1. PREFACE
James
D. Mooney, engineer and corporate executive, was born in Cleveland, Ohio on 18
February, 1884. In 1908, he received a B.S. from Case School of Applied
Sciences in Mining and Metallurgy, leaving soon after graduation for gold
mining expeditions in Mexico and California. Between 1910 and 1917, he worked
successively at Westinghouse, B. F. Goodrich and Hyatt Roller Bearing Company
during which time he became increasingly involved in corporate management. In
1917, although somewhat over age, he enlisted and served as a captain in France
with the 309th Ammunition Regiment, 159th Field Artillery. He was honourably
discharged in the spring of 1919. At the close of the war, Mooney was named
President and General Manager of the Remy Electric Company, by then a
subsidiary of General Motors Corporation. In 1919, he was appointed an
Assistant Vice-President of General Motors Corporation, possibly at the same
time as President and G.M. of Remy Electric Company, and thus precessed one
step behind Alfred P. Sloan.
James D. Mooney had worked as
Sales Manager of the Hyatt Roller Bearing Company, and then Sales Manager of
the Remy Electric Company, from 1915 to 1917, until he volunteered for war
service. He returned, from war service in the autumn of 1919, and went back to
Remy. Mooney stated in October 1935 that he had travelled
through England with his Regiment in 1917, on his way to France, and then again
on return in the Autumn of 1919.[1]
It seems that
G.M. had previously considered acquiring Morris Motors Limited previously and
it is suggested that because of the interest in Morris, Mooney must have been
well aware of the agreement that William Morris later had with Budd about the
technology for all-steel bodies, which would then migrate to all-steel
chassis-less construction.
From 1920 to 1921 Mooney was
appointed President of Remy Electric Company in Andersen, Indiana, by Alfred P.
Sloan, Jr., and was thus responsible ultimately for the British
Remy operation. On 1 January 1922 Mooney
took over as General Manager of the General Motors Export Company with
business in more than one hundred countries.
He was appointed Vice-President and General Manager of the General Motors
Export Company on 1 January 1922 in succession to Peter Steenstrupp, the
Export Company having combined in 1918 with General Motors (Europe) Limited in
London, as it was then called: the next year it changed its name to General
Motors Limited. When J. Amory Haskell resigned on 15 November 1922 as President of
the Export Company, Mooney replaced him as President of the Export Company
instead.[2]
A.L. Haskell then took over from November 1922 to June 1925 as Vice-President
and General Manager in succession to Mooney. A few days after Mooney was
appointed President of the Export Company, he was further honoured at a special
meeting of the Board of Directors of General Motors Corporation by his election
to Vice-President of G.M.C. and a member of the board, which he was to maintain
until 1941. His new appointment gave him general charge of all G.M.’s overseas
activities. Haskell resigned as Vice-president and general manager of the
Export company 15 June 1925, and was replaced in turn by L.M. Rumely, former
Regional Director for Australia: Rumely sailed for Sydney on 22 April 1923, and
subsequently appointed “in the field”, Vice-president of the Export Company and
Regional Director for Australia. Mooney states in his memoirs that when he
first contemplated sales to Australia in 1922, he had to look up the country in
the atlas!
Mooney
stated in the autumn of 1936 that he had visited the Morris Motors Limited
factory in 1922, in Cowley, and had been asked by William Morris what he
thought of the operation. Morris Motors were at the time assembling the Cowley
Touring car, importing Timken axles and U.S.-built Continental engines. Some
chassis parts were made on the premises, but otherwise the wooden frame was
made on the premises and bought-in parts were added in what we would call now a
“screwdriver operation”. Mooney was
impressed with the great volume of business with a very low investment, and the
fact that there were only standard tools around. Morris laughed and replied “
But you would be surprised to know how much money I am making”! Mooney
commented to the industrial heads that he congratulated on their performance
over the previous 18 years, and had remarkable progress, and wished them all
the best for the future. Part of this improvement he put down to “an
enlightened government”.[3]
In the Spring and Summer of 1924, General Motors of
Canada Limited exhibited at the 1924 British Empire Exhibition at Wembley Park,
which saw the opening of Wembley Stadium. H.M. King George V officially opened
the British Empire Exhibition on 23 April 1924, and attending his father was
H.R.H. The Prince of Wales. James D. Mooney stated that he gave a speech from
the same platform as the Prince. The idea was to promote and display industrial
and social exhibits of the Empire, including Canada. The Canadian pavilion was
massive, and was one of the most, if not the most, well-visited of the various
pavilions housed in the 219 acre site. General Motors of Canada Ltd. occupied
3/5ths of the space in the Canadian car section. He also stated that Prime
Minister Stanley Baldwin[4]
as well as Minister of Transport, Leslie Hore-Belisha were well known to him[5].
Given that Mooney was appointed a Director of General Motors Limited on July 5th
1924, presumably he was resident in the U.K. from April to July, and attended a
meeting of the Board of General Motors Limited on the day that he was appointed
a Director.
Mooney headed a committee formed to acquire Austins.
Mooney was consistently a Director of General Motors Limited until 1941 that is
both companies, and therefore the longest-serving Director pre-1945. He was
also a member of the Society of Motor Manufacturers and Traders and evidently a
regular visitor to the U.K. Sloan reports in his book[6]
that the suggestion of acquiring Austin Motor Car Company Limited was first
mooted in 1924, presumably after the acquisition of Morris Motors Limited had
fallen through after, no doubt, constant negotiations. Mooney commissioned a
survey on the British motor industry and the domestic market in 1924. The
report pointed out that the tax on engine size [the “Horsepower Tax”] plus
fees, insurance and garage charges placed the Chevrolet Superior at $112
disadvantage with an Austin.[7]
In the spring of 1925, Mooney travelled to the U.K. to inspect Austins’ plant
and then in July 1925 was appointed to head a committee including John J.
