The Secret History of the 20th Century (Part 4)
The Great Depression and the Build-Up to WWII
20. The Postwar Gold Standard
Heading into the 20th century, the British Empire existed as the central controlling force over international finance. The global economic system that it presided over was at that time rooted in a Gold Standard, which the City of London’s banking oligarchs, as the world's largest holders of monetary gold, were the dominant force in controlling.
Elaborating on the relationship between the British Empire and the Gold Standard, F. William Engdahl, in his book “Gods of Money”, writes that “for well over a century, the ability of the City of London to stand as the center of international finance had depended on (its ability to control) the world’s physical trade of gold through London.”
Notably, It was not the British government but rather its private central banking institution, the Bank of England, who oversaw this system.
In particular, the Rothschild banking dynasty played an especially important part in orchestrating this global trade system, as their privately owned family bank, N.M. Rothschild & Sons, was the entity responsible for setting the world’s daily gold price.
Going deeper into the underlying dynamics involved with Britain’s gold standard system, Engdahl note several key features:
He writes that “the world trade system prior to World War I had been based on an international gold standard that had been more or less self-correcting.” Here, “international trade rested on market supply-demand principles, with imbalances settled in gold.”
This system works because each country participating in it set a fixed exchange rate in which its domestic currency could be exchanged for gold, a convertibility that anyone holding its currency, whether private citizens or foreign governments, could take advantage of.
So, for example, if Britain racked up a trade deficit with a country like France, it could settle the balance in gold, with the French converting the pound sterling they had accumulated as a result of their trade surplus back into gold. The British were obligated to honor this currency swap, which took place according to a fixed exchange rate established ahead of time.
Engdahl notes that “it was a technical system that, theoretically at least, separated money from the State.”
Essentially, it put the financing of international trade in the hands of the oligarchy, while at the same time requiring the state government participating in the system to maintain tight fiscal policies and balanced trade deficits. If not, there would be a drain on the country’s gold reserves, weakening the value of its currency on the international market.
By implication, “a country with chronic inflation would lose gold, forcing it to impose higher interest rates to hold its reserves, resulting in a domestic credit contraction.” Therefore, while the profits of this system were privatized to the bankers, the responsibility for maintaining fiscal disciple and balanced trade fell upon the shoulders of the state.
One implication of this system is that there was financial incentive for countries to circulate too little money in the economy, as this ensured that a drain on its gold reserves would not take place.
This is a system that favors the oligarchs while disfavoring the masses, who suffer because of there being too little money in circulation, because the banking oligarchs are incentivized to hoard it.
In this system, whoever has the most gold is in the most strategically advantageous position in terms of their ability to dictate the terms of world trade. Heading into the 20th century, England held this position, and its military and navy enforced this privilege with violence.
While this system worked well for the British Empire for most of the 19th century, by the onset of the 20th century, it had begun to fall apart.
Engdahl explains that, toward the end of the 19th century, the British economy underwent a 20+ year economic slump “owing to a gold shortage in the Bank of England.” This economic depression ended only due to Britain’s violent occupation of South Africa’s gold mines, which, by the year 1925, produced fully 50% of the world’s gold annually.
The onset of World War I only made the situation worse, as the British became financially beholden to the American oligarchy and their hallmark private banking institution, the Federal Reserve. The Americans, lead by the House of Morgan, both financed and supplied the British and French war efforts, with both falling into exorbitant debt to the Americans as a consequence.
For this reason, by 1919 Britain was no longer the financial superpower it once had been, with the oligarchs on Wall Street rising instead to take their place as the new center of power in world geopolitics.
In his writing, Engdahl elaborates further on the advantageous position the US found itself in after the end of the First World War:
He states that “the United States had emerged from the war in a most powerful position – as the creditor to all major European countries. America’s gold stocks had multiplied fourfold during the war, giving it the world’s largest monetary gold reserves. … Britain, by contrast, had massive foreign debts, mostly to the United States. Its currency had sharply depreciated, and its reserves of gold had fallen dangerously low.
