HITLER'S SECRET BACKERS Part 2

by Sidney Warburg

1931

I have sworn not to expound any longer on international financial relations. This oath was too hasty. I must bring up several more incidents that took place on the stockmarkets of London and New York, in order to give a clearer picture of that which follows. It is not romantic, dear reader, but complain to those who make history, not to me.

In September, 1931 the Bank of England gave up the gold standard. This means a great deal for a country whose financial world considers gold the basis of its economy and consequently practices the gold theory. Since the days of the great Kent, England has used gold as the criterion of its financial system except for a short interruption for 1915-1921. This change of principle and practice in England had great consequences in America. The value of the enormous gold deposits in the Federal Reserve Banks was considerably reduced. But that was not the worst result felt on the New York stockmarket. America was much more afraid of endangering the dollar. It was feared that the dollar would follow the same path as the pound sterling. The American financial world knew that the decline of the pound sterling was the result of French tactics, intended to weaken London financially, preventing further assistance to Germany. The position of New York in 1931 was not much different from that of London in 1929 and 1930, for that reason America was afraid of being left unprotected by the same French tactics in case London cooperated with France. French financiers have proven since 1926 that they are clever manipulators. Poincare is the greatest financial genius of these times. Earlier, American and English financiers and experts had looked down on their French colleagues with confident contempt. The years 1926 and 1931 plus the time in between have taught us that we could learn a good deal from the French financial world. Perhaps I will give some evidence later for any doubtful readers. This is not, however, within the frame of reference of this book. New York was tense.

This tension had turned to uneasiness -- the same had happened in London a few years earlier -- enormous shipments of gold were made from New York to Europe, and it seemed as if these shipments were destined for the most part for France. This is nor absolutely certain. In the beginning we were glad to see these gold shipments, because we had long since given up the belief in the financial legend that huge gold supplies mean actual well being for a country. But the French people still believed this. When, at the end of September, 1931 and the beginning of October, 1931, between 650 and 700 million dollars in gold had been shipped to Europe in three weeks, we became rather anxious. We are concerned here with so-called particulars, partial shipments. The gold deposits of the French government still sat in the Federal Reserve Banks. They were estimated at 800 million dollars at the end of October. If this amount was asked for, what then? Naturally we were prepared to pay it, but it would have caused a panic in the States, and the flight from the dollar would become fact. France therefore had the key to the dollar situation in its hands.

Let us go back a few weeks. Hoover had granted an interview to an editor of the Chicago Tribune at that time. Unconsciously Hoover and the editor played into France's hands. Very few leaders possess international financial insight. Do you know that a Rockefeller, a Wanamaker, a Harding, son of the late President, and I will calmly say, even Hoover, are all childishly inept and naive in this field? I also know statesmen in European countries who know equally little about international finance and economy. It is not a specifically American occurrence.

Let us go further. Hoover told the editor of his intention to make radical proposals very soon regarding reparations to Germany and the regulation of war debts between all states. One could see from the editor's information that it was possible for Hoover to propose the annulment of reparations payments. Most people in America were astounded by the proposal. But France was on the qui-vive. I don't know if in October, 1931 Hoover, on his own initiative, asked Laval to come to Washington, or if Laval invited himself. In financial circles on Wall Street they believed the latter. So Laval was coming to Washington, but unexpectedly two French financiers came to New York, landing on October 15, the same day Laval arrived. The French financiers were Farnier, Governor-Delegate of the Bank of France, and Lacour-Gayet, former financial attache to the French embassy in Washington. They contacted the heads of the Federal Reserve Banks immediately, who then pulled in two representatives of the Treasury Department. Many rumors were circulated as to what was being discussed at this meeting. I know from Carter what was generally brought up. He never would disclose much detail. I gathered from this that the negotiations were not always friendly. The French had come to New York to decide along with the Federal Reserve Banks what could be done in New York. They supposed that the French government had lost several million by the decline of the pound sterling and London's renunciation of the gold standard. The weak position of the dollar had caused unrest in Paris, and they wanted to be sure they would not suffer further losses from the dollar. They wanted to know what was being done to support the dollar. Of course, the enormous gold shipments to Europe were mentioned, as well as the huge French deposit in the Federal Reserve Banks. The French were prepared to transfer the sum of 200 million dollars, a sum by French calculation still deposited in private American banks, to the Federal Reserve Banks, strengthening its position. The French, however, added conditions:

• 1. The Federal Reserve Banks must guarantee a minimum rate of exchange on the dollar, applying to French accounts in the U.S.A.;
• 2. The rate of interest for these sums should be raised 4.5%;
• 3. A minimum sum should be determined, that France would leave in the States.

Since the Americans were not immediately prepared to agree to these conditions, the French revealed nonchalantly that even though the agreement they, Lacour-Gayet and Farnier, would make with the Federal Reserve Banks was of great importance, it was only part of a general agreement Laval would be settling a few days later in Washington. They had let the cat out of the bag. It was clear that Laval had to dissuade Hoover from his plans for reparations payments and regulation of debts, and that Laval had to make use of the government funds deposited in the U.S.A. to force the President to give up his plans. No one can say what the result of these negotiations was in New York as well as Washington. The banking world in New York stubbornly resisted the idea of the States selling themselves to French interests on international territory for the sum of 800 million dollars -- the French funds in America. It is a fact, however, that Hoover promised Laval not to undertake anything pertaining to the question of reconstruction and regulation of debts without first consulting the French government. When Wall Street found out about this, Hoover lost the respect of this circle at one blow. Even the subsequent elections were affected -- many believe that Hoover's failure to get reelected can be traced back to the issue. One forgets that Hoover was in the middle of a difficult situation. On one side, the American banking world with the Federal Reserve Banks at the head, who represented the opinion that America could readily dispense with the French deposit if it was misused by France to hold moral influence over the U.S. government in the field of international politics. On the other side stood the Treasury Department, whose leaders would do anything to avoid a dollar panic, pointing to the English precedent.

