Section III
THE NEW ALCHEMY
 

The ancient alchemists sought in vain to convert lead into gold. Modern alchemists have succeeded in that quest.

 

The lead bullets of war have yielded an endless source of gold for those magicians who control the Mandrake Mechanism. The startling fact emerges that, without the ability to create fiat money, most modern wars simply would not have occurred.

 

As long as the Mechanism is allowed to function, future wars are inevitable. This is the story of how that came to pass.

Lord Mersey (right) was put in charge of an official inquiry into the sinking of the Lusitania. It was not an investigation but a coverup. He was instructed by the Admiralty to place the entire blame on the Captain of the ship.

 

Mersey obeyed his orders but refused payment for his services and declined to accept further judicial assignments. In later years, he said the affair "was a damn dirty business."

 

11. The Rothschild Formula
12. Sink the Lusitania
13. Masquerade in Moscow
14. The Best Enemy Money Can Buy

 

 

 

 

 

 

 

Chapter Eleven
THE ROTHSCHILD FORMULA

 

The rise of the House of Rothschild in Europe; the tradition among financiers of profiting from both sides of armed conflict; the formula by which war is converted into debt and debt converted back into war.
 

So far we have adhered closely to the subject of money and the history of its manipulation by political and monetary scientists.

 

Now we are going to take a short detour along a parallel path and view some of the same historical scenery from a different perspective. As we progress, it may seem that we have lost our way, and you may wonder what connection any of this can possibly have with the Federal Reserve System.

 

Please be assured, however, it has everything to do with it, and, when we finally return to that topic, the connection will have become painfully clear.
 

 

 

THE PROFITS OF WAR
The focus of this chapter is on the profits of war and, more [specifically, the tendency of those who reap those profits to manipulate governments into military conflicts, not for national or patriotic reasons, but for private gain.

 

The mechanism by which [this was accomplished in the past was more complex than simply lending money to warring governments and then collecting interest, although that was part of it The real payoff has always been in |he form of political favoritism in the market place.

 

Writing in the year 1937, French historian Richard Lewinsohn explains:

Although often called bankers, those who financed wars in the pre-capitalist period... were not bankers in the modern sense of the [word. Unlike modern bankers who operate with money deposited with them by their clients [or, in more recent times, created out of nothing by a central bank - E.G.], they generally worked with the fortune which they themselves had amassed or inherited, and which they lent at a high rate of interest. Thus those who risked the financing of a war were for the most part already very rich, and this was the case down to the seventeenth century.

When they agreed to finance a war, these rich lenders did not, however, always attach great importance to the rate of interest In this respect they often showed the greatest compliance to their august clients.

 

But in return they secured for themselves privileges which could be turned into industrial or commercial profit, such as mining concessions, monopolies of sale or importation, etc. Sometimes even they were given the right to appropriate certain taxes as a guarantee of their loans.

 

So though the loan itself carried a very real risk and often did not bring in much interest, the indirect profits were very considerable, and the lenders' leniency well rewarded.¹
 

 

 

THE ROTHSCHILD DYNASTY
No discussion of banking as a mechanism for financing wars would be complete without turning eventually to the name Rothschild.

 

It was Mayer Amschel Rothschild who is quoted as saying:

"Let me issue and control a nation's money and I care not who writes the laws."²

Biographer Frederic Morton concluded that the Rothschild dynasty had:

"...conquered the world more thoroughly, more cunningly, and much more lastingly than all the Ceasars before or all the Hitlers after them."³

The dynasty was begun in Frankfurt, Germany, in the middle of the eighteenth century by Mayer Amschel Bauer, the son of a goldsmith.

 

Mayer became a clerk in the Oppenheimer Bank in Hanover and was eventually promoted to junior partner. After his father's death, he returned to his home in Frankfurt to continue the family business. Over the door hung a red shield with an eagle as a sign to identify the establishment.

 

The German words for red shield are rothschild, so he changed his name from Bauer to Rothschild and added five gold arrows held in the talons of the eagle to represent his five sons.

The Rothschild fortune began when Mayer adopted the practice of fractional-reserve banking. As we have seen, he was not alone in this, but the House of Rothschild greatly surpassed the competition. That was due to his sharp business acumen and also because of his five most unusual sons, all of whom became financial power centers of their own.

 

As they matured and learned the magic of converting debt into money, they moved beyond the confines of Frankfurt and established additional operations in the financial centers, not only of Europe, but of much of the civilized world.

Throughout the first half of the nineteenth century, the brothers conducted important transactions on behalf of the governments of England, France, Prussia, Austria, Belgium, Spain, Naples, Portugal, Brazil, various German states, and other smaller countries.

 

They were the personal bankers of many of the crowned heads of Europe. They made large investments, through agents, in markets as distant as the United States, India, Cuba, and Australia. They were financiers to Cecil Rhodes, making it possible for him to establish a monopoly over the diamond fields of South Africa.

 

They are still connected with the de Beers.¹
 

Biographer Derek Wilson writes:

Those who lampooned or vilified the Rothschilds for their "sinister" influence had a considerable amount of justification for their anger and anxiety. The banking community had always constituted a "fifth estate" whose members were able, by their control of royal purse strings, to affect important events. But the house of Rothschild was immensely more powerful than any financial empire that had ever preceded it.

 

It commanded vast wealth. It was international. It was independent. Royal governments were nervous of it because they could not control it. Popular movements hated it because it was not answerable to the people. Constitutionalists resented it because its influence was exercised behind the scenes - secretly.²

1. Morton, pp. 145, 219.
2. Derek Wilson, Rothschild: The Wealth and Power of A Dynasty (New York: Charles Scribner's Sons, 1988), pp. 79, 98-99.
 

 

Secrecy, of course, is essential for the success of a cabal, and the Rothschilds perfected the art.

 

By remaining behind the scenes, they were able to avoid the brunt of public anger which was directed, instead, at the political figures which they largely controlled. This is a technique which has been practiced by financial manipulators ever since, and it is fully utilized by those who operate the Federal Reserve System today.

 

Wilson continues:

Clandestinity was and remained a feature of Rothschild political activity. Seldom were they to be seen engaging in open public debate on important issues. Never did they seek government office. Even when, in later years, some of them entered parliament, they did not feature prominently in the assembly chambers of London, Paris or Berlin.

 

Yet all the while they were helping to shape the major events of the day: by granting or withholding funds; by providing statesmen with an official diplomatic service; by influencing appointments to high office; and by an almost daily intercourse with the great decision makers.¹

 

A FORTUNE IN SMUGGLING
Continual war in Europe created excellent opportunities for profit from smuggling scarce consumer goods past military blockades.

 

Since the Rothschilds often financed both sides in a conflict and were known to have great political influence, the mere sight of the red shield on a leather pouch, a carriage, or a ship's flag was sufficient to insure that the messenger or his cargo could pass through check points in either direction.

 

This immunity allowed them to deal in a thriving black market for cotton goods, yarn, tobacco, coffee, sugar, and indigo; and they moved freely through the borders of Germany, Scandinavia, Holland, Spain, England, and France.²

 

 

1. Derek Wilson, p. 99.
2. Morton, pp. 40-41.

 

 

This government protection was one of those indirect benefits that generated commercial profits far in excess of the interest received on the underlying government loans.

It is generally true that, one man's loss is another man's gain. And even the friendliest of biographers admit that, for more than two centuries, the House of Rothschild profited handsomely from wars and economic collapses, the very occasions on which others sustained the greatest losses.
 

 

 

NAPOLEON VS THE BANKERS
If one picture is worth a thousand words, then one example surely must be worth a dozen explanations.

 

There is no better example than the economic war waged by the financiers of nineteenth-century Europe against Napoleon Bonaparte. It is an easily forgotten fact of history that Napoleon had restored law and order to a chaotic, post-revolutionary France and had turned his Attention, not to war, but to establishing peace and improving economic conditions at home.

 

He was particularly anxious to get his country and his people out of debt and out of the control of bankers.

 

R. McNair Wilson, in Monarchy or Money Power, says:

It was ordained by him that money should not be exported from France on any pretext whatever except with the consent of the Government, and that in no circumstance should loans be employed to meet current expenditure whether civil or military...

 

"One has only to consider," Napoleon remarked, "what loans can lead to in order to realize their danger. Therefore, I would never have anything to do with them and have always striven against them"...

The object was to withhold from finance the power to embarrass the Government as it had embarrassed the Government of Louis XVI. When a Government, Bonaparte declared, is dependent for money upon bankers, they and not the leaders of that Government control the situation, since "the hand that gives is above the hand that takes"...

"Money," he declared, "has no motherland; financiers are without patriotism and without decency: their sole object is gain."¹

1. R. McNair Wilson, Monarchy or Money Power (London: Eyre and Spottiswoode, Ltd., 1933), pp. 68, 72.

 

 

One of Napoleon's first blows against the bankers was to establish an independent Bank of France with himself as president.

 

But even this bank was not trusted, and government funds were never placed into it. It was his refusal to borrow, however, that caused the most concern among the financiers. Actually, to them this was a mixture of both bad and good news.

 

The bad news was that they were denied the benefit of royalty payments on fractional money. The good news was that, without resorting to debt, they were confident Napoleon could not militarily defend himself. Thus, he easily could be toppled and replaced by Louis XVI of the old monarchic dynasty who was receptive to banker influence.

 

Wilson continues:

They had good hope of compassing his downfall.

 

None believed that he could finance war on a great scale now that the resource of paper money had been denied him by the destruction of the Assignant.¹ Where would he obtain the indispensable gold and silver to feed and equip a great army? Pitt [the Prime Minister of England] counted already on a coalition of England, Austria, Prussia, Russia, Spain, Sweden, and numerous small states. Some 600,000 men would be put into the field.

 

All the resources of England's wealth - that is to say, of the world's wealth - would be placed at the disposal of this overwhelming force. Could the Corsican muster 200,000? Could he arm them? Could he feed them? If the lead bullets did not destroy him, the gold bullets would soon make an end. He would be forced, like his neighbors, to come, hat in hand, for loans and, like them, to accept the banker's terms...

He could not put his hands on £2,000,000, so empty was the Treasury and so depleted the nation's stock of metallic money. London waited with interest to see how the puzzle would be solved.²

1. The Assignat was pure fiat money which rapidly became totally worthless in commerce and which all but destroyed the French economy.

2. R. McNair Wilson, pp. 71-72.

 

 

Napoleon solved the puzzle quite simply by selling off some real estate. Those crazy Americans gave him £3,000,000 for a vast swamp called Louisiana.
 

 

 

A PLAN TO DESTROY THE UNITED STATES
Napoleon did not want war, but he knew that Europe's financial rulers would not settle for peace - unless, of course, they were forced into it by the defeat of their puppet regimes or unless, somehow, it would be to their monetary advantage.

 

It was in pursuit of the latter tactic that he threatened to take direct possession of Holland, which then was ruled by his brother, King Louis. Napoleon knew that the Dutch were heavily in debt to the English bankers. If Holland were to be annexed by France, this debt would never be repaid.

 

So Napoleon made a proposal to England's bankers that, if they would convince the English government to accept peace with France, he would agree to leave Holland alone.

The negotiations were handled by the banker, Pierre-Cesar Labouchere, who was sent by the Dutch, and the English banker, Sir Francis Baring who was Labouchere's father-in-law. Although this was an attractive proposal to the bankers, at least on a short-term basis, it was still against their nature to forego the immense profits of war and mercantilism.

 

They revised the proposal, therefore, to include a plan whereby both England and France would combine forces to destroy the newly independent United States and bring at least half of it - the industrial half - back under the domination of England. The incredible plan, conceived by the French banker, Ouvard, called for military invasion and conquest followed by division of the spoils. England would receive the northern states, united with Canada, while the southern states would fall to France.

 

Napoleon was to be tempted by offering him the awesome title of "King of America."

 

McNair Wilson tells us:

Labouchere wrote to Baring on March 21, and enclosed a note for [British Foreign Secretary] Wellesley dictated by Ouvrard which ran:
"From a conqueror he (Napoleon) is becoming a preserver; the first result of his marriage with Marie Louise will be that he will make an offer of peace to England.

 

It is to this nation's (i.e., England's) interest to make peace, for it has the command of the sea; on the contrary, it is really in the interest of France to continue war, which allows her to expand indefinitely and make a fresh fleet, which cannot be done once peace is established.

 

Why does not the English Cabinet make a proposal to France to destroy the United States of America, and by making them again dependent on England, persuade Napoleon to lend his aid to destroy the life-work of Louis XVI?... It is to her (England's) interest to conclude peace and to flatter Napoleon's vanity by recognizing his work and his imperial title"...

 

The Cabinet discussed the proposals and approved them. Wellesley at once hurried to Baring's house to give him the good news... The Dutch would be able to pay and would be compelled to pay in gold.

Unhappily Napoleon found out what was afoot and took somewhat strong objections to the plan of a joint attack on the United States. He arrested Ouvrard, dismissed and exiled Fouche, and published the whole story, to the grave distress of Wellesley and Baring.¹

It must not be concluded from this that Napoleon was a paragon of virtue or a champion of honest money.

 

His objection to the bankers was that their monetary power was able to threaten the sovereignty of his own political power. He allowed them a free hand while they served the purpose of the state. Then, when the heed for military financing subsided, he would condemn them for making "unholy profits" and simply take it from them in the name of the people. If the bankers protested, they were sent to prison.

And so the battle lines were drawn. Napoleon had to be destroyed at all costs. To make this possible, the Bank of England created vast new amounts of fiat money to "lend" to the government so it could finance an overpowering army. A steady stream of gold flowed out of the country to finance the armies of Russia, Prussia, and Austria.

 

The economy staggered once again under the load of war debt, and the little people paid the bill with hardly a grumble because they hadn't the slightest knowledge it was being charged to their account.

 

Wilson concludes the story:

The bankers won. Louis XVIII was restored by British arms and British diplomacy to the throne of his ancestors. Loans were placed at his disposal, though Napoleon had left a France which enjoyed a credit balance.

A year later the man whom every King and every banker in Europe called "usurper" won back his throne with 800 men and without the firing of a single shot. On this occasion he had no option but to raise a loan for the defense of France. The City of London [banking district] accommodated him with £5,000,000.

 

With this sum he equipped the army which Wellington defeated at Waterloo.

 

GOLD FOR THE DUKE OF WELLINGTON
One of the most fascinating and revealing episodes to be recorded by Rothschild biographers concerns the smuggling of a large shipment of gold to finance the Duke of Wellington who was attempting to feed and equip an army in Portugal and in the Pyrenees mountains between Spain and France.

It was not at all certain that Wellington would be able to defeat Napoleon in the coming battle, and the Duke was hard pressed to convince bankers and merchants in Portugal and Spain to accept his written promises-to-pay, even though they were officially guaranteed by the British government.

 

These notes were deeply discounted, and Wellington was desperate for gold coin. It was at this point that Nathan Rothschild offered the services of himself and his brothers. With an efficient smuggling apparatus already functioning throughout Europe, he was able to offer Wellington much better terms while still making a magnificent profit.

 

But, to accomplish this, the gold had to pass right under Napoleon's nose.

 

Frederic Morton describes the scene:

There was only one way to route the cash: through the very France England's army was fighting. Of course, the Rothschild blockade-running machine already had superb cogs whirring all over Germany, Scandinavia and England, even in Spain and Southern France. But a very foxy new wheel was needed in Napoleon's capital itself. Enter Jacob - henceforth called James - the youngest of Mayer's sons.²

James was only nineteen years old but was well trained by his father in the art of deception. He arrived in Paris with a dual mission.

 

First, he was to provide the French authorities with a false report about the British gold movement, with just enough truth in it to sound convincing. He presented the government with falsified letters indicating that the English were desperate to halt the flow of their gold into France. The ploy paid off when the French authorities then actually encouraged the financial community to accept British gold and to convert it into commercially sound banknotes.

 

Second, James was to serve as a vital link in a financial chain stretching between London and the Pyrenees. He was to coordinate the receipt of the gold into France, the conversion of that gold into Spanish banknotes, and the movement of those notes out of the country on their way to Wellington. All of this he did with amazing dexterity, especially considering his youth.

 

Morton concludes:

In the space of a few hundred hours Mayer's youngest had not only gotten the English gold rolling through France, but conjured a fiscal mirage that took in Napoleon himself. A teen-age Rothschild tricked the imperial government into sanctioning the very process that helped to ruin it....
 

The family machine began to hum. Nathan sent big shipments of British guineas, Portuguese gold ounces, French napoleons d'or (often freshly minted in London) across the Channel. From the coast James saw them to Paris and secretly transmuted the metal into bills on certain Spanish bankers. South of the capital, Kalmann [another of Mayer's sons] materialized, took over the bills, blurred into a thousand shadowed canyons along the Pyrenees - and reappeared, with Wellington's receipts in hand.

 

Salomon [another son] was everywhere, trouble-shooting, making sure the transit points were diffuse and obscure enough not to disturb either the French delusion or the British guinea rate. Amschel stayed in Frankfurt and helped father Mayer to staff headquarters.

The French did catch a few whiffs of the truth. Sometimes the suspicious could be prosperously purged of their suspicion. The police chief of Calais, for example, suddenly was able to live in such distracting luxury that he found it difficult to patrol the shoreline thoroughly....
 

While Napoleon struggled his might away in the Russian Winter, there passed through France itself a gold vein to the army staving in the Empire's back door.¹

At a dinner party in later years, Nathan casually summed up the episode as though it were merely a good piece of routine business.

 

He said:

The East India Company had £800,000 worth of gold to sell. I went to the sale and bought it all. I knew the Duke of Wellington must have it. The government sent for me and said they must have the gold. I sold the gold to them, but they didn't know how to get it to the Duke in Portugal. I undertook all that and sent it through France. It was the best business I have ever done.¹

1. Morton, p. 45.

 

 

THE BATTLE OF WATERLOO
The final outcome of the battle at Waterloo between Wellington and Napoleon was crucial to Europe both politically and economically.

 

If Napoleon had been victorious, England would have been in even greater economic trouble than before. Not only would she have lost international power and prestige, but even at home, her subjects would have been further disgruntled over such great personal and financial wartime sacrifices. Her defeat almost surely would have resulted in not being able to repay the great amounts she had borrowed to conduct the war. In the London stock exchange, therefore, where British government bonds were traded along with other securities, everyone waited anxiously for news of the outcome.

It was well known that the Rothschilds had developed a private courier service that was used, not only to transport gold and other tangible cargo, but to rapidly move information that could be useful in making investment decisions.

 

It was expected, therefore, that Nathan in London would be the first to know the name of the victor after the cannon smoke had cleared from the battlefield. And they were not to be disappointed. The first news of Wellington's victory arrived in Brussels around midnight on June 18, 1815, where a Rothschild agent named Rothworth was waiting in readiness.

 

He immediately mounted a fresh horse and set off for the port of Ostend where a boat was standing by to speed him across the channel to London. In the early hours of June 20, the exhausted messenger was pounding on Nathan's door, a full twenty-four hours before Wellington's own courier, Major Henry Percy, arrived.

At least one friendly biographer claims that Nathan's first act was to deliver the news to the Prime Minister, but that government officials were hesitant at first to believe it, because it ran contrary to reports they had received previously telling of serious British setbacks. At any rate, there is no doubt that Nathan's second act of the morning was to set off for the stock exchange to take up a position at his usual pillar.

All eyes were upon him as he slumped dejectedly, staring at the floor. Then, he raised his gaze and, with pained expression, began to sell. The whisper went through the crowded room,

"Nathan is selling?"

"Nathan is selling!"

"Wellington must have lost."

"Our government bonds will never be repaid."

"Sell them now. Sell. Sell!"

Prices tumbled, and Nathan sold again.

 

Prices plummeted, and still Nathan sold. Finally, prices collapsed altogether and, in one quick move, Nathan reversed his call and purchased the entire market in government bonds.

