Buried within a book removed from circulation not long after publication is an assertion by its author as to the founding purpose for an institution most won't know exists. This institution is the Bank for International Settlements.
“In addition to these pragmatic goals, the powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basle, Switzerland, a private bank owned and controlled by the world's central banks, which were themselves private corporations. Each central bank, in the hands of men like Montagu Norman of the Bank of England, Benjamin Strong of the New York Federal Reserve Bank, Charles Rist of the Bank of France, and Hjalmar Schacht of the Reichsbank, sough to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world.”
Conventional history claims the BIS was created to facilitate reparation payments by Germany to Entente nations. The ‘austere’ armistice behind this is also often used as the genesis of gestation leading up to ww2. But this ignores how Germany somehow managed to rebuild itself into a highly industrialised economy during this same period, while also apparently paying off the world’s greatest debt burden. It is important to understand that reparations paid by Germany to Triple Entente nations were used by the latter to pay off war debts owed to international financiers. This is why agents working on behalf of these financiers such as Charles Dawes, and after him Owen D. Young, were the authors of the two policies written to collect war debts from Germany.
During the period of 1918-1932(or the Wiemar Republic years), German reparations were managed by three separate policies defining three seperate periods of the Wiemar Republic years:
1) The London Schedule 1918-1923
2) The Dawes Plan 1924 - 1929
3) The Young Plan 1930 - 1932
Under the London schedule Germany had to pay 132 billion reichsmarks. To make these payments the German central bank, the Reichsbank, simply printed the required surplus of reichsmarks. This period is also known as the Wiemar hyperinflation, spanning 1918-1923, and eventually ended in a currency reset onto the rentenmark. This hyperinflationary period was used by German industrialists to finance mergers and acquisitions using cheap credit to consolidate German industries into monolithic firms, the most significant of these being I.G Farben and Vereinigte Stahlwerke.2
– the reichsmark becomes worthless.
In 1924 a man named Hjalmar Schacht was put in charge of the Reichbank and he gave a guarantee that the new rentenmark would be finite. This meant Germany would have to generate the surplus for reparations from its real economy. But its real economy couldn’t generate this surplus. Since this impossible to generate surplus was ultimately owed to the banks, it became the banks imperative to come up with a solution for Germany, which is precisely what they did in the form of the Dawes Plan. Involved in its implementation were Charles Dawes and Owen Young representing financial interests out of New York City, and Hjalmar Schacht representing the industrial interests of Germany.
The Dawes plan loaned Germany $800 million over four years to rebuild its industrial sector to provide it with the means to increase its exports, from which it could then generate a surplus to pay reparations owed. This loan was distributed by the Reichsbank, under the guidance of Hjalmar Schacht, amongst the monolithic industrial firms like I.G Farben and Vereinigte Stahlwerke, revitalising the nation into an industrial power soon to nurture the worlds greatest mechanised army. Further more, the new rentenmark was artificially protected on the foreign exchange market. This currency protection, or devaluation of it, allowed Germany to attract massive amounts of foreign investment, mostly from the US, which was used to pay reparations in the intervening period.
Between 1924 and 1931 Germany paid $10 billion marks in reparations but took out $18 billion in foreign loans. This allowed Germany to rapidly rebuild while paying reparations to entente nations using it to payoff war bonds owed to a consortium of international financiers, who had financed ww1 out of New York City, though most of the capital did not originate there.1
By 1929 Germany had been rebuilt, the banks had been repaid their war bonds by the Entente nations, but the Entente nations themselves had hardly gotten any reparations money to put towards actual war damages. Owed the most was France as it suffered the most damage having shared a front with Germany. Up until this point the French reconstruction had been mostly self financed. When the stock market crashed in the United States it became apparent Germany would no longer be able to make payments on its reparation obligations as it had been paying them with loans, predominantly coming from the US. France, realising this, knew they had to sell the German debt owed to them if they were to see the money any time soon. But to do this they needed Germany’s permission to allow the commercialisation of these debt obligations. In exchange for this permission Germany wanted the French occupation of the Rhineland to cease 5 years ahead of time. Such a point of contention is digressive as it diverges from economics, but serves as the underlying basis for the Young Plan, which were three things:
1) Allowing France to sell German reparation bonds to private investors in exchange for evacuating German territory they occupied.