“Until the 1914 outbreak of war, gold had been the basis of the international monetary system, a system that had been centered in the City of London since the Napoleonic Wars.” But after the war, “the United States, as the world’s largest holder of central bank gold reserves,” had emerged to become the new dominant power at the center of world order.
The American oligarchs made their intentions known to the British in very clear terms “when the US Treasury demanded, at the Versailles peace talks in 1919, that all Allied nations, particularly Britain, must repay all their billions of dollars of war loans.” Through this mechanism, the US was able to wage a covert economic war on the nations of Europe, particularly Britain, burdening its nations with both “severe war reparations and war debt repayment obligations.”
The House of Morgan, as the dominant player in international finance on the American side, orchestrated this postwar system.
As Engdahl informs us, the Morgans were well familiar with the inner-workings of the British gold standard system and sought to import their model here to America, with them taking over for the Rothschilds as the dominant player in international finance.
Originally, the Morgans and the Rothschilds had been allies. Indeed, "the Morgan faction owed much of its enormous power within the United States since the 1870s to its intimate links with leading London financial groups, above all, the House of Rothschild. Morgan therefore favored a strategy of alliance, a form of ‘special relationship’ between a weakened City of London and the emerging power of Wall Street, as the preferred path to an ultimate American Century.”
The US-lead model that Morgan and co. favored was one that featured certain key alterations to the previous British model. One key difference was that the US would not colonize foreign territories in the same way the Brits once had. Instead, the US would work covertly to coerce the heads of state in various countries, from Europe to Latin America to Asia and Africa, into becoming vassal states for its banks and corporations to move into and plunder.
According to this plan, America and its central bank, the Federal Reserve, would become the central creditor to the world, with vassal states established all around it, each coerced into becoming debtors to America’s oligarchs on Wall Street.
The American foreign policy establishment, controlled by these same oligarchs, would in turn, through the implementation of harsh austerity measures, gut each nation’s internal capacity to rise and challenge America’s economic supremacy.
In short, each country was to become restructured and its economy re-oriented in order to support the growth in wealth and power of America’s financial oligarchs, who sought to spread their imperial capitalistic system all over the world.
In his book “Gods of Money”, F. William Engdahl offers further details about how America’s postwar financial empire operated during this initial phase of operation. He states that, over the course of the 1920s, “the amount of foreign bonds issued by Wall Street … was about $7,000,000,000, a relatively huge amount equal to nearly 10% of total Gross Domestic Product.”
These foreign investments were then redirected back into the coffers of American corporations, which these same Wall Street oligarchs also owned. As Engdahl details, “the war-damaged European economies used more than 90% of these American loans to buy American goods, a boon to major US corporations listed on the New York Stock Exchange.”
Underlying this whole scheme was the larger plan of the American Deep State to centralize a world economic imperium around the military power of Washington and the financial power of Wall Street.
Carroll Quigley, an insider within elite American financial circles, notes how, during this period, the plan of the American oligarchs was to “force all the major countries of the world to go on the gold standard and to operate it through central banks free from all political control.”
In this way, control of the global economic system would be delivered to a small network of Anglo-American banking oligarchs, who would control and direct the course of world development as the “gods of money”.
21. The Great Depression Goes Global
At the same time that the US banking establishment was setting their eyes on domination of the international gold trade - and with it, control over the domestic economies of the sovereign nations of the world - they were also working to consolidate their control over the American citizenry back home.
The goal here was to neutralize the threat of a populist political movement or potentially devastating labor strike from taking place, thereby squashing the oligarchy’s plans for global empire.
This is where the stock market bubble of the 1920s and the consequential Great Depression of the 1930s come into play. By first inflating a massive credit-driven stock market bubble, and then subsequently withdrawing that credit, collapsing the bubble, the American power elite were able to financially devastate and disempower large swathes of the American population.
