*Patriotism is believing that your country is the best simply because you
were born there*
The USA' Federal Reserve &
America and the world...where nothing is as it appears!!!
Data and format compiled Aug. 2009.
the eye-opening Videos*
After reading this very documented article, you may ask
what you can do to stop this corruption and economical control. The answer
may seem difficult in achieving, but if done it will stop the fleecing of
our country and world. The answer is to stay out of the game of investing,
using banks and credit cards, and or other financial companies and
never...never obtain a loan, but if you must...put away enough money to
cover your daily expenses and pay off your debt as quickly as possible.
Always be prepared for the worst and personally retain maximum control of
"For every $1 dollar deposited into a
Federal Bank $7 additional dollars are created out of thin air in the form of
credits. In other words, the additional Federal Reserve Notes are not physically
printed but in reality are created by a journal entry and lent out at
interest." According to the US Treasury, the Federal
Reserve pays them a scant $20.60 per 1,000 denomination or a little over two
cents for a $100.00 bill, which definitely displays the worthlessness of the
money in distribution.
Inflation is based on the actual value of
entertaining video with Jon Stewart of The Daily Show Comedy Hour;
End The Fed.
The Rothschilds 1; Getting
Control of The Bank of England
The Rothschilds 2;
Controlling over 50% of the entire world's Wealth
The Rothschilds 3;
Dividing the World's Wealth
American National Debt has continued to increase an average of $1.93 billion
per day since September 28, 2007.
Is it a coincident that most
all of US's big businesses, bankers, financial & mortgage institutions, as
well as the heads of the Federal Reserve & The Treasury, just happen to be
Jewish? The US is in a depression and Israel is spending billions on new
Population; As of; Aug
U.S. 307,307,060 - 307.3 Million - World 6,780,802,316 - 6.78 Billion (+ or
World's total Jewish Population; 13.3 million
or 0.2% of all peoples.
It does seem odd that the Jewish, being such a global minority, 0.2 % would
control nearly 80% of the world's wealth.
Michael Dell is Jewish and
while Microsoft's Bill Gate's ethnicity is Jewish he does not
practice Judaism like his parents. If we experience another 1929, people
will quickly realize why people like Bill Gates, Michael Moore, John Kerry,
and thousands of other wealthy Americans decided to change their names.
Gates and all co-founders of Microsoft were all Jewish. AIG CEO Robert
Benmosche, Jewish, is consulting with former AIG chief Greenberg, also
Jewish, on the restructuring of AIG...'definitely the
path to another crisis!
On the 29th of Aug. 2009 another consumer protection control bit the dust
as the very liberal DC Federal Court lifted the restrictions on the 30%
market restriction for telecom companies. The Jewish 'Brian L. Roberts,
CEO of Comcast, the nations largest cable & telecommunications network
celebrated the lifting of the FCC regulation. Roberts is also
the Chairman of the Board of Directors of the National Cable &
Telecommunications Association (NCTA) and previous Treasurer. He also served
as Chairman of NCTA from 1995 to 1996, when the landmark
deregulatory 1996 Telecommunications Act became law.
Mr. Roberts and his companies lobbyists seems to be quite influent in lifting
80+% of the world's billionaires are Jewish.
For verification; search 'The World's Most Wealthiest
Are these postings Anti-Semitic...absolutely not, just
facts and the truth is never prejudice. And having Jewish heritage does not
mean you practice Judaism.
Jewish Presidents Of The USA;
Of Woodrow Wilson the famous Dr. H.J. Boldt wrote as follows: "Woodrow
Wilson was a Sephardic Jew...The name of his parents was Wohlson -- a
German-Jewish name; they came from Germany, and went to England where they
were known as Mr. and Mrs. Wolfson and when they landed here in America they
called themselves Wilson." Theodore
Roosevelt & Franklin D. Roosevelt: A Carnegie Institution
Genealogy; Roosevelt's Jewish Ancestry: A reprint from the October 18,
1936, Issue of "The Revelator," of Wichita, Kansas, Rev. G.B. Winrod,
Editor. Harry S. Truman; His Jewish
ancestry is recorded in his autobiography. Dwight D.
Eisenhower: The most famous book revealing this information is his
West Point Yearbook, which stated that he was "that terrible Swedish Jew." William
Jefferson Blythe Clinton: His Jewish ancestry has been revealed in
"The Truth At Last" with an address of: The Truth At Last, P.O. Box 1211,
Marietta, GA 30061.
I must add that the Jewish
people are very educated and of highly elevated entrepreneurship. The Jewish
community was & remains united not only morally but financially. Like for
instance, Jews fleeing from war torn Europe, Argentina and Russia may not
have even been practicing their faith when arriving in America, but they
were supported by the Jewish federations, the Jewish temples, and etc.
simply because they were Jews. So, if they needed a car to get to work or
they needed an education, a loan, etc. it was provided because it was
important to the Jewish community as a whole. Their fundamental idea of
deriving income and capital is not through their physical efforts but by the
force of their ideas. The Jewish people, in general, are the most educated,
connected and wealthiest class on the planet. If other classes or heritages
fail when everything is equal...it is of their own doing!
Do I blame these people for the global economical
collapse? Not necessarily, as all people are allowed and encouraged to gain
wealth, but then again...not by defrauding others! That is my concern.
My question is why are most of the CEOs, founders and
owners of major financial, media and large corporations, as well as the
heads of our Treasury and Federal Reserve...all Jewish? Trillions of dollars
are circulated to and from the same groups of very connected people! Who
pays for it...those hard working common blokes on the bottom of the money
Are you aware that the IRS is NOT a bureau or agency of
the Department of the US Government? Another thing you should know is that the
IRS is a “trust” that is domiciled in Puerto Rico and have no
Constitutionally legal right to collect Fed. Income Taxes. As that their
records are private and very well-protected they remain unaccountable to the
American people. When you sign a W2 or W4, or 1099 form you
are thereby agreeing to be taxed, making your taxation voluntary. You do
have the right not to sign the forms and thus avoid paying the
unconstitutional taxes. Check with a Constitutional Attorney. Take notice
that the date the federal income tax began was in 1913...the same
year the Fed. Reserve was created. A coincidence? I think not!!
Tying the Money Lenders to the World's Conglomerated
The Wealthy Jews and Zionism;
In general it may be said that until recently the Rothschild family has
opposed Zionism on the grounds that it would be dangerous for their status
as “citizens” of the various nations they infested. Mayer Amschel
Rothschild, the son of the original Amschel Mayer, refused in 1845 to have
anything to do with Zionism. Edmund Rothschild also opposed political
Zionism, although the Jewish colonies in Palestine before the war really
owed their existence to his donations. In 1900 he ceded his eight “colonies”
in Palestine to the Jewish Colonization Association. But he approached Lord
Bertie of Thame about a National Home in Palestine on 25th January, 1915.
(P, p. 105). Nathaniel in England was also an opponent of Zionism, until he
met Theodor Herzl, the Zionist leader, in 1902, when, alone in the
Rothschild family he endorsed the project for making a National Home for the
Jews in East Africa. After a while, the resistance of other Rothschilds to
Zionist ideas was worn down, and Balfour made his notorious “Declaration” of
1917 as an address to Baron Lionel Walter Rothschild. The first Zionist
political committee’s meeting on 7th Feb., 1917, had been attended by Lionel
Walter and by James Rothschild, son ofEdmond.
Ask yourself why do so
many Jewish people hold top positions of global governments and control most
of the world's industries? They control most, if not all large global banks
and financial institutions, controlling 80%+ of the
world's monies and yet they represent less than 1/4 of 1% of the world population?
They also own and control the diamond, silver, gold, tin, coal and most
other markets. Their ownership the world's
largest diamond and gold mines around the globe, many in S. Africa, allows
them to easily control the markets and prices. I have personally toured many
of the S. African mines and saw the horrific working conditions for the
locals whom forefathers once owned the land. The largest diamond and gold
mines are owned by the Jewish De Beers, partnered with the Oppenheimers and
were originally financed by Lord Rothschild. The Rothschilds made their
initial fortunes financing wars and in the opium and slave trades of the
It was in 1888 when Cecil Rhodes
applied to the London Rothschilds to buy out
the French interests in the Kimberley mines to
obtain control of the Diamond industry in South Africa. For this purpose,
Rhodes was financed by the Rothschilds to the extent of £1,400,000, and soon
afterwards (with Barnato, to whom £5,338,000 was paid), the De Beers
Consolidated Mines was formed, and the Rothschilds put in the Jew Sir Carl
Meyer as their watchdog director. Out of the first deal, Rothschilds made
£100,000 in 3 months by the rise in value of the Company’s shares; they got
a further £100,000 commission for the purchase of the De Beers mine. The
Chairman of the De Beers Consolidated Mines is now the
Jew Sir Ernest Oppenheimer. Sir Alfred Beit (Jew) is a Life Governor.
The Diamond mining industry is a complete monopoly, and the price of these
beautiful stones is kept up by artificial means so that no-one but the rich,
or those willing to go into great debt, can acquire them, and the enormous
profits pour into the hands of the Jews.
Before that, the Rothschilds “had long been interested
behind the scenes, together with the Mosenthals,
in London and South African Exploration Co.” They took a financial interest
also in the enormously powerful firm of Wernher Beit
and Co., which owned huge tracts of land and gold mines in South
Africa. “When Beit realized that it would be necessary to obtain the support
of international financiers and bankers in order to raise all the capital
required for the gold-mining industry, he decided to broaden the market by
giving participations to the Rothschilds of Germany, Austria and France.” So
writes J. B. Taylor, of Wernher Beit & Co. in his A Pioneer looks back,
1939, p. 109.
According to the Daily Telegraph, 8th January,
1935, it was at Tring Park, the residence of Baron Nathaniel Rothschild,
that Rhodes met the leading politicians of Britain. It is well known that
the South African War was brought about by the
Jews to obtain a strangle-hold on South African gold by means of the Union
Jack of Britain, which they were unable to do under the rule of the crafty
old S. A. Boer President Kruger. According to
Randlords, by P. H. Emden (1935), it was the Rothschilds who backed
financially the offer made to Portugal to purchase
Delagoa Bay with the object of encircling the Transvaal of the Boers,
the sum offered being £700,000.
Most significant of all is the information given by Dr.
Hans Sauer in his book From Africa, 1937; Dr. Sauer was present in
Westminster Hall when the Parliamentary Committee was examining Rhodes on
his part in the Jameson Raid of
January 1896 in an abortive attempt to overthrow the Transvaal government
and set up a South African federation under the
British. The actions led to one of the most significant events
in the history of South Africa, which was the Anglo-Boer War of 1899-1902.
Although the protagonists were Britain and the two Boer Republics, the
population of South Africa as a whole became embroiled in the war either
directly or indirectly.
Although it was the largest and most costly war in which
the British engaged between the Napoleonic Wars and World War I (spending
more than £200 million), it was fought between wholly unequal protagonists.
The total British military strength in Southern Africa reached nearly
500,000 men, whereas the Boers could muster no more than about 88,000. But
the British were fighting in a hostile country over difficult terrain, with
long lines of communications, while the Boers, mainly on the defensive, were
able to use modern rifle fire to good effect at a time when attacking forces
had no means of overcoming it. The conflict provided a foretaste of warfare
fought with breach-loading rifles and machine guns, with the advantage to
the defenders, that was to characterize World War I.
The causes of the Anglo-Boer War of 1899-1902 war was in reality the contest
for control of the rich Witwatersrand gold-mining complex located in the SAR
South African Republic). It was the largest gold-mining complex in the world
at a time when the world’s monetary systems, preeminently the British, were
increasingly dependent upon gold. Although there were many Uitlanders
(foreigners; i.e., non-Dutch/Boer and in this case primarily British)
working in the Witwatersrand gold-mining industry, the complex itself was
beyond direct British control. Also, the discovery of gold on the
Witwatersrand in 1886 allowed the SAR to make progress with modernization
efforts and vie with Britain for domination in Southern Africa.
After 1897 Britain—through Alfred Milner, its high commissioner for South
Africa—maneuvered to undermine the political independence of the SAR and
demanded the modification of the Boer republic’s constitution to grant
political rights to the primarily British Uitlanders, thereby providing them
with a dominant role in formulating state policy that would presumably be
more pro-British than the current policy of the SAR. In an effort to prevent
a conflict between Britain and the SAR, Marthinus Steyn, president of the
Orange Free State, hosted the unsuccessful Bloemfontein Conference in
May–June 1899 between Milner and Paul Kruger, president of the SAR. Kruger
did offer to make concessions to Britain, but they were deemed insufficient
by Milner. After the conference, Milner requested that the British
government send additional troops to reinforce the British garrison in
Southern Africa; they began arriving in August and September. The buildup of
troops alarmed the Boers, and Kruger offered additional Uitlander-related
concessions, which were again rejected by Milner.
The Boers, realizing war was unavoidable, took the offensive. On Oct. 9,
1899, they issued an ultimatum to British government, declaring that a state
of war would exist between Britain and the two Boer republics if the British
did not remove their troops from along the border. The ultimatum expired
without resolution, and the war began on Oct. 11, 1899.
In discussing Sauer’s book, the Cape Times, 2nd
Nov., 1937, identifies the “big man” as (the late)
Lord Rosebery! Rhodes told Sauer that he had discussed the
possibility of the raid with Lord Rosebery when the latter was Prime
Minister! The dates of Rosebery’s Ministry were 1894-5, at which time he was
a widower, his wife having been a Rothschild, and his children half-caste
Rothschilds! Now as Lord Rosebery and his Jewish friends and relations
evidently arranged the Jameson Raid, the reader may guess what they must all
have “made” by “bearing” the mining shares on the Johannesburg Bourse. In
the jargon of the stock exchange, a “bear” is
one who sells shares, which he does not actually possess, for future
delivery with a view to a drop in prices meanwhile; when that drop in values
occurs, he buys the shares and delivers them to his customer. The weapon of
the successful “bear” is thus seen to be possession of information on coming
events. These Jews knew what was coming, for they arranged it to happen; the
Jameson Raid (1895) produced a fearful slump, and the Jews made millions as
Four “leaders” of the raid, including the Jew Lionel
Phillips, were sentenced to death by a British Court, but the black cap
meant nothing where Rothschilds were concerned, so the prisoners were able
to buy their lives by a fine of £25,000 per head! Soon after this, there was
a perfect epidemic of Jewish baronetcies among those intimately concerned
with the dastardly business of the Raid. Cecil Rhodes was rewarded by
becoming a Director of De Beers in 1900. The Jameson Raid provoked the
costly (in life and treasure) South African War, 1899-1902. Speeches made by
President Kruger in 1899 prove that he knew
that the Jews, not the British, were his real enemies.
*In 1919 the South African
Government arranged a new producers' agreement, and a consortium
including Ernest Oppenheimer (Jewish) took over
the fields in Namibia. By 1926 Oppenheimer and his company Anglo American
felt strong enough for a showdown with De Beers, and after negotiations each
company took a large shareholding in the other, with Oppenheimer essentially
After the great stock market crash of 1929, Oppenheimer
realized that demand and sales would drop, while production continued. In
1930 he set up a new company, the Diamond Corporation Limited, specifically
to bear the costs of keeping large stocks of diamonds off the sales market,
while assuring some kind of cash flow to the producers.
Oppenheimer was chairman of both De Beers and the
Diamond Corporation by this time, and De Beers and the Rothschilds actually
provided most of the cash for four years.
De Beers made a profit again in 1934. By a chain of
interlocking directorships and joint stock holdings, De Beers was once again
the dominant diamond producing company: it held 38% of the stock of Anglo
American, and Anglo American held 34% of De Beers. Meanwhile, the Diamond
Corporation began to make a profit by the middle 1930s, and dominated
diamond buying. By 1939, 97% of the world's diamond trade passed through the
Anglo American Today
The diamond empire of De Beers is now one of about 600
companies associated with "South Africa Inc." (officially called The Anglo
American Corporation of South Africa, 44 Main Street, Johannesburg). Anglo
American controls South African gold mines as well as diamond mines, and
almost half the capitalization of the Johannesburg
Stock Exchange represents companies owned or controlled by Anglo American.
The traditional “big six” African mining houses - Anglo
American / De Beers, Gencor / Billiton, Goldfields, JCI, Anglovaal and Rand
In recent years, Anglo American has gradually shifted its
operations to London, and is diversifying outside South Africa to an extent
it never did while there was white-minority government in Pretoria. But De
Beers had already for years run its diamond-selling operation in London,
through a division called the "Central Selling Organization" or CSO. The CSO
is the controlling company in a global diamond marketing system (cartel)
that ensures stable (high) prices for all producers. In the 1950s, De Beers
created one of the most successful advertising campaigns in history with the
slogan "A Diamond Is Forever," which became a household phrase and made
diamonds the stone of choice for rings all over the world.
In 1990, De Beers moved its international headquarters to
Switzerland and Luxembourg. The new companies control all of De Beers
business outside South Africa. This move occurred almost simultaneously with
the release of Nelson Mandela and the renewed negotiations for greater
political power for black South Africans. It is difficult to believe that
these two events were independent. De Beers argued that 80% of its earnings
(over $4 billion in 1989) were generated overseas, through its diamond sales
in London, but that had been true for many years. De Beers was almost
certainly restructured so that most of its profits involved money flow that
did not pass through South Africa.
Within a few months of De Beers' move to Switzerland, it
had concluded an agreement with Russia to sell that country's rough diamonds
on an exclusive 5-year contract, thus maintaining an almost total control
over all the global production of diamonds. De Beers
paid $1 billion as a cash advance. As the South African mining
industry is still predominantly white controlled, emphasis is now being
placed on stimulating black empowerment in the industry.
In the far north of Western Australia, the British
company Rio Tinto with operations around the world, holds 60% of a large
diamond field called Argyle. The Argyle field is about ten times as large as
the original De Beers pipe, and is now the single largest diamond mine in
the world, producing 34 million carats a year; with at least 20 years of
production. The Rio Tinto plc ADR facility is administered by
JPMorgan Chase Bank NA, the same company that
partnered with the Rochchilds to form The Federal Reserve.
Afrikaners, white S. African of Dutch heritage, were the founders and
maintainers of Apartheid. One of their own, Jan du
Plessis of S. Africa, was recently appointed CEO chairman of Rio
To this day, the Jewish De Beers Company
dominates the South African Press.
Not only do the Rothschilds control the mining of South
African gold, but they control also its price. In London, all gold bullion
passes through the hands of three Jewish firms
who govern the price of gold from day to day; these are N. M. Rothschild &
Sons, Mocatta & Goldsmid, and Samuel Montagu & Co.
These groups of closely associated Rothschild
companies also control the world's mineral markets and are majority owners
of the below mines, quarries and terminals in Africa:
* Antimony Mine
* Base Metals Mines
* Base Metals Plants
* Chrome Mines
* Coal Mines
* Coal Terminals
* Copper Mines
* Diamond Mines
* Gold - Copper Mines
* Gold Mines
* Heavy Mineral Sands
* Iron Ore Mines
The world's largest Nichol
Mines are owned by the Rothschilds and the largest supply of Nichol
discovered in Finland is owned by the Jew Lord Melchett’s International
Nickel Co. of Canada. Most of the globe's Mercury
is and has been owned by the Rothschilds. Copper,
The Rothschilds and according to the Jewish Encyclopædia (B, Vol.
V., p. 384) the world control of Copper was (in 1903) in the hands of the
Jew firms Lewisohn Bros. & Guggenheim Sons. Lead;
Among the most important Lead-mines in the world are those of the
Spanish Company Societe Miniere de Penarroya which produces one-eighth of
the world’s total. Since 1883, the Paris Rothschilds controlled the Company
and in 1909 they allied themselves with the Frankfort Metallgesellschaft
(which meant Krupp and the Kaiser, Jewish firms. This arrangement
continued until 31st December, 1916, and must have been most profitable for
Rothschild Freres during the first two years of the war, when they sent
150,000 tons to Germany, via Switzerland.
Oil; The story of
Rothschild Oil-interests can be largely told by
means of extracts from well-authenticated sources. Even as far back as 1883
the Rothschilds controlled two important companies, the Caspian-Black Sea
Company, and, since 1898, the Mazut Company. They battled to wrench control
of the larger Standard Oil company. Then appears Deterding on the scene, an
official of the Royal Dutch Company, later to become Sir Henri Deterding; It
was Deterding who induced the House of Rothschild to give
Royal Dutch its backing, which undoubtedly saved the Company from
ruin. The Royal Dutch Company allied itself with the
Shell Transport of Marcus Samuel (afterwards Viscount Bearsted), in
1897, and later, in 1902 with a sales firm, the Asiatic Petroleum Company.
“As before, Samuel got the House of Rothschild to finance the companies.
Standard Oil’s first desperate onslaught upon Royal Dutch was discontinued
only when the Americans realized that Rothschild’s
millions were behind the Dutch company. America was already in great debt to
the Rothschilds and thus backed off support for their own American
The Rothschilds were always hostile to the Tsars of
Russia who were the only European monarchs to protect their people from the
Jews by refusing to give them the status of Russians in Russia. They must,
therefore, like Jacob Schiff of Kuhn Loeb & Co.,
have been interested in the success of Kerensky’s revolution; but it is
impossible that the Rothschilds could have desired the success of the
Bolshevik revolution which came next, because
of the losses they would, and did, sustain in the Russian Oil-fields which
were ultimately confiscated by the Soviet Government. When the Rothschilds
and their associates funded the Jew, Joseph Stalin
and his revolution that began by murdering the Tsars family members,
they regained control of Russia's oil and other resources.
The Royal Dutch Company strongly representing the
Rothschilds also controls the Anglo-Saxon Petroleum
Prices of Oil, now in the future. There is little meaning in
the title of Anglo-Saxon in the composition of
its Directorate. It is strongly Jewish, and is part owner of the
Consolidated Petroleum Co. and the Anglo-Mexican Petroleum Co. which in turn
controls the Shell-Mex Companies of Argentine, Chile
and Uruguay. The number of books written about
“Oil-wars” is Legion; and it will be noted that in all the
international crises caused by conflicting interests chiefly between
American Standard Oil and the European Royal Dutch, the Rothschilds have
held strong position in the latter Company. Under the Rothschild Paris
regime, France found that she had neglected her Colonial oil-fields and
suffered for it in the Great War 1914-18. Why was this allowed? R. Neumann
blandly explains in his book Zaharoff: the Armaments King (1935),
p. 210:—“It was known that it was in the interests of the foreign oil trust
that France should not discover any oil-wells in her own soil or in any of
her colonial territories, for then she would remain permanently under the
control of the foreign oil producers.” And there you also have the
explanation of the curious non-discovery of Oil in British territories. It
was, however, so necessary for the Jews to have Hitlerism destroyed, that we
should not be surprised to hear of many wonderful new discoveries of Oil in
British and French possessions, although such discoveries must not be
expected until the highest prices have been wrung out of the taxpayers of
both countries for the benefit of the oil-fields already working.
Oil Wars Among the major
Oil-Wars we note the following theatres:— 1.
Mexico. Here the game was the corruption of successive
Presidents by the two belligerents (Standard Oil and Deterding), or, where
that did not work, they resorted to the financing of revolutions against
such Presidents of the forcing of “incidents” rendering “necessary” the
landing of armed forces. One side was just as bad as the other, and thus
they made of Mexico a shuttlecock, caring nothing for the welfare of the
Mexican people and rendering good government there an impossibility. 2.
Venezuela. The Oil-war in this country
consisted chiefly in a duel of bribery of President Gomez from 1928 onward,
the belligerents being Standard Oil and Deterding. This oil-war completely
prevented good government in Venezuela, and made it possible for Gomez to
reign as a most barbarous dictator to the intense suffering of the
Venezuelan people. 3. Asia Minor. The
Turko-Greek war (1920) in this country was really an oil-war, Greece being
backed by “Britain” and Turkey by “France.” When Turkey won, we sent her an
ultimatum to yield to us the Oil-field, but then the U.S.A. stepped in and
obtained a concession for oil which made Turkey her ally! Britain’s reply to
that situation was to begin to jib at paying her War-debts to the U.S.A. and
that brought the U.S.A. to heel. The dispute was referred to the League of
Nations, and Iraq gained the oil-field under a 25 years’ British Mandate.
The above leads us to the current Oil Wars in Iraq.
Americans and International Armies are fighting, destroying and dying for
Jewish companies also control the planet's
silver and other precious metal markets.
*With most of the world's media, resources and wealth, along
with the printing and control of money, in the hands of the Jewish dynasty
makes it quiet easy for the manipulation of the world markets and the lives
and livelihood of us all.*
Watch the below Video of the
"History of American Money"
The below video, while not
necessary connected to the Federal Reserve, is related to the undermining of
America. The info displayed on the video is compiled from 9-11 witnesses and
on the scene news people. Yet another American Lie that resulted in the
deaths of over 3000 Americans, led to 2 wars and the eventual bankruptcy of
Controllers and Comptrollers!!
With newfound bailout money
in their wallets, big banks have been rushing to gobble up smaller ones. At
the center of these mergers is the Treasury Department, led by Goldman Sachs
alums Henry Paulson and Neel Kashkari. While neglecting struggling
homeowners they have created major incentives for widespread bank
consolidation, which could lead to a host of new problems. And, as members
of Congress recently noted, Treasury officials seem to be making the rules
up as they go.
2009 Acquisitions by the Federal Reserve.
BOA forcefully bought by the Fed.
Reserve even when they didn't need or want the bailout!
Bank of America gets $138, + a previous $25
billion bailout - 2009, after being forced to Buy Merrill Lynch!
More worthless paper money being shoveled into our
immensely indebted nation!
Fed bailout Of Bear Sterns
and forced sale to JPMorgan Chase (Feds shifting control & the money)
On March 14, 2008, JP Morgan Chase, in conjunction with the Federal Reserve
Bank of New York, agreed to provide (under terms and conditions to be
agreed) a (up to) 28-day emergency loan to Bear Stearns in order to prevent
the potential market crash that would result from Bear Stearns becoming
insolvent. Despite, or because of, this, belief in Bear's ability to repay
its obligations rapidly diminished among counterparties and traders. Seeing
that the terms of the emergency loan was not enough to bolster Bear Stearns,
and worried that a still-floundering Bear would result in systemic losses if
allowed to open in the markets on the following Monday, Federal Reserve
Chairman Ben Bernanke and Treasury Secretary Henry Paulson Jr. told CEO Alan
Schwartz that he had to sell the firm over the weekend, in time for the
opening of the Asian market. Two days later, on March 16, 2008, Bear Stearns
signed a merger agreement with JP Morgan Chase in a stock swap worth $2 a
share or less than 10 percent of Bear Stearns' market value just two days
before. This sale price represented a staggering loss as its stock had
traded at $172 a share as late as January 2007, and $93 a share as late as
February 2008. In addition, the Federal Reserve agreed to issue a
non-recourse loan of $29 billion to JP Morgan Chase, thereby assuming the
risk of Bear Stearns's less liquid assets (see Maiden Lane LLC). This
non-recourse loan means that the loan is collateralized by mortgage debt and
that the government can not seize J.P. Morgan Chase's assets if the mortgage
debt collateral becomes insufficient to repay the loan. Chairman of the Fed,
Ben Bernanke, defended the bailout by stating that a Bear Stearns'
bankruptcy would have affected the real economy and could have caused a
"chaotic unwinding" of investments across the US markets.
On March 20, Securities and Exchange Commission Chairman Christopher Cox
said the collapse of Bear Stearns was due to a lack of confidence, not a
lack of capital. Cox noted that Bear Stearns's problems escalated when
rumors spread about its liquidity crisis which in turn eroded investor
confidence in the firm. "Notwithstanding that Bear Stearns continued to have
high quality collateral to provide as security for borrowings, market
counterparties became less willing to enter into collateralized funding
arrangements with Bear Stearns," said Cox. Bear Stearns' liquidity pool
started at $18.1 billion on March 10 and then plummeted to $2 billion on
March 13. Ultimately market rumors about Bear Stearns' difficulties became
self-fulfilling, Cox said.
On March 24, 2008, a class action lawsuit was filed on behalf of
shareholders, challenging the terms of JPMorgan’s recently announced
acquisition of Bear Stearns. That same day, a new agreement was reached that
raised JPMorgan Chase's offer to $10 a share, up from the initial $2 offer,
that meant an offer of $1.2 billion. The revised deal was aimed to quiet
upset investors and any subsequent legal action brought against JP Morgan
Chase as a result of the deal as well as to prevent employees, many of whose
past compensation consisted of Bear Stearns stock, from leaving for other
firms. The Bear Stearns bailout was seen as an extreme-case scenario, and
continues to raise significant questions about Fed intervention. On May 29,
Bear Stearns shareholders approved the sale to JPMorgan Chase at the
Obama appoints yet another
Jewish investment banker to his list of so-called Czars;
Ron Bloom will serve as senior counselor for
manufacturing policy and "provide leadership on policy development and
strategic planning for the president's agenda to revitalize the
manufacturing sector," the White House said in a statement.
Bloom will also continue in his capacity as part of the
auto industry task force
that has overseen US government aid to the auto sector, which is contingent
on a long-term viability plan for the troubled manufacturers.
He was named
senior advisor to the Treasury Secretary, Jewish Timothy Geithner, on
the president's auto task force in February.
I may be wrong, but the US
economical fall and the elite postings of the same people involved in the fall
seem more than just coincidence? Nothing ever changes...like Larry
Silverstein, owner of the World Trade Towers, the Rockefellers owners of
the New Your Port, then the very convenient attack of Sept. 11... then the
invasion of Iraq to capture control of the oil fields. Dick Cheney being the
Director of Halliburton and the issuance of no-bid contracts to his old
company Halliburton, worth billions of dollars!!! Bush's ties to the oil
industry, the Jews control of the Federal Reserve, the FDIC, The US Treasury
and so on. Israel's building
thousands of new housing units in stolen Palestinian land. Just too much of
the same old imperialism behavior. The Federal Reserve recently took major
ownership of hundreds of banks, control of the auto industries,
the country's largest real estate companies, insurance companies, such as
AIG and on it goes. The next move toward socialism is coming
soon...socialist health care. Why else would Obama make it such a top
priority when the country is falling
apart, in 2 wars and have untold trillions in a debt it can never repay? The
Jewish Federal Reserve is simply printing more billions of unsecured paper
money to bail out their partners in Wall
Street. Why do we the people never hear of such things...it's simply because
the Jews have control of the world's media and
all capital investments...so what's left? Agree or disagree, but you can be
assured a new world is painfully evolving and we won't like it!
Bear Stearns Merchant Banking
As part of the acquisition of
Bear Stearns, JPMorgan Chase acquired several private equity groups within
Bear Stearns Asset Management, including:
* Bear Stearns Merchant Banking, a $4.4 billion private equity business
founded in 1997. In June 2008, it was announced BSMB would spin out of J.P.
Morgan and in November 2008, the firm relaunched as Irving Place Capital..
* Bear Growth Capital Partners, a growth capital investment group founded in
2003 with a $375 million commitment from Bear Stearns. J.P. Morgan hired
CCMP Capital to manage the legacy fund.
* Bear Stearns Private Equity Ltd., renamed J.P. Morgan Private Equity
Limited (LSE: JPEL), a publicly traded private equity vehicle making fund of
funds and secondary investments.
* Bear Stearns Health Innoventures, a venture capital fund established to
invest in early- to mid-stage health care focused companies with a focus on
the biotechnology sector.
* Constellation Ventures a venture capital group, founded in 1998, making
investments in the media, communications, software and services sectors[
(most all were Jewish)
The largest Bear Stearns shareholders as of December 2007
Being of Jewish Polish heritage' Zell's father Bernard
changed the family name from Zielonka to Zell.
Billionaire, Mr. Sam Zell, previous owner of the Chicago
Cubs baseball empire, borrows millions from JP Morgan and others to buy The
Tribune Media then files bankruptcy wiping out all of his debt and the
stockholders investments. Zell, a billionaire Chicago real estate investor,
took the company private in December 2007 and filed for bankruptcy in
December 2008, which literally destroyed the corporation. Just another shady
deal in a lifetime of countless others for the benefit of the few...the very
Sam Zell, the chairman and chief executive of the Tribune
Company, whose holdings include The Chicago Tribune, The Los Angeles Times
and the Chicago Cubs baseball team. In mid-2008, Mr. Zell sold another one
of his media empire, Newsday to Cablevision’s Dolan family for a very
SAM NEWHOUSE, whose family owns 26 of the US media,
newspapers, magazines, cable companies and so forth, was the oldest of eight
children born to poor Jewish immigrants from
Eastern Europe. Their estimated fortune is near 7 billion dollars. Sam was 5
feet 2 inches tall and if you stacked his worth in 1000 notes on top of each
In a court filing in December 2008, The Tribune said it
had nearly $13 billion in debt, compared to $7.6 billion in assets. Most of
that debt was taken on when Mr. Zell acquired the company — a deal he struck
using mostly borrowed money. All of the company’s equity is owned by the
employee stock-ownership plan, which was wiped out. On Aug. 31 2009. Walt
Disney, a Jewish owned mega corporation expanded their empire by buying our
Marvel Comics for a meager 4 Billion dollars,
giving them access to numerous comic characters. The giant corporations are
swallowing up all competition in their drive to have total control of all
markets. What does it mean to consumers? Far less choices, which in turn
allows these large conglomerates to raise prices whenever and however they
wish! Most all of the American industries have been totally deregulated by
the government and there is only one explanation...money flowing to the top.
Another eye-opener about greed and lack of
The Church has been tied to the world's shadowy financiers for centuries.
THE VATICAN TRILLIONS
by Avro Manhattan:
"The Vatican has large investments
with the Rothschilds of Britain, France and America, with the Hambros Bank,
with the Credit Suisse in London and Zurich. In the United States it has
large investments with the Morgan Bank, the Chase-Manhattan Bank, the First
National Bank of New York, the Bankers Trust Company, and others. The
Vatican has billions of shares in the most powerful international
corporations such as Gulf Oil, Shell, General Motors, Bethlehem Steel,
General Electric, International Business Machines, T.W.A., etc. At a
conservative estimate, these amount to more than 500 million dollars in the
Yet another wealthy syndicated
example of religious bigotry; while restricting the prevention of HIV in
Africa by condemning the use of condoms...the Catholic monarchy actually
invests in their manufacturing.
"In a statement published in
connection with a bond prospectus, the Boston archdiocese listed its assets
at Six Hundred and Thirty-five Million ($635,891,004), which is 9.9 times
its liabilities. This leaves a net worth of Five Hundred and Seventy-one
million dollars ($571,704,953). It is not difficult to discover the truly
astonishing wealth of the church, once we add the riches of the twenty-eight
archdioceses and 122 dioceses of the U.S.A., some of which are even
wealthier than that of Boston.
The above $$$ numbers are mostly an
insult to anyone with even minimal intelligence...as the numbers are
definitely under-valued by a few hundred billion or so, and with no taxes or
accountability...no one really knows the church's true worth!!! So much
power and wealth and yet the world's impoverished, mostly religious, are
starving and dying by the millions. Consider that the poorest are always
religious. To eradicate this is really quite simple...lose the
religion...get educated and learn to rise above the superstitious rhetoric.
Anyone believing they will burn forever in a pit of fire simply for being
human...is definitely in need of therapy.
I was once told by a priest in
Mexico that the church was the most ingenious mafia of all. I asked him "why the
church scares the people with tales of eternal death and hell-fire to coerce
people to give donations and then assures them that God needs the money? And continuing, I asked how much of the money goes to God...being
rhetorical, of course. He laughed and said..."Oh it's simple...we tell the
people that the church is God's earthly representative and in giving God his
share we simply throw the money into the air and he takes what he wants and
the church keeps the rest." MS. 08-30-09
"Some idea of the real estate and
other forms of wealth controlled by the Catholic church may be gathered by
the remark of a member of the New York Catholic Conference, namely 'that his
church probably ranks second only to the United States Government in total
annual purchase.' Another statement, made by a nationally syndicated
Catholic priest, perhaps is even more telling. 'The Catholic church,' he
said, 'must be the biggest corporation in the United States, if not the
world. We have a branch office in every neighborhood. Our assets and real
estate holdings must exceed those of Standard Oil, A.T.&T., and U.S. Steel
combined. And our roster of dues-paying members is many times over the tax
rolls of the United States Government.' (Actually
the Catholic Dynasty is by far the largest hoarder of wealth, plays on the
fear of the weak and never pays it's share of taxes...thus making it the
most contemptible empire in the world)
"The Catholic church, once all her
assets have been put together, is the most formidable stockbroker in the
world. The Vatican, independently of each successive pope, has been
increasingly orientated towards the U.S. The Wall Street Journal said that
the Vatican's financial deals in the U.S. alone were so big that very often
it sold or bought gold in lots of millions or more dollars at one time.
"The Vatican's treasure of solid
gold has been estimated by the United Nations World Magazine to amount to
several billion dollars. A large bulk of this is stored in gold ingots with
the U.S. Federal Reserve Bank, while banks in England and Switzerland hold
the rest. But this is just a small portion of the wealth of the Vatican,
which in the U.S. alone, is greater than that of the five wealthiest giant
corporations of the country. When added to all their real estate, industrial
properties, stocks and shares abroad, the staggering accumulation of the
wealth of the Catholic church becomes so formidable as to defy any rational
"The Catholic church is the biggest
financial power, wealth accumulator and property owner ever in existence.
She is a greater possessor of material riches than any other single
institution, corporation, bank, giant trust, government or state of the
whole globe. The pope, as the visible ruler of this immense amassment of
wealth, is consequently the richest individual of the twentieth century. No
one can realistically assess how much he is worth in terms of Billions, or
Trillions, of dollars."
So remember that before you empty your pockets
into their bank accounts.
Money spent on Bush's 2 Wars,
Iraq & Afghanistan from 2002 just to mid 2006 was as posted below. The
amount has increased to over 1
Trillion USD as of March 2013.
Six-hundred-fifteen billion dollars
... add $450 billion more up to 2013
... totaling over 1 trillion, not including slush funds
Update : July 21, 2006
is the amount of money the US has allocated for the wars in Iraq and
Afghanistan, to be spent by September 30, 2006, the end of the fiscal year.
And the Senate is working on a spending bill that will add another $50
billion more in spending for 2007.
This pile is 125 feet wide,
200 feet deep, and 750 feet tall.
50 feet is the height of a
75-story building. It's the twice the height of the Millennium Wheel in London. It is
also the twice the height of the Luxor Hotel in Las Vegas and the Louisiana State
If you were to stack the
money in a single stack, it would be 29,887 miles tall, enough to wrap the
Moon at its equator almost 5 times.
President Bush, Jan. 6,
2003. How could this duck-faced moron ever have
made it out of grade school and we let his media and corporate buddies buy
the US president's office...twice! Shame on America and especially for
allowing our sons and brothers to fight and die in their war for oil at the
demise of our country...shame...shame on you all.
Watch this video explaining just much money we are in debt.
"One of the greatest battles for the preservation of this
Republic was fought out here in Jackson's time; when the second Bank of the
United States, founded on the same false principles of those which are here
exemplified in the Fed was hurled out of existence. After that, in 1837, the
Country was warned against the dangers that might ensue if the predatory
interests after being cast out should come back in disguise and unite
themselves to the Executive and through him acquire control of the
Government. That is what the predatory interests did when they came back in
the livery of hypocrisy and under false pretenses obtained the passage of
"The danger that the Country was warned against came upon
us and is shown in the long train of horrors attendant upon the affairs of
the traitorous and dishonest Fed. Look around you when you leave this
Chamber and you will see evidences of it in all sides. This is an era of
misery and for the conditions that caused that misery, the Fed are
fully liable. This is an era of financed crime and in the financing of crime
the Fed does not play the part of a disinterested spectator.
"It has been said that the draughts man who was employed
to write the text of the Aldrich bill because that had been drawn up by
lawyers, by acceptance bankers of European origin in New York. It was a
copy, in general a translation of the statues of the Reichsbank and other
European central banks. One-half million dollars was spent on the part of
the propaganda organized by these bankers for the purpose of misleading
public opinion and giving Congress the impression that there was an
overwhelming popular demand for it and the kind of currency that goes with
it, namely, an asset currency based on human debts and obligations.
pictured in 1913. Charles Sumner Hamlin (1861–1938) was an American
lawyer and the first Chairman of the Federal Reserve.* Note the connection
between this first Fed chairman and the president that signed the Federal
Reserve act into law...Woodrow Wilson. A coincidence? I think not!
He was born in Boston, Massachusetts on August 30, 1861, and graduated from
Harvard University in 1886. From 1893 to 1897 and again from 1913 to 1914 he
was the Assistant Secretary of the Treasury. He twice ran unsuccessfully for
governor of Massachusetts, in 1902 and 1910. On August 10, 1914, he was
appointed the first Chairman of the Federal Reserve Board and served in that
capacity until August 10, 1916. He lectured at Harvard on government in 1902
and 1903; In 1912 was vice president of the Woodrow
Wilson College Men's League and president of the Woodrow Wilson League of
Massachusetts; and he published, besides pamphlets on statistical and
financial subjects, an Index Digest of Interstate Commerce Laws (1907) and
the Index Digest of the Federal Reserve Bulletin (1921). He died in
Washington, D.C. on April 25, 1938.
A list of all the Federal Reserve Chairmen; (Please
click your back button to return) Almost all were Jewish
"Twelve private credit monopolies were deceitfully and
disloyally foisted upon this Country by the bankers who came here from
Europe and repaid us our hospitality by undermining our American
institutions. Those bankers took money out of this Country to finance Japan
in a war against Russia. They created a reign of terror in Russia with our
money in order to help that war along. They instigated the separate peace
between Germany and Russia, and thus drove a wedge between the allies in
World War 11. They financed Trotsky's passage from New York to Russia so
that he might assist in the destruction of the Russian Empire. They fomented
and instigated the Russian Revolution, and placed a large fund of American
dollars at Trotsky's disposal in one of their branch banks in Sweden so that
through him Russian homes might be thoroughly broken up and Russian children
flung far and wide from their natural protectors. They have since begun
breaking up American homes and the dispersal of American children.
"Mr. Chairman, there should be no partisanship in matters
concerning banking and currency affairs in this Country, and I do not speak
"In 1912 the National Monetary Association, under the
chairmanship of the late Senator Nelson W. Aldrich, made a report and
presented a vicious bill called the National Reserve Association bill. This
bill is usually spoken of as the Aldrich bill. Senator Aldrich did not write
the Aldrich bill. He was the tool, if not the accomplice, of the European
bankers who for nearly twenty years had been scheming to set up a central
bank in this Country and who in 1912 has spent and were continuing to spend
vast sums of money to accomplish their purpose. Obviously they succeeded and
our America was changed forever. Their policies of corruption, money and
debt control eventually led to;
THE GREAT DEPRESSION
"Meanwhile and on account of it, we found ourselves in
the midst of the greatest depression we have ever known. From the Atlantic
to the Pacific, our Country has been ravaged and laid waste by the evil
practices of the Fed and the interests which control them. At no time in our
history, has the general welfare of the people been at a lower level or the
minds of the people so full of despair.
"Recently in one of our States, 60,000 dwelling houses
and farms were brought under the hammer in a single day. 71,000 houses and
farms in Oakland County, Michigan, were sold and their erstwhile owners
dispossessed. The people who have thus been driven out are the wastage of
the Fed. They are the victims of the Fed. Their children are the new slaves
of the auction blocks in the revival of the institution of human slavery.
The Scheme of the Fed
"In 1913, before the Senate Banking and Currency
Committee, Mr. Alexander Lassen made the following statement: "The whole
scheme of the Fed with its commercial paper is an impractical, cumbersome
machinery- is simply a cover to secure the privilege of issuing money, and
to evade payment of as much tax upon circulation as possible and then
control the issue and maintain, instead of reducing interest rates. It will
prove to the advantage of the few and the detriment of the people. It will
mean continued shortage of actual money and further extension of credits,
for when there is a shortage of money people have to borrow to their cost.'
"A few days before the Fed passed, Senator Root denounced the Fed as an
outrage on our liberties. He predicted: 'Long before we wake up from our
dream of prosperity through an inflated currency, our gold, which alone
could have kept us from catastrophe- will have vanished and no rate of
interest will tempt it to return.'
"If ever a prophecy came true, that one did.
"The Fed became law the day before Christmas Eve, in the
year 1913, when all but a select few Congressmen left for the holidays, and
shortly afterwards, the Jewish German International bankers, Kuhn, Loeb and
Co. sent one of their partners here to run it.
Federal Reserve has been printing billions of non-valued paper money ever
since it's 1913 creation and used it to take control of the US Economy.
Even, as of today, Aug. 30, 2009
they are buying up of hundreds of banks, financial institutes and other
industry assets, such as General Motors, realtor giants and a long list of
others! Hundreds of billions of federal Reserve dollars were approved,
printed and given to bail out Wall Street and their global partners. The
financiers are foreclosing on tens of thousands of small business, farms and
homes across America and no one seems to notice or care!
George W. Bush in one of
his public addresses during his Presidency, thinking the cameras were off, flipped off the
American people when asked about the economy! Our leaders know they're above
the law and thus do as they please. Are you still proud to be an American?
SECRETS OF THE FEDERAL RESERVE
Information posted here is not imaginary or from conspiracy theorists. It
was gathered from Congress, The Library of Congress, notes from official
meetings, news articles, etc.
"G. Edward Griffin exposes the most blatant scam of all history. It’s all
here: the cause of wars, boom-bust cycles, inflation, depression,
prosperity. It's just exactly what every American needs to know about the
power of the central bank."
News of Today; Aug.09-09
** President Obama is establishing a new cabinet of officials who are
accountable only to him. This is an unprecedented power grab.
White House Appoints a Jewish Pay Czar
WASHINGTON -- The Obama administration has appointed a "Special Master for
Compensation" to ensure that companies receiving federal bailout funds are
abiding by executive-pay guidelines, according to people familiar with the
The administration appointed Kenneth Feinberg, who oversaw the federal
government's compensation fund for victims of the Sept. 11, 2001, terrorist
attacks, to act as a pay czar for the Treasury Department, these people
Mr. Feinberg will report only to Jewish Treasury Secretary Timothy Geithner
and is expected to have wide discretion on how the rules should be
interpreted. Firms likely won't be able to appeal decisions that Mr.
Feinberg makes to Mr. Geithner, according to people familiar with the
Mr. Feinberg, founder and managing partner of the law firm Feinberg Rozen
LLP, spent several years overseeing payouts totaling more than $7 billion to
victims of the 9/11 attacks. He personally reviewed every claim, approving
or denying awards and allocating sums to be paid out of the Treasury. The
victims of 9-11 fell victim again to a very bias and unfair compensation by
one the possible persons deeply involved with 9-11.
The government is also pursuing a separate revamping of financial-sector
rules that could change industry compensation practices more broadly. For
instance, the Federal Reserve is considering rules that would curb banks'
ability to pay employees in a way that would threaten the "safety and
soundness" of the bank.
Obama Appoints Czar to Oversee Appointed Czars
29th May 2009, 12:27 pm
WASHINGTON —President Obama announced on Friday the creation of a “Czar
czar” to oversee the officials he has appointed as czars since taking
office. “There are so many people running around the White House who have
not gone through any vetting whatsoever that I think it’s important for me
to appoint a czar just to keep track of them.”
In addition to (Border Czar Alan) Bersin, we
have energy czar Carol Browner, urban czar Adolfo Carrion, Jr., infotech
czar Vivek Kundra, faith-based czar Joshua DuBois, health reform czar
Nancy-Ann DeParle, new TARP czar Herb
Allison, stimulus accountability czar Earl
Devaney, non-proliferation czar Gary Samore,
terrorism czar John Brennan, regulatory czar Cass
Sunstein, drug czar Gil
Kerlikowske, and Guantanamo closure czar Daniel
Fried. We also have a host of special envoys
that fall into the czar category including AfPak special envoy Richard
Holbrooke, Mideast peace envoy George
Mitchell, special advisor for the Persian Gulf
and Southwest Asia Dennis Ross, Sudan special envoy J. Scott Gration and
climate special envoy Todd
Stern. By the time Obama gets finished
appointing Czars...the US may end up with 60 to 100.
Czars Appointed by Obama
Here I will list the names of the 'czars' appointed by the executive branch
in 2009: And the bonus here is that if he appoints enough Czars he can solve
at least one important problem – unemployment.
After countless days of research I
find it discomforting that all of the appointed czars have one or more
things in common...that were all part of the problem...most were chief
officers or in close business ties with all of the failed, and bailed out,
firms. Coincidence...I don't think so!
The Czars have no accountability or oversight by the
Congress, no rules for "open meetings", no reporting mandates, no vetting or
questioning by the State-Run Media, invisibility (probably) from being
listed in the White Crib visitors log, and each has an off-budget budget.
Another irony...most all of the new czars are Jewish!
1. Compensation Czar aka Pay Czar: *Kenneth Feinberg, Washington lawyer.
2. Health-Care Czar: *Nancy Ann DeParle.
*2. DeParle has drawn criticism for her lucrative service on corporate
boards after her tenure in the Clinton administration. MSNBC.com reported
that she was paid more than $6 million, and served as a director of half a
dozen companies that faced federal investigations, whistleblower lawsuits
and other regulatory actions. Many of these companies have a stake in the
health care reform that she is leading.
3. Urban Czar: Aldolfo Carrion, Jr.
4. Great Lakes Czar: Cameron Davis, Chicago-based environmentalist.
5. Green Jobs Czar Van Jones;
Van Jones, ‘Green Jobs Czar’, a self-described ‘communist’ arrested during
Rodney King riots.
6. Infotech-Information Czar Vivek Kundra.
6. Iran Czar: Dennis Ross (also Persian Gulf / Southwest Asia Czar)
8. Middle East Czar: George Mitchell. Jewish. And Czar 2; Dennis Ross
9. Energy Czar / Climate Czar: Carol Browner, former EPA chief
In January 1981, Holbrooke left government and became
both senior advisor to Lehman Brothers and vice
president of Public Strategies, a Washington, D.C.-based consulting firm he
formed with James A. Johnson, a former top aide to Walter Mondale. From 1985
until 1993, Holbrooke served as managing director of Lehman Brothers. During
this time, he co-authored Counsel to the President, The New York Times
best-selling memoirs of legendary Democratic wise man and Defense Secretary
Clark Clifford, published in 1991. He was a top policy adviser to
then-Senator Al Gore (D-TN) during his 1988 campaign for the Democratic
presidential nomination. And four years later he advised another southern
governor, Bill Clinton, in his quest for the White House.
Holbrooke’s father, a doctor born of Russian Jewish
parents in Warsaw, died of cancer. His father changed his name to Holbrooke
when he arrived in the United States in the 1930’s. Such, however, is the
family’s loss of contact with its roots that his original name is unknown.
Holbrooke’s mother, whose Jewish family fled Hamburg in 1933 for Buenos
Aires before eventually coming to New York.
Holbrooke making deals with
mass murderers; Karadžić controversy;
According to Radovan Karadžić and Muhamed Sacirbey,
ex-Bosnian Foreign Minister, Richard Holbrooke
signed an agreement with Karadžić that if the latter withdrew from politics
he would not be sent to the Hague Tribunal. Holbrooke denied these terms,
saying Karadžić's statement was "a flat-out lie," despite Karadžić's
counsel, Peter Robinson, claiming that he had fifteen witnesses of the
conversation held in Belgrade on 18-19 July, 1996.
11. Bank-Bailout Czar aka TARP Czar: *Herbert Allison.
*Biography for Herbert Allison
Name: Herbert Allison
Title: President and Chief Executive Officer
Company: Fannie Mae
Date of Birth: 1943-08-24
Place of Birth: Pittsburgh, Pennsylvania
Nationality: United States
Spouse: Name: Simin
Education: 1965 BA, Yale University
1971 MBA, Stanford University
Professional Career: President and Chief Executive Officer,
• Prior Professional Experience: Previously, Mr. Allison served in the
- Chairman, President, and Chief Executive Officer, Teachers Insurance and
Annuity Association - College Retirement Equities Fund – 2002 - 2008.
- President and Chief Executive Officer, Alliance for Lifelong Learning -
- Executive positions at Merrill Lynch & Co., including President, Chief
Operating Officer, Chief Financial Officer, Treasurer, Head of Investment
Banking, Head of Debt, and Head of Equity Divisions Worldwide - 1971-1999.
• Company Directorship: Mr. Allison is an Independent Director. He was
elected as a Director of the Company in July 2008.
• Other Directorships: Mr. Allison served on the Board of Directors of
Merrill Lynch from 1997-1999 and served on the
Board of Overseers and as Chairman of the Board of Trustees of TIAA from
12. Border Czar: Alan Bersin, former DOJ official.
13. Drug Czar: Gil Kerlikowske, former Seattle police chief, now head of the
Office of National Drug Control Policy.
*The term "Drug Czar" was first used by Joe Biden in 1982.
14. Cyber-Security Czar: To Be Announced
15. Non-Proliferation Czar: Weapons of mass destruction; Gary Samore.
16. Faith-Based Czar: Joshua DuBois.
17. Regulatory Czar: Cass Sunstein, Harvard Law Professor.
18. Car Czar: Dr. Ed Montgomery, head of the Presidential Task Force on the
*The other "Car Czar" Steve Rattner is stepping down stepping down as chief
adviser to Obama's automotive task force. (In the news July 14, 2009)
19. Domestic violence Czar; Lynn Rosenthal.
20. Stimulus-Accountability Czar aka Stimulus Watchdog Czar: Earl Devaney,
former Secret Service agent, RAT board chairman.
21. Banking Czar Timothy Geithner (the crook that didn't pay his past due
taxes of $34,000) Jewish
22. Science Czar *John Holden
*John Holdren considered ideas of forced abortions and compulsory
sterilization programs to control population in his 1,000-page text book
entitled, "Not Free To Breed You And Me." In addition, the book suggested
the creation of a "Planetary Regime" that would monitor population levels
and would wear require uniforms, probably with really nifty patches on them
to designate their social strata. Advocated forced abortions intentionally
tainting the water supply with infertility drugs. Mandating unwed and teen
mothers chose between abortion or giving child up for adoption. Creating a
global transnational police force to enforce population control John
Holdren's declared and quoted proposals to take over the world with a
mixture of eugenics and extermination, Americans are saying that Holdren is
one of the few Obama czars who deserves the title..."John The Terrible"
23.Technology Czar: Aneesh Chopra,
24. Food Czar, Michael Taylor [a former Monsanto executive, or the fox in
charge of the henhouse]
25. Copyright Czar: Not appointed yet.
26. Aids czar Jeffrey Crowley
27. Iran Czar: Not appointed yet.
28. Tarp Czar: Herb Allison.
29. Middle-East peace Czar: George Mitchell. And Mideast policy Czar; Dennis
30. Afghanistan Czar: Richard Holbrooke.
31. Sudan Czar: J. Scott Gration.
32. Mideast policy Czar: Dennis Ross.
33. Health Care Czar: Nancy-Ann DeParle.
34. Education Czar: Arne Duncan.
35. Religion Czar, aka God Czar Joshua DuBois
36. Climate Change Czar: Todd Stern.
37. Water Czar; David J. Hayes
38. War Czar, Douglas Lute [retained from Bush
administration, married to Jane Holl Lute, currently a Deputy Secretary of
39. Safe schools Czar, Kevin Jennings [appointed to be
Assistant Deputy Secretary of the Office of Safe and Drug-Free Schools, a
newly created post (that does not require Senate confirmation); he's the
openly gay founder of an organization dedicated
to promoting pro-homosexual clubs and curricula in public schools.
