Che dan Pelukan Maut Komunisme
http://cahyono-adi.blogspot.com/2009/03/che-dan-pelukan-maut-komunisme.html#.UcqVldiN6So
Dunia
tidak mungkin melepaskan diri dari kehancuran selama masih "memeluk"
komunisme dengan segala "tetek bengek"-nya. Salah satu tanda dari "tetek
bengek" komunisme adalah masih beredarnya buku-buku komunisme di
perpustakaan-perpustakaan, beredarnya kaos-kaos, buku-buku, dan
film-film mengenai Che Guevara.
Kalau di Indonesia adalah masih dihormatinya sosok seperti Pramoedya Ananta Toer dan Tan Malaka. Saya pernah membaca biografi Che Guevara yang dimuat di majalah Matra dan edisi khusus Tan Malaka di majalah Tempo. Kini saya tahu kaitan antara Matra-Tempo dengan Che-Tan Malaka, yaitu melalui para eksekutif kedua majalah tersebut dengan Eric Samola, melewati taipan Ciputra dan berakhir di konglomerasi media massa global milik Yahudi.
Tetek bengek komunisme itu kini tengah mencapai kulminasi dengan diproduksinya sebuah film biografi Che Guevara berdurasi 4 jam 17 menit. Bukan oleh orang-orang komunis China, Kuba atau mantan komunis Uni Sovyet, melainkan oleh orang-orang "kapitalis" Hollywood Amerika. Tepatnya sutradara peraih Oscar Steven Soderbergh.
Bagi orang-orang liberal itu (pemuja kapitalis dan komunis sekaligus), rupanya Che lebih berharga dibandingkan para founding father Amerika sendiri. Demi Tuhan, bangsa Amerika bahkan memberi penghargaan sangat tinggi kepada sosok komunis yang lain, Marthin Luther King, dengan menjadikan hari kelahirannya sebagai hari libur nasional. Arwah para founding father pasti iri para arwah Marthin Luther.
Mick LaSalle, seorang kritikus film dari San Francisco pun dibuat bingung oleh sutradara Steven Soderbergh yang membuat film ini. "Jika saja Soderberg membuat film tentang George Washington dan Abraham Lincoln. Dengan membuat film tentang kepahlawanan Che Guevara, Soderberg menganggap kita semua setuju dengan pandangan dalam filmnya," katanya.
"Film itu merupakan versi gerilya komunis dari film Stations of the Cross, dimana kita melihat sosok Guevara dalam berbagai periode yang penuh kekerasan. Film ini tidak mengajak orang untuk berfikir, namun untuk memuji, bahkan mungkin memuja."
Ini bukan film pertama buatan Hollywood tentang Che, seorang pembunuh (tidak ada komunisme tanpa pembunuhan-pembunuhan massal yang keji) yang digambarkan sebagai "orang suci". Pada tahun 1969 Hollywood membuat film serupa dengan Omar Sharif berperan sebagai Che dan Jack Palance sebagai Fidel Castro. Selain itu pada tahun 2004 lalu juga diproduksi film sejenis dengan judul "The Motorcycle Diaries" (Che dikabarkan menggunakan motor trail selama menjalankan missi gerilyanya di Amerika Selatan), dan belasan film sejenis yang dibuat oleh stasion-stasion televisi.
Kaum komunis mengklaim perjuangannya adalah demi melayani rakyat. Mengejutkannya, masih cukup banyak orang bodoh yang mempercayainya, membaca dan melihat film-film Che dengan berlinangan air mata. Namun mengapa para pemuja Che juga melibatkan para sineas kapitalis Hollywood?
Sudah menjadi pengetahuan umum bahwa media massa dan dunia hiburan Amerika bahkan global, dikuasai oleh kapitalis Yahudi. Namun tidak banyak yang tahu bahwa para kapitalis Yahudi itulah yang menjadi "bapak komunisme" dunia.
Peristiwa-peristiwa besar dunia, hampir semuanya merupakan hasil skenario mereka untuk mengubah bentuk monopoli kekuasaan penciptaan uang dan kredit menjadi monopoli politik, bisnis, budaya dan agama. Mereka menciptakan kedua paham kapitalisme dan komunisme untuk membuat dunia sibuk menghabiskan energi, mengalihkan perhatian massa sekaligus menangguk untung dari bisnis peperangan komunisme versus kapitalisme.
Pada tahun 1953 Ketua Ford Foundation Howard Gaither mengakui kepada tim penyidik Congress bahwa kebijakan lembaganya adalah "menggunakan dana-dana sumbangan untuk merubah kehidupan kita di Amerika sehingga dapat bergabung dengan nyaman dengan Uni Sovyet."
Bangsa Amerika mempunyai ingatan sejarah yang sempit sehingga lupa bahwa agen-agen komunis nyaris berhasil merubah Amerika menjadi negara komunis, kalau saja tidak ada beberapa patriot dipimpin oleh anggota Congress McCarthy, yang melawan dan menggagalkan rencana tersebut. Akibat kegagalan tersebut maka rencanya besarnya diubah, yaitu mengganti Uni Sovyet menjadi kapitalis. Maka runtuhlah Uni Sovyet karena pengkhianatan Gorbachev dan Boris Yeltsin. Inilah sebabnya mengapa jargon komunisme "political corectness" kini menjadi jargon politik Amerika.
Mengapa yayasan-yayasan dan media massa mempromosikan feminisme, homoseksualisme, dan pornografi untuk menghancurkan masyarakat? Mengapa mereka mensponsori "liberalisme" dan "keberagaman" untuk menghancurkan identitas bangsa. Mengapa industri hiburan dan informasi berubah menjadi berorientasi sek, kekerasan, dan penyimpangan-penyimpangan sosial. Kita tidak sadar bahwa sebuah "mesin budaya" tengah mengendalikan kita menuju kehancuran masyarakat.
Eustace Mullins, seorang penulis murid sastrawan besar Ezra Pound, menulis buku tentang konspsirasi Bank Sentral Amerika. Tulisan tersebut diilhami oleh Ezra Pound yang terobsesi untuk membongkar kejahatan di balik pembentukan Bank Sentral. Para penerbit mengatakan kepadanya, mengapa ia melawan mereka dan mengabaikan tawaran menjadikannya sastrawan besar pemenang Nobel seperti Hemingway, Steinbeck, dan Faulkner (semuanya murid Ezra Pound).
Maka Mullins tetap menjadi sastrawan kelas bawah. Namanya mungkin baru akan dihormati nanti setelah masyarakat sadar bahwa apa yang ditulisnya dalam buku "Secret of The Federal Reserve (The London Connection)" adalah benar. Sementara Ezra Pound harus menghabiskan hidupnya di klinik kejiwaan setelah pemerintah tidak memiliki alasan untuk mengadilinya.
Rupert Murdoch, yang korporasi media massanya didanai oleh keluarga bankir Yahudi Rothschilds, mengatakan baru-baru ini, "Kita berada di tengah-tengah sejarah dunia dimana bangsa-bangsa akan didefinisikan kembali (redifined) dan masa depan akan berubah secara fundamental."
Murdoch benar bahwa orang-orang seperti keluarga Rothchild lah yang bisa menentukan masa depan bangsa-bangsa di dunia.
Che, Castro, dan Revolusi Kuba
Sampai beberapa hari lalu saya masih tidak bisa mengetahui dengan pasti, mengapa Amerika memiliki sebuah pangkalan militer di Kuba, tepatnya di Guantanamo. Sampai saat itu saya juga tidak memahami mengapa regim Batista dukungan Amerika, kalah dengan mudah melawan Castro, di negeri yang sangat dekat dengan Amerika.
Fidel Catro berhasil mengalahkan Batista berkat bantuan para kapitalis Amerika yang bekerja di birokrasi, militer dan media massa. Mereka menghentikan bantuan kepada Batista dan membiarkan Castro mendapat bantuan senjata besar-besaran dari Uni Sovyet. Ini membuat para pendukung Batista sadar bahwa "angin tidak lagi berhembus ke arah yang benar" dan mereka pun berubah haluan dengan mendukung Castro.
Hal ini tertulis di buku karangan Nataniel Weyl berjudul "Red Star Over Cuba". Weyl adalah seorang tokoh komunis Amerika tahun 1930-an, dan kenal dekat dengan tokoh-tokoh komunis Kuba. Saat itu ia sebenarnya bekerja untuk bankir Amerika dengan "menyamar" sebagai peneliti Federal Reserve (bank sentral AS) untuk wilayah Amerika Selatan. Weyl adalah seorang yahudi yang sadar dengan kejahatan komunisme dan kemudian mendedikasikan hidupnya untuk membongkar kejahatan komunisme di Amerika Latin.
Menurut Weyl baik Che Guevara dan Fidel Castro dididik oleh agen-agen komunis Sovyet sejak masih remaja. Guevara, kelahiran Argentina, menjadi penghubungan antara agen-agen rahasia Sovyet dengan kelompok Castro yang menyamar sebagai penduduk asli.
"Senjata rahasia Castro adalah uang --- jutaan dolar dengannya ia membeli kemenangan. Ia membeli semua tentara Batista, dan dalam satu kesempatan membayar $650 ribu tunai untuk satu batalion tentara dengan perlengkapannya.
Dubes Amerika di Kuba Earl Smith mengaku bahwa militer Kuba pimpinan Batista tidak pernah bertempur dengan sungguh-sungguh. Alasan utamanya, menurut Earl adalah perubahan politik Amerika yang meruntuhkan moral pasukan Batista.
Alasan lainnya adalah maraknya gerakan freemason bentukan Rothschild di Kuba. Baik Castro maupun Che adalah anggota mason. Saking besarnya gerakan ini, di ibukota Havana terdapat markas Grand Lodge berlantai 15.
Menurut Humberto Fantova yang menulis buku "Che! Hollywood's Favorite Tyrant", Guevara terlibat dalam pembantaian 10,000 warga Kuba setelah revolusi. Fantova menulis tentang Che, "pembunuh haus darah, pengecut, hipokrit. Tidaklah berlebihan mengatakan Che adalah godfather dari terorisme modern. Dan kini para penganutnya dengan naif memuji-mujinya terus menerus. Mereka adalah orang-orang yang oleh Stalin disebut sebagai "para idiot yang menyenangkan."
Segera setelah revolusi Kuba yang mendudukkan komunis di kursi kekuasaan Kuba, seorang wartawan menanyakan kepada Che, "Apakah Anda melihat dalam waktu dekat akan ada sebuah pemilu yang demokratis di Kuba." Che hanya tertawa mendengar pertanyaan naif tersebut. Hingga kini Kuba adalah kerajaan diktator dengan Castro sebagai rajanya. Komunisme yang melayani rakyat? Itu hanya sebuah alat untuk menggapai kekuasaan mutlak.
Kalau begitu sebenarnya yang terjadi, lalu bagaimana dengan insiden Invasi Teluk Babi oleh Amerika (invasi Amerika ke Kuba yang gagal)? Itu hanya operasi intelegen Amerika yang sengaja dibuat gagal untuk menaikkan image Castro.
Lalu bagaimana dengan pembunuhan Che oleh agen-agen Cia? Baik. Ia telah melaksanakan tugasnya dan tidak diperlukan lagi. Sebagaimana komunisme, ia hanyalah alat.
Kalau di Indonesia adalah masih dihormatinya sosok seperti Pramoedya Ananta Toer dan Tan Malaka. Saya pernah membaca biografi Che Guevara yang dimuat di majalah Matra dan edisi khusus Tan Malaka di majalah Tempo. Kini saya tahu kaitan antara Matra-Tempo dengan Che-Tan Malaka, yaitu melalui para eksekutif kedua majalah tersebut dengan Eric Samola, melewati taipan Ciputra dan berakhir di konglomerasi media massa global milik Yahudi.
Tetek bengek komunisme itu kini tengah mencapai kulminasi dengan diproduksinya sebuah film biografi Che Guevara berdurasi 4 jam 17 menit. Bukan oleh orang-orang komunis China, Kuba atau mantan komunis Uni Sovyet, melainkan oleh orang-orang "kapitalis" Hollywood Amerika. Tepatnya sutradara peraih Oscar Steven Soderbergh.
Bagi orang-orang liberal itu (pemuja kapitalis dan komunis sekaligus), rupanya Che lebih berharga dibandingkan para founding father Amerika sendiri. Demi Tuhan, bangsa Amerika bahkan memberi penghargaan sangat tinggi kepada sosok komunis yang lain, Marthin Luther King, dengan menjadikan hari kelahirannya sebagai hari libur nasional. Arwah para founding father pasti iri para arwah Marthin Luther.
Mick LaSalle, seorang kritikus film dari San Francisco pun dibuat bingung oleh sutradara Steven Soderbergh yang membuat film ini. "Jika saja Soderberg membuat film tentang George Washington dan Abraham Lincoln. Dengan membuat film tentang kepahlawanan Che Guevara, Soderberg menganggap kita semua setuju dengan pandangan dalam filmnya," katanya.
"Film itu merupakan versi gerilya komunis dari film Stations of the Cross, dimana kita melihat sosok Guevara dalam berbagai periode yang penuh kekerasan. Film ini tidak mengajak orang untuk berfikir, namun untuk memuji, bahkan mungkin memuja."
Ini bukan film pertama buatan Hollywood tentang Che, seorang pembunuh (tidak ada komunisme tanpa pembunuhan-pembunuhan massal yang keji) yang digambarkan sebagai "orang suci". Pada tahun 1969 Hollywood membuat film serupa dengan Omar Sharif berperan sebagai Che dan Jack Palance sebagai Fidel Castro. Selain itu pada tahun 2004 lalu juga diproduksi film sejenis dengan judul "The Motorcycle Diaries" (Che dikabarkan menggunakan motor trail selama menjalankan missi gerilyanya di Amerika Selatan), dan belasan film sejenis yang dibuat oleh stasion-stasion televisi.
Kaum komunis mengklaim perjuangannya adalah demi melayani rakyat. Mengejutkannya, masih cukup banyak orang bodoh yang mempercayainya, membaca dan melihat film-film Che dengan berlinangan air mata. Namun mengapa para pemuja Che juga melibatkan para sineas kapitalis Hollywood?
Sudah menjadi pengetahuan umum bahwa media massa dan dunia hiburan Amerika bahkan global, dikuasai oleh kapitalis Yahudi. Namun tidak banyak yang tahu bahwa para kapitalis Yahudi itulah yang menjadi "bapak komunisme" dunia.
Peristiwa-peristiwa besar dunia, hampir semuanya merupakan hasil skenario mereka untuk mengubah bentuk monopoli kekuasaan penciptaan uang dan kredit menjadi monopoli politik, bisnis, budaya dan agama. Mereka menciptakan kedua paham kapitalisme dan komunisme untuk membuat dunia sibuk menghabiskan energi, mengalihkan perhatian massa sekaligus menangguk untung dari bisnis peperangan komunisme versus kapitalisme.
Pada tahun 1953 Ketua Ford Foundation Howard Gaither mengakui kepada tim penyidik Congress bahwa kebijakan lembaganya adalah "menggunakan dana-dana sumbangan untuk merubah kehidupan kita di Amerika sehingga dapat bergabung dengan nyaman dengan Uni Sovyet."
Bangsa Amerika mempunyai ingatan sejarah yang sempit sehingga lupa bahwa agen-agen komunis nyaris berhasil merubah Amerika menjadi negara komunis, kalau saja tidak ada beberapa patriot dipimpin oleh anggota Congress McCarthy, yang melawan dan menggagalkan rencana tersebut. Akibat kegagalan tersebut maka rencanya besarnya diubah, yaitu mengganti Uni Sovyet menjadi kapitalis. Maka runtuhlah Uni Sovyet karena pengkhianatan Gorbachev dan Boris Yeltsin. Inilah sebabnya mengapa jargon komunisme "political corectness" kini menjadi jargon politik Amerika.
Mengapa yayasan-yayasan dan media massa mempromosikan feminisme, homoseksualisme, dan pornografi untuk menghancurkan masyarakat? Mengapa mereka mensponsori "liberalisme" dan "keberagaman" untuk menghancurkan identitas bangsa. Mengapa industri hiburan dan informasi berubah menjadi berorientasi sek, kekerasan, dan penyimpangan-penyimpangan sosial. Kita tidak sadar bahwa sebuah "mesin budaya" tengah mengendalikan kita menuju kehancuran masyarakat.
Eustace Mullins, seorang penulis murid sastrawan besar Ezra Pound, menulis buku tentang konspsirasi Bank Sentral Amerika. Tulisan tersebut diilhami oleh Ezra Pound yang terobsesi untuk membongkar kejahatan di balik pembentukan Bank Sentral. Para penerbit mengatakan kepadanya, mengapa ia melawan mereka dan mengabaikan tawaran menjadikannya sastrawan besar pemenang Nobel seperti Hemingway, Steinbeck, dan Faulkner (semuanya murid Ezra Pound).
Maka Mullins tetap menjadi sastrawan kelas bawah. Namanya mungkin baru akan dihormati nanti setelah masyarakat sadar bahwa apa yang ditulisnya dalam buku "Secret of The Federal Reserve (The London Connection)" adalah benar. Sementara Ezra Pound harus menghabiskan hidupnya di klinik kejiwaan setelah pemerintah tidak memiliki alasan untuk mengadilinya.
Rupert Murdoch, yang korporasi media massanya didanai oleh keluarga bankir Yahudi Rothschilds, mengatakan baru-baru ini, "Kita berada di tengah-tengah sejarah dunia dimana bangsa-bangsa akan didefinisikan kembali (redifined) dan masa depan akan berubah secara fundamental."
Murdoch benar bahwa orang-orang seperti keluarga Rothchild lah yang bisa menentukan masa depan bangsa-bangsa di dunia.
Che, Castro, dan Revolusi Kuba
Sampai beberapa hari lalu saya masih tidak bisa mengetahui dengan pasti, mengapa Amerika memiliki sebuah pangkalan militer di Kuba, tepatnya di Guantanamo. Sampai saat itu saya juga tidak memahami mengapa regim Batista dukungan Amerika, kalah dengan mudah melawan Castro, di negeri yang sangat dekat dengan Amerika.
Fidel Catro berhasil mengalahkan Batista berkat bantuan para kapitalis Amerika yang bekerja di birokrasi, militer dan media massa. Mereka menghentikan bantuan kepada Batista dan membiarkan Castro mendapat bantuan senjata besar-besaran dari Uni Sovyet. Ini membuat para pendukung Batista sadar bahwa "angin tidak lagi berhembus ke arah yang benar" dan mereka pun berubah haluan dengan mendukung Castro.
Hal ini tertulis di buku karangan Nataniel Weyl berjudul "Red Star Over Cuba". Weyl adalah seorang tokoh komunis Amerika tahun 1930-an, dan kenal dekat dengan tokoh-tokoh komunis Kuba. Saat itu ia sebenarnya bekerja untuk bankir Amerika dengan "menyamar" sebagai peneliti Federal Reserve (bank sentral AS) untuk wilayah Amerika Selatan. Weyl adalah seorang yahudi yang sadar dengan kejahatan komunisme dan kemudian mendedikasikan hidupnya untuk membongkar kejahatan komunisme di Amerika Latin.
Menurut Weyl baik Che Guevara dan Fidel Castro dididik oleh agen-agen komunis Sovyet sejak masih remaja. Guevara, kelahiran Argentina, menjadi penghubungan antara agen-agen rahasia Sovyet dengan kelompok Castro yang menyamar sebagai penduduk asli.
"Senjata rahasia Castro adalah uang --- jutaan dolar dengannya ia membeli kemenangan. Ia membeli semua tentara Batista, dan dalam satu kesempatan membayar $650 ribu tunai untuk satu batalion tentara dengan perlengkapannya.
Dubes Amerika di Kuba Earl Smith mengaku bahwa militer Kuba pimpinan Batista tidak pernah bertempur dengan sungguh-sungguh. Alasan utamanya, menurut Earl adalah perubahan politik Amerika yang meruntuhkan moral pasukan Batista.
Alasan lainnya adalah maraknya gerakan freemason bentukan Rothschild di Kuba. Baik Castro maupun Che adalah anggota mason. Saking besarnya gerakan ini, di ibukota Havana terdapat markas Grand Lodge berlantai 15.
Menurut Humberto Fantova yang menulis buku "Che! Hollywood's Favorite Tyrant", Guevara terlibat dalam pembantaian 10,000 warga Kuba setelah revolusi. Fantova menulis tentang Che, "pembunuh haus darah, pengecut, hipokrit. Tidaklah berlebihan mengatakan Che adalah godfather dari terorisme modern. Dan kini para penganutnya dengan naif memuji-mujinya terus menerus. Mereka adalah orang-orang yang oleh Stalin disebut sebagai "para idiot yang menyenangkan."
Segera setelah revolusi Kuba yang mendudukkan komunis di kursi kekuasaan Kuba, seorang wartawan menanyakan kepada Che, "Apakah Anda melihat dalam waktu dekat akan ada sebuah pemilu yang demokratis di Kuba." Che hanya tertawa mendengar pertanyaan naif tersebut. Hingga kini Kuba adalah kerajaan diktator dengan Castro sebagai rajanya. Komunisme yang melayani rakyat? Itu hanya sebuah alat untuk menggapai kekuasaan mutlak.
Kalau begitu sebenarnya yang terjadi, lalu bagaimana dengan insiden Invasi Teluk Babi oleh Amerika (invasi Amerika ke Kuba yang gagal)? Itu hanya operasi intelegen Amerika yang sengaja dibuat gagal untuk menaikkan image Castro.
Lalu bagaimana dengan pembunuhan Che oleh agen-agen Cia? Baik. Ia telah melaksanakan tugasnya dan tidak diperlukan lagi. Sebagaimana komunisme, ia hanyalah alat.
SECRETS OF THE FEDERAL RESERVE
The London Connection
By Eustace Mullins
http://www.theforbiddenknowledge.com/hardtruth/federal_reserve_secrets.htm
Dedicated to two of the finest scholars of the
twentieth century GEORGE STIMPSON and
EZRA POUND who generously gave of their vast knowledge to
a young writer to guide him in a field which he could not have managed alone.
ACKNOWLEDGEMENTS
I wish to thank my former fellow members of the
staff of the Library of Congress whose very kind assistance, cooperation and
suggestions made the early versions of this book possible. I also wish to thank
the staffs of the Newberry Library, Chicago, the New York City Public Library,
the Alderman Library of the University of Virginia, and the McCormick Library of
Washington and Lee University, Lexington, Virginia, for their invaluable
assistance in the completion of thirty years of further research for this
definitive work on the Federal Reserve System.
About the Author
Eustace Mullins is a veteran of the United
States Air Force, with thirty-eight months of active service during World War
II. A native Virginian, he was educated at Washington and Lee University, New
York University, Ohio University, the University of North Dakota, the Escuelas
des Bellas Artes, San Miguel de Allende, Mexico, and the Institute of
Contemporary Arts, Washington, D.C.
The original book, published under the title
Mullins On The Federal Reserve, was commissioned by the poet Ezra Pound in 1948.
Ezra Pound was a political prisoner for thirteen and a half years at St.
Elizabeth’s Hospital, Washington, D.C. (a Federal institution for the insane).
His release was accomplished largely through the efforts of Mr. Mullins.
The research at the Library of Congress was
directed and reviewed daily by George Stimpson, founder of the National Press
Club in Washington, whom The New York Times on September 28, 1952 called,
"A highly regarded reference source in the capitol. Government officials,
Congressmen, and reporters went to him for information on any subject."
Published in 1952 by Kasper and Horton, New
York, the original book was the first nationally-circulated revelation of the
secret meetings of the international bankers at Jekyll Island, Georgia,
1907-1910, at which place the draft of the Federal Reserve Act of 1913 was
written.
During the intervening years, the author
continued to gather new and more startling information about the backgrounds of
the people who direct the Federal Reserve policies. New information gathered
over the years from hundreds of newspapers, periodicals, and books give
corroborating insight into the connections of the international banking houses.*
While researching this material, Eustace
Mullins was on the staff of the Library of Congress. Mullins later was a
consultant on highway finance for the American Petroleum Institute, consultant
on hotel development for Institutions Magazine, and editorial director for the
Chicago Motor Club’s four publications.
__________________________
* The London Acceptance Council is limited to
seventeen international banking houses authorized by the Bank of England to
handle foreign exchange.
ABOUT THE COVER
The cover reproduces the outline of the eagle
from the red shield, the coat of arms of the city of Frankfurt, Germany, adapted
by Mayer Amschel Bauer (1744-1812) who changed his name from Bauer to Rothschild
("Red Shield"). Rothschild added five golden arrows held in the eagle’s
talons, signifying his five sons who operated the five banking houses of the
international House of Rothschild: Frankfurt, London, Paris, Vienna, and Naples.
Table of Contents
Chapter One Jekyll Island 1
Chapter Two The Aldrich Plan 10
Chapter Three The Federal Reserve Act 16
Chapter Four The Federal Advisory Council 40
Chapter Five The House of Rothschild 47
Chapter Six The London Connection 63
Chapter Seven The Hitler Connection 69
Chapter Eight World War One 82
Chapter Nine The Agricultural Depression 114
Chapter Ten The Money Creators 119
Chapter Eleven Lord Montagu Norman 131
Chapter Twelve The Great Depression 143
Chapter Thirteen The 1930's 151
Chapter Fourteen Congressional Expose 171
Addendum 179
Appendix I 181
Biographies 186
Bibliography 193
Index 197
@The above facsimile is reproduced from page 60
of "HISTORICAL BEGINNINGS . . . . THE FEDERAL RESERVE", published by
the Federal Reserve Bank of Boston in its seventh printing, 1982.
Foreword
In 1949, while I was visiting Ezra Pound who
was a political prisoner at St. Elizabeth’s Hospital, Washington, D.C. (a
Federal institution for the insane), Dr. Pound asked me if I had ever heard of
the Federal Reserve System. I replied that I had not, as of the age of 25. He
then showed me a ten dollar bill marked "Federal Reserve Note" and
asked me if I would do some research at the Library of Congress on the Federal
Reserve System which had issued this bill. Pound was unable to go to the Library
himself, as he was being held without trial as a political prisoner by the
United States government. After he was denied broadcasting time in the U.S., Dr.
Pound broadcast from Italy in an effort to persuade people of the United States
not to enter World War II. Franklin D. Roosevelt had personally ordered Pound’s
indictment, spurred by the demands of his three personal assistants, Harry
Dexter White, Lauchlin Currie, and Alger Hiss, all of whom were subsequently
identified as being connected with Communist espionage.
I had no interest in money or banking as a
subject, because I was working on a novel. Pound offered to supplement my income
by ten dollars a week for a few weeks. My initial research revealed evidence of
an international banking group which had secretly planned the writing of the
Federal Reserve Act and Congress’ enactment of the plan into law. These
findings confirmed what Pound had long suspected. He said, "You must work
on it as a detective story." I was fortunate in having my research at the
Library of Congress directed by a prominent scholar, George Stimpson, founder of
the National Press Club, who was described by The New York Times of September
28, 1952: "Beloved by Washington newspapermen as ‘our walking Library of
Congress’, Mr. Stimpson was a highly regarded reference source in the Capitol.
Government officials, Congressmen and reporters went to him for information on
any subject."
I did research four hours each day at the
Library of Congress, and went to St. Elizabeth’s Hospital in the afternoon.
Pound and I went over the previous day’s notes. I then had dinner with George
Stimpson at Scholl’s Cafeteria while he went over my material, and I then went
back to my room to type up the corrected notes. Both Stimpson and Pound made
many suggestions in guiding me in a field in which I had no previous experience.