As a result of the crash, because so many in the populace were put in a position of being desperate for work and living paycheck to paycheck, their willingness to put their jobs on the line in order to strike and protest for better labor conditions and increased pay became compromised.
Zooming out, we discover that the conditions that set the stage for the stock market collapse of 1929 and consequent Great Depression that resulted were ones that had been built up incrementally over the preceding ten year period that followed the conclusion of the Great War.
In his writings, Joseph P. Farrell goes into the debt dynamics that underpinned the stock market bubble of the 1920s and consequent Great Depression that resulted - a situation that appears to have been deliberately orchestrated for the purpose of expanding and consolidating the power of the Wall Street oligarchs over the rest of the population.
He states that “the problem began in the Roaring Twenties, when the Fed made money plentiful by keeping interest rates (artificially) low. Money seemed to be plentiful, but what was actually flowing freely was credit or debt. Production was up more than wages were up, so more goods were available than the money to pay for them; but people could borrow. By the end of the 1920s, major consumer purchases such as cars and radios were bought mainly on credit. Money was so easy to get that people were borrowing just to invest, taking out short-term, low-interest loans that were readily available from the banks.”
Farrell then explains how this situation did not come about naturally, but rather as the result of a coordinated campaign of the Wall Street bankers:
“The stock market held little interest for most people until the Robber Barons started promoting it, after amassing large stock holdings very cheaply themselves. They sold the public on the idea that it was possible to get rich quick by buying stock on ‘margin’ (or on credit). The investor could put a down payment on the stock and pay off the balance after its price went up, reaping a hefty profit.”
“This investment strategy turned the stock market into a speculative pyramid scheme, in which most of the money invested did not actually exist.” Nevertheless, “the public went wild over this scheme. In a speculative fever, many people literally ‘bet the farm.’ … Homesteads that had been owned free and clear were mortgaged to the bankers, who fanned the fever by offering favorable credit terms and interest rates.”
In sum, F. William Engdahl writes that, “behind the façade of American prosperity in the 1920s was an edifice built on debt and illusions of permanent prosperity and rising stock prices.”
As with the tech, stock market, and real estate bubbles of recent years, “America’s conspicuous consumption during the ‘Roaring Twenties’ was based on an illusion of rising household wealth for the majority of its citizens. This severely distorted, debt-driven consumption (model) created the nation’s illusory wealth — the Achilles Heel of the economy in 1929.”
But “once the consumer credit carousel stopped in 1929-1931, the consumption boom collapsed, as the majority of Americans simply could not afford to buy on credit any longer.”
The end effect of this decade-long financial bubble and the eventual collapse that resulted was that a large percentage of Americans were either economically bankrupted or brought to its threshold.
By means of the speculative bubble of the 1920s and its consequent collapse, the American labor force became politically neutralized and turned into yet another dependency of the Wall Street oligarchy, joining the peoples of foreign nations as the target of the American oligarchy’s merciless economic warfare strategies.
In the meantime, the American oligarchs were able to further expand and consolidate their wealth, thereby reinforcing their position as the autocratic rulers over America’s now hollowed-out democratic system.
Engdahl offers further details on how the oligarchy took advantage of this crisis: he explains that “by 1929, as the number and size of giant corporations such as US Steel, General Electric, and RCA Corporation continued to expand, some two-thirds of the industrial wealth had passed from individual ownership to ownership by large, publicly-financed, privately-owned corporations. At the top of the corporate pyramid of control stood the major banks of Wall Street such as J.P. Morgan, Chase Bank, Kuhn Loeb, Mellon Bank, and the like.”
Adding further insult to injury, “a series of Republican tax cuts during the Coolidge Presidency, drafted by the very wealthy Treasury Secretary Andrew Mellon, further shifted income to a tiny minority of corporate owners and those who inherited wealth. The tax cuts benefited the wealthy, helping to concentrate more of a share of rising national income into the upper one-tenth of 1% of very wealthy Americans.” Meanwhile, “taxes on the middle class and poorer families increased.”
