The conflicts and accords of a discordant and dangerous European world; The Schneider Papers is a story of American business funding Nazi Germany and the rebuilding of Soviet Russia, as part of President Franklin D. Roosevelt’s New Deal programme.
1936: Squadron Leader Harald Mason, a German-born naturalised British airman, is sent by a concerned Foreign Office to Berlin to unearth Luftwaffe expansion plans and investigate the sustainability of high-octane aviation fuel supply in times of war. A narrative of disparate characters, from the leonine intelligence chief Major Alastair Cartwright MC in London, to the clever and elegant Elisabeth Schneider, economist, and a Soviet spy embedded in IG Farben AG, the most powerful chemical combine in Europe. Ivan Mikhailovich Maisky, the Soviet Ambassador to the Court of St James’, s needs something to turn national rancor away from the Soviet Union and towards Germany. It was Elisabeth who enlightened the Soviet NKVD to the extent of American banking and industry funding of the nascent pre-1933 Hitler regime, and subsequent Wall Street and business relationships with IG Farben. Mason befriends Werner Scribner, a technical draftsman, a Catholic and a Bavarian monarchist at the new Luftwaffe Air Ministry in Berlin – determined to bring down the Anti-Christ Hitler – juxtaposed with his father Klaus Scribner, who was spiritually re-born in the chaos that was Weimar Germany. It’s the conflict and accord of characters in a discorded and dangerous European world.
This is a story of American business funding Nazi Germany, and the rebuilding of Soviet Russia, as part of President FR Roosevelt’s New Deal programme to get ‘America working again.’
1931 – the Industrial Resource Section
Major Alastair Cartwright MC convinced his superiors that although military intelligence was obviously crucial, industrial capacity, skilled manpower, and access to strategic commodities were equally if not more important in assessing a country’s ability to fight a war.
He impressed upon his audience one spring morning in 1931 the story of the totally brilliant and simple Schlieffen Plan of 1914, based on the successful German invasion of France in 1870 under Count Alfred von Schlieffen, late Chief of the Imperial General Staff. It was totally brilliant because it was simple and it worked, and there were no new impediments to stop it working again. While a small force would contain Russia in the east, the bulk of the German army would brush aside poor old neutral Belgium, smash into France and bring about its collapse before anyone knew about it. Simplicity itself.
Cartwright continued his story. As a blueprint for war it was bold, clear, but seriously flawed. Germany’s military leaders in 1914 had convinced themselves that France’s army would be no more able to withstand the destructive power of sophisticated weaponry than it had been a generation earlier and would consequently surrender in a few weeks.
Cartwright rose from his chair, and began walking around the wide eighteenth century walnut table with the five listening heads turning to follow his circumnavigation. He talked as he slowly walked, looking at no one in particular, deeply immersed in his oral dissertation.
‘Brussels fell, they marched into northern France. Favourite Parisian restaurants already earmarked for patronage, and remembered old masters hanging in art galleries ticked for new homes east of the Ardennes. Then it happened. At the battle of the Marne in September 1914, the French, supported by a small British Expeditionary force, launched a desperate counterattack that stopped the Germans in their tracks.’ He stopped, turned and glared defiantly at his audience. ‘Then, by jove,’ clenching his right fist, ‘the same thing happened at Ypres a few weeks later.’
‘Where are you going with all this, Cartwright?’ questioned a now impatient clock-watching Maurice deVilliers, head of Foreign Office Administration, index finger tapping his writing pad.
Cartwright ignored the interruption. ‘The quick and decisive German invasion was stuck in the mud of Flanders. The Russians had now woken up and they were pressing from the east. Consequence?’ He stopped and looked at his audience. No response. He had the floor. His show. His reply to his question was expected. Hypophora was a well known Cartwright device for engaging his audience; ask a question and then answer it. Quite effective, and they were used to it. They all knew Cartwright.
‘Germany had prepared meticulously for the war – but for a short war, with no contingency plans for a more protracted conflict. The Fatherland had a serious natural resources problem. Nitrates, oil and rubber, all vital to sustain a long war, were only available from abroad. But we had our Royal Navy controlling the sea routes and implemented a strategy we used against Napoleon; that is to say, gentlemen, a maritime blockade.’
He turned and stopped at a spot near the fireplace where he could look at their faces. He stared into each one in turn, just for a second or so. He was speaking directly to the individual.
‘Now, and this is important, the Germans imported most if not all of its nitrates for the use of explosives from Chile. The German Chiefs of Staff were warned about this potential blockade headache, but ignored it because of absolute confidence in the Schlieffen Plan. Then as 1914 drew to a close and the opposing armies entrenched in northern France, with the now obvious start of a war of attrition, virtual panic set in amongst the Imperial General Staff. They were, gentlemen, running out of explosives.