 

In a matter of just a few hours, he had acquired the dominant holding of England's entire debt at but a tiny fraction of its worth.¹

 

1.The New York Times, in its April 1, 1915, edition, reported that Baron Nathan Mayer de Rothschild had attempted to secure a court order to suppress a book written by Ignatious Balla entitled The Romance of the Rothschilds on the grounds that £e Waterloo story about his grandfather was untrue and libelous. The court ruled Fiat the story was true, dismissed the suit, and ordered Rothschild to pay all court costs.
 

 

 

SIDONIA
Benjamin Disraeli, the Prime Minister of England, wrote a book in 1844 called Coningsby.

 

It was a political novel in which the author expressed his views about contemporary issues. One of the strong characters in the book was a financier named Sidonia, but every detail of Sidonia's actions was an exact replica of the real Lord Rothschild, whom Disraeli greatly admired.

 

In the guise of a novel, we read about Rothschild's emigration from Germany, his family and banking ties throughout Europe, his handling of the gold for Wellington, and his financial coup after Waterloo.

 

Then Disraeli wrote:

Europe did require money, and Sidonia was ready to lend it to Europe. France wanted some; Austria more; Prussia a little; Russia a few millions. Sidonia could furnish them all...

It is not difficult to conceive that, after having pursued the career we have intimated for about ten years, Sidonia had become one of the most considerable personages in Europe. He had established a brother, or a near relative, in whom he could confide, in most of the principal capitals. He was lord and master of the money market of the world, and of course virtually lord and master of everything else.

 

He literally held the revenues of Southern Italy in pawn; and monarchs and ministers of all countries courted his advice and were guided by his suggestions.¹

That Disraeli was not exaggerating was made clear by the boast of James Rothschild himself.

 

When U.S. Treasury agents approached him in Paris in 1842 with a request for a loan to the American government, he said to them:

"You have seen the man who is at the head of the finances of Europe."²

There have always been men who were in a position to make private fortunes out of cooperating with both sides in a war.

 

The Rothschilds were not unique in this, but they no doubt perfected the art and became the personification of that breed. They were not necessarily evil in a moral sense. What preoccupied their minds were not questions of right or wrong but of profit and loss.

 

This analytical indifference to human suffering was aptly described by one Rothschild when he said:

"When the streets of Paris are running with blood, I buy."

They may have held citizenship in the country of their residence, but patriotism was beyond their comprehension. They were also very bright, if not cunning, and these combined traits made them the role model of the cool pragmatists who dominate the political and financial world of today.

 

Disraeli well described this type when he wrote of Sidonia:

He was a man without affections. It would be harsh to say he had no heart, for he was susceptible of deep emotions, but not for individuals... The individual never touched him. Woman was to him a toy, man a machine.⁴

It would seem that an absence of patriotism and a cold, analytical outlook would lead financiers to avoid making loans to governments, particularly foreign ones.

 

Private borrowers can be hauled into court and their assets confiscated to make good on their debts. But governments control the legalized use of force. They are the courts. They are the police.

 

Who will seize their assets? The answer is another government.

 

Speaking of a relatively modern example of this principle, Ron Chernow explains:

The new alliance [between the monetary and political scientists] was mutually advantageous. Washington wanted to harness the new financial power to coerce foreign governments into opening their markets to American goods or adopting pro-American policies. The banks, in turn, needed levers to force debt repayment and welcomed the government's police powers in distant places.

 

The threat of military intervention was an excellent means by which to speed loan repayment. When Kuhn, Loeb considered a loan to the Dominican Republic, backed by customs receipts, Jacob Schiff inquired of his London associate Sir Ernest Cassel,

"If they do not pay, who will collect these customs duties?" Cassel replied, "Your marines and ours."¹

1. Quoted by Jacques Attali, translated by Barbara Ellis, A Man of Influence: Sir Siegmund Warburg, 1902-82 (London: Weidenfeld, & Nicolson, 1986), p. 57.

 

 

One of the great puzzles of history is why governments always go into debt and seldom attempt to put themselves on a "pay-as-you-go" basis.

 

A partial answer is that kings and politicians lack the courage to tax their subjects the enormous sums that would be required under such an arrangement. There is also the deeper question of why the expenditures are so high in the first place.

Given the mentality of the world's financial lords and masters, as Disraeli described them, it is conceivable that a coldly calculated strategy has been developed over the years to insure this result. In fact, the historical evidence strongly suggests that just such a plan zoos developed in eighteenth-century Europe and perfected in twentieth-century America.

 

For the purposes of hypothetical analysis, let us identify this strategy as The Rothschild Formula.

 

 

 

THE FORMULA
Let us imagine a man who is totally pragmatic.

 

He is smarter and more cunning than most men and, in fact, holds them in thinly disguised contempt. He may respect the talents of a few, but has little concern over the condition of mankind. He has observed that kings and politicians are always fighting over something or other and has concluded that wars are inevitable.

 

He also has learned that wars can be profitable, not only by lending or creating the money to finance them, but from government favoritism in the granting of commercial subsidies or monopolies. He is not capable of such a primitive feeling as patriotism, so he is free to participate in the funding of any side in any conflict, limited only by factors of self interest.

 

If such a man were to survey the world around him, it is not difficult to imagine that he would come to the following conclusions which would become the prime directives of his career:

1. War is the ultimate discipline to any government. If it can successfully meet the challenge of war, it will survive. If it cannot, it will perish. All else is secondary. The sanctity of its laws, the prosperity of its citizens, and the solvency of its treasury will be quickly sacrificed by any government in its primal act of self-survival.
    

2. All that is necessary, therefore, to insure that a government will maintain or expand its debt is to involve it in war or the threat of war. The greater the threat and the more destructive the war, the greater the need for debt.
    

3. To involve a country in war or the threat of war, it will be necessary for it to have enemies with credible military might. If such enemies already exist, all the better. If they exist but lack military strength, it will be necessary to provide them the money to build their war machine. If an enemy does not exist at all, then it will be necessary to create one by financing the rise of a hostile regime. N
    

4. The ultimate obstacle is a government which declines to finance its wars through debt. Although this seldom happens, when it does, it will be necessary to encourage internal political opposition, insurrection, or revolution to replace that government with one that is more compliant to our will. The assassination of heads of state could play an important role in this process.
    

5. No nation can be allowed to remain militarily stronger than its adversaries, for that could lead to peace and a reduction of debt. To accomplish this balance of power, it may be necessary to finance both sides of the conflict. Unless one of the combatants is hostile to our interests and, therefore, must be destroyed, neither side should be allowed a decisive victory or defeat. While we must always proclaim the virtues of peace, the unspoken objective is perpetual war.

Whether anyone actually put this strategy into words or passed it along from generation to generation is not important.

 

In fact, it is doubtful it has ever worked that way. Whether it is the product of conscious planning or merely the consequence of men responding to the profit opportunities inherent in fiat money, the world's financial lords have acted as though they were following such a plan, and this has become especially apparent since the creation of the central-bank Mandrake Mechanism three centuries ago.

The "balance-of-power" question is particularly intriguing. Most history texts present the concept as though it were some kind of natural, social phenomenon which, somehow, has worked to the benefit of mankind. The implication is that it's just wonderful how, after all those European wars, no nation was strong enough to completely dominate the others.

 

When the United States emerged from World War II with exactly such power, it was widely deplored, and massive political/financial mechanisms such as foreign aid and disarmament were set in motion to restore the balance. This has become almost a revered doctrine of international democracy. But the overlooked consequence of this sentimental notion is that wars "between equals" have become the permanent landscape of history.

This does not mean that every war-like group that comes along will find easy financing from the lords and masters. It depends on whom they threaten and how likely they are to succeed. In 1830, for example, the Dutch were facing an uprising of their subjects in Belgium. Both the ruling government and the revolutionaries were dependent upon the Rothschilds for financing their conflict.

 

The Dutch rulers were reliable customers for loans and, just as important, they were reliable in their payment of interest on those loans.

 

It would have been foolhardy to provide more than token assistance to the rebels who, if they came to power, quite likely would have refused to honor the debts of the former puppet regime.

 

Salomon Rothschild explained:

These gentlemen should not count on us unless they decide to follow a line of prudence and moderation... Our goodwill does not yet extend to the point of putting clubs into the hands that would beat us, that is, lending money to make war and ruin the credit that we sustain with all our efforts and all our means.¹

After the revolution was resolved by negotiation rather than by arms, the new government in Brussels was a natural target for financial takeover.

 

James Rothschild laid out the strategy that has become the model of such operations ever since:

Now is the moment of which we should take advantage to make ourselves absolute masters of that country's finances. The first step will be to establish ourselves on an intimate footing with Belgium's new Finance Minister, to gain his confidence... and to take all the treasury bonds he may offer us.¹

1. Derek Wilson, p. 100.

 

 

PERPETUAL WAR IN EIGHTEENTH CENTURY ENGLAND
Wars, great and small, have always been a plague to Europe, but it was not until they were easy to finance through central banking and fiat money that they became virtually perpetual.

 

For example, the following war chronicle begins immediately following the formation of the Bank of England which, as you recall, was created for the specific purpose of financing a war:

1689-1697 - The War of the League of Augsberg

1702-1713 - The War of Spanish Succession

1739-1742 - The War of Jenkin's Ear

1744-1748 - The War of Austrian Succession

1754-1763 - The French and Indian War

1793-1801 - The War against Revolutionary France

1803-1815 - The Napoleonic Wars

In addition to these European conflicts, there also were two wars with America: the War for Independence and the War of 1812.

 

In the 126 years between 1689 and 1815, England was at war 63 of them. That is one out of every two years in combat. The others were spent preparing for combat.

The mark of the Rothschild Formula is unmistakable in these conflicts. The monetary scientists often were seen financing both sides. Whether ending in victory or defeat, the outcome merely preserved or restored the European "balance of power."

 

And the most permanent result of any of these wars was expanded government debt for all parties.
 

 

 

SUMMARY
By the end of the eighteenth century, the House of Rothschild had become one of the most successful financial institutions the world has ever known.

 

Its meteoric rise can be attributed to the great industry and shrewdness of the five brothers who established themselves in various capitals of Europe and forged the world's first international financial network. As pioneers in the practice of lending money to governments, they soon learned that this provided unique opportunities to parlay wealth into political power as well.

 

Before long, most of the princes and kings of Europe had come within their influence.

The Rothschilds also had mastered the art of smuggling on a grand scale, often with the tacit approval of the governments whose laws they violated. This was perceived by all parties as an unofficial bonus for providing needed funding to those same governments, particularly in time of war.

 

The fact that different branches of the Rothschild network also might be providing funds for the enemy was pragmatically ignored. Thus, a time-honored I practice among financiers was born: profiting from both sides.

The Rothschilds operated a highly efficient intelligence gathering system which provided them with advance knowledge of important events, knowledge which was invaluable for investment decisions. When an exhausted Rothschild courier delivered the first news of the Battle of Waterloo, Nathan was able to deceive the London bond traders into a selling panic, and that allowed him to acquire the dominant holding of England's entire debt at but a tiny fraction of its worth.
 

A study of these and similar events reveals a personality profile, not just of the Rothschilds, but of that special breed of international financiers whose success typically is built upon certain character traits.

 

Those include cold objectivity, immunity to patriotism, and indifference to the human condition. That profile is the basis for proposing a theoretical strategy, called the Rothschild Formula, which motivates such men to propel governments into war for the profits they yield. This formula most likely has never been consciously phrased as it appears here, but subconscious motivations and personality traits work together to implement it nevertheless.

 

As long as the mechanism of central banking exists, it will be to such men an irresistible temptation to convert debt into perpetual war and war into perpetual debt.

In the following chapters we shall track the distinctive footprint of the Rothschild Formula as it leads up to our own doorstep in the present day.

 

Back to The Rothschilds

 

 

 

 

 

Chapter Twelve
SINK THE LUSITANIA!

 

The role of J.P. Morgan in providing loans to England and France in World War I; the souring of those loans as it became apparent that Germany would win; the betrayal of a British ship and the sacrifice of American passengers as a stratagem to bring America into the war; the use of American taxes to pay off the loans.

 

The origin of World War I usually is attributed to the assassination of Archduke Francis Ferdinand of Austria-Hungary by a Serbian nationalist in 1914.

 

This was a serious affront to Austria but hardly sufficient reason to plunge the world into a mortal conflict that would claim over ten million lives and twenty million Wounded. American schoolchildren are taught that Uncle Sam came into the war "to make the world safe for democracy."

 

But, as we shall see, the American war drums were pounded by men with par less idealistic objectives.

Since the latter part of the eighteenth century, the Rothschild formula had controlled the political climate of Europe. Nations had increasingly confronted each other over border disputes, colonial territories, and trade routes. An arms race had been in progress for many years; large, standing armies had been recruited and trained; military alliances had been hammered together; all in preparation for war.

 

The assassination of Ferdinand was not the cause but the trigger. It was merely the spark that lit the fuse that fired the first loaded cannon.
 

 

 

AN INVESTMENT IN WAR
The exigencies of war in Europe required England and France to go heavily into debt.

 

When their respective central banks and local merchant banks could no longer meet that need, the beleaguered governments turned to the Americans and selected the House of Morgan - acting as partners of the Rothschilds - to act as sales agent for their bonds.

 

Most of the money raised in this fashion was quickly returned to the United States to acquire war-sensitive materials, and Morgan was selected as the U.S. purchase agent for those as well. A commission was paid on all transactions in both directions: once when the money was borrowed and again when it was spent.

 

Furthermore, many of the companies receiving production contracts were either owned outright by Morgan holding companies or were securely within his orbit of bank control. Under such an arrangement, it will not be surprising to learn, as we shall in a moment, that Morgan was not overly anxious to see hostilities come to a close.

 

Even the most honorable of men can be corrupted by the temptation of such gigantic flows of cash.

Writing in the year 1919, just a few months after the end of the war, John Moody says:

Not only did England and France pay for their supplies with money furnished by Wall Street, but they made their purchases through the same medium... Inevitably the house of Morgan was selected for this important task.

 

Thus the war had given Wall Street an entirely new role. Hitherto it has been exclusively the headquarters of finance; now it became the greatest industrial mart the world had ever known.

 

In addition to selling stocks and bonds, financing railroads, and performing the other tasks of a great banking center, Wall Street began to deal in shells, cannon, submarines, blankets, clothing, shoes, canned meats, wheat, and the thousands of other articles needed for the prosecution of a great war.¹

The money began to flow in January of 1915 when the House of Morgan signed a contract with the British Army Council and the Admiralty.

 

The first purchase, curiously, was for horses, and the amount tendered was $12 million. But that was but the first drop of rain before the deluge. Total purchases would eventually climb to an astronomical $3 billion. The firm became the largest consumer on earth, spending up to $10 million per day.

 

Morgan offices at 23 Wall Street were mobbed by brokers and manufacturers seeking to cut a deal The bank had to post guards at every door and at the partners' homes as well. Each month, Morgan presided over purchases which were equal to the gross national product of the entire world just one generation before.

Throughout all this, Morgan vigorously claimed to be a pacifist.

"Nobody could hate war more than I do," he told the Senate Munitions Committee.

But such professions of righteousness were difficult to accept.

 

Lewinsohn comments:

The 500 million dollar loan contracted in autumn 1915 brought to the group of bankers, at whose head Morgan was, a net profit of 9 million dollars...

 

Again, in 1917, the French government paid to Morgan's and other banks a commission of 1,500,000 dollars, and a further million in 1918.

 

Besides the issue of loans there was another source of profit: the purchase and sale of American stock which the Allies surrendered so that they could buy munitions in the States.

 

It is estimated that in the course of the war some 2000 million [two billion] dollars passed in this way through Morgan's hands. Even if the commission was very small, transactions of such dimensions would give him an influence on the stock market which would carry very real advantages...
 

His hatred against war did not prevent him, citizen of a neutral country, from furnishing belligerent powers with 4,400,000 rifles for a matter of $194,000,000... The profits were such as to compensate to some degree his hatred of warfare. According to his own account, he received, as agent of the English and French governments, a commission of 1% on orders totaling $3,000,000,000.

 

That is, he received some $30,000,000... Besides these two chief principals, Morgan, however, also acted for Russia (for whom he did business amounting to $412,000,000) and for Italy and Canada (figures for his business with the last two not having been published)...

1 J.P. Morgan, and some of his partners in the bank, were at the time shareholders in companies that were ... concerns which made substantial profits from the orders he placed with them... It is really astonishing that a central buying organization should have been confided to one who was buyer and seller at the same time.¹

1- Lewinsohn, pp. 103-4, 222-24.

 

 

 

GERMANY'S U-BOATS ALMOST WON THE WAR
But there were dark clouds gathering above Wall Street as the war began to go badly for the Allies.

 

With the passage of time and the condensing of history, it is easy to forget that Germany and the Central Powers almost won the war prior to U.S. entry. Employing a small fleet of newly developed submarines, Germany was well on her way to cutting off England and her allies from all outside help. It was an amazing feat and it changed forever the concept of naval warfare.

 

Germany had a total of twenty-one U-boats, but, because they constantly had to be repaired and serviced, the maximum number at sea was only seven at any one time. Yet, between 1914 and 1918, German submarines had sunk over 5,700 surface ships. Three-hundred thousand tons of Allied shipping were sent to the bottom every week. One out of every four steamers leaving the British Isles never returned.

 

In later years, British Foreign Secretary, Arthur Balfour, wrote:

"At that time, it certainly looked as though we were going to lose the war."¹

Robert Ferrell, in his Woodrow Wilson and World War I, concluded:

"The Allies approached the brink of disaster, with no recourse other than to ask Germany for terms."²

William McAdoo, who was Secretary of the Treasury at the time, says in his memoirs:

Across the sea came the dismay of the British - a dismay that carried a deepening note of disaster. There was a fear, and a well-grounded one, that England might be starved into abject surrender... On April 27,1917, Ambassador Walter H. Page reported confidentially to the President that the food in the British Isles was not more than enough to feed the civil population for six weeks or two months.³

Under these circumstances, it became impossible for Morgan to find new buyers for the Allied war bonds, neither for fresh funding nor to replenish the old bonds which were coming due and facing default.

 

This was serious on several counts. If bond sales came to a halt, there would be no money to continue purchasing war materials. Commissions would be lost at both ends. Furthermore^ if the previously sold bonds were to go into default, as they certainly would if Britain and France were forced to accept peace on Germany's terms, the investors would sustain gigantic losses.

 

Something had to be done. But what?

 

Robert Ferrell hints at the answer:

In the mid thirties a Senate committee headed by Gerald P. Nye of North Dakota investigated the pre-1917 munitions trade and raised a possibility that the Wilson administration went to war because American bankers needed to protect their Allied loans.⁴

 

1. Balfour MSS, FO/800/208, British Foreign Office records, Public Record Office, London, as cited by Robert H. Ferrell, Woodrow Wilson and World War I (New York: Harper & Row, 1985), p. 35.
2. Ferrell, p. 12.
3. William G. McAdoo, Crowded Years (New York: Houghton Mifflin, 1931; rpt. New York: Kennikat Press, 1971), p. 392.
4. Ferrell, p. 88.

 

 

As previously mentioned by William McAdoo, the American ambassador to England at that time was Walter Hines Page, a trustee of Rockefeller's social-engineering foundation called the General Education Board.

 

It was learned by the Nye committee that, in addition to his government salary, which he complained was not high enough, Page also received an allowance of $25,000 a year (an enormous amount in 1917) from Cleveland Dodge, president of Rockefeller's National City Bank. On March 15, 1917, Ambassador Page sent a telegram to the State Department outlining the financial crisis in England.

 

Since sources of new capital had dried up, the only way to keep the war going, he said, was to make direct grants from the U.S. Treasury. But, since this would be a violation of neutrality treaties, the United States would have to abandon its neutrality and enter the war.

 

He said:

I think that the pressure of this approaching crisis has gone beyond the ability of the Morgan Financial Agency for the British and French Governments... The greatest help we could give the Allies would be such a credit... Unless we go to war with Germany, our Government, of course, cannot make such a direct grant of credit.¹

The Morgan group had floated one-and-a-half billion dollars in loans to Britain and France. With the fortunes of war turning against them, investors were facing the threat of a total loss.