40. Economic Czar, Larry Summers.
41. Economic Czar number two, Paul Volcker.
42. Guantanamo closure Czar, Daniel Fried.
43. Trade Czar, Ron Kirk.
44. The Homeland Security Czar;
(Pic. on right) Janet Napolitano. A Jewish Lesbian?,
Declares the Minutemen as terrorists. She is a staunch defender of
Abortionists and open borders for Mexican transgressors, or more
bluntly "Cheap Labor." She and Obama, just appointed one of her associates
for Border Czar; Alan Bersin, also Jewish.
Positions being planned:
1. Income redistribution czar
2. Land-use czar
3. Mortgage czar, formally “consumer financial protection czar” (source)
4. Radio-internet fairness czar
5. Student loan czar, to oversee a program of mandatory service in return
for college money (source)
6. Voter list czar
7. Zoning czar
*Some information on
number 1. The newly appointed "Pay Czar, Mr. Kenneth
By Michael Corkery
Wall Street’s new executive-pay czar insists he is no
Solomon when it comes to doling out money.
Feinberg, the lawyer tapped to oversee the Obama administration’s guidelines
on executive pay, cut his teeth on arguably the thorniest, most delicate
payout ever: meting out $7 billion of government funds to compensate the
families of 9/11 victims.
What heightened the controversy was that Feinberg didn’t
authorize equal payments for all victims, instead adopting a formula that
considered a victim’s age, income, marital status and family status. Under
the formula, survivors of a 40-year-old person who was married with two
children and earning $200,000 a year would receive $3 million, while the
next of kin of a 25-year-old single person earning $40,000 a year would
receive $777,000. The average award was about $2 million.
On more than one occasion, Feinberg was forced to defend a formula that
decided that a stock brokers’ family received more money than the family of
a janitor or even a New York City fire fighter.
““ Survivors and families of the 3,000+ people killed on 9-11-01 stated it
was so un-American, "We were handed out money like street beggars. We were
judged, and profiled, and received widely varying and insignificant amounts.
What happened to equal protection and egalitarianism,” Feinberg said in a
2005 interview on NPR. “That’s wrong. This program reflected what the civil
justice system does every day if you are a stock broker and fell off a
ladder, you will get more money than if you are waiter and fall off a
Now Feinberg wades into another fractious valuation debate, how much Wall
Street can pay its executives in order to retain talents at a time when many
Americans blame banker high pay and incentives for causing the global
Feinberg may surprise those expecting he will succumb to the populist
outrage directed at executive pay at Citigroup, American International Group
and other recipients of the Treasury Department’s $700 billion Troubled
Asset Relief Program.
Despite a liberal pedigree (he is a former aide to Senator Ted Kennedy),
Feinberg could push for higher pay for executives, not less, says Lanny
Davis, a friend of Feinberg who is a former special counsel to President
“He is perfect person to make a ‘man bites dog’ case that executives should
be paid more to get these banks out of trouble and make sure the taxpayers’
money is not squandered,’’ Davis says. “It’s like Nixon going to China.”
Many more czars to come... Check back!
* Czars are presidential appointees who are not required to undergo Senate
The title of Czar is a title of nobility from the regions of eastern and
central Europe, most notably in old Russia. Czar in effect is a title of
king and emperor, and hence is a title of royalty coming down through
history from Rome. Under the Constitution of the United States, no one can
accept a title of nobility or royalty. Our government was set up so that we
have a representative form of government and not a non representative form
where people are appointed to positions that they did not run for in the
election process. Czars thus have accepted a title of nobility and have
violated the Constitution and hence are not Constitutional. And so Czar is a
king with sovereign authority.
The banking industry, now Federal Reserve, went after and collapsed Wall
Street in the 1920s, leading up to the Great depression in the 30s and have
been involved with every recession...from manipulating the gas supply in the
70s and 2007-8 leading to huge price increases...and to bank rolling global
wars...and so it continues without abatement.
SECRETS OF THE FEDERAL RESERVE
The London Connection
By Eustace Mullins
Dedicated to two of the finest scholars of the twentieth century
I wish to thank my former fellow members of the staff of the Library of
Congress whose very kind assistance, cooperation and suggestions made the
early versions of this book possible. I also wish to thank the staffs of the
Newberry Library, Chicago, the New York City Public Library, the Alderman
Library of the University of Virginia, and the McCormick Library of
Washington and Lee University, Lexington, Virginia, for their invaluable
assistance in the completion of thirty years of further research for this
definitive work on the Federal Reserve System.
About the Author
Eustace Mullins is a veteran of the United States Air Force, with
thirty-eight months of active service during World War II. A native
Virginian, he was educated at Washington and Lee University, New York
University, Ohio University, the University of North Dakota, the Escuelas
des Bellas Artes, San Miguel de Allende, Mexico, and the Institute of
Contemporary Arts, Washington, D.C.
The research at the Library of Congress was directed and reviewed daily by
George Stimpson, founder of the National Press Club in Washington, whom The
New York Times on September 28, 1952 called, "A highly regarded reference
source in the capitol. Government officials, Congressmen, and reporters went
to him for information on any subject."
Published in 1952 by Kasper and Horton, New York, the original book was the
first nationally-circulated revelation of the secret meetings of the
international bankers at Jekyll Island, Georgia, 1907-1910, at which place
the draft of the Federal Reserve Act of 1913 was written.
During the intervening years, the author continued to gather new and more
startling information about the backgrounds of the people who direct the
Federal Reserve policies. New information gathered over the years from
hundreds of newspapers, periodicals, and books give corroborating insight
into the connections of the international banking houses.*
While researching this material, Eustace Mullins was on the staff of the
Library of Congress. Mullins later was a consultant on highway finance for
the American Petroleum Institute, consultant on hotel development for
Institutions Magazine, and editorial director for the Chicago Motor Club’s
(The Writings of Thomas Jefferson, ed. by H. E. Bergh, Vol. III, p. 145 ff.)
The bill for establishing a national bank, in 1791, undertakes, among other
1. To form the subscribers into a corporation.
2. To enable them, in their corporate capacities, to receive grants of
lands; and, so far, is against the laws of mortmain.
3. To make alien subscribers capable of holding lands; and so far is against
the laws of alienage.
4. To transmit these lands, on the death of a proprietor, to a certain line
of successors; and so far, changes the course of descents.
5. To put the lands out of the reach of forfeiture, or escheat; and so far,
is against the laws of forfeiture and escheat.
6. To transmit personal chattels to successors, in a certain line; and so
far, is against the laws of distribution.
7. To give them the sole and exclusive right of banking, under the national
authority; and, so far, is against the laws of monopoly.
8. To communicate to them a power to make laws, paramount to the laws of the
states; for so they must be construed, to protect the institution from the
control of the state legislatures; and so probably they will be construed.
"I consider the foundation of the Constitution as laid on this ground--that
all powers not delegated to the United States, by the Constitution, nor
prohibited by it to the states, are reserved to the states, or to the people
(12th amend.). To take a single step beyond the boundaries thus specially
drawn around the powers of Congress, is to take possession of a boundless
field of power, no longer susceptible of any definition.
The incorporation of a bank, and the powers assumed by this bill, have not,
in my opinion, been delegated to the United States by the Constitution."
One-sixth of the total wealth of the world was represented by the members of
the Jekyll Island Club." Membership was by inheritance only.
"Centralization of credit in the banks of the state, by means of a national
bank with state capital and an exclusive monopoly." -- Fifth plank of the
Communist Manifesto, 1848
Crisis is and has always been very good to government growth. It happens
this way: the central government never accepts any responsibility for
anything gone wrong as it's always some external force, such as Communism,
Drug Wars, Terrorism, etc. Sometimes it is external, as in 9-11, other times
it is internal, as in the case of certain economic upheavals. When the
crisis is mostly economic, the culprit is always the private sector, and the
guilty parties are usually big players who got swept away with avarice. With
a lapdog media clamoring for "reform," politicians pass more laws and flood
the airwaves with rhetoric about how their new legislation will crush the
forces of greed. Most of us then go about our business in rebuilding the
economy bankrolling the next callamity.
In the era following the War of Secession, the federal government
aggressively promoted development of the West through huge subsidies and
other favors to business cronies. Corruption flourished, and overextended
banks occasionally failed, causing panics in 1873, 1884, 1893, and 1907.
Throughout this era there was growing opposition to sound money, eloquently
expressed by railroad speculator Jay Cooke in 1869: "Why," he asked, "should
this Grand and Glorious country be stunted and dwarfed--its activities
chilled and its very life blood curdled by these miserable 'hard coin'
theories--the musty theories of a bygone age."
The Panic of 1907 is especially significant because it led to
government-directed banking "reform." The panic got underway when United
Copper's stock price collapsed. Knickerbocker Trust of New York had invested
heavily in United Copper, and depositors made a run on the bank to get their
money out. When Knickerbocker failed, depositors at other banks got nervous
and demanded their money, igniting the panic.
J. P. Morgan got together with other banking leaders and met virtually
nonstop for three weeks to solve the crisis. They secured credit from
foreign investors, redirected funds from strong banks to weak ones, and
bought stock in foundering but still promising companies. The panic
died a few weeks later.
For the New York bankers, there remained a much more serious problem. The
growth of state banks over the previous 20 years had slowly eroded their
power. By 1896, state and other non-national banks constituted 61% of the
total, and by 1913, 71%. More significantly, non-nationals commanded 57% of
banking resources by 1913.
With such a troubling trend, what did the New York bankers do? They turned
to their pals in Washington. As we've seen, from the time of Lincoln's
administration government sought to partner with business, delivering
special favors in return for political support. This is mercantilism, the
system we rejected in 1776. By the early 20th century, we were neck-deep in
Progressive propaganda, and there was no viable group opposing government
takeover of our lives. The once laissez-faire, sound-money Democratic Party
died with the nomination of William Jennings Bryant for president in 1896.
From that point on, both Republicans and Democrats were promoting more
statism as the miracle cure for ills it had bred. The making of another
Empire of bloodshed and debt.
Both Congress and the American Banking Association had been pushing for
central banking since the 1890s. The Panic of 1907 gave them another excuse
to go after it. Amid all the maneuvering and proposals, Morgan banker Henry
Davison organized a duck hunting trip at Jekyll Island, Georgia in December,
1910. The ducks they took aim at were not the web-footed kind, but the
unsuspecting American citizen who had always thought of money as gold.
The hunters were major players in American mercantilism: Senator Nelson
Aldrich (R., R.I.), who had headed up the National Monetary Commission, a
congressional committee dedicated to developing ideas for central banking;
Frank Vanderlip of Rockefeller's National City Bank; Paul Warburg of the
investment firm of Kuhn, Loeb, & Co., who was there to promote the German
central bank of Bismarck; Charles Norton of First National Bank of New York,
a Morgan company; and Davison, a partner of J.P. Morgan's.
They devised a plan whereby a board of commercial bankers would supervise
regional reserve banks. When Aldrich later introduced it to Congress,
Democrats blocked it. In 1913, Carter Glass, a Democratic congressman from
Virginia, used the Jekyll Island scheme as the basis for the Federal Reserve
The Act created 12 regional reserve banks ruled by a board of Washington
bureaucrats, including the Treasury secretary and presidential appointees.
Though the 12 reserve banks are officially "private" institutions, they're
little different than government agencies, as Murray Rothbard noted.
In this manner government seized what Rothbard called "a crucial command
post" of the economy, and therefore of the American society. It used crisis
-- repeated panics created by government meddling -- and the economic
illiteracy and trust of the public to achieve its purpose.
And what has it sown from its command post? A subtle means of wealth
transfer. A method of taxing us without legislation. A way of counterfeiting
money legally. "Through the purchase of [usually government] debt by a bank,
fiat money is injected into the economy," Gary North writes. "Wealth then
moves to those market participants who gain early access to this newly
created fiat money," who are usually politically connected. The ones on
fixed incomes or without close government connections bear the cost of
higher prices later, as the money injection passes through the economy.
As most people know by now, the Fed greatly reduced reserve requirements
during the 1920s, expanding credit recklessly and generating a false
prosperity that ended in the crash of 1929. People understood that the Fed
was manufacturing dollars out of thin air and started to pull their money
out of banks, converting them to gold. Roosevelt closed the banks, then
announced it was illegal to own gold. He forced people to give back to the
Fed what was rightfully theirs. In 1933 Roosevelt made the dollar fiat
currency domestically, but backed by gold internationally.
Roosevelt also created the Federal Deposit Insurance Corporation (FDIC) in
1933, providing federal guarantee of bank deposits. Bank runs and the threat
thereof have vanished, and most people believe this is good. But as Lew
Rockwell observes, "The government-banking cartel regards the bank run--the
threat of which used to keep wanton investing at bay--as against the
national interest. As a result, the industry is perpetually shaky, and the
largest banks are a menace to public life itself."
Prior to 1929 the government had never intervened to help recovery from a
recession. Previous administrations had let recessions run their course and
recovery, at the hands of the market, usually occurred in a year or less.
Hoover, and then Roosevelt to a much greater degree, took the statist course
and drove the economy into a prolonged depression. For this, Roosevelt has
The Fed is the keystone of government wrong-doing. As Ludwig von Mises wrote
long ago, "Ideologically, [sound money] belongs in same class with political
constitutions and bills of rights." In the name of civil liberty and
civilization itself, the Fed should be abolished.
A few of the World's Richest Bankers holding secret
meetings on Jekyll Island beginning in 1910 to establish the Federal Reserve
(The Central Bank).
Sen. Nelson Aldrich Frank Vanderlip
J.P Morgans sommarställe
Henry P. Davidson & Charles D. Norton. Chief
supporters of the Act.
The participants were no strangers to public
benefactions. Usually, their names were inscribed on brass plaques, or on
the exteriors of buildings which they had donated. This was not the
procedure which they followed at Jekyll Island. No brass plaque was ever
erected to mark the selfless actions of those who met at their private hunt
club in 1910 to improve the lot of every citizen of the United States.
In fact, no benefaction took place at Jekyll Island. The Aldrich group
journeyed there in private to write the banking and currency legislation
which the National Monetary Commission had been ordered to prepare in
public. At stake was the future control of the money and credit of the
United States. If any genuine monetary reform had been prepared and
presented to Congress, it would have ended the power of the elitist one
world money creators. Jekyll Island ensured that a central bank would be
established in the United States which would give these bankers everything
they had always wanted.
As the most technically proficient of those present, Paul Warburg was
charged with doing most of the drafting of the plan. His work would then be
discussed and gone over by the rest of the group. Senator Nelson Aldrich was
there to see that the completed plan would come out in a form which he could
get passed by Congress, and the other bankers were there to include whatever
details would be needed to be certain that they got everything they wanted,
in a finished draft composed during a onetime stay. After they returned to
New York, there could be no second get together to rework their plan. They
could not hope to obtain such secrecy for their work on a second journey.
The Jekyll Island group remained at the club for nine days, working
furiously to complete their task. Despite the common interests of those
present, the work did not proceed without friction. Senator Aldrich, always
a domineering person, considered himself the chosen leader of the group, and
could not help ordering everyone else about. Aldrich also felt somewhat out
of place as the only member who was not a professional banker. He had had
substantial banking interests throughout his career, but only as a person
who profited from his ownership of bank stock. He knew little about the
technical aspects of financial operations. His opposite number, Paul
Warburg, believed that every question raised by the group demanded, not
merely an answer, but a lecture. He rarely lost an opportunity to give the
members a long discourse designed to impress them with the extent of his
knowledge of banking. This was resented by the others, and often drew barbed
remarks from Aldrich. The natural diplomacy of Henry
P. Davison proved to be the catalyst which kept them at their work.
Warburg’s thick alien accent grated on them, and constantly reminded them
that they had to accept his presence if a central bank plan was to be
devised which would guarantee them their future profits. Warburg made little
effort to smooth over their prejudices, and contested them on every possible
occasion on technical banking questions, which he considered his private
The "monetary reform" plan prepared at Jekyll Island was to be presented to
Congress as the completed work of the National Monetary Commission. It was
imperative that the real authors of the bill remain hidden. So great was
popular resentment against bankers since the Panic of 1907 that no
Congressman would dare to vote for a bill bearing the Wall Street taint, no
matter who had contributed to his campaign expenses. The Jekyll Island plan
was a central bank plan, and in this country there was a long tradition of
struggle against inflicting a central bank on the American people. It had
begun with Thomas Jefferson’s fight against Alexander
Hamilton’s scheme for the First Bank of the United States, backed by
James Rothschild. It had continued with President Andrew Jackson’s
successful war against Alexander Hamilton’s scheme for the Second Bank of
the United States, in which
Nicholas Biddle was acting as the agent for
James Rothschild of Paris. The result of that struggle was the creation of
the Independent Sub-Treasury System, which supposedly had served to keep the
funds of the United States out of the hands of the financiers. A study of
the panics of 1873, 1893, and 1907 indicates that these panics were the
result of the international bankers’ operations in London. The public was
demanding in 1908 that Congress enact legislation to prevent the recurrence
of artificially induced money panics. Such monetary reform now seemed
inevitable. It was to head off and control such reform that the National
Monetary Commission had been set up with Nelson
Aldrich at its head, since he was majority leader of the Senate.
The main problem, as Paul Warburg informed his colleagues, was to avoid the
name "Central Bank". For that reason, he had decided upon the designation of
"Federal Reserve System". This would deceive the people into thinking it was
not a central bank. However, the Jekyll Island plan would be a central bank
plan, fulfilling the main functions of a central bank; it would be owned by
private individuals who would profit from ownership of shares. As a bank of
issue, it would control the nation’s money and credit.
In the chapter on Jekyll Island in his biography of Aldrich, Stephenson
writes of the conference:
"How was the Reserve Bank to be controlled? It must be controlled by
Congress." The government was to be represented in the board of directors,
it was to have full knowledge of all the Bank’s, affairs, but a majority of
the directors were to be chosen, directly or indirectly, by the banks of the
Thus the proposed Federal Reserve Bank was to be "controlled by Congress"
and answerable to the government, but the majority of the directors were to
be chosen, "directly or indirectly" by the banks of the association. In the
final refinement of Warburg’s plan, the Federal Reserve Board of Governors
would be appointed by the President of the United States, but the real work
of the Board would be controlled by a Federal Advisory
Council, meeting with the Governors. The Council would be chosen by
the directors of the twelve Federal Reserve Banks, and would remain
unknown to the public.
The next consideration was to conceal the fact that the proposed "Federal
Reserve System" would be dominated by the masters of the New York money
market. The Congressmen from the South and the West could not survive if
they voted for a Wall Street plan. Farmers and small businessmen in those
areas had suffered most from the money panics. There had been great popular
resentment against the Eastern bankers, which during the nineteenth century
became a political movement known as "populism". The private papers of
Nicholas Biddle, not released until more than a century after his death,
show that quite early on the Eastern bankers were fully aware of the
widespread public opposition to them.
Paul Warburg advanced at Jekyll Island the primary deception which would
prevent the citizens from recognizing that his plan set up a central bank.
This was the regional reserve system. He proposed a system of four (later
twelve) branch reserve banks located in different sections of the country.
Few people outside the banking world would realize that the existing
concentration of the nation’s money and credit structure in New York made
the proposal of a regional reserve system a delusion.
Another proposal advanced by Paul Warburg at Jekyll Island was the manner of
selection of administrators for the proposed regional reserve system.
Senator Nelson Aldrich had insisted that the officials should be appointive,
not elected, and that Congress should have no role in their selection. His
Capitol Hill experience had taught him that congressional opinion would
often be inimical to the Wall Street interests, as Congressmen from the West
and South might wish to demonstrate to their constituents that they were
protecting them against the Eastern bankers.
Warburg responded that the administrators of the proposed central banks
should be subject to executive approval by the President. This patent
removal of the system from Congressional control meant that the Federal
Reserve proposal was unconstitutional from its inception, because the
Federal Reserve System was to be a bank of issue. Article 1, Sec. 8, Par. 5
of the Constitution expressly charges Congress with "the power to coin money
and regulate the value thereof." Warburg’s plan would deprive Congress of
its sovereignty, and the systems of checks and balances of power set up by
Thomas Jefferson in the Constitution would now be destroyed. Administrators
of the proposed system would control the nation’s money and credit, and
would themselves be approved by the executive department of the government.
The judicial department (the Supreme Court, etc.) was already virtually
controlled by the executive department through presidential appointment to
Paul Warburg later wrote a massive exposition of his plan, The Federal
Reserve System, Its Origin and Growth7 of some 1750 pages, but the name
"Jekyll Island" appears nowhere in this text. He does state (Vol. 1, p. 58):
"But then the conference closed, after a week of earnest deliberation, the
rough draft of what later became the Aldrich Bill had been agreed upon, and
a plan had been outlined which provided for a ‘National Reserve
Association,’ meaning a central reserve organization with an elastic note
issue based on gold and commercial paper."
On page 60, Warburg writes, "The results of the conference were entirely
confidential. Even the fact there had been a meeting was not permitted to
become public." He adds in a footnote, "Though eighteen [sic] years have
since gone by, I do not feel free to give a description of this most
interesting conference concerning which Senator Aldrich pledged all
participants to secrecy."
B.C. Forbes’ revelation8 of the secret expedition to Jekyll Island, had had
surprisingly little impact. It did not appear in print until two years after
the Federal Reserve Act had been passed by Congress, hence it was never read
during the period when it could have had an effect.
* Theodore Roosevelt
Elisha Ely Garrison, Roosevelt, Wilson and the Federal Reserve Law,
Christopher Publications, Boston, 1931
House’s phrase, "take away the power of a President" is significant, because
later Presidents found themselves helpless to change the direction of the
government because they did not have the power to change the composition of
the Federal Reserve Board to attain a majority on it during that President’s
term of office. Garrison also wrote in this book,
"Paul Warburg is the man who got the Federal
Reserve Act together after the Aldrich Plan aroused such nationwide
resentment and opposition. The mastermind of both plans was
Baron Alfred Rothschild of London."
Colonel Edward Mandell House* was referred to by Rabbi Stephen Wise in his
autobiography, Challenging Years as "the unofficial Secretary of State".
House noted that he and Wilson knew that in passing the
Federal Reserve Act, they had created an
instrument more powerful than the Supreme Court.
The Federal Reserve Board of Governors actually comprised a Supreme Court of
Finance, and there was no appeal from any of their rulings.
In 1911, prior to Wilson’s taking office as President, House had returned to
his home in Texas and completed a book called Philip Dru, Administrator.
Ostensibly a novel, it was actually a detailed plan for the future
government of the United States, "which would establish Socialism as dreamed
by Karl Marx", according to House. This "novel" predicted the enactment of
the graduated income tax, excess profits tax, unemployment insurance, social
security, and a flexible currency system. In short, it was the blueprint
which was later followed by the Woodrow Wilson and Franklin D. Roosevelt
administrations. It was published "anonymously" by B. W. Huebsch of New
York, and widely circulated among government officials, who were left in no
doubt as to its authorship. George Sylvester Viereck**, who knew House for
years, later wrote an account of the Wilson-House relationship, The
Strangest Friendship in History.14 In 1955, Westbrook Pegler, the Hearst
columnist from 1932 to 1956, heard of the Philip Dru book and called Viereck
to ask if he had a copy. Viereck sent Pegler his copy of the book, and
Pegler wrote a column about it, stating:
"One of the institutions outlined in Philip Dru is the Federal Reserve
System. The Schiffs, the
Kahns, the Rockefellers
Morgans put their faith in House. The Schiff,
Warburg, Rockefeller and Morgan interests were personally represented in the
mysterious conference at
Jekyll Island. Frankfurter landed on the
Harvard law faculty, thanks to a financial contribution to Harvard by Felix
Warburg and Paul Warburg, and so we got Alger and Donald Hiss, Lee Pressman,
Harry Dexter White and many other protégés of Little Weenie."*
* See House note in "Biographies"
** See Viereck note in "Biographies"
George Sylvester Viereck, The Strangest Friendship in History, Woodrow
Wilson and Col. House, Liveright, New York, 1932
House’s openly Socialistic views were forthrightly expressed in Philip Dru,
Administrator; on pages 57-58, House wrote:
"In a direct and forceful manner, he pointed out that our civilization was
fundamentally wrong, inasmuch, among other things, as it restricted
efficiency; that if society were properly organized, there would be none who
were not sufficiently clothed and fed. The result, that the laws, habits and
ethical training in vogue were alike responsible for the inequalities in
opportunity and the consequent wide difference between the few and the many;
that the results of such conditions was to render inefficient a large part
of the population, the percentage differing in each country in the ratio
that education and enlightenment and unselfish laws bore to ignorance,
bigotry and selfish laws."15
In his book, House (Dru) envisions himself becoming a dictator and forcing
on the people his radical views, page 148: "They recognized the fact that
Dru dominated the situation and that a master mind had at last risen in the
Republic." He now assumes the title of General. "General Dru announced his
purpose of assuming the powers of a dictator . . . they were assured that he
was free from any personal ambition . . . he proclaimed himself
‘Administrator of the Republic.’"*
This pensive dreamer who imagined himself a dictator actually managed to
place himself in the position of the confidential advisor to the President
of the United States, and then to have many of his desires enacted into law!
On page 227, he lists some of the laws he wishes to enact as dictator. Among
them are an old age pension law, laborers insurance compensation,
cooperative markets, a federal reserve banking system, cooperative loans,
national employment bureaus, and other "social legislation", some of which
was enacted during Wilson’s administration, and others during the Franklin
D. Roosevelt’s administration. The latter was actually a continuation of the
* The present writer was with Viereck in his suite at the Hotel Belleclaire
when Pegler called and asked for the book. Viereck sent it over by his
secretary. He grinned and said Pegler seemed very excited. "He ought to get
a good column out of that," Viereck told me. Indeed Pegler did get a good
column out of it. Unfortunately for him, he had gone too far in mentioning
the Warburgs. As long as he confined his attacks to La Grand Bouche (Eleanor
Roosevelt), and her spouse, he had been permitted to continue, but now that
he had exposed the Warburg connection with the Communist spy ring in
Washington, his column was immediately dropped by the big city dailies, and
Pegler’s long run was over.
Col. Edward M. House, Philip Dru, Administrator, B. W. Heubsch, New York,
* This quotation from Philip Dru, Administrator, written by Col. House in
1912, is included here to show his totalitarian Marxist philosophy. House
was to become for 8 years with Wilson, the President’s closest advisor.
Later he continued his influence in the Franklin D. Roosevelt
administration. From his home in Magnolia, Mass., House advised FDR through
frequent trips of Felix Frankfurter to the White House. Frankfurter was
later appointed to the Supreme Court by F.D.R. with many of the same
personnel, and with House guiding the administration from behind the scenes.
Like most of the behind-the-scenes operators in this book, Col. Edward
Mandell House had the obligatory "London connection". Originally a Dutch
family, "Huis", his ancestors had lived in England for three hundred years,
after which his father settled in Texas, where he made a fortune in
blockade-running during the Civil War, shipping cotton and other contraband
to his British connections, including the Rothschilds, and bringing back
supplies for the beleaguered Texans. The senior House, not trusting the
volatile Texas situation, prudently deposited all his profits from his
blockade-running in gold with Baring banking house in London*. At the close
of the Civil War, he was one of the wealthiest men in Texas. He named his
son "Mandell" after one of his merchant associates. According to Arthur
Howden Smith, when House’s father died in 1880, his estate was distributed
among his sons as follows: Thomas William got the banking business; John,
the sugar plantation; and Edward M. the cotton plantations, which brought
him an income of $20,000 a year.
At the age of twelve, the young Edward Mandell House had brain fever, and
was later further crippled by sunstroke. He was a semi-invalid, and his
ailments gave him an odd Oriental appearance. He never entered any
profession, but used his father’s money to become the kingmaker of Texas
politics, successively electing five governors from 1893 to 1911. In 1911 he
began to support Wilson for president, and threw the crucial Texas
delegation to him which ensured his nomination. House met Wilson for the
first time at the Hotel Gotham, May 31, 1912.
In The Strangest Friendship In History, Woodrow Wilson
and Col. House, by George Sylvester Viereck, Viereck writes:
"What," I asked House, "cemented your friendship?" "The identity of our
temperaments and our public policies," answered House. "What was your
purpose and his?" "To translate into legislation certain liberal and
House told Viereck that when he went to Wilson at the White House.
* Dope, Inc., identifies Barings as follows: "Baring Brothers, the premier
merchant bank of the opium trade from 1783 to
the present day, also maintained close contact with the Boston families . .
. The group’s leading banker became, at the close of the 19th century, the
House of Morgan--which also took its cut in Eastern opium traffic . . .
Morgan’s Far Eastern operations were the officially conducted British opium
traffic . . . Morgan’s case deserves special scrutiny from American police
and regulatory agencies, for the intimate associations of Morgan Guaranty
Trust with the identified leadership of the British dope banks."
Arthur Howden Smith, The Real Col. House, Doran Company, New York, 1918
George Sylvester Viereck, The Strangest Friendship in History, Woodrow
Wilson and Col. House, Liveright, New York, 1932
House, he handed him $35,000. This was exceeded only by the $50,000 which
Bernard Baruch had given Wilson.
The successful enactment of House’s programs did not escape the notice of
other Wilson associates. In Vol. 1, page 157 of The Intimate Papers of Col.
House, House notes, "Cabinet members like Mr. Lane and Mr. Bryan commented
upon the influence of Dru with the President. ‘All that the book has said
should be,’ wrote Lane, ‘comes about. The President comes to ‘Philip Dru’ in
House recorded some of his efforts on behalf of the Federal Reserve Act in
The Intimate Papers of Col. House,
"December 19, 1912. I talked with Paul Warburg over the phone concerning
currency reform. I told of my trip to Washington and what I had done there
to get it in working order. I told him that the Senate and the Congressmen
seemed anxious to do what he desired, and that President-elect Wilson
thought straight concerning the issue."19
Thus we have Warburg’s agent in Washington, Col. House, assuring him that
the Senate and Congressmen will do what he desires, and that the
President-elect "thought straight concerning the issue." In this context,
representative government seems to have ceased to exist. House continues in
"March 13, 1913. Warburg and I had an intimate discussion concerning
"March 27, 1913. Mr. J.P. Morgan, Jr. and Mr. Denny of his firm came
promptly at five.
McAdoo came about ten minutes afterward. Morgan had a currency plan already
printed. I suggested he have it typewritten, so it would not seem too
prearranged, and send it to Wilson and myself today.
July 23, 1913. I tried to show Mayor Quincy (of Boston) the folly of the
Eastern bankers taking an antagonistic attitude towards the Currency Bill. I
explained to Major Henry Higginson* with what care the bill had been framed.
Just before he arrived, I had finished a review by Professor Sprague of
Harvard of Paul Warburg’s criticism of the Glass-Owen Bill, and will
transmit it to Washington tomorrow. Every banker known to Warburg, who knows
the subject practically, has been called up about the making of the bill.
October 13, 1913. Paul Warburg was my first caller today. He came to discuss
the currency measure. There are many features of the Owen-Glass Bill that he
does not approve. I promised to put him in touch with McAdoo and Senator
Owen so that he might discuss it with them.
November 17, 1913. Paul Warburg telephoned about his trip to Washington.
Later, he and Mr. Jacob Schiff came over for a few minutes.
Col. Edward Mandell House, The Intimate Papers of Col.
House, edited by Charles Seymour, Houghton Mifflin Co., 1926-28.
* The most prominent banker in Boston.
Col. House, who President Wilson called his "alter ego," because he was his
closest friend and most trusted advisor, anonymously wrote a novel in 1912
called Philip Dru: Administrator, which revealed the manner in which Wilson
was controlled. House, who lobbied for the implementation of central
banking, would now turn his attention towards a graduated income tax.
Incidentally, a central bank providing inflatable currency and a graduated
income tax were two of the ten points in the Communist Manifesto for
socializing a country.
It was House who hand-picked the first Federal Reserve Board. He named
Benjamin Strong as its first Chairman. In 1914, Paul M. Warburg quit his
$500,000 a year job at Kuhn, Loeb and Co. to be on the Board, later
resigning in 1918 during World War I because of his German connections.
The Banking Act of 1935 amended the Federal
Reserve Act, changing its name to the Federal Reserve System, and
reorganizing it in respect to the number of directors and length of term.
Headed by a seven member Board of Governors appointed by the President and
confirmed by the Senate for a 14 year term, the Board acts as an overseer to
the nation's money supply and banking system.
The Board of Governors, the President of the Federal
Reserve Bank of New York, and four other Reserve Bank Presidents who serve
on a rotating basis make up the "Federal Open Market Committee". This group
decides whether or not to buy and sell government securities on the open
market. The Government buys and sells government securities, mostly through
21 Wall Street bond dealers, to create reserves to make the money needed to
run the government. The Committee also determines the supply of money
available to the nation's banks and consumers.
There are twelve Federal Reserve Banks in twelve
districts: Boston (MA), Cleveland (OH), New York (NY), Philadelphia (PA),
Richmond (VA), Atlanta (GA), Chicago (IL), St. Louis (MO), Minneapolis (MN),
Kansas City (KS), San Francisco (CA), and Dallas (TX). The twelve regional
banks were set up so that the people wouldn't think that the Federal Reserve
was controlled from New York. Each of the Banks has nine men on [its] Board
of Directors; six are elected by member Banks, and three are appointed by
the Board of Governors.
They also have 25 branch Banks, and many member Banks. All Federal Banks are
members and four out of every ten commercial banks are members. In whole,
the Federal Reserve System controls about 70% of the
country's bank deposits. Ohio
Senator, Warren G. Harding, who was elected to
the Presidency in 1920, said in a 1921 Congressional inquiry that the
Reserve was a private banking monopoly. He said: "The Federal Reserve Bank
is an institution owned by the stockholding member banks. The Government has
not a dollar's worth of stock in it." His term was cut short in 1923 when he
mysteriously died, leading to rumors that he was poisoned. This claim was
never substantiated because his wife would not allow an autopsy.
Three years after the initiation of the Federal Reserve, Woodrow Wilson
said: "The growth of the nation ... and all our activities are in the hands
of a few men ... We have come to be one of the worst ruled; one of the most
completely controlled and dominated governments in the civilized world ...
no longer a government of free opinion, no longer a government by conviction
and the free vote of the majority, but a government by the opinion and
duress of a small group of dominant men."
In 1919, John Maynard Keynes, later an advisor to
Franklin D. Roosevelt, wrote in his book The Economic Consequences of
Peace: "Lenin is to have declared that the best way to
destroy the capitalist system was to debauch the currency ... By a
continuing process of inflation, governments can confiscate secretly and
unobserved, an important part of the wealth of their citizens ... As the
inflation proceeds and the real value of the currency fluctuates wildly from
month to month, all permanent relations between debtors and creditors, which
form the ultimate foundation of capitalism, become so utterly disordered as
to be almost meaningless..."
Jekyll Island Meetings; Warburg did most of the talking in the secret
meetings. He had a new suggestion in regard to grouping the regular reserve
banks so as to get the units welded together and in easier touch with the
Federal Reserve Board."
George Sylvester Viereck in The Strangest Friendship in History;
Woodrow Wilson and Col. House wrote: "The Schiffs, the
Warburgs, the Kahns, the Rockefellers, the Morgans put their faith in House.
When the Federal Reserve legislation at last assumed definite shape, House
was the intermediary between the White House and the financiers." On page
45, Viereck notes, "Col. House looks upon the reform of the monetary system
as the crowning internal achievement of the Wilson Administration."
The Glass Bill (the House version of the final Federal Reserve Act) had
passed the House on September 18, 1913 by 287 to 85. On December 19, 1913,
the Senate passed their version by a vote of 54-34. More than forty
important differences in the House and Senate versions remained to be
settled, and the opponents of the bill in both houses of Congress were led
to believe that many weeks would yet elapse before the Conference bill would
be ready for consideration. The Congressmen prepared to leave Washington for
the annual Christmas recess, assured that the Conference bill would not be
brought up until the following year. Now the money creators prepared and
executed the most brilliant stroke of their plan. In a single day, they
ironed out all forty of the disputed passages in the bill and quickly
brought it to a vote. On Monday, December 22, 1913, the bill was passed by
the House 282-60 and the Senate 43-23.
On December 21, 1913, The New York Times commented editorially on the act,
"New York will be on a firmer basis of financial growth, and we shall soon
see her the money centre of the world."
The New York Times reported on the front page, Monday, December 22, 1913 in
headlines: MONEY BILL MAY BE LAW TODAY--CONFEREES HAD ADJUSTED NEARLY ALL
DIFFERENCES AT 1:30 THIS MORNING--NO DEPOSIT GUARANTEES--SENATE YIELDS ON
THIS POINT BUT PUTS THROUGH MANY OTHER CHANGES "With almost unprecedented
speed, the conference to adjust the House and Senate differences on the
Currency Bill practically completed its labours early this morning. On
Saturday the Conferees did little more than dispose of the preliminaries,
leaving forty essential differences to be thrashed out Sunday. . . . No
other legislation of importance will be taken up in either House of Congress
this week. Members of both houses are already preparing to leave
"Unprecedented speed", says The New York Times. One sees the fine hand of
Paul Warburg in this final strategy. Some of the bill’s most vocal critics
had already left Washington. It was a long-standing political courtesy that
important legislation would not be acted upon during the week before
Christmas, but this tradition was rudely shattered in order to perpetrate
the Federal Reserve Act on the American people.
The Times buried a brief quote from Congressman Lindbergh that "the bill
would establish the most gigantic trust on earth," and quoted Representative
Guernsey of Maine, a Republican on the House Banking and Currency Committee,
that "This is an inflation bill, the only question being the extent of the
Congressman Lindbergh said on that historic day, to the House:
"This Act establishes the most gigantic trust on earth. When the President
signs this bill, the invisible government by the Monetary Power will be
legalized. The people may not know it immediately, but the day of reckoning
is only a few years removed. The trusts will soon realize that they have
gone too far even for their own good. The people must make a declaration of
independence to relieve themselves from the Monetary Power. This they will
be able to do by taking control of Congress. Wall Streeters could not cheat
us if you Senators and Representatives did not make a humbug of Congress. .
. . If we had a people’s Congress, there would be stability.
The greatest crime of Congress is its currency system.
The worst legislative crime of the ages is perpetrated by this banking bill.
The caucus and the party bosses have again operated and prevented the people
from getting the benefit of their own government."
The December 23, 1913 New York Times editorially commented, in contrast to
Congressman Lindbergh’s criticism of the bill, "The Banking and Currency
Bill became better and sounder every time it was sent from one end of the
Capitol to the other. Congress worked under public supervision in making the
By "public supervision" The Times apparently meant Paul Warburg, who for
several days had maintained a small office in the Capitol building, where he
directed the successful pre-Christmas campaign to pass the bill, and where
Senators and Congressmen came hourly at his bidding to carry out his
The "unprecedented speed" with which the Federal
Reserve Act had been passed by Congress during what became known as "the
Christmas massacre" had one unforeseen aspect. Woodrow Wilson was taken
unaware, as he, like many others, had been assured the bill would not come
up for a vote until after Christmas. Now he refused to sign it, because he
objected to the provisions for the selection of Class B. Directors. William
L. White relates in his biography of Bernard Baruch that Baruch, a principal
contributor to Wilson’s campaign fund, was stunned when he was informed that
Wilson refused to sign the bill. He hurried to the White House and assured
Wilson that this was a minor matter, which could be fixed up later through
"administrative processes". The important thing was to get the Federal
Reserve Act signed into law at once. With this reassurance, Wilson signed
the Federal Reserve Act on December 23, 1913. History proved that on that
day, the Constitution ceased to be the governing covenant of the American
people, and our liberties were handed over to a small group of international
The December 24, 1913 New York Times carried a front page headline "WILSON
SIGNS THE CURRENCY BILL!" Below it, also in capital letters, were two
further headlines, "PROSPERITY TO BE FREE" and "WILL HELP EVERY CLASS". Who
could object to any law which provided benefits to everyone? The Times
described the festive atmosphere while Wilson’s family and government
officials watched him sign the bill. "The Christmas spirit pervaded the
gathering," exulted The Times.
In his biography of Carter Glass, Rixey Smith states that those present at
the signing of the bill included Vice President Marshall, Secretary Bryan,
Carter Glass, Senator Owen, Secretary McAdoo, Speaker Champ Clark, and other
Treasury officials. None of the real writers of the bill, the draftees of
Jekyll Island, were present. They had prudently absented themselves from the
scene of their victory. Rixey Smith also wrote, "It was as though Christmas
had come two days early." On December 24, 1913, Jacob Schiff wrote to Col.
"My dear Col. House. I want to say a word to you for the silent, but no
doubt effective work you have done in the interest of currency legislation
and to congratulate you that the measure has finally been enacted into law.
I am with good wishes, faithfully yours, JACOB SCHIFF."
Representative Moore of Kansas, in commenting on the passage of the Act,
said to the House of Representatives:
"The President of the United States now becomes the absolute dictator of all
the finances of the country. He appoints a controlling board of seven men,
all of whom belong to his political party, even though it is a minority. The
Secretary of the Treasury is to rule supreme whenever there is a difference
of opinion between himself and the Federal Reserve Board. AND, only one
member of the Board is to pass out of office while the President is in
The ten year terms of office of the members of the Board were lengthened by
the Banking Act of 1935 to fourteen years, which meant that these directors
of the nation’s finances, although not elected by the people, held office
longer than three presidents.
While Col. House, Jacob Schiff and Paul Warburg basked in the glow of a job
well done, the other actors in this drama were subject to later
afterthoughts. Woodrow Wilson wrote in 1916, National Economy and the
Banking System, Sen. Doc. No. 3, No. 223, 76th Congress, 1st session, 1939:
"Our system of credit is concentrated (in the Federal Reserve System). The
growth of the nation, therefore, and all our activities, are in the hands of
a few men."
When he was asked by Clarence W. Barron whether he approved of the bill as
it was finally passed. Warburg remarked, "Well, it hasn’t got quite
everything we want, but the lack can be adjusted later by administrative
Woodrow Wilson and Carter Glass are given credit for the Act by most
contemporary historians, but of all those concerned, Wilson had least to do
with Congressional action on the bill. George Creel, a veteran Washington
correspondent, wrote in Harper’s Weekly, June 26, 1915:
"As far as the Democratic Party was concerned, Woodrow Wilson was without
influence, save for the patronage he possessed. It was Bryan who whipped
Congress into line on the tariff bill, on the Panama Canal tolls repeal, and
on the currency bill." Mr. Bryan later wrote, "That is the one thing in my
public career that I regret--my work to secure the enactment of the Federal
On December 25, 1913, The Nation pointed out that "The New York Stock Market
began to rise steadily upon news that the Senate was ready to pass the
Federal Reserve Act."
This belies the claim that the Federal Reserve Act was a monetary reform
bill. The New York Stock Exchange is generally considered an accurate
barometer of the true meaning of any financial legislation passed in
Washington. Senator Aldrich also decided that he no longer had misgivings
about the Federal Reserve Act. In a magazine which he owned, and which he
called The Independent, he wrote in July, 1914: "Before the passage of this
Act, the New York bankers could only dominate the reserves of New York. Now
we are able to dominate the bank reserves of the entire country."
H.W. Loucks denounced the Federal Reserve Act in The Great Conspiracy of the
House of Morgan,
"In the Federal Reserve Law, they have wrested from the people and secured
for themselves the constitutional power to issue money and regulate the
value thereof." On page 31, Loucks writes,
"The House of Morgan is now in supreme control of our industry, commerce and
political affairs. They are in complete control of the policy making of the
Democratic, Republican and Progressive parties. The present extraordinary
propaganda for ‘preparedness’ is planned more for home coercion than for
defense against foreign aggression."
The signing of the Federal Reserve Act by Woodrow Wilson represented the
culmination of years of collusion with his intimate friend, Col. House, and
Paul Warburg. One of the men with whom House became acquainted in the Wilson
Administration was Franklin D.
H.W. Loucks, The Great Conspiracy of the House of Morgan, Privately printed,
Roosevelt, Assistant Secretary of Navy. As soon as he obtained the
Democratic nomination for President, in 1932, Franklin D. Roosevelt made a
"pilgrimage" to Col. House’s home at Magnolia, Mass. Roosevelt, after the
Republican hiatus of the 1920s, filled in the goals of Philip Dru,
Administrator, which Wilson had not been able to carry out. The late
Roosevelt achievements included the enactment of the social security
program, excess profits tax, and the expansion of the graduated income tax
to 90% of earned income.
House’s biographer, Charles Seymour, wrote: "He was wearied by the details
of party politics and appointments. Even the share he had taken in
constructive domestic legislation (the Federal Reserve Act, tariff revision,
and the Income Tax amendment) did not satisfy him. From the beginning of
1914 he gave more and more of his time to what he regarded as the highest
form of politics and that for which he was particularly
In 1938, shortly before he died, House told Charles Seymour, "During the
last fifteen years I have been close to the center of things, although few
people suspect it. No important foreigner has come to the United States
without talking to me. I was close to the movement that nominated Roosevelt.
He has given me a free hand in advising him. All the Ambassadors have
reported to me frequently."
A comparative print of the Federal Reserve Act of 1913 as passed by the
House of Representatives and amended by the Senate shows the following
The Senate struck out, "To suspend the officials of Federal Reserve banks
for cause, stated in writing with opportunity of hearing, require the
removal of said official for in-competency, dereliction of duty, fraud or
deceit, such removal to be subject to approval by the President of the
United States." This was changed by the Senate to read "To suspend or remove
any officer or director of any Federal Reserve Bank, the cause of such
removal to be forthwith communicated in writing by the Federal Reserve Board
to the removed officer or director and to said bank." This completely
altered the conditions under which an officer or director might be removed.
We no longer know what the conditions for removal are, or the cause.
Apparently in-competency, dereliction of duty, fraud or deceit do not matter
to the Federal Reserve Board. Also, the removed officer does not have the
opportunity of appeal to the President. In answer to written inquiry, the
Assistant Secretary of the Federal Reserve Board replied that only one
officer has been removed "for cause" in the thirty-six years, the name and
details of this matter being a "private concern" between the individual, the
Reserve Bank concerned, and the Federal Reserve Board.
E.M. House, Philip Dru, Administrator, B. W. Heubsch, N.Y., 1912
Col. E.M. House, The Intimate Papers of Col. House, 4 v. 1926-1928, Houghton
The Federal Reserve System began its operations in 1914 with the activity of
the Organization Committee, appointed by Woodrow Wilson, and composed of
Secretary of the Treasury William McAdoo, who was his son-in-law, Secretary
of Agriculture Houston and Comptroller of the Currency John Skelton
On January 6, 1914. J.P. Morgan met with the Organizing Committee in New
York. He informed them that there should not be more than seven regional
districts in the new system.
This committee was to select the locations of the "decentralized" reserve
banks. They were empowered to select from eight to twelve reserve banks,
although J.P. Morgan had testified he thought that not more than four should
be selected. Much politicking went into the selection of these sites, as the
twelve cities thus favored would become enormously important as centers of
finance. New York, of course, was a foregone conclusion. Richmond was the
next selection, as a payoff to Carter Glass and Woodrow Wilson, the two
Virginians who had been given political credit for the Federal Reserve Act.
The other selections of the Committee were Boston, Philadelphia, Cleveland,
Chicago, St. Louis, Atlanta, Dallas, Minneapolis, Kansas City, and San
Francisco. All of these cities later developed important "financial
districts" as the result of this selection.
These local battles, however, paled in view of the complete dominance of the
Federal Reserve bank of New York in the system. Ferdinand Lundberg pointed
out, in America’s Sixty Families, that, "In practice, the Federal Reserve
Bank of New York became the fountainhead of the system of twelve regional
banks, for New York was the money market of the nation. The other eleven
banks were so many expensive mausoleums erected to salve the local pride and
quell the Jacksonian fears of the hinterland. Benjamin Strong, president of
the Bankers Trust (J.P. Morgan) was selected as the first Governor of the
New York Federal Reserve Bank. Adept in high finance, Strong for many years
manipulated the country’s monetary system at the discretion of directors
representing the leading New York banks. Under Strong, the Reserve System
was brought into interlocking relations with the Bank of England and the
Bank of France. Benjamin Strong held his position as Governor of the Federal
Reserve Bank of New York until his sudden death in 1928, during a
Congressional investigation of the secret meetings between Reserve Governors
and heads of European central banks which brought on the Great Depression of
Strong had married the daughter of the President of Bankers Trust, which
brought him into the line of succession in the dynastic intrigues which play
such an important role in the world of high finance. He also had been a
member of the original Jekyll Island group, the First Name Club, and was
thus qualified for the highest position in the Federal Reserve System, as
the Governor of the Federal Reserve Bank of New York which dominated the
Paul Warburg also is mentioned in J. Laurence Laughlin’s definitive volume,
The Federal Reserve Act, Its Origins and Purposes,
"Mr. Paul Warburg of Kuhn, Loeb Company offered in March, 1910 a fairly well
thought out plan to be known as the United Reserve Bank of the United
States. This was published in The New York Times of March 24, 1910. The
group interested in the purposes of the National Monetary Commission met
secretly at Jekyll Island for about two weeks in December, 1910, and
concentrated on the preparation of a bill to be presented to Congress by the
National Monetary Commission. The men who were present at Jekyll Island were
Senator Aldrich, H. P. Davison of J.P. Morgan Company, Paul Warburg of Kuhn,
Loeb Company, Frank Vanderlip of the National City Bank, and Charles D.
Norton of the First National Bank. No doubt the ablest banking mind in the
group was that of Mr. Warburg, who had had a European banking training.
Senator Aldrich had no special training in banking."
A mention of Paul Warburg, written by Harold Kelloch, and titled, "Warburg
the Revolutionist" appeared in the Century Magazine, May, 1915. Kelloch
"He imposed his ideas on a nation of a hundred million people . . . Without
Mr. Warburg there would have been no Federal Reserve Act. The banking house
of Warburg and Warburg in Hamburg has always been strictly a family
business. None but a Warburg has been eligible for it, but all Warburgs have
been born into it. In 1895 he married the daughter of the late Solomon Loeb
of Kuhn Loeb Company. He became a member of Kuhn Loeb Company in 1902. Mr.
Warburg’s salary from his private business has been approximately a half
million a year. Mr. Warburg’s motives had been purely those of patriotic
The true purposes of the Federal Reserve Act soon began to disillusion many
who had at first believed in its claims. W. H. Allen wrote in Moody’s
"The purpose of the Federal Reserve Act was to prevent concentration of
money in the New York banks by making it profitable for country bankers to
use their funds at home, but the movement of currency shows that the New
York banks gained from the interior in every month except December, 1915,
since the Act went into effect. The stabilization of rates has taken place
in New York alone. In other parts, high rates continue. The Act, which was
to deprive Wall Street of its funds for speculation, has really given the
bulls and the bears such a supply as they have never had before. The truth
is that far from having clogged the channel to Wall Street, as Mr. Glass so
confidently boasted, it actually widened the old channels and opened up two
new ones. The first of these leads directly to Washington and gives Wall
Street a string on all the surplus cash in the United States Treasury.
Besides, in the power to issue bank-note currency, it furnishes an
inexhaustible supply of credit money; the second channel leads to the great
central banks of Europe, whereby, through the sale of acceptances, virtually
guaranteed by the United States Government, Wall Street is granted immunity
from foreign demands for gold which have precipitated every great crisis in
Dividing the Shares
For many years, there has been considerable mystery about who actually owns
the stock of the Federal Reserve Banks. Congressman Wright Patman, leading
critic of the System, tried to find out who the stockholders were. The stock
in the original twelve regional Federal Reserve Banks was purchased by
national banks in those twelve regions. Because the Federal Reserve Bank of
New York was to set the interest rates and direct open market operations,
thus controlling the daily supply and price of money throughout the United
States, it is the stockholders of that bank who are the real directors of
the entire system. For the first time, it can be revealed who those
stockholders are. This writer has the original organization certificates of
the twelve Federal Reserve Banks, giving the ownership of shares by the
national banks in each district. The Federal Reserve Bank of New York issued
203,053 shares, and, as filed with the Comptroller of the Currency May 19,
1914, the large New York City banks took more than half of the outstanding
shares. The Rockefeller Kuhn, Loeb-controlled National
City Bank took the largest number of shares of any bank, 30,000
shares. J.P. Morgan’s First National Bank took
15,000 shares. When these two banks merged in 1955, they owned in one block
almost one fourth of the shares in the Federal Reserve Bank of New York,
which controlled the entire system, and thus they could name
Paul Volcker or anyone else they chose to be Chairman of the Federal
Reserve Board of Governors. Chase National Bank took 6,000 shares. The
Marine Nation Bank of Buffalo, later known as Marine Midland, took 6,000
shares. This bank was owned by the Schoellkopf family, which controlled
Niagara Power Company and other large
interests. National Bank of Commerce of New York City took 21,000 shares.
The shareholders of these banks which own the stock of the Federal Reserve
Bank of New York are the people who have controlled our political and
economic destinies since 1914. They are the Rothschilds, of Europe, Lazard
Freres (Eugene Meyer), Kuhn Loeb Company, Warburg Company, Lehman Brothers,
Goldman Sachs, the Rockefeller family, and the J.P. Morgan interests. These
interests have merged and consolidated in recent years, so that the control
is much more concentrated. National Bank of Commerce is now Morgan Guaranty
Trust Company. Lehman Brothers has merged with Kuhn, Loeb Company, First
National Bank has merged with the National City Bank, and in the other
eleven Federal Reserve Districts, these same shareholders indirectly own or
control shares in those banks, with the other shares owned by the leading
families in those areas who own or control the principal industries in these
regions.* The "local" families set up regional councils, on orders from New
York, of such groups as the Council on Foreign Relations, The Trilateral
Commission, and other instruments of control devised by their masters. They
finance and control political developments in their area, name candidates,
and are seldom successfully opposed in their plans.
With the setting up of the twelve "financial
districts" through the Federal Reserve Banks, the traditional division of
the United States into the forty-eight states was overthrown, and we entered
the era of "regionalism", or twelve regions which had no relation to the
traditional state boundaries.
These developments following the passing of the Federal Reserve Act proved
every one of the allegations Thomas Jefferson had made against a central
bank in 1791: that the subscribers to the Federal Reserve Bank stock had
formed a corporation, whose stock could be and was held by aliens; that this
stock would be transmitted to a certain line of successors; that it would be
placed beyond forfeiture and escheat; that they would receive a monopoly of
banking, which was against the laws of monopoly; and that they now had the
power to make laws, paramount to the laws of the states. No state
legislature can countermand any of the laws laid down by the Federal Reserve
Board of Governors for the benefit of their private stockholders. This board
issues laws as to what the interest rate shall be, what the quantity of
money shall be and what the price of money shall be. All of these powers
abrogate the powers of the state legislatures and their responsibility to
the citizens of those states.
The New York Times stated that the Federal Reserve
Banks would be ready for business on August 1, 1914, but they actually began
operations on November 16, 1914. At that time, their total assets were
listed at $143,000,000, from the sale of shares in the Federal Reserve Banks
to stockholders of the national banks which subscribed to it.