When Pound’s resources ran low, I applied to the Guggenheim Foundation,
Huntington Hartford Foundation, and other foundations to complete my research on
the Federal Reserve. Even though my foundation applications were sponsored by
the three leading poets of America, Ezra Pound, E.E. Cummings, and Elizabeth
Bishop, all of the foundations refused to sponsor this research. I then wrote up
my findings to date, and in 1950 began efforts to market this manuscript in New
York. Eighteen publishers turned it down without comment, but the nineteenth,
Devin Garrity, president of Devin Adair Publishing Company, gave me some
friendly advice in his office. "I like your book, but we can’t print
it," he told me. "Neither can anybody else in New York. Why don’t
you bring in a prospectus for your novel, and I think we can give you an
advance. You may as well forget about getting the Federal Reserve book
published. I doubt if it could ever be printed."
This was devastating news, coming after two
years of intensive work. I reported back to Pound, and we tried to find a
publisher in other parts of the country. After two years of fruitless
submissions, the book was published in a small edition in 1952 by two of Pound’s
disciples, John Kasper and David Horton, using their private funds, under the
title Mullins on the Federal Reserve. In 1954, a second edition, with
unauthorized alterations, was published in New Jersey, as The Federal Reserve
Conspiracy. In 1955, Guido Roeder brought out a German edition in Oberammergau,
Germany. The book was seized and the entire edition of 10,000 copies burned by
government agents led by Dr. Otto John.
The burning of the book was upheld April 21,
1961 by judge Israel Katz of the Bavarian Supreme Court. The U.S. Government
refused to intervene, because U.S. High Commissioner to Germany, James B. Conant
(president of Harvard University 1933 to 1953), had approved the initial book
burning order. This is the only book which has been burned in Germany since
World War II. In 1968 a pirated edition of this book appeared in California.
Both the FBI and the U.S. Postal inspectors refused to act, despite numerous
complaints from me during the next decade. In 1980 a new German edition
appeared. Because the U.S. Government apparently no longer dictated the internal
affairs of Germany, the identical book which had been burned in 1955 now
circulates in Germany without interference.
I had collaborated on several books with Mr.
H.L. Hunt and he suggested that I should continue my long-delayed research on
the Federal Reserve and bring out a more definitive version of this book. I had
just signed a contract to write the authorized biography of Ezra Pound, and the
Federal Reserve book had to be postponed. Mr. Hunt passed away before I could
get back to my research, and once again I faced the problem of financing
research for the book.
My original book had traced and named the
shadowy figures in the United States who planned the Federal Reserve Act. I now
discovered that the men whom I exposed in 1952 as the shadowy figures behind the
operation of the Federal Reserve System were themselves shadows, the American
fronts for the unknown figures who became known as the "London
Connection." I found that notwithstanding our successes in the Wars of
Independence of 1812 against England, we remained an economic and financial
colony of Great Britain. For the first time, we located the original
stockholders of the Federal Reserve Banks and traced their parent companies to
the London Connection.
This research is substantiated by citations and
documentation from hundreds of newspapers, periodicals and books and charts
showing blood, marriage, and business relationships. More than a thousand issues
of The New York Times on microfilm have been checked not only for original
information, but verification of statements from other sources.
It is a truism of the writing profession that a
writer has only one book within him. This seems applicable in my case, because I
am now in the fifth decade of continuous writing on a single subject, the inside
story of the Federal Reserve System. This book was from its inception
commissioned and guided by Ezra Pound. Four of his protégés have previously
been awarded the Nobel Prize for Literature, William Butler Yeats for his later
poetry, James Joyce for "Ulysses", Ernest Hemingway for "The Sun
Also Rises", and T.S. Elliot for "The Waste Land". Pound played a
major role in the inspiration and in the editing of these works--which leads us
to believe that this present work, also inspired by Pound, represents an ongoing
literary tradition.
Although this book in its inception was
expected to be a tortuous work on economic and monetary techniques, it soon
developed into a story of such universal and dramatic appeal that from the
outset, Ezra Pound urged me to write it as a detective story, a genre which was
invented by my fellow Virginian, Edgar Allan Poe. I believe that the continuous
circulation of this book during the past forty years has not only exonerated
Ezra Pound for his much condemned political and monetary statements, but also
that it has been, and will continue to be, the ultimate weapon against the
powerful conspirators who compelled him to serve thirteen and a half years
without trial, as a political prisoner held in an insane asylum a la KGB. His
earliest vindication came when the government agents who represented the
conspirators refused to allow him to testify in his own defense; the second
vindication came in 1958 when these same agents dropped all charges against him,
and he walked out of St. Elizabeth’s Hospital, a free man once more. His third
and final vindication is this work, which documents every aspect of his exposure
of the ruthless international financiers to whom Ezra Pound became but one more
victim, doomed to serve years as the Man in the Iron Mask, because he had dared
to alert his fellow-Americans to their furtive acts of treason against all
people of the United States.
In my lectures throughout this nation, and in
my appearances on many radio and television programs, I have sounded the toxin
that the Federal Reserve System is not Federal; it has no reserves; and it is
not a system at all, but rather, a criminal syndicate. From November, 1910, when
the conspirators met on Jekyll Island, Georgia, to the present time, the
machinations of the Federal Reserve bankers have been shrouded in secrecy.
Today, that secrecy has cost the American people a three trillion dollar debt,
with annual interest payments to these bankers amounting to some three hundred
billion dollars per year, sums which stagger the imagination, and which in
themselves are ultimately unpayable. Officials of the Federal Reserve System
routinely issue remonstrances to the public, much as the Hindu fakir pipes an
insistent tune to the dazed cobra which sways its head before him, not to
resolve the situation, but to prevent it from striking him. Such was the
soothing letter written by Donald J. Winn, Assistant to the Board of Governors
in response to an inquiry by a Congressman, the Honorable Norman D. Shumway, on
March 10, 1983. Mr. Winn states that "The Federal Reserve System was
established by an act of Congress in 1913 and is not a ‘private corporation’."
On the next page, Mr. Winn continues, "The stock of the Federal Reserve
Banks is held entirely by commercial banks that are members of the Federal
Reserve System." He offers no explanation as to why the government has
never owned a single share of stock in any Federal Reserve Bank, or why the
Federal Reserve System is not a "private corporation" when all of its
stock is owned by "private corporations".
American history in the twentieth century has
recorded the amazing achievements of the Federal Reserve bankers. First, the
outbreak of World War I, which was made possible by the funds available from the
new central bank of the United States. Second, the Agricultural Depression of
1920. Third, the Black Friday Crash on Wall Street of October, 1929 and the
ensuing Great Depression. Fourth, World War II. Fifth, the conversion of the
assets of the United States and its citizens from real property to paper assets
from 1945 to the present, transforming a victorious America and foremost world
power in 1945 to the world’s largest debtor nation in 1990. Today, this nation
lies in economic ruins, devastated and destitute, in much the same dire straits
in which Germany and Japan found themselves in 1945. Will Americans act to
rebuild our nation, as Germany and Japan have done when they faced the identical
conditions which we now face--or will we continue to be enslaved by the
Babylonian debt money system which was set up by the Federal Reserve Act in 1913
to complete our total destruction? This is the only question which we have to
answer, and we do not have much time left to answer it.
Because of the depth and the importance of the
information which I had developed at the Library of Congress under the tutelage
of Ezra Pound, this work became the happy hunting ground for many other would-be
historians, who were unable to research this material for themselves. Over the
past four decades, I have become accustomed to seeing this material appear in
many other books, invariably attributed to other writers, with my name never
mentioned. To add insult to injury, not only my material, but even my title has
been appropriated, in a massive, if obtuse, work called "Secrets of the
Temple--the Federal Reserve". This heavily advertised book received reviews
ranging from incredulous to hilarious. Forbes Magazine advised its readers to
read their review and save their money, pointing out that "a reader will
discover no secrets" and that "This is one of those books whose
fanfares far exceed their merit." This was not accidental, as this
overblown whitewash of the Federal Reserve bankers was published by the most
famous nonbook publisher in the world.
After my initial shock at discovering that the
most influential literary personality of the twentieth century, Ezra Pound, was
imprisoned in "the Hellhole" in Washington, I immediately wrote for
assistance to a Wall Street financier at whose estate I had frequently been a
guest. I reminded him that as a patron of the arts, he could not afford to allow
Pound to remain in such inhuman captivity. His reply shocked me even more. He
wrote back that "your friend can well stay where he is." It was some
years before I was able to understand that, for this investment banker and his
colleagues, Ezra Pound would always be "the enemy".
Eustace Mullins
Jackson Hole, Wyoming
1991
Introduction
Here are the simple facts of the great
betrayal. Wilson and House knew that they were doing something momentous. One
cannot fathom men’s motives and this pair probably believed in what they were
up to. What they did not believe in was representative government. They believed
in government by an uncontrolled oligarchy whose acts would only become apparent
after an interval so long that the electorate would be forever incapable of
doing anything efficient to remedy depredations.
EZRA POUND
(St. Elizabeth’s Hospital,
Washington, D.C. 1950)
(AUTHOR’S NOTE: Dr. Pound wrote this
introduction for the earliest version of this book, published by Kasper and
Horton, New York, 1952. Because he was being held as a political prisoner
without trial by the Federal Government, he could not afford to allow his name
to appear on the book because of additional reprisals against him. Neither could
he allow the book to be dedicated to him, although he had commissioned its
writing. The author is gratified to be able to remedy these necessary omissions,
thirty-three years after the events.)
JEFFERSON’S OPINION ON THE
CONSTITUTIONALITY OF THE BANK
February 15, 1791
(The Writings of Thomas Jefferson, ed. by H. E.
Bergh, Vol. III, p. 145 ff.)
The bill for establishing a national bank, in
1791, undertakes, among other things,--
1. To form the subscribers into a corporation.
2. To enable them, in their corporate
capacities, to receive grants of lands; and, so far, is against the laws of
mortmain.
3. To make alien subscribers capable of holding
lands; and so far is against the laws of alienage.
4. To transmit these lands, on the death of a
proprietor, to a certain line of successors; and so far, changes the course of
descents.
5. To put the lands out of the reach of
forfeiture, or escheat; and so far, is against the laws of forfeiture and
escheat.
6. To transmit personal chattels to successors,
in a certain line; and so far, is against the laws of distribution.
7. To give them the sole and exclusive right of
banking, under the national authority; and, so far, is against the laws of
monopoly.
8. To communicate to them a power to make laws,
paramount to the laws of the states; for so they must be construed, to protect
the institution from the control of the state legislatures; and so probably they
will be construed.
I consider the foundation of the Constitution
as laid on this ground--that all powers not delegated to the United States, by
the Constitution, nor prohibited by it to the states, are reserved to the
states, or to the people (12th amend.). To take a single step beyond the
boundaries thus specially drawn around the powers of Congress, is to take
possession of a boundless field of power, no longer susceptible of any
definition.
The incorporation of a bank, and the powers
assumed by this bill, have not, in my opinion, been delegated to the United
States by the Constitution.
CHAPTER ONE
Jekyll Island
"The matter of a uniform discount rate was
discussed and settled at Jekyll Island."--Paul M. Warburg1
On the night of November 22, 1910, a group of
newspaper reporters stood disconsolately in the railway station at Hoboken, New
Jersey. They had just watched a delegation of the nation’s leading financiers
leave the station on a secret mission. It would be years before they discovered
what that mission was, and even then they would not understand that the history
of the United States underwent a drastic change after that night in Hoboken.
The delegation had left in a sealed railway
car, with blinds drawn, for an undisclosed destination. They were led by Senator
Nelson Aldrich, head of the National Monetary Commission. President Theodore
Roosevelt had signed into law the bill creating the National Monetary Commission
in 1908, after the tragic Panic of 1907 had resulted in a public outcry that the
nation’s monetary system be stabilized. Aldrich had led the members of the
Commission on a two-year tour of Europe, spending some three hundred thousand
dollars of public money. He had not yet made a report on the results of this
trip, nor had he offered any plan for banking reform.
Accompanying Senator Aldrich at the Hoboken
station were his private secretary, Shelton; A. Piatt Andrew, Assistant
Secretary of the Treasury, and Special Assistant of the National Monetary
Commission; Frank Vanderlip, president of the National City Bank of New York,
Henry P. Davison, senior partner of J.P. Morgan Company, and generally regarded
as Morgan’s personal emissary; and Charles D. Norton, president of the
Morgan-dominated First National Bank of New York. Joining the group just before
the train left the station were Benjamin Strong, also known as a lieutenant of
J.P. Morgan; and Paul Warburg, a recent immigrant from Germany who had joined
the banking house of Kuhn, Loeb
__________________________
1 Prof. Nathaniel Wright Stephenson, Paul
Warburg’s Memorandum, Nelson Aldrich A Leader in American Politics, Scribners,
N.Y. 1930
1
and Company, New York as a partner earning five
hundred thousand dollars a year.
Six years later, a financial writer named
Bertie Charles Forbes (who later founded the Forbes Magazine; the present
editor, Malcom Forbes, is his son), wrote:
"Picture a party of the nation’s
greatest bankers stealing out of New York on a private railroad car under cover
of darkness, stealthily hieing hundred of miles South, embarking on a mysterious launch, sneaking onto an island deserted by all
but a few servants, living there a full week under such rigid secrecy that the names of not one of
them was once mentioned lest the servants learn
the identity and disclose to the world this
strangest, most secret expedition in the history of American finance. I am not romancing; I am
giving to the world, for the first time, the real story of how the famous Aldrich currency report, the
foundation of our new currency system, was written . . . . The utmost secrecy was enjoined
upon all. The public must not glean a hint of what
was to be done. Senator Aldrich notified each
one to go quietly into a private car of which the railroad had received orders to draw up on an
unfrequented platform. Off the party set. New York’s ubiquitous reporters had been foiled .
. . Nelson (Aldrich) had confided to Henry, Frank, Paul and Piatt that he was to keep them locked
up at Jekyll Island, out of the rest of the world, until they had evolved and compiled a
scientific currency system for the United States, the real birth of the present Federal Reserve System,
the plan done on Jekyll Island in the conference with
Paul, Frank and Henry . . . . Warburg is the
link that binds the Aldrich system and the present
system together. He more than any one man has
made the system possible as a working reality."2
The official biography of Senator Nelson
Aldrich states:
"In the autumn of 1910, six men went out
to shoot ducks, Aldrich, his secretary Shelton, Andrews, Davison, Vanderlip and
Warburg. Reporters were waiting at the Brunswick (Georgia) station. Mr. Davison
went out and talked to them. The reporters dispersed and the secret of the
strange journey was not divulged. Mr. Aldrich asked him how he had managed it
and he did not volunteer the information."3
Davison had an excellent reputation as the
person who could conciliate warring factions, a role he had performed for J.P.
Morgan during the settling of the Money Panic of 1907. Another Morgan partner,
T.W. Lamont, says: "Henry P. Davison served as arbitrator of
the Jekyll Island expedition."4
__________________________
2 "CURRENT OPINION", December, 1916,
p. 382.
3 Nathaniel Wright Stephenson, Nelson W.
Aldrich, A Leader in American Politics, Scribners, N.Y. 1930, Chap. XXIV "Jekyll
Island"
4 T.W. Lamont, Henry P. Davison, Harper, 1933
2
From these references, it is possible to piece
together the story. Aldrich’s private car, which had left Hoboken station with
its shades drawn, had taken the financiers to Jekyll Island, Georgia. Some years
earlier, a very exclusive group of millionaires, led by J.P. Morgan, had
purchased the island as a winter retreat. They called themselves the Jekyll
Island Hunt Club, and, at first, the island was used only for hunting
expeditions, until the millionaires realized that its pleasant climate offered a
warm retreat from the rigors of winters in New York, and began to build splendid
mansions, which they called "cottages", for their families’ winter
vacations. The club building itself, being quite isolated, was sometimes in
demand for stag parties and other pursuits unrelated to hunting. On such
occasions, the club members who were not invited to these specific outings were
asked not to appear there for a certain number of days. Before Nelson Aldrich’s
party had left New York, the club’s members had been notified that the club
would be occupied for the next two weeks.
The Jekyll Island Club was chosen as the place
to draft the plan for control of the money and credit of the people of the
United States, not only because of its isolation, but also because it was the
private preserve of the people who were drafting the plan. The New York Times
later noted, on May 3, 1931, in commenting on the death of George F. Baker, one
of J.P. Morgan’s closest associates, that "Jekyll Island Club has lost
one of its most distinguished members. One-sixth of the total wealth of the
world was represented by the members of the Jekyll Island Club." Membership
was by inheritance only.
The Aldrich group had no interest in hunting.
Jekyll Island was chosen for the site of the preparation of the central bank
because it offered complete privacy, and because there was not a journalist
within fifty miles. Such was the need for secrecy that the members of the party
agreed, before arriving at Jekyll Island, that no last names would be used at
any time during their two week stay. The group later referred to themselves as
the First Name Club, as the last names of Warburg, Strong, Vanderlip and the
others were prohibited during their stay. The customary attendants had been
given two week vacations from the club, and new servants brought in from the
mainland for this occasion who did not know the names of any of those present.
Even if they had been interrogated after the Aldrich party went back to New
York, they could not have given the names. This arrangement proved to be so
satisfactory that the members, limited to those who had actually been present at
Jekyll Island, later had a number of informal get-togethers in New York.
Why all this secrecy? Why this thousand mile
trip in a closed railway car to a remote hunting club? Ostensibly, it was to
carry out a program of public service, to prepare banking reform which would be
a boon to the people of the United States, which had been ordered by the
National
3
Monetary Commission. The participants were no
strangers to public benefactions. Usually, their names were inscribed on brass
plaques, or on the exteriors of buildings which they had donated. This was not
the procedure which they followed at Jekyll Island. No brass plaque was ever
erected to mark the selfless actions of those who met at their private hunt club
in 1910 to improve the lot of every citizen of the United States.
In fact, no benefaction took place at Jekyll
Island. The Aldrich group journeyed there in private to write the banking and
currency legislation which the National Monetary Commission had been ordered to
prepare in public. At stake was the future control of the money and credit of
the United States. If any genuine monetary reform had been prepared and
presented to Congress, it would have ended the power of the elitist one world
money creators. Jekyll Island ensured that a central bank would be established
in the United States which would give these bankers everything they had always
wanted.
As the most technically proficient of those
present, Paul Warburg was charged with doing most of the drafting of the plan.
His work would then be discussed and gone over by the rest of the group. Senator
Nelson Aldrich was there to see that the completed plan would come out in a form
which he could get passed by Congress, and the other bankers were there to
include whatever details would be needed to be certain that they got everything
they wanted, in a finished draft composed during a onetime stay. After they
returned to New York, there could be no second get together to rework their
plan. They could not hope to obtain such secrecy for their work on a second
journey.
The Jekyll Island group remained at the club
for nine days, working furiously to complete their task. Despite the common
interests of those present, the work did not proceed without friction. Senator
Aldrich, always a domineering person, considered himself the chosen leader of
the group, and could not help ordering everyone else about. Aldrich also felt
somewhat out of place as the only member who was not a professional banker. He
had had substantial banking interests throughout his career, but only as a
person who profited from his ownership of bank stock. He knew little about the
technical aspects of financial operations. His opposite number, Paul Warburg,
believed that every question raised by the group demanded, not merely an answer,
but a lecture. He rarely lost an opportunity to give the members a long
discourse designed to impress them with the extent of his knowledge of banking.
This was resented by the others, and often drew barbed remarks from Aldrich. The
natural diplomacy of Henry P. Davison proved to be the catalyst which kept them
at their work. Warburg’s thick alien accent grated on them, and constantly
reminded them that they had to accept his presence if a central bank plan was to
be devised which would guarantee them their future pro-
4
fits. Warburg made little effort to smooth over
their prejudices, and contested them on every possible occasion on technical
banking questions, which he considered his private preserve.
"In all conspiracies there must be great
secrecy."5
The "monetary reform" plan prepared
at Jekyll Island was to be presented to Congress as the completed work of the
National Monetary Commission. It was imperative that the real authors of the
bill remain hidden. So great was popular resentment against bankers since the
Panic of 1907 that no Congressman would dare to vote for a bill bearing the Wall
Street taint, no matter who had contributed to his campaign expenses. The Jekyll
Island plan was a central bank plan, and in this country there was a long
tradition of struggle against inflicting a central bank on the American people.
It had begun with Thomas Jefferson’s fight against Alexander Hamilton’s
scheme for the First Bank of the United States, backed by James Rothschild. It
had continued with President Andrew Jackson’s successful war against Alexander
Hamilton’s scheme for the Second Bank of the United States, in which Nicholas
Biddle was acting as the agent for James Rothschild of Paris. The result of that
struggle was the creation of the Independent Sub-Treasury System, which
supposedly had served to keep the funds of the United States out of the hands of
the financiers. A study of the panics of 1873, 1893, and 1907 indicates that
these panics were the result of the international bankers’ operations in
London. The public was demanding in 1908 that Congress enact legislation to
prevent the recurrence of artificially induced money panics. Such monetary
reform now seemed inevitable. It was to head off and control such reform that
the National Monetary Commission had been set up with Nelson Aldrich at its
head, since he was majority leader of the Senate.
The main problem, as Paul Warburg informed his
colleagues, was to avoid the name "Central Bank". For that reason, he
had decided upon the designation of "Federal Reserve System". This
would deceive the people into thinking it was not a central bank. However, the
Jekyll Island plan would be a central bank plan, fulfilling the main functions
of a central bank; it would be owned by private individuals who would profit
from ownership of shares. As a bank of issue, it would control the nation’s
money and credit.
In the chapter on Jekyll Island in his
biography of Aldrich, Stephenson writes of the conference:
"How was the Reserve Bank to be
controlled? It must be controlled by Congress. The government
was to be represented in the board of
directors, it was to have full knowledge of all the Bank’s,
affairs, but a majority
__________________________
5 Clarendon, Hist. Reb. 1647
5
of the directors were to be chosen, directly or
indirectly, by the banks of the association."6
Thus the proposed Federal Reserve Bank was to
be "controlled by Congress" and answerable to the government, but the
majority of the directors were to be chosen, "directly or indirectly"
by the banks of the association. In the final refinement of Warburg’s plan,
the Federal Reserve Board of Governors would be appointed by the President of
the United States, but the real work of the Board would be controlled by a
Federal Advisory Council, meeting with the Governors. The Council would be
chosen by the directors of the twelve Federal Reserve Banks, and would remain
unknown to the public.
The next consideration was to conceal the fact
that the proposed "Federal Reserve System" would be dominated by the
masters of the New York money market. The Congressmen from the South and the
West could not survive if they voted for a Wall Street plan. Farmers and small
businessmen in those areas had suffered most from the money panics. There had
been great popular resentment against the Eastern bankers, which during the
nineteenth century became a political movement known as "populism".
The private papers of Nicholas Biddle, not released until more than a century
after his death, show that quite early on the Eastern bankers were fully aware
of the widespread public opposition to them.
Paul Warburg advanced at Jekyll Island the
primary deception which would prevent the citizens from recognizing that his
plan set up a central bank. This was the regional reserve system. He proposed a
system of four (later twelve) branch reserve banks located in different sections
of the country. Few people outside the banking world would realize that the
existing concentration of the nation’s money and credit structure in New York
made the proposal of a regional reserve system a delusion.
Another proposal advanced by Paul Warburg at
Jekyll Island was the manner of selection of administrators for the proposed
regional reserve system. Senator Nelson Aldrich had insisted that the officials
should be appointive, not elected, and that Congress should have no role in
their selection. His Capitol Hill experience had taught him that congressional
opinion would often be inimical to the Wall Street interests, as Congressmen
from the West and South might wish to demonstrate to their constituents that
they were protecting them against the Eastern bankers.
Warburg responded that the administrators of
the proposed central banks should be subject to executive approval by the
President. This patent removal of the system from Congressional control meant
that the
__________________________
6 Nathaniel Wright Stephenson, Nelson W.
Aldrich, A Leader in American Politics, Scribners, N.Y. 1930, Chap. XXIV "Jekyll
Island" p. 379
6
Federal Reserve proposal was unconstitutional
from its inception, because the Federal Reserve System was to be a bank of
issue. Article 1, Sec. 8, Par. 5 of the Constitution expressly charges Congress
with "the power to coin money and regulate the value thereof.".
Warburg’s plan would deprive Congress of its sovereignty, and the systems of
checks and balances of power set up by Thomas Jefferson in the Constitution
would now be destroyed. Administrators of the proposed system would control the
nation’s money and credit, and would themselves be approved by the executive
department of the government. The judicial department (the Supreme Court, etc.)
was already virtually controlled by the executive department through
presidential appointment to the bench.
Paul Warburg later wrote a massive exposition
of his plan, The Federal Reserve System, Its Origin and Growth7 of some 1750
pages, but the name "Jekyll Island" appears nowhere in this text. He
does state (Vol. 1, p. 58):
"But then the conference closed, after a
week of earnest deliberation, the rough draft of what later
became the Aldrich Bill had been agreed upon,
and a plan had been outlined which provided for a ‘National Reserve
Association,’ meaning a central reserve organization with an elastic note
issue based on gold and commercial paper."
On page 60, Warburg writes, "The results
of the conference were entirely confidential. Even the fact there had been a
meeting was not permitted to become public." He adds in a footnote,
"Though eighteen [sic] years have since gone by, I do not feel free to give
a description of this most interesting conference concerning which Senator
Aldrich pledged all participants to secrecy."
B.C. Forbes’ revelation8 of the secret
expedition to Jekyll Island, had had surprisingly little impact. It did not
appear in print until two years after the Federal Reserve Act had been passed by
Congress, hence it was never read during the period when it could have had an
effect, that
__________________________
7 Paul Warburg, The Federal Reserve System, Its
Origin and Growth, Volume I, p. 58, Macmillan, New York, 1930
8 CURRENT OPINION, December, 1916, p. 382
7
is, during the Congressional debate on the
bill. Forbes’ story was also dismissed, by those "in the know," as
preposterous, and a mere invention. Stephenson mentions this on page 484 of his
book about Aldrich.9
"This curious episode of Jekyll Island has
been generally regarded as a myth. B.C. Forbes got
some information from one of the reporters. It
told in vague outline the Jekyll Island story, but
made no impression and was generally regarded
as a mere yarn."
The coverup of the Jekyll Island conference
proceeded along two lines, both of which were successful. The first, as
Stephenson mentions, was to dismiss the entire story as a romantic concoction
which never actually took place. Although there were brief references to Jekyll
Island in later books concerning the Federal Reserve System, these also
attracted little public attention. As we have noted, Warburg’s massive and
supposedly definite work on the Federal Reserve System does not mention Jekyll
Island at all, although he does admit that a conference took place. In none of
his voluminous speeches or writings do the words "Jekyll Island"
appear, with a single notable exception. He agreed to Professor Stephenson’s
request that he prepare a brief statement for the Aldrich biography. This
appears on page 485 as part of "The Warburg Memorandum". In this
excerpt, Warburg writes, "The matter of a uniform discount rate was
discussed and settled at Jekyll Island."
Another member of the "First Name
Club" was less reticent. Frank Vanderlip later published a few brief
references to the conference. In the Saturday Evening Post, February 9, 1935, p.
