Chapter VIII
120 BROADWAY, NEW YORK CITY
William B. Thompson, who was in Petrograd from July
until November last, has made a personal contribution of $1,000,000 to
the Bolsheviki for the purpose of spreading their doctrine in Germany
and Austria ....
Washington Post, February 2, 1918
While collecting material for this book a single location and
address in the Wall Street area came to the fore — 120 Broadway, New York City.
Conceivably, this book could have been written incorporating only persons,
firms, and organizations located at 120 Broadway in the year 1917. Although this
research method would have been forced and unnatural, it would have excluded
only a relatively small segment of the story.
The original building at 120 Broadway was destroyed by fire
before World War I. Subsequently the site was sold to the Equitable Office
Building Corporation, organized by General T. Coleman du Pont, president of du
Pont de Nemours Powder Company.1 A new building was completed in 1915 and the
Equitable Life Assurance Company moved back to its old
site.2 In passing we should
note an interesting interlock in Equitable history. In 1916 the cashier of the
Berlin Equitable Life office was William Schacht, the father of Hjalmar Horace
Greeley Schacht — later to become Hitler's banker, and financial genie. William
Schacht was an American citizen, worked thirty years for Equitable in Germany,
and owned a Berlin house known as "Equitable Villa." Before joining
Hitler, young Hjalmar Schacht served as a member of the Workers and Soldiers
Council (a soviet) of Zehlendoff; this he left in 1918 to join the board of the
Nationalbank fur Deutschland. His codirector at DONAT was Emil Wittenberg, who,
with Max May of Guaranty Trust Company of New York, was a director of the first
Soviet international bank, Ruskombank.
In any event, the building at 120 Broadway was in 1917 known
as the Equitable Life Building. A large building, although by no means the
largest office building in New York City, it occupies a one-block area at
Broadway and Pine, and has thirty-four floors. The Bankers Club was located on
the thirty-fourth floor. The tenant list in 1917 in effect reflected American
involvement in the Bolshevik Revolution and its aftermath. For example, the
headquarters of the No. 2 District of the Federal Reserve System — the New York
area — by far the most important of the Federal Reserve districts, was located at
120 Broadway. The offices of several individual directors of the Federal Reserve
Bank of New York and, most important, the American International Corporation
were also at 120 Broadway. By way of contrast, Ludwig Martens, appointed by the
Soviets as the first Bolshevik "ambassador" to the United States and
head of the Soviet Bureau, was in 1917 the vice president of Weinberg &
Posner — and also had offices at 120 Broadway.*
Is this concentration an accident? Does the geographical
contiguity have any significance? Before attempting to suggest an answer, we
have to switch our frame of reference and abandon the left-right spectrum of
political analysis.
With an almost unanimous lack of perception the academic
world has described and analyzed international political relations in the
context of an unrelenting conflict between capitalism and communism, and rigid
adherence to this Marxian formula has distorted modern history. Tossed out from time to time are odd remarks
to the effect that the polarity is indeed spurious, but these are quickly
dispatched to limbo. For example, Carroll Quigley, professor of international
relations at Georgetown University, made the following comment on the House of
Morgan:
More than fifty years ago the Morgan firm decided to
infiltrate the Left-wing political movements in the United States. This was
relatively easy to do, since these groups were starved for funds and eager for a
voice to reach the people. Wall Street supplied both. The purpose was not to
destroy, dominate or take over...3
Professor Quigley's comment, apparently based on confidential
documentation, has all the ingredients of an historical bombshell if it can be
supported. We suggest that the Morgan firm infiltrated not only the domestic
left, as noted by Quigley, but also the foreign left — that is, the Bolshevik
movement and the Third International. Even further, through friends in the U.S.
State Department, Morgan and allied financial interests, particularly the
Rockefeller family, have exerted a powerful influence on U.S.-Russian relations
from World War I to the present. The evidence presented in this chapter will
suggest that two of the operational vehicles for infiltrating or influencing
foreign revolutionary movements were located at 120 Broadway: the first, the
Federal Reserve Bank of New York, heavily laced with Morgan appointees; the
second, the Morgan-controlled American International Corporation. Further, there
was an important interlock between the Federal Reserve Bank of New York and the
American International Corporation — C. A. Stone, the president of American
International, was also a director of the Federal Reserve Bank.
The tentative hypothesis then is that this unusual
concentration at a single address was a reflection of purposeful actions by
specific firms and persons and that these actions and events cannot be analyzed
within the usual spectrum of left-right political antagonism.
The American International Corporation (AIC) was organized in
New York on November 22, 1915, by the J.P. Morgan interests, with major
participation by Stillman's National City Bank and the Rockefeller interests.
The general office of AIC was at 120 Broadway. The company's charter authorized it to engage in any
kind of business, except banking and public utilities, in any country in the
world. The stated purpose of the corporation was to develop domestic and foreign
enterprises, to extend American activities abroad, and to promote the interests
of American and foreign bankers, business and engineering.
