CHAPTER 7 - The Hitler Connection

J. Henry Schroder Banking Company is listed as Number 2 in capitalization in Capital City⁶² on the list of the seventeen merchant bankers who make up the exclusive Accepting Houses Committee in London. Although it is almost unknown in the United States, it has played a large part in our history. Like the others on this list, it had first to be approved by the Bank of England. And, like the Warburg family, the von Schroders began their banking operations in Hamburg, Germany. At the turn of the century, in 1900, Baron Bruno von Schroder established the London branch of the firm. He was soon joined by Frank Cyril Tiarks, in 1902. Tiarks married Emma Franziska of Hamburg, and was a director of the Bank of England from 1912 to 1945.

During World War I, J. Henry Schroder Banking Company played an important role behind the scenes. No historian has a reasonable explanation of how World War I started. Archduke Ferdinand was assassinated at Sarajevo by Gavril Princeps, Austria demanded an apology from Serbia, and Serbia sent the note of apology. Despite this, Austria declared war, and soon the other nations of Europe joined the fray. Once the war had gotten started, it was found that it wasn't easy to keep it going. The principal problem was that Germany was desperately short of food and coal, and without Germany, the war could not go on. John Hamill in The Strange Career of Mr. Hoover⁶³ explains how the problem was solved.* He quotes from Nordeutsche Allgemeine Zeitung, March 4, 1915, "Justice, however, demands that publicity should be given to the preeminent part taken by the German authorities in Belgium in the solution of this problem. The initiative came from them and it was only due to their continuous relations with the American Relief Committee that the provisioning question was solved." Hamill points out "That is what the Belgian Relief Committee was organized for--to keep Germany in food."* Copies of Hamill's book were systematically located and destroyed by government agents, because it was published on the eve of President Hoover's re-election campaign.

The Belgian Relief Commission was organized by Emile Francqui, director of a large Belgian bank, Societe Generale, and a London mining promoter, an American named Herbert Hoover, who had been associated with Francqui in a number of scandals which had become celebrated court cases, notably the Kaiping Coal Company scandal in China, said to have set off the Boxer Rebellion, which had as its goal the expulsion of all foreign businessmen from China. Hoover had been barred from dealing on the London Stock Exchange because of one judgement against him, and his associate, Stanley Rowe, had been sent to prison for ten years. With this background, Hoover was called an ideal choice for a career in humanitarian work.

Although his name is unknown in the United States, Emile Francqui was the guiding spirit behind Herbert Hoover's rise to fortune. Hamill (on page 156) identifies Francqui as the director of many atrocities committed against natives in the Congo. "For every cartridge they spent, they had to bring in a man's hand". Francqui's frightful record may have been the source for the charge later leveled against German soldiers in Belgium, that they chopped off the hands of women and children, a claim which proved to be groundless. Hamill also says that Francqui "tricked the Americans out of the Hankow-Canton railroad concession in China in 1901, and at the same time had 'stood by' in case Hoover needed any further help in the 'taking' of the Kaiping coal mines. This is the humanitarian who had sole charge of the distribution of the Belgian 'relief' during the World War, for which Hoover did the buying and shipping. Francqui was a director with Hoover, in the Chinese Engineering and Mining Company (the Kaiping mines), through which Hoover transported 200,000 Chinese slave workers to the Congo to work Francqui's copper mines."

Hamill says on page 311 that "Francqui opened the offices of the Belgian Relief in his bank, Societe Generale, as a one-man show, with a letter of permission from the German Governor General von der Goltz dated October 16, 1914.

The New York Herald Tribune of February 18, 1930, quoted by Congressman Louis McFadden in the House on February 26, 1930, said,

One of Belgium's two directors on the Bank for International Settlements will be Emile Francqui of the Societe Generale, a member of both the Young and Dawes Plan Committees. The board of directors of the international bank will have no more colorful character than Emile Francqui, former Minister of Finance, veteran of the Congo and China . . . he is rated as the richest man in Belgium, and among the twelve richest men in Europe.

Despite his prominence, The New York Times Index mentions Francqui only a few times during two decades before his death. On October 3, 1931, The New York Times quoted Le Peuple of Brussels that Francqui would visit the United States. "As a friend of President Hoover, Monsieur Francqui will not fail to pay a visit to the President."

On October 30, 1931, The New York Times reported this visit with the headline, "Hoover-Francqui Talk was Unofficial". "It was stated that Mr. Francqui spent Tuesday night as a personal guest of the President, and that they talked of world financial problems in general, strictly unofficial. Mr. Francqui was an associate of President Hoover during the latters ministrations in Belgium during the war. Their visit had no official significance. Mr. Francqui is a private citizen and not engaged in any official mission."

No reference is made to the Hoover-Francqui business associations which were the subject of huge lawsuits in London. The Francqui visit probably involved Hoover's Moratorium on German War Debts, which stunned the financial world. On December 15, 1931, Chairman McFadden informed the House of a dispatch in the Public Ledger of Philadelphia, October 24, 1931, "GERMAN REVEALS HOOVER'S SECRET. The American President was in intimate negotiations with the German government regarding a year's debt holiday as early as December, 1930." McFadden continued,

"Behind the Hoover announcement there were many months of hurried and furtive preparations both in Germany and in Wall Street offices of German bankers. Germany, like a sponge, had to be saturated with American money. Mr. Hoover himself had to be elected, because this scheme began before he became President. If the German international bankers of Wall Street--that is Kuhn Loeb Company, J. & W. Seligman, Paul Warburg, J. Henry Schroder--and their satellites had not had this job waiting to be done, Herbert Hoover would never have been elected President of the United States. The election of Mr. Hoover to the Presidency was through the influence of the Warburg Brothers, directors of the great bank of Kuhn Loeb Company, who carried the cost of his election. In exchange for this collaboration Mr. Hoover promised to impose the moratorium of German debts. Hoover sought to exempt Kreuger's loan to Germany of $125 million from the operation of the Hoover Moratorium. The nature of Kreuger's swindle was known here in January when he visited his friend, Mr. Hoover, in the White House."

Not only did Hoover entertain Francqui in the White House, but also Ivar Kreuger, the most famous swindler of the twentieth century.
When Francqui died on November 13, 1935, The New York Times memorialized him as

"the copper king of the Congo . . . Mr. Francqui, last year having gained dictatorial powers over the belga, maintained it on the gold standard during a crisis. In 1891 he led an expedition into the Congo and gained it for King Leopold. A man of great wealth, rated among the twelve richest men in Europe, he secured enormous copper deposits. He was Minister of State in 1926 and Minister of Finance in 1934. It was his pride that he never accepted a centime of remuneration for his services to the government. While consul general at Shanghai, he secured valuable concessions, notably the Kaiping coal mines and the railway concession for the Tientsin Railroad. He was governor of the Societe Generale de Belgique, Lloyd Royal Belge, and regent of La Banque Nationale de Belgique."

The Times does not mention Francqui's business partnerships with Hoover. Like Francqui, Hoover also refused remuneration for "government service", and as Secretary of Commerce and as President of the United States, he turned his salary back to the government.
On December 13, 1932, Chairman McFadden introduced a resolution of impeachment against President Hoover for high crimes and misdemeanors, which covers many pages, including violation of contracts, unlawful dissipation of the financial resources of the United States, and his appointment of Eugene Meyer to the Federal Reserve Board. The resolution was tabled and never acted upon by the House.
In criticizing Hoover's Moratorium of German War Debts, McFadden had referred to Hoover's "German" backers. Although all of the principals of "the London Connection" did originate in Germany, most of them in Frankfurt, at the time they sponsored Hoover's candidacy for the Presidency of the United States, they were operating from London, as Hoover himself had done for most of his career.

Also, the Hoover Moratorium was not intended to "help" Germany, as Hoover had never been "pro-German". The Moratorium on Germany's war debts was necessary so that Germany would have funds for rearming. In 1931, the truly forward-looking diplomats were anticipating the Second World War, and there could be no war without an "aggressor".

Hoover had also carried out a number of mining promotions in various parts of the world as a secret agent for the Rothschilds, and had been rewarded with a directorship in one of the principal Rothschild enterprises, the Rio Tinto Mines in Spain and Bolivia. Francqui and Hoover threw themselves into the seemingly impossible task of provisioning Germany during the First World War. Their success was noted in Nordeutsche Allgemeine Zeitung, March 13, 1915, which noted that large quantities of food were now arriving from Belgium by rail. Schmoller's Yearbook for Legislation, Administration and Political Economy for 1916, shows that one billion pounds of meat, one and a half billion pounds of potatoes, one and a half billion pounds of bread, and one hundred twenty-one millions pounds of butter had been shipped from Belgium to Germany in that year. A patriotic British woman who had operated a small hospital in Belgium for several years, Edith Cavell, wrote to the Nursing Mirror in London, April 15, 1915, complaining that the "Belgian Relief" supplies were being shipped to Germany to feed the German army. The Germans considered Miss Cavell to be of no importance, and paid no attention to her, but the British Intelligence Service in London was appalled by Miss Cavell's discovery, and demanded that the Germans arrest her as a spy.

Sir William Wiseman, head of British Intelligence, and partner of Kuhn Loeb Company, feared that the continuance of the war was at stake, and secretly notified the Germans that Miss Cavell must be executed. The Germans reluctantly arrested her and charged her with aiding prisoners of war to escape. The usual penalty for this offense was three months imprisonment, but the Germans bowed to Sir William Wiseman's demands, and shot Edith Cavell, thus creating one of the principal martyrs of the First World War.

With Edith Cavell out of the way, the "Belgian Relief" operation continued, although in 1916, German emissaries again approached London officials with the information that they did not believe Germany could continue military operations, not only because of food shortages, but because of financial problems. More "emergency relief" was sent, and Germany continued in the war until November, 1918. Two of Hoover's principal assistants were a former lumber shipping clerk from the West Coast, Prentiss Gray, and Julius H. Barnes, a grain salesman from Duluth. Both men became partners in J. Henry Schroder Banking Corporation in New York after the war, and amassed large fortunes, principally in grain and sugar.

Continue chapter 7B