Global Power and Global Government:
Part 2 - Origins of the American
Empire: Revolution, World Wars and World Order
by Andrew Gavin Marshall
http://globalresearch.ca/, July
2009
Russia, Oil and Revolution
By the 1870s, John D. Rockefeller's Standard Oil Empire had a
virtual monopoly over the United States, and even many foreign
countries. In 1890, the King of Holland gave his blessing for
the creation of an international oil company called Royal Dutch
Oil Company, which was mainly founded to refine and sell kerosene
from Indonesia, a Dutch colony. Also in 1890, a British company
was founded with the intended purpose of shipping oil, the Shell
Transport and Trading Company, and it "began transporting
Royal Dutch oil from Sumatra to destinations everywhere,"
and eventually, "the two companies merged to become Royal
Dutch Shell."[1]
_Russia entered into the Industrial Revolution
later than any other large country and empire of its time. By
the 1870s, "Russia's oil fields, including those in Baku,
were challenging Standard Oil's supremacy in Europe. Russia's
ascendancy in natural resources disrupted the strategic balance
of power in Europe and troubled Britain." Britain thus attempted
to begin oil explorations in the Middle East, specifically in
Persia (Iran), first through Baron Julius de Reuter, the founder
of Reuters News Service, who gained exploration rights from the
Shah of Iran.[2] Reuter's attempt at uncovering vast quantities
of oil failed, and a man named William Knox D'Arcy took the lead
in Persia.
_By the middle of the 19th century, "the
Rothschilds were the richest family in the world, perhaps in all
of history. Their five international banking houses comprised
one of the first multinational corporations." Alfonse de
Rothschild was "heavily invested in Russian oil at least
forty years before William Knox D'Arcy began tying up Persian
oil concessions for the British. Russian oil, which in the 1860s
was already emerging as the European rival to the American monopoly
Standard Oil, was the Baron [Rothschild]'s pet project."
In the early 1880s, "almost two hundred Rothschild refineries
were at work in Baku," Russia's oil rich region.[3]
_By the mid-1880s, "the Rothschilds
were poised to become the chief oil supplier, not only to Europe
but to the Far East," however, "the Baku-Batum railroad
was already proving inadequate to transport the volume of oil
being produced. Another route was needed, and came in the form
of the recently opened Suez Canal, which shortened the journey
to the Far East by four thousand miles. Palestine was suddenly
of interest to the Rothschilds as it provided access to the Suez."[4]
When the Egyptian government was bankrupt in 1874, British Prime
Minister Benjamin Disraeli turned to his close friends, the Rothschilds,
"for the colossal cash advance necessary" to buy shares
in the Suez Canal Company.[5] By this time, the Rothschilds were
already principle shareholders in the Bank of France,[6] and the
Bank of England, sitting alongside other notable shareholders
such as Baring Brothers, Morgan Grenfell and Lazard Brothers.[7]
The Rothschilds "had long been involved
in developing Czarist Russia's nascent industry and banking system,
while that country's growing network of railroads was largely
financed by Rothschild-managed loans."[8] When the Czar died,
he was succeeded by his son, Czar Nicholas II, who instituted
anti-Semitic pogroms, discriminating against Jews, which had the
effect of stimulating a massive emigration of Jews out of Russia
and Eastern Europe and into Western Europe. However, these East
European and Russian Jewish émigrés grew up in a
newly industrializing nation in which the tyranny of the government
and collusion between it and powerful financial and industrial
interests left the great majority of people dispossessed and incited
more socialist tendencies in thought and action.
_The English Rothschilds were very alarmed
"when the socialist tendencies of the émigrés
contributed to a massively disruptive tailors' strike in the East
End of London in 1888. A young Georgian communist who would become
known to the world as Joseph Stalin was already organizing laborers
to strike at the Rothschild oil interests in Batum." The
British Rothschilds were very concerned with this wave of Jewish
immigrants into Western Europe and Britain, as they were intensely
anti-Czarist and progressively socialist, and the Rothschilds
were known for their heavy collaboration with the Czarist regimes
of Russia. One potential solution considered to the problem of
increased socialist-leaning Jewish immigrants in Britain was to
institute restrictions on immigration. However, this would likely
backlash, in the sense that it would be viewed as comparable to
expulsion. So, Edmond Rothschild began his personal campaign to
create a Jewish homeland in Palestine in order to create a release
valve for Jewish émigrés to put their political
action behind a new cause, and to promote them emigrating to Palestine,
and out of Western Europe.[9]
_On top of this, as the pre-eminent Zionist
in Britain, his proposal for the creation of a Jewish homeland
in Palestine served major economic interests of the Rothschilds
and of the British Empire, in that several years prior, Rothschild
bought the Suez Canal for the British, and it was the primary
transport route for Russian oil. Palestine, thus, would be a vital
landmass as a protectorate for British and Rothschild imperial-economic
interests.
_The Rothschilds, despite their overtly
pro-Zionist and pro-Jewish rhetoric, did not stop their support
of the Russian regime and economic activities within anti-Semitic
Russia. In 1895, the Rothschilds, then one of the world's leading
producers and distributors of oil, "had gone so far as to
co-sign an agreement with rival producers - including America's
Standard Oil [of Rockefeller interests] - to divide up world markets.
