. Why? The democratic way of life interferes with their methods and desires for: 1. Conducting business; 2. Living with their fellow-men; 3 having the final say in matters concerning others as well as themselves.
The basic principles of democracy stand in the way of their desires; hence-democracy must go! Anyone who is not a member of their inner gang has to do what he's told. They permit no civil liberties, no equality before the law. They make their own rules and change them when they choose. If you don't like it, its' T.S.
They maintain themselves in power by use of force combined with propaganda based on primitive ideas of blood and race, by skillful manipulation of fear and hate, and by false promises of security. The propaganda glorifies war and insists it is smart and realistic to be pitiless and violent. 41

It is hard to imagine that such a statement caused an outburst of protest on Capitol Hill. Indignant speeches were made on the floor of the House. Clare Hoffman of Michigan and John Rankin of Mississippi were outraged over Program #64 as were other pro-fascist members. Such outbursts of indignation from those aligned with the fascists on Capitol Hill soon led to the destruction of the top-rated Orientation Courses. In effect, the pro-fascists in Congress did not want the GIs to know the truth of what they were fighting and dying for.

There is one other contributing factor during this time: the general lack of education of the average GI, which stresses the need for programs such as the Army's Orientation Courses. In 1947, the average level of education for all adults was only 8.6 years, 75% did not complete high school. In 1947, only 19% of the voters had a generally correct view of the Wagner act according to a Gallup poll. Another 69% simply didn't know and the remainder gave wrong answers.

Even by 1951, only eight percent of adults could properly define the meanings of monopoly, antitrust suit, the Sherman Act and interlocking directories.27 The low level of education left 80% highly subjective to anyone's propaganda. In short, the majority of the voters were dupes for whoever could shout the loudest. The same pro-fascist block in Congress would soon replace the Orientation Course with an anti-communism program.


Part 2: Rainbow 5 & The Great Sit Down Strike


Just as the support for fascism crystallized among the nativist groups during the war years, so did the support for fascism among the isolationist members of Congress. In the previous chapter the removal of Maloney as prosecutor of the seditionist by Wheeler and the pro-fascist Congressmen contributed to the failing of the trials of even the minor fascists. Father Coughlin was not even indicted along with many others. However, it was on the eve of the war with Germany that Wheeler revealed himself as a traitor and a fascist. On December 4, 1941, the pro-fascist Chicago Tribune and its' sister publication the Washington Times Herald printed the plans for the top secret Rainbow 5 Plan.

Rainbow 5 was the battle plan developed by the military in case war broke out. Publishing the plan or leaking information about the plan would be the equivalent of publishing or leaking the battle order of the Pentagon during the Cold War. Unquestionably, leaking such a plan was an act of treason. In Hitler's speech declaring war against the United States on December 11, 1945, the final straw he listed was as follows.

"With no attempt at an official denial there has now been revealed in America, President Roosevelt's plan by which, at the latest in 1943, Germany and Italy are to be attacked in Europe by Military means."43

Amazing as it may seem, no one was charged with treason or sedition, not the Chicago Tribune, not Wheeler and not the army officer that delivered the papers to Wheeler despite an FBI investigation. Remember this was the battle plan in case war broke out. It was top secret and fewer than a dozen copies of the report were ever produced.

The author of the report was Colonel Albert Wedemeyer. Wedemeyer had been educated at the German War College. While in Berlin he rented an apartment with a member of the Nazi Party. Wedemeyer became close friends in Berlin with General Ludwig Beck, chief of the German General Staff. Wedemeyer was friends with Lindbergh and acted as his interpreter while Lindbergh toured Germany. Likewise, Wedemeyer was close friends with General Robert Woods, the president of the American First group.44 Wedemeyer had even attended several meetings of the American First group despite its pro-fascist and anti-war agenda.

Hoover was convinced Wedemeyer leaked the plans to Wheeler. Of special note, Reagan resurrected Wedemeyer's career as a special military adviser in the 1980s. Yet, another of the many seemingly innocence connections between Reagan and the Nazis. Taken singularly one could easily dismiss it as an error in judgement. However, when taken collectively it leaves Reagan as either extremely naïve and dumb or a pro-fascist.45

One clue as to how the files were leaked comes in the book A Man Called Intrepid. In that book, Sir William implies that he was authorized to leak the plan.46 As already mentioned, FDR allowed the British to keep watch of certain characters known to be friendly with the Nazis, particularly those associated with Wall Street. In his plan to trap the fascists, Roosevelt would appoint individuals friendly with the Nazis to positions of power so that they could be monitored. Following the war, Roosevelt planned on leaking the information to the press. With the resulting public outrage over their actions, trials could then be conducted for those guilty of sabotaging the war effort and aiding the Nazis.

Two of the individuals who were appointed so they could be monitored were Allen Dulles and Nelson Rockefeller. FDR's plan was to charge them with treason and sedition following the war. Wheeler may very well have been another of those being watched. With Wheeler's ties to the Rockefellers through Anaconda, a company that delivered substandard copper wire to both our allies and our own military, it seems certain that Roosevelt may have had some big fish to fry if he had lived past the end of the war.

By leaking the files to the Chicago Tribune, Wheeler ensured that they would be published. The Tribune was openly pro-fascist before the bombing of Pearl Harbor and rabidly opposed to Roosevelt. The Chicago Tribune was later charged with treason for publishing the names of the ships involved in the battle of the Coral Sea.

Wedemeyer's career, however, deserves more scrutiny. Wedemeyer was part of a military circle that was extremely anti-Semitic. A few years following the war, Wedemeyer wrote in a letter to his close friend retired colonel Truman Smith that the British, Zionists and Communists made America's entry into the war inevitable. Later, Wedemeyer stated that "most of the people associated with communism in the early days were Jews.

He further claimed that Roosevelt's Jewish advisers did everything possible to spread venom and hatred against the Nazis. He stated that during his attendance of the German War College in 1936 his eyes were opened to the number of Jews in the American government by reading the Die Frankfurter Zietung and Die Berliner. The Nazis controlled both papers.72

In 1937, Wedemeyer tied the shortage of food in Germany to the Jewish question. Using the embassy's attaché stationery, Wedemeyer wrote to friends, dismissing the food shortage as caused by poor weather and crop failures. He claimed that Jews in other countries had bought up the enormous quantities of foodstuffs and had intentionally diverted the shipments from Germany.

As late as 1958, Wedemeyer was still voicing pro-Nazi opinions. He completely ignored the Nazi's racial ideology. He described lebenstraum as merely a national movement to win living space. In his arguments, Wedemeyer used the same historical analogies that the Nazi propagandists used. He compared the German invasions and expansions eastward with the American expansion westward.

The two people with the largest influence of Wedemeyer's career were Truman Smith and Wedemyer's father-in-law, Deputy Chief of Staff Stanley Embrick. Embrick was the most outspoken isolationist general in 1939.

A brief look at Wedemeyer's circle of friends within the military provides a worthwhile examination of the opinions of many of the top military officers before the war. Many of those officers harbored pro-fascist leanings and an extreme hatred of Jews. Such views had been engrained into the officers since the 1920s and would affect how the war was conducted, as well as the post-war period.

In 1939, Smith was the attaché in Berlin and warned against allowing the Jewish question to interfere with German-American relations. After returning to Washington in 1939, Smith became General George C. Marsahll's German specialist. Smith conferred extensively with Lindbergh, as did Colonel Hamilton the head of G2's German section. Lindbergh's isolationist views were well known at the time and Lindbergh continued his isolationist radio broadcasts. Two weeks after the German invasion of Poland, Smith delivered a confidential message from Roosevelt offering Lindbergh a cabinet position in aviation if he would cease his radio broadcasts. Both Smith and Lindbergh scoffed at Roosevelt's offer.

In November of 1939, Smith's assistant attaché in Berlin, Major Percy Black returned to Washington. Black had accompanied the German army into Poland. Black, like Smith, talked glowingly of the prospect for a negotiated settlement. Even more disturbing was Black's discounting of Nazi brutality. In May 1940, the Nazi invasion of France proved Black wrong.

Wedemeyer opposed the creation of the State of Israel, as did Black and other members of his circle of friends. After retiring, Wedemeyer became a writer for the John Birch Society and a member of the American Security Council, a group formed in the 1950s from the remnants of three pro-fascist groups of the 1930s.

The most astonishing aspect of the publication of the Rainbow Plans was that charges of treason were never brought to bear, even after the end of the war. Most Americans are unaware of the plans ever having been leaked, and is yet another example of how high-level fascists within the United States were immune from prosecution. This brief look at Wedemeyer and his circle of friends reveals that even within the Army there was a group of officers sympathetic to the fascist cause.

However, the majority of support for fascism and opposition to the war came from the leaders of corporate America. It was the leaders of corporate America who were behind the plot to seize the White House and install a fascist government. It was the leaders of corporate America who were building the Third Reich's war machine as the statement from the US Ambassador to Germany, William Dodd, noted. And it would be the leaders of corporate America who went on a sit down strike to prevent the production of war munitions first for the Lend Lease program and then for our own troops once war was declared.

Between 1940 and 1945 there was a dramatic evolution in the tactics employed by the native fascists within America. The first phase of this evolution was marked by the sit-down strike during the summer of 1940. Prior to this time and throughout the remainder of 1940, corporate America opposed the entry of the United States into the European war. Considerable opposition was raised against Roosevelt's Lend Lease program and several contracts to supply Britain with war munitions were rejected outright by corporate America. One such example being the rejection of a contract to build Rolls Royce engines for the RAF by Ford Motor Company. Other corporations hid behind the terms of the cartel agreements with I.G. Farben and other German corporations. Such was the case of du Pont furnishing the British with inferior cartridges lacking tetrazine. However, by far the most damaging aspect of this phase was the sit-down strike of 1940, which reveals the complacency of corporate America toward Nazi Germany.

The need for aircraft was one of the most pressing needs as the ominous clouds of war gathered on the horizon. Aircraft production required massive amounts of aluminum. However, aluminum production in the United States was controlled by a virtual monopoly held by the American Aluminum Company of America (Alcoa). Alcoa had signed a cartel agreement through a slight of hand with German interests in the late 1920s. Alcoa was controlled and owned by Andrew Mellon, one of the participants in the plot against FDR and steadfastly delayed increasing production. George Seldes recorded the following quotes about Alcoa:

"If America loses the war it can thank the Aluminum Corporation of America" Secretary of Interior Harold Ickles, June 26,1941.
By its cartel agreement with I.G. Farben controlled by Hitler, Alcoa sabotaged the aluminum program of the US air force. The Truman Committee heard testimony that Alcoa's representative, A.H. Bunker a dollar a year head of the aluminum section of the OPM prevented work on our $600,000,000 aluminum expansion program.
Congressman Pierce of Oregon said in May 1941: "To date 137 days or 371/2% of a year's production has been wasted in the effort to protect Alcoa's monopolistic position. This delay translated into planes means 10,000 fighters or 1,665 bombers."
This of course is the answer to the boys on Guadalcanal and in Tunisia and not absenteeism, the 48 hour week or wage increases to meet the cost of living."99

Not only did Alcoa own almost all of the plants that produced aluminum, but it also controlled most of the high-grade bauxite ore. Aluminum production requires massive amounts of electric power and Alcoa controlled much of the hydropower. In a radio broadcast on March 22, 1941 the Assistant Secretary of State, Adolf Berle declared:

"The Lord Almighty so built the continent of North America that most of the water in the northeast quarter of the continent forms streams and rivers which flow into that huge collection of reservoirs we call the Great Lakes. This is an enormous amount of water. All of it funnels out to the sea through a single great millrace, which is the St. Lawrence River. If that water is ever harnessed, it will make the largest and cheapest supply of electricity available anywhere in the world."74


However, the St. Lawrence was unharnessed and would remain so. Andrew Mellon owned all of the land on the American side and much of the land on the Canadian side of the International Rapids stretch. Along this course of 49 miles, the river fell 92 feet and could be used to generate electricity at a cost of one tenth of a cent per kilowatt-hour. Only last-minute fights by New York governors, Charles Hughes in 1907 and Alfred Smith in 1926 prevented Alcoa from exercising absolute control over it. By 1940, Roosevelt had still failed to gain passage in Congress of a treaty negotiated by Herbert Hoover for the joint development of the St Lawrence. The Alcoa lobby was too strong to break. Both Ontario and New York drew electrical power from Niagara. The Canadian power was generated by a public owned system and charged $0.85 a kilowatt-hour. On the New York side the power was produced by the private Niagara Hudson combine and the cost was $1.59 for a kilowatt-hour.75

This example of the conglomerate gouging New Yorkers at almost twice the rate of cost of the Canadian public utility should serve to remind us that some services and materials are far too valuable to ever be entrusted to private hands and should remain in the hands of local public utilities. Especially in light of the contrived energy shortage in California during the winter months of 2001, this price gouging was miniscule compared to the profits that Alcoa would generate during the war. In a long antitrust suit in 1940, a government brief stated that Alcoa's highest profits came from the production of sheets of 24S and XA 24S alloys, both of which were used extensively in aircraft. According to the Justice Department, as the sole supplier of these alloys Alcoa was realizing a profit of 181% over costs.76 Alcoa's cartel agreement with a German corporation in the 1920s allowed Germany to produce 165,600 tons of aluminum in 1938, while the total United States production was only 103,129 tons. Additionally, Alcoa had invested heavily in plants in Norway, Hungary, Italy and Spain---two of which were outright fascist countries and two of which had fallen under the boot of the Third Reich. No investigation of Alcoa's dealings with the Nazis was ever made.

Mellon not only controlled the production of aluminum through Alcoa, but he also sought to prevent all others from entering production through his cronies in the Office of Production and Management (OPM). E. R. Stettinius, chairman of the board of U.S. Steel, headed the OPM and was in charge of the Industrial Materials Section. Stettinius issued glowing reports assuring that an adequate supply of raw materials was available. Many of the materials such as antimony, manganese, mercury, tungsten, nickel, chromium and tin came from South Pacific Islands and Malaya and would be vulnerable to a supply cutoff. Nor were the stocks on hand adequate for a two-year supply, as purchasing of the materials didn't begin until 1940.

In May of 1941, the truth of the shortages was brought to light in a report from the Metals Reserve Corporation. The report detailed the amount purchased, the amount in transit and the amount delivered. In the case of mica, the report showed a purchase of 500 tons from India, but as of the date of the report none had been shipped. In the case of zinc, a vital material in producing the brass cartridges, the report was dismal. The only amount ordered was from Newfoundland for 50,000 tons (less than a month's supply). Zinc was being consumed at 70,000 tons per month (7,000 tons more than domestic production). One thousand rounds of 30-caliber shells would consume 16 pounds of zinc, for 75-mm shells one thousand rounds would consume 3800 pounds of zinc. During the war production of small arms, ammunition reached four billion rounds per month.77

Perhaps the best example of how the dollar-a-year men like Stettinius hindered the war effort is that of aluminum. At the onset of the war, there was only one aluminum refiner, Alcoa. In 1941, Alcoa could produce a maximum of 642 million pounds of aluminum in one year. With Roosevelt's plan to produce bombers, the nation required 1.6 billion pound a year.

At the time, Reynolds Aluminum was a small upstart company compared to Alcoa. Reynolds was merely a fabricator of aluminum products and had never produced a single ingot of virgin aluminum. Foreseeing the shortage in aluminum and unable to obtain a full supply of aluminum from Alcoa, Reynolds agreed to mortgage all of his property to start refining in his own plants if the government would lend him the money. The Reconstruction Finance Corporation (RFC) approved his loan within 30 days for $15 million dollars and later increased it to $20 million dollars.78

Reynolds soon had a plant at Lister, Alabama, that produced forty million pounds and another plant in Longview, Washington, of sixty million pounds, but considerable pressure was brought against Reynold's loan application. W. Averill Harriman and a delegation of war department officials pressured Secretary Ickles to deny Reynolds an allocation of electrical power from Bonneville. Stettinius and his consultant, Grenville Holden, opposed Reynold's entry into the refining of aluminum vigorously behind the scenes.79

Although Reynolds persevered despite the objections and backroom dealings of Stettinius and Holden with the help of Ickes, others failed. To protect Alcoa, Stettinius and Holden blocked others from producing aluminum and from using new methods. In March 1941, the Bohn Aluminum Company sought a loan to produce aluminum and was denied by Holden. Although OPM had been ladling out millions of dollars to help businesses expand for the war effort, Holden replied to Bohn: "The Army is not disposed to finance expansion of industrial capacity with government funds as long as any company is prepared to expand with private funds." However, Holden was likewise uninterested in expanding aluminum production even when a private company from Switzerland sought to enter the market.80 Holden also opposed the use of low-grade ore in an effort to protect Alcoa. Alcoa controlled all of the high-grade ore. However, with the increased demand for aluminum production for bombers, the only North American high-grade ore would be exhausted in two years.

From May to October 1940, corporate America was engaged in a sit-down strike. Led by the aviation industry, defense contracts were left unsigned until the corporations were granted special tax privileges. Unlike labor strikes, the sit-down strikes of corporate America had the support of the news media of the War and Navy Departments and the new Defense Commission. Strikes by labor were immediately greeted with charges of treason. No strikes, however, were launched against any aviation corporation yet hardly any planes were produced.

A look at the figures of ships in service on January 31, 1941, only confirms the serious lack of Navy war ships. In three of the five categories listed the total tonnage falls woefully short of the tonnage Congress authorized in 1934.

Authorized 1934

In Service81


525,000 tons


Aircraft Carriers

135,000 tons



343,770 tons



190,000 tons



68,298 tons


Even more revealing as to the inadequacy of the navy's procurement of warships is a direct comparison of our fleet with the fleets of the Axis powers.82


January 1, 1941

January1, 1943











Aircraft Carriers




















With the exception of destroyers in the two year-period of 1941 to 1943, the United States shipbuilding industry had barely outpaced the losses sustained in the first year of the war. Fortunately, England's Royal Navy was up to the task of ruling the seas.


In May 1940, the financial editor of the New York Sun was astonished by the British 100-percent excess-profits tax. Corporate America, which built Hitler's war machine in violation of the Treaty of Versailles, was in no hurry to arm the United States or its allies. The July 29, 1940, issue of Barron's Financial Weekly reported: "The attitude of some defense industries that they must be assured of a profit is souring many Washington dispositions, even in the pro-business War and Navy Departments." Unlike the GIs who were drafted and compelled to serve and defend their country for the paltry sum of $21 a month the aviation industry would reap millions.

In June 1940, Congress revised the Vinson-Trammell Act of 1934 to limit profits on competitively bid contracts to eight percent and to seven percent on other contracts. Roosevelt signed the bill on June 28, 1940, but by July 10, he had to surrender to corporate America and its sit-down strike.

In addition to dropping the limits on profits, corporate America demanded and received legislation that would enable companies building new plants or equipment to amortize the purchases in five years. Assistant Secretary of War, Louis Johnson sent out a letter to all plane manufactures asking for work to begin immediately even though it would take sixty days for the new bill to pass through congress. The plane manufactures waited.

Even with the special tax breaks, corporate America chose to invest little of its own money in new plants and equipment, choosing instead to let the government directly finance the expansion. By April 13, 1941, the total amount of private funds invested in the expansion of various defense industries was miniscule, as shown in the table below.

Tank and Vehicles




Guns and Parts




Ship Construction


Of the $2.8 billion dollars in planned expansion of defense facilities, private capital only accounted for $773,000,000. The average government expenditure for plant expansion was six million dollars while the average expenditure of private capital under the five-year amortization was $60,000. In short, corporate America was holding the free world hostage. The figures in the table above are enough of a testament to bury the myth that private enterprise built America and created a "Fortress of Democracy." The fact remains it was all done with the taxpayer's money under the guidance of the Roosevelt administration.

In industry after industry, the story was much the same as it was for aluminum. In the critical machine tool industry, corporate America continued to drag its feet and delayed war production. About 15 million man-hours of machine tooling could have been made available by General Motors if it had foregone a model change. If the entire auto industry had foregone model changes in 1942, over 30 million man-hours of machine tooling could have been freed up for the war effort. General Motors promised to give up a model change and then promptly went ahead with a model change anyway.

Against Roosevelt's call for full production, survey after survey found machine tools sitting idle. According to the March issue of Monthly Labor Review, a publication of the Department of Labor, weekend shutdowns were commonplace. A survey of 45 machine tool plants found only 14 running three shifts and another 19 running two shifts. However, the number of employees working on the second shift was less than 20 percent of the workers on the normal day shift. In plants with three shifts operating, only 25 percent of the workers were employed on the second and third shift. Officials of the AFL Machinist's Union attributed the major obstacle to the strong anti-unionism of the Metal Trade Association and its fear of hiring new, pro-union workers. In May 1941, a Bureau of Labor Statistics study revealed a high ratio of workers had quit the machine tool industry because of the repressive working conditions. In eleven categories of skilled machinists, there were only prospective shortages of labor in four. Further complicating the shortage in machine tools was the reluctance of the industry to subcontract work to small shops.

Indeed, the reluctance of corporate America to subcontract work out to small shops was widespread and protected by the dollar-a-year men. No better example exists of the Defense Commission ignoring small businesses than the case of Beaver County, Pennsylvania. Community and labor leaders in Beaver County concerned with the war effort prepared a sixty page booklet detailing the production facilities available along with the available labor supply. The booklet was delivered to Sidney Hillman's division of the Defense Commission in charge of labor, the only division actively interested in farming out defense contracts to small firms.

The Beaver County booklet was ignored. The facilities of Beaver County's small businesses went unused. The idle facilities in Beaver County were not insubstantial in any sense of the word. There were five modern machine shops that combined could handle large contracts and seven additional plants with partially available production for alloy iron, steel, brass and aluminum castings. Also available: were seven pipe and tube mills; two plants that could produce machine tools parts; two plants that could handle metal stampings; four plants that could handle light steel fabrication; two additional plants that could produce rivets, bolts and nuts; five plants that could handle all kinds of wood packaging crates. It was not until May 1941 that Beaver County received its first subcontract, and even then the contract was for a mere $1,500 for nuts and bolts, despite pleas from Roosevelt to use all available production facilities.

The dollar-a-year-men staffing the Defense Commission and the OPM were not interested in farming out work to small firms. Instead, they sought to protect their former firms, many of which held cartel agreements with I.G. Farben. With a stranglehold on wartime production, the nation was held hostage. By the end of the war, only 150 large corporations had operated 80 percent of the government-built war plants. Only 31 corporations operated Fifty percent of the government-built plants. The 100 largest had operated 75 percent of those plants.28.

Labor statistics confirm how the largest corporations used the war to the disadvantage of smaller firms. In 1939, firms with fewer than 500 employees employed 52 percent of all manufacturing workers. Five years later, these firms employed only 38 percent. Corporations employing more than 10,000 employees accounted for less than 13 percent of all workers in 1939, but by 1944 they accounted for 31 percent of the workforce.

Only in the case of aluminum did the RFC finance a competitor to break a production monopoly and then only at the beginning of the transformation toward a war economy. By 1940, with war raging in Europe the large corporations were in the "catbird seat." Roosevelt was powerless to assert control over war production as the repeal of the revised Vinson-Trammell Act testifies to. Men could be drafted to serve their country; capital was exempt from the draft. Any attempt to draft capital would have been met with immediate claims of communism from the right-wing and pro-Nazi groups. In effect, the nation's security was held hostage by the same corporations that built Hitler's war machine and whose senior management and owners supported many of the pro-fascists groups.


Part 3: The Battle for the Home Front


While the bombing of Pearl Harbor caused many of the pro-fascist groups such as America First to go underground or change their tactics, corporate America continued to drag its feet in gearing up for full wartime production. By mid-1942, the news was truly dark. Rommel's Panzers had raced across North Africa and were within sixty miles of the Nile. On the eastern front, Hitler's forces were at the gates of Stalingrad. The Luftwaffe was pounding London into rubble. Ships from the United States bound for England were disappearing under the waves of the Atlantic at an alarming rate. The Philippines had fallen to the Japanese.

It was at this time, our darkest moment of the war, that the most devastating blow was struck. No ships were sunk in this assault, no planes were lost and no soldier was killed from this blow. This was a different type of assault. It would open the third front of the war on the home shores. It was a battle for the minds of Americans. It would be a battle that free people could hardly afford to lose.

For wrapped up in an electioneering jingle and cloaked behind a false flag of patriotism, Lamont du Pont had concealed the very heart of fascism. Hidden behind this thin veil of false patriotism of free enterprise was the root of fascism, corporate rule. Thus began the most blatant fraud ever perpetrated against the American people; in effect, du Pont had dressed up fascism with a smiley face to appeal to the American people. To accomplish this horrific swindle of freedom and liberty, all resources were to be deployed. It would become a full-scaled assault on the rights of the American people for the remainder of the century. This was the forgotten third front of the war, the battle for the minds of the American citizen. Under the banner of this new feckless goddess of free enterprise, a multiprong attack was launched against our freedoms. One prong would question the patriotism of anyone not subscribing to unbridled corporatism, another prong would attack unionism and the third prong would be launched against socialism and communism.

This often forgotten event launched by one of the most notorious fascist of his time is imperative to the understanding of fascism in America following the war. It clearly marks the beginning of the adoption of the fascist ideology by the right-wing in the country. Before Eisenhower's troops ever started to march across North Africa and before the Marines ever started island hopping one bloody atoll after another toward the Japanese homeland a third front of the war was raging in the American homeland, for the control of the people. Tragically, the heroic efforts of the war against fascism were lost as quickly as the Third Reich crumbled into ashes. While our armies were victorious on the battlefields of Europe and the South Pacific, the battle for the homeland would be lost. The new goddess of free enterprise would replace democracy in America. The war against fascism would be lost. Instead of corporations serving the general interest of society, society would now be forced to serve the general interest of corporations.

The American lexicon was expanded in 1942, never before had the term free enterprise been used. There is no such right listed in the constitution nor does the constitution grant any rights to corporations. While the founding fathers believed in an economy based on capitalism, they were hardly the fools to allow trade to go on unregulated. With one-third of the populace at the time of the revolution being former indentured servants to British corporations, corporations were closely regulated as the chapter on corporate law detailed. However, unregulated corporationism was precisely what Du Pont envisioned in his call for free enterprise. The best summary of free enterprise as envision by Lammont du Pont comes from his speech before a secretive meeting of the resolution committee for the National Manufacturers Association (NAM) on September 17, 1942.

"The way to view the issue is this: Are there common denominators for winning the war and the peace? If there are, then, we should deal with both in 1943. What are they? We will win the war by reducing taxes on corporations, high income brackets, and increasing taxes on lower incomes, by removing unions from any power to tell industry how to produce, how to deal with their employees or anything else, by destroying any and all government agencies that stand in the way of free enterprise."18

Du Pont's words are clearly treasonous as he calls for the destruction of any government agency that may stand in his way. It is the same agenda followed by Hitler on assuming power. In addition, as we enter the 21st Century it is the same agenda being put forward by the Republicans and the right-wingers.

The media immediately began extolling the virtues of free enterprise and singing its praises. No mention was ever made of the du Ponts funding of the pro-Nazi Liberty League or the Black Legion. No mention was made of the du Ponts involvement in the fascist plot against the White House a decade ago. This was a full-scale assault against the New Deal and responsible government. The timing of this campaign for free enterprise coincided with the upcoming election. The election would reduce the majority of Democrats considerably. In effect, it left Congress under the control of the Republicans and conservative "Dixiecrats."

Throughout the 1920s and into the 1930s the du Ponts and other munitions makers were embroiled in congressional investigations into war profiteering. Thus as the battle for Midway raged the du Ponts were already covering up their crimes of war profiteering and their dealings with the Nazis during the war. Once again, no mention of war profiteering was ever made in the media, nor was there any mention of the repressive nature of free enterprise as envisioned by du Pont.