Raskob and A.H. Swayne, to make a formal visit. In then meantime, the Hendon
Plant of General Motors Limited was allegedly turned over to assembly of
Chevrolets with locally produced commercial vehicle bodies in order to keep the
plant busy.[8]
In August, the committee unanimously recommended the purchase of Austins for
the sum of £1,333,000, which the G.M. Board agreed to, though Sloan quotes
$2,575,291 “as a kind of experiment in overseas manufacturing”, i.e. for a
company producing 1,500 “class cars” per year. Alfred P. Sloan then publicly
announced on September 1st [New York
Times] that the Austin company had agreed to the take-over subject to
shareholder approval, etc. Sloan again confirmed the financial arrangements in
the New York Times 5 September 1924, but three directors of
Austins disagreed with their colleagues, and on 11 September, G.M. withdrew its
offer. This approach to take over Austin was seized upon by the British Press,
as well as the American, and as Mooney later stated in 1936, he was cast as an
American “Romeo”, with the “lover” being Herbert Austin.[9]
In The Motor 27 October 1925 there
was an article “THE BRITISH MOTOR INDUSTRY FOR THE BRITISH NATION”, for
instance.
On
21 October 1925, according to Arthur Pound[10],
there was a proposal to acquire Vauxhall Motors Limited instead, which was
completed 24 November 1925, probably through Morgan Grenfell, G.M.’s Merchant
Bankers, who had dealt with the Austin proposals. G.M. then acquired the
majority of the share capital in Vauxhalls for £510,000. However, we now know
that although Sloan made the official announcements, it was in fact James D.
Mooney at the “sharp end”. Mooney lived in a house, which was presumably
rented, about 20 miles north of London, until at least December 1925. When the
news was revealed there was a huge outcry: Maurice Platt in his autobiography
states that Vauxhall Motors had:
“hundreds of letters from readers, deploring
the sale of on eof the pioneering British motor companies to the Americans, in
which a recurrent theme was the change in character of the car which was
certain to ensue under the new management. One result of this was that the
General Motors connection was never mentioned in Vauxhall’s advertising or
“sales promotion” for many years thereafter”.
However,
Ford was not affected by these sentiments![11]
In fact there is no evidence that there was any reference to General Motors in
Vauxhall advertising pre-war!
Mooney made a speech in late November of 1925 to
fellow Americans in London just as the negotiations for acquiring Vauxhall
Motors Limited were coming to the fore, and a few days before the acquisition
was completed: in fact it was a justification for purchasing Vauxhalls. His
speech ambles on, what the most relevant points which he proposed, and which
were of relevance 10 years later were:
Labour: “our British workmen are always willing and have always been
willing to do a good day’s work for a fair day’s pay”.
Economic background:
a) The
raw materials were always available, and the industrial and production
facilities that had to provide the general background for producing cars in
quantities existed readily and within a comparatively limited area.
b) The
mental approach to manufacturing a high-grade complex product like a motor car
was readily available, with a complete industrial tradition and background
including elements of personnel, management, engineering, mechanical
craftsmanship, which supported a broad manufacturing programme.
c) The
U.K. was faced with the economic necessity of capitalising to better advantage
manufacturing high-grade, complex, fine quality products. Motor car assembly
fitted into this requirement as one of the U.K.’s economic necessities.
The rising costs of raw materials which
were endangering competitiveness in world markets could be remedied by
increasing the amount of labour on the products that were exported, so that
less items shipped in a raw or semi-finished state, and an increase in
manufactured goods, i.e. by increasing the degree of fabrication of U.K. manufactures
for export would be considerably advantageous.
General
Motors found that the U.K. had the general elements that provided a sound basis
for investment in the motor industry, with high character values, the amount
and character of labour needed, the fundamental production facilities, and an
expanding market. The U.K. provided the entire background that was needed to
support the manufacture of motor cars that could compete on the world’s
markets.
Mooney
stated that as an American, speaking to Americans, that [G.M.] would develop
more cordial relations between Americans and the British Empire. They did not
intend to play the role of “hands across the seas”, as this was in the sage
hands of [politicians] on both sides of the Atlantic. Mooney said that he had
been living in a village 20 miles or so north of London for some time, which
seems to have had a profound effect on him, by contact with the local
Vicar. This had resulted, according to
the clergyman, “a more brotherly union among the English speaking peoples of
the World”.[12]
In 1926, General Motors Corporation tried to acquire
Morris Motors Limited for $11 million, but were rejected, and then entered into
an auction with William Morris and Herbert Austin for the bankrupt Wolseley
company: Morris won that battle.
2.
OPEL JOINS THE EMPIRE
Automotive Industries 30 March 1929 announced that General Motors had
purchased Opel. It was stated that on 20 March 1928, James D. Mooney, President
of the G.M. Export Company, speaking before the Export Managers’ Club of New
York referred in his speech to that of “the building of an industrial and
commercial empire”. The next year, G.M. Corporation acquired all of the shares
in Vauxhall Motors Limited that it did not already own, and that year, 1928,
Delco-Remy & Hyatt Limited came under total G.M. ownership. However,
alongside this was an announcement made on 18 March 1929 by Alfred P. Sloan
Jnr., President of G.M. Corporation, at Wiesbaden, Germany, that General Motors
Corporation had formed an association with Adam Opel Company in Rüsselsheim,
Germany, a substantial interest in that company being taken at a cost of
approximately US$30 million. The financial world had already guessed that
something was afoot by October 1928, and finally when Messrs. Sloan and Mooney
left for Germany by ship and the rumours seemed to have been confirmed. In
fact, and General Motors World confirms[13],
that the Adam Opel was experiencing a decline in its domestic market as it
lacked funds for modern machinery and equipment, and had no adequate export
facilities either. G.M. were apparently to be wishing to expand into those
export markets where German-made cars sold, just as the decision was made to
increase exports of Vauxhalls from 1930 to the British Empire markets, though
southern Africa was one Empire area that Opel met success in and yet Vauxhalls
did not. G.M. had realised that so far as exports were concerned, the larger
North American car was losing out to smaller, cheaper, more economical cars
favoured by the European manufacturers. G.M. therefore needed a Continental
base for its North American and British products, and of course G.M. had
assembly plants all over Europe as well as subsidiary sales companies. Thus,
during the latter part of 1928, Geheimrat
Wilhelm von Opel met and talked to G.M. executives and the many advantages of
taking over an existing factory persuaded G.M. to buy-out Opel on a majority
basis.