In October, 1931 the situation was tense on Wall Street and the atmosphere was ominous. At the end of the month I received the following letter from Hitler in Berlin:

Our movement is growing rapidly all over Germany, putting large demands on our financial organization. I have used the money you procured for me to build up the party and realize now that I will have to leave the country in a foreseeable amount of time if new revenue is not supplied. I do not have access to huge government financial sources, as do our enemies the Communists and Social Democrats, but am dependent completely on party contributions. There is nothing left of the amount I received. Next month I must begin the last great action that will bring us power in Germany.

A great deal of money is needed. I ask you to report immediately how much I can count on from you.

Two things struck me from this letter. It was the first time Hitler had used the word party with me. His tone in the letter was more one of command than one of a petitioner. Although the letter was dated from Berlin, it arrived in an envelope postmarked in New York with an American stamp. Hitler must already have had supporters in the States, specifically in New York.

The next day I was at Carter's, and I gave him the letter. Carter was the leader of the opposition to the 'Old Wives' behavior of the government, as he called it, regarding the French demands. The report of Hoover's reversal had angered him so, that he vented his fury over France to whoever would listen. Carter was a hot-tempered man. He read Hitler's letter and began to laugh, then swore and called himself an idiot. He said to me: "We are such dopes. Since 1929 we haven't thought of 'this man' Hitler. All this time we had the means right in our hands to put France down, and we didn't use them. Just wait, we will hold a meeting here this afternoon, and I will try to reach Montagu Norman from the Bank of England, who is here in New York. If he comes, then we can play our trumps. You must come too, of course."

The meeting at the offices of Guaranty Trust Co. was fully attended. I can only explain this by the fact that the tense situation of the New York stockmarket required the presence of its leaders, and Carter had reached them all easily. Opinions were divided. Rockefeller, Carter, and McBean were the Hitlerians, if I may call them that, and the others vacillated. First, Montagu Norman had to be informed of the events in 1929. He found the sum of ten million dollars to finance a political movement very high, an opinion not understood by the rest, since it was well known that political parties in England spend huge sums on propaganda. Glean from Royal Dutch shared Montagu Norman's view. He added that there was little aggression against France in the publications of the Hitler movement. He felt that Hitler was a loudmouth and would never act. He also noticed how Hitler had obviously changed his "movement" to a "party," a transformation that would place great importance on his parliamentary efforts. Glean closed his commentary by saying that there had been enough talk, in Germany more than elsewhere, and a man like Hitler would play along with the majority of his followers in the Reichstag without changing anything in the existing situation. Carter and Rockefeller argued against this view, saying that even if Hitler achieved a majority in parliament he could not be dissuaded from the platform binding him to the German people, and was obligated to use what he had written and spoken of as the only method of pulling the country out of difficult times. He would have to go out on the streets with his followers while keeping up parliamentary efforts at the same time, if he didn't want to lose his immense support. It was finally agreed that in principle Hitler should be assisted further, but someone should be directly informed of the situation in Germany and in the Hitler party before the amount was determined. I was asked if I was prepared to take on this assignment and to telegraph the amount to Carter as before, then signing it over to Europe in the same way as in 1929, or whatever way I thought best.

I was not able to free myself immediately from my own affairs, so after ten days I traveled to Europe.

Much had changed in Germany since 1929. The National Socialist movement, whose "Fuhrer" had received me in a beer cellar in 1929, had reached the upper levels of society and had his headquarters in the same city, in one of the most beautiful buildings in the best part of town. The National Socialists had their own houses everywhere, in the cities of Berlin, Hamburg, Frankfurt, Dusseldorf, Koln, two uniformed watchmen always stood in front of each, day and night as in front of a barracks.

I saw numerous passersby salute the watchmen with an arm movement similar to the fascist greeting, each shouting simultaneously "Heil Hitler." It didn't take much study to see that Hitler's following had increased enormously since 1929. I could cut my trip through Germany short, because I saw the same picture everywhere. On Saturday afternoons and Sundays the majority of the young people in most cities donned their uniforms and marched in formations differing little from military groups. It is true that there were differences between uniforms, but most were brown and black. Swastikas were everywhere, the emblem of the Hitler party. Even women had swastikas on the rims of their purses -- the saleslady in the cigar store in Berlin, where I shopped regularly, wore a huge swastika on a thin necklace. This was no silly decoration, the intent to display conviction was obvious. I had a talk with a bank director in Hamburg whom I had known well in the past. He was quite taken in by Hitler and confessed that earlier he had trusted the German Nationalist Party more, but now he doubted their success because monarchists were in control of it, and the German people had not forgotten the treason of the imperial family in 1918. It was hard for me to take his opinion seriously, because he was a Jew. I needed an explanation, so I asked him how it was possible for him, as a Jew, to be sympathetic to Hitler's party. He laughed. "Hitler is a strong man, and that is what Germany needs. The compromises and vacillations must finally come to an end. The German people are not mature enough for democracy. When the Kaiser ruled the country badly, and he alone was responsible for the administration, not one person objected, everyone fulfilled his tasks, understood his duty. The Germans are quite another story from the English and Americans. They must have someone they can look up to, then they will do whatever is ordered just because the strong man is giving the orders. They have always had basically nothing but contempt for an Ebert, even the Social Democrats, and regarding Hindenburg, they respect him, but regret that he can't act as regent in the true sense of the word. Since 1918 we have had Chancellors who were commoners, who had reached the top of the ladder through politics. No one respected them. A prince of pure blood in opposition to the Kaiser would have made a good Chancellor." I remarked that Hitler also came from low origins.