Instead, the major media chains flaunted free enterprise as the new goddess to be worshipped. However, it should be clear after the previous chapter and the beginning of this chapter that the major newspaper chains and media outlets were openly pro-fascist, as evidenced by the Hearst papers publishing the most notorious Nazi propaganda unedited. Likewise, the Chamber of Commerce, the American Legion and the National Association of Manufactures (NAM) quickly adopted the false goddess of free enterprise, particularly NAM with its mouthpiece Fulton Lewis broadcasting over the air waves. Lewis was one of Hoover's media allies and often the recipient of leaked information from the FBI and Hoover. This became a standard form of attack by Hoover and the FBI against a group or an individual. Lacking information to convict, Hoover would seek to destroy the individual by leaking rumors to his press allies.20 A tactic quickly adopted by the likes of Nixon and Joe McCarthy.

Central to propagandizing this message was the NAM. Seldes, arguably the best investigative reporter of the 20th Century devotes two chapters in exposing NAM and its mouthpiece Fulton Lewis.17 NAM was headed by Frederick C. Crawford, who during the 1930s was director in Associated Industries, a strikebreaking agency. NAM was investigated by at least three congressional committees. The Garrett Committee exposed its lobby as secretive and reprehensible. The lobby functioned to defeat Congressmen who opposed its policies of illegal strikebreaking and other activities. The findings of the La Follette committee were already presented in the previous chapter and will not be discussed further. The O'Mahoney Investigation showed that 200 industrial firms and 50 financial families owned, controlled and ruled the United States. Of these families, thirteen were the most powerful.

At the same secret meeting of the resolution committee in which du Pont was quoted above, NAM hammered out its agenda for the future. The platform included were a fight against any management-labor committees. These committees were a prominent part of war-time contracts. They were indispensable in over coming obstacles and bottlenecks in production. Freeing Wall Street from all restrictions and driving women out of industry after the war both figured prominently in the NAM platform. Note the eerily similarity of du Pont's call for forcing women out of the workplace to Hitler's opposition to women in the workplace.

More disturbing was the call for a launching of a propaganda program in high schools and colleges and the elimination of all social programs of the New Deal. Even more ominous was a threat to sabotage war production and to undermine Roosevelt's prestige unless NAM's demands for taxes to make the poor pay for the war were met.

A quick look at the officers of the National Industrial Information Committee, the propaganda arm of NAM reads like a who's who list of fascist. J.H. Rand president of Remington Rand used newspapers to propagate lies about big labor during strikes. Walter D. Fuller president of Curtis Publishing and the man responsible for the pro-fascist attitude of the Saturday Evening Post. The pro-Franco and pro-fascist H.W. Pretis president of Armstrong Cork was listed by Attorney General Jackson as an un-American. Howard Pew of Sun Oil was exposed by Senator Gillette as the main subsidizer of the Republican Party in Pennsylvania. Pew was also a large financial contributor to the Sentinels, Crusaders and other profascist groups. With his threat to pull a big ad contract Pew was responsible for the New York Times going Republican in 1940. Colby Chester and William Warner respective heads of General Foods and McCall Corporation headed NAM during the period in which the La Follette investigation found NAM guilty of employing spies.

In congressional hearings held on March 2, 1938, evidence was entered showing that NAM was controlled and financed by 207 firms. Leading the list of firms were General Motors, du Pont, Chrysler, National Steel and the Pennsylvania Railroad. The leading contributors to NAM were also the leading contributors to a number of pro-Nazi groups such as the American Liberty League, the Crusaders, the Sentinels of the Republic, and the National Economy League. In the Senate report produced by Senator Black entitled "Special Committee to Investigate Lobbying Activities" letters from members of the Sentinels stating: "the old line Americans of $1200 a year want a Hitler," "the New Deal is communist," and "the Jewish treat is a real one."70

The power behind NAM was the Special Conference Committee. Twelve corporations comprised the Special Conference Committee, a secretive business organization dedicated to destroying unions and promoting the agenda of NAM. The twelve firms are listed as follows: ATT, Bethlehem Steel, E.I Du Pont de Nemours, General Electric, General Motors, Goodyear Tire, International Harvester, Irving Trust, Standard Oil of N.J, U.S. Rubber, United Steel and Westinghouse.68 They met in the offices of Standard Oil, 30 Rockefeller Plaza. With one possible exception all of the corporations listed supplied the Nazis with arms.

In 1943, Colombian University Professor Robert Brady described the Special Conference Committee as follows:

"The most important line of policies within NAM, in short, seems to be traceable directly or indirectly to this inside clique within the inner councils of the organization...Nowhere else is shown so clearly the dominating positions in the NAM of concerns such as those which are members of the Special Conference Committee. Public relations techniques were born, nurtured and brought to flower within these ranks". They met in the offices of Standard Oil, 30 Rockefeller Plaza.69

The Civil Liberties report produced by a Senate committee led by La Follette and Thomas described the Special Conference Committee as a secret coalition in direct furtherance of the specific forms of company union by Colorado Fuel and Iron, the Rockefeller corporation involved in the Ludlow massacre.

According to Seldes, the thirteen most powerful families in the United States and members of NAM are as follows: Ford, du Pont, Rockefeller, Mellon, McCormick, Hartford, Harkness, Duke, Pew, Pitcairn, Clark, Reynolds and Kress. Of these, five were involved in the plot of against Roosevelt: du Pont, Mellon, Pew, Pitcairn and Clark.67 With the possible exception of three, all of these families had close connections with fascism and arming Hitler.

NAM was more than just a mouthpiece for the fascist elite. It was also a bridge group between classes. Just as in Germany the real power behind the Nazi movement were the rich financial backers. The legions of brown shirts making up the majority of the Nazi membership came from the lower classes however, they were controlled and directed by the upper classes that charted the party's policies. The same was true of the fascist movement in the United States. The following example of how NAM bridged this gap between classes with the Black Legion, and even more importantly, between the nativist groups and fascism.


The membership of the Black Legion in Michigan's Oakland county were mostly unskilled and semi-skilled workers, who had migrated to the Detroit area from the hill country of the south. They were unused to an urban environment. The insecurity and monotony of factory work, rendered them eager to join an organization that promised power and adventure. The following quote characterizes the average Black Legion member.

"He came from a small farm in the South. He had gone through grammar school, though he had not received a high school diploma. Married, the father of two children, working on construction or as unskilled labor in a steel plant or auto assembly line, he never came to reconcile himself to city life or industrial work. His greatest concern was obtaining and holding a job for his family's sake. To the general insecurity of the times was added the fear that alien labor might displace him. Detroit had a large immigrant labor population and this offered further justification for the traditional nativist dislike of alien groups."30

The upper levels of NAM made references to the alien nature of unions, calling unions un-American and anti-American and playing on the very fears foremost in the mind of the average the Black Legion member. In this way, NAM became a gateway between classes and between various nativist groups with fascism playing on the fears of the unorganized worker. Nor is this the only example of NAM acting as a bridge group. Many of the top John Birch officials including Robert Welch himself were officers of NAM. This association will be revealed in more detail in a later chapter. With the Birch Society, NAM created a group of far right-wing extremists controlled by former NAM officials that appealed to the poor and middle class. The John Birch Society's chain of bookstores in the late 1950s and early 1960s were directed specifically at these classes of people and served as propaganda centers for the hard right. Unlike the direct connection between the Birch Society and NAM, the Black Legion was independent of NAM. However, the Black Legion was directed and controlled to a large degree by the automakers in the Detroit area.

With almost unlimited power corporations were able to create and fund numerous fronts to hide their support for fascism. Often times these fronts would have a claim to respectability such as, we saw in the chapter on the 1920s and the American Legion. While NAM was at the forefront of propagandizing the new feckless goddess of free enterprise, other groups figured prominently as well particularly the Chamber of Commerce. Recall from the chapter on the 1920s that under the direction of Pa Watson of IBM the Chamber of Commerce took on a fascist character and was supportive of both Hitler and Mussolini.

The Chamber of Commerce authored the 1934 report, "Combating Subversion Activities in the United States," a report that became the blueprint for the repression of the left in the 1950s and the McCarthy Era.13 The report demanded the passage of an anti-subversive legislation, including a sedition law and urged that a special agency within the Justice Department be created to investigate subversive activities with special attention to Communists.

In 1948, the Chamber of Commerce published a pamphlet entitled "Program for Community Anti-Communist Action." This pamphlet contained detailed instruction for developing and maintaining a file system which was nothing more than a blacklist.14 Such file systems have their roots in nativism and serve as a vital ideological resource for the promoters of corporate America. Such blacklists are common among the various groups that comprise the far right since the end of the war. The Church League and the American Security Council were two of the largest compilers of such blacklists. A later chapter on the various right-wing groups will provide a more detailed accounting of such blacklists.

By most regards, du Pont's campaign for free enterprise was an overall success. Even more remarkable is the relativity short time in which it was accomplished. The press suppressed all efforts opposing this fascist campaign. One such example was the suppression of Roosevelt's State of the Union Address on January 11, 1944 in which FDR proposed an economic bill of rights, as given below:

"The right of a useful and remunerative job in the industries, or shops or farms or mines of the nation.
The right to earn enough to provide adequate food and clothing and recreation.
The right of every farmer to raise and sell his products at a return which will give him and his family a decent living.
The right of every business man, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies at home or abroad.
The right of every family to a decent home.
The right to adequate medical care and the opportunity to achieve and enjoy good health.
The right to adequate protection from the economic fears of old age, sickness, accident and unemployment.
The right to a good education."42

Nevertheless, the media suppressed this speech just as it did the "Century of the Common Man Speech" by Roosevelt's Vice President, Wallace. Note how successfully the Republicans and the hard right has been in denying these basic freedoms to the American people. Sixty years later the American people still have not gained a single one of those freedoms. The right-wing actively opposes increases in the minimum wage law; the family farmer is rapidly being replaced with the corporate farmer and social welfare has been reduced to inadequate levels. We still have no national healthcare plan that ensures everyone's basic right to adequate medical treatment. The former Mayor of New York City, Rudy Giuliani, even adopted a program in which if the homeless refuse to work they will be denied shelter and their children will be taken from them and made wards of the fascist state. The economy is dominated by big business, large corporations collectively controls the economy. In addition, the Republicans and right-wingers are feverishly trying to destroy one of the most successful programs created under FDR, Social Security. George W. Bush has even eliminated overtime pay. This is the sad state of America today. Where the Republicans can grant billions in corporate welfare to corporations but are unable to spare a red cent for a poor man, effectively condemning millions to a life of poverty with no hope of ever bettering themselves.

In the 1946 election, the Republicans gained a majority in both the Senate and the House. They immediately set out to attack labor and unions on all fronts; at one time, there were no fewer than 200 antiunion bills in the house. The Taft-Hartley Act emerged out of the fray and was passed over President Truman's veto. Republican Fred Hartley from New Jersey proposed the bill in the House. Hartley had been more than friendly with the Hitler regime and Japan if not an outright fascist right up to the day Pearl Harbor was bombed.26 The act severely restricted the activities of unions and also gave corporations the right to interfere with union organizing drives and to propagandize their employees. The bill was written by lobbyists for large corporations such as General Electric, Allis-Chalmers, Inland Steel, J.I. Case and other large industrials. Numerous amendments favoring small businesses were added to ensure passage over Truman's veto. It soon became known as the Slave Labor Act. Thus, in four short years the fascist agenda of the du Ponts was marching swiftly forward obliterating the rights of labor and setting a course for corporate rule. Additionally, the pro-fascist group, Christian America was successful in passing right to work laws in several Midwestern and Southern states in the second half of the 1940s.

The passage of the Taft-Hartley Act was closely associated with the Allis Chalmers strike of 1946 and 1947. The Local CIO 248 had succeeded in uniting its workers through tough times and had solidified the support of labor. Members of the local could look forward to increasing wages and better working conditions. Allis-Chalmers had anticipated the end of the war and was spoiling for a confrontation with the union to break unionism in Wisconsin.

Just as the media played a major role in the union busting during the Red Scare of 1919 the media would once again fan the flames of another red scare. The Milwaukee Sentinel, a Hearst newspaper would play a critical role. On September 23, 1946, the Sentinel launched a series of articles with an expose of Communist in Local 248. An Allis-Chalmers speechwriter secretly wrote the article. Company management soon got another boost from Charles Wilson, the head of General Electric and former vice chairmen of the War Production Board stated.

"The problem of the United States can be captiously summed up in two words: Russia abroad and Labor at home." Charles Wilson October, 1946.

Allis-Chamlers would combine elements of communism and labor to break one of the nation's most important post war strikes. The extreme right-wing, Maz Babb and Walter Geist headed Allis-Chalmers' management; successive presidents were leaders of the pro-Nazi America First group. Harold Story was head of labor relations at Allis-Chalmers and was instrumental in writing of several of the provisions of the Taft-Hartley Act. After leaving the company Story was elected to the Milwaukee School Board and led the anti-integration forces.

The post war period was marked by a spate of anti-unionism from the pro-fascists. Several states passed right to work laws from intense lobbying pressure from the fascist group, Christian America centered about the Kirby family of Texas. By 1950, labor had clearly lost, although it would be another eight years before union membership peaked.

By the time the Freedom Train began to roll across America in 1947 one of the freedoms it touted in an exhibit was the right to free enterprise, two of the freedoms that FDR held dear were replaced with this non-existent freedom. Before the Freedom Train had completed its journey across the country, the right of unions to assemble had been severely curtailed with the passage of the Taft-Hartley Act. No mention was made of FDR's Economic Bill of Rights. Ironically one of the other freedoms, that of free speech would be trampled the most in the following years by the feet of Joe McCarthy. The remaining freedom of religion would be employed in the war on the home front for free enterprise and fascism. The inclusion of this exhibit in the Freedom Train could serve no other purpose other than to spread the propaganda for the false god of free enterprise.

The second prong attack on communism was even more of a success. The adoption of the basic tenets of fascism in 1942 by the right-wing in America would propel the world to the brink of a nuclear holocaust during the Cold War. It would lead to one of the most repressive decades in the history of the country, the 1950s and the McCarthy Era. This embracing of fascism by the right was led by two factions, the rich industrialists within this country and the CIA's reliance on Nazi war criminals in the post-war era. A later chapter will detail the role of Wall Street, the CIA and the Nazi war criminals, the remainder of this chapter concentrates on the role of the domestic fascists.

This plot against freedom by du Pont would not have succeeded without the aid of the pro-Nazi congressmen. It was a pro-fascist House member, Fred Hartley, who was one of the authors of the anti-union Taft-Hartley Act. In addition, it would be another pro-fascist congressmen who would head up the attack against communism, which was really an attack on any ideology to the left of fascism, just in the Great Red Scare of 1919.


Part 4: The Nazis Run for Cover


Perhaps the most influential congressman in aiding the du Pont's free enterprise was Martin Dies. As already covered in the previous chapter Dies set about sabotaging the search for fascists by the House committee and instead started a witch-hunt for reds. Remember that it was a Republican committee from Minnesota led by some of the leading industrialist of that state that asked Dies to investigate the communist influence in the Farmer-Labor Party. Both the FBI and the Dies committee were guilty of pursuing reds over fascists. Both did investigate a few fascists but the emphasis was the investigation of communist.

Ironically, the communists posed a very minor threat compared to the fascists. The results from the 1936 election can readily attest to this fact. In 1936, the pro-fascist candidate, Lemke polled 8882,479 votes--- eleven times the vote total of the communist candidate.83 In fact, the Communist Party vote in 1936 had declined twenty percent from the previous election in 1934. Other polls from the era confirms that the threat was from the right and fascism and not the communism or left. Polls of college professors of the time reveal a deep intolerance by the conservative faculty. One poll revealed that 35 percent of the professors would omit facts from textbooks that might lead to criticism of the social order. Another poll found that 48 percent of the professors favored deportation of aliens who criticized the constitution.84

Hoover was estranged from Dies after Dies leveled charges that the FBI had bungled the en masse arrest of the veterans of the Spanish Civil War and the subsequent dismissal of their indictments. The arrest of these veterans who volunteered to fight fascism while the right wing still was still apologetic to the cause of Hitler stands as an one of the greatest injustices of the 20th Century. Their arrest was based solely on their political views since most members of the Abraham Lincoln Brigade were either socialists or communists. 21 In effect, their only crime was their political views. These veterans of the Abraham Lincoln brigade suffered throughout their lifetime at the hands of Hoover and the FBI. As late as the 1990s the FBI was still keeping them under surveillance. Dies even went so far as to red-bait Attorney General Jackson, citing his support for such groups as the American League for Peace and Democracy and the League of American Writers as communist fronts.

Thus, to further the du Ponts' free enterprise the same whipping boy that was used following WWI to protect the interest of the rich elite was invoked--- the menacing hordes of godless reds. With fascism fanatically opposed to communism, socialism and liberalism, this could only magnify and encourage the fascist groups. One of the first groups charged with being infiltrated with communist were labor unions, just as the case had been after WWI. One of Dies' first and primary targets within the labor movement was Harry Bridges. Bridges was finally deported in 1945 after ten years of harassment by the Dies Committee and the FBI. Dies extended his attack on Bridges to a sweeping attack against the Labor Secretary, Frances Perkins. 22

Dies and his committee also attacked the New Deal extending their attack on communism to include liberal elements. One target within the New Deal was the President's wife, Eleanor. Working covertly the FBI would leak derogatory information about her to right wing publicists.23

Other targets of Dies were California Democratic nominee for governor, Culbert Olson and United States Senator Sheriadan Downey. In this case, Harper Knowles brought the charges before the committee from the private sector. Knowles claimed to be a representative from the Radical Research division of the American Legion; in reality, he represented a fascist connected organization, Associated Farmers Inc. The Radical Research division was created in the 1920s during the Red Scare. The Radical Research division targeted union organizers and any group from the left that was perceived as a threat to business. Most of these radical research groups within the Legion were first formed following WWI and were partially responsible for fanning the flames of the Great Red Scare of 1919.

Downey's Republican opponent in the upcoming election was a millionaire landowner and member of the Associated Farmers. One agenda of the Associated Farmers was to ban John Stienbeck's Grapes of Wrath from the California public libraries. Knowles went on to found the Western Research Foundation, a blacklist operation that figured prominently in the 1970s and 1980s. 24

One final example will establish just how psychopathic Dies was and the extent of his red hysteria. The case centered on J.B. Mathews's charges of communist influence in the consumer movement. Mathews and Fred Schlink had been consumer advocates until Schlink's employees unionized and formed a rival Consumer Union. Mathews timed his release to coincide with a 1939 Federal Trade Commission (FTC) decision to cite Hearst's Good House Keeping for fraudulent advertising. At least one manufacturer claimed the seal could be obtained simply by placing ads in Good Housekeeping. Other manufactures claimed the seal would be withdrawn if their ads were canceled. The FTC decided to act due to the complaints from retailers and manufacturers. Hearst launched a massive anticommunist advertising blitz and Dies threatened to open an investigation into the consumer groups. 25 Since, these housewives and other manufactures were threatening corporate America they were branded as communist and had to be discredited. It simply never occurred to Dies that these housewives could have legitimate complaints about a product. They had to be godless reds and their movement silenced.

With the nation involved in a global war with all resources directed to winning it, the efforts expended by the FBI and the Dies Committee chasing communists were squandered. As each focused primarily on communists the fascists were left unmolested for the most part. Only a few minor fascists were ever indicted on sedition and even fewer found guilty. Nor was there any effort to investigate corporations trading with the Nazis after the Truman committee. Resources in short supply and directed at red-baiting could have been better utilized against the source of funding for the fascist groups and the corporations that continued to supply Hitler's war machine.

In 1944, Dies voluntarily chose not to seek reelection. This, however, would not be the end of his radical right-wing activities. During the late 1950s and early 1960s he was one of the contributing editors of American Opinion, the tabloid rag published by the John Birch Society. Another of the contributing editors was Hans Sennholz, a former Luftwaffe pilot who taught economics at Grove City College. This institution was heavily subsidized by J. Howard Pew Sun Oil executive and a huge benefactor of far right groups throughout the 40s and until his death. 36

On convening the new Congress on January 3, 1945 racist Mississippian John Rankin offered an amendment to the rules of the old Congress making the Dies Committee a standing committee and increasing its membership to nine. Thus was born the most notorious congressional committee of all time. The House Committee for Un-American Activities would span another thirty years before finally being dismantled in the mid-1970s following the Watergate and COINTELPRO scandals. Unlike with the Dies Committee Hoover and the FBI would cooperate fully with the new committee, using it to launder illegally obtained information from wiretaps, blackjobs and other dubious and unconstitutional methods. A later chapter will deal with the abuses of the HAUC and McCarthyism. For now it will suffice that HAUC like the Dies Committee was only interested in destroying the left wing; the right-wing extremists and fascists would be protected along with corporate America.

Although du Pont's fascist campaign for free enterprise was an overall success in wrestling control of Congress from the liberals in the 1942 election, the new year brought forth a change in the fortunes of war. Hitler's troops were trapped at Stalingrad. Mongomery's troops had defeated Rommel at El Alamein. In the South Pacific, the U.S. Navy had dealt the Japanese fleet defeats at Midway and in the Coral Sea. Germany and its Axis partners were clearly defeated; it would only be a matter of time before they were forced to surrender to the allies.

With the imminent defeat of Nazi Germany pending in 1943 corporate America had to cover its tracks. The same corporations that were guilty of delaying war production in the sit-down strike and sponsoring pro-fascist groups at home were also guilty of knowingly trading with the Nazis during the war. A massive change in tactics was required to protect themselves from sedition or treason charges following the conclusion of the war. The change in tactics is clearly marked by three notable aspects. First, it marked the beginning of targeting those within the government that were fully opposed to fascism. Many of those within the Roosevelt administration or in the halls of Congress that called for the complete destruction of fascism were discredited, forced to resign or targeted for defeat in elections by corporate America. In the short span of this and the previous chapter several dedicated public servants who fought passionately against fascism were dismissed or otherwise discredited at the hands of the native fascists.

Below is a sampling of these individuals and the date of their dismissal. The list is by no means complete; hundreds of others suffered the same fate.


Year Removed

William Maloney


John Rogge


Summer Wells


Jerry Voorhis


Norman Littell


Harry Dexter White


Secondly, it marked a distinct change into an openly and aggressive antagonistic attitude toward our Russian ally by the right-wing within America led by J. Edgar Hoover. Hoover would crisscross the country delivering speeches against the evils of communism. As previously noted, Hoover gave many speeches against communism from 1941 to 1945. Each speech was more inflammatory and the threat more urgent than in his previous speech. The House's Un-American Activities Committee would step up its attacks on communists leading to the McCarthy Era. Finally, many of the Nazis recruited by the CIA would intensify the fear.

Finally, the change in tactics signaled a frantic effort for a negotiated peace. While there were previous efforts for a negotiated peace in the past, most notably the effort by Texas oilman William Rhodes Davis in 1940, the new efforts clearly marked the beginning of the cover-up of corporate America's treasonous behavior. The most significant peace plan during this time was initiated between Allen Dulles and Prince Hohenlohe. The role of Dulles and his association with Nazis is exposed in more detail in the following chapters but for now to convey the treachery of Dulles the following will suffice. In 1943, Dulles began meeting with the Nazi, Prince Hohenlohe. Dulles falsely claimed to speak for Roosevelt and agreed with Hohenlohe that post war Germany should be the leader of industrial production to maintain a bulkhead against Russia. Dulles was lying because Roosevelt was leaning towards the Morgethau Plan calling for the complete dismantling of German industry.

Dulles agreed with the Prince that it would be unbearable for any European to think that Jews might return and that there must be no toleration of a return of Jews to positions of power. Dulles also made the statement that Americans were only continuing the war to get rid of the Jews and that there were people in America who were intent on sending the Jews to Africa.


In the course of his talks with Hohenlohe, Dulles gave away the entire battle plan for Europe. He informed the Nazi Prince that the allies would not land in Spain, but instead, after conquering Tunisia, would advanced towards the Ploesti oil fields to cut off the German supply of oil. The information that no invasion of Spain was planned was particularly useful to the Nazis. It meant the Nazi's vital supply of tungsten from the Iberian Peninsula was safe. He informed Hohenlohe that the Allies would invade Sicily to cut Rommel off.47

In other meetings, Dulles spoke of Papal action in the area of negotiations. Later chapters will detail the Vatican's role in the surrender of Wolff and in helping Nazi war criminals escape from Europe and justice. In the reconstruction of Germany Dulles spoke of giving preference to Bavaria and described a speech by Goebbels as a work of genius.

Noting that he was speaking for himself and other right-wing elements in America, Dulles spoke disparagingly about Churchill and the British in their talks with the Russians over the Balkans. On concluding the talks, Dulles requested that the American Embassy in Madrid to be of assistance to Hohenlohe at any time.

Dulles spent more time giving away the Allies's battle plan than in discussing the proposed German peace treaty. In effect, Dulles may have been stalling for time hoping to delay the end of the war. He was well aware of the many American corporations that were currently doing business with the Nazis and may have been buying time--- hoping for a negotiated peace or at least enough time to ferry the Nazi's ill-gotten assets out of Germany.

Dulles had several Americans in Switzerland who were willing collaborators with the Nazis. Alexander Kreuter was the American Nazi collaborator who Aryanized the French Worms bank when the Nazis marched into Paris. Kreuter was likewise connected to Dillon Reed, the Wall Street firm that helped finance Hitler until 1934.

Another Dulles accomplice was Gerhardt Westrick, a partner in the German law firm associated with both Dulles brothers. Westrick secured the assets of many American corporations throughout the war from nationalization. His partner was Heinrich Albert, the head of the Ford operation in Germany. Albert received orders directly from Edsel Ford in Dearborn, Michigan after the bombing of Pearl Harbor to build trucks for the German Army.47 Also included in the list of Dulles collaborators was the American minister in Berne, Leland Harrison, who authorized shipments of enemy oil through Switzerland as well as American oil to fuel the German army.

While the talks between Dulles and the Nazi Prince were initiated by the Germans as they saw the Third Reich collapsing into ashes around them, the talks were remarkably similar to the earlier peace plan of Davis in1940. The only major difference was that Himmler instead of Goering would replace Hitler. In both cases the Nazis would remain in power and receive United States aid to maintain a bulkhead against Russia. It is not clear whether Dulles ever presented his peace plan to the White House, but such plans received a cold shoulder from the White House because Roosevelt was adamant in removing the Nazis from any position of power within Germany.

This wasn't the only peace effort advanced in 1943 by those claiming to represent Roosevelt. The head of the OSS, Bill Donovan, advanced another effort called the M Project. In July, Donovan ordered Theodore Morde, a former journalist for Reader's Digest to meet the local OSS chief in Cairo. From there, Morde traveled to Turkey to meet with another OSS agent and to make contact with von Papen through the von Papen's agent, Posth. The meeting with von Papen was arranged. The only condition for peace in Morde's plan was the arrest of Hitler. The plan was the same as the plan that Dulles had advanced earlier. It would terminate all lend lease aid to the Soviet Union and set Germany up as the dominating force militarily and industrially.

Returning to Washington, Morde wrangled a meeting with Roosevelt's speechwriter by claiming that he had been authorized by General Hurley to advance the proposed peace plan. The good general immediately denounced Morde's claims. The general went on to state that Morde's actions were merely a thinly disguised attempt to promote the Reader's Digest. In a memo dated October 29, 1943, Donovan urged FDR to give Morde's plan serious consideration. Roosevelt promptly canceled the plan.48

George Earle in Spain advanced a similar plan during the summer. Earle was a wealthy anticommunist. After the Morde plan, collapsed Baron Kurt von Lersner proposed a new plan to Earle. In this new plan, Lersner claimed to have the backing and approval of a group of German officers. This group of officers with the backing of the officer in charge of Hitler's cavalry division in East Prussia would kidnap Hitler and make a peace proposal with only one condition--- that the Soviet Union be precluded from entering Germany. Roosevelt again turned down the proposal.

Other peace plans were advanced in 1943 through New York attorney Abram Stevens Hewitt. Like Morde and Earle Hewitt falsely claimed to be a Roosevelt representative. The plan was once again similar to the plans advanced by Dulles and Morde. Early in 1944, another plan was attempted through Gabrielle Chanel, the perfume magnate. Chanel was denounced as a German agent by her friend Lombardi. Chanel had attempted to use Lombardi's connections to the British royal family to advance her peace plan.