The actual part of this $143,000,000 which was paid in
for these shares remains shrouded in mystery. Some historians believe that
the shareholders only paid about half of the amount in cash; others believe
that they paid in no cash at all, but merely sent in checks which they drew
on the national banks which they owned. This seems most likely, that from
the very outset, the Federal Reserve operations were "paper issued against
paper", that bookkeeping entries comprised the only values which changed
The men whom President Woodrow Wilson chose to make up the first Federal
Reserve Board of Governors were men drawn from the banking group. He had
been nominated for the Presidency by the Democratic Party, which had claimed
to represent the "common man" against the "vested interests". According to
Wilson himself, he was allowed to choose only one man for the Federal
Reserve Board. The others were chosen by the New York bankers. Wilson’s
choice was Thomas D. Jones, a trustee of Princeton and director of
International Harvester and other corporations. The other members were
Adolph C. Miller, economist from Rockefeller’s University of Chicago and
Morgan’s Harvard University, and also serving as Assistant Secretary of the
Interior; Charles S. Hamlin, who had served previously as an Assistant
Secretary to the Treasury for eight years; F.A. Delano, a Roosevelt
relative, and railroad operator who took over a number of railroads for
Kuhn, Loeb Company, W.P.G. Harding, President of the First National Bank of
Atlanta; and Paul Warburg of Kuhn, Loeb Company. According to The Intimate
Papers of Col. House, Warburg was appointed because "The President accepted
(House’s) suggestion of Paul Warburg of New York because of his interest and
experience in currency problems under both Republican and Democratic
Administrations."27 Like Warburg, Delano had also been born outside the
continental limits of the United States, although he was an American
citizen. Delano’s father, Warren Delano, according to Dr. Josephson and
other authorities, was active in Hong Kong in the Chinese opium trade, and
Frederick Delano was born in Hong Kong in 1863.
In The Money Power of Europe, Paul Emden writes that "The Warburgs reached
their outstanding eminence during the last twenty years of the past century,
simultaneously with the growth of Kuhn, Loeb Company in New York, with whom
they stood in a personal union and family relationship. Paul Warburg with
magnificent success carried through in 1913 the reorganization of the
American banking system, at which he had with Senator Aldrich been working
since 1911, and thus most thoroughly consolidated the currency and finances
of the United States.
The New York Times* had noted on May 6, 1914 that Paul
Warburg had "retired" from Kuhn, Loeb Company in order to serve on the
Federal Reserve Board, although he had not resigned his directorships of
American Surety Company, Baltimore and Ohio Railroad, National Railways of
Mexico, Wells Fargo, or Westinghouse Electric Corporation, but would
continue to serve on these boards of directors. "Who’s Who" listed
him as holding these directorships and in addition,
American I.G. Chemical Company (branch of I.G. Farben), Agfa
Ansco Corporation, Westinghouse Acceptance Company, Warburg Company of
Amsterdam, chairman of the Board of
International Acceptance Bank, and numerous other banks, railways and
corporations. "Kuhn Loeb & Co. with Warburg
have four votes or the majority of the Federal Reserve
Despite his retirement from Kuhn, Loeb Company in May of 1914 to serve on
the Federal Reserve Board of Governors, Warburg
was asked to appear before a
Senate Subcommittee in June of 1914 and answer
some questions about his behind-the-scenes role in getting the Federal
Reserve Act through Congress. This might have meant some questions about the
secret conference in Jekyll Island, and Warburg
refused to appear. On July 7, 1914 he wrote a letter to G.M.
Hitchcock, Chairman of the Senate Banking and Currency Committee, stating
that it might impair his usefulness on the Board if he were required to
answer any questions, and that he would therefore withdraw his name. It
seemed that Warburg was prepared to bluff the Senate Committee into
confirming him without any questions asked. On July 10, 1914,
The New York Times defended Warburg on the
editorial page and denounced the "Senatorial Inquisition". Since Warburg had
not yet been asked any questions, the term "Inquisition" seemed remarkably
inappropriate, nor was there any real danger that the Senators were
preparing to use instruments of torture on Mr. Warburg. The imbroglio was
resolved when the Senate Committee, in abject surrender, agreed that Mr.
Warburg would be given a list of questions in advance of his appearance so
that he could go over them, and that he could be excused from answering any
questions which might tend to impair his service on the Board of Governors.
The Nation reported on July 23, 1914 that "Mr. Warburg finally had a
conference with Senator O’Gorman and agreed to meet the members of the
Senate Subcommittee informally, with a view to coming to an understanding,
and to giving them any reasonable information they might desire. The opinion
in Washington is that Mr. Warburg’s confirmation is assured." The Nation was
correct. Mr. Warburg was confirmed, the way having been smoothed by his
"fixer", Senator O’Gorman of New York, more familiarly known as "the
Senator from Wall Street." Senator Robert L. Owen had previously
charged that Warburg was the American representative of the Rothschild
family, but questioning him about this would indeed have smacked of the
mediaeval "Inquisition", and his fellow Senators were too civilized to
indulge in such barbarity*.
During the Senate Hearings on Paul Warburg before the Senate Banking and
Currency Committee, August 1, 1914, Senator Bristow asked, "How many of
these partners (of Kuhn, Loeb Company) are American citizens?" WARBURG:
"They are all American citizens except Mr. Kahn.
He is a
British subject." BRISTOW: "He was at one time
a candidate for Parliament, was he not?" WARBURG: "There was talk about it,
it had been suggested and he had it in his mind."
Paul Warburg also stated to the Committee, "I
England, where I stayed for two years, first in
the banking and discount firm of
Samuel Montague & Company. After that I went to
France, where I stayed in a French bank."
CHAIRMAN: "What French bank was that?" WARBURG: "It is the Russian bank for
foreign trade which has an agency in Paris."
BRISTOW: "I understand you to say that you were a Republican, but when Mr.
Theodore Roosevelt came around, you then became a sympathizer with Mr.
Wilson and supported him?" WARBURG: "Yes." BRISTOW: "While your brother
(Felix Warburg) was supporting Taft?" WARBURG: "Yes." Thus three partners of
Kuhn, Loeb Company were supporting three different candidates for President
of the United States. Paul Warburg was supporting Wilson, Felix Warburg was
supporting Taft, and Otto Kahn was supporting Theodore Roosevelt. Paul
Warburg explained this curious situation by telling the Committee that they
had no influence over each other’s political beliefs, "as finance and
politics don’t mix."
Questions about Warburg’s appointment vanished in a hue and cry with
Wilson’s sole appointment to the Board of Governors, Thomas B. Jones.
Reporters had discovered that Jones, at the time of his appointment, was
under indictment by the Attorney General of the United States. Wilson leaped
to the defense of his choice, telling reporters that "The majority of the
men connected with what we have come to call ‘big business’ are honest,
incorruptible and patriotic." Despite Wilson’s protestations, the Senate
Banking and Currency Committee scheduled
* Warburg was confirmed August 8, 1914, 38-11, and
principally opposed by Sen. Bristow of Kansas, who was denounced by The New
York Times as a "radical Republican", and whose excellent library of
rare books on banking were acquired by the present writer in 1983 for
research on this work.
The Federal Advisory Council
In steamrolling the Federal Reserve Act through the House of
Representatives, Congressman Carter Glass declared on September 30, 1913 on
the floor of the House that the interests of the public would be protected
by an advisory council of bankers. "There can be nothing sinister about its
transactions. Meeting with it at least four times a year will be a bankers’
advisory council representing every regional reserve district in the system.
How could we have exercised greater caution in safeguarding the public
Carter Glass neither then nor later gave any substantiation for his belief
that a group of bankers would protect the interests of the public, nor is
there any evidence in the history of the United States that any group of
bankers has ever done so. In fact, the Federal Advisory Council proved to be
the "administrative process" which Paul Warburg had inserted into the
Federal Reserve Act to provide just the type of remote but unseen control
over the System which he desired. When he was asked by financial reporter
C.W. Barron, just after the Federal Reserve Act was enacted into law by
Congress, whether he approved of the bill as it was finally passed, Warburg
replied, "Well, it hasn’t got quite everything we want, but the lack can be
adjusted later by administrative processes." The council proved to be the
ideal vehicle for Warburg’s purposes, as it has functioned for seventy years
in almost complete anonymity, its members and their business associations,
unnoticed by the public.
Senator Robert Owen, chairman of the Senate Banking and Currency Committee,
had said, as quoted in The New York Times, August 3, 1913 before passage of
"The Federal Reserve Act will furnish the bank and industrial and commercial
interests with the discount of qualified commercial paper and thus stabilize
our commercial and industrial life. The Federal Reserve banks are not
intended as money making banks, but to serve a great national purpose of
accommodating commerce and businessmen and banks, safeguard a fixed market
for manufactured goods, for agricultural products and for labor. There is no
reason why the banks should be in control of the Federal Reserve system.
Stability will make our commerce expand healthfully in every direction."
Senator Owen’s optimism was doomed by the domination of the Jekyll Island
promoters over the initial composition of the Federal Reserve System. Not
only did the Morgan-Kuhn, Loeb alliance purchase the dominant control of
stock in the Federal Reserve Bank of New York, with almost half of the
shares owned by the five New York banks under their control, First National
Bank, National City Bank, National Bank of Commerce, Chase National Bank and
Hanover National Bank, but they also persuaded President Woodrow Wilson to
appoint one of the Jekyll Island group, Paul Warburg, to the Federal Reserve
Board of Governors.
Each of the twelve Federal Reserve Banks was to elect a member of the
Federal Advisory Council, which would meet with the Federal Reserve Board of
Governors four times a year in Washington, in order to "advise" the Board on
future monetary policy. This seemed to assure absolute democracy, as each of
the twelve "advisors", representing a different region of the United States,
would be expected to speak up for the economic interests of his area, and
each of the twelve members would have an equal vote. The theory may have
been admirable in its concept, but the hard facts of economic life resulted
in a quite different picture. The president of a small bank in St. Louis or
Cincinnati, sitting in conference with Paul Warburg and J.P. Morgan to
"advise" them on monetary policy, would be unlikely to contradict two of the
most powerful international financiers in the world, as a scribbled note
from either one of them would be sufficient to plunge his little bank into
bankruptcy. In fact, the small banks of the twelve Federal Reserve districts
existed only as satellites of the big New York financial interests, and were
completely at their mercy. Martin Mayer, in The Bankers, points out that
"J.P. Morgan maintained correspondent relationships with many small banks
all over the country."30 The big New York banks did not confine themselves
to multi-million dollar deals with other great financial interests, but
carried on many smaller and more routine dealings with their "correspondent"
banks across the United States.
Apparently secure in their belief that their activities would never be
exposed to the public, the Morgan-Kuhn, Loeb interests boldly selected the
members of the Federal Advisory Council from their correspondent banks and
from banks in which they owned stock. No one in the financial community
seemed to notice, as nothing was said about it during seventy years of the
Federal Reserve System’s operation.
To avoid any suspicion that New York interests might control the Federal
Advisory Council, its first president, elected in 1914 by the other members,
was J.B. Forgan, president of the First National Bank
of Chicago. Rand McNally Bankers Directory for 1914 lists the
principal correspondents of the large banks. The principal correspondent
bank of the Baker-Morgan controlled First National
Bank of New York is listed as the First National Bank of Chicago. The
principal correspondent listed by the First National Bank of Chicago is the
Bank of Manhattan in New York, controlled by Jacob
Schiff and Paul Warburg of Kuhn, Loeb Company. James B.
Forgan also was listed as a director of
Equitable Life Insurance Company, also controlled by Morgan. However,
the relationship between First National Bank of Chicago and these New York
banks was even closer than these listings indicate.
On page 701 of The Growth of Chicago Banks by F. Cyril James, we find
mention of "the First National Bank of Chicago’s profitable connection with
the Morgan interests. A goodwill ambassador was hastily sent to New York to
invite George F. Baker to become a director of the First National Bank of
Chicago."31 (J.B. Forgan to Ream, January 7, 1903.) In effect, Baker and
Morgan had personally chosen the first president of the Federal Advisory
James B. Forgan (1852-1924) also shows the obligatory "London Connection" in
the operation of the Federal Reserve System. Born in St. Andrew’s, Scotland,
he began his banking career there with the Royal Bank
of Scotland, a correspondent of the Bank of
England. He came to
Canada for the Bank of
British North America, worked for the Bank of Nova Scotia, which sent
him to Chicago in the 1880’s, and by 1900 he had become president of the
First National Bank of Chicago. He served for six years as president of the
Federal Advisory Council, and when he left the council, he was replaced by
Frank O. Wetmore, who had also replaced him as president of the First
National Bank of Chicago when Forgan was named chairman of the board.
Representing the New York Federal Reserve district on the first Federal
Advisory Council was J.P. Morgan. He was named chairman of the Executive
Committee. Thus, Paul Warburg and J.P. Morgan sat in conference at the
meetings of the Federal Reserve Board during the first four years of its
operation, surrounded by the other Governors and members of the council, who
could hardly have been unaware that their futures would be guided by these
two powerful bankers.
Another member of the Federal Advisory Council in 1914
was Levi L. Rue, representing the Philadelphia district. Rue was
president of the Philadelphia National Bank. Rand McNally Bankers Directory
of 1914 listed as principal correspondent of the First National Bank of New
York, the Philadelphia National Bank. First National Bank of Chicago also
listed Philadelphia National Bank as its principal correspondent in
Philadelphia. The other members of the Federal Advisory Council included
Daniel S. Wing, president of the First National Bank of Boston,
W.S. Rowe, president of the First National Bank of Cincinnati, and
C.T. Jaffray, president of the First National Bank of Minneapolis. These
were all correspondent
banks of the New York "big five" banks who controlled
the money market in the United States.
Jaffray had an even closer connection with the Baker-Morgan interests. In
1908, to reinvest the large annual dividends from their First National Bank
of New York stock, Baker and Morgan set up a holding company, First Security
Corporation, which bought 500 shares of the First National Bank of
Minneapolis. Thus Jaffray was little more than a wage-earning employee of
Baker and Morgan, although he had been "selected" by stockholders of the
Federal Reserve Bank of Minneapolis to represent their interests. First
Security Corporation also owned 50,000 shares of Chase National Bank, 5400
shares of National Bank of Commerce, 2500 shares of Bankers Trust, 928
shares of Liberty National Bank, the bank of which Henry P. Davison had been
president when he was tapped to join the J.P. Morgan firm, and shares of New
York Trust, Atlantic Trust and Brooklyn Trust. First Security concentrated
on bank stocks which rapidly appreciated in value, and paid handsome annual
dividends. In 1927, it earned five million dollars, but paid the
shareholders eight million, taking the rest from its surplus.
Another member of the initial Federal Advisory Council was E.F. Swinney,
president of the First National Bank of Kansas City. He was also a director
of Southern Railway, and lists himself in Who’s Who as "independent in
Archibald Kains represented the San Francisco district on the Federal
Advisory Council, although he maintained his office in New York, as
president of the American Foreign Banking Corporation.
After serving as a Governor of the Federal Reserve Board from 1914-1918,
Paul Warburg did not request another term. However, he was not ready to
sever his connection with the Federal Reserve System which he had done so
much to set up and put into operation. J.P. Morgan obligingly gave up his
seat on the Federal Advisory Council, and for the next ten years, Paul
Warburg continued to represent the Federal Reserve district of New York on
the Council. He was vice president of the council 1922-25, and president
1926-27. Thus Warburg remained the dominant presence at Federal Reserve
Board meetings throughout the 1920s, when the European central banks were
planning the great contraction of credit which precipitated the Crash of
1929 and the Great Depression. Although most of the Federal Advisory
Council’s "advice" to the Board of Governors has never been reported, on
rare instances a few glimpses into its deliberations were afforded by brief
items in The New York Times. On November 21, 1916, The Times reported that
the Federal Advisory Council had met in Washington for its quarterly
"There was talk about absorbing Europe’s extension of credit to South
America and other countries. Federal Reserve officials said that to maintain
a position as one of the world’s bankers the United States must expect to be
called upon to render a good deal of the service performed largely by
England in the past, in extending short term credits necessary in the
production and transportation of goods of all kinds in the world’s trade,
and that acceptances in foreign trade require lower discounts and the freest
and most reliable gold markets." (The First World War was at its zenith in
In addition to his service on the Board of Governors and the Federal
Advisory Council, Paul Warburg continued to address bankers’ groups about
the monetary policies they were expected to follow. On October 22, 1915, he
addressed the Twin City Bankers Club, St. Paul, Minnesota during which
speech he stated, "It is to your interest to see the Federal Reserve banks
as strong as they possibly can be. It staggers the imagination to think what
the future may have in store for the development of American banking. With
Europe’s foremost powers limited to their own field, with the United States
turned into a creditor nation for all the world, the boundaries of the field
that lies open for us are determined only by our power of safe expansion.
The scope of our banking future will ultimately be limited by the amount of
gold that we can muster as the foundation of our banking and credit
The composition of the Federal Reserve Board of Governors and the Federal
Reserve Advisory Council, from its initial membership to the present day,
shows links to the Jekyll Island conference and the London banking community
which offers incontrovertible evidence, acceptable in any court of law, that
there was a plan to gain control of the money and credit of the people of
the United States, and to use it for the profit of the architects. Old
Jekyll Island hands were Frank Vanderlip, president of the National City
Bank, which bought a large portion of the shares of the Federal Reserve Bank
of New York in 1914; Paul Warburg of Kuhn, Loeb Company; Henry P. Davison,
J.P. Morgan’s right-hand man, and director of the First National Bank of New
York and the National Bank of Commerce, which took a large portion of
Federal Reserve Bank of New York stock; and Benjamin Strong, also known as a
Morgan lieutenant, who served as Governor of the Federal Reserve Bank of New
York during the 1920’s.*
The selection of the regional members of the Federal Advisory Council from
the list of bankers who worked most closely with the "big five" banks of New
York, and who were their principal correspondent banks, proves that the
much-touted "regional safeguarding of the public interest" by Carter Glass
and other Washington proponents of the Federal Reserve Act was from its very
inception a deliberate deception. The fact that for seventy years this
council was able to meet with the Federal Reserve Board of Governors and to
"advise" the Governors on decisions of monetary policy which affected the
daily lives of every person in the United States, without the public being
aware of their existence, demonstrates that the planners of the central bank
operation knew exactly how to achieve their objectives through
"administrative processes" of which the public would remain ignorant. The
claim that the "advice" of the council members is not binding on the
Governors or that it carries no weight is to claim that four times a year,
twelve of the most influential bankers in the United States take time from
their work to travel to Washington to meet with the Federal Reserve Board
merely to drink coffee and exchange pleasantries. It is a claim which anyone
familiar with the workings of the business community will find impossible to
take seriously. In 1914, it was a four-day trip each way for bankers from
the Far West to come to Washington for a council meeting with the Federal
Reserve Board. These men had extensive business interests which demanded
their time. J.P. Morgan was a director of sixty-three corporations which
held annual meetings, and could hardly be expected to travel to Washington
to attend meetings of the Federal Reserve Board if his advice was to be
considered of no importance.**
* "The Federal Advisory Council has great influence with the Federal Reserve
Board. Conspicuously upon that council is J.P. Morgan,
the leading member of J.P. Morgan Company and son of the late J.P. Morgan.
Every one of the twelve members of the Advisory Council, as you well know,
was educated in the same atmosphere. The Federal Reserve Act is not only a
special privilege act but privileged persons have been placed in control and
are its advisors in its administration. The Federal Reserve Board and the
Federal Advisory Council administer the Federal Reserve System as its head
authority, and no one of the lesser officials, even if they wished, would
dare to cross swords with them."
(FROM: "Why Is Your Country At War?" by Charles Lindbergh, published in
1917). The above paragraph explains why Woodrow Wilson ordered government
agents to seize and destroy the printing plates and copies of this book in
the spring of 1918.
** The J.P. Morgan connection has remained predominant on the Federal
Advisory Council. For the past several years, the prestigious Federal
Reserve District No. 2, the New York District, has been represented on the
Federal Advisory Council by Lewis Preston. Preston is Chairman of J.P.
Morgan Company and also Chairman and Chief Executive Officer of Morgan
Guaranty Trust, New York. An heir to the Baldwin fortune (a company
controlled by Morgan), Preston married the heiress to the Pulitzer newspaper
fortune. On February 26, 1929, The New York Times noted that a merger had
been effected between National Bank of Commerce and Guaranty Trust, making
them the largest bank in the United States, with a capital of two billion
dollars. The merger was negotiated by Myron C. Taylor, president of U.S.
Steel, a Morgan firm. The banks occupied adjoining buildings on Wall Street,
and, as The New York Times noted, "The Guaranty Trust Company long has been
known as one of ‘the Morgan group’ of banks." The National Bank of Commerce
has also been identified with Morgan interests.
The House of Rothschild
The success of the Federal Reserve Conspiracy will raise many questions in
the minds of readers who are unfamiliar with the history of the United
States and finance capital. How could the Kuhn, Loeb-Morgan alliance,
powerful though it might be, believe that it would be capable, first, of
devising a plan which would bring the entire money and credit of the people
of the United States into their hands, and second, of getting such a plan
enacted into law?
The capability of devising and enacting the "National Reserve Plan", as the
immediate result of the Jekyll Island expedition was called, was easily
within the powers of the Kuhn, Loeb-Morgan alliance, according to the
following from McClure’s Magazine, August 1911, "The Seven Men" by John
"Seven men in Wall Street now control a great share of the fundamental
industry and resources of the United States. Three of the seven men, J.P.
Morgan, James J. Hill, and George F. Baker, head of the First National Bank
of New York belong to the so-called Morgan group;
four of them, John D. and William Rockefeller, James Stillman, head of the
National City Bank, and Jacob H. Schiff of the private banking firm of Kuhn,
Loeb Company, to the so-called Standard Oil City Bank
group... the central machine of capital extends its control over the
The process is not only economically logical; it is now practically
Thus we see that the 1910 plot to seize control of the money and credit of
the people of the United States was planned by men who already controlled
most of the country’s resources. It seemed to John Moody "practically
automatic" that they should continue with their operations.
What John Moody did not know, or did not tell his readers, was that the most
powerful men in the United States were themselves answerable to another
power, a foreign power, and a power which had been steadfastly seeking to
extend its control over the young republic of the United States since its
very inception. This power was the financial power of
England, centered in the London Branch of the
House of Rothschild. The fact was that in 1910, the United States was
for all practical purposes being ruled from England, and so it is today. The
ten largest bank holding companies in the United States are firmly in the
hands of certain banking houses, all of which have branches in London. They
are J.P. Morgan Company, Brown Brothers Harriman, Warburg, Kuhn Loeb and J.
Henry Schroder. All of them maintain close relationships with the House of
Rothschild, principally through the Rothschild control of international
money markets through its manipulation of the price of gold. Each day, the
world price of gold is set in the London office of N.M. Rothschild and
John Moody, "The Seven Men", McClure’s Magazine, August, 1911, p. 418
Although these firms are ostensibly American firms, which merely maintain
branches in London, the fact is that these banking houses actually take
their direction from London. Their history is a fascinating one, and unknown
to the American public, originating as it did in the international traffic
in gold, slaves, diamonds, and other contraband. There are no moral
considerations in any business decision made by these firms. They are
interested solely in money and power.
Tourists today gape at the magnificent mansions of the very rich in Newport,
Rhode Island, without realizing that not only do these "cottages" stand as a
memorial to the baronial desires of our Victorian millionaires, but that
their erection in Newport represented a nostalgic memorialization of the
great American fortunes, which had their beginnings in Newport when it was
the capital of the slave trade.
The slave trade for centuries had its headquarters in Venice, until
Seventeenth Century Britain, the new master of the seas, used its control of
the oceans to gain a monopoly. As the American colonies were settled, its
fiercely independent people, most of whom did not want slaves, found to
their surprise that slaves were being sent to our ports in great numbers.
For many years, Newport was the capital of this unsavory trade. William
Ellery, the Collector of the Port of Newport, said in 1791: "...an Ethiopian
could as soon change his skin as a Newport merchant could be induced to
change so lucrative a trade.... for the slow profits of any manufactory."
John Quincy Adams remarked in his Diary, page
459, "Newport’s former prosperity was chiefly owing to its extensive
employment in the African slave trade."
The pre-eminence of J.P. Morgan and the Brown firm in
American finance can be dated to the development of Baltimore as the
nineteenth century capital of the slave trade. Both of these firms
originated in Baltimore, opened branches in London, came under the aegis of
the House of Rothschild, and returned to the United States to open branches
in New York and to become the dominant power, not only in finance, but also
in government. In recent years, key posts such as Secretary of Defense have
been held by Robert Lovett, partner of Brown Brothers Harriman, and Thomas
S. Gates, partner of Drexel and Company, a J.P. Morgan subsidiary firm. The
present Vice President, George Bush, is the son of Prescott Bush, a partner
of Brown Brothers Harriman, for many years the senator from Connecticut, and
the financial organizer of Columbia Broadcasting System of which he also was
a director for many years.
To understand why these firms operate as they do, it is necessary to give a
brief history of their origins. Few Americans know that J.P. Morgan Company
began as George Peabody and Company. George
Peabody (1795-1869), born at South Danvers,
Massachusetts, began business in Georgetown, D.C. in 1814 as Peabody, Riggs
and Company, dealing in wholesale dry goods, and in operating the
Georgetown Slave Market. In 1815, to be closer to their source of
supply, they moved to Baltimore, where they operated as Peabody and Riggs,
from 1815 to 1835. Peabody found himself increasingly involved with business
originating from London, and in 1835, he established the firm of
George Peabody and Company in London. He had
excellent entree in London business through another Baltimore firm
established in Liverpool, the Brown Brothers. Alexander Brown came to
Baltimore in 1801, and established what is now known as the oldest banking
house in the United States, still operating as Brown Brothers Harriman of
New York; Brown, Shipley and Company of England; and Alex Brown and Son of
Baltimore. The behind the scenes power wielded by this firm is indicated by
the fact that Sir Montagu Norman, Governor of the Bank of England for many
years, was a partner of Brown, Shipley and Company.*
Considered the single most influential banker in the world, Sir Montagu
Norman was organizer of "informal talks" between heads of central banks in
1927, which led directly to the Great Stock Market
Crash of 1929.
Soon after he arrived in London, George Peabody was surprised to be summoned
to an audience with the gruff Baron Nathan Mayer
Rothschild. Without mincing words, Rothschild revealed to Peabody,
that much of the London aristocracy openly disliked Rothschild and refused
his invitations. He proposed that Peabody, a man of modest means, be
established as a lavish host whose entertainments would soon be the talk of
London. Rothschild would, of course, pay all the bills. Peabody accepted the
offer, and soon became known as the most popular host in London. His annual
Fourth of July dinner, celebrating American Independence, became extremely
popular with the English aristocracy, many of whom, while drinking Peabody’s
wine, regaled each other with jokes about Rothschild’s crudities and bad
manners, without realizing that every drop they drank had been paid for by
* "There is an informal understanding that a director of Brown, Shipley
should be on the Board of the Bank of England, and Norman was elected to it
in 1907." Montagu Norman, Current Biography, 1940.
It is hardly surprising that the most popular host in London would also
become a very successful businessman, particularly with the House of
Rothschild supporting him behind the scenes. Peabody often operated with a
capital of 500,000 pounds on hand, and became very astute in his buying and
selling on both sides of the Atlantic. His American agent was the Boston
firm of Beebe, Morgan and Company, headed by Junius S. Morgan, father of
John Pierpont Morgan. Peabody, who never married, had no one to succeed him,
and he was very favorably impressed by the tall, handsome Junius Morgan. He
persuaded Morgan to join him in London as a partner in George Peabody and
Company in 1854. In 1860, John Pierpont Morgan had been taken on as an
apprentice by the firm of Duncan, Sherman in New York. He was not very
attentive to business, and in 1864, Morgan’s father was outraged when
Duncan, Sherman refused to make his son a partner. He promptly extended an
arrangement whereby one of the chief employees of Duncan, Sherman, Charles
H. Dabney, was persuaded to join John Pierpont Morgan in a new firm, Dabney,
Morgan and Company. Bankers Magazine, December, 1864, noted that Peabody had
withdrawn his account from Duncan, Sherman, and that other firms were
expected to do so. The Peabody account, of course, went to Dabney, Morgan
John Pierpont Morgan was born in 1837, during the first money panic in the
United States. Significantly, it had been caused by the House of Rothschild,
with whom Morgan was later to become associated.
In 1836, President Andrew Jackson, infuriated by the
tactics of the bankers who were attempting to persuade him to renew the
charter of the Second Bank of the United States, said, "You are a den of
vipers. I intend to rout you out and by the Eternal God I will rout you out.
If the people only understood the rank injustice of our money and banking
system, there would be a revolution before morning."
Although Nicholas Biddle was President of the Bank of the United States, it
was well known that Baron James de Rothschild of Paris was the principal
investor in this central bank. Although Jackson had vetoed the renewal of
the charter of the Bank of the United States, he probably was unaware that a
few months earlier, in 1835, the House of Rothschild had cemented a
relationship with the United States Government by superseding the firm of
Baring as financial agent of the Department of State on January 1, 1835.
Henry Clews, the famous banker, in his book, Twenty-eight Years in Wall
Street33, states that the Panic of 1837 was engineered because the charter
of the Second Bank of the United States had run out in 1836. Not only did
President Jackson promptly withdraw government funds
Henry Clews, Twenty-eight Years in Wall Street, Irving Company, New York,
1888, page 157 from the Second Bank of the United States, but he deposited
these funds, $10 million, in state banks. The immediate result, Clews tells
us, is that the country began to enjoy great prosperity. This sudden flow of
cash caused an immediate expansion of the national economy, and the
government paid off the entire national debt, leaving a surplus of $50
million in the Treasury.
The European financiers had the answer to this situation. Clews further
states, "The Panic of 1837 was aggravated by the Bank
of England when it in one day threw out all the paper connected with the
The Bank of England, of course, was synonymous with the name of Baron Nathan
Mayer Rothschild. Why did the Bank of England in one day "throw out" all
paper connected with the United States, that is, refuse to accept or
discount any securities, bonds or other financial paper based in the United
States? The purpose of this action was to create an immediate
financial panic in the United States, cause a
complete contraction of credit, halt further issues of stocks and bonds, and
ruin those seeking to turn United States securities into cash. In this
atmosphere of financial panic,
John Pierpont Morgan came into the world. His
grandmother, Joseph Morgan, was a well to do farmer who owned 106 acres in
Hartford, Connecticut. He later opened the City Hotel, and the Exchange
Coffee Shop, and in 1819, was one of the founders of the
Aetna Insurance Company.
George Peabody found that he had chosen well in selecting Junius S. Morgan
as his successor. Morgan agreed to continue the sub rosa relationship with
N.M. Rothschild Company, and soon expanded the firm’s activities by shipping
large quantities of railroad iron to the United States. It was Peabody iron
which was the foundation for much of American railroad tracks from 1860 to
1890. In 1864, content to retire and leave his firm in the hands of Morgan,
Peabody allowed the name to be changed to Junius S. Morgan Company. The
Morgan firm then and since has always been directed from London. John
Pierpont Morgan spent much of his time at his magnificent London mansion,
One of the high water marks of the successful
Rothschild-Peabody Morgan business venture was the Panic of 1857. It
had been twenty years since the Panic of 1837: its lessons had been
forgotten by hordes of eager investors who were anxious to invest the
profits of a developing America. It was
time to fleece them again. The stock market
operates like a wave washing up on the beach. It sweeps with it many
minuscule creatures who derive all of their life support from the oxygen and
water of the wave. They coast along at the crest of the "Tide of
Prosperity". Suddenly the wave, having reached the high water mark on the
beach, recedes, leaving all of the creatures gasping on the sand. Another
wave may come in time to save them, but in all likelihood it will not come
as far, and some of the sea creatures are doomed. In the same manner,
waves of prosperity, fed by newly created money, through an
artificial contraction of credit, recedes, leaving those it had borne
high to gasp and die without hope of salvation.
Corsair, the Life of J.P. Morgan, page 34, tells us that the Panic of 1857
was caused by the collapse of the grain market and by the sudden collapse of
Ohio Life and Trust, for a loss of five million dollars. With this collapse
nine hundred other American companies failed.
Significantly, one not only survived, but prospered from the crash. In
Corsair, we learn that the Bank of England lent George Peabody and Company
five million pounds during the panic of 1857. Winkler, in Morgan the
Magnificent, page 35, says that the Bank of England advanced Peabody one
million pounds, an enormous sum at that time, and the equivalent of one
hundred million dollars today, to save the firm. However, no other firm
received such beneficence during this Panic. The reason is revealed by
Matthew Josephson, in The Robber Barons. He says on page 60:
"For such qualities of conservatism and purity, George Peabody and Company,
the old tree out of which the House of Morgan grew, was famous. In the panic
of 1857, when depreciated securities had been thrown
on the market by distressed investors in America, Peabody and the
elder Morgan, being in possession of cash, had purchased such bonds as
possessed real value freely, and then resold them at a
large advance when sanity was restored." Page 36.
Thus, from a number of biographies of Morgan, the story can be pieced
together. After the panic had been engineered, one firm came into the market
with one million pounds in cash, purchased securities from distressed
investors at panic prices, and later resold them at an enormous profit. That
firm was the Morgan firm, and behind it was the
clever maneuvering of
Baron Nathan Mayer Rothschild. The association
remained secret from the most knowledgeable financial minds in London and
New York, although Morgan occasionally appeared as the financial agent in a
Rothschild operation. As the Morgan firm grew
rapidly during the late nineteenth century, until it
dominated the finances of the nation, many
observers were puzzled that the Rothschilds seemed so little interested in
profiting by investing in the rapidly advancing American economy. John Moody
notes, in The Masters of Capital, page 27, "The Rothschilds were content to
remain a close ally of Morgan... as far as the American field was
concerned.’ Page 37. Secrecy was more profitable than valor.
John K. Winkler, Morgan the Magnificent, Vanguard, N.Y. 1930
Matthew Josephson, The Robber Barons, Harcourt Brace, N.Y. 1934
John Moody, The Masters of Capital
The reason that the European Rothschilds preferred to operate anonymously in
the United States behind the facade of J.P. Morgan and Company is explained
by George Wheeler, in Pierpont Morgan and Friends, the Anatomy of a Myth:
"But there were steps being taken even now to bring him out of the financial
backwaters--and they were not being taken by Pierpont Morgan himself. The
first suggestion of his name for a role in the recharging of the reserve
originated with the London branch of the House of Rothschild, Belmont’s
Wheeler goes on to explain that a considerable anti-Rothschild movement had
developed in Europe and the United States which focused on the banking
activities of the Rothschild family. Even though they had a registered agent
in the United States, August Schoenberg, who had changed his name to Belmont
when he came to the United States as the representative of the Rothschilds
in 1837, it was extremely advantageous to them to have an American
representative who was not known as a Rothschild agent.
Although the London house of Junius S. Morgan and Company continued to be
the dominant branch of the Morgan enterprises, with the death of the senior
Morgan in 1890 in a carriage accident on the Riviera, John Pierpont Morgan
became the head of the firm. After operating as the American representative
of the London firm from 1864-1871 as Dabney Morgan
Company, Morgan took on a new partner in 1871, Anthony Drexel of
Philadelphia and operated as Drexel Morgan and Company until 1895. Drexel
died in that year, and Morgan changed the name of the American branch to
J.P. Morgan and Company.
LaRouche tells us that on February 5, 1891, a secret association known as
the Round Table Group was formed in London by Cecil Rhodes, his banker, Lord
Rothschild, the Rothschild in-law, Lord Rosebery, and Lord Curzon. He states
that in the United States the Round Table was represented by the Morgan
group. Dr. Carrol Quigley refers to this group as "The British-American
Secret Society" in Tragedy and Hope, stating that "The chief backbone of
this organization grew up along the already existing financial cooperation
running from the Morgan Bank in New York to a group of international
financiers in London led by Lazard Brothers (in
William Guy Carr, in Pawns In The Game states that, "In 1899, J.P. Morgan
and Drexel went to England to attend the International Bankers Convention.
When they returned, J.P. Morgan had been appointed head representative of
the Rothschild interests in the United States. As the result of the London
Conference, J.P. Morgan and Company of New York, Drexel and Company of
Philadelphia, Grenfell and Company of London, and Morgan Harjes Cie of
Paris, M.M. Warburg Company of Germany and America, and the House of
Rothschild were all affiliated. Apparently unaware of the Peabody connection
with the Rothschilds and the fact that the Morgans had always been
affiliated with the House of Rothschild, Carr supposed that he had uncovered
this relationship as of 1899, when in fact it went back to 1835.*
After World War I, the Round Table became known as the Council on Foreign
Relations in the United States, and the Royal Institute of International
Affairs in London. The leading government officials of both England and the
United States were chosen from its members. In the 1960s, as growing
attention centered on the surreptitious governmental activities of the
Council on Foreign Relations, subsidiary
groups, known as the
Trilateral Commission and the
Bilderbergers, representing the identical financial interests, began
operations, with the more important officials, such as
Robert Roosa, being members of all three groups.
William Guy Carr, Pawns In The Game, privately printed, 1956, pg. 60
* July 30, 1930 McFadden Basis of Control of Economic Conditions. This
control of the world business structure and of human happiness and progress
by a small group is a matter of the most intense public interest. In
analyzing it, we must begin with the internal group which centers itself
around J.P. Morgan Company. Never before had there been such a powerful
centralized control over finance, industrial production, credit and wages as
is at this time vested in the Morgan group... The Morgan control of the
Federal Reserve System is exercised through control of the management of the
Federal Reserve Bank of New York.
George F. Peabody History of the Great American Fortunes, Gustavus Myers,
Mod. Lib. 537, notes that J.P. Morgan’s father, Junius
S. Morgan, had become a partner of George Peabody in the banking
business. "When the
Civil War came on, George Peabody and Company
were appointed the financial representatives in
England of the U.S. Government.... with this appointment their wealth
suddenly began to pile up; where hitherto they had amassed the riches by
stages not remarkably rapid, they now added many millions within a very few
years." According to writers of the day, the methods of George Peabody &
Company were not only unreasonable but double treason, in that, while in the
act of giving inside aid to the enemy, George Peabody & Company were the
potentiaries of the U.S. Government and were being well paid to advance its
interests. "Springfield Republic", 1866: "For all who know anything on the
subject know very well that Peabody and his partners gave us no faith and no
help in our struggle for national existence. They participated to the
fullest in the common English distrust of our cause and our success, and
talked and acted for the South rather than for our nation. No individuals
contributed so much to flooding our money markets and weakening financial
confidence in our nationality than George Peabody & Company, and none made
more money by the operation. All the money that Mr. Peabody is giving away
so lavishly among our institutions of learning was gained by the
speculations of his house in our misfortunes." Also, New York Times, Oct.
31, 1866: Reconstruction Carpetbaggers Money Fund.
Lightning over the Treasury Building, John Elson, Meador Publishing Co.,
Boston 41, pg. 53, "The Bank of England with its subsidiary banks in America
(under the domination of J.P. Morgan) the Bank of France, and the Reichsbank
of Germany, composed an interlocking and cooperative banking system, the
main objective of which was the exploitation of the people."
According to William Guy Carr, in Pawns In The Game, the initial meeting of
these ex officio planners took place in Mayer Amschel Bauer’s Goldsmith Shop
in Frankfurt in 1773. Bauer, who adopted the name of "Rothschild"
or Red Shield, from the red shield which he
hung over his door
to advertise his business (the red shield today is the official coat
of arms of the City of Frankfurt), (See Cover) "was only thirty years of age
when he invited twelve other wealthy and influential men to meet him in
Frankfurt. His purpose was to convince them that if they agreed to
pool their resources they could then
finance and control the World Revolutionary Movement
and use it as their Manual of Action to win ultimate control of the
wealth, natural resources, and manpower of the entire world. This
agreement reached, Mayer unfolded his revolutionary plan. The project would
be backed by all the power that could be purchased with their pooled
resources. By clever manipulation of their combined wealth it would be
possible to create such adverse economic conditions that the masses would be
reduced to a state bordering on starvation by unemployment... Their paid
propagandists would arouse feelings of hatred and revenge against the ruling
classes by exposing all real and alleged cases of extravagance, licentious
conduct, injustice, oppression, and persecution. They would also invent
infamies to bring into disrepute others who might, if left alone, interfere
with their overall plans... Rothschild turned to a manuscript and proceeded
to read a carefully prepared plan of action. 1. He argued that LAW was FORCE
only in disguise. He reasoned it was logical to conclude ‘By the
laws of nature right lies in force.’ 2.
Political freedom is an idea, not a fact. In order to usurp political
power all that was necessary was to preach ‘Liberalism’ so that the
electorate, for the sake of an idea, would yield some of their power and
prerogatives which the plotters could then gather into their own hands. 3.
The speaker asserted that the Power of Gold had usurped the power of Liberal
rulers.... He pointed out that it was immaterial to the
success of his plan whether the established
governments were destroyed by external or internal foes because the victor
had to of necessity ask the aid of ‘Capital’ which ‘Is entirely in our
hands’. 4. He argued that the use of any and all means to reach their
final goal was justified on the grounds that the ruler who governed by the
moral code was not a skilled politician because he left himself vulnerable
and in an unstable position. 5. He asserted that
‘Our right lies in force. The word RIGHT is an
abstract thought and proves nothing. I find a new RIGHT... to attack by the
Right of the Strong, to reconstruct all existing institutions, and to
become the sovereign Lord of all those who left to us the Rights to their
powers by laying them down to us in their liberalism. 6. The power of our
resources must remain invisible until the very moment when it has gained
such strength that no cunning or force can undermine it. He went on to
outline twenty-five points. Number 8 dealt with the use of alcoholic
liquors, drugs, moral corruption, and all vice to systematically corrupt
youth of all nations. 9. They had the right to seize property by any means,
and without hesitation, if by doing so they secured submission and
sovereignty. 10. We were the first to put the slogans Liberty, Equality, and
Fraternity into the mouths of the masses, which set up a new aristocracy.
The qualification for this aristocracy is WEALTH
which is dependent on us. 11. Wars should be directed
so that the nations engaged on both sides should be further in our debt.
Candidates for public office should be servile and
obedient to our commands, so that they may readily be used. 13.
Propaganda--their combined wealth would control all
outlets of public information. 14. Panics and
financial depressions would ultimately result in World Government, a new
order of one world government."
The Rothschild family has played a crucial role in international finance for
two centuries, as Frederick Morton, in The Rothschilds writes:
"For the last one hundred and fifty years the history of the
House of Rothschild has been to an amazing
extent the backstage history of Western Europe. Because of their success in
making loans not to individuals, but to nations, they reaped huge
profits, although as Morton writes, "Someone once said that
the wealth of Rothschild consists of the bankruptcy of nations.
E.C. Knuth writes, in The Empire of the City, "The fact that the House of
Rothschild made its money in the great crashes
of history and the great wars of history, the very periods when others lost
their money, is beyond question.
The Great Soviet Encyclopedia, states, "The
clearest example of a personal linkup (international directorates) on a
Western European scale is the Rothschild family. The London and Paris
branches of the Rothschilds are bound not just by family ties but also by
personal link-ups in jointly controlled companies. The encyclopedia further
described these companies as international monopolies.
The sire of the family, Mayer Amschel Rothschild,
established a small business as a coin dealer in Frankfurt in 1743. Although
previously known as Bauer*, he advertised his profession by putting up a
sign depicting an eagle on a red shield, an adaptation of the coat of arms
of the City of Frankfurt, to which he added five golden arrows extending
from the talons, signifying his five sons. Because of this sign, he took the
name ‘Rothschild" or "Red Shield". When the Elector of Hesse earned a
renting Hessian mercenaries to the British to put down
the rebellion in the American colonies, Rothschild was entrusted with
this money to invest. He made an excellent profit both for himself and the
Elector, and attracted other accounts. In 1785 he moved to a larger house,
148 Judengasse, a five story house known as "The Green Shield" which he
shared with the Schiff family.
The five sons established branches in the principal cities of Europe, the
most successful being James in Paris and Nathan Mayer in London. Ignatius
Balla in The Romance of the Rothschilds, page 46, tells us how the London
Rothschild established his fortune. He went to Waterloo, where the fate of
Europe hung in the balance, saw that Napoleon was
losing the battle, and rushed back to Brussels. At Ostend, he tried
to hire a boat to England, but because of a raging storm, no one was willing
to go out. Rothschild offered 500 francs, then 700, and finally 1,000 francs
for a boat. One sailor said, "I will take you for 2000 francs; then at least
my widow will have something if we are drowned." Despite the storm, they
crossed the Channel. The next morning, Rothschild was at his usual post in
the London Exchange. Everyone noticed how pale and exhausted he looked.
Suddenly, he started selling, dumping large quantities
of securities. Panic immediately swept the Exchange. Rothschild is
selling; he knows we have lost the Battle of Waterloo.
Rothschild and all of his known agents continued to throw securities onto
Ignatius Balla, The Romance of the Rothschilds, Everleigh Nash, London,
* The New York Times, April 1, 1915 reported that in 1914, Baron Nathan
Mayer de Rothschild went to court to suppress Ignatius Balla’s book on the
grounds that the Waterloo story about his grandfather was untrue and
libelous. The court ruled that the story was true, dismissed Rothschild’s
suit, and ordered him to pay all costs. The New York Times noted in this
story that "The total Rothschild wealth has been estimated at $2 billion." A
previous story in The New York Times (May 27, 1905) noted that Baron
Alphonse de Rothschild, head of the French house of Rothschild, possessed
$60 million in American securities in his fortune, although the Rothschilds
reputedly were not active in the American field. This explains why their
agent, J.P. Morgan, had only $19 million in securities in his estate when he
died in 1913, and securities handled by Morgan were
actually owned by his employer, Rothschild."
Richard Lewinsohn, The Profits of War, E.P. Dutton, 1937
After the success of his Waterloo exploit, Nathan
Mayer Rothschild gained control of the Bank of England through his
near monopoly of "Consols" and other shares. Several "central" banks, or
banks which had the power to issue currency, had been started in Europe: The
Bank of Sweden, in 1656, which began to issue notes in 1661, the earliest
being the Bank of Amsterdam, which financed Oliver
Cromwell’s seizure of power in England in 1649, ostensibly because of
religious differences. Cromwell died in 1657 and the throne of England was
re-established when Charles II was crowned in 1660. He died in 1685.
In 1689, the same group of bankers regained power in England by putting King
William of Orange on the throne.
He soon repaid his backers by ordering the British
Treasury to borrow 1,250,000 pounds from these bankers. He also
issued them a Royal Charter for the Bank of England,
which permitted them to consolidate the National debt (which had just been
created by this loan) and to secure payments of interest and principal by
direct taxation of the people. The Charter
forbade private goldsmiths to store gold and to issue receipts, which gave
the stockholders of the Bank of England a money monopoly. The
goldsmiths also were required to store their gold in the Bank of England
vaults. Not only had their privilege of issuing circulating medium
been taken away by government decree, but their fortunes were now turned
over to those who had supplanted them.*
In his "Cantos", 46; 27, Ezra Pound refers to the unique privileges which
William Paterson advertised in his prospectus for the Charter of the Bank of
"Said Paterson Hath benefit of interest on all the
moneys which it, the bank, creates out of nothing."
The "nothing" which is referred to, of course, is the
bookkeeping operation of the bank, which "creates" money by entering a
notation that it has "lent" you one thousand dollars, money which did not
exist until the bank made the entry.
By 1698, the British Treasury owed 16 million pounds
sterling to the Bank of England. By 1815, principally due to the compounding
of interest, the debt had risen to 885 million pounds sterling. Some of this
increase was due to the wars which had flourished during that period,
including the Napoleonic Wars and the wars which England had fought to
retain its American Colony.
* NOTE: In the United States, after the stockholders of the Federal Reserve
System had consolidated their power in 1934, our government also issued
orders that private citizens could not store or hold gold.
William Paterson (1658-1719) himself benefited little from "the moneys which
the bank creates out of nothing" as he withdrew, after a policy
disagreement, from the Bank of England a year after it was founded. A later
William Paterson became one of the framers of the United States
Constitution, while the name lingers on, like the pernicious central bank
Paterson had found himself unable to work with the Bank of England’s
stockholders. Many of them remained anonymous, but an early description of
the Bank of England stated it was "A society of about
1330 persons, including the King and Queen of England, who had 10,000 pounds
of stock, the Duke of Leeds, Duke of Devonshire, Earl of Pembroke, and the
Earl of Bradford."
Because of his success in his speculations, Baron Nathan Mayer de
Rothschild, as he now called himself, reigned as the supreme financial power
in London. He arrogantly exclaimed, during a party in his mansion, "I care
not what puppet is placed upon the throne of England to rule the Empire on
which the sun never sets. The man that controls Britain’s money supply
controls the British Empire, and I control the British money supply."
His brother James in Paris had also achieved dominance in French finance. In
Baron Edmond de Rothschild, David Druck writes, "(James)
Rothschild’s wealth had reached the 600 million mark. Only one man in
France possessed more. That was the King, whose wealth
was 800 million. The aggregate
wealth of all the bankers in France was 150 million
less than that of James Rothschild. This naturally gave him untold
powers, even to the extent of unseating governments whenever he chose to do
so. It is well known, for example, that
he overthrew the Cabinet of Prime Minister Thiers."
The expansion of Germany under Bismarck was accompanied by his dependence on
Samuel Bleichroder, Court Bankers of the Prussian Emperor, who had been
known as an agent of the Rothschilds since 1828. The later Chancellor of
Germany, Dr. von Bethmann Hollweg, was the son of Moritz Bethmann of
Frankfurt, who had intermarried with the Rothschilds. Emperor Wilhelm I also
relied heavily on Bischoffsheim, Goldschmidt, and Sir Ernest Cassel of
Frankfurt, who emigrated to England and became personal banker to the Prince
of Wales, later Edward VII. Cassel’s daughter married Lord Mountbatten,
giving the family a direct relationship to the present British Crown. Balla
says, "Nothing could arrest the disaster. At the same time he was quietly
buying up all securities by means of secret agents whom no one knew. In a
single day, he had gained nearly a million sterling, giving rise to the
saying, ‘The Allies won the Battle of Waterloo, but it was really Rothschild
who won.’"*In The Profits of War, Richard Lewinsohn says, "Rothschild’s
war profits from the Napoleonic Wars financed their later stock speculations.
Under Metternich, Austria after long hesitation,
finally agreed to accept financial direction from the House of Rothschild.
Ignatius Balla, The Romance of the Rothschilds, Everleigh Nash,
* The New York Times, April 1, 1915 reported that in 1914, Baron Nathan
Mayer de Rothschild went to court to suppress Ignatius Balla’s book on the
grounds that the Waterloo story about his grandfather was untrue and
libelous. The court ruled that the story was true, dismissed Rothschild’s
suit, and ordered him to pay all costs. The New York Times noted in this
story that "The total Rothschild wealth has been estimated at $2 billion." A
previous story in The New York Times (May 27, 1905) noted that Baron
Alphonse de Rothschild, head of the French house of Rothschild, possessed
$60 million in American securities in his fortune, although the Rothschilds
reputedly were not active in the American field. This explains why their
agent, J.P. Morgan, had only $19 million in securities in his estate when he
died in 1913, and securities handled by Morgan were actually owned by his
Josephson49 states that Philip Mountbatten was related through the Cassels
to the Meyer Rothschilds of Frankfurt. Thus, the English royal House of
Windsor has a direct family relationship to the Rothschilds. In 1901, when
Queen Victoria’s son, Edward, became King Edward VII, he re-established the
Paul Emden in Behind The Throne says, "Edward’s preparation for his metier
was quite different from that of his mother, hence he ‘ruled’ less than she
did. Gratefully, he retained around him men who had been with him in the age
of the building of the Baghdad Railway...there were added to the advisory
staff Leopold and Alfred de Rothschild, various members of the Sassoon
family, and above all his private financial advisor Sir Ernest Cassel.
The enormous fortune which Cassel made in a relatively short time gave him
an immense power which he never misused. He amalgamated the firm of Vickers
Sons with the Naval Construction Company and the Maxim-Nordenfeldt Guns and
Ammunition Company, a fusion from which there arose the worldwide firm of
Vickers Sons and Maxim. On an entirely different capacity from Cassel were
businessmen like the Rothschilds. The firm was run on democratic principles,
and the various partners all had to be members of the family. With great
hospitality and in a princely manner they led the lives of grand seigneurs,
and it was natural that Edward VII should find them congenial. Thanks to
their international family relationships and still more extended business
connections, they knew the whole world, were well informed about everybody,
and had reliable knowledge of matters which did not appear on the surface.
This combination of finance and politics had been a trademark of the
Rothschilds from the very beginning. The House of Rothschild always knew
more than could be found in the papers and even more than could be read in
the reports which arrived at the Foreign Office. In other countries also the
relations of the Rothschilds extended behind the throne. Not until numerous
diplomatic publications appeared in the years after the war did a wider
public learn how strongly Alfred de Rothschild’s hand affected the politics
of Central Europe during the twenty years before the war (World War I)."
With the control of the money came the control of the
news media. Kent Cooper, head of the Associated Press, writes in his
autobiography, Barriers Down,
"International bankers under the House of Rothschild acquired an interest in
the three leading European agencies.
Thus the Rothschilds bought control of
Reuters International News Agency, based in London, Havas of France, and
Wolf in Germany, which controlled the dissemination of all news in Europe.
It now controls the news of the entire world.
Paul Emden, Behind The Throne, Hoddard Stoughton, London, 1934
Kent Cooper, Barriers Down, pg. 21
In Inside Europe, John Gunther wrote in 1936 that any French prime minister,
at the end of 1935, was a creature of the financial oligarchy, and that this
financial oligarchy was dominated by twelve regents, of whom six were
bankers, and were headed by Baron Edmond de Rothschild.
The iron grip of the "London Connection" on the media was exposed in a
recent book by Ben J. Bagdikian The Media Monopoly, described as "A
startling report on the 50 corporations that control what America sees,
hears, reads".53 Bagdikian, who edited the nation’s most influential
magazine the Saturday Evening Post until the monopoly suddenly closed it
down, reveals the interlocking directorates among the fifty corporations
which control the news, but fails to trace them back to the five London
banking houses which control them. He mentions that CBS interlocks with the
Washington Post, Allied Chemical, Wells Fargo Bank, and others, but does not
tell the reader that Brown Brothers Harriman controls CBS, or that the
Eugene Meyer family (Lazard Freres) controls Allied Chemical and the
Washington Post, and Kuhn Loeb Co. the Wells Fargo Bank. He shows the New
York Times interlocked with Morgan Guaranty Trust, American Express, First
Boston Corporation and others, but does not show how the banking interlocks.
He does not mention the Federal Reserve System in his entire book, which is
conspicuous by its absence.
Bagdikian documents that the media monopoly is steadily closing down more
newspapers and magazines. Washington D.C., with one paper, The Post, is
unique among world capitols. London has eleven daily newspapers, Paris
fourteen, Rome eighteen, Tokyo seventeen, and Moscow nine. He cites a study
from the 1982 World Press Encyclopedia that the United States is at the
bottom of industrial nations in the number of daily newspapers sold per
1,000 population. Sweden leads the list with 572, the United States is at
the bottom with 287. There is universal distrust of the media by Americans,
because of their notorious monopoly and bias. The media unanimously urge
higher taxes on working people, more government spending, a welfare state
with totalitarian powers, close relations with Russia, and a rabid
denunciation of anyone who opposes Communism. This is the program of "the
London Connection." It flaunts a maniacal racism, and has as its motto the
dictum of its high priestess, Susan Sontag, that "The white race is the
cancer of history." Everyone should be against cancer. The media monopoly
deals with its opponents in one of two ways; either frontal assault of libel
which the average person cannot afford to litigate, or an iron curtain of
silence, the standard treatment for any work which exposes its clandestine
John Gunther, Inside Europe, 1936
Ben H. Bagdikian, The Media Monopoly, Beacon Press, Boston 1983
Although the Rothschild plan does not match any single political or economic
movement since it was enunciated in 1773, vital parts of it can be discerned
in all political revolution since that date. LaRouche54 points out that the
Round Tables sponsored Fabian Socialism in England, while backing the Nazi
regime through a Round Table member in Germany, Dr. Hjalmar Schacht, and
that they used the Nazi Government throughout World War II through Round
Table member Admiral Canaris, while Allen Dulles ran a collaborating
intelligence operation in Switzerland for the Allies.