25, Vanderlip wrote:
"Despite my views about the value to
society of greater publicity for the affairs of corporations,
there was an occasion near the close of 1910,
when I was as secretive, indeed, as furtive, as any
conspirator. . . . Since it would have been
fatal to Senator Aldrich’s plan to have it known that he
was calling on anybody from Wall Street to help
him in preparing his bill, precautions were taken that would have delighted the
heart of James Stillman (a colorful and secretive banker who was President of
the National City Bank during the Spanish-American War, and who was thought to
have been involved in getting us into that war) . . . I do not feel it is any
exaggeration to speak of our secret expedition to Jekyll Island as the occasion
of the actual conception of what eventually became the Federal Reserve
System."
In a Travel feature in The Washington Post,
March 27, 1983, "Follow The Rich to Jekyll Island", Roy Hoopes writes:
"In 1910, when Aldrich and four financial
experts wanted a place to meet in secret to reform the
country’s banking system, they faked a
hunting trip to Jekyll and for 10 days holed up in the
Clubhouse, where they made plans for what
eventually would become the Federal Reserve Bank."
__________________________
9 Nathaniel Wright Stephenson, Nelson W.
Aldrich, A Leader in American Politics, Scribners, N.Y. 1930, Chap. XXIV "Jekyll
Island" p. 379
8
Vanderlip later wrote in his autobiography,
From Farmboy to Financier:10
"Our secret expedition to Jekyll Island
was the occasion of the actual conception of what eventually became the Federal Reserve System.
The essential points of the Aldrich Plan were all contained in the Federal Reserve Act as it
was passed."
Professor E.R.A. Seligman, a member of the
international banking family of J. & W. Seligman, and head of the Department
of Economics at Columbia University, wrote in an essay published by the Academy
of Political Science, Proceedings, v. 4, No. 4, p. 387-90:
"It is known to a very few how great is
the indebtedness of the United States to Mr. Warburg. For
it may be said without fear of contradiction
that in its fundamental features the Federal Reserve
Act is the work of Mr. Warburg more than any
other man in the country. The existence of a Federal Reserve Board creates, in everything
but in name, a real central bank. In the two fundamentals of command of reserves and of a
discount policy, the Federal Reserve Act has frankly accepted the principle of the Aldrich
Bill, and these principles, as has been stated, were the creation of Mr. Warburg
and Mr. Warburg alone. It must not be forgotten that Mr. Warburg had a practical
object in view. In formulating his plans and in advancing in them slightly
varying suggestions from time to time, it was incumbent
on him to remember that the education of the country must be gradual and that a large part
of the task was to break down prejudices and remove suspicion. His plans
therefore contained all sorts of elaborate suggestions designed to guard the
public against fancied dangers and to persuade the country that the general
scheme was at all practicable. It was the hope of Mr. Warburg that with the
lapse of time it might be possible to eliminate from the law a few clauses which
were inserted largely at his suggestion for educational purposes."
Now that the public debt of the United States
has passed a trillion dollars, we may indeed admit "how great is the
indebtedness of the United States to Mr. Warburg." At the time he wrote the
Federal Reserve Act, the public debt was almost nonexistent.
Professor Seligman points out Warburg’s
remarkable prescience that the real task of the members of the Jekyll Island
conference was to prepare a banking plan which would gradually "educate the
country" and "break down prejudices and remove suspicion". The
campaign to enact the plan into law succeeded in doing just that.
__________________________
10 Frank Vanderlip, From Farmboy to Financier
9
CHAPTER TWO
The Aldrich Plan
"Finance and the tariff are reserved by
Nelson Aldrich as falling within his sole purview and jurisdiction. Mr. Aldrich
is endeavoring to devise, through the National Monetary Commission, a banking
and currency law. A great many hundred thousand persons are firmly of the
opinion that Mr. Aldrich sums up in his personality the greatest and most
sinister menace to the popular welfare of the United States. Ernest Newman
recently said, ‘What the South visits on the Negro in a political way, Aldrich
would mete out to the mudsills of the North, if he could devise a safe and
practical way to accomplish it.’"--Harper’s Weekly, May 7, 1910."
The participants in the Jekyll Island
conference returned to New York to direct a nationwide propaganda campaign in
favor of the "Aldrich Plan". Three of the leading universities,
Princeton, Harvard, and the University of Chicago, were used as the rallying
points for this propaganda, and national banks had to contribute to a fund of
five million dollars to persuade the American public that this central bank plan
should be enacted into law by Congress.
Woodrow Wilson, governor of New Jersey and
former president of Princeton University, was enlisted as a spokesman for the
Aldrich Plan. During the Panic of 1907, Wilson had declared, "All this
trouble could be averted if we appointed a committee of six or seven
public-spirited men like J.P. Morgan to handle the affairs of our country."
In his biography of Nelson Aldrich in 1930,
Stephenson says:
"A pamphlet was issued January 16, 1911,
‘Suggested Plan for Monetary Legislation’, by Hon. Nelson Aldrich, based on
Jekyll Island conclusions." Stephenson says on page 388, "An
organization for financial progress has been formed. Mr. Warburg introduced a
resolution authorizing the establishment of the Citizens’ League, later the
National Citizens League . . . Professor Laughlin of the University of Chicago
was given charge of the League’s propaganda."11
It is notable that Stephenson characterizes the
work of the National Citizens League as "propaganda", in line with
Seligman’s exposition of
__________________________
11 Nathaniel Wright Stephenson, Nelson W.
Aldrich, A Leader in American Politics, Scribners, N.Y. 1930
10
Warburg’s work as "the education of the
country" and "to break down prejudices".
Much of the five million dollars of the bankers
slush fund was spent under the auspices of the National Citizens’ League,
which was made up of college professors. The two most tireless propagandists for
the Aldrich Plan were Professor O.M. Sprague of Harvard, and J. Laurence
Laughlin of the University of Chicago.
Congressman Charles A. Lindbergh, Sr., notes:
"J. Laurence Laughlin, Chairman of the
Executive Committee of the National Citizens’ League since its organization,
has returned to his position as professor of political economics in the
University of Chicago. In June, 1911, Professor Laughlin was given a year’s
leave from the university, that he might give all of his time to the campaign of
education undertaken by the League . . . He has worked indefatigably, and it is
largely due to his efforts and his persistence that the campaign enters the
final stage with flattering prospects of a successful outcome . . . The reader
knows that the University of Chicago is an institution endowed by John D.
Rockefeller, with nearly fifty million dollars."12
In his biography of Nelson Aldrich, Stephenson
reveals that the Citizens’ League was also a Jekyll Island product. In chapter
24 we find that: The Aldrich Plan was represented to Congress as the result of
three years of work, study and travel by members of the National Monetary
Commission, with expenditures of more than three hundred thousand dollars.*
Testifying before the Committee on Rules,
December 15, 1911, after the Aldrich plan had been introduced in Congress,
Congressman Lindbergh stated,
"Our financial system is a false one and a
huge burden on the people . . . I have alleged that there is a Money Trust. The
Aldrich plan is a scheme plainly in the interest of the Trust . . . Why does the
Money Trust press so hard for the Aldrich Plan now, before the people know what
the money trust has been doing?"
Lindbergh continued his speech,
"The Aldrich Plan is the Wall Street Plan.
It is a broad challenge to the Government by the champion of the Money Trust. It
means another panic, if necessary, to intimidate the people. Aldrich, paid by
the Government to represent the people, proposes a plan for the trusts instead.
It was by a very clever move that the National Monetary Commission was created.
In 1907 nature responded most beautifully and gave this country the most
bountiful crop it had ever had. Other industries were busy too, and from a
natural standpoint all the conditions were right for a most
__________________________
12 Charles A. Lindbergh, Sr., Banking, Currency
and the Money Trust, 1913, p. 131
* In 1911, the Aldrich Plan became part of the
official platform of the Republican Party.
11
prosperous year. Instead, a panic entailed
enormous losses upon us. Wall Street knew the American people were demanding a
remedy against the recurrence of such a ridiculously unnatural condition. Most
Senators and Representatives fell into the Wall Street trap and passed the
Aldrich Vreeland Emergency Currency Bill. But the real purpose was to get a
monetary commission which would frame a proposition for amendments to our
currency and banking laws which would suit the Money Trust. The interests are
now busy everywhere educating the people in favor of the Aldrich Plan. It is
reported that a large sum of money has been raised for this purpose. Wall Street
speculation brought on the Panic of 1907. The depositors’ funds were loaned to
gamblers and anybody the Money Trust wanted to favour. Then when the depositors
wanted their money, the banks did not have it. That made the panic."
Edward Vreeland, co-author of the bill, wrote
in the August 25, 1910 Independent (which was owned by Aldrich), "Under the
proposed monetary plan of Senator Aldrich, monopolies will disappear, because
they will not be able to make more than four percent interest and monopolies
cannot continue at such a low rate. Also, this will mark the disappearance of
the Government from the banking business."
Vreeland’s fantastic claims were typical of
the propaganda flood unleashed to pass the Aldrich Plan. Monopolies would
disappear, the Government would disappear from the banking business. Pie in the
sky.
Nation Magazine, January 19, 1911, noted,
"The name of Central Bank is carefully avoided, but the ‘Federal Reserve
Association’, the name given to the proposed central organization, is endowed
with the usual powers and responsibilities of a European Central Bank."
After the National Monetary Commission had
returned from Europe, it held no official meetings for nearly two years. No
records or minutes were ever presented showing who had authored the Aldrich
Plan. Since they held no official meetings, the members of the commission could
hardly claim the Plan as their own. The sole tangible result of the Commission’s
three hundred thousand dollar expenditure was a library of thirty massive
volumes on European banking. Typical of these works is a thousand page history
of the Reichsbank, the central bank which controlled money and credit in
Germany, and whose principal stockholders, were the Rothschilds and Paul Warburg’s
family banking house of M.M. Warburg Company. The Commission’s records show
that it never functioned as a deliberative body. Indeed, its only
"meeting" was the secret conference held at Jekyll Island, and this
conference is not mentioned in any publication of the Commission. Senator
Cummins passed a resolution in Congress ordering the Commission to report on
January 8, 1912, and show some constructive results of its three years’ work.
In the face of this challenge, the National Monetary Commission ceased to exist.
12
With their five million dollars as a war chest,
the Aldrich Plan propagandists waged a no-holds barred war against their
opposition. Andrew Frame testified before the House Banking and Currency
Committee of the American Bankers Association. He represented a group of Western
bankers who opposed the Aldrich Plan:
CHAIRMAN CARTER GLASS: "Why didn’t the
Western bankers make themselves heard when the American Bankers Association gave
its unqualified and, we are assured, unanimous approval of the scheme proposed
by the National Monetary Commission?"
ANDREW FRAME: "I’m glad you called my
attention to that. When that monetary bill was given to the country, it was but
a few days previous to the meeting of the American Bankers Association in New
Orleans in 1911. There was not one banker in a hundred who had read that bill.
We had twelve addresses in favor of it. General Hamby of Austin, Texas, wrote a
letter to President Watts asking for a hearing against the bill. He did not get
a very courteous answer. I refused to vote on it, and a great many other bankers
did likewise."
MR. BULKLEY: "Do you mean that no member
of the Association could be heard in opposition to the bill?"
ANDREW FRAME: "They throttled all
argument."
MR. KINDRED: "But the report was given out
that it was practically unanimous."
ANDREW FRAME: "The bill had already been
prepared by Senator Aldrich and presented to the executive council of the
American Bankers Association in May, 1911. As a member of that council, I
received a copy the day before they acted upon it. When the bill came in at New
Orleans, the bankers of the United States had not read it."
MR. KINDRED: "Did the presiding officer
simply rule out those who wanted to discuss it negatively?"
ANDREW FRAME: "They would not allow anyone
on the program who was not in favor of the bill."
CHAIRMAN GLASS: "What significance has the
fact that at the next annual meeting of the American Bankers Association held at
Detroit in 1912, the Association did not reiterate its endorsement of the plan
of the National Monetary Commission, known as the Aldrich scheme?"
ANDREW FRAME: "It did not reiterate the
endorsement for the simple fact that the backers of the Aldrich Plan knew that
the Association would not endorse it. We were ready for them, but they did not
bring it up."
13
Andrew Frame exposed the collusion which in
1911 procured an endorsement of the Aldrich Plan from the American Bankers
Association but which in 1912 did not even dare to repeat its endorsement, for
fear of an honest and open discussion of the merits of the plan.
Chairman Glass then called as witness one of
the ten most powerful bankers in the United States, George Blumenthal, partner
of the international banking house of Lazard Freres and brother-in-law of Eugene
Meyer, Jr. Carter Glass effusively welcomed Blumenthal, stating that
"Senator O’Gorman of New York was kind enough to suggest your name to
us." A year later, O’Gorman prevented a Senate Committee from asking his
master, Paul Warburg, any embarrassing questions before approving his nomination
as the first Governor of the Federal Reserve Board.
George Blumenthal stated, "Since 1893 my
firm of Lazard Freres has been foremost in importations and exportations of gold
and has thereby come into contact with everybody who had anything to do with
it."
Congressman Taylor asked, "Have you a
statement there as to the part you have had in the importation of gold into the
United States?" Taylor asked this because the Panic of 1893 is known to
economists as a classic example of a money panic caused by gold movements.
"No," replied George Blumenthal,
"I have nothing at all on that, because it is not bearing on the
question."
A banker from Philadelphia, Leslie Shaw,
dissented with other witnesses at these hearings, criticizing the much vaunted
"decentralization" of the System. He said, "Under the Aldrich
Plan the bankers are to have local associations and district associations, and
when you have a local organization, the centered control is assured. Suppose we
have a local association in Indianapolis; can you not name the three men who
will dominate that association? And then can you not name the one man everywhere
else. When you have hooked the banks together, they can have the biggest
influence of anything in this country, with the exception of the
newspapers."
To promote the Democratic currency bill, Carter
Glass made public the sorry record of the Republican efforts of Senator Aldrich’s
National Monetary Commission. His House Report in 1913 said, "Senator
MacVeagh fixes the cost of the National Monetary Commission to May 12, 1911 at
$207,130. They have since spent another hundred thousand dollars of the taxpayer’s
money. The work done at such cost cannot be ignored, but, having examined the
extensive literature published by the Commission, the Banking and Currency
Committee finds little that bears upon the present state of the credit market of
the United States. We object to the Aldrich Bill on the following points:
14
Its entire lack of adequate government or
public control of the banking mechanism it sets up.
Its tendency to throw voting control into the
hands of the large banks of the system.
The extreme danger of inflation of currency
inherent in the system.
The insincerity of the bond-funding plan
provided for by the measure, there being a barefaced pretense that this system
was to cost the government nothing.
The dangerous monopolistic aspects of the bill.
Our Committee at the outset of its work was met
by a well-defined sentiment in favor of a central bank which was the manifest
outgrowth of the work that had been done by the National Monetary
Commission."
Glass’s denunciation of the Aldrich Bill as a
central bank plan ignored the fact that his own Federal Reserve Act would
fulfill all the functions of a central bank. Its stock would be owned by private
stockholders who could use the credit of the Government for their own profit; it
would have control of the nation’s money and credit resources; and it would be
a bank of issue which would finance the government by "mobilizing"
credit in time of war. In "The Rationale of Central Banking," Vera C.
Smith (Committee for Monetary Research and Education, June, 1981) writes,
"The primary definition of a central bank is a banking system in which a
single bank has either a complete or residuary monopoly in the note issue. A
central bank is not a natural product of banking development. It is imposed from
outside or comes into being as the result of Government favors."
Thus a central bank attains its commanding
position from its government granted monopoly of the note issue. This is the key
to its power. Also, the act of establishing a central bank has a direct
inflationary impact because of the fractional reserve system, which allows the
creation of book-entry loans and thereby, money, a number of times the actual
"money" which the bank has in its deposits or reserves.
The Aldrich Plan never came to a vote in
Congress, because the Republicans lost control of the House in 1910, and
subsequently lost the Senate and the Presidency in 1912.
15
CHAPTER THREE
The Federal Reserve Act
"Our financial system is a false one and a
huge burden on the people . . . This Act establishes the most gigantic trust on
earth."--Congressman Charles Augustus Lindbergh, Sr.
The speeches of Senator LaFollette and
Congressman Lindbergh became rallying points of opposition to the Aldrich Plan
in 1912. They also aroused popular feeling against the Money Trust. Congressman
Lindbergh said, on December 15, 1911, "The government prosecutes other
trusts, but supports the money trust. I have been waiting patiently for several
years for an opportunity to expose the false money standard, and to show that
the greatest of all favoritism is that extended by the government to the money
trust."
Senator LaFollette publicly charged that a
money trust of fifty men controlled the United States. George F. Baker, partner
of J.P. Morgan, on being queried by reporters as to the truth of the charge,
replied that it was absolutely in error. He said that he knew from personal
knowledge that not more than eight men ran this country.
The Nation Magazine replied editorially to
Senator LaFollette that "If there is a Money Trust, it will not be
practical to establish that it exercises its influence either for good or for
bad."
Senator LaFollette remarks in his memoirs that
his speech against the Money Trust later cost him the Presidency of the United
States, just as Woodrow Wilson’s early support of the Aldrich Plan had brought
him into consideration for that office.
Congress finally made a gesture to appease
popular feeling by appointing a committee to investigate the control of money
and credit in the United States. This was the Pujo Committee , a subcommittee of
the House Banking and Currency Committee, which conducted the famous "Money
Trust" hearings in 1912, under the leadership of Congressman Arsene Pujo of
Louisiana, who was regarded as a spokesman for the oil interests. These hearings
were deliberately dragged on for five months, and resulted in six-thousand pages
of printed testimony in four volumes. Month after month, the bankers made the
train trip from New York to Washington, testified before the Committee and
returned to New York. The hearings were extremely dull, and no startling
information turned up at these sessions. The bankers solemnly admitted that they
16
were indeed bankers, insisted that they always
operated in the public interest, and claimed that they were animated only by the
highest ideals of public service, like the Congressmen before whom they were
testifying.
The paradoxical nature of the Pujo Money Trust
Hearings may better be understood if we examine the man who single-handedly
carried on these hearings, Samuel Untermyer. He was one of the principal
contributors to Woodrow Wilson’s Presidential campaign fund, and was one of
the wealthiest corporation lawyers in New York. He states in his autobiography
in "Who’s Who" of 1926 that he once received a $775,000 fee for a
single legal transaction, the successful merger of the Utah Copper Company and
the Boston Consolidated and Nevada Company, a firm with a market value of one
hundred million dollars. He refused to ask either Senator LaFollette or
Congressman Lindbergh to testify in the investigation which they alone had
forced Congress to hold. As Special Counsel for the Pujo Committee, Untermyer
ran the hearings as a one-man operation. The Congressional members, including
its chairman, Congressman Arsene Pujo, seemed to have been struck dumb from the
commencement of the hearings to their conclusion. One of these silent servants
of the public was Congressman James Byrnes, of South Carolina, representing
Bernard Baruch’s home district, who later achieved fame as "Baruch’s
man", and was placed by Baruch in charge of the Office of War Mobilization
during the Second World War.
Although he was a specialist in such matters,
Untermyer did not ask any of the bankers about the system of interlocking
directorates through which they controlled industry. He did not go into
international gold movements, which were known as a factor in money panics, or
the international relationships between American bankers and European bankers.
The international banking houses of Eugene Meyer, Lazard Freres, J. & W.
Seligman, Ladenburg Thalmann, Speyer Brothers, M. M. Warburg, and the Rothschild
Brothers did not arouse Samuel Untermyer’s curiosity, although it was well
known in the New York financial world that all of these family banking houses
either had branches or controlled subsidiary houses in Wall Street. When Jacob
Schiff appeared before the Pujo Committee, Mr. Untermyer’s adroit questioning
allowed Mr. Schiff to talk for many minutes without revealing any information
about the operations of the banking house of Kuhn Loeb Company, of which he was
senior partner, and which Senator Robert L. Owen had identified as the
representative of the European Rothschilds in the United States.
The aging J.P. Morgan, who had only a few more
months to live, appeared before the Committee to justify his decades of
international financial deals. He stated for Mr. Untermyer’s edification that
"Money is a commodity." This was a favorite ploy of the money
creators, as they wished to make the public believe that the creation of money
was a natural occur-
17
rence akin to the growing of a field of corn,
although it was actually a bounty conferred upon the bankers by governments over
which they had gained control.
J.P. Morgan also told the Pujo Committee that,
in making a loan, he seriously considered only one factor, a man’s character;
even the man’s ability to repay the loan, or his collateral, were of little
importance. This astonishing observation startled even the blasé members of the
Committee.
The farce of the Pujo Committee ended without a
single well-known opponent of the money creators being allowed to appear or
testify. As far as Samuel Untermyer was concerned, Senator LaFollette and
Congressman Charles Augustus Lindbergh had never existed. Nevertheless, these
Congressmen had managed to convince the people of the United States that the New
York bankers did have a monopoly on the nation’s money and credit. At the
close of the hearings, the bankers and their subsidized newspapers claimed that
the only way to break this monopoly was to enact the banking and currency
legislation now being proposed to Congress, a bill which would be passed a year
later as the Federal Reserve Act. The press seriously demanded that the New York
banking monopoly be broken by turning over the administration of the new banking
system to the most knowledgeable banker of them all, Paul Warburg.
The Presidential campaign of 1912 records one
of the more interesting political upsets in American history. The incumbent,
William Howard Taft, was a popular president, and the Republicans, in a period
of general prosperity, were firmly in control of the government through a
Republican majority in both houses. The Democratic challenger, Woodrow Wilson,
Governor of New Jersey, had no national recognition, and was a stiff, austere
man who excited little public support. Both parties included a monetary reform
bill in their platforms: The Republicans were committed to the Aldrich Plan,
which had been denounced as a Wall Street plan, and the Democrats had the
Federal Reserve Act. Neither party bothered to inform the public that the bills
were almost identical except for the names. In retrospect, it seems obvious that
the money creators decided to dump Taft and go with Wilson. How do we know this?
Taft seemed certain of reelection, and Wilson would return to obscurity.
Suddenly, Theodore Roosevelt "threw his hat into the ring." He
announced that he was running as a third party candidate, the "Bull
Moose". His candidacy would have been ludicrous had it not been for the
fact that he was exceptionally well-financed. Moreover, he was given unlimited
press coverage, more than Taft and Wilson combined. As a Republican
ex-president, it was obvious that Roosevelt would cut deeply into Taft’s vote.
This proved the case, and Wilson won the election. To this day, no one can say
what Theodore Roosevelt’s program was, or why he would sabotage his own party.
Since the bankers were financing all three candi-
18
dates, they would win regardless of the
outcome. Later Congressional testimony showed that in the firm of Kuhn Loeb
Company, Felix Warburg was supporting Taft, Paul Warburg and Jacob Schiff were
supporting Wilson, and Otto Kahn was supporting Roosevelt. The result was that a
Democratic Congress and a Democratic President were elected in 1912 to get the
central bank legislation passed. It seems probable that the identification of
the Aldrich Plan as a Wall Street operation predicted that it would have a
difficult passage through Congress, as the Democrats would solidly oppose it,
whereas a successful Democratic candidate, supported by a Democratic Congress,
would be able to pass the central bank plan. Taft was thrown overboard because
the bankers doubted he could deliver on the Aldrich Plan, and Roosevelt was the
instrument of his demise. *The final electoral vote in 1912 was Wilson - 409;
Roosevelt - 167; and Taft - 15.
To further confuse the American people and
blind them to the real purpose of the proposed Federal Reserve Act, the
architects of the Aldrich Plan, powerful Nelson Aldrich, although no longer a
senator, and Frank Vanderlip, president of the National City Bank, set up a hue
and cry against the bill. They gave interviews whenever they could find an
audience denouncing the proposed Federal Reserve Act as inimical to banking and
to good government. The bugaboo of inflation was raised because of the Act’s
provisions for printing Federal Reserve notes. The Nation, on October 23, 1913,
pointed out, "Mr. Aldrich himself raised a hue and cry over the issue of
government "fiat money", that is, money issued without gold or bullion
back of it, although a bill to do precisely that had been passed in 1908 with
his own name as author, and he knew besides, that the ‘government’ had
nothing to do with it, that the Federal Reserve Board would have full charge of
the issuing of such moneys."
Frank Vanderlip’s claims were so bizarre that
Senator Robert L. Owen, chairman of the newly formed Senate Banking and Currency
Committee, which had been formed on March 18, 1913, accused him of openly
carrying on a campaign of misrepresentation about the bill. The interests of the
public, so Carter Glass claimed in a speech on September 10, 1913 to Congress,
would be protected by an advisory council of bankers. "There can be nothing
sinister about its transactions. Meeting with it at least four times a year will
be a bankers’ advisory council representing every regional reserve district in
the system. How could we have exercised greater caution in safeguarding the
public interests?"
Glass claimed that the proposed Federal
Advisory Council would force the Federal Reserve Board of Governors to act in
the best interest of the people.
Senator Root raised the problem of inflation,
claiming that under the Federal Reserve Act, note circulation would always
expand indefinitely, causing great inflation. However, the later history of the
Federal Reserve
19
System showed that it not only caused
inflation, but that the issue of notes could also be restricted, causing
deflation, as occurred from 1929 to 1939.
One of the critics of the proposed
"decentralized" system was a lawyer from Cleveland, Ohio, Alfred
Crozier: Crozier was called to testify for the Senate Committee because he had
written a provocative book in 1912, U.S. Money vs. Corporation Currency.* He
attacked the Aldrich-Vreeland Act of 1908 as a Wall Street instrument, and he
pointed out that when our government had to issue money based on privately owned
securities, we were no longer a free nation.
Crozier testified before the Senate Committee
that, "It should prohibit the granting or calling in of loans for the purpose of influencing
quotation prices of securities and the contracting of loans or increasing interest rates in concert by the
banks to influence public opinion or the action of any legislative body. Within recent months,
William McAdoo, Secretary of the Treasury of the United States was reported in the open press as
charging specifically that there was a conspiracy among certain of the large banking interests to
put a contraction upon the currency and to raise
interest rates for the sake of making the
public force Congress into passing currency legislation desired by those interests. The so-called
administration currency bill grants just what Wall Street
and the big banks for twenty-five years have
been striving for, that is, PRIVATE INSTEAD OF PUBLIC CONTROL OF CURRENCY. It does this as
completely as the Aldrich Bill. Both measures rob the government and the people of
all effective control over the public’s money, and vest in the banks exclusively the dangerous
power to make money among the people scarce or plenty. The Aldrich Bill puts this power in one
central bank. The Administration Bill puts it in twelve regional central banks, all owned
exclusively by the identical private interests that would have owned and operated the Aldrich Bank.
President Garfield shortly before his assassination declared that whoever controls the supply of
currency would control the business and activities of the people. Thomas Jefferson warned us a
hundred years ago that a private central bank issuing the public currency was a greater menace to the
liberties of the people than a standing army."
It is interesting to note how many
assassinations of Presidents of the United States follow their concern with the
issuing of public currency; Lincoln with his Greenback, non-interest-bearing
notes, and Garfield, making a pronouncement on currency problems just before he
was assassinated.
We now begin to understand why such a lengthy
campaign of planned deception was necessary, from the secret conference at
Jekyll Island to the identical "reform" plans proposed by the
Democratic and
__________________________
* Crozier’s book exposed the financiers plan
to substitute "corporation currency" for the lawful money of the U.S.
as guaranteed by Article I, Sec. 8 Para. 5, of the Constitution.
