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The Naked Capitalist (1970)
W. Cleon Skousen
"The highest centers of political and economic power have been forcing the entire human race toward a global socialist, dictatorial-oriented society. And what has been most baffling about it has been the fact that this drift toward dictatorship with its inevitable obliteration of a thousand years of struggle toward human freedom, is being plotted, promoted and implemented by the leaders of free nations and the super-rich of those nations whose positions of affluence would seem to make them the foremost beneficiaries of the free-enterprise, property-oriented, open society in which so much progress has been made."
-- Cleon Skousen, from The Naked Capitalist, excerpted below
Note: Cleon Skousen was an FBI agent, a lawyer, police chief , editor of the nations leading law-enforcement magazine magazine, author of over a dozen books, a university professor, and a man who has lectured in 44 countries. I know the Mormon culture of low-key competence and honesty, of love of this country and its constitution that that really qualified him to write this book. This review, The Naked Capitalist, by Skousen is one of the hardest "conspiracy books" to find. Even harder to find is the book that is reviewed, Triumph and Tragedy, by Carol Quigley (Bill Clinton's old professor at Georgetown, not surprisingly enough).
I have typed out this much of this book because I am convinced that the great peril to the America and the world that Skousen saw and sought to combat with the truth has now been fully realized. Quigley thought he could reveal the true history of the conspiracy because it was too late to stop it, that all one could do would be to be to bow down to the new masters. Skousen thought it was not too late. He attempted to reach the public. The power the merchant bankers to re-direct the public mind, to lull them to sleep or to distraction with misleading words and music and images was too great. Skousen's book is not in print, but I think that if enough of us can learn just the excerpt that I have typed out below, that now that supporting evidence for the truth plentiful around us, maybe we are ready to reach common agreement about the situation and this time organize to do something about it.
From an old friend,
W. Cleon Skousen
Extracts from
The Naked Capitalist (1970)
A Review and Commentary on Dr. Carroll Quigley's book:
TRAGEDY AND HOPE -- A History of the World in Our Time
WHY?
WHY DO SOME OF THE RICHEST PEOPLE IN THE
WORLD SUPPORT COMMUNISM AND SOCIALISM?
WHY WOULD THEY SUPPORT WHAT APPEARS
TO BE THE PATHWAY TO THEIR OWN DESTRUC-
TION? DR. CARROLL QUIGLEY OF HARVARD,
PRINCETON AND GEORGETOWN UNIVERSITIES
STATES THAT HE HAS BEEN ASSOCIATED WITH
MANY OF THESE DYNASTIC FAMILIES OF THE
SUPER-RICH. HE THEREFORE WRITES AS AN
AUTHORITY ON THE WORLD'S SECRET POWER
STRUCTURE. HIS ANSWERS TO THE ABOVE
QUESTIONS MAY ASTONISH YOU.
WHO IS TRYING TO TAKE OVER THE WORLD?
"I think the Communist consiracy is merely a branch of a much bigger consiracy!"
The above statement was made to this reviewer several years ago by Dr. Bella Dodd, a former member of the National Committee of the U.S. Communist Party.
Perhaps this is an appropriate introduction to a review of Dr. Carroll Quigley's book, Tragedy and Hope.
Dr. Dodd said she first became aware of some mysterious super-leadership right after World War II when the U.S. Communist Party had difficulty getting instructions from Moscow on several vital matters requiring immediate attention. The American Communist hierarchy was told that any time they had an emergency of this kind they should contact any one of three designated persons at the Waldorf Towers. Dr. Dodd noted that whenever the Party obtained instructions from any of these three men, Moscow always ratified them.
What puzzled Dr. Dodd was the fact that not one of these three contacts was a Russian. Nor were any of them Communists. In fact, all three were extremely wealthy American capitalists!
Dr. Dodd said, "I would certainly like to find out who is really running things."
This reviewer had also observed a number of strange developments which seemed to point to a conspiratorial control center higher and stronger than either Moscow or Peiping. For example, when Harry Dexter White (Under-Secretary of the U.S. Treasury during World War II) was discovered by the FBI to be a Soviet agent, the White House was immediately informed. But instead of being fired or arrested, Harry Dexter White was appointed as the new Executive Director of the U.S. Mission to the International Monetary Fund of the United Nations. He was also given a substantial increase in salary. J. Edgar Hoover was amazed. Attorney General Herbert Brownell Jr. stated publically that President Truman knew White was a Soviet spy when he made the appointment. (Quigley, Tragedy And Hope, p. 991)
WHy would men in charge of the world's massive financial problems want an exposed Soviet agent such as Harry Dexter White to occupy such a highly important position in the World Bank? ANd why in the name of common sense would the President of the United States approve of such a thing? I heard both Congressmen and intelligence officers quizzically exclaiming, "What's going on?"
It was not long after this that the former chairman of the Federal Reserve Board began advocating economic aid and comfort to Communist China. His speech was all the more shocking because the American people had just been jolted by a Congressional hearing in which it had been shown with sworn testimony that the U.S. State Department had either recklessly allowed or deliberately propelled six hundred million Chinese allies into the grip of the Communist Chinese leaders. Nevertheless, here was this American capitalist (and former chairman of the Federal Reserve Board) telling a large meeting (where the reviewer was present) that the United States should immediatly undertake extensive trade with Red China. Said he, "We never fight the people we trade with." I thought to myself, "Well, we certainly had to fight Japan in spite of all the oil and scrap iron we sold her just before World War II." It did not seem possible that this famous international banker would have forgotten such an elementary lesson so quickly.