Connecting these events back to the Gold Standard policy of the US financial oligarchy that we discussed in the previous section, Engdahl explains that “the fundamental cause of the global depression and banking crisis of the early 1930s, and also the driver for the stock bubble in the first place, was the misconceived attempt by the House of Morgan and the Wall Street banking establishment to replace the City of London with New York as the heart of world finance. Gold would play the decisive role in this attempt.”
Here, we find that the American oligarchs’ policy of indebting its domestic population was intimately connected with its foreign affairs strategy of creating debtor nations throughout the world - particularly those nations (Britain, Germany) that might pose a threat to American power if they were to develop their economies free from American involvement.
With the Gold Standard forming the foundation of the whole system, "most of Europe and a large number of developing countries from Bolivia to Poland were linked into the Wall Street credit pyramid.”
It therefore put the entire world financial system in a precarious position when, in 1929-31, “the domino-style failure of those Morgan-initiated credit links to Europe and beyond turned a manageable American stock market crash into the worst deflation crisis in American history, precipitating a global depression.”
If the domestic stock market bubble in the US was built off unsustainable foundations, making collapse inevitable, the same can be said of the US’s Morgan-lead postwar international lending policies. The two came together to create the “perfect storm” that was the Great Depression.
Engdahl explains how and why the international lending policies of the US were doomed to failure. First off, as we noted above, despite the pleas of the Allied Powers for the cancellation of their war debts, “ the US Government had insisted at Versailles in 1919 that Britain, France and Italy repay its US war loans in dollars.”
The question then became: how were they to get these dollars? “A series of US protective tariffs in the 1920s beginning with the Fordney-McCumber Act of 1922 and ending with the infamous Smoot-Hawley Tariff of 1930, had raised US import barriers to an all-time high. This made it difficult, if not impossible, for European nations to repay their war debts or reparations through the traditional method of building trade surpluses with the US.”
Therefore, “Europe had no recourse except to borrow even more from US banks.” In this way, “the whole edifice of dollar credits that supported Europe’s debt pyramid during the 1920’s rested on the loans of New York banks, above all from J.P. Morgan & Co., to Europe to refinance short-term credits.”
This situation was further exasperated by the fact that the Europeans’ “debts to Washington equaled almost precisely the sum of war reparations the British, French and Italian allied governments had imposed on the defeated German economy at Versailles.”
Seemingly, this was by design: the Germans owed money to the European Allied Powers, which in turn was to be forwarded to the US as a means to service their own debts.
But this design created a situation that was inherently unsustainable, as the Allied countries, in order to service their own debts to America, “needed Germany to repay its Versailles war reparations also in dollars.”
At the time, Germany, with its domestic industrial base depleted and suffering from extreme sanctions designed to prevent the re-industrialization of its military machine, had no realistic way of obtaining enough dollars to service this whole American-driven debt scheme.
Overall, as Engdahl summarizes, “the entire edifice of the world financial system during the Roaring ‘20s rested on this absurd and fragile Ponzi pyramid of international loans and debts.” In 1929-1931, this whole system collapsed, it having lasted only a decade.
22. The Postwar Gold Standard Collapses
As we just explored, the postwar structure of international finance was built on an unsustainable edifice of dollar-denominated debts, which fell largely on the shoulders of Germany to service.
This unsustainable structure began to teeter in 1929 and finally collapsed for good in 1931. Explaining how this happened, Engdahl writes that, in March of that year, “Austria, a tiny shard of the prewar Austro-Hungarian Empire with 6 million people, announced it had entered talks with Germany to create a common customs union to boost trade, as depression threatened. Such a union would not even be a technical violation of the Versailles Treaty. It was certainly no threat to world security.”