20
Republican parties under different names. The
bankers could not wrest control of the issuance of money from the citizens of
the United States, to whom it had been designated through its Congress by the
Constitution, until the Congress granted them their monopoly for a central bank.
Therefore, much of the influence exerted to get the Federal Reserve Act passed
was done behind the scenes, principally by two shadowy, non-elected persons: The
German immigrant, Paul Warburg, and Colonel Edward Mandell House of Texas.
Paul Warburg made an appearance before the
House Banking and Currency Committee in 1913, in which he briefly stated his
background: "I am a member of the banking house of Kuhn, Loeb Company. I
came over to this country in 1902, having been born and educated in the banking
business in Hamburg, Germany, and studied banking in London and Paris, and have
gone all around the world. In the Panic of 1907, the first suggestion I made was
‘Let us get a national clearing house.’ The Aldrich Plan contains some
things which are simply fundamental rules of banking. Your aim in this plan (the
Owen-Glass bill) must be the same--centralizing of reserves, mobilizing
commercial credit, and getting an elastic note issue."
Warburg’s phrase, "mobilization of
credit" was an important one, because the First World War was due to begin
shortly, and the first task of the Federal Reserve System would be to finance
the World War. The European nations were already bankrupt, because they had
maintained large standing armies for almost fifty years, a situation created by
their own central banks, and therefore they could not finance a war. A central
bank always imposes a tremendous burden on the nation for "rearmament"
and "defense", in order to create inextinguishable debt,
simultaneously creating a military dictatorship and enslaving the people to pay
the "interest" on the debt which the bankers have artificially
created.
In the Senate debate on the Federal Reserve
Act, Senator Stone said on December 12, 1913, "The great banks for years have sought to
have and control agents in the Treasury to serve their
purposes. Let me quote from this World article,
‘Just as soon as Mr. McAdoo came to Washington, a woman whom the National City Bank
had installed in the Treasury Department to get advance information on the condition of
banks, and other matters of interest to the big Wall Street group, was removed. Immediately the
Secretary and the Assistant Secretary, John Skelton Williams, were criticized severely by the
agents of the Wall Street group.’"
"I myself have known more than one
occasion when bankers refused credit to men who opposed
their political views and purposes. When
Senator Aldrich and others were going around the country exploiting this scheme, the big banks
of New York and Chicago were engaged in 21
raising a munificent fund to bolster up the
Aldrich propaganda. I have been told by bankers of my own state that contributions to this
exploitation fund had been demanded of them and that they had contributed because they were afraid
of being blacklisted or boycotted. There are bankers of this country who are enemies of the
public welfare. In the past, a few great banks have followed policies and projects that have
paralyzed the industrial energies of the country to perpetuate their tremendous power over the
financial and business industries of America."
Carter Glass states in his autobiography that
he was summoned by Woodrow Wilson to the White House, and that Wilson told him
he intended to make the reserve notes obligations of the United States. Glass
says, "I was for an instant speechless. I remonstrated. There is not any
government obligation here, Mr. President. Wilson said he had had to compromise
on this point in order to save the bill."
The term "compromise" on this point
came directly from Paul Warburg. Col. Elisha Ely Garrison, in Roosevelt,* Wilson
and the Federal Reserve Law wrote,
"In 1911, Lawrence Abbot, Mr. Roosevelt’s
private officer at ‘The Outlook’ handed me a copy of the so-called Aldrich Plan for currency reform.
I said, I could not believe that Mr. Warburg was the author. This plan is nothing more than the
Aldrich-Vreeland legislation which provided for currency issue against securities. Warburg
knows that as well as I do. I am going to see him at once and ask him about it. All right, the
truth. Yes, I wrote it, he said. Why? I asked. It was a compromise, answered Warburg."13
Garrison says that Warburg wrote him on
February 8, 1912.
"I have no doubt that at the end of a
thorough discussion, either you will see it my way or I will see it yours--but I hope you will see it
mine."
This was another famous Warburg saying when he
secretly lobbied Congressmen to support his interest, the veiled threat that
they should "see it his way". Those who did not found large sums
contributed to their opponents at the next elections, and usually went down in
defeat.
Col. Garrison, an agent of Brown Brothers
bankers, later Brown Brothers Harriman, had entree everywhere in the financial
community. He writes of Col. House, "Col. House agreed entirely with the
early writing of Mr. Warburg." Page 337, he quotes Col. House:
"I am also suggesting that the Central
Board be increased from four members to five and their terms lengthened from eight to ten years. This
would give stability and would take away the power of a President to change the personnel of
the board during a single term of office."
__________________________
* Theodore Roosevelt
13 Elisha Ely Garrison, Roosevelt, Wilson and
the Federal Reserve Law, Christopher Publications, Boston, 1931
22
House’s phrase, "take away the power of
a President" is significant, because later Presidents found themselves
helpless to change the direction of the government because they did not have the
power to change the composition of the Federal Reserve Board to attain a
majority on it during that President’s term of office. Garrison also wrote in
this book,
"Paul Warburg is the man who got the
Federal Reserve Act together after the Aldrich Plan aroused such nationwide resentment and
opposition. The mastermind of both plans was Baron Alfred Rothschild of London."
Colonel Edward Mandell House* was referred to
by Rabbi Stephen Wise in his autobiography, Challenging Years as "the
unofficial Secretary of State". House noted that he and Wilson knew that in
passing the Federal Reserve Act, they had created an instrument more powerful
than the Supreme Court. The Federal Reserve Board of Governors actually
comprised a Supreme Court of Finance, and there was no appeal from any of their
rulings.
In 1911, prior to Wilson’s taking office as
President, House had returned to his home in Texas and completed a book called
Philip Dru, Administrator. Ostensibly a novel, it was actually a detailed plan
for the future government of the United States, "which would establish
Socialism as dreamed by Karl Marx", according to House. This
"novel" predicted the enactment of the graduated income tax, excess
profits tax, unemployment insurance, social security, and a flexible currency
system. In short, it was the blueprint which was later followed by the Woodrow
Wilson and Franklin D. Roosevelt administrations. It was published
"anonymously" by B. W. Huebsch of New York, and widely circulated
among government officials, who were left in no doubt as to its authorship.
George Sylvester Viereck**, who knew House for years, later wrote an account of
the Wilson-House relationship, The Strangest Friendship in History.14 In 1955,
Westbrook Pegler, the Hearst columnist from 1932 to 1956, heard of the Philip
Dru book and called Viereck to ask if he had a copy. Viereck sent Pegler his
copy of the book, and Pegler wrote a column about it, stating:
"One of the institutions outlined in
Philip Dru is the Federal Reserve System. The Schiffs, the
Warburgs, the Kahns, the Rockefellers and
Morgans put their faith in House. The Schiff,
Warburg, Rockefeller and Morgan interests were
personally represented in the mysterious
conference at Jekyll Island. Frankfurter landed
on the Harvard law faculty, thanks to a financial
contribution to Harvard by Felix Warburg and
Paul
__________________________
* See House note in "Biographies"
** See Viereck note in "Biographies"
14 George Sylvester Viereck, The Strangest
Friendship in History, Woodrow Wilson and Col. House, Liveright, New York, 1932
23
Warburg, and so we got Alger and Donald Hiss,
Lee Pressman, Harry Dexter White and many other protégés of Little Weenie."*
House’s openly Socialistic views were
forthrightly expressed in Philip Dru, Administrator; on pages 57-58, House
wrote:
"In a direct and forceful manner, he
pointed out that our civilization was fundamentally wrong, inasmuch, among other things, as it restricted
efficiency; that if society were properly organized,
there would be none who were not sufficiently
clothed and fed. The result, that the laws, habits
and ethical training in vogue were alike
responsible for the inequalities in opportunity and the consequent wide difference between the few and
the many; that the results of such conditions was
to render inefficient a large part of the
population, the percentage differing in each country in the ratio that education
and enlightenment and unselfish laws bore to ignorance, bigotry and selfish
laws."15
In his book, House (Dru) envisions himself
becoming a dictator and forcing on the people his radical views, page 148:
"They recognized the fact that Dru dominated the situation and that a
master mind had at last risen in the Republic." He now assumes the title of
General. "General Dru announced his purpose of assuming the powers of a
dictator . . . they were assured that he was free from any personal ambition . .
. he proclaimed himself ‘Administrator of the Republic.’"*
This pensive dreamer who imagined himself a
dictator actually managed to place himself in the position of the confidential
advisor to the President of the United States, and then to have many of his
desires enacted into law! On page 227, he lists some of the laws he wishes to
enact as dictator. Among them are an old age pension law, laborers insurance
compensation, cooperative markets, a federal reserve banking system, cooperative
loans, national employment bureaus, and other "social legislation",
some of which was enacted during Wilson’s administration, and others during
the Franklin D. Roosevelt’s administration. The latter was actually a
continuation of the Wilson Administration,
__________________________
* The present writer was with Viereck in his
suite at the Hotel Belleclaire when Pegler called and asked for the book.
Viereck sent it over by his secretary. He grinned and said Pegler seemed very
excited. "He ought to get a good column out of that," Viereck told me.
Indeed Pegler did get a good column out of it. Unfortunately for him, he had
gone too far in mentioning the Warburgs. As long as he confined his attacks to
La Grand Bouche (Eleanor Roosevelt), and her spouse, he had been permitted to
continue, but now that he had exposed the Warburg connection with the Communist
spy ring in Washington, his column was immediately dropped by the big city
dailies, and Pegler’s long run was over.
15 Col. Edward M. House, Philip Dru,
Administrator, B. W. Heubsch, New York, 1912.
* This quotation from Philip Dru,
Administrator, written by Col. House in 1912, is included here to show his
totalitarian Marxist philosophy. House was to become for 8 years with Wilson,
the President’s closest advisor. Later he continued his influence in the
Franklin D. Roosevelt administration. From his home in Magnolia, Mass., House
advised FDR through frequent trips of Felix Frankfurter to the White House.
Frankfurter was later appointed to the Supreme Court by F.D.R.
24
with many of the same personnel, and with House
guiding the administration from behind the scenes.
Like most of the behind-the-scenes operators in
this book, Col. Edward Mandell House had the obligatory "London
connection". Originally a Dutch family, "Huis", his ancestors had
lived in England for three hundred years, after which his father settled in
Texas, where he made a fortune in blockade-running during the Civil War,
shipping cotton and other contraband to his British connections, including the
Rothschilds, and bringing back supplies for the beleaguered Texans. The senior
House, not trusting the volatile Texas situation, prudently deposited all his
profits from his blockade-running in gold with Baring banking house in London*.
At the close of the Civil War, he was one of the wealthiest men in Texas. He
named his son "Mandell" after one of his merchant associates.
According to Arthur Howden Smith, when House’s father died in 1880, his estate
was distributed among his sons as follows: Thomas William got the banking
business; John, the sugar plantation; and Edward M. the cotton plantations,
which brought him an income of $20,000 a year.16
At the age of twelve, the young Edward Mandell
House had brain fever, and was later further crippled by sunstroke. He was a
semi-invalid, and his ailments gave him an odd Oriental appearance. He never
entered any profession, but used his father’s money to become the kingmaker of
Texas politics, successively electing five governors from 1893 to 1911. In 1911
he began to support Wilson for president, and threw the crucial Texas delegation
to him which ensured his nomination. House met Wilson for the first time at the
Hotel Gotham, May 31, 1912.
In The Strangest Friendship In History, Woodrow
Wilson and Col. House, by George Sylvester Viereck, Viereck writes:
"What," I asked House, "cemented
your friendship?" "The identity of our temperaments and our
public policies," answered House.
"What was your purpose and his?" "To translate into
legislation certain liberal and progressive
ideas."17House told Viereck that when he went to Wilson at the White
__________________________
* Dope, Inc., identifies Barings as follows:
"Baring Brothers, the premier merchant bank of the opium trade from 1783 to
the present day, also maintained close contact with the Boston families . . .
The group’s leading banker became, at the close of the 19th century, the House
of Morgan--which also took its cut in Eastern opium traffic . . . Morgan’s Far
Eastern operations were the officially conducted British opium traffic . . .
Morgan’s case deserves special scrutiny from American police and regulatory
agencies, for the intimate associations of Morgan Guaranty Trust with the
identified leadership of the British dope banks."
16 Arthur Howden Smith, The Real Col. House,
Doran Company, New York, 1918
17 George Sylvester Viereck, The Strangest
Friendship in History, Woodrow Wilson and Col. House, Liveright, New York, 1932
25
House, he handed him $35,000. This was exceeded
only by the $50,000 which Bernard Baruch had given Wilson.
The successful enactment of House’s programs
did not escape the notice of other Wilson associates. In Vol. 1, page 157 of The
Intimate Papers of Col. House, House notes, "Cabinet members like Mr. Lane
and Mr. Bryan commented upon the influence of Dru with the President. ‘All
that the book has said should be,’ wrote Lane, ‘comes about. The President
comes to ‘Philip Dru’ in the end.’"18
House recorded some of his efforts on behalf of
the Federal Reserve Act in The Intimate Papers of Col. House,
"December 19, 1912. I talked with Paul
Warburg over the phone concerning currency reform. I
told of my trip to Washington and what I had
done there to get it in working order. I told him that the Senate and the Congressmen seemed
anxious to do what he desired, and that President- elect Wilson thought straight concerning the
issue."19
Thus we have Warburg’s agent in Washington,
Col. House, assuring him that the Senate and Congressmen will do what he
desires, and that the President-elect "thought straight concerning the
issue." In this context, representative government seems to have ceased to
exist. House continues in his "Papers":
"March 13, 1913. Warburg and I had an
intimate discussion concerning currency reform.
March 27, 1913. Mr. J.P. Morgan, Jr. and Mr.
Denny of his firm came promptly at five.
McAdoo came about ten minutes afterward. Morgan
had a currency plan already printed. I suggested he have it typewritten, so it
would not seem too prearranged, and send it to Wilson and myself today.
July 23, 1913. I tried to show Mayor Quincy (of
Boston) the folly of the Eastern bankers taking an antagonistic attitude towards the Currency
Bill. I explained to Major Henry Higginson* with what care the bill had been
framed. Just before he arrived, I had finished a review by Professor Sprague of
Harvard of Paul Warburg’s criticism of the Glass-Owen Bill, and will transmit
it to Washington tomorrow. Every banker known to Warburg, who knows the subject
practically, has been called up about the making of the bill.
October 13, 1913. Paul Warburg was my first
caller today. He came to discuss the currency measure. There are many features
of the Owen-Glass Bill that he does not approve. I promised to put him in touch
with McAdoo and Senator Owen so that he might discuss it with them.
November 17, 1913. Paul Warburg telephoned
about his trip to Washington. Later, he and Mr. Jacob Schiff came over for a few
minutes.
__________________________
18 Col. Edward Mandell House, The Intimate
Papers of Col. House, edited by Charles Seymour, Houghton Mifflin Co., 1926-28,
Vol. 1, p. 157
19 Ibid. Vol. 1, p. 163
* The most prominent banker in Boston.
26
Warburg did most of the talking. He had a new
suggestion in regard to grouping the regular reserve banks so as to get the
units welded together and in easier touch with the Federal Reserve Board."
George Sylvester Viereck in The Strangest
Friendship in History, Woodrow Wilson and Col. House wrote: "The Schiffs,
the Warburgs, the Kahns, the Rockefellers, the Morgans put their faith in House.
When the Federal Reserve legislation at last assumed definite shape, House was
the intermediary between the White House and the financiers."20
On page 45, Viereck notes, "Col. House
looks upon the reform of the monetary system as the crowning internal
achievement of the Wilson Administration."21
The Glass Bill (the House version of the final
Federal Reserve Act) had passed the House on September 18, 1913 by 287 to 85. On
December 19, 1913, the Senate passed their version by a vote of 54-34. More than
forty important differences in the House and Senate versions remained to be
settled, and the opponents of the bill in both houses of Congress were led to
believe that many weeks would yet elapse before the Conference bill would be
ready for consideration. The Congressmen prepared to leave Washington for the
annual Christmas recess, assured that the Conference bill would not be brought
up until the following year. Now the money creators prepared and executed the
most brilliant stroke of their plan. In a single day, they ironed out all forty
of the disputed passages in the bill and quickly brought it to a vote. On
Monday, December 22, 1913, the bill was passed by the House 282-60 and the
Senate 43-23.
On December 21, 1913, The New York Times
commented editorially on the act, "New York will be on a firmer basis of
financial growth, and we shall soon see her the money centre of the world."
The New York Times reported on the front page,
Monday, December 22, 1913 in headlines: MONEY BILL MAY BE LAW TODAY--CONFEREES
HAD ADJUSTED NEARLY ALL DIFFERENCES AT 1:30 THIS MORNING--NO DEPOSIT
GUARANTEES--SENATE YIELDS ON THIS POINT BUT PUTS THROUGH MANY OTHER CHANGES
"With almost unprecedented speed, the conference to adjust the House and
Senate differences on the Currency Bill practically completed its labours early
this morning. On Saturday the Conferees did little more than dispose of the
preliminaries, leaving forty essential differences to be thrashed out Sunday. .
. . No other legislation of importance will be taken up in either House of
Congress this week. Members of both houses are already preparing to leave
Washington."
__________________________
20 George Sylvester Viereck, The Strangest
Friendship In History, Woodrow Wilson and Col. House, Liveright, New York, 1932
21 Ibid.
27
"Unprecedented speed", says The New
York Times. One sees the fine hand of Paul Warburg in this final strategy. Some
of the bill’s most vocal critics had already left Washington. It was a
long-standing political courtesy that important legislation would not be acted
upon during the week before Christmas, but this tradition was rudely shattered
in order to perpetrate the Federal Reserve Act on the American people.
The Times buried a brief quote from Congressman
Lindbergh that "the bill would establish the most gigantic trust on
earth," and quoted Representative Guernsey of Maine, a Republican on the
House Banking and Currency Committee, that "This is an inflation bill, the
only question being the extent of the inflation."
Congressman Lindbergh said on that historic
day, to the House:
"This Act establishes the most gigantic
trust on earth. When the President signs this bill, the invisible government by the Monetary Power will
be legalized. The people may not know it immediately, but the day of reckoning is only a
few years removed. The trusts will soon realize that they have gone too far even for their own
good. The people must make a declaration of independence to relieve themselves from the
Monetary Power. This they will be able to do by taking control of Congress. Wall Streeters
could not cheat us if you Senators and Representatives
did not make a humbug of Congress. . . . If we
had a people’s Congress, there would be stability.
The greatest crime of Congress is its currency
system. The worst legislative crime of the ages is
perpetrated by this banking bill. The caucus
and the party bosses have again operated and
prevented the people from getting the benefit
of their own government."
The December 23, 1913 New York Times
editorially commented, in contrast to Congressman Lindbergh’s criticism of the
bill, "The Banking and Currency Bill became better and sounder every time
it was sent from one end of the Capitol to the other. Congress worked under
public supervision in making the bill."
By "public supervision", The Times
apparently meant Paul Warburg, who for several days had maintained a small
office in the Capitol building, where he directed the successful pre-Christmas
campaign to pass the bill, and where Senators and Congressmen came hourly at his
bidding to carry out his strategy.
The "unprecedented speed" with which
the Federal Reserve Act had been passed by Congress during what became known as
"the Christmas massacre" had one unforeseen aspect. Woodrow Wilson was
taken unaware, as he, like many others, had been assured the bill would not come
up for a vote until after Christmas. Now he refused to sign it, because he
objected to the provisions for the selection of Class B. Directors. William L.
White relates in his biography of Bernard Baruch that Baruch, a principal
contributor to Wilson’s campaign fund, was stunned when he was informed that
Wilson refused to sign the bill. He hurried
28
to the White House and assured Wilson that this
was a minor matter, which could be fixed up later through "administrative
processes". The important thing was to get the Federal Reserve Act signed
into law at once. With this reassurance, Wilson signed the Federal Reserve Act
on December 23, 1913. History proved that on that day, the Constitution ceased
to be the governing covenant of the American people, and our liberties were
handed over to a small group of international bankers.
The December 24, 1913 New York Times carried a
front page headline "WILSON SIGNS THE CURRENCY BILL!" Below it, also
in capital letters, were two further headlines, "PROSPERITY TO BE
FREE" and "WILL HELP EVERY CLASS". Who could object to any law
which provided benefits to everyone? The Times described the festive atmosphere
while Wilson’s family and government officials watched him sign the bill.
"The Christmas spirit pervaded the gathering," exulted The Times.
In his biography of Carter Glass, Rixey Smith
states that those present at the signing of the bill included Vice President
Marshall, Secretary Bryan, Carter Glass, Senator Owen, Secretary McAdoo, Speaker
Champ Clark, and other Treasury officials. None of the real writers of the bill,
the draftees of Jekyll Island, were present. They had prudently absented
themselves from the scene of their victory. Rixey Smith also wrote, "It was
as though Christmas had come two days early." On December 24, 1913, Jacob
Schiff wrote to Col. House,
"My dear Col. House. I want to say a word
to you for the silent, but no doubt effective work you have done in the interest of currency
legislation and to congratulate you that the measure has finally been enacted into law. I am with
good wishes, faithfully yours, JACOB SCHIFF."
Representative Moore of Kansas, in commenting
on the passage of the Act, said to the House of Representatives:
"The President of the United States now
becomes the absolute dictator of all the finances of the country. He appoints a controlling board of
seven men, all of whom belong to his political party, even though it is a minority. The Secretary of
the Treasury is to rule supreme whenever there is a difference of opinion between himself and the
Federal Reserve Board. AND, only one member of the Board is to pass out of office while the
President is in office."
The ten year terms of office of the members of
the Board were lengthened by the Banking Act of 1935 to fourteen years, which
meant that these directors of the nation’s finances, although not elected by
the people, held office longer than three presidents.
While Col. House, Jacob Schiff and Paul Warburg
basked in the glow of a job well done, the other actors in this drama were
subject to later afterthoughts. Woodrow Wilson wrote in 1916, National Economy
and the Banking System, Sen. Doc. No. 3, No. 223, 76th Congress, 1st session,
1939: "Our system of credit is concentrated (in the Federal Reserve
29
System). The growth of the nation, therefore,
and all our activities, are in the hands of a few men."
When he was asked by Clarence W. Barron whether
he approved of the bill as it was finally passed. Warburg remarked, "Well,
it hasn’t got quite everything we want, but the lack can be adjusted later by
administrative processes."
Woodrow Wilson and Carter Glass are given
credit for the Act by most contemporary historians, but of all those concerned,
Wilson had least to do with Congressional action on the bill. George Creel, a
veteran Washington correspondent, wrote in Harper’s Weekly, June 26, 1915:
"As far as the Democratic Party was
concerned, Woodrow Wilson was without influence, save for the patronage he possessed. It was Bryan who
whipped Congress into line on the tariff bill, on the Panama Canal tolls repeal, and on the
currency bill." Mr. Bryan later wrote, "That is the one thing in my public career that I regret--my
work to secure the enactment of the Federal Reserve
Law."
On December 25, 1913, The Nation pointed out
that "The New York Stock Market began to rise steadily upon news that the
Senate was ready to pass the Federal Reserve Act."
This belies the claim that the Federal Reserve
Act was a monetary reform bill. The New York Stock Exchange is generally
considered an accurate barometer of the true meaning of any financial
legislation passed in Washington. Senator Aldrich also decided that he no longer
had misgivings about the Federal Reserve Act. In a magazine which he owned, and
which he called The Independent, he wrote in July, 1914: "Before the
passage of this Act, the New York bankers could only dominate the reserves of
New York. Now we are able to dominate the bank reserves of the entire
country."
H.W. Loucks denounced the Federal Reserve Act
in The Great Conspiracy of the House of Morgan,
"In the Federal Reserve Law, they have
wrested from the people and secured for themselves the constitutional power to issue money and
regulate the value thereof." On page 31, Loucks writes, "The House of Morgan is now in supreme
control of our industry, commerce and political affairs.
They are in complete control of the policy
making of the Democratic, Republican and Progressive parties. The present extraordinary propaganda
for ‘preparedness’ is planned more for home coercion than for defense against foreign
aggression."22
The signing of the Federal Reserve Act by
Woodrow Wilson represented the culmination of years of collusion with his
intimate friend, Col. House, and Paul Warburg. One of the men with whom House
became acquainted in the Wilson Administration was Franklin D.
__________________________
22 H.W. Loucks, The Great Conspiracy of the
House of Morgan, Privately printed, 1916
30
Roosevelt, Assistant Secretary of Navy. As soon
as he obtained the Democratic nomination for President, in 1932, Franklin D.
Roosevelt made a "pilgrimage" to Col. House’s home at Magnolia,
Mass. Roosevelt, after the Republican hiatus of the 1920s, filled in the goals
of Philip Dru, Administrator,23 which Wilson had not been able to carry out. The
late Roosevelt achievements included the enactment of the social security
program, excess profits tax, and the expansion of the graduated income tax to
90% of earned income.
House’s biographer, Charles Seymour, wrote:
"He was wearied by the details of party politics and appointments. Even the share he had taken
in constructive domestic legislation (the Federal Reserve Act, tariff revision, and the
Income Tax amendment) did not satisfy him. From the beginning of 1914 he gave more and more of
his time to what he regarded as the highest form of politics and that for which he was
particularly suited--international affairs."24
In 1938, shortly before he died, House told
Charles Seymour, "During the last fifteen years I have been close to the
center of things, although few people suspect it. No important foreigner has
come to the United States without talking to me. I was close to the movement
that nominated Roosevelt. He has given me a free hand in advising him. All the
Ambassadors have reported to me frequently."
A comparative print of the Federal Reserve Act
of 1913 as passed by the House of Representatives and amended by the Senate
shows the following striking change:
The Senate struck out, "To suspend the
officials of Federal Reserve banks for cause, stated in writing with opportunity
of hearing, require the removal of said official for incompetency, dereliction
of duty, fraud or deceit, such removal to be subject to approval by the
President of the United States." This was changed by the Senate to read
"To suspend or remove any officer or director of any Federal Reserve Bank,
the cause of such removal to be forthwith communicated in writing by the Federal
Reserve Board to the removed officer or director and to said bank." This
completely altered the conditions under which an officer or director might be
removed. We no longer know what the conditions for removal are, or the cause.
Apparently incompetency, dereliction of duty, fraud or deceit do not matter to
the Federal Reserve Board. Also, the removed officer does not have the
opportunity of appeal to the President. In answer to written inquiry, the
Assistant Secretary of the Federal Reserve Board replied that only one officer
has been removed "for cause" in the thirty-six years, the name and
details of this matter being a "private concern" between the
individual, the Reserve Bank concerned, and the Federal Reserve Board.
__________________________
23 E.M. House, Philip Dru, Administrator, B. W.
Heubsch, N.Y., 1912
24 Col. E.M. House, The Intimate Papers of Col.
House, 4 v. 1926-1928, Houghton Mifflin Co.
31
The Federal Reserve System began its operations
in 1914 with the activity of the Organization Committee, appointed by Woodrow
Wilson, and composed of Secretary of the Treasury William McAdoo, who was his
son-in-law, Secretary of Agriculture Houston and Comptroller of the Currency
John Skelton Williams.
On January 6, 1914. J.P. Morgan met with the
Organizing Committee in New York. He informed them that there should not be more
than seven regional districts in the new system.
