Will Rogers once said, ‘If you can build a business up big enough, it’s respectable.’ We see this all the time, with corporate bailouts and banks deemed ‘too big too fail’. Another basic business concept we see played out over and over is that war is profitable (hello, Dubya!). We don’t tend to think about these cynical ideas in relation to the Second World War and its ‘greatest generation’, preferring a carefully cultivated narrative about altruism.
But, of course, the United States has almost always been a capitalist utopia, and the largest war effort in the nation’s history was an irresistible feast, with American corporations lining up on both sides of the table. In other words, the Third Reich was an official enemy, but often a backroom business partner.
Little needs to be said about the United States’ official policy regarding the Third Reich. After Germany sank four American ships, both merchant and military, in the first eight months of 1941, President Franklin D. Roosevelt gave a speech on 11 September, 1941 to address the problem. He ordered the navy to shoot Nazi ships on sight. Additionally, he said the Germans were ‘inhuman, unrestrained seekers of world conquest and permanent world domination by the sword’.
This disdain for Germany and its people was of course not shared by every American, becoming less of a majority opinion the further up the socio-economic ladder one went. Between World War One and World War Two, many American corporations built ties with Germany which they were loathe to sever when the United States joined the war. However, given the general public’s feelings towards Nazi Germany, these companies knew they’d have to cover their tracks.
IG Farben, Corporate Hydra
It is impossible to discuss these relationships without discussing the behemoth known as IG Farben. Originally a German chemical complex, it became a business gateway between Germany and America. The Aluminum Company of America [Alcoa], General Electric, and Standard Oil were just a few of the American firms involved in this multi-national cartel.
Alcoa’s addition to the IG Farben group was essential to Germany’s acquisition of aluminium for its war machine. Although the last of Alcoa’s two patents on making aluminium expired in 1909, to maintain a chokehold on production it bought up as much of the raw bauxite supply as it could. The company then signed an agreement with IG Farben in 1920s which limited US aluminium production. This, in turn, limited production of aircraft as well as shipbuilding. When other companies tried to step up and pick up the slack in production, Alcoa pressured the Office of Production Management to deny loans to assist these companies in refining aluminium.
Alcoa also assisted Germany in acquiring magnesium. There were eight producers of magnesium in the United States as a result of World War I, but during the interwar years this number dwindled to two. Alcoa owned one of them: American Magnesium Co. The Alig Agreement between AMC and IG Farben allowed the latter’s shareholders to restrict production capacity in the United States to a maximum of 4,000 tons per year. And they weren’t the only corporations hamstringing the US war effort in the name of greater profits abroad.
Like with aluminium, what Germany lacked the US had in abundance. So corporations that spanned both nations used their pull to restrict the US’s access to its own resources. By 1936, General Electric, through its subsidiary Carboloy, enjoyed a complete monopoly on the production of tungsten carbide in the US, and used this unique position to divert resources from the US to Germany. Germany now had the materials it needed to build everything it needed, but it would still need the means to power the vehicles they planned to build. And that’s where yet another member of the IG Farben cartel came in.
Originally founded by John D. Rockefeller (who we’ll hear more about later), Standard Oil collaborated with IG Farben to research methods of making synthetic oil from coal, of which Germany had abundant supplies, investing millions of dollars in today’s money in assistance. They also helped Germany develop iso-octane and tetra-ethyl lead, which are crucial for aviation fuels. Additionally, Standard Oil supplied Germany with ethyl lead, an anti-knocking compound found in fuels for both aircraft and automobiles. This was all possible through the creation of a separate company, the Ethyl Gasoline Corporation, which blatantly ignored a warning from the Army Air Corps not to share its technology with Germany when it signed a joint production agreement with I.G. Farben.
IG Farben’s hydra-esque reach provided more than raw materials. General Electric had subsidiaries in Germany during the interwar years, which received money from American banks to build themselves up as the Third Reich came to power. GE’s German equivalent received $35,000 (around $500k in today’s money) in loans from National City Co. between 1925–1928. And in 1933, German General Electric contributed 60,000 Reichsmarks, or roughly half of the amount of the loan, to Hitler’s campaign fund. To further demonstrate the interconnectedness of American and German businesses, Owen D. Young was president of US General Electric, chairman of the board of General Electric Company in New York City, and a director of German General Electric, and Osram, a German lighting manufacturer.
These actions rarely led to any sort of consequences. Although many were never made to answer for their actions, there were instances where the United States tried to hold corporations accountable for assisting wartime enemies of the nation.