"Of course, but that is a different story. Hitler worked himself up and did not crawl into a political party to reach his goals, but created his own party from scratch. You will see that Hitler is on the rise. It will only last another year, then he will be the man. He began in the trenches and will finish as dictator." Again I posed my question of how my informant, as a Jew, could be a member of the Hitler party. He passed over the question with a sweep of his hand. "By Jews Hitler means Galician Jews, who polluted Germany after the war. He recognizes Jews of pure German origin as equal to other Germans, and when the time comes he will not bother us in any way. Also you must not forget that Jews control both the Social Democratic Party and the Communist Party. He will have to win these over, not because they are Jews, but because they are Communists or Social Democrats." I interjected again that Hitler was still against Jewish bank capital, I can even say against banking in general. My informant thought I was very naive. He added that Hitler's platform could not be fulfilled on every point, and Hitler knew that very well. "He has to make unrealizable demands to win over the masses, and this is certainly the least that should worry us. When Hitler comes to power he won't have to be so careful of the masses; then he will be strong enough to push through whatever he wants."

Two days later I spoke to an industrial magnate. He was also a follower of National Socialism. I also read all the newspapers, and tried to make a coherent summary of the political streams in the German press; I concluded that the National Socialist Party showed the greatest activity, had established its roots in all levels of the population, and that opposition from Communists, Social Democrats and other parties was lukewarm and definitely uncoordinated.

I became more and more convinced that Hitler was not experimenting, but wanted to achieve a clearly defined goal, supported by the majority of the German people. It was now time for me to contact Hitler and I wrote to the Berlin address I had received from him, and took a room in the Hotel Adlon. The next day I was called to the telephone while I was reading newspapers in the hotel lobby. A voice, very likely a woman's, asked me if I would be in my hotel evenings, and referred to a letter I had directed to the "Fuhrer."

I received von Heydt and a newcomer in my room. He was introduced to me as Luetgebrunn. After a short statement from von Heydt, Luetgebrunn began to speak. It was as if he was making a prepared speech, he glanced at a bundle of notes from time to time.

"Our activities with the unemployed have succeeded against all expectation, but do cost a lot of money. Our organization is military and therefore also not cheap. Our houses in various cities are all set up like barracks, our people sleep there, eat there, everything at the cost of the party. We provide uniforms, those who have the money buy them, but the unemployed should not be driven away by the costs of equipment. For that reason we are obligated to donate free uniforms and other equipment to our unemployed members. Some of our transportation vehicles belong to party members, but we have had to provide our own trucks and other transportation in the areas in which we have not much following. There are party members who are not able to lend us their trucks because they are afraid of losing customers. Then there are weapons to think of. We have to buy our weapons from smugglers, and their demands are high. We have our buying posts on the borders of Austria, Holland and Belgium, but often the weapons are confiscated by the authorities, thousands are lost and we have to start over again. We have not established direct contact with weapons factories; the only one we have contact with is the F.N. Fabrik in Belgium, but the amount we have been guaranteed is too small. Our Storm-Detachments are incompletely equipped. We can't buy machine guns. Revolvers and carbines are not sufficient on the streets, streams of unemployed join up in the cities and every new man costs money."

Luetgebrunn continued in this vein for quite a while. Then it was von Heydt's turn, and he informed me that the "Fuhrer" would receive me the next day at eleven in the morning in his house on 28 Fasanenstrasse. I would just have to give my name to the maid. No. 28 Fasanenstrasse is an ordinary family house. I could not tell from the outside that the "Fuhrer" lived here, no brown uniforms, or any other sign. An ordinary visit to an ordinary citizen. Hitler had aged in the two years I had not seen him. Yet I found him less nervous, more dignified, more carefully dressed, I could say he was more self-confident. He seemed pleased to see me again, because he asked me with interest about all sorts of details concerning myself. Then, according to his usual custom, he began with the main issue without introduction.

"I don't have much time. Luetgebrunn has informed you of everything already. What has America been saying? Give us one more year and we will have the power in our hands. Do you read the Reichstag reports? What do you think of our showing? When one of our delegates stands up, everyone listens, and the red hordes tremble and quiver. We'll get those greenhorns. They have betrayed and sold out the German people, and we will punish them for it. We have prepared a mobilization plan that will run as smoothly as a clock. One of my best partners is Goring. I have entrusted this to him. Our troops can be mobilized over the whole country in two hours to go out on the streets. First come the Storm Detachments, whose task it is to occupy the buildings, take the political leaders and members of the government who don't collaborate with us prisoner. Then come our other people, who will occupy the buildings continuously, and our organization will be complete. If blood has to flow, then it will. Revolution is not made with a handkerchief; whether the handkerchief is red or white has nothing to do with it. Traitors can only be taught how to behave with force."

