In mid-1933, a midwestern oilman found himself sitting in the opulent director’s suite of the Reichsbank in Berlin to make a peculiar business pitch. Around the table were a dozen German bankers and bureaucrats, few if any of whom were impressed with the proposals of the visiting American. If Germany wanted to do business with American oil companies, most thought, why were the representatives of Standard Oil not sitting in front of them? The powerful president of the Reichsbank, Hjalmar Schacht, was among the skeptics. This on its own should have doomed the scheme to immediate rejection.
But the American had a supporter even more powerful than Germany’s leading financiers. As he began his pitch, a door abruptly opened to reveal the uniformed figure of the Führer himself. Muttering a few words of approval, Hitler disappeared as quickly as he had come. The short visit was enough. At the end of the meeting, no opposition to the plan could be found among the Reichsbank’s directors.1 This momentous meeting would mark the beginning of an international plot that would eventually ensnare a Boston bank, the Mexican government, and one of America’s most prominent labor union leaders in a daring plan to unseat President Franklin D. Roosevelt at the behest of the Nazi government. The machinations begun that day were deemed so serious that O. John Rogge, the American investigator who examined the plot after the war, deemed it the “single biggest scheme” hatched by the Nazis in the United States, even exceeding George Sylvester Viereck’s Capitol Hill machinations.2 It would ultimately center around a cleverly planned but ham-handed attempt by a hostile foreign power to influence a US presidential election.
The American businessman sitting in the Reichsbank that day was William Rhodes Davis, an Alabama-born oil speculator who had already made and lost several fortunes by the start of the Great Depression.3 A shadowy figure with a constant chip on his shoulder against the “international combine” of Big Oil companies he believed were plotting to keep him down, Davis’s biographer has compared him to the main villain in the 1989 film Indiana Jones and the Last Crusade.4 In the film, unscrupulous American businessman Walter Donovan tricks Jones into becoming part of a Nazi plot to find the Holy Grail, only to ultimately be outwitted himself and meet a grisly end. There would be no such outwitting of the real-life Davis, though his own end would be nearly as premature.
The plot centered around Davis was certainly serious and over the course of the coming years would not only bring Nazi money into American politics but also provide the Reich with nearly 1 million barrels of badly needed oil. Rather than as a character from an Indiana Jones film, Davis might more accurately be seen as a prototypical James Bond villain, sitting at the middle of an extensive web of deceit while maintaining an impeccable wardrobe and lavish lifestyle designed to impress and entice allies and enemies alike. The eventual intervention of British intelligence in the Davis case only furthers the comparison.
Putting aside the more sinister aspects of Davis’s plot, however, he was far from being the only foreign businessman who engaged with the Third Reich. Before 1939, a wide range of American corporate executives showed little reluctance in doing business with Hitler’s government. Many American corporations were heavily invested in Germany and had little option but to cooperate with the new regime, or face serious losses. The 1920s had been an era of rapid globalization, particularly by American firms that used their prosperity to acquire imperiled European rivals. Until the 1929 stock market crash, this looked like a winning strategy, particularly for American companies looking to tap an underdeveloped German market. A prominent example could be found in the auto industry. A 1929 press report estimated that there were only 1.2 million automobiles on the road in Germany, while 23 million were operating in the United States. German automakers like Mercedes produced excellent luxury cars, it continued, but no company produced “a good, serviceable, and cheap car for the average man.” The German market, seen as “one of the most promising in the world at the moment,” would soon entice both General Motors and Ford.5
Other firms were tempted by similar opportunities. International Business Machines (IBM) would soon have a European division, as would the Coca-Cola corporation.6 One of the world’s most powerful corporations, Standard Oil, entered a business relationship with German firm I.G. Farben in 1929 that resulted in Standard taking a 25 percent share in the latter’s gasoline business.7 In addition, Standard and I.G. Farben entered a patent-sharing agreement that ended up giving Farben the ability to boost its octane levels and supply the Luftwaffe with more effective fuel.8 American corporations ended up with an estimated $300 million invested in German corporate branches and manufacturing facilities when Hitler rose to power in 1933. This was far too much capital for American corporate bosses to simply walk away from when political conditions changed. Many of America’s corporate leaders were therefore more or less being held economic hostage by the German government from the first day of Hitler’s reign.9
There was therefore a clear incentive for American corporate leaders to behave as if they were Hitler’s friends, whether they agreed with his politics or not. As will be seen, some of these figures would later become leaders in the noninterventionist America First movement. Corporate opposition to the Roosevelt administration was also nothing new by the late 1930s. Roosevelt’s efforts to pull the country out the Great Depression were greeted by accusations from Wall Street that he was alternatively borrowing from the fascist or communist playbooks, despite those same critics being less vocal when Roosevelt had dramatically intervened to save the American banking system in the first weeks of his presidency.10
There were dark rumors about where corporate America’s hatred of Roosevelt might lead. In late 1934, Marine Corps General Smedley Butler was called to testify before Congress and told a hair-raising story. Butler claimed that earlier in the year he had been approached by a shadowy group of American Legion members who wanted to enlist his support for a plot to overthrow Roosevelt and replace him with a fascist-military dictatorship. The outlandish scheme was supposedly backed by a list of prominent bankers and industrialists who were discontented with the president’s policies. According to Butler, the plotters wanted him to lead a half-million-man army of veterans to march on Washington to pressure Roosevelt into resigning or becoming the figurehead of a fascist government. The plotters had supposedly already raised $3 million to support Butler’s army, and were said to be willing to spend a hundred times that amount if necessary. If true, money of this scale could only have come from America’s most powerful banks and corporations.11