The exact price was put at $28
million. On the 24 January 1929, the Opel family holdings were placed into a
limited liability company. Shares were issued totalling 60,000 with a par value
of 1000 marks each, capitalising the company at over $12 million. This was a
holding company for the Opel works, and public offering of stock was made, but
the Opel family retained control. It was then surmised that G.M. paid $28
million for 76% of the stock which represented the Opel family holdings, or
more than twice the par value of the company! 18 March it was stated that the
new board of directors would consist of five Americans and three Germans and
that an American would displace the then head of the firm, Fritz Opel. However,
Sloan went on to say that Opels would be run as an independent organisation by
the then present management committee, with G.M. engineering, manufacturing,
financing and managerial co-operation. However, this time G.M. had acquired a
majority stake in a company five times that of Vauxhall Motors Limited!
Mooney, Edward C. Riley and Alfred Swayne, formerly
of G.M. Export Company New York, were appointed directors of Vauxhall Motors
Limited in 1925, though Riley resigned in August 1926 to become Managing
Director of G.M. Continental until July 1930. Mooney remained a director of
Vauxhalls until 1940 though. Ronald K. Evans the Regional Director for Europe,
was appointed as Managing Director of Vauxhall Motors to replace Leslie Walton
who was promoted Chairman. In 1930, Mooney was asked by Sloan to pick an
Englishman to run Vauxhall, whose sales programmes had been subordinated to
G.M. Limited in 1928. In addition, post-Wall Street Crash, the anti-American
sentiments concerning Chevrolet cars and trucks assembled in Luton required
measures to emphasise their “Britishness”. The 40-year old Charles John
Bartlett was appointed Managing Director of Vauxhall Motors Limited in
succession to Evans, because allegedly his capabilities had been noted during
the investigations and financial planning that preceded the purchase of
Vauxhalls in 1925. However, a story at the time was that Sloan asked Mooney to
pick an Englishman to run Vauxhall, and Mooney suggested that they pick
Bartlett, as “he’s about as English as they come”. Bartlett
was born in 1889 to a modest family from Bibury, Gloucestershire. He received
training in business methods from Bath Technical College specialising in
accounting. During the First World War he gained the rank of sergeant having
joined the Devonshire regiment. He was injured in Loos and later served in the
Middle East and then joined G.M. Limited in
1919 as a clerk at £3 per week. In 1921 he joined General Motors Limited
at Hendon as an accounting clerk. In August 1926, Bartlett was appointed
Managing Director of Limited in succession to Riley, only to move across to
Vauxhall in the same year. From September 1930 he would assume the same role at
Vauxhall. Bartlett remained as Managing Director of G.M. Limited until the
company was dissolved in 1934. However, Bartlett was also appointed a director
of the British G.M. subsidiaries, Delco-Remy & Hyatt Limited in 1930 and
then AC-Sphinx Sparking Plug Company Limited in 1931.
As
part of his responsibilities in managing overseas production, Mooney travelled
extensively throughout the world, visiting G.M.C.'s numerous manufacturing and
assembly plants. In this capacity, he was afforded the opportunity of meeting
with "top-flight government officials and others in positions of power and
influence, and with them discussed not only their own economic problems but
also the impact of the international situation on their own countries and on
economic affairs." Mooney became a pioneer in the development of
management thought and the nature of organisation. Many of his theories and
practical experiences were widely read and studied in Onward Industry (1931), later re-worked and re-titled The Principles of Organisation. The
success of G.M.C. Overseas was due in large part to Mooney's ability to adapt
American methods and technology to existing conditions of amazingly diverse
natures.
Mooney’s
various trips to Europe convinced him that the Treaty of Versailles was responsible
for many of Europe’s post-war ills. In 1930, he delivered a speech calling
attention to the follies of the Treaty. “Not very long after the great nations
laid down their arms an economic warfare began that has increased in momentum
and intensity until we find ourselves today, twelve years after the armistice,
beginning more or less seriously to discuss war again”.[14]
Mooney states in his unpublished autobiography that
in the lifetime of the Weimar Republic, he met various leaders from time to time
including Chancellor Heinrich Bruening, Hjalmar Schacht and others. Then, with
the “start of Hitlerism”, he came to Nazi leaders especially well because the
government began moving in more prominently on industry, which required
frequent meetings with various members of the regime.[15]
General
Motors World, June 1934 referred to James D. Mooney’s
discussions with Hitler on 1 May 1934. Mooney was in Berlin at the time on a
European trip, and apart from visiting Berlin, he also visited London. The 1 May was celebrated as the first
anniversary of the German “New Deal” under Hitler’s guidance [not to be
confused with Schacht’s New Plan of September 1934]. Mooney was invited to see
Hitler’s landing at Tempelhof airfield, and the triumphal motorcade to the Chancellery.
The next day, Mooney was invited to meet the Chancellor and was accompanied by
Ronald K. Evans and R.A. Fleischer of Opel. They discussed the automotive
industry in Germany, and Opel’s important place in it as the leading
manufacturer of cars. Hitler characterised the 1.2 litre Opel [the Model P-4]
as his conception of the true Volkswagen,
the car for the German masses. The G.M. men apparently thought that this was
welcome news as many interpretations of what Hitler would consider a Volkswagen had leaned towards a baby or
cyclecar class vehicle, as per Porsche’s first attempt through NSU. Hitler
definitely stated that any car giving less package size and less performance
than the 1.2 litre Opel "would be an imposition upon the German people”. Hitler
estimated that using the U.S. as a standard, Germany should have 12 million
cars, but realised that the difference in conditions would make 3 million more
logical.
In a discussion on how to
benefit more German families to enjoy the benefits of car ownership, Dr.