I wanted to ask here what the foreign policy would be. Hitler stood up and strode with large steps across the room. "Foreign countries will be divided into two camps. Our enemies and our competitors. Our enemies are first of all France, Poland and Russia, our competitors are England, America, Spain, Scandinavia and Holland. We have no score to settle with any of the other countries. The population of the Alsace Lorraine must be brought to revolution, as well as Silesia. That is our first task, as soon as we can get power. If France wants war, then war it will be. We don't recognize the Treaty of Versailles. I want to see Germany and the German people free. If we are not allowed to arm ourselves, then we will do it secretly. All German governments have shown all their cards to France. We won't do this. Our divisions are not regiments, our weapons are not war materials. In two years I will build a German army strong enough to surround France. I will have the chemical industry adapted for war purposes. The situation with our competitors is even simpler. They can't live and work without Germany. I will make demands. Wherever German products are turned down by high import taxes, unlimited production must still be kept up. The German people must be totally self-sufficient, and if it doesn't work with France alone, then I will bring in Russia. The Soviets can't 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."

I must make a small remark here. When I returned to my hotel I wrote this conversation down word for word. My notes are in front of me, and I am not responsible for their incoherence or incomprehensibility. If you think his views on foreign policy are illogical, it is his fault, not mine. I will continue.

"Stalin has made plans, and he will succeed because he has won over the Russian people. I will also make plans and hold myself strictly to them; what the Russians can do we can do twice as quickly, twice as intensively. After one year of my government there will be no more unemployment in Germany. Jews will be excluded, as well as Communists and Social Democrats; the camps I will lock them up in are already being planned. The Reichswehr is already in our hands to the last man. The government hasn't even noticed this, but I will leave them to their blindness -- I am certain of my control. Goring and Gobbels, Streicher and von Heydt have been to Rome many times and have spoken to Mussolini, Rossi, Dumini, and other fascist leaders about the whole organization there. We are also building up our organization according to our own circumstances. Mussolini and Stalin, the first more than the second, are the only leaders for whom I have any respect. All others are a bunch of old wives. Stalin is a Jew, that is a shame. Did von Heydt tell you how much we need? When your letter came we calculated everything exactly. Have you any idea in America of how many difficulties we have here? If everything followed the usual political channels it would be easy, but there is not one city in Germany where I am not joyfully received. I will certainly achieve a political majority, but the people must be afraid, in case the NSDAP doesn't shrink from using other methods to reach my goals, in case my parliamentary political moves don't succeed. We can only create fear by displaying power. This is only possible with uniforms and weapons. If a couple of Communists should be killed by a group of Brownshirts, that is of the same propagandistic value for the party as a speech of mine. Mussolini has introduced a new period in politics. He is the first one to carry out domestic policy with something other than big words and parliamentary motions. In short, everything we need to display our party as a power to foreign countries and to overawe the people costs money. I wrote you at that time because our time is running short and the moment has arrived to take the situation quickly in hand. In some places we have been obliged to turn away the unemployed. That is regrettable at this point, because everything can be done with the unemployed if we can only give them uniforms and food. Are you familiar with our barracks? I will let you see one of our houses here in Berlin. I don't need anything from wealthier people who fear for their possessions when things get rough. We need the ordinary worker, the proletariat, they, after all, have nothing to lose. Have you also spoken to Luetgebrunn? He is a lawyer, but an intellectual of the good sort. Generally I don't think much of intellectuals. They always bring up science and historic teachings. What have they accomplished with all their knowledge? Nothing. Now it's our turn, now let the fist and sword speak. Work and fight, surely that must be the complete life. Dreams and speeches have never accomplished anything. Do you also have connections with the Reichsbank? There is supposed to be great confusion there. Once I get there I will clean everything up. Schacht seems to me to be the best of the lot, but he is a doctor, and that I don't like. These people have mostly become untrustworthy because of all their fabrications. We must put an end to this studying and dreaming. Young people must work the land and be drilled so they can fight, if it should soon become necessary."

His pacing back and forth in the room was making me nervous. It could also be that his sharp words and the lack of a consistent train of thought in his conversation were making me tired. But Hitler continued, "If I lived in America, then I would have nothing to do with politics; there the people are really free, and it is a privilege to be an American. It has become a disgrace to be a German in the last few years. We will see that it becomes an honor again. Do you know that they won't give me this shameful name? I was born in Austria, so I am not a German. Ridiculous. They will recognize me on their knees, not as one of them, but as one above them. The Communists are beginning to be afraid, the Jews think it won't really go on like this, and the Social Democrats still believe they can save their skins with parliamentary speeches and motions. The best people here in Berlin are Communists, their leaders complain to Moscow of their bad straits and demand help. But they don't realize that Moscow can't help. They have to help themselves, but are too cowardly for that. The most difficult issue now is our relationship with the churches. The Lutheran-German church is giving me trouble, the other Protestant churches will soon adapt themselves. But the Catholics. You must know that I am Catholic. The Center Party [1] is very strong and can accomplish something with the support of Bavarian parties. We must neutralize this party so that we are the strongest. I know well that there are also scoundrels in it, but I will leave them alone for the time being. The Bishops are coming forward against National Socialists in some districts, there are priests who give no absolution to National Socialists and deny them communion. A good beating would change this, but that is not good tactics right now; we have to wait."

"So von Heydt mentioned no sum, nor did Luetgebrunn. No, he couldn't, he didn't know the amount. You will see, we have calculated everything exactly, and will leave the choice up to your backers. There are two possibilities. Either we go out on the streets as soon as our Storm-Detachments are completely organized, which will take three months after we get the money. Or we work persistently with votes and keep our troops in readiness if they should be needed. The first we call the revolution plan, the second we call the "legal takeover" plan. As I said, the first is a question of three months, the second of three years. What do you think of this yourself?"

I could do nothing more than show ignorance by shrugging my shoulders. "Naturally you Americans don't know the situation here, and it is hard to say which is the best method to use. But what do you think your backers will say?"

Again I could give no answer. Hitler continued.