It never took effect, presumably because of the opposition of
the Russian government." In 1902, the Rothschilds "entered
into a partnership with Royal Dutch and Shell (soon to become
a single global company) to form the Asiatic Petroleum Company
for exploiting the fields of Southern Russia."[10]
_In the early 1900s, the Rothchilds were
the primary oil interests in Russia, second in the world only
to the Rockefellers. As industrialization was under way, conditions
worsened for the great majority of Russian people. This spurred
protests and riots, and a "young Stalin himself led the agitation
against the Caucasian oil industry in general, [and] the Rothschilds
in particular. Mass action by oil workers in Baku [the major oil
fields in Russia] in 1903 was the spark that set off the first
general strike across the Russian landmass." Then with the
Russian loss in the Russo-Japanese War of 1904, and further protests,
came the Revolution of 1905. In the following years, the Rothschilds
sold their Russian oil interests to Royal Dutch Shell, gaining
significant shares in the international oil company.[11]
_The specter of political and social instability
within Russia was high and did not go without notice from international
banking, oil, and industrial interests. Naturally, the international
banking houses were keeping a close eye on developments within
Russia. The Rothschilds had to lessen their overt involvement
with Russia, as they could not maintain such a relationship with
the most anti-Jewish nation in the world at the time, while also
claiming to be the primary advocates of Jewish aspirations for
a homeland. This is why they sold their Russian oil interests
to Royal Dutch Shell, but then gained significant shares in the
company itself. So while publicly cutting their ties with Russia,
they still held massive interests in its industrial capacity.
Following the Russo-Japanese War, the Rothschilds "refused
to participate in underwriting a major loan, this at a time when
Russia desperately needed funds to stabilize the regime."[12]
_So, in 1906, John D. Rockefeller stepped
in to aid Czarist Russia, and offered $200,000,000, or "400,000,000
rubles for a concession for railroads from Tashkend to Tomsk and
from Tehita to Polamoshna and a grant of land on both sides of
the prospective lines."[13] These international financiers
were still clearly intent upon maintaining their interests within
Russia.
_However, the Russian governments refusal
to allow the deal between the Rockefellers and Rothschilds and
other major oil monopolies to divide up the world's oil reserves,
may well have spurred discontent among these powerful interests.
If Russia refused to allow them to control all the oil and have
a right to all oil, did this mean that Russia was planning on
building a domestic oil industry? If this were the case, it could
pose a threat to all the entrenched economic and financial interests,
particularly those of the Rockefellers and Rothschilds, as Russia's
significant oil reserves and resources would allow it to possibly
even surpass the United States in industrialization. Further,
Czarist Russia became an increasingly unstable investment environment,
controlled by an increasingly unpredictable monarchy.
_The 1917 October Revolution "inspired
workers' uprisings in the oil fields against low wages and harsh
working conditions. In 1919, Azerbaijan took advantage of the
political unrest to declare sovereignty over the Baku fields.
That same year SONJ [Standard Oil of New Jersey] made an agreement
with the Azerbaijani government to purchase undeveloped land for
exploration in the Baku region. Amidst the chaos, foreign oil
companies rushed into Russia hoping to collect concessions at
reduced rates. The Nobel brothers sold much of their operations
to SONJ (today ExxonMobil) to build an alliance in 1920."[14]
_Antony C. Sutton, economist, historian
and author, as well as research fellow at Stanford University's
Hoover Institution, wrote in Wall Street and the Bolshevik Revolution,
that both fascist and communist systems are "based on naked,
unfettered political power and individual coercion. Both systems
require monopoly control of society. While monopoly control of
industries was once the objective of J.P. Morgan and J.D. Rockefeller,
by the late nineteenth century the inner sanctums of Wall Street
understood that the most efficient way to gain an unchallenged
monopoly was to 'go political' and make society go to work for
the monopolists," and that, "the totalitarian socialist
state is a perfect captive market for monopoly capitalists, if
an alliance can be made with the socialist powerbrokers."[15]
Thus, the major money powers of the west decided to put their
money behind the creation of a totalitarian communist state in
Russia, in order to create a captive economy, which they could
exploit and remove from competititon.
_When the Revolution began, Trotsky was
in New York, and was immediately granted an American passport
by President Wilson, and then given a Russian entry permit and
a British transit visa, in order to return to Russia and "carry
forward" the revolution.[16] Trotsky, while traveling, was
arrested in Canada, but was released as a result of British intervention.[17]
_Trotsky traveled on board a ship in 1917,
leaving New York, along with an interesting cast of fellow passengers,
including "other Trotskyite revolutionaries, Wall Street
financiers, American Communists, and a man named Charles Crane.
Charles Richard Crane, former chairman of the Democratic Party's
finance committee, whose son, Richard Crane, was an assistant
to U.S. Secretary of State Robert Lansing, played a significant
part in what occurred in Russia. Former U.S. Ambassador to Germany,
William Dodd, said that Crane, "did much to bring on the
[Alexander] Kerensky revolution which gave way to Communism."
Kerensky was the second Prime Minister in the Russian Provisional
Government, which followed the collapse of the Czarist government,
and preceded the Bolshevik. Crane also thought that the Kerensky
government "is the revolution in its first phase only."[18]
_The Revolution occurred in the midst
of World War I, which broke out in 1914, and had all the major
European powers at war. Morgan and Rockefeller interests, organized
in Wall Street and centralized in the Federal Reserve Bank of
New York, the most powerful of all the regional Federal Reserve
Banks, used "the Red Cross Mission as its operational vehicle"
in Russia at the time of the Bolshevik Revolution. The Red Cross
Mission in Russia got its endowment from wealthy people such as
J.P. Morgan, Mrs. E. H. Harriman, Cleveland H. Dodge, and Mrs.
Russell Sage, and "in World War I the Red Cross depended
heavily on Wall Street, and specifically the Morgan firm."