‘Panic! What to do? What did they do?’ Cartwright raised his hands in mock consternation. And again once the curiosity of his audience was assured, he answered his own question. ‘The solution was to make nitrates artificially, so to speak. Germany was and is, and I stress this fact, blessed with a strong chemical industry and world class industrial chemists. This alchemy was achieved. All that was required, and I say this as a non-scientist, was the mixing of nitrogen and air and innovative high pressure engineering chemistry. Explosives shortage solved. What brought the war to an end in 1918 was not a shortage of explosives.’ He said this with finger pointing emphasis.
‘Now gentlemen, let’s move forward to today, 1931. We should concentrate our surveillance efforts on countries we feel need watching.’ He held up his hands and brought them together as if in prayer. ‘Geopolitics and economics in the context of intelligence gathering need to merge. It is therefore my submission that we need to dedicate a department to this important issue. Political intelligence and resource intelligence working together.’ He paused, then repeated slowly and with emphasis, ‘Working together.’ Another pause. ‘I present you gentlemen a proposal.’
He bent down by his chair and from a large and scruffy dark brown Gladstone bag took out and distributed the requisite number of copies to his audience. He spent another ten minutes or so, seated this time, to explain his scheme. His project.
The new Industrial Resource Section or IRS proposal found itself on the agenda of two ad hoc gatherings including the all-important internal budget allocation sub-committee. Usual grumblings from the holders of the purse, fought off by an invited and sometimes exasperated, but always determined Cartwright. Then the day finally arrived; the sprinkling of holy water over the project by the Permanent Secretary at the Foreign Office gave it life.
Cartwright, on hearing the news, celebrated with a bottle of Chateau Lafon at his club. He sat by the window, armchair turned so he looked out at the activity on Pall Mall, and for privacy. He drank alone, deep in thought.
And so the Industrial Resource Section was born, its subject remit decided by high ranking Foreign Office civil servants and Bolshevik-wary politicians: the Soviet Union should be its primary concern. It came first, especially with the Russian eye permanently cast towards the Middle East and India. Other countries were left to Cartwright’s discretion and direction from the Chiefs of Staff Intelligence Committee.
The Industrial Resource Section, the IRS was to assess industrial capacity and natural resources in the Soviet Union. Bolshevism was the bête noire of Western Europe and America. ‘Best keep a close eye on those Bolshie chaps,’ was the standing order. As time and world events moved on, so did the department. It grew and spread to tabulate salt imports into Japan, rubber into Italy, and iron ore, copper and manganese into Germany. Scissors in hands, IRS people would organise press cuttings, albums, and various trade almanacs, collected and cross indexed on shelves dedicated to countries, commodities and products.
Its world was different from that of the soldier, sailor, and airman.
However, first things first. Cartwright needed a new home, a central command for his data gathering and data analysis enterprise.
He was led up to the first floor, and entered what the Superintendent of Buildings and Works had described as a spacious and airy office area, ideal for open plan use. ‘If only walls could talk, Major Cartwright sir,’ Mr Babbage remarked wistfully, clipboard in hand, with a short stubby pencil tucked behind his right ear and dressed in a long brown work coat. They stood with unconscious respect to past occupants in the middle of Room 10. Both took in the silence of the now empty ballroom, with its two plaster medallion ceiling mouldings and bare hooks which once held crystal chandeliers. Mr Babbage swept his arm towards his pièce de résistance selling point at the far wall: an ostentatious man-height white rococo marble fireplace with large scroll bracket corbels and two carved arches, centred with an ornate keystone. ‘Impressive, wouldn’t you say sir,’ admired Babbage. He walked over to it, and lovingly stroked the mantelpiece. Like an estate agent, which one supposes he was, albeit for the Foreign Office branch of HM Government, he then continued over to one of the six long casement windows overlooking St James’ Park, opened the window wide, and looked up at the sun shining above the horse chestnut and plane trees along Birdcage Walk. He inhaled slowly and deeply, and turned to his client and said in his best sales patter, ‘You just can’t get better than this sir. Not on this west side of Whitehall,’ he added quickly, to cover himself. Mr Babbage of Whitehall office management had been in his job a long time, and had learnt from his masters the art of protecting oneself against future accountability.
‘Very well, I’ll take it. Long lease, obviously,’ replied a very satisfied Cartwright.