A couple of years later, while visiting Central America and South America, I noticed that certain well-known American banks were extremely powerful in controlling the politics and economic affairs of many Latin American countries. But what was baffling about it was the fact that the political regimes which these American banks supported were often virtual dictators who promoted socialism and engaged in the confiscation of privately owned industries, including American industries. Many of these bank-sponsored regimes were also openly pro-Communist.
While visiting Paraguay, I asked a man I had known for several years and who was manager of the principal American bank in Paraguay, why his bank supported the dictatorship. "Stability," he replied. "THese developing countries need stability." Yet, I noticed that this dictator was wiping out wealth-producing industries operating under private enterprise and placing everything under government ownership or tight socialist control.
Why was an American-owned bank financing a hard-core socialist regime? Wherever I had friends who knew the inside story in Latin American political circles, they verified the fact that the massive swing to the Left in Central and South America was being financed by certain American banks. It just didn't make sense.
Politics in Washington were equally puzzling. Why were so many top government officials always members of the Democratic Socialist cadre called Americans for Democratic Action (ADA), or were members of the exclusive Council on Foreign Relations? Whether the President was Roosevelt, Truman, Eisenhower, Kennedy, Johnson or Nixon, it seemed to make no difference. There was often a change of personalities, but membership in these two organization seemed a prerequisite for many top government jobs.
Another puzzle was the fact that whenever the political blunders of these high-powered people aroused the anger of the public, they were not only allowed to quietly resign, but were given extremely lucrative outside jobs, usually in one of the tax-exempt foundations. It didn't look like government "by the people" but government by certain people.
I was reminded of the words of Benjamin Disraeli: "The world is governed by very different personages from what is imagined by those who are NOT behind the scenes." I began to wonder if there might not be something to the British Intelligence Digest reports which claimed that there is a small but powerful control group behind the scenes which is extremely influential in manipulating world events. The Digest seemed to have inside contacts with this group and therefore avoided identifying them by name. It simply referred to the control center as "Force X."
Professional investigators of criminal conspiracies will tell you that no matter how carefully these conspiracies are organized, they do not remain secret for long because eventually somebody on the inside becomes dissatisfied or abused and goes to the authorities with facts which can be independently verified. Political conspiracies also have a way of reaching the public, because someone on the inside is willing to tell the story. I have waited for thirty years for somebody on the inside of the modern political power structure to talk. At last, somebody has.
DR. CARROLL QUIGLEY WRITES A BOOK ON THE
WORLD"S SECRET POWER STRUCTURE
Dr. Carroll Quigley is a professor of history at the Foreign Service School of Georgetown University. He formerly taught at Princeton and Harvard. He has done research in the archives of France, Italy and England. He is the author of the widely known text, Evolution of Civilization.
When Dr. Quigley decided to write his 1,3000 page book called Tragedy and Hope, he knew he was deliberately exposing one of the best kept secrets in the world. As one of the elite "insiders," he knew the scope of this power complex and he knew that its leaders hope to eventually attain total global control. Furthermore, Dr. Quigley makes it clear throughout his book that by and large he warmly supports the goals and purposes of the "network." But if that is the case, why would he want to expose this world-wide conspiracy and disclose many of its most secret operations? Obviously, disclosiong the existence of a mammoth power network which is trying to take over the world could not help but arouse the vigorous resistance of the millions of people who are its intended victims. So why did Dr. Quigley write this book?
His answer appears in a number of places but is especially forceful and clear on pages 979-980. He says, in effect, that it is now too late for the little people to turn back the tide. In a spirit of kindness he is therefor urging them not to fight the noose which is already around their necks. He feels certain that those who do will only choke themselves to death. On the other hand, those who go along with the immense pressure which is beginning to be felt by all humanity will eventually find themselves in a man-made millennium of peace and prosperity. All through this book, Dr. Quigley assures us that we can trust these benevolent, well-meaning men who are secretly operating behind the scenes. THEY are the hope of the world. All who resist them represent tragedy. Hence, the title of his book.
To assure us of his own unique qualification for the writing of this book, Dr. Quigley states:
"I know of the operations of this network because I have studied it for twenty years and was permitted for two years, in the early 1960's, to examine its papers and secret records. I HAVE NO AVERSION TO IT OR TO MOST OF ITS AIMS AND HAVE, FOR MUCH OF MY LIFE, BEEN CLOSE TO IT AND TO MANY OF ITS INSTRUMENTS. I have objected, both in the past and recently, to a few of its policies . . . but in general my chief difference of opinion is that IT WISHES TO REMAIN UNKNOWN, and I believe its role in history is significant enough to be known." (p. 950, emphasis added)
Anyone reading Dr. Quigley's Tragedy and Hope will have little difficulty detecting the tremendous self-esteem of the author. He considers himself not only an "insider" but a member of the intellectual elite among the insiders. He feels that the forces of total global control are now sufficiently entrenched so that they can reveal their true identity without fear of being successfully overturned. He expresses the utmost contempt for members of the American middle class who think they can preserve what he calls their "petty-bourgeois" property rights and constitutional privileges. (See, for example, p. 1248)
He also expresses contempt for those who thought the Communist conspiracy was the real center of collectivized conspiracy. He ridicules their conclusions (p. 949), and then turns right around and admits that their conclusions were correct -- American anti-Communists had merely erred in knowing whom to blame. (See pp. 950-956)
Although a brilliant compiler, it becomes quite apparent from the start that Dr. Quigley's book is not intended to be objective. He himself boasts (as we saw in the quotation above) of his inside position with the "network," and this book is designed to protray modern history the way the network wants it told. However, as we have also noted in the previous quotations, Dr. Quigley admits he is telling more than his comrades-in-arms would care to have disclosed. They want their conspiratorial subversion to be kept a secret. Dr. Quigley thinks it is time people knew who was running things.