"You see I am not even clear myself, nor are my co-workers, which path we should take. Goring is simply for revolution, the others more for legal takeover, and I am in favor of both. Revolution can put power in our hands in a few days, legal takeover requires long months of preparation, and a lot of underground work. Of course there is a reason why we haven't been able to make a decision, and it is that we don't know how much money we can count on from your backers. If you had been more generous in 1929 things would have been settled long before this, but we were barely able to carry out half our program with ten million dollars. I will itemize our calculations for you. Revolution means we attract people by large donations to the unemployed, buy weapons quickly and organize our Storm-Detachments. Smugglers will take advantage of us and demand prices that will severely cut into our funds. With a lot of money we will certainly succeed in smuggling in machine guns, it makes no sense to open our attack without machine guns."

"Legal takeover on the other hand, when it has finally been completed, after we have forced different elections by obstruction in the Landtags and Reichstag, then the masses will be tired of voting and will be easily bluffed by our clever propaganda. While we take care of our parliamentary work we arm our people and organize the Storm-Detachments. Then a few repeated demonstrations from time to time against the Communists will be enough to give the people an idea of our armed power. In addition we will use the time to penetrate even deeper into the ranks of the Reichswehr. The elections, by giving us an effective majority, achieve the same result as revolution would in three or four months. I would like to have both ways. Everything depends on the money."

Hitler sat down at his table. He took out his little notebook, looked up at me, and continued.

"Revolution costs five hundred million marks, legal takeover cost two hundred million marks. ..." He waited. "What will your backers decide?"

I couldn't answer. I promised to contact New York and report as soon as possible what they had decided. Hitler took up the conversation again and began to ramble.

"You people there in America must be interested in our party coming to power in Germany, otherwise you wouldn't be here and ten million dollars would never have been given to me in 1929. Your motives don't interest me, but if you understand the situation well you will surely realize that I can't get anywhere without financial means. The Communists here get money from Moscow, I know this and can prove it. The Social Democrats are supported by Jewish bankers and other large banks, and have a huge treasury. German-Nationalists get huge sums from large industry, and their leader Hugenberg owns several newspapers that earn big profits. The Center Party gets whatever money it needs from the Catholic Church, which has billions at its disposal, especially in South Germany. When I compare that to the meagre forty million marks I received from your backers in 1929, then I can hardly believe that we could have dared to start our planning with such limited funds. You must have noticed how we have progressed in Germany and here in Berlin since 1929. Aren't you amazed at these results? Should I tell you something else? The Reichswehr is National Socialist through and through. You know that already, but there is not one civil service our party does not have a strong following in, we are especially powerful in the railroads and Post Office, and when our revolutionary slogans are circulated in a few months we can put our hands on these state institutions without too much trouble. When I spoke to you in 1929 I had to admit that the North and Rhineland were still lukewarm. Now that is completely changed. We are well organized even in Frankfurt am Main, where German Nationalists and Communists have a strong following. Party members are sitting in numerous foreign consulates, and will participate actively at the first signal from Berlin. Doesn't all this mean something? Doesn't it prove that those "paltry" forty millions were well invested? But everything now must go well and quickly, and our money is used up. Tell your backers that they should, in their own interests, send the five hundred million marks as quickly as possible, then we will be finished in six months at the latest."

Hitler screamed out these last sentences as if he stood at a political rally, and he assailed me as if I were his worst enemy. I had had enough. I repeated that I would report to New York and let him know as soon as I could. I telegraphed that same day. It took five days to receive an answer from New York. In those five days I had the feeling that I was never alone. Except, of course, during the hours I spent in my hotel. I thought I saw people everywhere who followed me. I still don't know if it was reality or my imagination, but I could think of several different occasions that are strong proof of a continuous control hanging over me in those five days. But I don't want to stir up the detective instincts of my readers. There is, however, one case I would like to relate. The second day after my conversation with Hitler I went on the Kurfurstendamm towards Wilmersdorf. An old friend of my family lived in a small villa there. I wanted to visit him. As I went down the Kurfurstendamm and turned into the street where the villa stood, I clearly saw a man pass in front of me whom I had noticed at least three or four times in front or behind in the last ten minutes. I arrived at the villa and was just about to press the electric doorbell when I saw a small box outside the bushes. Printed in pencil on it was the word: absent. I didn't ring. That evening I telephoned my friend's house from my hotel. I could get no connection, and after waiting several minutes the operator told me that no one was at home. This still seemed very normal and natural in Berlin, but later I had written my friend a letter on my last day in Berlin and said how much I had regretted his absence -- I received an answer from him in New York, in which he said he had not been away from Berlin, and could not understand my statement of his absence. I also didn't understand the story until I learned at the beginning of this year that our old family friend in Berlin was a well-known Social Democrat and had flown to Switzerland. We Americans are generally only mildly interested in the political persuasions of our friends. I had never known earlier that he was a Social Democrat, but now the incident in 1931 is clear, and I believe I was not only being shadowed personally in those five days, but my telephone and hotel room were also under control. We should not forget that in 1931 Hitler was not yet Reichskanzler, just leader of a strong political party.

Carter's answer was unclear. I wired back: "Repeat," and then received a long cablegram:

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 investigations. Persuade man of impossible demands. Don't forget to include in report own opinion of possibilities for future of man.

So Carter had no great belief in Hitler's financial capabilities. He would wait for a detailed report from me before making a decision and expected me to convince the Fuhrer of the impossibility of his demands, and to include my own opinion on the chances for success in the report.

I wrote Hitler a short letter and described the content of the telegram. Two days later two men I hadn't met yet, Goring and Streicher, visited me in my hotel. The first was an elegant-looking man, dashing in appearance, very brutal, and the second made a feminine impression on me.