2) The restructuring of those reparation bonds by extending them to reduced periodic payments over 59 years.
3) The creation of a new financial institution called—yep, The Bank for International Settlements, to help facilitate these new longer term debt obligations coming out of Germany.
The planning for this began in 1929 when the US economy began to fail and It was ratified by 1930. Then in June 1932, within the midst of a global financial collapse, it was decided at the Lausanne Conference that total German reparations would be reduced to $3 billion marks. A year later Hitler repudiated even that and it became zilch. By 1933 the German reparation bonds which France had sold onto the global market had become worthless, and it wasn’t just France selling them. The Bank for International Settlements did not help facilitate German reparation payments. Rather, it helped minimise them.
A pattern emerges during this period whereby the economy predominantly paying the German reparations quickly went bust:
1918-1924: The Germany economy paid them through hyperinflation of its currency. The German economy had collapsed by 1924.
1924-1928: The US economy paid them through foreign loans to Germany. The US economy collapsed by 1929.
1929-1932: The global economy paid them through reparation bonds sold onto the global market. The global economy collapsed by 1932.
Out of the third and final period emerged a new financial institution.
The BIS’ was founded with seed capital of 500 million francs pooled from the following institutions which distributed 200,000 shares evenly between them: National Bank of Belgium, Bank of England, Banque de France, Bank of Italy, and the Reichsbank. The United States was represented by three private institutions: J.P Morgan & Co, First National Bank of New York(Rockefeller’s Citibank), and First National Bank of Chicago(J.P Morgan). By this time the Morgan firm had declined and was serving more as name, as front it had been all along for interests within the City of London, but now too the dominant Rockefeller family. Today the J.P Morgan name is completely Rockefeller controlled and exists as one of the top five custodian banks in the world, J.P Morgan Chase.
The headquarters was located in Basel, Switzerland, and was given nation state status. This BIS immunity from Swiss law was clarified in a 1987 charter given by the Swiss Federal Council. The property on which the BIS building resides acts as its own sovereign territory in a similar arrangement Rome has with Vatican City, or London has with the City of London. All BIS employees are extended full diplomatic immunity throughout broader Switzerland and their ‘diplomatic’ pouches cannot be opened or intercepted. The BIS was one of the major reasons Switzerland dodged ww2. The country became a safe haven for war profiteers operating just on the margins of destruction, and the BIS was a financial asylum within such a sanctuary. 4
The central banking governors, founding fathers so to speak, were Montagu Norman of the Bank of England, Charles Rist of the Bank of France, Hjalmar Schacht of the Reichsbank, Vincenzo Azzolini of the Bank of Italy, and Louis Franck of the National Bank of Belgium. Owen D. Young likely represented US interests during the planning period of 1928-1930.
The directors originally assigned to roles within the new created institution were:
For the United States(Aforementioned private banks): Gates McGarrah and Leon Fraser.
Germany: Hjalmar Schacht, Carl Melchior, Paul Reusch, Wilhelm Vocke, and Hans Luther.
Britain: Charles Addis, Montagu Norman, and H A Siepmann.
France: Baron Brincard, Marquis de Vogue, Clemen Moret, and Charles Farnier.
Italy: V. Azzolini, Alberto Beneduce, and Pasquale Troise.
Belgium: Louis Franck, Emile Francqui, and Paul Van Zeeland.
These six national central banks were called ex officio members, or core members, and still hold the majority stake of voting rights to this day. This core of six never changed, though the American contingent would later become represented directly by the Federal Reserve Governor. The unique arrangement for the Americans was likely due to the infancy of the Federal Reserve as an institution through most of the 20th century. All the European central banks had over a century of institutionalised controls over its governance. The United States political situation in those days was probably still viewed as “unsound” and political outcomes more volatile. Benjamin Strong Jr, Governor of the New York Federal Reserve Bank had died in 1928, which may have been a factor for the US to be represented directly by their private interests as opposed to central bank intermediaries. Strong was first ever governor and very much the private banks “man”, and this abrupt leadership change put the US Fed on uncertain ground. The other unique aspect were the number of German directors. Because the BIS was established to manage that nations reparations, it was given an inordinate amount of influence. This influence remained after it’s justification expired in 1933 and had profound effects onBIS operations during ww2.
