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Royal Dutch Shell and the Nazi (updated with report of 4 day meeting between Deterding and Hitler)

By John Donovan

5 January 2009

More than 60 years after the demise of Nazi Germany, people apparently remain fascinated by the evil deeds of Adolf Hitler and his equally evil henchmen.

The new movie ‘Valkyrie‘ tells the story of the well-documented bomb plot against Hitler. Tom Cruise is in the lead role of Colonel Claus von Stauffenberg, the patriotic aristocrat who unsuccessfully attempted to carry out the assassination. An article published in The Sunday Times on 4 January 2009 reviews a related book release: Valkyrie, by Philipp von Boeselager.

Another example of the current resurgent interest is the video clips on YouTube said to glorify Nazi troops. A Daily Telegraph article reports that the controversial clips have received “million of hits”.

The same newspaper published an article on 3 January 2009 reporting the extraordinary news that “the Fuehrer has been given centre stage by the next European City of Culture.” The article said that the Austrian city of Linz has decided to showcase the works of the architect of the Third Reich.

What is less well known is the Royal Dutch Shell connection with Hitler and the Nazi. It is one of those episodes in Shell’s history, such as the recent multibillion-dollar reserves fraud, which the oil giant would prefer to forget.

The unfortunate association stemmed from the actions of a colossal figure in the history of the Royal Dutch Shell Group, Sir Henri Deterding, the ruthless Dutchman described as THE MOST POWERFUL MAN IN THE WORLD”, the title of a book written about the oil baron by Glyn Roberts. Deterding was the man responsible for founding the Royal Dutch Shell Group and was at the helm of the oil giant for 30 years.  He was known as the “Napoleon of Oil”.

A Time Magazine article about the lunch of the Glyn Roberts book said: “Roberts thinks his backing for Hitler and his admiration for Mussolini are based on his hatred of communism…”

The association between Deterding and the Nazi was such that Hitler and Goering both sent wreaths to his funeral when Deterding died just before the outbreak of the 2nd World War.  The Nazis propaganda machine exploited his funeral and also intended to exploit the circumstances of his death to gain control over the entire Royal Dutch Shell Group.

A New York Times article reported that as earlier as 1929, the Nazi had begun to try and make friends in Britain and a firmer bond had been established with “Sir Henri Deterding, the oil magnate, and his associates.”

In 1933, Sir Henri was said to be “currying favor with Adolf Hitler in the hope of winning oil contracts for Royal Dutch Shell.”

He was openly described as being “pro-Nazi” and a Nazi supporter.

The New York Times published an article on 26 October 1934 under the headline:

REICH OIL MONOPOLY SOUGHT BY DETERDING”.  

The article with the sub-headline: “Hitler’s Terms for Control of Distribution Unsatisfactory to Royal Dutch and Shell” reported the content and outcome of a four day meeting between Hitler and his guest, Sir “Henry” Deterding, held at Berchtesgaden – Hitler’s mountain top retreat known as the Eagles Nest. 

“LONDON, Oct. 25.-It is reported confidentially from Berlin that the object of Sir Henry Deterding’s recent visit to Chancellor Hitler at Berchtesgaden, where he stayed for four days, was to discuss the conditions for granting a monopoly to the Royal Dutch and Shell Companies of petrol distribution in Germany for a long period of years. Chancellor Hitler’s terms were unsatisfactory and the negotiations have broken down temporarily. Three conditions advanced by the Germans were” 

First-The companies were to supply oil on credit for the first year.

Second-The companies were to build a network of distributing stations along strategic motor roads, these buildings to be protected against air attacks.

Third-The companies were to invest their money, frozen in Germany, locally. 

On 13 February 1939, Time Magazine published an article about the death of Sir Henri.  It said that he “backed Hitler in Germany” and had “added a German residence to his English, Dutch and Swiss homes.”

Printed below are extracts from three books, which included extensive coverage of the Royal Dutch Shell connection with Hitler and the Nazi.