When the American Red Cross set up a mission to Russia, "William
Boyce Thompson, director of the Federal Reserve Bank of New York,
had 'offered to pay the entire expense of the commission'."[19]
All expenses were paid for by William Boyce Thompson, who was
a major stockholder in Chase National Bank, whose President had
Thompson appointed head of the New York Fed.[20]
_The Mission was primarily made up of
lawyers, financiers, their assistants, people affiliated with
Standard Oil and the Rockefeller's National City Bank.[21] The
Mission supported through a loan, the Provisional government of
Alexander Kerensky, yet, William B. Thompson of the New York Fed
"made a personal contribution of $1,000,000 to the Bolsheviki
for the purpose of spreading their doctrine in Germany and Austria."
Interestingly, when the Bolsheviks took control, "The National
City Bank branch in Petrograd had been exempted from the Bolshevik
nationalization decree - the only foreign or domestic Russian
bank to have been so exempted."[22] Ultimately, the Red Cross
mission in Russia "was in fact a mission of Wall Street financiers
to influence and pave the way for control, through either Kerensky
or the Bolshevik revolutionaries, of the Russian market and resources."[23]
_The American International Corporation
(AIC), was "created in 1915 to develop domestic and foreign
enterprises, to extend American activities abroad, and to promote
the interests of American and foreign bankers, business and engineering."
It was created and controlled by Morgan, Stillman and Rockefeller
interests, and its directors were affiliated with National City
Bank (Rockefeller), the Carnegie Foundation, General Electric,
the DuPont family, New York Life Insurance, American Bankers Association
and the Federal Reserve Bank of New York. Members of its board
financially supported the Bolsheviks and urged the US State Department
to recognize the Bolshevik government.[24]
_In 1920, Russian gold was being siphoned
through Sweden, where it was melted down and stamped with the
Swedish mint, funneled through the Federal Reserve Bank of New
York and into Kuhn, Loeb & Company and Guaranty Trust Company
(Morgan), two of the primary banking interests behind the creation
of the Federal Reserve System. [25] During the civil war in Russia
between the Reds and the Whites, while Wall Street financiers
were aiding the Bolsheviks quietly, they also began to finance
Aleksandr Kolchak (of the Whites) with millions of dollars, in
order to ensure that whoever emerged victorious in the war, Wall
Street would win.[26]
_As Antony Sutton wrote, "Russia,
then and now, constituted the greatest potential competitive threat
to American industrial and financial supremacy," and that,
"The gigantic Russian market was to be converted into a captive
market and a technical colony to be exploited by a few high-powered
American financiers and the corporations under their control."[27]
_Eventually, the Bolsheviks emerged victorious,
and Wall Street won. Under Stalin's Five-Year Plans in the early
1930s, Soviet industrialization "required Western technology
and expertise," and in a "frequently overlooked contribution"
that came "from abroad," American firms aided in the
industrialization of the USSR, including Ford, General Electric
and DuPont,[28] with Standard Oil, General Electric, Austin Co.,
General Motors, International Harvester, and Caterpillar Tractor
trading heavily with the Soviet Union.[29]
_Standard Oil bought "gargantuan
quantities of Red Oil," General Electric received a $100,000,000
contract from the Soviet Union to build "the four largest
hydroelectric generators in the world," Austin Co., got a
$50,000,000 contract to erect the City of Austingrad, "complete
with tractor and automobile factories involving an additional
$30,000,000 contract for parts and technical assistance with Ford
Motor Corp." On top of this, "Other [Soviet] business
friends are General Motors, DuPont de Nemours, International Harvester,
John Deere Co., Caterpillar Tractor, Radio Corp. and the U. S.
Shipping Board, which sold the Reds a fleet of 25 cargo steamers."
Banks with close ties to the Russian economy included Chase National,
National City Bank and Equitable Trust, all of which are either
Rockefeller or Morgan interests.[30]
World War Restructures World Order
_In the midst of World War I, a group of American scholars were
tasked with briefing "Woodrow Wilson about options for the
postwar world once the kaiser and imperial Germany fell to defeat."
This group was called, "The Inquiry." The group advised
Wilson mostly through his trusted aide, Col. Edward M. House,
who was Wilson's "unofficial envoy to Europe during the period
between the outbreak of World War I in 1914 and the intervention
by the United States in 1917," and was the prime driving
force in the Wilson administration behind the establishment of
the Federal Reserve System.[31]
_"The Inquiry" laid the foundations
for the creation of the Council on Foreign Relations (CFR), the
most powerful think tank in the US, and "The scholars of
the Inquiry helped draw the borders of post World War I central
Europe." On May 30, 1919, a group of scholars and diplomats
from Britain and the US met at the Hotel Majestic, where they
"proposed a permanent Anglo-American Institute of International
Affairs, with one branch in London, the other in New York."
When the scholars returned from Paris, they were met with open
arms by New York lawyers and financiers, and together they formed
the Council on Foreign Relations in 1921. The "British diplomats
returning from Paris had made great headway in founding their
Royal Institute of International Affairs." The Anglo-American
Institute envisioned in Paris, with two branches and combined
membership was not feasible, so both the British and American
branches retained national membership, however, they would cooperate
closely with one another.[32] They were referred to, and still
are, as "Sister Institutes."[33]
_The Milner Group, the secret society
formed by Cecil Rhodes, "dominated the British delegation
to the Peace Conference of 1919; it had a great deal to do with
the formation and management of the League of Nations and of the
system of mandates; it founded the Royal Institute of International
Affairs in 1919 and still controls it."[34] There were other
groups founded in many countries representing the same interests
of the secret Milner Group, and they came to be known as the Round
Table Groups, preeminent among them were the Royal Institute of
International Affairs (Chatham House), the Council on Foreign
Relations in the United States, and parallel groups were set up
in Canada, Australia, New Zealand, South Africa and India.[35]
_World War I had marked a monumental period
in history in what can be understood as "transitional imperialism."
What I mean by this is that historically, periods of imperial
decline and transition (that is, the rise or fall of an empire
or empires), are often marked by increased international violence
and war.