After the issue of German reparations was dealt with, the BIS segued itself into what would become its real purpose, a clearing house for the gold reserves of central banks. Due to global currency devaluation during the great depression, central banks didn’t want reserves of foreign currency depreciating in value so began swapping it into gold to preserve value. This substantially increased the velocity of gold swaps and the BIS positioned itself the international third party to service this activity.
The first strange and questionable transactions the BIS would facilitate occurred on March 15th 1939. Czechoslovakian gold being stored at the Bank of England was transferred to Nazi Germany at the authorisation of a Frenchman. This absurdness of Czech gold being transferred from British custody to Germans by the French cannot be adequately explained as a matter of national interest, and denotes a moment in history where the BIS had become a supranational institution of vested interests above ones customarily delineated in standardised accounts of history. The Frenchman was named Roger Auboin and he had been appointed general manager at the BIS the year prior. This event would mark the beginning of six year period where BIS took custody of Nazi gold annexed from other nations and laundered it on the foreign exchange market to help them bypass embargoes. Such a thing did not go unnoticed at the time. Henry Morgenthau and Harry White within Franklin D. Roosevelt’s Treasury Department froze the US accounts held by the BIS in 1941. Thomas McKittrick, who was the President of the BIS during ww2, alongwith Allen Dulles lobbied to have them unfrozen. Morgenthau refused, and rightly too, as rough estimates put the amount of Nazi gold taken into custody by the BIS at 13.7 tonnes between 1939 and 1945, at least 3.7 tonnes of this stolen.5
The BIS and Nazi State were interlinked during the war through a series of central figures within the banking and industrial sectors.
- Principal party was Hjarmar Schacht, the German founding father of the BIS, also known as ‘Hitler’s Banker’. Schacht became President of the Reichsbank at the tailend of 1923, right around when the Wiemar hyperinflation hit its peak and Hitler carried out his Beer Hall putsch. The two would share a close personal relationship right until the end, though had very different fates. At Nuremberg Schacht was acquitted, largely thanks to British influences, and by 1948 was a free enough man to start his own bank and then retire.
- Representing an industrial interest was Hermann Schmitz. CEO of I.G Farben from 1935-1945, who was a Director at the BIS until 1944. At Nuremberg he was sentenced to four years but served only two, before being released to become a director at the infamous Deutschebank. His American connections were likely at play here, as Hermann had a brother, Dietrich Schmitsz, a naturalised US citizen who managed I.G Farben’s US subsidiary which shared a close business relationship with both Du pont chemicals in Delaware and Rockefeller’s standard oil.
- Emil Puhl. Worked as a Vice President under Schacht at the Reichsbank and was a director at BIS until 1944.He was sentenced to five years at Nuremberg though was released within six months and went to work at the Dresdner Bank becoming one of its directors.
- Walther Funk, President of the Reichsbank after Schacht and a director at BIS until 1944. He was sentenced to life at Nuremberg and actually did serve 8 years before being released due to poor health. Perhaps he would’ve been sprung sooner had he not replaced Schacht at the Reichbank as an apparent outcome of power struggle between the Schacht and Goring in 1938 over the management of the Germany economy.
- Kurt Freiherr von Schröder, a key industrialist figure and real ideologue of the Nazi regime, shown through his membership within the SS. He was a critical figure within the consortium of German industrialists who back Hitler’s rise to power in 1932, and had also helped facilitate the German end of a banking conduit used to funnel political contributions from New York Banks to the Nazi Party during its formative years during the 1920s.He served as president of Chamber of Commerce and as a director at BIS until 1943. His sentenced to probably the most glaring of any handed out at Nuremberg, as it amounted to no more than three months after a series of “complications”. His case best illustrates that a directorship at the BIS came with a get out of jail free card.
Serving alongside these men as President of the BIS from 1940-’46 was the aforementioned American named Thomas McKittrick. Much of the BIS activity during this period has been blamed on him, tied in with te rationalisation or confusion that he was in fact acting as a spy. A spy for who is unclear. Though it is clear to me he wasn’t serving any national interest over that of the BIS.