EXTRACTS FROM “THE SEVEN SISTERS” BY ANTHONY SAMPSON: PUBLISHED IN 1975

His influence on the company was erratic and as one Shell veteran recalls: ‘Deterding’s interventions were like thunderstorms; suddenly flattening a field of wheat, while leaving other fields un-scathed.’ The stately managers of Shell began to have the worrying impression that their Director-General was going mad, and still worse, going pro-Nazi. His anti-Communism, spurred on by his Russian second wife, had already made him sympathetic to the Nazis. But in 1936, just after he had celebrated his seventieth birthday and his fortieth year with Shell, he married a third time, to a German girl, Charlotte Knaack, who had been his secretary. He was now convinced that the Nazis were the only solution to the Communist menace.

He died six months before the outbreak of war: memorial services were held in all Shell offices in Germany and Hitler and Goering both sent wreaths to the funeral on his estate.

EXTRACTS FROM “THE PRIZE” BY DANIEL YERGIN PUBLISHED IN 1992

The outlook was grim and disheartening. Norway and Denmark were in German hands, France would surrender the following month, and Britain would stand alone, bearing the brunt of the war. No one was better suited than Churchill to lead his country through its “darkest hour.” No one better understood the critical role that oil would play, first in Britain’s very survival, and then in the prolonged conflict ahead.

The government also had to cope with a different kind of problem-the future of the Royal Dutch/Shell Group. The current management of the Group was no less concerned and apprehensive. For there was a risk that the Group could pass under the Nazi sway. The heart of the problem was Henri Deterding, the grand master of the company. He had continued to dominate the Group through the 192os. “Sir Henri’s word is law,” observed a British official in 1927.

“He can bind the Board of the Shell without their knowledge and consent.” But by the 1930s, Deterding’s grip on the company was slipping, and he was becoming an embarrassment to the management and a source of anxiety to the British government. His behavior was increasingly erratic, disruptive, megalomaniacal.

In the mid-1930s, as he entered his seventies, Deterding had developed two infatuations. One was for his secretary, a young German woman. The other was for Adolf Hitler. The determined Dutchman-who had gravitated to Britain before World War I, had been courted by Admiral Fisher and Winston Churchill, and had become a firm and fervent ally during that war-was now, in his old age, entranced with the Nazis.

On his own, Deterding initiated discussions in 1935 with the German government about Shell’s providing a year’s supply of oil-in effect, a military reserve-to Germany on credit. Rumors of these talks so greatly alarmed the Shell management in London that one of the senior directors, Andrew Agnew, asked the government to have the British embassy in Berlin investigate so that Agnew “could take suitable actions with his colleagues on the Board here in good time.”

Finally, retiring from Shell at the end of 1936, Deterding acted on both of his new infatuations. He divorced his second wife, married his German secretary, and went to live on an estate in Germany.

Deterding died in Germany in early 1939, six months before the war began. Strange and deeply disturbing rumors immediately reached London. Not only had the Nazis made much of his funeral, but they were also trying to take advantage of the circumstances of his death to gain control of the Royal Dutch/Shell Group. That, of course, would have been a disaster for Great Britain. The company had virtually been Britain’s quartermaster general for oil during World War 1. Should it now pass under Nazi domination, Britain’s entire system of petroleum supply would be undermined. But it was discovered that the key “preference” shares, which embodied control, could only be held by directors, and at his demise, Deterding’s shares had been swiftly distributed to the other directors. At best, the Germans could only get their hands on a tiny fraction of the common shares, which would do them no good at all, either before or after the outbreak of war.

EXTRACTS FROM “A CENTURY OF OIL” BY STEPHEN HOWARTH PUBLISHED IN 1997

The 1930s had proved a difficult and unpredictable decade for Shell Transport and Trading – the Depression, the successful move into chemicals, the increasing politicization of oil as governments of both extremes came to power. Yet even if none of that had occurred, it would still have been a climactic time, for on l7 November 1936 Sir Henri Deterding retired. He was then a few months over 70 years old. His forty years in the oil business included twenty-nine as an executive director of Shell Transport and Trading (in modern terminology, a Group Managing Director) and thirty-six as General Manager (that is, president) of Royal Dutch. He had been a decisive, governing influence in Shell Transport, and in almost complete charge of Royal Dutch, for more than half his life: he had become a dominant force throughout the world-wide industry, earning the respect of almost everyone who knew him, and often their affection too.