Butler claimed he had been appalled by the scheme and played the plotters for time while he contacted FBI director J. Edgar Hoover. Rumors of the conspiracy were soon circulating around Washington, and Butler was called to testify before Congress along with several of the alleged connivers.12 The story broke explosively in the nation’s newspapers, the editorial pages of which responded with a mixture of alarm and incredulity. “The old saying that where there’s some smoke there must be some fire may apply in this case but the details revealed to date seem too preposterous to give much credence to the story,” the Wisconsin Rapids Daily Tribune told readers.13 “New York doesn’t know whether to laugh or get mad about Smedley Butler’s story of a Wall Street–engineered Fascist putsch.… General Butler has never been known to shun the front page,” nationally syndicated reporter James McMullin wrote, before suggesting that Butler should take some tips on the “beauty of silence” from famously mute comedian Harpo Marx.14 “What can we believe?” the New York Times asked simply.15
The official congressional report on the matter was less skeptical, concluding that some kind of plot likely existed and might have been set into motion without Butler’s intervention. In the end, however, there were no prosecutions, and Roosevelt himself appears to have wanted the matter to simply go away. Historians have debated ever since how serious the “Business Plot” really was, with most concluding that some kind of scheme probably existed but did not get far past the planning stages. Serious or not, novelist Sinclair Lewis used it as a partial inspiration for his 1935 novel It Can’t Happen Here.16
Regardless of whether a shady cabal had actually tried to overthrow the government, there was no doubt that prevailing business opinion was staunchly anti-Roosevelt. The president’s diplomatic recognition of the Soviet Union in November 1933, which both Democratic and Republican administrations had refused to do since the Russian Revolution, scandalized right-wing opinion.17 A tradition of business support for fascism dated back to Mussolini’s ascension to power in Italy and was well established by the time Hitler appeared on the scene a decade later. “With few exceptions, the dominant voices of business responded to Fascism with hearty enthusiasm,” historian John P. Diggins has written about the Italian case.18 Similar sentiments about Hitler were easily found as well. “There are those who consider Hitler a fool or a madman,” the business-minded Barron’s editorialized in 1936, “but whether in his own capacity or under the guidance of advisers, he sees the necessity of forming a strong, and ever-stronger, Central European front facing eastward—a defensive cordon against Bolshevism, for the protection of the capitalist system and the rights of private property.”19 Hitler might not be the ideal capitalist leader (he was, after all, an avowed “National Socialist”) but at least he was not a communist. O. John Rogge later described this position as the argument that “You can do business with Hitler.”20 There were some hints the American people were sympathetic to this view too. A July 1940 Fortune poll asked respondents if, in the event Hitler won the war in Europe, the United States should “Find some way of continuing our old European commercial business with Hitler’s new Europe” or alternatively “make every effort to develop business only with countries not under Hitler’s control.” A plurality (44 percent) declared themselves in favor of continued business ties, while 40 percent said the United States should only do business with countries not under German control.21 The prospect of doing business with Hitler was therefore hardly abhorrent to many Americans.
Many of America’s corporate leaders seem to have quickly embraced this very notion. As already noted, some thought they had little choice but to comply with the German government’s diktats to protect their investments. The automobile industry presented perhaps the most prominent examples of American corporations simply becoming too deeply mired in the Third Reich to easily extricate themselves. In March 1929, both General Motors and Ford made attempts to purchase Opel, the largest automaker outside the United States.22 GM’s Alfred P. Sloan outmaneuvered Ford by acquiring 80 percent of Opel stock for a sizable $33.3 million, making the German company GM’s largest foreign holding. The prospect of using Opel’s manufacturing facilities to produce a low-cost automobile initially seemed shrewd, yet by the early years of the Depression GM was losing money in Germany. The natural solution was to make a swift exit from the German market, but in 1931 the government imposed capital controls to prevent companies from taking money out of the country. GM was trapped.23 Smarting from its loss in the Opel bid, Ford opened a subsidiary in the German city of Cologne—Ford-Werke-AG—which soon became the only foreign Ford plant allowed to produce powerful V-8 engines.24 As with GM’s Opel facilities, Ford’s plant would soon deliver dividends for Hitler’s government.
A similar story could be found with the most iconic American brand: Coca-Cola. In the heady year of 1929, an American expat named Ray Rivington Powers began bottling Coca-Cola in Germany and quickly found a market for more than one hundred thousand cases of the soft drink. Powers was a colorful character and a great promoter, but was less talented when it came to running a business. The withdrawal of a German partner left his operation in financial jeopardy, resulting in the corporation dividing German Coca-Cola between the official company, Coca-Cola GmbH, and a second company that would control bottling and be run by Powers.25 Coca-Cola GmbH fell under the control of Max Keith, a German former bookkeeper with a dictatorial manner who was occasionally compared by subordinates to the führer and harbored a fanatical love of the brand. As one historian has recounted, for Keith the slogan to follow was not the Nazi “Deutschland über Alles” but “Coca-Cola über Alles.” By 1934, Keith had launched an aggressive advertising campaign to promote his beverage in restaurants and cafes that traditionally served only beer. The effort was so successful that Keith was able to open a new plant in Frankfurt and a series of warehouses to hold the finished product. By 1936, more than a million cases of Coca-Cola were being sold in the Third Reich, making it one of the country’s favorite beverages.26
Entanglements of this kind gave many of America’s leading corporations a vested interest in the success of the Third Reich from its earliest days onward. Many executives soon found that it was definitely possible to do business in the Reich as long as they played their cards right. As the German economy began to bounce back and even thrive in the early 1930s, corporate profits followed. The autobahn system stimulated the automobile industry not just for consumer vehicles but also trucks. One of Hitler’s first acts in 1933 was slashing taxes on automobile purchases. Opel sales doubled in the first year of Hitler’s reign alone.27 Coca-Cola sales followed suit, as thirsty and tired workers turned to a caffeine-laced beverage that was safer to drink on the job than beer.28 IBM tabulators kept track of the economic growth—and the German population itself—using punch cards that could be used to quickly and easily count at previously unthinkable speeds.29 Hitler seemed to have delivered remarkable economic prosperity at a time when the rest of the world was still mired in the doldrums.