By 1943 it was apparent to German industrialists Hitler had become some sort of Ahab, Germany his ship, them Starbuck, and Russia the whale who took his leg. It is likely that around this time the vested interests at I.G Farben began to use the BIS as a diplomatic backchannel to negotiate favourable terms for themselves. While conjecture, it appears Hermann Schmitz managed to have I.G Farben’s critical infrastructure substantially spared from allied strategic bombing raids. For instance, by the beginning of 1945 I.G Farben headquarters in Frankfurt stood unscathed, enveloped by a broader expanse of urban rubble, which had been the residential and rather innocuous commercial districts of the city. This I.G Farben building was without a doubt the safest structure in Germany when the bombs were dropping, despite it standing unapologetically above ground and impossible to miss. I.G Farben’s synthetic oil plants were also deemed low priority targets. While Allied strategic bombing raids did target German sources of oil, their either did so generally outside of Germany territory and targeted the oil refineries. The of which completely ignored the very well known fact that German got the bulk of its oil synthetically from coal. It could also be reasoned given this pattern, that Auschwitz and the infrastructure including railroads supporting its continued operator late in the war were spared due to a protection granted the general area thanks to an I.G Farben facility located there.
– I.G Farben building located at the top just right of center.
At Nuremberg I.G Farben directors were extended a similiar strange strange indemnity as those tied to the BIS. Carl Krauch was Sentenced to six years and was out in two. As mentioned, Hermann Schmitz was sentenced to four years and was out in two. Fritz Ter Meer was sentenced to seven years and out in three. Otto Ambros was sentenced to nine years and was out in three. Heinrich Butefisch was sentenced to six years and was out in three. Walter Durrfeld was sentenced to eight years and was out in three.
The significance of I.G Farben in Germany’s ability to carry out the war, and carry it on after it’s own directors were sure of defeat, cannot be understated. The firm was solely responsible for Germany’s ability to compensate for a lack of natural resources through manufacture of synthetics. It utilised concentration camp labour for production and product testing. It supplied the gas to genocide this labour once nerve and muscle had been expended. Yet I.G Farben directors were extended the curiosity of being kept under guard by former members of the SS guard during their trials. Trials which resulted in no more than two or three year sentences. And upon becoming free men they were given back their component parts of I.G Farben, mostly intact, as separate companies which would be built up to become, or merge as part of, modern day chemical giants like Bayer, BASF, Sanofi, or AGFA. When they eventually died, in was comfortably in old age, with legacies untarnished like that of Albert Speer’s, who appears to carry the solitary cross for 'odd' Nuremberg sentences even though he actually served his full sentence.
The not so hidden influences wouldn't be so astounding as they are apparent had they been given due coverage within standardised authoritative sources. For the accounts omitted in works such as these one must put down the fiction masquerading as non-fiction, and read the non-fiction masquerading as fiction.
"Don't forget the real business of war is buying and selling. The murdering and violence are self-policing, and can be entrusted to non-professionals. The mass nature of wartime death is useful in many ways. It serves as spectacle, as diversion from the real movements of the War. It provides raw material to be recorded into History, so that children may be taught History as sequences of violence, battle after battle, and be more prepared for the adult world. Best of all, mass death's a stimolous to just ordinary folks, little fellows, to try 'n' grab a piece of that Pie while they're still here to gobble it up. The true war is a celebration of markets."
The BIS during this period was a supranational, not quite secret, but enclosed society, of membership watching on indifferent, sipping tea and raising no more than an inquisitive eyebrow as their respective nations amassed slaughter, their minds elsewhere, probably on amassed debt obligations. While the war was not a threat to them, the post wars plans of the FDR administration were. Henry Morgenthau, Secretary of the Treasury had a plan which would’ve dismantled what bits of German industry were left standing after the war 9. The idea was to prevent what happened after the first world war from happening again with regards the swift post-war re-industrialisation of the German economy. The plan was opposed by the State Department and Henry Stimson in the War Department. Stimson was a Skull&Bones alum of Yale, a secret society which was originally an American chapter of a Germanic fraternity of some form.