Lyndon H. LaRouche, Jr., Dope, Inc., New Benjamin Franklin House Publishing
Co., New York, 1978
The London Connection
"So you see, my dear Coningsby, that the world is governed by very different
personages from what is imagined by those who are not behind the
scenes."55--Disraeli, Prime Minister of England during Queen Victoria’s
In 1775, the colonists of America declared their independence from Great
Britain, and subsequently won their freedom by the American Revolution.
Although they achieved political freedom, financial independence proved to
be a more difficult matter. In 1791, Alexander
Hamilton, at the behest of European bankers, formed the first Bank of the
United States, a central bank with much the same powers as the Bank of
England. The foreign influences behind this bank, more than a century
later, were able to get the Federal Reserve Act through Congress, giving
them at last the central bank of issue for our economy.
Although the Federal Reserve Bank was neither Federal, being owned by
private stockholders, nor a Reserve, because it was intended to create
money, instead of to hold it in reserve, it did achieve enormous financial
power, so much so that it has gradually superseded the popular elected
government of the United States. Through the Federal Reserve System,
American independence was stealthily but invincibly absorbed back into the
British sphere of influence. Thus the London Connection became the arbiter
of policy of the United States.
Because of England’s loss of her colonial empire after the Second World War,
it seemed that her influence as a world political power was waning.
Essentially, this was true. The England of 1980 is not the England of 1880.
She no longer rules the waves; she is a second rate, perhaps third rate,
military power, but paradoxically, as her political and military power
waned, her financial power grew. In Capital City we find, "On almost any
measure you care to take, London is the world’s leading financial centre . .
. In the 1960s London dominance increased . . ."
A partial explanation of this fact is given:
"Daniel Davison, head of London’s Morgan Grenfell, said, ‘The American banks
have brought the necessary money, customers, capital for our capitulation.
Coningsby, by Disraeli, Longmans Co., London, 1881, p. 252
McRae and Cairncross, Capital City, Eyre Methuen, London, 1963, p. 163 and
skills which have established London in its present preeminence . . . . only
the American banks have a lender of last resort. The
Federal Reserve Board of the United States can, and does, create dollars
when necessary. Without the Americans, the big dollar deals cannot be put
together. Without them, London would not be credible as an international
Thus London is the world’s financial center, because it can command enormous
sums of capital, created at its command by the Federal Reserve Board of the
United States. But how is this possible? We have already established that
the monetary policies of the United States, the interest rates, the volume
and value of money, and sales of bonds, are decided, not by the figurehead
of the Federal Reserve Board of Governors, but by the Federal Reserve Bank
of New York. The pretended decentralization of the Federal Reserve System
and its twelve, equally autonomous "regional" banks, is and has been a
deception since the Federal Reserve Act became law in 1913. That United
States monetary policy stems solely from the Federal Reserve Bank of New
York is yet another fallacy. That the Federal Reserve Bank of New York is
itself autonomous, and free to set monetary policy for the entire United
States without any outside interference is especially untrue.
We might believe in this autonomy if we did not know
that the majority stock of the Federal Reserve Bank of New York was
purchased by three New York City banks: First National Bank, National City
Bank, and the National Bank of Commerce. An examination of the principal
stockholders in these banks, in 1914, and today, reveals a direct London
In 1812, the National City Bank began business as the City Bank, in the same
room in which the defunct Bank of the United States, whose charter had
expired, had been doing business. It represented many of the same
stockholders, who were now functioning under a legitimate American charter.
During the early 1800s, the most famous name associated with
City Bank was Moses Taylor (1806-1882).
Taylor’s father had been a confidential agent employed in buying property
for the Astor interests while concealing the fact that Astor was the
purchaser. Through this tactic, Astor succeeded in
buying many farms, and also a great deal of potentially valuable real estate
in Manhattan. Although Astor’s capital was reputed to come from his
fur trading, a number of sources indicate that he also represented foreign
interests. LaRouche states that Astor, in exchange for
providing intelligence to the British during the years before and after the
Revolutionary War, and for inciting Indians to attack and kill American
settlers along the frontier, received a handsome reward. He was not
paid cash, but was given a percentage of the British
opium trade with China. It was the income from this lucrative
concession which provided the basis for the Astor fortune.
With his father’s connection with the Astors, young
Moses Taylor had no difficulty in finding a place as apprentice in a
banking house at the age of 15. Like so many others in these pages, he found
his greatest opportunities when many other Americans were going bankrupt
during an abrupt contraction of credit. During the
Panic of 1837, when more than half the business firms in New York failed, he
doubled his fortune. In 1855,
he became president of City Bank.
During the Panic of 1857, the City Bank profited by the failure of many of
its competitors. Like George Peabody and Junius Morgan, Taylor seemed to
have an ample supply of cash for buying up distressed stocks.
He purchased nearly all the stock of Delaware
Lackawanna Railroad for $5 a share. Seven years later, it was selling for
$240 a share. Moses Taylor was now worth fifty million dollars.
In August, 1861, Taylor was named Chairman of the Loan Committee to finance
the Union Government in the Civil War. The Committee
shocked Lincoln by offering the government $5,000,000 at 12% to finance the
war. Lincoln refused and financed the war by issuing the famous "Greenbacks"
through the U.S. Treasury, which were backed by gold. Taylor
continued to increase his fortune throughout the war, and in his later
years, the youthful James Stillman became his protégé. In 1882, when Moses
Taylor died, he left seventy million dollars.* His
son-in-law, Percy Pyne, succeeded him as president of City Bank, which had
now become National City Bank. Pyne was paralyzed, and was barely
able to function at the bank. For nine years, the bank stagnated, nearly all
its capital being the estate of Moses Taylor. William Rockefeller, brother
of John D. Rockefeller, had bought into the bank, and was anxious to see it
progress. He persuaded Pyne to step aside in 1891 in favor of James
Stillman, and soon the National City Bank became the
principal repository of the Rockefeller oil income.
William Rockefeller’s son, William, married Elsie, James Stillman’s
daughter, Isabel. Like so many others in New York banking,
James Stillman also had a British connection. His father, Don Carlos
Stillman, had come to Brownsville, Texas, as a British agent and blockade
runner during the Civil War. Through his banking connections in New York,
Don Carlos had been able to find a place for his son as apprentice in a
banking house. In 1914, when National City Bank
purchased almost ten per cent of the shares of the newly organized Federal
Reserve Bank of New York, two of Moses Taylor’s grandsons, Moses Taylor Pyne
and Percy Pyne, owned 15,000 shares of National City stock. Moses Taylor’s
son, H.A.C. Taylor, owned 7699 shares of National City Bank. The bank’s
attorney, John W. Sterling, of the firm of Shearman and Sterling, also owned
6000 shares of National City Bank. However, James Stillman owned 47,498
shares, or almost twenty percent of the bank’s total shares of 250,000.
The second largest purchaser of Federal Reserve Bank of New York shares in
1914, First National Bank, was generally known as "the Morgan Bank", because
of the Morgan representation on the board, although the bank’s founder
George F. Baker held 20,000 shares, and his son G.F. Baker, Jr., had 5,000
shares for twenty-five percent of the bank’s total stock of 100,000 shares.
George F. Baker Sr.’s daughter married George F. St. George of London.
The St. Georges later settled in the United States,
where their daughter, Katherine St. George, became a prominent Congresswoman
for a number of years. Dr. E.M. Josephson wrote of her, "Mrs. St. George, a
first cousin of FDR and New Dealer, said, ‘Democracy is a failure’." George
Baker, Jr.’s daughter, Edith Brevoort Baker, married Jacob Schiff’s
grandson, John M. Schiff, in 1934. John M. Schiff is now honorary chairman
of Lehman Brothers Kuhn Loeb Company.
The third large purchase of Federal Reserve Bank of
New York stock in 1914 was the National Bank of Commerce which issued
250,000 shares. J.P. Morgan, through his controlling interest in Equitable
Life, which held 24,700 shares and Mutual Life, which held 17,294 shares of
National Bank of Commerce, also held another 10,000 shares of National Bank
of Commerce through J.P. Morgan and Company (7800 shares), J.P. Morgan, Jr.
(1100 shares), and Morgan partner H.P. Davison (1100 shares). Paul Warburg,
a Governor of the Federal Reserve Board of Governors, also held 3000 shares
of National Bank of Commerce. His partner, Jacob Schiff had 1,000 shares of
National Bank of Commerce. This bank was clearly controlled by Morgan, who
was really a subsidiary of Junius S. Morgan Company in London and the N.M.
Rothschild Company of London, and Kuhn, Loeb Company, which was also known
as a principal agent of the Rothschilds.
The financier Thomas Fortune Ryan also held 5100 shares of National Bank of
Commerce stock in 1914. His son, John Barry Ryan, married Otto Kahn’s
daughter, Kahn was a partner of Warburg and Schiff in Kuhn, Loeb Company,
Ryan’s granddaughter, Virginia Fortune Ryan, married Lord Airlie, the
present head of J. Henry Schroder Banking Corporation in London and New
Another director of National Bank of Commerce in 1914, A.D. Juillard, was
president of A.D. Juillard Company, a trustee of New York Life, and Guaranty
Trust, all of which were controlled by J.P. Morgan. Juillard also had a
British connection, being a director of the North British and Mercantile
Insurance Company. Juillard owned 2000 shares of National Bank of Commerce
stock, and was also a director of Chemical Bank.
In The Robber Barons, by Matthew Josephson, Josephson
tells us that Morgan dominated New York Life, Equitable Life and Mutual Life
by 1900, which had one billion dollars in assets, and which had fifty
million dollars a year to invest. He says, "In this campaign of
secret alliances he (Morgan) acquired direct control of the National Bank of
Commerce; then a part ownership in the First National Bank, allying himself
to the very strong and conservative financier, George F. Baker, who headed
it; then by means of stock ownership and interlocking directorates he linked
to the first named banks other leading banks, the Hanover, the Liberty, and
Mary W. Harriman, widow of E.H. Harriman, also owned 5,000 shares of
National Bank of Commerce in 1914. E.H. Harriman’s railroad empire had been
entirely financed by Jacob Schiff of Kuhn, Loeb Company. Levi P. Morton also
owned 1500 shares of National Bank of Commerce stock in 1914. He had been
the twenty-second vice-president of the United States, was an ex-Minister
from the U.S. to France, and president of L.P. Morton Company, New York,
Morton-Rose and Company and Morton Chaplin of London. He was a director of
Equitable Life Insurance Company, Home Insurance Company, Guaranty Trust,
and Newport Trust.
The astounding idea that the Federal Reserve System of the United States is
actually operated from London will probably be rejected at first hearing by
most Americans. However, Minsky has become famous for his theory of the
"dominant frame". He states that in any particular situation, there is a
"dominant frame" to which everything in that situation is related and
through which it can be interpreted. The "dominant frame" in the monetary
policy decisions of the Federal Reserve System is that these decisions are
made by those who stand to benefit most from them. At first glance, this
would seem to be the principal stockholders of the Federal Reserve Bank of
New York. However, we have seen that these stockholders all have a "London
Connection". The "London Connection" becomes more obvious as the dominant
power when we find in The Capital City, page 61, that only seventeen firms
are allowed to operate as merchant bankers in the City of London, England’s
financial district. All of them must be approved by the Bank of England. In
fact, most of the Governors of the Bank of England come from the partners of
these seventeen firms. Clarke ranks the seventeen in order of their
capitalization. Number 2 is the Schroder Bank. Number 6 is Morgan Grenfell,
the London branch of the House of Morgan and actually its dominant branch.
Lazard Brothers is Number 8. N.M. Rothschild is Number 9. Brown Shipley
Company, the London branch of Brown Brothers Harriman, is Number 14.
These five merchant banking firms of London actually
control the New York banks which own the controlling interest in the Federal
Reserve Bank of New York.
The control over Federal Reserve System decisions is also founded in another
unique situation. Each day, representatives of four other London banking
firms meet in the offices of N.M. Rothschild Company in London to fix the
price of gold for that day. The other four bankers are from Samuel Montagu
Company, which ranks Number 5 on the list of seventeen London merchant
banking firms, Sharps Pixley, Johnson Matheson, and Mocatta and Goldsmid.
Despite the huge tide of paper pyramided currency and notes which are now
flooding the world, at some point, every credit extension must return to be
based, in however minuscule a fashion, on some deposit of gold in some bank
somewhere in the world. Because of this factor, the London merchant bankers,
with their power to set the price of gold each day,
become the final arbiters of the volume of money and the price of money in
those countries which must bow to their power. Not the least of these is the
United States. No official of the Federal Reserve Bank of New York, or of
the Federal Reserve Board of Governors, can command the power over the money
of the world which is held by these London merchant bankers. Great Britain,
while waning in political and military power, today exercises the greatest
financial power. It is for this reason that London is the present financial
center of the world, regardless of people believing it is new York.
McRae and Cairncross, Capital City, Eyre Methuen, London, 1963
McRae and Cairncross, Capital City, Eyre Methuen, London, 1963
John Hamill, The Strange Career of Mr. Hoover, William Faro, New York, 1931
* Copies of Hamill’s book were systematically located and destroyed by
government agents, because it was published on the eve of President Hoover’s
The Hitler Connection
J. Henry Schroder Banking Company is listed as Number 2 in capitalization in
Capital City62 on the list of the seventeen merchant bankers who make up the
exclusive Accepting Houses Committee in London. Although it is almost
unknown in the United States, it has played a large part in our history.
Like the others on this list, it had first to be approved by the Bank of
England. And, like the Warburg family, the von Schroders began their banking
operations in Hamburg, Germany. At the turn of the century, in 1900, Baron
Bruno von Schroder established the London branch of the firm. He was soon
joined by Frank Cyril Tiarks, in 1902. Tiarks married Emma Franziska of
Hamburg, and was a director of the Bank of England from 1912 to 1945.
During World War I, J. Henry Schroder Banking Company played an important
role behind the scenes. No historian has a reasonable explanation of how
World War I started. Archduke Ferdinand was assassinated at Sarajevo by
Gavril Princeps, Austria demanded an apology from Serbia, and Serbia sent
the note of apology. Despite this, Austria declared war, and soon the other
nations of Europe joined the fray. Once the war had gotten started, it was
found that it wasn’t easy to keep it going. The principal problem was that
Germany was desperately short of food and coal, and without Germany, the war
could not go on. John Hamill in The Strange Career of Mr. Hoover63 explains
how the problem was solved.* He quotes from Nordeutsche Allgemeine Zeitung,
March 4, 1915, "Justice, however, demands that publicity should be given to
the preeminent part taken by the German authorities in Belgium in the
solution of this problem. The initiative came from them and it was only due
to their continuous relations with the American Relief Committee that the
provisioning question was solved." Hamill points out "That is what the
Belgian Relief Committee was organized for--to keep Germany in food."
The Belgian Relief Commission was organized by Emile Francqui, director of a
large Belgian bank, Societe Generale, and a London mining promoter, an
American named Herbert Hoover, who had been associated with Francqui in a
number of scandals which had become celebrated court cases, notably the
Kaiping Coal Company scandal in China, said to have set off the Boxer
Rebellion, which had as its goal the expulsion of all foreign businessmen
from China. Hoover had been barred from dealing on the London Stock Exchange
because of one judgement against him, and his associate, Stanley Rowe, had
been sent to prison for ten years. With this background, Hoover was called
an ideal choice for a career in humanitarian work.
Although his name is unknown in the United States, Emile Francqui was the
guiding spirit behind Herbert Hoover’s rise to fortune. Hamill (on page 156)
identifies Francqui as the director of many atrocities committed against
natives in the Congo. "For every cartridge they spent, they had to bring in
a man’s hand." Francqui’s frightful record may have been the source for the
charge later leveled against German soldiers in Belgium, that they chopped
off the hands of women and children, a claim which proved to be groundless.
Hamill also says that Francqui "tricked the Americans out of the Hankow-Canton
railroad concession in China in 1901, and at the same time had ‘stood by’ in
case Hoover needed any further help in the ‘taking’ of the Kaiping coal
mines. This is the humanitarian who had sole charge of the distribution of
the Belgian ‘relief’ during the World War, for which Hoover did the buying
and shipping. Francqui was a director with Hoover, in the Chinese
Engineering and Mining Company (the Kaiping mines), through which Hoover
transported 200,000 Chinese slave workers to the Congo to work Francqui’s
Hamill says on page 311 that "Francqui opened the offices of the Belgian
Relief in his bank, Societe Generale, as a one-man show, with a letter of
permission from the German Governor General von der Goltz dated October 16,
The New York Herald Tribune of February 18, 1930, quoted by Congressman
Louis McFadden in the House on February 26, 1930, said, "One of Belgium’s
two directors on the Bank for International Settlements will be Emile
Francqui of the Societe Generale, a member of both the Young and Dawes Plan
Committees. The board of directors of the international bank will have no
more colorful character than Emile Francqui, former Minister of Finance,
veteran of the Congo and China . . . he is rated as the richest man in
Belgium, and among the twelve richest men in Europe."
Despite his prominence, The New York Times Index mentions Francqui only a
few times during two decades before his death. On October 3, 1931, The New
York Times quoted Le Peuple of Brussels that Francqui would visit the United
States. "As a friend of President Hoover, Monsieur Francqui will not fail to
pay a visit to the President."
On October 30, 1931, The New York Times reported this visit with the
headline, "Hoover-Francqui Talk was Unofficial". "It was stated that Mr.
Francqui spent Tuesday night as a personal guest of the President, and that
they talked of world financial problems in general, strictly unofficial. Mr.
Francqui was an associate of President Hoover during the latter's
ministrations in Belgium during the war. Their visit had no official
significance. Mr. Francqui is a private citizen and not engaged in any
No reference is made to the Hoover-Francqui business associations which were
the subject of huge lawsuits in London. The Francqui visit probably involved
Hoover’s Moratorium on German War Debts, which stunned the financial world.
On December 15, 1931, Chairman McFadden informed the House of a dispatch in
the Public Ledger of Philadelphia, October 24, 1931, "GERMAN REVEALS
HOOVER’S SECRET. The American President was in intimate negotiations with
the German government regarding a year’s debt holiday as early as December,
1930." McFadden continued, "Behind the Hoover announcement there were many
months of hurried and furtive preparations both in Germany and in Wall
Street offices of German bankers. Germany, like a sponge, had to be
saturated with American money. Mr. Hoover himself had to be elected, because
this scheme began before he became President. If the German international
bankers of Wall Street--that is Kuhn Loeb Company, J. & W. Seligman, Paul
Warburg, J. Henry Schroder--and their satellites had not had this job
waiting to be done, Herbert Hoover would never have been elected President
of the United States. The election of Mr. Hoover to the Presidency was
through the influence of the Warburg Brothers, directors of the great bank
of Kuhn Loeb Company, who carried the cost of his election. In exchange for
this collaboration Mr. Hoover promised to impose the moratorium of German
debts. Hoover sought to exempt Kreuger’s loan to Germany of $125 million
from the operation of the Hoover Moratorium. The nature of Kreuger’s swindle
was known here in January when he visited his friend, Mr. Hoover, in the
Not only did Herbert Hoover entertain Francqui in the
White House, but also Ivar Kreuger, the most famous swindler of the
When Francqui died on November 13, 1935, The New York Times memorialized him
as "the copper king of the Congo . . . Mr. Francqui, last year having gained
dictatorial powers over the belga, maintained it on the gold standard during
a crisis. In 1891 he led an expedition into the Congo and gained it for King
Leopold. A man of great wealth, rated among the twelve richest men in
Europe, he secured enormous copper deposits. He was Minister of State in
1926 and Minister of Finance in 1934. It was his pride that he never
accepted a centime of remuneration for his services to the government. While
consul general at Shanghai, he secured valuable concessions, notably the
Kaiping coal mines and the railway concession for the Tientsin Railroad. He
was governor of the Societe Generale de Belgique, Lloyd Royal Belge, and
regent of La Banque Nationale de Belgique."
The Times does not mention Francqui’s business partnerships with Hoover.
Like Francqui, Hoover also refused remuneration for "government service",
and as Secretary of Commerce and as President of the United States, he
turned his salary back to the government.
On December 13, 1932, Chairman McFadden introduced a resolution of
impeachment against President Hoover for high crimes and misdemeanors, which
covers many pages, including violation of contracts, unlawful dissipation of
the financial resources of the United States, and his appointment of Eugene
Meyer to the Federal Reserve Board. The resolution was tabled and never
acted upon by the House.
In criticizing Hoover’s Moratorium of German War Debts, McFadden had
referred to Hoover’s "German" backers. Although all of the principals of
"the London Connection" did originate in Germany, most of them in Frankfurt,
at the time they sponsored Hoover’s candidacy for the Presidency of the
United States, they were operating from London, as Hoover himself had done
for most of his career.
Also, the Hoover Moratorium was not intended to "help" Germany, as Hoover
had never been "pro-German". The Moratorium on Germany’s war debts was
necessary so that Germany would have funds for rearming. In 1931, the truly
forward-looking diplomats were anticipating the Second World War, and there
could be no war without an "aggressor".
Hoover had also carried out a number of mining promotions in various parts
of the world as a secret agent for the Rothschilds, and had been rewarded
with a directorship in one of the principal Rothschild
Rio Tinto Mines in Spain and Bolivia. Francqui
and Hoover threw themselves into the seemingly impossible task of
provisioning Germany during the First World War. Their success was noted in
Nordeutsche Allgemeine Zeitung, March 13, 1915, which noted that large
quantities of food were now arriving from Belgium by rail. Schmoller’s
Yearbook for Legislation, Administration and Political Economy for 1916,
shows that one billion pounds of meat, one and a half billion pounds of
potatoes, one and a half billion pounds of bread, and one hundred twenty-one
millions pounds of butter had been shipped from Belgium to Germany in that
year. A patriotic British woman who had operated a small hospital in Belgium
for several years, Edith Cavell, wrote to the Nursing Mirror in London,
April 15, 1915, complaining that the "Belgian Relief" supplies were being
shipped to Germany to feed the German army. The Germans considered Miss
Cavell to be of no importance, and paid no attention to her, but the British
Intelligence Service in London was appalled by Miss Cavell’s discovery, and
demanded that the Germans arrest her as a spy.
Sir William Wiseman, head of British Intelligence, and partner of Kuhn Loeb
Company, feared that the continuance of the war was at stake, and secretly
notified the Germans that Miss Cavell must be executed. The Germans
reluctantly arrested her and charged her with aiding prisoners of war to
escape. The usual penalty for this offense was three months imprisonment,
but the Germans bowed to Sir William Wiseman’s demands, and shot Edith
Cavell, thus creating one of the principal martyrs of the First World War.
With Edith Cavell out of the way, the "Belgian Relief" operation continued,
although in 1916, German emissaries again approached London officials with
the information that they did not believe Germany could continue military
operations, not only because of food shortages, but because of financial
problems. More "emergency relief" was sent, and Germany continued in the war
until November, 1918. Two of Hoover’s principal assistants were a former
lumber shipping clerk from the West Coast, Prentiss Gray, and Julius H.
Barnes, a grain salesman from Duluth. Both men became partners in J. Henry
Schroder Banking Corporation in New York after the war, and amassed large
fortunes, principally in grain and sugar.
With the entry of the United States into the war,
Barnes and Gray were given important posts in the newly created U.S. Food
Administration, which also was placed under Herbert Hoover’s direction.
Barnes became President of the Grain Corporation of the U.S. Food
Administration from 1917 to 1918, and Gray was chief of Marine
Transportation. Another J. Henry Schroder partner, G. A. Zabriskie, was
named head of the U.S. Sugar Equalization Board. Thus the London Connection
controlled all food in the United States through its grain and sugar "Czars"
during the First World War. Despite many complaints of corruption and
scandal in the U.S. Food Administration, no one was ever indicted.
After the war, the partners of J. Henry Schroder Company found that they now
owned most of Cuba’s sugar industry. One partner, M.E. Rionda, was
president of Cuba Cane Corporation, and director of Manati Sugar Company,
American British and Continental Corporation, and other firms. Baron Bruno
von Schroder, senior partner of the firm, was a director of North British
and Mercantile Insurance Company. His father,
Baron Rudolph von Schroder of Hamburg, was a director
of Sao Paulo Coffee Ltd., one of the largest Brazilian coffee companies,
with F.C. Tiarks, also of the Schroder firm.*
* The New York Times noted on October 11, 1923: "Frank C. Tiarks, Governor
of the Bank of England, will spend two weeks here to set up the opening of
the banking house branch of J. Henry Schroder of London."
After the war, Zabriskie, who had been sugar Czar of the United States by
presiding over the U.S. Sugar Equalization Board, became the president of
several of the largest baking corporations in the United States: Empire
Biscuit, Southern Baking Corporation, Columbia Baking, and other firms.
As his principal assistant in the U.S. Food
Administration, Hoover chose Lewis Lichtenstein Strauss, who was soon to
become a partner in Kuhn Loeb Company, marrying the daughter of Jerome
Hanauer of Kuhn Loeb. Throughout his distinguished humanitarian
service with the Belgian Relief Commission, the U.S. Food Administration,
and, after the war, the American Relief Administration, Hoover’s closest
associate was one Edgar Rickard, born in Pontgibaud, France. In Who’s Who,
he states that he was "World War administrative assistant to Herbert Hoover
in all war and post-war organizations including the Commission For Relief in
Belgium. He also served on the U.S. Food Administration from 1914-1924." He
remained one of Hoover’s closest friends, and usually the Rickards and
Hoovers took their vacations together. After Hoover became Secretary of
Commerce under Coolidge, Hamill tells us that Hoover awarded his friend the
Hazeltine Radio patents, which paid him one million dollars a year in
In 1928, "the London Connection" decided to run Herbert Hoover for president
of the United States. There was only one problem; although Herbert Hoover
had been born in the United States, and was thus eligible for the office of
the presidency, according to the Constitution, he had never had a business
address or a home address in the United States, as he had gone abroad just
after completing college at Stanford. The result was that during his
campaign for the presidency, Herbert Hoover listed as
his American address Suite 2000, 42 Broadway, New York, which was the office
of Edgar Rickard. Suite 2000 was also shared by the grain tycoon and partner
of J. Henry Schroder Banking Corporation, Julius H. Barnes.
After Herbert Hoover was elected president of the United States, he insisted
on appointing one of the old London crowd, Eugene
Meyer, as Governor of the Federal Reserve Board. Meyer’s father had
been one of the partners of Lazard Freres of Paris, and Lazard Brothers of
London. Meyer, with Baruch, had been one of the most powerful men in the
United States during World War I, a member of the famous Triumvirate which
exercised unequalled power;
Meyer as Chairman of the War Finance Corporation,
Bernard Baruch as Chairman of the War Industries Board, and Paul Warburg as
Governor of the Federal Reserve System.
A longtime critic of Eugene Meyer, Chairman Louis McFadden of the House
Banking and Currency Committee, was quoted in The New York Times, December
17, 1930, as having made a speech on the floor of the House attacking
Hoover’s appointment of Meyer, and charging that "He represents the
Rothschild interest and is liaison officer between the French Government and
J.P. Morgan." On December 18, The Times reported that "Herbert Hoover is
deeply concerned" and that McFadden’s speech was "an unfortunate
occurrence." On December 20, The Times commented on the editorial page,
under the headline, "McFadden Again", "The speech ought to insure the Senate
ratification of Mr. Meyer as head of the Federal Reserve. The speech was
incoherent, as Mr. McFadden’s speeches usually are." As The Times predicted,
Meyer was duly approved by the Senate.
Not content with having a friend in the White House, J. Henry Schroder
Corporation was soon embarked on further international adventures, nothing
less than a plan to set up World War II. This was to be done by providing,
at a crucial juncture, the financing for Adolf
Hitler’s assumption of power in Germany. Although any number of
magnates have been given credit for
the financing of Hitler, including Fritz Thyssen,
Henry Ford, and J.P. Morgan, they, as well as others, did provide millions
of dollars for his political campaigns during the 1920s, just as they did
for others who also had a chance of winning, but who disappeared and were
never heard from again. In December of 1932, it seemed inevitable to
many observers of the German scene that Hitler was also ready for a toboggan
slide into oblivion. Despite the fact that he had done well in national
campaigns, he had spent all the money from his usual sources and now faced
heavy debts. In his book Aggression, Otto Lehmann-Russbeldt tells us that "Hitler
was invited to a meeting at the Schroder Bank in Berlin on January 4, 1933.
The leading industrialists and bankers of Germany tided Hitler over his
financial difficulties and enabled him to meet the enormous debt he had
incurred in connection with the maintenance of his private army. In return,
he promised to break the power of the trade unions. On May 2, 1933, he
fulfilled his promise."
Present at the January 4, 1933 meeting were the Dulles brothers, John Foster
Dulles and Allen W. Dulles of the New York law firm, Sullivan and Cromwell,
which represented the Schroder Bank. The Dulles brothers often turned up at
important meetings. They had represented the United States at the Paris
Peace Conference (1919); John Foster Dulles would die in harness as
Eisenhower’s Secretary of State, while Allen Dulles headed the Central
Intelligence Agency for many years. Their apologists have seldom attempted
to defend the Dulles brothers appearance at the meeting which installed
Hitler as the Chancellor of Germany, preferring to pretend that it never
happened. Obliquely, one biographer Leonard Mosley, bypasses it in Dulles
when he states, "Both brothers had spent large amounts of time in Germany,
where Sullivan and Cromwell had considerable interest during the early
1930’s, having represented several provincial governments, some large
industrial combines, a number of big American companies with interests in
the Reich, and some rich individuals."65
Allen Dulles later became a director of J. Henry Schroder Company. Neither
he nor J. Henry Schroder were to be suspected of being pro-Nazi or
pro-Hitler; the inescapable fact was that if Hitler did not become
Chancellor of Germany, there was little likelihood of getting a Second World
War going, the war which would double their profits.*
The Great Soviet Encyclopedia states "The banking house Schroder Bros. (it
was Hitler’s banker) was established in 1846;
its partners today are the barons von Schroeder, related to branches in the
United States and England." Page 66.**
The financial editor of "The Daily Herald" of London wrote on Sept. 30, 1933
of "Mr. Norman’s decision to give the Nazis the backing of the Bank (of
England.)" John Hargrave, in his biography of Montagu Norman says,
"It is quite certain that Norman did all he could to assist Hitlerism to
gain and maintain political power, operating on the financial plane from his
stronghold in Threadneedle Street." [i.e. Bank of England.--Ed.]
Baron Wilhelm de Ropp, a journalist whose closest friend was Major F.W.
Winterbotham, chief of Air Intelligence of the British Secret Service,
brought the Nazi philosopher, Alfred Rosenberg, to London and introduced him
to Lord Hailsham, Secretary for War, Geoffrey Dawson, editor of The Times,
and Norman, Governor of the Bank of England. After talking with Norman,
Rosenberg met with the representative of the Schroder Bank of London. The
managing director of the Schroder Bank, F.C. Tiarks, was also a director of
the Bank of England. Hargrave says (p. 217), "Early in 1934 a select group
of City financiers gathered in Norman’s room behind the windowless walls,
Sir Robert Kindersley, partner of Lazard Brothers, Charles Hambro, F.C.
Tiarks, Sir Josiah Stamp, (also a director of the Bank of England). Governor
Norman spoke of the political situation in Europe. A new power had
established itself, a great ‘stabilizing force’, namely, Nazi Germany.
Norman advised his co-workers to include Hitler in their plans for financing
Europe. There was no opposition."
In Wall Street and the Rise of Hitler, Antony C.
Sutton writes "The Nazi Baron Kurt von Schroeder acted as the conduit for
I.T.T. money funneled to Heinrich Himmler’s S.S. organization in 1944, while
World War II was in progress, and the United States was at war with Germany."
Page 67. Kurt von Schroeder, born in 1889, was partner in the Cologne
Bankhaus, J.H. Stein & Co., which had been founded in 1788. After the Nazis
gained power in 1933, Schroeder was appointed the German representative at
the Bank of International Settlements. The Kilgore Committee in 1940 stated
that Schroeder’s influence with the Hitler Administration was so great that
he had Pierre Laval appointed head of the French Government during the Nazi
Occupation. The Kilgore Committee listed more than a dozen important titles
held by Kurt von Schroeder in the 1940’s, including President of Deutsche
Reichsbahn, Reich Board of Economic Affairs, SS Senior Group Leader, Council
of Reich Post Office, Deutsche Reichsbank and other leading banks and
industrial groups. Schroeder served on the board of all International
Telephone and Telegraph subsidiaries in Germany.
In 1938, the London Schroder Bank became the German
financial agent in Great Britain. The New York branch of Schroder had been
merged in 1936 with the Rockefellers, as Schroder, Rockefeller, Inc. at 48
Wall Street. Carlton P. Fuller of Schroder was president of this firm, and
Avery Rockefeller was vice-president. He had been a behind the scenes
partner of J. Henry Schroder for years, and had set up the construction firm
of Bechtel Corporation, whose employees (on leave) then went on to a leading
role in the Reagan Administration, as Secretary of Defense and Secretary of
Ladislas Farago, in The Game of the Foxes, reported that Baron William de
Ropp, a double agent, had penetrated the highest echelons in pre-World War
II days, and Hitler relied upon de Ropp as his confidential consultant about
British affairs. It was de Ropp’s advice which Hitler followed when he
refused to invade England.
Victor Perlo writes, in The Empire of High Finance: "The Hitler government
made the London Schroder Bank their financial agent in Britain and America.
Hitler’s personal banking account was with J.M. Stein Bankhaus, the German
subsidiary of the Schroder Bank. F.C. Tiarks of the British J. Henry
Schroder Company was a member of the Anglo-German Fellowship with two other
partners as members, and a corporate membership.
Leonard Mosley, Dulles, Dial Publishing Co., New York 1978,
* Ezra Pound, in an April 18, 1943 broadcast over
Radio Rome stated, ". . .and men in America, not content with this war are
already aiming at the next one. The time to object is now."
The Great Soviet Encyclopedia, Macmillan, London, 1973, v.2, p. 620
** The New York Times noted on October 11, 1944: "Senator Claude Pepper
criticized John Foster Dulles, Gov. Dewey’s foreign relations advisor for
his connection with the law firm of Sullivan and Cromwell and having aided
Hitler financially in 1933. Pepper described the January 4, 1933 meeting of
Franz von Papen and Hitler in Baron Schroder’s home in Cologne, and from
that time on the Nazis were able to continue their march to power."
Victor Perlo, The Empire of High Finance, International Publishers, 1957, p.
The story goes much further than Perlo suspects. J. Henry Schroder 'WAS' the
Anglo-German Fellowship, the English equivalent of the America First
movement, and also attracting patriots who did not wish to see their nation
involved in a needless war with Germany. During the 1930’s, until the
outbreak of World War II, the Schroders poured money into the Anglo-German
Fellowship, with the result that Hitler was convinced he had a large
pro-German fifth column in England composed of many prominent politicians
and financiers. The two divergent political groups in the 1930’s in England
were the War Party, led by Winston Churchill, who furiously demanded that
England go to war against Germany, and the Appeasement Party, led by Neville
Chamberlain. After Munich, Hitler believed the Chamberlain group to be the
dominant party in England, and Churchill a minor rabble-rouser. Because of
his own financial backers, the Schroders, were sponsoring the Appeasement
Party, Hitler believed there would be no war. He did not suspect that the
backers of the Appeasement Party, now that Chamberlain had served his
purpose in duping Hitler, would cast Chamberlain aside and make Churchill
the Prime Minister. It was not only Chamberlain, but also Hitler, who came
away from Munich believing that it would be "Peace in our time."
The success of the Schroders in duping Hitler into this belief explains
several of the most puzzling questions of World War II. Why did Hitler allow
the British Army to decamp from Dunkirk and return home, when he could have
wiped them out? Against the frantic advice of his generals, who wished to
deliver the coup de grace to the English Army, Hitler held back because he
did not wish to alienate his supposed vast following in England. For the
same reason, he refused to invade England during a period when he had
military superiority, believing that it would not be necessary, as the
Anglo-German Fellowship group was ready to make peace with him. The Rudolf
Hess flight to England was an attempt to confirm that the Schroder group was
ready to make peace and form a common bond against the Soviets.
Rudolf Hess continues to languish in prison today,
many years after the war, because he would, if released, testify that he had
gone to England to contact the members of the Anglo-German Fellowship, that
is, the Schroder group, about ending the war.*
If anyone supposes this is all ancient history, with no application to the
present political scene, we introduce the name of John
Lowery Simpson of Sacramento, California. Although he appears for the
first time in Who’s Who in America for 1952, Mr. Simpson states that he
served under Herbert Hoover on the Commission for Relief in Belgium from
1915 to 1917; U.S. Food Administration, 1917 to 1918, American Relief
Commission, 1919, and with P.N. Gray Company, Vienna, 1919 to 1921. Gray was
the Chief of Maritime Transportation for the U.S. Food Administration, which
enabled him to set up his own shipping company after the war. Like other
Simpson also joined the J. Henry Schroder Banking
Company (Adolf Hitler’s personal bankers) and the J. Henry Schroder
Trust Company. He also became a partner of Schroder-Rockefeller Company when
that investment trust backed a construction company which became the world’s
largest, the firm of Bechtel Incorporated. Simpson was chairman of the
finance committee of Bechtel Company, Bechtel International, and Canadian
Bechtel. Simpson states he was consultant to the Bechtel-McCone interests in
war production during World War II. He served on the
Allied Control Commission in Italy 1943-44. He married Margaret
Mandell, of the merchant family for whom Col. Edward Mandell House was
named, and he backed a California personality, first for Governor, then for
President. As a result, Simpson and J. Henry Schroder Company now have
serving them as Secretary of Defense, former Bechtel employee
Caspar Weinberger. As Secretary of State they have serving them
George Pratt Schultz, also a Bechtel employee, who happens to be a Standard
Oil heir, reaffirming the Schroder-Rockefeller company ties. Thus the
"conservative" Reagan Administration has a Secretary of Defense from
Schroder Company, a Secretary of State from Schroder-Rockefeller, and a vice
president whose father was senior partner of Brown Brothers Harriman.
* The following accounts are from The New York Times: October 21, 1945, "A
broadcast over the Luxembourg radio said tonight that
Baron Kurt von Schroder, former banker who helped finance the rise of the
Nazi party, had been recognized in an American prison camp and arrested."
November 1, 1945, "British Army Headquarters: Baron Kurt von Schroder, 55
year old banker and friend of Heinrich Himmler is being held in Dusseldorf
pending decision on his indictment as a war criminal, the Military
Government official announcement said today." February 29, 1948, "An
immediate investigation was demanded yesterday by the Society for the
Prevention of World War III as to why the German Nazi banker, Kurt von
Schroder, was not tried as a war criminal by an allied military tribunal.
Noting that von Schroder was sentenced last November
to three months imprisonment and fined 1500 Reichsmarks by a German
denazification court in Bielefeld, in the British Zone, C. Monteith Gilpin,
secretary for the society said the question should be asked why von Schroder
was allowed to escape allied justice, and why our own officials have
not demanded that von Schroder be tried by an Allied military tribunal. ‘Von
Schroder is as guilty as Hitler or Goering.’"
The Heritage Foundation has also been an important factor in the
policy-making of the Reagan Administration. Now we find that the Heritage
Foundation is part of the Tavistock Institute network, directed by British
Intelligence. The financial decisions are still made at the Bank of England,
and who is head of the Bank of England? Sir Gordon Richardson, chairman of
J. Henry Schroder Co. of London and New York from 1962 to 1972, when he
became Governor of the Bank of England. The "London Connection" has never
been more firmly in the saddle of the United States Government.
On July 3, 1983, The New York Times announced that Gordon Richardson,
Governor of the Bank of England for the past ten years, had been replaced by
Robert Leigh-Pemberton, Chairman of the National Westminster Bank. The list
of directors of National Westminster Bank reads like a Who’s Who of the
British ruling class. They include the Chairman, Lord
Aldenham, who is also Chairman of Antony Gibbs & Son, merchant
bankers, one of the seventeen privileged firms chartered by the Bank of
England; Sir Walter Barrie, Chairman of the British Broadcasting System; F.E.
Harmer, Governor of the London School of Economics, the training school for
the international bankers, and chairman of New Zealand
Shipping Company; Sir E.C. Mieville, private secretary to the King of
England 1937-45; Marquess of Salisbury, Lord Cecil, Lord Privy Seal
(the Cecils have been considered one of England’s three ruling families
since the Middle Ages); Lord Leathers, Baron of Purfleet, Minister of War
Transport 1941-45, chairman of William Cory group of companies; Sir W.H.
Coates and W.J. Worboys of Imperial Chemical Industries (the
English DuPont); Earl of Dudley, chairman British Iron & Steel, Sir
W. Benton Jones, chairman United Steel and many other steel companies; Sir
G.E. Schuster, Bank of New Zealand; East India Coal Company; A.
d’A. Willis, Ashanti Goldfields and many banks, tea companies and other
firms; V.W. Yorke, chairman of Mexican Railways Ltd.
Richardson, former chairman of Schroders with a New York subsidiary holding
Federal Reserve Bank of New York stock, was replaced by the chairman of
National Westminster, with a subsidiary in New York holding Federal Reserve
Bank of New York stock. Robert Leigh Pemberton, a director of Equitable Life
Assurance Society (J.P. Morgan), married the daughter of the Marchioness of
Exeter, (the Cecil Burghley family). Thereby, the control of the London
Connection remains constantly in effect.
The list of the present directors of J. Henry Schroder Bank and Trust shows
the continuing international influence since the First World War. George A.
Braga is also director of Czarnikow-Rionda Company, vice-president of
Francisco Sugar Company, president of Manati Sugar Company, and
vice-president of New Tuinicui Sugar Company. His relative,
Rionda B. Braga, is president of Francisco Sugar Company and vice-president
of Manati Sugar Company. The Schroder control of sugar
goes back to the U.S. Food Administration under Herbert Hoover and Lewis L.
Strauss of Kuhn, Loeb, Company during World War I. Schroder’s attorneys are
the firm of Sullivan and Cromwell. John Foster Dulles of this firm was
present during the historic agreement to finance Hitler, and was later
Secretary of State in the Eisenhower administration. Alfred Jaretzki, Jr.,
of Sullivan and Cromwell is also a director of Manati Sugar Company and
Francisco Sugar Company.
Another director of J. Henry Schroder is Norris Darrell, Jr., born in
Berlin, Germany, partner of Sullivan and Cromwell, and a director of
Schroder Trust Company. Bayless Manning, partner of the Wall Street law firm
of Paul, Weiss, Rifkind and Wharton, is also a director of J. Henry
Schroder. He was president of the Council on Foreign Relations from
1971-1977, and is editor in chief of the Yale Law Review.
Paul H. Nitze, the prominent "disarmament negotiator" for the United States
government, is a director of Schroder’s Inc. He married Phyllis Pratt, of
the Standard Oil fortune, whose father gave the Pratt family mansion as the
building which houses the Council on Foreign Relations.
World War One
"Money is the worst of all contraband."--William Jennings Bryan
It is now apparent that there might have been no World War without the
Federal Reserve System. A strange sequence of events, none of which were
accidental, had occurred. Without Theodore Roosevelt’s "Bull Moose"
candidacy, the popular President Taft would have been reelected, and Woodrow
Wilson would have returned to obscurity.* If Wilson had not been elected, we
might have had no Federal Reserve Act, and World War One could have been
avoided. The European nations had been led to maintain large standing armies
as the policy of the central banks which dictated their governmental
decisions. In April, 1887, the Quarterly Journal of Economics had pointed
"A detailed revue of the public debts of Europe shows interest and sinking
fund payments of $5,343 million annually (five and one-third billion). M.
Neymarck’s conclusion is much like Mr. Atkinson’s. The finances of Europe
are so involved that the governments may ask whether war, with all its
terrible chances, is not preferable to the maintenance of such a precarious
and costly peace. If the military preparations of Europe do not end in war,
they may well end in the bankruptcy of the States. Or, if such follies lead
neither to war nor to ruin, then they assuredly point to industrial and
From 1887 to 1914, this precarious system of heavily armed but bankrupt
European nations endured, while the United States continued to be a debtor
nation, borrowing money from abroad, but making few international loans,
because we did not have a central bank or "mobilization of credit". The
system of national loans developed by the Rothschilds served to finance
European struggles during the nineteenth century, because they were spread
out over Rothschild branches in several countries. By 1900, it was obvious
that the European countries could not afford a major war. They had large
standing armies, universal military service, and modern weapons, but their
economies could not support the enormous expenditures. The Federal Reserve
System began operations in 1914, forcing the American people to lend the
Allies twenty-five billion dollars which was not repaid, although
considerable interest was paid to New York bankers. The American people were
driven to make war on the German people, with whom we had no conceivable
political or economic quarrel. Moreover, the United States comprised the
largest nation in the world composed of Germans; almost half of its citizens
were of German descent, and by a narrow margin, German had been voted down
as the national language.* The German Ambassador to Turkey, baron Wangeheim
asked the American Ambassador to Turkey, Henry Morgenthau, why the United
States intended to make war in Germany. "We Americans," replied Morgenthau,
speaking for the group of Harlem real estate operators of which he was the
head, "are going to war for a moral principle." J.P. Morgan received the
proceeds of the First Liberty Loan to pay off $400,000,000 which he advanced
to Great Britain at the outset of the war. To cover this loan, $68,000,000
in notes had been issued under the provisions of the Aldrich-Vreeland Act
for issuing notes against securities, the only time this provision was
employed. The notes were retired as soon as the Federal Reserve Banks began
operation, and replaced by Federal Reserve Notes.
During 1915 and 1916, Wilson kept faith with the bankers who had purchased
the White House for him, by continuing to make loans to the Allies. His
Secretary of State, William Jennings Bryan, protested constantly, stating
that "Money is the worst of all contraband." By 1917, the Morgans and Kuhn,
Loeb Company had floated a billion and a half dollars in loans to the
Allies. The bankers also financed a host of "peace" organizations which
worked to get us involved in the World War. The Commission for Relief in
Belgium manufactured atrocity stories against the Germans, while a Carnegie
organization, The League to Enforce Peace, agitated in Washington for our
entry into war. This later became the Carnegie Endowment for International
Peace, which during the 1940s was headed by Alger Hiss. One writer* claimed
that he had never seen any "peace movement" which did not end in war.
The U.S. Ambassador to Britain, Walter Hines Page, complained that he could
not afford the position, and was given twenty-five thousand dollars a year
spending money by Cleveland H. Dodge, president of the National City Bank.
H.L. Mencken openly accused Page in 1916 of being a British agent, which was
unfair. Page was merely a bankers’ agent.
‘Wilson was elected by Teddy Roosevelt.’" The Strangest Friendship in
History, Woodrow Wilson and Col. House, George Sylvester Viereck, Liveright,
1787 Constitutional Convention
* NOTE: Emmett Tyrell, Jr., Richmond Times Dispatch, Feb. 15, 1983 "Every
peace movement of this century has been followed by war."
On March 5, 1917, Page sent a confidential letter to Wilson. "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 a credit. Unless we go to
war with Germany, our Government, of course, cannot make such a direct grant
The Rothschilds were wary of Germany’s ability to continue in the war,
despite the financial chaos caused by their agents, the Warburgs, who were
financing the Kaiser, and Paul Warburg’s brother, Max, who, as head of the
German Secret Service, authorized Lenin’s train to pass through the lines
and execute the Bolshevik Revolution in Russia. According to Under Secretary
of the Navy, Franklin D. Roosevelt, America’s heavy industry had been
preparing for war for a year. Both the Army and Navy Departments had been
purchasing war supplies in large amounts since early in 1916. Cordell Hull
remarks in his Memoirs:
"The conflict forced the further development of the income-tax principle.
Aiming, as it did, at the one great untaxed source of revenue, the
income-tax law had been enacted in the nick of time to meet the demands of
the war. And the conflict also assisted the putting into effect of the
Federal Reserve System, likewise in the nick of time. One may ask, in the
nick of time for whom? Certainly not for the American people, who had no
need for "mobilization of credit" for a European war, or to enact an income
tax to finance a war. Hull’s statement affords a rare glimpse into the
machinations of our "public servants."
The Notes of the Journal of Political Economy, October, 1917, state:
"The effect of the war upon the business of the Federal Reserve Banks has
required an immense development of the staffs of these banks, with a
corresponding increase in expenses. Without, of course, being able to
anticipate so early and extensive a demand for their services in this
connection, the framers of the Federal Reserve Act had provided that the
Federal Reserve Banks should act as fiscal agents of the Government."
The bankers had been waiting since 1887 for the United States to enact a
central bank plan so that they could finance a European war among the
nations whom they had already bankrupted with armament and "defense"
programs. The most demanding function of the central bank mechanism is war
On October 13, 1917, Woodrow Wilson made a major address, stating:
"It is manifestly imperative that there should be a complete mobilization of
the banking reserves of the United States. The burden and the privilege (of
the Allied loans) must be shared by every banking institution in the
country. I believe that cooperation on the part of the banks is a patriotic
duty at this time, and that membership in the Federal Reserve System is a
distinct and significant evidence of patriotism."
Cordell Hull, Memoirs, Macmillan, New York, 1948, v. 1, page 76
E.W. Kemmerer writes that "As fiscal agents of the Government, the federal
reserve banks rendered the nations services of incalculable value after our
entrance into the war. They aided greatly in the conservation of our gold
resources, in the regulation of our foreign exchanges, and in the
centralization of our financial energies. One shudders when he thinks what
might have happened if the war had found us with our former decentralized
and antiquated banking system."
Mr. Kemmerer’s shudders ignore the fact that if we had kept "our antiquated
banking system" we would not have been able to finance the World War or to
enter as a participant ourselves.
Woodrow Wilson himself did not believe in his crusade
to save the world for democracy. He later wrote that "The World War was a
matter of economic rivalry."
On being questioned by Senator McCumber about the circumstances of our entry
into the war, Wilson was asked, "Do you think if Germany had committed no
act of war or no act of injustice against our citizens that we would have
gotten into this war?"
"I do think so," Wilson replied.
"You think we would have gotten in anyway?" pursued McCumber.
"I do," said Wilson.
In Wilson’s War Message in 1917, he included an incredible tribute to the
Communists in Russia who were busily slaughtering the middle class in that
"Assurance has been added to our hope for the future
peace of the world by the wonderful and heartening things that have been
happening in the last few weeks in Russia. Here is a fit partner for a
League of Honor.
Wilson’s paean to a bloodthirsty regime which has since murdered sixty-six
million of its inhabitants in the most barbarous manner exposes his true
sympathies and his true backers, the bankers who had financed the blood
purge in Russia. When the Communist Revolution seemed in doubt, Wilson sent
his personal emissary, Elihu Root, to Russia with one hundred million
dollars from his Special Emergency War Fund to save the toppling Bolshevik
regime. This action is documented history!
The documentation of Kuhn, Loeb Company’s involvement in the establishment
of Communism in Russia is much too extensive to be quoted here, but we
include one brief mention, typical of the literature on this subject. In his
book, Czarism and the Revolution, Gen. Arsene de Goulevitch writes, "Mr.
Bakmetiev, the late Russian Imperial Ambassador to the United States, tells
us that the Bolsheviks, after victory, transferred 600 million roubles in
gold between the years 1918-1922 to Kuhn, Loeb Company."
After our entry into World War I, Woodrow Wilson turned the government of
the United States over to a triumvirate of his campaign backers, Paul
Warburg, Bernard Baruch and Eugene Meyer. Baruch was appointed head of the
War Industries Board, with life and death powers over every factory in the
United States. Eugene Meyer was appointed head of the War Finance
Corporation, in charge of the loan program which financed the war. Paul
Warburg was in control of the nation’s banking system*.
Knowing that the overwhelming sentiment of the American people during 1915
and 1916 had been anti-British and pro-German, our British allies viewed
with some trepidation the prominence of Paul Warburg and Kuhn, Loeb Company
in the prosecution of the war. They were uneasy about his high position in
the Administration because his brother, Max Warburg, was at that time
serving as head of the German Secret Service. On December 12, 1918, the
United States Naval Secret Service Report on Mr. Warburg was as follows:
"WARBURG, PAUL: New York City. German, naturalized citizen, 1911. was
decorated by the Kaiser in 1912, was vice chairman of the Federal Reserve
Board. Handled large sums furnished by Germany for Lenin and Trotsky. Has a
brother who is leader of the espionage system of Germany."
Strangely enough, this report, which must have been compiled much earlier,
while we were at war with Germany, is not dated until December 12, 1918.
AFTER the Armistice had been signed. Also, it does not contain the
information that Paul Warburg resigned from the Federal Reserve Board in
May, 1918, which indicates that it was compiled before May, 1918, when Paul
Warburg would theoretically have been open to a charge of treason because of
his brother’s control of Germany’s Secret Service.
Paul Warburg’s brother Felix in New York was a director of the Prussian Life
Insurance Company of Berlin, and presumably would not have liked to see too
many of his policyholders killed in the war. On September 26, 1920, The New
York Times mentioned in its obituary of Jacob Schiff in reference to Kuhn,
Loeb and Company, "During the world War certain of its members were in
constant contact with the Government in an advisory capacity. It shared in
the conferences which were held regarding the organization and formation of
the Federal Reserve System."
Public Papers of Woodrow Wilson, Dodd & Baker, v.5, p. 12-13
* NOTE: New York Times, August 10, 1918; "Mr. (Paul) Warburg was the author
of the plan organizing the War Finance Corporation."
The 1920 Schiff obituary revealed for the first time that Jacob Schiff, like
the Warburgs, also had two brothers in Germany during World War I, Philip
and Ludwig Schiff, of Frankfurt-on-Main, who also were active as bankers to
the German Government! This was not a circumstance to be taken lightly, as
on neither side of the Atlantic were the said bankers obscure individuals
who had no influence in the conduct of the war. On the contrary,
Loeb partners held the highest governmental posts in the United States
during World War I, while in Germany, Max and Fritz Warburg, and Philip and
Ludwig Schiff, moved in the highest councils of government. From Memoirs of
Max Warburg, "The Kaiser thumbed the table violently and shouted,
‘Must you always be right?’ but then listened carefully to Max’s view on
In June, 1918, Paul Warburg wrote a private note to Woodrow Wilson, "I have
two brothers in Germany who are bankers. They naturally now serve their
country to their utmost ability, as I serve mine."
Neither Wilson nor Warburg viewed the situation as one of concern, and Paul
Warburg served out his term on the Federal Reserve Board of Governors, while
World War I continued to rage.
The background of Kuhn, Loeb & Company had been exposed in "Truth Magazine",
edited by George Conroy:
"Mr. Schiff is head of the great private banking house of Kuhn, Loeb & Co.
which represents the Rothschild interest on this side of the Atlantic. He
has been described as a financial strategist and has been for years the
financial minister to the great impersonal power known as Standard Oil. He
was hand-in-glove with the Harrimans, the Goulds and the Rockefellers, in
all their railroad enterprises and has become the dominant power in the
railroad and financial world in America. Louis Brandeis, because of his
great ability as a lawyer and for other reasons which will appear later, was
selected by Schiff as the instrument through which Schiff hoped to achieve
his ambition in New England. His job was to carry on an agitation which
would undermine public confidence in the New Haven system and cause a
decrease in the price of its securities, thus forcing them on the market for
the wreckers to buy."
We mention Schiff’s lawyer, Brandeis, here because the first available
appointment on the Supreme Court of the United States which Woodrow Wilson
was allowed to fill was given to the Kuhn, Loeb lawyer, Brandeis.