Frank A. Vanderlip has described in his memoirs how American
International was formed and the excitement created on Wall Street over its
business potential.4 The original idea was generated by a discussion between
Stone & Webster — the international railroad contractors who "were
convinced there was not much more railroad building to be done in the United
States" — and Jim Perkins and Frank A. Vanderlip of National City Bank (NCB).5
The original capital authorization was $50 million and the board of directors
represented the leading lights of the New York financial world. Vanderlip
records that he wrote as follows to NCB president Stillman, enthusing over the
enormous potential for American International Corporation:
James A. Farrell and Albert Wiggin have been invited [to be
on the board] but had to consult their committees before accepting. I also have
in mind asking Henry Walters and Myron T. Herrick. Mr. Herrick is objected to by
Mr. Rockefeller quite strongly but Mr. Stone wants him and I feel strongly that
he would be particularly desirable in France. The whole thing has gone along
with a smoothness that has been gratifying and the reception of it has been
marked by an enthusiasm which has been surprising to me even though I was so
strongly convinced we were on the right track.
I saw James J. Hill today, for example. He said at first that
he could not possibly think of extending his responsibilities, but after I had
finished telling him what we expected to do, he said he would be glad to go on
the board, would take a large amount of stock and particularly wanted a
substantial interest in the City Bank and commissioned me to buy him the stock
at the market.
I talked with Ogden Armour about the matter today for the
first time. He sat in perfect silence while I went through the story, and,
without asking a single question, he said he would go on the board and wanted
$500,000 stock.
Mr. Coffin [of General Electric] is another man who is
retiring from everything, but has 'become so enthusiastic over this that he was
willing to go on the board, and offers the most active cooperation.
I felt very good over getting Sabin. The Guaranty Trust is
altogether the most active competitor we have in the field and it is of great
value to get them into the fold in this way. They have been particularly
enthusiastic at Kuhn, Loeb's. They want to take up to $2,500,000. There was
really quite a little competition to see who should get on the board, but as I
had happened to talk with Kahn and had invited him first, it was decided he
should go on. He is perhaps the most enthusiastic of any one. They want half a
million stock for Sir Ernest Castle** to whom they have cabled the plan and they
have back from him approval of it.
I explained the whole matter to the Board [of the City Bank]
Tuesday and got nothing but favorable comments.6
Everybody coveted the AIC stock. Joe Grace (of W. R. Grace
& Co.) wanted $600,000 in addition to his interest in National City Bank.
Ambrose Monell wanted $500,000. George Baker wanted $250,000. And "William
Rockefeller tried, vainly, to get me to put him down for $5,000,000 of the
common."7
By 1916 AIC investments overseas amounted to more than $23
million and in 1917 to more than $27 million. The company established
representation in London, Paris, Buenos Aires, and Peking as well as in
Petrograd, Russia. Less than two years after its formation AIC was operating on
a substantial scale in Australia, Argentina, Uruguay, Paraguay, Colombia,
Brazil, Chile, China, Japan, India, Ceylon, Italy, Switzerland, France, Spain,
Cuba, Mexico, and other countries in Central America.
American International owned several subsidiary companies
outright, had substantial interests in yet other companies, and operated still
other firms in the United States and abroad. The Allied Machinery Company of
America was founded in February 1916 and the entire share capital taken up by
American International Corporation. The vice president of American International
Corporation was Frederick Holbrook, an engineer and formerly head of the
Holbrook
Cabot & Rollins Corporation. In January 1917 the Grace Russian Company was
formed, the joint owners being W. R. Grace & Co. and the San Galli Trading
Company of Petrograd. American International Corporation had a substantial
investment in the Grace Russian Company and through Holbrook an interlocking
directorship.
AIC also invested in United Fruit Company, which was
involved in Central American revolutions in the 1920s. The American
International Shipbuilding Corporation was wholly owned by AIC and signed
substantial contracts for war vessels with the Emergency Fleet Corporation: one
contract called for fifty vessels, followed by another contract for forty
vessels, followed by yet another contract for sixty cargo vessels. American
International Shipbuilding was the largest single recipient of contracts awarded
by the U.S. government Emergency Fleet Corporation. Another company operated by
AIC was G. Amsinck & Co., Inc. of New York; control of the company was
acquired in November 1917. Amsinck was the source of financing for German
espionage in the United States (see page 66). In November 1917 the American
International Corporation formed and wholly owned the Symington Forge
Corporation, a major government contractor for shell forgings. Consequently,
American International Corporation had significant interest in war contracts
within the United States and overseas. It had, in a word, a vested interest in
the continuance of World War I.