Goring opened the conversation by expressing his amazement that I did not share the opinion of the Fuhrer. It would certainly be difficult as an American to understand the German situation, but the Fuhrer had informed me so well of the plans and platform of the party, that I should be well on top of the situation. I countered immediately that my views were irrelevant, I was not the one with the money, but just a middleman. He didn't seem to believe this, and continued to speak to me in a personal way, denying the fact that I had backers behind me. Streicher entered the conversation with an unctuous tone. I could not stand the man. I preferred Goring's brutality a hundred times over, however unpleasant it was. We couldn't agree. I explained I don't know how many times that I could change none of the circumstances, that I had sent off my report to New York that same day and had to wait for my backers' decision. Goring finally became furious and said literally: "This is all a swindle. We didn't call on you. First you dangle a huge sum of money in front of our eyes, then when we tell you how much we need, it is much too high for you and the gentlemen don't come up with the goods. You are swindlers." This brutality made me mad and I showed Goring the door. He left with Streicher without saying good-bye. I immediately wrote a short letter to Hitler and requested him to deal with me personally in the future and not to send any more representatives, especially not Goring. I related briefly what had happened, and added that I wanted nothing more to do with Goring again. I don't know what transpired between Hitler and Goring, but the next day I received a short letter from Goring offering his apologies and blaming his behavior on the great tension he lived under being a party leader along with Hitler.

The next day, however, two men were announced again. Americans make a grave mistake in Europe. They receive anybody after a simple announcement. In America it makes no difference, everything is accomplished quickly. Superfluous speeches seldom take place in the business world there. I received the two men: von Heydt and a new figure. Introduction: Gregor Strasser. A more refined type than Goring, but equally brutal underneath a cover of formality. Von Heydt opened the conversation. I hardly listened and interrupted him. All this talk about party leaders made no sense at the moment. I had to wait for New York's decision. If Herr Hitler wanted the opportunity to speak to me, I would gladly discuss things with him and attempt to make the position of my backers clear. Strasser intervened. Did I share their point of view? "'I have no point of view in the whole situation. I am carrying out an assignment. The answer they sent me was, however, left in code, and even though I passed it on to Hitler, it might be possible that I could explain certain points further. This is how my statement should be interpreted."

Strasser began to expound on the party platform. I had the impression that his job was mainly to work with the unemployed. He reproached, without being crude, however, the union bosses and the Social Democrats. He listed forty, fifty names one after the other and pointed cold-bloodedly to the wall, saying quietly: "This is where those fellows will be standing with ten sharpshooters in front of them." The coarsest words he used were rascal and dog, but he uttered these as calmly as everything else. I had had enough of this chatter and asked the men to leave me alone, as I had still a number of letters to write. Strasser gave me an invitation to attend a National Socialist parade in Breitenbach the following Sunday.

An overwhelming sight. On a field with gnarled tree stumps stood five Storm-Detachments in formation, listening to the priest who held the field service. I have remembered the following sentences from the priest's sermon. They gave me a much clearer understanding of German National Socialism than all the words of Hitler and his leaders.

"You are fighters for God. Day in, day out the best blood will be spilled because you have heroically put up your lives as bulwarks against Bolshevism, to save 2,000 years of Christian culture from ruin. You, you have inscribed the bitter fight for German nature and race on the red flag of the people with its white field of purity and loyalty and the runic sign of victory, you are satisfying your own consciences as well as God's. Do not let yourselves be led astray, and do not be intimidated."

"The spirit of Christ is the spirit of conflict, against Satan and against his hell. The enemy that Christ wanted to conquer by his crucifixion aspires to rise again right at this moment, the enemy, the eternal Wandering Jew, has decided to take revenge. He endeavors to destroy the holiness of marriage, and to poison the purity of custom and the soul of the people on purpose. Christian brotherly love must be brought into the battle, because the existence or nonexistence of Christianity is at stake. Comrades, our battle is a vital defense, our nationalism is the savior of people and fatherland. Do not listen to the politicians who designate our fanatic nationalism as misdeed, condemning all nationalism. Our nationalism is the same as that of a Pastor Wetterle, as that of a Cardinal Mercier von Mecheln, of Cardinal Dubois in Paris, who with thousands of their priests inflame the French people to a burning love of their country and encourage stamina for victory with glowing enthusiasm. What is good enough for the French and Belgians is equally good for us Germans. In the burning world of 1914 the enemy stood at the German borders, today the enemy rests in the core of our country, subjugating our people and enslaving it. In August 1914 millions, blessed by the church and protected by the prayers of the church, went to the murderous battlefields to save people and fatherland. What was permitted then, even demanded of our priests, should now be forbidden as evil teaching? ... Comrades, that is a lie. So I say to you, to be National Socialist is to be a fighter for a people that is prepared to defend its religious beliefs, its purity of custom, and its honor to the last breath. You are a providence of God, because you want to banish the underworld with its deadly poison of dissension. The blessing of God rests on your battle. And now let us remove our helmets. Let us fold our hands and sing, as the Dutch Geusen did before the last decisive battle, so that it will ring a thousand fold all over the land: Lord make us free. ..."

The prayer of thanks is over. The field service is at an end. Sharp commands ring all over the field. The brown rows line up to march off.

Two policemen in green uniforms watch the Storm-Detachments with interest. The police are all at their posts. They had strict orders to watch all movements of the Storm-Detachments all over Germany, especially in Prussia. Secretary of the Interior Severing spoke last week in the Reichstag about these dangerous preparations for takeover by the NSDAP. [2] Three days later I received a cablegram from New York: "Report received. Prepared to deliver ten, maximum fifteen million dollars. Advise man necessity of aggression against foreign danger."

