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Gm, Itt War

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Recent reportsby Bradford Snell about the extensive economie interests which GM maintained in Nazi Germany, even after the U.S. entered the war, should come as no surprise to those familiar with the rapacious activities of American corporations abroad in our own time. But it was not an isolated incident even back then. Large American conglomerates had extensive holdings and interests all over Europe in the 1930's, and their relationship with fascist regimes was everywhere cosy and mutually beneficial. So that Snell's news may be placed in perspective, it is useful to add some other information. ITT & THE NAZIS Anthony Sampson, who studied the matter, found that ITT acted just like GM. After the Nazis seized power in 1933, one of Hitler's fïrst American visitors was Colonel Sosthenes Behn, the buccaneer Chairman of ITT. He had come to Germany to "adjust" ITT's operations to the new order. From Hitler's economie advisor, Wilhelm Keppler, he collected the names of men acceptable to the Nazis for placement on the boards of ITT's Germán companies. One of those chosen was Kurt VonSchroeder, who later became a General in the SS and a principal source of funds for Heinrich Himmler. Schroeder's connections soon brought large contracts for Germán re-armament to ITT's subsidiaries, Standard Elektrizitats Gesellschaft (SEC) átid Lorenz. He was able to obtáin privileged facilities for clearing bilis and debts, denied to other foreign companies. And in 1938, he was able to assist Hermann Goering (head of Germán . re-armament) buy a large share Wulf air by having Loreaz of the Fockecraft companyát which bomb all, ITT enorm made eis. [tl reaped fits. war, test ified: " ous pro After tffljít' Schroeder From 1 9333 until the out break of the war,' the great bulk of the profits of ITT Germán companies could have been transferred to Colonel Behn's companies in the U.S.; but he never asked me to do that for hirrh Instead he appeared to be perfectly content to have all the protits of the -a companies in % invested in new buildings and machinery and in other enterp.ises engaged in the production of armaments. Behn did more. Even after Hitler had banned the export of patents and technical information out of Germany, Colonel Behn continued to send patents on new techniques and equipment into Germany. Favors were exchanged. For example, when Hitler seized Austria in 1938, there was some talk of nationalizing ITT's Austrian subsidiary. But Behn made another quick visit to Hitler and, instead, the Austrian operation was placed under ITT's Berlin office and its staff purged of all Jews, including the director. All over Europe in the last years before the war, ITT returned such favors by aligning and coordinating its operations in neighboring J and neutral countries with its operations in j Germany, thus facilitating the Nazi econoji mie penetration of Eastern Europe and the Balkans, while maximizing ITT's profitable association with the Nazi regime. Was there something special, then, about the Nazi regime that stimulated and attracted American corporate cooperation? Not in the least. A look at American businesses in Spain during the civil war ( 1936-1 93#) reveáis the same cpld-blooded pursuit of profit and the sanae eozy relationsliip witli fascism. Il SPANISH FASCIST & U.S. C0RPORATI0NS American corporations had moved into Spain in a big way during the 1920's. thanks , to the hospitality of the right-wng ' ship íhat rao the country at the time. They were olïered fat concessions. by the coopo] alive regime; they were able to exploit cheap Spattish laboi : and they could escape nierican corporate taxes in the bargain. ( , VI. Ford. Chrysler. Singer Sewing Machine, aud Firestone al! moved in and built factories on attractive terms. But none could rival ITT again. whicli managed to cop ] trol of the entire Spanish telephone system. ín 1931 Spain had a revolution which toppled the dictatorship; between 1 93 1 and the outbreak of the civil war in 1936 the country was run by a shaky bourgeois Republic with left-wing inclinations. On ' several occasions, tliis Republic tried to impose some control over 5?v American porations in their country. They always meet with fierce resistence. In 1932, for example, the Spanish tried to nationalize the telephone system. but ITT had close connections with the State Department, and pretty soon the entire U.S. government was thundering its denunciations of this "fantastic" and "high-handed" scheme and threatening to cut off vital supplies of oil which Spain imported mostly from the U.S. TheSpanish had to back down. A similar thing happened over a different controversy between the Spanish government and the G.M.-FordChrysler alliance in 1935. American corporations never liked the Spanish Republic. But their dislike became outright alarm in the spring of 1936, when the Spanish people elected a Popular Front government (made up of communists, socialists, and left-wing liberáis). "Business Week" and the "New York Time immediately concluded that the Spanish ec onomy was in the grip of the "reds" and that the business outlook was, consequently, "not very bright." But once again, fascism carne to the rescue. In the summer of 1936, the army (led by General Franco) together with various right-wing groups and the Catholic Church, tried to pull off a coup against the Republic: the workers and trade unions in the big cities and industrial regions put up an alert and stiff resistance; the coup attempt turned into a civil war that lasted until 1939. G.M. FINANCES FASCIST FRANCO At the beginning of this war, most of Spain's manufacturing and mining industry was in Republican hands. One might assume from this that American corporations (at least at the outset) would have supported the Republic, since this is where their interests and stakes were. But they did not. As far as they were concerned, the legitimate regime was "red." the Republican economy was in "chaos," and worst of all, the Republicans "stole" corporate property. Moral, legal, or even circumstantial considërations could not be allowéd to interfere with profits, which were best secured by a "strong" (i.e. authoritarian) regime that would preserve economie "stability," maintain