This committee was to select the locations of
the "decentralized" reserve banks. They were empowered to select from
eight to twelve reserve banks, although J.P. Morgan had testified he thought
that not more than four should be selected. Much politicking went into the
selection of these sites, as the twelve cities thus favored would become
enormously important as centers of finance. New York, of course, was a foregone
conclusion. Richmond was the next selection, as a payoff to Carter Glass and
Woodrow Wilson, the two Virginians who had been given political credit for the
Federal Reserve Act. The other selections of the Committee were Boston,
Philadelphia, Cleveland, Chicago, St. Louis, Atlanta, Dallas, Minneapolis,
Kansas City, and San Francisco. All of these cities later developed important
"financial districts" as the result of this selection.
These local battles, however, paled in view of
the complete dominance of the Federal Reserve bank of New York in the system.
Ferdinand Lundberg pointed out, in America’s Sixty Families, that, "In
practice, the Federal Reserve Bank of New York became the fountainhead of the
system of twelve regional banks, for New York was the money market of the
nation. The other eleven banks were so many expensive mausoleums erected to
salve the local pride and quell the Jacksonian fears of the hinterland. Benjamin
Strong, president of the Bankers Trust (J.P. Morgan) was selected as the first
Governor of the New York Federal Reserve Bank. Adept in high finance, Strong for
many years manipulated the country’s monetary system at the discretion of
directors representing the leading New York banks. Under Strong, the Reserve
System was brought into interlocking relations with the Bank of England and the
Bank of France. Benjamin Strong held his position as Governor of the Federal
Reserve Bank of New York until his sudden death in 1928, during a Congressional
investigation of the secret meetings between Reserve Governors and
32
heads of European central banks which brought
on the Great Depression of 1929-31."25
Strong had married the daughter of the
President of Bankers Trust, which brought him into the line of succession in the
dynastic intrigues which play such an important role in the world of high
finance. He also had been a member of the original Jekyll Island group, the
First Name Club, and was thus qualified for the highest position in the Federal
Reserve System, as the Governor of the Federal Reserve Bank of New York which
dominated the entire system.
Paul Warburg also is mentioned in J. Laurence
Laughlin’s definitive volume, The Federal Reserve Act, Its Origins and
Purposes,
"Mr. Paul Warburg of Kuhn, Loeb Company
offered in March, 1910 a fairly well thought out plan to be known as the United Reserve Bank of
the United States. This was published in The New York Times of March 24, 1910. The group
interested in the purposes of the National Monetary Commission met secretly at Jekyll
Island for about two weeks in December, 1910, and concentrated on the preparation of a bill to be
presented to Congress by the National Monetary
Commission. The men who were present at Jekyll
Island were Senator Aldrich, H. P. Davison of J.P. Morgan Company, Paul Warburg of Kuhn, Loeb
Company, Frank Vanderlip of the National City Bank, and Charles D. Norton of the First
National Bank. No doubt the ablest banking mind in the group was that of Mr. Warburg, who had
had a European banking training. Senator Aldrich had no special training in
banking."26
A mention of Paul Warburg, written by Harold
Kelloch, and titled, "Warburg the Revolutionist" appeared in the
Century Magazine, May, 1915. Kelloch writes:
"He imposed his ideas on a nation of a
hundred million people . . . Without Mr. Warburg there would have been no Federal Reserve Act. The
banking house of Warburg and Warburg in Hamburg has always been strictly a family
business. None but a Warburg has been eligible for it, but all Warburgs have been born into it. In
1895 he married the daughter of the late Solomon Loeb of Kuhn Loeb Company. He became a member
of Kuhn Loeb Company in 1902. Mr. Warburg’s salary from his private business
has been approximately a half million a year. Mr. Warburg’s motives had been purely those of
patriotic self-sacrifice."
The true purposes of the Federal Reserve Act
soon began to disillusion many who had at first believed in its claims. W. H.
Allen wrote in Moody’s Magazine, 1916,
"The purpose of the Federal Reserve Act
was to prevent concentration of money in the New York
banks by making it profitable for country
bankers to use their funds at home, but the movement of currency shows
__________________________
25 Ferdinand Lundberg, America’s Sixty
Families, 1937
26 J. Laurence Laughlin, The Federal Reserve
Act, It’s Origins and Purposes
33
that the New York banks gained from the
interior in every month except December, 1915, since the Act went into effect. The stabilization of
rates has taken place in New York alone. In other parts, high rates continue. The Act, which was
to deprive Wall Street of its funds for speculation,
has really given the bulls and the bears such a
supply as they have never had before. The truth is that far from having clogged the channel to
Wall Street, as Mr. Glass so confidently boasted, it actually widened the old channels and opened up
two new ones. The first of these leads directly to Washington and gives Wall Street a string on
all the surplus cash in the United States Treasury. Besides, in the power to issue
bank-note currency, it furnishes an inexhaustible supply of credit money; the second channel leads to
the great central banks of Europe, whereby, through the sale of acceptances, virtually guaranteed
by the United States Government, Wall Street is granted immunity from foreign demands for gold
which have precipitated every great crisis in our history."
For many years, there has been considerable
mystery about who actually owns the stock of the Federal Reserve Banks.
Congressman Wright Patman, leading critic of the System, tried to find out who
the stockholders were. The stock in the original twelve regional Federal Reserve
Banks was purchased by national banks in those twelve regions. Because the
Federal Reserve Bank of New York was to set the interest rates and direct open
market operations, thus controlling the daily supply and price of money
throughout the United States, it is the stockholders of that bank who are the
real directors of the entire system. For the first time, it can be revealed who
those stockholders are. This writer has the original organization certificates
of the twelve Federal Reserve Banks, giving the ownership of shares by the
national banks in each district. The Federal Reserve Bank of New York issued
203,053 shares, and, as filed with the Comptroller of the Currency May 19, 1914,
the large New York City banks took more than half of the outstanding shares. The
Rockefeller Kuhn, Loeb-controlled National City Bank took the largest number of
shares of any bank, 30,000 shares. J.P. Morgan’s First National Bank took
15,000 shares. When these two banks merged in 1955, they owned in one block
almost one fourth of the shares in the Federal Reserve Bank of New York, which
controlled the entire system, and thus they could name Paul Volcker or anyone
else they chose to be Chairman of the Federal Reserve Board of Governors. Chase
National Bank took 6,000 shares. The Marine Nation Bank of Buffalo, later known
as Marine Midland, took 6,000 shares. This bank was owned by the Schoellkopf
family, which controlled Niagara Power Company and other large interests.
National Bank of Commerce of New York City took 21,000 shares. The shareholders
of these banks which own the stock of the Federal Reserve Bank of New York are
the people who have controlled our political and economic destinies since 1914.
They are the Rothschilds, of Europe, Lazard Freres (Eugene Meyer), Kuhn Loeb
Company, Warburg Company, Lehman Brothers,
34
Goldman Sachs, the Rockefeller family, and the
J.P. Morgan interests. These interests have merged and consolidated in recent
years, so that the control is much more concentrated. National Bank of Commerce
is now Morgan Guaranty Trust Company. Lehman Brothers has merged with Kuhn, Loeb
Company, First National Bank has merged with the National City Bank, and in the
other eleven Federal Reserve Districts, these same shareholders indirectly own
or control shares in those banks, with the other shares owned by the leading
families in those areas who own or control the principal industries in these
regions.* The "local" families set up regional councils, on orders
from New York, of such groups as the Council on Foreign Relations, The
Trilateral Commission, and other instruments of control devised by their
masters. They finance and control political developments in their area, name
candidates, and are seldom successfully opposed in their plans.
With the setting up of the twelve
"financial districts" through the Federal Reserve Banks, the
traditional division of the United States into the forty-eight states was
overthrown, and we entered the era of "regionalism", or twelve regions
which had no relation to the traditional state boundaries.
These developments following the passing of the
Federal Reserve Act proved every one of the allegations Thomas Jefferson had
made against a central bank in 1791: that the subscribers to the Federal Reserve
Bank stock had formed a corporation, whose stock could be and was held by
aliens; that this stock would be transmitted to a certain line of successors;
that it would be placed beyond forfeiture and escheat; that they would receive a
monopoly of banking, which was against the laws of monopoly; and that they now
had the power to make laws, paramount to the laws of the states. No state
legislature can countermand any of the laws laid down by the Federal Reserve
Board of Governors for the benefit of their private stockholders. This board
issues laws as to what the interest rate shall be, what the quantity of money
shall be and what the price of money shall be. All of these powers abrogate the
powers of the state legislatures and their responsibility to the citizens of
those states.
The New York Times stated that the Federal
Reserve Banks would be ready for business on August 1, 1914, but they actually
began operations on November 16, 1914. At that time, their total assets were
listed at $143,000,000, from the sale of shares in the Federal Reserve Banks to
stockholders of the national banks which subscribed to it.
The actual part of this $143,000,000 which was
paid in for these shares remains shrouded in mystery. Some historians believe
that the shareholders only paid about half of the amount in cash; others believe
__________________________
* See charts V through IX
35
that they paid in no cash at all, but merely
sent in checks which they drew on the national banks which they owned. This
seems most likely, that from the very outset, the Federal Reserve operations
were "paper issued against paper", that bookkeeping entries comprised
the only values which changed hands.
The men whom President Woodrow Wilson chose to
make up the first Federal Reserve Board of Governors were men drawn from the
banking group. He had been nominated for the Presidency by the Democratic Party,
which had claimed to represent the "common man" against the
"vested interests". According to Wilson himself, he was allowed to
choose only one man for the Federal Reserve Board. The others were chosen by the
New York bankers. Wilson’s choice was Thomas D. Jones, a trustee of Princeton
and director of International Harvester and other corporations. The other
members were Adolph C. Miller, economist from Rockefeller’s University of
Chicago and Morgan’s Harvard University, and also serving as Assistant
Secretary of the Interior; Charles S. Hamlin, who had served previously as an
Assistant Secretary to the Treasury for eight years; F.A. Delano, a Roosevelt
relative, and railroad operator who took over a number of railroads for Kuhn,
Loeb Company, W.P.G. Harding, President of the First National Bank of Atlanta;
and Paul Warburg of Kuhn, Loeb Company. According to The Intimate Papers of Col.
House, Warburg was appointed because "The President accepted (House’s)
suggestion of Paul Warburg of New York because of his interest and experience in
currency problems under both Republican and Democratic Administrations."27
Like Warburg, Delano had also been born outside the continental limits of the
United States, although he was an American citizen. Delano’s father, Warren
Delano, according to Dr. Josephson and other authorities, was active in Hong
Kong in the Chinese opium trade, and Frederick Delano was born in Hong Kong in
1863.
In The Money Power of Europe, Paul Emden writes
that "The Warburgs reached their outstanding eminence during the last
twenty years of the past century, simultaneously with the growth of Kuhn, Loeb
Company in New York, with whom they stood in a personal union and family
relationship. Paul Warburg with magnificent success carried through in 1913 the
reorganization of the American banking system, at which he had with Senator
Aldrich been working since 1911, and thus most thoroughly consolidated the
currency and finances of the United States."28
__________________________
27 Charles Seymour, The Intimate Papers of Col.
House, 4 v. 1926-1928, Houghton Mifflin Co.
28 Paul Emden, The Money Power of Europe in the
19th and 20th Century, S. Low, Marston Co., London, 1937
36
The New York Times* had noted on May 6, 1914
that Paul Warburg had "retired" from Kuhn, Loeb Company in order to
serve on the Federal Reserve Board, although he had not resigned his
directorships of American Surety Company, Baltimore and Ohio Railroad, National
Railways of Mexico, Wells Fargo, or Westinghouse Electric Corporation, but would
continue to serve on these boards of directors. "Who’s Who" listed
him as holding these directorships and in addition, American I.G. Chemical
Company (branch of I.G. Farben), Agfa Ansco Corporation, Westinghouse Acceptance
Company, Warburg Company of Amsterdam, chairman of the Board of International
Acceptance Bank, and numerous other banks, railways and corporations. "Kuhn
Loeb & Co. with Warburg have four votes or the majority of the Federal
Reserve Board."29
Despite his retirement from Kuhn, Loeb Company
in May of 1914 to serve on the Federal Reserve Board of Governors, Warburg was
asked to appear before a Senate Subcommittee in June of 1914 and answer some
questions about his behind-the-scenes role in getting the Federal Reserve Act
through Congress. This might have meant some questions about the secret
conference in Jekyll Island, and Warburg refused to appear. On July 7, 1914 he
wrote a letter to G.M. Hitchcock, Chairman of the Senate Banking and Currency
Committee, stating that it might impair his usefulness on the Board if he were
required to answer any questions, and that he would therefore withdraw his name.
It seemed that Warburg was prepared to bluff the Senate Committee into
confirming him without any questions asked. On July 10, 1914, The New York Times
defended Warburg on the editorial page and denounced the "Senatorial
Inquisition". Since Warburg had not yet been asked any questions, the term
"Inquisition" seemed remarkably inappropriate, nor was there any real
danger that the Senators were preparing to use instruments of torture on Mr.
Warburg. The imbroglio was resolved when the Senate Committee, in abject
surrender, agreed that Mr. Warburg would be given a list of questions in advance
of his appearance so that he could go over them, and that he could be excused
from answering any questions which might tend to impair his service on the Board
of Governors. The Nation reported on July 23, 1914 that "Mr. Warburg
finally had a conference with Senator O’Gorman and agreed to meet the members
of the Senate Subcommittee informally, with a view to coming to an
understanding, and to giving them any reasonable information they might desire.
The opinion in Washington is that Mr. Warburg’s confirmation is assured."
The Nation
__________________________
* The New York Times April 30, 1914, reported
that the 12 districts had subscriptions of $74,740,800 and that the subscribing
banks would pay one-half of this sum in six months.
29 Clarence W. Barron, More They Told Barron,
Arno Press, New York Times, 1973, June 12, 1914. p. 204
37
was correct. Mr. Warburg was confirmed, the way
having been smoothed by his "fixer", Senator O’Gorman of New York,
more familiarly known as "the Senator from Wall Street". Senator
Robert L. Owen had previously charged that Warburg was the American
representative of the Rothschild family, but questioning him about this would
indeed have smacked of the mediaeval "Inquisition", and his fellow
Senators were too civilized to indulge in such barbarity*.
During the Senate Hearings on Paul Warburg
before the Senate Banking and Currency Committee, August 1, 1914, Senator
Bristow asked, "How many of these partners (of Kuhn, Loeb Company) are
American citizens?" WARBURG: "They are all American citizens except
Mr. Kahn. He is a British subject." BRISTOW: "He was at one time a
candidate for Parliament, was he not?" WARBURG: "There was talk about
it, it had been suggested and he had it in his mind."
Paul Warburg also stated to the Committee,
"I went to England, where I stayed for two years, first in the banking and
discount firm of Samuel Montague & Company. After that I went to France,
where I stayed in a French bank."
CHAIRMAN: "What French bank was
that?" WARBURG: "It is the Russian bank for foreign trade which has an
agency in Paris."
BRISTOW: "I understand you to say that you
were a Republican, but when Mr. Theodore Roosevelt came around, you then became
a sympathizer with Mr. Wilson and supported him?" WARBURG: "Yes."
BRISTOW: "While your brother (Felix Warburg) was supporting Taft?"
WARBURG: "Yes." Thus three partners of Kuhn, Loeb Company were
supporting three different candidates for President of the United States. Paul
Warburg was supporting Wilson, Felix Warburg was supporting Taft, and Otto Kahn
was supporting Theodore Roosevelt. Paul Warburg explained this curious situation
by telling the Committee that they had no influence over each other’s
political beliefs, "as finance and politics don’t mix."
Questions about Warburg’s appointment
vanished in a hue and cry with Wilson’s sole appointment to the Board of
Governors, Thomas B. Jones. Reporters had discovered that Jones, at the time of
his appointment, was under indictment by the Attorney General of the United
States. Wilson leaped to the defense of his choice, telling reporters that
"The majority of the men connected with what we have come to call ‘big
business’ are honest, incorruptible and patriotic." Despite Wilson’s
protestations, the Senate Banking and Currency Committee scheduled
__________________________
* Warburg was confirmed August 8, 1914, 38-11,
and principally opposed by Sen. Bristow of Kansas, who was denounced by The New
York Times as a "radical Republican", and whose excellent library of
rare books on banking were acquired by the present writer in 1983 for research
on this work.
38
hearings on the fitness of Thomas D. Jones to
be a member of the Board of Governors. Wilson then wrote a letter to Senator
Robert L. Owen, Chairman of that Committee:
White House
June 18, 1914
Dear Senator Owen:
Mr. Jones has always stood for the rights of
the people against the
rights of privilege. His connection with the
Harvester Company was a
public service, not a private interest. He is
the one man of the whole
number who was in a peculiar sense my personal
choice.
Sincerely,
Woodrow Wilson
Woodrow Wilson said, "There is no reason
to believe that the unfavorable report represents the attitude of the Senate
itself." After several weeks, Thomas D. Jones withdrew his name, and the
country had to do without his services.
The other members of the first Board of
Governors were Secretary of the Treasury, William McAdoo, Wilson’s son-in-law,
and President of the Hudson-Manhattan Railroad, a Kuhn, Loeb Company controlled
enterprise, and Comptroller of the Currency John Skelton Williams.
When the Federal Reserve Banks were opened for
business on November 16, 1914, Paul Warburg said, "This date may be
considered as the Fourth of July in the economic history of the United
States."
39
SECRETS OF THE FEDERAL
RESERVE
The London Connection
By Eustace
Mullins
pt. 2
CHAPTER FOUR
The Federal Advisory Council
In steamrolling the Federal Reserve Act through the House of Representatives, Congressman Carter Glass declared on September 30, 1913 on the floor of the House that the interests of the public would be protected by an advisory council of bankers. "There can be nothing sinister about its transactions. Meeting with it at least four times a year will be a bankers’ advisory council representing every regional reserve district in the system. How could we have exercised greater caution in safeguarding the public interest?
Carter Glass neither then nor later gave any substantiation for his belief that a group of bankers would protect the interests of the public, nor is there any evidence in the history of the United States that any group of bankers has ever done so. In fact, the Federal Advisory Council proved to be the "administrative process" which Paul Warburg had inserted into the Federal Reserve Act to provide just the type of remote but unseen control over the System which he desired. When he was asked by financial reporter C.W. Barron, just after the Federal Reserve Act was enacted into law by Congress, whether he approved of the bill as it was finally passed, Warburg replied, "Well, it hasn’t got quite everything we want, but the lack can be adjusted later by administrative processes." The council proved to be the ideal vehicle for Warburg’s purposes, as it has functioned for seventy years in almost complete anonymity, its members and their business associations, unnoticed by the public.
Senator Robert Owen, chairman of the Senate Banking and Currency Committee, had said, as quoted in The New York Times, August 3, 1913 before passage of the act:
"The Federal Reserve Act will furnish the bank and industrial and commercial interests with the
discount of qualified commercial paper and thus stabilize our commercial and industrial life. The
Federal Reserve banks are not intended as money making banks, but to serve a great national
purpose of accommodating commerce and businessmen and banks, safeguard a fixed market for
manufactured goods, for agricultural products and for labor. There is no reason why the banks
should be in control of the Federal Reserve system. Stability will make our commerce expand
healthfully in every direction."
40
Senator Owen’s optimism was doomed by the domination of the Jekyll Island promoters over the initial composition of the Federal Reserve System. Not only did the Morgan-Kuhn, Loeb alliance purchase the dominant control of stock in the Federal Reserve Bank of New York, with almost half of the shares owned by the five New York banks under their control, First National Bank, National City Bank, National Bank of Commerce, Chase National Bank and Hanover National Bank, but they also persuaded President Woodrow Wilson to appoint one of the Jekyll Island group, Paul Warburg, to the Federal Reserve Board of Governors.
Each of the twelve Federal Reserve Banks was to elect a member of the Federal Advisory Council, which would meet with the Federal Reserve Board of Governors four times a year in Washington, in order to "advise" the Board on future monetary policy. This seemed to assure absolute democracy, as each of the twelve "advisors", representing a different region of the United States, would be expected to speak up for the economic interests of his area, and each of the twelve members would have an equal vote. The theory may have been admirable in its concept, but the hard facts of economic life resulted in a quite different picture. The president of a small bank in St. Louis or Cincinnati, sitting in conference with Paul Warburg and J.P. Morgan to "advise" them on monetary policy, would be unlikely to contradict two of the most powerful international financiers in the world, as a scribbled note from either one of them would be sufficient to plunge his little bank into bankruptcy. In fact, the small banks of the twelve Federal Reserve districts existed only as satellites of the big New York financial interests, and were completely at their mercy. Martin Mayer, in The Bankers, points out that "J.P. Morgan maintained correspondent relationships with many small banks all over the country."30 The big New York banks did not confine themselves to multi-million dollar deals with other great financial interests, but carried on many smaller and more routine dealings with their "correspondent" banks across the United States.
Apparently secure in their belief that their activities would never be exposed to the public, the Morgan-Kuhn, Loeb interests boldly selected the members of the Federal Advisory Council from their correspondent banks and from banks in which they owned stock. No one in the financial community seemed to notice, as nothing was said about it during seventy years of the Federal Reserve System’s operation.
To avoid any suspicion that New York interests might control the Federal Advisory Council, its first president, elected in 1914 by the other members, was J.B. Forgan, president of the First National Bank of
__________________________
30 Martin Mayer, The Bankers, Weybright and
Talley, New York, 1974, p. 207.
41
Chicago. Rand McNally Bankers Directory for 1914 lists the principal correspondents of the large banks. The principal correspondent bank of the Baker-Morgan controlled First National Bank of New York is listed as the First National Bank of Chicago. The principal correspondent listed by the First National Bank of Chicago is the Bank of Manhattan in New York, controlled by Jacob Schiff and Paul Warburg of Kuhn, Loeb Company. James B. Forgan also was listed as a director of Equitable Life Insurance Company, also controlled by Morgan. However, the relationship between First National Bank of Chicago and these New York banks was even closer than these listings indicate.
On page 701 of The Growth of Chicago Banks by F. Cyril James, we find mention of "the First National Bank of Chicago’s profitable connection with the Morgan interests. A goodwill ambassador was hastily sent to New York to invite George F. Baker to become a director of the First National Bank of Chicago."31 (J.B. Forgan to Ream, January 7, 1903.) In effect, Baker and Morgan had personally chosen the first president of the Federal Advisory Council.
James B. Forgan (1852-1924) also shows the obligatory "London Connection" in the operation of the Federal Reserve System. Born in St. Andrew’s, Scotland, he began his banking career there with the Royal Bank of Scotland, a correspondent of the Bank of England. He came to Canada for the Bank of British North America, worked for the Bank of Nova Scotia, which sent him to Chicago in the 1880’s, and by 1900 he had become president of the First National Bank of Chicago. He served for six years as president of the Federal Advisory Council, and when he left the council, he was replaced by Frank O. Wetmore, who had also replaced him as president of the First National Bank of Chicago when Forgan was named chairman of the board.
Representing the New York Federal Reserve district on the first Federal Advisory Council was J.P. Morgan. He was named chairman of the Executive Committee. Thus, Paul Warburg and J.P. Morgan sat in conference at the meetings of the Federal Reserve Board during the first four years of its operation, surrounded by the other Governors and members of the council, who could hardly have been unaware that their futures would be guided by these two powerful bankers.
Another member of the Federal Advisory Council in 1914 was Levi L. Rue, representing the Philadelphia district. Rue was president of the Philadelphia National Bank. Rand McNally Bankers Directory of 1914 listed as principal correspondent of the First National Bank of New York,
__________________________
31 F. Cyril James, The Growth of Chicago Banks,
Harper, New York, 1938.
42
the Philadelphia National Bank. First National Bank of Chicago also listed Philadelphia National Bank as its principal correspondent in Philadelphia. The other members of the Federal Advisory Council included Daniel S. Wing, president of the First National Bank of Boston, W.S. Rowe, president of the First National Bank of Cincinnati, and C.T. Jaffray, president of the First National Bank of Minneapolis. These were all correspondent banks of the New York "big five" banks who controlled the money market in the United States.
Jaffray had an even closer connection with the Baker-Morgan interests. In 1908, to reinvest the large annual dividends from their First National Bank of New York stock, Baker and Morgan set up a holding company, First Security Corporation, which bought 500 shares of the First National Bank of Minneapolis. Thus Jaffray was little more than a wage-earning employee of Baker and Morgan, although he had been "selected" by stockholders of the Federal Reserve Bank of Minneapolis to represent their interests. First Security Corporation also owned 50,000 shares of Chase National Bank, 5400 shares of National Bank of Commerce, 2500 shares of Bankers Trust, 928 shares of Liberty National Bank, the bank of which Henry P. Davison had been president when he was tapped to join the J.P. Morgan firm, and shares of New York Trust, Atlantic Trust and Brooklyn Trust. First Security concentrated on bank stocks which rapidly appreciated in value, and paid handsome annual dividends. In 1927, it earned five million dollars, but paid the shareholders eight million, taking the rest from its surplus.
Another member of the initial Federal Advisory Council was E.F. Swinney, president of the First National Bank of Kansas City. He was also a director of Southern Railway, and lists himself in Who’s Who as "independent in politics".
Archibald Kains represented the San Francisco district on the Federal Advisory Council, although he maintained his office in New York, as president of the American Foreign Banking Corporation.
After serving as a Governor of the Federal Reserve Board from 1914-1918, Paul Warburg did not request another term. However, he was not ready to sever his connection with the Federal Reserve System which he had done so much to set up and put into operation. J.P. Morgan obligingly gave up his seat on the Federal Advisory Council, and for the next ten years, Paul Warburg continued to represent the Federal Reserve district of New York on the Council. He was vice president of the council 1922-25, and president 1926-27. Thus Warburg remained the dominant presence at Federal Reserve Board meetings throughout the 1920s, when the European central banks were planning the great contraction of credit which precipitated the Crash of 1929 and the Great Depression.
43
Although most of the Federal Advisory Council’s "advice" to the Board of Governors has never been reported, on rare instances a few glimpses into its deliberations were afforded by brief items in The New York Times. On November 21, 1916, The Times reported that the Federal Advisory Council had met in Washington for its quarterly conference.
"There was talk about absorbing Europe’s extension of credit to South America and other
countries. Federal Reserve officials said that to maintain a position as one of the world’s bankers
the United States must expect to be called upon to render a good deal of the service performed
largely by England in the past, in extending short term credits necessary in the production and
transportation of goods of all kinds in the world’s trade, and that acceptances in foreign trade
require lower discounts and the freest and most reliable gold markets." (The First World War
was at its zenith in 1916.)
In addition to his service on the Board of Governors and the Federal Advisory Council, Paul Warburg continued to address bankers’ groups about the monetary policies they were expected to follow. On October 22, 1915, he addressed the Twin City Bankers Club, St. Paul, Minnesota during which speech he stated,
"It is to your interest to see the Federal Reserve banks as strong as they possibly can be. It
staggers the imagination to think what the future may have in store for the development of
American banking. With Europe’s foremost powers limited to their own field, with the United
States turned into a creditor nation for all the world, the boundaries of the field that lies open for
us are determined only by our power of safe expansion. The scope of our banking future will
ultimately be limited by the amount of gold that we can muster as the foundation of our banking
and credit structure."
