BANKING: Insider from Overseas

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Despite the denunciations of demagogues, shrewd international bankers are a commodity of which the U. S. has never had an adequate supply. Most costly evidence of the fact is the $1,175,000,000 of defaulted bonds outstanding which foreigners (Germany: 26.4%) owe U. S. investors. This week, however, the U. S. acquired a very competent specimen of the breed—a present from Adolf Hitler. He is Otto Jeidels (pronounced Yi-dels), a tall handsome man with a twinkle in his eye, who habitually talks so fast that no one else can get in a word. Before teller purged German banking he was only one size smaller than Hjalmar Schacht himself; now he is a partner of the Manhattan banking firm of Lazard Freres & Co.

Lazard Brothers & Co. of London is Aryan and aristocratic, a member of the Bank of England coterie, helps back the appeasement movement in London, favors the theory that concessions to Hitler will bring Dr. Schacht and his orthodox economics back to Berlin. It has a highly lucrative and increasingly important sideline in helping frightened European capitalists put their money into good safe American dollars. On the receiving end of this flood of gold from Europe is Lazard Freres of Manhattan, not entirely Aryan, not a Wall Street insider, still correspondent (but no longer a partner) of the highly political London and Paris Lazard banks. Lazard's of Manhattan underwrites securities and, above all, does a big business in foreign exchange. Invaluable to this clearing house of news, bullion and foreign capital will be Jeidels, who is a friend of Montagu Norman, has access to choice Continental pipelines into Hitlerland.

Jeidels was born an insider, the son of an old Frankfurt Jewish banking family. Thirty-four years ago when he was in his twenties he began his career by writing ponderous, respectable tomes on Germany's growing steel industry. Later he worked in the very unerudite Manhattan brokerage shop of art-collecting Jules Bache. By 1908 he was back in Germany with its Metal Trust (whose presiding genius, Dr. Alfred Merton, was one of the German sponsors of Dictator Franco's rebellion).

In Germany there is a cynical saying that Schacht has managed to doublecross all save two of his intimates: one of the two is Hitler; the other is Jeidels. Schacht gave Jeidels the high sign in time for him to leave Germany with his family before the great pogrom of 1938 began.

In the twenties Jeidels, as boss of Germany's No. 1 investment bank, the Berliner Handels Gesellschaft. was one of Schacht's closest cronies. No chain store bank with a branch on every other street corner was the Handels Gesellschaft. Only the biggest of big businesses were its customers, and they went to it in Berlin.