I wrote to Hitler again to arrange a meeting. I told him that I had received word from New York and that I preferred to inform him of its contents personally. That same evening von Heydt, accompanied by Strasser, visited me. "The Fuhrer is overworked. Upon the advice of his doctors, he must have at least two weeks of rest." They had full powers to act in his name, for which they had proof. Reluctantly I described the contents of the telegram from New York.

Von Heydt said: "Fifteen million dollars" -- he chose the maximum immediately -- "is not much for our massive plans, but I know the Fuhrer will accept it. Now there can be no talk of revolution. It is not as easy as Goring and the others imagine. I would even gladly go out on the barricades myself I have had enough of these conditions. But we can't put foolish ideas in our heads. We would be shot down before we knew what happened. That would be irresponsible to our Fuhrer. Now we must go to Hitler with proposals to organize ourselves more efficiently and to train our people. To have a revolution now would show a lack of soldierly and comradely spirit, provoking sacrifice is a communist idea. We will have nothing to do with that. Sending the Storm Detachments to the barricades now would mean the destruction of our movement, would spill blood, valuable blood for nothing, and the flag of chaos and desperation, the flag of Bolshevism, would be planted on our dead bodies. In the past few weeks we have had an influx of new elements in our party that are even harder to handle, they come from other parties and have other viewpoints, and they have to adapt to our world."

Von Heydt, just like all other leaders of the National Socialist party I have met, seemed to be possessed by a mania to broadcast, either rightly or wrongly, the platform and tactics of the party as if he were at a political rally.

Strasser asked me when I thought the fifteen million dollars could be payed out to Germany. I answered that it was a question of a few days, as soon as I knew that Hitler agreed with the determined amount, but I would only take the necessary measures to sign the amount over to Europe when I had had a discussion with Hitler. Von Heydt explained to me that this was temporarily impossible because Hitler had to have rest. To wait for his return would mean great delay. If I insisted upon it then tomorrow or the next day a meeting of all party leaders could be organized, and I could report there what I wanted to say to Hitler personally. I kept, however, to my demand and said finally that I would do nothing until I had spoken to Hitler personally.

The next day at noon I was called away from lunch in my hotel. A chauffeur awaited me in the hall and gave me a letter. It was written in Hitler's handwriting, and it requested me to come to his house in the automobile waiting there. A quarter of an hour later I sat in his room on the Fasanenstrasse. I noticed neither fatigue or sickness on him, but said nothing of his health, just carried out my assignment directly. Hitler stood up, and while he walked up and down the room he shrieked: "Fifteen million dollars, that is about sixty million marks. How long will it be until it gets here? It is much too little to really tackle the problem. You Americans don't know our plans."

I remarked that fifteen million dollars was the maximum, and he could tell from the copy of the cablegram I showed him that ten million and a maximum of fifteen million were offered. He listened at first attentively. I took the opportunity to refer to the necessity of an aggressive stance towards foreign countries as mentioned in the cablegram. Supposedly America had the impression that his actions in other parts of Europe had not really had effect. I didn't want to go any further. Perhaps he would realize what my backers meant. But Hitler began to shriek again. "Do you think I can perform miracles here with our people? Do you have any idea of the apathy of the Germans? This 'pack of Jews' has imposed a spirit of swindling, acquisitiveness, internationalism, and pacifism. Day in, day out we must fight it: first we must teach the people courage, then we can do something."

"There is no discipline in Germany, and we must start from the very beginning again. Just wait until we are finished with our work on the German people, then we can think about foreign policy. Read our platform. We will not stray from it one inch. Read points 1 through 7. Point 1. Establishment of a unified national state, including everyone of German origin. The explanation of this runs: we will not give up one single German in the Sudentenland, in Alsace-Lorraine, in Poland, in the League of Nations colony of Austria and in the succession states of old Austria. Read the explanation to point 2: we don't want Erzberg's and Stresemann's servility towards foreign powers; soon it will be seen that foreign powers will have much more regard and respect for a strong representation of German interests. The result of our new stance will be consideration and attentiveness to German wishes on foreign and international territory instead of kicks and beatings. Point 3 says: removal of Jews and all non-Germans from all responsible positions of public life. And Point 4? Immigration of Eastern Jews and other inferior foreigners will no longer be permitted. Unwanted foreigners and Jews will be turned away from the country. Read Point 6 again: whoever is not German can only live in the German state as a guest and is subject to laws pertaining to aliens. Point 7: rights and interests of Germans supersedes rights and interests of foreign citizens. Above all we have as our goal the rebirth of Germany in the German spirit for German freedom. What more can you want? We will adhere to this program and will fulfill it to the last letter. I know that I will have France, Poland, Czechoslovakia, maybe also Prussia, Italy and Hungary on my neck because of this. That is irrelevant at this point. We will deal with that once our people are prepared to take on the consequences of German politics in the interest of the German people, with no reservations. The people have become bastardized and foreign customs must be driven out of them." Hitler sat down again and thought. Then he spoke more calmly.

"Good, I will take the fifteen million. We will carry out our program, but our tactics will change. I will choose the slow path, the path of legal takeover, but we will succeed. A change is already coming over President Hindenburg. I will be finished when I have moved the aristocratic clique that surrounds him out of the way. His son thinks nothing of me and incites his father against me. The president is an old man. He lets others influence him. Just give me the fifteen million. Von Heydt will make the arrangements with you as to how I will receive the money."