The directors of American International and some of their
associations were (in 1917):
J. OGDEN ARMOUR Meatpacker, of Armour & Company,
Chicago; director of the National City Bank of New York; and mentioned by A.
A. Heller in connection with the Soviet Bureau (see p. 119).
GEORGE JOHNSON BALDWIN Of Stone & Webster, 120
Broadway. During World War I Baldwin was chairman of the board of American
International Shipbuilding, senior vice president of American International
Corporation, director of G. Amsinck (Von Pavenstedt of Amsinck was a German
espionage paymaster in the U.S., see page 65), and a trustee of the Carnegie
Foundation, which financed the Marburg Plan for international socialism to be
controlled behind the scenes by world finance (see page 174-6).
C. A. COFFIN Chairman of General Electric (executive
office: 120 Broadway), chairman of cooperation committee of the American Red
Cross.
W. E. COREY (14 Wall Street) Director of American Bank Note
Company, Mechanics and Metals Bank, Midvale Steel and Ordnance, and
International Nickel Company; later director of National City Bank.
ROBERT DOLLAR San Francisco shipping magnate, who attempted
in behalf of the Soviets to import tsarist gold rubles into U.S. in 1920, in
contravention of U.S. regulations.
PIERRE S. DU PONT Of the du Pont family.
PHILIP A. S. FRANKLIN Director of National City Bank.
J.P. GRACE Director of National City Bank.
R. F. HERRICK Director, New York Life Insurance; former
president of the American Bankers Association; trustee of Carnegie Foundation.
OTTO H. KAHN Partner in Kuhn, Loeb. Kahn's father came to
America in 1948, "having taken part in the unsuccessful German revolution
of that year." According to J. H. Thomas (British socialist, financed by
the Soviets), "Otto Kahn's face is towards the light."
H. W.
PRITCHETT Trustee of Carnegie Foundation.
PERCY A. ROCKEFELLER Son of John D. Rockefeller; married to
Isabel, daughter of J. A. Stillman of National City Bank.
JOHN D. RYAN Director of copper-mining companies, National
City Bank, and Mechanics and Metals Bank. (See frontispiece to this book.)
W. L. SAUNDERS Director the Federal Reserve Bank of New
York, 120 Broadway, and chairman of Ingersoll-Rand. According to the National
Cyclopaedia (26:81): "Throughout the war he was one of the
President's most trusted advisers." See page 15 for his views on the
Soviets.
J. A. STILLMAN President of National City Bank, after his father
(J. Stillman, chairman of NCB) died in March 1918.
C. A. STONE Director (1920-22) of Federal Reserve Bank of New
York, 120 Broadway; chairman of Stone & Webster, 120 Broadway; president
(1916-23) of American International Corporation, 120 Broadway.
T. N. VAIL
President of National City Bank of Troy, New York
F. A. VANDERLIP President
of National City Bank.
E. S. WEBSTER Of Stone & Webster, 120 Broadway.
A. H. WIGGIN Director of Federal Reserve Bank of New York in
the early 1930s.
BECKMAN WINTHROPE Director of National City Bank.
WILLIAM WOODWARD Director of Federal Reserve Bank of New
York, 120 Broadway, and Hanover National Bank.
The interlock of the twenty-two directors of American
International Corporation with other institutions is significant. The National
City Bank had no fewer than ten directors on the board of AIC; Stillman of NCB
was at that time an intermediary between the Rockefeller and Morgan interests,
and both the Morgan and the Rockefeller interests were represented directly on
AIC. Kuhn, Loeb and the du Ponts each had one director. Stone & Webster
had three directors. No fewer than four directors of AIC (Saunders, Stone,
Wiggin, Woodward) either were directors of or were later to
join the Federal Reserve Bank of New York. We have noted in an earlier chapter
that William Boyce Thompson, who contributed funds and his considerable
prestige to the Bolshevik Revolution, was also a director of the Federal
Reserve Bank of New York — the directorate of the FRB of New York comprised
only nine members.
Having identified the directors of AIC we now have to identify
their revolutionary influence.
As the Bolshevik Revolution took hold in central Russia,
Secretary of State Robert Lansing requested the views of American
International Corporation on the policy to be pursued towards the Soviet
regime. On January 16, 1918 — barely two months after the takeover in Petrograd
and Moscow, and before a fraction of Russia had come under Bolshevik control —
William Franklin Sands, executive secretary of American International
Corporation, submitted the requested memorandum on the Russian political
situation to Secretary Lansing. Sands covering letter, headed 120 Broadway,
began:
To the Honourable
January 16, 1918
Secretary of State
Washington D.C.
Sir
I have the honor to enclose herewith the memorandum which
you requested me to make for you on my view of the political situation in
Russia.
