In the previous blog we briefly discussed the Deutsche Bank’s relationship with Romanian oil. It throws an interesting light on just how complex the matrix of oil ownership was. When a consortium lead by Deutsche purchased the Steaua Romana Petroleum Company in Romanian in 1903, its major market lay in Germany. Steaua had access to substantial oil deposits lying south of the Carpathian Mountains, and owned barges on the Danube to transport it on to Germany from holding tanks at Regensburg in Austria.

Steaua Romana oilfield at Bustenari.

It was alleged by those historians who saw imperialist ambitions as the driving force inside the Kaiser’s empire that Deutsche Bank yielded to pressure from the German government to take over Steaua. Not so. The impulse sprang from national economy, not national politics, though the two were often interwoven. [1] By 1914 Steaua had become the largest and most productive plant in Romania [2] and would play a significant role in supplying Germany during the war. Steaua’s success, however, had only been achieved through sourcing vast sums of money, and much of that investment came from the Rothschilds.

Emil George von Strauss, Head of Deutsche Bank

In due course, Deutsche Bank appointed a friend and colleague of the Rothschilds, Emil von Stauss, to manage the Steaua Romana company. He was Managing Director of the Rothschild/ Nobel/ Deutsche Bank oil consortium, the Europaische Petroleum Union (EPU), which had originally been set up to counter the ever ambitious Standard Oil. [3] Thus, in the pre-war years, a strategy emerged to guarantee Germany’s future oil supplies under the benign direction of the Rothschilds. With this vital link secured, the German Government was confident that economic growth would continue unabated, but in reality what they had was a source of oil that was far from exclusively German. The Rothschilds, who were among the very first to invest in the European oil markets, had their own agenda and no intention of sharing control with the German or any other government. They put in place a hugely profitable framework for the production of Romanian oil, and its distribution from Romania to Germany, but ensured that its control remained in their gift. In essence, while the major German bank, Deutsche Bank, played a significant role in Romanian oil, the Rothschilds played a significant part in Deutsche Bank. It was never exclusively ‘German’ oil.

In addition, important Rothschild banks involved in the European oil industry, including Romania, were the Disconto Gesellschaft bank and its associated Bleichroder Bank. Established in 1851, the Disconto Bank grew steadily in size and importance through a series of amalgamations to become a leading player in German finance. As revealed in oil blog 2, it was generally considered to be a Rothschild front. In 1901 Disconto officially acquired the Rothschild Bank in Frankfurt, original seat of the Dynasty. The bank was allegedly sold on for two reasons; there was no male Rothschild heir in Frankfurt and it was deemed to be unprofitable. All staff members at the Rothschild Bank were transferred to Disconto and the Rothschild name was withdrawn. [4]

What conceivable reason would they have for doing this? Germany at that time was experiencing massive economic, industrial and technological growth. It was the emerging power-house of manufacturing in Europe. [5] Indeed from the viewpoint of the British Secret Elite, Germany was the most dangerous threat to their wider ambitions [6] Banks were booming. Selling an important asset, especially one in Frankfurt with sentimental attachments in the heart of the original Rothschild family base, sits at complete odds with the Rothschild modus operandi of the previous two centuries. They were in the business of amassing assets, not liquidating them. The sale was undoubtedly a sham. Little had changed other than the bank’s name. Disconto was nothing more than a front. The assets and the staff were simply transferred while the Rothschilds kept control behind the scenes.

Disconto - Gesellschaft bank stampIn fact the Rothschilds retained their dominant position in German banking. The New York Times, reporting on the German Stock Market in 1902 identified ‘Disconto Gesellschaft and other concerns in the Rothschild Group’ as the agents behind a massive one million crown loan adjustment to the Hungarian Government. [7] In 1909, Senator Nelson Aldrich presented a joint report to Congress in conjunction with Professor Reisser from the University of Berlin on the condition of European banks. [8] It concluded that ‘Disconto Gesellschaft, as a member of the Rothschild syndicate, participated in large numbers of Austro-Hungarian state, railroad and other transactions’ [9] Clearly the Americans knew that Disconto was a Rothschild organisation despite protestations that it had become an independent German entity. It was simply the way Rothschilds worked. They minimised public awareness of their role in the hundreds of banking, oil and industrial concerns they controlled, but maximised the impact they could wield on governments no matter which side those governments fought on in any given war.