The new home of the Industrial Resource Section: Queen Anne’s Gate, a short hop, skip and a jump from the Foreign and Colonial Office. Within a few weeks the ballroom had come to life; rows of desks, chairs, telephones, a glass-topped map, and work tables. The wall opposite the windows was jocularly referred to as the library. Here rows of bookshelves reached from floor to ceiling covering the whole wall. It housed the industrial reference collection. There were two doors set in this wall of almanacs, box files and albums, both leading out to the first floor. Over in the corner, as far away from the fireplace as possible, and in a newly-constructed, glass-framed, ceiling-high independent office sat the intangible man. He had the usual office paraphernalia: a wide desk, a blue velvet captain’s chair on castors (his own purchase), two uncomfortable-looking straight-backed visitors chairs, a four drawer steel filing cabinet times three, a row of black bakelite telephones on a stand next to the desk, and a free standing teleprinter machine. Cartwright had an uninterrupted view of his ballroom. This enclosure was later referred to as the greenhouse by one and all. As one Foreign Office wag, who had popped in to see Cartwright on one thing or another, shared the scene with colleagues over a drink in a Foreign Office basement watering hole: ‘… there he was, in the greenhouse, jacket off, hunched over his lever operated desktop calculator adding up figures like a turf accountant totting up the day’s takings …’ One of them guffawed and someone ordered another round of drinks.
He called them his DCs, his Diggers and Compilers – his band of helpers. Sat at their desks or bent over large work desks designed for spreading out papers, maps and reference books, talking together in groups or compilers alone with their matrix thoughts. The whoosh of sliding library ladders moving along the floor to ceiling bookshelves – diggers looking for a particular reference annual or putting one back. Cartwright had begun building his DCs, virtually from scratch, before the move to his new home, his new Industrial Resource Section. He wanted analytical thinkers; look for inconsistencies, put a series of events in proper order, use logic to pick apart a problem and come up with a solution or a reason for inconsistency. Curiosity and lateral thinking ability were prerequisite; age and gender specifications weren’t. He picked only the best that he could get his hands on. In more than one instance an IRS candidate reject landed up in some other building that defined Whitehall. The age group was decidedly mid-twenties to mid-thirties, or as one statistician put it: an age mean of twenty six, a median value of twenty eight, and a mode of twenty nine, Cartwright excluded. Two thirds were university graduates.
He had spent his time slowly and methodically. Linguists with an aptitude for analytical thinking. Non linguists with the ability to solve problems. A good example was young Sarah Stephens. He had spotted her by chance during a lunch break at a Foreign Office canteen he rarely visited. Obviously waiting for a lunch companion, she got out of her handbag a small compendium of cryptic crossword puzzles and became so engrossed in its word play clues that she hardly noticed her lunch companion sit down next to her. Cartwright, sat not too far away, listened in to parts of the conversation. She was employed as a clerk in the personnel section of one department or another, and came across as a shy unassuming person, but with her own views on world events, and how she would tackle them. An intelligent free thinker. She joined Cartwright in the ballroom the following week.
And so it went, the slow but steady building of the team. Ballroom size and budget allocation determined the numbers, but strength and depth was his personal responsibility. He was judicious in his choosing. He was aware of the mindset of some of the analysts he brought in – in essence, not popular in the outside world. They gave the impression of being arrogant, especially because they did not hesitate to speak their minds with their often harsh criticism and self-confidence. He knew that it would take time for the team to gel, but once friendship was made he would have a formidable group of people ready to meet the challenges of the section, its Committee, and upward to its Whitehall masters.
It took him nearly a year to gather and recruit and get the personnel architecture right in his DC section. They constituted the heart and mind of his little known organisation. The soul was himself, Cartwright the arbiter. What should he disclose, what to keep in the back pocket for another day. All dependant on his near term objective and subjective analysis of current government thinking and world events.
The Industrial Resource Section had a supervisory board called the Industrial Intelligence Committee and was itself was made up of a Treasury mandarin, useful for currency and foreign exchange advice and assistance, as well as being a Cartwright mole inside the Treasury; a couple of Ministry of Labour civil servants, general industry statistics and manipulation thereof experience, useful for understanding arguments in statistical inconsistencies – gamekeepers turned poachers, or poachers turned gamekeepers, take your pick. The Committee had the authority to bring in, as required, outside specialists in a particular field of investigation for brain-picking or ‘swabbing down,’ as it was known in the ballroom, chaired by one Major Alastair Cartwright MC.