Fleischer demonstrated to Hitler that whilst the buyer paid only RM1,880 for
the 1.2 litre Opel saloon, he had to spend an additional RM7,700 in operating
costs during the expected seven years of use. Simply reducing the acquisition
cost would not make much wider use of cars that Hitler was calling for. The
Chancellor then admitted that this was valid, and said that he would definitely
see to it that operating costs were reduced. There was no logic in a small and
dark garage costing RM30-40 per month when comfortable furnished rooms were
available at RM25. To bring down garaging costs, he promised to rescind the
rigid building regulation regulations relating to garages, as well as making
street parking legal. Hitler also asked that Opel’s experience with car
insurance be placed at his disposal as he thought insurance costs could also
safely be cut. He also mentioned the possibility of reducing gasoline taxes and
prices to accelerate Germany’s motorization.[16]
Anita Kugler comments
that the Reich foreign ministry notes state that Mooney was supposed to receive
assurances that the Führer would
“allow no discrimination against foreign capital invested in legitimate
business pursuits in Germany. That also applies, despite the special German
interest in advancing the German motor vehicle industry, to the capital of
General Motors and similar companies. He naturally expects that German capital
abroad is just as secure”. Hitler’s promise was not broken, she says, and Opel
had been treated as though it was a German company.[17]
Wilhelm von Opel has been
regarded dimly in histories of the Volkswagen car because he tended to be
critical of the Porsche project. However, Ferdinand Porsche had been engaged
since 1934 to develop designs for the Volkswagen,
though the contract originated not with the Reich
government, but with the Society of German Automobile Manufacturers of which
von Opel was a life member. Neither he nor Mooney, as private industrialists
can have been expected to be opposed to the Kraft
durch Freude car and all the restraints on industry of the time.
In 1935 Mooney was
appointed a member of the General Motors Corporation’s Executive Committee,
though it is not known yet whether he was appointed to the board as well.
There were also speeches in 1935 and 1936 to the
British motor industry in London that were in fact of no great consequence,
though this proves that he visited General Motors Limited on several occasions
in those years. Mooney made a
speech at the Car Distributors Section, Motor Traders Association, on 22
October 1935. Then, about a year later, at the Banquet of the Society of Motor
Manufacturers and Traders in London on 14 October 1936, Mooney commented to the
industrial heads he congratulated on their performance over the previous 18 years,
and had remarkable progress, and wished them all the best for the future. Part
of this improvement he put down to “an enlightened government”.
Guy Nicholas Vansittart was appointed Regional
Director for the European Region in March 1937, and then on 1 January 1938 the
European Region was split into the North European region under David F. “Dave”
Ladin [based in Copenhagen]; Mediterranean Region under G.D. Riedel bases in
Alexandria, Egypt], and Central European Region under Vansittart [based in
Antwerp]. On 30 September 1938, with the formation of General Motors Operations
Division by the merger of the Export Division with the German and Vauxhall
operations, Vansittart was appointed Regional Director for the British Isles
based in London, and Arthur J. Wieland Regional Director for Western Europe,
based in Antwerp.
In view of the information
below, it is queried as to when Vansittart and Mooney first came into contact
with each other. Mooney brought a number of young men into the Export Company
from 1923 onwards, and this included Edward C. Riley, on 1 January 1923, and
probably arranged for him to be appointed Managing Director of General Motors
Continental, Antwerp, in 1926. Vansittart joined the Sales Department of
Continental in April 1925, but left and rejoined as Sales Manager in May 1927,
being promoted Assistant Managing Director under Riley until the latter was
promoted again in July 1930 to Regional Director for Europe based in Antwerp,
and Vansittart succeeded Riley as Managing Director of G.M. Continental. Riley
and Vansittart had worked together from at least 1927 therefore, and it can
only be suggested that Mooney had known Vansittart from then as well. R.W.
Seeley, a future General Motors Limited director, was appointed Mooney’s
Assistant in August 1936, until he was appointed 1 April 1937 as Managing
Director of General Motors Nørdiska, Stockholm.
3. MORE THAN AN INTERNATIONAL BUSINESSMAN AND
ECONOMIST
3.1 INTRODUCTION
Mooney made the following
speeches that were of relevance to the American-German relations[18]:
18
January 1934 “International Trade”
23
January 1934 “Paper Money and Gold Prices in International Trade”
23
June 1934 “America’s Stake in International Trade”
10
August 1934 “Paper Money and Gold in International Trade”
9
October 1934 “Fallacies and Realities in International Trade”
20
December 1934 “International Economic Relations”
1934
“Developing Foreign Trade”
10
June 1935 “Economic Values of International Trade”
18
July 1935 “The International Money Situation”
17
September 1935 “The American Foreign Trade Situation”
1935
“Foreign Trade and Domestic Markets”
24
January 1936 “Remarks Before the Foreign Trade Council”
7
February 1936 “American Neutrality and Trade”
16
November 1936 “Stabilizing the Exchanges”
25
January 1935 “The Impending War in Europe-and a Gamble Toward Halting It”
17
April 1937 “American Economic Policies for the Impending World War”
1
May 1937 “What World War Will Mean for Us and What we Can Do About It”
18
May 1937 “Peace or War: A Trade Policy for America”
27
May 1937 “German-American Trade A Shadow of Its Former Self”
January
1938 Stabilizing The Exchanges”
14
January 1938 “Some Observations on Economics, Politics and Government”
27
January 1938 “European Observations”
25
May 1938 “Remarks at World Fair Dinner/Foreign Trade Week”
16
June 1938 “Gold, Paper Money and Commodity Prices”
19
January 1939 “Paper Money: A National and International Hazard”
4
February 1939 “Economic Policies for the Next World War”
Mooney travelled extensively,
throughout the world, and visited G.M.’s numerous manufacturing and assembly
Plants. In this capacity he was afforded the opportunity of meeting with
top-flight government officials and others in positions of power and influence,
and with them discussed their own economic problems but also the impact of the
international situation on their own countries and on economic affairs. He had
the ability to adapt U.S. methods and technology to existing conditions of
amazingly diverse natures.
Mooney expressed the
inadequacies of traditional diplomacy by arguing that diplomats were frequently
“willing to risk millions of lives rather than to try and see the other side
and to arrive at conclusions which involve some give-and-take on both sides,
but which are far, far, cheaper than the resort to war”. Hitler awarded the German Order of Merit of the Eagle in 1938 to
Mooney: the is was the highest award that could be given to a foreigner, and
the same decoration as awarded to Henry Ford in July 1938 by the German Consul
in the U.S.