But, fearing a resurgence of Germany, France reacted to this announcement by swiftly demanding “immediate repayment of some $300 million in short-term credits owed by Germany and Austria to French banks, to pressure both countries to halt their customs union. The demands triggered a panic flight from the shaky Austrian currency,” causing a number of bank failures in the country - ones with systemic linkages to the economies of neighboring European countries.”
Consequently, “the crisis spread across Austria and into the interconnected German banking system like a brushfire.” The collapse of the Credit Anstalt (in Austria) led to a depositor panic run on (systematically important) German banks,” creating a currency crisis there as well. … (This) ignited a panic flight of foreign banks out of German assets, as investors feared worse to come. Germans also began flight capital out of the Reichsmark into dollars, Sterling, Francs, or gold.”
"The crisis now was fully focused on Germany’s debt, private and public. … By July 1931, the gold reserves of Germany, Austria, Hungary and most of Eastern European countries had been drained, and most banks had been closed. “
As a consequence of these events, “the entire postwar international financial edifice was beginning to crumble.”
The US’s own domestic financial system, already in Depression, was heavily exposed to European debt as a result of its postwar lending policies. Therefore, the situation going down in Europe served to further exasperate the US’s domestic credit crisis.
As Engdahl explains, “the edifice of the (postwar) Gold Exchange Standard had been built on an international credit structure centered on New York bank loans which in turn were predicated on the ability of the major European economies to continue borrowing to finance their own economic growth at abnormally low interest rates.”
But, as a consequence of the US’s own domestic credit crunch, “once the interest rates set by the New York Federal Reserve, the heart of the debt pyramid, reversed, the entire edifice of cheap credits began to unravel in domino-style defaults and bankruptcies, first in the weakest economies of Europe, then ultimately within the United States itself as confidence collapsed.”
While the global financial system was beginning to unravel everywhere, the Morgan-lead “gods of money” on Wall Street refused to change course, attempting desperately to “salvage their gold standard and with it, their dreams of an American financial empire.” Engdahl points out that this situation resulted ultimately “in the destruction of both, even though (the American oligarchs) refused to accept the fact.”
Engdahl emphasizes that “it was not because of economic orthodoxy that (the US) held on to the fixed gold standard so long. It was because the powerful forces directing Wall Street, the Money Trust, were determined not to sacrifice their goal of a US-controlled global money power (operating) through the Gold Exchange Standard that J. P. Morgan & Co., Benjamin Strong, Dillon-Read, Edwin Kemmerer, and the leading financial elites of the United States had built on the ashes of World War One.”
In true oligarchical fashion, in order to keep their self-serving ambitions for world power alive, "they had few qualms about plunging the economy of the United States into the most severe depression in American history.”
Meanwhile, as a result of the 1931 credit crisis, France and Britain had maneuvered themselves into a more advantageous financial position in relation to America.
Engdahl states that, as a result of its actions against Germany and Austria, France was left “in an extraordinarily strong position when the (greater) European crisis erupted.”
Britain, meanwhile, decided to de-link its domestic monetary system from gold. This resulted in a devaluation in their currency, which “boosted British exports and mitigated the effects of world collapse.”
Following their lead, “in rapid succession, other European countries left the gold standard, except for France. The United States, meanwhile, clung to the deflationary gold parity until April 1933.”
As a consequence of all this, the international credit market dried up during the 1930s.
Engdahl explains how, “with no gold standard to serve as a psychological underpinning for the possible risk of huge international loans, banks were forced to look closely at the actual credit risk of their borrowers. What they saw was scary. The result was that international credit dried up almost overnight.”
“Banks, fearing default, called in existing loans. The cumulative effect contributed to a self- fulfilling cycle of default and deflation worldwide.”
This turn of events would have a big impact on the inner power dynamics of the American Deep State: the oligarchy-controlled “shadow government” that had been positioned into place gradually during the Gilded Age and the early decades of the 20th century.