As a consequence of the Bank for International Settlements ww2 activities, a Norwegian contingent at the Bretton Woods summit held in July 1944, put forward a resolution for the institutions post-war liquidation. The motivation behind this being a substantial portion of gold looted by the Nazis had been Norway’s(source 6). On top of this the conference had established plans for two new world economic institutions, the International Monetary Fund(IMF) and the World Bank (then called International Bank for Reconstruction and Development), which were to take over the foreign exchange duties of the BIS.6
Remember, until this point the two greatest achievements of the BIS had been:
1) The minimisation of German war reparations
2) The laundering of annexed gold reserves on the international market to help the Nazis bypasss embargoes.
It would appear reasonable for the allies to liquidate and replace BIS with two new institutions that didn’t have inordinate German influence. This was decided upon in the final act of Bretton-Woods Commission III, which determined “The United Nations Monetary and Financial Conference recommends: the liquidation of the Bank for International Settlements at the earliest possible moment”. The issue was a contentious one, with the British contingent in opposition of this for what Maynard Keynes described as “an unexplained obligation undertaken by Britain when it joined the BIS”8. The lead proponents of BIS liquidation supporting the Norwegian proposal were Henry Morgenthau and Harry White in the US Treasury. On the other hand the US State Department sided with the British in opposition. This factional divide are the vested interests within an old institution reacting against those seeking reformation through the creation of two new instruments to carry out its duties. An important thing to note is that the BIS accounts which were frozen by the US Treasury in 1941 remained frozen, and the capital amounts they stored were of European origin.
The source of American opposition to the IMF came from the NY Banks with BIS shares. The American Bankers Association lobbied Senate and House committees to prevent US membership to the new organisation. (source 8) FDR on the other hand publicly supported the creation of the IMF to carry out the former duties of the BIS. He illustrated this position clearly in an appeal to Congress on Feb 12 1945 10:
The intention to liquidate and replace the BIS with the IMF lasted for no longer than a month after this speech was given. As on April 12th 1945, FDR died from what his personal physician diagnosed to be a brain haemorrhage. Harry Truman(33° Freemason) was sworn in that same day, and Henry Morgenthau was soon replaced by Fred Vinson at the Treasury Department, and the American mandate for BIS liquidation effectively died with FDR. On a completely unrelated note, FDR’s son Elliott Roosevelt claimed Stalin had told him privately his father was poisoned by ‘Churchill’s gang’. Elliot claimed he included this information in an article for Look magazine back in 1946, but it had been edited out11. By 1948 the BIS accounts in the US had been unfrozen and it was internationally recognised as a supranational central bank for national central banks. The IMF and World Bank were still created, but served a lesser role. In exchange for its perpetuation the BIS returned 3740 kg of gold to countries the Germans had looted it from.
Since 1948 the BIS has only grown in influence yet manages to maintain its low profile. And if the world is currently under the dominion of a supranational power structure of financial oligarchs controlling their respective economies, then the BIS would be their primary instrument of control, and the institution itself the most powerful in the world.
Refs
- Tragey and Hope: A history of the world in our time, Carroll Quigley, The Macmillan Company, 1966.
- Dying of Money: Lessons of the Great German and American Inflations, Ronald H. Marcks, 1974.
- The Bank For International Settlements, 1930-1955, Roger Auboin, Essays in international finance, Princeton University, No. 22 May 1955.
- https://www.bis(dot)org/about/headquart-en.pdf
- 'Meet the American Banker Who Helped Hitler Loot Jewish Gold—While Spying for the OSS', Adam Lebor, Tablet Magazine.
- 'Global Central Bank Says It Held Gold Looted by Nazis', Adam Cowell, New York Times.
- https://www.bis(dot)org/publ/arpdf/archive/ar1944_en.pdf
- 'Bretton Woods debates: A memoir', Raymond Mikesell
- 'Suggested Post-Surrender Program for Germany', FDR Library.
- 'Message to Congress on the Bretton Woods Agreements', The American Presidency Project
- 'Stalin Admitted Knowledge Of English, Roosevelt’s Son Says', Rick Hampson, AP News