_World War I was the result of the culmination
of imperial ambitions by various powers. This was the natural
result of the wave of "New Imperialism" that swept the
industrialized world in the 1870s. In 1879, the German Empire
and Austria-Hungary created the Dual Alliance to combat growing
Russian influence in the Balkans with the decline of the Ottoman
Empire. Italy joined in 1882, making it the Triple Alliance. In
1892, the Franco-Russia Alliance was made, which was a military
alliance between France and the Russian Empire to counteract the
German Empire's supremacy over Europe. In 1904, the Entente Cordiale,
a series of agreements between France and Britain, was agreed
upon in order to maintain a balance of power in Europe. In 1907,
the Anglo-Russia Entente was formed in an effort to end their
long-running Great Game by setting the boundaries of their imperial
control over Afghanistan, Persia and Tibet. It also acted as a
balance to the growing German Empire's might and influence in
Europe. After the signing of the Anglo-Russian Entente, the Triple
Entente was cemented between Britain, Russia and France as a significant
counter to the Triple Alliance.
_The decline of the Ottoman Empire had
been a long and slow process. The Ottoman Empire dated back to
1299, and lasted until 1923. "From 1517 until the end of
World War I, a period of 400 years, the Ottoman Empire was the
ruling power in the central Middle East. Ottoman administrative
institutions and practices shaped the peoples of the modern Middle
East and left a legacy that endured after the empire's disappearance."[36]
_In the late 16th century, "Ottoman
raw materials, normally channeled into internal consumption and
industry, were increasingly exchanged for European manufactured
products. This trade benefited Ottoman merchants but led to a
decline in state revenues and a shortage of raw materials for
domestic consumption. As the costs of scarce materials rose, the
empire suffered from inflation, and the state was unable to procure
sufficient revenues to meet its expenses. Without these revenues,
the institutions that supported the Ottoman system, especially
the armed forces, were undermined." This was largely done
through commercial treaties known as Capitulations. The first
Capitulation "was negotiated with France in 1536; it allowed
French merchants to trade freely in Ottoman ports, to be exempt
from Ottoman taxes, and to import and export goods at low tariff
rates. In addition, the treaty granted extraterritorial privileges
to French merchants by permitting them to come under the legal
jurisdiction of the French consul in Istanbul, thus making them
subject to French rather than Ottoman-Islamic law. This first
treaty was the model for subsequent agreements signed with other
European states."[37]
_The Ottoman state had been sufficiently
weakened by the early 20th century, which happened to be the same
time period that Europeans, particularly the British, were looking
at Middle East oil to fuel their empires. The major European alliances
sought to take advantage of this weakened Ottoman position. In
1909, Austria-Hungary annexed Bosnia-Herzegovina, inciting the
anger of the Russia Empire. The First Balkan War was fought between
1912 and 1913, in which Serbia, Montenegro, Greece and Bulgaria
fought the Ottoman Empire. The settlement that followed angered
Bulgaria, which then began to engage in territorial disputes with
Serbia and Romania. Bulgaria then attacked Greece and Serbia in
1913, followed by Romania and the Ottoman Empire declaring war
against Bulgaria, which was the Second Balkan War.
_This further destabilized the region,
and Austria-Hungary grew wary of the growing influence of Serbia.
When Austrian Archduke Franz Ferdinand was assassinated in 1914,
Austria delivered an ultimatum to Serbia, where the assassin was
from, and then declared war. The Russian Empire mobilized for
war the next day, with German mobilization following behind, and
France behind it. Germany then declared war on Russia, and World
War I was under way.
_The end of the Great War saw the disillusion
of the Ottoman Empire, breaking up its territory, which was carved
up between France and Britain at the Paris Peace Conference. The
German Empire and Austro-Hungarian Empires also officially ended
as a result of the war, for which Germany was given the sole blame
for the war and punished through the Versailles reparations. The
Russian Empire ended with the Bolshevik Revolution, which resulted
in Russia pulling out of the war in 1917, the same year the United
States entered the war. The Great War turned the United States
into a powerful nation in the world, becoming a leading creditor
nation with significant international influence. The British and
French maintained their empires, though they were in decline.
However, they attempted to maintain significant control over the
Middle East.
_World War I was thus the culmination
of a massive build-up of imperial nations seeking expanded influence
and markets for their capital. Entering the War, there were many
empires, leaving it, there were two dominant European Empires
(France and Britain) and an emerging new force in the world, the
United States.
The Great Depression
The modern banking system manufactures money out of nothing. The
process is perhaps the most astounding piece of sleight of hand
that was ever invented. Banking was conceived in inequity and
born in sin . . . Bankers own the earth. Take it away from them
but leave them the power to create money, and, with a flick of
a pen, they will create enough money to buy it back again . .
. Take this great power away from them, and all great fortunes
like mine will disappear, for then this would be a better and
happier world to live in. . . . But, if you want to continue to
be the slaves of bankers and pay the cost of your own slavery,
then let bankers continue to create money and control credit.[38]
- Sir Josiah Stamp, Director of the Bank of England, 1927
Benjamin Strong, Governor of the Federal Reserve Bank of New York,
and Montagu Norman, Governor of the Bank of England, who worked
closely together throughout the 1920s, decided to "use the
financial power of Britain and the United States to force all
the major countries of the world to go on the gold standard and
to operate it through central banks free from all political control,
with all questions of international finance to be settled by agreements
by such central banks without interference from governments."