Engdahl offers further elaboration on the transition that began taking place during the interwar period within the American Deep State, which had, up to then, been dominated by the House of Morgan.
He writes that “from the years in which Morgan & Co. were the exclusive bankers to the UK Treasury during the First World War, the House of Morgan had built its growing international influence through deepening and leveraging its ties to the power of the fatally weakened City of London.”
But once the declining British Empire, in an act of self-preservation, decided to leave the gold standard, this left the Morgan-wing of America’s power elite in a compromised position, "effectively ending J.P. Morgan’s strategy of incorporating Great Britain and the City of London as partners in a New York-centered financial imperium.”
“From that point on, the British Government never again would use J.P. Morgan & Co. as its exclusive Government financial agents in the United States, a role Morgan had played since 1914 to its enormous advantage. This marked the clear decline of the House of Morgan within the American establishment, as well.”
Rising to take their place as the new dominant faction of the American Deep State was a group we first began introducing in our previous article: the Rockefellers, who, as the owners and operators of the strategically vital Standard Oil, had by this point already become an indispensable component of the American oligarchy’s global imperial ambitions. With the Morgans falling out of favor, it was now their time to rise as the dominant hierarchs lording over what would become, in their own words, the “American Century.”
23. The New Deal and the Restructuring of US Finance
As we covered in the previous section, the plot of the Morgan-lead Wall Street bankers to port over to America the imperial financial model of Britain’s Gold Standard had initially been a success for US banking institutions and certain of its corporate cartels. But the good times wouldn’t last long: ultimately the entire edifice would crumble into collapse, with all the nations involved ultimately being forced to de-link their currencies to Gold.
This turn of events resulted in the formation of an oppositional movement within the American Deep State, one that wanted to see the American oligarchy pivot away from its previous Morgan-driven policies, pursuing instead a new grand strategy for empire-formation.
As we will see, the Rockefeller faction of the American oligarchy became the leaders of this “change management” effort. Over the course of the 1930s, they would succeed in their campaign to shift the course of American Empire, while, in the process, rising to displace the House of Morgan as the central power players in American oligarchy.
In his book “Gods of Money”, F. William Engdahl provides a detailed account of how this transition in power from Morgan to Rockefeller took place.
He begins by pointing out that the United State’s initial bid at “creating a global imperium - an informal empire of finance secured by the world’s most powerful military, … had proved a catastrophic failure, (one) that plunged the United States into the worst financial crisis in its history, with chain-reaction bank failures and years of depression.”
Of course, this “collapse was lawful and entirely predictable, given the fragile international system of bank loans and bond underwriting that had been created by the House of J.P. Morgan & Co. after the Versailles peace conference in 1919.”
Consequently, a new direction in American grand strategy was needed, and the Rockefeller wing of American oligarchy swooped in to provide it. Under their direction, “within less than a decade, Wall Street and the powerful families behind it were ready to make their second and victorious bid for global power,” which would come about through a new world war: World War II.
Summarizing this situation, Engdahl writes that "amid the turmoil of the 1929-1933 New York stock market meltdown, and the failure of the thousands of smaller regional banks across America, a titanic power struggle was taking place within the highest ranks of the New York banking elite over who would emerge strongest from the crisis.”
Initially, it was the House of Morgan who dominated the Wall Street Money Trust. But after 1931, “the Rockefeller group and their banks emerged as the unchallenged leaders of the emerging American domination of the globe.”
As we will see, the plans and vision of the Rockefeller faction different in important ways from those of the initial group of imperialists lead by J.P. Morgan.
One of the main differences has to do with the type of banking policies the Rockefellers preferred: because they did not rely on the same type of international government loans that the Morgans specialized in, they were relatively immune to changes in banking regulations that were to take place after the Great Depression.
In an attempt to forestall a populist uprising from taking place due to the disastrous consequences of the Great Depression, the US oligarchy needed to act. The plan they decided upon involved establishing a national version of the same type of “industrial welfare” model that corporations such Standard Oil had pioneered in the preceding decades with their labor force.
