Quotes from CHAPTER TEN: The Myth of “Sidney Warburg” (from WALL ST AND THE RISE OF HITLER)

The question posed in this chapter is the accusation that some Wall Street financiers (the Rockefellers and Warburgs specifically have been accused) directly planned and financed Hitler’s takeover in 1933, and that they did this from Wall Street. On this question the so-called myth of “Sidney Warburg” is relevant. Prominent Nazi Franz von Papen has stated in his Memoirs-.3

. . . the most documented account of the National Socialists’ sudden acquisition of funds was contained in a book published in Holland in 1933, by the old established Amsterdam publishing house of Van Holkema & Warendorf, called De Geldbronnen van Het Nationaal-Socialisme (Drie Gesprekken Met Hitler) under the name “Sidney Warburg.”

A book with this title in Dutch by “Sidney Warburg” was indeed published in 1933, but remained on the bookstalls in Holland only for a matter of days. The book was purged.4 One of three surviving original copies was translated into English. The translation was at one time deposited in the British Museum, but is now withdrawn from public circulation and is unavailable for research. Nothing is now known of the original Dutch copy upon which this English translation was based. The Second Dutch copy.... The third Dutch copy found its way to Switzerland and was translated into German. The German translation has survived down to the present day in the Schweizerisches Sozialarchiv in Zurich, Switzerland. A certified copy of the authenticated German translation of this Swiss survivor was purchased by the author in 1971 and translated into English. It is upon this English translation of the German translation that the text in this chapter is based.

Publication of the “Sidney Warburg” book was duly reported in the New York Times (November 24, 1933) under the title “Hoax on Nazis Feared.”

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

A Synopsis of the Suppressed “Sidney Warburg” Book

The Financial Sources of National Socialism opens with an alleged conversation between “Sidney Warburg” and joint author/translator J. G. Shoup. “Warburg” relates why he was handing Shoup an English language manuscript for translation into Dutch and publication in Holland.

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

The general concensus at the bankers’ meeting was that the only way to free Germany from French financial clutches was by revolution, either Communist or German Nationalist.

In return for preferred financial support, Hitler would be expected to conduct an “aggressive foreign policy and stir up the idea of revenge against France.” This policy, it was anticipated, would result in a French appeal to the United States and England for assistance in “international questions involving the eventual German aggression.” Hitler was not to know about the purpose of Wall Street’s assistance. It would be left “to his reason and resourcefulness to discover the motives behind the proposal.”

few weeks after Warburg’s return from Europe the Hearst newspapers showed “unusual interest” in the new German Nazi Party and even the New York Times carried regular short reports of Hitler’s speeches. Previously these newspapers had not shown too much interest, but that now changed.6 Also, in December 1929 a long study of the German National Socialist movement appeared “in a monthly publication at Harvard University.”

Part II of the suppressed “Financial Sources of National Socialism” is entitled “1931” and opens with a discussion of French influence on international politics. It avers that Herbert Hoover promised Pierre Laval of France not to resolve the debt question without first consulting the French government and [writes Shoup]: When Wall Street found out about this Hoover lost the respect of this circle at one blow. Even the subsequent elections were affected — many believed that Hoover’s failure to get re-elected can be traced back to the issue.7

In the next Warburg-Hitler meeting, Hitler argued that “the Soviets cannot miss our industrial products yet. We will give credit, and if I am not able to deflate France myself, then the Soviets will help me.” Hitler said he had two plans for takeover in Germany: (a) the revolution plan, and (b), the legal takeover plan. The first plan would be a matter of three months, the second plan a matter of three years. Hitler was quoted as saying, “revolution costs five hundred million marks, legal takeover costs two hundred million marks—what will your bankers decide?” After five days a cable from Guaranty Trust arrived for Warburg and is cited in the book as follows: Suggested amounts are out of the question. We don’t want to and cannot. Explain to man that such a transfer to Europe will shatter financial market. Absolutely unknown on international territory. Expect long report, before decision is made. Stay there. Continue investigation. Persuade man of impossible demands. Don’t forget to include in report own opinion of possibilities for future of man.

Warburg cabled his report back to New York and three days later received a second cablegram reading: Report received. Prepare to deliver ten, maximum fifteen million dollars. Advise man necessity of aggression against foreign danger.

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

The third section of “Financial Sources of National Socialism” is entitled simply “1933.” The section records “Sidney Warburg’s” third and last meeting with Hitler — on the night the Reichstag was burned.

At this meeting Hitler informed Warburg of Nazi progress towards legal takeover. Since 1931 the Nationalist Socialist party had tripled in size. Massive deposits of weapons had been made near the German border in Belgium, Holland, and Austria — but these weapons required cash payments before delivery. Hitler asked for a minimum of 100 million marks to take care of the final step in the takeover programme. Guaranty Trust wired Warburg offering $7 million at most, to be paid as follows — $2 million to the Renania Joint Stock Company in Düsseldorf (the German branch of Royal Dutch), and $5 million to other banks. Warburg reported this offer to Hitler, who requested the $5 million should be sent to the Banca Italiana in Rome and (although the report does not say so) presumably the other $2 million was paid to Düsseldorf. The book concludes with the following statement from Warburg: I carried out my assignment strictly down to the last detail. Hitler is dictator of the largest European country. The world has now observed him at work for several months. My opinion of him means nothing now. His actions will prove if he is bad, which I believe he is. For the sake of the German people I hope in my heart that I am wrong. The world continues to suffer under a system that has to bow to a Hitler to keep itself on its feet. Poor world, poor humanity.

What would be the motive behind such a book?

The only motive that seems acceptable is that the unknown author had knowledge a war was in preparation and hoped for a public reaction against the Wall Street fanatics and their industrialist friends in Germany—before it was too late. Clearly, whoever wrote the book, his motive almost certainly was to warn against Hitlerian aggression and to point to its Wall Street source, because the technical assistance of American companies controlled by Wall Street was still needed to build Hitler’s war machine. The Standard Oil hydrogenation patents and financing for the oil from coal plants, the bomb sights, and the other necessary technology had not been fully transferred when the “Sidney Warburg” book was written. Consequently, this could have been a book designed to break the back of Hitler’s supporters abroad, to inhibit the planned transfer of U.S. war-making potential, and to eliminate financial and diplomatic support of the Nazi state. If this was the goal, it is regrettable that the book failed to achieve any of these purposes.