The situation was not completely rosy, however. The German government’s economic policies still prevented profits from leaving the country without complicated machinations. It was possible to convert small quantities of German marks to dollars, but it meant accepting a deliberately extortionate exchange rate. The intent was to spur continued investment in the Reich. Its effect was to sharply reduce the actual profits American corporations could reap from their holdings. Many foreign firms doing business in Germany simply let their profits pile up in accounts when they had no further need to invest. Some, including GM, would eventually manage to recoup some of their profits after the war.30
There were political dangers associated with doing business in the Reich as well. Nazi ideology was expressly German-centric and took a dim view of foreign-owned businesses, especially those that might be owned or run by Jews. Opel, for one, changed its management structure to bring in German directors who became the public face of the company. Its bosses also added several Nazi Party “old fighters”—members of the party who had joined before Hitler obtained power, serving as testimony of their commitment to the cause—to increase its standing with the regime.31 Opel then arranged its factories according to Nazi ideological dictates and sacked most of its Jewish employees (though, to their credit, executives occasionally tried to find the victims of Nazi racism alternative jobs at GM’s holdings outside Germany).32 GM’s general manager of overseas operations, Graeme Howard, reported to his superiors in 1936 that Hitler enjoyed nearly universal support among the German population and that it would be foolish to antagonize the Nazis in any way. Howard, whose father was a Stanford professor, had lived in Berlin and Heidelberg and would shortly become one of the most vocal advocates of doing business with Hitler.33
Coca-Cola faced similar challenges. The 1936 Berlin Olympics provided a sizable sales boost, but later that year new government restrictions imperiled its ability to import the American-made concentrate that served as the base for its drink. Executives were forced to negotiate behind the scenes with Luftwaffe chief Hermann Göring to ensure that needed supplies of syrup could be brought into the country.34 That same year, a Nazi industrialist who hoped to launch a German rival to the American beverage was foolishly invited to tour a New York bottling plant. During the visit he snatched several bottle tops bearing the Star of David to demonstrate the drink’s kosher credentials to Jewish customers. He subsequently distributed thousands of posters in Germany showing the caps and claiming the company was owned by Jews. Coca-Cola GmbH managed to survive the subsequent sales drop, and the following year Göring was photographed sipping a Coke at an event in Düsseldorf. Rumor had it that even the famously health-obsessed Führer himself enjoyed an occasional tipple.35
American corporate leaders were thus very aware of the vagaries of doing business in the Reich. Many decided that it was simply impossible to exit the country, or that the money to be made was too substantial to leave on the table. Nazi policies offered some intriguing opportunities as well. Hitler’s tax cut on automobiles was followed by a speech in 1934 in which the Führer announced a national effort to produce a small and affordable car that could be purchased by five million Germans making average incomes. The idea of owning a “People’s Automobile”—or Volkswagen—became so sensationally popular among the German public that the government had to warn that it would take “months if not a few years before such a thing is possible.”36
This was exactly the opportunity GM had been looking for when it purchased Opel. In 1934, Opel was already offering the cheapest car in the country, so it would have made sense for Hitler to choose the company to produce his People’s Automobile. GM executives began making plans to convince the government to give Opel exclusive rights to the Volkswagen. They were outmaneuvered by engineer Ferdinand Porsche, who successfully networked his way through the Nazi bureaucracy and into the Führer’s affections. Stinging from the loss, Opel pivoted to manufacturing trucks that became the German army’s favorite form of mechanized transportation. As the country rearmed, Opel’s profits soared.37 GM executives could only hope they would someday be able to repatriate the substantial profits building up in their German accounts that were, for the moment, untouchable. The same was true for Ford-Werke, which quickly moved into second place in German truck production. Revenues quadrupled for Ford-Werke between 1934 and 1938, but as with GM the money was essentially inaccessible outside Germany.38
It was not just profit motives and business opportunities that drove American corporate bosses into the arms of the Nazis. Some were motivated by genuine affinities for Nazism. The most prominent example was Henry Ford, arguably America’s most famous businessman. Ford’s engineering and business prowess were beyond doubt, but there had always been indications that his personal views might be less admirable. During World War I, Ford adopted the view that the conflict had been the product of an international plot by Jewish bankers.39 Anti-Semitic slurs soon became a common aspect of his vocabulary, and in the early 1920s he owned a newspaper called the Dearborn Independent that transformed into a viciously anti-Semitic mouthpiece. The automaker also began personally distributing huge numbers of the anti-Semitic tract The Protocols of the Learned Elders of Zion. He was eventually forced to apologize for these activities after losing a libel suit brought by a Jewish agricultural leader whom the Independent had accused of plotting to corner the international wheat market. Privately, however, Ford’s views were unchanged. Like so many of Hitler’s American friends, by the mid-1930s Ford was blaming “financiers and money lenders” for both the New Deal and the prospect of another world war. Rumors circulated in the late 1930s that he was secretly funding the German American Bund, though those claims were never conclusively proven.40 One of his many admirers was Hitler himself, who once indicated his desire to help “Heinrich Ford” become “the leader of the growing Fascist movement in America.”41
The mutual admiration between Ford and Hitler had a real impact on the company’s German production facilities. By 1938, Ford’s Dearborn office was making arrangements to secretly supply truck parts to its Cologne plant to meet the German government’s demand for military vehicles. These had to be officially built in Germany, so Ford simply provided prebuilt components that could be quickly combined to produce working vehicles. In June 1938, the German military requested more than 3,100 trucks from Ford for use in the future occupation of Czechoslovakia. The vehicles were quickly assembled in the dead of night at the Cologne factory after being shipped in pieces from the United States.42 On July 30, the German consul in Cleveland pinned the Grand Cross of the German Eagle on Ford’s chest in honor of his seventy-fifth birthday and his services to the automotive industry, though his specific contributions to the German truck industry went unmentioned. As will be seen, this was a major honor and the same medal that would be controversially awarded to Charles Lindbergh later that year. Jewish comedian Eddie Cantor, one of the most outspoken anti-Nazi activists in the country, denounced Ford’s acceptance of the award in no uncertain terms. “I doubt the Americanism of that great industrialist, Henry Ford, for accepting that citation from Hitler,” Cantor told a Jewish women’s group. “I think he is foolish to permit the world’s greatest gangster to give him a citation. I question the Americanism and the Christianity of Mr. Ford.”43 The leaders of Jewish War Veterans of the United States similarly called on Ford to return the award, calling it “an endorsement of the cruel, barbarous inhuman action and policies of the Nazi regime.”44
Regardless of the exact reasons for their involvement in the Reich, American businessmen were deeply enmeshed in the German economy by the start of World War II. Economic historian Adam Tooze has estimated that Standard Oil had the most to lose in the German economy through its almost $65 million stake in the petroleum industry and its agreements with I.G. Farben. GM’s stake in Opel was the second largest and valued at more than $50 million, while Ford’s interests were worth around $8.5 million. Other American corporations including Woolworth’s and the Singer sewing machine company held assets worth around $20 million each.45 The prospect of war with Germany therefore presented a very direct financial risk to some of America’s leading corporations. As war approached, the Nazi government began using this fact to its own advantage.