 

As Ferdinand Lundberg observed:

"The declaration of war by the United States, in addition to extricating the wealthiest American families from a dangerous situation, also opened new vistas of profits."²

 

COLONEL HOUSE
One of the most influential men behind the scenes at this time was Colonel Edward Mandell House, personal adviser to Woodrow Wilson and, later, to F.D.R.

 

House had close contacts with both J.P. Morgan and the old banking families of Europe. He had received several years of his schooling in England and, in later years, surrounded himself with prominent members of the Fabian Society. Furthermore, he was a man of great personal wealth, most of it acquired during the War Between the States.

 

His father, Thomas William House, had acted as the confidential American agent of unknown banking interests in London. It was commonly believed he represented the Rothschilds. Although settled in Houston, Texas, the elder often remarked that he wanted his sons to "know and serve England." He was one of the few residents of a Confederate state who emerged from the War with a great fortune.

It is widely acknowledged that Colonel House was the man who selected Wilson as a presidential candidate and who secured his nomination.¹

 

He became Wilson's constant companion, and the President admitted publicly that he depended on him greatly for instruction and guidance. Many of Wilson's important appointive posts in government were hand selected by House. He and Wilson even went so far as to develop a private code so they could communicate freely over the telephone.

 

The President himself had written:

"Mr. House is my second personality. He is my independent self. His thoughts and mine are one." ³

George Viereck, an admiring biographer of House, tells us:

House had the Texas delegation in his pocket... Always moving quietly in the background, he made and unmade several governors of Texas... House selected Wilson because he regarded him as the best available candidate...

 

For seven long years Colonel House was Woodrow Wilson's other self. For six long years he shared with him all but the title of the Chief Magistracy of the Republic. For six years two rooms were at his disposal in the North Wing of the White House... It was House who made the slate for the Cabinet, formulated the first policies of the Administration and practically directed the foreign affairs of the United States.

 

We had, indeed, two Presidents for one!... Super-ambassador, he talked to emperors and kings as an equal. He was the spiritual generalissimo of the Administration.

 

He was the pilot who guided the ship.⁴

 

1. The Columbia Encyclopedia (Third Edition, 1962, p. 2334) says the Democratic Party nomination went to Wilson when William Jennings Bryan switched his support to him "prompted by Edward M. House." For details, see Martin, p. 155

2. Charles Seymour, The Intimate Papers of Colonel House (New York: Houghton Mifflin Co., 1926), Vol 1, pp. 114-15.
3. Seymour, Vol. I, p. 1 1 4.
4. George Sylvester Viereck, The Strangest Friendship in History: Woodrow Wilson and Colonel House (New York: Liveright Publishers, 1932), pp. 4, 18-19, 33, 35.

 

 

 

A SECRET AGREEMENT TO GET THE U.S. INTO WAR
As the presidential election neared for Wilson's second term, Colonel House entered into a series of confidential talks with Sir William Wiseman, who was attached to the British embassy in Washington and who acted as a secret intermediary between House and the British Foreign Office.

 

Charles Seymour writes:

"Between House and Wiseman there were soon to be few political secrets."¹

This was upsetting to the Secretary of State, William Jennings Bryan.

 

Mrs. Bryan, as co-author of her husband's memoirs, writes:

While Secretary Bryan was bearing the heavy responsibility of the Department of State, there arose the curious conditions surrounding Mr. E.M. House's unofficial connection with the President and his voyages abroad on affairs of State, which were not communicated to Secretary Bryan... The President was unofficially dealing with foreign governments.²

What was the purpose of those dealings? It was nothing less than to work out the means whereby the United States could be brought into the war.

 

Viereck explains:

Ten months before the election which returned Wilson to the White House in 1916 "because he kept us out of war," Colonel House negotiated a secret agreement with England and France on behalf of Wilson which pledged the United States to intervene on behalf of the Allies.

 

On March 9, 1916, Woodrow Wilson formally sanctioned the undertaking. If an inkling of the conversations between Colonel House and the leaders of England and France had reached the American people before the election, it might have caused incalculable revulsions of public opinion...

From this conversation and various conferences with Sir Edward Grey grew the Secret Treaty, made without the knowledge and consent of the United States Senate, by which Woodrow Wilson and House chained the United States to the chariot of the Entente... After the War the text of the agreement leaked out. Grey was the first to tattle. Page discussed it at length. Colonel House tells its history.

 

C Hartley Grattan discusses it at length in his book, Why We Fought. But for some incomprehensible reason the enormous significance of the revelation never penetrated the consciousness of the American people.³

The basic terms of the agreement were that the United States government would offer to negotiate a peaceful settlement between Germany and the Allies and would then put forth a specific proposal for the terms of that settlement.

 

If either side refused to accept the proposal, then the United States would come into the war as an ally of the other side. The catch was that the terms of the proposal were carefully drafted so that Germany could not possibly accept them. Thus, to the world, it would look as though Germany was at fault and the United States was humanitarian.

 

As Ambassador Page observed in a memorandum dated February 9,1916:

House arrived from Berlin-Havre-Paris full of the idea of American intervention. First his plan was that he and I and a group of the British Cabinet (Grey, Asquith, Lloyd George, Reading, etc.) should at once work out a minimum program of peace - the least that the Allies would accept, which, he assumed, would be unacceptable to the Germans; and that the President would take this program and present it to both sides; the side that declined would be responsible for continuing the war... Of course, the fatal moral weakness of the foregoing scheme is that we should plunge into the War, not on the merits of the cause, but by a carefully sprung trick.¹

1. Quoted by Viereck, pp. 112-13.

 

On the surface it is a paradox that Wilson, who had always been a pacifist, should now enter into a secret agreement with foreign powers to involve the United States in a war which she could easily avoid.

 

The key that unlocks this mystery is the fact that Wilson also was an internationalist. One of the strongest bonds between House and himself was their common dream of a world government. They both recognized that the American people would never accept such a concept unless there were extenuating circumstances.

 

They reasoned that a long and bloody war was probably the only event that could condition the American mind to accept the loss of national sovereignty, especially if it were packaged with the promise of putting an end to all wars in the future. Wilson knew, also, that, if the United States came into the war early enough to make a real difference on the battlefield and if large amounts of American dollars could be loaned to the Allied powers, he would be in a position after the war to dictate the terms of peace.

 

He wrote to Colonel House:

"England and France have not the same views with regard to peace as we have by any means. When the war is over, we can force them to our way of thinking, because by that time they will among other things be financially in our hands."¹

And so Wilson tolerated the agony of mixed emotions as he plotted for war as a necessary evil to bring about what he perceived as the ultimate good of world government.

With the arrival of 1917, the President was planting hints of both war and world government in almost every public utterance.

 

In a typical statement made in March of that year, he said:

"The tragic events of the thirty months of vital turmoil through which we have just passed have made us citizens of the world. There can be no turning back. Our own fortunes as a nation are involved, whether we would have it so or not."²

It was about this same time that Wilson called together the Democratic leaders of Congress to a special breakfast meeting at the White House.

 

He told them that, in spite of public sentiment, there were many sound reasons for the country to enter the war and he asked them to help him sell this plan to Congress and the voters.

 

Harry Elmer Barnes tells us:

These men were opposed to war and, hence, rejected his proposals somewhat heatedly. Wilson knew that it was a poor time to split the party just before an election, so he dropped the matter at once and, with Col. House, mapped out a pacifist platform for the coming campaign.

 

Governor Martin Glynn of New York and Senator Ollie James of Kentucky were sent to the St. Louis convention to make keynote speeches, which were based on the slogan:

"He kept us out of war!"...

Before he had been inaugurated a second time, the Germans played directly into his hands by announcing the resumption of submarine warfare...

 

It was fortunate for Britain and the bankers that the Germans made this timely blunder, as Great Britain had overdrawn her American credit by some $450,000,000 and the bankers were having trouble in floating more large private loans. It was necessary now to pass on the burden of financing the Entente to the Federal Treasury.³

 

1- Quoted by Ferrell, p. 88.
2- Ferrell, p. 12.
3. Harry Elmer Barnes, In Quest of Truth and Justice: De-Bunking the War Guilt Myth (Chicago: National Historical Society, 1928; rpt. New York: Arno Press & The New York Time

 

SELLING WAR TO THE AMERICAN PEOPLE
Through secret agreements and trickery, America had been committed to war, but the political and monetary scientists realized that something still had to be done to change public sentiment.

 

How could that be accomplished? Wall Street control over important segments of the media was considerable.

 

George Wheeler tells us:

"Around this time the Morgan firm was choosing the top executives for the old and troubled Harper & Brothers publishing house... In the newspaper field, Pierpont Morgan at this period was in effective control of the New York Sun... the Boston News Bureau, Barron's magazine, and the Wall Street Journal"¹

On February 9,1917, Representative Callaway from Texas took the floor of Congress and provided further insight.

 

He said:

In March, 1915, the J. P. Morgan interests, the steel, shipbuilding, and powder interests, and their subsidiary organizations, got together 12 men high up in the newspaper world and employed them to select the most influential newspapers in the United States and sufficient number of them to control generally the policy of the daily press...

 

They found it was only necessary to purchase the control of 25 of the greatest papers... An agreement was reached; the policy of the papers was bought, to be paid for by the month; an editor was furnished for each paper to properly supervise and edit information regarding the questions of preparedness, militarism, financial policies, and other things of national and international nature considered vital to the interests of the purchasers.²

Charles S. Mellen of the New Haven Railroad testified before Congress that his Morgan-owned railroad had more than one-thousand New England newspapers on the payroll, costing about $400,000 annually.

 

The railroad also held almost a half-million dollars in bonds issued by the Boston Herald? This web of control was multiplied by hundreds of additional companies which also were controlled by Morgan and other investment-banking houses.

In addition, the Morgan trust exercised media control by its power of advertising. Writing in 1937, Lundberg says:

"More advertising is controlled by the J.P. Morgan junta than by any single financial group, a factor which immediately gives the banking house the respectful attention of all alert independent publishers."

Morgan control over the media at that time is well documented, but he was by no means alone in this.

 

During the 1912 hearings held by the Senate Privileges and Elections Committee, it was revealed that Representative Joseph Sibley from Pennsylvania was acting as a funnel for Rockefeller money to various cooperative Congressmen.

 

A letter was introduced to the Committee written by Sibley in 11905 to John D. Archibald, the man at Rockefeller's Standard Oil Company who provided the money.

 

In that letter Sibley said:

"An efficient literary bureau is needed, not for a day or a crisis but a permanent healthy control of the Associated Press and kindred avenues. It will cost money but will be the cheapest in the end."²

Lundberg comments further:

So far as can be learned, the Rockefellers have given up their old policy of owning newspapers and magazines outright, relying now upon the publications of all camps to serve their best interests in return for the vast volume of petroleum and allied advertising under Rockefeller control.

 

After the J.P. Morgan bloc, the Rockefellers have the most advertising of any group to dispose of. And when advertising tolone is not sufficient to insure the fealty of a newspaper, the Rockefeller companies have been known to make direct payments in return for a friendly editorial attitude.³

It is not surprising, therefore, that a large part of the nation's press, particularly in the East, began to editorially denounce Germany.

 

The cry spread across the land to take up arms against "the enemy of western civilization." Editors became eloquent on the Patriotic duty of all Americans to defend world democracy. Massive "preparedness" demonstrations and parades were organized.

But it was not enough. In spite of this massive sales campaign, the American people still were not buying. Polls conducted at the [time showed popular sentiment continuing to run ten-to-one in favor of staying out of Europe's war.

 

Clearly, what was needed was ^something both drastic and dramatic to change public opinion.
 

 

 

MORGAN CONTROL OVER SHIPPING
Banking was not the only business in which Morgan had a strong financial interest.

 

Using his control over the nation's railroads as financial leverage, he had created an international shipping trust which included Germany's two largest lines plus one of the two in England, the White Star Lines. Morgan had attempted in 1902 to take over the remaining British line, the Cunard Company, but was blocked by the British Admiralty which wanted to keep Cunard out of foreign control so her ships could be pressed into military service, if necessary, in time of war.

 

The Lusitania and the Mauretania were built by Cunard and became major competitors of the Morgan cartel. It is an interesting footnote of history, therefore, that, from the Morgan perspective, the Lusitania was quite dispensable.

 

Ron Chernow explains:

"Pierpont assembled a plan for an American-owned shipping trust that would transpose his "community of interest" principle - cooperation among competitors in a given industry - to a global plane. He created ... the world's largest [fleet] under private ownership...

 

An important architect of the shipping trust was Albert Ballin, whose Hamburg-Amerika Steamship Line, with hundreds of vessels, was the world's largest shipping company... Pierpont had to contend with a single holdout, Britain's Cunard Line...

 

After the Boer War, the Morgan combine and Cunard exhausted each other in debilitating rate wars."¹

As stated previously, Morgan had been retained as the official trade agent for Britain.

 

He handled the purchasing of all war materials in the United States and coordinated their shipping as well. Following in the footsteps of the Rothschilds of centuries past, he quickly learned the profitable skills of war-time smuggling.

 

Colin Simpson, author of The Lusitania, describes the operation:

Throughout the period of America's neutrality, British servicemen in civilian clothes worked at Morgan's. This great banking combine rapidly established such a labyrinthine network of false shippers, bank accounts and all the paraphernalia of smuggling that, although they fooled the Germans, there were also some very serious occasions when they flummoxed the Admiralty and Cunard, not to speak of the unfortunate passengers on the liners which carried the contraband.

 

 

THE LUSITANIA
The Lusitania was a British passenger liner that sailed regularly between Liverpool and New York.

 

She was owned by the Cunard Company, which, as previously mentioned, was the only major ship line which was a competitor of the Morgan cartel. She left New York harbor on May 1, 1915, and was sunk by a German submarine off [the coast of Ireland six days later.

 

Of the 1,195 persons who lost their lives, 195 were Americans. It was this event, more than any other, that provided the advocates of war with a convincing platform for their views, and it became the turning point where Americans reluctantly began to accept, if not the necessity of war, at least its inevitability.

The fact that the Lusitania was a passenger ship is misleading. Although she was built as a luxury liner, her construction specifications were drawn up by the British Admiralty so that she could be Converted, if necessary, into a ship of war. Everything from the horsepower of her engines and the shape of her hull to the placement of ammunition storage areas were, in fact, military designs.

 

She was built specifically to carry twelve six-inch guns. The construction costs for these features were paid for by the British government. Even in times of peace, it was required that her crew include officers and seamen from the Royal Navy Reserve.

In May of 1913, she was brought back into dry dock and outfitted with extra armor, revolving gun rings on her decks, and shell racks in the hold for ammunition. Handling elevators to lift the shells to the guns were also installed. Twelve high-explosive cannons were delivered to the dry dock. All this is a matter of public Record at the National Maritime Museum in Greenwich, England, but whether the guns were actually installed at that time is still hotly debated.

 

There is no evidence that they were. In any event, on September 17, the Lusitania returned to sea ready for the rigors of war, and she was entered into the Admiralty fleet register, not as a passenger liner, but an armed auxiliary cruiser.

 

From then on, she was listed in Jane's Fighting Ships as an auxiliary cruiser and in the British publication, The Naval Annual, as an armed merchant man.²

 

 

1. Chernow, pp. 100-01.
2. Colin Simpson, The Lusitania (Boston: Little, Brown & Co., 1972), p. 50.

 

Part of the dry dock modification was to remove all the passenger accommodations in the lower deck to make room for more military cargo.

 

Thus, the Lusitania became one of the most important carriers of war materials - including munitions - from the United States to England. On March 8,1915, after several close calls with German submarines, the captain of the Lusitania turned in his resignation.

 

He was willing to face the U-boats, he said, but he was no longer willing,

"to carry the responsibility of mixing passengers with munitions or contraband." ¹

 

 

CHURCHILL SETS A TRAP
From England's point of view, the handwriting on the wall was clear.

 

Unless the United States could be brought into the war as her ally, she soon would have to sue for peace. The challenge was how to push Americans off their position of stubborn neutrality. How that was accomplished is one of the more controversial aspects of the war.

 

It is inconceivable to many that English leaders might have deliberately plotted the destruction of one of their own vessels with American citizens aboard as a means of drawing the United States into the war as an ally. Surely, any such idea is merely German propaganda.

 

Robert Ballard, writing in National Geographic, says:

"Within days of the sinking, German sympathizers in New York came up with a conspiracy theory. The British Admiralty, they said, had deliberately exposed Lusitania to harm, hoping she would be attacked and thus draw the U.S. into the war."²

Let's take a closer look at this conspiracy theory.

 

Winston Churchill, who was First Lord of the Admiralty at that time, said:

There are many kinds of maneuvers in war... There are maneuvers in time, in diplomacy, in mechanics, in psychology; all of which are removed from the battlefield, but react often decisively upon it...

 

The maneuver which brings an ally into the field is as serviceable as that which wins a great battle. The maneuver which gains an important strategic point may be less valuable than that which placates or overawes a dangerous neutral.³

 

1. Sunpson, p. 87.
2. "Riddle of the Lusitania/' by Robert Ballard, National Geographic, AprU, 1994, p. 74.
3. Winston Churchill, The World Crisis (New York: Scribner's Sons, 1949), p. 300. This appears on p. 464 of the Barnes & Noble 1993 reprint.

 

 

The maneuver chosen by Churchill was particularly ruthless.

 

Under what was called the Cruiser Rules, warships of both England and Germany gave the crews of unarmed enemy merchant ships a chance to take to the lifeboats before sinking them.

 

But, in October of 1914, Churchill issued orders that British merchant ships must no longer obey a U-boat order to halt and be searched. If they had armament, they were to engage the enemy. If they did not, they were to attempt to ram the sub. The immediate result of this change was to force German U-boats to remain submerged for protection and to simply sink the ships without warning.

Why would the British want to do such a stupid thing that would cost the lives of thousands of their own seamen? The answer is that it was not an act of stupidity. It was cold blooded strategy.

 

Churchill boasted:

The first British countermove, made on my responsibility... was to deter the Germans from surface attack. The submerged U-boat had to rely increasingly on underwater attack and thus ran the greater risk of mistaking neutral for British ships and of drowning neutral crews and thus embroiling Germany with other Great Powers.¹

To increase the likelihood of accidentally sinking a ship from a neutral "Great Power," Churchill ordered British ships to remove their names from their hulls and, when in port, to fly the flag of a neutral power, preferably that of the United States.

 

As further provocation, the British navy was ordered to treat captured U-boat crew members not as prisoners of war but as felons.

"Survivors," wrote Churchill, "should be taken prisoner or shot - whichever is the most convenient."²

Other orders, which now are an embarrassing part of official navy archives, were even more ruthless:

"In all actions, white flags should be fired upon with promptitude."³

The trap was carefully laid. The German navy was goaded into a position of shoot-first and ask questions later and, under those conditions, it was inevitable that American lives would be lost.
 

 

 

A FLOATING MUNITIONS DEPOT
After many years of investigation, it is now possible to identify the cargo that was loaded aboard the Lusitania on her last voyage.

 

It included 600 tons of pyroxyline (commonly called gun cotton),⁴ six-million rounds of ammunition, 1,248 cases of shrapnel shells (which may not have included explosive charges), plus an unknown quantity of munitions that completely filled the holds on the lowest deck and the trunk-ways and passage-ways of F deck.

 

In addition, there were many tons of "cheese," "lard," "furs" and other items which were shown later to be falsely labeled.

 

What they were is not now known, but it is certain they were at least contraband if not outright weapons of war. They were all consigned through the J.P. Morgan Company. But none of this was suspected by the public, least of all those hapless Americans who unknowingly booked a passage to death for themselves and their families as human decoys in a global game of high finance and low politics.

The German embassy in Washington was well aware of the nature of the cargo being loaded aboard the Lusitania and filed a formal complaint to the United States government, because almost all of it was in direct violation of international neutrality treaties.