These secret and unauthorized negotiations reveal the length that Dulles and others would go in sabotaging the war effort. One thing was common to all of these negotiations; the Nazis would remain in power in Germany. By 1943, Nazi Germany was clearly defeated on the battlefield. The battles for Stalingrad and El Alamein were the turning points for the war. Allen Dulles and the others revealed their desperate plight in trying to cover up for corporate America's and the rich industrialists' collaboration with Nazi Germany. No other reason can explain their willingness to risk charges of treason or sedition, as none of these talks called for free elections in Germany. In effect, the plans centered on finding a more palatable replacement for Hitler and ensured a government that would be friendly to the corporate America collaborators.

Even more odious, these talks mark the beginning of the Cold War. Not only were the Nazis to be left in power but they were also to be rearmed to provide a bulkhead against Russian. Corporate America and the rich industrialists had to be protected at all costs against their enemies, real and imagined. The war had been very profitable for corporate America and a new war against the Soviets would likewise be very profitable. The benefits and profits of trade with Russia would be small in comparison. In effect, corporate America was willing to risk another major war that the neither the American or the Russian people wanted even if it meant pushing the world to the brink of a nuclear holocaust to inflate the bottom line.

Both Donovan and Dulles came from Wall Street. Donovan was a prominent Wall Street lawyer and was involved with the Drug Inc cartel. Dulles's role in the cartels was more extensive and is detailed in the following chapter. Both Donovan and Dulles had knowledge of the extensive involvement of U.S. corporations with the Nazis and both were in ideal positions to cover up the crimes of corporate America.

During 1943, war production peaked and thereafter declined until the end of the war. The critical phase in war production had been met and passed. However, with the decline in military orders a new problem emerged, reconversion to a consumer economy. Orders to small firms were being canceled. Once their military contracts had been canceled, the small firms wanted to revert back to producing goods for the consumer. This set off a firestorm of protest among the "dollar a year men" with the War Production Board (WPG). They argued that allowing the small firms to reenter into the consumer market immediately was unfair and would take business away from the larger firms while they fulfilled their military contracts. In effect, big business demanded that if they had a twenty- percent share of the market before the war they should have a twenty- percent share during reconversion. The same firms that had engaged in the sit-down strike were now demanding that no reconversion take place until after the war was over.

Donald Nelson was the chairman of the WPG. In early 1943, the War Department attempted to have Nelson fired. Secretaries of War and Navy, Stimson and Knox respectively, along with their undersecretaries Patterson and Forrestal had scheduled a meeting with Roosevelt to demand Nelson's dismissal and to replace him with Bernard Baruch. Baruch was the choice of big business. His wartime plan rested on the assumption that industry itself should have the right to determine what controls were needed and to administer them as they saw fit. The ultimate end of such folly was that big business would end up with full control of the economy. The Baruch plan included special legislation to prevent the use of antitrust laws to penalize an overly-enthusiastic exercise of that power. In effect, it would grant big businesses powers over the economy that exceeded the government's power to regulate commerce.54 By publicly firing Eberstadt, the War Department's proposed aide by to Baruch, Nelson avoided being dismissed. He later brought in Charles Wilson the president of GE, as co-chairman of the WPG.

At the center of the controversy were Donald Nelson and Charles Wilson, co-chairmen of the WPG. In the fall of 1943, Wilson made a speech warning against fascist thinking among the higher ranks of big business.53 The War Department backed the ranks of the big businessmen. On July 7, Nelson received a letter from Admiral William Leahy as follows:

"We are disturbed over the existing lag in war production which, if it continues, may necessitate revision in strategic plans which could prolong the war.
In view of the major offensive operations under way on every front, it is essential at this time that there be no relaxation in war production and that deficits in deliveries be made up at the earliest possible date.
The issuance of orders at this time which will affect our ability to produce war materials is not consistent with the all out prosecution of the war."87

In an unusual move, the letter was published on July 9. Of course, the letter was an appeal to the public and not to Nelson, as contracts were already being canceled by the War Department and others were not being renewed. Leahy was hoping to panic the public into opposition of the WPG's policies on reconversion.

By 1944, those that supported the fascist line of corporate rule had clearly gained the upper hand. In January 1944, Charles Wilson proposed the wedding of the military to corporate America. Wilson suggested that every large corporation appoint a liaison man with the armed forces with a commission of a colonel or above in the Reserve. The liaison man would coordinate industrial production to meet the military's need. Experts from his proposed wedding follows below.

"First of all such a [preparedness] program must be the responsibility of the federal government. It must be initiated and administrated by the executive branch--by the President as Commander in Chief and by the War and Navy Departments. Of equal importance is the fact that this must be, once and for all, a continuing program and not the creature of an emergency. In fact one of its objects will be to eliminate emergencies so far as possible. The role of Congress is limited to voting the needed funds...
Industry's role in this program is to respond and cooperate.... in the execution of the part allotted to it; industry must not be hampered by political witch-hunts, or thrown to the fanatical isolationist fringe tagged with a merchants of death label."88

Note how Wilson denigrates the role of Congress to merely providing the needed funds. Under such a system no congressional investigations would be possible. It would completely remove the checks and balances provided in the constitution. Fraud would become widespread under such a system since there would be no congressional investigations into $800 toilet seats or any other items.

The war had been good for the largest corporations as previously shown by the increase in the large corporations' employment figures. Profits for these same corporations had skyrocketed to dizzy heights and the largest firms were of the mind to ensure that they continued to do so.

However, even more ominous is the fact that before Eisenhower's troops stormed the beaches of Omaha and Normandy, the war against fascism was lost on the home front. As Wilson's words embraced the very heart of fascism and the power that ruled Germany, the military-industrial alliance of Nazi Germany. In effect, Wilson's proposal was the same as Germany's Economic High Command that allowed Germany to wage total war.

Wilson's proposal formed the very basis of what so alarmed Eisenhower a decade later, the military-industrial complex. It would become the nerve center from which the Cold War could be waged. Wilson's proposal wanted to remove all oversight of corporations from Congress. Congress would be removed from approving new weapon systems, investigating the misappropriation of funds, and investigating profit mongering. Such words render the elegant debates of Hamilton, Madison, Jefferson and other founding fathers granting Congress the sole ability to wage war and appropriate funding mute.

There was also another crisis facing large corporations. As 1944 continued to pass it became clearer and clearer that the Axis powers were defeated and it would only be a matter of time before they surrendered. Orders for war munitions continued to decrease. Once the war was over there would be an enormous supply of government-built factories and manufacturing facilities up for grab. The same large corporations that had engaged in the sit-down strike and had frozen out smaller firms from engaging in defense production wanted to retain the ownership of these facilities. However, these facilities had been built solely with government funds because the large corporations had refused to invest in expanding their facilities for the war effort. The value of the war surplus that would be up for grabs was immense, $60 billion dollars. In fact, the federal government at the end of the war owned ten percent of the industrial capacity.

The agenda of the large corporations was then to force the government to give up control of these plants or otherwise face a formidable competitor. Likewise, the corporations did not want these plants to fall into the hands of smaller firms. It would be a fire sale for large corporations, who had successfully rigged the bidding process to exclude the smaller firms. Competitive bids from firms other than those that had run the plants during the war were only rarely allowed. With competing firms successfully eliminated from the bidding process, the low-ball bids of the large corporations were accepted. The government received pennies on the dollar. In the case of government-built integrated steel plants, one company U.S. Steel got 71%. Only four corporations received the synthetic rubber and polymer plants. Eventually, two-thirds all government-built plants went to just 87 large corporations.28


Part 5: Corporate Traitors


The large corporations faced other problems with the end of the war. Many of these corporations attained their large size because cartel agreements with German firms gave them exclusive production rights within the United States while the German firms held the patents. Center to Truman's plan to remove Germany's ability to wage war and to break up I.G. Farben was the removal of patents from German hands. One executive of US Steel Corporation with extensive ties to Schmitz and Krupp attempted to reverse Truman's policy. The executive called for an immediate opening of the German Patent Office and for prohibiting inspections. The opening of the patent office, along with a ban on searches, would have been disastrous for the decartelization and de-Nazification programs.86

The end of the war would also reveal the many crimes of a corporate America willingly supplying the Nazis with war munitions. The dealings between corporate America and the Nazis during the war occurred with the direct knowledge of the American corporate headquarters and often times at the direction from the head office. Forget the rubbish that these poor corporations were forced to cooperate with the Nazis. Generally, nothing could be further from the truth. Many of these corporations went to extraordinary measures to remain in control of their assets in Germany fully cooperating with the Nazis even if it was a violation of the law and all moral principles.

Once again, the media would play a central role in concealing from the American people the truth about corporate America. Perpetrating another red scare on the country would conceal the truth. The words of Charles Wilson during the Allis-Chalmers strike spoke of only two problems unions and communism. These two issues would frame the issues in the media into the next decade. Union members would be forced to sign loyalty oaths, as would government employees and even teachers. Russia was a new menace and there would be no reports in the media of Ford building trucks for the Nazis or of any other American corporation aiding the Nazis. .

Up until recently the media has led the American people to believe that only a handful of American corporations ever invested in Germany or dealt directly with the Nazis. But a recent article puts the number of American corporations involved with supplying the Nazis at more than 300.55 However, even this article while particularly damaging for Chase Bank as well as to Ford and General Motors, is shamefully apologetic to corporate America and plainly inaccurate on other accounts. It shamefully tries to exonerate one of the most notorious fascists in America during the war, the du Ponts by suggesting they did not invest in Nazi Germany after the 1930s. The reality is that the du Ponts had several cartel agreements with the Nazis and were openly pro-fascist supporters in this country.

Another recent article coming from German investigators states that 26 of the top 100 firms in the U.S were guilty of serious war crimes. One report is particularly damaging for Ford and General Motors indicating that US lawyers now have direct evidence of the companies both knowingly using slave labor and having closely collaborated with the Nazis. The lawyers are currently considering filing a possible class action suit.56 Additionally, this news wire substantiates that many of the links between corporate America and the Nazis began in the 1920s (as presented in an earlier chapter).

The first article mentioned above details the actions of John Foster Dulles and Sullivan & Cromwell, that helped conceal Nazi ownership of the U.S. subsidiary of Bosch. They concealed the real ownership by drafting a voting trust agreement making the Wallenbergs' Enskilda Bank a dummy owner. Here is another example of I.G. Farben's practice of tarn. The fraud worked throughout the war, but in 1948 Bosch's American subsidiary was forced onto the auction block. This is but one of many such frauds involving the actions of Sullivan & Cromwell, as well as both of the Dulles brothers.

These articles provide good examples of unlawful conduct on the part of the American corporations. The use of slave labor by Ford and General Motors and the seizure of Jewish accounts by the Paris branch of Chase Bank are typical of the crimes corporate America committed during the war. To understand fully how such crimes against humanity have gone unpunished for half a century, one needs to follow the money trail beginning with the Bank for International Settlements (BIS). Such a look at international financial intrigue paints a vivid picture of the dangers of the World Trade Organization and how it currently imperils freedom globally.

The world's central banks originally, including the Federal Reserve created the BIS in 1930. The BIS was originally inspired by Hjalmar Horce Greeley Schacht who later became the Nazi Minister of Economics and president of the Riechsbank. Schacht was raised in Brooklyn and retained powerful Wall Street connections. He foresaw the rise of Hitler and the advent of WWII. Even before Hitler rose to power, Schacht pushed for an institution that would retain communication and collusion with the world's financial leaders in the event of war. Thus, it was written into the BIS's charter that BIS would be immune from seizure even if its owners were at war.

One of the owners Of BIS was the Morgan-affiliated First National Bank of New York. The Morgans had extensive connections with the BIS. The BIS established purpose upon its founding was to provide the Allies with reparations from WWI as part of the Young Plan. Owen Young was a Morgan banker. The Morgans were involved in the fascist plot against FDR in the 1930s. In addition, Wendell Willkie was on the BIS board of directors and Willkie was the candidate of choice among the native fascists group to unseat Roosevelt.

Here is the crux of the power. Immune from seizure, the bank was free to act as it wished under whomever retained control of it. Citizens of other countries and indeed even the governments of other countries were powerless to oppose the bank or its actions. Instead, the bank was free to hold the world at the mercy of its knighted financial autocrats.

Granting such powers to any institution is foolhardy at best and a mistake that should never be repeated. However, after more than fifty years, the world has yet to learn. Currently the world's financial knights are once again reengineering the BIS in the form of the Multilateral Agreement on Investment (MAI), GATS and other free trade agreements. In effect, all of these so-called free trade agreements would override the Bill of Rights and hold a country responsible for any loses a corporation would receive by any legal action initiated by the country or its citizens. Further, these trade agreements prevent a country from withdrawing from it by assessing penalties for lost income for up to twenty years after a nation withdrew. Again, the media is playing the role of an obedient lap dog for its corporate masters. The media has done such a good job in killing the story on MAI and its ramifications that most Americans have not heard of it. The reader is urged to become informed of the negative consequences of the MAI and the other free trade agreements and oppose them before another fascist institution can unleash it horrors on an unsuspecting world.

The danger of NAFTA and other so-called free trade agreements can best be conveyed by the example of the Metalclad suit against Mexico. Metalclad, a U.S. waste disposal company had bought a closed dump site in the north-central state of San Luis Potos that had been plagued in the past with problems. The purchase included an agreement for the cleanup of the past problems and leaks. The site sat atop an underground aquifer that provided water for a good deal of this arid region. The governor of San Luis Potos had an environmental audit conducted on the site. The audit concluded that the site would contaminate the underground water supply and, therefore, refused to let Metalclad reopen the site.52

Metalclad then filed suit against Mexico for $90 million dollars under Chapter 11 of NAFTA. The tribunal set up under NAFTA awarded Metalclad $16.7 million dollars. The crux of the ruling is that under these free trade agreements, the cost of environmental regulations are shifted from the corporations to the governments and to bypass the legal system in the signature countries. In other words, the cost of environmental regulations and clean up was socialized, freeing corporations from their costs. These free trade agreements are unconstitutional as they set up a tribunal of corporations as the final arbitrator in any dispute and fail to recognize the court system in any of the signature countries.

By the outbreak of war, the BIS was under the control of Hitler. Directors of the BIS included: Thomas McKittrick, an associate of the Morgans; Herman Schmitz, head of I.G. Farben; Kurt von Schroder, head of the J. H. Stein Bank of Cologne and leading financier of the Gestapo; Walther Funk, president of the Riechsbank; and Emil Puhl, vice president of the Riechsbank. In May 1946, at the Nuremberg Trials, Walter Funk testified that Puhl had been offered a major post at Chase in New York shortly before Pearl Harbor. Such an offer by Chase to a leading Nazi banker reveals the callous disregard of any moral principles by Chase. Surely at such a late date with Europe already embroiled in war Chase could not been oblivious to Nazi atrocities and aggression.

The first president of the BIS was Gates McGarrah formerly of Chase National Bank. During the first two years after Hitler's assumption to power, McGarrah was instrumental in financing the Nazis through the BIS. In 1940, McKittrick held a meeting at the Riechsbank with Kurt von Schroder and the Gestapo discussing means to continue doing business if war broke out. On February 5, 1942, two months after the bombing of Pearl Harbor, the Riechsbank and the German and Italian governments approved orders that permitted McKittrick to remain in charge of the BIS. One of the documents of authorization simply stated, "McKittrick's opinions are safely known by us." 57 In response, McKittrick gratefully arranged a loan of several million Swiss Francs to the Nazi puppet governments of Poland and Hungary. On September 7, 1942, McKittrick issued the first annual report after Pearl Harbor read it to an empty room. In doing so, he could report to Washington that no Nazi directors were present. The report was purely Nazi propaganda assuming an immediate peace in favor of Germany with a sizable distribution of American gold to stabilize the German Mark. In the spring of 1943, McKittrick traveled to Berlin in violation of U.S. law after meeting with Leon Fraser of the First National Bank of New York and the heads of the Federal Reserve. His mission was to provide Emil Puhl with secret intelligence on financial problems and high-level attitudes in the United States. 57

On March 26, 1943, liberal California Congressman Jerry Voorhis entered a resolution in the House of Representatives calling for an investigation of the BIS. Congress failed to consider the matter. Voorhis was a liberal Californian representative and supporter of the New Deal and a relentless opponent of fascism. In 1945, Voorhis attacked the policy of placing men who had been officers of American companies tied to I.G Farben in the Office of military Government (OMG). OMG was tasked with the destruction of I.G. Farben. One such person assigned to OMG was Colonel Frederick Pope. Before the war Pope had been a director or top official of more than one of I.G. Farben's American affiliates.50

Obviously, if either the BIS or I.G Farben were opened to investigations in Congress, the risk was that many American corporations would be exposed to trading with the Nazis. Those supportive of the Nazis had but one choice--- Voorhis had to be eliminated. The cabal of Nazi supporters selected Richard Nixon to run against Voorhis in the 1946 election.

At the time Nixon was an unknown outside of California and only a bit player within California. Yet Nixon received financial support from the Wall Street firm Sullivan and Cromwell.65 With a large financial backing Nixon easily defeated the Congressmen branding him a communist. Nixon later offered the following to a Voorhis supporter.

"Of course I knew Jerry Voorhis wasn't a communist, but I had to win. That's the thing you don't understand. The important thing is to win."51

The early financial backing of Nixon and Nixon's cover-up of Nazi war criminals will be detailed further in a following chapter. In January of the following year, Washington Congressman John Coffee introduced a resolution similar to Voorhis's resolution. Despite the continued protests calling for the dissolution of the BIS, it survived. As for McKittrick, he was amply rewarded for his treasonous behavior following the war with an appointment as vice president of Chase National Bank.

Two of the largest U.S. banks had extensive dealings with Nazi Germany, the Rockefeller- owned Chase Bank and the Morgan-controlled National City Bank of New York. Both banks handled accounts for many of the American corporations that traded with Nazi Germany during the war such as Standard Oil, Sterling Products, General Aniline & Film, and ITT.

In charge of European affairs for Chase was Joseph Larkin, a member of the Knights of Malta and a fascist sympathizer. (An abnormal number of Nazi and their supporters were members of the Knights of Malta.) Larkin, like McKittrick has a long history of aiding the Nazis. Perhaps the first example of Larkin aiding the fascist was in 1936, when he refused a $4 million account for the Loyalist of Spain. When a similar account was opened in the Paris branch, he had the Paris branch withdraw the deposit. However, Larkin gladly accepted accounts by Franco and the Riechsbank.


With the approach of war, the ties between the Rockefellers and the Nazi government solidified even more. In 1936, the Schroder Bank of New York entered into a partnership with the Rockefellers forming the Schroder, Rockefeller and Company Investment Bank. Time magazine described the partnership as the economic booster of the Rome-Berlin Axis. Both Allen and John Foster Dulles were lawyers for the resulting firm. Allen Dulles was also on the board of Schroder. Six months after the start of the war in Europe, Larkin secured $25 million dollars for the use of the Nazi government. Accompanying the money was a detailed account of the assets and backgrounds of ten thousand Nazi sympathizers in the United States. In essence, the Nazi government was offering the sympathizers a chance to buy marks with dollars at a discounted rate through the Chase Bank. This scheme was only open to those willing to return to Germany, a rush on the German mark resulted.

Chase's support of the Nazis went even further--- to outright defiance of the U.S. government and treason in the fullest extent of the word. In May 1940, New York diamond merchant Leonard Smit began smuggling industrial-grade diamonds to Nazi Germany through Panama. Roosevelt had issued a freeze on all monies sent to Europe. A few days later at Smit's request, Chase unblocked his account and allowed the funds to flow to Panama and then on to Nazi Germany.

In another instance on June 17,1940, as France was collapsing the head of the Treasury Department, Moregnthau issued an order with FDR's approval to block the French accounts in this country to prevent the Nazis from looting those funds. Within hours, Chase officials unblocked the accounts and the funds went to South America and then to Nazi Germany.

On June 23, 1941, the FBI reported to Morgenthau that its monitoring of funds through Chase banks showed several payments to American oil companies from the Nazis. There was overwhelming evidence of Standard Oil receiving money from the Nazi government. The pro-Nazi publications from The German-American Commerce Association disclosed connections between Chase Bank, Emil Puhl and the Riechsbank throughout 1940. Additionally, the publications revealed that the Riechsbank maintained accounts with both Chase and National City banks.

Larkin went to extreme efforts to ensure that the Paris branch stayed open even after the bombing of Pearl Harbor. Throughout the war, Larkin allowed known Nazi collaborator Carlos Niedermann to manage the Paris branch. By May 1942, Harry Dexter White had uncovered evidence that Niedermann was enforcing Nazi restrictions on the withdraw of Jewish funds.

White was arguably one of the government's most important post-war economists. He was the architect of the International Monetary Fund (IMF). However, due to his liberal economic policies as well as his relentless pursuit of the financial dealings of large corporations with the Nazis, he had to be removed. By 1948, White was unjustly branded as an agent of the Soviet Union. One of his chief accusers was Whittaker Chambers, who may have been a Nazi agent. Even with the recently released Venona tapes, no conclusive evidence exists of White being a Soviet agent as claimed in several books. White died of a heart attack three days after testifying before the HUAC committee.89

Additional evidence shows that Larkin was directing the actions of the Paris branch at least six months after the bombing of Pearl Harbor. In fact, the Paris branch had the American accounts blocked while maintaining Nazi accounts. A Treasury report dated December 20, 1944 revealed that Niedermann was a Nazi collaborator and that the fact was known by Larkin. The report further revealed that Larkin was aware of the Nazis plan to use these accounts following the war as an instrument of German policy in the United States.

With Larkin's full knowledge, the Paris branch of Chase handled the account of Otto Abetz, the Nazi ambassador to Paris. Abetz's account was used as a funnel to pour vast amounts of money into several French companies that were collaborating with the Nazis. The money in some cases was used to support the torture of the French people. Constant communications were maintained between the Paris branch and the New York office. The following quote from a letter from Albert Bertrand of the Chase Vichy branch to Larkin in 1942 attests to the communication and shameless collaboration between Chase and the Nazis.58

"The present basis of our relationship with the authorities in Germany is as satisfactory as the modus vivendi worked out with the German authorities by the Morgans. We anxiously sought and actually obtained substantial deposit of German funds...which funds were invested by Chase in French treasury banks to produce additional income."59

After the war, Morgenthau's investigators in Paris found further shocking evidence of Chase's collaborations with the Nazis. They found that at the time of the fall of Paris in June 1940, S.P. Bailey, and an U.S. citizen and manager of the Paris office offered to immediately liquidate the branch in a patriotic gesture to Larkin. Larkin promptly fired Mr. Bailey and appointed a known Nazi collaborator. In 1946, Larkin appointed the collaborationist Albert Bertrand to the board of Chase in Paris.

In addition to the already mentioned dealings of Standard Oil with the Nazis Major Charles Burrows of Military Intelligence reported to the War Department on July 15, 1941 that Standard Oil was shipping oil from Aruba in the Dutch West Indies to the Canary Islands. Part of his report follows.

"Standard...is diverting about 20 percent of the fuel oil to the present German Government. About six ships operating on this route are reputed to be manned mainly by Nazi officers. Seamen have reported to the informant that they have seen submarines in the immediate vicinity of the Canary Islands and have learned that the submarines are refueling there. The Informant also stated that Standard Oil Company has not lost any ships to date by torpedoing as have other American companies whose ships operate to other ports."60

By 1941, it was well known that Standard Oil was supplying the Nazis with vital fuel. The British blockade ran the entire length of North and South America, stopping ships bound for Germany wherever possible. To elude the British blockade, Farish sent the fuel to Russia and then transported it across Asia via the Trans-Siberian Railroad to Hitler's waiting Panzers. Another route Farish devised to elude the blockade was to ship the oil to Vichy North Africa once Hitler invaded Russia.

William La Varne, a dedicated employee of the Department of Commerce, uncovered the details of Standard Oil's dealings with the Nazi airline, LATI. LATI was not subject to boarding searches by the British blockade and was used to ferry spies into the Americas, as well as to transport large quantities of propaganda and drugs into Latin America--- all addressed to Sterling Products. Only Standard Oil could make these flights possible, as the trip from Europe to South America required refueling unless the airline had the high-octane fuel controlled by Standard Oil. To supply the airline, Farish changed the registration of many of his ships from German to Panamanian. Under Secretary of the Navy and vice president of General Aniline & Film (another company with extensive dealing with the Nazis), James Forestal promptly granted them immunity.

Summer Welles, a State Department employee presented a detailed report of refueling stations for Nazi vessels in South and Central America on March 31, 1941. Chief among the suppliers was Standard Oil of New Jersey and California. On May 5, 1941, the U.S. Legation in Managua, Nicaragua, that reported Standard Oil subsidiaries were distributing Nazi propaganda. Further investigations by John Muccio of the U.S. Consulate revealed that Standard Oil was distributing Nazi propaganda around the world. 61 Such were the dealings of Standard Oil at a time when Nelson Rockefeller was at his post of Coordinator of Inter-American Affairs, an intelligence agency with the mission to stop the Nazi influence in South America.

By 1944, America was seriously short on oil. The upcoming D-Day invasion would require an even greater amount and a stable supply. Lack of oil would cancel the planned invasion or imperil the troops ashore if it was not forthcoming. At the time, it cost ten cents a barrel to bring the oil up and another fifteen cents for royalties to the Sheikh of Bahrain or 20 cents for drilling in Arabia and another twenty-one cents for the royalties to Ibn Saud. However, prior to the invasion, W.S.S. Rodgers of Texas Company and Henry Collier of Standard Oil of California informed Ickes that the price for the government would be $1.05 a barrel. This was almost double the current price. The offer was take it or leave it. Ickes was forced to accept. 62 The threat of an interruption of supply if the U.S. government should intervene was explicit. Even more grievous was the fact that Rodgers and Collier paid no income tax on their ill-gotten profits because they had registered their company in the Bahamas. Their profit of $120 million dollars was made on a $1 million dollar investment.

Such behavior is not only criminal; it is treasonous. Standard put its own self-interest ahead of the country's interest. It willingly to put the lives of GIs in danger and even ran the risk of a defeat in Europe. In effect, Standard Oil blackmailed FDR's administration for private gains. No charges of war profiteering were ever filed. Like Seldes said, the big boys are immune from prosecution.

The large faction of anti-Semitism and Nazi sympathizers within the State Department made such deals possible. One of the Nazi sympathizers with a large degree of influence in the State Department was William Bullitt. He conducted a personal vendetta against the previously mentioned Summer Welles. Welles was the most powerful force within the department against fascism and was unrelenting in his pursuit of Nazis. Welles, however, had one weakness that Bullitt would exploit; he was bisexual. Bullitt conspired with Hoover in 1940 to investigate Welles. In September, Hoover hired two Pullman porters to flirt with Welles once he was drunk aboard a train back to Washington after attending the funeral of William Bankhead. Hoover's agents then noted his drunken conversations and sexual acts. It would take until 1943 before FDR would call for his resignation under pressure from Bullitt. Welles's dismissal allowed the Nazi sympathizers full reign in the State Department and derailed his promising career. Once again, a staunch opponent of fascism was removed from power. However, FDR was so outraged at Bullitt that his influence was rendered impotent.

Early in 1942, the Standard Oil representative in Berlin, Karl Lindermann, held a series of urgent meetings with the two directors of American ITT in Germany, Walter Schellenberg and Baron Kurt von Schroder. Schellenberg was also the head of the Gestapo's counterintelligence and von Schroder was a director of the BIS. As a result of these meetings, Gerhardt Westrick, the CEO of ITT in Nazi Germany flew to Madrid to meet with Sosthenes Behn the founder of ITT. The meeting centered on how links with the Gestapo and ITT could be improved and how ITT could improve the entire Nazi telephone system and a host of war munitions. Westrick was also an associate of John Foster Dulles. He not only represented ITT but also served as an agent for Ford, GM, Standard Oil, the Texas Company, Sterling Products and the Davis Oil Company, all of which were guilty of trading with the Nazis.

The fascist government aided Behn because of his system of assuring politicians "promising plums" on his boards of directors. One such example was his Spanish chairman, the Duke of Alba, a major supporter of Franco and Hitler. Behn was closely connected with the Circle of Friends of the Gestapo through Henry Mann of the National City Bank. Behn increased his donations to the Circle of Friends after Pearl Harbor. Besides owning ITT Behn acquired a 28-percent share of Focke-Wulf company. With the aid of ITT, Focke-Wulf was able to improve the accuracy of the German bomber squadrons and later had a hand in the V2 that menaced England.