This was where William Rhodes Davis and his strange plot entered the picture. Davis was far from being a leading American executive, but he would play the most direct American role in the Third Reich. Born in Alabama in 1889, Davis worked as a driller in the Oklahoma oil fields but soon found his real talent as a promoter and salesman. In 1913 he set up an oil and gas company and made a small fortune, only to lose it all through subsequent investments. After serving in World War I he went back to the oil fields and became a wildcatter. A lawsuit by jilted investors cleaned Davis out a second time in 1924, after which he moved to Europe and began promoting oil properties for the British-Mexican Petroleum Company. The following year he resigned and set up an oil pipeline business in Arkansas, only to be blocked in his efforts by Standard Oil. Another colorful effort, this time to enter the Peruvian oil market, subsequently failed, and at the start of the Great Depression Davis was dead broke but thirsty to get back to living the high life.46
Davis saw his opportunity when Hitler gained power. Correctly assuming that the new chancellor’s ambitions would require huge amounts of oil that the Reich lacked, Davis concocted a plan. He first formed a new oil company with the deceptively bland title of the Foreign Oil Company, Inc., and secured financing from the Bank of Boston. He then set out exploring several oil fields in Mexico and Nicaragua, all of which were unsuccessful. His true stroke of genius came when he traveled to Germany and acquired a Hamburg oil storage company called Eurotank that was in dire financial straits, and began converting it into a full-fledged oil refinery. The plan was to import crude oil from somewhere in Latin America, refine it in Hamburg, and sell it at a profit to the German government or other European customers. This scheme would obviously require the support and financial backing of the German government, which Davis managed to secure in the Reichsbank that fateful day in 1933. By 1934, the plan was a go. Davis hired Winkler-Koch Engineering of Kansas to build the actual refinery (Winkler-Koch was headed by Fred Koch, the father of present-day billionaire activists David and Charles Koch). The refinery was completed the following year and became the third-largest refinery in the Reich.47 In 1936, the German navy signed an agreement to purchase fuel oil from Davis, giving him a guaranteed source of income and putting him back on the road to the high life.48
Davis now had an unusual problem, however. He had the capacity to refine huge amounts of crude oil, but no reliable source to fill his tanks. Initially, Davis simply bought crude oil from his archnemesis Big Oil rivals, but as he became more prominent they started to raise prices and squeeze his profit margins.49 Davis looked again to the oil fields of Mexico to solve his problem. Having had purchased in 1934 a majority stake in a Mexican oil company, he now devised a complicated barter plan that would allow him to get money out of Germany by trading it for other goods that could then be sold elsewhere. This plan required the involvement of the US government, however, because one of the things being traded was cheap surplus cotton being held in federal warehouses. To secure the assistance of the Roosevelt administration for his scheme, Davis turned to the time-honored tradition of campaign contributions. In the 1936 election cycle, Davis donated a substantial $175,000 (about $3 million in today’s money) to the Democratic Party. Most of the cash paid for radio programming and the rest went to key Senate races. The generous contribution not only gained Davis an autographed photograph of Franklin Roosevelt, but also access to the Oval Office.50
Davis now put his plan into action and asked the Roosevelt administration to set up a meeting with Mexican officials, including President Lázaro Cárdenas, to nail down the details of his plan. The Mexican government agreed to its side of the deal, but Roosevelt got cold feet when he realized the United States would be indirectly doing business with the Nazis. The US government pulled out and Davis lost access to the cotton.51 To complicate matters further, the left-wing Cárdenas government abruptly began nationalizing foreign-owned oil fields as part of a populist campaign to punish companies that were supposedly exploiting the country’s workers.52
Davis shrewdly saw a second chance to close the deal. He now struck a backroom agreement with the Mexican government to purchase oil from the nationalized fields at below-market prices. This was an exceptionally clever move, because following nationalization Shell and Standard Oil launched a worldwide boycott of Mexican oil, making it difficult for the government to sell the crude anywhere. Davis had both tankers and a refinery, and he could provide Mexico a guaranteed market for its oil even if he was paying less than the market value. The deal was too good to pass up for everyone involved, and Davis made a profit every step of the way.53
The plan was extraordinarily successful. By August 1938, Davis reported he had shipped nearly 1 million barrels of Mexican oil to the Eurotank refinery.54 In mid-1940 it was rumored in Washington that he had shipped at least 8 million, and perhaps as many as 30 million, barrels of oil out of Mexico, the majority of which had ended up in Germany.55 Historians have estimated that about 30 percent of the Reich’s total oil supply in 1938–1939 was provided by Davis, making him an essential player in the Nazi economy and a very rich man at the same time.56
This was where Davis’s plot took another strange twist. In the course of negotiating the Mexican oil deal, Davis had called upon the help of John L. Lewis, the powerful head of the four-million-member strong Congress of Industrial Organizations (CIO) and a celebrity in the international labor movement.57 Lewis was close friends with leaders of Mexican labor and supported Cárdenas’s nationalization campaign. For reasons that remain opaque to the present day, he agreed to help Davis secure the necessary agreement with Cárdenas, and intervened on his behalf with the Mexican government. Questioned later by author and activist Saul Alinsky about the relationship, Lewis cited Davis’s support for the Democratic Party and quipped that “If William Rhodes Davis was good enough for Roosevelt, he was good enough for me. That, of course, would be a false answer. The fact that a person was good enough for Franklin Delano Roosevelt really was not an exalted criterion.”58
As this remark indicates, Lewis was no friend of the Roosevelt administration despite his left-wing union credentials. Lewis and the president had long disdained each other in private, with Lewis believing Roosevelt to be dishonest and disloyal to labor. Roosevelt reciprocated and thought Lewis was a demagogue and a grandstander. These personal feelings aside, the men maintained an awkward show of public friendship through the 1936 election to avoid a political split that could only benefit the Republicans.59 The fragile arrangement collapsed almost immediately after the election. As tensions grew with Germany, Lewis began to fear the impact a war would have on organized labor. Rumors that the administration was already convening secret war planning meetings that included prominent businessmen but no labor representatives hardened his views further.60 After Hitler’s invasion of Poland made war in Europe a reality, Lewis found himself in the noninterventionist camp. He would soon transition from being a critic of Roosevelt’s domestic policies to one of the most outspoken antiwar activists in the country, and strike a strange alliance with both corporate interests and Nazi Germany in a stunning attempt to destroy the president.