“In
Germany, Dr. Schacht kept pointing out all the time, even after Hitler had
taken charge, that his country was headed for a bad end unless steps were taken
with the help and co-operation of other great powers to export manufactured
wares in exchange for food…”[19]
3.2
BUSINESS IN GERMANY
“With my far-flung international contacts as General Motors Overseas
executive, and on the basis of what I could observe directly in the course of
my travels, I could not but note that the world was, alas, once again headed
for war”.[22] Mooney
expressed this view in an address before the Economic Club of New York in 1937:
“There is a great war threatening in Europe. When this great war will come,
whether it will come at all, I do not even pretend to be able to say. But I do
know that the Germans will not starve. They will be on the march again before
they starve. America and her recent allies could make an intelligent gamble
toward halting this march and the war by putting up the food for Germany in
exchange for guarantees for peace”. He claims that he was then a “voice crying
in the wilderness”. Money pointed out that Europe was “getting itself tied up
in an economic knot particularly because of tariff barriers. In insisted that
hungry people will march across borders if you don’t break down the barriers to
the flow of trade”. [23]Mooney
made various speeches that year: 25 January 1935 “The Impending
War in Europe- and a Gamble Toward Halting It”; 17 April 1937 “American
Economic Policies for the Impending World War”; 1 May 1937 “What World War Will
Mean for Us and What we Can Do About It”; 18 May 1937 “Peace or War: A Trade
Policy for America” and finally 27 May 1937 “German-American Trade A Shadow of
Its Former Self”. [24]
It was probably the latter that his comments were made in because the other, [not “another”] speaker at the same
evening was Dr. Hjalmar Schacht himself, President of the Reichsbank and
Minister for Economics. He
was asked after his address numerous questions from the 1,500 or so members of
the audience: however three-quarters of the answers were simply references to
Mooney’s speech, stating that Mooney had already anticipated Schacht’s answer
by comments already made.
“In Germany, Dr. Schacht kept pointing out all the time, even after
Hitler had taken charge, that his country was headed for a bad end unless steps
were taken with the help and co-operation of other great powers to export
manufactured wares in exchange for food…”[25]
Mooney excuses his visits to Berlin as General Motors had a “great deal
at stake” in Adam Opel A.G., with a company of 26,000 German employees. It was
thus natural to see men like Schacht as American industrial managers went to
Washington. Mooney states that Schacht was always helpful and extremely eager
to assist the operations in Germany. Schacht apparently realised that “American
engineers were making a great contribution potentially to the industrial and
economic life of Germany, particularly in the field of standards of living,
because naturally the motor car is an important factor in connection with the
standard of living.” Schacht naturally wanted to encourage G.M. in every
possible way and to help the Corporation make the venture succeed”. This is
with respect sheer smokescreen on the part of Schacht: Mooney would not have
personally fallen for this line, although he had in fact made much the same
points to Hitler in 1934. Mooney was too astute to not realise that the German
government sought the benefits of foreign exchange in the first instance, and
the use of facilities for all-out industrial techno-war. For reasons of
diplomacy to satisfy certain quarters in both countries, including those who
had interests in American-German trade, this front had to be presented.
It is not yet known when Mooney first met President Franklin Delano
Roosevelt, but we do know that Mooney met “FDR” on 7 March 1935 at the White
House. This enabled Mooney to be able to approach the President much later on:
see below.[26]
Mooney states that he was called “up to” Berlin [which suggests that he
was in Rüsselsheim at the time] by German bureaucrats who were objecting to the
manner in which “we” [G.M. Overseas Operations Group] were pricing Opel cars
for export. The General Manager at the time was Ronald K. Evans, so this dates
it to prior to July 1936, when Evans left for the U.S. to become a Corporation
Vice-president and was replaced by E.R. Palmer, Assistant General Manager of
Adam Opel since March 1933.[27]
Because foreign exchange was a difficult problem, as Germany had no gold, the
bureaucrats were apparently sceptical about anyone who was seemingly exporting
capital out of the country. The bureaucrats challenged Opel’s costs as they
thought the costs and prices placed on cars for export were too low. This suggests
that this meeting was indeed around October 1935 as the Brandenburg truck Plant
had not officially opened until January 1936 and major exports had thus not
started. Mooney states that Dr. Schacht “did us the courtesy” of attending the
meeting, and defended G.M.’s cause, taking issue with his fellow bureaucrats.[28]
This is either a false or naive interpretation of events: there were several
Reich departments involved in export subsidies overseen by Schacht with overall
responsibility and interest in exports. A retrospective and non-jaundiced view
is that this was a clever and successful attempt by the Reich ministries and
the Reichsbank to have detailed assessments of costs, export potential,
foreign-currency potential, etc. in the manner of an internal revenue audit,
with Schacht then playing the trump card of appearing to be an amicus curiae or “best friend” to the
manufacturer once the audit had been completed to his satisfaction. Ever the
diplomat, Schacht obtained the required information sought and at the same time
enhanced the impression of the importance of Opel to the Reich economy.
Mooney states that two German representatives travelled to New York in
the autumn of 1936 to plead that G.M. put up $1,000,000 to finance Adam Opel’s
own rubber requirements in Germany as demanded by a newly-introduced government
ruling. Apparently Ford Werke also had a similar
requirement levied on them.[29]
G.M. put up the money, but only after receiving assurances that the
expenditure would be liquidated by means of barter transactions and exports of
Opel cars and trucks. It was further agreed that the German government would
assume the financing responsibility for crude rubber in about a year. G.M. did
not therefore put up dollars in cash, but compounded their difficulties in
extracting dividends out of Adam Opel by having to enter into barter and export
deals. One of the two representatives was an Adam Opel director from 1935, and
President of the company, Professor Dr. Karl Lüer, who was appointed Chairman
of the company in 1942. R.K. Evans was General Manager of Adam Opel at the
time.
In
the summer of 1938, Mooney, as a U.S. Naval reserve officer
[Lieutenant-Commander?] was serving on the U.S.S.
Enterprise, an aircraft carrier, with a Captain Wallace L. Lind.[30]He
did not otherwise mention his U.S.N.R. commission in any way in his memoirs
until 1940 when he took advantage of the Naval signals system for his messages
back to Washington. However, after Pearl Harbor, Mooney was taken on active
duty and his career is of considerable interest since it hints that he had been
involved in intelligence work of some sort in peacetime.