 

The response was a flat denial of any knowledge of such cargo. Seeing that the Wilson Administration was tacitly approving the shipment, the German embassy made one final effort to avert disaster. It placed an ad in fifty East Coast newspapers, including those in New York City, warning Americans not to take passage on the Lusitania.

 

The ad was prepaid and requested to be placed on the paper's travel page a full week before the sailing date.

 

It read as follows:

 

Although the ad was in the hands of newspapers in time for the Requested deadline, the State Department intervened and, raising the specter of possible libel suits, frightened the publishers into not printing it without prior clearance from State Department attorneys.

 

Of the fifty newspapers, only the Des Moines Register carried the ad on the requested date.

 

What happened next is described by Simpson:

George Viereck [who was the editor of a German-owned newspaper at that time and who had placed the ads on behalf of the embassy] spent April 26 asking the State Department why his advertisement had not been published. Eventually he managed to obtain an interview with [Secretary of State, William Jennings] Bryan and pointed out to him that on all but one of her wartime voyages the Lusitania had carried munitions.

 

He produced copies of her supplementary manifests, which were open to public inspection at the collector's office. More important, he informed Bryan, no fewer than «ix million rounds of ammunition were due to be shipped on the Lusitania the following Friday and could be seen at that moment being loaded on pier 54. Bryan picked up the telephone and cleared the publication of the advertisement.

 

He promised Viereck that he would endeavor to persuade the President publicly to warn Americans not to travel. No such warning was issued by the President, but there can be no doubt that President Wilson was told of the character of the cargo destined for the Lusitania. He did nothing, but was to concede on the day he was told of her sinking that his foreknowledge had given him many sleepless hours.¹

It is probably true that Wilson was a pacifist at heart, but it is Equally certain that he was not entirely the master of his own des-|tiny.

 

He was a transplanted college professor from the ivy-covered walls of Princeton, an internationalist at heart who dreamed of helping to create a world government and to usher in a millennium of peace. But he found himself surrounded by and dependent upon men of strong wills, astute political aptitudes, and powerful financial resources.

 

Against these forces, he was all but powerless to act on his own, and there is good reason to believe that he inwardly Suffered over many of the events in which he was compelled to participate. We shall leave it to others to moralize about a man who, by his deliberate refusal to warn his countrymen of their mortal peril, lends 195 of them to their watery graves.

 

We may wonder, also, about how such a man can commit the ultimate hypocrisy of condemning the Germans for this act and then doing everything possible to prevent the American public from learning the truth. It would be surprising if the extent of his private remorse was not greater than merely a few sleepless hours.
 

 

 

THE FINAL VOYAGE
But we are getting slightly ahead of the story.

 

While Morgan and Wilson were setting the deadly stage on the American side of the Atlantic, Churchill was playing his part on the European side. When the Lusitania left New York Harbor on May 1, her orders were to rendezvous with a British destroyer, the Juno, just off the coast of Ireland so she would have naval protection as she entered hostile waters.

 

When the Lusitania reached the rendezvous point, however, she was alone, and the captain assumed they had missed each other in the fog. In truth, the Juno had been called out of the area at the last minute and ordered to return to Queenstown. And this was done with the full knowledge that the Lusitania was on a direct course into an area where a German submarine was known to be operating.

 

To make matters worse, the Lusitania had been ordered to cut back on the use of coal, not because of shortages, but because it would be less expensive. Slow targets, of course, are much easier to hit. Yet, she was required to shut down one of her four boilers and, consequently, was now entering submarine-infested waters at only 75% of her potential speed.

As the Lusitania drew closer to hostile waters, almost everyone knew she was in grave danger. Newspapers in London were alive with the story of German warnings and recent sinkings.

 

In the map room of the British Admiralty, Churchill watched the play unfold and coldly called the shots. Small disks marked the places where two ships had been torpedoed the day before. A circle indicated the area within which the U-boat must still be operating. A larger disk represented the Lusitania travelling at nineteen knots directly into the circle. Yet, nothing was done to help her.

 

Admiral Coke at Queenstown was given perfunctory instructions to protect her as best he could, but he had no means to do so and, in fact, no one even bothered to notify the captain of the Lusitania that the rendezvous with the Juno had been canceled.

One of the officers present in the high-command map room on that fateful day was Commander Joseph Kenworthy, who previously had been called upon by Churchill to submit a paper on what would be the political results of an ocean liner being sunk with American passengers aboard. He left the room in disgust at the cynicism of his superiors.

 

In 1927, in his book, The Freedom of the Seas, he wrote without further comment:

"The Lusitania was sent at considerably reduced speed into an area where a U-boat was known to be waiting and with her escorts withdrawn."¹

Further comment is not needed. Colonel House was in England at that time and, on the day of the sinking, was scheduled to have an audience with King George V.

 

He was accompanied by Sir Edward Grey and, on the way, Sir Grey asked him:

"What will America do if the Germans sink an ocean liner with American passengers on board?"

As recorded in House's diaries, he replied:

"I told him if this were done, a flame of indignation would sweep America, which would in itself probably carry us into the war."²

Once at Buckingham Palace, King George also brought up the subject and was even more specific about the possible target.

 

He asked,

"Suppose they should sink the Lusitania with American passengers on board..."³

 

1. Joseph M. Kenworthy and George Young, The Freedom of the Seas (New York: Ayer Company, 1929), p. 211.
2. Seymour, Vol I, p. 432
3. Ibid., p. 432.

 

 

 

A MIGHTY EXPLOSION, A WATERY GRAVE
Four hours after this conversation, the black smoke of the Lusitania was spotted on the horizon through the periscope of the German submarine, li-20.

 

The ship came directly toward the U-boat, allowing it to full-throttle out of her path and swing around for a ninety-degree shot at her bow as she passed only 750 yards away. The torpedo struck nine feet below the water line on the starboard side slightly forward of the bridge. A second torpedo was readied but not needed.

 

Quickly after the explosion of the impact, there was a second and much larger explosion that literally blew the side off of cargo hold number two and started the great ship immediately toward the bottom. And what a hole it must have been. The Lusitania, one of the largest ships ever built, sank in less than eighteen minutes!

Survivors among the crew who were working in the boiler rooms during the attack have attested that the boilers did not blow at that time. Simpson tells us:
The G torpedo had failed to blow in the inner bulkhead of No. 1 boiler room, but just further forward something blew out most of the bottom of the bow of the ship.

 

It may have been the Bethlehem Company's 3-inch shells, the six million rounds of rifle ammunition, or the highly dubious contents of the bales of furs or the small forty-pound boxes of cheese.

 

Divers who have been down to the wreck unanimously testify that the bow was blasted by a massive internal explosion, and large pieces of the bow plating, buckled from the inside, are to be found some distance from the hull.¹

When a search team from the Woods Hole Oceanographic Institute surveyed the wreckage in the summer of 1993, they reported:

"When our cameras swept across the hold, we got a big surprise: There was no hole... We found no evidence that U-20's torpedo had detonated an explosion, undermining one theory of why the liner sank."²

 

1. Simpson, p. 157.
2. Ballard, "Riddle of the Lusitania," pp. 74, 76.

 

 

It is difficult to share the team's surprise.

 

Photographs show that the wreck is resting on its starboard (right) side. Since that is where the torpedo struck, it is logical that the hole would not be visible. It would be on the side buried in the ocean floor. The team reported that they were able to inspect only part of the hull's underside. That is because most of it - plus the entire starboard side - is buried in the muck.

 

Since the torpedo struck only nine feet below the waterline, the hole would not logically be anywhere near the bottom of the hull but at a point midway between the main deck and the bottom. In other words, it would be at the midpoint of the side that is now facing down. Failure to see the hole does not undermine the theory of internal explosion. It is exactly what one would expect.

In any event, it should be obvious that the Lusitania would not have gone to the bottom in eighteen minutes without a hole somewhere. Even the search team had to acknowledge that fact indirectly when it addressed the question of what might have caused the second explosion. In an obvious effort to avoid giving support to a "conspiracy theory," the report concluded that the explosion probably was caused, not by munitions, but by coal dust.

In the final analysis, it makes little difference whether the explosion was caused by munitions or coal dust.

 

The fact that it could have been caused by munitions is sufficient for the case.
 

 

 

A HURRIED COVER-UP
An official inquiry, under the direction of Lord Mersey, was held to determine the facts of the sinking and to place the blame.

 

It was a rigged affair from the beginning. All evidence and testimony [was carefully pre-screened to make sure that nothing was admitted into the record which would reveal duplicity on the part of British and American officials.

 

Among the papers submitted to Lord Mersey prior to the hearings was one from Captain Richard Webb, one of the men chosen by the navy to assist in the cover up.

 

It read:

"I am [directed by the board of Admiralty to inform you that it is considered politically expedient that Captain Turner, the master of the Lusitania, be most prominently blamed for the disaster."¹

The final report was a most interesting document.

 

Anyone reading it without knowledge of the facts would conclude that Captain William Turner was to blame for the disaster. Even so, Mersey attempted to soften the blow.

 

He wrote:

"...blame ought not to be imputed to the captain... His omission to follow the advice in all respects cannot fairly be attributed either to negligence or incompetence."

And then he added a final paragraph which, on the surface, appears to be a condemnation of the Germans but which, if read with understanding of the background, was an indictment of Churchill, Wilson, House and Morgan.

 

He wrote:

The whole blame for the cruel destruction of life in this catastrophe must rest solely with those who plotted and with those who committed the crime.²

Did Lord Mersey know that there could be a dual meaning to his words? Perhaps not, but, two days after delivering his judgment, he wrote to Prime Minister Asquith and turned down his fee for services.

 

He added:

"I must request that henceforth I be excused from Administering His Majesty's Justice."

In later years, his only comment on the event was:

"The Lusitania case was a damn dirty business."³

 

THE CRY FOR WAR
The purposes of the Cabal would have been better served had an American ship been sunk by the Germans, but a British ship with 195 Americans drowned was sufficient to do the job.

 

The players wasted no time in whipping up public sentiment. Wilson sent a note of outraged indignation to the Imperial German Government, and this was widely quoted in the press.

By that time, Bryan had become completely disillusioned by the duplicity of his own government.

 

On May 9, he sent a dour note to Wilson:

Germany has a right to prevent contraband going to the Allies, and a ship carrying contraband should not rely upon passengers to protect her from attack - it would be like putting women and children in front of an army.¹

This did not deter Wilson from his commitment. The first note was followed by an even stronger one with threatening overtones, which was intensely discussed at the Cabinet meeting on the first of June.

 

McAdoo, who was present at the meeting, says:

I remember that Bryan had little to say at this meeting; he sat throughout the proceedings with his eyes half closed most of the rime. After the meeting he told the President, as I learned later, that he could not sign the note...

 

Bryan went on to say that he thought his usefulness as Secretary of State was over, and he proposed to resign.²

 

At the request of Wilson, McAdoo was dispatched to the Bryans' home to persuade the Secretary to change his mind, lest his resignation be taken as a sign of disunity within the President's Cabinet.

 

Bryan agreed to think it over one more day but, the following morning, his decision remained firm. In his memoirs, annotated by his wife, Mrs. Bryan reveals that her husband could not sleep that night.

 

"He was so restless I suggested that he read a little till he should become drowsy. He had in his handbag a copy of an old book printed in 1829 and called 'A Wreath of Appreciation of Andrew Jackson.' He found it very interesting."³

What irony....

 

 

1. Bryan, Vol II, pp. 398-9.
2. McAdoo, p. 333.
3. Bryan, Vol. II, p. 424.

 

 

In chapter seventeen we shall review the total war waged by President Jackson against the Bank of the United States, the predecessor of the Federal Reserve System, and we shall be reminded that it was Jackson who prophesied:

Is there no danger to our liberty and independence in a bank that in its nature has so little to bind it to our country?... [Is there not] cause to tremble for the purity of our elections in peace and for the independence of our country in war?... Controlling our currency, receiving our public monies, and holding thousands of our citizens in dependence, it would be more formidable and dangerous than a naval and military power of the enemy.¹

One can only wonder what thoughts went through Bryan's mind as he recalled Jackson's warning and applied it to the artificially created war hysteria that, at that very moment, was being generated by the financial powers on Wall Street and at the newly created Federal Reserve.

From England, Colonel House sent a telegram to President Wilson which he, in turn, read to his Cabinet. It became the genesis of thousands of newspaper editorials across the land.

 

He said piously:

America has come to the parting of the ways, when she must determine whether she stands for civilized or uncivilized warfare. We can no longer remain neutral spectators.

 

Our action in this crisis will determine the part we will play when peace is made, and how far we may influence a settlement for the lasting good of humanity. We are being weighed in the balance, and our position amongst nations is being assessed by mankind^.2

In another telegram two days later, House reveals himself as the master psycho-politician playing on Wilson's ego like a violinist stroking the strings of a Stradivarius.

 

He wrote:

If, unhappily, it is necessary to go to war, I hope you will give the world an exhibition of American efficiency that will be a lesson for a century or more. It is generally believed throughout Europe that we are so unprepared and that it would take so long to put our resources into action, that our entering would make but little difference.

In the event of war, we should accelerate the manufacture of munitions to such an extent that we could supply not only ourselves but the Allies, and so quickly that the world would be astounded.³

Congress could not resist the combined pressure of the press and the President.

 

On April 16, 1917, the United States officially declared war on the Axis powers. Eight days later, Congress dutifully passed the War Loan Act which extended $1 billion in credit to the Allies. The first advance of $200 million went to the British the next day and was immediately applied as payment on the debt to Morgan. A few days later, $100 million went to France for the same purpose.

 

But the drain continued.

 

Within three months the British had run up their overdraft with Morgan to $400 million dollars, and the firm presented it to the government for payment.

 

The Treasury, however, was unable to put its hands on that amount of money without jeopardizing its own spendable funds and, at first, refused to pay. The problem was quickly solved, however, through a maneuver described at some length in chapter ten.

 

The Federal Reserve System under Benjamin Strong simply created the needed money through the Mandrake Mechanism.

"The Wilson Administration found itself in an extremely awkward position, having to bail out J.P. Morgan," wrote Ferrell, but Benjamin Strong "offered to help [Treasury-Secretary] McAdoo out of the difficulty. Over the following months in 1917-18, the Treasury quietly paid Morgan piecemeal for the overdraft."

By the time the war was over, the Treasury had loaned a total of $9,466,000,000 including $2,170,000,000 given after the Armistice.

That was the cash flow they had long awaited. In addition to saving the Morgan loans, even larger profits were to be made from war production. The government had been secretly preparing for war for six months prior to the actual declaration.

 

According to Franklin D. Roosevelt, then Assistant Secretary of the Navy, the Navy Department began extensive purchasing of war supplies in the Fall of 1916.²

 

 

1. Ferrell, p. 89,90.
2. Clarence W. Barron, They Told Barron- Notes of Clarence Walker Barron, edited by Arthur Pound and Samuel Taylor Moore (New York: Harper and Brothers, 1930), p. 51
 

 

Ferdinand Lundberg adds this perspective:

By no accident all the strategic government posts, notably those concerned with buying, were reserved for the Wall Street patriots. On the most vital appointments, Wilson consulted with Dodge [President of Rockefeller's National City Bank], who... recommended the hitherto unknown [Bernard] Baruch, speculator in copper stocks, as chairman of the all-powerful War Industries Board...

As head of the War Industries Board, Baruch spent government funds at the rate of $10,000,000,000 annually... Baruch packed the War 'Industries Board and its committees with past and future Wall Street manipulators, industrialists, financiers, and their agents... who fixed prices on a cost-plus basis and, as subsequent investigations revealed, saw to it that costs were grossly padded so as to yield hidden profits...
 

The American soldiers fighting in the trenches, the people working at home, the entire nation under arms, were fighting, not only to subdue Germany, but to subdue themselves. That there is nothing metaphysical about this interpretation becomes clear when we observe that the total wartime expenditure of the United States government from April 6, 1917, to October 31, 1919, when the last contingent of troops returned from Europe, was $35,413,000,000.

 

Net corporation profits for the period January 1,1916, to July, 1921, when wartime industrial activity was finally liquidated, were $38,000,000,000, or approximately the amount of the war expenditures. More than two-thirds of these corporation profits were taken by precisely those enterprises which the Pujo Committee had found to be under the control of the "Money Trust." ¹

The banking cartel was able, through the operation of the Federal Reserve System, to create the money to give to England and France so they, in turn, could pay back the American banks - exactly as was to be done again in World War II and again in the Big Bailout of the 1980s and '90s.

 

It is true that, in 1917, the recently enacted income tax was useful for raising a sizable amount of revenue to conduct the war and also, as Beardsley Ruml pointed out a few years later, to take purchasing power away from the middle class.

 

But the greatest source of funding came, as it always does in wartime, not from direct taxes, but from the hidden tax called inflation. Between 1915 and 1920, the money supply doubled from $20.6 billion to $39.8 billion.²

 

 

1. Lundberg, pp. 134, 144-45.
2. "Deposits and Currency - Adjusted Deposits of All Banks and Currency Outside Banks, 1892-1941," Banking and Monetary Statistics, 1914-1942 (Washington, D.C.: Board of Governors of the Federal Reserve System, 1976), p. 34.

 

 

Conversely, during World War I, the purchasing power of the currency fell by almost 50%. That means Americans unknowingly paid to the government approximately one-half of every dollar that existed.

 

And that was in addition to their taxes. This massive infusion of money was the product of the Mandrake Mechanism and cost nothing to create. Yet, the banks were able to collect interest on it all.

 

The ancient partnership between the political and monetary scientists had performed its mission well.
 

 

 

SUMMARY
To finance the early stages of World War I, England and France had borrowed heavily from investors in America and had selected the House of Morgan as sales agent for their bonds.

 

Morgan also acted as their U.S. purchasing agent for war materials, thus profiting from both ends of the cash flow: once when the money was borrowed and again when it was spent. Further profits were derived from production contracts placed with companies within the Morgan orbit. But the war began to go badly for the Allies when Germany's submarines took virtual control of the Atlantic shipping lanes.

 

As England and France moved closer to defeat or a negotiated peace on Germany's terms, it became increasingly difficult to sell their bonds. No bonds meant no purchases, and the Morgan cash flow was threatened.

 

Furthermore, if the previously sold bonds should go into default, as they certainly would in the wake of defeat, the Morgan consortium would suffer gigantic losses.

The only way to save the British Empire, to restore the value of the bonds, and to sustain the Morgan cash flow was for the United States government to provide the money. But, since neutral nations were prohibited from doing that by treaty, America would have to be brought into the war. A secret agreement to that effect was made between British officials and Colonel House, with the concurrence of the President.

 

From that point forward, Wilson began to pressure Congress for a declaration of war. This was done at the very time he was campaigning for reelection on the slogan "He kept us out of war." Meanwhile, Morgan purchased control over major segments of the news media and engineered a nation-wide editorial blitz against Germany, calling for war as an act of American patriotism.

Morgan had created an international shipping cartel, including Germany's merchant fleet, which maintained a near monopoly on the high seas. Only the British Cunard Lines remained aloof.

 

The Lusitania was owned by Cunard and operated in competition with Morgan's cartel.

 

The Lusitania was built to military specifications and was registered with the British Admiralty as an armed auxiliary cruiser. She carried passengers as a cover to conceal her real mission, which was to bring contraband war materials from the United States.

 

This fact was known to Wilson and others in his administration, but they did nothing to stop it. When the German embassy tried to publish a warning to American passengers, the State Department intervened and prevented newspapers from printing it. When the Lusitania left New York harbor on her final voyage, she was virtually a floating ammunition depot.

The British knew that to draw the United States into the war would mean the difference between defeat and victory, and anything that could accomplish that was proper - even the coldly calculated sacrifice of one of her great ships with Englishmen aboard. But the trick was to have Americans on board also in order to create the proper emotional climate in the United States.

 

As the Lusitania moved into hostile waters, where a German U-boat was known to be operating, First Lord of the Admiralty, Winston Churchill, ordered her destroyer protection to abandon her.

 

This, plus the fact that she had been ordered to travel at reduced speed, made her an easy target. After the impact of one well placed torpedo, a mighty second explosion from within ripped her apart, and the ship that many believed could not be sunk, gurgled to the bottom in less than eighteen minutes.

The deed had been done, and it set in motion great waves of revulsion against the Germans. These waves eventually flooded through Washington and swept the United States into war. Within days of the declaration, Congress voted $1 billion in credit for England and France. $200 million was sent to England immediately and was applied to the Morgan account.

 

The vast quantity of money needed to finance the war was created by the Federal Reserve System, which means it was collected from Americans through that hidden tax called inflation.

 

Within just five years, this tax had taken fully one-half of all they had saved. The infinitely higher cost in American blood was added to the bill.

Thus it was that the separate motives of such diverse personalities as Winston Churchill, J.P. Morgan, Colonel House, and Woodrow Wilson all found common cause in bringing America into World War II.

 

Churchill maneuvered for military advantage, Morgan sought the profits of war, House schemed for political power, and Wilson dreamed of a chance to dominate a post-war League of Nations.
 

 

 

 

Chapter Thirteen
MASQUERADE IN MOSCOW

The secret society founded by Cecil Rhodes for the purpose of world dominion; the establishment in America of a branch of tluit group called the Council on Foreign Relations; the role played by financiers representing both of these groups in financing the Russian revolution; the use of the Red Cross mission in Moscow as a cover for that maneuver.

One of the greatest myths of contemporary history is that the Bolshevik Revolution in Russia was a popular uprising of the downtrodden masses against the hated ruling class of the Tsars. As we shall see, however, the planning, the leadership, and especially the financing came entirely from outside Russia, mostly from financiers in Germany, Britain, and the United States.

 

Furthermore, we shall see that the Rothschild Formula played a major role in shaping these events.

This amazing story begins with the war between Russia and Japan in 1904. Jacob Schiff, who was head of the New York investment firm of Kuhn, Loeb, and Company, had raised the capital for large war loans to Japan. It was due to this funding that the Japanese were able to launch a stunning attack against the Russians at Port Arthur and, the following year, to virtually decimate the Russian fleet.

 

In 1905, the Mikado awarded Jacob Schiff a medal, the Second Order of the Treasure of Japan, in recognition of his important role in that campaign.

During the two years of hostilities, thousands of Russian soldiers and sailors were taken as prisoners. Schiff paid for the printing of one-and-a-half tons of Marxist propaganda and had it delivered to the prison camps. He also sent scores of Russian-speaking revolutionaries, trained in New York, to distribute the

pamphlets among the prisoners and to indoctrinate them into rebellion against their own government When the war was ended, 50,000 officers and enlisted men returned home to become virtual seeds of treason against the Tsar.

 

They were to play a major role a few years later in creating mutiny among the military during the Communist takeover of Russia.
 

 

 

TROTSKY WAS SCHIFF'S AGENT
One of the best known Russian revolutionaries at that time was Leon Trotsky.

 

In January of 1916, Trotsky was expelled from France and came to the United States at the invitation of Schiff. His travel expenses aboard the Mortserrat were paid by his host. He remained for several months while writing for a Russian socialist paper, the Novy Mir (New World), and giving revolutionary speeches at mass meetings in New York City.

 

According to Trotsky himself, on many occasions a chauffeured limousine was placed at the service of his family by a wealthy friend identified as Dr. M.

 

In his book, My Life, Trotsky wrote:

The doctor's wife took my wife and the boys out driving and was very kind to them.

 

But she was a mere mortal, whereas the chauffeur was a magician, a titan, a superman! With the wave of his hand, he made the machine obey his slightest command. To sit beside him was the supreme delight.

 

When they went into a tea-room, the boys would anxiously demand of their mother,

"Why doesn't the chauffeur come in?"¹

 

1. Leon Trotsky, My Life (New York: Scribner's, 1930), p. 277.

 

 

It must have been a curious sight to see the family of the great socialist radical, defender of the working class, enemy of capitalism, enjoying the pleasures of tea rooms and chauffeurs, the very symbols of capitalist luxury.

 

In any event, it is now known that almost all of his expenses in New York, including the mass rallies, were paid for by Jacob Schiff.

On March 23,1917, a mass meeting was held at Carnegie Hall to celebrate the abdication of Nicholas II, which meant the overthrow of Tsarist rule in Russia. Thousands of socialists, Marxists, nihilists, and anarchists attended to cheer the event. The following day there was published on page two of the New York Times, a telegram from Jacob Schiff which had been read to this audience.

 

He expressed regrets that he could not attend and then described the successful Russian revolution as,

"...what we had hoped and striven for these long years."

In the February 3,1949, issue of the New York Journal American, Schiff's grandson, John, was quoted by columnist Cholly Knickerbocker as saying that his grandfather had given about $20 million for the triumph of Communism in Russia.

When Trotsky returned to Petrograd in May of 1917 to organize the Bolshevik phase of the Russian Revolution, he carried $10,000 for travel expenses, a generously ample fund considering the value of the dollar at that time.

 

The amount is known with certainty because Trotsky was arrested by Canadian and British naval personnel when the ship on which he was travelling, the S.S. Kristianiafjord, put in at Halifax. The money in his possession is now a matter of official record. Because Trotsky was a known enemy of the Tsar and because Germany was then at war with Russia, it was assumed that the $10,000 was German money given to him in New York.

 

The evidence, however, is that this, too, came from Kuhn, Loeb and Company.

Trotsky was not arrested on a whim. He was recognized as a threat to the best interests of England, Canada's mother country in [the British Commonwealth. Russia was an ally of England in the first World War which then was raging in Europe. Anything that would weaken Russia - and that certainly included internal revolution - would be, in effect, to strengthen Germany and weaken England.

 

In New York, on the night before his departure, Trotsky had given a speech in which he said:

"I am going back to Russia to overthrow the provisional government and stop the war with Germany."³

Trotsky, therefore, represented a real threat to England's war effort. He was arrested as a German agent and taken |as a prisoner of war.

With this in mind, we can appreciate the great strength of those mysterious forces, both in England and the United States, that intervened on Trotsky's behalf. Immediately, telegrams began to [come into Halifax from such divergent sources as an obscure attorney in New York City, from the Canadian Deputy Postmaster-General, and even from a high-ranking British military officer, all inquiring into Trotsky's situation and urging his immediate release.

 

The head of the British Secret Service in America at the time was Sir William Wiseman who, as fate would have it, occupied the apartment directly above the apartment of Edward Mandell House and who had become fast friends with him.

 

House advised Wiseman that President Wilson wished to have Trotsky released, Wiseman advised his government, and the British Admiralty issued orders on April 21st that Trotsky was to be sent on his way.

 

It was a fateful decision that would affect, not only the outcome of war, but the future of the entire world.

 

 

 

SCHIFF WAS NOT ALONE
It would be a mistake to conclude that Jacob Schiff acted alone in this drama.

 

Trotsky could not have gone even as far as Halifax without having been granted an American passport, and this was accomplished by the personal intervention of President Wilson Professor Anthony Sutton says:

President Woodrow Wilson was the fairy godmother who provided Trotsky with a passport to return to Russia to "carry forward" the revolution... At the same time careful State Department bureaucrats, concerned about such revolutionaries entering Russia, were unilaterally attempting to tighten up passport procedures.²

 

1. "Why Did We Let Trotsky Go? How Canada Lost an Opportunity to Shorten the War," MacLeans magazine, Canada, June, 1919. Also see Martin, pp. 163-64.
2. Sutton, Revolution, p. 25.

 

 

And there were others, as well.

 

In 1911, the St. Louis Dispatch published a cartoon by a Bolshevik named Robert Minor. Minor was later to be arrested in Tsarist Russia for revolutionary activities and, in fact, was himself bankrolled by famous Wall Street financiers. Since we may safely assume that he knew his topic well, his cartoon is of great historical importance. It portrays Karl Marx, with a book entitled Socialism under his arm, standing amid a cheering crowd on Wall Street.

 

Gathered around and greeting him with enthusiastic handshakes are characters in silk hats identified as John D. Rockefeller, J.P. Morgan, John D. Ryan of National City Bank, Morgan partner George W. Perkins, and Teddy Roosevelt, leader of the Progressive Party.
 

What emerges from this sampling of events is a clear pattern of strong support for Bolshevism coming from the highest financial [and political power centers in the United States; from men who, supposedly, were "capitalists" and who, according to conventional wisdom, should have been the mortal enemies of socialism and communism.

Nor was this phenomenon confined to the United States. Trotsky, in his book, My Life, tells of a British financier who, in 1907, gave him a "large loan" to be repaid after the overthrow of the Tsar.

 

Arsene de Goulevitch, who witnessed the Bolshevik Revolution first hand, has identified both the name of the financier and the ^amount of the loan.

"In private interviews," he said, "I have been told that over 21 million roubles were spent by Lord [Alfred] Milner in financing the Russian Revolution... The financier just mentioned was by no means alone among the British to support the Russian revolution with large financial donations."

Another name specifically mentioned by de Goulevitch was that of Sir George Buchanan, the British Ambassador to Russia at the time.¹

 

It was one thing for Americans to undermine Tsarist Russia ,-and, thus, indirectly help Germany in the war, because Americans were not then into it, but for British citizens to do so was tantamount to treason.

 

To understand what higher loyalty compelled these men to betray their battlefield ally and to sacrifice the blood of their own countrymen, we must take a look at the unique organization to which they belonged.
 

 

 

THE SECRET SOCIETY
Lord Alfred Milner was a key figure in organizing a secret society which, at the time of these events, was about sixteen years old.

 

It was dedicated to nothing less than the quiet domination of the world. The conquest of Russia was seen as but the first phase of that plan. Since the organization is still in existence today and continues to make progress toward its goal, it is important to have its history included in this narrative.

One of the most authoritative reference works on the history of this group is Tragedy And Hope by Dr. Carroll Quigley.

 

Dr. Quigley Was a professor of history at Georgetown University where President Clinton had been one of his students. He was the author of the widely used textbook, Evolution of Civilization; he was a member of the editorial board of the monthly periodical, Current History; and he was a frequent lecturer and consultant for such groups as the Industrial College of the Armed Forces, the Brookings Institution, the U.S. Naval Weapons Laboratory, the Naval College, the Smithsonian Institute, and the State Department.

 

But Dr. Quigley was no mere academic. He also had been closely associated with many of the family dynasties of the super-rich. He was, by his own boast, an insider with a front row view of the world's money power structure.

When Dr. Quigley wrote his scholarly, 1300-page book of dry history, it was not intended for the masses.

 

It was to be read by the intellectual elite, and to that select readership he cautiously exposed one of the best-kept secrets of all time. He also made it clear, however, that he was a friendly apologist for this group and that he supported its goals and purposes.

 

Dr. Quigley said:

I know of the operation of this network because I have studied it tor twenty years and was permitted for two years, in the 1960s, to examine its papers and secret records. I have no aversion to it or to most of its aims and have, for much of my life, been close to it and to many of its instruments... In general, my chief difference of opinion is that it wishes to remain unknown.¹

As mentioned, Quigley's book was intended for an elite readership composed of scholars and network insiders.

 

But, unexpectedly, it began to be quoted in the journals of the John Birch Society, which correctly had perceived that his work provided a valuable insight to the inner workings of a hidden power structure. That exposure triggered a large demand for the book by people who were opposed to the network and curious to see what an insider had to say about it. That was not according to the original plan.

 

What happened next is best described by Quigley, himself.

 

In a personal letter dated December 9,1975, he wrote:

Thank you for your praise of Tragedy and Hope, a book which has brought me headaches as it apparently says something which powerful people do not want known. My publisher stopped selling it in 1968 and told me he would reprint (but in 1971 he told my lawyer that they had destroyed the plates in 1968).

 

The rare-book price went up to $135 and parts were reprinted in violation of copyright, but I could do nothing because I believed the publisher, and he would not take action even when a pirate copy of the book appeared. Only when I hired a lawyer in 1974 did I get any answers to my questions...

In another personal letter, Quigley commented further on the duplicity of his publisher:

They lied to me for six years, telling me that they would reprint when they got 2,000 orders, which could never happen because they told anyone who asked that it was out of print and would not be reprinted.

 

They denied this to me until I sent them Xerox copies of such replies in libraries, at which they told me it was a clerk's error. In other words, they lied to me but prevented me from regaining publication rights... I am now quite sure that Tragedy and Hope was suppressed...

To understand why "powerful people" would want to suppress this book, note carefully what follows.

 

Dr. Quigley describes the goal of this network of world financiers as:

... nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences...

Each central bank, in the hands of men like,

• Montagu Norman of the Bank of England

• Benjamin Strong of the New York Federal Reserve Bank

• Charles Rist of the Bank of France

• Hjalmar Schacht of the Reichsbank,

...sought to dominate its government by its ability to control treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world.

That is the information that "powerful people" do not want the common man to know.

Notice that Quigley refers to this group as a "network." That is a precise choice of words, and it is important to an understanding of the forces of international finance. The network to which he refers is not the secret society. It is no doubt directed by it, and there are society members in key positions within the network, but we can be sure that there are many in the network who have little or no knowledge of hidden control.

 

To explain how this can be possible, let us turn to the origin and growth of the secret society itself.
 

 

 

RUSKIN, RHODES, AND MILNER
In 1870, a wealthy British socialist by the name of John Ruskin was appointed as professor of fine arts at Oxford University in London.

 

He thought that the state must take control of the means of production and organize them for the good of the community as a whole. He advocated placing control of the state into the hands of a small ruling class, perhaps even a single dictator.

 

He said:

"My continual aim has been to show the eternal superiority of some men to others, sometimes even of one man to all others."¹

This, of course, is the same intellectual appeal of Communism.

 

Lenin taught that the masses could not be trusted to handle their own affairs and that a special group of disciplined intellectuals must assume this role for them. That is the function of the Communist Party, which never comprises more than about three per cent of the population. Even when the charade of free elections is allowed, only members of the Party - or those over whom the KGB has total control - are permitted to run for office.

 

The concept that a ruling party or class is the ideal structure for society is at the heart of all collectivist schemes, regardless of whether they are called Socialism, Communism, Nazism, Fascism, or any other "ism" which may yet be invented to disguise it.

 

It is easy, therefore, for adherents of this elitist mentality to be comfortable in almost any of these collectivist camps, a fact to which Dr. Quigley alluded when he wrote:

"This network, which we may identify as the Round Table Groups, has no aversion to cooperating with the Communists, or any other groups, and frequently does so."²

Returning to the subject of the origins of this group, however, Dr. Quigley tells us:

Ruskin spoke to the Oxford undergraduates as members of the privileged ruling class.

 

He told them that they were the possessors of a magnificent tradition of education, beauty, rule of law, freedom, decency, and self-discipline, but that this tradition could not be saved, and did not deserve to be saved, unless it could be extended to the lower classes in England itself and to the non-English masses throughout the world.

Ruskin's message had a sensational impact. His inaugural lecture was copied out in long-hand by one undergraduate, Cecil Rhodes, who kept it with him for thirty years.¹

Cecil Rhodes made one of the world's greatest fortunes.

 

With the cooperation of the Bank of England and financiers like Rothschild, he was able to establish a virtual monopoly over the diamond output of South Africa and most of the gold as well. The major portion of this vast income was spent to advance the ruling-class ideas of John Ruskin.

 

Dr. Quigley explains:

The Rhodes Scholarships, established by the terms of Cecil Rhodes' seventh will, are known to everyone. What is not so widely known is that Rhodes in five previous wills left his fortune to form a secret society, which was to devote itself to the preservation and expansion of the British Empire.

 

And what does not seem to be known to anyone is that this secret society was created by Rhodes and his principal trustee, Lord Milner, and continues to exist to this day... In his book on Rhodes' wills, he [Stead, who was a member of the inner circle] wrote in one place: "Mr. Rhodes was more than the founder of a dynasty.

 

He aspired to be the creator of one of those vast semi-religious, quasi-political associations which, like the Society of Jesus, have played so large a part in the history of the world. To be more strictly accurate, he wished to found an Order as the instrument of the will of the Dynasty.²

In this secret society,

• Rhodes was to be leader

• Stead, Brett (Lord Esher), and Milner were to form an executive committee

• Arthur (Lord) Balfour, (Sir) Harry Johnston, Lord Rothschild, Albert (Lord) Grey, and others were listed as potential members of a "Circle of Initiates",

...while there was to be an outer circle known as the "Association of Helpers" (later organized by Milner as the Round Table organization).¹
 

 

1. Quigley, Tragedy, p. 131.

 

 

 

THE PATTERN OF CONSPIRACY
Here, then, was the classical pattern of political conspiracy.

 

This was the structure that made it possible for Quigley to differentiate between an international "network" and the secret society within that network. At the center, there is always a tiny group in complete control, with one man as the undisputed leader. Next is a circle of secondary leadership that, for the most part, is unaware of an inner core.

 

They are led to believe that they are the inner-most ring.

In time, as these conspiracies are built from the center out, they form additional rings of organization. Those in the outer echelons usually are idealists with an honest desire to improve the world. They never suspect an inner control for other purposes, and only those few who demonstrate a ruthless capacity for higher leadership are ever allowed to see it.

After the death of Cecil Rhodes, the inner core of his secret society fell under the control of Lord Alfred Milner, Governor-General and High Commissioner of South Africa. As director of a number of public banks and as corporate precursor of England's Midland Bank, he became one of the greatest political and financial powers in the world.

 

Milner recruited into his secret society a group of young men chiefly from Oxford and Toynbee Hall and, according to Quigley:

Through his influence these men were able to win influential posts in government and international finance and became the dominant influence in British imperial and foreign affairs up to 1939... In 1909-1913 they organized semi-secret groups, known as Round Table Groups, in the chief British dependencies and the United States...

Money for the widely ramified activities of this organization came ... chiefly from the Rhodes Trust itself, and from wealthy associates such as the Beit brothers, from Sir Abe Bailey, and (after 1915) from the Astor family ... and from foundations and firms associated with the international banking fraternity, especially the Carnegie United Kingdom Trust, and other organizations associated with J.P. Morgan, the Rockefeller and Whitney families, and the associates of Lazard Brothers and of Morgan, Grenfell, and Company...

At the end of the war of 1914, it became clear that the organization of this system had to be greatly extended. Once again the task was entrusted to Lionel Curtis who established, in England and each dominion, a front organization to the existing local Round Table Group. This front organization, called the Royal Institute of International Affairs, had as its nucleus in each area the existing submerged Round Table Group.

 

In New York it was known as the Council on Foreign Relations, and was a front for J.P. Morgan and Company in association with the very small American Round Table Group.¹

The Council on Foreign Relations was a spin-off from the failure of the world's leaders at the end of World War I to embrace the League of Nations as a true world government.

 

It became clear to the master planners that they had been unrealistic in their expectations for rapid acceptance. If their plan were to be carried forward, it would have to be done on the basis of patient gradualism symbolized by the Fabian turtle.

 

Rose Martin says:

Colonel House was only one man, where a multitude was needed. He had set the pattern and outlined goals for the future, and he still had a scheme or two in mind. In particular, he foresaw it would be necessary for the Fabians to develop a top level Anglo-American planning group in the field of foreign relations which could secretly influence policy on the one hand and gradually "educate" public opinion on the other...

 

To the ambitious young Fabians, British and American, who had flocked to the peace conference as economists and junior officials, it soon became evident that a New World Order was not about to be produced at Paris...

 

For them, Colonel House arranged a dinner meeting at the Hotel Majestic on May 19,1919, together with a select group of Fabian-certified Englishmen - notably, Arnold Toynbee, R.H. Tawney and John Maynard Keynes. All were equally disillusioned, for various reasons, by the consequences of the peace.

 

They made a gentlemen's agreement to set up an organization, with branches in England and America,

"to facilitate the scientific study of international questions."

As a result two potent and closely related opinion-making bodies were founded...

 

The English branch was called the Royal Institute of International Affairs. The American branch, first known as the Institute of International Affairs, was reorganized in 1921 as the Council on Foreign Relations.²

 

1. Quigley, Tragedy, pp. 132, 951-52.
2. Martin, pp. 174-5.

 

 

It is through this front group, called the Council on Foreign Relations, and its influence over the media, tax-exempt foundations, universities, and government agencies that the international financiers have been able to dominate the domestic and foreign policies of the United States ever since.

 

We shall have more to say about the CFR, but our focal point for now is Great Britain and, in particular, the help given to Communism in Russia by Lord Alfred Milner and his web of secret societies.
 

 

 

ROUND TABLE AGENTS IN RUSSIA
In Russia, prior to and during the revolution, there were many local observers, tourists, and newsmen who reported that British and American agents were everywhere, particularly in Petrograd, providing money for insurrection.

 

One report said, for example, that British agents were seen handing out 25-rouble notes to the men at the Pavlovski regiment just a few hours before it mutinied against its officers and sided with the revolution.

 

The subsequent publication of various memoirs and documents made it clear that this funding was provided by Milner and channeled through Sir George Buchanan who was the British Ambassador to Russia at that time.1 It was a repeat of the ploy that had worked so well for the cabal many times in the past. Round Table members were once again working both sides of the conflict to weaken and topple a target government.

 

Tsar Nicholas had every reason to believe that, since the British were Russia's allies in the war against Germany, British officials would be the last persons on Earth to conspire against him. Yet, the British Ambassador himself represented the hidden group which was financing the regime's downfall.

The Round Table agents from America did not have the advantage of using the diplomatic service as a cover and, therefore had to be considerably more ingenious. They came, not as diplomats or even as interested businessmen, but disguised as Red Cross officials on a humanitarian mission. The group consisted almost entirely of financiers, lawyers, and accountants from New York banks and investment houses.

 

They simply had overpowered the American Red Cross organization with large contributions and, in effect, purchased a franchise to operate in its name.

 

Professor Sutton tells us:

The 1910 [Red Cross] fund-raising campaign for $2 million, for example, was successful only because it was supported by these wealthy residents of New York City. J.P. Morgan himself contributed $100,000... Henry P. Davison [a Morgan partner] was chairman of the 1910 New York Fund-Raising Committee and later became chairman of the War Council of the American Red Cross... The Red Cross was unable to cope with the demands of World War I and in effect was taken over by these New York bankers.¹

 

1. Sutton, Revolution, p. 72.

 

 

For the duration of the war, the Red Cross had been made, nominally, a part of the armed forces and subject to orders from the proper military authorities.

 

It was not clear who these authorities were and, in fact, there were never any orders, but the arrangement made it possible for the participants to receive military commissions and wear the uniform of American army officers.

 

The entire expense of the Red Cross Mission in Russia, including the purchase of uniforms, was paid for by the man who was appointed by President Wilson to become its head, "Colonel" William Boyce Thompson.

Thompson was a classical specimen of the Round Table network. Having begun his career as a speculator in copper mines, he soon moved into the world of high finance.

 

He,

• refinanced the American Woolen Company and the Tobacco Products Company

• launched the Cuban Cane Sugar Company

• purchased controlling interest in the Pierce Arrow Motor Car Company

• organized the Submarine Boat Corporation and the Wright-Martin Aeroplane Company

• became a director of the Chicago Rock Island & Pacific Railway, the Magma Arizona Railroad, and the Metropolitan Life Insurance Company

• was one of the heaviest stockholders in the Chase National Bank

• was the agent for J.P. Morgan's British securities operation

• became the first full-time director of the Federal Reserve Bank of New York, the most important bank in the Federal Reserve System

• and, of course, contributed a quarter-million dollars to the Red Cross

When Thompson arrived in Russia, he made it clear that he was not your typical Red Cross representative. According to Hermann Hagedorn, Thompson's biographer:

He deliberately created the kind of setting which would be expected of an American magnate: established himself in a suite in the Hotel de l'Europe, bought a French limousine, went dutifully to receptions and teas and evinced an interest in objects of art. Society and the diplomats, noting that here was a man of parts and power, began to flock about him.

 

He was entertained at the embassies, at the houses of Kerensky's ministers. It was discovered that he was a collector, and those with antiques to sell fluttered around him, offering him miniatures, Dresden china, tapestries, even a palace or two.¹

When Thompson attended the opera, he was given the imperial box. People on the street called him the American Tsar.

 

And it is not surprising that, according to George Kennan,

"He was viewed by the Kerensky authorities as the 'real' ambassador of the United States."²

It is now a matter of record that Thompson syndicated the purchase on Wall Street of Russian bonds in the amount of ten-million roubles.³

 

In addition, he gave over two-million roubles to Aleksandr Kerensky for propaganda purposes inside Russia and, with J.P. Morgan, gave the rouble equivalent of one-million dollars to the Bolsheviks for the spreading of revolutionary propaganda outside of Russia, particularly in Germany and Austria.

 

A photograph of the cablegram from Morgan to Thompson advising that the money had been transferred to the National City Bank branch in Petrograd is included in this book.

 

 

1. Hermann Hagedorn, The Magnate: William Boyce Thompson and His Time (New York: Reynal & Hitchcock, 1935), pp. 192-93.
2. George R Kennan, Russia Leaves the War; Soviet-American Relations, 1917-1920 (Princeton, New Jersey: Princeton University Press, 1956), p. 60.
3. Hagedorn, p. 192.
4. Sutton, Revolution, pp. 83,91. It was the agitation made possible by this funding that led to the abortive German Sparticus Revolt of 1918. See "W.B. Thompson, Red Cross Donor, Believes Party Misrepresented," Washington Post, Feb. 2,1918.
 

 

 

AN OBJECT LESSON IN SOUTH AFRICA
At first it may seem incongruous that the Morgan group would provide funding for both Kerensky and Lenin.

 

These men may have both been socialist revolutionaries, but they were miles apart in their plans for the future and, in fact, were bitter competitors for control of the new government. But the tactic of funding both sides in a political contest by then had been refined by members of the Round Table into a fine art.

 

A stunning example of this occurred in South Africa during the outset of Boer War in 1899.

The British and Dutch had been active in the settlement of .Southern Africa for decades. The Dutch had developed the provinces of Transvaal and the Orange Free State, while the British had ^colonized such areas as Rhodesia, Cape Hope, Basutoland, Swaziland, and Bechuanaland. Conflict was inevitable between these two groups of settlers whenever they found themselves in competition for the resources of the same territory, but it was the discovery of gold in the Whitewater area of the Transvaal that provided the motive for war.

Politically, the Transvaal was in the hands of the Boers, who were the descendants of the Dutch settlers. But, after the discovery of gold in that area, the mine fields had been developed primarily •by the British and became solidly under their control. Not surprisingly, one of the largest players in that game was Cecil Rhodes who already had monopolized the diamond fields under British control to the South.

 

Historian Henry Pike tells us:

With the discovery of gold in the Transvaal, Rhodes' greed became passionate. His hatred of Paul Kruger, the Afrikaner President of the Transvaal, knew no limits. He was bitterly opposed to Kruger's independent Transvaal, and viewed this as the main obstacle to his efforts to sweep all Southern Africa under British rule.¹

In 1895, Rhodes set in motion a plan to overthrow Kruger's government by organizing an uprising among the British inhabitants in Johannesburg.

 

The uprising was financed by himself and was to be led by his brother, Frank, and other loyal supporters. This was to be followed by a military invasion of the Transvaal by British troops from Bechuanaland and Rhodesia led by Sir Leander Jameson. The uprising fizzled and ended in Jameson's arrest and public disgrace.

But Rhodes was determined to have the Transvaal, and began immediately to prepare a second, more patient ploy. Through Rhodes' influence, Lord Alfred Milner was appointed as the British High Commissioner of South Africa. In London, Lord Esher - another member of the secret society - became the chief political adviser to King Edward and was in daily contact with him throughout this period.

 

That took care of the British side of this contest.

 

With regard to the Boers' side, Professor Quigley tells the amazing story:

By a process whose details are still obscure, a brilliant young graduate of Cambridge, Jan Smuts, who had been a vigorous supporter of Rhodes and acted as his agent in Kimberly [South Africa's largest diamond mine] as late as 1895 and who was one of the most important members of the Rhodes-Milner group in the period 1908-1950, went to the Transvaal and, by violent anti-British agitation, became state secretary of that country (although a British subject) and chief political adviser to President Kruger.

 

Milner made provocative troop movements on the Boer frontiers in spite of the vigorous protests of his commanding general in South Africa, who had to be removed; and, finally, war was precipitated when Smuts drew up an ultimatum insisting that the British troop movements cease and when this was rejected by Milner.¹

And so, as a result of careful engineering by Round Table members on both sides - one making outrageous demands and the other responding to those demands in pretended indignation - the war finally began with a British invasion in October of 1899.

 

After 2 years of fierce fighting, the Boers were forced to surrender, and Milner administered the former republic as a militarily occupied territory. Round Table members, known to the public as "Milner's Kindergarten," were placed into all key government posts, and the gold fields were finally secured.

 

 

 

PLACING BETS ON ALL HORSES
On the other side of the world, in New York City, the same tactic of playing both sides against each other was being applied with brilliant precision by Round Table member J.P. Morgan.

 

Professor Quigley tells us:

To Morgan all political parties were simply organizations to be used, and the firm always was careful to keep a foot in all camps. Morgan himself, Dwight Morrow, and other partners were allied with Republicans; Russell C Leffingwell was allied with the Democrats; Grayson Murphy was allied with the extreme Right; and Thomas W. Lamont was allied with the Left.²

 

1. Quigley, Tragedy, pp. 137-38.
2. Ibid., p. 945.

 

 

Although it is true that Thomas Lamont was the father of Corliss Lamont, a well-known Communist, and was himself widely Regarded as a man of leftist persuasions, it must also be remembered that he felt equally at home among the Fascists and, in fact, served as an unofficial business consultant for Mussolini in the 1920s.¹

At the same time that Morgan was funding pro-Bolshevik groups, he founded what was probably the most virulent anti-Bolshevik organization ever to exist in America. It was called [United Americans and it set about to frighten everyone into believing that a Red mob was at that very moment poised to capture New York City.

 

It issued shocking reports warning about a pending financial collapse, widespread starvation, and a desperate working class being maneuvered into accepting Communist slogans and rhetoric as a last resort.

 

Ironically, the officers of this organization were:

• Allen Walker of the Guarantee Trust Company, which was then acting as the Soviet's fiscal agent in the U.S.

• Daniel Willard, president of the Baltimore & Ohio Railway, which was then active in the development of Soviet railways

• H.H. Westinghouse of Westinghouse Air Brake Company which was then Operating a major plant in Russia

• Otto H. Kahn of Kuhn, Loeb & Company, which was one of the principal financial backers of the fledgling Soviet regime ²

Even inside Russia itself, the Round Table was spreading its pets. In addition to the funding, previously mentioned, which was given to the Bolsheviks and to their opponents, the Mensheviks, Morgan also financed the military forces of Admiral Kolchak who [was fighting against the Bolsheviks in Siberia. Not surprisingly, Kolchak also received funding from a consortium of British financiers, including Alfred Milner.

It is commonly stated that the original intent of the Red Cross mission to Moscow was to prevent the Russian government from making a separate peace with Germany which would release German troops to fight against England and France.

 

According to that version of the story - which portrays the actors as patriots merely doing what was best for the war effort - the first goal was to support the Tsar.

 

When the Tsar was overthrown, they supported the Mensheviks because they had pledged to stay in the war. When the Mensheviks were ousted, they continued to support the Bolsheviks in order to gain sufficient influence to convince them not to give aid to Germany. It takes a great deal of gullibility to swallow that line.

 

A far more plausible reading is that the Morgan interests were merely doing what they had always done: placing bets on all horses so that, no matter which one crossed the finish line, the winner would be obligated to them.
 

 

 

BRITISH AGENT OF THE ROUND TABLE
After the Bolsheviks had seized power in Russia, Sir George Buchanan was recalled as the British Ambassador and replaced by a member of Milner's Kindergarten, a young man by the name of Bruce Lockhart. In his book, British Agent, Lockhart describes the circumstances of his assignment.

 

Speaking of a meeting with Prime Minister Lloyd George, he wrote:

I saw that his own mind was made up. He had been greatly impressed, as Lord Milner told me afterwards, by an interview with Colonel Thompson of the American Red Cross, who had just returned from Russia and who had denounced in blunt language the folly of the Allies in not opening up negotiations with the Bolsheviks...

Three days later all my doubts were put at rest. I was to go to Russia as head of a special mission to establish unofficial relations with the Bolsheviks... I had been selected for this Russian mission not by the Foreign Secretary but by the War Cabinet - actually by Lord Milner and Mr. Lloyd George...

Lord Milner I saw almost daily. Five days before my departure I dined alone with him at Brook's. He was in his most inspiring mood. He talked to me with a charming frankness about the war, about the future of England, about his own career, and about the opportunities of youth... He was, too, very far from being the Jingo and the Conservative reactionary whom popular opinion at one time represented him to be.

 

On the contrary, many of his views on society were startling modem. He believed in the highly organized state, in which service, efficiency, and hard work were more important than titles or money-bags.¹
 

 

AMERICAN AGENT OF THE ROUND TABLE
When Thompson returned to the United States, the man he selected to replace himself as head of the American Red Cross Mission was his second-in-command, Raymond Robins.

 

Not much is known about Robins except that he was the protégé of Col. Edward Mandell House, and he might have remained an obscure player in this drama had it not been for the fact that he became one of the central characters in Bruce Lockhart's book.

 

It is there that we get this inside view:

Another new acquaintance of these first days in the Bolshevized St. Petersburg was Raymond Robins, the head of the American Red Cross Mission... He had been a leading figure in Roosevelt's "Bull Moose" campaign for the American Presidency in 1912. Although a rich man himself, he was an anti-capitalist...

 

Hitherto, his two heroes had been Roosevelt and Cecil Rhodes. Now Lenin had captured his imagination... Robins was the only man whom Lenin was always willing to see and who ever succeeded in imposing his own personality on the unemotional Bolshevik leader.

In a less official sense Robins had a similar mission to my own. He was the intermediary between the Bolsheviks and the American Government and had set himself the task of persuading President Wilson to recognize the Soviet regime.¹

What an amazing revelation is contained in those words.

 

First, we learn that Robins was a leader in the team effort that threw the election of 1912 to Woodrow Wilson. Then we learn that he was an anti-capitalist. Third, we discover that an anti-capitalist can hero-worship Cecil Rhodes. Then we see the tremendous power he wielded over Lenin.

 

And finally, we are told that, although he was part of a private group financed by Wall Street bankers, he was in reality the intermediary between the Bolsheviks and the American Government One will look in vain for a better summary.

 

1. Lockhart, p. 220.
2. Ibid., p. 270.

 

The fact that Cecil Rhodes was one of Robin's great heroes has special significance for this story. It was not merely an intellectual infatuation from college days. On the night before he left Russia, Robins dined with Lockhart.

 

Describing the occasion, Lockhart says:

"He had been reading Rhodes' life and after dinner he gave us a wonderful exposition of Rhodes' character."²

Thus, both Lockhart and Robins were dedicated disciples of Cecil Rhodes and both were undoubtedly part of the international network to which Professor Quigley alluded - possibly even members of the Round Table.

 

Lockhart reported to the British group while Robins reported to the American group, but both were clearly working for identical objectives and doing the work of the unseen hand.

The Bolsheviks were well aware of the power these men represented, and there was no door closed to them. They were allowed to attend meetings of the Central Executive Committee,¹ and were consulted regarding important decisions. But perhaps the best way to appraise the extent of the influence these "capitalists" had over the "anti-capitalists" is to let Lockhart tell his own story.

 

In his memoirs, he wrote:

I returned from our interview to our flat to find an urgent message from Robins requesting me to come to see him at once. I found him in a state of great agitation. He had been in conflict with Saalkind, a nephew of Trotsky and then Assistant Commissar for Foreign Affairs.

 

Saalkind had been rude, and the American, who had a promise from Lenin that, whatever happened, a train would always be ready for him at an hour's notice, was determined to exact an apology or to leave the country.

 

When I arrived, he had just finished telephoning to Lenin. He had delivered his ultimatum, and Lenin had promised to give a reply within ten minutes. I waited, while Robins fumed. Then the telephone rang and Robins picked up the receiver. Lenin had capitulated. Saalkind was dismissed from his post. But he was an old member of the Party.

 

Would Robins have any objection if Lenin sent him as a Bolshevik emissary to Berne? Robins smiled grimly.

"Thank you, Mr. Lenin" he said. "As I can't send the son of a bitch to hell, 'burn' is the next best thing you can do with him."

Such was the raw power over the leaders of Communism that was concealed behind the innocent facade of the American Red Cross Mission.

 

And yet, the world - even today - has no inkling of its reality. It has been a carefully guarded secret, and even many of those who were close to it were unable to see it. The assistant to William Thompson in Russia was Cornelius Kelleher. In later years, reflecting on the naïveté of Dr. Franklin Billings, who was head of the mission's medical team, Kelleher wrote:

Poor Mr. Billings believed he was in charge of a scientific mission for the relief of Russia... He was in reality nothing but a mask - the Red Cross complexion of the mission was nothing but a mask.¹

 

1. Ibid., p. 253.
2. U.S. State Dept. Decimal File, 861.00/3449.
3. Lockhart, pp. 225-26.

 

The purpose of a mask, of course, is to conceal. And so we are led to ask the question, what was behind that mask? What were the true motives and goals of the masqueraders?

We shall turn to that subject next.
 

 

 

SUMMARY
The Bolshevik revolution was not a spontaneous uprising of the masses. It was planned, financed, and orchestrated by outsiders.

 

Some of the financing came from Germany which hoped that internal problems would force Russia out of the war against her. But most of the money and leadership came from financiers in England and the United States. It was a perfect example of the Rothschild formula in action.

This group centered mainly around a secret society created by Cecil Rhodes, one of the world's wealthiest men at the time.

 

The purpose of that group was nothing less than world dominion and the establishment of a modern feudalist society controlled by the "world's central banks. Headquartered in England, the Rhodes inner-most directorate was called the Round Table. In other countries, there were established subordinate structures called Round-Table Groups.

 

The Round-Table Group in the United States became known as the Council on Foreign Relations.

 

The CFR, which was initially dominated by J.P. Morgan and later by the Rockefellers, is pie most powerful group in America today. It is even more powerful than the federal government, because almost all of the key positions in government are held by its members. In other words, it is the United States government.

Agents of these two groups cooperated closely in pre-revolutionary Russia and particularly after the Tsar was overthrown. The American contingent in Russia disguised itself as a Red Cross mission allegedly doing humanitarian work.

 

Cashing in on their close friendship with Trotsky and Lenin, they obtained profitable business concessions from the new government which returned their initial investment many times over.

 

 

Chapter Fourteen
THE BEST ENEMY MONEY CAN BUY

The coup d'état in Russia in which the Bolshevik minority seized control from the revolutionary majority; the role played by New York financiers, masquerading as Red Cross officials, in supporting the Bolsheviks; the unbroken record since then of American assistance in building Russia's war-making potential; the emergence of a "credible enemy" in accordance with the Rothschild Formula.

In the previous section we saw that the Red Cross Mission in revolutionary Russia was, in the words of its own personnel, "nothing but a mask." This leads to the logical question, what were the true motives and goals that were hidden behind that mask.

In later years, it would be explained by the participants themselves that they simply were engaged in a humanitarian effort to keep Russia in the war against Germany and, thus, to help the cause of freedom for England and her allies.

 

For Jacob Schiff and other Jewish financiers in New York, there was the additional explanation that they opposed the Tsar because of his anti-Semitism. These, of course, are admirable motives, and they have been uncritically accepted by mainstream historians ever since.

 

Unfortunately, the official explanations do not square with the facts.
 