Not only was the U.S. Food Administration managed by Hoover’s director,
Lewis Lichtenstein Strauss, who married into the Kuhn Loeb Company by
marrying Alice Hanauer, daughter of partner Jerome Hanauer, but in the most
critical field, military intelligence, Sir William Wiseman, chief of the
British Secret Service, was a partner of Kuhn, Loeb & Company. He worked
most closely with Wilson’s alter ego, Col. House. "Between House and Wiseman
there were soon to be few political secrets, and from their mutual
comprehension resulted in large measure our close cooperation with the
One example of House’s cooperation with Wiseman was a confidential agreement
which House negotiated pledging the United States to enter into World War I
on the side of the Allies. Ten months before the election which returned
Wilson to the White House in 1916 ‘because he kept us out of war’, Col.
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, Wilson formally sanctioned the undertaking.
Nothing could more forcefully illustrate the duplicity of Woodrow Wilson’s
nature than his nationwide campaign on the slogan, "He kept us out of war",
when he had pledged ten months earlier to involve us in the war on the side
of England and France. This explains why he was regarded with such contempt
by those who learned the facts of his career. H.L. Mencken wrote that Wilson
was "the perfect model of the Christian cad", and that we ought "to dig up
his bones and make dice of them."
According to The New York Times, Paul Warburg’s letter of resignation stated
that some objection had been made because he had a brother in the Swiss
Secret Service. The New York Times has never corrected this blatant
falsehood, perhaps because Kuhn, Loeb Company owned a controlling interest
in its stock. Max Warburg was not Swiss, and although he had probably come
into contact with the Swiss Secret Service during his term of office as head
of the German Secret Service, no responsible editor at The New York Times
could have been unaware of the fact that Max Warburg was German, and that
his family banking house was in Hamburg, and that he held a number of high
positions in the German Government. He represented Germany at the Versailles
Peace Conference, and remained peacefully in Germany until 1939, during a
period when persons of his religion were being persecuted. To avoid injury
during the approaching war, when bombs would rain on Germany, Max Warburg
was allowed to sail to New York, his funds intact.
Edward M. House, The Intimate Papers of Col. House, edited by Charles
Seymour, Vol. II, p. 399. Houghton, Mifflin Co.
George Sylvester Viereck, The Strangest Friendship in History, Woodrow
Wilson and Col. House, p. 106
At the outset of World War I, Kuhn, Loeb Company had figured in the transfer
of German shipping interests to other control. Sir Cecil Spring-Rice,
British Ambassador to the United States, in a letter to Lord Grey wrote:
"Another matter is the question of the transfer of the flag to the Hamburg
Amerika ships. The company is practically a German Government affair. The
ships are used for Government purposes, the Emperor himself is a large
shareholder, and so is the great banking house of Kuhn, Loeb Company. A
member of that house (Warburg) has been appointed to a very responsible
position in New York, although only just naturalized. He is concerned in
business with the Secretary of the Treasury, who is the President’s
son-in-law. It is he who is negotiating on behalf of the Hamburg Amerika
On November 13, 1914, in a letter to Sir Valentine Chirol, Spring-Rice
wrote, (p. 241, v. 2)
"I was told today that The New York Times has been practically acquired by
Kuhn, Loeb and Schiff, special protégé of the (German) Emperor. Warburg,
nearly related to Kuhn Loeb and Schiff is a brother of the well known
Warburg of Hamburg, the associate of Ballin (Hamburg) Amerika line), is a
member of the Federal Reserve Board or rather THE member. He practically
controls the financial policy of the Administration, and Paish & Blackett
(England) had mainly to negotiate with him. Of course, it was exactly like
negotiating with Germany. Everything that was said was German property."
Col. Garrison wrote in Roosevelt, Wilson and the Federal Reserve Law, that
"Through the banking House of the Kuhn Loeb Company, a powerful weapon would
have been placed in the hands of the German Kaiser over the destiny of
American business and American citizens."
Garrison was referring to the Hamburg Amerika affair.
It seemed strange that Woodrow Wilson felt it necessary to place the nation
in the hands of three men whose personal history was one of ruthless
speculation and the quest for personal gain, or that during war with
Germany, he found as persons of supreme trust a German immigrant naturalized
in 1911, the son of an immigrant from Poland, and the son of an immigrant
from France. Bernard Baruch first attracted attention on Wall Street in 1890
while working for A.A. Housman & Co.
In 1896 he merged the six principal tobacco companies of the United States
into the Consolidated Tobacco Company, forcing James Duke and the American
Tobacco Trust to enter into this combination. The second great trust set up
by Baruch brought the copper industry into the hands of the Guggenheim
family, who have controlled it ever since. Baruch worked with Edward H.
Harriman, who was Schiff’s front man in controlling America’s railway system
for the Rothschild family. Baruch and Harriman also combined their talents
to gain control over the New York City transit system, which has been in
perilous financial condition ever since.
In 1901, Baruch formed the firm of Baruch Brothers, bankers, with his
brother Herman, in New York. In 1917, when Baruch was appointed Chairman of
the War Industries Board, the name was changed to Hentz Brothers.
Testifying before the Nye Committee on September 13, 1937, Bernard Baruch
stated that "All wars are economic in their origin." So much for religious
and political disagreements, which had been specially touted as the cause of
A profile in the "New Yorker" magazine reported that Baruch made a profit of
seven hundred fifty thousand dollars in one day during World War I, after a
phony peace rumor was planted in Washington. In "Who’s Who", Baruch mentions
that he was a member of the Commission which handled all purchasing for the
Allies during World War I. In fact, Baruch WAS the Commission. He spent the
American taxpayer’s money at the rate of ten billion dollars a year, and was
also the dominant member of the Munitions Price-Fixing Committee. He set the
prices at which the Government bought war materials. It would be naive to
presume that the orders did not go to firms in which he and his associates
had more than a polite interest.
As dictator over American manufacturers.* At the Nye Committee hearings in
1935, Baruch testified, "President Wilson gave me a letter authorizing me to
take over any industry or plant. There was Judge Gary, President of United
States Steel, whom we were having trouble with, and when I showed him that
letter, he said, ‘I guess we will have to fix this up’, and he did fix it
Some members of Congress were curious about Baruch’s qualifications to
exercise life and death powers over American industry in time of war. He was
not a manufacturer, and had never been in a factory. When he was called
before a Congressional Committee, Bernard Baruch stated that his profession
was "Speculator". A Wall Street gambler had been made Czar of American
* NOTE: Baruch also stated in this testimony, "I carried through the war
three major investments, Alaska Juneau Gold Mining Company (with partner
Eugene Meyer), Texas Gulf Sulphur, and Atolia Mining Company (tungsten)."
Rep. Mason, Illinois, told the House on February 21, 1921 that Baruch made
more than $50 million in copper during the war.
* Baruch chose as Assistant Chairman of the War Industries Board a fellow
Wall Street speculator, Clarence Dillon (Lapowitz). See biographies @insert
Facsimile of an article which appeared in The New York Times dated September
23, 1914. Listed are major stockholders of the five New York City banks
which purchased 40% of the 203, 053 shares of the Federal Reserve Bank of
New York when the System was organized in 1914. They thus obtained control
of that Federal Reserve Bank and have held it ever since. As of Tuesday,
July 26, 1983, the top five surviving New York City banks have increased
their ownership of the Federal Reserve Bank of New York to 53% of the
Chart I reveals the linear connection between the Rothschilds and the Bank
of England, and the London banking houses which ultimately control the
Federal Reserve Banks through their stockholdings of bank stock and their
subsidiary firms in New York. The two principal Rothschild representatives
in New York, J.P. Morgan Co., and Kuhn, Loeb & Co. were the firms which set
up the Jekyll Island Conference at which the Federal Reserve Act was
drafted, who directed the subsequent successful campaign to have the plan
enacted into law by Congress, and who purchased the controlling amounts of
stock in the Federal Reserve Bank of New York in 1914. These firms had their
principal officers appointed to the Federal Reserve Board of Governors and
the Federal Advisory Council in 1914.
In 1914 a few families (blood or business related) owning controlling stock
in existing banks (such as in New York City) caused those banks to purchase
controlling shares in the Federal Reserve regional banks.
Examination of the charts and text in the House Banking Committee Staff
Report of August, 1976 and the current stockholders list of the 12 regional
Federal Reserve Banks shows this same family control.
Baruch’s erstwhile partner, Eugene Meyer, (Alaska-Juneau Gold Mining Co.),
later claimed that Baruch was a nitwit, and that Meyer, with his family
banking connections (Lazard Freres), had guided Baruch’s investment career.
These claims appeared in the fiftieth anniversary edition of The Washington
Post, editorial page, June 4, 1983, with a parting shot from Meyer’s editor,
Al Friendly, that "Every journalist in Washington, Meyer included, knew that
Bernard M. Baruch was a self-aggrandizing phony."
The third member of the Triumvirate, Eugene Meyer, was son of the partner in
the international banking house of Lazard Freres, of Paris and New York. In
My Own Story Baruch explains how Meyer became head of the War Finance
Corporation. "At the outset of World War One," he says, "I sought out Eugene
Meyer, Jr. . . . who was a man of the highest integrity with a keen desire
to be of public service."79
The nation has suffered greatly from persons who desired to be of public
service, because their desires often went considerably beyond their passion
for office. In fact, Meyer and Baruch had operated an Alaska venture,
Alaska-Juneau Gold Mining Company in 1915, and had worked together on other
financial schemes. Meyer’s family house of Lazard Freres specialized in
international gold movements.
Bernard Baruch, My Own Story, Henry-Holt Company, New York, 1957, p. 194
Eugene Meyer’s stewardship of the War Finance Corporation comprises one of
the most amazing financial operations ever partially recorded in this
country. We say "partially recorded", because subsequent Congressional
investigations revealed that each night, the books were being altered before
being brought in for the next day’s investigation. Louis McFadden, Chairman
of the House Banking and Currency Committee, figured in two investigations
of Meyer, in 1925, and again in 1930, when Meyer was proposed as Governor of
the Federal Reserve Board. The Select Committee to Investigate the
Destruction of Government Bonds, submitted, on March 2, 1925, "Preparation
and Destruction of Government Bonds--68th Congress, 2d Session, Report No.
p.2. "Duplicate bonds amounting to 2314 pairs and duplicate coupons
amounting to 4698 pairs ranging in denominations from $50 to $10,000 have
been redeemed to July 1, 1924. Some of these duplications have resulted from
error and some from fraud."
These investigations may explain why, at the end of World War One, Eugene
Meyer was able to buy control of Allied Chemical and Dye Corporation, and
later on, the nation’s most influential newspaper, The Washington Post. The
duplication of bonds, "one for the government, one for me" in denominations
to the amount of $10,000 each, resulted in a tidy sum.
p. 6 of these Hearings. "These transactions of the Treasury prior to June
20, 1920 (including settlements for purchases and sales), executed by the
War Finance Corporation (Eugene Meyer, managing director), were largely
directed by the managing director of the War Finance Corporation, and
settlements with the Treasury were made principally by him with the
Assistant Secretary of the Treasury, and the books show that the basis of
the price paid by the Government for over $1,894 millions worth of bonds
($1,894,000,000.00), which the Treasury purchased through the War Finance
Corporation was not the market price and was not the cost of the bond plus
interest, and the elements entering into the settlement are not disclosed by
the correspondence. The managing director of the War Finance Corporation
stated that he and an Assistant Secretary of the Treasury (Jerome J. Hanauer,
partner of Kuhn, Loeb Co. whose daughter married Lewis L. Strauss) agreed to
the price, and it was simply an arbitrary figure set by an Assistant
Secretary of the Treasury as to the bonds so purchased by the War Finance
Corporation. During the period of these transactions and up until quite a
recent date the managing director of the War Finance Corporation, Eugene
Meyer, Jr., in his private capacity maintained an office at No. 14 Wall
Street, New York City, and through the War Finance Corporation sold about
$70 millions in bonds to the Government, and also bought through the War
Finance Corporation about $10 millions in bonds, and approved the bills for
most, if not all, of these bonds in his official capacity as managing
director of the War Finance Corporation. When these transactions, just
referred to, were disclosed to the committee in open hearing, the managing
director appeared before the committee and stated the fact that commissions
were paid on these transactions, they were in turn paid over to the brokers,
selected by the managing director, who executed the orders issued by his
brokerage house, and immediately after this disclosure to the committee, the
managing director employed Ernst and Ernst, certified public accountants, to
audit the books of the War Finance Corporation, who did, upon completion of
the examination of these books, report to the committee that all moneys
received by the brokerage house of the managing director had been accounted
for. While simultaneously with the examination being made by the committee,
the certified public accountants, heretofore referred to, were nightly
carrying on their examination, it was discovered by your committee that
alterations and changes
were being made in the books of record covering these transactions, and when
the same was called to the attention of the treasurer of the War Finance
Corporation, he admitted to the committee that changes were being made. To
what extent these books have been altered during the process the committee
have not been able to determine. After June, 1921, about $10 billions worth
of securities were destroyed."
It was Eugene Meyer’s Washington Post, (under the direction of his daughter,
Katherine Graham) which was later to drive a President of the United States
from the White House on the grounds that he had knowledge of a burglary.
What are we to think of the revelations of duplications of hundreds of
millions of dollars worth of bonds during The J. Henry Schroder Banking
Company chart encompasses the entire history of the twentieth century,
embracing as it does the program (Belgian Relief Commission) which
provisioned Germany from 1915-1918 and dissuaded Germany from seeking peace
in 1916; financing Hitler in 1933 so as to make a Second World War possible;
backing the Presidential campaign of Herbert Hoover; and even at the present
time, having two of its major executives of its subsidiary firm, Bechtel
Corporation serving as Secretary of Defense and Secretary of State in the
The head of the Bank of England since 1973, Sir Gordon Richardson, Governor
of the Bank of England (controlled by the House of Rothschild), was chairman
of J. Henry Schroder, New York, and Schroder Banking Corporation, New York,
as well as Lloyd’s Bank of London, and Rolls Royce. He maintains a residence
on Sutton Place in New York City, and as head of "The London Connection",
can be said to be the single most influential banker in the world.
Meyer’s directorship of the War Finance Corporation, the alteration of the
books during a Congressional investigation, and the fact that Meyer came out
of this situation with many millions of dollars with which he proceeded to
buy Allied Chemical Corporation, The Washington Post, and other properties?
Incidentally, Lazard Brothers, Meyer’s family banking house, personally
manages the fortunes of many of our political luminaries, including the
Kennedy family fortune.
Besides these men, Warburg, Baruch, and Meyer, a host of J.P. Morgan Co.,
and Kuhn, Loeb Co., partners, employees, and satellites came to Washington
after 1917 to administer the fate of the American people.
The Liberty Loans, which sold bonds to our citizens, were nominally in the
jurisdiction of the United States Treasury, under the leadership of Wilson’s
Secretary of the Treasury, William G. McAdoo, whom Kuhn, Loeb Co. had placed
in charge of the Hudson-Manhattan Railway Co. in 1902. Paul Warburg had most
of the Kuhn Loeb Co. firm with him in Washington during the War. Jerome
Hanauer, partner in Kuhn, Loeb Co., was Assistant Secretary of the Treasury
in charge of Liberty Loans. The two Under-secretaries of the Treasury during
the War were S. Parker Gilbert and Roscoe C. Leffingwell. Both Gilbert and
Leffingwell came to the Treasury from the law firm of Cravath and Henderson,
and returned to that firm when they had fulfilled their mission for Kuhn,
Loeb Co. in the Treasury. Cravath and Henderson were the lawyers for Kuhn
Loeb Co. Gilbert and Leffingwell subsequently received partnerships in J.P.
Kuhn, Loeb Company, the nation’s largest owners of railroad properties in
this country and in Mexico, protected their interests during the First World
War by having Woodrow Wilson set up a United States Railroad Administration.
The Director-General was William McAdoo, Comptroller of the Currency.
Warburg replaced this set up in 1918 with a tighter organization which he
called the Federal Transportation Council. The purpose of both of these
organizations was to prevent strikes against Kuhn, Loeb Company during the
War, in case the railroad workers should try to get in wages some of the
millions of dollars in wartime profits which Kuhn, Loeb received from the
United States Government.
Among the important bankers present in Washington during the War was Herbert
Lehman, of the rapidly rising firm of Lehman Brothers, Bankers, New York,
Lehman was promptly put on the General Staff of the Army, and given the rank
The Lehmans had had prior experience in "taking the profits out of war", a
double entendre and one of Baruch’s favorite phrases. In Men Who Rule
America, Arthur D. Howden Smith writes of the Lehmans during the Civil War,
"They were often agents, fixers for both sides, intermediaries for
confidential communications and handlers of the many illicit transactions in
cotton and drugs for the Confederacy, purveyors of information for the
North. The Lehmans, with Mayer in Montgomery, the first capital of the
Confederacy, Henry in New Orleans, and Emanuel in New York were ideally
situated to take advantage of every opportunity for profit which appeared.
They seem to have missed few chances.
The Peabody-Morgan chart shows the London Connection of these prominent
banking firms, which have been headquartered in London since their
inception. The Peabody fortune set up an Educational Fund in 1865, which was
later absorbed by John D. Rockefeller into the General Educational Board in
1905, which, in turn, was absorbed by the Rockefeller Foundation in 1960.
Arthur D. Howden Smith, Men Who Rule America, Bobbs Merrill, N.Y. 1935, p.
The David Rockefeller chart shows the link between the Federal Reserve Bank
of New York, Standard Oil of Indiana, General Motors, and Allied Chemical
Corporation (Eugene Meyer family) and Equitable Life (J.P. Morgan).
The Federal Reserve Bank of New York with Citibank, Guaranty Bank and Trust
Co. (J.P. Morgan), J.P. Morgan Co., Morgan Guaranty Trust Co., Alex Brown &
Sons (Brown Brothers Harriman), Kuhn Loeb & Co., Los Angeles and Salt Lake
RR (controlled by Kuhn Loeb Co.), and Westinghouse (controlled by Kuhn Loeb
Other appointments during the First World War were as follows:
J.W. McIntosh, director of the Armour meat-packing trust, who was made chief
of Subsistence for the United States Army in 1918. He later became
Comptroller of the Currency during Coolidge’s Administration, and ex-officio
member of the Federal Reserve Board. During the Harding Administration, he
did his bit as Director of Finance for the United States Shipping Board when
the Board sold ships to the Dollar Lines for a hundredth of their cost and
then let the Dollar Line default on its payments. After leaving public
service, J.W. McIntosh became a partner in J.W. Wollman Co., New York
W.P.G. Harding, Governor of the Federal Reserve Board, was also managing
director of the War Finance Corporation under Eugene Meyer.
George R. James, member of the Federal Reserve Board in 1923-24, had been
Chief of the Cotton Section of the War Industries Board.
Henry P. Davison, senior partner in J.P. Morgan Co., was appointed head of
the American Red Cross in 1917 in order to get control of the three hundred
and seventy million dollars cash which was collected from the American
people in donations.
Ronald Ransom, banker from Atlanta, and Governor of the Federal Reserve
Board under Roosevelt in 1938-39, had been the Director in Charge of
Personnel for Foreign Service for the American Red Cross in 1918.
John Skelton Williams, Comptroller of the Currency, was appointed National
Treasurer of the American Red Cross.
President Woodrow Wilson, the great liberal who signed the Federal Reserve
Act and declared war against Germany, had an odd career for a man who is now
enshrined as a defender of the common people. His chief supporter in both
his campaigns for the Presidency was Cleveland H. Dodge, of Kuhn Loeb, who
controlled National City Bank of New York. Dodge was also President of the
Winchester Arms Company and Remington Arms Company. He was very close to
President Wilson throughout the great democrat’s political career. Wilson
lifted the embargo on shipment of arms to Mexico on February 12, 1914, so
that Dodge could ship a million dollars worth of arms and ammunition to
Carranza and promote the Mexican Revolution. Kuhn, Loeb Co. which owned the
Mexican National Railways System, had become dissatisfied with the
administration of Huerta and had him kicked out.
When the British naval auxiliary Lusitania was sunk in 1915, it was loaded
with ammunition from Dodge’s factories. Dodge became Chairman of the
"Survivors of Victims of the Lusitania Fund", which did so much to arouse
the public against Germany. Dodge also was notorious for using professional
gangsters against strikers in his plants, yet the liberal Wilson does not
appear to have ever been disturbed by this.
Another clue to Wilson’s peculiar brand of liberalism is to be found in
Chaplin’s book Wobbly, which relates how Wilson scrawled the word "REFUSED"
across the appeal for clemency sent him by the aging and ailing Eugene Debs,
who had been sent to Atlanta Prison for "speaking and writing against war".
The charge on which Debs was convicted was "spoken and written denunciation
of war". This was treason to the Wilson dictatorship, and Debs was
imprisoned. As head of the Socialist Party, Debs ran for the Presidency from
Atlanta Prison, the only man ever to do so, and polled more than a million
votes. It was ironic that Debs’ leadership of the Socialist Party, which at
that time represented the desires of many Americans for an honest
government, should fall into the sickly hands of Norman Thomas, a former
student and admirer of Woodrow Wilson at Princeton University. Under Thomas’
leadership, the Socialist Party no longer stood for anything, and suffered a
steady decline in influence and prestige.
Wilson continued to be deeply involved in the Bolshevik Revolution, as were
House and Wiseman. Vol. 3, p. 421 of House Intimate Papers records a cable
from Sir William Wiseman to House from London, May 1, 1918, suggesting
allied intervention at the invitation of the Bolsheviki to help organize the
Bolshevik forces. Lt. Col. Norman Thwaites, in his memoirs, Velvet and
"Often during the years 1917-20 when delicate decisions had to be made, I
consulted with Mr. (Otto) Kahn, whose calm judgment and almost uncanny
foresight as to political and economic tendencies proved most helpful.
Another remarkable man with whom I have been closely associated is Sir
William Wiseman who was advisor on American affairs to the British
delegation at the Peace Conference, and liaison officer between the American
and British government during the war. He was rather more the Col. House of
this country in his relations with Downing Street."81
In the summer of 1917, Woodrow Wilson named Col. House to head the American
War Mission to the Inter-allied War Conference, the first American mission to
a European council in history. House was criticized for naming his
son-in-law, Gordon Auchincloss, as his assistant on this mission. Paul
Cravath, the lawyer for Kuhn, Loeb Company, was third in charge of the
American War Mission. Sir William Wiseman guided the American War Mission in
its conferences. In The Strangest Friendship in History, Viereck writes,
"After America entered the War, Wiseman, according to Northcliffe, was the
only man who had access at all times to the Colonel and to the White House.
Wiseman rented an apartment in the house where the Colonel lived. David
Lawrence referred to the Fifty-Third Street house (New York City) jestingly
as the American No. 10 Downing St. . . . Col. House had a special code used
only with Sir William Wiseman. Col. House was Bush, the Morgans were Haslam,
and Trotsky was Keble.
Thus these two "unofficial" advisors to the British and American governments
had a code solely for each other, which no one else could understand. Even
stranger was the fact that the international Communist espionage apparatus
for many years used Col. House’s book, Philip Dru, Administrator, as their
official code book. Francois Coty writes,
"Gorodin, Lenin’s agent in China, was alleged to have with him a copy of the
book published by Col. House, Philip Dru, Administrator and a code expert
who lived in China told this writer that the purpose of having constant
access to this book by Gorodin was to use it for coding and decoding
After the Armistice, Woodrow Wilson assembled the American Delegation to the
Peace Conference, and embarked for Paris. It was, on the whole, a most
congenial group, consisting of the bankers who had always guided Wilson’s
policies. He was accompanied by Bernard Baruch, Thomas W. Lamont of J.P.
Morgan Co., Albert Strauss of J & W Seligman bankers, who had been chosen by
Wilson to replace Paul Warburg on the Federal Reserve Board of Governors,
J.P. Morgan, and Morgan lawyers Frank Polk and John W. Davis. Accompanying
them were Walter Lippmann, Felix Frankfurter, Justice Brandeis, and other
interested parties. Mason’s biography of Brandeis states that "In Paris in
June of 1919, Brandeis met with such friends as Paul Warburg, Col. House,
Lord Balfour, Louis Marshall, and Baron Edmond de Rothschild."
Indeed, Baron Edmond de Rothschild served as the genial host to the leading
members of the American Delegation, and even turned over his Paris mansion
to them, although the lesser members had to rough it at the elegant Hotel
Crillon with Col. House and his personal staff of 201 servants.
Baruch later testified before the Graham Committee of the Senate Foreign
Relations Committee, "I was economic advisor with the peace mission. GRAHAM:
Did you frequently advise the President while there? BARUCH: Whenever he
asked my advice I gave it. I had something to do with the reparations
clauses. I was the American Commissioner in charge of what they called the
Economic Section. I was a member of the Supreme Economic Council in charge
of raw metals. GRAHAM: Did you sit in the council with the gentlemen who
were negotiating the treaty? BARUCH: Yes, sir, some of the time. GRAHAM: All
except the meetings that were participated in by the Five? (The Five being
the leaders of the five allied nations). BARUCH: And frequently those also."
Paul Warburg accompanied Wilson on the American Commission to Negotiate
Peace as his chief financial advisor. He was pleasantly surprised to find at
the head of the German delegation his brother, Max Warburg, who brought
along Carl Melchior, also of M.M. Warburg Company, William Georg von
Strauss, Franz Urbig, and Mathias Erzberger.
Thomas W. Lamont states in his privately printed memoirs, Across World
Frontiers, "The German delegation included two German bankers of the Warburg
firm whom I happened to know slightly and with whom I was glad to talk
informally, for they seemed to be striving earnestly to offer some
reparations composition that might be acceptable to the Allies."84 Lamont
was also pleased to see Sir William Wiseman, chief advisor to the British
The bankers at the conference convinced Wilson that they needed an
international government to facilitate their international monetary
operations. Vol. IV, p. 52, Intimate Papers of Col. House quotes a message
from Sir William Wiseman to Lord Reading, August 16, 1918, "The President
has two main principles in view; there must be a League of Nations and it
must be virile."
Wilson, who seems to have lived in a world of fantasy, was shocked when
American citizens booed him during his campaign to have them sign over their
hard won independence to what appeared to many to be an international
dictatorship. He promptly went into a depression, and retired to his
bedroom. His wife immediately shut the White House doors against Col. House,
and from September 25, 1919 to April 13, 1920, she ruled the United States
with the aid of an intimate friend, her "military aide", Col. Rixey Smith.
As everyone was shut out of their deliberations, no one ever knew which of
the pair functioned as the President, and which was the Vice President.
The admirers of Woodrow Wilson were led for decades by Bernard Baruch, who
stated that Woodrow Wilson was the greatest man he ever knew. Wilson’s
appointments to the Federal Reserve Board, and that body’s responsibility
for financing the First World War, as well as Wilson’s handing over the
United States to the immigrant triumvirate during the War, made him appear
to be the most important single effecter of ruin in American history.
It is no wonder that after his abortive trip to Europe, where he was hissed
and jeered in the streets by the French people, and snickered at in the
halls of Versailles by Orlando and Clemenceau, Woodrow Wilson returned home
to take to his bed. The sight of the destruction and death in Europe, for
which he was directly responsible, was perhaps more of a shock than he could
bear. The Italian Minister Pentaleoni expressed the feelings of the European
peoples when he wrote that:
Thomas W. Lamont, Across World Frontiers, (Privately printed) 1950, p. 138
"Woodrow Wilson is a type of Pecksniff who was now disappeared amid
It is America’s misfortune that our subsidized press and educational system
have been devoted to enshrining a man who colluded in causing so much death
and sorrow throughout the world.
The financial cartel suffered only minor setbacks in those crucial years. On
February 12, 1917, The New York Times reported that "The five members of the
Federal Reserve Board were impeached on the floor of the House by Rep.
Charles A. Lindbergh, Republican member of the House Banking and Currency
Committee. According to Mr. Lindbergh, ‘the conspiracy began in’ 1906 when
the late J.P. Morgan, Paul M. Warburg, a present member of the Federal
Reserve Board, the National City Bank and other banking firms ‘conspired’ to
obtain currency legislation in the interest of big business and the
appointment of a special board to administer such a law, in order to create
industrial slaves of the masses, the aforesaid conspirators did conspire and
are now conspiring to have the Federal Reserve Board administered so as to
enable the conspirators to coordinate all kinds of big business and to keep
themselves in control of big business in order to amalgamate all the trusts
into one great trust in restraint and control of trade and commerce." The
impeachment resolution was not acted on by the House.
The New York Times reported on August 10, 1918, "Mr. Warburg’s term having
expired, he voluntarily retired from the Federal Reserve Board." Thus the
previous intimation that Mr. Warburg left the Federal Reserve Board because
he had a brother in the Secret Service of a foreign country, namely,
Germany, with whom we were at war, was not the cause of his retirement. In
any case, he did not leave the Federal Reserve Administration, as he
immediately took over J.P. Morgan’s seat on the Federal Advisory Council,
from which post he continued to administer the Federal Reserve System for
the next ten years.
When Paul Warburg resigned from the Federal Reserve Board of Governors in
1918, his place was taken by Albert Strauss, partner in the international
banking house of J & W Seligman. This banking house had large interests in
Cuba and South America, and played a prominent part in financing the many
revolutions in those countries. Its most notorious publicity came during the
Senate Finance Committee’s investigation in 1933, when it was brought out
that J & W Seligman had given a $415,000 bribe to Juan Leguia, son of the
President of Peru, in order to get that nation to accept a loan.
A partial list of Albert Strauss’ directorships, according to "Who’s Who",
shows that he was: Chairman of the Board of the Cuba Cane Sugar Corporation;
director, Brooklyn Manhattan Transit Co., Coney Island Brooklyn RR, New York
Rapid Transit, Pierce-Arrow, Cuba Tobacco Corporation, and the Eastern Cuba
Governor Delano resigned in August, 1918, to be commissioned a Colonel in
the Army. The war ended on November 11, 1918.
William McAdoo was replaced in 1918 by Carter Glass as Secretary of the
Treasury. Both Strauss and Glass were present during the secret meeting of
the Federal Reserve Board on May 18, 1920, when the Agricultural Depression
of 1920-21 was made possible.
One of the main lies about the Federal Reserve Act when it was being
ballyhooed in 1913 was its promise to take care of the farmer. Actually, it
has never taken care of anybody but a few big bankers. Prof. O.M.W. Sprague,
Harvard economist, writing in the Quarterly Journal of Economics of
February, 1914, said:
"The primary purpose of the Federal Reserve Act is to make sure that there
will always be an available supply of money and credit in this country to
meet unusual banking requirements." There is nothing in that wording to help
The First World War had introduced into this country a general prosperity,
as revealed by the stocks of heavy industry on the New York Exchange in
1917-1918, by the increase in the amount of money circulated, and by the
enormous bank clearings during the whole of 1918. It was the assigned duty
of the Federal Reserve System to get back the vast amount of money and
credit which had escaped their control during this time of prosperity. This
was done by the Agricultural Depression of 1920-21. The operations of the
Federal Reserve Open Market Committee in 1917-18, while Paul Warburg was
still Chairman, show a tremendous increase in purchases of bankers’ and
trade acceptances. There was also a great increase in the purchase of United
States Government securities, under the leadership of the able Eugene Meyer,
Jr. A large part of the stock market speculation in 1919, at the end of the
War when the market was very unsettled, was financed with funds borrowed
from Federal Reserve Banks with Government securities as collateral. Thus
the Federal Reserve System set up the Depression, first by causing
inflation, and then raising the discount rate and making money dear.
In 1914, Federal Reserve Bank rates had dropped from six percent to four
percent, had gone to a further low of three percent in 1916, and had stayed
at that level until 1920. The reason for the low interest rate was the
necessity for floating the billion dollar Liberty Loans. At the beginning of
each Liberty Loan Drive, the Federal Reserve Board put a hundred million
dollars into the New York money market through its open market operations,
in order to provide a cash impetus for the drive. The most important role of
the Liberty Bonds was to soak up the increase in circulation of the medium
of exchange (integer of account) brought about by the large amount of
currency and credit put out during the war. Laborers were paid high wages,
and farmers received the highest prices for their produce they had ever
known. These two groups accumulated millions of dollars in cash which they
did not put into Liberty Bonds. That money was effectively out of the hands
of the Wall Street group which controlled the money and credit of the United
States. They wanted it back, and that is why we had the Agricultural
Depression of 1920-21.
Much of the money was deposited in small country banks in the Middle West
and West which had refused to have any part of the Federal Reserve System,
the farmers and ranchers of those regions seeing no good reason why they
should give a group of international financiers control of their money. The
main job of the Federal Reserve System was to break these small country
banks and get back the money which had been paid out to the farmers during
the war, in effect, ruin them, and this it proceeded to do.
First of all, a Federal Farm Loan Board was set up which encouraged the
farmers to invest their accrued money in land on long term loans, which the
farmers were eager to do. Then inflation was allowed to take its course in
this country and in Europe in 1919 and 1920. The purpose of the inflation in
Europe was to cancel out a large portion of the war debts owed by the Allies
to the American people, and its purpose in this country was to draw in the
excess moneys which had been distributed to the working people in the form
of higher wages and bonuses for production. As prices went higher and
higher, the money which the workers had accumulated became worth less and
less, inflicting upon them an unfair drain, while the propertied classes
were enriched by the inflation because of the enormous increase in the value
of land and manufactured goods. The workers were thus effectively
impoverished, but the farmers, who were as a class more thrifty, and who
were more self-sufficient, had to be handled more harshly.
G.W. Norris, in "Collier’s Magazine" of March 20, 1920, said:
"Rumor has it that two members of the Federal Reserve Board had a plain talk
with some New York bankers and financiers in December, 1919. Immediately
afterwards, there was a notable decline in transactions on the stock market
and a cessation of company promotions. It is understood that action in the
same general direction has already been taken in other sections of the
country, as evidence of the abuse of the Federal Reserve System to promote
speculation in land and commodities appeared."
Senator Robert L. Owen, Chairman of the Senate Banking and Currency
Committee, testified at the Senate Silver Hearings in 1939 that:
"In the early part of 1920, the farmers were exceedingly prosperous. They
were paying off the mortgages and buying a lot of new land, at the instance
of the Government--had borrowed money to do it--and then they were
bankrupted by a sudden contraction of credit and currency which took place
in 1920. What took place in 1920 was just the reverse of what should have
been taking place. Instead of liquidating the excess of credits created by
the war through a period of years, the Federal Reserve Board met in a
meeting which was not disclosed to the public. They met on the 18th of May,
1920, and it was a secret meeting. They spent all day conferring; the
minutes made sixty printed pages, and they appear in Senate Document 310 of
February 19, 1923. The Class A Directors, the Federal Reserve Advisory
Council, were present, but the Class B Directors, who represented business,
commerce, and agriculture, were not present. The Class C Directors,
representing the people of the United States, were not present and were not
invited to be present. Only the big bankers were there, and their work of
that day resulted in a contraction of credit which had the effect the next
year of reducing the national income fifteen billion dollars, throwing
millions of people out of employment, and reducing the value of lands and
ranches by twenty billion dollars."
Carter Glass, member of the Board in 1920 as Secretary of the Treasury,
wrote in his autobiography, Adventure in Constructive Finance published in
1928; "Reporters were not present, of course, as they should not have been
and as they never are at any bank board meeting in the world.
Carter Glass, Adventure in Constructive Finance, Doubleday, N.Y. 1928
It was Carter Glass who had complained that, if a suggested amendment by
Senator LaFollette were passed, on the Federal Reserve Act of 1913, to the
effect that no member of the Federal Reserve Board should be an official or
director or stockholder of any bank, trust company, or insurance company, we
would end up by having mechanics and farm laborers on the Board. Certainly
mechanics and farm laborers could have caused no more damage to the country
than did Glass, Strauss, and Warburg at the secret meeting of the Federal
Senator Brookhart of Iowa testified that at that secret meeting Paul
Warburg, also President of the Federal Advisory Council, had a resolution
passed to send a committee of five to the Interstate Commerce Commission and
ask for an increase in railroad rates. As head of Kuhn, Loeb Co. which owned
most of the railway mileage in the United States, he was already missing the
huge profits which the United States Government had paid during the war, and
he wanted to inflict new price raises on the American people.
Senator Brookhart also testified that:
"I went into Myron T. Herrick’s office in Paris, and told him that I came
there to study cooperative banking. He said to me, ‘as you go over the
countries of Europe, you will find that the United States is the only
civilized country in the world that by law is prohibiting its people from
organizing a cooperative system.’ I went up to New York and talked to about
two hundred people. After talking cooperation and standing around waiting
for my train--I did not specifically mention cooperative banking, it was
cooperation in general--a man called me off to one side and said, ‘I think
Paul Warburg is the greatest financier we have ever produced. He believes a
lot more of your cooperative ideas than you think he does, and if you want
to consult anybody about the business of cooperation, he is the man to
consult, because he believes in you, and you can rely on him.’ A few minutes
later I was steered up against Mr. Warburg himself, and he said to me, ‘You
are absolutely right about this cooperative idea. I want to let you know
that the big bankers are with you. I want to let you know that now, so that
you will not start anything on cooperative banking and turn them against
you.’ I said, ‘Mr. Warburg, I have already prepared and tomorrow I am going
to offer an amendment to the Lant Bill authorizing the establishment of
cooperative national banks.’ That was the intermediate credit act which was
then pending to authorize the establishment of cooperative national banks.
That was the extent of my conversation with Mr. Warburg, and we have not had
Mr. Wingo testified that in April, May, June and July of 1920, the
manufacturers and merchants were allowed a very large increase in credits.
This was to tide them through the contraction of credit which was intended
to ruin the American farmers, who, during this period, were denied all
At the Senate Hearings in 1923, Eugene Meyer, Jr. put his finger on a
primary reason for the Federal Reserve Board’s action in raising the
interest rate to 7% on agricultural and livestock paper:
"I believe," he said, "that a great deal of trouble would have been avoided
if a larger number of the eligible non-member banks had been members of the
Federal Reserve System."
Meyer was correct in pointing this out. The purpose of the Board’s action
was to break those state and joint land stock banks which had steadfastly
refused to surrender their freedom to the banker’s dictatorship set up by
the System. Kemmerer in the ABC of the Federal Reserve System had written in
"The tendency will be toward unification and simplicity which will be
brought about by the state institutions, in increasing numbers, becoming
stockholders and depositors in the reserve banks." However, the state banks
had not responded.
The Senate Hearings of 1923 investigating the causes of the Agricultural
Depression of 1920-21 had been demanded by the American people. The complete
record of the secret meeting of the Federal Reserve Board on May 18, 1920
had been printed in the "Manufacturers’ Record" of Baltimore, Maryland, a
magazine devoted to the interests of small Southern manufacturers.
Benjamin Strong, Governor of the Federal Reserve Bank of New York, and close
friend of Montagu Norman, the Governor of the Bank of England, claimed at
"The Federal Reserve System has done more for the farmer than he has yet
begun to realize."
Emmanuel Goldenweiser, Director of Research for the Board of Governors,
claimed that the discount rate was raised purely as an anti-inflationary
measure, but he failed to explain why it was a raise aimed solely at farmers
and workers, while at the same time the System protected the manufacturers
and merchants by assuring them increased credits.
The final statement on the Federal Reserve Board’s causing the Agricultural
Depression of 1920-21 was made by William Jennings Bryan. In "Hearst’s
Magazine" of November, 1923, he wrote:
"The Federal Reserve Bank that should have been the farmer’s greatest
protection has become his greatest foe. The deflation of the farmer was a
crime deliberately committed."
The Money Creators
The editorial page of The New York Times, January 18, 1920, carried an
interesting comment on the Federal Reserve System. The unidentified writer,
perhaps Paul Warburg, stated, "The Federal Reserve is a fount of credit, not
of capital." This is one of the most revealing statements ever made about
the Federal Reserve System. It says that the Federal Reserve System will
never add anything to our capital structure, or to the formation of capital,
because it is organized to produce credit, to create money for credit money
and speculations, instead of providing capital funds for the improvement of
commerce and industry. Simply stated, capitalization would mean the
providing of notes backed by a precious metal or other commodity. Reserve
notes are un-backed paper loaned at interest.
On July 25, 1921, Senator Owen stated on the editorial page of The New York
Times, The Federal Reserve Board is the most gigantic financial power in all
the world. Instead of using this great power as the Federal Reserve Act
intended that it should, the board....delegated this power to the banks,
threw the weight of its influence toward the support of the policy of German
inflation." The senator whose name was on the Act saw that it was not
performing as promised.
After the Agricultural Depression of 1920-21, the Federal Reserve Board of
Governors settled down to eight years of providing rapid credit expansion of
the New York bankers, a policy which culminated in the Great Depression of
1929-31 and helped paralyze the economic structure of the world. Paul
Warburg had resigned in May, 1918, after the monetary system of the United
States had been changed from a bond-secured currency to a currency based
upon commercial paper and the shares of the Federal Reserve Banks. Warburg
returned to his five hundred thousand dollar a year job with Kuhn, Loeb
Company, but he continued to determine the policy of the Federal Reserve
System, as President of the Federal Advisory Council and as Chairman of the
Executive Committee of the American Acceptance Council.
From 1921 to 1929, Paul Warburg organized three of the greatest trusts in
the United States, the International Acceptance Bank, largest acceptance
bank in the world, Agfa Ansco Film Corporation, with headquarters in
Belgium, and I.G. Farben Corporation whose American branch Warburg set up as
I.G. Chemical Corporation. The Westinghouse Corporation is also one of his
In the early 1920s, the Federal Reserve System played the decisive role in
the re-entry of Russia into the international finance structure. Winthrop
and Stimson continued to be the correspondents between Russian and American
bankers, and Henry L. Stimson handled the negotiations concluding in our
recognition of the Soviet after Roosevelt’s election in 1932. This was an
anti-climax, because we had long before resumed exchange relations with
The Federal Reserve System began purchasing Russian gold in 1920, and
Russian currency was accepted on the Exchanges. According to Colonel Ely
Garrison, in his autobiography, and according to the United States Naval
Secret Service Report on Paul Warburg, the
Russian Revolution had been financed by the Rothschilds and Warburgs, with a
member of the Warburg family carrying the actual funds used by Lenin and
Trotsky in Stockholm in 1918.
An article in the English monthly "Fortnightly", July, 1922, says:
"During the past year, practically every single capitalistic institution has
been restored. This is true of the State Bank, private banking, the Stock
Exchange, the right to possess money to unlimited amount, the right of
inheritance, the bill of exchange system, and other institutions and
practices involved in the conduct of private industry and trade. A great
part of the former nationalized industries are now found in semi-independent
The organization of powerful trusts in Russia under the guise of Communism
made possible the receipt of large amounts of financial and technical help
from the United States. The Russian aristocracy had been wiped out because
it was too inefficient to manage a modern industrial state. The
international financiers provided funds for Lenin and Trotsky to overthrow
the Czarist regime and keep Russia in the First World War. Peter Drucker,
spokesman for the oligarchy in America, declared in an article in the
Saturday Evening Post in 1948, that:
"RUSSIA IS THE IDEAL OF THE MANAGED ECONOMY TOWARDS WHICH WE ARE MOVING."
In Russia, the issuance of sufficient currency to handle the needs of their
economy occurred only after a government had been put in power which had
absolute control of the people. During the 1920s, Russia issued large
quantities of so-called "inflation money", a managed currency. The same
"Fortnightly" article (of July, 1922) observed that:
"As economic pressure produced the ‘astronomical dimensions system’ of
currency; it can never destroy it. Taken alone, the system is
self-contained, logically perfected, even intelligent. And it can perish
only through the collapse or destruction of the political edifice which it
"Fortnightly" also remarked, in 1929, that:
"Since 1921, the daily life of the Soviet citizen is no different from that
of the American citizen, and the Soviet system of government is more
Admiral Kolchak, leader of the White Russian armies, was supported by the
international bankers, who sent British and American troops to Siberia in
order to have a pretext for printing Kolchak rubles. At one time in 1920,
the bankers were manipulating on the London Exchange the old Czarist rubles,
Kerensky rubles and Kolchak rubles, the values of all three fluctuating
according to the movements of the Allied troops aiding Kolchak. Kolchak also
was in possession of considerable amounts of gold which had been seized by
his armies. After his defeat, a trainload of this gold disappeared in
Siberia. At the Senate Hearings in 1921 on the Federal Reserve System, it
was brought out that the System had been receiving this gold. Congressman
Dunbar questioned Governor W.P.G. Harding of the Federal Reserve Board as
DUNBAR: "In other words, Russia is sending a great deal of gold to the
European countries, which in turn send it to us?"
HARDING: "This is done to pay for the stuff bought in this country and to
create dollar exchange."
DUNBAR: "At the same time, that gold came from Russia through Europe?"
HARDING: "Some of it is thought to be Kolchak gold, coming through Siberia,
but it is none of the Federal Reserve Banks’ business. The Secretary of the
Treasury has issued instructions to the assay office not to take any gold
which does not bear the mint mark of a friendly nation."
Just what Governor Harding meant by "a friendly nation" is not clear. In
1921, we were not at war with any country, but Congress was already
beginning to question the international gold dealings of the Federal Reserve
System. Governor Harding could very well shrug his shoulders and say that it
was none of the Federal Reserve Banks’ business where the gold came from.
Gold knows no nationality or race. The United States by law had ceased to be
interested in where its gold came from in 1906, when Secretary of the
Treasury Shaw made arrangements with several of the larger New York banks
(ones in which he had interests) to purchase gold with advances of cash from
the United States Treasury, which would then purchase the gold from these
banks. The Treasury could claim that it did not know where its gold came
from since their office only registers the bank from which it made the
purchase. Since 1906, the Treasury has not known from which of the
international gold merchants it was buying its gold.
The international gold dealings of the Federal Reserve System, and its
active support in helping the League of Nations to force all the nations of
Europe and South America back on the gold standard for the benefit of
international gold merchants like Eugene Meyer, Jr. and Albert Strauss, is
best demonstrated by a classic incident, the sterling credit of 1925.
J.E. Darling wrote, in the English periodical, "Spectator", on January 10,
"Obviously, it is of the first importance to the United States to induce
England to resume the gold standard as early as possible. An American
controlled Gold Standard, which must inevitably result in the United States
becoming the world’s supreme financial power, makes England a tributary and
satellite, and New York the world’s financial centre."
Mr. Darling fails to point out that the American people have as little to do
with this as the British people, and that resumption of the gold standard by
Britain would benefit only that small group of international gold merchants
who own the world’s gold. No wonder that "Banker’s Magazine" gleefully
remarked in July, 1925 that:
"The outstanding event of the past half year in the banking world was the
restoration of the gold standard."
The First World War changed the status of the United States from that of a
debtor nation to the position of the world’s greatest creditor nation, a
title formerly occupied by England. Since debt is money, according to the
Governor Marriner Eccles of the Federal Reserve Board, this also made us the
richest nation of the world. The war also caused the removal of the
headquarters of the world’s acceptance market from London to New York, and
Paul Warburg became the most powerful trade acceptance banker in the world.
The mainstay of the international financiers, however, remained the same.
The gold standard was still the basis of foreign exchange, and the small
group of internationals who owned the gold controlled the monetary system of
the Western nations.
Professor Gustav Cassel wrote in 1928:
"The American dollar, not the gold standard, is the world’s monetary
standard. The American Federal Reserve Board has the power to determine the
purchasing power of the dollar by making changes in the rate of discount,
and thus controls the monetary standard of the world."
True, the members of the Federal Reserve Board would be the most powerful
financiers in the world. Occasionally their membership includes such
influential men as Paul Warburg or Eugene Meyer, Jr., but usually they are a
rubber-stamp committee for the Federal Advisory Council and the London
In May, 1925, the British Parliament passed the Gold Standard Act, putting
Great Britain back on the gold standard. The Federal Reserve System’s major
role in this event came out on March 16, 1926, when George Seay, Governor of
the Federal Reserve Bank of Richmond, testified before the House Banking and
Currency Committee that:
"A verbal understanding confirmed by correspondence, extended Great Britain
a two hundred million dollar gold loan or credit. All negotiations were
conducted between Benjamin Strong, Governor of the Federal Reserve Bank of
New York and Mr. Montagu Norman, Governor of the Bank of England. The
purpose of this loan was to help England get back on the gold standard, and
the loan was to be met by investment of Federal Reserve funds in bills of
exchange and foreign securities."
The Federal Reserve Bulletin of June, 1925, stated that:
"Under its arrangement with the Bank of England the Federal Reserve Bank of
New York undertakes to sell gold on credit to the Bank of England from time
to time during the next two years, but not to exceed $200,000,000
outstanding at any one time."
A two hundred million dollar gold credit had been arranged by a verbal
understanding between the international bankers, Benjamin Strong and Montagu
Norman. It was apparent by this time that the Federal Reserve System had
other interests at heart than the financial needs of American business and
industry. Great Britain’s return to the gold standard was further
facilitated by an additional gold loan of a hundred million dollars from
J.P. Morgan Company. Winston Churchill, British Chancellor of the Exchequer,
complained later that the cost to the British government of this loan was
$1,125,000 the first year, this sum representing the profit to J.P. Morgan
Company in that time.
The matter of changing the discount rate, for instance, has never been
satisfactorily explained. Inquiry at the Federal Reserve Board in Washington
elicited the reply that "the condition of the money market is the prime
consideration behind changes in the rate." Since the money market is in New
York, it takes no imagination to deduce that New York bankers may be
interested in changes of the rate and often attempt to influence it.
Norman Lombard, in the periodical "World’s Work" writes that:
"In their consideration and disposal of proposed changes of policy, the
Federal Reserve Board should follow the procedure and ethics observed by our
court of law. Suggestions that there should be a change of rate or that the
Reserve Banks should buy or sell securities may come from anyone and with no
formality or written argument. The suggestion may be made to a Governor or
Director of the Federal Reserve System over the telephone or at his club
over the luncheon table, or it may be made in the course of a casual call on
a member of the Federal Reserve Board. The interests of the one proposing
the change need not be revealed, and his name and any suggestions he makes
are usually kept secret. If it concerns the matter of open market
operations, the public has no inkling of the decision until the regular
weekly statement appears, showing changes in the holdings of the Federal
Reserve Banks. Meanwhile, there is no public discussion, there is no
statement of the reasons for the decision, or of the names of those opposing
or favoring it."
The chances of the average citizen meeting a Governor of the Federal Reserve
System at his club are also slight.
The House Hearings on Stabilization of the Purchasing Power of the Dollar in
1928 proved conclusively that the Federal Reserve Board worked in close
cooperation with the heads of European central banks, and that the
Depression of 1929-31 was planned at a secret luncheon of the Federal
Reserve Board and those heads of European central banks in 1927. The Board
has never been made responsible to the public for its decisions or actions.
The constitutional checks and balances seem not to operate in finance.
The true allegiance of the members of the Federal Reserve Board has always
been to the central bankers. The three features of the central bank, its
ownership by private stockholders who receive rent and profit for their use
of the nation’s credit, absolute control of the nation’s financial
resources, and mobilization of the nation’s credit to finance foreigners,
all were demonstrated by the Federal Reserve System during the first fifteen
years of its operations.
Further demonstration of the international purposes of the Federal Reserve
Act of 1913 is provided by the "Edge Amendment" of December 24, 1919, which
authorizes the organization of corporations expressly for "engaging in
international foreign banking and other international or foreign financial
operations, including the dealing in gold or bullion, and the holding of
stock in foreign corporations." In commenting on this amendment, E.W.
Kemmerer, economist from Princeton University, remarked that:
"The federal reserve system is proving to be a great influence in the
internationalizing of American trade and American finance."
The fact that this internationalizing of American trade and American finance
has been a direct cause for involving us in two world wars does not disturb
Mr. Kemmerer. There is plenty of evidence to show how Paul Warburg used the
Federal Reserve System as the instrument for getting trade acceptance
adopted on a wide scale by American businessmen.
The use of trade acceptances, (which are the currency of international
trade) by bankers and corporations in the United States prior to 1915 was
practically unknown. The rise of the Federal Reserve System exactly
parallels the increase in the use of acceptances in this country, nor is
this a coincidence. The men who wanted the Federal Reserve System were the
men who set up acceptance banks and profited by the use of acceptances.
As early as 1910, the National Monetary Commission began to issue pamphlets
and other propaganda urging bankers and businessmen in this country to adopt
trade acceptances in their transactions. For three years the Commission
carried on this campaign, and the Aldrich Plan included a broad provision
authorizing the introduction and use of bankers’ acceptances into the
American system of commercial paper.
The Federal Reserve Act of 1913 as passed by Congress did not specifically
authorize the use of acceptances, but the Federal Reserve Board in 1915 and
1916 defined "trade acceptance", further defined by Regulation A Series of
1920, and further defined by Series 1924. One of the first official acts of
the Board of Governors in 1914 was to grant acceptances a preferentially low
rate of discount at Federal Reserve Banks. Since acceptances were not being
used in this country at that time, no explanation of business exigency could
be advanced for this action. It was apparent that someone in power on the
Board of Governors wanted the adoptance of acceptances.
The National Bank Act of 1864, which was the determining financial authority
of the United States until November, 1914, did not permit banks to lend
their credit. Consequently, the power of banks to create money was greatly
limited. We did not have a bank of issue, that is, a central bank, which
could create money. To get a central bank, the bankers caused money panic
after money panic on the business people of the United States, by shipping
gold out of the country, creating a money shortage, and then importing it
back. After we got our central bank, the Federal Reserve System, there was
no longer any need for a money panic, because the banks could create money.
However, the panic as an instrument of power over the business and financial
community was used again on two important occasions, in 1920, causing the
Agricultural Depression, because state banks and trust companies had refused
to join the Federal Reserve System, and in 1929, causing the Great
Depression, which centralized nearly all power in this country in the hands
of a few great trusts.
A trade acceptance is a draft drawn by the seller of goods on the purchaser,
and accepted by the purchaser, with a time of expiration stamped upon it.
The use of trade acceptances in the wholesale market supplies short-term,
assured credit to carry goods in process of production, storage, transit,
and marketing. It facilitates domestic and foreign commerce. Seemingly,
then, the bankers who wished to replace the open-book account system with
the trade acceptance system were progressive men who wished to help American
import-export trade. Much propaganda was issued to that effect, but this was
not really the story.
The open-book system, heretofore used entirely by American business people,
allowed a discount for cash. The acceptance system discourages the use of
cash, by allowing a discount for credit. The open-book system also allowed
much easier terms of payment, with liberal extensions on the debt. The
acceptance does not allow this, since it is a short-term credit with the
time-date stamped upon it. It is out of the seller’s hands, and in the hands
of a bank, usually an acceptance bank, which does not allow any extension of
time. Thus, the adoption of acceptances by American businessmen during the
1920’s greatly facilitated the domination and swallowing up of small
business into huge trusts, which accelerated the crash of 1929.
Trade acceptances had been used to some extent in the United States before
the Civil War. During that war, exigencies of trade had destroyed the
acceptance as a credit medium, and it had not come back into favor in this
country, our people preferring the simplicity and generosity of the
open-book system. Open-book accounts are a single-name commercial paper,
bearing only the name of the debtor. Acceptances are two-name paper, bearing
the name of the debtor and the creditor. Thus they became commodities to be
bought and sold by banks. To the creditor, under the open-book system, the
debt is a liability. To the acceptance bank holding an acceptance, the debt
is an asset. The men who set up acceptance banks in this country, under the
leadership of Paul Warburg, secured control of the billions of dollars of
credit existing as open accounts on the books of American businessmen.
Governor Marriner Eccles of the Federal Reserve Board stated before the
House Banking and Currency Committee that: "Debt is the basis for the
creation of money."