After the bombing of Pearl Harbor Behn, entered into an agreement with the Nazi government, which was essentially a partnership of an American corporation with the Nazis. The agreement prohibited the Nazis from acquiring the shares of ITT, but made the Nazis administrators of those shares. Behn and his directors made repeated requests for licenses to allow his companies in neutral countries to trade with the Nazis. Morgenthau refused all attempts, but in open defiance to the U.S. government Behn proceeded anyway.

Besides providing as many as 50,000 fuses a month for artillery shells and bombs for Nazi Germany, Behn operated a worldwide communications network that continued to serve as a conduit for Nazi propaganda throughout the war. ITT's operations in South America were infested with Nazis, who oftentimes were in charge. However, perhaps the most grievous act of ITT during the war was in providing with Nazis with highly sophisticated communications equipment. This equipment allowed the Nazis to break the U.S. diplomatic code. In 1945, a special Senate committee on international communications was set up with Burton Wheeler as chairman. In the appendix to the report, an extensive dossier revealed the co-ownership of RCA and ITT with Germany and Japan. No one noted the significance of the report. As always, the big boys supporting Nazis were immune from prosecution. In fact, shortly after the war Behn receive millions in payment for his war-damaged plants in Nazi Germany---the very same plants that manufactured artillery shells that rained down on the GIs at Normandy and throughout the war.63

One cannot discuss Nazi Germany without mentioning I.G. Farben, the giant chemical firm responsible for the manufacture of Zyklon gas used in the concentration camps. In 1929, Hermann Schmitz, and joint chairman of I.G. Farben along with Max Ilgner, Walter Teagle, Edsel Ford and Charles Mitchell of National City Bank set up the American Farben organization. In 1931, Herbert Hoover hosted Schmitz in the White House sharing his view that Russia must be crushed. Hoover had lost his extensive oil holdings in the Russian revolution. Schmitz was able to sell $13 million dollars of debentures through National City Bank in one morning, a large feat in the middle of the depression.

In 1932, Schmitz joined forces with Kurt von Schroder of the BIS. Schroder was a fanatical Nazi and director of the private bank J.H. Stein. Schroder was also an SS man linked closely with Wintrop Aldrich of Chase Bank, Walter Teagle of Standard Oil and Behn of ITT. Schroder was also the person who set up the meeting between Hitler and von Papen that led to Hitler's appointment as chancellor. Schroder was also instrumental in setting up the Circle of Friends of the Economy, a fund for the Gestapo under Himmler's control. Representatives of ITT and Standard Oil were also members.

American I.G. owned General Aniline & Film and Ozalid a blue print firm. General Aniline & Film supplied the army with the khaki dye it used and supplied the navy with the blue dye it used. This gave Schmitz's salesmen the perfect cover for spying on U.S. military bases. Also connected through General Aniline were Agfa and Ansco, a huge film corporation. This later firm provided the army and navy with their private training films and photographs of secret installations. Every blueprint from Ozalid was sent to Berlin. In 1939, with war raging in Europe all references to I.G. were dropped and the company was transposed into I.G. Chemie, a Swiss corporation controlled by Schmitz's brother-in-law with the aid of the National City Bank of New York and Chase Bank. The board of the new corporation still included William Weiss of Sterling Products, Edsel Ford and in the place of Teagle, James Forestal, who was soon to become the Undersecretary of the Navy. Another board member was former Attorney General, Homer Cummings, and leading defense lawyer for the newly transformed corporation. Cummings supplied Thomsen, the Nazi government's Chare d' Affaires with Roosevelt's plans for Germany. In a telegraph marked "Top Secret" to Germany from Thomsen, Cummings had revealed the plans of FDR to deal with Germany. Eventually the firm was placed under government control for the duration of the war. General Aniline & Film was placed under the directorship of Leo Crowley a friend of big business and big money.

Norman Littell, an antitrust lawyer in the Attorney General's office, pursued Sterling Products relentlessly. It particularly galled him that Sterling withheld the Bayer patent for atabrine, a quinine substitute. Thousands of GIs died needlessly from malaria for the lack of quinine or atabrine. Quinine became especially scarce after the Japanese seizure of the Dutch East Indies. However, atabrine was freely available to those on the list of Proclaimed Customers in South America but Crowley refuse to release it for use by American soldiers.

Like many strident anti-Nazis, Littell's enemies eventually forced FDR to dismiss him. However, just prior to Roosevelt's death he asked to meet with Littlell in the Oval Office. FDR told Littell that he would like to see Biddle impeached for treason but in his present weaken physical condition, the task would be too difficult. In 1945, Littell found support for an investigation of Sterling Drug in Congress. Al Smith of Wisconsin and Jerry Voorhis of California entered Littell's charges into the Congressional Record and demanded a full-scale investigation. The investigation never took place. Within a few days of the resolution, Biddle quietly resigned and ironically took the post of prosecutor at Nuremberg.64

Thus, Littell faced the same fate as many of the other anti-Nazis within the Roosevelt administration who were forced to resign with careers ending in a shipwreck due to pressure from unseen forces. The process of purging the stringent anti-fascists from government continued into the 1950s, climaxing perhaps with the trial of Alger Hiss.

Yet most of the pro-Nazis successfully managed to rehabilitate themselves thanks to the same unseen forces with more power than the President. As already noted in this chapter, many of the pro-Nazi bankers received choice promotions following the end of the war. Many pro-Nazi Congressmen remained in office for years after the war. Even the pro-Nazi publisher Dewitt Wallace was rewarded with an overnight stay in the Lincoln Bedroom during Nixon's administration for his pro Nixon slant in the Reader's Digest as well as his large campaign donations. (Note the Republican's silence of this during Clinton's terms.) Wallace personally gave Nixon more than a hundred thousand dollars. Meanwhile, Wallace's rag managed to contribute even more by smuggling the money in through the Bahamas. 66

Not a single American corporation or American businessman guilty of supplying Hitler's war machine during the war has ever seen trial in over fifty years since the end of the war.


Part 6: Nativist Adopts Fascism


Besides a well-funded propaganda campaign by the pro-fascist forces within the United States and the decidedly pro-Nazi slant of many of the nation's leading newspaper chains, the lack of education was a contributing factor. During the 1930s, most Americans lacked a high school education. Even the typical GI was equipped with only an eighth-grade education, thereby justifying the need for the previously mentioned Army Orientation Program. The tables below from a 1964 study details the association of racism with education and religion.29


Percentage Prejudiced


Percentage Prejudiced

8th Grade


Under $ 5,000


High School




Some College




College Graduate


$15,000 and over



Percentage Prejudiced

Religious Commitment

Percentage Prejudiced


Percentage Prejudiced





Under 35


Liberal Protestant










54 and over


Other polls have shown that anti-Semitic and intolerance mirrors the results in the table above. Note that the modest gains made by the civil rights movement up until the time of the study reduced the level of prejudice. This is readily apparent by looking at the level of prejudice by age. We see that lower income earners were more likely to hold prejudicial view, a view consistent with the profile given earlier for the typical member of the Black Legion. The typical Black Legion member was poorly educated and came from the hill country of the South. Likewise, the Black Legion was composed mainly of members with a high level of commitment to their fundamentalist religion.

The three largest effects on the rising level of prejudice were lower education levels, the amount of religious commitment and the type of religion matching the profile of the Black Legion members. Not only does the religious group effect affect the level of prejudice, but also with a rising level of commitment the level of prejudice increases implying that religion itself was inherently racist. Considering the close relationship between the Klan and religion presented in an earlier chapter this should not be surprising. By looking at the level of prejudice, one can see that the fundamentalists exhibit the highest degree of prejudice in line with the heavy concentration of such religions in the South. The reader should not be surprised by such an implication; churches and religion were used as agents to enforce segregation in the South, along with the rise of the Identity religion at the hands of the pro-Nazi preachers Gerald Smith and others.

The rise of racism in the 1980s occurred after the rise of fundamentalism in the 1970s. An abundant supply of evidence exists to solidify the rising levels of racism in the 1980s and the increased numbers of fundamentalists. One such piece of evidence was the ban on interracial dating at the Bob Jones University, an issue that arouse in the 2000 primary election. Its no accident that the right wing is engaged in frantic efforts to do away with Affirmative Action and efforts to pass hate crime legislation.

Even as we entered the 21st Century, evidence still abounds of the racism in religion. Look at the ministries of hate by such people as Pat Robertson or Jerry Falwell. Another indicator is the recent Baptists' position adopted at their national convention of converting and saving Jews. It is not implied that the vast number of churchgoers are bigots, but rather the bigotry exists in the leaders and fanatical followers of what has become known as the religious right.

This group of fundamentalists has carried out a twenty-year campaign of terror against abortion clinics in a low intensity urban warfare, bombing clinics and murdering staff members. If this twenty-year campaign of terror were compressed into one night, it would be no different than the Crystal Night terrorization of the Jews at the hands of the Nazis--- and the voters would be demanding justice. The use of such low-intensity urban warfare spread over years has lulled Americans into a false sense of the inherent danger posed by these groups. A great many people have settled into a dangerous state of accepting the violence and actions of these terrorists, shrugging off the news of another abortion clinic bombing.

This acceptance of the violence directed toward abortion clinics was readily apparent after the destruction of the World Trade Centers on September 11, 2001. In the aftermath of the attacks on the Trade Center and the Pentagon, letters containing anthrax spores were delivered to several media sources and liberal Congressmen. However, abortion clinics and Planned Parenthood centers received a deluge of such threatening letters. Although, none proved to contain anthrax spores, the FBI showed little interest in investigating the perpetrators. In fact, abortion centers have been receiving such threats through the mail for several years with no response from the FBI.

Not even in the media is there the same sense of outraged being vented as that, which was vented over the bombings connected with the Weathermen in the 1960s and 1970s. However, a single action by Earth Liberation Front (ELF) will expend volumes of ink in the press. The media is guilty of conditioning the American public to believe that the only threat is from the left, yet Oklahoma City stands as a testament that the real threat is from the right.

As a group, fundamentalists exhibit all of the major traits of fascism, anti-liberalism, anti-socialism, anti-communism, anti-labor, extremely nationalistic, and the ultimate statist. To assuage any further doubts, following is a quote by a fundamentalist minister visiting the White House after returning from Guatemala in the 1980s.

"The Army doesn't massacre the Indians. It massacres demons, and the Indians are demon possessed; they are communist. We hold Brother Efrain Rios Mott like the King of David of the Old Testament. He is the king of the New Testament." 31

The quote above is a mirror of the Nazi's war on the Jews. The first step in the Nazi's final solution was to first demonize the Jews and then to openly attack Jewish businesses, homes and synagogues. This was followed by seizure of property. Only then were the concentration camps created. It is precisely this process that makes such statements as the quote above so dangerous. Racism is a learned trait; its early steps serve to desensitize society. Moreover, left unchecked once the process of desensitizing is over, open attacks on the minority groups proceed, followed by genocide as the final result. If there are any doubts of what would happen if the religious right ever came to power in this country reread the quote above one more time.

The previous example of the conversion of the Black Legion from an essentially nativist group into a fascist group is equally valid for what passes today as the religious right. In fact, the association of various nativist religious groups with the right wing of American politics goes back to the founding of the republic. This should note be surprising upon a little reflection. Liberalism in this country has always been associated with progressiveness and change, while conservatism has always been associated with maintaining the status quo. There are no other groups that are more statist than the various fundamental religious groups. At the first sign of change, they invoke a bloody crusade against what they perceive to be an onslaught of godless behavior and the work of the devil.

The history of the United States is replete with examples of nativist religious groups aligning themselves with the right wing political spectrum. Perhaps the best example would be the anti-Catholic movement starting in about 1820 and extending through the 1850s ending with the Know-Nothings. The various factions of this anti-Catholic movement aligned itself with the conservative Whigs before eventually forming their own party. In essence, it was a union of convenience between the conservative elite and the bigoted, as well as a fear that the Catholic immigrants were aligning themselves with the liberal Democrats of the time. Nor was the anti-Catholic movement simply a battle at the ballot box. At various times violence broke out, such as the riot in 1844 in Philadelphia in where a Catholic Church was burnt. Again, the members of the anti-Catholic movement during this time came from the lower classes. 32 Their effect upon elections and various legislation is simply beyond the scope of this book.

As testimony to the zeal of religious bigotry in the United States, the Know-Nothings were the largest third party ever assembled. They succeeded in electing numerous officials to Washington as well as to the state Houses. The demise of the Know-Nothings only came about through their success as the Republican Party absorbed the Know-Nothings. The anti-Catholic movement continued after the Know-Nothings's disbandment continuing right into the 20th Century and the election of JFK. In fact, the cause of the Civil War was blamed on the Catholics by many members of the Republican Party and far right groups into the 1880s. Even the assassination of Lincoln was described as a Catholic plot by some.

The present day infiltration of the Republican Party by the religious right is nothing more than a repeat performance and a dangerous one at that. The past history is littered with examples of religious bigotry being used as an agent of repression in this country. With the Republicans focused on destroying the social welfare and safety net as well as allowing churches to dispense federal aid, the future looks extremely bleak if the country ever enters another extended economic downturn as it did in the 1980s. In fact, George W. Bush has allowed Texas to support faith-based treatment centers for drug addiction, childcare and welfare services. Such connections between religion and government are strictly forbidden by the Constitution. However, in his efforts to pander to the religious right Bush, has taken it one step further; he has exempted such faith based services from all regulation. They are free to operate anyway they choose.49 They are free to operate in unsafe buildings, free from hiring qualified staff and free to abuse the rights of those whom they pretend to help.

Even more ominous was the secret deal cut between the Salvation Army and the George W. Bush administration in 2001. In that deal, the Salvation Army agreed to provide up to $110,000 a month to lobby for Bush's faith-based initiative. In exchange, the Bush administration agreed to exempt the Salvation Army from all federal and state anti-discrimination laws on the hiring of gays.90 Such secret negotiations are shameful enough. However, the Salvation Army is a member of a larger group of fundamentalists seeking to undermine the rights of gays. The Salvation Army's web site is hosted by the Christian Web portal, Christianity.com. This web portal host other such anti-gay sites such as Exodus International and Pat Robertson's Christian Broadcast Network. Nor does this web portal simply serve as a web host but there is in fact a commingling between the Christianity.com partners.91 Although, the media did report the secret negotiations, the media quickly dropped the story or relegated it to the back pages. No mention was made in the news of the Salvation Army alliance with the antigay Christianity.com.

More disturbing is the fact that Bush has chosen two men connected with the CIA's Manhattan Institute, John J. DiIulio Jr. and Stephen Goldsmith. Such actions can only further the connection between fundamentalists and hard right ministries and the CIA. These two are also connected with Charles Murray, author of the racist The Bell Curve. Additionally, Murray was a consultant on Tommy Thompsons's Wisconsin Welfare Reform Program.92

The mixing of religion with government as Bush proposes has never succeeded without catastrophe consequences as the following quotes serve to remind us.

"Thus inwardly armed with confidence in God and the unshakable stupidity of the voting citizenry, the politicians can begin the fight for the 'remaking' of the Reich as they call it." -Adolf Hitler, Mein Kampf Vol. 2 Chapter 1
Secular schools can never be tolerated because such schools have no religious instruction, and a general moral instruction without a religious foundation is built on air; consequently, all character training and religion must be derived from faith . . . we need believing people." [Adolf Hitler, April 26, 1933, from a speech made during negotiations leading to the Nazi-Vatican Concordant of 1933]

The Know-Nothings were not the first group of religious bigotry to penetrate American politics. Perhaps the first was the Illuminati in the 1790s. This myth of a secret group originating in Germany with the goal of the destruction of all religion has been disproved many times in the past. Yet, it is still popular and making somewhat of a comeback in right wing circles today particularly among the Identity religion and the hard right groups that have adopted the Identity religion. Another group that has been the victim of religious bigotry throughout the history of this country is the Masons.

Anti-Semitic bigotry only began in earnest in the latter part of the 1800s as more and more Jewish immigrants from Eastern Europe entered the country. This roughly coincides with the beginnings of the Identity religion in the United States---a religion based solely on racism that would emerge from the ministries of hate of Gerald Smith and Gerald Swift in the 1930s. These two ministers of hate and Father Coughlin preached of the dangers of "International Bankers" a code word for Jews.

Both Smith and Swift were fundamental in the development of what has become the Identity religion. Smith was both a member of the Silver Shirts and closely associated with Huey Long. It is not surprising then that the Identity religion espouses the traits of fascism today. The fascist nature of those who follow the Identity religion can be seen clearly in the right-wing extremist groups that have adopted it, such as the Posse Comitatus, the Aryan Nations and others.

More interesting is how the more mainstream elements of the religious right became indoctrinated with the fascist agenda and adopted a wildly pro-business anti-union view. As previously mentioned in this chapter, the fundamentalists in the past were aligned with the right and were statist. In the past, the fundamentalists were aligned sometimes with and at other times against big business. As groups, fundamentalists and businesses are statist by nature; it's only natural for the two to align themselves together more often than to oppose one another.


Other writers have attributed this close association to two factors: the rabid fear of the red atheist and large financial donations. The red hysteria following WWI was whipped into a frenzy by using the fundamentalists' fear of the red atheist. Unions at the time were portrayed as collectivist, socialist and finally communist in nature. Likewise, demagogues labeled unions as foreign and un-American. Moreover, each discovery of reds within the early labor movement following WWI only fanned the flames that much more. The Palmer Raids arrested more than 6,000 individuals, but in the end deported fewer than 600, as the evidence was simply not substantial enough to warrant deportation or any other charges. During the 1920s, the IWW became more associated with socialism and communism than with union activities.

During the late 1930s, the nativist and fundamentalist religious groups adopted the fascist ideology. Prior to adopting fascism, the ideology of these groups centered on bigotry and isolationism. The seed for racism and bigotry has always been a hallmark of nativist groups in the United States. Between the wars, the two largest nativist groups were the Klan and the prohibitionists. The Klan and its relationship to both racism and religion have already been covered in earlier chapters. Moreover, there was a subtle element of anti-Catholic bigotry in the prohibition movement.

However, after the war, the nativist fundamentalist groups all took on a global view with many openly calling for a new war with the USSR. Besides a global view, these same fundamentalist groups became fanatically anti-union and anti-liberal with a pro-corporation view. Most writers simply subscribe this conversion to large financial donations from corporations and a rabid fear of atheistic communism.

Although large cash donations from corporations and the rabid fear of atheistic communism certainly were large factors in this conversion, several other factors were equally important. The abandonment of isolationism in favor of direct confrontation of communism serves as sort of a guidepost marking the division between a traditionally fundamental group and one that exposes the fascist ideology. Even during the Red Scare of 1919, the fundamentalist groups (although rabidly opposed to communism) failed to call for a direct confrontation. Instead, they believed in the fortress of America as a bulkhead against the atheistic red horde.

In studying the adoption of fascism by the fundamentalist groups, the importance of the ministers of hate during the 1930s cannot be underestimated. The influence of Gerald Winrod and Gerald Smith is still readily apparent in the religious right. Many credit the present fundamentalist movement to the work of Billy Hargis. Indeed, Hargis' Christian Crusade of the 1950s and early 1960s has had an enormous impact on shaping the fundamentalist or religious right movement. Hargis' career in many ways served as a bridge between fascism and today's fundamentalist groups. Moreover, a quick look at Hargis's career clearly establishes the link between fascism and fundamentalism.

Politically, Hargis is best known for his rabid anticommunist views. However, his career is punctuated with links to fascist groups from the 1930s and 1940s. In 1956, Hargis distributed two pamphlets, one entitled Our 1956 Political Crisis and the other Stevenson and Kefauver. Both were keyed to the election; the latter one attempted to label Stevenson and Kefauver as communists.

In the October 1959 Christian Crusade, Hargis states unequivocally that he called upon Winrod for help in starting his radio program. In the December 1956 issue of Christian Crusade, he informs his reader of a meeting he had with the publisher of the notoriously fascist American Mercury. The Mercury was financed in a large part by the founder of the Pioneer Fund, Wickliffe Draper. Draper was an extreme racist. In 1967 the Draper family became the largest shareholder in Rockwell International, a prime defense contractor. Like Draper, Hargis was a racist although he loudly denounced those who labeled him as such as liars.

However, Hargis racist views was readily apparent at his 1962 Anti-Communist Leadership School. One of the invited speakers, R Carter Pittman stated that the chief difference between Negroes in American and in the Congo is that "in the Congo they eat more white people." 104

Moreover, Hargis described the early civil rights movement of the 1950s as follows "segregation and racism is an artificial one instigated by the Communist." Hargis used his Christian Crusade to make out a packet of information on the Civil Rights Act of 1964. The packet was described to contain: 1. The cruel and naked facts concerning this proposal, 2. The similarity of the Bill to the Communist Party Platform of 1928, 3. How the Bill fulfills many of the demands of Karl Marx's Communist Manifesto, 4. The pro-communist records of the authors and supporters of this Bill. 105 During the Little Rock school desegregation, Hargis distributed a pamphlet written by the fascist Joe Kamp. Hargis was also a member of the racist Liberty Lobby and several other right wing extremist groups. In 1961, Hargis bought the files of Allen Zoll. Zoll had been an associated of Gerald Smith and had founded the American Patriots Inc, a fascist group that was on the Attorney General's watch list.93

The lingering influences of Winrod and Smith are readily apparent in Hargis's career. Both Winrod and Smith cast a long shadow of influence over the fundamentalist movement. Both were close associates of Harvey Springer of Englewood, Colorado. Springer was far from being just a poor country preacher; he was one of the more influential voices in the fundamentalist movement. He was one of the founding members of the International Council of Christian Churches (ICCC) and served on its executive committee until his death. The ICCC opposed the liberal World Council of Churches, deriding it as communist infiltrated. Another associated of both Smith and Winrod was Kenneth Goff, head of the National Organization of Christian Youth. Winrod was connected to several other fundamentalists that were openly fascist such as Riley, the founder of Northwestern And covered in an earlier chapter. Winrod was also closely associated with Harry Hodge a leading member of the fascist Christian American Association. Hodge used his friendship with Martin Dies to intercede on the behalf of Winrod to prevent the Dies Committee from investigating Winrod.94

There were many other fundamentalist ministers putting forth the Nazi line throughout the 1940s. For example, William D Herrstrom of Minneapolis and publisher of Bible News Flashes was extremely anti-Semitic, anti-British and pro-fascist. Following the war, Herrstrom became one of the first Holocaust deniers. Other fundamentalists preaching the Nazi ideology in the 1930s and 1940s included: Harry Grube of Mobile, Alabama, R.M. Parr of Detroit, Michigan, Glen Smith of Palmer Lake, Colorado, S.J. Grear of Denver Colorado, C.K. Peterson of Phoenix, Arizona, and W.C. Love of Hazel Park, Michigan.

While several of the leading theologians of the fundamentalist movement in the 1930s and 1940s were true fascists, many others were embedded with the seed of fascism, anti-Semitism. However, there are additional factors for the adoption of fascism by the fundamental movement.

Fear of atheistic communism as typified by the Red Scare.
Large financial donations by business leaders
Founding of religious groups by fascists, for example, the American Bible Association.
The founding of religious groups by business leaders, for example, the Church League.
A lust for power from within.
The CIA/FBI use of religious groups

Note that the sixth factor is mostly applicable to the period following WWII and will be covered in later chapters although the association of some of the religious groups with Hoover and the FBI has already been alluded to. The first factor has already been fully covered both in this chapter and previous chapters. The purge of liberal and leftist leaders in the 1920s had one additional factor that must be considered. It dissolved any liberal influence that may have been present leaving these groups in the hands of the hard right wing extremists. Depleted of any moderating forces these fundamental groups were more susceptible to fascist ideology.

The past is littered with various examples of business leaders making large financial donations to various church groups. Perhaps one of the largest contemporary donors to various right-wing religious groups is Bunker Hunt. Additionally, the Coors family figures prominently in donations to various conservative religious organizations. Numerous examples in the past could be cited as well. The following example will suffice concerning these grants and the agenda that comes attached. The example is the fifty thousand dollar grant made to Howard Kershner's Christian Freedom Foundation in 1950 by Howard Pew, the Sun Oil Executive. The Christian Foundation's consulting economist was none other than Percy Greaves. Greaves was a researcher for New Jersey Representative Fred Harley of Taft-Hartley fame and later became a board member of the Liberty Lobby. Kershner's foundation's primary aim in the 1950s was to indoctrinate clergy with anti-Communist and libertarian viewpoints.34 Radical libertarian views are essentially nothing more than Social Darwinism, the very philosophy that Hitler subscribed to.

Another example of corporate sponsorship of religion would be the case of Harding College in Searcy, Arkansas. After returning from China, Dr. Benson assumed the presidency of Harding. Harding is operated by the Church of Christ, which opposes most modern doctrine including Darwin's theory of evolution. Benson began writing and speaking about fundamentalism attracting an ever-wider audience.

It wasn't until after the war when Benson began promoting the free enterprise agenda of du Ponts that he hit the big time. His main theme was that the free enterprise system would be lost unless corporate America could succeed in propagandizing citizens on the fundamentals of our way of life. Benson hit pay dirt the day Alfred Sloan, president of General Motors, heard one of his fundamentalist anti-labor diatribes. Sloan decided to bankroll Benson that day. In 1949, Sloan bequeathed a gift of $300,000 to Harding. Shortly thereafter, other industrialists followed suit with more money. Among them were Charles Hook chairman of Acme Steel, and the Falk Foundation. By 1961, Harding's endowment fund totaled $6 million with virtually all coming from corporate donors. Benson opposed all welfare legislation, was virulently anti-union and attacked anything he thought smelled of socialism, which he equated with liberalism. After the grant from Sloan, Benson established the propaganda affiliate of Harding known as the National Education Program. 40 Its sole purpose was to produce propaganda films supporting his fascist views. The largest consumers of these films came from industrial giants such as GE, U.S. Steel, Olin Mathieson Chemical Company and Lone Star Cement. 33 GE has made extensive use of these films, showing them to their employees and promoting them throughout corporate America.

No better example exists of fascists founding religious groups than the example of the American Bible Association given in the opening parts of this chapter. Nor is this the only example from the previous chapter, Christian America was shown to have been founded by fascists surrounding the Kirby family of Texas and was responsible for the passage of the anti-union right to work laws in the Midwest and South. Other examples would be Father Coughlin, Gerald Smith, and Gerald Swift, the ministers of hate during the 1930s and the pro-fascist groups that each had founded such as the Crusaders. The Identity religion as it has evolved since the 1930s has roots grounded in fascism.

Businessmen founded other religious groups, such as the Church League formed in 1937. The Church League was co-founded by the following three individuals: G.W. Robnett, better known as an ultra rightist; F.L. Loesch, chairman of the Chicago Crime Commission and Henry P. Crowell, chairman of the board at Quaker Oats. The Church League was based in Wheaton, Illinois. For two decades, the operating director was G.W. Robnett, an advertising man whose Institute for Special Research compiled files on suspected communists and sympathizers. The other two founders feared Roosevelt's court packing and anything else related to the New Deal.35 The Church League's financial supporters included the Hearst Foundation, the Coors Foundation, Howard Phillips and General Robert Woods.

Finally, there is the group of religious leaders that lusted for power. Religion in this country has always been a big business in itself. The extent of the wealth of churches or religion has been a nasty little secret of which few people are aware. Churches are the largest landowners after the government in this country. The extent of their wealth is mind boggling. In 1928, the contributions to just twenty-five denominations exceeded $400 million. In addition to this income, churches drew and additional $132 million from permanent funds and legacies. The table below reveals a portion of that wealth--- and hence the power that goes along with money.39


Valuation in 1926











A quick look at the table puts the total value of those denominations at roughly two billion dollars. Obviously, the value of the dollar in 1926 bought considerably more in 1926 than what it does today. To put the figures from the table in perspective, the 1926 federal budget was only $2.9 billion.