 

 

RUSSIA'S TWO REVOLUTIONS
The facts are that there were two revolutions in Russia that year, not one.

 

The first, called the February Revolution, resulted in [the establishment of a provisional socialist government under the leadership of Aleksandr Kerensky. It was relatively moderate in its policies and attempted to accommodate all revolutionary factions including the Bolsheviks who were the smallest minority.

 

When the February Revolution occurred, neither Lenin nor Trotsky were even in Russia. Lenin was in Switzerland and didn't arrive until April. Trotsky was still in New York writing propaganda and giving speeches.

The second revolution, called the October Revolution, was the one through which the Bolsheviks came to power. It was, in fact, no revolution at all. It was a coup d'état.

 

The Bolsheviks simply took advantage of the confusion and indecisiveness that existed among the various groups that comprised the new government and caught them by surprise with a lightening strike of force. With a combination of bribes and propaganda, they recruited several regiments of soldiers and sailors and, in the early morning darkness of October 25, methodically took military possession of all government buildings and communication centers. No one was prepared for such audacity, and resistance was almost non-existent.

 

By dawn, without the Russian people even knowing what had happened - much less having any voice in that action, their country had been captured by a minority faction and become the world's first so-called "people's republic."

 

Within two days, Kerensky had fled for his life, and all Provisional Government ministers had been arrested. That is how the Communists seized Russia and that is how they held it afterward. Contrary to the Marxian myth, they have never represented the people.

 

They simply have the guns.

The basic facts of this so-called revolution are described by Professor Leonard Schapiro in his authoritative work, The Russian Revolutions of1917:

All the evidence suggests that when the crisis came the great majority of units of the Petrograd Garrison did not support the government but simply remained neutral...

 

The Cossack units rejected its call for support, leaving the government with only a few hundred women soldiers and around two thousand military cadets on its side. The Bolsheviks, on the other hand, could count on several regiments to carry out their orders. Units of the Baltic Fleet also supported them...

In the event, the Bolshevik take-over was almost bloodless: in contrast with what had happened in February, nothing could have been less like a city in the throes of revolution than Petrograd on 25 October. Crowds of well-dressed people thronged the streets in the evening. Theaters and restaurants were open, and at the opera, Shaliapin sang in Boris Godunov. The principal stations and services had all been taken over by the morning of 25 October without a shot being fired...

A battleship and several cruisers, including the Aurora, had reached Petrograd from Kronstadt and were anchored with their guns trained on targets in the city...

The Provisional Government inside the Winter Palace...received an ultimatum calling for surrender of its members, under threat of bombardment of the palace by Aurora and by the guns of the Peter and Paul Fortress... It was only at 9:40 P.M. that the Aurora was ordered to fire - and discharged one blank shell.

 

The main effect of this was to accelerate the thinning out of the cadet defenders of the palace, who had already begun to dwindle. The women soldiers, who had formed part of its defense force, also left before the palace was invaded. At 11 P.M. some live shells were fired, and the palace was slightly damaged...

The story of the dramatic storming of the Winter Palace, popular with Soviet historians and in the cinema, is a myth. At around 2 A.M. on 26 October, a small detachment of troops, followed by an unruly crowd and led by two members of the MRC [Military Revolutionary Committee], entered the palace.

 

The remaining officer cadets were, apparently, prepared to resist, but were ordered to surrender by the ministers. In the end, the total casualties were three officer cadets wounded.¹

 

POPULAR SUPPORT WAS NOT NECESSARY
Eugene Lyons had been a correspondent for United Press in revolutionary Russia.

 

He began his career as highly sympathetic to the Bolsheviks and their new regime, but six years of actual living inside the new socialist Utopia shattered his illusions.

 

In his acclaimed book, Workers' Paradise Lost, he summarizes the true meaning of the October Revolution:

Lenin, Trotsky, and their cohorts did not overthrow the monarchy. They overthrew the first democratic society in Russian history, set up through a truly popular revolution in March, 1917... They represented the smallest of the Russian radical movements... But theirs was a movement that scoffed at numbers and frankly mistrusted the multitudes.

 

The workers could be educated for their role after the revolution; they would not be led but driven to their terrestrial heaven. Lenin always sneered at the obsession of competing socialist groups with their "mass base."

"Give us an organization of professional revolutionaries" he used to say, "and we will turn Russia upside down"...

Even these contingents were pathetically duped, having not the remotest notion of the real purposes for which they were being used.

 

They were striking out, they thought, for the multi-party Soviets, for freedom, equality, and other goals which their organizers regarded as emotional garbage...

On the brink of the dictatorship, Lenin dared to promise that the state will fade away, since "all need of force will vanish/' Not at some remote future, but at once:

"The proletarian state begins to wither immediately after its triumph, for in a classless society a state is unnecessary and impossible... Soviet power is a new kind of state, in which there is no bureaucracy, no police, no standing army."

Also:

"So long as the state exists, there is no freedom. When there is freedom, there will be no state."

Within a few months after they attained power, most of the tsarist practices the Leninists had condemned were revived, usually in more ominous forms: political prisoners, convictions without trial and without the formality of charges, savage persecution of dissenting views, death penalties for more varieties of crime than in any other modern nation.

 

The rest were put into effect in the following years, including the suppression of all other parties, restoration of the internal passport, a state monopoly of the press, along with repressive practices the monarchy had outlived for a century or more.¹

All of this, of course, is a departure from the main narrative, but it has been necessary to illustrate a fact that has been obscured by the passage of time and the acceptance of myth by mainstream historians. The fact is that Lenin and Trotsky were not sent to Russia to overthrow the anti-Semitic Tsar.

 

Their assignment from Wall Street was to overthrow the revolution.
 

 

 

NOTES FROM LINCOLN STEFFENS' DIARY
That this was the prevailing motive of the New York money powers was clearly brought to light in the diary of Lincoln Steffens, one of America's best-known leftist writers of that time.

 

Steffens was on board the S.S. Kristianiafjord when Trotsky was taken off and arrested in Halifax. He carefully wrote down the conversations he had with other passengers who also were headed to strife-torn Russia. One of these was Charles Crane, vice president of the Crane Company. Crane was a backer of Woodrow Wilson and former chairman of the Democratic Party's finance committee.

 

He also had organized the Westinghouse Company in Russia and had made no less than twenty-three prior visits. His son, Richard Crane, was confidential assistant to then Secretary of State, Robert Lansing.

 

It is instructive, therefore, to read Steffens' notes regarding the views of these traveling companions.

 

He wrote:

"... all agree that the revolution is in its first phase only, that it must grow. Crane and the Russian Radicals on the ship think we shall be in Petrograd for the re-revolution."¹

1. Lincoln Steffens, The Letters of Lincoln Steffens (New York Harcourt, Brace, 1941), p. 396.

 

 

Precisely. Re-revolution was the expectation and the goal, not the elimination of anti-Semitism.

With regard to Thompson's claim that he was merely trying to keep Russia in the war against Germany, here again, the logic of actual events speak against it. Kerensky and the provisional government were for the war effort. Yet, the Red Cross masqueraders eventually threw their strongest support to the Bolsheviks who were against it.

 

Their excuse was that it was obvious the Bolsheviks would soon control the new government and they were merely looking to the future. They did not like the Bolsheviks, they said, but had to deal with them pragmatically. So they became staunch supporters merely to gain influence with the inevitable victors and, hopefully, to persuade them to change their position on the war.

Alas, it didn't work out that way. Influence they had, as we have seen, but the Bolsheviks never wavered in their views.

 

After seizing control in the October coup d'état, they did exactly what they claimed all along they would do. They signed a peace treaty with Germany and confiscated private property. They also began one of the world's greatest bloodbaths to eliminate their opposition. None of this could be blamed on the masqueraders, you understand.

 

It was all the fault of Wilson and the other politicians at home who, by not following Thompson's recommendation to send U.S. tax dollars to the Bolsheviks, forced them into such drastic action. That, at least, is the accepted view.

In reality, a Bolshevik victory at that time was anything but certain, and there was little reason - beyond the support given by the New York financiers themselves - to believe they would become the dominant voice of Russia. But, even if we grant the assumption that these men were unusually astute political observers who were truly able to foresee the future course, we are still faced with serious obstacles not the least of which are the thoughts and words of the masqueraders themselves.

 

For example, in February of 1918, Arthur Bullard was in Russia as head of the Russian branch of the Committee on Public Information, which was the war-propaganda arm of the U.S. government.

 

Bullard was aptly described by historian George Kennan as a,

"liberal socialist, free lance writer, and private eye of Colonel House."¹

In his official capacity he had many occasions to consult with Raymond Robins and, in a report describing one of these conversations, Bullard wrote:

He [Robins] had one or two reservations - in particular, that recognition of the Bolsheviks was long overdue, that it should have been effected immediately, and that had the U.S. so recognized the Bolsheviks, "I believe that we would now be in control of the surplus resources of Russia and have control officers at all points on the frontier."²

 

1. George F. Kennan, The Decision to Intervene: Soviet-American Relations, 1917-1920 (Princeton, New Jersey: Princeton University Press, 1958), pp. 190,235.
2. Bullard ms., U.S. State Dept. Decimal File, 316-11-1265, March 19,1918.

 

 

WOLVES BEHIND THE MASK
The following year, the U.S. Senate conducted an investigation into the role played by prominent American citizens in supporting the Bolshevik's rise to power. One of the documents entered into the record was an early communiqué from Robins to Bruce Lockhart.

 

In it Robins said:

You will hear it said that I am an agent of Wall Street; that I am the servant of William B. Thompson to get Altai Copper for him; that I have already got 500,000 acres of the best timber land in Russia for myself; that I have already copped off the Trans-Siberian Railway; that they have given me a monopoly of the platinum in Russia; that this explains my working for the soviet...

 

You will hear that talk Now, I do not think it is true, Commissioner, but let us assume it is true. Let us assume that I am here to capture Russia for Wall Street and American business men.

 

Let us assume that you are a British wolf and I am an American wolf, and that when this war is over we are going to eat each other up for the Russian market; let us do so in perfectly frank, man fashion, but let us assume at the same time that we are fairly intelligent wolves, and that we know that if we do not hunt together in this hour the German wolf will eat us both up.¹

Professor Sutton has placed all this into perspective.

 

In the following passage, he is speaking specifically about William Thompson, but his remarks apply with equal force to Robins and all of the other financiers who were part of the Red Cross Mission in Russia.

Thompson's motives were primarily financial and commercial. Specifically, Thompson was interested in the Russian market, and how this market could be influenced, diverted, and captured for postwar exploitation by a Wall Street syndicate, or syndicates.

 

Certainly Thompson viewed Germany as an enemy, but less a political enemy than an economic or a commercial enemy. German industry and German banking were the real enemy.

 

To outwit Germany, Thompson was willing to place seed money on any political power vehicle that would achieve his objective. In other words, Thompson was an American imperialist fighting against German imperialism, and this struggle was shrewdly recognized and exploited by Lenin and Trotsky...

Thompson was not a Bolshevik; he was not even pro-Bolshevik. Neither was he pro-Kerensky. Nor was he even pro-American.

 

The overriding motivation was the capturing of the postwar Russian market. This was a commercial objective. Ideology could sway revolutionary operators like Kerensky, Trotsky, Lenin et al., but not financiers.²

Did the wolves of the Round Table actually succeed in their goal? Did they, in fact, capture the surplus resources of Russia?

 

The answer to that question will not be found in our history books. It must be tracked down along the trail of subsequent events, and what we must look for is this. If the plan had not been successful, we would expect to find a decline of interest on the part of high finance, if not outright hostility. On the other hand, if it did succeed, we would expect to see, not only continued support but some evidence of profit taking by the investors, a payback for their efforts and their risk.

 

With those footprints as our guide, let us turn now to an overview of what has actually happened since the Bolsheviks were assisted to power by the Round Table network.

ITEM: After the October Revolution, all the banks in Russia were taken over and "nationalized" by the Bolsheviks - except one: the Petrograd branch of Rockefeller's National City Bank.
I

TEM: Heavy industry in Russia was also nationalized - except the Westinghouse plant, which had been established by Charles Crane, one of the dignitaries aboard the S.S. Kristianiafjord who had traveled to Russia with Trotsky to witness the re-revolution.
 

ITEM: In 1922, the Soviets formed their first international bank. It was not owned and run by the state as would be dictated by Communist theory, but was put together by a syndicate of private bankers. These included, not only former Tsarist bankers, but representatives of German, Swedish, and American banks. Most of the foreign capital came from England, including the British government itself.1 The man appointed as Director of the Foreign Division of the new bank was Max May, Vice President of Morgan's Guaranty Trust Company in New York.
 

ITEM: In the years immediately following the October Revolution, there was a steady stream of large and lucrative (read non-competitive) contracts issued by the Soviets to British and American businesses which were directly or indirectly run by the Round Table network. The largest of these, for example, was a contract for fifty million pounds of food products to Morris & Company, Chicago meat packers. Helen Swift was married to Edward Morris who was the brother of Harold Swift Harold Swift had been a "Major" at the Red Cross Mission in Russia.
 

ITEM: In payment for these contracts and to return the "loans" of the financiers, the Bolsheviks all but drained their country of its gold - which included the Tsarist government's sizable reserve - and shipped it primarily to American and British banks. In 1920 alone, one shipment came to the U.S. through Stockholm valued at 39,000,000 Swedish kroner; three shipments came direct involving 540 boxes of gold valued at 97,200,000 gold roubles; plus at least one other direct shipment bringing the total to about $20 million. (Remember, these are 1920 values!) The arrival of these shipments was coordinated by Jacob Schiff s Kuhn, Loeb & Company and deposited by Morgan's Guaranty Trust.2
 

ITEM: It was at about this time that the Wilson Administration sent 700,000 tons of food to the Soviet Union which, not only saved the regime from certain collapse, but gave Lenin the power to consolidate his control over all of Russia.1 The U.S. Food Administration, which handled this giant operation, was handsomely profitable for those commercial enterprises that participated. It was beaded by Herbert Hoover and directed by Lewis Lichtenstein Strauss, married to Alice Hanauer, daughter of one of the partners of Kuhn, Loeb & Company.
 

ITEM: U.S., British, and German wolves soon found a bonanza of profit in selling to the new Soviet regime. Standard Oil and General Electric supplied $37 million worth of machinery from 1921 to 1925, and that was just the beginning. Junkers Aircraft in Germany literally created Soviet air power. At least three million slave laborers perished in the icy mines of Siberia digging ore for Britain's Lena Goldfields, Ltd. W. Averell Harriman - a railroad magnate and banker from the United States who later was to become Ambassador to Russia - acquired a twenty-year monopoly over all Soviet manganese production. Armand Hammer - close personal friend of Lenin - made one of the world's greatest fortunes by mining Russian asbestos.

 

ADDITIONAL BACKGROUND - THE DEAF MUTE BLINDMEN
In those early years, the Bolsheviks were desperate for foreign goods, services, and capital investment.

 

They knew that they would be gouged by their "capitalist" associates, but what of it? It wasn't their money. All they cared about was staying in power. And that was not as easy as it may have seemed. Even after the coup d'état in which they seized control of the mechanism of government, they still did not control the country at large.

 

In fact, in 1919, Lenin had almost given up hope of expanding beyond Petrograd and a part of Moscow. Except for Odessa, all of Southern Russia and the Crimea were in the hands of General Deniken who was strongly anti-Communist.

 

 

1. See George F. Kennan, Russia and the West under Lenin and Stalin (Boston: Little, Brown and Company, 1961), p. 180.
 

 

Speaking before the Tenth Congress of the Russian Communist Party, Lenin laid it out plainly:

Without the assistance of capital it will be impossible for us to retain proletarian power in an incredibly ruined country in which the peasantry, also ruined, constitutes the overwhelming majority - and, of course, for this assistance capital will squeeze hundreds per cent out of us. This is what we have to understand. Hence, either this type of economic relations or nothing...

On another occasion Lenin further explained his rationale for accepting Wall Street's terms.

 

He said:

The Capitalists of the world and their governments, in pursuit of conquest of the Soviet market, will close their eyes to the indicated higher reality and thus will turn into deaf mute blindmen.

 

They will extend credits, which will strengthen for us the Communist Party in their countries; and giving us the materials and technology we lack, they will restore our military industry, indispensable for our future victorious attack on our suppliers. In other words, they will labor for the preparation of their own suicide.²

Arthur Bullard, mentioned previously as the representative in Russia of the U.S. Committee on Public Information, apparently understood the Bolshevik strategy well.

 

Even as early as March of 1918, he sent a cablegram to Washington warning that, while it is true we ought to be ready to help any honest government in need, nevertheless, he said,

"men or money sent to the present rulers of Russia will be used against Russians at least as much as against Germans... I strongly advise against giving material help to the present Russian government. Sinister elements in Soviets seem to be gaining control."³

Unfortunately, Mr. Bullard was a minor player in this game, and his opinion was filtered by others along the way. This cablegram was sent to his superior, none other than Col. Edward Mandell House, in hopes that it would be relayed to the President.

 

The message did not get through.
 

 

 

A SIDE TRIP THROUGH WORLD WAR II
Returning to the trail of actual events since that time, let us pause briefly to take a short side trip through World War II.

Financing and profiting from both sides in a conflict has never been more blatant.

ITEM: From the beginning of Hitler's rise to power, German industry was heavily financed by American and British bankers. Most of the largest U.S. Corporations were knowingly invested in war industries. I.G. Farben was the largest of the industrial cartels and was a primary source of political funding for Hitler. It was Farben that staffed and directed Hitler's intelligence section and ran the Nazi slave labor camps as a supplemental source of manpower for Germany's factories. Farben even hired the New York public relations firm of Ivy Lee, who was John D. Rockefeller's PR specialist, to help improve Hitler's public image in America. Lee, incidentally, had also been used to help sell the Soviet regime to the American public in the late 1920s.1
 

ITEM: Much of the capital for the expansion of I.G. Farben came from Wall Street, primarily Rockefeller's National City Bank; Dillon, Read & Company, also a Rockefeller firm; Morgan's Equitable Trust Company; Harris Forbes & Company; and, yes, the predominantly Jewish firm of Kuhn, Loeb & Company.2
 

ITEM: During the Allied bombing raids over Germany, the factories and administrative buildings of I.G. Farben were spared upon instructions from the U.S. War Department. The War Department was liberally staffed with men, who in civilian life, had been associates of the investment firms previously mentioned. For example, the Secretary of War at that time was Robert P. Patterson. James Forrestal was Secretary of the Navy and later became Secretary of Defense. Both men had come from Dillon Read and, in fact, Forrestal had been president of that firm.
 

ITEM: During World War II, under the Lend-Lease program, I the United States sent to the Soviets more than $11 billion in aid, including 14,000 aircraft, nearly half a million tanks and other .military vehicles, more than 400 combat ships, and even half of the entire U.S. supply of uranium which then was critically needed for the development of the atomic bomb. But fully one-third of all the Lend-Lease shipments during this period comprised industrial equipment and supplies to be used for the development of the Russian economy after the war. And when the war did end, the Lend-Lease program continued to flow into the Soviet Union for over a year. As late as the end of 1946, Russia was still receiving twenty-year credit terms at 2⅜ per cent interest, a far lower rate than returning GIs could obtain.¹

 

1. Anthony C. Sutton, National Suicide: Military Aid to the Soviet Union (New Rochelle. New York: Arlington House, 1973), p: 24.

 

 

THE TRANSFUSION MECHANISM
With the termination of the Lend-Lease program, it was necessary to invent new mechanisms for the support of Soviet Russia and her satellites.

 

One of these was the sale of much-needed commodities at prices below the world market and, in fact, below the prices that Americans themselves had to pay for the same items. This meant, of course - as it did in the case of Lend Lease - that the American taxpayer had to make up the difference. The Soviets were not even required to have the money to buy these goods.

 

American financial institutions, the federal government, and international agencies which are largely funded by the federal government, such as the International Monetary Fund and the World Bank - lent the money to them. Furthermore, the interest rates on these loans also are below the market requiring still additional subsidy by American citizens. And that is not all.