The Arsenal of Democracy…and Nazism
In 1998, historians were employed on both sides of a lawsuit filed against Ford and GM, pressing for admission of their ties to the Third Reich. As two companies who established themselves early on as ‘the arsenal of democracy’, as well as the intrinsic patriotism in their branding, they could not afford the embarrassment of telling the general public they supplied both sides of the war. Imagine the American troops’ dismay when, rushing up to meet their German enemies, they found the Nazis using some of the same vehicles, only with different badges on their grilles.
Henry Ford was an easy ally for the Nazis. His strong anti-Semitic views were published in a faltering newspaper he acquired called the Dearborn Independent. Hitler picked up on these columns and other writings of Ford’s, and latched onto them, claiming that Henry Ford was an inspiration to him, and placed a portrait of the automaker in his office. In fact, Hitler even awarded Ford the Grand Cross of the German Eagle in 1938, the highest medal Nazi Germany could bestow upon a foreigner.
An investigative US Army report written by Henry Schneider and dated 5 September, 1945, found that Ford’s Dearborn headquarters struck a complex barter deal with Germany that gave the Third Reich increased access to certain war-essential raw materials, such as rubber. Additionally, Ford would produce a third of Germany’s trucks, in factories within their territory. Ford’s Reich-located factories were operated by forced labour kidnapped and transported back from conquered territories. According to one account of a girl who worked there, the conditions were deplorable, and comparable to those of a concentration camp. They were not paid, lived in barracks and were barely fed.
And in return for his assistance, Ford’s company was well compensated: American Ford received post-war dividends from German subsidiaries worth approximately $60,000 (approximately $1mil in today’s money) for the period between 1940–43.
General Motors also undermined the US war effort, but for quite different reasons than the other companies mentioned thus far. Its president, Alfred Sloan, detested Roosevelt’s running of the country, especially the New Deal, and vowed to do anything to undermine that vision. Thus, he did whatever he could to assist Germany and tear down President Roosevelt, even to the point of keeping America dependent upon oil, and denying it a huge advantage over the Axis in the form of electric mass transit. So when you get back from a European vacation and bemoan the lack of trams, etc., blame this guy. He was one of many vocal opponents that tore apart a blossoming electric mass transit network across America. But that wasn’t all he filled his time with.
He oversaw the acquisition of Opel, a German automaker, in 1929 and once the war broke out used this subsidiary to continue doing business in Germany and influence operations in German plants. These plants quickly ended up producing 29 percent of the trucks used by the German army. While Ford contributed what they were already making to the German war effort, GM/Opel designed and manufactured the three-ton Blitz truck specifically for the Reich’s war against the world. These plants, like Ford’s, were manned by forced labour kept under guard and behind barbed wire fences.
And the icing on the cake? After the war, GM was awarded $32 million by the U.S. government for ‘damages sustained to its German plants’ due to them being bombed during the war. Producers of war-essential goods weren’t the only American corporations unwilling to give up their German markets because of a trifling war. Which brings us to the domestic corporations.
I’d like to buy the Reich a Coke
During World War II, Coca-Cola bolstered the company’s image by dedicating itself to providing every soldier with Coca-Cola, in exchange for being largely exempt from the sugar rationing in place in the United States, and freely using the US military as a freight courier.
Super patriotic, right? But you already know where I’m going to go with this. Starting out in 1929, Coca-Cola increased their German sales to over 100,000 Reichsmarks (roughly $350k in today’s dollars) by the time Hitler came to power. The same year, Max Keith (pronounced ‘kite’) joined the ranks of the ‘Coca-Cola men’, and would later take over from Powers. Keith’s innovative workarounds would produce one of the most popular drinks the world over.
Without the cola syrup, unavailable due to blockades, Coca-Cola’s German subsidiary couldn’t produce actual Coca-Cola. In 1941, Keith asked chemists to come up with an alternative. They obliged, and combined leftovers from apple cider pressings with German-made Coke ingredients to create Fanta soda. When the American troops reached Germany, Coca-Cola’s ‘technical observers’ came and reclaimed Coca-Cola GmbH, as well as the new addition to the Coca-Cola family.
But what would American history be without the systemic degradation of everyone that wasn’t a White Anglo-Saxon Protestant?
The enemy of my enemy is my…country?
The Rockefeller Foundation of New York played a large part in providing the one essential component Germany lacked: money. They started in 1920 when they began funding the research of racial hygienist Agnes Bluhm, who was studying alcoholism and heredity. Seems pretty innocuous, right? Well turns out trying to blame societal ills on what would be known as genetics is a slippery slope.