We see no reason to question the basic historicity of the way Dr. Quigley says the world-wide conspiratorial network developed, since these facts can be verified from other sources. We note, however, that his interpretation of modern historical events is often seriously biased by expressions of opinion or uninhibited ridicule. In dealing with recent critical issues, he is often careful to deliberately ignore many important historical facts and fails to quote the factual conclusions brought out by the bi-partisan Congressional investigations.
The real value of Tragedy and Hope is not so much as a "history of the world in our time" (as its subtitle suggests), but rather as a bold and boastful admission by Dr. Quigely that there actually exists a relatively small but powerful group which has succeeded in acquiring a choke-hold on the affairs of practically the entire human race.
Of course, we should be quick to recognize that no small group could weild such gigantic power unless millions of people in all walks of life were "in on the take" and were willing to knuckle dlown to the iron-clad regimentation of the ruthless bosses behind the scenes. As we shall see, the network has succeeded in building its power structure by using tremendous quantities of money (together with the vast influence it buys) to manipulate, intimidate, or corrupt millions of men and women and their institutions on a world-wide basis.
PERHAPS WE SHOULD HAVE ANTICIPATED JUST SUCH
A DEVELOPMENT
Anyone familiar with the writings of John's Apocalypse might have suspected that modern history would eventually contain an account of a gigantic complex of political and economic power which would cover the whole earth.
John predicted that before the great epic of Messianic or Millennial peace, the human race would be subjected to a ruthless, world-wide conglomorate of dictatorial authority which would attempt to make all men subservient to it or be killed (Revelation 13:15). He said it would compel all men, "both small and great, rich and poor, free and bond," to be identified with it (Rev. 13:16).
John also referred to its economic grip on humanity and said that unless a person were identified with its monopoly network, "no man might buy or sell" (13:17).
Dr. Quigley assures us that this type of global power structure is on the verge of becoming a total reality. He points out that during the past two centures when the peoples of the world were gradually winning their poltiical freedom from the dynastic monarchies, the major banking families of Europe and America were actually reversing the trend by setting up new dynasties of political control through the formation of international financial combines.
Dr. Quigley points out that these banking dynasties had learned that all goverments must have sources of revenue from which to borrow in times of emergency. They had also learned that by providing such funds from their own private resources, they could make both kings and democratic leaders tremendously subservient to their will. It had proven to be a most effective means of controlling political appointments and deciding political issues.
We quote Dr. Quigley verbatim as he describes how these banker families evolved into vast, secret pockets of power. I have inserted topical sub-headings to facilitate reading.
The Banker Families Develop a Vast Network to Control High Finance and the Affairs of Governments:
"In time they brought into their financial network the provincial banking centers, organized as commercial banks and savings banks, as well as insurance companies, to form all of these into a single financial system on an international scale which manipulated the quantity and flow of money so that they were able to influence, if not control, governments on one side and industries on the other. The men who did this . . . aspired to establish dynasties of international bankers and were at least as successful at this as were many of the dynastic poltiical rulers." (p.51)
Introducing Some of the Major Banking Family Dynasties:
"The greatest of these dynasties, of course, were the descendants of Meyer Amshel Rothschild (1743-1812) of Frankfort, whose male decendants, for at least two generations, generally married first cousins or even nieces. Rothschild's five sons, established at branches in Vienna, London, Naples, and Paris, as well as Frankfort, cooperated together in ways which other international banking dynasties copied but rarely excelled . . .
"The names of some of these [other] banking families are familiar to all of us and should be more so. They include Baring, Lazard, Erlanger, Warburg, Schroder, Selingman, the Speyers, Mirabaud, Mallet, Fould, and above all Rothschild and Morgan.) (pp. 51-52)
Was This a Jewish Conspiracy? (A note by the reviewer)
It should be noted in passing that while the Rothschilds and certain other Jewish families cooperated together in these ventures, this was by no means a Jewish monopoly as some have alleged. Neither was it a "Jewish conspiracy." As we shall see, men of finance of many nationalities and many religions or non-religious backgrounds collaborated together to create the super-structure of economic and political power which Dr. Quigley is about to disclose. No student of the global conspiracy should fall for the Hitlerian deoctrin that the root of all evil is a super "Jewish conspiracy." Nor should they fall for that long-since discredited document, The Protocols of the Learned Elders of Zion, which Hitler palmed off on the German people as an authentic delcaration of policy by an all-Jewish congress. The spurious origin of this document was proven decades ago and serves as an object lesson to those who are inclined to accept an over-simplified explanation for the rise of the global power structure which has snared mankind. Some would answer this by saying that the Anti-Defamation League (ADL) and certain other Jewish organizations have been in the forefront of the collectivist movement and also in the suppression of American voices seeking to warn the nations. However, this infiltration of the Jewish community is no more applicable to the Jewish people as a whole than the scurrilous left-wing activities of the National and World Counsils of Churches is a reflection on all Protestants or the liberal, irreligious Catholic left-wing is a reflection on all Catholics. In studying the global conspiracy it is important to keep in mind that it was not any particular religion but the "pasion for money and power" which has drawn the tycoons of world finance into a tightly-knit, mutual-aid society. Dr. Quigley identifies this groups as the "International Bankers."