Around this same time, the Nazis themselves realized that their connections with American businessmen offered one of their best chances to tie the Roosevelt administration’s hands on foreign policy. The most obvious opportunity lay with Davis, who had been living the high life off his questionable oil deal for years and would almost certainly do anything to keep the cash flowing. Indeed, the war quickly caused him major problems and the cash spigot began to run dry. A British navy blockade of German ports prevented Davis from docking his ships in Hamburg, meaning he could not offload his Mexican crude. The logical alternative was to ship the oil to Italian ports instead and transport it from there, but the British soon figured out the scheme and ended it.61
Now fighting an actual war, the German military needed the oil more than ever before, and Davis was unwilling to let another fortune slip through his fingers. Desperate to save his imperiled business, he now launched an outrageous scheme to personally make peace in Europe. Just two weeks after the invasion of Poland, Davis asked Lewis to call the White House and request a meeting for him with the president. Lewis did as he asked, and Roosevelt accepted the appointment but only on the condition that Assistant Secretary of State Adolf Berle, an expert on counterintelligence, be present.62 In the meantime, Davis used his contacts in Berlin to extract a vague pledge from Hermann Göring that Germany would be willing to negotiate peace if Roosevelt would act as a neutral arbiter, and insinuating that the Luftwaffe head would even be willing to overthrow Hitler and seize power himself to accept the deal. Davis offered to travel to Rome in late September to meet secretly with German and Italian officials who would start the wheels of the peace plan in motion. All he needed to put this audacious peace plan in motion was a green light from the president.63
Undoubtedly chagrined by the outlandishness of Davis’s proposal—and the idea that a shady oilman would think himself capable of stopping a major war—Roosevelt and Berle listened politely in the meeting. The president committed to nothing and told Davis that “naturally any information as to the situation would be interesting; but pointed out that until some proposal reached him through some government, he could not take any position.”64 After Davis left the room, Berle remarked that he believed Davis to be “almost a Nazi agent.”65 He recommended the oilman be placed under FBI surveillance, which, if anything, seems to have been rather late to be taking such a basic step. Berle subsequently reported to Roosevelt directly about the outcome of the surveillance operation, which would naturally include Davis’s contacts with Lewis.66
Davis made the trip to Italy and traveled to Berlin from there. Meeting with Göring in the Air Ministry, and presumably giving copious Nazi salutes in the process, Davis recounted his conversation with Roosevelt but wove in his own alternative facts at the same time. He suggested that the president was generally sympathetic to the idea of reforming or even overturning the Treaty of Versailles, and might even be willing to extend Germany a generous loan if it ended the war. Understandably surprised by this news, Göring stated that these positions were not far from the “views of Mr. Hitler and his government.” A subsequent conversation turned to the possible role that Lewis might play in the negotiations. Davis assured the German delegation that he and Lewis were close friends and on the same page when it came to the peace plan. In turn, Göring assured Davis that if Roosevelt agreed to mediate peace, Germany would consider agreeing to the creation of a reconstituted Polish state and a restored Czechoslovakian government. It seemed like a good deal. Davis departed the meeting believing he held the keys to world peace in his back pocket.67
The plan quickly fell apart when the oilman returned to Washington. He and Lewis both contacted the president, but Roosevelt declined their request to meet. The president and his advisers were sensibly skeptical about both the proposal and the messenger carrying it. Instead, Davis was granted a meeting with Berle, to whom he subsequently lied about his activities in Germany and the details of his meeting with Göring. Berle presented a somewhat exaggerated version of this evidence to the president, who was outraged and refused to have anything more to do with Davis. Even a direct intercession by his old ally Lewis fell upon deaf ears. The peace plan had completely collapsed in just days.68
Davis, unwilling to give up his efforts to stop the war, now launched an even more audacious plan. If Roosevelt could not be counted on to make peace, Davis reasoned, then the president would have to be replaced. With the election of 1940 approaching, this was an effort the Germans were eager to support. Back in Berlin, Davis had taken the ultimate step to becoming one of Hitler’s leading American friends by agreeing to become an agent of German military intelligence (the Abwehr).69 He was assigned the agent designation C-80 and, interestingly, Lewis was registered as agent C-80/L, meaning he was considered a sub-agent of Davis. Whether Lewis ever knew the Germans considered him to be an agent working on their behalf is unknown, but the registration itself was telling.70
During his meeting with Göring, Davis had already begun to lay the groundwork for his bold contingency plan. He asked Göring for millions of dollars to influence the American election in favor of any candidate running against Roosevelt from either political party. After the war, Heribert von Strempel—the same paymaster who was funding George Sylvester Viereck’s operations in Washington, DC—told interrogators that Davis requested and received $5 million (a stunning $87 million in 2018) for this task. Total expenditure in the 1940 election by both political parties has been estimated at $21 million, mostly on the Republican side. If Davis’s money had been fully used as intended, it could have made a major impact on the race.71 In his own postwar interrogation, Göring chortled at the sum. “If a serious representative … approached me and told me that he could influence the Presidential election so that they elected a President who was favorably inclined toward Germany,” he replied, “for such a purpose I would have spent $100 million to $150 million.” (The notoriously corrupt Göring also remarked that he once considered hanging a sign in his office establishing $10 million as the minimum amount of “business transacted here”).72 Göring’s bluster aside, $5 million was apparently allocated for the plot and made available to Davis from the German embassy.73 But who was the candidate who could defeat Roosevelt? Davis told his Nazi connections he had the perfect candidate already: John L. Lewis. The oilman was even willing to put in some of his own money to further the plot and, presumably, help cover the source of the German money he would be drawing from. In exchange for all this, Davis asked to be appointed secretary of state in the future Lewis administration.74
With Davis’s plan moving forward, the Nazis simultaneously focused on mobilizing the American business community to push for an end to the war. In this effort they found a host of willing allies. American businessmen with holdings in Germany had a vested financial interest in making peace, especially with the Royal Air Force starting to bomb German factories that might soon include their own. Remarkably, even after the war’s start American corporate bosses tried to maintain a sense of normalcy in relations with their German divisions. Ford’s Dearborn office continued to communicate with its Cologne factory, and even sent new equipment to the plant in 1941 to boost production for the German military.75 In 1938, Ford-Werke was responsible for producing a full 48 percent of German 2- to 3-ton trucks. One estimate at the end of the war suggested that 15 to 20 percent of all vehicles used by the German army were built by Ford. Profits in the Cologne plant soared.76