This new Rockefeller-backed “social welfare” policy came in the form of the New Deal policies of President Franklin Roosevelt, which were adopted immediately upon his inauguration in 1933.
Ultimately, the US oligarchs chose to adopt the New Deal policies for the same reason that corporate cartels like Standard Oil had chosen to do so decades before: as an attempt to neutralize the power of the labor movements and as a means to subvert their claims for more radical wealth distribution policies.
As a result of the New Deal, two new events took place: first, from now on the federal government would come to play an increased role in American life; second, the cost structure of the American government would see a significant rise.
In response to this new situation, the US financial system would be re-engineered, moving away from its former Morgan-lead focus of servicing the debt of foreign governments. Now, its focus would be to service the exploding national debt of its own government.
Engdahl offers further elaboration on this important transition, writing that: “the long-term consequence of the Roosevelt era policies was a dramatic shift away from the power of international private banking, especially investment banking as done by J.P. Morgan, Kuhn Loeb, Dillon Read, and others. Their ability to earn bountiful profits from underwriting bond issues in Europe or Latin America collapsed in September 1931 when Britain left the Gold Exchange Standard.”
Replacing this old model, in the new era “the business of US banking (would shift) dramatically from financing stock margin buying and international loans, to that of financing the rise of an enormous Federal Government debt. Banks became, in effect, government bond traders rather than commercial business lenders.”
Fueling this transition in the structure of US banking was the well-known Glass-Steagall Act, also passed in 1933, which was formulated “as a measure intended to curtail future stock and financial speculation bubbles.”
Among the new regulations it introduced were ones intended to prevent “bank holding companies from owning other financial companies, including insurance and investment banks. In addition, it established the Federal Deposit Insurance Corporation for insuring bank deposits.”
Overall, while this Act was good for the overall stability of the US economy, and therefore to American national security, it also represented a “second devastating blow to the primacy of the House of Morgan in New York finance.”
Notably, as Engdahl highlights, “the only major New York bank that encouraged Congress to pass the Glass-Steagall Act was Rockefeller’s Chase Bank.”
Describing the backroom processes of how this went down, Engdahl writes that “Chase Bank chairman Winthrop Aldrich strenuously lobbied Congress to pass Glass-Steagall, despite the strong opposition from Morgan and other New York banks.”
Meanwhile, “the Rockefellers had one of their top men, a former Rockefeller employee, at President Roosevelt’s side – FDR confidante Harry Hopkins. He would make certain Roosevelt did what was useful for the vast Rockefeller interests.”
The reason for the Rockefeller’s enthusiasm for the project was that, “unlike J.P. Morgan, Chase Bank had become the world’s largest deposit bank largely through extending traditional (commercial) loans to the circle of Rockefeller companies such as Standard Oil.”
“Chase was (therefore) less dependent than Morgan on the underwriting of international bonds or the speculation in buying and selling of stocks” - these being the primary financial schemes responsible for bringing about the Great Depression in the first place.
Therefore, “while most of Wall Street initially treated Roosevelt’s New Deal as anathema and a major step in the direction of economic Bolshevism for the United States, the Rockefeller brothers realized they could use the depression crisis and the emerging role of the state to huge advantage in building their global empire.”
And use it they did: “during the course of the depression and the Roosevelt Presidency (that followed), the Rockefeller faction consolidated its decisive role in United States domestic and foreign policy.”
In sum, the shifts taking place in US finance during the 1930s had the effect of displacing the Morgan wing of the American Deep State, with a new faction centered around the Rockefeller interests rising to replace it.
Therefore, when we zoom out and look at the larger patterns underlying world events during the 1920s and 30s, we discover that, behind the financial restructuring of Wall Street that was playing out during this period, a covert battle was also being waged between the Morgan and Rockefeller factions of the American Deep State.