The International Bankers Are Different From Ordinary Bankers:
". . . they remained different from ordinary bankers in distinctive ways: (1) they were cosmopolitian and international; (2) they were close to governments and pwer particularly concerned with questions of government debts . . . (3) their interests were almost exclusively in bonds and very rarely in goods. . . (4) they were accordingly, fanatical devotes of deflation . . . (5) they were almost equally devoted to secrecy and the secret use of financial influence in political life. These bankers came to be called 'international bankers' and, more particularly, were known as 'merchant bankers' in England, 'private bankers' in France, and 'investment bankers' in the United States. In all countries they carried on various kinds of banking and exchange activities, but everywhere they were sharply distinguishable from other, more obvious kinds of banks, such as savings banks or commercial banks." (p.52)
How Centers of Monetary Power Were Kept Secret:
"One of their less obvious characteristics was that they remained as private unincorporated firms, usually partnerships, until relatively recently, offering no shares, no reports, and usually no advertising to the public. This risky status, which deprived them of limited liability, was retained, in most cases, until modern inheritance taxes made it essential to surround such family wealth with the immortality of corporate status for tax avoidance purposes. This persistence as private firms continued because it ensured maximum anonymity and secrecy to persons of tremendous public power who dreded public knowledge of their activities as an evil almost as great as inflation. As a consequence, ordinary people had no way of knowing the wealth or areas of operation of such firms, and often were somewhat hazy as to their membership. Thus, people of considerable political knowledge might not associate the names of Walter Burns, Clinton Dawkins, Edward Grenfell, Willard Straight, Thomas Lamont, Dwight Morrow, Nelson Perkins, Russell Feffingwell, Elihu Root, Jowh W. Davis, John Foster Dulles, and S. Parker Gilbert with the name "Morgan," yet all these and many others were parts of the system of influence which centered on the J.P. Morgan office at 23 Wall Street. This firm, like others of the international banking fraternity, constantly operated through corporations and governments. . . ." (pp. 52-53)
The Campaign to Keep Governments From COntrolling Their Own Money Systems:
"The influence of financial capitalism and of the international bankers who created it was exercised both on business and on goverment, but could have done neither if it had not been able to persuade both of these to accept two "axioms" of its own ideology. Both of these were based on the assumption that politicians were too weak and to subject to temporary popular pressures to be trusted with control of the money system. . . . To do this it was necessary to conceal, or even to mislead, both governments and people about the nature of money and its methods of operation." (p.53)
THE ROTHSCHILDS --
ONE OF THE OLDEST BANKING DYNASTIES
The founder of the famous Rothschild dynasty was Mayer Amchel Rothschild (1743-1812) of Frankfort Germany. Although destined originally to be a rabbi, he became highly successful in a number of commercial pursuits and eventuyally established his famous banking house in Frankfurt with his five sone. Four of these sons were later sent to Vienna, London, Paris and Naples, to set up branches of their family bank. This comine soon became the most powerful banking establishement in Europe.
AMSCHEL ROTHSCHILD (the eldest son)
remained in Frankfurt with his Father.
Eventually he became the Treasurer of the
German Confederation.
SALOMON, the second son, founder
of the Vienna branch. He became a
leading personality in the Austro-
Hungarian Empire.
NATHAN, the third son, founder of the
London branch. He became the most
powerful man in England.
CARL, the fourth son, who founded the
Naples branch and became on of the
most powerful men in Italy.
JAMES (Jacob), the fifth son, who founded
the Paris branch and soon dominated the
financial destiny of France.
The Private Bankers Decide to Set Up the Bank of England As a Means of Monopolizing Credit
"Credit has been known to the Italians and Netherlanders long before it became one of the instruments of English world supremacy. Nevertheless, the founding of the Bank of England by WIlliam Paterson and his friends in 1694 is one of the great dates of world history. For generations men had sought to avoid the one draw-back of gold, its heaviness, by using pieces of paper to represent specific pieces of gold. Today we call such pieces of paper gold certificates. Such a certificate entitles its bearer to exchange it for its piece of gold on demand, but in view of the convenience of paper, only a small fraction of certificate holders ever did make such demands. It early became clear that gold need be hold on hand ONLY to the amount needed to cover the FRACTION of certificates likely to be presented for payment; accordingly, the rest of the gold could be used for business purposes, or, what amounts to the same thing, a volume of certificates could be issued GREATER than the volume of godl reserved for payment. ... Such an excess volume of paper claims against reserves we now call bank notes.
"In effect, this creation of paper claims greater than the reserves available means that bankers were creating money out of nothing. The same thing could be done inanother way. . . . Deposit bankers discovered that orders and checks drawn against DEPOSITS by depositiors and given to a third person were often not cashed by the latter but were deposited totheir own accounts. Thus there were no actual movments of funds, and payments were made simply by bookkeeping transactions on the accounts. Accordingly, it was necessary for the banker to keep on hand in acutal money (gold , certificates, and notes) nore than the FRACTION of deposits likely to be drawn upon and cashed; the rest could be used for loan, and if those loans were made by creating a deposit [account] for the borrower, who in turn would draw checks, upon it rather than withdraw it in money, such 'created deposits' or loans could also be covered adequately by retaining reserves to only a FRACTION of their value. Such created deposits also were a creation of money out of nothing, although bankers usually refused to express their actions, either note issuing or deposit lending, in these terms. William Paterson, however, on obtaining the charter of the Bank of England in 1694, to use the moneys he had won in privateering, said, 'The bank hath benefit of interest on all moneys which it creates out of nothing.'" (pp. 48-49, emphasis added)
The Bank of England Becomes the Secret Center of Political Power:
"In government the power of the Bank of England was a considerable restriction on political action as early as 1819 but an effort to break this power by a modification of the bank's charter in 1844 failed. In 1852, Gladstone, then Chancellor of the Exchequer and later prime minister, declared, "The hinge of the whole situation was this: the goverment itself was not to be a substantive power in matters of Finance, but was to leave the Money Power supreme and unquestioned.'