Large holders of trade acceptances got the use of billions of dollars worth
of credit-money, besides the rate of interest charged upon the acceptance
itself. It is obvious why Paul Warburg should have devoted so much time,
money, and energy to getting acceptances adopted by this country’s banking
On September 4, 1914, the National City Bank accepted the first time-draft
drawn on a national bank under provisions of the Federal Reserve Act of
1913. This was the beginning of the end of the open-book account system as
an important factor in wholesale trade. Beverly Harris, vice-president of
the National City Bank of New York, issued a pamphlet in 1915 stating that:
"Merchants using the open account system are usurping the functions of
In The New York Times on June 14, 1920, Paul Warburg, Chairman of the
American Acceptance Council, said:
"Unless the Federal Reserve Board puts itself heart and soul behind the
untrammeled development of acceptances as a prime investment for banks of
the Federal Reserve Banks the future safe and sound development of the
system will be jeopardized."
This was a statement of the purpose of Warburg and his bunch who wanted
"monetary reform" in this country. They were out to get control of all
credit in the United States, and they got it, by means of the Federal
Reserve System, the acceptance system, and the lack of concern by the
The First World War was a boon to the introduction of trade acceptances, and
the volume jumped to four hundred million dollars in 1917, growing through
the 1920s to more than a billion dollars a year, which culminated in a high
peak just before the Great Depression of 1929-31. The Federal Reserve Bank
of New York’s charts show that its use of acceptances reached a peak in
November, 1929, the month of the stock market crash, and declined sharply
thereafter. The acceptance people by then had gotten what they wanted, which
was control of American business and industry. "Fortune Magazine" in
February of 1950 pointed out that:
"Volume of acceptances declined from $1,732 million in 1929 to $209 million
in 1940, because of the concentration of acceptance banking in a few hands,
and the Treasury’s low-interest policy, which made direct loans cheaper than
acceptance. There has been a slight upturn since the war, but it is often
cheaper for large companies to finance imports from their own coffers."
In other words, the "large companies" more accurately, the great trusts, now
have control of credit and have not needed acceptances. Besides the barrage
of propaganda issued by the Federal Reserve System itself, the National
Association of Credit Men, the American Bankers’ Association, and other
fraternal organizations of the New York bankers devoted much time and money
to distributing acceptance propaganda. Even their flood of lectures and
pamphlets proved insufficient, and in 1919 Paul Warburg organized the
American Acceptance Council, which was devoted entirely to acceptance
The first convention held by this association at Detroit, Michigan, on June
9, 1919, coincided with the annual convention of the National Association of
Credit Men, held there on that date, so that "interested observers might
with facility participate in the lectures and meetings of both groups,"
according to a pamphlet issued by the American Acceptance Council.
Paul Warburg was elected President of this organization, and later became
chairman of the Executive Committee of the American Acceptance Council, a
position which he held until his death in 1932. The Council published lists
of corporations using trade acceptances, all of them businesses in which
Kuhn, Loeb Co. or its affiliates held control. Lectures given before the
Council or by members of the Council were attractively bound and distributed
free by the National City Bank of New York to the country’s businessmen.
Louis T. McFadden, Chairman of the House Banking and Currency Committee,
charged in 1922 that the American Acceptance Council was exercising undue
influence on the Federal Reserve Board and called for a Congressional
investigation, but Congress was not interested.
At the second annual convention of the American Acceptance Council, held in
New York on December 2, 1920, President Paul Warburg stated:
"It is a great satisfaction to report that during the year under review it
was possible for the American Acceptance Council to further develop and
strengthen its relations with the Federal Reserve Board."
During the 1920s Paul Warburg, who had resigned from the Federal Reserve
Board after holding a position as Governor for a year in wartime, continued
to exercise direct personal influence on the Federal Reserve Board by
meeting with the Board as President of the Federal Advisory Council and as
President of the American Acceptance Council. He was, from its organization
in 1920 until his death in 1932, Chairman of the Board of the International
Acceptance Bank of New York, the largest acceptance bank in the world. His
brother, Felix M. Warburg, also a partner in Kuhn, Loeb Co., was director of
the International Acceptance Bank and Paul’s son, James Paul Warburg, was
Vice-President. Paul Warburg was also a director on other important
acceptance banks in this country, such as Westinghouse Acceptance Bank,
which were organized in the United States immediately after the World War,
when the headquarters of the international acceptance market was moved from
London to New York, and Paul Warburg became the most powerful acceptance
banker in the world.
Paul Warburg became an even more legendary
figure by his memorialization as "Daddy Warbucks" in the comic strip,
"Little Orphan Annie". The strip celebrated a homeless waif and her dog who
are adopted by "the richest man in the world", Daddy Warbucks, a takeoff on
"Warburg", who has almost magical powers and can accomplish anything by the
power of his limitless wealth. Those in the know snickered when "Annie", the
musical comedy version of this story, had a highly successful run of several
years on Broadway, because the vast majority of the audience had no idea
that this was merely another Warburg operation.
It was the transference of the acceptance market from England to this
country which gave rise to Thomas Lamont’s ecstatic speech before the
Academy of Political Science in 1917 that:
"The dollar, not the pound, is now the basis for international exchange."
Americans were proud to hear that, but they did not realize at what a price.
Visible proof of the undue influence of the American Acceptance Council on
the Federal Reserve Board, about which Congressman McFadden complained, is
the chart showing the rate-pattern of the Federal Reserve Bank of New York
during the 1920s. The Bank’s official discount rate follows exactly for nine
years the ninety-day bankers’ acceptance rate, and the Federal Reserve Bank
of New York sets the discount rate for the rest of the Reserve Banks.
Throughout the 1920s the Board of Governors retained two of its first
members, C.S. Hamlin and Adolph C. Miller. These men found themselves
careers as arbiters of the nation’s monetary policy. Hamlin was on the Board
from 1914 until 1936, when he was appointed Special Counsel to the Board,
while Miller served from 1914 until 1931. These two men were allowed to stay
on the Board so many years because they were both eminently respectable men
who gave the Board a certain prestige in the eyes of the public. During
these years one important banker after another came on the Board, served for
awhile, and went on to better things. Neither Miller nor Hamlin ever
objected to anything that the New York bankers wanted. They changed the
discount rate and they performed open market operation with Government
securities whenever Wall Street wanted them to. Behind them was the figure
of Paul Warburg, who exercised a continuous and dominant influence as
President of the Federal Advisory Council, on which he had such men of
common interests with himself as Winthrop Aldrich and J.P. Morgan. Warburg
was never too occupied with his duties of organizing the big international
trusts to supervise the nation’s financial structures. His influence from
1902, when he arrived in this country as immigrant from Germany, until 1932,
the year of his death, was dependent on his European alliance with the
banking cartel. Warburg’s son, James Paul Warburg, continued to exercise
such influence, being appointed Franklin D. Roosevelt’s Director of the
Budget when that great man assumed office in 1933, and setting up the Office
of War Information, our official propaganda agency during the Second World
In The Fight for Financial Supremacy, Paul Einzig, editorial writer for the
London Economist, wrote that:
"Almost immediately after World War I a close cooperation was established
between the Bank of England and the Federal Reserve authorities, and more
especially with the Federal Reserve Bank of New York.* This cooperation was
largely due to the cordial relations existing between Mr. Montagu Norman of
the Bank of England and Mr. Benjamin Strong, Governor of the Federal Reserve
Bank of New York until 1928. On several occasions the discount rate policy
of the Federal Reserve Bank of New York was guided by a desire to help the
Bank of England.
* William Boyce Thompson (Wall Street operator) commented to Clarence
Barron, Nov. 27, 1920, "Why should the Federal Reserve Bank have private
wires all over the country and talk daily by cable with the Bank of
England?" p. 327 "They Told Barron". There has been close cooperation in the
fixing of discount rates between London and New York."86
Paul Einzig, The Fight For Financial Supremacy, Macmillan, 1931
The collaboration between Benjamin Strong and Lord Montagu Norman is one of
the greatest secrets of the twentieth century. Benjamin Strong married the
daughter of the president of Bankers Trust in New York, and subsequently
succeeded to its presidency. Carroll Quigley, in Tragedy and Hope says:
"Strong became Governor of the Federal Reserve Bank of New York as the joint
nominee of Morgan and of Kuhn, Loeb Company in 1914."87
Lord Montagu Norman is the only man in history who had both his maternal
grandfather and his paternal grandfather serve as Governors of the Bank of
England. His father was with Brown, Shipley Company, the London Branch of
Brown Brothers (now Brown Brothers Harriman). Montagu Norman (1871-1950)
came to New York to work for Brown Brothers in 1894, where he was befriended
by the Delano family, and by James Markoe, of Brown Brothers. He returned to
England, and in 1907 was named to the Court of the Bank of England. In 1912,
he had a nervous breakdown, and went to Switzerland to be treated by Jung,
as was fashionable among the powerful group which he represented.*
Lord Montagu Norman was Governor of the Bank of England from 1916 to 1944.
During this period, he participated in the central bank conferences which
set up the Crash of 1929 and a worldwide depression. In The Politics of
Money by Brian Johnson, he writes, "Strong and Norman, intimate friends,
spent their holidays together at Bar Harbour and in the South of France."
Johnson says, "Norman therefore became Strong’s alter ego. . . . "Strong’s
easy money policies on the New York money market from 1925-28 were the
fulfillment of his agreement with Norman to keep New York interest rates
below those of London. For the sake of international cooperation, Strong
withheld the steadying hand of high interest rates from New York until it
was too late. Easy money in New York had encouraged the surging American
boom of the late 1920s, with its fantastic heights of speculation.
Benjamin Strong died suddenly in 1928. The New York Times obituary, Oct. 17,
1928, describes the conference between the directors of the three great
central banks in Europe in July, 1927, "Mr. Norman, Bank of England, Strong
of the New York Federal Reserve Bank, and Dr. Hjalmar Schacht of the
Reichsbank, their meeting referred to at the time as a meeting of ‘the
world’s most exclusive club’. No public reports were ever made of the
foreign conferences, which were wholly informal, but which covered many
important questions of gold movements, the stability of world trade, and
The meetings at which the future of the world’s economy are decided are
always reported as being "wholly informal", off the record, no reports made
to the public, and on the rare occasions when outraged Congressmen summon
these mystery figures to testify about their activities they merely trace
the outline of steps taken, and develop no information about what was really
said or decided.
At the Senate Hearings on the Federal Reserve System in 1931, H. Parker
Willis, one of the authors and First Secretary of the Federal Reserve Board
from 1914 until 1920, pointedly asked Governor George Harrison, Strong’s
successor as Governor of the Federal Reserve Bank of New York:
"What is the relationship between the Federal Reserve Bank of New York and
the money committee of the Stock Exchange?" "There is no relationship,"
Governor Harrison replied. "There is no assistance or cooperation in fixing
the rate in any way?", asked Willis. "No," said Governor Harrison, "although
on various occasions they advise us of the state of the money situation, and
what they think the rate ought to be." This was an absolute contradiction of
his statement that "There is no relationship". The Federal Reserve Bank of
New York which set the discount rate for the other Reserve Banks, actually
maintained a close liaison with the money committee of the Stock Exchange.
The House Stabilization Hearings of 1928 proved conclusively that the
Governors of the Federal Reserve System had been holding conferences with
heads of the big European central banks. Even had the Congressmen known the
details of the plot which was to culminate in the Great Depression of
1929-31, there would have been nothing they could have done to stop it. The
international bankers who controlled gold movements could inflict their will
on any country, and the United States was as helpless as any other.
Carroll Quigley, Tragedy and Hope, Macmillan, New York, p. 326
* When people of this class are stricken by guilt feelings while plotting
world wars and economic depressions which will bring misery, suffering and
death to millions of the world’s inhabitants, they sometimes have qualms.
These qualms are jeered at by their peers as "a failure of nerve". After a
bout with their psychiatrists, they return to their work with renewed gusto,
with no further digressions of pity for "the little people" who are to be
Brian Johnson, The Politics of Money, McGraw Hill, New York, 1970, p. 63.
$2,493 in the year 2012 has the same "purchase power" as
$100 in the year 1913.
$113.33 in the year 1913 has the same "purchase power" as $100 in the year
Notes from these House Hearings follow:
MR. BEEDY: "I notice on your chart that the lines which produce the most
violent fluctuations are found under ‘Money Rates in New York.’ As the rates
of money rise and fall in the big cities the loans that are made on
investments seem to take advantage of them, at present, a quite violent
change, while industry in general does not seem to avail itself of these
violent changes, and that line is fairly even, there being no great rises or
GOVERNOR ADOLPH MILLER: This was all more or less in the interests of the
international situation. They sold gold credits in New York for sterling
balances in London.
REPRESENTATIVE STRONG: (No relation to Benjamin): Has the Federal Reserve
Board the power to attract gold to this country?
E.A. GOLDENWEISER, research director for the Board: The Federal Reserve
Board could attract gold to this country by making money rates higher.
GOVERNOR ADOLPH MILLER: I think we are very close to the point where any
further solicitude on our part for the monetary concerns of Europe can be
altered. The Federal Reserve Board last summer, 1927, set out by a policy of
open market purchases, followed in course by reduction on the discount rate
at the Reserve Banks, to ease the credit situation and to cheapen the cost
of money. The official reasons for that departure in credit policy were that
it would help to stabilize international exchange and stimulate the
exportation of gold.
CHAIRMAN MCFADDEN: Will you tell us briefly how that matter was brought to
the Federal Reserve Board and what were the influences that went into the
GOVERNOR ADOLPH MILLER: You are asking a question impossible for me to
CHAIRMAN MCFADDEN: Perhaps I can clarify it--where did the suggestion come
from that caused this decision of the change of rates last summer?
GOVERNOR ADOLPH MILLER: The three largest central banks in Europe had sent
representatives to this country. There were the Governor of the Bank of
England, Mr. Hjalmar Schacht, and Professor Rist, Deputy Governor of the
Bank of France. These gentlemen were in conference with officials of the
Federal Reserve Bank of New York. After a week or two, they appeared in
Washington for the better part of a day. They came down the evening of one
day and were the guests of the Governors of the Federal Reserve Board the
following day, and left that afternoon for New York.
CHAIRMAN MCFADDEN: Were the members of the Board present at this luncheon?
GOVERNOR ADOLPH MILLER: Oh, yes, it was given by the Governors of the Board
for the purpose of bringing all of us together.
CHAIRMAN MCFADDEN: Was it a social affair, or were matters of importance
GOVERNOR MILLER: I would say it was mainly a social affair. Personally, I
had a long conversation with Dr. Schacht alone before the luncheon, and also
one of considerable length with Professor Rist. After the luncheon I began a
conversation with Mr. Norman, which was joined in by Governor Strong of New
CHAIRMAN MCFADDEN: Was that a formal meeting of the Board?
GOVERNOR ADOLPH MILLER: No.
CHAIRMAN MCFADDEN: It was just an informal discussion of the matters they
had been discussing in New York?
GOVERNOR MILLER: I assume so. It was mainly a social occasion. What I said
was mainly in the nature of generalities. The heads of these central banks
also spoke in generalities.
MR. KING: What did they want?
GOVERNOR MILLER: They were very candid in answers to questions. I wanted to
have a talk with Mr. Norman, and we both stayed behind after luncheon, and
were joined by the other foreign representatives and the officials of the
New York Reserve Bank. These gentlemen were all pretty concerned with the
way the gold standard was working. They were therefore desirous of seeing an
easy money market in New York and lower rates, which would deter gold from
moving from Europe to this country. That would be very much in the interest
of the international money situation which then existed.
MR. BEEDY: Was there some understanding arrived at between the
representatives of these foreign banks and the Federal Reserve Board or the
New York Federal Reserve Bank?
GOVERNOR MILLER: Yes.
MR. BEEDY: It was not reported formally?
GOVERNOR MILLER: No. Later, there came a meeting of the Open-Market Policy
Committee, the investment policy committee of the Federal Reserve System, by
which and to which certain recommendations were made. My recollection is
that about eighty million dollars worth of securities were purchased in
August consistent with this plan.
CHAIRMAN MCFADDEN: Was there any conference between the members of the Open
Market Committee and those bankers from abroad?
GOVERNOR MILLER: They may have met them as individuals, but not as a
MR. KING: How does the Open-Market Committee get its ideas?
GOVERNOR MILLER: They sit around and talk about it. I do not know whose idea
this was. It was distinctly a time in which there was a cooperative spirit
CHAIRMAN MCFADDEN: You have outlined here negotiations of very great
GOVERNOR MILLER: I should rather say conversations.
CHAIRMAN MCFADDEN: Something of a very definite character took place?
GOVERNOR MILLER: Yes.
CHAIRMAN MCFADDEN: A change of policy on the part of our whole financial
system which has resulted in one of the most unusual situations that has
ever confronted this country financially (the stock market speculation boom
of 1927-1929). It seems to me that a matter of that importance should have
been made a matter of record in Washington.
GOVERNOR MILLER: I agree with you.
REPRESENTATIVE STRONG: Would it not have been a good thing if there had been
a direction that those powers given to the Federal Reserve System should be
used for the continued stabilization of the purchasing power of the American
dollar rather than be influenced by the interests of Europe?
GOVERNOR MILLER: I take exception to that term "influence". Besides, there
is no such thing as stabilizing the American dollar without stabilizing
every other gold currency. They are tied together by the gold standard.
Other eminent men who come here are very adroit in knowing how to approach
the folk who make up the personnel of the Federal Reserve Board.
MR. STEAGALL: The visit of these foreign bankers resulted in money being
cheaper in New York?
GOVERNOR MILLER: Yes, exactly.
CHAIRMAN MCFADDEN: I would like to put in the record all who attended that
luncheon in Washington.
GOVERNOR MILLER: In addition to the names I have given you, there was also
present one of the younger men from the Bank of France. I think all members
of the Federal Reserve Board were there. Under Secretary of the Treasury
Ogden Mills was there, and the Assistant Secretary of the Treasury, Mr.
Schuneman, also, two or three men from the State Department and Mr. Warren
of the Foreign Department of the Federal Reserve Bank of New York. Oh yes,
Governor Strong was present.
CHAIRMAN MCFADDEN: This conference, of course, with all of these foreign
bankers did not just happen. The prominent bankers from Germany, France, and
England came here at whose suggestion?
GOVERNOR MILLER: A situation had been created that was distinctly
embarrassing to London by reason of the impending withdrawal of a certain
amount of gold which had been recovered by France and that had originally
been shipped and deposited in the Bank of England by the French Government
as a war credit. There was getting to be some tension of mind in Europe
because France was beginning to put her house in order for a return to the
gold standard. This situation was one which called for some moderating
MR. KING: Who was the moving spirit who got those people together?
GOVERNOR MILLER: That is a detail with which I am not familiar.
REPRESENTATIVE STRONG: Would it not be fair to say that the fellows who
wanted the gold were the ones who instigated the meeting?
GOVERNOR MILLER: They came over here.
REPRESENTATIVE STRONG: The fact is that they came over here, they had a
meeting, they banqueted, they talked, they got the Federal Reserve Board to
lower the discount rate, and to make the purchases in the open market, and
they got the gold.
MR. STEAGALL: Is it true that action stabilized the European currencies and
GOVERNOR MILLER: Yes, that was what it was intended to do.
CHAIRMAN MCFADDEN: Let me call your attention to the recent conference in
Paris at which Mr. Goldenweiser, director of research for the Federal
Reserve Board, and Dr. Burgess, assistant Federal Reserve Agent of the
Federal Reserve Bank of New York, were in consultation with the
representatives of the other central banks. Who called the conference?
GOVERNOR MILLER: My recollection is that it was called by the Bank of
GOVERNOR YOUNG: No, it was the League of Nations who called them together."
The secret meeting between the Governors of the Federal Reserve Board and
the heads of the European central banks was not called to stabilize
anything. It was held to discuss the best way of getting the gold held in
the United States by the System back to Europe to force the nations of that
continent back on the gold standard. The League of Nations had not yet
succeeded in doing that, the objective for which that body was set up in the
first place, because the Senate of the United States had refused to let
Woodrow Wilson betray us to an international monetary authority. It took the
Second World War and Franklin D. Roosevelt to do that. Meanwhile, Europe had
to have our gold and the Federal Reserve System gave it to them, five
hundred million dollars worth. The movement of that gold out of the United
States caused the deflation of the stock boom, the end of the business
prosperity of the 1920s and the Great Depression of 1929-31, the worst
calamity which has ever befallen the nation. It is entirely logical to say
that the American people suffered that depression as a punishment for not
joining the League of Nations. The bankers knew what would happen when that
five hundred million dollars worth of gold was sent to Europe. They wanted
the Depression because it put the business and finance of the United States
in their hands.
The Hearings continue:
MR. BEEDY: "Mr. Ebersole of the Treasury Department concluded his remarks at
the dinner we attended last night by saying that the Federal Reserve System
did not want stabilization and the American businessman did not want it.
They want these fluctuations in prices, not only in securities but in
commodities, in trade generally, because those who are now in control are
making their profits out of that very instability. If control of these
people does not come in a legitimate way, there may be an attempt to produce
it by general upheavals such as have characterized society in days gone by.
Revolutions have been promoted by dissatisfaction with existing conditions,
the control being in the hands of the few, and the many paying the bills.
CHAIRMAN MCFADDEN: I have here a letter from a member of the Federal Reserve
Board who was summoned to appear here. I would like to have it put in the
record. It is from Governor Cunningham:
Dear Mr. Chairman:
For the past several weeks I have been confined to my home on account of
illness and am now preparing to spend a few weeks away from Washington for
the purpose of hastening convalescence.
Edward H. Cunningham
This is in answer to an invitation extended him to appear before our
Committee. I also have a letter from George Harrison, Deputy Governor of the
Federal Reserve Bank of New York.
My dear Mr. Congressman:
Governor Strong sailed for Europe last week. He had not been at all well
since the first of the year, and, while he did appear before your Committee
last March, it was only shortly after that that he suffered a very severe
attack of shingles, which has sorely racked his nerves. George L. Harrison,
May 19, 1928
I also desire to place in the record a statement in the New York Journal of
Commerce, dated May 22, 1928, from Washington:
‘It is stated in well-informed circles here that the chief topic being taken
up by Governor Strong of the Federal Reserve Bank of New York on his present
visit to Paris is the arrangement of stabilization credits for France,
Rumania, and Yugoslavia. A second vital question Mr. Strong will take up is
the amount of gold France is to draw from this country.’"
Further questioning by Chairman McFadden about the strange illness of
Benjamin Strong brought forth the following testimony from Governor Charles
S. Hamlin of the Federal Reserve Board on May 23rd, 1928:
"All I know is that Governor Strong has been very ill, and he has gone over
to Europe primarily, I understand, as a matter of health. Of course, he
knows well the various offices of the European central banks and undoubtedly
will call on them."
Governor Benjamin Strong died a few weeks after his return from Europe,
without appearing before the Committee.
The purpose of these hearings before the House Committee on Banking and
Currency in 1928 was to investigate the necessity for passing the Strong
bill, presented by Representative Strong (no relation to Benjamin, the
international banker), which would have provided that the Federal Reserve
System be empowered to act to stabilize the purchasing power of the dollar.
This had been one of the promises made by Carter Glass and Woodrow Wilson
when they presented the Federal Reserve Act before Congress in 1912, and
such a provision had actually been put in the Act by Senator Robert L. Owen,
but Carter Glass’ House Committee on Banking and Currency had struck it out.
The traders and speculators did not want the dollar to become stable,
because they would no longer be able to make a profit. The citizens of this
country had been led to gamble on the stock market in the 1920s because the
traders had created a nationwide condition of instability.
The Strong Bill of 1928 was defeated in Congress.
The financial situation in the United States during the 1920s was
characterized by an inflation of speculative values only. It was a
trader-made situation. Prices of commodities remained low, despite the
over-pricing of securities on the exchange.
The purchasers did not expect their securities to pay dividends. The idea
was to hold them awhile and sell them at a profit. It had to stop somewhere,
as Paul Warburg remarked in March, 1929. Wall Street did not let it stop
until the people had put their savings into these over-priced securities. We
had the spectacle of the President of the United States, Calvin Coolidge,
acting as a shill for the stock market operators when he recommended to the
American people that they continue buying on the market, in 1927.
"The same words ex President Bush used in 2007 to
convince people to invest their retirement funds into the market...right
before it collapsed." There had been uneasiness about the inflated
condition of the market, and the bankers showed their power by getting the
President of the United States, the Secretary of the Treasury, and the
Chairman of the Board of Governors of the Federal Reserve System to issue
statements that brokers’ loans were not too high, and that the condition of
the stock market was sound.
Irving Fisher warned us in 1927 that the burden of stabilizing prices all
over the world would soon fall on the United States. One of the results of
the Second World War was the establishment of an International Monetary Fund
to do just that. Professor Gustav Cassel remarked in the same year that:
"The downward movement of prices has not been a spontaneous result of forces
beyond our control. It is the result of a policy deliberately framed to
bring down prices and give a higher value to the monetary unit."
The Democratic Party, after passing the Federal Reserve Act and leading us
into the First World War, assumed the role of an opposition party during the
1920s. They were on the outside of the political fence, and were supported
during those lean years by liberal handouts from Bernard Baruch, according
to his biography. How far outside of it they were and how little chance they
had in 1928, is shown by a plank in the official Democratic Party platform
adopted at Houston on June 28, 1928:
"The administration of the Federal Reserve System for the advantage of the
stock-market speculators should cease. It must be administered for the
benefit of farmers, wage-earners, merchants, manufacturers, and others
engaged in constructive business."
This idealism insured defeat for its protagonist, Al Smith, who was
nominated by Franklin D. Roosevelt. The campaign against Al Smith also was
marked by appeals to religious intolerance, because he was a Catholic. The
bankers stirred up anti-Catholic sentiment all over the country to achieve
the election of their World War I protégé, Herbert Hoover.
Instead of being used to promote the financial stability of the country, as
had been promised by Woodrow Wilson when the Act was passed, financial
instability has been steadily promoted by the Federal Reserve Board. An
official memorandum issued by the Board on March 13, 1939, stated that:
"The Board of Governors of the Federal Reserve System opposes any bill which
proposes a stable price level."
Politically, the Federal Reserve Board was used to advance the election of
the bankers’ candidates during the 1920s. The "Literary Digest" on August 4,
1928, said, on the occasion of the Federal Reserve Board raising the rate to
five percent in a Presidential year:
"This reverses the politically desirable cheap money policy of 1927, and
gives smooth conditions on the stock market. It was attacked by the Peoples’
Lobby of Washington, D.C. which said that ‘This increase at a time when
farmers needed cheap money to finance the harvesting of their crops was a
direct blow at the farmers, who had begun to get back on their feet after
the Agricultural Depression of 1920-21.
"The New York World" said on that occasion:
"Criticism of Federal Reserve Board policy by many investors is not based on
its attempt todeflate the stock market, but on the charge that the Board
itself, by last year’s policy, is completely responsible for such stock
market inflation as exists."
A damning survey of the Federal Reserve System’s first fifteen years appears
in the "North American Review" of May, 1929, by H. Parker Willis,
professional economist who was one of the authors of the Act and First
Secretary of the Board from 1914 until 1920. He expresses complete
"My first talk with President-elect Wilson was in 1912. Our conversation
related entirely to banking reform. I asked whether he felt confident we
could secure the administration of a suitable law and how we should get it
applied and enforced. He answered: ‘We must rely on American business
idealism.’ He sought for something which could be trusted to afford
opportunity to American Idealism. It did serve to finance the World War and
to revise American banking practices. The element of idealism that the
President prescribed and believed we could get on the principle of noblesse
oblige from American bankers and businessmen was not there. Since the
inauguration of the Federal Reserve Act we have suffered one of the most
serious financial depressions and revolutions ever known in our history,
that of 1920-21. We have seen our agriculture pass through a long period of
suffering and even of revolution, during which one million farmers left
their farms, due to difficulties with the price of land and the odd status
of credit conditions. We have suffered the most extensive era of bank
failures ever known in this country. Forty-five hundred banks have closed
their doors since the Reserve System began functioning. In some Western
towns there have been times when all banks in that community failed, and
given banks have failed over and over again. There has been little
difference in liability to failure between members and non-members of the
Federal Reserve System. "Wilson’s choice of the first members of the Federal
Reserve Board was not especially happy. They represented a composite group
chosen for the express purpose of placating this, that, or the other big
interest. It was not strange that appointees used their places to pay debts.
When the Board was considering a resolution to the effect that future
members of the reserve system should be appointed solely on merit, because
of the demonstrated incompetence of some of their number. Comptroller John
Skelton Williams moved to strike out the word ‘solely’ and in this he was
sustained by the Board. The inclusion of certain elements (Warburg, Strauss,
etc.) in the Board gave an opportunity for catering to special interests
that was to prove disastrous later on. "President Wilson erred, as he often
erred, in supposing that the holding of an important office would transform
an incumbent and revivify his patriotism. The Reserve Board reached the low
ebb of the Wilson period with the appointment of a member who was chosen for
his ability to get delegates for a Democratic candidate for the Presidency.
However, this level was not the dregs reached under President Harding. He
appointed an old crony, D.R. Crissinger, as Governor of the Board, and named
several other super-serviceable politicians to other places. Before his
death he had done his utmost to debauch the whole undertaking. The System
has gone steadily downhill ever since.
"Reserve Banks had hardly assumed their first form when it became apparent
that local bankers had sought to use them as a means of taking care of
‘favorite sons’, that is, persons who had by common consent become a kind of
general charge upon the banking community, or inefficients of various kinds.
When reserve directors were to be chosen, the country bankers often refused
to vote, or, when they voted, cast their ballots as directed by city
correspondents. In these circumstances popular or democratic control of
reserve banks was out of the question. Reasonable efficiency might have been
secured if honest men, recognizing their public duty, had assumed power. If
such men existed, they did not get on the Federal Reserve Board. In one
reserve bank today the chief management is in the hands of a man who never
did a day’s actual banking in his life, while in another reserve institution
both Governor and Chairman are the former heads of now defunct banks. They
naturally have a high failure record in their district. In a majority of
districts the standard of performance as judged by good banking standards is
disgracefully low among reserve executive officials. The policy of the
Federal Reserve Bank of Philadelphia is known in the System as the ‘Friends
and Relatives Banks.’
"It was while making war profits in considerable amounts that someone
conceived the idea of using the profits to provide themselves with
phenomenally costly buildings. Today the Reserve Banks must keep a full
billion dollars of their money constantly at work merely to pay their own
expenses in normal times.
"The best illustration of what the System has done and not done is offered
by the experience which the country was having with speculation, in May,
1929. Three years prior to that, the present bull market was just getting
under way. In the autumn of 1926 a group of bankers, among them one of world
famous name, were sitting at a table in a Washington hotel. One of them
raised the question whether the low discount rates of the System were not
likely to encourage speculation. "‘Yes’, replied the famous banker, ‘they
will, but that cannot be helped. It is the price we must pay for helping
"It may well be questioned whether the encouragement of speculation by the
Board has been the price paid for helping Europe or whether it is the price
paid to induce a certain class of financiers to help Europe, but in either
case European conditions should not have had anything to do with the Board’s
discount policy. The fact of the matter is that the Federal Reserve Banks do
not come into contact with the community.
"The ‘small man’ from Maine to Texas has gradually been led to invest his
savings in the stock market, with the result that the rising tide of
speculation, transacted at a higher and higher rate of speed, has swept over
the legitimate business of the country.
"In March, 1928, Roy A. Young, Governor of the Board, was called before a
‘Do you think the brokers’ loans are too high?", he was asked.
"‘I am not prepared to say whether brokers’ loans are too high or too low,’
he replied, ‘but I am sure they are safely and conservatively made.’
"Secretary of the Treasury Mellon in a formal statement assured the country
that they were not too high, and Coolidge, using material supplied him by
the Federal Reserve Board, made a plain statement to the country that they
were not too high. The Federal Reserve Board, charged with the duty of
protecting the interests of the average man, thus did its utmost to assure
the average man that he should feel no alarm about his savings. Yet the
Federal Reserve Board issued on February 2, 1929, a letter addressed to the
Reserve Bank Directors cautioning them against grave danger of further
"What could be expected from a group of men such as composed the Board, a
set of men who were solely interested in standing from under when there was
any danger of friction, displaying a bovine and canine appetite for credit
and praise, while eager only to ‘stand in’ with the ‘big men’ whom they know
as the masters of American finance and banking?"
H. Parker Willis omitted any reference to Lord Montague Norman and the
machinations of the Bank of England which were about to result in the Crash
of 1929 and the Great Depression.
R.G. Hawtrey, the English economist, said, in the March, 1926 American
"When external investment outstrips the supply of general savings the
investment market must carry the excess with money borrowed from the banks.
A remedy is control of credit by a rise in bank rate."
The Federal Reserve Board applied this control of
credit, but not in 1926, nor as a remedial measure. It was not applied until
1929, and then the rate was raised as a punitive measure, to freeze out
everybody but the big trusts.
Professor Cassel, in the Quarterly Journal of Economics, August 1928, wrote
"The fact that a central bank fails to raise its bank rate in accordance
with the actual situation of the capital market very much increases the
strength of the cyclical movement of trade, with all its pernicious effects
on social economy. A rational regulation of the bank rate lies in our hands,
and may be accomplished only if we perceive its importance and decide to go
in for such a policy. With a bank rate regulated on these lines the
conditions for the development of trade cycles would be radically altered,
and indeed, our familiar trade cycles would be a thing of the past."
This is the most authoritative premise yet made relating that our business
depressions are artificially precipitated. The occurrence of the Panic of
1907, the Agricultural Depression of 1920, and the Great Depression of 1929,
all three in good crop years and in periods of national prosperity, suggests
that premise is not guesswork. Lord Maynard Keynes pointed out that most
theories of the business cycle failed to relate their analysis adequately to
the money mechanism. Any survey or study of a depression which failed to
list such factors as gold movements and pressures on foreign exchange would
be worthless, yet American economists have always dodged this issue.
The League of Nations had achieved its goal of getting the nations of Europe
back on the gold standard by 1928, but three-fourths of the world’s gold was
in France and the United States. The problem was how to get that gold to
countries which needed it as a basis for money and credit. The answer was
action by the Federal Reserve System.
Following the secret meeting of the Federal Reserve Board and the heads of
the foreign central banks in 1927, the Federal Reserve Banks in a few months
doubled their holdings of Government securities and acceptances, which
resulted in the exportation of five hundred million dollars in gold in that
year. The System’s market activities forced the rates of call money down on
the Stock Exchange, and forced gold out of the country. Foreigners also took
this opportunity to purchase heavily in Government securities because of the
low call money rate.
"The agreement between the Bank of England and the Washington Federal
Reserve authorities many months ago was that we would force the export of
725 million of gold by reducing the bank rates here, thus helping the
stabilization of France and Europe and putting France on a gold basis."89
(April 20, 1928)
On February 6, 1929, Mr. Montagu Norman, Governor of the Bank of England,
came to Washington and had a conference with Andrew Mellon, Secretary of the
Treasury. Immediately after that mysterious visit, the Federal Reserve Board
abruptly changed its policy and pursued a high discount rate policy,
abandoning the cheap money policy which it had inaugurated in 1927 after Mr.
Norman’s other visit. The stock market crash and the deflation of the
American people’s financial structure was scheduled to take place in March.
To get the ball rolling, Paul Warburg gave the official warning to the
traders to get out of the market. In his annual report to the stockholders
of his International Acceptance Bank, in March, 1929, Mr. Warburg said:
"If the orgies of unrestrained speculation are permitted to spread, the
ultimate collapse is certain not only to affect the speculators themselves,
but to bring about a general depression involving the entire country."
During three years of "unrestrained speculation", Mr. Warburg had not seen
fit to make any remarks about the condition of the Stock Exchange. A
friendly organ, The New York Times, not only gave the report two columns on
its editorial page, but editorially commented on the wisdom and profundity
of Mr. Warburg’s observations. Mr. Warburg’s concern was genuine, for the
stock market bubble had gone much farther than it had been intended to go,
and the bankers feared the consequences if the people realized what was
going on. When this report in The New York Times started a sudden wave of
selling on the Exchange, the bankers grew panicky, and it was decided to
ease the market somewhat. Accordingly, Warburg’s National City Bank rushed
twenty-five million dollars in cash to the call money market, and postponed
the day of the crash.
The revelation of the Federal Reserve Board’s final decision to trigger the
Crash of 1929 appears, amazingly enough, in The New York Times. On April 20,
1929, the Times headlined, "Federal Advisory Council Mystery Meeting in
Washington. Resolutions were adopted by the council and transmitted to the
board, but their purpose was closely guarded. An atmosphere of deep mystery
was thrown about the proceedings both by the board and the council. Every
effort was made to guard the proceedings of this extraordinary session.
Evasive replies were given to newspaper correspondents."
Only the innermost council of "The London Connection" knew that it had been
decided at this "mystery meeting" to bring down the curtain on the greatest
speculative boom in American history. Those in the know began to sell off
all speculative stocks and put their money in government bonds. Those who
were not privy to this secret information, and they included some of the
wealthiest men in America, continued to hold their speculative stocks and
lost everything they had.
In FDR, My Exploited Father-in-Law, Col. Curtis B.
Dall, who was a broker on Wall Street at that time, writes of the Crash,
"Actually it was the calculated ‘shearing’ of the public by the World
Money-Powers, triggered by the planned sudden shortage of the supply of call
money in the New York money market."P. 90. Overnight, the Federal
Reserve System had raised the call rate to twenty percent. Unable to meet
this rate, the speculators’ only alternative was to jump out of windows.
The New York Federal Reserve Bank rate, which dictated the national interest
rate, went to six percent on November 1, 1929. After the investors had been
bankrupted, it dropped to one and one-half percent on May 8, 1931.
Congressman Wright Patman in "A Primer On Money", says that the money supply
decreased by eight billion dollars from 1929 to 1933, causing 11,630 banks
of the total of 26,401 in the United States to go bankrupt and close their
The Federal Reserve Board had already warned the stockholders of the Federal
Reserve Banks to get out of the Market, on February 6, 1929, but it had not
bothered to say anything to the rest of the people. Nobody knew what was
going on except the Wall Street bankers who were running the show. Gold
movements were completely unreliable. The Quarterly Journal of Economics
"The question has been raised, not only in this country, but in several
European countries, as to whether customs statistics record with accuracy
the movements of precious metals, and, when investigation has been made,
confidence in such figures has been weakened rather than strengthened. Any
movement between France and England, for instance, should be recorded in
each country, but such comparison shows an average yearly discrepancy of
fifty million francs for France and eighty-five million francs for England.
These enormous discrepancies are not accounted for."
The Right Honorable Reginald McKenna stated that:
"Study of the relations between changes in gold stock and movement in price
levels shows what should be very obvious, but is by no means recognized,
that the gold standard is in no sense automatic in operation. The gold
standard can be, and is, usefully managed and controlled for the benefit of
a small group of international traders."
In August 1929, the Federal Reserve Board raised the rate to six percent.
The Bank of England in the next month raised its rate from five and one-half
percent to six and one-half percent. Dr. Friday in the September, 1929,
issue of Review of Reviews, could find no reason for the Board’s action:
"The Federal Reserve statement for August 7, 1929, shows that signs of
inadequacy for autumn requirements do not exist. Gold resources are
considerably more than the previous year, and gold continues to move in, to
the financial embarrassment of Germany and England. The reasons for the
Board’s action must be sought elsewhere. The public has been given only the
hint that ‘This problem has presented difficulties because of certain
peculiar conditions’. Every reason which Governor Young advanced for
lowering the bank rate last year exists now. Increasing the rate means that
not only is there danger of drawing gold from abroad, but imports of the
yellow metal have been in progress for the last four months. To do anything
to accentuate this is to take the responsibility for bringing on a
world-wide credit deflation."
Thus we find that not only was the Federal Reserve System responsible for
the First World War, which it made possible by enabling the United States to
finance the Allies, but its policies brought on the world-wide depression of
1929-31. Governor Adolph C. Miller stated at the Senate Investigation of the
Federal Reserve Board in 1931 that:
"If we had had no Federal Reserve System, I do not think we would have had
as bad a speculative situation as we had, to begin with."
Carter Glass replied, "You have made it clear that the Federal Reserve Board
provided a terrific credit expansion by these open market transactions."
Emmanuel Goldenweiser said, "In 1928-29 the
Federal Board was engaged in an attempt to restrain the rapid increase in
security loans and in stock market speculation. The continuity of this
policy of restraint, however, was interrupted by reduction in bill rates in
the autumn of 1928 and the summer of 1929."
Both J.P. Morgan and Kuhn, Loeb Co. had "preferred
lists" of men to whom they sent advance announcements of profitable stocks.
The men on these preferred lists were allowed to purchase these stocks at
cost, that is, anywhere from 2 to 15 points a share less than they were sold
to the public. The men on these lists were fellow bankers, prominent
industrialists, powerful city politicians, national Committeemen of the
Republican and Democratic Parties, and rulers of foreign countries.
The men on these lists were notified of the coming crash, and sold all but
so-called gilt-edged stocks, General Motors, Dupont, etc. The prices on
these stocks also sank to record lows, but they came up soon afterwards. How
the big bankers operated in 1929 is revealed by a Newsweek story on May 30,
1936, when a Roosevelt appointee, Ralph W. Morrison, resigned from the
Federal Reserve Board:
"The consensus of opinion is that the Federal Reserve Board has lost an able
man. He sold his Texas utilities stock to Insull for ten million dollars,
and in 1929 called a meeting and ordered his banks to close out all security
loans by September 1. As a result, they rode through the depression with
Predictably enough, all of the big bankers rode through the depression "with
flying colors." The people who suffered were the workers and farmers who had
invested their money in get-rich stocks, after the President of the United
States, Calvin Coolidge, and the Secretary of the Treasury, Andrew Mellon,
had persuaded them to do it.
There had been some warnings of the approaching crash in England, which
American newspapers never saw. The London Statist on May 25, 1929 said:
"The banking authorities in the United States apparently want a business
panic to curb speculation."
The London Economist on May 11, 1929, said:
"The events of the past year have seen the beginnings of a new technique,
which, if maintained and developed, may succeed in ‘rationing the speculator
without injuring the trader.’"
Governor Charles S. Hamlin quoted this statement at the Senate hearings in
1931 and said, in corroboration of it:
"That was the feeling of certain members of the Board, to remove Federal
Reserve credit from the speculator without injuring the trader."
Governor Hamlin did not bother to point out that the "speculators" he was
out to break were the school-teachers and small town merchants who had put
their savings into the stock market, or that the "traders" he was trying to
protect were the big Wall Street operators, Bernard Baruch and Paul Warburg.
When the Federal Reserve Bank of New York raised its
rate to six percent on August 9, 1929, market conditions began which
culminated in tremendous selling orders from October 24 into November, which
wiped out a hundred and sixty billion dollars worth of security values. That
was a hundred and sixty billions which the American citizens had one month
and did not have the next. Some idea of the calamity may be had if we
remember that our enormous outlay of money and goods in the Second World War
amounted to not much more than two hundred billions of dollars, and a great
deal of that remained as negotiable securities in the national debt. The
stock market crash is the greatest misfortune which the United States has
The Academy of Political Science of Columbia
University in its annual meeting in January, 1930, held a post-mortem on the
Crash of 1929. Vice-President Paul Warburg was to have presided, and
Director Ogden Mills was to have played an important part in the discussion.
However, these two gentlemen did not show up. Professor Oliver M.W.
Sprague of Harvard University remarked of the crash:
"We have here a beautiful laboratory case of the stock market’s dropping
apparently from its own weight."
It was pointed out that there was no exhaustion of
credit, as in 1893, nor any currency famine, as in the Panic of 1907, when
clearing-house certificates were resorted to, nor a collapse of commodity
prices, as in 1920. What then, had caused the crash? The people had
purchased stocks at high prices and expected the prices to continue to rise.
The prices had to come down, and they did. It was obvious to the
economists and bankers gathered over their brandy and cigars at the Hotel
Astor that the people were at fault. Certainly the people had made a mistake
in buying over-priced securities, but they had been
talked into it by every leading citizen from the President of the United
States on down. Every magazine of national circulation, every big
newspaper, and every prominent banker, economist, and politician, had joined
in the big confidence game of urging people to buy those over-priced
securities. When the Federal Reserve Bank of New York raised its rate to six
percent, in August 1929, people began to get out of the market, and it
turned into a panic which drove the prices of securities down far below
their natural levels. As in previous panics, this
enabled both Wall Street and foreign operators in the know to pick up
"blue-chip" and gilt-edged" securities for a fraction of their real value.
The Crash of 1929 also saw the formation of giant
holding companies which picked up these cheap bonds and securities, such as
the Marine Midland Corporation, the Lehman Corporation, and the Equity
Corporation. In 1929 J.P. Morgan Company organized the giant food trust,
Standard Brands. There was an unequaled opportunity for trust operators to
enlarge and consolidate their holdings.
Emmanuel Goldenweiser, director of research for the Federal Reserve System,
said, in 1947:
"It is clear in retrospect that the Board should have ignored the
speculative expansion and allowed it to collapse of its own weight."
This admission of error eighteen years after the event was small comfort to
the people who lost their savings in the Crash.
The Wall Street Crash of 1929 was the beginning of a
world-wide credit deflation which lasted through 1932, and from which the
Western democracies did not recover until they began to rearm for the Second
World War. During this depression, the trust operators achieved
further control by their backing of three international swindlers, The Van
Sweringen brothers, Samuel Insull, and Ivar Kreuger. These men pyramided
billions of dollars worth of securities to fantastic heights. The bankers
who promoted them and floated their stock issue could have stopped them at
any time, by calling loans of less than a million dollars, but they let
these men go on until
they had incorporated many industrial and financial
properties into holding companies, which the banks then took over for
nothing. Insull piled up public utility holdings throughout the Middle West,
which the banks got for a fraction of their worth. Ivar Kreuger was
backed by Lee Higginson Company, supposedly one of the nation’s most
reputable banking houses. The Saturday Evening Post called him "more than a
financial titan", and the English review Fortnightly said, in an article
written December 1931, under the title, "A Chapter in Constructive Finance":
"It is as a financial irrigator that Kreuger has become of such vital
importance to Europe."*
"Financial irrigator" we may remember, was the title
bestowed upon Jacob Schiff by Newsweek Magazine, when it described how
Schiff had bought up American railroads with Rothschild’s money.
The New Republic remarked on January 25th, 1933, when it commented on the
fact that Lee Higginson Company had handled Kreuger and Toll Securities on
the American market:
"Three-quarters of a billion dollars was made away with. Who was able to
dictate to the French police to keep secret the news of this extremely
important suicide for some hours, during which somebody sold Kreuger
securities in large amounts, thus getting out of the market before the
The Federal Reserve Board could have checked the enormous credit expansion
of Insull and Kreuger by investigating the security on which their loans
were being made, but the Governors never made any examination of the
activities of these men.
The modern bank with the credit facilities it affords, gives an opportunity
which had not previously existed for such operators as Kreuger to make an
appearance of abundant capital by the aid of borrowed capital. This enables
the speculator to buy securities with securities. The only limit to the
amount he can corner is the amount to which the banks will back him, and, if
a speculator is being promoted by a reputable banking house, as Kreuger was
promoted by Lee Higginson Company, the only way he could be stopped would be
by an investigation of his actual financial resources, which in Kreuger’s
case would have proved to be nil.
The leader of the American people during the Crash of 1929 and the
subsequent depression was Herbert Hoover. After the first break of the
market (the five billion dollars in security values which disappeared on
October 24, 1929) President Hoover said:
"The fundamental business of the country, that is, production and
distribution of commodities, is on a sound and prosperous basis."
Sounds familiar, remember George W. Bush's words in 2008?
His Secretary of the Treasury, Andrew Mellon, stated on December 25, 1929,
"The Government’s business is in sound condition."
His own business, the Aluminum Company of America, apparently was not doing
so well, for he had reduced the wages of all employees by ten percent.
The New York Times reported on April 7, 1931, "Montagu Norman, Governor of
the Bank of England, conferred with the Federal Reserve Board here today.
Mellon, Meyer, and George L. Harrison, Governor of the Federal Reserve Bank
of New York, were present."
The London Connection had sent Norman over this time
to ensure that the Great Depression was proceeding according to schedule.
Congressman Louis McFadden had complained, as reported in The New York
Times, July 4, 1930, "Commodity prices are being reduced to 1913 levels.
Wages are being reduced by the labor surplus of four million unemployed. The
Morgan control of the Federal Reserve System is exercised through control of
the Federal Reserve Bank of New York, the mediocre representation and
acquiescence of the Federal Reserve Board in Washington." As the depression
deepened, the trust’s lock on the American economy strengthened, but no
finger was pointed at the parties who were controlling the system.
* NOTE: Ivar Kreuger, we may recall, was occasionally the personal guest of
his old friend, President Herbert Hoover, at the White House. Hoover seems
to have maintained a cordial relationship with many of the most prominent
swindlers of the twentieth century, including his partner, Emile Francqui.
The receivership of the billion dollar Kreuger Fraud was handled by Samuel
Untermeyer, former counsel for Pujo Committee hearings.
In 1930 Herbert Hoover appointed to the Federal Reserve Board an old friend
from World War I days, Eugene Meyer, Jr., who
had a long record of public service dating from 1915, when he went into
partnership with Bernard Baruch in the Alaska-Juneau Gold Mining Company.
Meyer had been a Special Advisor to the War Industries Board on Non-Ferrous
Metals (gold, silver, etc.); Special Assistant to the Secretary of War on
aircraft production; in 1917 he was appointed to the National Committee on
War Savings, and was made
Chairman of the War Finance Corporation from 1918-1926.
He then was appointed chairman of the Federal Farm Loan Board from 1927-29.
Hoover put him on the Federal Reserve Board in 1930,
and Franklin D. Roosevelt created the Reconstruction Bank for Reconstruction
and Development in 1946. Meyer must have been a man of exceptional
ability to hold so many important posts. However, there were
some Senators who did not believe he should hold any Government office,
because of his family background as an international gold dealer and his
mysterious operations in billions of dollars of Government securities in the
First World War. Consequently, the Senate held Hearings to determine
whether Meyer ought to be on the Federal Reserve Board.
At these Hearings, Representative Louis T. McFadden, Chairman of the House
Banking and Currency Committee, said:
"Eugene Meyer, Jr. has had his own crowd with him in
the government since he started in 1917. His War Finance Corporation
personnel took over the Federal Farm Loan System, and almost immediately
afterwards, the Kansas City Join Stock Land Bank and the Ohio Joint Stock
Land Bank failed."
REPRESENTATIVE RAINEY: Mr. Meyer, when he nominally resigned as head of the
Federal Farm Loan Board, did not really cease his activities there. He left
behind him an able body of wreckers. They are continuing his policies and
consulting with him. Before his appointment, he was frequently in
consultation with Assistant Secretary of the Treasury Dewey.
Just before his appointment, the Chicago Joint Land
Stock Bank, the Dallas Joint Stock Land Bank, the Kansas City Joint Land
Stock Bank, and the Des Moines Land Bank were all functioning. Their bonds
were selling at par. The then farm commissioner had an understanding with
Secretary Dewey that nothing would be done without the consent and approval
of the Federal Farm Loan Board. A few days afterwards, United States
Marshals, with pistols strapped at their sides, and sometimes with drawn
pistols, entered these five banks and demanded that the banks be turned over
to them. Word went out all over the United States, through the newspapers,
as to what had happened, and these banks were ruined. This led to the breach
with the old Federal Farm Loan Board, and to the resignation of three of its
members, and the appointment of Mr. Meyer to be head of that Board.
SENATOR CAREY: Who authorized the marshals to take over the banks?
REP. RAINEY: Assistant Secretary of the Treasury Dewey. That started the
ruin of all these rural banks, and the Gianninis bought them up in great
World’s Work of February 1931, said:
"When the World War began for us in 1917, Mr. Eugene Meyer, Jr. was among
the first to be called to Washington. In April, 1918, President Wilson named
him Director of the War Finance Corporation. This
corporation loaned out 700 million dollars to banking and financial
The Senate Hearings on Eugene Meyer, Jr. continued:
REPRESENTATIVE MCFADDEN: "Lazard Freres, the international banking house of
New York and Paris, was a Meyer family banking house. It frequently figures
in imports and exports of gold, and one of the important functions of the
Federal Reserve System has to do with gold movements in the maintenance of
its own operations. In looking over the minutes of the hearing we had last
Thursday, Senator Fletcher had asked Mr. Meyer, ‘Have you any connections
with international banking?’ Mr. Meyer had answered, ‘Me? Not personally.’
This last question and answer do not appear in the stenographic transcript.
Senator Fletcher remembers asking the question and the answer. It is an odd
SENATOR BROOKHART: I understand that Mr. Meyer looked it over for
REPRESENTATIVE MCFADDEN: Mr. Meyer is a brother-in-law of George Blumenthal,
a member of the firm of J.P. Morgan Company, which represents the Rothschild
interests. He also is a liaison officer between the French Government and
J.P. Morgan. Edmund Platt, who had eight years to go on a term of ten years
as Governor of the Federal Reserve Board, resigned to make room for Mr.
Meyer. Platt was given a Vice-Presidency of Marine Midland Corporation by
Meyer’s brother-in-law Alfred A. Cook. Eugene Meyer, Jr. as head of the War
Finance Corporation, engaged in the placing of two billion dollars in
Government securities, placed many of those orders first with the banking
house now located at 14 Wall Street in the name of Eugene Meyer, Jr. Mr.
Meyer is now a large stockholder in the Allied Chemical Corporation. I call
your attention to House Report No. 1635, 68th Congress, 2nd Session, which
reveals that at least twenty-four million dollars in bonds were duplicated.
Ten billion dollars worth of bonds surreptitiously destroyed. Our committee
on Banking and Currency found the records of the War Finance Corporation
under Eugene Meyer, Jr. extremely faulty. While the books were being brought
before our committee by the people who were custodians of them and taken
back to the Treasury at night, the committee discovered that alterations
were being made in the permanent records."
The record of public service did not prevent Eugene Meyer, Jr. from
continuing to serve the American people on the Federal Reserve Board, as
Chairman of the Reconstruction Finance Corporation, and as head of the
President Rand, of the Marine Midland Corporation, questioned about his
sudden desire for the services of Edmund Platt, said:
"We pay Mr. Platt $22,000 a year, and we took his secretary over, of
course." This meant another five thousand a year.
Senator Brookhart showed that Eugene Meyer, Jr. administered the Federal
Farm Loan Board against the interests of the American farmer, saying:
"Mr. Meyer never loaned more than 180 million dollars of the capital stock
of 500 million dollars of the farm loan board, so that in aiding the farmers
he was not (or would not) able to use half of the capital."
MR. MEYER: Senator Kenyon wrote me a letter which showed that I cooperated
with great advantage to the people of Iowa.
SENATOR BROOKHART: "You went out and took the opposite side from the Wall
Street crowd. They always send somebody out to do that. I have not yet
discovered in your statements much interest in making loans to the farmers
at large, or any real effort to help their condition. In your two years as
head of the Federal Farm Loan Board you made very few loans compared to your
capital. You loaned only one-eighth of the demand, according to your own
Despite the damning evidence uncovered at these Senate
Hearings, Eugene Meyer, Jr. remained on the Federal Reserve Board.
During this tragic period, chairman Louis McFadden of the House Banking and
Currency Committee continued his lone crusade against the "London
Connection" which had wrecked the nation. On June 10, 1932, McFadden
addressed the House of Representatives:
"Some people think the Federal Reserve banks are United States Government
institutions. They are not government institutions. They are private credit
monopolies which prey upon the people of the United States for the benefit
of themselves and their foreign customers. The Federal Reserve banks are the
agents of the foreign central banks. Henry Ford has said, ‘The one aim of
these financiers is world control by the creation of inextinguishable
debts.’ The truth is the Federal Reserve Board has usurped the Government of
the United States by the arrogant credit monopoly which operates the Federal
Reserve Board and the Federal Reserve Banks."