I have separated it into three parts; an explanation of the
historical causes of the Revolution, told as briefly as possible; a suggestion
as to policy and a recital of the various branches of American activity at
work now in Russia ....8
Although the Bolsheviks had only precarious control in
Russia — and indeed were to come near to losing even this in the spring of
1918 — Sands wrote that already (January 1918) the United States had delayed
too long in recognizing "Trotzky." He added, "Whatever ground
may have been lost, should be regained now, even at the cost of a slight
personal triumph for Trotzky."9
Firms located at, or near, 120 Broadway:
American
International Corp 120 Broadway
National City Bank 55 Wall Street
Bankers Trust Co Bldg 14 Wall Street
New York Stock Exchange 13 Wall Street/12 Broad
Morgan
Building corner Wall & Broad
Federal Reserve Bank of NY 120 Broadway
Equitable Building 120
Broadway
Bankers Club 120 Broadway
Simpson, Thather & Bartlett 62 Cedar St
William Boyce Thompson 14 Wall Street
Hazen, Whipple & Fuller 42nd Street Building
Chase National
Bank 57 Broadway
McCann Co 61 Broadway
Stetson, Jennings & Russell 15 Broad Street
Guggenheim
Exploration 120 Broadway
Weinberg & Posner 120 Broadway
Soviet Bureau 110 West 40th Street
John MacGregor Grant Co 120 Broadway
Stone & Webster 120 Broadway
General Electric Co 120 Broadway
Morris Plan of NY 120 Broadway
Sinclair Gulf Corp 120 Broadway
Guaranty Securities 120 Broadway
Guaranty Trust 140 Broadway
Map of Wall Street Area Showing Office Locations
Sands then elaborates the manner in which the U.S. could make
up for lost time, parallels the Bolshevik Revolution to "our own
revolution," and concludes: "I have every reason to believe that the
Administration plans for Russia will receive all possible support from Congress,
and the hearty endorsement of public opinion in the United States."
In brief, Sands, as executive secretary of a corporation
whose directors were the most prestigious on Wall Street, provided an emphatic
endorsement of the Bolsheviks and the Bolshevik Revolution, and within a matter
of weeks after the revolution started. And as a director of the Federal Reserve
Bank of New York, Sands had just contributed $1 million to the Bolsheviks —
such
endorsement of the Bolsheviks by banking interests is at least consistent.
Moreover, William Sands of American International was a man
with truly uncommon connections and influence in the State Department.
Sands' career had alternated between the State Department and
Wall Street, In the late nineteenth and early twentieth century he held various
U.S. diplomatic posts. In 1910 he left the department to join the banking firm
of James Speyer to negotiate an Ecuadorian loan, and for the next two years
represented the Central Aguirre Sugar Company in Puerto Rico. In 1916 he was in
Russia on "Red Cross work" — actually a two-man "Special
Mission" with Basil Miles — and returned to join the American International
Corporation in New York.10
In early 1918 Sands became the known and intended recipient
of certain Russian "secret treaties." If the State Department files
are to be believed, it appears that Sands was also a courier, and that he had
some prior access to official documents — prior, that is, to U.S. government
officials. On January 14, 1918, just two days before Sands wrote his memo on
policy towards the Bolsheviks, Secretary Lansing caused the following cable to
be sent in Green Cipher to the American legation in Stockholm: "Important
official papers for Sands to bring here were left at Legation. Have you
forwarded them? Lansing." The reply of January 16 from Morris in Stockholm
reads: "Your 460 January 14, 5 pm. Said documents forwarded Department in
pouch number 34 on December 28th." To these documents is attached another
memo, signed "BM" (Basil Miles, an associate of Sands): "Mr.
Phillips. They failed to give Sands 1st installment of secret treaties wh.
[which] he brought from Petrograd to Stockholm."11
Putting aside the question why a private citizen would be
carrying Russian secret treaties and the question of the content of such secret
treaties (probably an early version of the so-called Sisson Documents), we can
at least deduce that the AIC executive secretary traveled from Petrograd to
Stockholm in late 1917 and must indeed have been a privileged and influential
citizen to have access to secret treaties.12
A few months later, on July 1, 1918, Sands wrote to Treasury
Secretary McAdoo suggesting a commission for "economic assistance to
Russia." He urged that since it would be difficult for a government
commission to "provide the machinery" for any such assistance, "it
seems, therefore, necessary to call in the financial, commercial and
manufacturing interest of the United States to provide such machinery under the
control of the Chief Commissioner or whatever official is selected by the
President for this purpose."13 In other words, Sands obviously intended
that any commercial exploitation of Bolshevik Russia was going to include 120
Broadway.
The certification of incorporation of the Federal Reserve
Bank of New York was filed May 18, 1914. It provided for three Class A directors
representing member banks in the district, three Class B directors representing
commerce, agriculture, and industry, and three Class C directors representing
the Federal Reserve Board. The original directors were elected in 1914; they
proceeded to generate an energetic program. In the first year of organization
the Federal Reserve Bank of New York held no fewer than 50 meetings.
