Chapter XI
THE ALLIANCE OF BANKERS
AND REVOLUTION
The name Rockefeller does not connote a revolutionary, and my life situation has fostered a careful and cautious attitude that verges on conservatism. I am not given to errant causes...
John D.
Rockefeller III, The Second American
Revolution (New York: Harper &
Row. 1973)
Evidence
already published by George Katkov, Stefan Possony, and Michael Futrell has
established that the return to Russia of Lenin and his party of exiled
Bolsheviks, followed a few weeks later by a party of Mensheviks, was financed
and organized by the German government.1 The necessary funds were transferred in
part through the Nya Banken in Stockholm, owned by Olof Aschberg, and the dual
German objectives were: (a) removal of Russia from the war, and (b) control of
the postwar Russian market.2
We have now
gone beyond this evidence to establish a continuing working relationship
between Bolshevik banker Olof Aschberg and the Morgan-controlled Guaranty Trust
Company in New York before, during, and after the Russian Revolution. In
tsarist times Aschberg was the Morgan agent in Russia and negotiator for
Russian loans in the United States; during 1917 Aschberg was financial
intermediary for the revolutionaries; and after the revolution Aschberg became
head of Ruskombank, the first Soviet international bank, while Max May, a vice
president of the Morgan-controlled Guaranty Trust, became director and chief of
the Ruskom-bank foreign department. We have presented documentary evidence of a
continuing working relationship between the Guaranty Trust Company and the
Bolsheviks. The directors of Guaranty Trust in 1917 are listed in Appendix 1.
Moreover, there
is evidence of transfers of funds from Wall Street bankers to international
revolutionary activities. For example, there is the statement (substantiated by
a cablegram) by William Boyce Thompson — a director of the Federal Reserve Bank
of New York, a large stockholder in the Rockefeller-controlled Chase Bank, and
a financial associate of the Guggenheims and the Morgans — that he (Thompson)
contributed $1 million to the Bolshevik Revolution for propaganda purposes.
Another example is John Reed, the American member of the Third International
executive committee who was financed and supported by Eugene Boissevain, a
private New York banker, and who was employed by Harry Payne Whitney's Metropolitan magazine. Whitney was at
that time a director of Guaranty Trust. We also established that Ludwig
Martens, the first Soviet "ambassador" to the United States, was
(according to British Intelligence chief Sir Basil Thompson) backed by funds
from Guaranty Trust Company. In tracing Trotsky's funding in the U.S. we
arrived at German sources, yet to be identified, in New York. And though we do
not know the precise German sources of Trotsky's funds, we do know that Von Pavenstedt, the chief German espionage paymaster
in the U.S., was also senior partner of Amsinck & Co. Amsinck was owned by
the ever-present American International Corporation — also controlled by the
J.P. Morgan firm.
Further, Wall
Street firms including Guaranty Trust were involved with Carranza's and Villa's
wartime revolutionary activities in Mexico. We also identified documentary
evidence concerning. a Wall Street syndicate's financing of the 1912 Sun
Yat-sen revolution in China, a revolution that is today hailed by the Chinese
Communists as the precursor of Mao's revolution in China. Charles B. Hill, New
York attorney negotiating with Sun Yat-sen in behalf of this syndicate, was a
director of three Westinghouse subsidiaries, and we have found that Charles R. Crane
of Westinghouse in Russia was involved in the Russian Revolution.
Quite apart
from finance, we identified other, and possibly more significant, evidence of
Wall Street involvement in the Bolshevik cause. The American Red Cross Mission
to Russia was a private venture of William B. Thompson, who publicly proffered
partisan support to the Bolsheviks. British War Cabinet papers now available
record that British policy was diverted towards the Lenin-Trotsky regime by the
personal intervention of Thompson with Lloyd George in December 1917. We have
reproduced statements by director Thompson and deputy chairman William Lawrence
Saunders, both of the Federal Reserve Bank of New York, strongly favoring the
Bolshevists. John Reed not only was financed from Wall Street, but had
consistent support for his activities, even to the extent of intervention with
the State Department from William Franklin Sands, executive secretary of
American International Corporation. In the sedition case of Robert Minor there
are strong indications and some circumstantial evidence that Colonel Edward
House intervened to have Minor released. The significance of the Minor case is
that William B. Thompson's program for Bolshevik revolution in Germany was the
very program Minor was implementing when arrested in Germany.
