GR-related: Thomas McKittrick and the BIS

[Jamie McKittrick]

Oh my.


On Tue, Aug 19, 2014 at 12:31 PM, Kai Frederik Lorentzen <
lorentzen at hotmail.de> wrote:

>
> > McKittrick started work in Basel in January 1940. The outbreak of war in
> Europe posed existential choices for the BIS management. There were three
> options: liquidate the bank, downsize and become dormant until the end of
> hostilities, or remain as active as possible within the bounds of the
> declared policy of “neutrality.” The directors were unanimous—and already
> thinking ahead of the needs of transnational capital: The BIS must be kept
> going to assist with postwar financial reconstruction. McKittrick assured
> the Swiss authorities that the bank would be neutral and the staff would
> not “undertake political activities of any sort whatsoever on behalf of any
> governments or national organizations.”
>
> The bank was indeed a bizarre island of neutrality. Basel is perched on
> the northern Swiss border, overlooking both France and Germany. Just a few
> miles away, Allied and Nazi troops were fighting and dying. But at the BIS,
> nationals of opposing sides worked together in courteous harmony. Roger
> Auboin, the manager, was a Frenchman. Paul Hechler, the assistant manager,
> was a German, a Nazi party member who signed his correspondence ‘*Heil
> Hitler*,’ as German law required. Rafaele Pilotti, the bank’s secretary,
> was Italian. British nationals also worked at the bank. After the fall of
> France, the BIS and the staff were temporarily evacuated from Basel, in
> anticipation of a Nazi attack. But the German invasion of Switzerland never
> materialized. Switzerland was far more useful to the Nazis as a neutral
> launderer of Nazi gold, a supplier of hard currency, and a financial
> channel to the rest of the world than as another territory under Nazi rule.
>
> In any case, McKittrick’s declarations of neutrality soon proved
> worthless. He and the rest of the bank’s management turned the BIS into a
> de facto arm of the Reichsbank. This was not a result of inertia,
> passivity, or bureaucratic sloth. It followed from a series of deliberate
> policy decisions. The BIS accepted Nazi gold looted from occupied countries
> such as Belgium until the final days of the war, when even neutral
> countries refused the plunder. The BIS recognized the forcible
> incorporation of 10 countries, including France, Belgium, Greece, and the
> Netherlands, into the Third Reich. The BIS allowed the Nazi occupation
> regimes to take ownership of those nations’ BIS shares, so that the Axis
> bloc held 64.7 percent of the bank’s voting stock. Board meetings were
> suspended, but Annual General Meetings continued, with member banks voting
> by proxy.
>
> McKittrick was especially close to Emil Puhl, the Reichsbank
> vice-president, whom McKittrick described as his friend. Puhl, who was a
> director of the BIS, was a regular visitor to Basel. In autumn 1941
> McKittrick gave Puhl a tutorial on the Lend-Lease program, under which the
> United States supplied the Allies with arms, ammunition, and other war
> materiel. The act, passed in March of that year, effectively marked the end
> of the United States’ policy of neutrality. But America’s entry into the
> war did not affect McKittrick’s cordial and productive relationship with
> the Reichsbank. Puhl wrote of McKittrick in September 1942, “Neither his
> personality nor his manner of conducting business have been any cause for
> any criticism whatsoever.”
>
> The Reichsbank greatly valued its relationship with the BIS. Berlin
> continued to pay interest on the BIS’s prewar investments in Germany, even
> though that interest contributed to the bank’s dividends, which were paid
> to its shareholders, including the Bank of England. Thus, through the BIS,
> Nazi Germany was contributing to Britain’s wartime economy. It was a price
> worth paying, Puhl believed. Some of the BIS’s dividend payments to
> shareholders in Nazi-occupied countries went through the Reichsbank, thus
> giving Berlin access to the foreign exchange transactions and allowing it
> to charge a fee for its services.
>
> Hermann Schmitz, the CEO of IG Farben, the giant Nazi chemicals
> conglomerate, and a BIS board member, sent his sincerest New Year wishes to
> McKittrick in January 1941. Schmitz wrote, “For their friendly wishes for
> Christmas and the New Year, and for their good wishes for my 60th birthday,
> I am sending my sincere thanks. In response, I am sending you my heartfelt
> wishes for a prosperous year for the Bank for International Settlements.”
> It would certainly be another prosperous year for IG Farben, one of whose
> subsidiaries manufactured Zyklon B, the gas used to murder millions of Jews.
>
> ***
>
> In the winter of 1942 McKittrick traveled to the United States. His return
> to New York was the talk of Wall Street. On Dec. 17, 1942, Leon Fraser, an
> American banker and himself a former BIS president, hosted a dinner for
> McKittrick at the University Club. Thirty-seven of the United States’ most
> powerful financiers, industrialists, and businessmen gathered in his honor.
> They included the presidents of the New York Federal Reserve, the National
> City Bank, the Bankers’ Trust, and General Electric, as well as a former
> under-secretary of the treasury and a former U.S. ambassador to Germany.
> Standard Oil, General Motors, JP Morgan, Brown Brothers Harriman, several
> insurance companies, and Kuhn Loeb also sent executives. It was probably
> the greatest single gathering of America’s war profiteers. Many of these
> companies and banks had, like McKittrick, made fortunes from their
> connections with Germany, connections that carried on producing profits
> long after Hitler took power in 1933 and certainly after the outbreak of
> war in 1939. <
>
> http://www.tabletmag.com/jewish-news-and-politics/143053/hitlers-american-banker
>
>
>
>
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