A Pledge Betrayed
Part 1: What went wrong at Aachen?

Dawn on October 21, 1944 was cool and crisp as the last traces of summer gave way to autumn. The forests around Aachen, Germany were a profusion of autumn colors.

At noon, Colonel Gerhard Wilck surrendered what remained of the town to the American First Army. It was the first major city of Germany to be captured. Of its 160,000 inhabitants only five thousand remained. The rest were either dead or had been forced by the Nazis to evacuate the city.

The American forces hoped to use Aachen as a model for its 4-Ds program, demilitarization, denazification, decartelization and democratization.

On November 10, the Stars and Stripes reflected the upbeat outlook of US forces in the following editorial.

"The Americans have come to Germany not to pat childslayers on the head or to feed SS scoundrels with Spam. The Americans have come to this land of gangsters in order to bring villains to justice.

It is not only American divisions that have entered Germany. Justice has entered Germany and not a single German will venture to cry welcome. For justice carries a sword."⁸  
 

The town’s records had been destroyed. Nevertheless, a temporary German administration had to be organized. Because of this lack of records, it seemed only nature for FIG2, the Military Government detachment, to ask the advice of an upstanding citizen of the community. Hence, they sought out the advice of the local Catholic bishop, Johann van der Velte who had remained behind. The bishop recommended a devout Catholic and upstanding citizen, Franz Oppenhoff. According to the bishop, Oppenhoff had never joined the Nazi Party. He further informed the Military Government detachment that party membership was an irrelevant encumbrance.

The Americans found Oppenhoff to be clean, intelligent, well dressed and apparently respectable. Oppenhoff accepted the subsequent American offer to manage the city. At first, the Americans did not question Oppenhoff’s authoritarian and anti-democratic views. Nor did they question the fact that he and his fellow businessmen had prospered during the Nazis reign.

At the local coalmines, Herr Aschke was placed in charge. Again, Aschke seemed competent. No Americans in the occupation forces bothered to question Ashchke about his use of slave labor under the Nazis or had even bothered to ask if he had been a Nazi. A few eyebrows were raised when Aschke cut wages in an effort to produce more coal. However, winter was coming and the coal was desperately needed so the American forces allowed Aschke to continue as manager.

Aschke, however, had been a rabid Nazi.

Oppenhoff and his leading assistants had been former officials at the Veltrup Armaments Works and were suspected of making substantial contributions to the Nazis by local inhabitants. Oppenhoff appointed 22 Nazis to 72 essential positions in the city. In total, the mayor had assembled 750 bureaucrats to administer the city or one for every fifteen inhabitants. The mayor’s bureaucrats were exempt from the otherwise compulsory work of clearing debris and harvesting local crops.

It was a full two months after the capture of Aachen before Saul Padover, a member of the SHAEF Psychological Warfare Division, arrived in town. He heard that the local trade unionists were extremely critical of the appointments of Oppenhoff and Aschke.

He reported back to SHAEF that the U. S. Military Government officers assigned to Aachen were politically ignorant and morally indifferent towards the Nazis. They had made a through political mess by the appointments of Oppenhoff and Aschke who were as compact a clique of ultra-reactionaries and fascists as could be found anywhere in Germany.¹ Padover’s report caused reverberations throughout the allied occupation forces.

What had went terribly wrong? What was the war of liberation for if the occupation forces placed the Nazis they had vowed to eliminate right back into positions of power?

There were no easy answers. The Military Government had been briefed to appoint a mayor and then leave everything to the Germans. The officers of the Military Government had relied on technical competency, respectability and the ability to speak English in choosing their appointments. In addition, they had brought with them their own prejudices which included not choosing socialists, communists, union leaders or men that were less well dressed. It never occurred to the occupation forces that those that had opposed the Nazis would most likely be homeless and dressed in rags after being sent to the concentration camps. . Relying on Bishop van der Velte was another mistake. A mistake that would be repeated across Germany, as the Catholic bishops and priests were supportive of the Nazis. The general values that every American soldier carried with him were contributing factors in the failure of the 4D’s program.

On November 11, 1944 the Joint Chiefs of Staffs in Washington issued the following directive.

The entire Nazi leadership will be removed from posts of authority and no member of the German General Staff or nazi hierarchy should occupy any important governmental or civil position. You will not appoint the employment of active Nazis or ardent sympathizers, and no exception will be made to this policy on grounds of administrative convenience or expediency. You will remove and exclude from office any persons who act, or whom you deem likely to act contrary to Allied interests and principles.²

The order was followed a month later by another directive which forbade the use of dissolved Nazi organizations for relief and later broaden to include additional categories of officials, who would be subject to automatic arrest. Every school, university, courthouse and newspapers was to be closed. The British were horrified at the American policies.