"This power of the Bank of England and of its governor was admitted by most qualified observers. In January, 1924, Reginald McKenna, who had been Chancellor of the Exchequer in 1915-1916, as chairman of the board of the Midland Bank told its stock-holders: 'I am agraid the ordinary citizen will not like to be told that the banks can, and do, create money. . . . And they who control the credit of the nation direct the policy of Governments and hold in the hollow of their hands THE DESTINY OF THE PEOPLE.' In that same year, Sir Drummond Fraser, vice-president of the Institute of Bankers, stated, 'The Governor of the Bank of England must be the autocrat who dictates the terms upon which alone the Goverment can obtain borrowed money.'" (p. 325, emphais added)
Concering the Dynastic Powers Secretly Entrenched Behind British Financial Life:
"Although this situation is changing slowly, the inner circle of English financial life remains a matter of 'whom one knows,' rather than 'what one knows.' Jobs are still obtained by family, marriage, or school connections; character is considered far more important than knowledge or skill; and important positions, on this basis, are given to men who have no training, experience, or knowledge to qualify them.
"As part of this system and at the core of English financial life have been seventeen private firms of 'merchant bankers' who find money for established and wealthy enterprises. . . . These merchant bankers, WITH A TOTAL OF LESS THAN A HUNDRED ACTIVE PARTNERS, include the firms of Baring Brothers, N. M. Rothschild, J. Henry Shroder, Morgan Grenfell, Hambros, and Lazard Brothers. These merchant bankers in the period of financial capitalism had a dominant position with the Bank of England and, strangely enough STILL HAVE RETAINED SOME OF THIS, DESPITE THE NATIONALIZATION OF THE BANK by the Labour government in 1946. As late as 1961 a Baring (Lord Cromer) was named governor of the bank, and his board of directors, called the "Court' of the bank, included representatives of Lazard, Hambros, and of Morgan Grenfell, as well as an industrial firm (English Electric) controlled by these." (pp. 499-500, emphasis added)
J.P. Morgan Jr.
With celebrated midget, Lya Graf,
during Senate hearings, 1933
Similar Financial Dynasties Developed in the United States:
"This period, 1884-1933, was the period of financial capitalism in which investment bankers moving into commercial banking and insurance on one side and into railroading and heavy industry on the other were able to mobilize enormous wealth and wield enormous economic, political and social power. Popularly known as "Society,' or the '400' they lived a life of dazzling splendor. Sailing the ocean in great private yachts or traveling on land by private trains, they moved in a ceremonious round between their spectacular estates and town houses in Palm Beach, Long Island, the Berkshires, Newport and Bar Harbor, assembling from their fortress-like New York residences to attend the Metropolitan Opera under the critical eye of Mrs. Astor, or gather ing for business meetings of the highest strategic level in the awesome presence of J. P. Morgan himself.
"The structure of financial control created by the tycoons of "Biug Banking" and "Big Business" in the period 1880-1933 was of extraordinary complexity, one business fief being built on another, both being allied with semi-independent associates, the whole rearing upward into two pinnacles of economic and financial power, of which one, centered in New York, was headed by J. P. Morgan and Company and the other, in Ohio, was headed by the Rockefeller family. When these two cooperated, as they generally did, they could influence the economic life of the country to a large degree and could almost control its political life, at least on the Federal level." (pp.71-72)
Monopolist Financial Structures Of the American Dynasties:
"in the United States the number of billion-dollar corporations rose from one in 1909 (United States Steel, controlled by Morgan) to fifteen in 1930. The share of all corporations assets held by the 200 largest corporations rose from 32 percent in 1909 to 49 percent in 1930 and reached 57 percent by 1939. By 1930 these 200 largest coporations held 49.2 percent of the assets of all 40,000 corporations in the country ($81 out of $165 billion). . . . In fact, in 1930, one corporation (American Telephone and Telegraph, controlled by Morgan) had greater assets than the total wealth in twenty-one states of the Union.
"The influence of these businss leaders was so great that the Morgan and Rockefeller groups action together, or even Morgan acting alone, could have wrecked the economic system of the country. . . . " (p.72)
AMERICAN FAMILIES DECIDE TO ORGANIZE
A FEDERAL RESERVE SYSTEM
By the beginning of the Twentieth Century, the American economy had become so dynamic that the major banking dynasties found it increasingly difficult to maintain a tight control. Even the control they had so carefully kept secret was being challenged as a major political issue in national elections.
As we have previously noted, the dynastic "bankr families" in England had established their monopoly control over finance by setting up the Bank of England as a privately controlled institution which had the appearance of an official government institution. Similar centers of financial control had been set up in France, Germany, Italy and Swtizerland. Many of these European banking families had inter-married or bought their way into the American banking dynasties so it was inevitable that eventually the same device for centralized control would be set up in the United States as that which had worked so well in vrious European countries. The formula called for a scheme which would look like the government was taking over when in reality, the control would be solidified in the same secret group which had always held it. As Dr. Gabriel Kolkopointed out: "Ironically, contrary to the consensus of historians, it was not the existence of monopoly that caused the federal government to intervene in the economy, but the lack of it. . . . In the long run, key business leaders realized they had no vested interest in a chaotic [uncontrolled] industry and economy in which not only their profits but their very existence might be challenged." (The Triumph of Conservatism, Quadrangle Books, Chicago, 1967, p. 4-6)
Who Were These "Key Business Leaders?"