The composition of the Federal Reserve Board of Governors and the Federal Reserve Advisory Council, from its initial membership to the present day, shows links to the Jekyll Island conference and the London banking community which offers incontrovertible evidence, acceptable in any court of law, that there was a plan to gain control of the money and credit of the people of the United States, and to use it for the profit of the architects. Old Jekyll Island hands were Frank Vanderlip, president of the National City Bank, which bought a large portion of the shares of the Federal Reserve Bank of New York in 1914; Paul Warburg of Kuhn, Loeb Company; Henry P. Davison, J.P. Morgan’s righthand man, and director of the First National Bank of New York and the National Bank of Commerce, which took a large portion of Federal Reserve Bank of New York stock; and Benjamin Strong, also known as a Morgan lieutenant,
44
who served as Governor of the Federal Reserve Bank of New York during the 1920’s.*
The selection of the regional members of the Federal Advisory Council from the list of bankers who worked most closely with the "big five" banks of New York, and who were their principal correspondent banks, proves that the much-touted "regional safeguarding of the public interest" by Carter Glass and other Washington proponents of the Federal Reserve Act was from its very inception a deliberate deception. The fact that for seventy years this council was able to meet with the Federal Reserve Board of Governors and to "advise" the Governors on decisions of monetary policy which affected the daily lives of every person in the United States, without the public being aware of their existence, demonstrates that the planners of the central bank operation knew exactly how to achieve their objectives through "administrative processes" of which the public would remain ignorant. The claim that the "advice" of the council members is not binding on the Governors or that it carries no weight is to claim that four times a year, twelve of the most influential bankers in the United States take time from their work to travel to Washington to meet with the Federal Reserve Board merely to drink coffee and exchange pleasantries. It is a claim which anyone familiar with the workings of the business community will find impossible to take seriously. In 1914, it was a four-day trip each way for bankers from the Far West to come to Washington for a council meeting with the Federal Reserve Board. These men had extensive business interests which demanded their time. J.P. Morgan was a director of sixty-three corporations which held annual meetings, and
__________________________
* "The Federal Advisory Council has great
influence with the Federal Reserve Board. Conspicuously upon that council is
J.P. Morgan, the leading member of J.P. Morgan Company and son of the late J.P.
Morgan. Every one of the twelve members of the Advisory Council, as you well
know, was educated in the same atmosphere. The Federal Reserve Act is not only a
special privilege act but privileged persons have been placed in control and are
its advisors in its administration. The Federal Reserve Board and the Federal
Advisory Council administer the Federal Reserve System as its head authority,
and no one of the lesser officials, even if they wished, would dare to cross
swords with them."
(FROM: "Why Is Your Country At War?"
by Charles Lindbergh, published in 1917). The above paragraph explains why
Woodrow Wilson ordered government agents to seize and destroy the printing
plates and copies of this book in the spring of 1918.
45
could hardly be expected to travel to Washington to attend meetings of the Federal Reserve Board if his advice was to be considered of no importance.**
_________________________
** The J.P. Morgan connection has remained
predominant on the Federal Advisory Council. For the past several years, the
prestigious Federal Reserve District No. 2, the New York District, has been
represented on the Federal Advisory Council by Lewis Preston. Preston is
Chairman of J.P. Morgan Company and also Chairman and Chief Executive Officer of
Morgan Guaranty Trust, New York. An heir to the Baldwin fortune (a company
controlled by Morgan), Preston married the heiress to the Pulitzer newspaper
fortune. On February 26, 1929, The New York Times noted that a merger had been
effected between National Bank of Commerce and Guaranty Trust, making them the
largest bank in the United States, with a capital of two billion dollars. The
merger was negotiated by Myron C. Taylor, president of U.S. Steel, a Morgan
firm. The banks occupied adjoining buildings on Wall Street, and, as The New
York Times noted, "The Guaranty Trust Company long has been known as one of
‘the Morgan group’ of banks." The National Bank of Commerce has also
been identified with Morgan interests.
46
CHAPTER FIVE
The House of Rothschild
The success of the Federal Reserve Conspiracy
will raise many questions in the minds of readers who are unfamiliar with the
history of the United States and finance capital. How could the Kuhn, Loeb-Morgan
alliance, powerful though it might be, believe that it would be capable, first,
of devising a plan which would bring the entire money and credit of the people
of the United States into their hands, and second, of getting such a plan
enacted into law?The capability of devising and enacting the "National Reserve Plan", as the immediate result of the Jekyll Island expedition was called, was easily within the powers of the Kuhn, Loeb-Morgan alliance, according to the following from McClure’s Magazine, August 1911, "The Seven Men" by John Moody:
"Seven men in Wall Street now control a great share of the fundamental industry and resources
of the United States. Three of the seven men, J.P. Morgan, James J. Hill, and George F. Baker,
head of the First National Bank of New York belong to the so-called Morgan group; four of them,
John D. and William Rockefeller, James Stillman, head of the National City Bank, and Jacob H.
Schiff of the private banking firm of Kuhn, Loeb Company, to the so-called Standard Oil City Bank group... the central machine of capital extends its control over the United States... The
process is not only economically logical; it is now practically automatic."32
Thus we see that the 1910 plot to seize control of the money and credit of the people of the United States was planned by men who already controlled most of the country’s resources. It seemed to John Moody "practically automatic" that they should continue with their operations.
What John Moody did not know, or did not tell his readers, was that the most powerful men in the United States were themselves answerable to another power, a foreign power, and a power which had been steadfastly seeking to extend its control over the young republic of the United States since its very inception. This power was the financial power of England, centered in the London Branch of the House of Rothschild. The fact was that in 1910, the United States was for all practical purposes being ruled
__________________________
32 John Moody, "The Seven Men",
McClure’s Magazine, August, 1911, p. 418
47
from England, and so it is today. The ten largest bank holding companies in the United States are firmly in the hands of certain banking houses, all of which have branches in London. They are J.P. Morgan Company, Brown Brothers Harriman, Warburg, Kuhn Loeb and J. Henry Schroder. All of them maintain close relationships with the House of Rothschild, principally through the Rothschild control of international money markets through its manipulation of the price of gold. Each day, the world price of gold is set in the London office of N.M. Rothschild and Company.
Although these firms are ostensibly American firms, which merely maintain branches in London, the fact is that these banking houses actually take their direction from London. Their history is a fascinating one, and unknown to the American public, originating as it did in the international traffic in gold, slaves, diamonds, and other contraband. There are no moral considerations in any business decision made by these firms. They are interested solely in money and power.
Tourists today gape at the magnificent mansions of the very rich in Newport, Rhode Island, without realizing that not only do these "cottages" stand as a memorial to the baronial desires of our Victorian millionaires, but that their erection in Newport represented a nostalgic memorialization of the great American fortunes, which had their beginnings in Newport when it was the capital of the slave trade.
The slave trade for centuries had its headquarters in Venice, until Seventeenth Century Britain, the new master of the seas, used its control of the oceans to gain a monopoly. As the American colonies were settled, its fiercely independent people, most of whom did not want slaves, found to their surprise that slaves were being sent to our ports in great numbers.
For many years, Newport was the capital of this unsavory trade. William Ellery, the Collector of the Port of Newport, said in 1791:
"...an Ethiopian cld as soon change his skin as a Newport merchant cld be induced to change so
lucrative a trade.... for the slow profits of any manufactory."
John Quincy Adams remarked in his Diary, page 459, "Newport’s former prosperity was chiefly owing to its extensive employment in the African slave trade."
The pre-eminence of J.P. Morgan and the Brown firm in American finance can be dated to the development of Baltimore as the nineteenth century capital of the slave trade. Both of these firms originated in Baltimore, opened branches in London, came under the aegis of the House of Rothschild, and returned to the United States to open branches in New York and to become the dominant power, not only in finance, but also in government. In recent years, key posts such as Secretary of Defense have been held by Robert Lovett, partner of Brown Brothers Harriman, and Thomas S. Gates, partner of Drexel and Company, a J.P. Morgan sub-
48
sidiary firm. The present Vice President, George Bush, is the son of Prescott Bush, a partner of Brown Brothers Harriman, for many years the senator from Connecticut, and the financial organizer of Columbia Broadcasting System of which he also was a director for many years.
To understand why these firms operate as they do, it is necessary to give a brief history of their origins. Few Americans know that J.P. Morgan Company began as George Peabody and Company. George Peabody (1795-1869), born at South Danvers, Massachusetts, began business in Georgetown, D.C. in 1814 as Peabody, Riggs and Company, dealing in wholesale dry goods, and in operating the Georgetown Slave Market. In 1815, to be closer to their source of supply, they moved to Baltimore, where they operated as Peabody and Riggs, from 1815 to 1835. Peabody found himself increasingly involved with business originating from London, and in 1835, he established the firm of George Peabody and Company in London. He had excellent entree in London business through another Baltimore firm established in Liverpool, the Brown Brothers. Alexander Brown came to Baltimore in 1801, and established what is now known as the oldest banking house in the United States, still operating as Brown Brothers Harriman of New York; Brown, Shipley and Company of England; and Alex Brown and Son of Baltimore. The behind the scenes power wielded by this firm is indicated by the fact that Sir Montagu Norman, Governor of the Bank of England for many years, was a partner of Brown, Shipley and Company.* Considered the single most influential banker in the world, Sir Montagu Norman was organizer of "informal talks" between heads of central banks in 1927, which led directly to the Great Stockmarket Crash of 1929.
Soon after he arrived in London, George Peabody was surprised to be summoned to an audience with the gruff Baron Nathan Mayer Rothschild. Without mincing words, Rothschild revealed to Peabody, that much of the London aristocracy openly disliked Rothschild and refused his invitations. He proposed that Peabody, a man of modest means, be established as a lavish host whose entertainments would soon be the talk of London. Rothschild would, of course, pay all the bills. Peabody accepted the offer, and soon became known as the most popular host in London. His annual Fourth of July dinner, celebrating American Independence, became extremely popular with the English aristocracy, many of whom, while drinking Peabody’s wine, regaled each other with jokes about Rothschild’s crudities and bad manners, without realizing that every drop they drank had been paid for by Rothschild.
__________________________
* "There is an informal understanding that
a director of Brown, Shipley should be on the Board of the Bank of England, and
Norman was elected to it in 1907." Montagu Norman, Current Biography, 1940.
49
It is hardly surprising that the most popular host in London would also become a very successful businessman, particularly with the House of Rothschild supporting him behind the scenes. Peabody often operated with a capital of 500,000 pounds on hand, and became very astute in his buying and selling on both sides of the Atlantic. His American agent was the Boston firm of Beebe, Morgan and Company, headed by Junius S. Morgan, father of John Pierpont Morgan. Peabody, who never married, had no one to succeed him, and he was very favorably impressed by the tall, handsome Junius Morgan. He persuaded Morgan to join him in London as a partner in George Peabody and Company in 1854. In 1860, John Pierpont Morgan had been taken on as an apprentice by the firm of Duncan, Sherman in New York. He was not very attentive to business, and in 1864, Morgan’s father was outraged when Duncan, Sherman refused to make his son a partner. He promptly extended an arrangement whereby one of the chief employees of Duncan, Sherman, Charles H. Dabney, was persuaded to join John Pierpont Morgan in a new firm, Dabney, Morgan and Company. Bankers Magazine, December, 1864, noted that Peabody had withdrawn his account from Duncan, Sherman, and that other firms were expected to do so. The Peabody account, of course, went to Dabney, Morgan Company.
John Pierpont Morgan was born in 1837, during the first money panic in the United States. Significantly, it had been caused by the House of Rothschild, with whom Morgan was later to become associated.
In 1836, President Andrew Jackson, infuriated by the tactics of the bankers who were attempting to persuade him to renew the charter of the Second Bank of the United States, said, "You are a den of vipers. I intend to rout you out and by the Eternal God I will rout you out. If the people only understood the rank injustice of our money and banking system, there would be a revolution before morning."
Although Nicholas Biddle was President of the Bank of the United States, it was well known that Baron James de Rothschild of Paris was the principal investor in this central bank. Although Jackson had vetoed the renewal of the charter of the Bank of the United States, he probably was unaware that a few months earlier, in 1835, the House of Rothschild had cemented a relationship with the United States Government by superseding the firm of Baring as financial agent of the Department of State on January 1, 1835.
Henry Clews, the famous banker, in his book, Twenty-eight Years in Wall Street33, states that the Panic of 1837 was engineered because the charter of the Second Bank of the United States had run out in 1836. Not only did President Jackson promptly withdraw government funds
__________________________
33 Henry Clews, Twenty-eight Years in Wall
Street, Irving Company, New York, 1888, page 157
50
from the Second Bank of the United States, but he deposited these funds, $10 million, in state banks. The immediate result, Clews tells us, is that the country began to enjoy great prosperity. This sudden flow of cash caused an immediate expansion of the national economy, and the government paid off the entire national debt, leaving a surplus of $50 million in the Treasury.
The European financiers had the answer to this situation. Clews further states, "The Panic of 1837 was aggravated by the Bank of England when it in one day threw out all the paper connected with the United States."
The Bank of England, of course, was synonymous with the name of Baron Nathan Mayer Rothschild. Why did the Bank of England in one day "throw out" all paper connected with the United States, that is, refuse to accept or discount any securities, bonds or other financial paper based in the United States? The purpose of this action was to create an immediate financial panic in the United States, cause a complete contraction of credit, halt further issues of stocks and bonds, and ruin those seeking to turn United States securities into cash. In this atmosphere of financial panic, John Pierpont Morgan came into the world. His grandmother, Joseph Morgan, was a well to do farmer who owned 106 acres in Hartford, Connecticut. He later opened the City Hotel, and the Exchange Coffee Shop, and in 1819, was one of the founders of the Aetna Insurance Company.
George Peabody found that he had chosen well in selecting Junius S. Morgan as his successor. Morgan agreed to continue the sub rosa relationship with N.M. Rothschild Company, and soon expanded the firm’s activities by shipping large quantities of railroad iron to the United States. It was Peabody iron which was the foundation for much of American railroad tracks from 1860 to 1890. In 1864, content to retire and leave his firm in the hands of Morgan, Peabody allowed the name to be changed to Junius S. Morgan Company. The Morgan firm then and since has always been directed from London. John Pierpont Morgan spent much of his time at his magnificent London mansion, Prince’s Gate.
One of the high water marks of the successful Rothschild-Peabody Morgan business venture was the Panic of 1857. It had been twenty years since the Panic of 1837: its lessons had been forgotten by hordes of eager investors who were anxious to invest the profits of a developing America. It was time to fleece them again. The stock market operates like a wave washing up on the beach. It sweeps with it many minuscule creatures who derive all of their life support from the oxygen and water of the wave. They coast along at the crest of the "Tide of Prosperity". Suddenly the wave, having reached the high water mark on the beach, recedes, leaving all of the creatures gasping on the sand. Another wave may come in time to
51
save them, but in all likelihood it will not come as far, and some of the sea creatures are doomed. In the same manner, waves of prosperity, fed by newly created money, through an artificial contraction of credit, recedes, leaving those it had borne high to gasp and die without hope of salvation.
Corsair, the Life of J.P. Morgan,34 tells us that the Panic of 1857 was caused by the collapse of the grain market and by the sudden collapse of Ohio Life and Trust, for a loss of five million dollars. With this collapse nine hundred other American companies failed. Significantly, one not only survived, but prospered from the crash. In Corsair, we learn that the Bank of England lent George Peabody and Company five million pounds during the panic of 1857. Winkler, in Morgan the Magnificent35 says that the Bank of England advanced Peabody one million pounds, an enormous sum at that time, and the equivalent of one hundred million dollars today, to save the firm. However, no other firm received such beneficence during this Panic. The reason is revealed by Matthew Josephson, in The Robber Barons. He says on page 60:
"For such qualities of conservatism and purity, George Peabody and Company, the old tree out of
which the House of Morgan grew, was famous. In the panic of 1857, when depreciated securities
had been thrown on the market by distressed investors in America, Peabody and the elder
Morgan, being in possession of cash, had purchased such bonds as possessed real value freely,
and then resold them at a large advance when sanity was restored."36
Thus, from a number of biographies of Morgan, the story can be pieced together. After the panic had been engineered, one firm came into the market with one million pounds in cash, purchased securities from distressed investors at panic prices, and later resold them at an enormous profit. That firm was the Morgan firm, and behind it was the clever maneuvering of Baron Nathan Mayer Rothschild. The association remained secret from the most knowledgeable financial minds in London and New York, although Morgan occasionally appeared as the financial agent in a Rothschild operation. As the Morgan firm grew rapidly during the late nineteenth century, until it dominated the finances of the nation, many observers were puzzled that the Rothschilds seemed so little interested in profiting by investing in the rapidly advancing American economy. John Moody notes, in The Masters of Capital, page 27, "The Rothschilds were content to remain a close ally of Morgan... as far as the American field was concerned.’37 Secrecy was more profitable than valor.
__________________________
34 Corsair, The Life of Morgan
35 John K. Winkler, Morgan the Magnificent,
Vanguard, N.Y. 1930
36 Matthew Josephson, The Robber Barons,
Harcourt Brace, N.Y. 1934
37 John Moody, The Masters of Capital
52
The reason that the European Rothschilds preferred to operate anonymously in the United States behind the facade of J.P. Morgan and Company is explained by George Wheeler, in Pierpont Morgan and Friends, the Anatomy of a Myth, page 17:
"But there were steps being taken even now to bring him out of the financial backwaters--and
they were not being taken by Pierpont Morgan himself. The first suggestion of his name for a role
in the recharging of the reserve originated with the London branch of the House of Rothschild,
Belmont’s employers."38
Wheeler goes on to explain that a considerable anti-Rothschild movement had developed in Europe and the United States which focused on the banking activities of the Rothschild family. Even though they had a registered agent in the United States, August Schoenberg, who had changed his name to Belmont when he came to the United States as the representative of the Rothschilds in 1837, it was extremely advantageous to them to have an American representative who was not known as a Rothschild agent.
Although the London house of Junius S. Morgan and Company continued to be the dominant branch of the Morgan enterprises, with the death of the senior Morgan in 1890 in a carriage accident on the Riviera, John Pierpont Morgan became the head of the firm. After operating as the American representative of the London firm from 1864-1871 as Dabney Morgan Company, Morgan took on a new partner in 1871, Anthony Drexel of Philadelphia and operated as Drexel Morgan and Company until 1895. Drexel died in that year, and Morgan changed the name of the American branch to J.P. Morgan and Company.
LaRouche39 tells us that on February 5, 1891, a secret association known as the Round Table Group was formed in London by Cecil Rhodes, his banker, Lord Rothschild, the Rothschild in-law, Lord Rosebery, and Lord Curzon. He states that in the United States the Round Table was represented by the Morgan group. Dr. Carrol Quigley refers to this group as "The British-American Secret Society" in Tragedy and Hope, stating that "The chief backbone of this organization grew up along the already existing financial cooperation running from the Morgan Bank in New York to a group of international financiers in London led by Lazard Brothers (in 1901)."40
William Guy Carr, in Pawns In The Game states that, "In 1899, J.P. Morgan and Drexel went to England to attend the International Bankers
__________________________
38 George Wheeler, Pierpont Morgan and Friends,
the Anatomy of a Myth, Prentice Hall, N.J. 1973
39 Lyndon H. LaRouche, Jr., Dope, Inc., The New
Benjamin Franklin House Publishing Company, N.Y. 1978
40 Dr. Carrol Quigley, Tragedy and Hope,
Macmillan Co., N.Y.
53
Convention. When they returned, J.P. Morgan had been appointed head representative of the Rothschild interests in the United States. As the result of the London Conference, J.P. Morgan and Company of New York, Drexel and Company of Philadelphia, Grenfell and Company of London, and Morgan Harjes Cie of Paris, M.M. Warburg Company of Germany and America, and the House of Rothschild were all affiliated."41
Apparently unaware of the Peabody connection with the Rothschilds and the fact that the Morgans had always been affiliated with the House of Rothschild, Carr supposed that he had uncovered this relationship as of 1899, when in fact it went back to 1835.*
After World War I, the Round Table became known as the Council on Foreign Relations in the United States, and the Royal Institute of International Affairs in London. The leading government officials of both England and the United States were chosen from its members. In the 1960s, as growing attention centered on the surreptitious governmental activities of the Council on Foreign Relations, subsidiary groups, known as the Trilateral Commission and the Bilderbergers, representing the identical financial interests, began operations, with the more important officials, such as Robert Roosa, being members of all three groups.
__________________________
41 William Guy Carr, Pawns In The Game,
privately printed, 1956, pg. 60
* July 30, 1930 McFadden Basis of Control of
Economic Conditions. This control of the world business structure and of human
happiness and progress by a small group is a matter of the most intense public
interest. In analyzing it, we must begin with the internal group which centers
itself around J.P. Morgan Company. Never before had there been such a powerful
centralized control over finance, industrial production, credit and wages as is
at this time vested in the Morgan group... The Morgan control of the Federal
Reserve System is exercised through control of the management of the Federal
Reserve Bank of New York.
George F. Peabody History of the Great American
Fortunes, Gustavus Myers, Mod. Lib. 537, notes that J.P. Morgan’s father,
Junius S. Morgan, had become a partner of George Peabody in the banking
business. "When the Civil War came on, George Peabody and Company were
appointed the financial representatives in England of the U.S. Government....
with this appointment their wealth suddenly began to pile up; where hitherto
they had amassed the riches by stages not remarkably rapid, they now added many
millions within a very few years." According to writers of the day, the
methods of George Peabody & Company were not only unreasonable but double
treason, in that, while in the act of giving inside aid to the enemy, George
Peabody & Company were the potentiaries of the U.S. Government and were
being well paid to advance its interests. "Springfield Republic",
1866: "For all who know anything on the subject know very well that Peabody
and his partners gave us no faith and no help in our struggle for national
existence. They participated to the fullest in the common English distrust of
our cause and our success, and talked and acted for the South rather than for
our nation. No individuals contributed so much to flooding our money markets and
weakening financial confidence in our nationality than George Peabody &
Company, and none made more money by the operation. All the money that Mr.
Peabody is giving away so lavishly among our institutions of learning was gained
by the speculations of his house in our misfortunes." Also, New York Times,
Oct. 31, 1866: Reconstruction Carpetbaggers Money Fund. Lightning over the
Treasury Building, John Elson, Meador Publishing Co., Boston 41, pg. 53,
"The Bank of England with its subsidiary banks in America (under the
domination of J.P. Morgan) the Bank of France, and the Reichsbank of Germany,
composed an interlocking and cooperative banking system, the main objective of
which was the exploitation of the people."
54
According to William Guy Carr, in Pawns In The Game,42 the initial meeting of these ex officio planners took place in Mayer Amschel Bauer’s Goldsmith Shop in Frankfurt in 1773. Bauer, who adopted the name of "Rothschild" or Red Shield, from the red shield which he hung over his door to advertise his business (the red shield today is the official coat of arms of the City of Frankfurt), (See Cover) "was only thirty years of age when he invited twelve other wealthy and influential men to meet him in Frankfurt. His purpose was to convince them that if they agreed to pool their resources they could then finance and control the World Revolutionary Movement and use it as their Manual of Action to win ultimate control of the wealth, natural resources, and manpower of the entire world. This agreement reached, Mayer unfolded his revolutionary plan. The project would be backed by all the power that could be purchased with their pooled resources. By clever manipulation of their combined wealth it would be possible to create such adverse economic conditions that the masses would be reduced to a state bordering on starvation by unemployment... Their paid propagandists would arouse feelings of hatred and revenge against the ruling classes by exposing all real and alleged cases of extravagance, licentious conduct, injustice, oppression, and persecution. They would also invent infamies to bring into disrepute others who might, if left alone, interfere with their overall plans... Rothschild turned to a manuscript and proceeded to read a carefully prepared plan of action. 1. He argued that LAW was FORCE only in disguise. He reasoned it was logical to conclude ‘By the laws of nature right lies in force.’ 2. Political freedom is an idea, not a fact. In order to usurp political power all that was necessary was to preach ‘Liberalism’ so that the electorate, for the sake of an idea, would yield some of their power and prerogatives which the plotters could then gather into their own hands. 3. The speaker asserted that the Power of Gold had usurped the power of Liberal rulers.... He pointed out that it was immaterial to the success of his plan whether the established governments were destroyed by external or internal foes because the victor had to of necessity ask the aid of ‘Capital’ which ‘Is entirely in our hands’. 4. He argued that the use of any and all means to reach their final goal was justified on the grounds that the ruler who governed by the moral code was not a skilled politician because he left himself vulnerable and in an unstable position. 5. He asserted that ‘Our right lies in force. The word RIGHT is an abstract thought and proves nothing. I find a new RIGHT... to attack by the Right of the Strong, to reconstruct all existing institutions, and to become the sovereign Lord of all those who left to us the Rights to their powers by laying them down to us in their liberalism. 6. The power of our resources must remain invisible until the very moment when it has gained such
__________________________
42 William Guy Carr, Pawns In The Game,
privately printed, 1956
55
strength that no cunning or force can undermine it. He went on to outline twenty-five points. Number 8 dealt with the use of alcoholic liquors, drugs, moral corruption, and all vice to systematically corrupt youth of all nations. 9. They had the right to seize property by any means, and without hesitation, if by doing so they secured submission and sovereignty. 10. We were the first to put the slogans Liberty, Equality, and Fraternity into the mouths of the masses, which set up a new aristocracy. The qualification for this aristocracy is WEALTH which is dependent on us. 11. Wars should be directed so that the nations engaged on both sides should be further in our debt. 12. Candidates for public office should be servile and obedient to our commands, so that they may readily be used. 13. Propaganda--their combined wealth would control all outlets of public information. 14. Panics and financial depressions would ultimately result in World Government, a new order of one world government."
The Rothschild family has played a crucial role in international finance for two centuries, as Frederick Morton, in The Rothschilds writes:
"For the last one hundred and fifty years the history of the House of Rothschild has been to an amazing extent the backstage history of Western Europe."38 (Preface)... Because of their success in making loans not to individuals, but to nations, they reaped huge profits, although as Morton writes, p. 36, "Someone once said that the wealth of Rothschild consists of the bankruptcy of nations."43
E.C. Knuth writes, in The Empire of the City, "The fact that the House of Rothschild made its money in the great crashes of history and the great wars of history, the very periods when others lost their money, is beyond question."44
The Great Soviet Encyclopaedia, states, "The clearest example of a personal linkup (international directorates) on a Western European scale is the Rothschild family. The London and Paris branches of the Rothschilds are bound not just by family ties but also by personal link-ups in jointly controlled companies."45 The encyclopaedia further described these companies as international monopolies.
The sire of the family, Mayer Amschel Rothschild, established a small business as a coin dealer in Frankfurt in 1743. Although previously known as Bauer*, he advertised his profession by putting up a sign depicting an eagle on a red shield, an adaptation of the coat of arms of the City of Frankfurt, to which he added five golden arrows extending from the talons, signifying his five sons. Because of this sign, he took the
__________________________
43 Frederick Morton, The Rothschilds, Fawcett
Publishing Company, N.Y., 1961
44 E.C. Knuth, Empire of the City, p. 71
45 Great Soviet Encyclopaedia, Edition 3, 1973,
Macmillan, London, Vol. 14, pg. 691
* "The original name of Rothschild was
Bauer." p. 397, Henry Clews, Twenty-eight years in Wall Street.
