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Thursday, Nov 26, 2009
In 1941, Thyssen fled Germany after falling out with Hitler, but he was captured in France and detained for the remainder of the war.
There was nothing illegal in doing business with the Thyssens throughout the 1930s, and many of America's best-known business names invested heavily in the German economic recovery. However, everything changed after Germany invaded Poland in 1939. Even then it could be argued that BBH was within its rights in continuing business relations with the Thyssens until the end of 1941, as the U.S. was still technically neutral until the attack on Pearl Harbor. The trouble started on July 30, 1942, when the New York Herald-Tribune ran an article titled "Hitler's Angel Has $3m in U.S. Bank." UBC's huge gold purchases had raised suspicions that the bank was in fact a "secret nest egg" hidden in New York for Thyssen and other Nazi bigwigs. The Alien Property Commission launched an investigation.
There is no dispute over the fact that the U.S. government seized a string of assets controlled by BBH -- including UBC and Silesian-American Co. -- in the autumn of 1942 under the Trading with the Enemy Act. What is in dispute is if Harriman, Walker and Bush did more than own these companies on paper.
Erwin May, a treasury attaché and officer for the department of investigation in the Alien Property Commission, was assigned to look into UBC's business. The first fact to emerge was that Roland Harriman, Prescott Bush and the other directors didn't actually own their shares in UBC but merely held them on behalf of Bank voor Handel. Strangely, no one seemed to know who owned the Rotterdam-based bank, including UBC's president.
May wrote in his report of Aug. 16, 1941: "Union Banking Corporation, incorporated August 4 1924, is wholly owned by the Bank voor Handel en Scheepvaart N.V. of Rotterdam, the Netherlands. My investigation has produced no evidence as to the ownership of the Dutch bank. Mr. Cornelis [sic] Lievense, president of UBC, claims no knowledge as to the ownership of the Bank voor Handel but believes it possible that Baron Heinrich Thyssen, brother of Fritz Thyssen, may own a substantial interest."
May cleared the bank of holding a golden nest egg for the Nazi leaders but went on to describe a network of companies spreading out from UBC across Europe, America and Canada, and how money from voor Handel traveled to these companies through UBC.
By September May had traced the origins of the non-American board members and found that Dutchman H.J. Kouwenhoven -- who met with Harriman in 1924 to set up UBC -- had several other jobs: In addition to being the managing director of voor Handel he was also the director of the August Thyssen bank in Berlin and a director of Fritz Thyssen's Union Steel Works, the holding company that controlled Thyssen's steel and coal mine empire in Germany.
Within a few weeks, Homer Jones, the chief of the Alien Property Commission investigation and research division, sent a memo to the executive committee of APC recommending the U.S. government vest UBC and its assets. Jones named the directors of the bank in the memo, including Prescott Bush, and wrote: "Said stock is held by the above named individuals, however, solely as nominees for the Bank voor Handel, Rotterdam, Holland, which is owned by one or more of the Thyssen family, nationals of Germany and Hungary. The 4,000 shares hereinbefore set out are therefore beneficially owned and help for the interests of enemy nationals, and are vestible by the APC," according to the memo from the National Archives seen by the Guardian.
Jones recommended that the assets be liquidated for the benefit of the government, but instead UBC was maintained intact and eventually returned to the American shareholders after the war. Some claim that Bush sold his share in UBC after the war for $1.5 million -- a huge amount of money at the time -- but there is no documentary evidence to support this claim. No further action was ever taken nor was the investigation continued, despite the fact UBC was caught red-handed operating a American shell company for the Thyssen family eight months after America had entered the war and that this was the bank that had partly financed Hitler's rise to power.
The most tantalizing part of the story remains shrouded in mystery: the connection, if any, between Prescott Bush, Thyssen, Consolidated Silesian Steel Co. and Auschwitz.
Thyssen's partner in United Steel Works, which had coal mines and steel plants across the region, was Friedrich Flick, another steel magnate who also owned part of IG Farben, the powerful German chemical company.
Flick's plants in Poland made heavy use of slave labor from the concentration camps in Poland. According to a New York Times article published on March 18, 1934, Flick owned two-thirds of CSSC while "American interests" held the rest.
The U.S. National Archive documents show that BBH's involvement with CSSC was more than simply holding the shares in the mid-1930s. Bush's friend and fellow "bonesman" Knight Woolley, another partner at BBH, wrote to Averill Harriman in January 1933 warning of problems with CSSC after the Poles started their drive to nationalize the plant. "The Consolidated Silesian Steel Company situation has become increasingly complicated, and I have accordingly brought in Sullivan and Cromwell, in order to be sure that our interests are protected," wrote Knight. "After studying the situation Foster Dulles is insisting that their man in Berlin get into the picture and obtain the information which the directors here should have. You will recall that Foster is a director and he is particularly anxious to be certain that there is no liability attaching to the American directors."
But the ownership of the CSSC between 1939 when the Germans invaded Poland and 1942 when the U.S. government vested UBC and SAC is not clear.
"SAC held coal mines and definitely owned CSSC between 1934 and 1935, but when SAC was vested there was no trace of CSSC. All concrete evidence of its ownership disappears after 1935 and there are only a few traces in 1938 and 1939," says Eva Schweitzer, a journalist and author whose book, "America and the Holocaust," is to be published next month.
Silesia was quickly made part of the German Reich after the invasion, but while Polish factories were seized by the Nazis, those belonging to the still neutral Americans (and some other nationals) were treated more carefully, as Hitler was still hoping to persuade the U.S. to at least sit out the war as a neutral country. Schweitzer says American interests were dealt with on a case-by-case basis. The Nazis bought some out, but not others.