Dr. Quigley has identified them in Tragedy and Hope, and Serano S. Pratt supports the Quigley position in his book entitled, The Work of Wall Street:
"When we speak in Wall Street of the 'private bankers' we refer to a handful of great banking houses whose operations are on an international scale and which in the United States represent the same power that the Rothschilds have so long possessed in Europe. These houses may, like J. P. Morgan & Co., and Brown Bros. & CO., be closely allied by partnership ties to other powerful firms in other cities; and represent here the great firms and institutions of Europe, just as August Belmont & Co. have long represented the Rothschilds." (Appleton & Company, New York, 1916, p.340)
By the turn of the century the Rockefllers had also joined the dynastic banking families. John D. Rockefeller had purchased the Chase Bank and his brother William bought the National City Bank of New York. The Rockefeller Chase-Manhattan, the most powerful financial combine in the world today.
The scheme to set up a privatley-controlled Federal Reserve System was supported by all of these dynastic banking families.
THE FIRST ATTEMPT FAILS
To appreciate some of Dr. Quigley's comments in Tragedy and Hope, we should summarize the origina and history of the Federal Reserve System.
Stephen Birmingham (in his book, Our Crowd, Dell Publishing Co., New York, 1967, p. 400) says the person who played the most signficiant part in getting the Federal Reserve adopted was Paul Warburg. He had come to the United States with his brother, Felix Warburg, from Germany in 1902. They left their brother Max in Frankfurt to runt he family bank. In due time Paul married Nina Loeb of Kuhn, Loeb and Company, while Felix married Jacob Schiff's daughter, Frieda Schiff. Bother brothers became Kuhn-Loeb partners and Paul was awared a yearly salary of $500,000 to go up and down the country preparing the climate for a central banking system in the United States.
Working with Warburg was J. P. Morgan's leading Washington representative, Senator Nelson Aldrich, whose daughter Abby was married to John D. Rockefeller, Jr. (Nelson Rockefeller, governor of New York is named after his maternal grandfather.)
Senator Aldrich and Paul Walburg set up an extremely secretive meeting with representatives of the leading banking dynastices to prepare the first draft for the Federal Reserve System. They met on Jeckyl Island , Georgia, Rockefeller's agent, Frank Vanderlip admitted many years later:
"Despite my views about the value to society of greater publicity for the affairs of corporations, there was an occasion, near the close of 1910, when I was as secretive -- indeed as furtive -- as any conspirator. . . . I do not fell it is any exaggeration to speak of our secret expedition to Jekyl Island as theoccasion of the actual conception of what eventauylly became the Federal Reserve System." (Frank Vanderlip, "Farm Boy to Financier," Saturday Evening Post, February 9, 1935, p.25)
The secret meeting on Jekyl Island included Henry P. Davison of J. P. Morgan & Company; Frank A. Vanderlip, President of the Rockefller-owned National City Bank; A. Piatt Andrew, Assistant Secretary of the Treasury; Benjamin Strong of Morgan's Bankers's Trust Company, and of course, Paul Warburg.
Paul Warburg
This was the right at the time when the idea of creating a Federal central bank "free of Wall Street or any monopolist interst" was being promoted by the Banking Law Journal and a number of national political personalities. Therefore the object of the conference on Jekyl Island was to set up a central bank which had the appearance of meeting this demand while actually thwarting it. Paul Warburg went to the conference with a plan copied after the private central banks in England and Europe. Professor Kolko writes: "The plan which emerged from the conference was very much like Warburg's in principle, and Warburg claimed authorship for it even though Vanderlip actually drafted the final plan." (Op. Cit., p.184)
But the plan failed. It was introduced into the Senate as the ALdrich Bill. The name of Aldrich was so closely linked to Morgan and Wall Street, and the resentment against these influenes was so strong, that the bill was readily defeated. The group of master planners backed away to devise a new tactic.
THE
It was decided that the Republican Party was too closely connected with Wall Street and the only hope of getting a central bank adopted would be to get the Democrats in power and have a new bill introduced which would be promoted into popular acceptance by claiming that it was a measure designed to strip Wall Street of its power. The Wall Street cadre thereupon set forth to achieve this in the presidential election of 1912.
At first this looked virtually impossible because President William Howard Taft (a Republican who had opposed the Aldrich Bill) was very popular and seemed a sure-fire bet for re-election. The picture changed when the former President Teddy Roosevelt (also a Republican but opposed to Taft) decided to run on the Progressive Party ticket against Taft. The Democrats then nominated Woodrow Wilson, making it a three-way race. Suddenly the central bank promoters had their opportunity.
Two Morgan agents, Frank Munsey and George Perkins moved in behind Teddy Roosevelt with money and manpower from Wall Street. As Ferdinand Lundberg states:
"As soon as Roosevelt signified that he would again challenge Taft, the President's defeat was inevitable. Throughout the three-cornered fight Roosevelt had Munsey and Perkins constantly at his heels, supplying money, going over his speeches, bringing people from Wall Street in to help, and, in general, carrying the entire burden of the campaign against Taft. . . .
"Perkins and J.P. Morgan and Company were the substance of the Progressive Party; everything else was trimmin. . . . In short, most of Roosevelt's campaign fund was supplied by the two Morgan hatchet men who were seeking Taft's scalp. (American 60 Families, the Vanguard Press, New York, 1938, pp. 110-112)
Meanwhile, Wall Street was ALSO backing Wilson. Clear back in 1906, George Harvey, president of Morgan-controlled Harper's Weekly, had suggested Wilson for President. Then the Rockefellers took up the fund-raising for Wilson together with other Wall Street backers of the Democratic Party.