These men were not working for the governments and nations of
whom they purportedly represented, but "were the technicians
and agents of the dominant investment bankers of their own countries,
who had raised them up and were perfectly capable of throwing
them down."[39]
_In the 1920s, the United States experienced
a stock market boom, which was a result of the commercial banks
providing "funds for the purchase of stock and took the latter
as collateral," creating a massive wave of underwriting and
purchasing of securities. The stock market speculation that followed
was the result of the banks "borrowing substantially from
the Federal Reserve. Thus the Federal Reserve System was helping
to finance the great stock market boom."[40]
_In 1927, a meeting took place in New
York City between Montagu Norman of the Bank of England, Hjalmar
Schacht, President of the Reichsbank, the German central bank
of the Weimar Republic; Charles Rist, Deputy Governor of the Bank
of France and Benjamin Strong of the New York Fed. The topic of
the meeting was the "persistently weak reserve position of
the Bank of England. This, the bankers thought, could be helped
if the Federal Reserve System would ease interest rates to encourage
lending. Holders of gold would then seek the higher returns from
keeping their metal in London." The Fed obliged.[41]
_The Bank of England had a weak reserve
position because of Britain's position as champion of the gold
standard. Foreign central banks, including the Bank of France,
were transferring their exchange holdings into gold, of which
the Bank of England did not have enough to supply. So the Fed
lowered its discount rate, and began buying securities to equal
French gold purchases. Money in the US, then, "was going
increasingly into stock-market speculation rather than into production
of real wealth."[42]
_In early 1929, the Federal Reserve board
of governors "called upon the member banks to reduce their
loans on stock-exchange collateral," and took other actions
with the publicly pronounced aim of reducing "the amount
of credit available for speculation." Yet, it had the reverse
effect, as "the available credit went more and more to speculation
and decreasingly to productive business." On September 26,
1929, London was hit with a financial panic, and the Bank of England
raised its bank rate, causing British money to leave Wall Street,
"and the over inflated market commenced to sag," leading
to a panic by mid-October.[43]
_The longest-serving Federal Reserve Chairman,
Alan Greenspan, wrote that the Fed triggered the speculative boom
through its pumping excess credit into the economy (sound familiar?),
and eventually this resulted in the American and British economies
collapsing due to the massive imbalances produced. Britain then
"abandoned the gold standard completely in 1931, tearing
asunder what remained of the fabric of confidence and inducing
a world-wide series of bank failures. The world economies plunged
into the Great Depression of the 1930's."[44]
The Bank for International Settlements
In 1929, the Young Committee was formed to create a program for
the settlement of German reparations payments that emerged out
of the Versailles Treaty, written at the Paris Peace talks in
1919. The Committee was headed by Owen D. Young, founder of Radio
Corporation of America (RCA), as a subsidiary of General Electric.
He was also President and CEO of GE from 1922 until 1939, co-author
of the 1924 Dawes Plan, was appointed to the Board of Trustees
of the Rockefeller Foundation in 1928, and was also, in 1929,
deputy chairman of the New York Federal Reserve Bank. When Young
was sent to Europe in 1929 to form the program for German reparations
payments he was accompanied by J.P Morgan, Jr.[45]
_What emerged from the Committee was the
creation of the Young Plan, which "was assertedly a device
to occupy Germany with American capital and pledge German real
assets for a gigantic mortgage held in the United States."
Further, the Young Plan "increased unemployment more and
more," allowing Hitler to say he would "do away with
unemployment," which, "really was the reason of the
enormous success Hitler had in the election."[46]
_The Plan went into effect in 1930, following
the stock market crash. Part of the Plan entailed the creation
of an international settlement organization, which was formed
in 1930, and known as the Bank for International Settlements (BIS).
It was purportedly designed to facilitate and coordinate the reparations
payments of Weimar Germany to the Allied powers. However, its
secondary function, which is much more secretive, and much more
important, was to act as "a coordinator of the operations
of central banks around the world." Described as "a
bank for central banks," the BIS "is a private institution
with shareholders but it does operations for public agencies.
Such operations are kept strictly confidential so that the public
is usually unaware of most of the BIS operations."[47]
_The BIS was established "to remedy
the decline of London as the world's financial center by providing
a mechanism by which a world with three chief financial centers
in London, New York, and Paris could still operate as one."[48]
As Carroll Quigley explained:
[T]he powers of financial capitalism had another far-reaching
aim, nothing less than to create a world system of financial control
in private hands able to dominate the political system of each
country and the economy of the world as a whole. This system was
to be controlled in a feudalist fashion by the central banks of
the world acting in concert, by secret agreements arrived at in
frequent private meetings and conferences. The apex of the system
was to be the Bank for International Settlements in Basle, Switzerland,
a private bank owned and controlled by the world's central banks
which were themselves private corporations.[49]
The BIS was founded by "the central banks of Belgium, France,
Germany, Italy, the Netherlands, Japan, and the United Kingdom
along with three leading commercial banks from the United States,
including J.P. Morgan & Company, First National Bank of New
York, and First National Bank of Chicago. Each central bank subscribed
to 16,000 shares and the three U.S. banks also subscribed to this
same number of shares." However, "Only central banks
have voting power."[50]
_In a letter dated November 21, 1933,
President Franklin Roosevelt told Edward M. House, "The real
truth .. is, as you and I know, that a financial element in the
larger centers has owned the Government ever since the days of
Andrew Jackson - and I am not wholly excepting the administration
of W[oodrow]. W[ilson]. The country is going through a repetition
of Jackson's fight with the Bank of the United States - only on
a far bigger and broader basis."[51]
Banking on Hitler
Throughout the 1930s, with the loans provided through the Dawes
and Young Plans, Germany was able to create a few dominant industrial
cartels, which were all financed by Wall Street bankers and industrialists.[52]
These cartels provided the basis for and main financial backing
of the Nazi regime. Collaboration between the German Nazi industry
and American industry and finance continued, specifically with
Morgan and Rockefeller interests, as well as Ford and DuPont.
