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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