Naturally, therefore, his departure engendered a considerable sense of loss; and yet it was not entirely unwelcome, for as he had grown older he had become rather an embarrassment to his colleagues.

Given all his achievements, this is an unhappy story, and one which has caused lasting distress within Shell Transport and Royal Dutch; but it is as much a part of the history as the more glorious days, and enough time has passed for it to be seen in some perspective.

Briefly, Deterding had become increasingly right-wing, bordering, some said, on the megalomaniac. His memoirs, published in 1934, were a masterpiece of vanity and egocentricity, reading as the self-portrait of an autocrat. For example, there was his talk with Mussolini – ‘a man who, regard him as you may, has shown a driving force almost unparalleled in running a country’. Deterding decided that this conversation:

proved that there were several points on which we saw eye to eye. We both agreed that the coping-stone of Education is a sense of discipline and a respect for prestige, lacking which no youth can be considered to have been properly educated at all… To people unacquainted with the Italian character his manner in public may seem at times to be a trifle theatrical, but what chiefly interested me at our meeting was that he seemed so direct. One felt that, if faced with a difficulty, he would get out his sledge-hammer and strike straight at its root.

So too would the ageing Sir Henri. When he wrote that, he was 68. Many people, as they grow older and see the world changing around them, become more conservative, with a hankering for ‘the good old days’ and a growing belief that things are not what they were. With Sir Henri the process was becoming somewhat marked. In the same text, he wrote this memorable sentence:

If I were dictator of the world – and please, Mr. Printer, set this in larger type – I WOULD SHOOT ALL IDLERS AT SIGHT.

But in a world where millions of working men and women were idle through no fault or desire of their own, Deterding’s colleagues (particularly in The Hague) were very sensitive to the public display of such sentiments, and still more so to his open admiration of what he perceived as the firm government which had recently been elected in Germany.

Back in 19l4, just before the outbreak of the Great War, Britain’s Admiral Fisher had written to Winston Churchill: ‘I have just received a most patriotic letter from Deterding to say he means you shan’t want for oil or tankers in case of war – Good Old Deterding! How these Dutchmen do hate the Germans!’

The new Lady Deterding was German. In a striking lack of imagination on Sir Henri’s part, she was also his former secretary; and because the Nazi regime was visibly restoring order to her country’s chaotic economy, she was very much in favour of it. So was Sir Henri, who saw the disciplined economic aspects of Nazism as the world’s most powerful weapon against Communism. The Nazis, eager even after his death to exploit the publicly-avowed support of this world-famous individual, virtually hijacked his funeral: Field Marshal Goering, chief of the German air force, sent a wreath; so did Hitler himself; and, even Germanizing his name, the functionary who represented them said as he laid the wreaths: ‘In the name and on the instructions of the Fuhrer, I greet thee, Heinrich Deterding, the great friend of the Germans.’

To his former colleagues both in Shell Transport and Royal Dutch, these events were intensely painful and hard to come to terms with.

Recalling his irrational and damaging price war in 1927 against buyers of Soviet oil, and his high-handed ‘colonial’ treatment of the left-wing Mexican government in 1934, some wondered privately if he might have been going mad. Probably he had not; rather, traits that he had always possessed – simplicity of outlook, clarity of goals, strength of character and forcefulness of speech – had become accentuated by old age. By then, their expression was crude and humiliating. In his youth and middle age, though, the same traits had been priceless business assets. Using them, he had rescued Shell Transport from virtually certain extinction, and had built its fortunes, together with those of Royal Dutch, to an level which simply would not have been credible when he began; so both as a friend and an inspiring leader, his passing was genuinely mourned.

EXTRACTS END

Deterding apparently felt very strongly on the subject of “idlers”. According to an article published on 18 February 1940, “Sir Henri Deterding had told Hitler that Mexico had the laziest population in the world, and rich prizes for Germany to grasp.”

Ironically, the driven ruthless man most responsible for the great enterprise which is Royal Dutch Shell Plc today, was also responsible for one of the darkest periods in its long history.

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