After a tour of Europe, the Rockefeller Foundation began supporting other eugenicists and racial hygienists, such as Hermann Poll, Alfred Grotjahn, and Hans Nachtshiem. By 1926, German researchers had received $410,000 (in modern day terms, approximately $4 million) from the Rockefeller Foundation. They also helped establish several of Germany’s largest centres for conducting eugenics research and experiments, including the Kaiser Wilhelm Institute for Psychiatry and the Kaiser Wilhelm Institute for Anthropology, Eugenics, and Human Heredity. Later, when the latter was going under during the depression, the Rockefeller Foundation would pump money into the Institute to keep it afloat. In 1928 they built a new building for the Department of Genealogy and Demography, which carried a price tag of $325,000. Even after the Nazi rise to power and the start of the Third Reich, Rockefeller remained supportive of Germany’s institutions and practices.
(For the uninitiated, eugenics was the well-intentioned-but-racist pseudoscience born in Virginia and culminating in eliminating ‘unfit’ individuals in German gas chambers. Developed by Charles Darwin’s cousin Francis Galton, it applied the concepts behind livestock husbandry to human populations, with the devastating, if not unforeseeable, consequence that people started being treated like livestock.)
More help researching what to do with those pesky nonwhites shortly followed. The Carnegie Institution of Washington kept close-knit ties with Germany’s fascist eugenicists, and the two worked closely, sharing work and results. One of the Carnegie-backed studies produced the formulas for calculating if someone was a full Jew, a half-Jew, or a quarter-Jew. California eugenicists worked to produce propaganda pamphlets for the Nazis, and helped to distribute them. In return, America would get the German documentary Erbkrank, or The Hereditary Defective, which would be shown in public schools across the country. That was the justification for the systemic annihilation of people. Now they just needed a method. Once again, America provided.
THINK of people as numbers
Like the rest of the companies mentioned, IBM had a respectable German subsidiary company which veiled connections with its New York-based parent company. Deutsche Hollerith Maschinen Gesellschaft, better known as Dehomag, was responsible for providing the punch card and database system the Nazis used to identify, organise and systematically exterminate enemies of the Reich. These cards gave the Nazis everything they needed to know: nationality, date of birth, family information, which category of ‘unfit’ people they belonged to, and their fate once they reached the camps. Dehomag also designed systems to track Luftwaffe inventory, railroad schedules and other aspects of life in the Third Reich.
On 12 April, 1933, Hitler decreed that a census would immediately take place. But the local governments were not up to the task of such a massive project. Enter Karl Koch, an attorney for Dehomag, who offered to do the job on a contract. Their successful handling of the project started IBM’s prosperous relationship with Nazi Germany, despite the gathering war clouds. In anticipation of this, Thomas Watson, the company’s president, took actions to ensure that Dehomag received the clients and factories of any IBM companies within other European countries, so that when Germany’s borders expanded, no profit would be lost. Austrian IBM systems even logged all Jewish possessions for records of assets acquired by the Reich.
Their relationship grew even more entangled in 1941, when an agreement was made to sell some shares of Dehomag to the Nazi government in exchange for a secure monopoly and the right to pay royalties to IBM in New York. As the war progressed, nearly every camp the Nazis established had its own IBM outpost for cataloguing its victims. Each camp had its own code, and these outposts were responsible for giving each inmate their assigned number. Under this system, each camp could potentially register 999,999 people.
Without Dehomag’s ability to handle great swaths of data, the Third Reich would never have successfully implemented the Holocaust to the extent that they did. And while Dehomag was inextricably tied to Hitler’s regime, throughout the war IBM NY maintained awareness of its subsidiary’s actions and directed it via companies in neutral countries, so that IBM appeared to cut ties in Germany once the United States entered the war. Then, like GM, IBM lodged post-war claims for compensation for war damage to their machines in each of the countries affected by the war, including Bulgaria, France, Poland and Romania.
It’s pretty telling, I think, that none of these companies were ever held accountable for their double-agent roles in WWII. Telling of the fact that America didn’t necessarily take issue with what Germany was doing within its own borders, just what Germany’s allies were doing in the Pacific and to a lesser extent what Germany was doing to the United Kingdom.
All of the above companies are still active, and some of the largest players in the corporate world. Even Standard Oil, which was dissolved as part of an antitrust suit, lives on in BP, Chevron, and Exxon. So unfortunately, the lesson here is that assisting in the murder of millions of people, for the purpose of extra profit, has no consequences. Hopefully as these stories come to light, and the complacency of these corporations becomes known, they will prevent such reckless pursuits of personal gain in the future. But companies like Blackwater, who escaped the Iraqi war to go into the domestic security business as Academi, don’t give me much confidence.
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