From our viewpoint what is interesting is the association
between, on the one hand, the directors of the Federal Reserve Bank (in the New
York district) and of American International Corporation, and, on the other, the
emerging Soviet Russia.
In 1917 the three Class A directors were Franklin D. Locke,
William Woodward, and Robert H. Treman. William Woodward was a director of
American International Corporation (120 Broadway) and of the
Rockefeller-controlled Hanover National Bank. Neither Locke nor Treman enters
our story. The three Class B directors in 1917 were William Boyce Thompson,
Henry R. Towne, and Leslie R. Palmer. We have already noted William B.
Thompson's substantial cash contribution to the Bolshevik cause. Henry R. Towne
was chairman of the board of directors of the Morris Plan of New York, located
at 120 Broadway; his seat was later taken by Charles A. Stone of American
International Corporation (120 Broadway) and of Stone & Webster (120
Broadway). Leslie R. Palmer does not come into our story. The three Class C
directors were Pierre Jay, W. L. Saunders, and George Foster Peabody. Nothing is
known about Pierre Jay, except that his office was at 120 Broadway and he
appeared to be significant only as the owner of Brearley School, Ltd. William
Lawrence Saunders was also a director of American International Corporation; he
openly avowed, as we have seen, pro-Bolshevik sympathies, disclosing them in a
letter to President Woodrow Wilson (see page 15). George Foster Peabody was an
active socialist (see page 99-100).
In brief, of the nine directors of the Federal Reserve Bank
of New York, four were physically located at 120 Broadway and two were then
connected with American International Corporation. And at least four members of
AIC's board were at one time or another directors of the FRB of New York. We
could term all of this significant, but regard it not necessarily as a dominant
interest.
William Franklin Sands' proposal for an economic commission
to Russia was not adopted. Instead, a private vehicle was put together to
exploit Russian markets and the earlier support given the Bolsheviks. A group of
industrialists from 120 Broadway formed the American-Russian Industrial
Syndicate Inc. to develop and foster these opportunities. The financial backing
for the new firm came from the Guggenheim Brothers, 120 Broadway, previously
associated with William Boyce Thompson (Guggenheim controlled American Smelting and Refining, and the Kennecott and Utah
copper companies); from Harry F. Sinclair, president of Sinclair Gulf Corp.,
also 120 Broadway; and from James G. White of J. G. White Engineering Corp. of
43 Exchange Place — the address of the American-Russian Industrial Syndicate.
In the fall of 1919 the U.S. embassy in London cabled
Washington about Messrs. Lubovitch and Rossi "representing American-Russian Industrial Syndicate Incorporated What is the
reputation and the attitude of the Department toward the syndicate and
the individuals?"14
To this cable State Department officer Basil Miles, a former associate of Sands, replied:
. . . Gentlemen
mentioned together with their corporation are of good
standing being backed financially by the White, Sinclair and Guggenheim
interests for the purpose of opening up business relations with
Russia.15
So we may conclude that Wall Street interests had quite
definite ideas of the manner in which the new Russian market was to be
exploited. The assistance and advice proffered in behalf of the Bolsheviks by
interested parties in Washington and elsewhere were not to remain unrewarded.
Quite apart from American International's influence in the
State Department is its intimate relationship — which AIC itself called
"control" — with a known Bolshevik: John Reed. Reed was a prolific,
widely read author of the World War I era who contributed to the
Bolshevik-oriented Masses.16 and to the Morgan-controlled journal Metropolitan.
Reed's book on the Bolshevik Revolution, Ten Days That Shook the World, sports
an introduction by Nikolai Lenin, and became Reed's best-known and most widely
read literary effort. Today the book reads like a superficial commentary on
current events, is interspersed with Bolshevik proclamations and decrees, and is
permeated with that mystic fervor the Bolsheviks know will arouse foreign
sympathizers. After the revolution Reed became an American member of the executive committee of the Third
International. He died of typhus in Russia in 1920.
The crucial issue that presents itself here is not Reed's
known pro-Bolshevik tenor and activities, but how Reed who had the entire
confidence of Lenin ("Here is a book I should like to see published in
millions of copies and translated into all languages," commented Lenin in Ten
Days), who was a member of the Third International, and who possessed a
Military Revolutionary Committee pass (No. 955, issued November 16, 1917) giving
him entry into the Smolny Institute (the revolutionary headquarters) at any time
as the representative of the "American Socialist press," was also —
despite these things — a puppet under the "control" of the Morgan
financial interests through the American International Corporation. Documentary
evidence exists for this seeming conflict (see below and Appendix 3).