With such wealth comes power and a lust for more power. Perhaps the best example of a lust for power today from a largely religious group is the Council for National Policy (CNP), a shadowy secretive group of right-wing extremists hell bent on gaining control of the country and imposing a theocracy. Another good example would be that of Pat Robertson immanently tied to the CNP. Robertson sold part of his broadcasting empire, The Family Channel, to Rupert Murdoch for $1.9 billion dollars. In his quest for power Robertson ran for president in the Republican primaries of 1988 and has vowed to control the Republican presidential nominee in 2000. He has used his ministry of hate and his broadcasting empire to advance his views and the views of the Council for National Policy

Robertson's counterpart from the 1940s can best be typified by Carl McIntire. McIntire was expelled from the Presbyterian Church for his opposition to liberalizing trends in 1936. In 1941, he formed the American Council of Churches to unite various fundamentalists to oppose any liberalization in both religion and politics. His views were essentially those expressed in the present day by the religious right, extremely anti-communism, anti-socialism, anti-liberalism, anti-Catholic, anti-union, anti-Semitic, racist and pro-business. By the mid-1960s, McIntire was surpassed by other leaders in the religious right. However, during the 1940s and 1950s, McIntire helped to shape and mold the religious right into the form it has now evolved into.

McIntire began petitioning the Federal Communications Commission in 1941 to divide the radio airtime allotted for Protestants between the fundamentalists and the mainline Federal Council of Churches.37 Although, he was soon surpassed by the broader National Association of Evangelicals, McIntire played a pivotal role in obtaining and exploiting airtime. McIntire's 20th Century Reformation Hour aired for years before being surpassed by the new fundamentalists of the 60s. Perhaps McIntire's greatest hour came in the early 1950s with his close association with McCarthy and Hoover of the FBI. However, McIntire's more lasting impact was that in furthering the careers of three other fundamentalists, Billy James Hargis, Dr Fred Schwartz and Major Edgar Bundy.38

Although this chapter and the preceding chapters have shown that the fascist influence was pervasive in the fundamentalist religious movement, the fascist influence extended into the halls of Congress and even into elements of the U.S. Military. It should however, be readily apparent that the leaders of corporate America headed the fascist movement within the Untied States.

The two preceding chapters revealed that economic sabotage and the creation of civil unrest were integral parts of the Nazi battle plan from the earliest days, neither of which would have been successful without the willing participation of corporate America. It was the leaders of corporate America who willingly entered into the cartel agreements with I.G. Farben that hindered the early war effort. Likewise, it was the leaders of corporate America that funded many of the pro-fascist groups prevalent in the 1930s.

It was these same American corporations that built much of the Third Riech's war machine. GM and Ford built nearly 90 percent of all the three-ton vehicles and nearly 70 percent of all medium and heavy-duty trucks for the Riech.97 GM also built thousands of bombers for the Luftwaffe. When American forces liberated the Ford plants in Cologne and Berlin, they found destitute foreign workers confined behind barbed wire. Records show that nearly half the labor force of Ford's Cologne plant was slave labor. Shamelessly after the war, both GM and Ford demanded reparations for damages from allied bombing to their plants. In 1967, GM received $33 million for damages sustained to its Russelshiem plant.

However, unlike the corporations, those forced into slave labor for Ford have yet to be compensated. The issue will be left to die quietly as the victims of slave labor pass away--- as most are now in their 80s. The corporations will continue to hide behind the false claim that they lacked control over their investments in Germany. Such claims are frauds. Almost all American corporations went to great lengths to remain in control of their facilities in Germany. Both Edsel Ford and Robert Sorenson, a high-ranking official at Dearborn served as directors of Ford Werke A.G. throughout the war years.98 Furthermore, Edsel Ford sent direct orders to France that Ford was to build trucks for the Nazis once war broke out.

The same is true of almost all other American corporations that had investments in Germany. Many took extraordinary means to remain in control, oftentimes through shell corporations in Switzerland. These same corporations sought the help of the Dulles brothers in concealing their treacherous dealings from our own government. With the first step toward remaining in control or in concealing their dealings with the Nazis, these corporations became traitors to their country, war criminals and morally responsible for the resulting Holocaust and the deaths of thousands of GIs.

Thus far, this book has presented an abundance of evidence of treasonous behavior on the part of corporate America. With the clouds of war looming on the horizon, corporate America sought to delay the day of reckoning by delaying war production in the great sit down strike of 1941. Following the attack on Pearl Harbor, the native fascist did not fold their tent and go home. Corporate America still sought out means to delay production of war munitions. The large firms essentially eliminated any small or midsize firms from the production of munitions. Likewise, they failed to use their production facilities to full advantage, shutting down weekends and only running skeleton crews on the second and graveyard shifts. Many jobs went unfilled not because of the lack of qualified workers, but because of corporate policy. One such policy was barring the hiring of Blacks until Roosevelt ordered firms with defense contracts to hire Blacks.

At the darkest hour during the war, 1942, the native fascist unleashed a full-scale assault on the homeland. One of the country's most notorious families had dressed fascism up with a smiley face and labeled it with the electioneering jingle of free enterprise. By 1943, the fortunes of war had shifted; the defeat of Nazi Germany was only a matter of time. Facing exposure with the defeat of Nazi Germany, corporate America and the native fascist once again switched tactics. A blizzard of peace proposals were put forth. Common to all such proposals was the fact the Nazis would be left in power, only Hitler would be displaced. Also starting at this time, the native fascist began a campaign to remove those who were adamantly opposed to fascism.

By 1944, the same papers that were pro-fascist before Pearl Harbor unleashed a media blitz for an early or easy peace with Germany. The papers were full of articles and editorials proposing peace terms and leaving the Nazis in control. To further obscure their past support for the Nazis, native fascists increased attacks on communism. Many of those dedicated to the war against fascism were labeled communist and removed from their positions. By the end of the war, the anticommunist sentiment was once again reaching fevered proportions. Perhaps the perfect example to illustrate this point is the defeat of Jerry Voorhis by Richard Nixon.

However, Roosevelt remained adamant. There would be no easy peace with the Nazis. The only acceptable peace was unconditional surrender. Likewise, FDR was firm in his pledge to bring all who supported the Nazi cause to justice. In this regard Roosevelt had allowed the British Intelligence to secretly spy on Americans. The information gained was not admissible in courts, but the British could use it to stop shipments of war munitions and money flowing to the Nazis.

In the operation headed by master British spy INTREPID, Bill Stephenson uncovered damning evidence from the very first day of operation of American fascists aiding the Nazi cause. One of the first organizations penetrated by the British spies was the American First organization. The British infiltrators learned that American First had received direct funding from Ulrich von Gienanth of the German Embassy and Gunther Hansen-Sturm. The latter had paid Congressman Hamilton Fish a check, of which Stephenson had managed to get a copy. At an American First rally, Stephenson then arranged for a group of anti-fascist infiltrators to hand Fish a card with the words, "Der Fuehrer thanks you for your loyalty" as cameras captured the moment.96

The British agents soon had a wealth of information of those supplying the Nazis. Besides unearthing the many tentacles of I.G. Farben, British agents had information implicating Chase National Bank of New York of dealing and trading with the Nazis. Stephenson had gained information that Dr. Kurt Heinrich Rieth was staying in New York's Waldorf Astoria hotel to negotiate the sale of Standard Oil's Hungarian oil subsidy to the Nazis. Rieth's father was Standard Oil's representative in Antwerp. Stephenson leaked the information to the press and soon Rieth was deported for falsifying his vista. Stephenson's group also linked William Rhodes Davis to supplying the Nazis with the oil. There is some speculation that the British agents may have poisoned Davis. Davis died of a poison incident. Stephenson's group is known to have murdered some key Nazi supporters in the U.S. when the threat they posed was critical to Britian.

In 1941, Stephenson expanded his special operations, section with a particular emphasis on South America. Shortly thereafter, they uncovered a plot to establish a fascist regime in Uruguay led by Arnulf Fuhrmann. In May 1941, a similar plot in Bolivia was uncovered. Both plots were foiled.

In short, Stephenson's group had uncovered volumes of information on those trading with the Nazis. Many prominent Americans within the government and industry were implicated. None of the information gained would be admissible in court. However, Roosevelt planned to release the information following the war. The resulting outrage would then be used to pressure Congress for a full investigation.

In a cruel twist of fate, Roosevelt would die a month before Nazi Germany surrendered. Tragically, this plan died him. None of the information was ever leaked to the press. There would be no public outrage. The public would remain in the dark about corporate America's treason. There would be no trials of businessmen for trading with the Nazis. On May 8, 1945, in a bulletin broadcast to the Nation President Truman announced to the nation the unconditional surrender of Germany.

"This is a solemn but a glorious hour. General Eisenhower informs me that the forces of Germany have surrendered to the United Nations. The flags of freedom fly over all Europe.
For this victory, we join in offering our thanks to the Providence which has guided and sustained us through the dark days of adversity.
Our rejoicing is sobered and subdued by a supreme consciousness of the terrible price we have paid to rid the world of Hitler and his evil band. Let us not forget, my fellow Americans, the sorrow and the heartbreak which today abide in the homes of so many of our neighbors-neighbors whose most priceless possession has been rendered as a sacrifice to redeem our liberty.
We can repay the debt which we owe to our God, to our dead, and to our children only by work-by ceaseless devotion to the responsibilities which lie ahead of us.
If I could give you a single watchword for the coming months, that word is-work, work, work.
We must work to finish the war. Our victory is but half won. The West is free, but the East is still in bondage to the treacherous tyranny of the Japanese. When the last Japanese division has surrendered unconditionally, then only will our fighting job be done.
We must work to bind up the wounds of a suffering world-to build an abiding peace, a peace rooted in justice and in law. We can build such a peace only by hard, toilsome, painstaking work---by understanding and working with our Allies in peace as we have in war.
The job ahead is no less important, no less urgent, no less difficult than the task which now happily is done.
I call upon every American to stick to his post until the last battle is won. Until that day, let no man abandon his post or slacken his efforts."95

People filled Times Square despite the pleas of Truman with news that the Nazi menace had been eliminated in Europe. It would be another four months before the Pacific would be liberated. Ticker tape parades for the returning GIs would fill the streets.

Although the Allied forces were victorious on the battlefields of Europe and the South Pacific, tragically, the war against fascism was lost on the home front. In the 1946 election, the Republicans gained control of both chambers of congress. True to their pro-big business agenda and their past support of fascists over 200 anti-union bills would flood congress. The rehabilitated Fred Hartley, who had supported Japan and Germany up until the moment Pearl Harbor was bombed, would co-author the anti-union Taft-Hartley act. The fascist group Christian America would successfully lobby several Southern and Midwestern states to pass anti-union right to work laws. One could argue that such measures were not full-blown fascism but that is the danger of creeping fascism. Such steps as the anti-union measures were only the first steps on a slippery slope towards fascism. However, anytime the government enacts a law placing the rights of corporations or the elite ahead of the people its is an act of fascism or more properly another step towards fascism.

Fascism is an inherent problem of any economy based on capitalism. Its insidious as corporations grow and become more powerful, more and more laws are passed favoring large corporations and the rights of the people are damned. Fascism has never appeared first in its full-blown totalitarian state. It took Hitler six years to consolidate his power into a fully fascist state. Fascism always assumes power in gradual steps. It destroys our rights one at a time until suddenly it blossoms into full-blown fascism, a totalitarian society controlled by the corporate elite.

Thousands of war criminals and pro-fascist were allowed to emigrate to the U.S. despite Truman's ban. The CIA's reliance on Nazi war criminals, along with the native fascist's hatred of communism and anything liberal, would propel the world towards the brink of a nuclear holocaust. For the fascist leaders of corporate America, the resulting Cold War would serve to cover their past dealings with the Nazis. For the Nazis collaborators, it was much more than just a chance to save their miserable hides. If they could induce a war between the two super powers, the U.S. and USSR, the Nazis could then have a chance to reestablish a Nazi state in Germany.



1. The Age of Surveillance, Frank Donner, Vintage Books, 1981, p30.
2. The Age of Surveillance, p47-46.
3. http://www.english.upenn.edu/~afilreis/88/sacvan.html
4. The Age of Surveillance, p125.
5. The Age of Surveillance, p118.
6. The Age of Surveillance, p86.
7. Facts and Fascism, George Seldes, In fact Inc., 1943, p158-184.
8. The reader should be aware that the Reader's Digest is still a hotbed of reactionary right wingers. The present editor Eugene Lyons has been and officer of both right wing extremist groups the Christian Anti-Communism Crusade, American Enterprise Institute and Accuracy in the Media. In addition the Wallace foundation has made numerous grants to the American Enterprise Institute. The point for the reader here is to show how the pro-fascist of the 1930s are still exerting an influence today.
9. Facts and Fascism, p158.
10. The Age of Surveillance, p86-87.
11. The Age of Surveillance, p 98-99.
12. The Age of Surveillance, p 174.
13. The Age of Surveillance, p50.
14. The Age of Surveillance, p 417.
15. http://atheists.org/flashline/bibwk9.htm
16. The Plotters, John Roy Carlson, E.P. Dutton, 1946.
17. Facts and Fascism, George Seldes, In Fact, 1943.
18. Facts and Fascism, p99.
19. Roads to Dominion, Sara Diamond, Guilford Press, 1995, p315-316.
20. Hoover and the Un-Americans, Kenneth O'Reilly, Temple University Press, 1983, p141.
21. Hoover, p70.
22. Hoover, p50-51.
23. Hoover, p52.
24. Hoover, p53.
25. Hoover, p54-55.
26. http://www.igc.org/lpa/lpv26/lp05.htm
27. Uneasy Partners: Big Business in American Politics 1945-1990, Kim McQuid, John Hopkins Press, 1994, p36-37.
28. Uneasy Partners, p23-24.
29. The Politics of Unreason, Seymour Lipset & Earl Raab, Harper &Row, 1970, p435.
30. The Politics of Unreason, p158-159.
31. Roads to Dominion, p238.
32. The Politics of Unreason, p47-61.
33. Men of the Far Right, Richard Dudman, Pyramid, 1962, p132.
34. Roads to Dominion, p98-99.
35. Power on the Right, William Turner, Ramparts, 1971, p134.
36. The Radical Right, Benjamin Epstein & Arnold Foster, Vintage, 1967, p207-208.
37. Roads to Dominion, p95-97.
38. Spiritaul Warfare, Sara Diamond, South End Press, 1989, p46-47.
39. www.infidels.org/library/historica...dreiser/church_and_wealth_in _america.html
40. The Warfare State, Fred Cook, Collier, 1964, p297-298
41. It's a Secret, Henry Hoke, Pamphlet Press, 1946, p70-73.
42. http://www.ssa.gov/history/fdrstmts.html#bill of rights
43. American Swastika, Charles Higham, Doubleday, 1985, p135.
44. American Swastika, p136-138.
45. Another association and seemingly innocence between fascist and Reagan was his refusal to grant a extradition request from Jim Garrison for Edgar Eugene Bradley, a right wing preacher from North Hollywood, California and part-time assistant to Carl McIntire, the fundamentalist minister who had founded the American Counsel of Christian Churches. This is the only time in the history of California that a governor refused an extradition request. In one theory of the assassination of JFK McIntire's group played a pivotal role. What is known was Bradley identified himself as a Secret Service agent to Deputy Sheriff Roger Craig in Dallas the day of the assassination shortly after the fatal bullets had been fired. Likewise it should be noted that Bradley filed and won a libel suit over this incident. http://www.ratical.org/ratville/JFK/WTKaP.html
46. American Swastika, p147.
47. American Swastika, p 191-193.
48. American Swastika, p194-195.
49.. http://washingtonpost.com/wp-dyn/politics/news/postseries/texasrecord/A8505-2000May4.html
50. Treason;s Peace, Howard Amruster, Crossroads, 1947, p494-495.
52. http://www.igc.org/solidarity/atc/90Greenfield.html
53. The War Lords Of Washington ,Bruce Catton, Harcourt, Brace and Co, 1948, p244.
54. The War Lords, p102.
55. http://newsweek.washingtonpost.com/nw-srv/issue/24_98b/printed/int/eur/ovbz0324_2.htm
56.Rueters news wire, US Firms' Connection to Nazis Detailed, 1/14/99.
57. Trading with the Enemy, Charles Higham, Barnes & Noble, 1995, p1-19.
58. Trading with the Enemy, p20-31.
59. Trading with the Enemy, p27.
60. Trading with the Enemy, p40-41.
61. Trading with the Enemy, p38-39.
62. Trading with the Enemy, p84.
63. Trading with the Enemy, p93-115.
64. Trading with the Enemy, p130-153.
65. The Arrogance of Power, Anthony Summers, Viling, 2000, p63.
66. The Arrogance of Power, p401.
67. One Thousand Americans, George Seldes, Boni & Gaer, 1947, p252.
68. One Thousand, p252.
69. One Thousand, p253.
70. One Thousand, p292.
71. The Secret War Against The Jews, John Loftus, Mark Aarons, St Martins, 1994, p74.
72. The Jewish Threat, Joseph Bendersky, Perseus Books, 2000, p232,238, 274-279.
73. Facts and Fascism, p262.
74. Business As Usual, I.F. Stone, Modern Age Books, 1941, p63.
75. Business As Usual, p64.
76. Business As Usual, p73.
77. Business As Usual, p30-34.
78. Business As Usual, p84.
79. Business As Usual, p89.
80. Business As Usual, p98-102.
81. Business As Usual, p20.
82. Business As Usual, p21.
83. I Find Treason, Richard Rollins, William Morrow, 1941, p81.
84. http://newdeal.feri.org/students/end.htm
85. The Old Boys, Burton Hersh, Charles Scribner, 1992, p35.
86. Trading with the Enemy, p222.
87. War Lords, p264.
88. The Warfare State, Fred Cook, Collier, 1962, p76-77.
89. www.imf.org/external/pubs/ft/wp/2000/wp00149.pdf
90. www.au.org/press/pr71001.htm
91. http://uspolitics.about.com/library/weekly/aa071001a.htm
92. New Bush Office Seeks Closer Ties to Church Groups, Frank Bruni and Laurie Goodstein, NY Times, January 29, 2001
93. The Strange Tactics of Extremism, Harry & Bonardo Overstreet., W.W. Norton, 1964, p196-201.
94. The Nazis Go Underground, Curt Riess, Doubleday, 1944, p126-127.
95. www.ibiblio.org/pha/policy/1945/450508c.html
96. Room 3603, H. Montgomery Hyde, Ballantine, 1962, p80-81.
97. www.ranknfile-ue.org/uen_nastybiz.html
98. www.religioustolerance.org/fin_nazi.htm
99. Facts and Fascism, p262.
100. Roosevelt's Secret War, Joseph Persico, Random House, 2001, p27-31.
101. Roosevelt's Secret War, p103-107.
102. Roosevelt's Secret War, p167.
103. The Last Hero, Anthony Cave Brown, Vintage Books, 1982, p 207-211.104, The Strange Tactics of Extremism, p 199.
105. The Strange Tactics of Extremism, p197.
106. . The Secret War Against The Jews, John Loftus, Mark Aarons, St Martin's Griffin, 1994, p73-76.


Chapter 7: A Pledge Betrayed



Part 1: What went wrong at Aachen?


Dawn on October 21, 1944 was cool and crisp as the last traces of summer gave way to autumn. The forests around Aachen, Germany were a profusion of autumn colors.

At noon, Colonel Gerhard Wilck surrendered what remained of the town to the American First Army. It was the first major city of Germany to be captured. Of its 160,000 inhabitants only five thousand remained. The rest were either dead or had been forced by the Nazis to evacuate the city.

The American forces hoped to use Aachen as a model for its 4-Ds program, demilitarization, denazification, decartelization and democratization.

On November 10, the Stars and Stripes reflected the upbeat outlook of US forces in the following editorial.

"The Americans have come to Germany not to pat childslayers on the head or to feed SS scoundrels with Spam. The Americans have come to this land of gangsters in order to bring villains to justice.
It is not only American divisions that have entered Germany. Justice has entered Germany and not a single German will venture to cry welcome. For justice carries a sword."8

The town's records had been destroyed. Nevertheless, a temporary German administration had to be organized. Because of this lack of records, it seemed only nature for FIG2, the Military Government detachment, to ask the advice of an upstanding citizen of the community. Hence, they sought out the advice of the local Catholic bishop, Johann van der Velte who had remained behind. The bishop recommended a devout Catholic and upstanding citizen, Franz Oppenhoff. According to the bishop, Oppenhoff had never joined the Nazi Party. He further informed the Military Government detachment that party membership was an irrelevant encumbrance.

The Americans found Oppenhoff to be clean, intelligent, well dressed and apparently respectable. Oppenhoff accepted the subsequent American offer to manage the city. At first, the Americans did not question Oppenhoff's authoritarian and anti-democratic views. Nor did they question the fact that he and his fellow businessmen had prospered during the Nazis reign.

At the local coalmines, Herr Aschke was placed in charge. Again, Aschke seemed competent. No Americans in the occupation forces bothered to question Ashchke about his use of slave labor under the Nazis or had even bothered to ask if he had been a Nazi. A few eyebrows were raised when Aschke cut wages in an effort to produce more coal. However, winter was coming and the coal was desperately needed so the American forces allowed Aschke to continue as manager.

Aschke, however, had been a rabid Nazi.

Oppenhoff and his leading assistants had been former officials at the Veltrup Armaments Works and were suspected of making substantial contributions to the Nazis by local inhabitants. Oppenhoff appointed 22 Nazis to 72 essential positions in the city. In total, the mayor had assembled 750 bureaucrats to administer the city or one for every fifteen inhabitants. The mayor's bureaucrats were exempt from the otherwise compulsory work of clearing debris and harvesting local crops.

It was a full two months after the capture of Aachen before Saul Padover, a member of the SHAEF Psychological Warfare Division, arrived in town. He heard that the local trade unionists were extremely critical of the appointments of Oppenhoff and Aschke.

He reported back to SHAEF that the U. S. Military Government officers assigned to Aachen were politically ignorant and morally indifferent towards the Nazis. They had made a through political mess by the appointments of Oppenhoff and Aschke who were as compact a clique of ultra-reactionaries and fascists as could be found anywhere in Germany.1 Padover's report caused reverberations throughout the allied occupation forces.

What had went terribly wrong? What was the war of liberation for if the occupation forces placed the Nazis they had vowed to eliminate right back into positions of power?

There were no easy answers. The Military Government had been briefed to appoint a mayor and then leave everything to the Germans. The officers of the Military Government had relied on technical competency, respectability and the ability to speak English in choosing their appointments. In addition, they had brought with them their own prejudices which included not choosing socialists, communists, union leaders or men that were less well dressed. It never occurred to the occupation forces that those that had opposed the Nazis would most likely be homeless and dressed in rags after being sent to the concentration camps. . Relying on Bishop van der Velte was another mistake. A mistake that would be repeated across Germany, as the Catholic bishops and priests were supportive of the Nazis. The general values that every American soldier carried with him were contributing factors in the failure of the 4D's program.

On November 11, 1944 the Joint Chiefs of Staffs in Washington issued the following directive.

The entire Nazi leadership will be removed from posts of authority and no member of the German General Staff or nazi hierarchy should occupy any important governmental or civil position. You will not appoint the employment of active Nazis or ardent sympathizers, and no exception will be made to this policy on grounds of administrative convenience or expediency. You will remove and exclude from office any persons who act, or whom you deem likely to act contrary to Allied interests and principles.2

The order was followed a month later by another directive which forbade the use of dissolved Nazi organizations for relief and later broaden to include additional categories of officials, who would be subject to automatic arrest. Every school, university, courthouse and newspapers was to be closed. The British were horrified at the American policies.

Con O'Neil of the United Nations War crimes Commission commented: "Is it really necessary that we seize monuments...It is a disastrous policy to lead to total chaos. It means we do what we can, but accept no responsibility for the results, it is merely a clumsy attempt to escape criticism although we cannot escape control."3 These sharp differences were to get worse. In February, a directive was issued allowing Nazis to be retained if military necessity so required. The justification for the new directive was that the allied army depended upon civilian water and electrical supplies. However, the astute reader should note that it was not until a month later before the allies breached the Rhine. Only a small sliver of Nazi Germany lay to the east of the Rhine. Colonel Bernard Bernstein immediately objected, claiming that too many detachments were taking advantage of the exception clause. He blamed the British for weakening the directives.

In March, the Twelfth Army, under Bernstein's influence issued its own directive overriding the exceptions. Additionally, the new directive banned the employment of Nazi sympathizers. A sympathizer was defined as any who had profited under the Nazis. On March 23, the Twelfth Army's directive was modified by a directive from the White House that allowed the employment of "nominal" Nazis. Once again, Bernstein blamed the British for softening the denazification program.

When Aachen was handed over to the British, the chief of SHAEF's G5, Brigadier General Frank McSherry suggested to the British commanding officer that he should remove Ashke from managing the mines. The miners had proven Aschke to be a fanatical Nazi supporter. The British refused, believing the coal was more important. It wasn't until January 1946 that the British removed Oppenhoff for being a member of the VDA (League of Germans in Foreign Countries.) The VDA was an organization that funded fifth column groups such as the American Bund.5

The mistakes made at Aachen would be repeated throughout Germany as the allied forces advanced. There were no less than four directives on the employment of Nazis and over forty subsidiary regulations. Such a bureaucratic maze was a perfect prescription for chaos and the complete failure of the denazification program.

The failure left behind in Aachen stands in stark contrast to the liberation of Nordhausen and the success of the American T Force. The T Force was known by the distinctive red T on their helmets and was part of Operation Paperclip. They had priority classification and the authority to commandeer any needed equipment, even including entire military units if needed.

Nordhausen was a small town in the Harz Mountains and the site of the V2 program after Peenemunde came under Allied bombing in 1943. To insure against future bombing the Nazis had imported thousands of concentration camp inmates to dig out a vast underground network of tunnels. On April 11 Patton's Third Army liberated Nordhausen. There were twenty-three thousand survivors in the associated Dora concentration camp. There were three thousand bodies rotting and unburied. Over thirty thousand others had already perished of disease, brutality or starvation.


Within hours of liberation, the T Force accompanying the Third Army had commandeered the healthier inmates to clear a mile of the main tunnel that had been damaged in recent bombings. Meanwhile, a fleet of trucks had been requisitioned some from as far away as Cherbourg, France. A US combat engineer group rapidly rebuilt a damaged bridge. Within eight days four hundred tons of equipment was moved to Antwerp for shipment to New Orleans.

Sadly, there were no war crimes unit attached to the Third Army, though, it was well known before liberation that Nordhausen depended upon slave labor from the nearby Dora concentration camp. No one gave a damn about the SS guards and officers from Dora. None were arrested. They were simply left to walk away. No effort was made to arrest them. It was several years before just thirty-nine of them were tracked down and brought to trial.4

The lack of arrests at Dora of the SS guards did not reflect public opinion. The responses in a 1943 British poll are given below.

"At the end of the war what do you think should be done with the Axis leaders?" 9

Let them go,ignore them


They won't be found


Leave them to their own peoples


They should be put on trial


Exile, them, imprison them, put them in solitary confinement


Hand them over to the Jews, the Poles and others who have suffered


Shoot them


Nothing is horrible enough torture them


Misc, no opinion


American opinion was much the same as the British. At one point in the negotiations over war crimes among the Big Three, Churchill supported summary executions. Stalin objected and insisted upon trials. Later, when Patton's forces liberated Dachau, some elements of his force became so outraged over what they had saw they started to execute SS guards before by the commanding officer stopped the executions. An investigation followed and when confronted by investigators, Patton did the right thing and stood by his men. He tore up the investigation ending it for all time. Patton was not concerned with a few dead Nazi SS guards executed by his troops.

The tragic mistakes made at Aachen and Dora were repeated across Germany as the allied armies advanced. Although there is a plethora of reasons for the failure of the 4-Ds program, the root cause was simple sabotage from within the program. The liberation of Germany would expose many powerful industrialists both in America and in England as collaborators with the Nazis. They had to be protected.