"The financial genius behind Woodrow Wilson was Cleveland H. Dodge of the [Rockefeller] National City Bank. . . . Sitting with Dodge as co-directors of the National City Bank at the time were the younger Rockefeller, J. Ogden Armour, and James Stillman. In short, except for George F. Baker, everyone whom the Pujo Committee (in Congress) had termed rules of the 'Money Trust' was in this bank." 9Op. Cit., pp. 109-113)
Jacob Schiff
Henry Morganthau
Adolph Ochs
Bernard Baruch (with Eisenhower in 1952)
Additional supporters of Wilson who belonged to the dynastic banking families included Jacob Schiff, Bernard Baruch, Henry Morgenthayu, Thomas Fortune Ryan, and the publisher of the New York Times, Adolph Ochs. (Kolko, Op. Cit., pp. 205 and 211)
Even Morgan's men who managed Teddy Roosevelt's campaign had money behind Wilson. The idea was to give Roosevelt enough support to divide Taft's Republican vote and give Wilson enough support to beat them both. This strategy worked, and Wilson was elected.
Even before the election, however, the promoters of the central bank set up a front organiztion to create a public climate which would be favorable to the Federal Reserve idea. Professor Kolko says: "During the spring of 191 the backers of the plan moved to create the 'National Citizens League for the Promotion of a Sound Banking System' to accomplish the task. Warburg and the other New York bankers behind the Aldrich plan arranged to have the league centered in Chicago. . . ." (Op. Cit., p.186)
Because of the Rockefeller influence over the University of Chicago, this new front organization was headed by J. Lawrence Laughlin of the institution with his former student and close confidante, H. Parker Willis, writing the necessary legislation. It was simply the Aldrich Bill in new dress.
To see that the newly elected President would have the right advisors, Wilson's financial backers surrounded him with their own agents. The most important of these was "Colonel" Edward Mandell House, British-educated son of a financier who represented certain British financial interests in the Southern States.
Woodrow Wilson, the 2nd Mrs. Wilson
and "Col. Edward M. House
House gradually emerged as the virtual president during the Wilson administration. Two of his pet projects, the central bank and the graduate income tax, were both successfully adopted through the amazing capacity of House to pull wires behind the scenes. It is now known that House was the author of the book, Philip Dru: Administrator, which described how Drue worked to establish "Socialism as dreamed by Karl Marx."
Professor Charles Seymour who edited The Intimate Papers of Colonel House, assures us further that "The Schiffs, the Warburgs, the Kahns, the Rockefellers, and the Morgans had faith in House. . . ."
To prevent opponents of Wall Street from identifying the Federal Reserve Act with the international bankers, a smoke-screen of opposition was fulminated. In his autobiography, William McAdoo, Wilson's Secreatary of the Treasury and son-in-law, wrote:
"Bankers fought the Federal Reserve legislation -- and every provision of the Federal Reserve Act -- with the tireless energy of fighting a forest fire. They said it was populistic, socialistic, half-baked, destructive, infantile, badly conceived and unworkable." (p.213)
However, McAdoo talked with these heated opponents of President Wilson of President WIlson's Federal Reserve Project and decided that there might be something phoney about the smoke-screen opposition. "These interviews with bankers led me to an interesting conclusion. I perceived gradually, through all the haze and smoke of controversy, that the banking world was not really as much opposed to the bill as it pretended to be. . . ." (p.225)
Thus the stage was set. It was December 22, 1913, that the Federal Reserve Act passed the House of Representatives by a vote of 298 to 60 and the Senate passed it by a majority of 43 to 25.
BUT WHO CONTROLS THE FEDERAL RESERVE SYSTEM?
The operation of the Federal Reserve System is one of the most interesting and mysterious combines in the country. SInce it was founded in 1913 it has successfully resisted every attempt to conduct an audit of its affairs. The system consisted of 12 "National Banks" but the only one of any significance is the one in New York. The New York bank has always been managed by someone completely congenial to the interests of the international bankers. It is important to realize that the Federal Reserve System is not a bona fide Goverment agency. Technically the stock is owned by the 12 National Banks which receive a divident of six percent each year. Any profits from the System are supposed to be turned over to the U.S. Treasury. In fact, the President appoints the seven members of the Federal Reserve Board for fourteen year terms, but in spite of all this window dressing the Federal Reserve Board is completely independent in its decisions. President Johnson admitted this when the Federal Reserve defied him during his administration and when David Kennedy, the Nixon Secretary of the treasury, was asked about the credit-tightening policies of the Federal Reserve, he replied: "It it not my job to approve or disapprove. It is the action of the Federal Reserve." (U.S. News and World Report, May 5, 1969)
The mamouth and secret operations of the Federal Reserve are therefore proceeding along the lines which Dr. Quigley says the international bankers were determined to achieve. They intended to use the financial power of Britain and the United States to force all the major countries to operate "trhough central banks free from all political control, with allquestions of internaitonal finance to be settled by agreements by such central banks without interference from governments." (Quigley, p. 326)
The motivation for such a scheme can be better appreciated when it is realized that loaning money to goverments can be very lucrative business, especially loans to the United States Goverment. The U.S. presently owes more money (most of it to the international banking institutions) than all the money owed by the rest of the nations in the world combined. The U.S. national debt is presently 372 billion dollars. EVERY YEAR American tax payers are require dto contribute 20 billion dollars to pay interest on this indebtedness. It is the thirt largest item in the Federal budget. It can be readily seen why those who are appointed to the key positions in the U.S. Federal Reserve System (where loans are negotiated and itnerest rates fixed) occupy possibly the most critically influential spot in the entire world.