Let's fill in the background. Articles for the Metropolitan
and the Masses gave John Reed a wide audience for reporting the
Mexican and the Russian Bolshevik revolutions. Reed's biographer Granville Hicks
has suggested, in John Reed, that "he was . . . the spokesman of the
Bolsheviks in the United States." On the other hand, Reed's financial
support from 1913 to 1918 came heavily from the Metropolitan — owned by
Harry Payne Whitney, a director of the Guaranty Trust, an institution cited in
every chapter of this book — and also' from the New York private banker and
merchant Eugene Boissevain, who channeled funds to Reed both directly and
through the pro-Bolshevik Masses. In other words, John Reed's financial
support came from two supposedly competing elements in the political spectrum.
These funds were for writing and may be classified as: payments from Metropolitan
from 1913 onwards for articles; payments from Masses from 1913
onwards, which income at least in part originated with Eugene Boissevain. A
third category should be mentioned: Reed received some minor and apparently
unconnected payments from Red Cross commissioner Raymond Robins in Petrograd.
Presumably he also received smaller sums for articles written for other
journals, and book royalties; but no evidence has been found giving the amounts
of such payments.
The Metropolitan supported contemporary establishment
causes including, for example, war preparedness. The magazine was owned by Harry
Payne Whitney (1872-1930), who founded the Navy League and was partner in the J.P. Morgan firm. In the late
1890s Whitney became a director of American Smelting and Refining and of
Guggenheim Exploration. Upon his father's death in 1908, he became a director of
numerous other companies, including Guaranty Trust Company. Reed began writing
for Whitney's Metropolitan in July 1913 and contributed a half-dozen
articles on the Mexican revolutions: "With Villa in Mexico," "The
Causes Behind/Mexico's Revolution," "If We Enter Mexico,"
"With Villa on the March," etc. Reed's sympathies were with
revolutionist Pancho Villa. You will recall the link (see page 65) between
Guaranty Trust and Villa's ammunition supplies.
In any event, Metropolitan was Reed's main source of
income. In the words of biographer Granville Hicks, "Money meant primarily
work for the Metropolitan and incidentally articles and stories for other
paying magazines." But employment by Metropolitan did not inhibit
Reed from writing articles critical of the Morgan and Rockefeller interests. One
such piece, "At the Throat of the Republic" (Masses, July
1916), traced the relationship between munitions industries, the national
security-preparedness lobby, the interlocking directorates of the
Morgan-Rockefeller interest, "and showed that they dominated both the
preparedness societies and the newly formed American International Corporation,
organized for the exploitation of backward countries."17
In 1915 John Reed was arrested in Russia by tsarist
authorities, and the Metropolitan intervened with the State Department in
Reed's behalf. On June 21, 1915, H. J. Whigham wrote Secretary of State Robert
Lansing informing him that John Reed and Boardman Robinson (also arrested and
also a contributor to the Masses) were in Russia "with commission
from the Metropolitan magazine to write articles and to make
illustrations in the Eastern field of the War." Whigham pointed out that
neither had "any desire or authority from us to interfere with the
operations of any belligerent powers that be." Whigham's letter continues:
If Mr. Reed carried letters of introduction from Bucharest to
people in Galicia of an anti-Russian frame of mind I am sure that it was done
innocently with the simple intention of meeting as many people as possible ....
Whigham points out to Secretary Lansing that John Reed was
known at the White House and had given "some assistance" to the administration on Mexican affairs; he concludes: "We have
the highest regard for Reed's great qualities as a writer and thinker and we are
very anxious as regards his safety."18 The Whigham letter is not, let it be
noted, from an establishment journal in support of a Bolshevik writer; it is
from an establishment journal in support of a Bolshevik writer for the Masses
and similar revolutionary sheets, a writer who was also the author of
trenchant attacks ("The Involuntary Ethics of Big Business: A Fable for
Pessimists," for example) on the same Morgan interests that owned Metropolitan.
The evidence of finance by the private banker Boissevain is
incontrovertible. On February 23, 1918, the American legation at Christiania,
Norway, sent a cable to Washington in behalf of John Reed for delivery to
Socialist Party leader Morris Hillquit. The cable stated in part: "Tell
Boissevain must draw on him but carefully." A cryptic note by Basil Miles
in the State Department files, dated April 3, 1918, states, "If Reed is
coming home he might as well have money. I understand alternatives are ejection
by Norway or polite return. If this so latter seems preferable." This
protective note is followed by a cable dated April 1, 1918, and again from the
American legation at Christiania: "John Reed urgently request Eugene
Boissevain, 29 Williams Street, New York, telegraph care legation
$300.00."19 This cable was relayed to Eugene Boissevain by the State
Department on April 3, 1918.
