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Publisher: Lyle Stuart, 1981


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"All companies competing for a foreign contract would notify A.G.K. of the facts of their bid. A.G.K. had the power to determine if a particular company's prices were right. One company could not offer a price lower than that of another German firm, on the same product. The contract would usually go to the company having the best name or the one preferred by the foreign government. The companies who were then unsuccessful in the bidding would often be licensed by the company securing the contract to for part of the order. The company receiving the order would be called the leader of the syndicate or 'consortium,' and would often license the other companies to aid them."

Brombacher gave as one example a 1937 Krupp contract with Brazil for the delivery of certain types of war materials. "To secure this contract and to introduce its products there, Krupp had several representatives in Brazil (namely, Bromberg & Co.). Rheinmetall-Borsig, Krupp's main competitor for the business, also had representatives in Brazil. When Krupp secured the contract, Rheinmetall was then ordered by A.G.K. not to compete with Krupp in Brazil. The expenses of Rheinmetall's representatives were ordered paid by A.G.K. out of the expense clause of the new contract."

As an insight into how Krupp operated its vast armaments business during World War I1 (in contrast to World War I, when it had to import precision instruments from Switzerland), Brombacher stated, "In the Second World War we had our own German sources for the photoelectric and radar fire controls used for our guns. We were supplied by the German f m s of Siemens & Halske A.G. and Siemens-Schuchert-Werke A.G. All optical devices were built by Carl Zeiss."

He added that Krupp had also shifted from being mass supplier of the German war machine to being primarily a development and invention agency for weapons that were then mass fabricated by other manufacturers.

While supplying weaponry to other countries on the O.K.W. approved list, Brombacher said they didn't let the war interfere with profits. He explained one gun contract Krupp had with Holland. Krupp had not finished building the border defense guns Holland wanted under terms of their contract, "so Krupp loaned Holland some big defense guns on a cash rental basis." When the German army rolled over Holland in May 1940, although it wasn't much of a roll-over because the borders were thinly patrolled and the way had been smoothed by the German Citizens' Association (the A-0), "the rented guns were repossessed by Krupp and later sold to the Italians."

The expansion of the German economy despite war produced a new Reichsmark diplomacy that made a profit for everyone involved: the corporations, the banks, their shareholders, the Reichsbank, the government of the Third Reich; and in countries where sales were made the business elite prospered, as did the middlemen who handled the goods and the tradesmen who sold to consumers. It was a golden circle of Reichsmark diplomacy, which had its effect on foreign policy and the conduct of the war.

Consider Turkey, and the reasons that it remained outside the Allied fold until the waning days of the war. The Big Three, Roosevelt, Churchill, and Stalin, all agreed it would be desirable to have Turkey in the war in 1943. But they didn't have Reichsmark power; they didn't have the guns and aircraft and diverse consumer products Turkey craved. In short supply themselves, they were carefully stockpiling any excess war equipment for 1944 and Operation Overlord. So they attempted rhetorical diplomacy.

Winston Churchill had Anthony Eden meet with a Turkish delegation on November 23, 1943, the time of the Churchill- Roosevelt Conference, which took place on the eve of their meeting in Teheran with Josef Stalin. Foreign Secretary Eden had persuaded a Turkish delegation to come to Cairo. At the meeting he pointed out the urgent Allied need for Turkish airbases, and the damages that would accrue to both sides if Turkey entered the war on the side of the Allies. The Turkish delegation sat through this discourse unmoved. They said that granting of airbases to the Allies would be an act of intervention, and that nothing could prevent German air strikes on Constantinople, Ankara, and Smyrna.

Later, Eden privately remarked to Churchill, "Considering what has been happening to us under their eyes in the Aegean, the Turks can hardly be blamed for their caution." What Eden did not know is that the Turkish delegation had better reasons for being negative to his proposals. They were locked up in Reichsmark diplomacy, and members of the delegation did not want this golden thread broken.

Germany was having a field day in Turkey. German assets totaled about $30 million and the Turkish-German clearing account was $15.7 million, yet neither figure tells the true story of German assets in Turkey at that time. Two German bank branches, the Deutsche Bank in Istanbul and the Deutsche Orient Bank (a Dresdner bank), were depositories for a steady flow of bonds, cash, gold, bank deposits, and foreign exchange belonging to German firms and individuals. Six German insurance companies with branches in Turkey followed a standard policy of linking Turkish insurance companies into their own operation with grants of German investment capital, which automatically forced these firms to bow to German policy. But it also generated large fluid assets, which were invested in local real estate and other properties and business ventures. More than sixty German-controlled firms in Turkey were engaged in building and public works contracting; building materials and tobacco merchandising; importing and exporting; chemicals and pharmaceuticals; shipping, forwarding, and transportation; machinery and electrical equipment; and as commission agents. I.G. Farben, Krupp, and Bayer were each represented.

Then there was a 100-million Reichsmark order for German war materials to Turkey. While the Eden conference was taking place in Cairo, Turkish and German businessmen and government leaders were discussing this contract by a consortium of German firms. By terms of this sale, bonds of the Turkish Treasury to the amount of RM 100 million were deposited with the Deutsche Bank, to be redeemed in half-yearly installments from 1944 to 1949 in return for Deutsche Bank credits.

Deutsche Bank was handling all the financial aspects of the Turkish order. This bank computed the sums each German firm was to receive in cash, and then formed a syndicate of several banks for the funding, with the German firms receiving their money immediately. To the German O.K.W., an important element of this transaction was the resumption of chromium ore shipments from Turkey to Germany. The Turks received their war materiel from Germany with promptness, but were able to pay only two installments on their war bonds, those due May 15 and November 15, 1945. In August 1944 Turkey had reluctantly cut its diplomatic and economic relations with Germany. On February 23, 1945, four months before the German surrender at Rheims, France (on May 7 ), Turkey declared war on the Axis.

In another neutral nation, Spain, Reichsmark diplomacy worked equally well. Although Franco sympathized with Hitler and his war against communist Russia, even to the extent of sending a volunteer division to the Eastern Front, he became more neutral as the war went on. In 1943 he had been told during a personal meeting with his old friend, Admiral Canaris, that Spain should stay out of the war; that Hitler could not win. From this moment on he became more even-handed in his treatment of German and British diplomatic representatives who were quietly fighting for his attention and for the other perks that go with a most-favored-nation relationship.

On the industrial front, however, Germany was winning hands down. Almost all sections of the Spanish chemical and pharmaceutical industry came under the control of I.G. Farbenindustrie. It controlled many Spanish firms directly or through Unicolor S.A. I.G. Farben owned 51 percent of the stock in Sociedad Electro-Quimica de mix, whose manufacturing processes were under license from I.G. Quimica Commercial y Farmaceutica S.A. was a subsidiary of I.G. Farben and distributed the Bayer line of medical products in Spain. Farben Unicalor SA, represented 16 German firms having interlocking directorates with several large Spanish chemical companies. There were Lipperheide and Guzman S A (later to be renamed Industrias Reunida Minero Metalurgicas S.A.), whose holdings included smelters and transportation facilities. There were also in Spain two prominent German-owned banks.

The Spanish Civil War had given Germany a strong foothold in Spain. Hitler had sent technical aid, a Condor division, and dive bombers to Franco. The war also enabled his new generation of army strategists to test new field and air tactics and weapons. In return, General Franco later sent his Blue Division to Russia, but by German accounts this did not square the Spanish debt.

In November 1943, an agreement was reached in which Spain acknowledged a $1 billion debt to Germany. Several payments were made, in free credits. One payment was of $60 million to be used by the Germans to buy Spanish property, finance goods, and sustain the German diplomatic staff in Spain. In July 1944 the balance due had been brought down to $40 million by Spain. By April 1945 Spain's debt was only $22 million, and it was being negotiated by German interests.

German economic penetration of Portugal was limited. In 1944 prewar investments in mining gave way to the purchase of properties in the cities of Portugal. I.G. Farben did not manufacture in Portugal, merely marketing pharmaceutical specialties through their Bayer Ltda., in Lisbon and Oporto. The most important German manufacturer in Portugal was the electrical firm of Siemens Companhia de Electricidad S.A.R.L., a division of the Siemens group of Germany. No German banks were established in Portugal.

In their efforts to harness the economies of Europe, administrators of the Four-Year Plan encountered resistance "to the proposed takeover of certain companies, such as the German branch of the Ford Motor Company. The management of "Ford-Werke A.G." wanted to hold this company together as a profit-making entity ("The war won't last forever and we have a good thing in Ford"). They believed that once government bureaucracy laid its hand on their corporation it would never be the same. Therefore, Dr. H.T. Albert, chairman of the board, sent a memorandum to the Four-Year Plan administrators from RH. Schmidt, president of the board of Ford-Werke A.G. They mustered the arguments on whether a complete Germanization of Ford would be necessary or advisable. In part, Schmidt wrote:

All vehicles and parts are being produced in Germany by German workers using German materials; export into the European and overseas sales territory of the United States and Great Britain has amounted to many millions in the last year of peace.

Foreign raw materials were obtained through the American company (rubber, nonferrous metals) to cover production needs of the German plant and in part for the whole industry.

As soon as the American stock majority in Ford-Werke A.G. is eliminated each Ford company in every country will fight for its individual existence. Amsterdam, Antwerp, Paris, Budapest, Bucharest, Copenhagen, etc. are concerned (about a collapse of the general Ford organization in Europe).

A majority, even if it is only a small one, of the Americans is essential for the actually free-transmittal of the newest American models as well as for the insight into the American production and sales methods. Since Americans are without a doubt particularly progressive in this field, the maintenance of this connection is in the German interest. Through license fees or contractual stipulations this advantage, as well as the importance of the company for the obtaining of raw materials and exports, would be lost. The plant would practically only be worth its own machine capacity.

The memorandum was dated November 25, 1941, and the United States went to war two weeks later. While Mr. Schmidt's and Dr. Albert's argument became moot, the German government did not break up the Ford operation of Europe. They admired its efficiency, placing the various motor companies in different countries into their armament production scheme.

At the apex of this vast financial and economic administrative structure was positioned Reichsleiter Martin Bormann. He had retained his grip on the pulse of German finance ever since the day he took charge of the finances of the Fuehrer, and the vast funds of the Reich chancellery. His friendship and association with Dr. Herman Josef Abs predated Abs's move into the management of Deutsche Bank. Dr. Abs had been a partner in the prestigious private bank of Delbruck Schickter & Co. in Berlin. Recalling those days, Abs has written:

The Reich Chancellery in Berlin was its largest account, and it was through this account that Adolf Hitler received his salary as Chancellor of the Reich.

Martin Bormann, whose control of the Reich chancellery was absolute the moment he succeeded Rudolf Hess, maintained a cordial relationship with the Berlin banker. Dr. Abs moved to the Deutsche Bank on December 30, 1937, where he became first a member of the board of management, later the chairman of the most powerful bank in Germany, which was to tug the German financial apparatus ever forward into new areas of financial expansion and power throughout the world.

Reichsleiter Bormann knew that his relationship with Abs would tighten as his own power grew. Remaining on friendly terms with the Third Reich's leading banker was a contentment. He knew in 1943 that with his Nazi banking committee well established, he had the means to ultimately take the reins of finance unto himself. Through this committee and through the power that flowed from Hitler to himself, he could set a new Nazi state policy, when the time was ripe for the general transfer of capital, gold, stocks, and bearer bonds to safety in neutral nations.

Bormann, like Hitler, had no illusions that victory would be theirs on the field of battle. Hitler had settled in his own mind that a sort of victory might accrue to Germany only with a compromise peace with the adversaries. To Martin Bormann, he had commented at Obersalzberg in 1943, "No one will make peace with us now." Yet he went on nurturing the hope of establishing a holding line near Kursk in the Ukraine, then fighting the British and the Americans to a standstill in the West.

In the summer of 1943 Hitler requested Bormann to call a meeting of his SS security chiefs. Present were Hitler, Bormann, Himmler, Heinrich Mueller of the Gestapo, and Schellenberg, head of SS foreign intelligence. Foreign Minister Ribbentrop also sat in on the conference because his ministry was to supply essential data in the game plan now being devised. It was a new, cagy diplomacy, in which negotiations were to be opened with the West, while simultaneously establishing contact with Moscow.

It was decided at the conference that Himmler should make the approach to the West, while Mueller would begin a "Funkspiel," a radio game using captured communist wireless operators to send messages to the intelligence gathering center in Moscow. This center, so-called, controlled all Soviet agent activities outside Russia. It was the net that pulled in all communications, which were then distributed to the various intelligence chiefs in Moscow, according to priority and need.

Anything dealing with shifting strategy in Berlin, London, and Washington went directly to Stalin. Mueller was very good at forcing captured "enemy" wireless operators to work for the Germans, using their transmitters, codes, and personnel to cause London or Moscow to believe it was their own agent on the air still transmitting valid information.

At the time of this 1943 conference with the Fuehrer, the Abwehr had control of Leopold Trepper, a Polish Jew who had run a brilliant network for the communists. It had earned the nickname "Red Orchestra," because its wireless operators in Berlin, Amsterdam, Brussels, and Paris appeared to transmit like an orchestra as they followed one after the other each night with their messages to the center in Moscow. It took the Abwehr and the Gestapo two years to demolish the Red Orchestra. Then they learned that all participants were militant Jews dedicated alike to communism and the concomitant defeat of Nazism; thus, to the Nazis it was yet another threat to contend with. By the end of 1943 the Gestapo had entrapped more than 130 communist agents, most of them workers for the Red Orchestra.

The Abwehr arrested Leopold Trepper, the leader, in Paris. Shortly thereafter he was placed under the control of the Gestapo, and rather than die he agreed to cooperate by transmitting coded messages to the center in Moscow, material that had been prepared by the Bormann-Mueller team in Berlin. This latter was about to launch "Operation Bear," under Hitler's direction, a campaign of sly and false information they believed just might split the Allies and lead into a separate peace with Russia.

Trepper was transported from a prison to a large and comfortable house in Neuilly, at the corner of the Boulevard Hugo and the rue de Rouvray. Well guarded, from this location Trepper sent messages to Moscow; the Red Orchestra had become the Brown Orchestra. But Trepper's hope was that some way along the line he could inform Moscow that he had been captured, that his network had been rolled up, and that he was transmitting under duress. Such an opportunity did come after some months when he smuggled out a coded account of his situation, which reached the Soviet Embassy in London and was passed along to Moscow. Until that time, however, the center was receiving streams of misinformation, from six transmitters, in five countries, all run by Mueller's Gestapo, in addition to the Trepper one in Paris. One of the more accomplished Red Orchestra members, who had succumbed to working for Mueller under dire threats to his person, was Johann Wenzel, an expert the center had shifted from Holland to Brussels to coordinate air traffic of the Belgian network. Wenzel stayed on the air for six months, only to be betrayed under duress by Sophie Paznanska, a cipher expert promoted to station chief in Brussels who had been seized by the Germans. Wenzel, who knew the new codes in use by the center, returned to the air waves, now for the Germans, unsuspected by the stag of the center. In January 1943 Wenzel, while transmitting, leaped up suddenly, knocked his guard unconscious, and fled. Reaching the Netherlands, and using a transmitter the Gestapo had not found, he sent a full disclosure of Mueller's radio game. It was evidently neither grasped nor comprehended in Moscow, for in his memoirs of 1977 Leopold Trepper stated: "Judging by his answers the Director suspected nothing.”

By this time, Heinrich Mueller had dispatched an assistant to Paris to handle Trepper and, in general, the transmission of information to the Russian leadership. Heinz Pannwitz was the individual, a Hauptsturmfuehrer SS, who had served as aide to Heydrich in Prague when the German SS leader was gunned down by Czech agents from London. In angry retaliation for this, Pannwitz had ordered the execution of thousands of Czechs and the burning of Lidice, becoming known to history as the "butcher of Prague." In Paris he was determined to make a name for himself, and he did so in a predictable, unsavory way. But during a full-scale propaganda offensive by means of the Paris Red Orchestra unit, Leopold Trepper had escaped and remained underground until the liberation of the French capital in August 1944. He was to return to Moscow the following year, but his misfortunes there are another story he was incarcerated ten years in Lubyanka prison waiting for his loyalty to the Soviet Union to be investigated. Following the death of Stalin, he was cleared and returned with his family to Warsaw. Captain Heinz Pannwitz had made his way to Moscow believing he could get better treatment from the Russians than from the English. He was also imprisoned for ten years, then released. In 1977 he was managing director of a bank in Ludwigsburg, in West Germany.

Back in 1943 at the start of Operation Bear, with a peace approach to both sides agreed upon at the above-mentioned conference, Himmler and Mueller locked horns. Himmler was SS chief and minister of the interior; Mueller was SS Oberstgruppenfuehrer and Generaloberst der Waffen SS-that is, SS chief group leader and highest general of the SS force. They disliked each other intensely. Himmler had been in chicken farming before the war; Mueller had been inspector of detectives on the Munich police force and had been taken into the Gestap0 by Heydrich, who needed a core of professionals to make the German Secret State Police more efficient. Their open hostility to each other made Hitler angry too, and he had ordered Bormann to be not only an arbitrator between Himmler and Mueller but to be personally in charge of the wireless game deceiving Moscow. This was fine with Mueller, who had cultivated Bormann ever since the day the Reichsleiter had succeeded Rudolf Hess. He perceived that this was a leader who knew what he was doing, and who would go far.

Things developed, two against one. Bormann didn't like Himmler either, and together they ultimately cut Himmler down to size. Bormann and Mueller began transmitting high-level information to the center in Moscow through their "turned" wireless operators. Mixed in with the valid data was information on Churchill and Roosevelt picked up from their transatlantic conversations, purportedly stolen by communist agents from German government files. Out of context, as they were, some of the remarks could be, and were, misinterpreted by Stalin.

Himmler made his peace approaches to the West through emissaries he sent to Stockholm and Berne, confirmed by Soviet agents in these cities. Himmler's men carried documents, falsely drawn to show Stalin's eagerness for a separate peace pact with Hitler. Himmler had a long talk with one German resistance leader about the desirability of peace with the West, and discussed how this could be accomplished. He knew the news would travel swiftly to London because, if nothing else, German resistance leaders were a talkative, hopeful lot. But the fellow sent to Berne almost brought about Himmler's undoing. He carried a suitcase filled with undeniably authentic documents provided by Ribbentrop's Foreign Ministry. The man, Herr Langbehn, went first to the British Legation in Berne and asked to see the British military attache. He explained he was an official of the German Foreign Ministry and had brought with him from Berlin a suitcase of Foreign Ministry documents. On hearing this claim, the attache presumed it false, and told him he was not interested. The German then tried to see the head of the chancellery in the British Embassy, but was rebuffed there. So he went to the American Legation and repeated his story. A Legation secretary, deciding this was cloak-and-dagger material, sent him on to Men Dulles, head of the OSS in Switzerland. He heard out the German's story, viewed the documents, realized they were genuine, and reported them to Washington immediately. "If only," his message went, "you could see these documents in all their pristine freshness."

The documents were duly copied and sent to Washington with Dulles's opinion appended that all evidence pointed to their being a genuine approach by the Germans for a peace with the United States and Britain. Copies were also sent to the OSS in London, which made them available to British intelligence. At this point Kim Philby, the British traitor who later fled to Russia after serving it for thirty years, took charge of the documents and of the Dulles memorandum, and reported their contents and the German peace feeler to his control in Moscow.

Moscow received an additional confirming report from their man in William Donovan's OSS headquarters. This communist agent was a chief of the desk staff in the Washington office, and his position gave him access to all incoming reports of OSS station chiefs around the world, including those of Colonel David Bruce in London, chief of the OSS in Europe. It also explained why many of Men Dulles's most secret memoranda were blocked on receipt in Washington, never to reach the commander in chief, the president. After the war, I visited Donovan in his Wall Street law office; he confirmed the story and remarked sadly, "It was all too true."

Himrnler, however, made a couple of mistakes. One was his rendezvous with a German resistance leader, which was observed by two of Mueller's men. Another was sending an emissary to Switzerland, whose information was too good and too secret-and the man had opened up too much with Allen Dulles. Later, a message from a British agent in Switzerland to London carried by a man who had talked to Dulles, was intercepted by Mueller, who showed it to Bormann, who in turn passed it on to Hitler, who hit the ceiling over such detailed revelations. Himrnler survived this only by arresting his own emissary to Berne, and cutting off all further overtures to the West. Everything was now in Bormann's hands, and he preferred dealing with Stalin at this point in history. He thought that with German armies pressing hard a better peace accommodation could be made with Russia than with Britain or the United States.

Peace was not to come to Europe through these initiatives in the summer and fall of 1945. Many strategies of deception of both Churchill and Hitler failed, but the suspicions fostered by Martin Bormann lingered. At the Teheran Conference, Stalin was plainly distrustful of the British prime minister. Two years had passed since Rudolf Hess's adventure to Scotland to arrange a cessation of hostilities between Britain and Germany, and this episode rankled the Russian leader, whose suspicion and anger were reinforced now by this other information from the center in Moscow. He questioned and needled Churchill repeatedly about the purpose of Hess's flight. Finally, Churchill replied heatedly that he was not accustomed to having his word challenged. 'When I make a statement I expect it to be accepted as fact," he retorted to Stalin. The Soviet deflected this with a sly response: 'But even my intelligence services don't tell me everything."

At Teheran, President Roosevelt tried for Stalin's approval of his statement made at the Casablanca Conference with Churchill, in which he called for the unconditional surrender of the German nation. At the time, this took Churchill by surprise, as it did the president's generals. The president told his aide, Harry Hopkins, "Of course, it's just the thing for the Russians. They couldn't want anything better. Unconditional surrender. Uncle Joe might have made it up himself." These remarks, seemingly offhand, had been decided upon earlier in Washington, following a meeting with one of the president's closest advisors, Supreme Court Justice Felix Franfurter, of whom it was written by Jay Pierrepont Moffet of the State Department, "The power behind the throne was Felix Frankfurter ." He wanted the German nation punished absolutely and totally, and told the president he should insist on "unconditional surrender." Henry Morgenthau, another advisor, had urged the president to "turn Germany in a howling wilderness." President Roosevelt accepted Frankfurter's proposal, but rejected that of Morgenthau.

But at Teheran, Stalin disapproved of Roosevelt's unconditional surrender position. He was not impressed with such superfluity; it would only prolong the war, and Russia had suffered in actuality more than the other nations. He commented, "This war is being fought with British brains, American brawn, and Russian blood."

After the Teheran Conference, early in 1944, Hitler terminated his wireless game with the Moscow center, and Operation Bear was shut down. An official in the Foreign Ministry in Berlin, who had been involved in the operation, said: "Either Hitler did not want to turn the radio game into a diplomatic reality, or he was not capable of doing so. And there was no Talleyrand in Berlin to take the matter in hand," he added sadly.

However, Hitler considered substantial the gains from Operation Bear. He had, thanks to it, planted divisive distrust among the Big Three. Because of it, too, he hoped they would go ahead with an invasion of Normandy, which Hitler was confident would be disastrous for the Allies in general and the political ruin of President Roosevelt and Prime Minister Churchill. Then he would make peace with Stalin, whose nation had been bled white; with 20 million dead, and a failed invasion of France by the United States and Britain, the upshot would be a peace conference between Hitler and Stalin.

Later, in Washington, President Roosevelt recalled that the sole agreement at Teheran was that each principal would move forward as quickly as possible. FDR had informed Stalin that he could not at the time make long-range agreements for his country because he faced an election. "Overlord," the code name for the invasion of Normandy, was to be made operational in May or June of 1944, and the Big Three prepared to return to their respective capitals. Sir Alec Cadogan, Britain's Permanent Under Secretary for Foreign Affairs, noted in his diary: "The Great Men don't know what they are talking about . . ." Still, they all knew June of 1944 would determine the future of the war, not to mention the future of each leader. FDR yearned for Overlord. Failure to launch a Second Front could mean defeat for him in the November national elections, at least Hitler thus wryly observed to Martin Bormann. Ninety percent of America's war effort was going to Europe, but there was widespread and influential sentiment for a shift in emphasis toward winning the struggle in the Pacific. After all, the Japanese had actually and without provocation attacked the United States at Pearl Harbor, said these advocates, and this made it more America's war, rather than the situation in Europe.

Roosevelt was fighting a rearguard action against this movement. A Second Front was vital to his plans of first defeating Germany before taking on Japan with full-scale intensity. He was also increasingly handicapped by a whispered belief that he had failed to alert the personnel at Pearl Harbor in time to prevent the catastrophe. After all, U.S. Army Signal Corps cipher experts had broken the Japanese diplomatic and military codes; the imminence of the attack was known in the White House a f d two weeks before it happened. Roosevelt's detractors accused him of deliberately sidetracking this information until it was too late for the defense command in Hawaii to take protective action. If indeed true, and all evidence now available indicates it is, it was the same High Command philosophy that propelled Prime Minister Churchill into approving the British raid on Dieppe, in August 1942, a disaster that served to show the American General Staff that it was not quite time for an invasion of France. At the time, Churchill explained, "My general impression is that the results fully justified the heavy cost." (Of the Canadian 2nd division which took part in the Dieppe raid, 18 percent of five thousand men lost their lives and nearly two thousand more men were taken prisoner.) Sir Alan Brooke, chief of the Imperial General Staff, added: "It is a lesson to the people who are clamouring for the invasion of France."

So it was that in June 1944, as an outcome of the Teheran Conference, there was set up one of the awesome military gambles of history. On its outcome rested, among other things, the personal future of the leaders who had guided the war but who now regarded each other's motives with intractable suspicion. Operation Bear had worked.

The people in the occupied nations had meanwhile settled into the mold imposed on them by the German army and the economic experts of the Third Reich. Their banks and industries and agriculture had been brought into Bormann's Four-Year Plan, for greater efficiency and prosperity. All nations on the Continent, whether occupied or neutral, now looked to Germany for economic leadership, as they were to resume doing in the years following World War II, when the Common Market was formed by consenting nations acknowledging that unity of purpose is the key to co prosperity and that somehow the Germans had the answer originally in 1942 when they were melding the economic institutions of the Continent into their own design.

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