I explained further that it was possible my backers would send the fifteen million in two installments, one of ten million and later one of five million, and they would wait for information from me before doing anything. I referred once more to the meaning of the conditions in Carter's telegram -- a vigorous foreign policy. This time he didn't preach the standard phrases about his platform, but said directly and quietly: "Just leave it to me. What I have achieved already is proof of what I can do in the future."

The conversation had come to an end, which pleased me very much, a conversation with Hitler is an exhausting thing. He yells and raves at you. Obviously he is so used to speaking at national assemblies, it takes hold of him so, that he can't carry on a normal, quiet conversation.

That same day I wired a detailed report of my conversation with Hitler to New York and referred for the moment only to his plans for foreign policy and his firm promise not to stray an inch from his party platform. I didn't think this would be enough to satisfy Carter and his colleagues regarding an aggressive foreign policy by the National Socialists, and thought the deal would be closed.

Three days later I received an answer from Carter that contradicted my opinion. Fifteen million dollars would be delivered upon my first request to a European bank indicated by me. I promptly gave this answer to Hitler. Von Heydt looked me up and asked me to transfer the money to Europe immediately in the following way: Five million dollars in my name to Mendelsohn & Co., Amsterdam, five million to the Rotterdamsche Bankvereinigung, Rotterdam, and five million to the Banca Italianna in Rome.

I traveled to these three places with von Heydt, Gregor Strasser and Goring, to deposit the amounts. A huge number of checks had to be made out to many different names in large and small locations in Germany. The National Socialist leaders had long lists of names with them. In Rome we were received in the main building of the bank by its President-Commissioner, and while we waited in his office for five minutes two fascists whose uniforms obviously indicated high ranks came in. Introduction: Rossi and Balbo.

Goring opened the conversation. He spoke Italian to the men. I couldn't understand what was said. We were invited to a dinner at Balbo's house. I was the only one not in uniform. The National Socialist leaders wore their brown uniforms and the fascists their black ones. After dinner everyone danced in a huge hall, with open doors looking out on a magnificent garden. The brown uniforms were much preferred by the ladies. An old Italian, a black-shirt with many decorations, sat next to me and watched the dancers. He began speaking in German. "Italy should never have given up its alliance with Germany. Then we would be in a much stronger position against France. But our German friends are on the right path, and when revolution becomes reality then the good old days will come back. There is no better combination possible: Italian culture with German spirit, they will renew and conquer the world." Three days later I traveled on the Savoya from Genoa to New York.

Carter called a full meeting the next day after my return from Europe. Rockefeller asked immediately if I thought Hitler would dare an open battle with Hindenburg. I said that I felt Hitler to be capable of anything if it would further his goals. He was also no dreamer and was very aware of difficulties he faced, he would not experiment if he was not sure of success. I was asked to quote what was said in my dialogues with Hitler literally. I was also questioned on my impressions of conditions in Germany. When I gave the opinion of the Hamburg banker, Glean wanted to know if well-to-do classes in Germany feared Hitler's financial policies and his "breakdown of the enslavement of finance capital" as Hitler called it. I answered by quoting the Berlin industrialist and the feeling of the Hamburg banker, that points can be found in every political platform that are only there to please the masses, and will never be put into practice. I formed the conclusion that the wealthy German classes (according to Hitler's wishes) would not take these aspects of the Hitler program seriously. Carter remarked that the requested amounts I had wired were absurd and proved clearly how little understanding Hitler had of international relations. I added that in my opinion this was not only the case with financial relations, but I had also been amazed at his ignorance in the area of international politics. No one seemed to find this significant -- it is quite common in America. Carter asked me what I thought about Hitler's co-workers. I related the incident with Goring. This seemed to please him especially, and he said flatly that a man of Goring's type would be a fitting partner for a leader like Hitler.

A full year later, in September, after the National Socialist Party in Germany received 107 delegates in the Reichstag on the 14th, Carter wrote me a short letter, recalling my two trips to Germany and the conversations I had had with Hitler. He asked me if I was prepared to go to Germany again to have a meeting with the Fuhrer in case it was necessary. After my last visit to Germany I had received letters regularly from von Heydt, Strasser, and Goring, along with extensive shipment of books, brochures, and daily newspapers. I was now very familiar with National Socialism, and the person of Hitler was no longer as mysterious to me through my contact with him as it was for others in our circles. To see these people again in Europe was not the most pleasant prospect. Neither the people nor their literature or propaganda held much to attract me. Perhaps my German origins have faded into the routine of American life. My grandfather came to America ninety years ago, my father was born there, my mother is pure American. Perhaps for that reason I could not stand the inflated arrogance of the German people, which was the key to Hitler's whole program, and his work and goals were completely alien to me. In fact, I had personally come to the conclusion that my friends were on the wrong path, that Hitler's aggressive foreign policy might well make France more flexible and cooperative, but it was also dangerous for the world. It is always well known where such a dictator begins, but no one ever knows where it all ends. I had told Glean during the course of the year of my viewpoint, and he tried to dissuade me with the information that Mussolini, an equally violent dictator of a large country, had cooled off after having caused anxiety in the world and especially in France with his big mouth and threats, which was very good in his opinion, but when the going began to get rough, (Mussolini) retreated calmly. It would be no different with Hitler, he thought. It was certainly not our intention to cause war between Germany and France, but just to threaten the danger of war, to make France cooperate more in the possible support of England and America in international financial affairs.

I finally made my decision. I informed Carter that I was prepared to travel to Europe again and to deal with Hitler as soon as it was necessary.

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1. Catholic Party.

2. National Socialist Party.