Reed apparently received his funds and arrived safely back in
the United States. The next document in the State Department files is a letter
to William Franklin Sands from John Reed, dated June 4, 1918, and written from
Crotonon-Hudson, New York. In the letter Reed asserts that he has drawn up a
memorandum for the State Department, and appeals to Sands to use his influence
to get release of the boxes of papers brought back from Russia. Reed concludes,
"Forgive me for bothering you, but I don't know where else to turn, and I
can't afford another trip to Washington." Subsequently, Frank Polk, acting
secretary of state, received a letter from Sands regarding the release of John
Reed's papers. Sands' letter, dated June 5, 1918, from 120 Broadway, is here
reproduced in full; it makes quite explicit statements about control of Reed:
120 BROADWAY NEW YORK
June fifth, 1918
My dear Mr. Polk:
I take the liberty of enclosing to you an appeal from John
("Jack") Reed to help him, if possible, to secure the release of the
papers which he brought into the country with him from Russia.
I had a conversation with Mr. Reed when he first arrived, in
which he sketched certain attempts by the Soviet Government to initiate
constructive development, and expressed the desire to place whatever
observations he had made or information he had obtained through his connection
with Leon Trotzky, at the disposal of our Government. I suggested that he write
a memorandum on this subject for you, and promised to telephone to Washington to
ask you to give him an interview for this purpose. He brought home with him a
mass of papers which were taken from him for examination, and on this subject
also he wished to speak to someone in authority, in order to voluntarily offer
an>, information they might contain to the Government, and to ask for the
release of those which he needed for his newspaper and magazine work.
I do not believe that Mr. Reed is either a
"Bolshevik" or a "dangerous anarchist," as I have heard him
described. He is a sensational journalist, without doubt, but that is all. He is
not trying to embarrass our Government, and for this reason refused the
"protection" which I understand was offered to him by Trotzky, when he
returned to New York to face the indictment against him in the
"Masses" trial. He is liked by the Petrograd Bolsheviki, however, and,
therefore, anything which our police may do which looks like
"persecution" will be resented in Petrograd, which I believe to be
undesirable because unnecessary. He can be handled and controlled much better
by other means than through the police.
I have not seen the memorandum he gave to Mr.
Bullitt — I wanted
him to let me see it first and perhaps to edit it, but he had not the
opportunity to do so.
I hope that you will not consider me to be intrusive in this
matter or meddling with matters which do not concern me. I believe it to be wise
not to offend the Bolshevik leaders unless and until it may become necessary
to do so — if it should become necessary — and it is unwise to look on every
one as a suspicious or even dangerous character, who has had friendly relations
with the Bolsheviki in Russia. I think it better policy to attempt to use
such people for our own purposes in developing our policy toward Russia, if it is possible to do
so.
The lecture which Reed was prevented by the police from delivering in
Philadelphia (he lost his head, came into conflict with the police and was
arrested) is the only lecture on Russia which I would have paid to hear, if I
had not already seen his notes on the subject. It covered a subject which we
might quite possibly find to be a point of contact with the Soviet Government,
from which to begin constructive work!
Can we not use him, instead of embittering him and making
him an enemy? He is not well balanced, but he is, unless I am very much
mistaken, susceptible to discreet guidance and might be quite useful.
Sincerely yours,
William Franklin Sands
The Honourable
Frank Lyon Polk
Counselor for the Department of State
Washington, D.C.
The significance of this document is the hard revelation of
direct intervention by an officer (executive secretary) of American
International Corporation in behalf of a known Bolshevik. Ponder a few of Sands'
statements about Reed: "He can be handled and controlled much better by
other means than through the police"; and, "Can we not use him,
instead of embittering him and making him an enemy? . . . he is, unless I am
very much mistaken, susceptible to discreet guidance and might be quite
useful." Quite obviously, the American International Corporation viewed
John Reed as an agent or a potential agent who could be, and probably had
already been, brought under its control. The fact that Sands was in a position
to request editing a memorandum by Reed (for Bullitt) suggests some degree of
control had already been established.
Then note Sands' potentially hostile attitude
towards — and
barely veiled intent to provoke — the Bolsheviks: "I believe it to be wise
not to offend the Bolshevik leaders unless and until it may become necessary
to do so — if it should become necessary . . ." (italics added).
This is an extraordinary letter in behalf of a Soviet agent
from a private U.S. citizen whose counsel the State Department had sought, and
continued to seek.
A later memorandum, March 19, 1920, in the State files
reported the arrest of John Reed by the Finnish authorities at Abo, and Reed's
possession of English, American and German passports. Reed, traveling under the
alias of Casgormlich, carried diamonds, a large sum of money, Soviet propaganda
literature, and film. On April 21, 1920, the American legation at Helsingfors
cabled the State Department:
Am forwarding by the next pouch certified copies of letters
from Emma Goldman, Trotsky, Lenin and Sirola found in Reed's possession.
Foreign Office has promised to furnish complete record of the Court
proceedings.