a "favorable environment" for American penetration, insure the prompt payment of debts, and keep the Spanish workers in their place. The Republican regime was left-wing - but it was also.elected. The economy was in chaos - but this was partly because for" eign governments and corporations refued to extend credit. And the Republic did seize factories - but this was because they could not buy armaments and munitions abroad, whereas Franco got all lie needed from Nazi Germany and Mussolini's Italy. Thus, fqr example, the GM plant in Barcelona was commandeered by the anti-Fascist Militia of Catalonia and converted to war production, its workers being paid by checks drawn on GM's account. American corporations resented this, and they refused to offer cooperation or credit to the Republic. Only high profit could dispel this resentment. The only time American corporations did serious business with the Republic during the entire civil warwas KHH ■ ■ fl ■ ■ ■ fff ■ - - - - -. . - - "At a time when American public opinión was strongly sympathetic and supportive of Spain's stniggle against f ascism.. American corporations were actively encouraging both a fascist victory and the extensión of Nazi influence, while reaping profits from the selective sales of military supplies." In April, 1937, the ancien t and holy city ofGuernica in Northern Spain was destroyed by Germán hombers supporting General Franco in the Spanisli Civil War. The two drawings in the lower Ie ft and righl hand corners of these pages are from Picasso 's painting Gurenica, which expresses. according to him, "my horror at the military taste which lias plunged Spain into a sea of suffering and death. " when the Spanish managed to scrape togethei some scarce dollars, carry them over to New York, and pay cash for what they bought. Then, GM was glad to sell 3,500 trucks to the Republic, and Chrysler managed a large deal in Dodge chassis at prices far above the going market rate. When the cash ran out, however, American companies refused credit and took their business to the fascists. And here was a very different story. Franco was a fascist, but he was no fooi. He made it priority policy, in the midst of civil war, to establish a stable currency (with Germán and Italian help) and to offer his hospitality to American business. He had one enormous asset throughout: he looked like a winner. ThiS meant credit. Armstrong Cork and Firestone Rubber readily placed their Spanish operations at Franco's disposal. Texaco, which was the largest exporter of oil to Spain, supplied Franco with 75$ of his total fuel needs during the war - mostly on credit. And GM had sufficient confidence in him to go in 50-50 with one of Franco's financial cronies on a new factory in fascistheld territory. GM also sold 12,000 trucks to the fascist forces, using its subsidiary in Germany, Opel, and the Spanish-German trading monopoly (called HISMA-ROWAK) as a channel to facilítate delivery and payment. Again. American corporations happily cooperated in the extensión of Nazi economie penetrations - this time into Spain. At a time when American public opinión was strongly sympathetic and supportive of Spain's struggle against fascism.and even the American government (not known for its republican sympathies) was getting worried about the extent of Nazi influence around Franco, American corporations were actively encouraging both a fascist victory and the extensión of Nazi influence, while reaping profits from the selecüve sales of military supplies. ITT EXEC. GIVEN U.S. MEDAL OF MERIT None of this changed when world war broke out in 1939. Col. Behn hurried over to visit the victorious Franco and to re-establish ITT's telephone monopoly in Spain. ITTs entire Communications network, both in Spaih and Latin America, was used extensively by the Nazis during the war to pass on information about the movement of allied shipping. ITT's Focke-Wulf planes then bombed the ships. ITT's factory in Switzerland continued to collaborate with the Nazis at a time when its Swiss-owned rival, Halser, refused to make war equipment for Germany. ITT's subsidiary in Spain bouglit up zinc sulphate and mercury for export to Germán war industries. Madrid became the principal site for clandestine meetings between American executives and their Nazi counterparts. In 1943 an FCC report stated: Far from halting its dealings and breaking up the relationship of its neutrally located subsidiaries with the Axis, ITT in the U.S. has made repeated and persistent efforts to obtain licenses for such dealings with the enemy. In addition, ITT has sought ever since December 1941 to export materials from the U.S. to its subsidiaries in neutral nations which are producing for the Axis. The story ends with a curious twist. After the war, ITT was able to collect S27 million in compensation from the American government for damage done to its Germán faetones by allied bombers; $5 million of this was for damage to the Foeke-Wulf plants. which themselves had produced bombers that destroyed allied lives (and property) on a fat vaster scale. Moreover, Col. Behn was given the Medal of Merit, the highest U.S. civilian award, for ITT's services in the war; this service was mainly connected with the "high frequency direction finder" which ITT developed. It was a strange irony: while ITT Focke-Wulf planes were bombing allied ships and ITT Communications systems were passing on information to Germán U-boats, ITT direction finders were helping to save other ships from the very same torpedoes. As Sampson observes: "If the Nazis had won. ITT in Germany would have appeared impeccably Nazi; as they lost, it re-emerged as impeccably American." It did not matter: no moral, legal or public consideration could be allowed to come between a Corporation and its profïts. As they treated the Spanish Republic, so they treated Allende; as they connived with the Nazi racists, so they now connive with South África. In all, they remain impeccably capitalistic and rapacious - nothing more. (Information was drawn from: Anthony Sampson's "The Sovereign State of ITT;" Gabriel Kolko's "American Business and Germany, 1930-1941," Western Politica] Quarterly (December, 1962); and a paper done at York University by James Elston, called "Economie Foreign Policy: The U.S. and the Spanish Civil War.")