In the final year of the war, the United States and London put together an ultra secret organization---TICOM---that planted the first seed of the Cold War. This organization was so secret that in 1992 the National Security Administration extended the classification of all its missions and operation until 2012. The classification is higher than the top-secret bracket. Thus, only a handful of people are allowed access to the files. The British government is equally secretive. Colonel George Bucher the director of US Signal Intelligence conceived the group in the summer of 1944. TICOM (Target Intelligence Commission) was to capture all code making equipment and code breaking equipment they could find. To this end, it seems from what is known that they did operate behind enemy lines at times but for the most part followed advancing armies like the T Force.

Not only were they looking for the new German FISH code making equipment they were also looking for any Russian code equipment the Germans may have captured. The FISH was an advance cipher machine used to replace the older Enigma machines. The Germans referred to it as swordfish and used it only for the highest level messages.

Like the T Force, TICOM quickly snatched up any people, papers or equipment and returned it to the safety of rear guard areas for shipment back to the United States. From what information there is TICOM was equally successful as the T Force. They did capture a FISH coding machine and a machine capable of deciphering the highest level Russian code. The importance of cipher machines and other coding equipment in war cannot be underestimated. It was the British ability to read Enigma transmissions that forced the Nazis to withdraw their wolf packs from the North Atlantic or risk loosing their entire fleet of U-boats.

Due to all documents from TICOM being still classified its is unknown if the Nazi code breakers were given asylum in England or the United States or if any war criminals were given new identities. What is known is that Dr Erich Huettenhain was brought to the United States.

One benefit from the TICOM operations was the United States was able to read the messages of the Soviet police, military, KGB and diplomats. Thus, we knew without a doubt the condition of the Soviet Union. However, that period was relatively brief and lasted only until 1948 when the Russians discovered their code had been compromised.112

There is however, a very sinister side to the story of the T Forces and TICOM. Both those groups counted on capturing the equipment intact. In many cases the American army raced ahead to capture the site before the Russian forces got there. Some of the equipment was captured by luck as it was being moved. Other equipment was captured in place and unharmed by the bombing campaign. It leaves open the question of why weren't these sites bombed. Was these later sites deliberately omitted from the bombing campaign so the equipment could be captured intact even if it meant a greater loss of GIs?

The world stood aghast in the spring of 1941 at the new terror and horror unleashed by the Nazis against Yugoslavia. Hitler was enraged that the people of Yugoslavia had overthrown his quisling government and had issued Military Directive 25 for an immediate invasion. Belgrade had been reduced to rubble by the Nazi dive-bombers and anything left moving was subject to strafing. The Yugoslavian government in exile immediately petitioned the United Nations War Crimes Commission (note this refers to the commission established during the war of nations united against the Nazis and is not to be confused with the present United Nations) to include the bombing of civilian centers as a war crime to no avail. The war crimes commission was mute on ruling the bombing of civilian centers as a war crime. The allies would soon use similar tactics in even more destructive raids aimed at civilian centers.

By the war's end, most of Europe had been reduced to rubble. This wholesale destruction came not at the hands of the Nazi but at the hands of the allied air command. Yes, the Nazi war machine had been destroyed on the battlefield but at what cost? In Germany it was estimated that as much as 80% of all housing units had been destroyed. The major city of Dresden was simply erased in a massive firestorm by the bombing campaign. Estimates of civilian deaths in Dresden are generally accepted at approximately 70,000. However, some suggest that the estimate is as high as 500,000.

However, the effect of the air campaign against industrial centers and munitions makers was quite different. The Nazi war machine was producing more planes, tanks, trucks, etc at the end of the war than in 1941. Overall, production of munitions at the end of the war was estimated to be at roughly 80% of capacity.142 In short, the allied bombing campaign had been a failure.

Typical of the lack of damage to American connected factories was the Ford and I.G. Farben plants in Cologne. Cologne had been targeted in massive air raids during the war. In March 1845, the advancing allied forces liberated Cologne and initially estimated the damage to factories at ninety percent. While the British Ministry of Economic Warfare designated the plant as a Target Category 1 ("major plants in industries of major importance"), no raid targeted the plant for eighteen months. On October 15 and 18, 1944, the U.S. air force specifically targeted the Ford plant in precision daylight bombing raids. Amazingly the plant was untouched by the American bombing raids. No further bombings were scheduled, although aerial reconnaissance only days later verified the raids were unsuccessful. Throughout the allied bombing campaign the only damage the massive Ford complex received was the destruction of a barracks for slave labor during a nighttime aerial bombing raid by the British.143

A more through investigation of factories was made later in March. The American liberators were stunned the Ford plant was nearly intact. The only damage the plant received was from artillery shells during the pointless last stand by the Nazis. The plant was not in operation as much of the equipment had been removed and shipped across the Rhine to hidden locations. The able wartime director of Ford Werks, Robert Hans Schmidt suggested to the allies that he could produce 500 trucks in a short time if he was allowed to conserve material, which was available. On 8 May 1945, the day of Germany's unconditional surrender, an American documentary team set up its cameras to record the sight of the first postwar truck coming off the Ford Werke assembly line.144

The investigation of Ford Werke would not begin until June a month after Germany's surrender and just before the Cologne area was passed over to British control. The investigation was headed by Henry Schneider. On September 5, 1945 Schneider presented his report entitled Report on Ford Werke Aktiengesellschaft to General Clay. Schneider's team did not learn about a further set of meaningful documents kept by Johannnes Krohn, the Reichskommissar for the Treatment of Enemy Property. Nevertheless, the conclusions they made proved highly reliable. An excerpt from the report follows:

"The Reich used German Ford and its cooperative parent in Dearborn as a direct means of stockpiling the raw materials needed for war." "Even prior to the War, German Ford arranged to produce for the Reich vehicles of a strictly military nature This was done with the knowledge and approval of Dearborn.
- "When war came German Ford stepped into the position of a major supplier of vehicles for the Wehrmacht." In addition "as much as 7 or 8% of total output during the war years consisted of more specialized war material."
- "As was common in other German enterprises Ford increasingly resorted to use of prisoners of war and other slave labor" who had to live "behind barbed wire." "The foreigners employed rose to over 40% of its labor supply in 1944. The usual Nazi discriminations in wages and working conditions were practiced." 145

From the excerpt above not only did Ford willingly build trucks for the Nazis they also helped the Nazis stockpile materials for the war with the complete knowledge of the Dearborn headquarters.

Exhibit one of the report was a memorandum from Heinrich Albert, a Ford Werke director second only to Schmidt dated 25 November 1941, concerning the question "as to whether a complete Germanization would be necessary or advisable." In the memorandum Albert argued against those who might wish to see "enemy property" expropriated by the Nazi state. Ford Werke, he claimed, was a fully German company that also enjoyed the privileges of membership in a global corporation. The benefits to Germany were obvious in the country's current accounts, which profited by Ford Werke's exports. The memorandum was submitted to Orvis Schmidt, a Treasury director. Orvis Schmidt returned later in June 1945 to Washington to testify on German penetration into the industry and finance of foreign countries before the Kilgore Committee. Schmidt stressed the extent of the investments by American firms in various types of German industries and of the types of American concerns which are known to have had substantial interests in German industry.146

Despite the report on Ford Werke and the Senate investigations, no charges would ever be filed against Ford for trading with the enemy. Ford Werke was now rehabilitated; it was producing trucks for the revival of the German economy as a bulkhead against communism. The deaths of thousands of GIs on the battlefields of Europe were in vain. Betrayed by an elite cadre of their own countrymen, the war against fascism was lost. Under a cloak of free enterprise and anti-communism American fascist were now taking control.

Throughout Europe and in Germany in particular, the scene was much the same. Large industrial plants stood unscathed amid a field of rubble especially those plants that had connections to American firms as the Ford and I.G. Farben plants at Cologne. In fact, the I.G. Farben building in Berlin was untouched and used by the allies as a command center. It stood in stark contrast to the rest of the city, which lay in ruins. In order to understand such a discrepancy a brief look at how the allies chose bombing targets is needed.

During WWII there were no laser-guided bombs that could be dropped through exhaust vents. Precision bombing was still in its infancy. Indeed, the RAF abandoned any attempt at precision bombing when they switched to nighttime bombing because of heavy loses in the day. Weather also presented a problem.

The definition of precision bombing used by the U.S. air force during WWII reveals how crude precision bombing was then. The U.S. adopted the standard of seventy percent of the bombs falling within a thousand-foot circle as precision bombing. The U.S. was only to achieve this crude standard during a single week throughout the war. Oftentimes weather conditions or the requirement to fly in formation prevented the bombs from some aircraft ever reaching the intended target. The definition of precision bombing used during WWII and the way it was implemented in massive bombing raids is more akin to what is termed saturation or carpet bombing today.


During WWII there was no formal U.S. air force. The Air Force as a separate branch of the U.S. military command was not established until after the war. The term is used here to describe American air power under the Army's command. At the cabinet level, the air force was under the control of Secretary of War Stimpson. This Skull and Bones member advocated an "easy peace" with Germany at the end of the war. Roosevelt allowed Stimpson to choose his own staff. He chose John McCloy to act as assistant Secretary in charge of intelligence, civilian affairs and general troubleshooter. Stimpson placed Robert Lovett as assistant secretary of war for air. Both McCloy and Lovett had Wall Street backgrounds. McCloy had been a former Wall Street lawyer and Lovett a partner and close friend of Prescott Bush at Brown Brothers and Harriman. It was Prescott that selected Lovett for membership in the Skull and Bones. Lovett was a fervent advocate of terror bombing of population centers all of his life, including during the Vietnam War. McCloy had an essential role in selecting targets for non-destruction, which meant other targets were selected for destruction.113

Another individual involved in the Air Force command and target selection was Trubee Davison, who also had close contacts on Wall Street. Davison had been the assistant secretary of war for air between the wars. However, Davison's first association with the air force was during his years at Yale during WWI. At Yale, Trubee formed the special Yale Unit of the Naval Reserve Flying Corps. The unit was closely associated with the Skull and Bones. The Yale unit was often referred to snidely as the millionaire squadron. While training in Florida the pilots often times where wheeled to their planes in wheel chairs pushed by Black porters. Two other members of the Yale unit were Robert Lovett and Artemus Gates.

At that time the United States was not yet at war so the unit served under British command. Robert Lovett commanded the Yale unit. Trubee's father Henry Davison, a senior partner at J.P. Morgan and Co lavishly financed the unit. The unit distinguished itself during WWI.

During WWII Trubee served directly under Lovett. From June 1941 until December 1941 Trubee was deputy chief of staff in the air force combat command holding the rank of colonel. From December 1941 until his discharge in 1946 Trubee was assistant chief of staff at A-1. He was discharged as a brigadier general.

It is fitting here to take a close look at the members of the Yale Unit and the conduction of the air war during WWII. Robert Lovett as noted was assistant secretary of war for air. Directly under him was Trubee Davision. Additionally Artemus Gates served as Assistant Secretary of the Navy for air during WWII. Thus during WII the use of air power was directed largely by members of the Yale Unit.

A more interesting aspect of this league is their close family ties to Wall Street and the rich elite. Robert Lovett married Adele Quarterly Brown. The Miss Brown was the daughter of James Brown, a partner of Brown Brothers and Harriman and grandson of the founder. Artemus Gates married Trubee's sister.

Trubee's father was a partner with the Morgan's. However, this is only a beginning of the Davison family's connections. Trubee's wife was Dorothy Peabody, the sister to Malcolm Endicott Peabody a former Governor of Massachusetts and the grandchild of Marianne CABOT Lee. Additionally the Davison family was connected to the Rockefellers as in John Davison Rockefeller.

Davison had one other connection worthy of noting. Benjamin Strong may have been Trubee's brother in law. The author has found two conflicting reports. In one instant there was a reported marriage of Henry Davison's daughter with Strong. The other report does not emphatically indicate a marriage but does note that after Strong's first wife died the Davison family raised the children. Nevertheless, there was a strong bond between Henry Davison and Benjamin Strong. It was Davison, who made him a secretary of Banker's Trust and brought him in as J.P. Morgan's personal auditor. Strong however, was better known as the first director of the New York Federal Reserve Bank.

James Stillman Rockefeller served with the Airborne Command and Airborne Center as assistant chief of staff. He was a Lieutenant Colonel in the General Staff Corps at the time of his discharge in 1945.

The reader should note that these connections are carried through time. A good example of this is the connection of Prescott Bush with this circle of elites. Prescott Bush as a member of the Skull and Bones stole the skull of Geronimo. In 1986, the Apaches conducted negotiations with George Bush concerning the return of the skull. Representing Bush was Endicott Peabody Davison, Trubee's son.

Thus at the very top level, there was several people with detailed knowledge of American investments in Germany. In fact, Lovett was in charge of the entire air campaign and McCloy was deeply involved in removing targets from the selection list. Both individuals certainly were well aware of American investments in Nazi Germany and may have even had family members with such investments. Under their direct command there was another layer of individuals with family ties to the Wall Street firms that invested heavily in Nazi Germany.

Without additional records which are still sealed in secrecy by the government it is impossible to assess if this group of Wall Street elites steered the bombing campaign away from American owned targets in Germany.

It is interesting to note however, that the only massive bombing raid directed at a specific industrial target was the bombing of the S & K bearing plant deep inside Germany. S & K was Swedish owned. The raid incurred a terrible loss of both planes and life. Many of the bombers were lost before even reaching the destination and more were lost on the return flight after receiving heavy damage over the target. The exceptionally heavily loses were due to several factors. First, the S&K plant lay outside the range of any ally fighters so the bombers had fighter protection for only part of the trip. Secondly, the plant was very well protected with both anti-aircraft batteries and fighter squadrons. Planes damaged over the target proved to be easy targets for German fighter pilots since, the bombers had no fighter protection of their own on the return trip to England.

Nevertheless, choice industrial targets were present at much shorter ranges such as the Rhur steel district. Damage to any of the coal mines or steel plants in the district would have limited the Nazis ability to produce tanks and other heavy armaments. Moreover, raids on the Rhur district would have been short-range enough that the bombers would have had full fighter protection at all points of the raid. However, many of the plants and mines in the Rhur district were connected with American investments.

However, it should be noted that the S & K bombing raid was based solely on the basis that the S & K facility was the only major producer of bearings within Nazi Germany. Moreover, bearings are essential to any boat, plane, tank or truck. The allies had hoped that by damaging the S & K plant that they could delay German production of military vehicles for a considerable period. The raid only caused minor delays in production. Moreover, the Nazis could easily obtain bearings from both Sweden and Switzerland.

In July 1941, department of war developed a plan for target selection that would be in line with the ABC agreement with Britain and with the general battle plan for potential war known as Rainbow 5. The ABC agreement called for a sustained air war against Germany. The plan developed was Air War Plans Division --- Plan 1 or simply AWPD-1. The primary military objective of AWPD-1 was to defeat Germany by air power alone. If the plan failed in its primary objective then the plan called for preparing the way for a European invasion. AWPD-1 identified three vital targets within the Germany economy: electric power, transportation, and oil. It included a fourth intermediate target area --- the destruction of the Luftwaffe. AWPD-1 then included 154 targets to be destroyed in the first six months.114

AWPD-1 was never implemented. It was leaked to the press in the fall of 1941 along with the Rainbow 5 battle plan by Burton Wheeler a pro-Nazi Senator. Both Rainbow 5 and AWPD-1 appeared in the Chicago Tribune and Washington Times-Herald. The Nazis quickly realized the importance of both documents. On Dec 12, 1941, Hitler issued Directive 39, which called for massing air defenses around key industrial centers. Four days later Hitler rescinded the directive.

Early in 1942, AWPD-42 replaced AWPD-1. Other than shuffling the target priorities and the inclusion of round the clock bombing of Germany there was little difference between the two plans. The RAF would continue with nighttime area bombing while the Ameircan air forces would use precision daytime bombing as already defined in this chapter. AWPD-42 focused on tactical targets or targets producing equipment that the German military could not do without, rather than strategic targets required to produce war munitions. While very much similar to the preceding plan AWPD-42 placed the disruption of the electrical grid to thirteenth on the list. Such a reduction conforms to the emphasis on tactical targets versus strategic targets. Wiping out the German electric grid would severely limited Germany's ability to manufacture any war munitions. This reduction in priority of electric generating facilities was perhaps the largest failure of the air campaign. The analysts responsible for the reduction had concluded incorrectly that the German electrical grid had the ability to rapidly reroute power from one region to another when in fact Germany lacked this ability. Any strikes against power plants supplying industrial centers would have left those industrial centers idle for months.

AWPD-42 was hammered out by the committee of operations analysts (COA). COA was composed of industrialists, lawyers and various economists. The reader should note here the inclusion of industrialists. Almost all of America's major corporations had investments in Nazi Germany. In addition, most of these corporations went to extraordinary means to remain in contact and to continue doing business with the Nazis after war was declared.

The committed used several criteria in determining the suitability of the target. Essentially they looked for bottlenecks and weaknesses in the Nazi economy that could be exploited. The makeup of the COA is interesting in light of the tragic mistake of the downgrading of electrical targets. The German electrical industry was closely affiliated with two American firms GE and ITT, through cartel agreements. Plants owned by General Electric through its AEG subsidiary and those owned by ITT were only hit incidentally in area raids. The electrical plants that were bombed as targets were Brown Boveri and Siemensstadt which were not connected with either GE or ITT, although plants owned by GE such as the plant at Koppelsdorf, which also manufactured radar equipment, would have been a prime target.115


At the end of the war, a team known as FIAT was sent to examine the electrical industry plants to determine the extent of the bombing damage. The team consisted of Alexander Sanders of ITT, Whitworth Ferguson of Ferguson Electric and Erich Borgman of Westhinghouse. While the stated objective of the FIAT group was merely to survey the bomb damage their actions revealed that the real object was to get German electrical equipment back into production as soon as possible.

Along with the change to AWPD-42 came, a new bombing offensive, launched in 1942. In early 1943, the Point Blank Directive was approved. It called for around the clock bombing of Germany. The RAF was to continue to bomb cities at night while the USAF was to use daytime precision bombing on targets. The Point Blank included a permissive clause that allowed Bomber Command to continue with operations aimed at civilian morale and the general dislocation of the German economy.

Shortly after the implementation of AWPD-42, the RAF launched a thousand bomber attack against Cologne. The meat grinder was now fully operational and civilian centers would be reduced to rubble. The 1943, Pointblank Directive would ease selecting civilian centers as targets. When the RAF bombed the Ford plant at Poissy in March 1942, photographs of the burning plant were published in American newspapers. However, the media chains owning the majority of American newspapers were eager to protect one of their largest advertisers failed to mention that Ford owned the plant. The truth would be withheld from the American public to protect a traitor. The Vichy government paid Ford 38 million francs in compensation. Once again the newspapers were discrete and failed to report the payment.116

One member of the COA team was Guido R. Perera. Perera was a partner in Hutchins and Wheeler law firm in Boston before the war. He also served as trustee of the Massachusetts Investors Trust. During the war, Perera worked first worked on the legislative and administrative reorganization of the Army Air Corps. After which he served as deputy chairman of the Advisory Committee on Bombardment and as vice chairman of the Committee of Operations Analysts. In these positions, he oversaw the development of plans and target systems for the bombing of strategic industrial targets in Germany and Japan. 121

Perera had connections to Massachusetts Investors Trust, the trust was the first mutual fund in America. Paul Mellon founded it in the 1920s. One of the largest holdings of the trust was Boston Insurance Company. (The present owners of the Bank of Boston, Fleet Financial are desperately trying to distance themselves and deny any connections between Boston Insurance and the Bank of Boston as information linking the bank and insurance company to the Nazis has surfaced. It appears that Boston Insurance was a product of the bank or the directors.) One of the directors of Boston Insurance Co. was Erwin Pallavicini. He is described in the OSS file as an US-blacklisted Nazi collaborator who also served on the board of a German insurance firm in Argentina. The OSS documents list another director of Boston Insurance, Benjamin Nazar Anchorena as a Nazi collaborator. Newly declassified files outline the convoluted financial relationships that linked First National Bank of Boston interests with Hitler's financiers including Spanish and Mexican companies in business with Germany's Munich Re. The entire network involved around 230 German firms. Even as late as 1997, the identity of the owners of Boston Insurance remains unknown.

Quoting from an OSS report compiled in 1943: "The Boston Insurance Company is still writing all kinds of insurance of blacklisted names, and they are placing this business in the London market," the OSS report said. That meant "the Boston," as the document referred to the insurance firm, was spreading cash and information within and between both the Allies and the Axis. The Boston is known to have American board members and stockholders, having been formed by interests affiliated with the First National Bank of Boston.122 Note, insurance companies were ideal fronts for Nazi spies. Not only would the insurance company have detailed blueprints of the factory but they also would have a list of the equipment. From that information the Nazis could reliably determine what and how much a factory could produce.

The Mellon and Rockefeller families controlled the Bank of Boston. Both families were deeply involved in arming and supplying Hitler. The Mellon family through Alcoa had concluded several cartel agreements with I.G. Farben. Vast amounts of electricity were needed for the production of aluminum. Could Perera have been one of those responsible for downgrading the importance of eliminating the electrical companies in Germany? He certainly must have been aware of the Mellon - aluminum link and was closely associated with Mellons through Massachusetts Investors Trust. Perea also had more than the usual amount of knowledge of electric utilities. In 1947 after returning from the war, Perera was elected president and later chairman of Eastern Utilities Associates. However, without the complete records of the COA no solid conclusions can be reached.

However, Perera is not the only one from the COA with connections to the Wall Street money that built Hitler's war machine. Arthur Roseborough a former Sullivan and Cromwell employee from the firm's Paris office was assigned to the Air Force Intelligence in London during 1943. The Air Force Intelligence unit was created specifically to evaluate bombing damage and to recommend targets.123

Perera and Rosebourgh fall into the type of people employed by COA so we can conclude they were fairly typical of the group. Without additional files of COA, it is impossible to conclude the guilt or innocence of either Perera, Rosebourgh or of the entire staff of COA in protecting the investments of American industrialists and elitists. However, the undisputed fact remains 80% of the homes in Germany were destroyed while only 20% industrial production was destroyed. In fact, much of the reduced production capacity, came from the secondary effects of the bombing campaign such as lack of gasoline and a shortage of parts, came from the collateral damage to the transportation system.

After the war, the bombing survey concluded that overall the bombing was ineffectual in destroying German munitions production. The massive bombing of the S&K ball bearing plant at best only delayed production temporary, but at a horrible lost of allied airmen and aircraft.

A greater success of the bombing campaign was in the bombing of the Romanian oil fields. The shortage of gasoline in the Third Reich was acute and even limited the advance of German Wehrmacht in the Battle of the Bulge. However, Germany's oil supplies were always limited and restricted.

The survey also concluded that the bombing was most successful in delaying the deployment of troops by bombing rail centers. Although the rail centers were quickly repaired, the delay was enough to give the edge to the allies on the battlefield.

Without additional files it is impossible to determine if industrial targets associated with American firms were selectively removed from the target list. There is strong evidence for both sides of the argument. If these industrial plants were systematically removed from bombing list then the total destruction of Germany industry and means to wage war as favored by Roosevelt was being sabotaged. There is evidence that such may have been the case.

The massive area bombings of cities particularly the fire bombing of Dresden, raises another critical point. In essence, such bombings of civilian centers were nothing less than an act of terrorism. Estimates range from 40,000 to 500,000 thousand killed in the resultant firestorm in Dresden. When the Nazis bombed and strafed Belgrade, Yugoslavia demanded that it be included on the list of war crimes. While much of the world considers bombing of civilian centers to be war crimes, the US still maintains that it is not. The reader should also note that Dresden was an ancient city and contained many unique architectural wonders. However, it was in the path of the advancing Soviet army. The reader should ponder why John McCloy saved Rothenburg from bombing and not Dresden.

Unfortunately the 4Ds program was sabotaged from the very beginning. This sabotage reached epidemic proportions after the Morgenthau plan had been revealed to the public following the Quebec meeting between Roosevelt and Churchhill. Morgenthau was one of the few within the Roosevelt administration who pushed for a "hard peace" following the war. After the Quebec meeting, Morgenthau was viewed as the most hated man in America largely due to Nazi propaganda from the pro-Nazi leaders of American industry. Key to sabotaging the 4Ds program was the removal or marginalization of Morgenthau.


Following the success of the Normandy invasion, Morgenthau had lunch with General Eisenhower in Portsmouth. Morgenthau and his aides Dexter White and Fred Smith were eager to sound out Eisenhower's opinions on postwar Germany. Eisenhower's reply follows below.

"I'm not interested in the German economy and personally would not like to bolster it, if that will make it easier for the Germans." As far as he was concerned "the German General Staff should be utterly eliminated and the Nazi ringleaders given the death penalty." Ike felt that German people by supporting Hitler had been accomplices to everything done in their name. They must not be allowed to escape a sense of guilt of complicity in the tragedy that engulfed the world."135

While Eisenhower realized that Morgenthau became his severest critic after he arranged a pragmatic deal with Vichy Admiral Darlan, Eisenhower was indeed truthful in expressing his views on Germany. He often wrote of how he hated Germans in letters to his wife. As the war progress, Ike's view towards Germans became more hardened. His views were only further solidified after the first concentration camp was liberated.

Eisenhower also expressed his opinions on the Soviets to Morgenthau. He felt that a hard peace would cause the Soviets to redouble their efforts to win the European war. Ike staunchly felt that the Russians deserved the right to capture Berlin after suffering horrendous losses. Moreover, Eisenhower was optimistic about postwar relationships with the Soviet Union. He expressed to Morgenthau that Russia had problems of its own that would keep her busy long after they were dead.136

On January 5, 1944, with the Battle of the Bulge raging Roosevelt's policy of unconditional surrender came under brutal assault from Senator Burton Wheeler. Wheeler, a pro-Nazi demagogue, insisted that a majority of Americans are unwilling to sanction a peace of vengeance against Germany. Nor would they accept America acting as Europe's policeman. The British embassy in Washington took note, asserting Wheeler's assault made him anti-Soviet and anti-Semitic.

On March 3, 1945 Secretary of War, Stimson met with FDR and reminded him that Eisenhower had agreed to serve only for a few months as military governor of Germany after the surrender. The recent fire bombing of Dresden troubled Stimson. He noted in his diary that Dresden was the capital of Saxony, the least Prussianized part of Germany. Stimson opposed a hard peace with Germany and had at one time suggested his Under Secretary, Robert Patterson as Ike's replacement. Both Roosevelt and Morgenthau approved of the idea. However, in March 1945 Stimson informed FDR that after the Battle of the Bulge that the Pentagon needed to revise its war production and Patterson was needed to oversee that revision. However, Stimson took the opportunity to suggest that War Mobilization board member, General Lucius Clay would be the right man.

During the summer of 1944, Morgenthau heard that John McCloy was interested in the job. He indignantly had asked Hopkins how McCloy could deal with such big companies when his previous clients were firms like General Electric and Westinghouse, noting both companies had substantial investments in Germany.

McCloy established in advance that Clay was willing to make ample use if necessary of the loophole in JCS 1067 to allow military commanders to circumvent the 4Ds program.138

On March 10, James Dunn presented Stettinius with a document entitled "Draft Directive of the Treatment of Germany." Dunn had assured the Secretary of State he had merely put the Yalta decisions down on paper with no changes in policy. Four days later Stettinius presented the paper to Roosevelt falsely acclaiming that Stimson had endorsed it. FDR initialed the document on that recommendation.

Stettinus had asked Roosevelt to promote Dunn in December. Roosevelt had worried about Dunn's reputation for legerdemain and his conservative views but consented to the promotion. Dunn had been a backer of Franco and wanted to use German industrialists to rehabilitate Germany. Eleanor was outraged over the promotion.

Stettinus was unaware that Dunn had played him for a fool. The document had switched allied control from a decentralized power to a centralized power concentrated in the Control Council.137 This document upset everyone, including Stimson, McCloy, and Morgenthau. The following day, Stimson asked the President why he had signed such a terrible document. Roosevelt replied that he couldn't remember if he had signed it or not. At this time Roosevelt's health was declining rapidly and the incident raised a serious questions about his ability to continue to function as president. He was constantly tired and was reported to be inattentive within a month he would be dead.