3.3 PRE-WAR VISITS TO ENGLAND AND GERMANY
“So far as England was concerned, I had not only lived there, but had
been responsible for investing millions of dollars of capital in a British
manufacturing venture. Moreover, I had many personal friends in England, who to
sure, knew that I was difficult at times, but who were also aware that I could
be trusted to keep my mouth shut and be on the level. My war record, moreover,
was an added guaranty that I would not sell the Allies down the river.”[31]
The
very respected military and automotive historian, Mr. Bart Vanderveen wrote in
the specialist but well-circulated military vehicle magazine Wheels & Tracks in 1984 that in the
summer of 1938 the War Office in London was approached by a “senior
representative of the General Motors Corporation”, who came to discuss possible
British requirements in the even of conflict. The W.O. showed a “certain amount
of interest”, which caused the representative to immediately contact all
G.M.O.O. plants and requested them if not instructed them to “freeze” all truck
output in order to give the British first option on purchasing trucks if
required. The W.O. then received the following day a written statement of the
quantities and locations of vehicles available. However, with the apparent
resolution of the crisis as a result of the Munich agreement, the Treasury felt
that they did not need to take up the offer. However, as a means of expressing
gratitude for the endeavours, the British W.O. awarded a contract for 500
Chevrolet trucks to be assembled in the General Motors Near East plant in the
Rue des Ptolomées, Alexandria, Egypt. This assembly plant was under the
Mediterranean Regional Director, G.D. Riedel from 1 January 1938, and the
Region also covered the Bombay, India, plant for instance. We know that
Contract V3352 was placed to supply 500 Chevrolet trucks from the Ministry of
Supply census records, which were all supposedly British military orders, and
Mr Vanderveen quotes 350 of these as being either cargo or water tanker trucks.[32]
They would all have been based on civilian style 1940 series WA trucks, and
indeed similar trucks were supplied to General Motors Limited in 1940 for the
civilian market, all built in June and July 1940, according to registration
evidence, and slightly larger trucks, series WB, were also sold in the U.K. as
civilian trucks which were built in December 1939.[33]There
is adequate proof that a large order was placed, and there is no evidence to
suggest that an approach was not in fact made in 1938. However, did Mooney make
the offer, or was it, say, Guy Nicholas “Nick” Vansittart, the Regional
Director for Central Europe, as he then was, as he was appointed Regional
Director for the British Isles in November 1938, after Munich [although the
events have no connection on the face of it? We know that Mooney was away at
sea in the summer of 1938, but was he in the U.K. in September, say? We can
place him in London at the beginning of November though, as mentioned below.
Would anyone else in G.M.O.O. have had the authority to obtain the information
on stocks held by G.M. in Egypt and India, and perhaps Belgium, presumably by
telegraphing the plants concerned? If it was not Mooney, then it was most
likely Nick Vansittart given his position and connections, and he acted with
Mooney’s authority. Having said that, if Mooney had made the offer, then he
would have been acting in tandem and with the assistance of Nick Vansittart.
The result was the same whomever was there in person!
On Friday 5 November 1938,
James D. Mooney went to see the Southern Railway Docks & Marine Manager,
R.P. Biddle. He apparently visited Southampton and saw the new Plant which was
now finished, and would have called in at the London H.Q.[34]
In addition, he went to see Charles Bartlett, the Chairman of Vauxhall Motors
Limited. Bartlett was apparently quite
off-handed towards Mooney: the latter had allowed him a considerable degree of
independence on the basis that British managers understood British workers
better. However, a few years later, after Mooney had resigned, Edward C. Riley
wrested back control over Vauxhall and the two apparently failed to see
eye-to-eye until Bartlett finally retired.[35]
A
relevant piece of information not revealed by Mooney in Lochner’s draft is
revealed by the file on James D. Mooney in the papers of Secretary of Commerce
in Washington, Harry Hopkins. The file contains a letter from Mooney to
Hopkins, dated 21 March 1939, submitting a twenty-seven page document on
Monetary Policy and a note from Henry Chalmers, Chief, Division of Foreign
Trade, Department of Commerce dated 26 May 1939, commenting on the report[36].
James D. Mooney sailed from New York on the SS Europa for one of his regular visits
to the European operations of General Motors on Tuesday night, 21 March 1939,
presumably after he had finished and despatched the letter to Hopkins.[37]
He landed in Southampton[38],
and was presumably as was usual, met on the dockside by G.M. Limited managers
who then showed him the new Plant under construction. We know Mooney was in
London on or about the 27th March, and he thus probably arrived on
the 26th or 27th. Mooney says that he met Guy Nicholas
“Nick” Vansittart, Regional Director for the British Isles, and Geheimrat Wilhelm von Opel, Chairman of
the Board of Adam Opel A.G. in London, though meeting at Southampton and then
taking the train or car to London is more logical. Vansittart and von Opel had
disturbing news about several engineering executives who had been taken into
German police custody on a charge of alleged activities inimical to Germany’s
national economy in general, and its automotive industry in particular. It was
agreed that Mooney would proceed to Berlin to investigate. As Mooney, Riley,
and Opel were all in London, 27 and 28 March it is suggested that they must
have visited the Southampton Plant together with Nick Vansittart.
Together with Edward C. Riley, then Assistant
General Manager of G.M. Overseas Operations [under Graeme K. Howard, the
General Manager, G.M.O.O., and Mooney as President], who was also travelling in
Europe, Mooney left for Berlin 29 March 1939 [with von Opel?] arriving morning
of 30 March. Mooney spent the following week strenuously trying to expedite the
official investigation of the charges against the engineers, which Mooney said
the company knew were unfounded. Two men proved very co-operative and helpful
in securing clearance for the men: Raymond H. Geist, American Chargé d’Affaires
in Berlin and Joachim “von” Ribbentrop, the Reich Foreign Minister. By 6 April,
the men were released with a “clean bill of health”.[39]
One of the men was executive engineer Karl Stief who was in fact a member of
the Committee of Management of Adam Opel A.G. from 1937 to 1940 at least. Stief
and the others whom had been arrested not by the Kriminalpolizei, or “Kripos”,
but by the Geheimstaatspolizei, the “Gestapo”. Mooney wrote to Geist who was
then Counsellor at the U.S. Embassy in Mexico City, on 11 July 1947 and stated
that he head heard two weeks previously from Stief, whom Geist had helped
Mooney get out of the clutches of the Gestapo.[40]
Soon after Mooney arrived in Berlin he advised Adam
Opel President, Dr. Karl Lüer of Mooney’s desire to have the rubber financing
procedure discontinued. Lüer arranged for a dinner to be given on 19 April in
the Berlin apartment maintained by Opels so that he could discuss the subject
with Dr. Emil Puhl, a director of the Reichsbank [and the Vice-president], and
Dr. Helmuth E.H. Wohlthat, departmental chief [Ministerialdirektor] on Generalfeldmarschall
Göering’s special staff for the functioning of the “Four-Year Plan”.[41]
Puhl, who introduced Wohlthat to Mooney, sat at Mooney’s left and right at
dinner, respectively, with various other German officials and Adam Opel
executives flanking them. Mooney reminded that the rubber plan was meant to
last for a year, and had in fact operated a year longer than agreed: it was
time for it to be terminated. Mooney said that the greatest contribution to the
German foreign exchange problem was made by the export of Opel products and not
by purchases incidental to the rubber plan [because G.M. had agreed to
discharge the $1 million rubber scheme by means of barter and Opel exports: the
barter arrangements must have required complex deals]. Mooney argued that the
disposition of any foreign exchange created was fundamentally the concern of
the German government authorities and that it was not desirable to have G.M.