The Morgan-Rockefeller international banks and companies associated
with them "were intimately related to the growth of Nazi
industry."[53] Rockefeller's Standard Oil Empire "was
of critical assistance in helping Nazi Germany prepare for World
War II."[54] On top of this, the Rockefeller Foundation was
also pivotal in not only funding the racist and elitist eugenics
movement in the United States, but played a pivotal part in bringing
the eugenics ideology to Nazi Germany, facilitating the beliefs
that brought about the Holocaust.[55]
_Hjalmar Schacht, the President of the
Reichsbank throughout Weimar Germany, stayed on as President of
the German central bank from 1933 until 1939, and was thus a central
figure in Nazi Germany, being a major driver being the German
plans for reindustrialization, redevelopment and rearmament. Hitler,
in 1934, made Schacht his Minister of Economics.
_Central banks across Europe began to
purchase Nazi gold, which was smuggled and melted down and re-stamped
in Switzerland, (much like was done with Soviet gold). Sweden,
Spain, Portugal, Argentina, Turkey, France, Great Britain, Poland,
Hungary, and the United States all "traded with the Nazis
with gold transferred by the BIS." This was done as a collaborative
effort among central banks, as "the BIS did enter into gold
and currency transactions with Nazi Germany through its participation
with the Reichsbank." Schacht wielded his significant influence
and "had become instrumental in placing high-ranking Nazi
officials and foreign collaborators on the BIS Board of Directors."[56]
Empire, War and the Rise of the New Global Hegemon
World War Two also marked a period of massive imperial transition.
The build-up of the Third Reich led to Nazi imperialism throughout
Europe and North Africa and the Japanese Empire expanded into
China. At the end of the War, the British and French Empires were
all but vanished, holding onto remaining colonies in Africa and
Asia. The Soviet Union was devastated and Germany, with much of
Europe, was in ruins. What emerged from this war that was most
significant was the rise of a new empire, the American Empire.
America's intervention into the war and expansion into Europe
as a liberating force allowed it to set up bases throughout Europe
as well as in Japan on the Pacific. The Soviet Union, having taken
Europe from the East, expanded its influence and dominance across
Eastern Europe. Following Churchill's speech that an "Iron
Curtain" had fallen across Europe, the Cold War was underway.
Thus, World War II ended the age of many European empires, even
of those in decline, and created a bi-polar world, which was divided
between the USSR and the USA.
_Following World War II, the US, as the
only major nation in the world whose industrial base survived
the devastation of the war, assumed the position of global hegemon.
It began to set up the infrastructure, both national and international,
to assume the position of global superpower, exerting its hegemony
across the globe. The crown had been passed from the British Empire
to the American Empire. Ultimately, both were and are owned and
controlled by the same interests, primarily represented through
the central banks and the private banking interests that make
up the dominant shareholders.
_Before America had even entered the war
in late 1941, the Council on Foreign Relations (CFR), the American
branch of the round table groups Carroll Quigley discussed as
having originated from the secret society of Cecil Rhodes, was
planning on America entering the war. The CFR had essentially
captured US foreign policy firmly in the grips of the banking
elite. The establishment of the Federal Reserve (1913) ensured
that the United States would become indebted to and owned by international
banking interests, and thus, act in their interest. The Fed financed
the US role in World War I, provided the credit for speculation,
which led to the Great Depression, and massive consolidation for
the interests that own the Federal Reserve System. It then financed
US entry into World War II.
_The CFR, established six years after
the Federal Reserve was created, worked to promote an internationalist
agenda on behalf of the international banking elite. It was to
alter America's conceptualization of its place within the world
- from isolationist industrial nation to an engine of empire working
for international banking and corporate American interests. Where
the Fed took control of money and debt, the CFR took control of
the ideological foundations of such an empire - encompassing the
corporate, banking, political, foreign policy, military, media,
and academic elite of the nation into a generally cohesive overall
world view. By altering one's ideology to that of promoting such
an internationalist agenda, the big money that was behind it would
ensure one's rise through government, industry, academia and media.
The other major think tanks and policy institutions in the United
States are also represented at the CFR. They are constitutive
of divisions within the elite, however, such divisions are predicated
on the basis of how to use American imperial power, where to use
it, on what basis to justify it, and other various methodological
differences. The divide amongst elites was never on the questions
of: should we use American imperial power, why has America become
an Empire, or should there even be an empire? If one takes such
considerations to heart and questions these concepts, be it within
the foreign policy establishment, intelligence, military, academia,
finance, corporate world, or media; chances are, such a person
is not a member of the CFR.
_The CFR effectively undertook a policy
coup d'état over American foreign policy with the Second
World War. When war broke out, the Council began a "strictly
confidential" project called the War and Peace Studies, in
which top CFR members collaborated with the US State Department
in determining US policy, and the project was entirely financed
by the Rockefeller Foundation.[57] The post-War world was already
being designed by members of the Council, who would go into government
in order to enact these designs.
_The policy of "containment"
towards the Soviet Union that would define American foreign policy
for nearly half a century was envisaged in a 1947 edition of Foreign
Affairs, the academic journal of the Council on Foreign Relations.
So too were the ideological foundations for the Marshall Plan
and NATO envisaged at the Council on Foreign Relations, with members
of the Council recruited to enact, implement and lead these institutions.[58]
The Council also played a role in the establishment and promotion
of the United Nations,[59] which was subsequently built on land
bought from John D. Rockefeller, Jr.[60]
The Rise of the American Empire and Keynesian Political Economy
Within liberal political economy, a prominent individual and British
economist, John Maynard Keynes, undertook the process of evolving
liberal theory into what later became known as Keynesian economics.