On March 20, Morgenthau had lunch with Roosevelt and presented him with a memo opposing Dunn's draft. Roosevelt informed Morgenthau that if he and Stimson could come up with an agreement with Stettinius he would revoke the draft. Before leaving the President agreed with Morgenthau that he should fire Dunn and several others within the State Department.

On March 23, Morgenthau and Grew presented FDR with a new document to replace the Draft Directive. It was written primarily by McCloy and reflected FDR's current view of changing German industry and not to destroy it. McCloy's deviousness in sabotaging the 4Ds program extended even further than having a hand in the selection of the military governor and writing the control document. He made sure that the pentagon would have the upper hand and Clay would not be hamstrung by a Morgenthau man. General Clay was likewise shrewdly political and had asked Morgenthau for his recommendation for an economic aide. Morgenthau had recommended Bernard Bernstein. Clay disapproved of this recommendation. McCloy then saw to it that his brother-in-law Lewis Douglas would receive the post.

Douglas was the heir to the Phelps-Dodge copper fortune. He had served as Roosevelt's first budget director before resigning over the President's liberal policies. Privately Douglas complained that most of the bad things implemented in the New Deal could be traced to Jewish influence. His extreme anti-Semitism comes directly from the Douglas's family close business association with the Dodge family. The Dodge family was active members in the eugenic movement. The Phelps-Dodge Corporation was extremely anti-union as well and had driven their miners into the desert rather than negotiate with their union demands. There are enough gaps in Lewis Douglas's military files to suggest he was probably a member of the OSS. Following his appointment as economic aide to General Clay, Douglas served as ambassador to England.139 As economic advisor to Clay Douglas supported revitalizing German industry.

Clearly McCloy's machinations was to crippled the 4Ds program from the start. He had his hand in the selection of two of the most powerful positions in postwar Germany, the military governor and his economic aide. McCloy carefully chose both knowing that they were opposed to dismantling German industry and largely opposed to the 4Ds program. Moreover, he was chiefly responsible for rewriting the directive to insure that German industry would not be held responsible for some of the worst crimes of the Third Reich. Later, McCloy would take over as the military governor and free most of the war criminals.

The efforts to conceal Nazi assets and business arrangements actually began in 1943 with the realization that Germany had lost the war and it was only a matter of time before the Nazis surrendered. This presented a problem for both the Nazis and their American supporters such as Ford. For the Nazis this meant they had to transfer their stolen loot out of Germany. For American corporations the problem was more complex. While their plants were located in Germany they had to hide behind a thin facade of subterfuge, claiming the Nazis had seized control of their plants. This meant they had to remove dedicated New Dealers who vigorously opposed the Nazis and replace them with dollar a year men and Wall Street cronies that would overlook their Nazi dealings. By 1945, many of the New Dealers had been replaced.

By the end of the war, John McCloy and Robert Lovett had deputized numerous Wall Street financial specialist to prowl through the debris of Europe. J. Henry Schroder vice president, Lada Mocarski was transferred from his advisor post in the War Department to Bern, in time to take over the U.S. Consul. Allen Dulles was also a director of the Schroder Bank.148

John McCloy was a former Wall Street lawyer. Perhaps, his most famous case was against Black Tom, in which he proved German agents sabotaged a US munitions factory in New Jersey in 1916. After winning the case he served as advisors to every president from Roosevelt to Reagan. Following the war McCloy served as president of the World Bank and as chairman of the Chase Manhattan Bank, Ford Foundation, and Council on Foreign Relations. He was one of the original supporters of one world government ruled by corporations.

Robert Lovett was a former Brown Brothers and Harriman employee and a close friend of Prescott Bush. A Skull and Bones member, Lovett would later be the prime architect of the CIA.

The J Henry Schroder bank was founded by the family of Baron Kurt von Schorder, the radical Nazi that helped Hitler to power. Kurt von Schroder was a partner in the J.H. Stein bank, another bank that financed the Nazis. By 1938, the London branch of J. Henry Schroder bank was acting as the Nazi's financial agent in Great Britain. In 1933, Schroder began representing ITT interests in Nazi Germany. In 1936, J. Henry Schroder Banking Corporation merged with the Rockefellers to form Schroder Rockefeller and Company.147

In the summer of 1945, U.S. Treasury officials uncovered evidence that Gero von Gaevernitz was exploiting his quasi-official position with the U.S. Legation in Bern to complete some questionable deals with E.V.D. Wright. Gaevernitz was a close associate of Allen Dulles in Bern.149

Gaevernitz's sister had married Hugo Stinnes, the vigorous Hitler supporting banker. During the 1920s, Gaevernitz traveled back and forth between the Ruhr and Wall Street arranging deals. As late as 1941, Gaevernitz listed himself as an agent for Schildge Rumohr Inc, a New York dummy corporation better known as Transmares. Dulles had personally expediated the financing for Transmares through J. Henry Schroder. The Department of Justice identified Transmares as a front for circumventing the British blockade.Gaevernitz pocketed a 30,000 franc payoff for inducing North German Lloyd to permit the cross registration of a vessel from a Finish to Swiss a flag. He laundered the money through E.V.D. Wright in Portugal and continued to oversee Stinnes holdings in Germany and Switzerland.150

The obvious connections between top officials in post war Germany and their past dealings with Nazis did not pass entirely unnoticed. As previously noted in an earlier chapter both Treasury Secretary Morgenthau and the Kilgore committee were alarmed over it. Other in Europe were also alarmed. In the airgram A-1052 sent on September 15, 1945 from Switzerland by Leland Harrison to Secretary of State, the London Embassy and Robert Murphy noted the connection with the Stinnes bank. The airgram read as follows:

"In view of the recent reports of the arrest of Hugo Stinnes Jr. in Germany. The Department may wish to consider, with other interested agencies, the advisability of having former Stinnes associates employed by the American government agencies to advice military as to German nationals helpful in building a democratic Germany."151

The airgram blindsided Dulles and placed him on the defensive, forced to defend Gaevernitz. In a long rambling defense of Gaervernitz Dulles claimed such connections were necessary in order to gain information. However, Dulles failed to mention the connection between Gaevernitz and Transmares.

While Dulles faced serious allegations of treason immediately after the war, he had help from the highest levels of the military occupation government. William Draper headed the economic division and was emphatically against decartelization. Draper had risen to the senior management level at Dillon and Reed before the war along with James Forestal and Paul Nitze.

The economic division also drew heavily on the assessments of Captain Norbert Bogan. Bogan was on loan to the War Department from his vice presidential post at J. Henry Schroder. Bogan had landed in Algiers with Eisenhower and after France was liberated appeaered frequently in Bern. In Germany Bogan first attempted to head off the Army's Financial Division from investigating J. H. Stein bank by dismissing it as small potatoes. He then argued for travel orders to Cologne even before the city had fallen to cover up Schroder's records.

Richard Helms was requisitioned by Donovan from his job in New York of plotting Nazi submarine routes to serve in Europe. While the Helms family was not rich his grandfather served as the first president of the Bank of International settlements.

During the autumn of 1945, Dewitt Clinton Poole was sent to Germany to interrogate important Nazis. During the war Poole headed Foreign Nationalities Branch of the OSS. Poole directed OSS efforts to recruit agents from immigrant communities. DeWitt Poole, would later become president of the National Committee for a Free Europe, one of the CIA's largest propaganda efforts.

On his return from Europe, Poole met with Dulles who was already back at work on Wall Street after the OSS was disbanded. After two weeks Poole sent a long handwritten letter to Dulles. An excerpt from the letter follows.

" Department specialist Charles Kindleberger "is all right as far as he goes, but he doesn't appear to control the raft of young Jew boys under him. In the fulfillment of the Potsdam program they put ahead of everything the dismantling of German plants and shipment of machinery to Russia." There had been some "headway with details": "Of the 100,000 Nazis now arrested, 20,000 are soon to be turned loose. The British have vigorously protested the low ceiling put on German steel production.

Since "the Harry White boys continue on the job" at Treasury, some "change must be engineered at the highest levels"; the time has come to convince the President, or at least Secretary of State Jimmy Byrnes, that to "continue to ruin Germany by indiscriminate de-Nazification and unrelenting deindustrialization can only confirm Europe as a liability."152

After warning recipients to tear this thing up Dulles circulated Poole's letter to others opposed to the decartelization of Germany. Laird Bell a Chicago banker and president of the local Council on Foreign Relations was already on a one man crusade against decartelization was one of the recipients. A week later Bell informed Dulles he was developing a contact with a group centered around Notre Dame University and headed by some of the Catholic hierarchy who had formed a Save Europe Now Committee. 153


Part 2: United Nations War Crimes Commission

The allied forces on the ground were likewise hindered from completing the denazification program by their own officers. In a meeting of the Finance Division Captain Norbert Bogdan, a former vice president of the Schroder Banking Corporation of New York, argued furiously against investigations against the Stein Bank on grounds it was small potatoes. Bogdan was a former vice president of the Schroder Banking Corporation of New York. Shortly after Bogdan's successful effort in blocking the investigation, two of his staff applied for permission to investigate the bank. The Intelligence Division blocked that request. ITT was closely associated with Kurt von Schroder and wanted to conceal its past in helping the Nazis for all time. Once an investigation of the Stein Bank was started the connection would be soon exposed.117

Unfortunately, many officers were loyal to their former employer and not their country. As IBM's pressed for Treasury permission to transact business with Germany and Italy increased, Harold Carter, an employee of the Economic Warfare Section, took notice. Carter carefully prepared his case against IBM, but was unable to convince a court to issue a denied a subpoena. To further complicate the matter, the Dehomag machines were only leased to the Nazis. A quirk in the law meant they were American property and were to be protected.

Further, Watson had anticipated the war and on March 31, 1941, incorporated a new subsidiary, Munitions Manufacturing Corporations. Two small canning factories were purchased to house the new unit. Within sixty days of Pearl Harbor, Watson unveiled a fully equipped manufacturing facility staffed by 250 employees. Their first product was a 20mm anti-aircraft cannon. Eventually the subsidiary grew to produce a whole range of war munitions, including 90mm anti-aircraft gun directories, M1 rifles, gas masks, bombing sights and other items. IBM had taken up a host of research projects for the military.

IBM arrived on the beaches of Normandy shortly after the beachheads were established. Their mobile MRUs (Machine Records Units) specialized in deploying IBM made equipment. These MRUs were on the front line and became indispensable. These MRUs made up of IBM employees and those trained by IBM became the backbone of the MRU forces. Their loyalty laid more with IBM than with their country. Watson received hundreds of letters from IBM soldiers many telling of capturing Dehomag machines. None, however, caused more of a stir than a letter from a Lt. Lawernce Flick, written on September 2, 1945. Flick had told of enlisting a Captain from the Property Control Division to support Hermann Fellinger, a former Nazi IBM partner. Fellinger had been one of those in the Dehomag revolt, which tried to overthrow the iron grip of Watson on Dehomag. Watson had no intention of re-empowering Fellinger.118

Officers that retained a greater loyalty of their company than their country plagued the army's officer's ranks. (Note: this should not detract from the thousands that served their country honorably.) Many undoubtedly thought their corporate loyalty would stand them in good stead upon their return home. Others owning stock in the company were simply protecting their own investments.

As early as 1942, there were clear indications of corporate America's connivance to continue doing business with the German cartels after the war as if the war had never taken place. In a speech on June 3, 1942, before the Illinois Bar Association Assistant Attorney General Thurmond Arnold warned:

"The secret influence of the international cartel is going to be thrown in favor of peace without victory when the first opportunity arises---just as it was thrown in that direction at Munich.
The small group of American businessmen who are parties to these international rings are not unpatriotic, but they still think of war as a temporary recess from business as usual with a strong Germany. They expect to begin the game all over again after the war.
It is significant that all these cartel leaders still talk and think as if the war would end in a stalemate, and that therefore, they must be in a position to continue their arrangements with a strong Germany after the war. This is not shown by their speeches, but by actual documents and memoranda of business policy which we find in their files."6

Arnold's words confirm the findings listed in the previous chapter. As of June 1942, corporate America had yet given up hope of negotiating a peace with the Nazis. Arnold effectively predicted the outbreak of the Cold War. Perhaps, the only mistake Arnold made in his speech was in labeling these treasonous corporate leaders as patriotic. They were not.

Nor was this the only warning of the connivance. On June 4, 1943, Homer Boone, Chairman of the Senate Patents Committee informed the Senate Military Affairs Committee:

"The Standard Oil Company of New Jersey directors were asked by certain stockholders to cut off all relations with Farben after the war, but it refused. One official said such a request was an affront. There is clear indication that after this unpleasant interlude of war they will hold hands again and resume their very harmonious and beautiful arrangements with cartels."7

The quotes above should serve as a grim reminder to the power of the Nazi elements among us when compared to the success of the T Forces at Nordhausen.

To fully understand how the 4-Ds program was sabotaged from within a brief look at the development of the Nuremberg Tribunal and the elements assigned to the 4-Ds program is needed. Most studies only cover the Nuremberg trials. However, there were several other trials as well. The Nuremberg Trials were actually a culmination of a long and complicate process, steeped in geopolitics. Since, the agreement leading to the Nuremberg Trials was not reached until mid-1945 there was no official policy in handling of the Nazis as the allied forces swept over Germany.

From the very beginning, the debate between Washington and London on what constituted a war crime was haunted by the failure of the war crime trials following WWI in Leipzig.

The question of punishing war criminals in WWII was first raised in 1940 by the exiled government of Poland. The British Foreign Office opposed this so it laid dormant until after the German invasion of Russia, which took place accompanied by a horrendous increase in Nazi brutality. Existing international law was inadequate for the crimes committed, and an agreement was needed between the big three powers to adjust international law to address the horrors of this new type of war.

Periodically the British would issue periodic statements to fortify the morale of the occupied peoples. On October 21, 1940, Churchill stated that all crimes of Hitler would be upon him and upon all who belonged to his system. In May 1941, Foreign Secretary Anthony Eden spoke of a reckoning that would be wide and fierce. On June 12, 1941, following the Nazi invasion of Russia, Churchill was quoted as follows.

"These quislings, like Nazi leaders, if not disposed of by their fellow countrymen---which would save trouble----will be delivered by us on the morrow of victory to the justice of Allied tribunals."23

Germany's invasion of Russia marked a turning point in the relations between Poland and Britain. Britain, seeking allies against Germany, was now intent upon improving relations with the Soviet Union. The exiled Polish government wanted to preserve its 1939 borders while Moscow was adamant about retaining the Polish territory ceded to Russia following the Ribbentrop-Molotov agreement. Therefore, Polish wishes were incumbent upon the greater goals of British geopolitics.

By the autumn 1941, the Foreign Office had to contend with growing unrest in both the Cabinet and Parliament in response to reports of German atrocities. In September 1941, Hugh Dalton, Labour MP and minister of economic warfare, called Eden's attention to the German practice of executing hostages whenever German forces were attacked. Dalton proposed telling the people of Europe keep a list of names of all those connected to the execution of hostages including the commanding officer. After liberation those on the lists would be hunted down and summarily executed. The Foreign Office remained cold to Dalton's proposal and warned of a repetition of the "Hang the Kaiser" campaign after WWI.

 Recognizing the growing concern over Nazi atrocities Eden asked the War Cabinet on October 1, 1941 to approve of a statement along the lines of the Ango-Franco-Polish declaration of April 1940. The draft declaration was a vague statement unacceptable to the War Cabinet. The Foreign Office quickly revised the declaration to read as follows.

"We therefore publicly declare that brutalities which are being committed in occupied countries are contrary to the dictates of humanity; are a reversion to barbarism; and will meet with sure retribution. To this end, we are united in our resolve to win freedom of the oppressed peoples and to execute justice. The methods of oppression and terror used by Hitler are such that many people, including Germans and Italians, are ignorant of the full facts. When these things are known, world opinion will not allow the criminals to escape just punishment for their crimes. The facts are being put on record so that in due time the world may pronounce its judgement. With victory will come retribution."24

Leaders in the Parliament called for a stronger declaration. The Foreign Office did not deliver the declaration to the United States and Soviet Union until October 21, which indicated the low priority, they held for the war crime issue. Four days later, in an unexpected moved on October 25, Roosevelt unexpectedly issued a statement condemning the execution of 50 hostages in Nantes for reprisal of the shooting of the military commander of the region. Roosevelt's statement compelled the Foreign Office to make several quick decisions. Churchill responded immediately to Roosevelt's statement and concluded, "Retribution for these crimes must henceforth take its place among the major purposes of the war."25

Also plaguing the establishment of a unified war crimes declaration was the tendency of both London and Washington to dismiss the Soviet reports as exaggerations or worse as imaginary. Yet, some of the most brutal war crimes such as the Bari Yar massacre were occurring on the eastern front.

Following Churchill's remarks on October 25 various allies weighed in with their own comments. The Australians thought the statement to be coached in inappropriate language and should be made simple and all remarks about retributions be dropped. Governments-in-exile disagreed. The Greeks accepted in principle the British statement but insisted on adding Bulgaria's name to the war crimes declaration. The Yugoslavian government wanted to include all forms of atrocities including dive-bombing, burning of villages, and others. They also wanted to indict the Nazi Quisling governments, including the so-called Independent Croatia.

The War Cabinet however, approved the Foreign Office stance that the statements by Roosevelt and Churchill had made a joint resolution by the allies unnecessary. Frank Roberts, the first acting secretary in the Central Department of the Foreign Office argued that such a move by keeping Britain from signing a joint declaration would not commit Britain to whatever determination the allies might reach at the war's end. Many in the Foreign Office wanted to go further and free Britain of any commitment to making a list of war criminals or engaging in any preparation of any registry of atrocities.

Britain ultimately chose not to associate itself with the proposed declaration. Further complicating the matters was a dispute broke out among the allies as to the inclusion of the Soviet Union in such a declaration. The Poles, Czechs and Yugoslavs sided with England in favor of the inclusion. However, most other governments were opposed to the inclusion. The United States not yet at war declined to attend any joint signing of the declaration.

The meeting of the allies took place on January 13, 1942. Representatives from nine nations took part: Belgium, Czechoslovakia, Greece, Luxembourg, the Netherlands, Norway, Poland, Yugoslavia and the French National Committee. Also present as observers were the United States, Britain, the Soviet Union, China, the Dominions and India. Eden addressed the group with caution, concluding that the governments of occupied territories should take the initiative in declaring the principles by which they will be guided once liberated.

While the atrocities increased in Poland, the Polish government-in-exile began demanding more than just declarations. It asked that the British conduct bombing raids in central and western Germany in retaliation for the execution of one hundred hostages in Warsaw. The Foreign Office refused the request. Another Polish demand called for the execution of five Germans after the war for each Pole, Yugoslav or Czech killed. They further demanded that a special air force unit be created for the daily bombing of a German town that had no military value as a reprisal for the atrocities being committed in Poland.

The Poles were not the only occupied territory that demanded stronger measures from Britain. After the destruction of Lidice, the Czechs demanded that the RAF raze a German village. The Foreign Office turned this demand down, too. In response to British inaction, the Czechs announced unilaterally they would judge and punish those responsible. The Czech list included Hitler, the members of his government, all representatives of Germany stationed in Czechoslovakia as well as their subordinates and any German or Czech that aided them even indirectly.

The Foreign Office objecting that it was not consulted in advance, condemned the Czech action as inexcusable. Britain's rejection of the demands of the Poles and Czechs was not totally without reason. Up to this time, Britain had fared badly in the war, and there was a legitimate concern over German reprisals against captured British POWs. British mistrust of claims coming from Eastern Europe contributed to the rejections.

It wasn't until October 1943 that the United Nations War Crimes Commission (UNWCC do not confuse with the present day United Nations---the allies during the war referred to themselves as the United Nations) was established. The commission was plagued with differences between Britain and the Soviet Union as to what constituted a war crime, as well as differences on how to conduct the war. Just as some in the British Foreign Office were opposed to any war crime trials, a similar faction existed within the United States State Department. The influence of these factions is reflected by the eighteen months it took for the UNWCC to take shape.

Two of the largest stumbling blocks between Britain and the Soviets were the case of Rudolf Hess and the inclusion of the Dominions. The Soviets desired immediate trials, including that of Hess, the British on the other hand wanted to wait until after the war before beginning any trials. The British also wanted to include the Dominions such as New Zealand and South Africa on the commission. The Soviets were opposed to such inclusions unless each of the Soviet states was granted equal status. This was also a bedrock issue for the Soviets in the formation of the United Nations. By demanding that the Dominions each have a separate vote, British influence was multiplied by several fold, while denying the Soviet demand of a vote for each of its states weakening the overall influence of the Soviet Union.


Part 3: What is a war crime?


In forming the UNWCC, the British selected Sir Cecil Hurst as their representative. Hurst was legal advisor to the Foreign Office and sat on the Permanent Court of International Justice. The British asked both Washington and Moscow to select their representatives and proposed the American representative should be the chairman of the commission.

The State Department legal advisor, Green Hackwood thought the candidate should not be selected solely on the basis of criminal law but also on the bias of understanding of international geopolitics. Secretary Of State, Cordell Hull wanted Francis Biddle the U.S. Attorney General to fill the spot. Biddle on the other hand rejected the position. After four months of internal wrangling inside the State Department, Roosevelt named his friend Herbert Pell to fill the position. Pell had served in the 66th congress as a representative from New York and as America's minister in Portugal and Hungary. Hull accepted the nomination despite Pell's lack of any legal background. However, others within the State Department immediately sat out to sabotage Pell and his mission.

Pell was unknown in England despite his earlier diplomatic service. An initial impression of him came from Ham Armstrong, a State Department official and was forwarded to London by J. Forester of the British Embassy in Washington. Forester had gained his information from. Armstrong charged that Pell was a disappointing political appointment and the man would contribute little to the commission. Forester then met Pell and concluded that he is not unintelligent but seemed set in his ways. The British embassy official believed Pell's knowledge of war crimes was slight although he had already seemed to have formulated certain fixed views on policy. He concluded that Pell believed that war criminals should be brought before an international tribunal but that the tribunal should not be bound by Anglo-Saxon rules of evidence. Further Forester stated that Pell believed there should be no appeal of sentences and that execution of those sentenced to death be carried out immediately after pronouncement of the verdict.

Following his appointment, Pell's relationship with the State Department grew more tense. The State Department actively sought steps to constrain whatever policies Pell wanted to take. By the time Pell departed for London, he had concluded that the State Department did not regard war crimes as a legitimate concern. Pell was surprised that not a single official within the State Department was responsible for dealing with war crime issues.

On October 20,1943, representatives from seventeen nations met in London to inaugurate the UNWCC. The Soviets were absent. The Dutch representative offered a view differing from the British view that the commission should be limited to investigating and recording evidence of war crimes. The Dutch proposed the commission should be actively involved in preparing the trials. The Chinese representative raised another troublesome point for the British. The Chinese wanted to include all war crimes dating back to the Japanese invasion of Manchuria in 1931. The British feared granting this request would open the door for the Czechs to demand investigations back to the time of the Munich agreement in which the British role was less than exemplary. Beyond a vote to establish the commission and choosing the location of the headquarters nothing substantial was accomplished.

The Soviets refusal to participate in the opening meeting did not deter Stalin from joining the Allies in a joint statement condemning German atrocities. On November 1, the big three signed the Moscow Declaration dealing with the punishment of war criminals. The document ended with the following words.

"Let those who have hitherto not imbrued their hands with innocent blood beware lest they join the ranks of the guilty, for most assuredly the three Allied Powers will pursue them to the uttermost ends of the earth and will deliver them to their accusers in order that justice may be done. The above declaration is without prejudice to the case of major criminals, whose offences have no particular geographical localization and who will be punished by the joint decision of the Governments of the Allies."26

This statement was the only substantial agreement among the Allies concerning punishment of war criminals among the big three. Although its principles served as a guide for the Allies, it did nothing to bridge the differences to bring the Soviets into the UNWCC. The Soviets and the British would remain at odds over the British demand to include the Dominions, but not the various Soviet Republics. There were other obstacles to Soviet participation particularly the failure of the Allies to open a second front in 1942.

In mid-July 1943, the Soviet Union put eleven Soviet citizens on trial for high treason for assisting the German forces around the town of Krasnodar and their role in assisting the Germans in the liquidation of 7,000 people. Eight Soviets were sentenced to hang the remaining defendants were deported or sentenced to twenty years of hard labor. Moscow apparently wished to demonstrate its commitment to the punishment of war criminals and its desire for a joint policy. The Soviets held numerous German POWs including many believed to be guilty of war crimes.

Several weeks after the hangings the Soviet scholar Professor A. Farrin published an English version of War and the Working Class. This publication hinted at being the official viewpoint of the Soviet Union. The article divided war criminals into four classes. The first class included Hitler and his cabinet ministers. The second class included party leaders and the German Army Command. The third class was composed of the financial and industrial leaders. The forth group was defined as those that had benefited from the Nazi plundering such as those receiving stolen goods or those who exploited slave labor.

At Teheran, Stalin attempted to translate Farrin's principles into numbers. Only two weeks after the Teheran conference the Soviets put on trial three Germans and a Russian collaborator in Kharkov. The defendants were accused of using gas vans (vans in which the exhaust was pumped into the compartment holding prisoners), shooting of POWs and the execution of thousands of Soviet citizens. Once again, the trial also brought charges against the heads of the Nazi government. On December 19, the four defendants were hanged. American reporters that followed the trial were convinced of the guilt of the defendants and of the genuineness of the charges. They also thought the Soviets had been punctilious in observing legal proprieties.

The Kharkov trial opened an old wound between the Soviets and London. The Soviets had always been in favor of immediate trials while both London and Washington wanted to wait until the end of the war before beginning trials. The desire to wait until the end of the war by Britain and the U.S. was not unjustified. Both feared such trials could provoke retaliations by the Nazis against British and American POWs.

The Nazi government, within days of the trial, sought to drive a wedge between the big three by threatening to put POWs on trial for serious breaches of international law. In January 1944, information reached Washington of a protest by high military officers in Germany against any trials of American or British POWs in reprisal to the Russian trials. At the end of March, Germany published a statement saying that the preparations for trials of POWs for war crimes were well advanced. Britain and the U.S. asked the Soviets to refrain from holding any more trials until after the war's end. Russia complied.

Just prior to the Teheran Conference, Churchill proposed a radical plan of summary executions of high-ranking Nazis accused of war crimes that were not limited to a particular geographic location. Churchill's plan was that the nearest officer of major general rank would convene a court of inquiry not for the determination of guilt but solely to establish identity. Once identified the officer would order his execution within six hours.

Churchill approved a short list of war criminals that would be subject to his proposal. The Foreign Office opposed his plan, as did the Soviets.

The Roosevelt administration was divided on the terms of post-war Germany and war crimes. Morgenthau urged for a hard peace and broad war crime investigations. Secretary of War, Stimson, led a faction sympathetic to Germany. The military had prepared the booklet, Handbook of Military Government, which reflected the views of the top officials within the military favoring an immediate restoration of Germany. Many of the military officers thought we were fighting the wrong enemy and should be at war with the Soviets rather than the Nazis. Under pressure from Morgenthau, Roosevelt wondering how such a document came to be written and who approved it, ordered Stimson to have the booklet rewritten. Roosevelt's comments follows:

"It gives me the impression that Germany is to be restored just as much as the Netherlands or Belgium, and the people of Germany brought back as quickly as possible to their pre-war state. I do not want to starve them to death but as an example, if they should be fed three times a day with soup from army soap kitchens. That will keep them perfectly healthy and they will remember that experience all their lives. The fact that they are a defeated nation, collectively and individually, must be so impressed on them that they will hesitate to start a new war."27

Roosevelt further criticized the document during the Aug 28 cabinet meeting, in which he named Morgenthau, Hull, Stimson and Hopkins to a committee for determining the treatment of Germany after the war. Stimson was harshly opposed to the harsh treatment Roosevelt wanted for Germany. He passed on Roosevelt's request to rewrite the handbook to his aide, John McCloy, whom in turn passed it on to Murray Bernays. 64 Bernays was opposed to any action on war crimes until after the war ended. He feared reprisals against American POWs. Nevertheless in November 1944, Bernays' ideas on prosecution of war criminals were presented to FDR in a memo from Secretary of War, Henry Stimson, and Secretary of State, Cordell Hull, entitled The Trial and Punishment of European War Criminals. It was Bernays' work that provided the framework and legal theory behind the Nuremberg trials. Although Jewish, Bernays' own doubt over the reports and the inability to grasp the reality of the Holocaust played a role in his views.