Once again Sands intervened: "I knew Mr. Reed
personally."21 And, as in 1915, Metropolitan magazine also came to
Reed's aid. H. J. Whigham wrote on April 15, 1920, to Bainbridge Colby in the
State Department: "Have heard John Reed in danger of being executed in
Finland. Hope the State Dept. can take immediate steps to see that he gets
proper trial. Urgently request prompt action."22 This was in addition to an
April 13, 1920 telegram from Harry Hopkins, who was destined for fame under
President Roosevelt:
Understand State Dept. has information Jack Reed arrested
Finland, will be executed. As one of his friends and yours and on his wife's
behalf urge you take prompt action prevent execution and secure release. Feel sure can rely your immediate and effective
intervention.23
John Reed was subsequently released by the Finnish authorities.
This paradoxical account on intervention in behalf of a
Soviet agent can have several explanations. One hypothesis that fits other
evidence concerning Wall Street and the Bolshevik Revolution is that John Reed
was in effect an agent of the Morgan interests — perhaps only half aware of his
double role — that his anticapitalist writing maintained the valuable myth that all
capitalists are in perpetual warfare with all socialist revolutionaries.
Carroll Quigley, as we have already noted, reported that the Morgan interests
financially supported domestic revolutionary
organizations and anticapitalist writings.24 And we have presented in this
chapter irrefutable documentary evidence that the Morgan interests were also
effecting control of a Soviet agent, interceding on his behalf and, more important,
generally intervening in behalf of Soviet interests with the U.S. government.
These activities centered at a single address: 120 Broadway, New York City.
Footnotes:
1By
a quirk the papers of incorporation for the Equitable Office Building were
drawn up by Dwight W. Morrow, later a Morgan partner, but then a member of the
law firm of Simpson, Thacher & Bartlett. The Thacher firm contributed two
members to the 1917 American Red Cross Mission to Russia (see chapter five).
3Carroll
Quigley, Tragedy and Hope (New York: Macmillan, 1966), p. 938. Quigley
was writing in 1965, so this places the start of the infiltration at about
1915, a date consistent with the evidence here presented.
4Frank
A. Vanderlip, From Farm Boy to Financier (New York: A.
Appleton-Century, 1935).
6Ibid.,
pp. 268-69. It should be noted that several names mentioned by Vanderlip turn
up elsewhere in this book: Rockefeller, Armour, Guaranty Trust, and (Otto)
Kahn all had some connection more or less with the Bolshevik Revolution and its
aftermath.
8U.S.
Stale Dept. Decimal File, 861.00/961.
9Sands
memorandum to Lansing, p. 9.
10William
Franklin Sands wrote several books, including Undiplomatic Memoirs (New
York: McGraw-Hill, 1930), a biography covering the years to 1904. Later he
wrote Our .Jungle Diplomacy (Chapel Hill: University of North Carolina
Press, 1941), an unremarkable treatise on imperialism in Latin America. The
latter work is notable only for a minor point on page 102: the willingness to
blame a particularly unsavory imperialistic adventure on Adolf Stahl, a New
York banker, while pointing oust quite unnecessarily that Stahl was of
"German-Jewish origin." In August 1918 he published an article,
"Salvaging Russia," in Asia, to explain support of the
Bolshevik regime.
11All
the above in U.S. State Dept. Decimal File, 861.00/969.
12The
author cannot forbear comparing the treatment of academic researchers. In
1973, for example, the writer was still denied access to some State Department
files dated 1919.
13U.S.
State Dept. Decimal File, 861.51/333.
14U.S.
State Dept. Decimal File, 861.516 84, September 2, 1919.
16Other
contributors to the Masses mentioned in this book were journalist
Robert Minor, chairman of the, U.S. Public Info, marion Committee; George
Creel; Carl Sandburg, poet-historian; and Boardman Robinson, an artist.
17Granville
Hicks, John Reed, 1887-1920 (New York: Macmillan, 1936), p. 215.
18U.S.
State Dept. Decimal File, 860d.1121 R 25/4.
19Ibid.,
360d.1121/R25/18. According to Granville Hicks in John Reed, "Masses could
not pay his [Reed's] expenses. Finally, friends of the magazine, notably
Eugene Boissevain, raised the money" (p. 249).
20U.S.
State Dept. Decimal File, 360. D. II21.R/20/221/2, /R25 (John Reed). The
letter was transferred by Mr. Polk to the State Department archives on May 2,
1935. All italics added.
21Ibid.,
360d.1121 R 25/72.
23This
was addressed to Bainbridge Colby, ibid., 360d.1121 R 25/30. Another letter,
dated April 14, 1920, and addressed to the secretary of state from 100
Broadway, New York, was from W. Bourke Cochrane; it also pleaded for the
release of John Reed.
*The
John MacGregor Grant Co., agent for the Russo-Asiatic Bank (involved in
financing the Bolsheviks), was at 120 Broadway — and financed by Guaranty
Trust Company.
**Sir Ernest Cassel,
prominent British financier.
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