56
name ‘Rothschild" or "Red
Shield". When the Elector of Hesse earned a fortune by renting Hessian
mercenaries to the British to put down the rebellion in the American colonies,
Rothschild was entrusted with this money to invest. He made an excellent profit
both for himself and the Elector, and attracted other accounts. In 1785 he moved
to a larger house, 148 Judengasse, a five story house known as "The Green
Shield" which he shared with the Schiff family.The five sons established branches in the principal cities of Europe, the most successful being James in Paris and Nathan Mayer in London. Ignatius Balla in The Romance of the Rothschilds46 tells us how the London Rothschild established his fortune. He went to Waterloo, where the fate of Europe hung in the balance, saw that Napoleon was losing the battle, and rushed back to Brussels. At Ostend, he tried to hire a boat to England, but because of a raging storm, no one was willing to go out. Rothschild offered 500 francs, then 700, and finally 1,000 francs for a boat. One sailor said, "I will take you for 2000 francs; then at least my widow will have something if we are drowned." Despite the storm, they crossed the Channel.
The next morning, Rothschild was at his usual post in the London Exchange. Everyone noticed how pale and exhausted he looked. Suddenly, he started selling, dumping large quantities of securities. Panic immediately swept the Exchange. Rothschild is selling; he knows we have lost the Battle of Waterloo. Rothschild and all of his known agents continued to throw securities onto the market. Balla says, "Nothing could arrest the disaster. At the same time he was quietly buying up all securities by means of secret agents whom no one knew. In a single day, he had gained nearly a million sterling, giving rise to the saying, ‘The Allies won the Battle of Waterloo, but it was really Rothschild who won.’"*
In The Profits of War, Richard Lewinsohn says, "Rothschild’s war profits from the Napoleonic Wars financed their later stock speculations. Under Metternich, Austria after long hesitation, finally agreed to accept financial direction from the House of Rothschild."47
__________________________
46 Ignatius Balla, The Romance of the
Rothschilds, Everleigh Nash, London, 1913
* The New York Times, April 1, 1915 reported
that in 1914, Baron Nathan Mayer de Rothschild went to court to suppress
Ignatius Balla’s book on the grounds that the Waterloo story about his
grandfather was untrue and libelous. The court ruled that the story was true,
dismissed Rothschild’s suit, and ordered him to pay all costs. The New York
Times noted in this story that "The total Rothschild wealth has been
estimated at $2 billion." A previous story in The New York Times (May 27,
1905) noted that Baron Alphonse de Rothschild, head of the French house of
Rothschild, possessed $60 million in American securities in his fortune,
although the Rothschilds reputedly were not active in the American field. This
explains why their agent, J.P. Morgan, had only $19 million in securities in his
estate when he died in 1913, and securities handled by Morgan were actually
owned by his employer, Rothschild."
47 Richard Lewinsohn, The Profits of War, E.P.
Dutton, 1937
57
After the success of his Waterloo exploit, Nathan Mayer Rothschild gained control of the Bank of England through his near monopoly of "Consols" and other shares. Several "central" banks, or banks which had the power to issue currency, had been started in Europe: The Bank of Sweden, in 1656, which began to issue notes in 1661, the earliest being the Bank of Amsterdam, which financed Oliver Cromwell’s seizure of power in England in 1649, ostensibly because of religious differences. Cromwell died in 1657 and the throne of England was re-established when Charles II was crowned in 1660. He died in 1685. In 1689, the same group of bankers regained power in England by putting King William of Orange on the throne. He soon repaid his backers by ordering the British Treasury to borrow 1,250,000 pounds from these bankers. He also issued them a Royal Charter for the Bank of England, which permitted them to consolidate the National debt (which had just been created by this loan) and to secure payments of interest and principal by direct taxation of the people. The Charter forbade private goldsmiths to store gold and to issue receipts, which gave the stockholders of the Bank of England a money monopoly. The goldsmiths also were required to store their gold in the Bank of England vaults. Not only had their privilege of issuing circulating medium been taken away by government decree, but their fortunes were now turned over to those who had supplanted them.*
In his "Cantos", 46; 27, Ezra Pound refers to the unique privileges which William Paterson advertised in his prospectus for the Charter of the Bank of England:
"Said Paterson
Hath benefit of interest on all
the moneys which it, the bank, creates out of nothing."
The "nothing" which is referred to, of course, is the bookkeeping operation of the bank, which "creates" money by entering a notation that it has "lent" you one thousand dollars, money which did not exist until the bank made the entry.
By 1698, the British Treasury owed 16 million pounds sterling to the Bank of England. By 1815, principally due to the compounding of interest, the debt had risen to 885 million pounds sterling. Some of this increase was due to the wars which had flourished during that period, including the Napoleonic Wars and the wars which England had fought to retain its American Colony.
__________________________
* NOTE: In the United States, after the
stockholders of the Federal Reserve System had consolidated their power in 1934,
our government also issued orders that private citizens could not store or hold
gold.
58
William Paterson (1658-1719) himself benefited little from "the moneys which the bank creates out of nothing", as he withdrew, after a policy disagreement, from the Bank of England a year after it was founded. A later William Paterson became one of the framers of the United States Constitution, while the name lingers on, like the pernicious central bank itself.
Paterson had found himself unable to work with the Bank of England’s stockholders. Many of them remained anonymous, but an early description of the Bank of England stated it was "A society of about 1330 persons, including the King and Queen of England, who had 10,000 pounds of stock, the Duke of Leeds, Duke of Devonshire, Earl of Pembroke, and the Earl of Bradford."
Because of his success in his speculations, Baron Nathan Mayer de Rothschild, as he now called himself, reigned as the supreme financial power in London. He arrogantly exclaimed, during a party in his mansion, "I care not what puppet is placed upon the throne of England to rule the Empire on which the sun never sets. The man that controls Britain’s money supply controls the British Empire, and I control the British money supply."
His brother James in Paris had also achieved dominance in French finance. In Baron Edmond de Rothschild, David Druck writes, "(James) Rothschild’s wealth had reached the 600 million mark. Only one man in France possessed more. That was the King, whose wealth was 800 million. The aggregate wealth of all the bankers in France was 150 million less than that of James Rothschild. This naturally gave him untold powers, even to the extent of unseating governments whenever he chose to do so. It is well known, for example, that he overthrew the Cabinet of Prime Minister Thiers."48
The expansion of Germany under Bismarck was accompanied by his dependence on Samuel Bleichroder, Court Bankers of the Prussian Emperor, who had been known as an agent of the Rothschilds since 1828. The later Chancellor of Germany, Dr. von Bethmann Hollweg, was the son of Moritz Bethmann of Frankfurt, who had intermarried with the Rothschilds. Emperor Wilhelm I also relied heavily on Bischoffsheim, Goldschmidt, and Sir Ernest Cassel of Frankfurt, who emigrated to England and became personal banker to the Prince of Wales, later Edward VII. Cassel’s daughter married Lord Mountbatten, giving the family a direct relationship to the present British Crown.
__________________________
48 David Druck, Baron Edmond de Rothschild,
(Privately printed), N.Y. 1850
49 E.M. Josephson, The Strange Death of
Franklin D. Roosevelt, pg. 39, Chedney Press, N.Y. 1948
59
Josephson49 states that Philip Mountbatten was related through the Cassels to the Meyer Rothschilds of Frankfurt. Thus, the English royal House of Windsor has a direct family relationship to the Rothschilds. In 1901, when Queen Victoria’s son, Edward, became King Edward VII, he re-established the Rothschild ties. Paul Emden in Behind The Throne says, "Edward’s preparation for his metier was quite different from that of his mother, hence he ‘ruled’ less than she did. Gratefully, he retained around him men who had been with him in the age of the building of the Baghdad Railway...there were added to the advisory staff Leopold and Alfred de Rothschild, various members of the Sassoon family, and above all his private financial advisor Sir Ernest Cassel."50
The enormous fortune which Cassel made in a relatively short time gave him an immense power which he never misused. He amalgamated the firm of Vickers Sons with the Naval Construction Company and the Maxim-Nordenfeldt Guns and Ammunition Company, a fusion from which there arose the worldwide firm of Vickers Sons and Maxim. On an entirely different capacity from Cassel were businessmen like the Rothschilds. The firm was run on democratic principles, and the various partners all had to be members of the family. With great hospitality and in a princely manner they led the lives of grand seigneurs, and it was natural that Edward VII should find them congenial. Thanks to their international family relationships and still more extended business connections, they knew the whole world, were well informed about everybody, and had reliable knowledge of matters which did not appear on the surface. This combination of finance and politics had been a trademark of the Rothschilds from the very beginning. The House of Rothschild always knew more than could be found in the papers and even more than could be read in the reports which arrived at the Foreign Office. In other countries also the relations of the Rothschilds extended behind the throne. Not until numerous diplomatic publications appeared in the years after the war did a wider public learn how strongly Alfred de Rothschild’s hand affected the politics of Central Europe during the twenty years before the war (World War I)."
With the control of the money came the control of the news media. Kent Cooper, head of the Associated Press, writes in his autobiography, Barriers Down,
"International bankers under the House of Rothschild acquired an interest in the three leading European agencies."51
Thus the Rothschilds bought control of Reuters International News Agency, based in London, Havas of France, and Wolf in Germany, which controlled the dissemination of all news in Europe.
__________________________
50 Paul Emden, Behind The Throne, Hoddard
Stoughton, London, 1934
51 Kent Cooper, Barriers Down, pg. 21
60
In Inside Europe52, John Gunther wrote in 1936
that any French prime minister, at the end of 1935, was a creature of the
financial oligarchy, and that this financial oligarchy was dominated by twelve
regents, of whom six were bankers, and were headed by Baron Edmond de
Rothschild.The iron grip of the "London Connection" on the media was exposed in a recent book by Ben J. Bagdikian The Media Monopoly, described as "A startling report on the 50 corporations that control what America sees, hears, reads".53 Bagdikian, who edited the nation’s most influential magazine the Saturday Evening Post until the monopoly suddenly closed it down, reveals the interlocking directorates among the fifty corporations which control the news, but fails to trace them back to the five London banking houses which control them. He mentions that CBS interlocks with the Washington Post, Allied Chemical, Wells Fargo Bank, and others, but does not tell the reader that Brown Brothers Harriman controls CBS, or that the Eugene Meyer family (Lazard Freres) controls Allied Chemical and the Washington Post, and Kuhn Loeb Co. the Wells Fargo Bank. He shows the New York Times interlocked with Morgan Guaranty Trust, American Express, First Boston Corporation and others, but does not show how the banking interlocks. He does not mention the Federal Reserve System in his entire book, which is conspicuous by its absence.
Bagdikian documents that the media monopoly is steadily closing down more newspapers and magazines. Washington D.C., with one paper, The Post, is unique among world capitols. London has eleven daily newspapers, Paris fourteen, Rome eighteen, Tokyo seventeen, and Moscow nine. He cites a study from the 1982 World Press Encyclopaedia that the United States is at the bottom of industrial nations in the number of daily newspapers sold per 1,000 population. Sweden leads the list with 572, the United States is at the bottom with 287. There is universal distrust of the media by Americans, because of their notorious monopoly and bias. The media unanimously urge higher taxes on working people, more government spending, a welfare state with totalitarian powers, close relations with Russia, and a rabid denunciation of anyone who opposes Communism. This is the program of "the London Connection." It flaunts a maniacal racism, and has as its motto the dictum of its high priestess, Susan Sontag, that "The white race is the cancer of history." Everyone should be against cancer. The media monopoly deals with its opponents in one of two ways; either frontal assault of libel which the average person cannot afford to litigate, or an iron curtain of silence, the standard treatment for any work which exposes its clandestine activities.
__________________________
52 John Gunther, Inside Europe, 1936
53 Ben H. Bagdikian, The Media Monopoly, Beacon
Press, Boston 1983
61
Although the Rothschild plan does not match any
single political or economic movement since it was enunciated in 1773, vital
parts of it can be discerned in all political revolution since that date.
LaRouche54 points out that the Round Tables sponsored Fabian Socialism in
England, while backing the Nazi regime through a Round Table member in Germany,
Dr. Hjalmar Schacht, and that they used the Nazi Government throughout World War
II through Round Table member Admiral Canaris, while Allen Dulles ran a
collaborating intelligence operation in Switzerland for the Allies.
__________________________
54 Lyndon H. LaRouche, Jr., Dope, Inc., New
Benjamin Franklin House Publishing Co., New York, 1978
62
CHAPTER SIX
The London Connection
"So you see, my dear Coningsby, that the
world is governed by very different personages from what is imagined by those
who are not behind the scenes."55--Disraeli, Prime Minister of England
during Queen Victoria’s reign.In 1775, the colonists of America declared their independence from Great Britain, and subsequently won their freedom by the American Revolution. Although they achieved political freedom, financial independence proved to be a more difficult matter. In 1791, Alexander Hamilton, at the behest of European bankers, formed the first Bank of the United States, a central bank with much the same powers as the Bank of England. The foreign influences behind this bank, more than a century later, were able to get the Federal Reserve Act through Congress, giving them at last the central bank of issue for our economy. Although the Federal Reserve Bank was neither Federal, being owned by private stockholders, nor a Reserve, because it was intended to create money, instead of to hold it in reserve, it did achieve enormous financial power, so much so that it has gradually superseded the popular elected government of the United States. Through the Federal Reserve System, American independence was stealthily but invincibly absorbed back into the British sphere of influence. Thus the London Connection became the arbiter of policy of the United States.
Because of England’s loss of her colonial empire after the Second World War, it seemed that her influence as a world political power was waning. Essentially, this was true. The England of 1980 is not the England of 1880. She no longer rules the waves; she is a second rate, perhaps third rate, military power, but paradoxically, as her political and military power waned, her financial power grew. In Capital City we find, "On almost any measure you care to take, London is the world’s leading financial centre . . . In the 1960s London dominance increased . . ."56
A partial explanation of this fact is given: "Daniel Davison, head of London’s Morgan Grenfell, said, ‘The American banks have brought the necessary money, customers, capital
__________________________
55 Coningsby, by Disraeli, Longmans Co.,
London, 1881, p. 252
56 McRae and Cairncross, Capital City, Eyre
Methuen, London, 1963, p. 1
63
and skills which have established London in its present preeminence . . . . only the American
banks have a lender of last resort. The Federal Reserve Board of the United States can, and does,
create dollars when necessary. Without the Americans, the big dollar deals cannot be put together.
Without them, London would not be credible as an international financial centre.’"57
Thus London is the world’s financial center, because it can command enormous sums of capital, created at its command by the Federal Reserve Board of the United States. But how is this possible? We have already established that the monetary policies of the United States, the interest rates, the volume and value of money, and sales of bonds, are decided, not by the figurehead of the Federal Reserve Board of Governors, but by the Federal Reserve Bank of New York. The pretended decentralization of the Federal Reserve System and its twelve, equally autonomous "regional" banks, is and has been a deception since the Federal Reserve Act became law in 1913. That United States monetary policy stems solely from the Federal Reserve Bank of New York is yet another fallacy. That the Federal Reserve Bank of New York is itself autonomous, and free to set monetary policy for the entire United States without any outside interference is especially untrue.
We might believe in this autonomy if we did not know that the majority stock of the Federal Reserve Bank of New York was purchased by three New York City banks: First National Bank, National City Bank, and the National Bank of Commerce. An examination of the principal stockholders in these banks, in 1914, and today, reveals a direct London connection.
In 1812, the National City Bank began business as the City Bank, in the same room in which the defunct Bank of the United States, whose charter had expired, had been doing business. It represented many of the same stockholders, who were now functioning under a legitimate American charter. During the early 1800s, the most famous name associated with City Bank was Moses Taylor (1806-1882). Taylor’s father had been a confidential agent employed in buying property for the Astor interests while concealing the fact that Astor was the purchaser. Through this tactic, Astor succeeded in buying many farms, and also a great deal of potentially valuable real estate in Manhattan. Although Astor’s capital was reputed to come from his fur trading, a number of sources indicate that he also represented foreign interests. LaRouche58 states that Astor, in exchange for providing intelligence to the British during the years before and after the Revolutionary War, and for inciting Indians to attack
__________________________
57 Ibid, p. 225
58 Lyndon H. LaRouche, Dope, Inc., New Benjamin
Franklin House Publishing Co., N.Y. 1978
64
and kill American settlers along the frontier, received a handsome reward. He was not paid cash, but was given a percentage of the British opium trade with China. It was the income from this lucrative concession which provided the basis for the Astor fortune.
With his father’s connection with the Astor's, young Moses Taylor had no difficulty in finding a place as apprentice in a banking house at the age of 15. Like so many others in these pages, he found his greatest opportunities when many other Americans were going bankrupt during an abrupt contraction of credit. During the Panic of 1837, when more than half the business firms in New York failed, he doubled his fortune. In 1855, he became president of City Bank. During the Panic of 1857, the City Bank profited by the failure of many of its competitors. Like George Peabody and Junius Morgan, Taylor seemed to have an ample supply of cash for buying up distressed stocks. He purchased nearly all the stock of Delaware Lackawanna Railroad for $5 a share. Seven years later, it was selling for $240 a share. Moses Taylor was now worth fifty million dollars.
In August, 1861, Taylor was named Chairman of the Loan Committee to finance the Union Government in the Civil War. The Committee shocked Lincoln by offering the government $5,000,000 at 12% to finance the war. Lincoln refused and financed the war by issuing the famous "Greenbacks" through the U.S. Treasury, which were backed by gold. Taylor continued to increase his fortune throughout the war, and in his later years, the youthful James Stillman became his protégé. In 1882, when Moses Taylor died, he left seventy million dollars.* His son-in-law, Percy Pyne, succeeded him as president of City Bank, which had now become National City Bank. Pyne was paralyzed, and was barely able to function at the bank. For nine years, the bank stagnated, nearly all its capital being the estate of Moses Taylor. William Rockefeller, brother of John D. Rockefeller, had bought into the bank, and was anxious to see it progress. He persuaded Pyne to step aside in 1891 in favor of James Stillman, and soon the National City Bank became the principal repository of the Rockefeller oil income. William Rockefeller’s son, William, married Elsie, James Stillman’s daughter, Isabel. Like so many others in New York banking, James Stillman also had a British connection. His father, Don Carlos Stillman, had come to Brownsville, Texas, as a British agent and blockade runner during the Civil War. Through his banking connections in New York, Don Carlos had been able to find a place for
__________________________
* The New York Times noted on May 24, 1882 that
Moses Taylor was chairman of the Loan Committee of the Associated Banks of New
York City in 1861. Two hundred million dollars worth of securities were
entrusted to him. It is probably due to him more than any other one man that the
government in 1861 found itself with the means to prosecute the war.
65
his son as apprentice in a banking house. In 1914, when National City Bank purchased almost ten per cent of the shares of the newly organized Federal Reserve Bank of New York, two of Moses Taylor’s grandsons, Moses Taylor Pyne and Percy Pyne, owned 15,000 shares of National City stock. Moses Taylor’s son, H.A.C. Taylor, owned 7699 shares of National City Bank. The bank’s attorney, John W. Sterling, of the firm of Shearman and Sterling, also owned 6000 shares of National City Bank. However, James Stillman owned 47,498 shares, or almost twenty percent of the bank’s total shares of 250,000. [See Chart I]
The second largest purchaser of Federal Reserve Bank of New York shares in 1914, First National Bank, was generally known as "the Morgan Bank", because of the Morgan representation on the board, although the bank’s founder George F. Baker held 20,000 shares, and his son G.F. Baker, Jr., had 5,000 shares for twenty-five percent of the bank’s total stock of 100,000 shares. George F. Baker Sr.’s daughter married George F. St. George of London. The St. Georges later settled in the United States, where their daughter, Katherine St. George, became a prominent Congresswoman for a number of years. Dr. E.M. Josephson wrote of her, "Mrs. St. George, a first cousin of FDR and New Dealer, said, ‘Democracy is a failure’." George Baker, Jr.’s daughter, Edith Brevoort Baker, married Jacob Schiff’s grandson, John M. Schiff, in 1934. John M. Schiff is now honorary chairman of Lehman Brothers Kuhn Loeb Company.
The third large purchase of Federal Reserve Bank of New York stock in 1914 was the National Bank of Commerce which issued 250,000 shares. J.P. Morgan, through his controlling interest in Equitable Life, which held 24,700 shares and Mutual Life, which held 17,294 shares of National Bank of Commerce, also held another 10,000 shares of National Bank of Commerce through J.P. Morgan and Company (7800 shares), J.P. Morgan, Jr. (1100 shares), and Morgan partner H.P. Davison (1100 shares). Paul Warburg, a Governor of the Federal Reserve Board of Governors, also held 3000 shares of National Bank of Commerce. His partner, Jacob Schiff had 1,000 shares of National Bank of Commerce. This bank was clearly controlled by Morgan, who was really a subsidiary of Junius S. Morgan Company in London and the N.M. Rothschild Company of London, and Kuhn, Loeb Company, which was also known as a principal agent of the Rothschilds.
The financier Thomas Fortune Ryan also held 5100 shares of National Bank of Commerce stock in 1914. His son, John Barry Ryan, married Otto Kahn’s daughter, Kahn was a partner of Warburg and Schiff in Kuhn, Loeb Company, Ryan’s granddaughter, Virginia Fortune Ryan,
__________________________
59 E.M. Josephson, The Strange Death of
Franklin D. Roosevelt, Chedney Press, N.Y. 1948
66
married Lord Airlie, the present head of J. Henry Schroder Banking Corporation in London and New York. Another director of National Bank of Commerce in 1914, A.D. Juillard, was president of A.D. Juillard Company, a trustee of New York Life, and Guaranty Trust, all of which were controlled by J.P. Morgan. Juillard also had a British connection, being a director of the North British and Mercantile Insurance Company. Juillard owned 2000 shares of National Bank of Commerce stock, and was also a director of Chemical Bank.
In The Robber Barons, by Matthew Josephson, Josephson tells us that Morgan dominated New York Life, Equitable Life and Mutual Life by 1900, which had one billion dollars in assets, and which had fifty million dollars a year to invest. He says,
"In this campaign of secret alliances he (Morgan) acquired direct control of the National Bank of
Commerce; then a part ownership in the First National Bank, allying himself to the very strong
and conservative financier, George F. Baker, who headed it; then by means of stock ownership
and interlocking directorates he linked to the first named banks other leading banks, the Hanover,
the Liberty, and Chase."60
Mary W. Harriman, widow of E.H. Harriman, also owned 5,000 shares of National Bank of Commerce in 1914. E.H. Harriman’s railroad empire had been entirely financed by Jacob Schiff of Kuhn, Loeb Company. Levi P. Morton also owned 1500 shares of National Bank of Commerce stock in 1914. He had been the twenty-second vice-president of the United States, was an ex-Minister from the U.S. to France, and president of L.P. Morton Company, New York, Morton-Rose and Company and Morton Chaplin of London. He was a director of Equitable Life Insurance Company, Home Insurance Company, Guaranty Trust, and Newport Trust.
The astounding idea that the Federal Reserve System of the United States is actually operated from London will probably be rejected at first hearing by most Americans. However, Minsky has become famous for his theory of the "dominant frame". He states that in any particular situation, there is a "dominant frame" to which everything in that situation is related and through which it can be interpreted. The "dominant frame" in the monetary policy decisions of the Federal Reserve System is that these decisions are made by those who stand to benefit most from them. At first glance, this would seem to be the principal stockholders of the Federal Reserve Bank of New York. However, we have seen that these stockholders all have a "London Connection". The "London Connection" becomes more obvious as the dominant power when we find in The
__________________________
60 Matthew Josephson, The Robber Barons, p. 409
67
Capital City61 that only seventeen firms are allowed to operate as merchant bankers in the City of London, England’s financial district. All of them must be approved by the Bank of England. In fact, most of the Governors of the Bank of England come from the partners of these seventeen firms. Clarke ranks the seventeen in order of their capitalization. Number 2 is the Schroder Bank. Number 6 is Morgan Grenfell, the London branch of the House of Morgan and actually its dominant branch. Lazard Brothers is Number 8. N.M. Rothschild is Number 9. Brown Shipley Company, the London branch of Brown Brothers Harriman, is Number 14. These five merchant banking firms of London actually control the New York banks which own the controlling interest in the Federal Reserve Bank of New York.
The control over Federal Reserve System decisions is also founded in another unique situation. Each day, representatives of four other London banking firms meet in the offices of N.M. Rothschild Company in London to fix the price of gold for that day. The other four bankers are from Samuel Montagu Company, which ranks Number 5 on the list of seventeen London merchant banking firms, Sharps Pixley, Johnson Matheson, and Mocatta and Goldsmid. Despite the huge tide of paper pyramided currency and notes which are now flooding the world, at some point, every credit extension must return to be based, in however minuscule a fashion, on some deposit of gold in some bank somewhere in the world. Because of this factor, the London merchant bankers, with their power to set the price of gold each day, become the final arbiters of the volume of money and the price of money in those countries which must bow to their power. Not the least of these is the United States. No official of the Federal Reserve Bank of New York, or of the Federal Reserve Board of Governors, can command the power over the money of the world which is held by these London merchant bankers. Great Britain, while waning in political and military power, today exercises the greatest financial power. It is for this reason that London is the present financial center of the world.
__________________________
61 McRae and Cairncross, Capital City, Eyre
Methuen, London, 1963
68
CHAPTER SEVEN
The Hitler Connection
J. Henry Schroder Banking Company is listed as
Number 2 in capitalization in Capital City62 on the list of the seventeen
merchant bankers who make up the exclusive Accepting Houses Committee in London.
Although it is almost unknown in the United States, it has played a large part
in our history. Like the others on this list, it had first to be approved by the
Bank of England. And, like the Warburg family, the von Schroders began their
banking operations in Hamburg, Germany. At the turn of the century, in 1900,
Baron Bruno von Schroder established the London branch of the firm. He was soon
joined by Frank Cyril Tiarks, in 1902. Tiarks married Emma Franziska of Hamburg,
and was a director of the Bank of England from 1912 to 1945.During World War I, J. Henry Schroder Banking Company played an important role behind the scenes. No historian has a reasonable explanation of how World War I started. Archduke Ferdinand was assassinated at Sarajevo by Gavril Princeps, Austria demanded an apology from Serbia, and Serbia sent the note of apology. Despite this, Austria declared war, and soon the other nations of Europe joined the fray. Once the war had gotten started, it was found that it wasn’t easy to keep it going. The principal problem was that Germany was desperately short of food and coal, and without Germany, the war could not go on. John Hamill in The Strange Career of Mr. Hoover63 explains how the problem was solved.* He quotes from Nordeutsche Allgemeine Zeitung, March 4, 1915, "Justice, however, demands that publicity should be given to the preeminent part taken by the German authorities in Belgium in the solution of this problem. The initiative came from them and it was only due to their continuous relations with the American Relief Committee that the provisioning question was solved." Hamill points out "That is what the Belgian Relief Committee was organized for--to keep Germany in food."
The Belgian Relief Commission was organized by Emile Francqui, director of a large Belgian bank, Societe Generale, and a London mining
__________________________
62 McRae and Cairncross, Capital City, Eyre
Methuen, London, 1963
63 John Hamill, The Strange Career of Mr.
Hoover, William Faro, New York, 1931
* Copies of Hamill’s book were systematically
located and destroyed by government agents, because it was published on the eve
of President Hoover’s re-election campaign.
69
promoter, an American named Herbert Hoover, who had been associated with Francqui in a number of scandals which had become celebrated court cases, notably the Kaiping Coal Company scandal in China, said to have set off the Boxer Rebellion, which had as its goal the expulsion of all foreign businessmen from China. Hoover had been barred from dealing on the London Stock Exchange because of one judgment against him, and his associate, Stanley Rowe, had been sent to prison for ten years. With this background, Hoover was called an ideal choice for a career in humanitarian work.