The situation was somewhat different at General Motors’s Opel subsidiary. In 1939, Opel—and the GM home office—agreed to a request from Göring’s Air Ministry to begin producing aircraft parts based on American technology. This was seen as a political concession that would allow Opel to continue its profitable automobile operations on the side.77 The ministry then appropriated Opel’s factory in Rüsselsheim to produce parts for Junkers JU-88 bombers that could not be produced in sufficient quantities by their parent company. Opel vehicle production fell substantially and, in 1940, was shut down completely.78 In the words of historian Henry Ashby Turner Jr., by late 1940 Opel’s Rüsselsheim plant was “producing parts for the Junkers bombers heavily used in raining death and destruction on London and other British cities during the air attacks of the Battle of Britain.”79 GM executives remained apprised of the activities at Rüsselsheim until at least June 1940, at which time the home office lost contact with the now-all-German managers there.80
The US government was understandably concerned about the military assistance the Germans were receiving from these American investments. In November 1939, reports emerged that the government estimated the value of American holdings in Germany at $300 million ($5.2 billion in 2018), nearly all of which were now feeding the German war machine. “Eventually, the situation may lead to the formation of an administration policy against the future establishment of American factories abroad,” the Associated Press reported.81 For American corporate leaders, the prospect of the United States entering the war was simply an unacceptable business risk with this amount of capital on the line. Even those without extensive holdings in Germany were worried about the changes war would bring. U.S. Steel president Tom Moses, for instance, told John L. Lewis in 1939 that a European-wide war would end up opening the entire continent to communism. Making peace as quickly as possible was therefore essential.82
Others had more direct interests in peace. Aware of the risks to Opel, GM bosses were especially vocal in their efforts to convince American politicians and the public that it was still possible to “do business with Hitler.” President of GM Overseas Operations James D. Mooney set up a dinner meeting with Göring in October 1939 (just weeks after Göring had met with Davis) and tried to sound out the Air Ministry boss on the peace terms Germany would accept. Göring told him roughly the same thing he had told Davis. Mooney then tried to convince US ambassador to France William Bullitt that this was an unmissable opportunity. Bullitt declined to pass the message along to the French government.
Mooney refused to give up and now tried to convince the British Foreign Office to take the offer. British diplomats were unsure what to make of this bungling interference in international affairs. The country’s ambassador to the United States, Lord Lothian, cabled London to warn that Mooney had been “completely got at by the Germans,” might be “quite off his head,” and that GM was “much embarrassed by his behavior.”83 Mooney was again unfazed and requested a personal audience with Roosevelt in early 1940. A strange episode followed in which Roosevelt apparently sent Mooney back to talk to Hitler directly about the prospects of peace. Mooney did so and extracted more vague commitments from the Germans, only to find that Roosevelt was no longer interested in what he had to say when he got back to Washington. Mooney then went public with the story, writing a piece in the Saturday Evening Post claiming that the United States was lurching toward an avoidable war under Roosevelt. The White House was not amused. Left-wing New York tabloid PM went on the offensive and labeled Mooney a treacherous “Benedict Arnold.” Mooney was soon under FBI investigation.84
Undeterred, in March 1941 Mooney personally sponsored (going out of his way to distance GM from the effort) an exhibition at the Department of Commerce entitled “Econorama.” The displays Mooney paid for were designed to demonstrate the supposed superiority of the Nazi economic system, and were accompanied by narration from a slick-talking young speaker. Major themes included the argument that the United States should curtail domestic spending and embark on a massive defense spending program similar to the one undertaken by the Nazis. Appalled by what he was hearing, one visiting Federal Reserve economist asked the speaker, “If you like the Nazis so much, why don’t you bring Hitler over here?” There was apparently no reply.85 Mooney’s emerging reputation as a Nazi sympathizer was hardly helped by the publicity that followed this effort.
Mooney’s GM deputy, Graeme Howard, was no less outspoken in opposing potential American involvement in the war. In 1940, Howard published a short book entitled America and a New World Order that became an isolationist rallying cry. One postwar investigator quipped that the book “might just as well have been titled You Can Do Business with Hitler.” This assessment was not far from the mark.86 According to Howard, the United States should increase its military budget and enforce the Monroe Doctrine in the Western Hemisphere to keep European powers out of American affairs. Eventually, the United States, Canada, Mexico, Cuba, the Central American states, and “the two northern states of South America” should be combined into a single American federation to increase economic efficiency and build an impenetrable military deterrent.87 In the meantime, the United States should “keep out of foreign wars”; reestablish “satisfactory relations with all countries,” including Germany and Japan; and serve as an impartial arbiter to end the war.88 By enacting this program, Howard concluded, a “better America” and a “better world” would be achieved.89
Howard’s book was an obvious restatement of the isolationist position of the period combined with a strong dose of appeasement. Critics predictably pounced. “He [Howard] explains that the ‘meaning of the word appeasement is “conciliation” and “concession,” a quality essential to all life,’” The Philadelphia Inquirer’s book reviewer told readers in October 1940. “Sounds plausible, doesn’t it? Just as plausible as it sounded to England and France in 1938.”90 Historian Charles Higham has described Howard as an “outright fascist” who was under constant FBI surveillance and believed in creating a “United States of Fascism in which General Motors would no doubt play a prominent part.”91
The machinations of GM executives were merely a dangerous sideshow to the main act pursued by Davis and Lewis, however. Increasingly intoxicated by the idea of unseating Roosevelt, Berlin decided to take direct action to mobilize its business contacts in the United States. In April 1940, Foreign Minister Joachim von Ribbentrop enlisted Gerhardt Alois Westrick, a prominent attorney who had helped secure American loans to Germany after World War I, to join these efforts. Back in the 1920s Westrick had served as legal adviser to the German divisions of Coca-Cola, General Motors, and Woolworth’s, among other companies.92 There was no doubt that he enjoyed extensive connections to the American business community.