On January 13, 1932, McFadden had introduced a
resolution indicting the Federal Reserve Board of Governors for "Criminal
"Whereas I charge them, jointly and severally, with the crime of having
treasonably conspired and acted against the peace and security of the United
States and having treasonably conspired to destroy constitutional government
in the United States. Resolved, that the Committee on the Judiciary is
authorized and directed as a whole or by subcommittee to investigate the
official conduct of the Federal Reserve Board and agents to determine
whether, in the opinion of the said committee, they have been guilty of any
high crime or misdemeanour which in the contemplation of the Constitution
requires the interposition of the Constitutional powers of the House."
No action was taken on this Resolution. McFadden came back on December 13,
1932 with a motion to impeach President Herbert Hoover. Only five
Congressmen stood with him on this, and the resolution failed. The
Republican majority leader of the House remarked, "Louis T. McFadden is now
On May 23, 1933, McFadden introduced House Resolution No. 158, Articles of
Impeachment against the Secretary of the Treasury, two Assistant Secretaries
of the Treasury, the Federal Reserve Board of Governors, and officers and
directors of the Federal Reserve Banks for their guilt and collusion in
causing the Great Depression. "I charge them with having unlawfully taken
over 80 billion dollars from the United States Government in the year 1928,
the said unlawful taking consisting of the unlawful recreation of claims
against the United States Treasury to the extent of over 80 billion dollars
in the year 1928, and in each year subsequent, and by having robbed the
United States Government and the people of the United States by their theft
and sale of the gold reserve of the United States."
The Resolution never reached the floor. A whispering campaign that McFadden
was insane swept Washington, and in the next Congressional elections, he was
overwhelmingly defeated by thousands of dollars poured into his home
district of Canton, Pennsylvania.
In 1932, the American people elected Franklin D. Roosevelt President of the
United States. This was hailed as the freeing of the American people from
the evil influence which had brought on the Great Depression, the ending of
Wall Street domination, and the disappearance of the banker from Washington.
Roosevelt owed his political career to a fortuitous circumstance. As
Assistant Secretary of the Navy during World War I, because of old school
ties, he had intervened to prevent prosecution of a large ring of
homosexuals in the Navy which included several Groton and Harvard chums.
This brought him to the favorable appreciation of a wealthy international
homosexual set which travelled back and forth between New York and Paris,
and which was presided over by Bessie Marbury, of a very old and prominent
New York family. Bessie’s "wife", who lived with her for a number of years,
was Elsie de Wolfe, later Lady Mendl in a "marriage de convenance", the
arbiter of the international set. They recruited J.P. Morgan’s youngest
daughter, Anne Morgan, into their circle, and used her fortune to restore
the Villa Trianon in Paris, which became their headquarters. During World
War I, it was used as a hospital. Bessie Marbury expected to be awarded the
Legion of Honor by the French Government as a reward, but J.P. Morgan, Jr.,
who despised her for corrupting his youngest sister, requested the French
Government to withhold the award, which they did. Smarting from this rebuff,
Bessie Marbury threw herself into politics, and became a power in the
Democratic National Party. She had also recruited Eleanor Roosevelt into her
circle, and, during a visit to Hyde Park, Eleanor confided that she was
desperate to find something for "poor Franklin" to do, as he was confined to
a wheelchair, and was very depressed.
"I know what we’ll do," exclaimed Bessie, "We’ll run him for Governor of New
York!" Because of her power, she succeeded in this goal, and Roosevelt later
One of the men Roosevelt brought down from New York with him as a Special
Advisor to the Treasury was Earl Bailie of J & W Seligman Company, who had
become notorious as the man who handed the $415,000
bribe to Juan Leguia, son of the President of Peru, in order to get the
President to accept a loan from J & W Seligman Company. There was a
great deal of criticism of this appointment, and Mr. Roosevelt, in keeping
with his new role as defender of the people, sent Earl Bailie back to
@bringing in New York.
Franklin D. Roosevelt himself was Jewish and an
international banker of ill repute, having floated large issues of foreign
bonds in this country in the 1920s. These bonds defaulted, and our citizens
lost millions of dollars, but they still wanted Mr. Roosevelt as
President. The New York Directory of Directors lists
Mr. Roosevelt as President and Director of United European Investors, Ltd.,
in 1923 and 1924, which floated many millions of German marks in this
country, all of which defaulted. Poor’s Directory of Directors lists him as
a director of The International Germanic Trust Company in 1928. Franklin D.
Roosevelt was also an advisor to the Federal International Banking
Corporation, an Anglo-American outfit dealing in foreign securities in the
Roosevelt’s law firm of Roosevelt and O’Connor during
the 1920s represented many international corporations. His law
partner, Basil O’Connor, was a director in the following corporations:
Cuban-American Manganese Corporation, Venezuela-Mexican Oil Corporation,
West Indies Sugar Corporation, American Reserve Insurance Corporation, Warm
Springs Foundation. He was director in other corporations, and later head of
the American Red Cross.
When Franklin D. Roosevelt took office as President of the United States, he
appointed as Director of the Budget James Paul Warburg, son of Paul Warburg,
and Vice President of the International Acceptance Bank and other
corporations. Roosevelt appointed as Secretary of the Treasury W.H. Woodin,
one of the biggest industrialists in the country, Director of the American
Car Foundry Company and numerous other locomotive works, Remington Arms, The
Cuba Company, Consolidated Cuba Railroads, and other big corporations.
Woodin was later replaced by Henry Morgenthau, Jr., son of the Harlem real
estate operator who had helped put Woodrow Wilson in the White House. With
such a crew as this, Roosevelt’s promises of radical social changes showed
little likelihood of fulfillment. One of the first things he did was to
declare a bankers’ moratorium, to help the bankers get their records in
World’s Work says:
"Congress has left Charles G. Dawes and Eugene Meyer, Jr. free to appraise,
by their own methods, the security which prospective borrowers of the two
billion dollar capital may offer."
Roosevelt also set up the Securities Exchange Commission, to see to it that
no new faces got into the Wall Street gang, which caused the following
colloquy in Congress:
REPRESENTATIVE WOLCOTT: At hearings before this committee in 1933, the
economists showed us charts which proved beyond all doubt that the dollar
value commodities followed the price level of gold. It did not, did it?
LEON HENDERSON: No.
REPRESENTATIVE GIFFORD: Wasn’t Joe Kennedy put
in [as Chairman of the Securities Exchange Committee] by President Roosevelt
because he was sympathetic with big business?
LEON HENDERSON: I think so.
Paul Einzig pointed out in 1935 that:
"President Roosevelt was the first to declare himself openly in favor of a
monetary policy aiming at a deliberately engineered rise in prices. In a
negative sense his policy was successful. Between 1933 and 1935 he succeeded
in reducing private indebtedness, but this was done at the cost of
increasing public indebtedness."
In other words, he eased the burden of debts off of the rich onto the poor,
since the rich are few and the poor many.
Senator Robert L. Owen, testifying before the House Committee on Banking and
Currency in 1938, said:
"I wrote into the bill which was introduced by me in the Senate on June 26,
1913, a provision that the powers of the System should be employed to
promote a stable price level, which meant a dollar of stable purchasing,
debt-paying power. It was stricken out. The powerful money interests got
control of the Federal Reserve Board through Mr. Paul Warburg, Mr. Albert
Strauss, and Mr. Adolph C. Miller and they were able to have that secret
meeting of May 18, 1920, and bring about a contraction of credit so violent
it threw five million people out of employment. In 1920 that Reserve Board
deliberately caused the Panic of 1921. The same people, unrestrained in the
stock market, expanding credit to a great excess between 1926 and 1929,
raised the price of stocks to a fantastic point where they could not
possibly earn dividends, and when the people realized this, they tried to
get out, resulting in the Crash of October 24, 1929."
Senator Owen did not go into the question of whether the Federal Reserve
Board could be held responsible to the public. Actually, they cannot. They
are public officials who are appointed by the President, but their salaries
are paid by the private stockholders of the Federal Reserve Banks.
Jacobson; Churchill's mother was Jenny Jerome. Her father was
involved in theatre investment and changed his name from
Jacobson to Jerome.
‘Cunning, no doubt,
came to Churchill in the Jewish genes transmitted by his mother Lady
Randolph Churchill , née Jenny Jacobson/Jerome.’ Moshe Kohn, Jerusalem
Post. In England at the beginning of the
1900s commenting that there were very few English aristocrat families left
that hadn't intermarried with aspiring Jews. It was said that, when they
visited the Continent, Europeans were surprised to see Jewish looking
persons with English titles and accents.
Winston Churchill was the spoiled son of an
aristocratic father and an American mother who doted on him.As
a young man he was a dilettante who developed an early taste for expensive
clothes, imported cigars and old brandy.
At 26 he entered parliament.
the company of members of the English aristocracy and establishment
Winston’s ‘night on the town’ often ended at fringe homosexual private
shows in which every depravity known to man was indulged.
The first Roosevelt came to America in 1649.
His name was Claes Rosenfelt. He was a Jew.
Nicholas, the son of Claes was the ancestor of
both Franklin and Theodore. He married a Jewish girl, named Kunst, in 1682.
Nicholas had a son named Jacobus Rosenfeld..." (The Corvallis Gazette Times
of Corballis, Oregon).
entered the cloth business
New York, and was married in 1682. He accumulated a fortune running hundreds
f sweatshops. He then changed
his name to Nicholas Roosevelt. Of his four sons, Isaac died young. Nicholas
married Sarah Solomons. Jacobus married Catherina Hardenburg.
The Roosevelts were
not a fighting but a peace-loving people, devoted to trade. Isaac became a
capitalist. He founded the Bank of New York in 1790."
father married Sarah Delano; and it become clear. Schmalix (genealogist)
writes: 'In the seventh generation we see the mother of Franklin Delano
Roosevelt as being of Jewish descent.
The Delanos are
descendants of Italian and/or Spanish Jewish family; Dilano, Dilan, Dillano.
The Jew Delano drafted an agreement with the West Indies Co., in 1657
regarding the colonization of the island of Curacao. About this the
directors of the West Indies Co., had correspondence with the Governor of
A Jewish Moscow Coffee
Pictures of Joseph Stalin from boyhood to adult radical
Stalin's childhood origins were supposedly Georgian, but the truth is his
mother was Ossete, from the Khazarian region.In the Georgian language "shvili"
means son of, or son, as in Johnson. "Djuga" means Jew. Therefore
Djugashvili means Jewison.
So Joe Stalin's real name, before he changed it, was Joe Jewison. It gets
better, his name was Joseph David Djugashvili, a typical Jewish name. During
his revolutionary days he changed his name to "Kochba", the leader of the
Jews during one of the anti-Roman uprisings of the Jews. Russians don't
change their names. Georgians don't change their names. Jews change their
Stalin's mother Ekaterina did laundry and housekeeping for David Papisnedov,
a local Jew, who was Stalin's real father. Their nickname for Stalin was "Soso".
Stalin received Papisnedov at the Kremlin often. Comrade Papisnedov often
was visited by Nikolai Przhevalsky, a Jewish trader, and he is also
considered a possibility as Stalin's father.
Stalin had three
wives, all of them Jewesses.
His first wife, on left, was
Ekaterina Svanidze who bore him one son, Jacob.
The Second Wife on right.
His second wife
was Kadya Allevijah. She bore him a son Vassili,
and a daughter Svetlana. His second wife died in mysterious circumstances,
either by committing suicide, or murdered by
His third wife
was Rosa Kaganovich, the sister of Lazar Kaganovich,
who was the head of Soviet industry.
daughter, on right, (who in 1967 fled to the USA) then married Lazar's son
Mihail i.e. her step-mother's nephew. Svetlana Stalin had a total of four
husbands, three of them Jewish.
Molotov, on left, was also married to a Jewess, whose brother, Sam Karp,
ran an export business in Connecticut. Just to complicate things even
more, the Molotov's (half-Jewish) daughter also called Svetlana was
engaged to be married to Stalin's son Vassili.
Eisenhower's West Point Military Academy
graduating class yearbook, published in 1915, Eisenhower is identified as
a "terrible Swedish Jew."
Washington not only transferred Col. Eisenhower to Europe but promoted him
over more than 30 more experienced senior officers to five star general
and placed him in charge of all the US forces in Europe.
Eisenhower went during his military career, Eisenhower's Jewish background
and secondary manifesting behavior was a concern to his fellow officers.
During World War II when Col. Eisenhower was working for Gen. Douglas
McArthur in the South Pacific, McArthur protested to his superiors in
Washington (DC) that Eisenhower was incompetent and that he did not want
Eisenhower on his staff.
responsible for "Operation Keelhaul" - where allied forces rounded over two
million anti-Communists who escaped Stalin and tuned them over to Russian
forces. Part of the Yalta Agreement between the Big Three — Stalin,
Roosevelt, and Churchill — involved the repatriation of Russians to their
respective homelands where they were either immediately executed or sent to
die in the Gulag.
In 1945 Eisenhower
threw 1.7 million Germans in open fields which killed by starvation approx
Governor W.P.G. Harding of the Federal Reserve Board testified in 1921 that:
"The Federal Reserve Bank is an institution owned by the stockholding member
banks. The Government has not a dollar’s worth of stock in it."
However, the Government does give the Federal Reserve System the use of its
billions of dollars of credit, and this gives the Federal Reserve its
characteristic of a central bank, the power to issue currency on the
Government’s credit. We do not have Federal Government notes or gold
certificates as currency. We have Federal Reserve Bank notes, issued by the
Federal Reserve Banks, and every dollar they print is a dollar in their
W. Randolph Burgess, of the Federal Reserve Bank of New York, stated before
the Academy of Political Science in 1930 that:
"In its major principles of operation the Federal Reserve System is no
different from other banks of issue, such as the Bank of England, the Bank
of France, or the Reichsbank."
All of these central banks have the power of issuing currency in their
respective countries. Thus, the people do not own their own money in Europe,
nor do they own it here. It is privately printed for private profit. The
people have no sovereignty over their money, and it has developed that they
have no sovereignty over other major political issues such as foreign
As a central bank of issue, the Federal Reserve System has behind it all the
enormous wealth of the American people. When it began operations in 1913, it
created a serious threat to the central banks of the impoverished countries
of Europe. Because it represented this great wealth, it attracted far more
gold than was desirable in the 1920s, and it was apparent that soon all of
the world’s gold would be piled up in this country. This would make the gold
standard a joke in Europe, because they would have no gold over there to
back their issue of money and credit. It was the Federal Reserve’s avowed
aim in 1927, after the secret meeting with the heads of the foreign central
banks, to get large quantities of that gold sent back to Europe, and its
methods of doing so, the low interest rate and heavy purchases of Government
securities, which created vast sums of new money, intensified the stock
market speculation and made the stock market crash and resultant depression
a national disaster.
Since the Federal Reserve System was guilty of causing this disaster, we
might suppose that they would have tried to alleviate it. However, through
the dark years of 1931 and 1932, the Governors of the Federal Reserve Board
saw the plight of the American people worsening and did nothing to help
them. This was more criminal than the original plotting of the Depression.
Anyone who lived through those years in this country remembers the
widespread unemployment, the misery, and the hunger of our people. At any
time during those years the Federal Reserve Board could have acted to
relieve this situation.
The problem was to get some money back into circulation. So much of the
money normally used to pay rent and food bills had been sucked into Wall
Street that there was no money to carry on the business of living. In many
areas, people printed their own money on wood and paper for use in their
communities, and this money was good, since it represented obligations to
each other which people fulfilled.
The Federal Reserve System was a central bank of issue. It had the power to,
and did, when it suited its owners, issue millions of dollars of money. Why
did it not do so in 1931 and 1932? The Wall Street bankers were through with
Mr. Herbert Hoover, and they wanted Franklin D. Roosevelt to come in on a
wave of glory as the saviour of the nation. Therefore, the American people
had to starve and suffer until March of 1933, when the White Knight came
riding in with his crew of Wall Street bribers and put some money into
circulation. That was all there was to it. As soon as Mr. Roosevelt took
office, the Federal Reserve began to buy Government securities at the rate
of ten million dollars a week for ten weeks, and created a hundred million
dollars in new money, which alleviated the critical famine of money and
credit, and the factories started hiring people again.
During the Roosevelt Administration, The Federal Reserve Board, insofar as
the public was concerned, was Marriner Eccles, an emulator and admirer of
"the Chief". Eccles was a Utah banker, President of the First Securities
Corporation, a family investment trust consisting of a number of banks which
Eccles had picked up cheap during the Agricultural Depression of 1920-21.
Eccles also was a director of such corporations as Pet Milk Company,
Mountain States Implement Company, and Amalgamated Sugar. As a big banker,
Eccles fitted in well with the group of powerful men who were operating
There was some discussion in Congress as to whether Eccles ought to be on
the Federal Reserve Board at the same time he had all of these banks in
Utah, but he testified that he had very little to do with the First
Securities Corporation besides being President of it, and so he was
confirmed as Chairman of the Board.
Eugene Meyer, Jr. now resigned from the Board to spend more of his time
lending the two billion dollar capital of the Reconstruction Finance
Corporation, and determining the value of collateral by his own methods.
The Banking Act of 1935, which greatly increased Roosevelt’s power over the
nation’s finances, was an integral part of the legislation by which he
proposed to extend his reign in the United States. It was not opposed by the
people as was the National Recovery Act, because it was not so naked an
infringement of their liberties. It was, however, an important measure.
First of all, it extended the terms of office of the Federal Reserve Board
of Governors to fourteen years, or, three and a half times the length of a
Presidential term. This meant that a President assuming office who might be
hostile to the Board could not appoint a majority to it who would be
favorable to him. Thus, a monetary policy inaugurated before a President
came into the White House would go on regardless of his wishes.
The Banking Act of 1935 also repealed the clause of the
Banking Act of 1933, which had provided that a banking house could not be on
the Stock Exchange and also be involved in investment banking. This clause
was a good one, since it prevented a banking house from lending money to a
corporation which it owned. Still it is to be remembered that this clause
covered up some other provisions in that Act, such as the creation of the
Federal Deposit Insurance Corporation, providing insurance money to the
amount of 150 million dollars, to guarantee fifteen billion dollars worth of
deposits. This increased the power of the big bankers over small banks and
gave them another excuse to investigate them. The Banking Act of 1933 also
legislated that all earnings of the Federal Reserve Banks must by law go to
the banks themselves. At last the provision in the Act that the Government
share in the profits was gotten rid of. It had never been observed, and the
increase in the assets of the Federal Reserve Banks from 143 million dollars
in 1913 to 45 billion dollars in 1949 went entirely to the private
stockholders of the banks. Thus, the one constructive provision of the
Banking Act of 1933 was repealed in 1935, and also the Federal Reserve Banks
were now permitted to loan directly to industry, competing with the member
banks, who could not hope to match their capacity in arranging large loans
or in the printing of non-backed currencies.
When the provision that banks could not be involved in investment banking
and operate on the Stock Exchange was repealed in 1935, Carter Glass,
originator of that provision, was asked by reporters:
"Does that mean that J.P. Morgan can go back into investment banking?"
"Well, why not?" replied Senator Glass. "There has been an outcry all over
the country that the banks will not make loans. Now the Morgans can go back
Because that provision was unfavorable to them, the bankers had simply
clamped down on making loans until it was repealed.
Newsweek of March 14, 1936, noted that:
"The Federal Reserve Board fired nine chairmen of Reserve Banks, explaining
that ‘it intended to make the chairmanships of the Reserve Banks largely a
part-time job on an honorary basis.’"
This was another instance of the centralization of control in the Federal
Reserve System. The regional district system had never been an important
factor in the administration of monetary policy, and the Board was not
cutting down on its officials outside of Washington. The Chairman of the
Senate Committee on Banking and Currency had asked, during the Gold Reserve
Hearings of 1934:
"Is it not true, Governor Young, that the Secretary of the Treasury for the
past twelve years has dominated the policy of the Federal Reserve Banks and
the Federal Reserve Board with respect to the purchase of United States
Governor Young had denied this, but it had already been brought out that on
both of his hurried trips to this country in 1927 and 1929 to dictate
Federal Reserve policy, Governor Montagu Norman of the Bank of England had
gone directly to Andrew Mellon, Secretary of the Treasury, to get him to
purchase Government securities on the open market and start the movement of
gold out of the US back to Europe.
The Gold Reserve Hearings had also brought in other people who had more than
a passing interest in the operations of the Federal Reserve System. James
Paul Warburg, just back from the London Economic Conference with Professor
O.M.W. Sprague and Henry L. Stimson, came in to declare that he thought we
ought to modernize the gold standard. Frank Vanderlip suggested that we do
away with the Federal Reserve Board and set up a Federal Monetary Authority.
This would have made no difference to the New York bankers, who would have
selected the personnel anyway. And Senator Robert L. Owen, longtime critic
of the system, made the following statement:
"The people did not know the Federal Reserve Banks were organized for
profit-making. They were intended to stabilize the credit and currency
supply of the country. That end has not been accomplished. Indeed, there has
been the most remarkable variation in the purchasing power of money since
the System went into effect. The Federal Reserve men are chosen by the big
banks, through discreet little campaigns, and they naturally follow the
ideals which are portrayed to them as the soundest from a financial point of
Benjamin Anderson, economist for the Chase National Bank of New York, said:
"At the moment, 1934, we have 900 million dollars excess reserves. In 1924,
with increased reserves of 300 million, you got some three or four billion
in bank expansion of credit very quickly. That extra money was put out by
the Federal Reserve Banks in 1924 through buying government securities and
was the cause of the rapid expansion of bank credit. The banks continued to
get excess reserves because more gold came in, and because, whenever there
was a slackening, the Federal Reserve people would put out some more. They
held back a bit in 1926.
Things firmed up a bit that year. And then in 1927 they put out less than
300 million additional reserves, set the wild stock market going, and that
led us right into the smash of 1929."
Dr. Anderson also stated that:
"The money of the Federal Reserve Banks is money they created. When they buy
Government securities they create reserves. They pay for the Government
securities by giving checks on themselves, and those checks come to the
commercial banks and are by them deposited in the Federal Reserve Banks, and
then money exists which did not exist before."
SENATOR BULKLEY: It does not increase the circulating medium at all?
This is an explanation of the manner in which the Federal Reserve Banks
increased their assets from 143 million dollars to 45 billion dollars in
thirty-five years. They did not produce anything, they were non-productive
enterprises, and yet they had this enormous profit, merely by creating
money, 95 percent of it in the form of credit, which did not add to the
circulating medium. It was not distributed among the people in the form of
wages, nor did it increase the buying power of the farmers and workers. It
was credit-money created by bankers for the use and profit of bankers, who
increased their wealth by more than forty billion dollars in a few years
because they had obtained control of the Government’s credit in 1913 by
passing the Federal Reserve Act.
Marriner Eccles also had much to say about the creation of money. He
considered himself an economist, and had been brought into the Government
service by Stuart Chase and Rexford Guy Tugwell, two of Roosevelt’s early
brain-trusters. Eccles was the only one of the Roosevelt crowd who stayed in
office throughout his administration.
Before the House Banking and Currency Committee on June 24, 1941, Governor
"Money is created out of the right to issue credit-money."
Turning over the Government’s credit to private bankers in 1913 gave them
unlimited opportunities to create money. The Federal Reserve System could
also destroy money in large quantities through open market operations.
Eccles said, at the Silver Hearings of 1939:
"When you sell bonds on the open market, you extinguish reserves."
Extinguishing reserves means wiping out a basis for money and credit issue,
or, tightening up on money and credit, a condition which is usually even
more favorable to bankers than the creation of money. Calling in or
destroying money gives the banker immediate and unlimited control of the
financial situation, since he is the only one with money and the only one
with the power to issue money in a time of money shortage. The money panics
of 1873, 1893, 1920-21, and 1929-31, were characterized by a drawing in of
the circulating medium. In economical terms, this does not sound like such a
terrible thing, but when it means that people do not have money to pay their
rent or buy food, and when it means that an employer has to lay off
three-fourths of his help because he cannot borrow the money to pay them,
the enormous guilt of the bankers and the long record of suffering and
misery for which they are responsible would suggest that no punishment might
be too severe for their crimes against their fellowmen.
On September 30, 1940, Governor Eccles said:
"If there were no debts in our money system, there would be no money."
This is an accurate statement about our money system. Instead of money being
created by the production of the people, the annual increase in goods and
services, it is created by the bankers out of the debts of the people.
Because it is inadequate, it is subject to great fluctuations and is
basically unstable. These fluctuations are also a source of great profit.
For that reason, the Federal Reserve Board has consistently opposed any
legislation which attempts to stabilize the monetary system. Its position
has been set forth definitively in Chairman Eccles’ letter to Senator Wagner
on March 9, 1939, and the Memorandum issued by the Board on March 13, 1939.
Chairman Eccles wrote that:
"You are advised that the Board of Governors of the Federal Reserve System
does not favor the enactment of Senate Bill No. 31, a bill to amend the
Federal Reserve Act, or any other legislation of this general character."
The Memorandum of the Board stated, in its "Memorandum on Proposals to
maintain prices at fixed levels":
"The Board of Governors opposes any bill which proposes a stable price
level, on the grounds that prices do not depend primarily on the price or
cost of money; that the Board’s control over money cannot be made complete;
and that steady average prices, even if obtainable by official action, would
not insure lasting prosperity."
Yet William McChesney Martin, the Chairman of the Board of Governors in
1952, said before the Subcommittee on Debt Control, the Patman Committee, on
March 10, 1952 that "One of the fundamental purposes of the Federal Reserve
Act is to protect the value of the dollar."
Senator Flanders questioned him: "Is that specifically stated in the
original legislation setting up the Federal Reserve System?"
"No," replied Mr. Martin, "but it is inherent in the entire legislative
history and in the surrounding circumstances."
Senator Robert L. Owen has told us how it was taken out of the original
legislation against his will, and that the Board of Governors has opposed
such legislation. Apparently Mr. Martin does not know this.
Steady average prices, indeed, are impossible so long as we have the
speculators on the stock exchange driving prices up and down in order to
reap profits for themselves. Despite Governor Eccles’ insistence that steady
average prices would not insure lasting prosperity, they could do much to
bring about this condition. A man on a yearly wage of $2,500 is not more
prosperous if the price of bread increases five cents a loaf during the
In 1935, Eccles said before the House Committee on Banking and Currency:
"The Government controls the gold reserve, that is, the power to issue money
and credit, thus largely regulating the price structure."
This is an almost direct contradiction of Eccles’ statement in 1939 that
prices do not depend, primarily, on the price or cost of money.
In 1935, Governor Eccles stated before the House Committee:
"The Federal Reserve Board has the power of open market operations.
Open-market operations are the most important single instrument of control
over the volume and cost of credit in this country. When I say "credit" in
this connection, I mean money, because by far the largest part of money in
use by the people of this country is in the form of bank credit or bank
deposits. When the Federal Reserve Banks buy bills or securities in the open
market, they increase the volume of the people’s money and lower its cost;
and when they sell in the open market they decrease the volume of money and
increase its cost. Authority over these operations, which affect the welfare
of the whole people, must be invested in a body representing the national
Governor Eccles testimony exposes the heart of the money machine which Paul
Warburg revealed to his incredulous fellow bankers at Jekyll Island in 1910.
Most Americans comment that they cannot understand how the Federal Reserve
System operates. It remains beyond understanding, not because it is complex,
but because it is so simple. If a confidence man comes up to you and offers
to demonstrate his marvelous money machine, you watch while he puts in a
blank piece of paper, and cranks out a $100 bill. That is the Federal
Reserve System. You then offer to buy this marvelous money machine, but you
cannot. It is owned by the private stockholders of the Federal Reserve
Banks, whose identities can be traced partially, but not completely, to "the
At the House Banking and Currency Committee Hearings on June 6, 1960,
Congressman Wright Patman, Chairman, questioned Carl E. Allen, President of
the Federal Reserve Bank of Chicago. (p. 4).
PATMAN: "Now Mr. Allen, when the Federal Reserve Open Market Committee buys
a million dollar bond you create the money on the credit of the Nation to
pay for that bond, don’t you? ALLEN: That is correct.
PATMAN: And the credit of the Nation is represented by Federal Reserve Notes
in that case, isn’t it? If the banks want the actual money, you give Federal
Reserve notes in payment, don’t you?
ALLEN: That could be done, but nobody wants the Federal Reserve notes.
PATMAN: Nobody wants them, because the banks would rather have the credit as
This is the most incredible part of the Federal Reserve operation and one
which is difficult for anyone to understand. How can any American citizen
grasp the concept that there are people in this country who have the power
to make an entry in a ledger that the government of the United States now
owes them one billion dollars, and then collect the principal and interest on
Congressman Wright Patman tells us in "The Primer of Money," p. 38 of going
into a Federal Reserve Bank and asking to see their bonds on which the
American people are paying interest. After being shown the bonds, he asked
to see their cash, but they only had some ledgers and blank checks. Patman
"The cash, in truth, does not exist and has never existed. What we call
‘cash reserves’ are simply bookkeeping credits entered upon ledgers of the
Federal Reserve Banks. The credits are created by the Federal Reserve Banks
and then passed along through the banking system."
Peter L. Bernstein, in A Primer On Money, Banking and Gold says:
"The trick in the Federal Reserve notes is that the Federal reserve banks
lose no cash when they pay out this currency to the member banks. Federal
Reserve notes are not redeemable in anything except what the Government
calls ‘legal tender’--that is, money that a creditor must be willing to
accept from a debtor in payment of sums owed him. But since all Federal
Reserve notes are themselves declared by law to be legal money, they are
really redeemable only in themselves . . . they are an irredeemable
obligation issued by the Federal Reserve Banks."
As Congressman Patman puts it,
"The dollar represents a one dollar debt to the Federal Reserve System. The
Federal Reserve Banks create money out of thin air to buy Government bonds
from the United States Treasury, lending money into circulation at interest,
by bookkeeping entries of checkbook credit to the United States Treasury.
The Treasury writes up an interest bearing bond for one billion dollars. The
Federal Reserve gives the Treasury a one billion dollar credit for the bond,
and has created out of nothing a one billion dollar debt which the American
people are obligated to pay with interest." (Money Facts, House Banking and
Currency Committee, 1964, p. 9)
"Where does the Federal Reserve system get the money with which to create
Answer. It doesn’t get the money, it creates it. When the Federal Reserve
writes a check, it is creating money. The Federal Reserve is a total
moneymaking machine. It can issue money or checks."
In 1951, the Federal Reserve Bank of New York published a pamphlet, "A Day’s
Work at the Federal Reserve Bank of New York." On page 22, we find that:
"There is still another and more important element of public interest in the
operation of banks besides the safekeeping of money; banks can ‘create’
money. One of the most important factors to remember in this connection is
that the supply of money affects the general level of prices--the cost of
living. The Cost of Living Index and money supply are parallel."
The decisions of the Federal Reserve Board, or rather, the decisions which
they are told to make by "parties unknown", affect the daily lives of every
American by the effect of these decisions on prices. Raising the interest
rate, or causing money to became "dearer" acts to limit the amount of money
available in the market, as does the raising of reserve requirements by the
Federal Reserve System. Selling bonds by the Open Market Committee also
extinguishes and lowers the money supply. Buying government securities on
the open market "creates" more money, as does lowering the interest rate and
making money "cheaper". It is axiomatic that an increase in the money supply
brings prosperity, and that a decrease in the money supply brings on a
depression. Dramatic increases in the money which outstrip the supply of
goods brings on inflation, "too much money chasing too few goods". A more
esoteric aspect of the monetary system is "velocity of circulation", which
sounds much more technical than it is. This is the speed at which money
changes hands; if it is gold buried in the peasant’s garden, that is a slow
velocity of circulation, caused by a lack of confidence in the economy or
the nation. Very rapid velocity of circulation, such as the stock market
boom of the late 1920s, means quick turnover, spending and investment of
money, and its stems from confidence, or overconfidence, in the economy.
With a high velocity of circulation, a smaller money supply circulates among
as many people and goods as a larger money supply would circulate with a
slower velocity of circulation. We mention this because the velocity of
circulation, or confidence in the economy, also is greatly affected by the
Federal Reserve actions. Milton Friedman comments in Newsweek, May 2, 1983,
"The Federal Reserve’s major function is to determine the money supply. It
has the power to increase or decrease the money supply at any rate it
This is an enormous power, because increasing the money supply can cause the
re-election of an administration, while decreasing it can cause an
administration to be defeated. Friedman goes on to criticize the Federal
Reserve, "How is it that an institution which has so poor a record of
performance nevertheless has so high a public reputation and even commands a
considerable measure of credibility for its forecasts?"
Peter L. Bernstein, A Primer On Money, Banking and Gold, Vintage Books, New
York, 1965, p. 104
All open market transactions, which affect the money supply, are conducted
for a single System account by the Federal Reserve Bank of New York on the
behalf of all the Federal Reserve Banks, and supervised by an officer of the
Federal Reserve Bank of New York. The conferences at which decisions are
made to buy or sell securities by the Open Market Committee remain closed to
the public, and the deliberations also remain a mystery. On May 8, 1928, The
New York Times reported that Adolph C. Miller, Governor of the Federal
Reserve Board, testifying before the House Banking and Currency Committee,
stated that open market purchases and rediscount rates were established
through "conversations". At that time, the purchases on the open market
amounted to seventy or eighty million dollars a day, and would be ten times
that today. These are vast sums to be manipulated on the basis of mere
"conversations", but that is as much information as we can obtain.
Because of these mysterious transactions which affect the life, liberty and
happiness of every American citizen, there have been numerous proposals such
as Senate Document No. 23, presented by Mr. Logan on January 24, 1939, that
"The Government should create, issue and circulate all the currency and
credit needed to satisfy the spending power of the Government and the buying
power of the consumers. The privilege of creating and issuing money is not
only the supreme prerogative of Government, but it is the Government’s
greatest creative opportunity."
On March 21, 1960, Congressman Wright Patman used a simple illustration in
the Congressional Record of how banks "create money".
"If I deposit $100 with my bank and the reserve requirements imposed by the
Federal Reserve Bank are 20% then the bank can make a loan to John Doe of up
to $80. Where does the $80
come from? It does not come out of my deposit of $100; on the contrary, the
bank simply credits John Doe’s account with $80. The bank can acquire
Government obligations by the same procedure, by simply creating deposits to
the credit of the government. Money creating is a power of the commercial
banks . . . Since 1917 the Federal Reserve has given the private banks
forty-six billion dollars of reserves."
How this is done is best revealed by Governor Eccles at Hearings before the
House Committee on Banking and Currency on June 24, 1941:
ECCLES: "The banking system as a whole creates and extinguishes the deposits
as they make loans and investments, whether they buy Government Bonds or
whether they buy utility bonds or whether they make Farmer’s loans.
MR. PATMAN: I am thoroughly in accord with what you say, Governor, but the
fact remains that they created the money, did they not?
ECCLES: Well, the banks create money when they make loans and investments."
On September 30, 1941, before the same Committee, Governor Eccles was asked
by Representative Patman:
"How did you get the money to buy those two billion dollars worth of
Government securities in 1933?
ECCLES: We created it.
MR. PATMAN: Out of what?
ECCLES: Out of the right to issue credit money.
MR. PATMAN: And there is nothing behind it, is there, except our
ECCLES: That is what our money system is. If there were no debts in our
money system, there wouldn’t be any money."
On June 17, 1942, Governor Eccles was interrogated by Mr. Dewey.
ECCLES: "I mean the Federal Reserve, when it carries out an open market
operation, that is, if it purchases Government securities in the open
market, it puts new money into the hands of the banks which creates idle
DEWEY: There are no excess reserves to use for this purpose?
ECCLES: Whenever the Federal Reserve System buys Government securities in
the open market,
or buys them direct from the Treasury, either one, that is what it does.
DEWEY: What are you going to use to buy them with? You are going to create
ECCLES: That is all we have ever done. That is the way the Federal Reserve
The Federal Reserve System creates money. It is a bank of issue."
At the House Hearing of 1947, Mr. Kolburn asked Mr. Eccles:
"What do you mean by monetization of the public debt?
ECCLES: I mean the bank creating money by the purchase of Government
securities. All is created by debt--either private or public debt.
FLETCHER: Chairman Eccles, when do you think there is a possibility of
returning to a free and open market, instead of this pegged and artificially
controlled financial market we now have?
ECCLES: Never. Not in your lifetime or mine."
Congressman Jerry Voorhis is quoted in U.S. News, August 31, 1959, as
questioning Secretary of Treasury Anderson, "Do you mean that Banks, in
buying Government securities, do not lend out their customers’ deposits?
That they create the money they use to buy the securities?
ANDERSON: That is correct. Banks are different from other lending
institutions. When a savings association, an insurance company, or a credit
union makes a loan, it lends the very dollar that its customers have
previously paid in. But when a bank makes a loan, it simply adds to the
borrower’s deposit account in the bank by the amount of the loan. The money
is not taken from anyone. It is new money, recreated by the bank, for the
use of the borrower."
Strangely enough, there has never been a court trial on the legality or
Constitutionality of the Federal Reserve Act. Although it is on much the
same shaky grounds as the National Recovery Act, or NRA, which was
challenged in Schechter Poultry v. United States of America, 29 U.S. 495, 55
US 837.842 (1935), the NRA was ruled unconstitutional by the Supreme Court
on the grounds that "Congress may not abdicate or transfer to others its
legitimate functions. Congress cannot Constitutionally delegate its
legislative authority to trade or industrial associations or groups so as to
empower them to make laws."
Article 1, Sec. 8 of the Constitution provides that "The Congress shall have
power to borrow money on the credit of the United States . . . and to coin
Money, regulate the value thereof, and of foreign Coin, and fix the Standard
of Weights and Measures." According to the NRA decision, Congress cannot
delegate this power to the Federal Reserve System, nor can it delegate its
legislative authority to the Federal Reserve System to allow the System to
fix the rate of bank reserves, the rediscount rate, or the volume of money.
All of these are "legislated" by the Federal Reserve Board, meeting in
legislative sessions to determine these matters and to issue "laws" or
regulations fixing them.
The Second World War gave the big bankers who owned the Federal Reserve
System a chance to unload on the country billions of dollars printed early
in 1930, in the biggest counterfeiting operation in history, all legalized
by Roosevelt’s government, of course. Henry Hazlitt writes in the January 4,
1943 issue of Newsweek Magazine:
"The money that began to appear in circulation a week ago, December 21,
1942, was really printing press money in the fullest sense of the term, that
is, money which has no collateral of any kind behind it. The Federal Reserve
statement that ‘The Board of Governors, after consultation with the Treasury
Department, has authorized Federal Reserve Banks to utilize at this time the
existing stocks of currency printed in the early thirties, known as ‘Federal
Reserve Banknotes’. We repeat, these notes have absolutely no collateral of
any kind behind them."
Governor Eccles also testified to some other interesting matters of the
Federal Reserve and war finance at the Senate Hearings on the Office of
Price Administration in 1944:
"The currency in circulation was increased from seven billion dollars in
four years to twenty-one and a half billion. We are losing some considerable
amounts of gold during the war period. As our exports have gone out, largely
on a lend-lease basis, we have taken imports on which we havegiven dollar
balances. These countries are now drawing off these dollar balances in the
form of gold.
MR. SMITH: Governor Eccles, what is the objective that the foreign
governments are after in this projected program whereby we would contribute
gold to an international fund?
GOVERNOR ECCLES: I would like to discuss OPA, and leave the stabilization
fund for a time when I am prepared to go into it.
MR. SMITH: Just a minute. I feel that this fund is very pertinent to what we
are talking about today.
MR. FORD: I believe that the stabilization fund is entirely off the @OPA and
consequently we ought to stick to the business at hand."
The Congressmen never did get to discuss the Stabilization Fund, another
setup whereby we would give the impoverished countries of Europe back the
gold which had been sent over here. In 1945, Henry Hazlitt, commenting in
Newsweek of January 22, on Roosevelt’s annual budget message to Congress,
quoted Roosevelt as saying:
"I shall later recommend legislation reducing the present high gold reserve
requirements of the Federal Reserve Banks."
Hazlitt pointed out that the reserve requirement was not high, it was just
what it had been for the past thirty years. Roosevelt’s purpose was to free
more gold from the Federal Reserve System and make it available for the
Stabilization Fund, later called the International Monetary Fund, part of
the World Bank for Reconstruction and Development, the equivalent of the
League Finance Committee which would have swallowed the financial
sovereignty of the United States if the Senate had let us join it.
"Mr. Volcker’s politics is something of an enigma."--New York Times
Since 1933 when Eugene Meyer resigned from the Federal Reserve Board of
Governors, no member of the international banking families has personally
served on the Board of Governors. They have chosen to work from behind the
scenes through carefully selected presidents of the Federal Reserve Bank of
New York and other employees.
The present chairman of the Federal Reserve Board of Governors is Paul
Volcker. His appointment was greeted by one well-known economist with the
following prediction, "Volcker’s selection has been by far the worst. Carter
has put Dracula in charge of the blood bank. To us, it means a crash and
depression in the 80s is more certain than ever."
Col. E.C. Harwood’s Research Report, August 6, 1979, gave much the same
view. "Paul Volcker is from the same mold as the unsound money men who have
misguided the monetary actions of this nation for the past five decades. The
outcome probably will be equally disastrous for the dollar and the U.S.
Despite these gloomy views, the report from The New York Times on the
selection of Volcker was positively ecstatic. On July 26, 1979, The Times
commented that Volcker learned "the business" from Robert Roosa, now partner
of Brown Brothers Harriman, and that Volcker had been part of the Roosa
Brain Trust at the Federal Reserve Bank of New York, and, later, at the
Treasury in the Kennedy administration. "David Rockefeller, the chairman of
Chase, and Mr. Roosa were strong influences in the Mr. Carter decision to
name Mr. Volcker for the Reserve Board chairmanship." The New York Times did
not point out that David Rockefeller and Robert Roosa had previously chosen
Mr. Carter, a member of the Trilateral Commission, as the presidential
candidate of the Democratic Party, or that Mr. Carter would hardly refuse to
appoint their choice of Paul Volcker as the new Chairman of the Federal
Reserve Board. Nor is it straining the point to be reminded that this manner
of selection of the Chairman of the Board of Governors is directly in the
line of royal prerogative going back to George Peabody’s initial agreement
with N.M. Rothschild, to the Jekyll Island meeting, and to the enactment of
the Federal Reserve Act.
The Times noted that "Volcker’s choice was approved by European banks in
Bonn, Frankfurt and Zurich." William Simon, former Secretary of Treasury,
was quoted as saying "a marvelous choice." The Times further noted that the
Dow market rose on Volcker’s nomination, registering the best gains in three
weeks for a rise of 9.73 points, and that the dollar rose sharply on foreign
exchange@ at home and abroad.
Who was Volcker, that his appointment could have such an effect on the stock
market and the value of the dollar in foreign exchange? He represented the
most powerful house of "the London Connection," Brown Brothers Harriman, and
the London houses which directed the Rockefeller empire. On July 29, 1979,
The Times had said of Volcker, "New Man Will Chart His Own Course".
Volcker’s background shows that this was nonsense. His course has always
been charted for him by his masters in London. He attended Princeton,
obtained an M.A. at Harvard, and went to the London School of Economics
1951-52, the banker’s graduate school. He then came to the Federal Reserve
Bank of New York as an economist from 1952-57, economist at Chase Manhattan
Bank, 1957-61, with Treasury Department 1961-65, as deputy under secretary
for monetary affairs, 1963-65, and under secretary for monetary affairs,
1969-74. He then became President of the Federal Reserve Bank of New York
from 1975-79, when Carter, at the behest of Robert Roosa and David
Rockefeller, appointed him Chairman of the Federal Reserve Board of
Governors. He was succeeded as President of Federal Reserve Bank of New York
by Anthony Solomon, a Harvard Ph.D. who was with the OPA 1941-42 and with
the government financial mission to Iran 1942-46. He operated a canned food
company in Mexico from 1951-61, was president of International Investment
Corp. for Yugoslavia 1969-72 (a communist country), under secretary for
monetary affairs at Treasury 1977-80. In short, Solomon’s background was
much the same as Paul Volcker’s.
The New York Times stated on December 2, 1981, "For years the Federal
Reserve was the second or third most secret institution in town. The
Sunshine Act of 1976 penetrated the curtain a trifle. The board now holds a
public meeting once a week on Wednesday at 10 a.m., but not to discuss
Monetary policy, which is still regarded as top secret and not to be
discussed in public." The Times mentioned that when Open Market Committee
meetings are held, Solomon and Volcker sit together at the head of the table
and relay the instructions which they have received from abroad.
Behind Volcker and Solomon stands Robert Roosa, Secretary of the Treasury in
Carter’s shadow cabinet, and representing Brown Brothers Harriman, the
Trilateral Commission, the Council on Foreign Relations, the Bilderbergers,
and the Royal Economic Institute. He is a trustee of the Rockefeller
Foundation*, and a director of Texaco and American Express companies. Dr.
Martin Larson points out that "The international consortium of financiers
known as the Bilderbergers, who meet annually in profound secrecy to
determine the destiny of the western world, is a creature of the
Rockefeller-Rothschild alliance, and that it held its third meeting on St.
Simons Island, only a short distance from Jekyll Island." Larson also states
that "The Rockefeller interests work in close alliance with the Rothschilds
and other central banks."**
On June 18, 1983, President Ronald Reagan ended months of speculation by
announcing that he was reappointing Paul Volcker as Chairman of the Federal
Reserve Board of Governors for another four year term, although Volcker’s
term was not up until August 6, 1983. Reagan’s reappointment of a Carter
appointee puzzled some political observers, but apparently he had succumbed
to considerable pressure, as indicated by a lead editorial in The Washington
Post, June 10, 1983, "There is no one who matches Mr. Volcker in both
political standing and grasp of the intricate networks that make up the
world’s financial system." The anonymous writer gave no documentation for
his elevation of Volcker to the standing of the world’s greatest financier,
and as for his political standing, The New York Times commented on June 19,
1983, "Mr. Volcker’s politics is something of an enigma." His
"non-political" stance conforms with the Washington tradition of "the
political independence of the Fed" which has been maintained for many years.
However, the problem of its dependence on "the London connection" has never
been discussed in Washington.
In reality, Volcker is more of a politician than an economist. After
attending the London School of Economics, and finding out who issues the
orders of the international financial community, Volcker has ever since
played the game. Not once has he failed to carry out the orders of the
Can it really be possible that "The London Connection" exists, and that men
like Volcker and Solomon receive their instructions, in however devious or
indirect a manner, from foreign bankers? Let us look at the evidence,
circumstantial, to be sure, but circumstantial evidence of the quality which
has often sent men to the penitentiary or to the electric chair. John Moody
pointed out in 1911 that seven men of the Morgan group, allied with the
Standard Oil-Kuhn, Loeb group, ruled the United States. Where do these
groups stand in the financial picture today?
U.S. News published on April 11, 1983, a list of the largest bank holding
companies in the United States by assets as of December 31, 1982. Number 1
is Citicorp, New York, with assets of $130 billion. This is Baker and
Morgan’s First National Bank of New York, merged with National City Bank in
1955, two of the largest purchasers of Federal Reserve Bank of New York
stock in 1914. Number 3, is Chase Manhattan, New York, with assets of $80.9
billion. This is Chase and Bank of Manhattan merged, the Rockefeller and
Kuhn Loeb group, also purchasers of Federal Reserve Bank of New York stock
in 1914. Number 4 is Manufacturers Hanover of New York $64 billion, also
purchaser of Federal Reserve Bank of New York stock in 1914. Number 5 is
J.P. Morgan Company of New York, $58.6 billion in assets and holder of
considerable Federal Reserve Bank stock. Number 6 is Chemical Bank of New
York, $48.3 billion also purchaser of Federal Reserve stock in 1914. And
Number 11, First Chicago Corporation, the First National Bank of Chicago
which was principal correspondent of the Morgan-Baker bank in New York, and
which furnished the first two presidents of the Federal Advisory Council.
The direct line which leads from the participants in the Jekyll Island
Conference of 1910 to the present day is illustrated by a passage from "A
Primer on Money", Committee on Banking and Currency, U.S. House of
Representatives, 88th Congress, 2d session, August 5, 1964, p. 75:
"The practical effect of requiring all purchases to be made through the open
market is to take money from the taxpayer and give it to the dealers. It
forces the Government to pay a toll for borrowing money. There are six
‘bank’ dealers: First National City Bank of New York; Chemical Crop.
Exchange Bank, New York, Morgan Guaranty Trust Co., New York, Bankers Trust
of New York, First National Bank of Chicago, and Continental Illinois Bank
Thus the banks which receive a "toll" on all money borrowed by the
Government of the United States are the same banks which planned the Federal
Reserve Act of 1913. There is ample evidence demonstrating the present
preeminence of the same banks which set up the Federal Reserve System in
1914. For instance, Warren Brookes writes on the editorial page of The
Washington Post, June 6, 1983:
"Citicorp (National City Bank and First National Bank of New York, merged in
1955) just recorded an 18.6% return on equity, J.P. Morgan, 17%, Chemical
Bank and Bankers Trust, nearly 16%, an exceptional rate of return."
These are the banks which bought the first issue of Federal Reserve Bank
stock in 1914, and which owned the controlling interest in the Federal
Reserve Bank of New York, which sets the interest rate and is the bank for
all open market operations.
These banks also profit steadily from the otherwise inexplicable
fluctuations in monetary growth and interest rates. Brookes further comments
on "actual monetary growth rates alternately gyrating from 0 to 17% in
successive six month periods for three recession-wracked years. The two
measures of money growth most admired by Milton Friedman M2 and M3, have
actually shown little change on a year to year basis in the 1972-82 period."
Thus we have money growth rates gyrating from 0 to 17% but no actual year to
year changes, which raises the question of why we cannot have stability of
monetary growth throughout the year. The answer is that the big profits are
made by these gyrations, and the next question is, who sets in motion these
gyrations? The answer is "the London Connection".
To draw attention from the continued control of the bankers and their heirs,
who obtained the government monopoly of the nation’s money and credit in
1913, the paid propagandists of the controlled media monopoly and academia
are constantly trotting forth new and more exotic theories of economics.
Thus James Burnham, one of the National Review propagandists, won fame with
a ridiculous theory of "the managers". He postulated that the old arbiters
of wealth, the J.P. Morgans, the Warburgs and the Rothschilds had, by 1950,
disappeared from the scene, being replaced by a new class of "managers".
This theory, which had no foundation in fact, served to obscure the fact
that the same people still controlled the monetary system of the world. The
"managers" were just that, executives like Volcker who were front men, paid
employees who would continue to receive their paychecks only as long as they
carried out their employers’ instructions. Burnham remains a well-paid
propagandist at the National Review, which many prominent leaders, including
President Reagan, believe to be a "conservative" publication.
From 1914 to 1982, a period in which many thousands of American banks went
bankrupt, the original purchasers of Federal Reserve Bank stock have not
only survived but they have consolidated their power. And what of "the
London Connection"? Does it still exist, and is it still dictating the
economic destiny of the United States? The Washington Post, May 19, 1983,
carried a story datelined Nairobi, Kenya, noting the meeting of the African
Development Bank. "The British merchant bank, Morgan Grenfell and a
syndicate of the United States, Kuhn Loeb, Lehman Brothers International,
the French Lazard Freres and Britain’s Warburg are discreetly acting as
financial advisors to about ten debt-plagued African states."
There are the same names we encountered in 1914, still managing the finances
of the world, with profits for themselves but with disastrous results for
everyone else. Perhaps we can look for relief to the present Administration
of President Reagan. Unfortunately, before reaching him we have to run the
gamut of the long list of his principal staff, composed of men from J. Henry
Schroder, Brown Brothers Harriman, and other leading components of "The
Lopez Portillo, President of Mexico, in addressing the Mexican National
Congress of Mexico in September, 1982, called the world credit boom of the
past decade a financial pestilence akin to the Black Death which swept
Europe in the fourteenth century. "As in mediaeval times, it flattens
country after country. It is transmitted by rats and it yields unemployment
and misery, industrial bankruptcy and enrichment by speculation. The remedy
prescribed by faith healers is forced inactivity and depriving the patient
Forbes Magazine stated October 11, 1982, "The world gasps for liquidity, not
because the supply of money has contracted but because too much of it now
goes to pay off old debts rather than fund new productive investments."
The policy of high interest rates and tight money has been disastrous for
the United States. In early 1983, a slight easing of money and credit
promises some relief, but as long as the Federal Reserve system and its
unseen manipulators continue their control of the money supply, we can
expect more problems. The Nation on December 11, 1982, in commenting on
economic problems, stated, "The blame for all this lies at the door of the
Federal Reserve System working as usual on behalf of the international
The evidence of how the Federal Reserve System works on behalf of the
international banking system is graphically illustrated by a series of
charts drawn up by the staff of the Committee on Banking, Currency and
Housing of the House of Representatives, 94th Congress, 2d session, August,
1976, "FEDERAL RESERVE DIRECTORS: A STUDY OF CORPORATE AND BANKING
INFLUENCE".* We present as our Chart V page 49 of this study, showing the
interlocking directorates of David Rockefeller. As our Chart VI we reproduce
page 55 of this study, showing the interlocking directorates of Frank R.
Milliken, one of the Class C Directors** of the Federal Reserve Bank of New
York. In this chart are all the main personages in our story of the Jekyll
Island conference: Citibank, J.P. Morgan and Company, Kuhn Loeb and Company,
and many related firms. As Chart VII we reproduce page 53 of this study,
showing the interlocking directorates of another Class C Director of the
Federal Reserve Bank of New York, Alan Pifer. As President of the Carnegie
Corporation of New York, he interlocks with J. Henry Schroder Trust Company,
J. Henry Schroder Banking Corporation, Rockefeller Center, Inc., Federal
Reserve Bank of Boston, Equitable Life Assurance Society (J.P. Morgan), and
others. Thus an August, 1976 study from the House Committee on Banking,
Currency and Housing, brings before us all of our main cast of personages,
functioning today just as they did in 1914.
* Due to space limitations, only five of the seventy-five charts in the
study, all of which show the connections between prominent, powerful
individuals with control in the Federal Reserve System have been selected to
illustrate the connections between officers and directors of the twelve
Federal Reserve Banks in 1976 and the firms listed in this book.
** "The three Class C Directors are appointed by the Board of Governors as
representatives of the public interest as a whole." p. 34, Congressional
This 120 page Congressional study details public policy functions of the
Federal Reserve District Banks, how directors are selected, who is selected,
the public relations lobbying factor, bank domination and bank examination,
and corporate interlocks with Reserve banks. Charts were used to illustrate
Class A, Class B, and Class C directorships of each district bank. For each
branch bank a chart was designed giving information regarding bank appointed
directors and those appointed by the Board of Governors of the Federal
In his Foreword to the study, Chairman Henry S. Reuss, (D-Wis) wrote:
"This Committee has observed for many years the influence of private
interests over the essentially public responsibilities of the Federal
Reserve System. As the study makes clear, it is difficult to imagine a more
narrowly based board of directors for a public agency than has been gathered
together for the twelve banks of the Federal Reserve System.
Only two segments of American society--banking and big business--have any
substantial representation on the boards, and often even these become merged
through interlocking directorates . . . . Small farmers are absent. Small
business is barely visible. No women appear on the district boards and only
six among the branches. System-wide--including district and branch
boards--only thirteen members from minority groups appear.