Some
international agents, for example Alexander Gumberg, worked for Wall Street and the Bolsheviks. In 1917 Gumberg was
the representative of a U.S. firm in Petrograd, worked for Thompson's American
Red Cross Mission, became chief Bolshevik agent in Scandinavia until he was
deported from Norway, then became confidential assistant to Reeve Schley of
Chase Bank in New York and later to Floyd Odium of Atlas Corporation.
This activity
in behalf of the Bolsheviks originated in large part from a single address: 120
Broadway, New York City. The evidence for this observation is outlined but no
conclusive reason is given for the unusual concentration of activity at a
single address, except to state that it appears to be the foreign counterpart
of Carroll Quigley's claim that J.P. Morgan infiltrated the domestic left.
Morgan also infiltrated the international left.
The Federal
Reserve Bank of New York was at 120 Broadway. The vehicle for this
pro-Bolshevik activity was American International Corporation — at 120
Broadway. AIC views on the Bolshevik regime were requested by Secretary of
State Robert Lansing only a few weeks after the revolution began, and Sands,
executive secretary of AIC, could barely restrain his enthusiasm for the Bolshevik
cause. Ludwig Martens, the Soviet's first ambassador, had been vice president
of Weinberg & Posner, which was also located at 120-Broadway. Guaranty
Trust Company was next door at 140 Broadway but Guaranty Securities Co. was at
120 Broadway. In 1917 Hunt, Hill & Betts was at 120 Broadway, and Charles
B. Hill of this firm was the negotiator in the Sun Yat-sen dealings. John
MacGregor Grant Co., which was financed by Olof Aschberg in Sweden and Guaranty
Trust in the United States, and which was on the Military Intelligence black
list, was at 120 Broadway. The Guggenheims and the executive heart of General
Electric (also interested in American International) were at 120 Broadway. We
find it therefore hardly surprising that the Bankers Club was also at 120 Broadway,
on the top floor (the thirty-fourth).
It is
significant that support for the Bolsheviks did not cease with consolidation of
the revolution; therefore, this support cannot be wholly explained in terms of
the war with Germany. The American-Russian syndicate formed in 1918 to obtain
concessions in Russia was backed by the White, Guggenheim, and Sinclair
interests. Directors of companies controlled by these three financiers included
Thomas W. Lamont (Guaranty Trust), William Boyce Thompson (Federal Reserve
Bank), and John Reed's employer Harry Payne Whitney (Guaranty Trust). This
strongly suggests that the syndicate was formed to cash in on earlier support
for the Bolshevik cause in the revolutionary period. And then we found that
Guaranty Trust financially backed the Soviet Bureau in New York in 1919.
The first
really concrete signal that previous political and financial support was paying
off came in 1923 when the Soviets formed their first international bank,
Ruskombank. Morgan associate Olof Aschberg became nominal head of this Soviet
bank; Max May, a vice president of Guaranty Trust, became a director of
Ruskom-bank, and the Ruskombank promptly appointed Guaranty Trust Company its
U.S. agent.
What motive
explains this coalition of capitalists and Bolsheviks?
Russia was then
— and is today — the largest untapped market in the world. Moreover, Russia,
then and now, constituted the greatest potential competitive threat to American
industrial and financial supremacy. (A glance at a world map is sufficient to
spotlight the geographical difference between the vast land mass of Russia and
the smaller United States.) Wall Street must have cold shivers when it
visualizes Russia as a second super American industrial giant.
But why allow
Russia to become a competitor and a challenge to U.S. supremacy? In the late
nineteenth century, Morgan/Rockefeller, and Guggenheim had demonstrated their
monopolistic proclivities. In Railroads
and Regulation 1877-1916 Gabriel Kolko has demonstrated how the railroad
owners, not the farmers, wanted state control of railroads in order to preserve
their monopoly and abolish competition. So the simplest explanation of our
evidence is that a syndicate of Wall Street financiers enlarged their monopoly
ambitions and broadened horizons on a global scale. The gigantic Russian market was to be converted into a captive market
and a technical colony to be exploited by a few high-powered American
financiers and the corporations under their control. What the Interstate
Commerce Commission and the Federal Trade Commission under the thumb of
American industry could achieve for that industry at home, a planned socialist
government could achieve for it abroad — given suitable support and inducements
from Wall Street and Washington, D.C.