Renting a palatial hotel suite in the Waldorf-Astoria in New York City and a house in Westchester County, Westrick undertook a blundering effort to charm American corporate leaders. As Heribert von Strempel recalled, Westrick’s mission was to “use his personal relations with influential American business men that they should engage in propaganda to keep America out of the war and that if Hitler would win the war in Europe, it would be of great benefit for American economics in general and to their business in particular.”93 In essence, Westrick was there to convince American corporations that a German victory would help their bottom lines. In June 1940, he hosted a party at the Waldorf-Astoria to celebrate the fall of France. Among the attendees was GM’s James D. Mooney. Westrick subsequently reported to Ribbentrop that “reliable” American friends had assured him they would soon be pushing Roosevelt to appoint a new ambassador to Berlin, change ambassadors in London, and suspend arms shipments to Britain.94 To sweeten any potential deal, Westrick was authorized to offer help to American businessmen “through unfreezing their blocked credits in Germany,” thus giving them access to their profits in the country.95 This was outright bribery.
Appealing to corporate pocketbooks was a clever plan, but it soon went awry. The presence of a high-rolling German envoy charming the business community quickly attracted the attention of reporters who began following Westrick’s every move. Local police and the FBI kept an eye on the vehicles entering and leaving his driveway. Reporters staked out his house and interviewed both his wife and his live-in secretary at the Waldorf-Astoria, Baroness Irmingard von Wagenheim. The press latched on to Wagenheim particularly—reputedly a relative of Nazi foreign minister Joachim von Ribbentrop by marriage—and printed her photo next to stories about Westrick. One reporter working for the Hearst-owned International News Service condescendingly described her as “attractive rather than beautiful. She could pass for any nondescript little New York stenographer.”96 Facing this level of publicity, Westrick simply gave up on his efforts and left the country for Japan in late 1940. As Strempel recalled, a major reason for the failure was the exposure of his links to American businessmen by “[Walter] Winchell and other American newspapers.”97 The German Chargé d’Affaires in Washington similarly reported to Berlin that Westrick had to go because his American business contacts “are so compromised before the public that they have found themselves compelled to sever these relations.”98 Public association with the Nazis was now becoming too great a liability for American businessmen.
With Westrick out of the picture and US corporate leaders increasingly running for cover whenever the Reich was mentioned, Davis ended up standing almost alone in his plot to unseat Roosevelt. By mid-1940, things were not going well on this front either. Davis’s key assumption had been that he could convince either Lewis or someone else to run for the vacant Democratic nomination if Roosevelt did not seek an unprecedented third term in office. His first choice after Lewis was Burton K. Wheeler, the isolationist Montana senator who would shortly be drawn into the Viereck franking scandal.99 Wheeler was an implausible candidate for a variety of reasons, but not least because he had virtually no support in the national Democratic Party. A March 1940 poll found that just 2 percent of Democratic-leaning voters preferred Wheeler for the presidency (a full 57 percent preferred Roosevelt).100 Similarly, Lewis’s poll numbers were nowhere near where they would need to be for a presidential run. An April 1940 Fortune poll showed that just 33 percent of Americans believed Lewis had been “on the whole helpful to labor,” while 45 percent thought he had harmed his own movement.101 As a labor leader, this should have been his greatest strength with the public.
The German government inadvertently harmed Davis’s plan further. As the oilman bumbled in his efforts to find a viable candidate to take on Roosevelt, Göring dispatched a German agent who had worked with him previously, Joachim Hertslet, to help run the plot. This proved a major mistake, as one of Hertslet’s first acts was to take control of the $5 million stashed at the German embassy. Hertslet now demanded to approve all of Davis’s expenditures in advance. More damagingly, his appearance in the United States also tipped off the FBI to the direct German involvement with Davis’s activities. Agents began keeping a close eye on both men. Foolishly, Lewis then agreed to meet Hertslet and Davis in person to discuss the possibility of a presidential run. This attempt at subterfuge gave the FBI yet another opportunity to gather intelligence on Davis’s plan.102
Everything began to fall apart in May 1940 when Roosevelt announced that he would seek an unprecedented third term in office. Neither Wheeler nor Lewis had any real chance of beating Roosevelt, so the Democratic nomination was immediately put out of reach for Davis. Interestingly, Davis seems to have had few if any connections in the Republican Party and, regardless, he was a well-known Democratic Party donor who would have little credibility crossing the aisle. Both Lewis and Wheeler subsequently appeared at the Republican National Convention to denounce Roosevelt, and German agents managed to pay off a Republican congressman to insert a plank in the party platform opposing involvement in the war.103 Lewis then, bizarrely, tried to convince GOP delegates to give the nomination to former president Herbert Hoover, another noninterventionist but also no friend to organized labor. This effort fell completely flat and the convention nominated Wendell Willkie, an internationalist and former Democrat who had only recently joined the GOP. It was a catastrophic defeat for the isolationists and for Davis.104
Lewis and Davis had only one option left: Support Willkie and hope he could beat Roosevelt. This was not a completely outlandish idea. Polling the week before the election had the president beating Willkie by a narrow 52 to 48 percent margin. This was a substantial lead, but one that might be overcome in the final days of the campaign.105 Davis made substantial personal donations to the Republican campaign, though he apparently ended up spending less than half of the money stashed in the German embassy.106
Just days before the election, Lewis dramatically tried to turn the tables on Roosevelt. In a nationwide radio address on October 25, Lewis directly denounced Roosevelt in strident language and endorsed Willkie. Reelecting Roosevelt, he told the nation, would mean “war and dictatorship.” It would also, he said, be a personal insult. To up the stakes, he promised to resign as head of the CIO if Roosevelt won.107 It was a stunning moment for the American labor movement. More than twenty-five million Americans heard the address and, as Saul Alinsky put it, “Union men and women wept with bitter disappointment at this break between their two idols.”108 What those men and women could not have known was that the $55,000 used to pay for the national radio hookup of Lewis’s speech had come from a Nazi agent in the form of Davis.109
Lewis’s speech made no discernable impact on the final result. Roosevelt crushed Willkie to win nearly 55 percent of the popular vote and 84 percent of the electoral college. Polling had substantially overestimated Willkie’s support. Humiliated, Lewis dutifully resigned as head of the CIO. Davis attempted to continue his efforts to end the war, but by now the US government had amassed plenty of evidence that he was up to no good. In January 1941 he applied for a passport to visit Europe and was denied. Months later he was still telling associates that Germany would win the war and Roosevelt would be discredited.110 By now it was Davis who was discredited, however. There was increasing clamor in Congress for a full investigation into his activities, and pro-intervention congressmen began linking their isolationist rivals to Davis’s schemes. Wheeler was publicly accused of being “in the confidence of one William Rhodes Davis” by a fellow senator during a debate over Lend-Lease, and was forced to deny any connection to the oilman.111 The growing pressure did not deter Davis himself, however. In July 1941 he made a radio address for the America First Committee denouncing Roosevelt’s Lend-Lease proposal and calling for continued nonintervention in the war.112 He would not be the only American business leader to do so, as will be seen.