Following in the footsteps of the dominance of the liberal order,
in which the economic and political realms were viewed as separate,
and necessarily so, Keynes sought to re-imagine the political-economic
relationship. His work was largely influenced by the events leading
up to and following the Great Depression, which was largely seen
as a failure of the liberal economic order. Keynes wanted to combine
state and market forces, not rejecting the liberal notion of the
"invisible hand," however, relegated that to a more
distinct area, and imagined a broader role for the state in the
economy.
_Keynes advocated for the state to act,
or invest, when private individuals would not, in an effort to
stave off financial or economic crises. Thus, Keynes would argue,
the state strengthens the market. A Marxist theorist would likely
point to this as an example of how the state, within a capitalist
society, functions as an institutional organ which protects the
interests of the capitalist class. Keynes advocated a liberal
international order composed of free markets, however he recommended
state intervention domestically, particularly to protect jobs
and control inflation.
_Keynesian political economic theory served
in large part as a basis for the creation of the Bretton-Woods
System, established in 1944, and his concept of embedded liberalism
(promotion of liberal international economy, and state intervention
in domestic economy), reigned supreme until the 1970s.
_In 1944, representatives of the 44 Allied
nations met for the Bretton Woods conference (the United Nations
Monetary and Financial Conference) in New Hampshire, in an effort
to reorganize and regulate the international financial and monetary
order following the war. The UK was represented by John Maynard
Keynes; with the American contingent represented by Harry Dexter
White, an American economist and senior US Treasury department
official. It was out of this conference that the International
Monetary Fund (IMF), the International Bank for Reconstruction
and Development (IBRD), now part of the World Bank, and the General
Agreement on Tariffs and Trade (GATT), now institutionalized in
the World Trade Organization (WTO), originated. They were designed
to be the institutionalized economic foundations of exerting American
hegemony across the globe; they were, in essence, engines of economic
empire.
_In 1947, President Harry Truman signed
the National Security Act, which created the position of Secretary
of Defense overseeing the entire military establishment, and the
Joint Chiefs of Staff; as well as created the CIA modeled on its
war time incarnation of the Office of Strategic Services (OSS);
and the Act also created the National Security Council, headed
by a National Security Adviser, and designed to give the President
further advice on foreign affairs issues separate from the State
Department. Essentially, the Act created the basis for the national
security state apparatus for empire building.
_The founding of the CIA was urged by
the War and Peace Studies Project of the Council on Foreign Relations
in the early 1940s, and the architects of the CIA, designing the
shape and organization of the Agency, as well as its functions;
were all Wall Street lawyers, largely made up of members of the
Council on Foreign Relations. The Deputy Directors of the CIA
for the first two decades were all "from the same New York
legal and financial circles."[61]
Notes
[1] Edwin Black, Banking on Baghdad: Inside Iraq's 7,000-Year
History of War, Profit, and Conflict. John Wiley & Sons, Inc.:
2004: page 105
[2] Edwin Black, Banking on Baghdad: Inside Iraq's 7,000-Year
History of War, Profit, and Conflict. John Wiley & Sons, Inc.:
2004: page 107
[3] Patricia Goldstone, Aaronsohn's Maps: The Untold Story of
the Man who Might Have Created Peace in the Middle East. Harcourt
Trade, 2007: pages 21-22
[4] Patricia Goldstone, Aaronsohn's Maps: The Untold Story of
the Man who Might Have Created Peace in the Middle East. Harcourt
Trade, 2007: page 22
[5] Niall Ferguson, Empire: The Rise and Demise of the British
World Order and the Lessons for Global Power. Perseus, 2002: pages
193-194
[6] Carroll Quigley, Tragedy and Hope: A History of the World
in Our Time. The MacMillan Company: 1966: page 56
[7] Carroll Quigley, Tragedy and Hope: A History of the World
in Our Time. The MacMillan Company: 1966: pages 499-500
[8] Herbert R. Lottman, Return of the Rothschilds: The Great Banking
Dynasty Through Two Turbulent Centuries. I.B. Tauris, 1995: page
81
[9] Patricia Goldstone, Aaronsohn's Maps: The Untold Story of
the Man who Might Have Created Peace in the Middle East. Harcourt
Trade, 2007: pages 22-23
[10] Herbert R. Lottman, Return of the Rothschilds: The Great
Banking Dynasty Through Two Turbulent Centuries. I.B. Tauris,
1995: pages 141-142
[11] Herbert R. Lottman, Return of the Rothschilds: The Great
Banking Dynasty Through Two Turbulent Centuries. I.B. Tauris,
1995: pages 143-144
[12] Herbert R. Lottman, Return of the Rothschilds: The Great
Banking Dynasty Through Two Turbulent Centuries. I.B. Tauris,
1995: pages 141-142
[13] NYT, Rockefeller To Aid Czar? New York Times: March 6, 1906
[14] Toyin Falola and Ann Genova, The Politics of the Global Oil
Industry. Greenwood Publishing Group, 2005: page 215
[15] Antony C. Sutton, Wall Street and the Bolshevik Revolution.
Buccaneer Books, New York, 1974: pages 16-17
[16] Antony C. Sutton, Wall Street and the Bolshevik Revolution.
Buccaneer Books, New York, 1974: page 25
[17] Antony C. Sutton, Wall Street and the Bolshevik Revolution.
Buccaneer Books, New York, 1974: page 34
[18] Antony C. Sutton, Wall Street and the Bolshevik Revolution.
Buccaneer Books, New York, 1974: pages 25-26
[19] Antony C. Sutton, Wall Street and the Bolshevik Revolution.
Buccaneer Books, New York, 1974: pages 71-73
[20] Antony C. Sutton, Wall Street and the Bolshevik Revolution.
Buccaneer Books, New York, 1974: pages 89-90
[21] Antony C. Sutton, Wall Street and the Bolshevik Revolution.
Buccaneer Books, New York, 1974: pages 73-77
[22] Antony C. Sutton, Wall Street and the Bolshevik Revolution.
Buccaneer Books, New York, 1974: pages 82-83
[23] Antony C. Sutton, Wall Street and the Bolshevik Revolution.
Buccaneer Books, New York, 1974: page 87
[24] Antony C. Sutton, Wall Street and the Bolshevik Revolution.
Buccaneer Books, New York, 1974: pages 127-135
[25] Antony C. Sutton, Wall Street and the Bolshevik Revolution.
Buccaneer Books, New York, 1974: pages 159-161
[26] Antony C. Sutton, Wall Street and the Bolshevik Revolution.
Buccaneer Books, New York, 1974: pages 166-167
[27] Antony C. Sutton, Wall Street and the Bolshevik Revolution.
Buccaneer Books, New York, 1974: pages 172-173
[28] Michael Kort, The Soviet Colossus: History and Aftermath.
M.E. Sharpe, 2001: page 202
[29] Time, Russia & Recognition. Time Magazine: August 18,
1930: http://www.time.com/time/magazine/article/0,9171,789203,00.html
[30] Time, Everybody's Red Business. Time Magazine: June 9, 1930:
http://www.time.com/time/magazine/article/0,9171,739474-5,00.html
[31] H.W. Brands, "He Is My Independent Self". The Washington
Post: June 11, 2006: http://www.washingtonpost.com/wp-dyn/content/article/2006/06/08/AR2006060801104.html
[32] CFR, Continuing the Inquiry. History of CFR: http://www.cfr.org/about/history/cfr/inquiry.html
[33] Chatham House, CHATHAM HOUSE (The Royal Institute of International
Affairs): Background. Chatham House History: http://www.chathamhouse.org.uk/about/history/
[34] Carroll Quigley, The Anglo-American Establishment. GSG &
Associates, 1981: page 5
[35] Carroll Quigley, Tragedy and Hope: A History of the World
in Our Time. The MacMillan Company: 1966: pages 132-133
[36] William L. Cleaveland, A History of the Modern Middle East
(Boulder: Westview Press, 2004), 37-38
[37] William L. Cleaveland, A History of the Modern Middle East
(Boulder: Westview Press, 2004), 49-50
[38] Ellen Hodgson Brown, Web of Debt. Third Millennium Press:
2007: Page 2
[39] Carroll Quigley, Tragedy and Hope: A History of the World
in Our Time. The MacMillan Company: 1966: pages 326-327
[40] John Kenneth Galbraith, Money: Whence it Came, Where it Went
(Boston: Houghton Mifflin Company, 1975), 173
[41] John Kenneth Galbraith, Money: Whence it Came, Where it Went
(Boston: Houghton Mifflin Company, 1975), 174-175
[42] Carroll Quigley, Tragedy and Hope: A History of the World
in Our Time. The MacMillan Company: 1966: page 342
[43] Carroll Quigley, Tragedy and Hope: A History of the World
in Our Time. The MacMillan Company: 1966: page 344
[44] Alan Greenspan, "Gold and Economic Freedom" in
Capitalism: The Unknown Ideal. (New York: Signet, 1967), 99-100
[45] Time, HEROES: Man-of-the-Year. Time Magazine: Jan 6, 1930:
http://www.time.com/time/magazine/article/0,9171,738364-1,00.html
[46] Antony C. Sutton, Wall Street and the Rise of Hitler. G S
G & Associates Pub, 1976: pages 15-16
[47] James Calvin Baker, The Bank for International Settlements:
evolution and evaluation. Greenwood Publishing Group, 2002: page
2
[48] Carroll Quigley, Tragedy and Hope: A History of the World
in Our Time (New York: Macmillan Company, 1966), 324-325
[49] Carroll Quigley, Tragedy and Hope: A History of the World
in Our Time (New York: Macmillan Company, 1966), 324
[50] James Calvin Baker, The Bank for International Settlements:
evolution and evaluation. Greenwood Publishing Group, 2002: page
6
[51] Melvin Urofsky and Paul Finkelman, A March of Liberty: A
Constitutional History of the United States Volume II From 1877
to the Present 2nd Edition. Oxford University Press, 2002: pp.
674
[52] Antony C. Sutton, Wall Street and the Rise of Hitler. G S
G & Associates Pub, 1976: pages 17-19
[53] Antony C. Sutton, Wall Street and the Rise of Hitler. G S
G & Associates Pub, 1976: pages 19-20
[54] Antony C. Sutton, Wall Street and the Rise of Hitler. G S
G & Associates Pub, 1976: page 51
[55] Edwin Black, Eugenics and the Nazis -- the California connection.
The San Francisco Chronicle: November 9, 2003: http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2003/11/09/ING9C2QSKB1.DTL
[56] James Calvin Baker, The Bank for International Settlements:
evolution and evaluation. Greenwood Publishing Group, 2002: page
202
[57] CFR, War and Peace. CFR History: http://www.cfr.org/about/history/cfr/war_peace.html
[58] William P. Bundy, The History of Foreign Affairs. The Council
on Foreign Relations, 1994: http://www.cfr.org/about/history/foreign_affairs.html
[59] CFR, War and Peace. CFR History: http://www.cfr.org/about/history/cfr/war_peace.html
[60] UN, 1945-1949. Sixty Years: A Pictorial History of the United
Nations: http://www.un.org/issues/gallery/history/1940s.htm
[61] Peter Dale Scott, The Road to 9/11: Wealth, Empire, and the
Future of America. (Berkeley: University of California Press,
2007), 12
Andrew Gavin Marshall is a Research Associate with the Centre
for Research on Globalization (CRG). He is currently studying
Political Economy and History at Simon Fraser University.
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