Finally, lest
this explanation seem too radical, remember that it was Trotsky who appointed
tsarist generals to consolidate the Red Army; that it was Trotsky who appealed
for American officers to control revolutionary Russia and intervene in behalf
of the Soviets; that it was Trotsky who squashed first the libertarian element
in the Russian Revolution and then the workers and peasants; and that recorded
history totally ignores the
700,000-man Green Army composed of ex-Bolsheviks, angered at betrayal of the
revolution, who fought the Whites and the
Reds. In other words, we are suggesting that the Bolshevik Revolution was an
alliance of statists: statist revolutionaries and statist financiers aligned
against the genuine revolutionary libertarian elements in Russia.3
'The question
now in the readers' minds must be, were these bankers also secret Bolsheviks?
No, of course not. The financiers were without ideology. It would be a gross
misinterpretation to assume that assistance for the Bolshevists was
ideologically motivated, in any narrow sense. The financiers were power-motivated and therefore assisted any political vehicle that would give
them an entree to power: Trotsky, Lenin, the tsar, Kolchak, Denikin — all
received aid, more or less. All, that is, but those who wanted a truly free
individualist society.
Neither was aid
restricted to statist Bolsheviks and statist counter-Bolsheviks. John P.
Diggins, in Mussolini and Fascism: The
View from America,4 has noted in regard to Thomas Lamont of
Guaranty Trust that
Of all American
business leaders, the one who most vigorously patronized the cause of Fascism
was Thomas W. Lamont. Head of the powerful J.P. Morgan banking network, Lamont
served as something of a business consultant for the government of Fascist
Italy.
Lamont secured
a $100 million loan for Mussolini in 1926 at a particularly crucial time for
the Italian dictator. We might remember too that the director of Guaranty Trust
was the father of Corliss Lamont, a domestic Communist. This evenhanded
approach to the twin totalitarian systems, communism and fascism, was not
confined to the Lamont family. For example, Otto Kahn, director of American
International Corporation and of Kuhn, Leob & Co., felt sure that
"American capital invested in Italy will find safety, encouragement,
opportunity and reward."5 This is the same Otto Kahn who lectured
the socialist League of Industrial Democracy in 1924 that its objectives were his objectives.6 They differed only — according to Otto
Kahn — over the means of achieving these objectives.
Ivy Lee,
Rockefeller's public relations man, made similar pronouncements, and was
responsible for selling the Soviet regime to the gullible American public in
the late 1920s. We also have observed that Basil Miles, in charge of the
Russian desk at the State Department and a former associate of William Franklin
Sands, was decidedly helpful to the businessmen promoting Bolshevik causes; but
in 1923 the same Miles authored a profascist article, "Italy's Black
Shirts and Business."7 "Success of the Fascists is an
expression of Italy's youth," wrote Miles while glorifying the fascist movement
and applauding its esteem for American business.
The Marburg
Plan, financed by Andrew Carnegie's ample heritage, was produced in the early
years of the twentieth century. It suggests premeditation for this kind of
superficial schizophrenia, which in fact masks an integrated program of power
acquisition: "What then if Carnegie and his unlimited wealth, the
international financiers and the Socialists could be organized in a movement to
compel the formation of a league to enforce peace."8
The governments
of the world, according to the Marburg Plan, were to be socialized while the
ultimate power would remain in the hands of the international financiers
"to control its councils and enforce peace [and so] provide a specific for
all the political ills of mankind."9
This idea was
knit with other elements with similar objectives. Lord Milner in England
provides the transatlantic example of banking interests recognizing the virtues
and possibilities of Marxism. Milner was a banker, influential in British
wartime policy, and pro-Marxist.10 In New York the socialist "X" club was founded in 1903.