The study raises a substantial question about the Federal Reserve’s
oft-repeated claim of "independence." One might ask, independent from what?
Surely not banking or big business, if we are to judge from the massive
interlocks revealed by this analysis of the district boards.
The big business and banking dominance of the Federal Reserve System cited
in this report can be traced, in part, to the original Federal Reserve Act,
which gave member commercial banks the right to select two-thirds of the
directors of each district bank. But the Board of Governors in Washington
must share the responsibility for this imbalance. They appoint the so-called
"public" members of the boards of each district bank, appointments which
have largely reflected the same narrow interests of the bank-elected members
. . . Until we have basic reforms, the Federal Reserve System will be
handicapped in carrying out its public responsibilities as an economic
stabilization and bank regulatory agency. The System’s mandate is too
essential to the nation’s welfare to leave so much of the machinery under
the control of narrow private interests. Concentration of economic and
financial power in the United States has gone too far."
In a section of the text entitled "The Club System", the Committee noted:
"This ‘club’ approach leads the Federal Reserve to consistently dip into the
same pools--the same companies, the same universities, the same bank holding
companies--to fill directorships." This Congressional study concludes as
"Many of the companies on these tables, as mentioned earlier, have multiple
interlocks to the Federal Reserve System. First Bank Systems; Southeast
Banking Corporation; Federated Department Stores; Westinghouse Electric
Corporation; Proctor and Gamble; Alcoa; Honeywell, Inc.; Kennecott Copper;
Owens-Corning Fiberglass; all have two or more director ties to district or
In Summary, the Federal Reserve directors are apparently representatives of
a small elite group which dominates much of the economic life of this
nation." END OF CONGRESSIONAL REPORT.
As of 11:05 Tuesday, on July 26, 1983, the list of member banks holding
Federal Reserve Bank of New York stock includes twenty-seven New York City
banks. Listed below are the number of shares held by ten of these banks,
amounting to 66% of the total outstanding number of shares, namely
Bankers Trust Company 438,831 ( 6%)
Bank of New York 141,482 ( 2%)
Chase Manhattan Bank 1,011,862 (14%)
Chemical Bank 544,962 ( 8%)
Citibank 1,090,813 (15%)
European American Bank & Trust 127,800 ( 2%)
J. Henry Schroder Bank & Trust 37,493 ( .5%)
Manufacturers Hanover 509,852 ( 7%)
Morgan Guaranty Trust 655,443 ( 9%)
National Bank of North America 105,600 ( 2%)
The tremendous number of shares held today as against the original purchases
in 1914 is brought about by Section 5 of the original Federal Reserve Act
which called for a member bank to buy and hold stock in the district Federal
Reserve Bank equal to 6% of its capital and surplus.
Currently, shares held by five of the above named banks comprise 53% of the
total Federal Reserve Bank of New York stock. An examination of the major
stockholders of the New York City banks shows clearly that a few families,
related by blood marriage, or business interests, still control the New York
City banks which, in turn, hold the controlling stock of the Federal Reserve
Bank of New York.
It is notable that three of the banks holding Federal Reserve Bank of New
York stock, in the amount of 270,893 shares, are subsidiaries of foreign
banks. J. Henry Schroder Bank and Trust is listed by Standard and Poors as a
subsidiary of Schroders Ltd. of London. The National Bank of North America
is a subsidiary of the National Westminster Bank, one of London’s "Big
Five". European American Bank is a subsidiary of the European American Bank,
Bahamas, LTD. It is interesting to note that the directors of the European
American Bank & Trust include Milton F. Rosenthal, president and Chief
Operating Officer of the international gold company, Engelhard Minerals and
Chemical; Hamilton F. Potter, a partner in Sullivan and Cromwell (J. Henry
Schroder Bank & Trust attorneys); Edward H. Tuck, partner of Shearman and
Sterling (Citibank’s attorneys); F.H. Ulrich and Hans Liebkutsch, managing
directors of the giant Midland Bank of London, one of the "Big Five"; and
Roger Alloo, Paul-Emmanuel Janssen, and Maurice Laure of the Societe
Generale de Banque (Brussels, Belgium).
This information, derived from the latest issue of the tabulation available
from the Board of Governors, Federal Reserve System, is cited as current
evidence which indicates that the controlling stock in the Federal Reserve
Bank of New York, which sets the rate and scale of operations for the entire
Federal Reserve System is heavily influenced by banks directly controlled by
"The London Connection", that is, the Rothschild-controlled Bank of England.
E.C. Knuth, in The Empire of the City, priv. printed, 1946, p. 27, refers to
"the Bank of England, the full partner of the American Administration in the
conduct of the financial affairs of all the world" and cites the
Encyclopaedia Americana, 1943 edition.
Barron cites Lord Swaythling, (April 8, 1923), "Lord Swaythling said,
‘Exchange can only be run from London. This is the center in Exchange.’"
(They Told Barron, by Clarence W. Barron, founder of Baron’s Weekly,
Harpers, New York, 1930, p. 27.)
Exchange, in the international financial world, means the transactions in
money or securities, or simply, the "exchange" of the values of these
securities. It is necessary that this "exchange" take place where the values
can be established, and this place is the "City" in London.
London was established as the primary center of exchange because of the "Consoles"
of the Bank of England, bonds which could never be redeemed, but which paid
a stable rate of return. Henry Clews writes, in The Wall Street View, Silver
Burdett Co. 1900, p. 255, "The Consolidated Act of 1757 consolidated the
debts of the nation of England at 3%, which were kept in an account at the
Bank of England and is the great bulwark of its deposits." By ostentatiously
"dumping" "Consoles" on the London Exchange after the Battle of Waterloo, in
a pretended panic, Nathan Meyer Rothschild then secretly bought up the
Consoles sold in the panic by other holders at a low rate, and became the
largest holder of Consols, and thus won control of the Bank of England in
Although a Labor government nationalized the Bank of England in 1946, The
Great Soviet Encyclopaedia points out (vol. I, p. 490c) that the Bank of
England continues to pay 12% dividends per annum, just as it had done prior
to the nationalization. The "Governor" is appointed by the government, in a
situation similar to that in the United States, where the Governors of the
Federal Reserve System are appointed by the President. However, as is
pointed out in the Encyclopedia Americana v. 13, p. 272, "In practice, the
governors of the Bank of England have not hesitated to criticize and bring
pressure on the government in public."
The interest rate set by the Bank of England is known as "the Bank rate",
and it is a controlling factor in interest rates throughout the world,
although rates in other countries may be higher or lower than this "Bank
rate". The Bank of England manages the government debt, and is called upon
to arbitrate in political affairs. It served as the intermediary with the
Iran revolutionaries in negotiating for the return of the American
hostages--a recent example.
We should not be surprised that the present Governor of the Bank of England,
Sir Gordon Richardson is a prominent international financial figure, who
appears elsewhere in these pages because of his connection with the J. Henry
Schroder @Wagg in London from 1962 to 1972, when he became Governor of the
Bank of England. He was also director of J. Henry Schroder Co., New York,
and Schroder Banking Corp., New York. He also serves as director of Rolls
Royce and Lloyd’s Bank. Although he resides in London, he maintains a home
in New York, and is listed in the current Manhattan directory simply as "G.
Richardson, 45 Sutton Place S.", although a prior listing showed him at 4
Sutton Place. Sutton Place was developed as a fashionable address for the
international set by Bessie Marbury, whom we earlier cited for her
connection with the Morgan family and the Roosevelts.
The present directors of the Bank of England (1982) include Leopold de
Rothschild of N.M. Rothschild & Sons, Sir Robert Clark, chairman of Hill
Samuel Bank, the most influential bank after Rothschilds, John Clay, of
Hambros Bank, and David Scholey, of Warburg Bank, and joint chairman of S.C.
Anthony Sampson writes, in "The Changing Anatomy of Britain", Random House,
New York, 1982, p. 279, "The more cosmopolitan banks with foreign experts
and directors, such as Warburgs, Montagus, Rothschilds and Kleinworts, had
also discovered a huge new source of profits in the market for Eurodollars
which began in the late fifties and multiplied through the 60s . . . British
bankers themselves controlled relatively small funds, but they knew how to
make money out of other people’s money."
The Eurodollar market, a new development in "created money" is monopolized
by the above firms.
"Today, together with allies on the island of Manhattan (Britain’s most
important piece of real estate), the British Empire controls the entire $1.5
trillion Eurodollar financial market, another $300-$500 billion in the
Cayman Islands, Bahamas, and $50-$100 billion in the Hong-Kong Singapore
"Asia-dollar market". . . . Consider the $1.5 trillion Eurodollar market an
"outlaw" market in the U.S. dollars over which this nation has no control.
Here control and profits are overwhelmingly in the hands of London banks,
who set the terms of lending and the interest rate on this mass of American
dollars in relation to the London Interbank Borrowing Rate (LIBOR) . . .
U.S. banks like Citibank (New York City), on whose board of directors sits
the powerful British financier, Lord Aldington, collaborate openly in this
market. At the same time, British banks including the known central bank for
the world’s drug trade, the Hong Kong and Shanghai Bank, pour into America to
devour U.S. banks.
In 1978 the Hongshang (Ed.--Hong kong and Shanghai Bank) took over New York’s
Marine Midland Bank, the state’s 11th largest commercial bank. . . The
British also control the creation of American dollars. While Federal Reserve
Board Chairman Paul Volcker tightens credit against the domestic economy,
British-controlled banks in the Cayman Islands (such as the European
American Bank--Ed.) a British possession 200 miles off Florida, and in the
Bermudas and a dozen other "free banking" computer terminals create hundreds
of billions of American dollars. How is this done? There are no reserve
ratios or other restrictions on the creation of dollar-denominated credits
in the Empire’s "free enterprise" banking. A $1 million bona fide credit
coming from the United States can be turned into $20 to $100 million in
dollar-denominated credits as it passes through the British system without
Not only the financial power, but also the legal power, has remained seated
in Britain. The Washington Post commented on June 18, 1983 that after the
American Revolution, all the old laws remained in effect in the new United
States: Some of these laws of "English common law" dated back to 1278, long
before America was discovered.
This enormous financial power of "the City" is revealed in many areas. Dean
Acheson states, in "Present at the Creation", 1969, W.W. Norton, New York,
p. 779, "We stayed at the embassy residence, the old J.P. Morgan mansion, 14
Prince’s Gate, facing Hyde Park." How many Americans are aware that the U.S.
Embassy residence in London is the J.P. Morgan home, or that Dean Acheson, a
former Morgan employee, described himself as Secretary of State on p. 505,
"My own attitude had long been, and was known to have been, pro-British." No
one commented on an American Secretary of State’s open bias in favor of
The Federal Reserve "created" money is not used only for financial matters;
this money is also used to maintain the bankers’ control of every aspect of
political, economic and social life. It is used to bankroll the enormous
expenditures of political candidates, the swollen budgets of universities,
the huge outlays required to start newspapers or magazines, and a vast array
of foundations, "think-tanks" and other instruments of public control.
Few Americans know that almost every development in psychology in the United
States in the past sixty-five years has been directed by the Bureau of
Psychological Warfare of the British Army. A short time ago, the present
writer learned a new name, The Tavistock Institute of London, also known as
the Tavistock Institute of Human Relations. "Human relations" covers every
aspect of human behavior, and it is the modest goal of the Tavistock
Institute to obtain and exercise control over every aspect of human behavior
of American citizens.
Because of the intensive artillery barrages of World War I, many soldiers
were permanently impaired by shell shock. In 1921, the Marquees of
Tavistock, 11th Duke of Bedford, gave a building to a group which planned to
conduct rehabilitation programs for shell shocked British soldiers. The
group took the name of "Tavistock Institute" after its benefactor. The
General Staff of the British Army decided it was crucial that they determine
the breaking point of the soldier under combat conditions. The Tavistock
Institute was taken over by Sir John Rawlings Reese, head of the British
Army Psychological Warfare Bureau. A cadre of highly trained specialists in
psychological warfare was built up in total secrecy. In fifty years, the
name "Tavistock Institute’ appears only twice in the Index of the New York
Times, yet this group, according to LaRouche and other authorities,
organized and trained the entire staffs of the Office of Strategic Services
(OSS), the Strategic Bombing Survey, Supreme Headquarters of the Allied
Expeditionary Forces, and other key American military groups during World
War II. During World War II, the Tavistock Institute combined with the
medical sciences division of the Rockefeller Foundation for esoteric
experiments with mind-altering drugs. The present drug culture of the United
States is traced in its entirety to this Institute, which supervised the
Central Intelligence Agency’s training programs. The "LSD counter culture"
originated when Sandoz A.G., a Swiss pharmaceutical house owned by S.G.
Warburg & Co., developed a new drug from lysergic acid, called LSD. James
Paul Warburg (son of Paul Warburg who had written the Federal Reserve Act in
1910), financed a subsidiary of the Tavistock Institute in the United States
called the Institute for Policy Studies, whose director, Marcus Raskin, was
appointed to the National Security Council. James Paul Warburg set up a CIA
program to experiment with LSD on CIA agents, some of whom later committed
suicide. This program, MK-Ultra, supervised by Dr. Gottlieb, resulted in
huge lawsuits against the United States Government by the families of the
The Institute for Policy Studies set up a campus subsidiary, Students for
Democratic Society (SDS), devoted to drugs and revolution. Rather than
finance SDS himself, Warburg used CIA funds, some twenty million dollars, to
promote the campus riots of the 1960s.
The English Tavistock Institute has not restricted its activities to
left-wing groups, but has also directed the programs of such supposedly
"conservative" American think tanks as the Herbert Hoover Institute at
Stanford University, Heritage Foundation, Wharton, Hudson, Massachusetts
Institute of Technology, and Rand. The "sensitivity training" and "sexual
encounter" programs of the most radical California groups such as Esalen
Institute and its many imitators were all developed and implemented by
Tavistock Institute psychologists.
One of the rare items concerning the Tavistock Institute appears in Business
Week, Oct. 26, 1963, with a photograph of its building in the most expensive
medical offices area of London. The story mentions "the Freudian bias" of
the Institute, and comments that it is amply financed by British blue-chip
corporations, including Unilever, British Petroleum, and Baldwin Steel.
According to Business Week, the psychological testing programs and group
relations training programs of the Institute were implemented in the United
States by the University of Michigan and the University of California, which
are hotbeds of radicalism and the drug network.
It was the Marquees of Tavistock, 12th Duke of Bedford, whom
flew to England to contact about ending World War II. Tavistock was said to
be worth $40 million in 1942. In 1945, his wife committed suicide by taking
an overdose of pills.
NELSON W. ALDRICH (1841-1915)
Senator from Rhode Island; head of National Monetary Commission; his
daughter Abby Aldrich married Jewish John D. Rockefeller, Jr.; he became the
grandfather of his namesake. Nelson Aldrich Rockefeller, as well as the
present David Rockefeller and Laurence Rockefeller.
WILLIAM JENNINGS BRYAN (1860-1925)
Woodrow Wilson’s Secretary of State, three times losing presidential
candidate of the Democratic Party, in 1896, 1900, and 1908, and head of the
ALFRED OWEN CROZIER (1863-1939)
A prominent attorney in Grand Rapids, Cincinnati, and New York, Crozier
wrote eight books on legal and monetary problems, focusing on his
opposition to the supplanting of Constitutional money by the corporation
currency printed by private firms for their profit.
CLARENCE DILLON (1882-1979)
Born in San Antonio, Texas, son of Samuel Dillon and Bertha Lapowitz.
Harvard, 1905. Married Anne Douglass of Milwaukee. His son, C. Douglas
Dillon (later Secretary of the Treasury, 1961-65) was born in Geneva,
Switzerland in 1909 while they were abroad. Dillon met William A. Read,
founder of the Wall Street bond broker William A. Read and Company, through
introduction by Harvard classmate William A. Phillips in 1912 and Dillon
joined Read’s Chicago office in that year. He moved to New York in 1914.
Read died in 1916, and Dillon bought a majority interest in the firm. During
World War 1, Bernard Baruch, chairman of the War Industries Board, (known as
the Czar of American industry) asked Dillon to be assistant chairman of the
War Industries Board. In 1920, William A. Read & Company name was changed to
Dillon, Read & Company. Dillon was director of American Foreign Securities
Corporation, which he had set up in 1915 to finance the French Government’s
purchases of munitions in the United States. His right-hand man at Dillon
Read, James Forrestal, became Secretary of the Navy, later Secretary of
Defense, and died under mysterious circumstances at a Federal hospital. In
1957, Fortune Magazine listed Dillon as one of the richest men in the United
States, with a fortune then estimated to be from $150 to $200 million.
ALAN GREENSPAN (1926- Jewish) Appointed by President Reagan to succeed Paul
Volcker (also Jewish) as Chairman of the Board of Governors of the Federal Reserve System
in 1987. Greenspan had succeeded Herbert Stein as chairman of the
President’s Council of Economic Advisors in 1974. He was the protégé of
former chairman of the Board of Governors, Arthur Burns of Austria
(Bernstein - Jewish). Burns was a monetarist representing the Rothschild’s Viennese
School of Economics, which manifested its influence in England through the
Royal Colonial Society, a front for Rothschilds (Jewish) and other English bankers
who stashed their profits from the world drug trade in
the Hong Kong Shanghai Bank. The staff economist for the Royal
Colonial Society was Alfred Marshall, inventor of the monetarist theory,
who, as head of the Oxford Group, became the patron of Wesley Clair
Mitchell, who founded the National Bureau of Economic Research for the
Rockefellers in the United States. Mitchell, in turn, became the patron of
Arthur Burns and Milton Friedman (both Jewish), whose theories are now the power
techniques of Greenspan at the Federal Reserve Board. Greenspan is also the
protégé of Ayn Rand, a weirdo who interposed her sexual affairs with
guttural commands to be selfish. Rand was also the patron of CIA
propagandist William Buckeley and the National Review.
Greenspan was director of major Wall Street firms such as the Jewish
J.P. Morgan Co., Morgan Guaranty Trust (the American bank for the Soviets after the
Bolshevik Revolution of 1917), Brookings Institution, Bowery Savings Bank,
the Dreyfus Fund, General Foods, and Time, Inc. (All Jewish Cos. Greenspan’s most impressive
achievement was as chairman of the National Commission
on Social Security from 1981-1983. He juggled figures to convince the
public that Social Security was bankrupt, when in fact it had an enormous
surplus. These figures were then used to fasten onto American workers a
increase in Social Security withholding tax, which invoked David Ricardo’s
economic dictum of the iron law of wages, that workers could only be paid a
subsistence wage, and any funds beyond that must be extorted from them
forcibly by tax increases. As a partner of J.P. Morgan Co. since 1977,
Greenspan represented the unbroken line of control of the Federal Reserve
System by the firms represented at the secret meeting on Jekyll Island in
1910, where Henry P. Davison, right-hand man of J.P. Morgan, was a key
figure in the drafting of the Federal Reserve Act. Within days of taking
over as chairman of the Federal Reserve Board, Greenspan immediately raised
the interest rate on Sept. 4, 1987, the first such increase in three years
of general prosperity, and precipitated the stock
market crash of Oct., 1987, Black Monday, when the Dow Jones average
plunged 508 points. Under Greenspan’s direction, the Federal Reserve Board
has steadily nudged the United States deeper and deeper into recession,
without a word of criticism from the complaisant members of Congress, which
are dependent on the Jews for their own careers.
COLONEL EDWARD MANDELL HOUSE (1858-1938)
Son of a Rothschild agent in Texas. Succeeded in electing five consecutive
governors of Texas; became Woodrow Wilson’s advisor in 1912. Cooperated with
Paul Warburg to get the Federal Reserve Act passed by Congress in 1913.
ROBERT MARION LAFOLLETTE (1855-1925)
Served in Senate from Wisconsin 1905-25. Led agrarian reformers in opposing
Eastern bankers and their plans for the Federal Reserve Act. Ran for
President in 1924 on Progressive-Socialist ticket.
CHARLES AUGUSTUS LINDBERGH, SR. (1860-1924)
Congressman from Minnesota (1907-1917) who led the fight against enactment
of the Federal Reserve Act in 1913. He served until 1917 when he resigned to
run for governor of Minnesota. He ran a good campaign despite adverse
newspaper attacks led by The New York Times. His campaign was adversely
affected when Federal agents burned his books, including Why Is Your Country
At War? and the papers and contents of his home office in Little Falls,
LOUIS T. McFADDEN (1876-1936)
Congressman and Chairman of the House Banking and Currency Committee,
1927-33; courageously opposed the manipulators of the Federal Reserve System
in the 1920’s and the 1930’s. Introduced bills to impeach Federal Reserve
Board of Governors and allied officials. After three attempts on his life,
he died mysteriously.
JOHN PIERPONT MORGAN (1837-1913) Jewish
Considered the dominant American financier at the turn of the century. Who’s
Who in 1912 stated he "controls over 50,000 miles of railroads in the United
States." Organized United States Steel Corporation. Became representative of
House of Rothschild through his father, Junius S. Morgan, who had become
London partner of George Peabody & Company, later Junius S. Morgan Company,
a Rothschild agent. John Pierpont Morgan, Jr. succeeded his father as head
of the Morgan empire.
DAVID MULLINS (1946- )
Appointed Governor of the Federal Reserve Board May 21, 1990, David Mullins’
term ran to Jan. 31, 1996. He was also nominated to serve as Vice
Chairman of the Federal Reserve Board, and served as Assistant Secretary of
the Treasury for Domestic Finance 1988-90, receiving the department’s
highest award, the Alexander Hamilton Award, for his service in such
programs as synthetic fuels, federal finance, Farm Credit Assistance Board,
and author of the President’s Plan for rescuing the savings and loan
institutions. He is a distant cousin of the author, descended from John
Mullins, the first recorded settler in the western area of Virginia, hero of
the battle of King’s Mountain, and recipient of a 200 acre grant of land for
his service in the American Revolution.
WRIGHT PATMAN (1893-1976)
Congressman and Chairman of the House Banking and Currency Committee
1963-74. Led the fight in Congress to stop the manipulators of the Federal
Reserve System from 1937 to his death in 1976.
CONGRESSMAN ARSENE PUJO
Served in Congress 1903-1913. Democrat from Louisiana. Chairman of House
Banking and Currency Committee. Chairman of "Pujo Hearings" Subcommittee,
SIR GORDON RICHARDSON (1915- )
Head of the Bank of England since 1973. Chairman J. Henry Schroder Wagg,
London, 1962-72; director of J. Henry Schroder Banking Corporation, New
York; Schroder Banking Corporation, New York; Lloyd’s Bank, London; Rolls
JACOB HENRY SCHIFF (1847-1920)
Born in Rothschild house in Frankfurt, Germany. Emigrated to United States,
married Therese Loeb, daughter of Solomon Loeb, founder of Kuhn, Loeb and
Co. Schiff became senior partner of Kuhn, Loeb and Co., and as
representative of Rothschild interests gained control of most of railway
mileage in United States.
BARON KURT VON SCHRODER (1889- ) Jewish
Adolph Hitler’s personal banker, advanced funds for Hitler’s accession to
power in Germany in 1933; German representative of the London and New York
branches of J. Henry Schroder Banking Corporation; SS Senior Group Leader;
director of all German subsidiaries of I.T.T; Himmler’s Circle of Friends;
advisor to board of directors, Deutsche Reichsbank (German central bank).
ANTHONY MORTON SOLOMON (1919- ) Jewish
Educated at Harvard, economist Office of Price Administration, 1941-42;
financial mission to Iran, 1942-46; Agency for international Development
South America, 1965-69; president international Investment Corporation for
Yugoslavia 1969-72; advisor to Chairman, Ways and Means Committee, House of
Representatives, 1972-73; Undersecretary Monetary Affairs, U.S. Treasury,
1977-80; president Federal Reserve Bank of New York, 1980-
SAMUEL UNTERMYER (1858-1940) Jewish
A partner of the law firm of Guggenheimer and Untermyer of New York, who
conducted the "Pujo Hearings" of the House Banking and Currency Committee in
1912. Counsel for Rogers and Rockefeller in many large suits against F.
Augustus Heinze, Thomas W Lawson and others. Earned a single fee of $775,000
for handling merger of Utah Copper Company. Reported in The New York Times
May 26, 1924 as urging immediate recognition of Soviet Russia at Carnegie
Hall meeting. Untermyer’s prestige and power is illustrated by the fact that
this front page obituary in The New York Times covered six columns. His
listing in Who’s Who was the longest for thirteen years.
FRANK VANDERLIP (1864-1937)
Assistant Secretary of Treasury 1897-1901; won prestige for financing
Spanish American War by floating $200,000,000 in bonds during his incumbency
for what is known as "National City Bank’s War" President of National City
Bank 1909-19. One of the original Jekyll Island group who wrote Federal
Reserve Act in November, 1910. No mention of this important fact is made in
extensive obituary in The New York Times, June 30, 1937.
GEORGE SYLVESTER VIERECK (1884-1962) Jewish
Author of the definitive study The Strangest Friendship in History, Woodrow
Wilson and Col. House, Liveright, 1932. A leading poet of the early 1900’s,
reviewed on the front page of The New York Times Book Review, and known as
the leading German-American citizen of the United States.
PAUL VOLCKER (1927- ) Jewish
Chairman of the Federal Reserve Board of Governors since 1979, appointed by
President Carter, reappointed by President Reagan for another four year term
beginning August 6, 1983. Educated at Princeton, Harvard and London School
of Economics; employed by Federal Reserve Bank of New York, 1952-57; Chase
Manhattan Bank, 1957-61; Treasury Department, 1961-74; president Federal
Reserve Bank of New York, 1975-79.
PAUL WARBURG (1868-1932) Jewish
Conceded to be the actual author of our central bank plan, the Federal
Reserve System, by knowledgeable authorities. Emigrated to the United States
from Germany 1904; partner, Kuhn Loeb and Company bankers, New York;
naturalized 1911. Member of the original Federal Reserve Board of Governors,
1914-1918; president Federal Advisory Council, 1918-1928. Brother of Max
Warburg, who was head of German Secret Service during World War I and who
represented Germany at the Peace Conference, 1918-1919, while Paul was
chairman of the Federal Reserve System.
SIR WILLIAM WISEMAN (1885-1962) Jewish
Partner of Kuhn, Loeb and Company (All Jewish); head of British Secret Service during
World War I. Worked closely with Col. House dominating the United States and
New York Times 1858-1983
Washington Post 1933-1983
Barron’s Weekly 1921-1983
Business Week 1929-1983
Forbes Magazine 1917-1983
National Review 1955-1983
The Nation 1865-1983
The New Republic 1914-1983
Current Biography 1940-1983 H.W. Wilson Co., N.Y.
Dictionary of National Biography, Scribners, N.Y. 1934-1965
Directory of Directors, London 1896-1983
Directory of Directors In The City of New York 1898-1918
The Concise Dictionary of National Biography, 1903-1979, Oxford University
Congressional Record 1910-1983
International Index to Periodicals 1920-1965, H.W. Wilson Co., N.Y.
Poole’s Index to Periodical Literature 1802-1906, Wm. T Poole, Chicago
Readers Guide to Periodicals 1900-1983
Rand McNally’s Bankers Guide 1904-1928
Moody’s Banking and Finance 1928-1968
Who’s Who in America 1890-1983, A.N. Marquis Co.
Who’s Who, Great Britain 1921-1983
Who Was Who In America 1607-1906, A.N. Marquis Co.
Who’s Who in the World 1972-1983, A.N. Marquis Co.
Who’s Who in Finance and Industry 1936-1969, A.N. Marquis Co.
Standard and Poor’s Register of Directors 1928-1983
Senate Committee Hearings on Federal Reserve Act, 1913
House Committee Hearings on Federal Reserve Act, 1913
House Committee Hearings on the Money Trust (Pujo Committee) 1913
House Investigation of Federal Reserve System, 1928
Senate Investigation of Fitness of Eugene Meyer to be a Governor of the
Federal Reserve Board, 1930
Senate Hearings on Thomas B. McCabe to be a Governor of the Federal Reserve
House Committee Hearings on Extension of Public Debt, 1945
Federal Reserve Directors: A Study of Corporate and Banking Influence.
Staff Report, Committee on Banking, Currency and Housing, House of
The Federal Reserve System, Purposes and Functions, Board of Governors, 1963
A History of Monetary Crimes, Alexander Del Mar, the Del Mar Society, 1899
Fiat Money Inflation in France, Andrew Dickson White, Foundation for
Economic Education, N.Y. 1959
The War on Gold, Antony C. Sutton, 76 Press, California, 1977
Wall Street and the Rise of Hitler, Antony C. Sutton, 76 Press, California,
Collected Speeches of Louis T McFadden, Congressional Record
The Truth About Rockefeller, E.M. Josephson, Chedney Press, N.Y. 1964
The Strange Death of Franklin D. Roosevelt, E.M. Josephson, Chedney Press,
Behind the Throne, Paul Emden, Hoddard Stoughton, London, 1934
The Money Power of Europe, Paul Emden, Hoddard Stoughton, London
The Robber Barons, Mathew Josephson, Harcourt Brace, N.Y. 1934
The Rothschilds, Frederic Morton, Curtis Publishing Co., 1961
The Magnificent Rothschilds, Cecil Roth, Robert Hale Co., 1939
Pawns In The Game, William Guy Carr, (privately printed), 1956
Tearing Away the Veils, Francois Coty, Paris, 1940
Writers on English Monetary History, 1626-1730, London, 1896
The Federal Reserve System After Fifty Years, Committee on Banking and
Currency, Jan., Feb. 1964
The Bankers’ Conspiracy, Arthur Kitson, 1933
Laws Of The United States Relating to Currency, Finance and Banking From
1789 to 1891, Charles F. Dunbar, Ginn & Co., Boston, 1893
Monetary Policy of Plenty Instead of Scarcity, Committee on Banking and
The Strangest Friendship In History, Woodrow Wilson and Col. House, George
Sylvester Viereck, Liveright, N.Y. 1932
Federal Reserve Policy Making, G.L. Bach, Knapf, N.Y. 1950
Rulers of America, A Study of Finance Capital, Anna Rockester, International
Publishers, N.Y. 1936
Banking in the United States Before the Civil War, National Monetary
National Banking System, National Monetary Commission, 1911
The Federal Reserve System, Paul Warburg, Macmillan, N.Y. 1930
Roosevelt, Wilson and the Federal Reserve Law, Col. Elisha Garrison,
Christopher Publishing House, Boston, 1931
Men Who Run America, Arthur D. Howden Smith, Bobbs Merrill, N.Y., 1935
Financial Giants of America, George E Redmond, Stratford, Boston, 1922
The Great Soviet Encyclopaedia, Macmillan, London, 1973
Encyclopaedia Britannica, 1979
Encyclopaedia Americana, 1982
Dope, Inc., Goldman, Steinberg et at, New Benjamin Franklin House Publishing
Company, N.Y. 1978
Banking and Currency and the Money Trust, Charles A. Lindbergh, Sr. 1913
The Strange Career of Mr. Hoover Under Two Flags, John Hamill, William Faro,
The Federal Reserve System, H. Parker Willis, Ronald Co., 1923
A.B.C. of the Federal Reserve System, E.W. Kemmerer, Princeton Univ., 1919
Adventures in Constructive Finance, Carter Glass, Doubleday, N.Y. 1927
Banking Reform in the United States, Paul Warburg, Columbia Univ., 1914
U.S. Money vs. Corporation Currency, Alfred Crozier, Cleveland, 1912
Philip Dru, Administrator, E.M. House, B.W. Huebsch, N.Y. 1912
The Intimate Papers of Col. House, edited by Charles Seymour, 4 v.
Houghton Mifflin Co.
The Great Conspiracy of the House of Morgan, H.W. Loucks, 1916
Capital City, McRae and Cairncross, Eyre Methuen, London, 1963
Aggression, Otto Lehmann-Russbeldt, Hutchinson, London, 1934
The Empire of High Finance, Victor Perlo, International Pub., 1957
Memoirs of Max Warburg, Berlin, 1936
Letters and Friendships of Sir Cecil Spring-Rice
Tragedy and Hope, Carroll Quigley, Macmillan, N.Y.
The Politics of Money, Brian Johnson, McGraw Hill, N.Y. 1970
A Primer on Money, House Banking and Currency Committee, 1964
Pierpont Morgan and Friends, The Anatomy of A Myth, George Wheeler,
Prentice Hall, N.J., 1973
Pierpont Morgan, Herbert Satterleee, Macmillan, N.Y., 1940
Morgan the Magnificent, John K. Winkler, Vanguard, N.Y., 1930
Wilson, Arthur Link (5 vol.) Princeton University Press, Princeton, N.J.
Historical Beginning… The Federal Reserve, Roger T Johnson, Federal Reserve
Bank of Boston, 1977 (7 printings, 1977-1982, totaling 92,000 copies.) [It
is noteworthy that this 64 page booklet makes no mention of Jekyll Island,
Paul Warburg’s authorship, or source of promotion funds which resulted in
enactment of the Federal Reserve Act on December 23, 1913.]
The Federal Reserve and Our Manipulated Dollar, Martin A. Larson, Devin
Adair Co., Old Greenwich, Conn., 1975
Chain Banking, Stockholder and Loan Links of 200 Largest Member Banks, House
Banking and Currency Committee, Jan. 3, 1963
International Banking, Staff Report, Committee on Banking Currency and
Housing, May 1976
Audit of the Federal Reserve System, Hearings Before the House Banking and
Currency Committee, 1975.
Watch the below video on the
"Founding of the Federal Reserve"
Monopoly Men (Federal Reserve Fraud)
Monopoly Men (Part 2)
Questions and Answers
While lecturing in many countries, and appearing on radio and television
programs as a guest, the author is frequently asked questions about the
Federal Reserve System. The most frequently asked questions and the answers
are as follows:
Q: What is the Federal Reserve System?
A: The Federal Reserve System is not Federal; it has no reserves; and it is
not a system, but rather, a criminal syndicate. It is the product of
criminal syndicalist activity of an international consortium of dynastic
families comprising what the author terms "The World Order" (see "THE WORLD
ORDER" and "THE CURSE OF CANAAN", both by Eustace Mullins). The Federal
Reserve system is a central bank operating in the United States. Although
the student will find no such definition of a central bank in the textbooks
of any university, the author has defined a central bank as follows: It is
the dominant financial power of the country which harbors it. It is entirely
private-owned, although it seeks to give the appearance of a governmental
institution. It has the right to print and issue money, the traditional
prerogative of monarchs. It is set up to provide financing for wars. It
functions as a money monopoly having total power over all the money and
credit of the people.
Q: When Congress passed the Federal Reserve Act on December 23, 1913, did
the Congressmen know that they were creating a central bank?
A: The members of the 63rd Congress had no knowledge of a central bank or of
its monopolistic operations. Many of those who voted for the bill were
duped; others were bribed; others were intimidated. The preface to the
Federal Reserve Act reads "An Act to provide for the establishment of
Federal reserve banks, to furnish an elastic currency, to afford means of
rediscounting commercial papers, to establish a more effective supervision
of banking in the United States, and for other purposes." The unspecified
"other purposes" were to give international conspirators a monopoly of all
the money and credit of the people of the United States; to finance World
War I through this new central bank, to place American workers at the mercy
of the Federal Reserve system’s collection agency, the Internal Revenue
Service, and to allow the monopolists to seize the assets of their
competitors and put them out of business.
Q: Is the Federal Reserve system a government agency?
A: Even the present chairman of the House Banking Committee claims that the
Federal Reserve is a government agency, and that it is not privately owned.
The fact is that the government has never owned a single share of Federal
Reserve Bank stock. This charade stems from the fact that the President of
the United States appoints the Governors of the Federal Reserve Board, who
are then confirmed by the Senate. The secret author of the Act, banker Paul
Warburg, a representative of the Rothschild bank, coined the name "Federal"
from thin air for the Act, which he wrote to achieve two of his pet
aspirations, an "elastic currency" read (rubber check), and to facilitate
trading in acceptances, international trade credits. Warburg was founder and
president of the International Acceptance Corporation, and made billions in
profits by trading in this commercial paper. Sec. 7 of the Federal Reserve
Act provides "Federal reserve banks, including the capital and surplus
therein, and income derived there from, shall be exempt from Federal, state
and local taxation, except taxes on real estate." Government buildings do
not pay real estate tax.
Q: Are our dollar bills, which carry the label "Federal Reserve notes"
A: Federal Reserve notes are actually promissory notes, promises to pay,
rather than what we traditionally consider money. They are interest bearing
notes issued against interest bearing government bonds, paper issued with
nothing but paper backing, which is known as fiat money, because it has only
the fiat of the issuer to guarantee these notes. The Federal Reserve Act
authorizes the issuance of these notes "for the purposes of making advances
to Federal reserve banks... The said notes shall be obligations of the
United States. They shall be redeemed in gold on demand at the Treasury
Department of the United States in the District of Columbia." Tourists
visiting the Bureau of Printing and Engraving on the Mall in Washington,
D.C. view the printing of Federal Reserve notes at this governmental agency
on contract from the Federal Reserve System for the nominal sum of .00260
each in units of 1,000, at the same price regardless of the denomination.
These notes, printed for a private bank, then become liabilities and
obligations of the United States government and are added to our present $54
trillion debt. The government had no debt when the Federal Reserve Act was
passed in 1913.
Q: Who owns the stock of the Federal Reserve Banks?
A: The dynastic families of the ruling World Order, internationalists who
are loyal to no race, religion, or nation. They are families such as the
Rothschilds, the Warburgs, the Schiffs, the Rockefellers, the Harrimans, the
Morgans and others known as the elite, or "the big rich."
Q: Can I buy this stock?
A: No. The Federal Reserve Act stipulates that the stock of the Federal
Reserve Banks cannot be bought or sold on any stock exchange. It is passed
on by inheritance as the fortune of the "big rich." Almost half of the
owners of Federal Reserve Bank stock are not Americans.
Q: Is the Internal Revenue Service a governmental agency?
A: Although listed as part of the Treasury Department, the IRS is actually a
private collection agency for the Federal Reserve System. It originated as
the Black Hand in mediaeval Italy, collectors of debt by force and extortion
for the ruling Italian mob families. All personal income taxes collected by
the IRS are required by law to be deposited in the nearest Federal Reserve
Bank, under Sec. 15 of the Federal Reserve Act, "The moneys held in the
general fund of the Treasury may be ....deposited in Federal reserve banks,
which banks, when required by the Secretary of the Treasury, shall act as
fiscal agents of the United States."
Q: Does the Federal Reserve Board control the daily price and quantity of
A: The Federal Reserve Board of Governors, meeting in private as the Federal
Open Market Committee with presidents of the Federal Reserve Banks, controls
all economic activity throughout the United States by issuing orders to buy
government bonds on the open market, creating money out of nothing and
causing inflationary pressure, or, conversely, by selling government bonds
on the open market and extinguishing debt, creating deflationary pressure
and causing the stock market to drop.
Q: Can Congress abolish the Federal Reserve System?
A: The last provision of the Federal Reserve Act of 1913, Sec. 30, states,
"The right to amend, alter or repeal this Act is expressly reserved." This
language means that Congress can at any time move to abolish the Federal
Reserve System, or buy back the stock and make it part of the Treasury
Department, or to altar the System as it sees fit. It has never done so.
Q: Are there many critics of the Federal Reserve beside yourself?
A: When I began my researches in 1948, the Fed was only thirty-four years
old. It was never mentioned in the press. Today the Fed is discussed openly
in the news section and the financial pages. There are bills in congress to
have the Fed audited by the Government Accounting Office. Because of my
expose, it is no longer a sacred cow, although the Big Three candidates for
President in 1992, Bush, Clinton and Perot, joined in a unanimous chorus
during the debates that they were pledged not to touch the Fed.
Q: Have you suffered any personal consequences because of your expose of the
A: I was fired from the staff of the Library of Congress after I published
this expose in 1952, the only person ever discharged from the staff for
political reasons. When I sued, the court refused to hear the case. The
entire German edition of this book was burned in 1955, the only book burned
in Europe since the Second World War. I have endured continuous harassment
by government agencies, as detailed in my books "A WRIT FOR MARTYRS". My
family also suffered harassment. When I spoke recently in Wembley Arena in
London, the press denounced me as "a sinister lunatic".
Q: Does the press always support the Fed?
A: There were some encouraging defections, but are not now pertinent. A
front page story in the Wall Street Journal, Feb. 8, 1993, stated, "The
current Fed structure is difficult to justify in a democracy. It’s an oddly
undemocratic institution. Its organization is so dated that there is only
one Reserve bank west of the Rockies, and two in Missouri...Having a central
bank with a monopoly over the issuance of the currency in a democratic
society is a very difficult balancing act."
Congressman McFadden on the Federal Reserve Corporation
Remarks in Congress, 1934 (Please click your
back button to return to this page)
05/03/06 "ICH" -- -- Why did George Bush & now Obama work to destroy the
Maybe, neither. It is the Federal Reserve, the privately owned group of 12
central banks that prints our money and sets the policy?
A UK Telegraph article on Tuesday “Dollar Drops as great Sell-Off Looms”
explains the current dilemma. The dollar is falling against the euro and the
Asian currencies while gold and energy prices continue to skyrocket.
“Greenback liquidation comes amid growing concerns that global central banks
and Middle East oil funds are quietly paring back their holdings of US
” David Bloom, a currency expert at HSBC, said the dollar was vulnerable to
a steep sell-off as investors begin to refocus on America’s yawning current
account deficit, now 7% of GDP”. (UK Telegraph)
Just to add some perspective to this topic; Argentina’s economy collapsed
when its trade deficit reached 4% of GDP. The US deficit is at an
Normally, we could say that these are the predictable effects of market
forces, but that’s not the case here. After all, we know that Bush insisted
that the lavish tax cuts be made permanent even though it was understood
that such action would undercut the dollar. So, what is going on here; why
does Bush want to kill the goose that laid the golden egg?
There are two ways to weaken the currency; either print more money which
dilutes the supply, or create new debt which lowers the value.
Bush has done both simultaneously and with such gusto that it’s a wonder the
dollar hasn’t crashed already. He’s expanded government spending by 35% and
produced humongous $450 billion per year tax cuts. Add this to the projected
costs of a $2 trillion war and the dollar was bound to get hammered.
At the same time Bush has been spending us into oblivion, the Federal
Reserve has kept the printing presses humming along at full-throttle
doubling the money supply in the last decade. Almost half of all greenbacks
are now located outside the country, which means that if the dollar becomes
less attractive to investors those greenbacks will come flooding back to
America and plunge the country into recession.
Regardless of one’s political leanings, there is an obvious and demonstrable
attempt to savage the currency by the political and banking establishment.
The real force behind Bush’s actions was the Federal Reserve. No one has any
illusion that our previous paper-mache president, who even boast about not reading
the newspapers, was making complex policy decisions about geopolitics and
finance. As a privately owned institution, the Fed has its own agenda which
runs contrary to the interests of the American people. Many people fail to
realize that it was Greenspan who cooked up the massive increases in Social
Security in 1983 to help Reagan reduce the soaring interest rates that were
caused by his tax cuts for the wealthy. Ever since then, Social Security
payments have gone directly into the general fund; paying for roads, social
programs and war. This was the Fed’s clever way of creating a flat tax
directed exclusively at the poor and middle class.
The Federal Reserve has engineered many similar coups, the most impressive
being the huge stock market bubble of the late 1990s. Greenspan kept the
cheap money flowing into the Wall Street Casino (and refused to even
increase marginal rates on stock purchases) while PE’s skyrocketed and the
bubble expanded to Hindenburg-proportions.
Following the explosion, which left tens of thousands of Americans stripped
of their retirement and savings, Greenspan breezily noted that it is not the
task of the Fed to stop bubbles.
Really? The European Central Bank (ECB) takes an entirely different track
intervening whenever it is clearly in the public interest. Greenspan’s
recalcitrance has nothing to do with principle; he was simply acting on
behalf of constituents in the investment community.
Currently, the Fed has created the largest equity bubble of all time; the $9
trillion housing bubble, slapped together over the last 3 years by lowering
rates to an unbelievable 1.5% (at one point) and facilitated through shabby
lending practices. As rates continue to rise to satisfy America’s need for
$2 billion cash inflows from foreign lenders every day, the carnage from the
housing-bomb is bound to be extensive and agonizing.
The Federal Reserve has always served the singular interests of the ruling
class, the only difference now is that the present clash is designed to
drive the wooden-stake into the heart of the middle class and create a
permanent American oligarchy.
Bush had purposely generated another $3 trillion in debt ensuring that the
dollar will fall mightily and working class people be left with a trifling
of their life savings. Now that Obama has taken the reins the Fed has
printed over 2 Trillion more dollars, placing the working class in a
hole they could never escape!
6 months ago, the Federal Reserve, anticipating the day when the foreign
inflows would dry up, eliminated the M-3, their public record of foreign
purchases of dollars and securities. It all sounds very abstract, but what
it means is that we no longer have any way of knowing how quickly foreign
banks are dumping their greenbacks. This means that the American people will
be left holding the bag once again; stuck with an inflationary dollar while
foreign investors bail out.
The Federal Reserve gave Bush the go-ahead on his “war of choice” just as
they cheerily endorsed the budget-busting tax cuts. They’ve doubled the
money supply and done everything in their power to shift middle class wealth
to corporate kingpins and American plutocrats.
Still, this doesn’t explain why they appear to be intentionally savaging the
Here’s the key: We are not a “capitalistic” system or a “free market”
system, that’s all just philosophical mumbo-jumbo. In practical terms, we
are a “Dollar system” and the greenback must continue to dominate the world
oil trade or the Federal Reserve, the IMF, the World Bank and all the
privately owned global institutions will crash and burn. That’s not their
plan; their plan is to perpetuate this debt-pyramid into infinity;
integrating dissident states into an expanding and predatory neo-liberal
The face value of the dollar doesn’t matter to the men who print the money.
The actual value is constantly manipulated to shift wealth from one class to
another. (via bubbles and inflation) What really matters is who controls the
system and the means whereby others are coerced to participate. In the last
decade the amount of dollars stockpiled in foreign banks has gone from 53%
to nearly 70%; this is a monopoly that the US intends to defend by every
means possible. To maintain this monopoly, the Federal Reserve has linked
arms with the oil industry (and the US military) in its effort to control
the world oil market. This has become an “existential” issue for the
corporate elites who run American foreign policy. If the dollar is not
supported by access to the world’s dwindling oil supplies, then there is no
incentive for foreign banks to accumulate the anemic dollar. (Oil is sold
exclusively in US greenbacks)
By this standard, we can see that Bush’s fictitious war on terror was really
just a smokescreen for a global resource war that will decide which economic
Will it be the dollar system, with its wars and gulags spread across the
planet? Or will some other system emerge, some non-ideological incarnation
of socialism that redistributes wealth according to people’s needs like we
see in Venezuela?
The future of the dollar may be decided sooner than any of us had imagined.
Iran’s Mehr News Agency announced that the long-awaited Iran Oil Bourse (OIB)
will open sometime next week on Kish Island challenging head-on America’s
monopoly on the sale of oil in dollars. Iran’s plan is a direct attack on
the greenback as the world’s “reserve currency”. The US must preserve that
advantage because it allows it to maintain massive deficits as well as a
national debt of $8.4 trillion without fear of economic collapse or
hyper-inflation. The opening of the bourse guarantees that central banks
around the world will convert some of their reserves into euros
precipitating a sharp decline in the dollar’s value.
This may be the most serious threat the dollar has ever faced. The
fundamental economic law of “supply and demand” ensures that the bourse
means hard times for the greenback. This explains why the Bush
administration is cobbling together a feeble coalition of European allies
(England, France and Germany) to push a resolution through the Security
Council expressing their “serious concern” about Iran’s alleged nuclear
Washington is looking for international cover to conceal its battle-plans.
The hawkish members of the administration want to preempt the opening of the
bourse with a unilateral attack (nuclear?) on Iranian facilities.
Even if Washington succeeds in stopping Iran’s plans to compete in the oil
market, it’s still a bumpy road ahead for the greenback. The dollar is under
growing pressure from overspending and mismanagement. The prospect of
diminishing foreign inflows and a fragile housing market are telltale signs
of an inflationary cycle.
America is now facing a slow-motion meltdown that could escalate into a
widespread run on the dollar. Attacking Iran will only aggravate the
situation and push tenuous states towards new alliances. (China, India,
Venezuela and Russia have already expressed support for the new bourse)
Military action will do nothing to relieve America’s enormous account
imbalances or lesson the vulnerability of the ailing greenback.
The problems facing the dollar are purely systemic. The privately owned
central banks in the Federal Reserve cannot be trusted to decide monetary
policy any more than the oil giants can be trusted to decide foreign policy.
When the public interest is excluded from policy-making, catastrophe is
Expect the greenback to follow a long-downward spiral.
Florida congressman Alan Grayson laughs in Ben Bernanke's
Watch the below video of a
US Congressman drill the
Federal Reserve Chairman Ben
Bernanke over the Federal Reserve's lending half of a trillion dollars of
our bailout funds to Central European Banks and To New Zealand, which added
up to $3000 + USD to each New Zealander.
With this and other such
behavioral over the last 100 years or so it does seem, at least to me, that
perhaps Britain and their central banking is still in control of America.
Think about it...the US Reserve gives the 500 billion to Britain who then
lends it to New Zealand, that just happens to be their Common Wealth
1. NO REFORM: The plan attempts to mask, rather than reform, imbalances in
credit markets and in U.S. economic public policy. The plan props up
reckless and failed banks by buying “troubled assets” instead of focusing on
real reforms that go after government sponsored culprits Fannie Mae and
Freddie Mac, and sustainable policies that will increase the availability of
private capital and expanded economic growth.
2. TREASURY POWER GRAB: The plan raises Constitutional concerns by
dramatically expanding the power of the current and future Treasury
Secretaries, giving the government agency power to directly purchase assets
from for-profit financial and non-financial firms.
3. STUNNING PRICE TAG: The $700+ billion bailout figure is as much money as
the combined annual budgets of the Departments of Defense, Education and
Health and Human Services. It amounts to $2,300 for every man, woman, and
child in America.
4. INCREASES NATIONAL DEBT: Instead of cutting spending elsewhere, Congress
will borrow all $700 billion on global capital markets, and the bill raises
the national debt ceiling to a staggering $11.3 trillion, which does not
include all foreign debt, obligations and interest payments.
5. GLOBAL BAILOUT: The plan includes taxpayer purchases of distressed assets
from foreign banks.
6. HURTS RESPONSIBLE AMERICAN BANKS: The plan punishes responsible U.S.
banks by keeping reckless, insolvent investment banks in business. As BB&T
CEO John Allison wrote in a letter to Congress on Sept. 23rd, “….this is
primarily a bailout of poorly run financial institutions…. Corrections are
not all bad. The market correction process eliminates irrational
7. FLAWED PROCESS: Members of Congress and the public will have less than 24
hours and no hearings to discuss and understand the impact of this sweeping
plan. This rush to pass a wildly unpopular plan without benefit of
significant public debate and input will also undermine its legitimacy and
8. BY WALL STREET, FOR WALL STREET: The previous Treasury Secretary
architect of the plan, was formerly the head of Goldman Sachs, one of the
firms responsible for the mess and a direct beneficiary of the bailout.
Further, the advisers managing the bailout auctions and assets will be Wall
Street firms and will receive billions of tax dollars in fees.
9. OTHER OPTIONS NOT EXHAUSTED: The idea that taxpayers will make money on
the bailout is not credible. There are ready buyers for these “troubled
assets” — Merrill Lynch sold its entire portfolio of mortgage backed
securities in July– provided the price is low enough. If a profit was
possible, private speculators would readily buy these troubled assets.
10. MORALLY OFFENSIVE: The plan violates basic principles of American
capitalism and honest governance by creating a system of “private profits,
socialized losses” that transfers money from taxpayers directly to Wall
Street investment banks. Free market capitalism only functions if
individuals and firms are held accountable and are allowed to both succeed
and profit, and also to sustain losses and even fail.
The Federal Reserve, or the Fed as it is lovingly called,
may be one of the most mysterious entities in modern American government.
Created during Wilson's presidency to protect the economy in times of
financial turmoil, its real business remains to be discovered. During the
Wilson presidency, the U.S. government sanctions the creation of the Federal
Reserve. Thought by many to be a government organization maintained to
provide financial accountability in the event of a domestic depression, the
actual business of the Fed is shrouded in secrecy.
With all the recessions and depressions the Jewish bankers, along with the
1913 founded Federal Reserve have orchestrated in the last 100 years...their
purpose and goals are quite clear...to control the US industry and it's
monetary wealth. They already control most of the remaining world's currency
and markets, as well as it's minerals and resources.
THE JEWISH PERSPECTIVE ON MONEY
"WEALTH IS GOOD"
According to the New Testament, the
Christian world has, at best, an ambivalent attitude toward money and
wealth: "Easier for a camel to pass through the eye of a needle than for
someone who is rich to enter the kingdom of God." (Matthew 19:24, Luke
18:25, Mark 10:25) "You cannot serve God and wealth." (Luke 16:13) "If we
have food and clothing, we will be content with these. But those who want to
be rich fall into temptation and are trapped by many senseless and harmful
desires that plunge people into ruin and destruction." (Timothy 6:8-9) "For
the love of money is the root of all kinds of evil." (Timothy 6:10)
For Jews, on the other hand, wealth
is a good thing, a worthy and respectable goal to strive toward. What's
more, once you earn it, it is tragic to lose it. Judaism has never
considered poverty a virtue. The first Jews were not poor, and that was
good. The Jewish founding fathers, Abraham, Isaac and Jacob, were blessed
with cattle and land in abundance. Asceticism and self-denial are not Jewish
ideals. With your financial house in order, it is easier to pursue your
spiritual life: "Where there is no flour, there is no Bible." The Mishna
(a collection of books that outline the detailed laws for daily
Jewish living) "Poverty causes transgression." (Hasidic folk
saying) "Poverty in a man's house is worse than fifty plagues." (The Talmud
(a collection of books of rabbinical commentary on the Old Testament))
Did you know that Rockefellers Companies are not required to post their
They have never been subject to an audit or investigated in any business
James McDonald was found shot to
death in his home on Sept. 15th 2009. He was CEO of a Rockefeller Company.
Five days previous another CEO of a Rockefeller company was also found dead
with a gun shot wound to his head. Of course the police state they were
suicides...not like there were ever be a real investigation into the world's
most powerful family.
Watch this current video from a US Congressman on the Federal Reserve
Many Americans will be shocked to discover that the principle business of
the Federal Reserve is to print money from nothing, lend it to the U.S. government and
charge interest on the loans. Who keeps the interest? Good question. Find
out as the connective tissue between this and other top-secret international
organizations is explored and exposed.
Disclaimer; Travelers Digest makes no claims to or
accepts any responsibilities for the articles claims or content. It is posted simply as a Public
We do not require or seek the readers permission in the
posting of any article or commentary and defend our right to post thought
provoking editorials that we feel may provide a public service. We will
not respond directly to any abusive correspondence and any conceived to be
a direct or indirect threat against any person, place or thing will be
reported to the proper authorities.
Fair Use Notice: This document
may contain copyrighted material whose use has not been specifically
authorized by the copyright owners. We believe
that this not-for-profit, educational use on the Web constitutes a fair
use of the copyrighted material (as provided for in section 107 of the US
Copyright Law). If you wish to use this copyrighted material for purposes
of your own that go beyond fair use, you must obtain permission from the
Vietnam - Kennedy - CIA - Texans - Dick Cheney - Halliburton - Iraq -
Afghanistan - Paul Wolfowitz
Federal Reserve - Paul Wolfowitz - Timothy Geithner - Alan Greenspan - Commercialism