The IRS was to remind political and military strategists of the resources required to conduct modern warfare. It concerned itself with specific imports, storage facilities, shipyards, railway stock, and chemical refineries as much as Military Intelligence did with tanks, naval destroyers and bombers. It was no more important to know the number of panzer divisions in Germany than to realise that the German industrial complex in the Ruhr was likely to need seven million tons of high grade iron ore in the first year of war and that the bulk of this would come from where? Sweden? Spain? Or both? And through which port? Hamburg? Or somewhere much nearer to the end user in the Ruhr valley, like Rotterdam in nearby Holland perhaps?
His organisation in time reached an information critical mass. He could only do so much with foreign press cuttings, almanacs and intelligence scraps for which he had to virtually beg at tables for. What he now needed, a phase two, as he called it, and to borrow the language of international industry, were in-country representatives. Operatives with the gumption to wheedle out information in real time. Opportunity driven people. They would be residents in certain to-be-decided intelligence required hot-spots, as designated by his Committee; get a feel for the place, the politics, current events and act independently on opportunities, with only a light steer from the captain’s velvet chair.
The hurdle, as always in intelligence gathering, was funding. Cartwright put his other hat on, that of a Secret Intelligence Service grandee, and discussed his expansion plan in an office on Victoria Street. In principle there was agreement. Cartwright’s nemesis, the internal budget allocation sub-committee, was also copied in to the memoranda which passed back and forth between IRS and the SIS. Finally, a balding chap with a nervous eyebrow tick turned up unannounced at the ballroom one rainy morning and informed Cartwright in an unexcited tone that he had received approval, additional budget to be paid by the SIS. However, as with all Whitehall favours, there were certain caveats, as the balding man was quick to stress – on the insistence of SIS and the Chiefs of Staff Intelligence Committee. IRS was not authorised to do anything subterranean. All above ground. Subterranean activities most definitely not allowed. SIS would get sniffy and muscle in, he warned, and all military type information was to be passed on immediately, underline and repeated, to the relevant service intelligence committees. For this cross my heart and hope to die promise, it was agreed that Cartwright and his IRS could access and, within reason, ‘infiltrate’ (Cartwright’s word) the political and Military Attaché pool at British embassies abroad.
Cartwright got his foot in the door for direct clandestine work. Argue the toss later. He knew what the SIS condition meant, he had agreed the rules of engagement with his SIS colleagues earlier. No spying or espionage per se, just information gathering as one would at a drinks party or dinner conversation for example. God bless HMS Opportunity and all who sail in her, thought Cartwright as he later toasted himself.
By the mid 1930s, IRS had a number of country managers scattered around the globe. Miscellaneous Armed Forces Attachés, Passport Officers, a representative of the British Council empowered to educate less fortunate nationalities to British culture, and even the odd so-called overseas trade promoter, unbeknownst to the Board of Trade which paid his salary.
The omens were there when the government signed that naval pact with Germany in June 1935. Cartwright could not believe that a similar Air Force arrangement had been proposed by the War Office. It was beginning to be clear to him that perhaps the Foreign Office was losing ground to the War Office in collusion with the Cabinet Office. Their common goal was appeasement. There was a very strong and dangerous argument that a re-armed Germany would counter the communist Soviet Union. Indeed, in one War Office paper Cartwright read, it positively lauded, albeit hypothetically ‘… German expansion plans to the east … as it would not greatly increase German strength … as annexation of Slav districts would weaken the racial cohesion of the Reich.’ This report, which Cartwright read with disbelief, stated that ‘… sooner or later German expansion would bring her into conflict with the Soviet Union …’ and here was the crux of the thinking, ‘… and a conflict would probably ruin our two potential enemies in Europe … we have little to lose and everything to gain …’ Cartwright just sat and stared out into the ballroom. He felt as he did in 1917 before going climbing out of the trench just outside the village of Arras in northern France.
In early 1936 War Office attitudes towards Germany began to diverge strongly from those held in the Foreign Office. Cartwright had been fighting, a now rear-guard action in committees, hand-to-hand combat, as he described it to a bemused non-partisan colleague. The War Office, egged on by Army Intelligence, became convinced that the Foreign Office and by implication the SIS and IRS were painting too black a picture of Herr Hitler. The War Office began to search for its own alternative foreign policy that would downplay the inevitability, according to the Foreign Office, of Anglo-German conflict.
The various War Office generated reports that came his way were flicked through to the ‘conclusion and recommendation’ section and sometimes thrown onto the floor or against the glass panes of the greenhouse, other times quietly placed down, followed by reflection and then sitting down at his desk, holding his head in his hands. The War Office began to echo some of the schemes already emanating from Downing Street for a policy of appeasement with Germany. test