 

Almost all of these loans have been guaranteed by the United States government, which means that if - no, make that when - these countries default in their payments, the gullible American public is once again called upon to make them good.

 

In other words, the new mechanism, innocently and deceptively referred to as "trade," is little more than a thinly disguised means by which members of the Round Table who direct our national policies have bled billions of dollars from American citizens for an ongoing economic transfusion into the Soviet bloc - and continue to do so now that the word Soviet has been changed to the less offensive Democratic Socialism. This enables those regimes to enter into contracts with American businessmen to provide essential services.

 

And the circle is complete: From the American taxpayer to the American government to the "socialist" regime to the American businessman and, ultimately, to the American financier who funded the project and provided the political influence to make it all possible.

This is the key to understanding the transfusion mechanism.

 

Many Americans have looked at this process and have jumped to the conclusion that there must be a nest of Communist agents within our government. In an exam on reality politics, they would receive half credit for that answer. Yes, there undoubtedly have been, and continue to be, Red agents and sympathizers burrowed deep into our government woodwork, and they are all too happy to help the process along.

 

But the main motive force has always come from the non-Communist, non-Democratic Socialist, non-American, non-anything members of the Round Table network who, as Lenin said, in the pursuit of profit are laboring for the preparation of their own suicide.

These men are incapable of genuine patriotism. They think of themselves, not as citizens of any particular country, but as citizens of the world. They can do business just as easily with bloodthirsty dictatorships as with any other government - especially since they are assured by the transfer mechanism that the American taxpayer is going to make good on the deal.

When David Rockefeller was asked about the propriety of providing funding for Marxist and Communist countries which are openly hostile to the United States, he responded:

"I don't think an international bank such as ours ought to try to set itself as a judge about what kind of government a country wishes to have."

Wishes to have?

 

He was talking about Angola where the Marxist dictatorship was forced upon the people with Cuban soldiers and Soviet weapons!

Thomas Theobald, Vice President of Citicorp, was asked in 1981 about his bank's loans to Poland. Was he embarrassed by making loans to a Communist country, especially following the regime's brutal repression of free-trade unions?

 

Not at all.

"Who knows which political system works?" he replied. "The only test we care about is, can they pay their bills."

What he meant, of course, was can the American taxpayer pay Poland's bills.

ITEM: The following item, taken directly from the Los Angeles Times just a few months after Theobald's statement, tells the story:

WASHINGTON - For months, the Reagan Administration has been using federal funds to repay Polish loans owed to U.S. banks, and the bill for this fiscal year may amount to $400 million, Deputy Secretary of Agriculture Richard E. Lyng said Monday... "They (the Polish authorities) have not been making payments for at least the last half of the last year" Lyng said. "When they don't make a payment, the U.S. Department of Agriculture makes a payment"...

Lyng said the U.S. Government paid $60 million to $70 million a month on guaranteed Polish loans in October, November, December, and January - and "we will continue to pay them."¹

This, remember, was precisely at the time the Polish government had declared martial law and was using military force to crush workers7 demonstrations for political reform. The Polish default on this $1.6 billion loan was by no means an isolated event. Communist Rumania and a multitude of Latin American countries were soon to follow.

The hard fact is that American taxpayers unknowingly have been making monthly bank payments on behalf of Communist, socialist, and so-called Third-World countries for many years. And, with the more recent staging of apparent reform within the former Soviet bloc, Congress has tripped all over itself to greatly accelerate that trend.

Americans, of course, want to believe that the Evil Empire is crumbling, and the Soviets-turned-Democrats play directly to that desire. Since the end of World War II, their primary objectives have been (1) to disarm us and (2) to get our money. The facade of Perestroika and Glasnost has been merely a ploy to accomplish both objectives at once. All they have had to do is get rid of a few of the old hard-liners, replace them with less well-known personalities who are essentially the same (all of the new leaders come from the ranks of the old leadership), change their labels from "Communists" to "Social Democrats" and then sit back while we happily tear down our military defenses and rush billions of dollars to their failing economies.

 

There undoubtedly will be some progress allowed in the area of free speech, but the military and security organizations continue in full readiness. The iron fist beneath the velvet glove remains ready to strike when the time comes that the facade is no longer necessary.

Even if the entire ploy were genuine, there is no reason to believe that these Social Democracies will ever become better investment risks. The primary thing that has held them back economically in the past is their socialist system, and that most definitely will not be changed. All of the new "anti-Communist Social Democrats" have pledged their loyalty to the principles of Marx and have said in plain language that they will use our money to develop, not abandon socialism.

 

These countries will continue to be unproductive and will continue to be unable to pay their loans. The American taxpayers will continue to be forced by the Cabal to pay the bill.
 

ITEM: Before the Bolshevik coup d'état, Russia was one of the most productive agricultural nations in the world. The great wheat fields in Ukraine justly earned her the title of the Bread Basket of Europe. But when the people's Utopia arrived, agriculture came to a standstill, and famine stalked the land. Even after Stalin, when the regime is said to have adopted more humane and productive policies, Russia never produced enough food for itself. A nation that cannot feed its citizens cannot develop its industry and it certainly cannot build a potent military force. It is not surprising, therefore, that for decades, the United States has annually "sold" tens of millions of tons of wheat - and other food stuffs - to Russia. The quote marks are to emphasize the underlying transfusion mechanism previously described.
 

ITEM: The American government-industrial complex provided the Soviets with the money, technology, and the actual construction of two of the world's largest and most modern truck plants. The Kama River plant and the Zil plant produce over 150,000 heavy-duty trucks per year - including armored personnel carriers and missile launchers - plus 250,000 diesel engines, many of which are used to power Soviet tanks.

 

Forty-five per cent of the cost of this project came from the U.S. Export-Import Bank, an agency of the federal government, and an equal amount from David Rockefeller^ Chase Manhattan Bank. The Soviets put up only ten per cent.

 

The loan, of course, was taxpayer-guaranteed by the U.S. Export-Import Bank which, at the time, was under the direction of William Casey. Casey later was appointed as head of the C.I.A. to protect America from global Communism.¹ (Are you beginning to get the picture?)

 

1. "U.S. Builds Soviet War Machine," Industrial Research & Development, July, 1980, pp. 51-54.
 

ITEM: Almost every important facet of Eastern-Bloc heavy industry could well be stamped "Made in the U.S.A.77 With the specific approval of each successive president, we have provided the latest oil-drilling equipment, chemical processing plants, air-traffic radar systems, equipment to produce precision bearings, large-craft helicopter engines, laser technology, highly advanced computer systems, and nuclear power plants.

 

We have trained hundreds of their technicians in American institutions and factories and have provided their astronauts with the space suits developed by NASA. We have even trained their pilots at U.S. Air Force bases and paid for their military officers to attend our War College. All of this has been used by the Russian government - as Lenin predicted it would - to build their military industry in preparation for an attack on their suppliers. The great pretense of crumbling Communism, has not altered that strategy. It may even be the implementation of it.
 

ITEM: When Boris Yeltsin seized control of the former Soviet government, one of his first official acts was to decree that foreign businesses had the right to take their profits out of the country. From a purely business perspective, that was a sound move because it would provide incentive for foreign investment. But there was more to it than that.

 

Recall from a previous chapter that the lion's share of that investment was to be funded by American taxpayers in the form of direct aid, bank-loan bailouts, and government insurance through the Overseas Private Investment Corporation.

 

Jane Ingraham provides the details:

During 1992 Yeltsin wheeled and dealed with Royal Dutch/Shell, British Petroleum, Amoco, Texaco, and Exxon. The Chevron joint venture to develop the Tengiz oil field was signed. McDermott International, Marathon Oil, and Mitsui signed a contract with the Russian government to develop oil and natural gas off Sakhalin Island.

 

Chevron and Oman formed a consortium to build a huge pipeline to carry crude oil from Kazakhstan to the Black Sea, Mediterranean, and Persian Gulf. Occidental Petroleum signed a joint venture with Russia to modernize two oil fields in Siberia... Newmont mining signed a joint venture to extract gold in Uzbekistan. Merrill Lynch's chairman, William Schreyer (CFR), signed up as financial adviser to "aid in privatizing" the Ukrainian State Property Fund. AT&T CEO Robert Allen (CFR, TC1) signed a huge contract to supply switching systems for all of Kazakhstan...

US West joined with the Hungarian government to own and operate a national cellular telephone system; GM Vice President Marina Whitman (CFR, TC) joined the governments of Hungary and Yugoslavia to make cars; GE CEO lohn Welch (CFR) and vice chairman of the board, Lawrence Bossidy (TC), bought a majority stake in Hungary's lighting industry; Ralston-Purina, Dow Chemical, Eastman Kodak, SC Johnson & Son, Xerox, American Express, Procter & Gamble, Woolworth, Philip Morris, Ford, Compaq Computer - hardly a single American brand name was missing.¹

1. "The Payoff," by Jane H. Ingraham, The New American, June 28,1993, pp. 25-6.
 

ITEM: In February of 1996, the Clinton Administration made a $1 billion loan of US taxpayers' money to Russia's state-controlled Aeroflot company so it could more effectively compete with American companies such as Boeing in the building of jumbo jets. *By the end of that year, the former Soviet Bloc countries had received transfusions from the World Bank of over $3 billion.
 

ITEM: Now the action has spread to China. American banks and businessmen - with taxpayers standing by with guarantees - have provided power-generating equipment, modern steel mills, and military hardware including artillery shells, anti-submarine torpedoes, and high-tech electronic gear to update Russian-made jet fighters.

 

All of this is explained as a means of weaning the Red Chinese away from mother Russia and encouraging them to move closer to free-enterprise capitalism. Yet, in 1985, at the height of the frenzy over building trade bridges to China, the regime signed a .$14 billion trade pact with Russia and, in 1986, sent a $20 million interest-free loan to the Communist Sandinistas in Nicaragua.

 

Even after the 1989 Tiananmen Square massacre in Beijing, when U.S. officials were publicly condemning China for human-rights violations, business quietly continued as usual.

"The United States cannot condone the violent attacks and cannot ignore the consequence for our relationship with China," said President Bush.

Yet, within only a few weeks of the bloodshed, and at the very time that student leaders were being executed, the Administration approved p $200 million, low-interest loan for delivery of four of Boeing's newest jumbo-jet aircraft. In 1993, forty-seven more jetliners were sold with a projected sale of 800 more over the next fifteen years. Amoco is spending $1.5 billion to develop oil fields in the China Sea. A joint venture between the Chinese government and Chrysler is building military jeeps. A similar joint project is being used to upgrade their F-8 fighter planes.

 

Three communications satellites were cleared for delivery. AT&T contracted a $30 million cellular communications network. Even the President's brother, Prescott Bush, resumed his plan to set up a satellite-linked computer network and to build a golf course near Shanghai.

China's interest in military technology is revealing. In addition to the advanced hardware purchased from the United States, the Chinese have bought MIG-31 and SU-27 jet fighters from Russia and an aircraft carrier constructed in Ukraine. In May of 1992, China set off its biggest underground nuclear blast In 1997, the purchase list was extended to include self-propelled gun-mortar systems and Russia's most advanced diesel-electric submarines.

Although it is known that China maintains a slave-labor work force in excess of a million people - they call them "convicts" - and although the Tariff Act of 1930 prohibits the United States from importing any goods made even in part by convicts or other forced labor, every administration starting with Nixon has renewed the "most-favored-nation" trade status for China.

How is China expected to pay for all this "trade"? Very simple. By 1996, China had become the largest single recipient of guaranteed loans and subsidies from the World Bank.
 

ITEM: In addition to these decades of global trade, credit, and taxpayer guarantees, the United States government has transferred tens of billions of dollars in direct foreign-aid grants with no pretense at all regarding expectation of repayment.

The trail leads to Wall Street, and the tracks are fresh. The Round Table network did succeed in exploiting the markets of Eastern Europe and continues to do so today. The cast of characters has changed, but the play remains the same. In the beginning, the Council on Foreign Relations was dominated by J.P. Morgan. It is still controlled by international financiers.

 

The Morgan group gradually has been replaced by the Rockefeller consortium, and the roll call of participating businesses now reads like the Fortune 500. The operation no longer pretends to be a Red Cross mission; it now masquerades under the cover of "East-West Trade."

Politicians are fond of talking about the necessity of preserving world peace, and trade, we are told, is one of the best ways to do it.

 

The implication is that this is a time of peace. In truth, we live in one of the most war-torn eras the world has ever seen. No continent today, except Antarctica, is free from war. There are from 25 to 40 military struggles going on somewhere every day of the year. There have been more than 150 armed conflicts since the end of World War II with the death count already in excess of 20 million and rising.¹

 

We cannot help noticing that this also has been a period of rising government debt and the global creation of fiat money.

 

 

1- These figures are taken from United Nations publication E/CN5/1985/Rev.l, 1985 Report on the World Social Situation (New York: United Nations, 1985), p. 14. The January 1993 revision of that document does not give cumulative figures but shows that the number of conflicts has been accelerating. So the current numbers, whatever they may be, are even worse.
 

 

 

THE NEW ALCHEMY
The alchemists of ancient times vainly sought the philosophers' stone which they believed would turn lead into gold.

 

Is it possible that such a stone actually has been found? Can it be that the money alchemists of our own time have learned how to transmute war into debt, and debt into war, and both into gold for themselves?

In a previous section, we theorized a strategy, dubbed the Rothschild Formula, in which the world's money cabal deliberately encourages war as a means of stimulating the profitable production of armaments and of keeping nations perpetually in debt. This is not profit seeking, it is genocide.

 

It is not a trivial matter, therefore, to inquire into the possibility that our elected and non-elected leaders are, in fact, implementing the Rothschild Formula today.

ITEM: In his address to the graduating class at Annapolis in 1983, Secretary of the Navy, John Lehman, said:

"Within weeks, many of you will be looking across just hundreds of feet of water at some of the most modern technology ever invented in America. Unfortunately, it is on Soviet ships."

As Professor Sutton observed in his book, The Best Enemy Money Can Buy, the guns, the ammunition, the weapons, and the transportation systems that killed Americans in Korea and Vietnam came from the American-subsidized economy of the Soviet Union. The trucks that carried these weapons down the Ho Chi Minh Trail were manufactured in American-built plants.

 

The ships that carried the supplies to Sihanoukville and Haiphong and later to Angola and Nicaragua came from NATO allies and used propulsion systems that our State Department could have kept out of Soviet hands.

 

Sutton concludes:

"The technical capability to wage the Korean and Vietnamese wars originated on both sides in Western, mainly American, technology, and the political illusion of "peaceful trade" promoted by the deaf mute blind-men was the carrier for this war-making technology."¹

ITEM: That leads us to the more recent wars in the Middle East and the rise of "Islamic Fundamentalism." Iran, Iraq, Syria, Algeria, the PLO, the Muslim Brotherhood, and similar anti-American groupings have all received weapons, funding, and clandestine support from the U.S. government.

 

In the Gulf War, every effort was made to insure that Hussein's regime was contained but not destroyed (shades of the Korean and Vietnam wars). Most of his bacterial-weapons factories were spared. After the cease fire, he was allowed to keep his fleet of helicopter gunships, which he promptly used to put down a large-scale internal revolt.

The big pill to swallow is that Saddam Hussein has been an asset to the global planners in the West, and they have done everything possible to keep him in power. This strategy has lately become so obvious that there is no longer any serious attempt to conceal it. The task now is how to explain it to the gullible public so as to make it sound like a good idea.

As mentioned previously, the think-tank and talent pool for the implementation of this strategy has been the Council on Foreign Relations.

 

In 1996, the Managing Editor of the CFR's monthly journal, Foreign Affairs, was Fareed Zakaria, who offered the following rationalization:

Yes, it's tempting to get rid of Saddam. But his bad behavior actually serves America's purposes in the region... If Saddam Hussein did not exist, we would have to invent him... The end of Saddam Hussein would be the end of the anti-Saddam coalition. Nothing destroys an alliance like the disappearance of the enemy... Maintaining a long-term American presence in the gulf would be difficult in the absence of a regional threat.²

That is about as clear a statement of the Rothschild Formula as one is apt to find. Yet, many people cannot believe it is real, even Congressmen.

 

For example, Representative James Traficant from Ohio, speaking before the House on April 29,1997, exclaimed:

America gives billions to Russia. With American cash, Russia builds missiles. Russia then sells those missiles to China. And China, who gets about $45 billion in trade giveaways from Uncle Sam, then sells those Russian-made missiles to Iran.

Now Iran, with those Russian-made missiles sold to them by China, threatens the Mideast. So Uncle Sam, who is concerned about about Iran threatening the Mideast because of those Russian-made missiles sold to them by China that we financed by American cash sends more troops and sends more dollars... Mr. Speaker, this is not foreign policy.

 

This is foreign stupidity.¹

Traficant is on target with his analysis of the problem, but he missed the bull's eye regarding the cause.

 

American leaders are not stupid. They merely are implementing the Rothschild Formula. To justify world government, it is necessary to have wars and the threat of wars. Wars require enemies with frightful weapons. Saddam Hussein is one of the best enemies money can buy.

If it is true that Western leaders are deliberately funding their own enemies, we must assume they have considered Lenin's prediction that, by so doing, they are preparing their own suicide - ours, also, by the way. We must also conclude that they are confident of avoiding that destiny. Whether they are right or wrong is not the issue here.

 

The point is they believe they are correct and, further, they are building a world order which they are confident of being able to control. How they plan to bring that to pass is the subject of a later section, but perpetual war is an important part of it.

 

Unless we are able to break the grip of these strategists, the Rothschild Formula will continue to play a major role in our future.
 

 

 

FIFTH REASON TO ABOLISH THE SYSTEM
There are few historians who would challenge the fact that the funding of World War I, World War II, the Korean War, and the Vietnam War was accomplished by the Mandrake Mechanism through the Federal Reserve System.

 

An overview of all wars since the establishment of the Bank of England in 1694 suggests that most of them would have been greatly reduced in severity, or perhaps not even fought at all, without fiat money. It is the ability of governments to acquire money without direct taxation that makes Modern warfare possible, and a central bank has become the preferred method of accomplishing that.

One can argue the necessity, or at least the inevitability, of fiat money in time of war as a means of raw survival. That is the primal instinct of both individuals and governments, all other considerations aside. We shall leave that for the philosophers.

 

But there can be no debate over the fact that fiat money in time of peace has no such justification. Furthermore, the ability of governments and banking institutions to use fiat money to fund the wars of other nations is a powerful temptation for them to become embroiled in those wars for personal profit, political advancement, or other reasons which fall far short of a moral justification for bloodshed.

The Federal Reserve System has always served that function. The on-going strategy of building up the military capabilities of America's potential enemies leaves us no reason to believe we have seen the last of war. Therefore, it is not an exaggeration to say that the Federal Reserve System encourages war.

 

There can be no better reason for the Creature to be put to sleep.
 

 

 

SUMMARY
The Bolshevik Revolution was a coup d'état in which a radical minority captured the Russian government from the moderate revolutionary majority.

 

They accomplished this through deception, organization, discipline, and surprise.

 

The Red Cross Mission of New York financiers threw support to the Bolsheviks and, in return, received economic rewards in the form of rights to Russia's natural resources plus contracts for construction and supplies.

 

The continued participation in the economic development of Russia and Eastern Europe since that time indicates that this relationship has survived to the present day. These financiers are not pro-Communist nor pro-anything else. Their motivation is profit and power.

 

They are now working to bring both Russia and the United States into a world government which they expect to control.

 

War and threats of war are tools to prod the masses toward the acceptance of that goal. It is essential, therefore, that the United States and the industrialized nations of the world have credible enemies.

 

As these words are being written, Russia is wearing the mask of peace and cooperation. But we have seen that before. We may yet see a return of the Evil Empire when the timing is right.

 

U.S. government and megabank funding, first of Russian, and now of Chinese and Middle-East military capabilities, cannot be understood without this insight.

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