working within a certain specialised and restricted area creating foreign
exchange earmarked for Opel’s specific rubber requirements. He also pointed out
the special difficulties created by the plan in New York where it drew
attention and emphasis greatly in excess of its true magnitude. The plan had
outlived its usefulness and should be gradually liquidated, with responsibility
for Opel’s internal domestic rubber requirements being taken over by the German
authorities. A unanimous agreement on the desirability of developing an alternate
plan for rubber financing was agreed. [42]
Mooney took the opportunity to present at the dinner
to deliver his own “blockbuster”: if the Germans could negotiate some form of
gold loan, would they be willing to stop their subsidised exports and special
exchange practices which were so annoying to foreign traders, particularly the
U.K. and the U.S. Whilst Mooney clearly
honestly believed that this might ensure peace, in truth the practices had had
a deleterious effect on General Motor’s extraction of profit out of Germany.
Wohlthat and Puhl reputedly readily agreed to this proposal if there was the
slightest possibility of negotiating a gold loan with which the Germans could
resume normal trading arrangements. The reason for the attraction of the gold
loan is twofold: firstly, the supply of foreign currency had sunken because of
preparations for the invasion of Czechoslovakia and replenishment was
considered necessary for increasing armaments, and secondly because Schacht’s
replacement as President of the Reichsbank, Walter Funk, who had served under
Göering in the Four Year Plan, was in the process of secretly transferring all
available funds of the Reichsbank abroad into gold. Mooney probably had no idea
that the prospect of a gold loan would have seemed extremely attractive to the
Reichsbank and Göering’s office. Mooney remained in Berlin the following day to
witness the celebrations and huge military parade to celebrate Hitler’s
birthday on 20 April, and then left for London that night[43].
Whilst Mooney was in Europe, Alfred P. Sloan, Jr.
chaired the General Motors Corporation General Meeting [“Stockholders’
Meeting]. Sloan is reputed to have said “we are too big to be affected by petty
international squabbles…the company’s operations in Germany are highly profitable
and the internal politics of Nazi Germany should not be considered the business
of the management of General Motors….”.[44]
and commented “We must conduct ourselves [in Germany] as a German organization.
We have no right to shut down the [Rüsselsheim] Plant”.[45]
However, there is no evidence as yet that this letter existed: it has been
oft-quoted and yet the original has not been found yet, casting doubt on
whether it was genuine.
After Mooney arrived in London, 21 April, 1939, he
paid a courtesy call on the U.S. Ambassador, Joseph Kennedy, whereupon he
acquainted him of the discussion with Wohlthat and Puhl. Kennedy suggested a
meeting with Puhl in Paris and asked Mooney to see if he could arrange such a
meeting. Mooney made an appointment with Francis Rodd, a partner in Morgan
Grenfell & Co. in the City, with whom Mooney was well acquainted, to be
appraised of the technicalities involved in a gold loan. Mooney asked Rodd on
the various steps necessary to provide an Anglo-American gold loan to Germany.
Rodd replied that there had been a great deal of discussion on that subject
from time to time in the City by people who believed a move of that sort should
be made, and he happened to be one of them. Rodd thought that an Anglo-German
loan might be made through the Bank for International Settlements in Basle,
Switzerland. Germany had been a party to the B.I.S., and the U.K. and the U.S.
could deposit gold in the B.I.S. accordingly. Rodd pointed out that the B.I.S.
provided a flexible medium for avoiding conflict with some of the internal
legal limitations on international loans.[46] Mr. Montagu Norman, Governor of the Bank of England,
was presumably associated with the International Bank, as he can be placed in
Basel where he had seen Dr. Schacht. This must have been before the end of
January 1939 as Schacht resigned/was dismissed on 20 January as President of
the Reichsbank
Mooney returned to Berlin 29 April, stopping at
Antwerp en route, probably meeting Nick Vansittart again. On 2 May, Mooney wrote from his Berlin hotel
to Dr. Puhl, stating that Ambassador Joseph Kennedy had asked him to come to
Berlin so that he could invite Puhl to meet him in Paris to discuss mutual
American-German economic and financial problems. Mooney suggested a meeting in
his own apartment in the Hotel Ritz in Paris for an unobserved rendezvous with
Kennedy, to which Puhl was interested and said that he would take the matter up
with his government. However, on the 3rd Puhl advised Mooney that
because of the conferences he was holding at the time with British and U.S.
bankers in connection with the Dawes Plan payments, he could not make the trip
to Paris without attracting public attention and newspaper surmise, and it
would be better if Dr. Wohlthat went in Puhl’s place. Wohlthat agreed to be in
Paris the following weekend, and Kennedy agreed over the telephone his
willingness to go to Paris. On Thursday 4 May, Mooney left for Antwerp, and
stayed at G.M. Continental the next day, Friday 5 May 1939. Whilst at the
Plant, Ed Zdunek gave a message to Mooney that Kennedy had tried in vain to
reach him by telephone to tell him that Roosevelt had refused approval for
Kennedy’s trip to Paris. Embarrassed by the turn of events, Mooney chartered an
aircraft and flew back to London.[47]
Whilst in transit, Mooney formulated a list of
principal contributions to peace that could be made by Germany and thus which
could be made by the U.K. and the U.S.:
Contributions
by Germany:
1.
