Some of the most intriguing material the OSS obtained from McKittrick detailed his role as a back-channel between anti-Nazi Germans and the United States. McKittrick told the OSS that he received “peace feelers” from non- or anti-Nazi Germans twice a month. All of them, however, argued that, even if a deal was made, Germany would remain the dominant European power “with a free hand in the east and a large measure of economic control in western Europe.” McKittrick also strongly emphasized the BIS’s future use in planning the postwar order. “While it does not concern itself with political affairs, it does offer facilities for the discussion of postwar financial and economic questions,” wrote the author of the OSS memo, “and he thinks that a year or two can be saved in getting Europe back to work by informal international conversations under its auspices.”
McKittrick finally arrived back in Basel in April 1943. Despite his lobbying and John Foster Dulles’ legal advice, the BIS’s request for exemption was denied, and the bank’s funds in the United States remained frozen. There were many in Washington who asked why the State Department had renewed McKittrick’s passport and allowed him to return to Basel, when it was clear that the BIS was aiding the Nazi war effort. The answer was 60 miles south, in Berne, at Herrengasse, 23.
There, McKittrick’s old friend Allen Dulles ran the Swiss branch of the OSS. McKittrick, also known as OSS codename 644, regularly met with Dulles and American Ambassador Leland Harrison. The three men, McKittrick recalled, talked more freely “in those meetings than at any other time.” Dulles and Harrison wanted to know everything McKittrick knew, especially about Nazi money channels. McKittrick, they discovered, knew a lot. For example, the BIS held gold for the Reichsbank, so sometimes, when the interest was due on the bank’s investments, the BIS simply helped itself to the Nazi gold it held to make up the payments. At other times, the Germans borrowed BIS gold for their dealings with Swiss banks. This cozy arrangement caused no concern at the BIS, said McKittrick, as “we knew that they’d replace it.” McKittrick’s close relationship with Emil Puhl, the vice president of the Reichsbank, was especially valued by Dulles and the OSS.
OSS telegram 3589-90, sent on May 25, 1944—at a time when thousands of Jews were still being deported every day to Auschwitz, where most were immediately murdered—records Puhl’s fears, not that the war was lost, but that the Reichsbank might lose its privileged position during the reconstruction:
Not long ago our 644 [McKittrick] had two lengthy conversations with Puhl of the Reichsbank. The latter was extremely depressed, not so much by the idea of Nazi defeat, but by the situation, which Germany will have to contend with later. The Reichsbank has been engaged in work on plans for the reconstruction, and evidently they are unable to see where an effective beginning can be made.
Declassified OSS documents reveal that McKittrick played a central role in an American psychological-warfare operation known as the “Harvard Plan,” which aimed to undermine the morale of German businessmen—and their support for the Nazi regime. The Stockholm OSS office published a wartime newsletter called “Information for German Business,” the purpose of which was to suggest that cooperation now would pay handsome dividends after the Allied victory.
On Feb. 1, 1945, David Williamson, an official in the OSS Morale Operations department, wrote to codename 110—Allen Dulles. Williamson suggested to Dulles that he set up a similar psychological-warfare operation in Switzerland. He enclosed some draft material. Notably, all the material had been passed by the State Department before it was to be distributed. It revealed how McKittrick was arranging deals with Nazi industrialists to guarantee their profits after the war was over. “The new agreement will guarantee the German export interests during this second period an export income at least equal to their prewar revenues regardless of the expected break in the German cartel control,” read the document. A second paragraph outlined how, even as Allied airmen were bombing Germany, negotiations were under way to “preserve the industrial substance of the Reich.” Anyone who questioned this was merely a “leftist radical,” according to McKittrick:
Mr. Thomas H. McKittrick, the American president of the BIS, has announced his decision to continue his efforts for a close cooperation between the Allied and German business world, irrespective of the opposition of certain leftist radical groups; in these efforts he counts on the full assistance of the American State Department. “After the war such agreements will be invaluable,” said McKittrick.
For Morgenthau and White, such “agreements” were simply treasonous. They wanted the country to be deindustrialized and the power of the German cartels broken forever. For a brief moment, it seemed as though they might triumph. In July 1944 the Allies met at Bretton Woods to plan the postwar financial system. There would be a new International Monetary Fund and an International Bank for Reconstruction and Development. A resolution was passed calling for the dissolution of the BIS “at the earliest possible moment.”
But the Dulles brothers and their allies, who argued that Germany must be rebuilt as rapidly as possible as a bulwark against the Soviet Union, triumphed over Morgenthau and White. The BIS returned the looted Nazi gold, and the calls for its dissolution faded away. Today, the bank is richer and more inviolable than ever. Last year, the BIS made a tax-free profit of $1.36 billion—an impressive sum for a bank with just 140 customers. Ultimately, McKittrick was proved right: The agreements he brokered were indeed “invaluable.”
After he stepped down as BIS president in 1946, McKittrick was appointed a vice president of Chase National Bank in New York, in charge of foreign loans. He was even lauded by those whose stolen goods, in the form of looted Nazi gold, he had traded: That same year, McKittrick was invited to Brussels and decorated with the Royal Order of the Crown of Belgium. The honor, noted a press release, was “in recognition of his friendly attitude to Belgium and his services as President of the Bank for International Settlements during World War II.”
Additional research by Jay Weixelbaum and Emmanuelle Welch.
Adapted from Tower of Basel: The Shadowy History of the Secret Bank That Runs the World, published by PublicAffairs.
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