Gerson von Bleichroeder of Bleichroeder's Bank

The Bleichroder Bank was yet another Rothschild front. [10] ‘It maintained close contacts with the Rothschild Dynasty; the banking house of Gerson Bleichroder acted as a branch office of the Rothschild Bank in Berlin’. [11] Bleichroder was known as Bismarck’s banker. Thus, despite the Rothschilds removing their name from the front office of German banking, they retained all of their influence and control through the ‘back office’ of their Disconto and Bleichroder banks, and their placements and stock interest in Deutsche Bank. And the most crucial product over which that control extended, was oil. The Rothschilds controlled Germany’s oil supply from Europe through these companies. They were to be found in every aspect of European oil, quietly amassing a monopoly. In 1904 they bought up Deutsche Petroleum AG as well as refineries in Galicia and elsewhere, and consolidated them into a company called OLEX. [12] One year later they also bought up and amalgamated a small but significant number of Romanian oil producers to form Allgeneine Petroleum Industrie (APAIG). Aware that a major global war was looming, it was very sound business. [13]

The Rothschild holdings diversified throughout Germany, reaping great reward at every stage from the rapid economic expansion. It was Germany, not Britain that was surging ahead in economic growth in the first decades of the twentieth century. The new scientific and technological developments in Germany were feeding an emerging colossus, and success bred ambition to develop its industries further. [14] The Rothschilds, behind a myriad of different company titles, constructed oil tank wagons for the railways, storage depots and refineries for the production of petrol and kerosene, and bartered with Government departments over concessions and favourable rail cargo fares. OLEX centralised its management at its Berlin subsidiary, OLEX – Petroleum – Gesellschaft, and thus identified itself as a German based company operating from the heart of the capital, close to the political and military decision-makers. With OLEX secure in Berlin, another Rothschild concern, Deutsche Erdol Aktiengesellschaft (DEA) was created by Disconto. It took over APAIG in Romania and gained control of more north German refineries. Disconto, as DEA’s major stockholder, directly administered the finances of these newly integrated oil enterprises. [15]

Bustenari, Romania in the early 1900s.Behind this bewildering flurry of name changes, of company amalgamations, of buy-outs and stockholdings, of new flotations and aggressive take-overs, the Rothschild Dynasty had control of supplies, distribution and storage of Romanian oil throughout much of Germany. They produced much of the oil, transported it through railroad systems and oil wagons across Austro-Hungaria and then Germany itself. They stored the oil in great purpose-built depots. They refined it into its marketable end products. In essence, they ensured that Germany and the Central Powers would have the supply of oil and infrastructure crucial for the long war planned by the British Secret Elites. And it all looked like normal business.

In most of their business organisation, they operated a complex and sophisticated network of interlocking front companies and trusts which concealed not just the true extent of their ownership of key industries, but their unrivalled power over nations.  They had the finance; they ran the merchant banks that mattered; they controlled politicians and sometimes, governments. Most importantly, the Rothschilds had knowledge. [16] They had a first-rate intelligence gathering service stretching across the business and political world that enabled them to double and then redouble their capital with swift market operations that caught rivals off balance. They had more information at their finger tips than any secret service. They knew what was happening. Everywhere. More importantly, they knew what was going to happen. Their links to numerous governments were legendary, and they ensured that all within the dynasty shared crucial knowledge. Their agents knew more about local business developments, trade agreements, industrial unrest, treaties and concessions than any individual Ministry or Foreign Office. They knew exactly what they were building up and facilitating in Central Europe. One cannot overestimate the power and spread of influence that the House of Rothschild vested in Germany.

Rothschild Schloss Hinterließen in Austria- Hungary.

Through its Deutsche Bank involvement the dynasty supplied oil for Germany’s war needs, and did likewise through their Disconto and Bleichroder banks. At no point was the Rothschild name directly attached to these German companies. Knowing that war with Germany was imminent they had to make it appear as if they had abandoned their financial, industrial and commercial interests there. Reality could not have been more different.

[1] F.C. Gerretson, History of the Royal Dutch, Vol III, pp. 80-81.
[2] Ibid., p. 123.
[3] Daniel Yergin, The Prize, The Epic Quest For Oil, Money and Power, p. 116.
[4] Niall Ferguson, The House of Rothschild, p. 242.
[5] David S Landes, The Unbound Prometheus, p. 290.
[6] Gerry Docherty and Jim Macgregor, Hidden History, The Secret Origins of the First World War, p. 14.
[7] New York Times, 10 February, 1902.
[8] 61st Congress, 2nd session, Senate Document 593, National Monetary Commission, the Economic Development of Germany by Dr J Reisser.
[9] Ibid., p. 412.
[10] Ibid.
[11] Fritz Stern, Gold and Iron: Bismarck, Bleichröder and the Building of the German Empire, pp. 9-11.
[12] F C Gerretson, History of the Royal Dutch, Vol. III, p. 119.
[13] Ibid., p. 82.
[14] Landes, The Unbound Prometheus, pp. 235-7.
[15] Alfred Dupont Chandler, Scale and Scope: The Dynamics of Industrial Capitalism, p. 438.
[16] Ferguson, The House of Rothschild, p. xxvii.