It counted among its members not only the Communist Lincoln Steffens, the
socialist William English Walling, and the Communist banker Morris Hillquit,
but also John Dewey, James T. Shotwell, Charles Edward Russell, and Rufus Weeks
(vice president of New York Life Insurance Company). The annual meeting of the
Economic Club in the Astor Hotel, New York, witnessed socialist speakers. In
1908, when A. Barton Hepburn, president of Chase National Bank, was president
of the Economic Club, the main speaker was the aforementioned Morris Hillquit,
who "had abundant opportunity to preach socialism to a gathering which
represented wealth and financial interests."11
From these
unlikely seeds grew the modern internationalist movement, which included not
only the financiers Carnegie, Paul Warburg, Otto Kahn, Bernard Baruch, and
Herbert Hoover, but also the Carnegie Foundation and its progeny International Conciliation. The trustees
of Carnegie were, as we have seen, prominent on the board of American
International Corporation. In 1910 Carnegie donated $10 million to found the
Carnegie Endowment for International Peace, and among those on the board of
trustees were Elihu Root (Root Mission to Russia, 1917), Cleveland H. Dodge (a
financial backer of President Wilson), George W. Perkins (Morgan partner), G.
J. Balch (AIC and Amsinck), R. F. Herrick (AIC), H. W. Pritchett (AIC), and
other Wall Street luminaries. Woodrow Wilson came under the powerful influence
of — and indeed was financially indebted to — this group of internationalists.
As Jennings C. Wise has written, "Historians must never forget that
Woodrow Wilson... made it possible for Leon Trotsky to enter Russia with an
American passport."12
But Leon
Trotsky also declared himself an internationalist. We have remarked with some
interest his high-level internationalist connections, or at least friends, in
Canada. Trotsky then was not pro-Russian, or pro-Allied, or pro-German, as many
have tried to make him out to be. Trotsky was for world revolution, for world
dictatorship; he was, in one word, an internationalist.13 Bolshevists and bankers have then this
significant common ground — internationalism. Revolution and international
finance are not at all inconsistent if the result of revolution is to establish
more centralized authority. International finance prefers to deal with central
governments. The last thing the banking community wants is laissez-faire
economy and decentralized power because these would disperse power.
This,
therefore, is an explanation that fits the evidence. This handful of bankers
and promoters was not Bolshevik, or Communist, or socialist, or Democrat, or
even American. Above all else these men wanted markets, preferably captive
international markets — and a monopoly of the captive world market as the
ultimate goal. They wanted markets that could be exploited monopolistically
without fear of competition from Russians, Germans, or anyone else — including
American businessmen outside the charmed circle. This closed group was
apolitical and amoral. In 1917, it had a single-minded objective — a captive
market in Russia, all presented under, and intellectually protected by, the
shelter of a league to enforce the peace.
Wall Street did
indeed achieve its goal. American firms controlled by this syndicate were later
to go on and build the Soviet Union, and today are well on their way to
bringing the Soviet military-industrial complex into the age of the computer.
Today the
objective is still alive and well. John D. Rockefeller expounds it in his book The Second American Revolution — which sports
a five-pointed star on the title page.14 The book contains a naked plea for humanism,
that is, a plea that our first priority is to work for others. In other words,
a plea for collectivism. Humanism is collectivism. It is notable that the
Rockefellers, who have promoted this humanistic idea for a century, have not
turned their OWN property over to others.. Presumably it is implicit in their
recommendation that we all work for the Rockefellers. Rockefeller's book
promotes collectivism under the guises of "cautious conservatism" and
"the public good." It is in effect a plea for the continuation of the
earlier Morgan-Rockefeller support of collectivist enterprises and mass
subversion of individual rights.
In brief, the
public good has been, and is today, used as a device and an excuse for
self-aggrandizement by an elitist circle that pleads for world peace and human
decency. But so long as the reader looks at world history in terms of an
inexorable Marxian conflict between capitalism and communism, the objectives of
such an alliance between international finance and international revolution
remain elusive. So will the ludicrousness of promotion of the public good by
plunderers. If these alliances still elude the reader, then he should ponder
the obvious fact that these same international interests and promoters are
always willing to determine what other people
should do, but are signally unwilling to be first in line to give up their own
wealth and power. Their mouths are open, their pockets are closed.
This technique,
used by the monopolists to gouge society, was set forth in the early twentieth
century by Frederick C. Howe in The
Confessions of a Monopolist.15 First,
says Howe, politics is a necessary part of business. To control industries it
is necessary to control Congress and the regulators and thus make society go to
work for you, the monopolist. So, according to Howe, the two principles of a
successful monopolist are, "First, let Society work for you; and second,
make a business of politics."16 These, wrote Howe, are the basic
"rules of big business."
Is there any
evidence that this magnificently sweeping objective was also known to Congress
and the academic world? Certainly the possibility was known and known publicly.