Although his name is unknown in the United States, Emile Francqui was the guiding spirit behind Herbert Hoover’s rise to fortune. Hamill (on page 156) identifies Francqui as the director of many atrocities committed against natives in the Congo. "For every cartridge they spent, they had to bring in a man’s hand". Francqui’s frightful record may have been the source for the charge later leveled against German soldiers in Belgium, that they chopped off the hands of women and children, a claim which proved to be groundless. Hamill also says that Francqui "tricked the Americans out of the Hankow-Canton railroad concession in China in 1901, and at the same time had ‘stood by’ in case Hoover needed any further help in the ‘taking’ of the Kaiping coal mines. This is the humanitarian who had sole charge of the distribution of the Belgian ‘relief’ during the World War, for which Hoover did the buying and shipping. Francqui was a director with Hoover, in the Chinese Engineering and Mining Company (the Kaiping mines), through which Hoover transported 200,000 Chinese slave workers to the Congo to work Francqui’s copper mines."
Hamill says on page 311 that "Francqui opened the offices of the Belgian Relief in his bank, Societe Generale, as a one-man show, with a letter of permission from the German Governor General von der Goltz dated October 16, 1914.
The New York Herald Tribune of February 18, 1930, quoted by Congressman Louis McFadden in the House on February 26, 1930, said, "One of Belgium’s two directors on the Bank for International Settlements will be Emile Francqui of the Societe Generale, a member of both the Young and Dawes Plan Committees. The board of directors of the international bank will have no more colorful character than Emile Francqui, former Minister of Finance, veteran of the Congo and China . . . he is rated as the richest man in Belgium, and among the twelve richest men in Europe."
Despite his prominence, The New York Times Index mentions Francqui only a few times during two decades before his death. On October 3, 1931, The New York Times quoted Le Peuple of Brussels that Francqui would visit the United States. "As a friend of President Hoover, Monsieur Francqui will not fail to pay a visit to the President."
70
On October 30, 1931, The New York Times reported this visit with the headline, "Hoover-Francqui Talk was Unofficial". "It was stated that Mr. Francqui spent Tuesday night as a personal guest of the President, and that they talked of world financial problems in general, strictly unofficial. Mr. Francqui was an associate of President Hoover during the latters ministrations in Belgium during the war. Their visit had no official significance. Mr. Francqui is a private citizen and not engaged in any official mission."
No reference is made to the Hoover-Francqui business associations which were the subject of huge lawsuits in London. The Francqui visit probably involved Hoover’s Moratorium on German War Debts, which stunned the financial world. On December 15, 1931, Chairman McFadden informed the House of a dispatch in the Public Ledger of Philadelphia, October 24, 1931, "GERMAN REVEALS HOOVER’S SECRET. The American President was in intimate negotiations with the German government regarding a year’s debt holiday as early as December, 1930." McFadden continued, "Behind the Hoover announcement there were many months of hurried and furtive preparations both in Germany and in Wall Street offices of German bankers. Germany, like a sponge, had to be saturated with American money. Mr. Hoover himself had to be elected, because this scheme began before he became President. If the German international bankers of Wall Street--that is Kuhn Loeb Company, J. & W. Seligman, Paul Warburg, J. Henry Schroder--and their satellites had not had this job waiting to be done, Herbert Hoover would never have been elected President of the United States. The election of Mr. Hoover to the Presidency was through the influence of the Warburg Brothers, directors of the great bank of Kuhn Loeb Company, who carried the cost of his election. In exchange for this collaboration Mr. Hoover promised to impose the moratorium of German debts. Hoover sought to exempt Kreuger’s loan to Germany of $125 million from the operation of the Hoover Moratorium. The nature of Kreuger’s swindle was known here in January when he visited his friend, Mr. Hoover, in the White House."
Not only did Hoover entertain Francqui in the White House, but also Ivar Kreuger, the most famous swindler of the twentieth century.
When Francqui died on November 13, 1935, The New York Times memorialized him as "the copper king of the Congo . . . Mr. Francqui, last year having gained dictatorial powers over the belga, maintained it on the gold standard during a crisis. In 1891 he led an expedition into the Congo and gained it for King Leopold. A man of great wealth, rated among the twelve richest men in Europe, he secured enormous copper deposits. He was Minister of State in 1926 and Minister of Finance in 1934. It was his pride that he never accepted a centime of remuneration for his services to the government. While consul general at Shanghai, he secured valuable concessions, notably the Kaiping coal mines and the
71
railway concession for the Tientsin Railroad. He was governor of the Societe Generale de Belgique, Lloyd Royal Belge, and regent of La Banque Nationale de Belgique."
The Times does not mention Francqui’s business partnerships with Hoover. Like Francqui, Hoover also refused remuneration for "government service", and as Secretary of Commerce and as President of the United States, he turned his salary back to the government.
On December 13, 1932, Chairman McFadden introduced a resolution of impeachment against President Hoover for high crimes and misdemeanors, which covers many pages, including violation of contracts, unlawful dissipation of the financial resources of the United States, and his appointment of Eugene Meyer to the Federal Reserve Board. The resolution was tabled and never acted upon by the House.
In criticizing Hoover’s Moratorium of German War Debts, McFadden had referred to Hoover’s "German" backers. Although all of the principals of "the London Connection" did originate in Germany, most of them in Frankfurt, at the time they sponsored Hoover’s candidacy for the Presidency of the United States, they were operating from London, as Hoover himself had done for most of his career.
Also, the Hoover Moratorium was not intended to "help" Germany, as Hoover had never been "pro-German". The Moratorium on Germany’s war debts was necessary so that Germany would have funds for rearming. In 1931, the truly forward-looking diplomats were anticipating the Second World War, and there could be no war without an "aggressor".
Hoover had also carried out a number of mining promotions in various parts of the world as a secret agent for the Rothschilds, and had been rewarded with a directorship in one of the principal Rothschild enterprises, the Rio Tinto Mines in Spain and Bolivia. Francqui and Hoover threw themselves into the seemingly impossible task of provisioning Germany during the First World War. Their success was noted in Nordeutsche Allgemeine Zeitung, March 13, 1915, which noted that large quantities of food were now arriving from Belgium by rail. Schmoller’s Yearbook for Legislation, Administration and Political Economy for 1916, shows that one billion pounds of meat, one and a half billion pounds of potatoes, one and a half billion pounds of bread, and one hundred twenty-one millions pounds of butter had been shipped from Belgium to Germany in that year. A patriotic British woman who had operated a small hospital in Belgium for several years, Edith Cavell, wrote to the Nursing Mirror in London, April 15, 1915, complaining that the "Belgian Relief" supplies were being shipped to Germany to feed the German army. The Germans considered Miss Cavell to be of no importance, and paid no attention to her, but the British Intelligence Service in London was appalled by Miss Cavell’s discovery, and demanded that the Germans arrest her as a spy.
72
Sir William Wiseman, head of British Intelligence, and partner of Kuhn Loeb Company, feared that the continuance of the war was at stake, and secretly notified the Germans that Miss Cavell must be executed. The Germans reluctantly arrested her and charged her with aiding prisoners of war to escape. The usual penalty for this offense was three months imprisonment, but the Germans bowed to Sir William Wiseman’s demands, and shot Edith Cavell, thus creating one of the principal martyrs of the First World War.
With Edith Cavell out of the way, the "Belgian Relief" operation continued, although in 1916, German emissaries again approached London officials with the information that they did not believe Germany could continue military operations, not only because of food shortages, but because of financial problems. More "emergency relief" was sent, and Germany continued in the war until November, 1918. Two of Hoover’s principal assistants were a former lumber shipping clerk from the West Coast, Prentiss Gray, and Julius H. Barnes, a grain salesman from Duluth. Both men became partners in J. Henry Schroder Banking Corporation in New York after the war, and amassed large fortunes, principally in grain and sugar.
With the entry of the United States into the war, Barnes and Gray were given important posts in the newly created U.S. Food Administration, which also was placed under Herbert Hoover’s direction. Barnes became President of the Grain Corporation of the U.S. Food Administration from 1917 to 1918, and Gray was chief of Marine Transportation. Another J. Henry Schroder partner, G. A. Zabriskie, was named head of the U.S. Sugar Equalization Board. Thus the London Connection controlled all food in the United States through its grain and sugar "Czars" during the First World War. Despite many complaints of corruption and scandal in the U.S. Food Administration, no one was ever indicted. After the war, the partners of J. Henry Schroder Company found that they now owned most of Cuba’s sugar industry. One partner, M.E. Rionda, was president of Cuba Cane Corporation, and director of Manati Sugar Company, American British and Continental Corporation, and other firms. Baron Bruno von Schroder, senior partner of the firm, was a director of North British and Mercantile Insurance Company. His father, Baron Rudolph von Schroder of Hamburg, was a director of Sao Paulo Coffee Ltd., one of the largest Brazilian coffee companies, with F.C. Tiarks, also of the Schroder firm.*
__________________________
* The New York Times noted on October 11, 1923:
"Frank C. Tiarks, Governor of the Bank of England, will spend two weeks
here to set up the opening of the banking house branch of J. Henry Schroder of
London."
73
After the war, Zabriskie, who had been sugar Czar of the United States by presiding over the U.S. Sugar Equalization Board, became the president of several of the largest baking corporations in the United States: Empire Biscuit, Southern Baking Corporation, Columbia Baking, and other firms.
As his principal assistant in the U.S. Food Administration, Hoover chose Lewis Lichtenstein Strauss, who was soon to become a partner in Kuhn Loeb Company, marrying the daughter of Jerome Hanauer of Kuhn Loeb. Throughout his distinguished humanitarian service with the Belgian Relief Commission, the U.S. Food Administration, and, after the war, the American Relief Administration, Hoover’s closest associate was one Edgar Rickard, born in Pontgibaud, France. In Who’s Who, he states that he was "World War administrative assistant to Herbert Hoover in all war and post-war organizations including the Commission For Relief in Belgium. He also served on the U.S. Food Administration from 1914-1924." He remained one of Hoover’s closest friends, and usually the Rickards and Hoovers took their vacations together. After Hoover became Secretary of Commerce under Coolidge, Hamill tells us that Hoover awarded his friend the Hazeltine Radio patents, which paid him one million dollars a year in royalties.
In 1928, "the London Connection" decided to run Herbert Hoover for president of the United States. There was only one problem; although Herbert Hoover had been born in the United States, and was thus eligible for the office of the presidency, according to the Constitution, he had never had a business address or a home address in the United States, as he had gone abroad just after completing college at Stanford. The result was that during his campaign for the presidency, Herbert Hoover listed as his American address Suite 2000, 42 Broadway, New York, which was the office of Edgar Rickard. Suite 2000 was also shared by the grain tycoon and partner of J. Henry Schroder Banking Corporation, Julius H. Barnes.
After Herbert Hoover was elected president of the United States, he insisted on appointing one of the old London crowd, Eugene Meyer, as Governor of the Federal Reserve Board. Meyer’s father had been one of the partners of Lazard Freres of Paris, and Lazard Brothers of London. Meyer, with Baruch, had been one of the most powerful men in the United States during World War I, a member of the famous Triumvirate which exercised unequalled power; Meyer as Chairman of the War Finance Corporation, Bernard Baruch as Chairman of the War Industries Board, and Paul Warburg as Governor of the Federal Reserve System.
A longtime critic of Eugene Meyer, Chairman Louis McFadden of the House Banking and Currency Committee, was quoted in The New York Times, December 17, 1930, as having made a speech on the floor of the House attacking Hoover’s appointment of Meyer, and charging that "He
74
represents the Rothschild interest and is liaison officer between the French Government and J.P. Morgan." On December 18, The Times reported that "Herbert Hoover is deeply concerned" and that McFadden’s speech was "an unfortunate occurrence." On December 20, The Times commented on the editorial page, under the headline, "McFadden Again", "The speech ought to insure the Senate ratification of Mr. Meyer as head of the Federal Reserve. The speech was incoherent, as Mr. McFadden’s speeches usually are." As The Times predicted, Meyer was duly approved by the Senate.
Not content with having a friend in the White House, J. Henry Schroder Corporation was soon embarked on further international adventures, nothing less than a plan to set up World War II. This was to be done by providing, at a crucial juncture, the financing for Adolf Hitler’s assumption of power in Germany. Although any number of magnates have been given credit for the financing of Hitler, including Fritz Thyssen, Henry Ford, and J.P. Morgan, they, as well as others, did provide millions of dollars for his political campaigns during the 1920s, just as they did for others who also had a chance of winning, but who disappeared and were never heard from again. In December of 1932, it seemed inevitable to many observers of the German scene that Hitler was also ready for a toboggan slide into oblivion. Despite the fact that he had done well in national campaigns, he had spent all the money from his usual sources and now faced heavy debts. In his book Aggression, Otto Lehmann-Russbeldt tells us that "Hitler was invited to a meeting at the Schroder Bank in Berlin on January 4, 1933. The leading industrialists and bankers of Germany tided Hitler over his financial difficulties and enabled him to meet the enormous debt he had incurred in connection with the maintenance of his private army. In return, he promised to break the power of the trade unions. On May 2, 1933, he fulfilled his promise."64
Present at the January 4, 1933 meeting were the Dulles brothers, John Foster Dulles and Allen W. Dulles of the New York law firm, Sullivan and Cromwell, which represented the Schroder Bank. The Dulles brothers often turned up at important meetings. They had represented the United States at the Paris Peace Conference (1919); John Foster Dulles would die in harness as Eisenhower’s Secretary of State, while Allen Dulles headed the Central Intelligence Agency for many years. Their apologists have seldom attempted to defend the Dulles brothers appearance at the meeting which installed Hitler as the Chancellor of Germany, preferring to pretend that it never happened. Obliquely, one biographer Leonard Mosley, bypasses it in Dulles when he states,
__________________________
64 Otto Lehmann-Russbeldt, Aggression,
Hutchinson & Co., Ltd., London, 1934, p. 44
75
considerable interest during the early 1930’s, having represented several provincial governments,
some large industrial combines, a number of big American companies with interests in the Reich,
and some rich individuals."65
Allen Dulles later became a director of J. Henry Schroder Company. Neither he nor J. Henry Schroder were to be suspected of being pro-Nazi or pro-Hitler; the inescapable fact was that if Hitler did not become Chancellor of Germany, there was little likelihood of getting a Second World War going, the war which would double their profits.*
The Great Soviet Encyclopaedia states "The banking house Schroder Bros. (it was Hitler’s banker) was established in 1846; its partners today are the barons von Schroeder, related to branches in the United States and England."66**
The financial editor of "The Daily Herald" of London wrote on Sept. 30, 1933 of "Mr. Norman’s decision to give the Nazis the backing of the Bank (of England.)" John Hargrave, in his biography of Montagu Norman says,
"It is quite certain that Norman did all he could to assist Hitlerism to gain and maintain political
power, operating on the financial plane from his stronghold in Threadneedle Street." [i.e. Bank
of England.--Ed.]
Baron Wilhelm de Ropp, a journalist whose closest friend was Major F.W. Winterbotham, chief
of Air Intelligence of the British Secret Service, brought the Nazi philosopher, Alfred Rosenberg, to London and introduced him to Lord Hailsham, Secretary for War, Geoffrey Dawson, editor of The Times, and Norman, Governor of the Bank of England. After talking with Norman, Rosenberg met with the representative of the Schroder Bank of London. The managing director of the Schroder Bank, F.C. Tiarks, was also a director of the Bank of England. Hargrave says (p. 217), "Early in 1934 a select group of City financiers gathered in Norman’s room behind the
windowless walls, Sir Robert Kindersley, partner of Lazard Brothers, Charles Hambro, F.C.
Tiarks, Sir Josiah Stamp, (also a director of the Bank of England). Governor Norman spoke of
the political situation in Europe. A new power had established itself, a great ‘stabilizing
__________________________
65 Leonard Mosley, Dulles, Dial
Publishing Co., New York 1978, p. 88
* Ezra Pound, in an April 18,
1943 broadcast over Radio Rome stated, ". . .and men in America, not
content with this war are already aiming at the next one. The time to object is
now."
66 The Great Soviet
Encyclopaedia, Macmillan, London, 1973, v.2, p. 620
** The New York Times noted on
October 11, 1944: "Senator Claude Pepper criticized John Foster Dulles,
Gov. Dewey’s foreign relations advisor for his connection with the law firm of
Sullivan and Cromwell and having aided Hitler financially in 1933. Pepper
described the January 4, 1933 meeting of Franz von Papen and Hitler in Baron
Schroder’s home in Cologne, and from that time on the Nazis were able to
continue their march to power."
76
force’, namely, Nazi Germany. Norman advised his co-workers to include Hitler in their plans
for financing Europe. There was no opposition."
In Wall Street and the Rise of Hitler, Antony C. Sutton writes "The Nazi Baron Kurt von Schroeder acted as the conduit for I.T.T. money funneled to Heinrich Himmler’s S.S. organization in 1944, while World War II was in progress, and the United States was at war with Germany."67 Kurt von Schroeder, born in 1889, was partner in the Cologne Bankhaus, J.H. Stein & Co., which had been founded in 1788. After the Nazis gained power in 1933, Schroeder was appointed the German representative at the Bank of International Settlements. The Kilgore Committee in 1940 stated that Schroeder’s influence with the Hitler Administration was so great that he had Pierre Laval appointed head of the French Government during the Nazi Occupation. The Kilgore Committee listed more than a dozen important titles held by Kurt von Schroeder in the 1940’s, including President of Deutsche Reichsbahn, Reich Board of Economic Affairs, SS Senior Group Leader, Council of Reich Post Office, Deutsche Reichsbank and other leading banks and industrial groups. Schroeder served on the board of all International Telephone and Telegraph subsidiaries in Germany.
In 1938, the London Schroder Bank became the German financial agent in Great Britain. The New York branch of Schroder had been merged in 1936 with the Rockefellers, as Schroder, Rockefeller, Inc. at 48 Wall Street. Carlton P. Fuller of Schroder was president of this firm, and Avery Rockefeller was vice-president. He had been a behind the scenes partner of J. Henry Schroder for years, and had set up the construction firm of Bechtel Corporation, whose employees (on leave) now play a leading role in the Reagan Administration, as Secretary of Defense and Secretary of State.
Ladislas Farago, in The Game of the Foxes,68 reported that Baron William de Ropp, a double agent, had penetrated the highest echelons in pre-World War II days, and Hitler relied upon de Ropp as his confidential consultant about British affairs. It was de Ropp’s advice which Hitler followed when he refused to invade England.
Victor Perlo writes, in The Empire of High Finance:
"The Hitler government made the London Schroder Bank their financial agent in Britain and
America. Hitler’s personal banking account was with J.M. Stein Bankhaus, the German subsidiary
of the Schroder Bank. F.C. Tiarks of the British J. Henry Schroder Company
__________________________
67 Antony C. Sutton, WALL STREET
AND THE RISE OF HITLER, 76 Press, Seal Beach, California, 1976, p. 79
68 Ladislas Farago, The Game of
the Foxes, 1973
77
was a member of the Anglo-German Fellowship with two other partners as members, and a
corporate membership."69
The story goes much further than Perlo suspects. J. Henry Schroder WAS the Anglo-German Fellowship, the English equivalent of the America First movement, and also attracting patriots who did not wish to see their nation involved in a needless war with Germany. During the 1930’s, until the outbreak of World War II, the Schroders poured money into the Anglo-German Fellowship, with the result that Hitler was convinced he had a large pro-German fifth column in England composed of many prominent politicians and financiers. The two divergent political groups in the 1930’s in England were the War Party, led by Winston Churchill, who furiously demanded that England go to war against Germany, and the Appeasement Party, led by Neville Chamberlain. After Munich, Hitler believed the Chamberlain group to be the dominant party in England, and Churchill a minor rabble-rouser. Because of his own financial backers, the Schroders, were sponsoring the Appeasement Party, Hitler believed there would be no war. He did not suspect that the backers of the Appeasement Party, now that Chamberlain had served his purpose in duping Hitler, would cast Chamberlain aside and make Churchill the Prime Minister. It was not only Chamberlain, but also Hitler, who came away from Munich believing that it would be "Peace in our time."
The success of the Schroders in duping Hitler into this belief explains several of the most puzzling questions of World War II. Why did Hitler allow the British Army to decamp from Dunkirk and return home, when he could have wiped them out? Against the frantic advice of his generals, who wished to deliver the coup de grace to the English Army, Hitler held back because he did not wish to alienate his supposed vast following in England. For the same reason, he refused to invade England during a period when he had military superiority, believing that it would not be necessary, as the Anglo-German Fellowship group was ready to make peace with him. The Rudolf Hess flight to England was an attempt to confirm that the Schroder group was ready to make peace and form a common bond against the Soviets. Rudolf Hess continues to languish in prison today, many years after the war, because he would, if released,
__________________________
69 Victor Perlo, The Empire of
High Finance, International Publishers, 1957, p. 177
78
testify that he had gone to England to contact the members of the Anglo-German Fellowship, that is, the Schroder group, about ending the war.*
If anyone supposes this is all ancient history, with no application to the present political scene, we introduce the name of John Lowery Simpson of Sacramento, California. Although he appears for the first time in Who’s Who in America for 1952, Mr. Simpson states that he served under Herbert Hoover on the Commission for Relief in Belgium from 1915 to 1917; U.S. Food Administration, 1917 to 1918, American Relief Commission, 1919, and with P.N. Gray Company, Vienna, 1919 to 1921. Gray was the Chief of Maritime Transportation for the U.S. Food Administration, which enabled him to set up his own shipping company after the war. Like other Hoover humanitarians, Simpson also joined the J. Henry Schroder Banking Company (Adolf Hitler’s personal bankers) and the J. Henry Schroder Trust Company. He also became a partner of Schroder-Rockefeller Company when that investment trust backed a construction company which became the world’s largest, the firm of Bechtel Incorporated. Simpson was chairman of the finance committee of Bechtel Company, Bechtel International, and Canadian Bechtel. Simpson states he was consultant to the Bechtel-McCone interests in war production during World War II. He served on the Allied Control Commission in Italy 1943-44. He married Margaret Mandell, of the merchant family for whom Col. Edward Mandell House was named, and he backed a California personality, first for Governor, then for President. As a result, Simpson and J. Henry Schroder Company now have serving them as Secretary of Defense, former Bechtel employee Caspar Weinberger. As Secretary of State they have serving them George Pratt Schultz, also a Bechtel employee, who happens to be a Standard Oil heir, reaffirming the Schroder-Rockefeller company ties. Thus the "conservative" Reagan Administration has a Secretary of Defense from Schroder Company, a Secretary of State from Schroder-Rockefeller, and a vice president whose father was senior partner of Brown Brothers Harriman.
__________________________
* The following accounts are
from The New York Times: October 21, 1945, "A broadcast over the Luxembourg
radio said tonight that Baron Kurt von Schroder, former banker who helped
finance the rise of the Nazi party, had been recognized in an American prison
camp and arrested." November 1, 1945, "British Army Headquarters:
Baron Kurt von Schroder, 55 year old banker and friend of Heinrich Himmler is
being held in Dusseldorf pending decision on his indictment as a war criminal,
the Military Government official announcement said today." February 29,
1948, "An immediate investigation was demanded yesterday by the Society for
the Prevention of World War III as to why the German Nazi banker, Kurt von
Schroder, was not tried as a war criminal by an allied military tribunal. Noting
that von Schroder was sentenced last November to three months imprisonment and
fined 1500 Reichsmarks by a German denazification court in Bielefeld, in the
British Zone, C. Monteith Gilpin, secretary for the society said the question
should be asked why von Schroder was allowed to escape allied justice, and why
our own officials have not demanded that von Schroder be tried by an Allied
military tribunal. ‘Von Schroder is as guilty as Hitler or Goering.’"
79
The Heritage Foundation has also been an
important factor in the policy-making of the Reagan Administration. Now we find
that the Heritage Foundation is part of the Tavistock Institute network,
directed by British Intelligence. The financial decisions are still made at the
Bank of England, and who is head of the Bank of England? Sir Gordon Richardson,
chairman of J. Henry Schroder Co. of London and New York from 1962 to 1972, when
he became Governor of the Bank of England. The "London Connection" has
never been more firmly in the saddle of the United States Government.
On July 3, 1983, The New York Times announced
that Gordon Richardson, Governor of the Bank of England for the past ten years,
had been replaced by Robert Leigh-Pemberton, Chairman of the National
Westminster Bank. The list of directors of National Westminster Bank reads like
a Who’s Who of the British ruling class. They include the Chairman, Lord
Aldenham, who is also Chairman of Antony Gibbs & Son, merchant bankers, one
of the seventeen privileged firms chartered by the Bank of England; Sir Walter
Barrie, Chairman of the British Broadcasting System; F.E. Harmer, Governor of
the London School of Economics, the training school for the international
bankers, and chairman of New Zealand Shipping Company; Sir E.C. Mieville,
private secretary to the King of England 1937-45; Marquess of Salisbury, Lord
Cecil, Lord Privy Seal (the Cecils have been considered one of England’s three
ruling families since the Middle Ages); Lord Leathers, Baron of Purfleet,
Minister of War Transport 1941-45, chairman of William Cory group of companies;
Sir W.H. Coates and W.J. Worboys of Imperial Chemical Industries (the English
DuPont); Earl of Dudley, chairman British Iron & Steel, Sir W. Benton Jones,
chairman United Steel and many other steel companies; Sir G.E. Schuster, Bank of
New Zealand; East India Coal Company; A. d’A. Willis, Ashanti Goldfields and
many banks, tea companies and other firms; V.W. Yorke, chairman of Mexican
Railways Ltd.
Richardson, former chairman of Schroders with a
New York subsidiary holding Federal Reserve Bank of New York stock, was replaced
by the chairman of National Westminster, with a subsidiary in New York holding
Federal Reserve Bank of New York stock. Robert Leigh Pemberton, a director of
Equitable Life Assurance Society (J.P. Morgan), married the daughter of the
Marchioness of Exeter, (the Cecil Burghley family). Thereby, the control of the
London Connection remains constantly in effect.
The list of the present directors of J. Henry
Schroder Bank and Trust shows the continuing international influence since the
First World War. George A. Braga is also director of Czarnikow-Rionda Company,
vice-president of Francisco Sugar Company, president of Manati Sugar Company,
and vice-president of New Tuinicui Sugar Company. His relative,
80
Rionda B. Braga, is president of Francisco
Sugar Company and vice-president of Manati Sugar Company. The Schroder control
of sugar goes back to the U.S. Food Administration under Herbert Hoover and
Lewis L. Strauss of Kuhn, Loeb, Company during World War I. Schroder’s
attorneys are the firm of Sullivan and Cromwell. John Foster Dulles of this firm
was present during the historic agreement to finance Hitler, and was later
Secretary of State in the Eisenhower administration. Alfred Jaretzki, Jr., of
Sullivan and Cromwell is also a director of Manati Sugar Company and Francisco
Sugar Company.
Another director of J. Henry Schroder is Norris
Darrell, Jr., born in Berlin, Germany, partner of Sullivan and Cromwell, and a
director of Schroder Trust Company. Bayless Manning, partner of the Wall Street
law firm of Paul, Weiss, Rifkind and Wharton, is also a director of J. Henry
Schroder. He was president of the Council on Foreign Relations from 1971-1977,
and is editor in chief of the Yale Law Review.
Paul H. Nitze, the prominent "disarmament
negotiator" for the United States government, is a director of Schroder’s
Inc. He married Phyllis Pratt, of the Standard Oil fortune, whose father gave
the Pratt family mansion as the building which houses the Council on Foreign
Relations.
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