Following Roosevelt’s reelection, Hitler’s corporate friends gradually retreated into the background. Some became involved in America First while others increasingly focused on their business affairs. After Pearl Harbor, most put on a newly patriotic face, denying that their sympathies had ever lain with Hitler and proclaiming their unyielding support for the war effort. James D. Mooney was commissioned as a navy lieutenant commander, though he was still occasionally criticized in the press for his previous activities.113 Graeme Howard entered military service and ended up in the postwar economics division that was tasked with uncovering the role of German business in wartime atrocities. This was a bizarre role for a man who had been so outspoken about his pro-German views, and his past activities would soon come back to haunt him.114 Mooney, Howard, and their GM colleagues lost touch with the Opel leadership shortly after the war’s beginning, but profits continued to pile up in the division’s German accounts. After the war GM would manage to reap the rewards of the Third Reich’s genocidal war effort.115
Similarly, Coca-Cola GmbH would survive the war and even reap profits. The company sold 4.5 million cases of the caffeinated beverage in 1939 alone.116 When war broke out, the British blockade of German ports meant the sugary concentrate the drink required could no longer be easily imported.117 The head of Coca-Cola GmbH, Max Keith, realized survival meant coming up with a new product. His chemists devised a new fruit-flavored drink created from the by-products of other food industries, including cheese making and apple cider pressing, that still had the caffeine that made Coke popular with German workers. The beverage received an exemption from wartime sugar rationing in 1941 and began selling well. Coca-Cola became generally unavailable that same year and the new drink—Fanta—caught on as a replacement.118 Coca-Cola remained a fond memory for many Germans, however. One entertaining story holds that a group of German POWs arriving in New Jersey late in the war were astounded to see Coca-Cola advertising in the United States because they assumed the product was authentically German and only existed in their homeland.119
Of the American corporations doing business in the Reich, Ford’s leadership engaged in arguably the most questionable conduct of all. The company’s elderly founder, Henry Ford, remained personally infatuated with Nazism throughout the war. By at least one account, he continued to make personal birthday gifts to the Führer until it was no longer possible to do so. His son, Edsel, opted to continue operations in France after the country fell to Germany occupation. A Ford plant near Paris began turning out aircraft engines, military trucks, and other vehicles for the German military, just as it had done in Cologne. Remarkably, Edsel kept up his contacts with the occupation French government for much of the war. In May 1942 the French plant was bombed by the British, and Edsel expressed relief that the pictures shown in American newspapers had not identified it as a Ford-owned property.120 Ford’s secret remained safe and the profits continued to pile up. Production resumed at the plant following repairs and, as with Opel, much of the Ford operation soon began profiting from forced labor.121
One American businessman who did not ultimately profit from his involvement with the Third Reich was the man who had been closest to its leadership: William Rhodes Davis. Just weeks after delivering his 1941 radio address calling for continued isolationism, Davis was staying in a Houston hotel when he suddenly became ill. Before a doctor could arrive, Davis fell to the ground and died on the spot. He was just fifty-two and considered to be in good health. The official verdict was that he had died of a sudden heart attack. Rumors started to spread that he had been poisoned, but the FBI discouraged further investigation into the circumstances of his death.122 His body was quickly cremated and no funeral was held. News of his death was carried in newspapers across the country, which referred to him both as a “well-known oil man” and a “reputed Nazi peace agent.” “From one skirmish after another with the powerful enemies he had made, this remarkable man emerged with his head bloody but unbowed,” his Associated Press obituary concluded.123 The full extent of his involvement with the Germans was still far from known.
In a strange postscript to an already strange life, Davis’s story did not end there. His substantial estate was soon mired in legal battles that lasted years. In 1971, espionage historian William Stevenson reported seeing a British intelligence document noting that Davis was still attempting to find a way to export oil from Mexico to the Reich when he died. “The swiftest way to put a stop to this scheme was to remove Davis from the scene,” the document allegedly concluded.124 The clear implication was that Davis’s untimely death was in fact an assassination by an American government agency or, much more likely, British intelligence. Stevenson provided no citation for his claim and the document he cites has never been found by other historians. Davis’s only biographer rejects this claim on the basis that the deceased had already suffered from a blood clot, indicating a possible heart problem, and that neither the US government nor British intelligence had a real motive or opportunity to poison him at the time.125
Given the wider context of Davis’s involvement with Hitler’s American friends and the German embassy, it seems unlikely that either government would risk the fallout from assassinating so prominent a figure. Furthermore, keeping Davis alive might have produced a wealth of counterintelligence information, especially if he could be convinced to change sides and use his connections to unmask German agents. Davis was, if nothing else, a political survivor who had made and lost several fortunes already. The US government would have had a great deal of leverage to secure his cooperation by threatening his hard-won but questionable fortune. On the other hand, it remains possible that the British in particular feared the future machinations of Hitler’s most important American business friend, and took a dramatic step to ensure his early departure from history. Either way, Davis did not live to enjoy the ill-gotten fortune he had worked so hard to obtain or see the defeat of the country he had worked to support. At the same time, the Third Reich lost one of its key supporters at a moment when it could least afford it. It would be left to Hitler’s other American friends to pick up the pieces of their German holdings and face the consequences of their actions after the war’s end. As it turned out, the most quintessentially American brands—Ford, Coca-Cola, General Motors—had all successfully done business with Hitler, at least for a time.