Limitation of armaments.
2.
Non-aggression pacts.
3.
Move into trade practices of western nations:
a)
Free exchange
b)
Discontinue subsidised exports
c)
Move into most-favoured nation practices.
d)
Discharge foreign obligations (pay debts).
Contributions
by United Kingdom and United States:
1.
Gold loan of $500,000,000 to $1,000,000,000 @ $4.46 = £112,102,763 to
£224,215,246 and @ RM12.17 to the £, approximately RM1,364,000,000 to
RM2,729,000,000 at “official” average rates, via Bank of International
Settlements in Basle to provide a gold reserve so that orthodox money and price
practices could be set up.
2.
Colonies
3.
Cut out embargoes on German goods
4.
Credits on raw materials
5.
Free access by trade to sources of critical raw materials such as tin and
rubber
6.
Participation in Chinese markets when reopened to Western powers.[48]
Mooney placed the notes on Kennedy’s desk in the
Embassy when he arrived in London, and after reading them Kennedy replied “What
a wonderful speech could be built up from those points back home!”. Kennedy
agreed to get permission from the President again to visit Paris, but the
following day he advised Mooney that he had had a second refusal. Mooney then
asked if it would be possible for Wohlthat to come over to London instead upon
invitation, as in some ways he felt it more hazardous to make the longer trip
to London than to Paris. Wohlthat had to undertake considerable re-arrangement
of plans and had to secure a British visa in order to accept the changed
invitation. Mooney was staying in the Berkeley Hotel in London, and was sent a
telegram stating that Wohlthat would arrive by aeroplane from Berlin in London
about 10 p.m. on Monday 8 May 1939 [he would have flown most probably to
Croydon, though he could also have landed at Heston]. [49]
It appears that Wohlthat had an office at Leifzugen Strasse No.3, Berlin W.8.
The actual Post Office Telegram states that it was received at the Piccadilly,
London Telegraph Office of the G.P.O. on [Saturday] 6 May at the Berkeley
Hotel.[50]
Mooney booked rooms for the German official in the Hotel two floors above his.
Dr. Puhl, Reichsbank director introduced Dr. H.C.H. Wohlthat, Ministerialdirektor in Göering’s office,
by typed note written dated 4 May 1939, which Wohlthat must have brought with
him. Wohlthat had already met Mooney, but presumably in order to effect an
introduction to Kennedy, brought with him a typed resume in German explaining
his responsibilities: Puhl wrote in English.[51]
Late in the morning of Tuesday 9 May Kennedy and
Wohlthat met Mooney in the latter’s apartment. Mooney left them to do the
talking, which they did for about two hours, discussing many phases of the
tangled international problems. After Kennedy left, Wohlthat spent several
hours dictating notes to his secretary, and Mooney and he had dinner together
that night. Mooney expressed some political and economic matters which he was
convinced that Germany had to face if she hoped to come into harmony with
British and American thinking. Wohlthat then returned to Berlin on Wednesday 10
May.
The meeting between the various parties would
certainly have come to the attention of Sir Robert Vansittart, the
germanophobic Diplomatic Adviser to H.M. Government even if there had been no
direct appraisal by his brother Nick Vansittart [by then General Motors
Overseas Operations Division Regional Director for the British Isles], which is
very much doubted. Mooney then left for Paris by Golden Arrow on the morning of 11 May 1939, and probably visited
the Gennevilliers Plant. Just before boarding the train, Mooney was handed a
copy of the Daily Mail, which was
headlined “Göering’s Mystery Man Here”, and beneath was a story of Wohlthat’s
“secret arrival” on a “secret mission”, followed by a denial of any knowledge
of his visit by the German embassy and the paper’s own speculation that
Wohlthat was “taking soundings for new Anglo-German trade discussions”. Despite
guarded arrangements, the whole story had become public, because of the need to
apply for a visa. Whether an interested very senior civil servant had leaked
the information[1], or whether
an astute reporter had picked up the information from the airport is not known.
The reporter could only surmise as to the nature of the mission and by the time
that it appeared in print, the Dr. was back in Berlin beyond the reach of
reporters. Mooney then sailed for New York by ship 25 May 1939 after a short holiday
in Cannes.[52]
The question of the Anglo-German Gold Loan to
Germany was evidently left with Kennedy and Wohlthat, and Mooney played no
further part in the negotiations. Mooney criticised the lack of acquaintance
between Berlin and London and Berlin and Washington, and the lack of
acquaintance between men in corresponding positions in corresponding
governments, with no interchange of thought.[53]
It appears as though the Reichsbank started transferring gold to the Swiss
National Bank in Bern in January 1939. Given the invasion of Czechoslovakia,
and seizure of Czech assets it is extremely unlikely that the U.K. government
would have entertained any contribution to a Gold Loan, even if it could have
been afforded, which is extremely doubtful. However, the principle may not have
been dismissed completely. Schacht’s successor, Dr. Walter Funk gave evidence
to the International Military Tribunal in Nuremberg that in the months before
the beginning of the war he concentrated his entire activity on international
negotiations for bringing about a better international economic order, and for
improving commercial relations between Germany and her foreign partners. At
that time it was arranged that the British Ministers Hudson and Stanley were to
visit him in Berlin. The subject of short-term foreign debts had again to be
discussed and settled namely the moratorium. Funk had worked out new proposals
for this, which he claimed were hailed with enthusiasm, especially in England.
In June 1939, an international financial discussion took place in his offices
in Berlin, and leading representatives of the banking world from the United
States, from England, from Holland, France, Belgium, Switzerland, and Sweden,
took part in it, and the discussions led to results that satisfied all parties
or so he claimed. At the same time Funk carried out the exchange or transfer of
Reichsbank assets in foreign countries. This exchange of gold shares was also
considered very fair and satisfactory in foreign banking circles and the
foreign press Funk suggested. Funk also participated in the customary monthly
discussions of the International Clearing Bank at Easel as late as the
beginning of July 1939, and despite the strong political tension which existed
at the time was convinced that a war would be avoided.
3.4 SAILED TO EUROPE