On September 5, Morgenthau presented Roosevelt with a comprehensive memorandum titled Program to Prevent Germany from Starting a World War III. The memorandum soon became known as the Morgenthau Plan and called for complete dismantling of Germany's industrial might and severe punishment for war crimes. Since, the State Department already had possession of documents indicting the Nazis were prepared to go underground and start a new war, Roosevelt had reasons to reject an easy peace with Germany.

Stimson was vigorously opposed the Morgenthau Plan and was soon joined by George Marshall and General Myron Cramer. Thus at the time when Roosevelt departed for the Quebec conference his administration had no set policy on the course of action for postwar Germany. Roosevelt left for Quebec without any senior aides. In Quebec, it soon became obvious to Roosevelt that Churchill's main focus was on postwar aid to Britain. Consequently, Roosevelt placed a call to his Treasury Secretary. Morgenthau then rushed to the conference, resulting in the Quebec conference concluding with agreement on the Morgenthau Plan for postwar Germany.

Before the end of September, the press was leaked the contents of the Morgenthau Plan which, came under heavy fire. With only six weeks to the election, Dewey saw his chances for victory over Roosevelt improved. Dewey charged that with such a heavy-handed plan, Roosevelt was prolonging the war and America was paying for it in blood.

Roosevelt suspected persons within the State Department of the leaks to the press.

Leaks such as this one might have been nothing more than someone with a big mouth. The timing of the leak suggests politically motivation. However, Nazi documents captured after the war indicate that it may have been an integral part of Nazi planing. A directive issued by the Chief of intelligence Division of the German High Command, Admiral Canaris of March 15, 1944 part of which follows here casts a suspicious eye towards Nazi intrigue.

"There is great fear in the USA of Bolshevism. The opposition against Roosevelt's alliance with Stalin grows constantly. Our chances for success are good, if we succeed to stir up influential circles against Roosevelt's policy. This can be done through clever pieces of information, or by references to unsuspicious neutral ecclesiastical contact men.
We have at our command in the United States efficient contacts, which have been carefully kept up even during the war. The campaign of hatred stirred up by Roosevelt and the Jews against everything German has been temporarily silenced the pro-German bloc in the USA. However, there is every hope that this situation will be completely changed within a few months. If the Republicans succeed in defeating Roosevelt in the coming election, it will greatly influence American conduct of the war towards us.
The KO-leaders abroad and their staffs have innumerable opportunities of constantly referring to Roosevelt's hate policy. They must use in this campaign all the existing contacts and they should try to open new channels. We must point to the danger Germany may be forced to cooperate with Russia. The greatest caution has to be observed in all talks and negotiations by those who, as 'anti-Nazis' maintain contact with the enemy. When fulfilling missions, they have to comply strictly with instructions."28


The above document now casts all such leaks and reports in the press appearing in the later stages of the war as Nazi intrigue or propaganda. As shown in the previous chapters the Nazis had willing accomplices in Congress, the military, and the press and industrial leaders. The reader also should be alerted to the reference to that if the Republican Party could win the election they would alter the American conduct of the war. The previous chapters have detailed the collaboration between the Nazis and the Republican Party.

In the 1940, election Herbert Hoover had collaborated with top Nazis in Berlin in an effort to unseat FDR. Did the Republicans again collaborate with the Nazis in 1944 and offered them an easy peace for their support in the 1944 elections? The question for now must remain unanswered. However, laying in vault and probably marked "top secret" there is a document that can answer the question either yes or no definitively. There is no question however, that starting around 1944 or so that the media in the United States started to print many editorials and articles for an easy peace with Germany. Many of those no doubt were the direct result of the Nazi directive above.

In mid-December 1943, the Czech representative to UNWCC proposed it be resolved that the UNWCC was fully competent to handle all aspects of the war crimes tribunal and should not be limited to just examination of dossiers and the compilation of a list of war criminals. The resolution succeeded.

Up until the end of the war there was no accepted definition of war crimes. In the absence of an official definition of war crimes British treasury solicitor Tom Barnes, who headed the British National Office for War Crimes informed Hurst that he was unable to submit any cases of war crimes or names of war criminals because of that lack.

By mid-May, the committee suggested four categories of war crimes. The first was crimes committed for the preparation of war. The second, crimes committed in Allied countries against armed forces or civilians. The third included crimes committed against persons without regard to nationality, race, religion or political beliefs. The last category was reserved for those crimes perpetrated in order to prevent the restoration of peace. The committee failed however, to supply a definition of war crimes or to draw up an exhaustive list of war crimes.

One of the issues the committee failed to reach agreement on before the end of the war was whether a war of aggression amounted to a war crime. No vote was ever taken on this question by the committee. It wasn't until after the London conference of June 26-Aug 8, 1945 at the insistence of the Untied States that the UNWCC included waging an aggressive war as a war crime.

In its first five months of operation, the UNWCC listed only 70 cases of war crimes. Half of these were so incomplete that the commission could not make a determination, others were trivial. Not a single case at the time was lodged against any prominent Nazi leader. The main reason for the small number of cases was due to the difficulty of obtaining precise information from occupied territories while the POWs and labor camps remained in Nazi hands.

At the beginning of June 1944, committee chairman Hurst met unofficially with Eisenhower's staff. Based on the conclusion of this meeting Hurst recommended an establishment of a war crimes agency attached to SHAEF. The Foreign Office sabotaged such a proposal and SHAEF formally rejected it.

In November 1944, Czech government decided to list Hitler as a war criminal. The British representative was opposed to such a listing until the German constitution could be examined. In December 1944, the commission presented a list of 712 names of German and Italian war criminals including the names of top Nazis such as Hitler, Himmler and 17 generals. In all 49, top Nazis were listed.

Perhaps the most contentious issue that came before the UNWCC was the Jewish issue. In August 1942, the Foreign Office and the State Department received a report from Dr. Gerhart Riegera a representative of the World Jewish Congress in Geneva, stating that plans were under consideration in Berlin in which all Jews in Europe would be deported and concentrated in the East and with one blow be exterminated. Both the Foreign Office and the State Department disbelieved the report and failed to pass it on. Reports of further atrocities against the Jews continued to pile up. The British Foreign Office believed the massacres of the Jews could not be considered a war crimes and sought to limit all war crimes to crimes committed against the citizens of Allied nations and then only after the date of the Polish invasion.


Almost immediately after beginning work in the UNWCC, Pell on his own initiative raised the question of crimes perpetrated by the Nazis against citizens of the Reich. His assistant from the State Department, Laurence Preuss opposed the proposal. Preuss in an effort to undermined Pell reported in an unofficial and confidential letter to the State Department Pell's actions. In fact, it was Pell's actions that served as a catalyst for the commission to include this issue. Preuss had also informed the Foreign Office the Pell was making dangerous mistakes. This issue of including crimes before 1939 against citizens of Germany was never adopted by the commission due to the actions of the British Foreign Office and the U.S. State Department. In fact, the issue would lead shortly to the removal of Pell.

Another problem that plagued the commission was the type of court to use to prosecute war criminals. Pell informed the State Department that unanimous agreement had been reached on the treatment of war crimes conducted within a single country. In crimes involving more than a single country, Pell proposed that international authority should handle such cases. Pell also urged FDR to establish some machinery of justice that could act firmly and quickly.

Pell's proposal and initiative irritated Hull, who believed the commission should restrict itself to the collection of evidence. Roosevelt preferred a military court and conveyed that opinion to Pell. On February 1944, a subcommittee chaired by Pell began examining the question of an international court. On September 22, Pell's subcommittee formally issued the final draft on the Convention for Establishment of a United Nations Joint Court. The full UNWCC approved the draft on September 26, 1944.

In January 1945, Hurst submitted his resignation as a result of a dispute with the Foreign Office. The Foreign Office was well aware of the tireless and relentless efforts of Pell to bring the Nazis to justice. They feared Pell would be elected chairman as a replacement for Hurst. The State Department was likewise upset with Pell's criticism of inaction by State.

Pell's appointment had been a thorn in the side of Hackworth, the State Department's legal advisor from the very beginning. In December 1944, Hackworth informed Pell that the issue of an international court was an issue being considered by several departments: State, War and Navy. Hackworth emphatically refused Pell's request to attend meetings at which these questions were debated.

Hackworth already knew Pell would be removed as a result of Congress's decision to defund Pell's $30,000 budget. The State Department now headed by Stettinius following Hull's resignation proposed to FDR that America's representative on the UNWCC be carried out by an army officer. On January 9, 1945 Hackworth and Stettinis ignominiously sacked Pell. On January 29, 1945 the undersecretary, Joseph Grew came under attack by the press over Pell's dismissal. One reporter questioned the State Department's record in the Senate hearings on appropriations for Pell's office. The Senate's records indicted that Hackworth's assistant Katherine Fate, appeared before the Senate committee for funding Pell's position lasted less than three minutes. Once again, a dedicated anti-Nazi was removed by the invisible hands of the pro-fascists within Congress and the Department of State.

The removal of both Hurst and Pell in January 1945 from the UNWCC brought about strong press commentary on the collapse of the committee. However, the committee continued operations until March 31, 1948. In four and half years the commission had presented 80 lists containing the names of 36,529 suspected war criminals of which 34,270 were German. The UNWCC eagerness to advance preparations in dealing with war crimes was opposed vigorously by both the British Foreign Office and the U.S. State Department. Both regarded the UNWCC as a political necessity to be exploited in neutralizing demands for reprisal by governments in exile. While the UNWCC committee was created with the noblest intentions in reality, it served no real purpose than to talk to death the crimes of the Holocaust. Certainly, it faced obstructionists from both the United States and Britain.


Part 4: The OSS Friend or Foe?

In April 1945, FDR dispatched an American delegation to England at London's request to overcome their differences and formulate a common war criminals policy. Judge Samuel Rosenman headed the delegation. Viscount Simon headed the British side. Rosenman's proposals included crimes committed before 1939 and against Germans citizens. To please the Americans, Simon in his proposal included a reference to crimes against Jews. Sadly, no resolution was reached due to the death of Roosevelt.

Shortly FDR's death, President Truman adopted the recommendations contained in the memorandum on trial and punishment of Nazi war criminals first presented to Roosevelt in January 1945. Truman used the San Francisco conference to discuss and promote this list with the allies. No decisions were reached since the Soviets and French were not authorized to negotiate the American proposal. On June 14, 1945, the British issued a royal warrant setting the stage for arrests of war criminals by British forces. This warrant was limited to only crimes occurring after September 1939. It also to excluded crimes against the Jews.

It was not until after intense negotiations from June 26 until August 8 among the Allies that a joint accord was reached. Under Article 6 paragraph c, the charter established crimes against humanity which included murder, extermination, enslavement, deportation and other inhuman acts committed against any civilian population before or during the war. Before this time the only Holocaust crimes recognized were merely violence directed at Jews.

On December 20, 1945 in order to establish a common basis for trials to be conducted in the four zones the Allied Control Council for Germany published Law No. 10 "Punishment of Persons Guilty of War Crimes, Crimes against Peace and Humanity." The law empowered the allied commanders of the four occupied zones to conduct criminal trials of individuals on charges of war crimes, crimes against humanity or membership in an organization that planned such crimes. In case of crimes committed by Germans against Germans or stateless persons the military commanders were authorized to permit trial by a German court.

Between December 1946 and April 1949 there were twelve trials involving 185 defendants in the American zone. These trials became known as the Subsequent Nuremberg Proceedings. In none of these trials was the mass murder of Jews considered as a separate criminal offense.29

In the end, the Americans tried 1857 defendants. The military courts convicted 1416 of the 1672 tried. Of those, 450 were sentenced to death, 219 were given life imprisonment and the remaining 889 to various prison terms of 5 years or less. The British tried 1085 sentencing 240 to death, acquitting 348, sentencing 24 to life the remaining 473 received varying prison sentences. The French tried 2107 acquitting 404, sentencing 104 to death, sentencing 44 to life imprisonment, the remaining 1475 received various prison sentences. The Soviets charged 14,240 with crimes, of which 138 were sentenced to death, 142 were acquitted and the remainder sentenced to various prison sentences.30

However, these statistics fail to tell the complete story. Many of the death sentences were commuted and many of those sentenced to prison for long terms were free by 1951. They indicate a lack of the desire by the United States and Britain to pursue war crimes when compared to the total brought to trial under the Soviets especially when many of the Nazis forces went to extraordinary lengths to surrender in the west rather than to the Soviets.

To gain further insight into the failure of the 4-Ds program and the failure of the 4-Ds program to denazify Germany a brief look at the OSS is required. In 1941, Roosevelt created the COI or the Office of Coordinator of Information with Bill Donovan at the helm. The COI evolved into the OSS, the forerunner of the CIA. In assembling his team, Donovan hired many recruits from Wall Street and the top echelons of major corporations. The OSS officers in Spain and Switzerland came from Standard Oil.10 Following the invasion of North Africa, Standard Oil was no longer able to supply Nazi Germany with oil through this route. Standard Oil then began shipping oil through the neutral countries of Spain and Switzerland.

It wasn't until January 28, 1944 that the British cut off oil shipments to Spain. They allowed the shipments to Spain resume only after just three short months on May 2, 1944 after vigorous protests by Franco.11

[EDITOR: HOW would Standard Oil tankers identify themselves to the German U-boats so they wouldn't be sunk in order to deliver oil to the Nazis?]

At the beginning of November 1942, Henri Henggler and David Duvoisin, the Standard Oil bosses in Berne asked Leland Hansen and Daniel Reagan respectively minister and commercial attaché of the United States Embassy permission to continue shipping Nazi Oil from Rumania through Switzerland. The request was made under the guise that it was used by the Hungarian and German embassies. The American embassy depended upon German coal.12

Here is the crux of the sabotaging the 4-Ds program. Many of the personnel within the OSS and the Office of Military Government (OMG) had previously been connected with corporations that traded with the Nazis or had signed cartel agreements with German companies. The problem was systemic throughout the U.S. forces in post-war Germany and throughout the intelligence forces during the war.

The statement above should not be construed to convey the impression that all of the corporate or Wall Street executives that served in the OSS or occupation forces were disloyal to their country and used their positions to the advantage of their corporation. Whether the former Standard executives stationed in Spain and Switzerland with the OSS played any role in the shipment of oil to Nazi Germany by Standard is not known with any degree of certainty and may never be known. However, in many cases there is no doubt that many put their loyalty to their firm ahead of their loyalty to their country. The sabotage of the 4-Ds program was widespread and in some cases can be traced back to Congress, elements within the Department of State or the top echelon of the military.

Even Bill Donovan as head of the OSS and former Wall Street lawyer had ties to I.G. Farben. The files of Ted Clark, vice president of Drug Inc. were withdrawn from the public shortly after Donovan was appointed to head the COI. Donovan had been associated with Drug Inc. Moreover, he had expressed an opinion that cartel agreements were not restricting the market.

A brief look at the formation of the OSS reveals much of its nature. Perhaps, one of the more striking features of the personnel from the OSS roster was how many of the employees rose to later positions within the political system (see appendix). The reader should bear in mind that the list in the appendix should not be considered complete. It was complied from a single source.13 However, scanning the list reveals that an extraordinary number of ex-OSS agents obtained positions as ambassadors or within the State Department. Throughout the 1950s and 60s, these ex-OSS agents had an inordinate influence on foreign policy. Likewise, they undoubtedly contributed to the image that our embassies were merely havens for the CIA.

The OSS had a role in foreign policy from the very beginnings of the agency. Sometimes that role was thrust upon the OSS officers. The State Department jealously guarded their domain while abdicating responsibility. One example was in Cairo, where the American ambassador to Greece and the Yugoslavia-in-exile governments refused to represent the American view at an Anglo-American planning committee. The American view was then put forth by Turner McBaine a California attorney and OSS officer.

Following the war McBaine became a senior partner in a San Francisco law firm and counsel to Standard Oil of California. McBaine also served on the Asia Foundation. In 1967, the Asia Foundation was revealed as having received funding from the CIA and was acting as a front for the CIA.

In a more significant matter, the OSS officers wrote the foreign policy towards Thailand during the war. At the time, Thailand's Minister of Defense was Pibul Songgram, an admirer of Mussolini and Hitler. His main opposition in the Thailand cabinet was Phanomyoung Pridi and admirer of the New Deal. Pibul soon became Premier of the government and purchased large quantities of arms from Italy and Japan. Pibul created a political and social model based on fascism and when the Japanese invaded Thailand, Pibul ordered the military to offer no resistance and agreed to form a military defensive agreement with Japan. The British regarded Thailand as a fascist state and was technically at war with Thailand. The State Department remained indifferent towards Thailand not wishing to ruffle English feathers. It was the OSS backing of Pridi and his underground army that lead to the creation of the free and independent state of Thailand following the war--despite British objections and desires to retain control over a former colony.

Donovan chose his agents from both the left and the right of the political spectrum. For instance, he hired James Murphy former organizer for the IWW for the labor unit. In other cases, he hired members of the Lincoln brigade that had fought in Spain, knowing beforehand they were communists. These veterans of guerilla warfare were assigned to Italy where they set up a network with their former comrades. The group provided some of the best intelligence in the Mediterranean Theater. They also were assigned to France where they could work effectively with the large communist faction of the resistance movement.

Other members of the OSS refused to work with the communist faction in France or at best could only offer half-hearted support.14 Most of the left-wing intellectuals hired by Donovan were for assigned to operational or research roles, while the majority of corporate attorneys and executives were assigned administrative roles. Never the less, by hiring some agents from the left, Donovan had slated the OSS for dissolution following the war. Additionally by hiring members of the Lincoln brigade Donovan provided fuel for the later McCarthy era.

While academia and corporations provided the bulk of the OSS recruits, many members of Americas wealthiest families provided another source. Andrew Mellon's son Paul served as administrative officer of the Special Operations Branch in London. William Mellon, the son of the president of Gulf Oil served in the SI Branch in Madrid. (Note the connection of oil and Spain.) Another OSS agent from the Mellon family was David Bruce, whose wife was the daughter of Andrew Mellon. Allan Scale whose wife was a cousin to Bruce's wife also served in the OSS.

The Mellon family was not the only family connected with the Nazis that had members serving in the OSS. Morgan's two sons were both OSS officers stationed in London. The du Pont family also had two family members serving in the OSS. Alfred was one of the top OSS officials in Washington at the French desk. The Rockefeller family was the only rich family without a family member serving in the OSS.

Just as the corporate attorneys and executives were assigned administrative roles and were in positions to make policy so were the offspring of America's wealthiest families. For instance, Junius Morgan was OSS Treasurer.

While these members of some of America's richest families undoubtedly contributed to winning the war, there is no question that they and many of those recruited from Wall Street and the corporate boardrooms across America were responsible for sabotaging the 4-Ds program. Despite overwhelming evidence by the end of the war of corporate America willingly trading with the Nazis during the war--not a single charge was ever brought against an American corporation. Nor were any top Nazi industrialists ever convicted of war crimes at Nuremberg. The OSS members recruited from Wall Street and corporate boardrooms had intimate knowledge of the cartel agreements and were in the ideal positions to squash any investigations that might lead to the truth about corporate America and its leading industrial families. The elite would be protected.

While Donovan chose his recruits without regard to their political views, he was not adverse to party politics. His non-partisan friendship with Roosevelt protected the OSS. However, Donovan was not adverse to party politics. He correctly foresaw that Thomas Dewey would be the Republican candidate to face Roosevelt in the 1944 election. In anticipation of that, Donovan had suddenly recruited a large number of former assistants of Dewey. Dewey was a Republican and a conservative that later developed a hatred of communism. In fact, Donovan had recruited so many Republicans that in some circles the OSS was referred to snidely as that Republican Club.

Several of Donovan's recruits from the hard-right were unable to fit in. Hilaire du Berrier a hard right journalist was interned by the Japanese and later rescued by the OSS. Donovan then recruited du Berrier as an expert on Indochinese affairs. In a matter of months, du Berrier left the OSS complaining that the leftists within the OSS had squeezed the right wing out of the organization. Du Berrier later became a writer for the John Birch Society.


Another hard right recruit that was dropped was Ralph de Tokdano. De Tokdano had been selected for a parachute drop behind enemy lines in Italy and was training for the mission at a Virginia mansion. While training for the upcoming mission, de Tokdano labeled his representive, Vito Marcantonio as a communist. To be fair Marcantonio had started politics as a Republican with very liberal views and was elected to Congress in 1935 from East Harlem's 20th District. In 1938, Marcantonio defended his seat running as an American Labor Party candidate. Marcantonio viewed the Communist Party as an American party. He was also a strong supporter of civil rights and a vigorous opponent of Joseph McCarthy. In 1944, his district was gerrymandered to include Yorkville, an area south of East Harlem whose major ethic groups, expressed hostility to left politics and had been a hotbed of support for the Nazis in the 1930s. The Wilson-Pakula Act of 1947 prevented him from entering the major-party primaries, thereby forcing him to run on the American Labor Party at a time when it was almost universally identified as Communist controlled. Marcantonio was defeated in 1950 as another victim of the spreading McCarthyism. Ralph de Tokdano later became a contributing editor of William Buckley's National Review.15

Donovan's warriors often experienced needless delays. The State Department objected to issuing the OSS officers passports. Mrs. Ruth Shipley ran the State Department's passport division and insisted on issuing passports with the OSS officer clearly identified as OSS.16 The British Psychological Assessment Board rejected a high proportion of OSS officers assigned to write anti-Nazi propaganda. Many of those rejected were well-known screenwriters and New York advertising men. The sole reason for their rejection was they were Jews.17

While Donovan allowed his agents a free reign to conduct their operations, this resulted in many embarrassing moments for the OSS. In one case, OSS officers in Portugal broke into the Japanese embassy and stole a copy of the enemy's codebook unaware that a naval intelligence team had already broken the code. The Japanese promptly changed their code after discovering the missing codebook. Washington and the Joint Chiefs were then left without a vital source of information for several months until the new code was broken. In another high-level flap, OSS officers armed Tito's guerillas, without first obtaining the permission of the British Theater commander. Additionally, OSS officers sent communist agents into Spain without first notifying the American embassy in Madrid. Thus the agents had been left with no contact and had to fare for themselves.18

In another incident following the establishment of a beachhead at Salerno, a group of OSS officers headed by a young Republican, John Shaheen hatched a wild plot to reach the Italian Naval Command in hopes of convincing the Italian admirals to surrender their fleet to the allies. Shaheen hadn't realized that the main body of the Italian fleet had already set sail for Malta to surrender to the British. Shaheen later became president of several international oil companies and is a large donor to the Republican Party.19 Shaheen later became embroiled in the October Surprise conspiracy in which the Reagan-Bush team conspired with Iran to hold the American captives until after the election. Shaheen was also involved in the Iran/Contra conpsiracy.20 Shaheen had served with Bill Casey in the OSS and they remained close associates throughout their lives.

In other cases, the embarrassment was more humorous such as in the case of an elderly former executive of General Electric briefing an OSS agent on his mission. The former GE executive now a colonel in the OSS incorrectly pronounced the name of the drop zone but spent ten minutes searching the map to find the location before an aide indicated that it was several hundred miles north of the area he was searching. In another case, the OSS parachuted a team into Brittany into a supposed safe zone. The zone turned out to be in the center of the German Second Parachute Division and the OSS team spent a few frantic days in avoiding the Germans.21

Often times the OSS engaged in truly ludicrous operations. One OSS operation involved a Hungarian astrologer. The Hungarian was sent to the Untied States to shake American public confidence of the invincibility of Hitler. After reading the Fuehrer's stars the astrologer predicted immediate doom for Hitler. The astrologer's report was carried from coast to coast in the media.

Although the Hungarian astrologer's operation was bordering on the inane, another OSS operation stands out above all others as truly ridiculous. An OSS group based in London had came to the conclusion that the Nazi State would implode if only its leader could be demoralized. After conducting a long psychological profile of Hitler, the group concluded that Hitler could be unhinged by exposure to vast quantities of pornography. The OSS groups then proceeded to assembly the finest collection of pornography ever put together. The material was to be dropped by plane in the area around the Fuehrer bunker in the assumption that Hitler would step outside and pick one up and immediately be thrown into a state of madness. The effort was in vain however, as the airforce liaison stormed out of the first meeting with the OSS cursing them as maniacs and swearing he would not risk a single life for such an insane plan.22

In another incident, OSS agent Jane Foster obtained a large supply of condoms from a doctor in Ceylon (Sri Lanka). Foster and her team then stuffed the condoms with a message urging the residents of Indonesia to resist the Japanese invaders. They then blew the condoms up and tied the end shut; submarines then released hundreds of these condoms off the Indonesian coast.

One of the first hints of sabotaging the efforts to bring Nazis and their supporters to justice occurred shortly after the invasion of North Africa. Charles Bedeaux was born a Frenchman and became a naturalized American citizen. He accumulated a small fortune in America by devising an anti-union efficiency system. Known as the speed king and hostile to unions, Bedeaux returned to France before the outbreak of war. Bedeaux openly supported the Nazis and cultivated close relationships between many leading Nazis. After the fall of France to the Nazis, Bedeaux became the Vichy representative of a number of French industrialists in their dealings with the Nazis.

As part of his collaboration with the Nazis, Bedeaux traveled to North Africa with a plan to lay a pipeline across the Sahara from West Africa to bring cheap vegetable oil from Dakar to Hitler's Europe. Unfortunately for the enterprising Bedeaux, he became trapped in North Africa following the allied landings in Algiers. As an American citizen, he could have been arrested for treason immediately. However, Allied headquarters took no action against the Nazi collaborator. Edmond Taylor the OSS officer finally had the French arrest the Mr. Bedeaux. Even then after his arrest, the American authorities refused to charge him with treason.

Following his arrest the OSS agent, Arthur Roseborough a former Sullivan and Cromwell attorney working with the Gaullists prepared a case against Bedeaux. Allied headquarters refused to act on the case. The OSS then took the case to Washington. Bedeaux was finally indicted for treason but not before an odd attempt by the FBI to destroy the evidence. Bedeaux was taken into custody and put aboard a plane to the United States. In Miami, Bedeuax committed suicide by taking poison under the very eyes of his guards. Many of the OSS agents in North Africa suspected that a group of influential Americans did not want Bedeaux to stand trial. 31 How Bedeaux obtained poison after being held prisoner for months first by the French and then by the Americans remains a mystery.


Part 5: The OSS in Europe


In late 1942, Washington received an improbable offer from the Vatican.

A high Papal Secretariat offered to furnish first hand information on strategic bombing targets in Japan. The roundabout transfer of documents took only days and became known as the Vessell project. In Rome, the project was headed by Cardinal Monsignor Giovanni Battista Montini, who later became Pope Paul VI. On the OSS side the project was headed by Earl Brennan, a State Department veteran and Republican member of the New Hampshire legislator. Brennan had befriended the leaders of the powerful Italian Masonic Order when he was assigned to the American embassy in Italy during the first year of Mussolini's rule.

Brennan had also befriended some of the leaders of the Italian Mafia that had been exiled in Canada. David Bruce, the OSS chief in London and the husband of Paul Mellon's sister, Ailsa thought Brennan's connections would be useful and was the one who recruited Brennan into the OSS.

Following the Torch landings in North Africa Brennan decided to send some of his agents into Algiers to begin planning for the infiltration operations of Italy. One of his agents was denied a passport by the State Department because of his past subversive activities. Brennan then checked with Martin Dies, the chairman of the House Un-American Activities Committee as to why the passport was rejected. On investigation, it was determined that the agent had been labeled as a subversive because he had provided legal counsel for a union strike in which the management had labeled as communist inspired. Once the offending remark was removed Brennan's agents then departed for North Africa in early 1943.

Following their departure for North Africa, Brennan's remaining staff became occupied with the Vessell project. However, OSS responsibilities for Italian espionage were preempted by the Office of Naval Intelligence. A mysterious deal had been reached with the American Mafia. The notorious mobster, Lucky Luciano would be paroled, in return for which the Mafia agreed to use its criminal syndicate in