US Military Intelligence report EW-Pa 128

Enclosure No. 1 to despatch No. 19,489 of Nov. 27, 1944, from
the Embassy at London, England.

S E C R E T
SUPREME HEADQUARTERS
ALLIED EXPEDITIONARY FORCE
Office of Assistant Chief of Staff, G-2
7 November 1944
INTELLIGENCE REPORT NO. EW-Pa 128

SUBJECT: Plans of German industrialists to engage in underground activity after Germany’s defeat; flow of capital to neutral countries.

SOURCE: Agent of French Deuxieme Bureau, recommended
by Commandant Zindel. This agent is regarded as
reliable and has worked for the French on German
problems since 1916. He was in close contact with
the Germans, particularly industrialists, during
the occupation of France and he visited Germany
as late as August, 1944.

1. A meeting of the principal German industrialists with
interests in France was held on August 10, 1944, in the Hotel
Rotes Haus in Strasbourg, France, and attended by the informant
indicated above as the source. Among those present
were the following:
Dr. Scheid, who presided, holding the rank of S.S.
Obergruppenfuhrer
and Director of the Heche
(Hermandorff & Schonburg) Company
Dr. Kaspar, representing Krupp
Dr. Tolle, representing Rochling
Dr. Sinderen, representing Messerschmitt
Drs. Kopp, Vier and Beerwanger, representing
Rheinmetall
Captain Haberkorn and Dr. Ruhe, representing Bussing
Drs. Ellenmayer and Kardos, representing
Volkswagenwerk
Engineers Drose, Yanchew and Koppshem, representing
various factories in Posen, Poland (Drose, Yanchew
and Co., Brown-Boveri, Herkuleswerke, Buschwerke,
and Stadtwerke)
Captain Dornbuach, head of the Industrial Inspection
Section at Posen
Dr. Meyer, an official of the German Naval Ministry in
Paris
Dr. Strossner, of the Ministry of Armament, Paris.

2. Dr. Scheid stated that all industrial material in France
was to be evacuated to Germany immediately. The battle of
France was lost for Germany and now the defense of the
Siegried Line was the main problem. From now on also
German industry must realize that the war cannot be won
and that it must take steps in preparation for a post-war commercial
campaign. Each industrialist must make contacts and
alliances with foreign firms, but this must be done individually
and without attracting any suspicion. Moreover, the ground
would have to be laid on the financial level for borrowing considerable
sums from foreign countries after the war. As examples
of the kind of penetration which had been most useful in
the past, Dr. Scheid cited the fact that patents for stainless
steel belonged to the Chemical Foundation, Inc., New York,
and the Krupp company of Germany jointly and that the U.S.
Steel Corporation, Carnegie Illinois, American Steel and Wire,
and national Tube, etc. were thereby under an obligation to
work with the Krupp concern. He also cited the Zeiss
Company, the Leisa Company and the Hamburg-American
Line as firms which had been especially effective in protecting
German interests abroad and gave their New York addresses
to the industrialists at this meeting.

3. Following this meeting a smaller one was held presided
over by Dr. Bosse of the German Armaments Ministry and
attended only by representatives of Hecho, Krupp and
Rochling. At this second meeting it was stated that the Nazi
Party had informed the industrialists that the war was practically
lost but that it would continue until a guarantee of the
unity of Germany could be obtained. German industrialists
must, it was said, through their exports increase the strength
of Germany. They must also prepare themselves to finance
the Nazi Party which would be forced to go underground as
Maquis (in Gebirgaverteidigungastellen
gehen). From now on
the government would allocate large sums to industrialists so
that each could establish a secure post-war foundation in foreign
countries. Existing financial reserves in foreign countries
must be placed at the disposal of the Party so that a
strong German Empire can be created after the defeat. It is
also immediately required that the large factories in Germany
create small technical offices or research bureaus which
would be absolutely independent and have no known connection
with the factory. These bureaus will receive plans and
drawings of new weapons as well as documents which they
need to continue their research and which must not be
allowed to fall into the hands of the enemy. These offices are
to be established in large cities where they can be most successfully
hidden as well as in little villages near sources of
hydro-electric power where they can pretend to be studying
the development of water resources. The existence of these is
to be known only by very few people in each industry and by
chiefs of the Nazi Party. Each office will have a liaison agent
with the Party. As soon as the Party becomes strong enough
to re-establish its control over Germany the industrialists will
be paid for their effort and cooperation by concessions and
orders.

4. These meetings seem to indicate that the prohibition
against the export of capital which was rigorously enforced
until now has been completely withdrawn and replaced by a
new Nazi policy whereby industrialists with government
assistance will export as much of their capital as possible.
Previously exports of capital by German industrialists to
neutral countries had to be accomplished rather surreptitiously
and by means of special influence. Now the Nazi
party stands behind the industrialists and urges them to save
themselves by getting funds outside Germany and at the same
time to advance the party’s plans for its post-war operation.
This freedom given to the industrialists further cements their
relations with the Party by giving them a measure of
protection.

5. The German industrialists are not only buying agricultural
property in Germany but are placing their funds abroad,
particularly in neutral countries. Two main banks through
which this export of capital operates are the Basler Handelsbank
and the Schweizerische Kreditanstalt of Zurich. Also
there are a number of agencies in Switzerland which for a
5 percent commission buy property in Switzerland, using a
Swiss cloak.

6. After the defeat of Germany the Nazi Party recognizes
that certain of its best known leaders will be condemned as
war criminals. However, in cooperation with the industrialists
it is arranging to place its less conspicuous but most important
members in positions with various German factories as
technical experts or members of its research and designing
offices.

For the A.C. of S., G-2.
WALTER K. SCHWINN
G-2, Economic Section
Prepared by
MELVIN M. FAGEN
Distribution:
Same as EW-Pa 1,
U.S. Political Adviser, SHAEF
British Political Adviser, SHAEF