For example, witness the testimony of Albert Rhys Williams, an astute
commentator on the revolution, before the Senate Overman Committee:
. . . it is
probably true that under the soviet government industrial life will perhaps be
much slower in development than under the usual capitalistic system. But why
should a great industrial country like America desire the creation and
consequent competition of another great industrial rival? Are not the interests
of America in this regard in line with the slow tempo of development which
soviet Russia projects for herself?
Senator
Wolcott: Then your argument is that it would be to the interest of America to
have Russia repressed?
MR. WILLIAMS:
Not repressed ....
SENATOR WOLCOTT:
You say. Why should America desire Russia to become an industrial competitor
with her?
MR. WILLIAMS:
This is speaking from a capitalistic standpoint. The whole interest of America
is not, I think, to have another great industrial rival, like Germany, England,
France, and Italy, thrown on the market in competition. I think another
government over there besides the Soviet government would perhaps increase the
tempo or rate of development of Russia, and we would have another rival. Of
course, this is arguing from a capitalistic standpoint.
SENATOR
WOLCOTT: So you are presenting an argument here which you think might appeal to
the American people, your point being this, that if we recognize the Soviet
government of Russia as it is constituted we will be recognizing a government
that can not compete with us in industry for a great many years?
MR. WILLIAMS:
That is a fact.
SENATOR
WOLCOTT: That is an argument that under the Soviet government Russia is in no
position, for a great many years at least, to approach America industrially?
MR. WILLIAMS:
Absolutely.17
And in that
forthright statement by Albert Rhys Williams is the basic clue to the
revisionist interpretation of Russian history over the past half century.
Wall Street, or
rather the Morgan-Rockefeller complex represented at 120 Broadway and 14 Wall
Street, had something very close to Williams' argument in mind. Wall Street
went to bat in Washington for the Bolsheviks. It succeeded. The Soviet
totalitarian regime survived. In the 1930s foreign firms, mostly of the
Morgan-Rockefeller group, built the five-year plans. They have continued to
build Russia, economically and militarily.18 On the other hand, Wall Street
presumably did not foresee the Korean War and the Vietnam War — in which
100,000 Americans and countless allies lost their lives to Soviet armaments
built with this same imported U.S. technology. What seemed a farsighted, and
undoubtedly profitable, policy for a Wall Street syndicate, became a nightmare
for millions outside the elitist power circle and the ruling class.
Footnotes:
1Michael Futrell, Northern Underground (London: Faber and
Faber, 1963); Stefan Possony, Lenin: The
Compulsive Revolutionary (London: George Allen & Unwin, 1966); and
George Katkov, "German Foreign Office Documents on Financial Support to
the Bolsheviks in 1917," International
Affairs 32 (Royal Institute of International Affairs, 1956).
2Ibid., especially
Katkov.
3See also Voline
(V.M. Eichenbaum), Nineteen-Seventeen:
The Russian Revolution Betrayed (New York: Libertarian Book Club, n.d.).
4Princeton, N.J.:
Princeton University Prss, 1972.
5Ibid., p. 149.
6See p. 49.
7Nation's
Business, February 1923, pp. 22-23.
8Jennings C. Wise,
Woodrow Wilson: Disciple of Revolution (New
York: Paisley Press, 1938), p.45
9Ibid., p.46
10See p. 89.
11Morris Hillquit,
Loose Leaves from a Busy Life (New
York: Macmillan, 1934), p. 81.
12Wise, op. cit.,
p. 647
13Leon Trotsky, The Bolsheviki and World Peace (New
York: Boni & Liveright, 1918).
14In May 1973
Chase Manhattan Bank (chairman, David Rockefeller) opened it Moscow office at 1
Karl Marx Square, Moscow. The New York office is at 1 Chase Manhattan Plaza.
15Chicago: Public
Publishin, n.d.
16Ibid.
17U.S., Senate, Bolshevik Propaganda, hearings before a
subcommittee of the Committee on the Judiciary, 65th Cong., pp. 679-80. See
also herein p. 107 for the role of Williams in Radek's Press Bureau.
18See Antony C.
Sutton, Western Technology and Soviet
Economic Development, 3 vols. (Stanford, Calif.: Hoover Institution, 1968,
1971, 1973); see also National Suicide:
Military Aid to the Soviet Union (New York: Arlington House, 1973).
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