Con O’Neil of the United Nations War crimes Commission commented: "Is it really necessary that we seize monuments…It is a disastrous policy to lead to total chaos. It means we do what we can, but accept no responsibility for the results, it is merely a clumsy attempt to escape criticism although we cannot escape control."³ These sharp differences were to get worse. In February, a directive was issued allowing Nazis to be retained if military necessity so required. The justification for the new directive was that the allied army depended upon civilian water and electrical supplies. However, the astute reader should note that it was not until a month later before the allies breached the Rhine. Only a small sliver of Nazi Germany lay to the east of the Rhine. Colonel Bernard Bernstein immediately objected, claiming that too many detachments were taking advantage of the exception clause. He blamed the British for weakening the directives.

In March, the Twelfth Army, under Bernstein's influence issued its own directive overriding the exceptions. Additionally, the new directive banned the employment of Nazi sympathizers. A sympathizer was defined as any who had profited under the Nazis. On March 23, the Twelfth Army’s directive was modified by a directive from the White House that allowed the employment of "nominal" Nazis. Once again, Bernstein blamed the British for softening the denazification program.

When Aachen was handed over to the British, the chief of SHAEF’s G5, Brigadier General Frank McSherry suggested to the British commanding officer that he should remove Ashke from managing the mines. The miners had proven Aschke to be a fanatical Nazi supporter. The British refused, believing the coal was more important. It wasn’t until January 1946 that the British removed Oppenhoff for being a member of the VDA (League of Germans in Foreign Countries.) The VDA was an organization that funded fifth column groups such as the American Bund.⁵

The mistakes made at Aachen would be repeated throughout Germany as the allied forces advanced. There were no less than four directives on the employment of Nazis and over forty subsidiary regulations. Such a bureaucratic maze was a perfect prescription for chaos and the complete failure of the denazification program.

The failure left behind in Aachen stands in stark contrast to the liberation of Nordhausen and the success of the American T Force. The T Force was known by the distinctive red T on their helmets and was part of Operation Paperclip. They had priority classification and the authority to commandeer any needed equipment, even including entire military units if needed.

Nordhausen was a small town in the Harz Mountains and the site of the V2 program after Peenemunde came under Allied bombing in 1943. To insure against future bombing the Nazis had imported thousands of concentration camp inmates to dig out a vast underground network of tunnels. On April 11 Patton’s Third Army liberated Nordhausen. There were twenty-three thousand survivors in the associated Dora concentration camp. There were three thousand bodies rotting and unburied. Over thirty thousand others had already perished of disease, brutality or starvation.

Within hours of liberation, the T Force accompanying the Third Army had commandeered the healthier inmates to clear a mile of the main tunnel that had been damaged in recent bombings. Meanwhile, a fleet of trucks had been requisitioned some from as far away as Cherbourg, France. A US combat engineer group rapidly rebuilt a damaged bridge. Within eight days four hundred tons of equipment was moved to Antwerp for shipment to New Orleans.

Sadly, there were no war crimes unit attached to the Third Army, though, it was well known before liberation that Nordhausen depended upon slave labor from the nearby Dora concentration camp. No one gave a damn about the SS guards and officers from Dora. None were arrested. They were simply left to walk away. No effort was made to arrest them. It was several years before just thirty-nine of them were tracked down and brought to trial.⁴

The lack of arrests at Dora of the SS guards did not reflect public opinion. The responses in a 1943 British poll are given below.

"At the end of the war what do you think should be done with the Axis leaders?" ⁹
 

American opinion was much the same as the British. At one point in the negotiations over war crimes among the Big Three, Churchill supported summary executions. Stalin objected and insisted upon trials. Later, when Patton’s forces liberated Dachau, some elements of his force became so outraged over what they had saw they started to execute SS guards before by the commanding officer stopped the executions. An investigation followed and when confronted by investigators, Patton did the right thing and stood by his men. He tore up the investigation ending it for all time. Patton was not concerned with a few dead Nazi SS guards executed by his troops.

The tragic mistakes made at Aachen and Dora were repeated across Germany as the allied armies advanced. Although there is a plethora of reasons for the failure of the 4-Ds program, the root cause was simple sabotage from within the program. The liberation of Germany would expose many powerful industrialists both in America and in England as collaborators with the Nazis. They had to be protected.

In the final year of the war, the United States and London put together an ultra secret organization---TICOM---that planted the first seed of the Cold War. This organization was so secret that in 1992 the National Security Administration extended the classification of all its missions and operation until 2012. The classification is higher than the top-secret bracket. Thus, only a handful of people are allowed access to the files. The British government is equally secretive. Colonel George Bucher the director of US Signal Intelligence conceived the group in the summer of 1944. TICOM (Target Intelligence Commission) was to capture all code making equipment and code breaking equipment they could find. To this end, it seems from what is known that they did operate behind enemy lines at times but for the most part followed advancing armies like the T Force.

Not only were they looking for the new German FISH code making equipment they were also looking for any Russian code equipment the Germans may have captured. The FISH was an advance cipher machine used to replace the older Enigma machines. The Germans referred to it as swordfish and used it only for the highest level messages.

Like the T Force, TICOM quickly snatched up any people, papers or equipment and returned it to the safety of rear guard areas for shipment back to the United States. From what information there is TICOM was equally successful as the T Force. They did capture a FISH coding machine and a machine capable of deciphering the highest level Russian code. The importance of cipher machines and other coding equipment in war cannot be underestimated. It was the British ability to read Enigma transmissions that forced the Nazis to withdraw their wolf packs from the North Atlantic or risk loosing their entire fleet of U-boats.

Due to all documents from TICOM being still classified its is unknown if the Nazi code breakers were given asylum in England or the United States or if any war criminals were given new identities. What is known is that Dr Erich Huettenhain was brought to the United States.

One benefit from the TICOM operations was the United States was able to read the messages of the Soviet police, military, KGB and diplomats. Thus, we knew without a doubt the condition of the Soviet Union. However, that period was relatively brief and lasted only until 1948 when the Russians discovered their code had been compromised.¹¹²

There is however, a very sinister side to the story of the T Forces and TICOM. Both those groups counted on capturing the equipment intact. In many cases the American army raced ahead to capture the site before the Russian forces got there. Some of the equipment was captured by luck as it was being moved. Other equipment was captured in place and unharmed by the bombing campaign. It leaves open the question of why weren’t these sites bombed. Was these later sites deliberately omitted from the bombing campaign so the equipment could be captured intact even if it meant a greater loss of GIs?

The world stood aghast in the spring of 1941 at the new terror and horror unleashed by the Nazis against Yugoslavia. Hitler was enraged that the people of Yugoslavia had overthrown his quisling government and had issued Military Directive 25 for an immediate invasion. Belgrade had been reduced to rubble by the Nazi dive-bombers and anything left moving was subject to strafing. The Yugoslavian government in exile immediately petitioned the United Nations War Crimes Commission (note this refers to the commission established during the war of nations united against the Nazis and is not to be confused with the present United Nations) to include the bombing of civilian centers as a war crime to no avail. The war crimes commission was mute on ruling the bombing of civilian centers as a war crime. The allies would soon use similar tactics in even more destructive raids aimed at civilian centers.

By the war's end, most of Europe had been reduced to rubble. This wholesale destruction came not at the hands of the Nazi but at the hands of the allied air command. Yes, the Nazi war machine had been destroyed on the battlefield but at what cost? In Germany it was estimated that as much as 80% of all housing units had been destroyed. The major city of Dresden was simply erased in a massive firestorm by the bombing campaign. Estimates of civilian deaths in Dresden are generally accepted at approximately 70,000. However, some suggest that the estimate is as high as 500,000.

However, the effect of the air campaign against industrial centers and munitions makers was quite different. The Nazi war machine was producing more planes, tanks, trucks, etc at the end of the war than in 1941. Overall, production of munitions at the end of the war was estimated to be at roughly 80% of capacity.¹⁴² In short, the allied bombing campaign had been a failure.

"The Reich used German Ford and its cooperative parent in Dearborn as a direct means of stockpiling the raw materials needed for war." "Even prior to the War, German Ford arranged to produce for the Reich vehicles of a strictly military nature This was done with the knowledge and approval of Dearborn.
- "When war came German Ford stepped into the position of a major supplier of vehicles for the Wehrmacht." In addition "as much as 7 or 8% of total output during the war years consisted of more specialized war material."
- "As was common in other German enterprises Ford increasingly resorted to use of prisoners of war and other slave labor" who had to live "behind barbed wire." "The foreigners employed rose to over 40% of its labor supply in 1944. The usual Nazi discriminations in wages and working conditions were practiced." ¹⁴⁵

Throughout Europe and in Germany in particular, the scene was much the same. Large industrial plants stood unscathed amid a field of rubble especially those plants that had connections to American firms as the Ford and I.G. Farben plants at Cologne. In fact, the I.G. Farben building in Berlin was untouched and used by the allies as a command center. It stood in stark contrast to the rest of the city, which lay in ruins. In order to understand such a discrepancy a brief look at how the allies chose bombing targets is needed.

During WWII there were no laser-guided bombs that could be dropped through exhaust vents. Precision bombing was still in its infancy. Indeed, the RAF abandoned any attempt at precision bombing when they switched to nighttime bombing because of heavy loses in the day. Weather also presented a problem.

The definition of precision bombing used by the U.S. air force during WWII reveals how crude precision bombing was then. The U.S. adopted the standard of seventy percent of the bombs falling within a thousand-foot circle as precision bombing. The U.S. was only to achieve this crude standard during a single week throughout the war. Oftentimes weather conditions or the requirement to fly in formation prevented the bombs from some aircraft ever reaching the intended target. The definition of precision bombing used during WWII and the way it was implemented in massive bombing raids is more akin to what is termed saturation or carpet bombing today.

During WWII there was no formal U.S. air force. The Air Force as a separate branch of the U.S. military command was not established until after the war. The term is used here to describe American air power under the Army’s command. At the cabinet level, the air force was under the control of Secretary of War Stimpson. This Skull and Bones member advocated an "easy peace" with Germany at the end of the war. Roosevelt allowed Stimpson to choose his own staff. He chose John McCloy to act as assistant Secretary in charge of intelligence, civilian affairs and general troubleshooter. Stimpson placed Robert Lovett as assistant secretary of war for air. Both McCloy and Lovett had Wall Street backgrounds. McCloy had been a former Wall Street lawyer and Lovett a partner and close friend of Prescott Bush at Brown Brothers and Harriman. It was Prescott that selected Lovett for membership in the Skull and Bones. Lovett was a fervent advocate of terror bombing of population centers all of his life, including during the Vietnam War. McCloy had an essential role in selecting targets for non-destruction, which meant other targets were selected for destruction.¹¹³

Another individual involved in the Air Force command and target selection was Trubee Davison, who also had close contacts on Wall Street. Davison had been the assistant secretary of war for air between the wars. However, Davison’s first association with the air force was during his years at Yale during WWI. At Yale, Trubee formed the special Yale Unit of the Naval Reserve Flying Corps. The unit was closely associated with the Skull and Bones. The Yale unit was often referred to snidely as the millionaire squadron. While training in Florida the pilots often times where wheeled to their planes in wheel chairs pushed by Black porters. Two other members of the Yale unit were Robert Lovett and Artemus Gates.

At that time the United States was not yet at war so the unit served under British command. Robert Lovett commanded the Yale unit. Trubee’s father Henry Davison, a senior partner at J.P. Morgan and Co lavishly financed the unit. The unit distinguished itself during WWI.

During WWII Trubee served directly under Lovett. From June 1941 until December 1941 Trubee was deputy chief of staff in the air force combat command holding the rank of colonel. From December 1941 until his discharge in 1946 Trubee was assistant chief of staff at A-1. He was discharged as a brigadier general.

It is fitting here to take a close look at the members of the Yale Unit and the conduction of the air war during WWII. Robert Lovett as noted was assistant secretary of war for air. Directly under him was Trubee Davision. Additionally Artemus Gates served as Assistant Secretary of the Navy for air during WWII. Thus during WII the use of air power was directed largely by members of the Yale Unit.

A more interesting aspect of this league is their close family ties to Wall Street and the rich elite. Robert Lovett married Adele Quarterly Brown. The Miss Brown was the daughter of James Brown, a partner of Brown Brothers and Harriman and grandson of the founder. Artemus Gates married Trubee’s sister.

Trubee’s father was a partner with the Morgan’s. However, this is only a beginning of the Davison family’s connections. Trubee’s wife was Dorothy Peabody, the sister to Malcolm Endicott Peabody a former Governor of Massachusetts and the grandchild of Marianne CABOT Lee. Additionally the Davison family was connected to the Rockefellers as in John Davison Rockefeller.

Davison had one other connection worthy of noting. Benjamin Strong may have been Trubee’s brother in law. The author has found two conflicting reports. In one instant there was a reported marriage of Henry Davison’s daughter with Strong. The other report does not emphatically indicate a marriage but does note that after Strong’s first wife died the Davison family raised the children. Nevertheless, there was a strong bond between Henry Davison and Benjamin Strong. It was Davison, who made him a secretary of Banker’s Trust and brought him in as J.P. Morgan’s personal auditor. Strong however, was better known as the first director of the New York Federal Reserve Bank.

James Stillman Rockefeller served with the Airborne Command and Airborne Center as assistant chief of staff. He was a Lieutenant Colonel in the General Staff Corps at the time of his discharge in 1945.

The reader should note that these connections are carried through time. A good example of this is the connection of Prescott Bush with this circle of elites. Prescott Bush as a member of the Skull and Bones stole the skull of Geronimo. In 1986, the Apaches conducted negotiations with George Bush concerning the return of the skull. Representing Bush was Endicott Peabody Davison, Trubee’s son.

Thus at the very top level, there was several people with detailed knowledge of American investments in Germany.  In fact, Lovett was in charge of the entire air campaign and McCloy was deeply involved in removing targets from the selection list. Both individuals certainly were well aware of American investments in Nazi Germany and may have even had family members with such investments. Under their direct command there was another layer of individuals with family ties to the Wall Street firms that invested heavily in Nazi Germany.

Without additional records which are still sealed in secrecy by the government it is impossible to assess if this group of Wall Street elites steered the bombing campaign away from American owned targets in Germany.

It is interesting to note however, that the only massive bombing raid directed at a specific industrial target was the bombing of the S & K bearing plant deep inside Germany. S & K was Swedish owned. The raid incurred a terrible loss of both planes and life. Many of the bombers were lost before even reaching the destination and more were lost on the return flight after receiving heavy damage over the target. The exceptionally heavily loses were due to several factors. First, the S&K plant lay outside the range of any ally fighters so the bombers had fighter protection for only part of the trip. Secondly, the plant was very well protected with both anti-aircraft batteries and fighter squadrons. Planes damaged over the target proved to be easy targets for German fighter pilots since, the bombers had no fighter protection of their own on the return trip to England.

Nevertheless, choice industrial targets were present at much shorter ranges such as the Rhur steel district. Damage to any of the coal mines or steel plants in the district would have limited the Nazis ability to produce tanks and other heavy armaments. Moreover, raids on the Rhur district would have been short-range enough that the bombers would have had full fighter protection at all points of the raid. However, many of the plants and mines in the Rhur district were connected with American investments.

However, it should be noted that the S & K bombing raid was based solely on the basis that the S & K facility was the only major producer of bearings within Nazi Germany. Moreover, bearings are essential to any boat, plane, tank or truck. The allies had hoped that by damaging the S & K plant that they could delay German production of military vehicles for a considerable period. The raid only caused minor delays in production. Moreover, the Nazis could easily obtain bearings from both Sweden and Switzerland.

In July 1941, department of war developed a plan for target selection that would be in line with the ABC agreement with Britain and with the general battle plan for potential war known as Rainbow 5. The ABC agreement called for a sustained air war against Germany. The plan developed was Air War Plans Division --- Plan 1 or simply AWPD-1. The primary military objective of AWPD-1 was to defeat Germany by air power alone. If the plan failed in its primary objective then the plan called for preparing the way for a European invasion. AWPD-1 identified three vital targets within the Germany economy: electric power, transportation, and oil. It included a fourth intermediate target area --- the destruction of the Luftwaffe. AWPD-1 then included 154 targets to be destroyed in the first six months.¹¹⁴

AWPD-1 was never implemented. It was leaked to the press in the fall of 1941 along with the Rainbow 5 battle plan by Burton Wheeler a pro-Nazi Senator. Both Rainbow 5 and AWPD-1 appeared in the Chicago Tribune and Washington Times-Herald. The Nazis quickly realized the importance of both documents. On Dec 12, 1941, Hitler issued Directive 39, which called for massing air defenses around key industrial centers. Four days later Hitler rescinded the directive.

Early in 1942, AWPD-42 replaced AWPD-1. Other than shuffling the target priorities and the inclusion of round the clock bombing of Germany there was little difference between the two plans. The RAF would continue with nighttime area bombing while the Ameircan air forces would use precision daytime bombing as already defined in this chapter. AWPD-42 focused on tactical targets or targets producing equipment that the German military could not do without, rather than strategic targets required to produce war munitions. While very much similar to the preceding plan AWPD-42 placed the disruption of the electrical grid to thirteenth on the list. Such a reduction conforms to the emphasis on tactical targets versus strategic targets. Wiping out the German electric grid would severely limited Germany’s ability to manufacture any war munitions. This reduction in priority of electric generating facilities was perhaps the largest failure of the air campaign. The analysts responsible for the reduction had concluded incorrectly that the German electrical grid had the ability to rapidly reroute power from one region to another when in fact Germany lacked this ability. Any strikes against power plants supplying industrial centers would have left those industrial centers idle for months.

AWPD-42 was hammered out by the committee of operations analysts (COA). COA was composed of industrialists, lawyers and various economists. The reader should note here the inclusion of industrialists. Almost all of America’s major corporations had investments in Nazi Germany. In addition, most of these corporations went to extraordinary means to remain in contact and to continue doing business with the Nazis after war was declared.

The committed used several criteria in determining the suitability of the target. Essentially they looked for bottlenecks and weaknesses in the Nazi economy that could be exploited. The makeup of the COA is interesting in light of the tragic mistake of the downgrading of electrical targets. The German electrical industry was closely affiliated with two American firms GE and ITT, through cartel agreements. Plants owned by General Electric through its AEG subsidiary and those owned by ITT were only hit incidentally in area raids. The electrical plants that were bombed as targets were Brown Boveri and Siemensstadt which were not connected with either GE or ITT, although plants owned by GE such as the plant at Koppelsdorf, which also manufactured radar equipment, would have been a prime target.¹¹⁵

At the end of the war, a team known as FIAT was sent to examine the electrical industry plants to determine the extent of the bombing damage. The team consisted of Alexander Sanders of ITT, Whitworth Ferguson of Ferguson Electric and Erich Borgman of Westhinghouse. While the stated objective of the FIAT group was merely to survey the bomb damage their actions revealed that the real object was to get German electrical equipment back into production as soon as possible.

Along with the change to AWPD-42 came, a new bombing offensive, launched in 1942. In early 1943, the Point Blank Directive was approved. It called for around the clock bombing of Germany. The RAF was to continue to bomb cities at night while the USAF was to use daytime precision bombing on targets. The Point Blank included a permissive clause that allowed Bomber Command to continue with operations aimed at civilian morale and the general dislocation of the German economy.

Shortly after the implementation of AWPD-42, the RAF launched a thousand bomber attack against Cologne. The meat grinder was now fully operational and civilian centers would be reduced to rubble. The 1943, Pointblank Directive would ease selecting civilian centers as targets. When the RAF bombed the Ford plant at Poissy in March 1942, photographs of the burning plant were published in American newspapers. However, the media chains owning the majority of American newspapers were eager to protect one of their largest advertisers failed to mention that Ford owned the plant. The truth would be withheld from the American public to protect a traitor. The Vichy government paid Ford 38 million francs in compensation. Once again the newspapers were discrete and failed to report the payment.¹¹⁶

One member of the COA team was Guido R. Perera. Perera was a partner in Hutchins and Wheeler law firm in Boston before the war. He also served as trustee of the Massachusetts Investors Trust. During the war, Perera worked first worked on the legislative and administrative reorganization of the Army Air Corps. After which he served as deputy chairman of the Advisory Committee on Bombardment and as vice chairman of the Committee of Operations Analysts. In these positions, he oversaw the development of plans and target systems for the bombing of strategic industrial targets in Germany and Japan. ¹²¹

Perera had connections to Massachusetts Investors Trust, the trust was the first mutual fund in America. Paul Mellon founded it in the 1920s. One of the largest holdings of the trust was Boston Insurance Company. (The present owners of the Bank of Boston, Fleet Financial are desperately trying to distance themselves and deny any connections between Boston Insurance and the Bank of Boston as information linking the bank and insurance company to the Nazis has surfaced. It appears that Boston Insurance was a product of the bank or the directors.) One of the directors of Boston Insurance Co. was Erwin Pallavicini. He is described in the OSS file as an US-blacklisted Nazi collaborator who also served on the board of a German insurance firm in Argentina. The OSS documents list another director of Boston Insurance, Benjamin Nazar Anchorena as a Nazi collaborator. Newly declassified files outline the convoluted financial relationships that linked First National Bank of Boston interests with Hitler's financiers including Spanish and Mexican companies in business with Germany's Munich Re. The entire network involved around 230 German firms. Even as late as 1997, the identity of the owners of Boston Insurance remains unknown.

Quoting from an OSS report compiled in 1943: "The Boston Insurance Company is still writing all kinds of insurance of blacklisted names, and they are placing this business in the London market," the OSS report said. That meant "the Boston," as the document referred to the insurance firm, was spreading cash and information within and between both the Allies and the Axis. The Boston is known to have American board members and stockholders, having been formed by interests affiliated with the First National Bank of Boston.¹²² Note, insurance companies were ideal fronts for Nazi spies. Not only would the insurance company have detailed blueprints of the factory but they also would have a list of the equipment. From that information the Nazis could reliably determine what and how much a factory could produce.

The Mellon and Rockefeller families controlled the Bank of Boston. Both families were deeply involved in arming and supplying Hitler. The Mellon family through Alcoa had concluded several cartel agreements with I.G. Farben. Vast amounts of electricity were needed for the production of aluminum. Could Perera have been one of those responsible for downgrading the importance of eliminating the electrical companies in Germany? He certainly must have been aware of the Mellon - aluminum link and was closely associated with Mellons through Massachusetts Investors Trust. Perea also had more than the usual amount of knowledge of electric utilities. In 1947 after returning from the war, Perera was elected president and later chairman of Eastern Utilities Associates. However, without the complete records of the COA no solid conclusions can be reached.

However, Perera is not the only one from the COA with connections to the Wall Street money that built Hitler’s war machine. Arthur Roseborough a former Sullivan  and Cromwell employee from the firm’s Paris office was assigned to the Air Force Intelligence in London during 1943. The Air Force Intelligence unit was created specifically to evaluate bombing damage and to recommend targets.¹²³

Perera and Rosebourgh fall into the type of people employed by COA so we can conclude they were fairly typical of the group. Without additional files of COA, it is impossible to conclude the guilt or innocence of either Perera, Rosebourgh or of the entire staff of COA in protecting the investments of American industrialists and elitists. However, the undisputed fact remains 80% of the homes in Germany were destroyed while only 20% industrial production was destroyed. In fact, much of the reduced production capacity, came from the secondary effects of the bombing campaign such as lack of gasoline and a shortage of parts, came from the collateral damage to the transportation system.

After the war, the bombing survey concluded that overall the bombing was ineffectual in destroying German munitions production. The massive bombing of the S&K ball bearing plant at best only delayed production temporary, but at a horrible lost of allied airmen and aircraft.

A greater success of the bombing campaign was in the bombing of the Romanian oil fields. The shortage of gasoline in the Third Reich was acute and even limited the advance of German Wehrmacht in the Battle of the Bulge. However, Germany’s oil supplies were always limited and restricted.

The survey also concluded that the bombing was most successful in delaying the deployment of troops by bombing rail centers. Although the rail centers were quickly repaired, the delay was enough to give the edge to the allies on the battlefield.

Without additional files it is impossible to determine if industrial targets associated with American firms were selectively removed from the target list. There is strong evidence for both sides of the argument. If these industrial plants were systematically removed from bombing list then the total destruction of Germany industry and means to wage war as favored by Roosevelt was being sabotaged. There is evidence that such may have been the case.

The massive area bombings of cities particularly the fire bombing of Dresden, raises another critical point. In essence, such bombings of civilian centers were nothing less than an act of terrorism. Estimates range from 40,000 to 500,000 thousand killed in the resultant firestorm in Dresden. When the Nazis bombed and strafed Belgrade, Yugoslavia demanded that it be included on the list of war crimes. While much of the world considers bombing of civilian centers to be war crimes, the US still maintains that it is not. The reader should also note that Dresden was an ancient city and contained many unique architectural wonders. However, it was in the path of the advancing Soviet army. The reader should ponder why John McCloy saved Rothenburg from bombing and not Dresden.

Unfortunately the 4Ds program was sabotaged from the very beginning. This sabotage reached epidemic proportions after the Morgenthau plan had been revealed to the public following the Quebec meeting between Roosevelt and Churchhill. Morgenthau was one of the few within the Roosevelt administration who pushed for a "hard peace" following the war. After the Quebec meeting, Morgenthau was viewed as the most hated man in America largely due to Nazi propaganda from the pro-Nazi leaders of American industry. Key to sabotaging the 4Ds program was the removal or marginalization of Morgenthau.

Following the success of the Normandy invasion, Morgenthau had lunch with General Eisenhower in Portsmouth. Morgenthau and his aides Dexter White and Fred Smith were eager to sound out Eisenhower’s opinions on postwar Germany. Eisenhower’s reply follows below.

"I’m not interested in the German economy and personally would not like to bolster it, if that will make it easier for the Germans." As far as he was concerned "the German General Staff should be utterly eliminated and the Nazi ringleaders given the death penalty." Ike felt that German people by supporting Hitler had been accomplices to everything done in their name. They must not be allowed to escape a sense of guilt of complicity in the tragedy that engulfed the world."¹³⁵

While Eisenhower realized that Morgenthau became his severest critic after he arranged a pragmatic deal with Vichy Admiral Darlan, Eisenhower was indeed truthful in expressing his views on Germany. He often wrote of how he hated Germans in letters to his wife. As the war progress, Ike's view towards Germans became more hardened. His views were only further solidified after the first concentration camp was liberated.

Eisenhower also expressed his opinions on the Soviets to Morgenthau. He felt that a hard peace would cause the Soviets to redouble their efforts to win the European war. Ike staunchly felt that the Russians deserved the right to capture Berlin after suffering horrendous losses. Moreover, Eisenhower was optimistic about postwar relationships with the Soviet Union. He expressed to Morgenthau that Russia had problems of its own that would keep her busy long after they were dead.¹³⁶

On January 5, 1944, with the Battle of the Bulge raging Roosevelt’s policy of unconditional surrender came under brutal assault from Senator Burton Wheeler. Wheeler, a pro-Nazi demagogue, insisted that a majority of Americans are unwilling to sanction a peace of vengeance against Germany. Nor would they accept America acting as Europe’s policeman. The British embassy in Washington took note, asserting Wheeler’s assault made him anti-Soviet and anti-Semitic.

On March 3, 1945 Secretary of War, Stimson met with FDR and reminded him that Eisenhower had agreed to serve only for a few months as military governor of Germany after the surrender. The recent fire bombing of Dresden troubled Stimson. He noted in his diary that Dresden was the capital of Saxony, the least Prussianized part of Germany. Stimson opposed a hard peace with Germany and had at one time suggested his Under Secretary, Robert Patterson as Ike's replacement. Both Roosevelt and Morgenthau approved of the idea. However, in March 1945 Stimson informed FDR that after the Battle of the Bulge that the Pentagon needed to revise its war production and Patterson was needed to oversee that revision. However, Stimson took the opportunity to suggest that War Mobilization board member, General Lucius Clay would be the right man.

During the summer of 1944, Morgenthau heard that John McCloy was interested in the job. He indignantly had asked Hopkins how McCloy could deal with such big companies when his previous clients were firms like General Electric and Westinghouse, noting both companies had substantial investments in Germany.

McCloy established in advance that Clay was willing to make ample use if necessary of the loophole in JCS 1067 to allow military commanders to circumvent the 4Ds program.¹³⁸

On March 10, James Dunn presented Stettinius with a document entitled "Draft Directive of the Treatment of Germany." Dunn had assured the Secretary of State he had merely put the Yalta decisions down on paper with no changes in policy. Four days later Stettinius presented the paper to Roosevelt falsely acclaiming that Stimson had endorsed it. FDR initialed the document on that recommendation.

Stettinus had asked Roosevelt to promote Dunn in December. Roosevelt had worried about Dunn’s reputation for legerdemain and his conservative views but consented to the promotion. Dunn had been a backer of Franco and wanted to use German industrialists to rehabilitate Germany. Eleanor was outraged over the promotion.

Stettinus was unaware that Dunn had played him for a fool. The document had switched allied control from a decentralized power to a centralized power concentrated in the Control Council.¹³⁷ This document upset everyone, including Stimson, McCloy, and Morgenthau. The following day, Stimson asked the President why he had signed such a terrible document. Roosevelt replied that he couldn’t remember if he had signed it or not. At this time Roosevelt’s health was declining rapidly and the incident raised a serious questions about his ability to continue to function as president. He was constantly tired and was reported to be inattentive within a month he would be dead.

On March 20, Morgenthau had lunch with Roosevelt and presented him with a memo opposing Dunn's draft. Roosevelt informed Morgenthau that if he and Stimson could come up with an agreement with Stettinius he would revoke the draft. Before leaving the President agreed with Morgenthau that he should fire Dunn and several others within the State Department.

On March 23, Morgenthau and Grew presented FDR with a new document to replace the Draft Directive. It was written primarily by McCloy and reflected FDR’s current view of changing German industry and not to destroy it. McCloy’s deviousness in sabotaging the 4Ds program extended even further than having a hand in the selection of the military governor and writing the control document. He made sure that the pentagon would have the upper hand and Clay would not be hamstrung by a Morgenthau man. General Clay was likewise shrewdly political and had asked Morgenthau for his recommendation for an economic aide. Morgenthau had recommended Bernard Bernstein. Clay disapproved of this recommendation. McCloy then saw to it that his brother-in-law Lewis Douglas would receive the post.

Douglas was the heir to the Phelps-Dodge copper fortune. He had served as Roosevelt’s first budget director before resigning over the President’s liberal policies. Privately Douglas complained that most of the bad things implemented in the New Deal could be traced to Jewish influence. His extreme anti-Semitism comes directly from the Douglas’s family close business association with the Dodge family. The Dodge family was active members in the eugenic movement. The Phelps-Dodge Corporation was extremely anti-union as well and had driven their miners into the desert rather than negotiate with their union demands. There are enough gaps in Lewis Douglas’s military files to suggest he was probably a member of the OSS. Following his appointment as economic aide to General Clay, Douglas served as ambassador to England.¹³⁹ As economic advisor to Clay Douglas supported revitalizing German industry.

Clearly McCloy’s machinations was to crippled the 4Ds program from the start. He had his hand in the selection of two of the most powerful positions in postwar Germany, the military governor and his economic aide. McCloy carefully chose both knowing that they were opposed to dismantling German industry and largely opposed to the 4Ds program. Moreover, he was chiefly responsible for rewriting the directive to insure that German industry would not be held responsible for some of the worst crimes of the Third Reich. Later, McCloy would take over as the military governor and free most of the war criminals.

" Department specialist Charles Kindleberger "is all right as far as he goes, but he doesn't appear to control the raft of young Jew boys under him. In the fulfillment of the Potsdam program they put ahead of everything the dismantling of German plants and shipment of machinery to Russia." There had been some "headway with details": "Of the 100,000 Nazis now arrested, 20,000 are soon to be turned loose. The British have vigorously protested the low ceiling put on German steel production.

Since "the Harry White boys continue on the job" at Treasury, some "change must be engineered at the highest levels"; the time has come to convince the President, or at least Secretary of State Jimmy Byrnes, that to "continue to ruin Germany by indiscriminate de-Nazification and unrelenting deindustrialization can only confirm Europe as a liability."¹⁵²