Dr. Quigley says the true dimensions of the whole scheme are better appreciated when it is realized that the far-reaching aim of the dynastic bankers was:
" . . . 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 frequewnt 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. Each central bank, in the hands of men like Montague Norman of the Bank of England, Benjamin Strong of the New York Federal Reserve Bank, Charles Rist of the Bank of France, and Hjalmer Schacht of the Reichs bank, sought to dominate its goverment by its ability to control Treasury loans, to manipuate foreign exchanges, to influence the level of economic activity in the coutnry, and to influence cooperative politicans by subsequent economic rewards in the business world." (p. 324, emphasis added)
Montague Norman
Benjamin Strong
That the international bankers have been in complete control of the U.S. Federal Reserve System form its inception is readily demonstrated. Dr. Quigley points out that the first governor of the Federal Reserve Bank of New York was Benjamin Strong, who became a close colleague of Montague Norman of the Bank of England.
"Strong owed his career to the favor of the Morgan Bank, especially of Henry P. Davison, who made him secretary of the Bankers Trust Company of New York (in succession to Thomas W. Lamont) in 1904, used him as Morgan's agent in the banking arrangements folowing the crash of 1907, and made him vice-president of the Bankers Trust (still in succession to Lamont) in 1909. He became governor of the Federal Reserve Bank of New York as the joint nominee of Morgan and of Kuhn Loeb and Campany in 1914. Two years later, Strong net Norman for the first time, and they at once made an agreement to work in cooperation for the finacial practices they both revered." (p.326)
The original Federal Reserve Board was largely hand-picked by "Colonel" House and included Paul Warburg. Subsequent appointments have always been completely congenial to the interest of Wall Street and the international bankers. Ferdinand Lundberg confirms Quigley's evaluations:
"In practice the Federal Reserve Bank of New York became the fountainhead of the system of twelve regional banks, for New York was the money market of the nation. The other eleven banks were so many expensive mausoleums erectged to salve the local pride and quell the Jacksonian fears of the Hinterland. Benjamin Strong . . . president of the Bankers Trust Company [Morgan], was selected as the first Governor of the New York Federal Reserve Bank. An adept in high finance, Strong for many years manipulated the country's monetary system at the discretion of directors representing the leading New York banks. Under Strong the Reserve System, unsuspected by the nation, was brought into interlocking relaitons with the Bank of England and the Bank of France. . . . (Op. Cit., p. 122)
So now we have run full circle. Dr. Carroll Quigley was anxious to have us know who has been running the world. He makes it clear that in spite of their power, these secret centers of control are seldom in dictatorial positions where they can actually take direct, decisive political action; but their financial stranglehold on the world allows them to INFLUENCE and MANIPULATE the affairs of various nations to an amaxing degree and to suit their own purposes. Therefore, whatever the purposes and goals of this group happen to be are of monumental importance to the rest of the world.
WHAT ARE THE GOALS OF THE WORLD'S SECRET
POWER MANIPULATORS?
Having established how powerful the money-managers of the world have now become, Dr. Quigley's second purpose appears to have been his desire to let us know what the poltical philosophy of these world giants has turned out to be. This is undoubtedly the most shocking aspect of his book. It is all the more disturbing because the facts in this part of his book fit perfectly with the world of reality in which we find ourselves. Many things which have seemed inconsistent and incongruous suddenly loom up with startling clarity as Dr. Quigley provides an insider's analysis of what has been happening.
In the beginning of this presentation I pointed out, some of the distrubign questions which are likely to occur to anyone who has been trying to understand the significance of the amazing trends of current history. There is a growing volume of evidence that the highest centers of political and economic power have been forcing the entire human race toward a global socialist, dictatorial-oriented society. And what has been most baffling about it has been the fact that this drift toward dictatorship with its inevitable obliteration of a thousand years of struggle toward human freedom, is being plotted, promoted and implemented by the leaders of free nations and the super-rich of those nations whose positions of affluence would seem to make them the foremost beneficiaries of the free-enterprise, property-oriented, open society in which so much progress has been made. Certainly they, above all men, should know that in order for this system to survive, freedom of action and the integrity of property rights must be preserved. Then why are the super-capitalists trying to destroy them?
Dr. Quigley provides an answer to this question but it is so startling that at first it seems virtually inconceivable. It becomes rational only as his scattered references to it are collected and disgested point by point. In a nutshell, Dr. Quigley has undertaken to expose wha every insider like himself has known all along -- that the world hierarchy of the dynastic super-rich is out to take over the entire planet, doing it with Socialistic legislation where possible, but having no reluctance to use Communist revolution where necessary to build the absolute state power they must have to achieve their end.
As we shall observe shortly, Dr. Quigley is sometimes reluctant to admit the full ramifications of his ugly thesis when the shocking and often revolting implications of it spill out on the blood-stained pages of recent history. This is why we find him proving thesis up to a point and then frantically endeavoring to cover up the consequences of it by denying the validity of what Congressional Committees have exposed through their investigations. This black threat of strange contradiction runs through several important sections of Dr. Quigley's book, but should offer no difficulty to the reader once he understands what is happening.
As we pointed out earlier, Dr. Quigley prides himself in being a member of this secret power group which is identified with the international jet-set of super-rich banking dynasties. He agrees with practically all of their goals and policies. However, he strongly objects to their policy of secrecy. (p. 950) He wants them to receive credit for what they have been doing. Here therefore undertakes toshow who has been largely responsible for the massive movement toward the centralizing of power on the Socialist-Communist Left during the past fifty to seventy-five years.
It began with the ideological conquest of some important peoples minds ...
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Here, on page 25, of The Naked Capitalist, is where I stop typing. The book is 130 pages long not counting the index.
Some short extracts from Naked Capitalist can be read here: