SECRETS OF THE FEDERAL RESERVE

^{CHAPTER EIGHT}

^{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 out:}

^{"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 economic revolution."}

^{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}

^{__________________________}

^{*NOTE: P.34.
"House revealed to me in a confidential moment, ‘Wilson was elected by
Teddy Roosevelt.’" The Strangest Friendship in History, Woodrow Wilson and
Col. House, George Sylvester Viereck, Liveright, N.Y. 1932}

⁸²

^{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.}

^{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
Govern-}

^{__________________________}

^{* 1787
Constitutional Convention}

^{* NOTE: Emmett
Tyrell, Jr., Richmond Times Dispatch, Feb. 15, 1983 "Every peace movement
of this century has been followed by war."}

⁸³

^{ments . . . 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 of credit."}

^{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."70}

^{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 finance.}

^{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."}

^{__________________________}

^{70 Cordell Hull,
Memoirs, Macmillan, New York, 1948, v. 1, page 76}

⁸⁴

^{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 unfortunate country.}

^{"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."71}

^{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.}

^{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,}

^{__________________________}

^{71 Public Papers
of Woodrow Wilson, Dodd & Baker, v.5, p. 12-13}

⁸⁵

^{"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."}

^{__________________________}

^{* NOTE: New York
Times, August 10, 1918; "Mr. (Paul) Warburg was the author of the plan
organizing the War Finance Corporation."}

⁸⁶

^{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,
the Kuhn, 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 financial
matters."72}

^{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."73}

^{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."74}

^{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}

^{__________________________}

^{72 Max Warburg,
Memoirs of Max Warburg, Berlin, 1936}

^{73 David Farrar,
The Warburgs, Michael Joseph, Ltd., London, 1974}

^{74 "Truth
Magazine", George Conroy, editor, Boston, issue of December 16, 1912}

⁸⁷

^{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 British."75}

^{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.76}

^{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.}

^{At the outset of World War I, Kuhn, Loeb Company had
figured in the transfer of German shipping interests to other control. Sir Cecil}

^{__________________________}

^{75 Edward M.
House, The Intimate Papers of Col. House, edited by Charles Seymour, Vol. II,
p. 399. Houghton, Mifflin Co.}

^{76 George
Sylvester Viereck, The Strangest Friendship in History, Woodrow Wilson and Col.
House, p. 106}

⁸⁸

^{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 Shipping Company."77}

^{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."78}

^{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}

^{__________________________}

^{77 Letters and
Friendships of Sir Cecil Spring-Rice, p. 219-220}

^{78 Col. Elisha
Garrison, Roosevelt, Wilson and the Federal Reserve Law, Christopher Publishing
House, Boston, 1931, p. 260}

⁸⁹

^{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 wars.*}

^{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.}

^{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
up."}

^{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 Industry.}

^{__________________________}

^{* 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.}

⁹⁰

^{@insert Facsimile of New York Times article}

^{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
shares.}

⁹¹

^{@insert CHART I}

⁹²

^{@CHART I cont.}

⁹³

^{CHART I}

^{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.}

^{__________________________}

^{79 Bernard Baruch,
My Own Story, Henry-Holt Company, New York, 1957, p. 194}

⁹⁴

^{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. 1635:}

^{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}

⁹⁵

⁹⁶

^{CHART II}

^{This chart shows the interlocking banking directorates
which were revealed by the backgrounds of the officials selected to be the
original members of the Federal Advisory Council in 1914. The principals were
the same bankers who had been present or represented at the Jekyll Island
Conference in 1910, and during the campaign to have the Federal Reserve Act
enacted into law by Congress in 1913. These officials represented the largest
stock holdings in the New York banks which bought the controlling stock in the
Federal Reserve Bank of New York, and also were the principal correspondent
banks of the banks in other Federal Reserve districts who, in turn, selected
their officials to represent them on the Federal Advisory Council.}

^{________________________________________________________________________}

^{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}

⁹⁷

^{@insert CHART III}

⁹⁸

^{CHART III}

^{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 Reagan Administration.}

^{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}

⁹⁹

^{@insert CHART IV}

¹⁰⁰

^{CHART IV}

^{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.}

^{________________________________________________________________________}

^{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.
Morgan Co.}

^{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 of Colonel.}

^{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."80}

^{__________________________}

^{80 Arthur D.
Howden Smith, Men Who Rule America, Bobbs Merrill, N.Y. 1935, p. 112}

¹⁰¹

¹⁰²

^{CHART V}

^{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).}

^{________________________________________________________________________}

^{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 Stockbrokers.}

^{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}

¹⁰³

¹⁰⁴

^{CHART VI}

^{This chart shows the interlocks between the Federal
Reserve Bank of New York, J. Henry Schroder Banking Corp., J. Henry Schroder
Trust Co., Rockefeller Center, Inc., Equitable Life Assurance Society (J.P.
Morgan), and the Federal Reserve Bank of Boston.}

^{________________________________________________________________________}

^{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}

¹⁰⁵

^{@insert CHART VII}

¹⁰⁶

^{CHART VII}

^{This chart shows the interlocks of 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 Co.).}

^{________________________________________________________________________}

^{to help organize the Bolshevik forces. Lt. Col. Norman
Thwaites, in his memoirs, Velvet and Vinegar says,}

^{"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 Interallied 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."82}

^{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}

^{__________________________}

^{81 Lt. Col. Norman
Thwaites, Velvet and Vinegar, Grayson Co., London, 1932}

^{82 George
Sylvester Viereck, The Strangest Friendship in History, Woodrow Wilson and Col.
House, Liveright, N.Y. 1932, p. 172}

¹⁰⁷

^{@insert CHART VIII}

¹⁰⁸

^{CHART VIII}

^{This chart shows the link between the Federal Reserve
Bank of New York, Brown Brothers Harriman, Sun Life Assurance Co. (N.M.
Rothschild and Sons), and the Rockefeller Foundation.}

^{________________________________________________________________________}

^{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
messages."83}

^{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}

^{__________________________}

^{83 Francois Coty,
Tearing Away the Veil, Paris, 1940}

¹⁰⁹

^{@insert CHART IX}

¹¹⁰

^{CHART IX}

^{This chart shows the interlocks between the Federal
Reserve Bank of New York and J.P. Morgan Co., Morgan Guaranty Trust Co., and
the Rothschild affiliates of Royal Bank of Canada, Sun Life Assurance Co. of
Canada, Sun Alliance, and London Assurance Group.}

^{________________________________________________________________________}

^{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 delegation.}

^{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}

^{__________________________}

^{84 Thomas W.
Lamont, Across World Frontiers, (Privately printed) 1950, p. 138}

¹¹¹

^{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 effector 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:}

^{"Woodrow
Wilson is a type of Pecksniff who was now disappeared amid universal
execration."}

^{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}

¹¹²

^{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.}

¹¹³