In this battle, the Rockefellers would rise victorious, obtaining their checkmate over the House of Morgan with the passage of the Glass-Steagall Act and Roosevelt’s New Deal policies in 1933. From here on out, the American Empire would follow a course of direction that the Rockefeller faction of American oligarchy would now dictate.
24. The Rockefellers Take Control of the American Deep State
As we just explored, over the course of the 1930s, the Rockefeller faction of the American Deep State would rise and seize control, displacing the House of Morgan in the process.
By this time, the original scion of the Rockefeller dynasty, John D. Rockefeller, had passed, and the four sons of his son John D. Rockefeller, Jr. had risen to take control over the family dynasty: David, Nelson, John D. III, and Laurance.
Together, they were determined to expand the Rockefeller empire, making it the centerpiece of the global economic imperium that the US oligarchy had long been seeking to establish.
Like the Rothschild brothers had originally done centuries before, each Rockefeller brother would take on a specialized role in service to the larger family dynasty. In his writings, Engdahl overviews each of the four brothers and notes in what areas of the family empire each chose to focus their efforts upon.
The most notable of the four, “David, the youngest, went into the family bank, Chase National Bank, which began to emerge as New York’s second strongest international bank, in no small part because it was the house bank to Rockefeller Standard Oil interests worldwide.”
“Nelson, who had already played an influential role in advising Democratic President Franklin Roosevelt and who emerged as FDR’s most influential policy figure in Latin America, had made a seamless transformation into an Eisenhower Republican by 1952. From that Republican pinnacle, Nelson oversaw a reorganization of the entire US Government and went on to become Special Assistant to the President for Psychological Warfare, shaping (America’s) Cold War responses to the Soviet Union.”
“Brother John D. III, who had played a central role in postwar Japan and in population control programs, was also heading the Rockefeller Brothers Fund and the Rockefeller Foundation, whose grants were shaping the future of academic research worldwide, all to the ultimate benefit of the family’s private agenda.”
“The fourth of the politically active brothers Laurance, the business entrepreneur of the four, founded … in the 1960s, through his Venrock venture capital group, a small semiconductor company called Intel Corporation.”
Together, these four brothers worked to corner key markets within the American military-industrial complex, holding positions of interlocking directorates in numerous key firms involved in American Empire.
These include: McDonnell Aircraft, Monsanto, DuPont, Hercules Powder, Nuclear Development Corporation, General Electric, and Rockwell Manufacturing - not to mention the old family stalwarts Standard Oil and Chase Bank.
There was a pattern behind this corporate ownership structure: the Rockefellers were, as Engdahl explains, positioning themselves to become the centerpiece of a new, petroleum-based “international chemicals and military industry, the predecessor to America’s Cold War era military-industry complex.”
At the same time that they were maneuvering to become the lead controllers of the corporate infrastructure underlying the Deep State, the Rockefellers also worked to exert their influence upon the key policy-making apparatus driving America’s national security establishment.
At the time, the lead policy-making institution in America was the Council on Foreign Relations, which John D. Rockefeller had co-founded with J.P. Morgan back in 1919.
After the Rockefellers’ ascendancy over Morgan, the four brothers maneuvered to take control of this critical Deep State institution, using it to direct the course of American Empire in a new direction, one that they and not the House of Morgan would now dictate.
In many ways, the Rockefellers were the perfect oligarchical entity, one ideally suited to take control over the course of American Empire: through Standard Oil, they had already established deep ties with US military intelligence. And from the standpoint of economic warfare, their network of vassal corporations were already globally extended, with major corporate assets already well-positioned in the Middle East, Europe, Latin America, and elsewhere.
Summarizing the Rockefeller’s corporate holdings during this period, Engdahl writes that “the Rockefeller group, in addition to controlling Chase Bank and First City Bank of New York, (also) controlled the largest US oil companies — Standard Oil of NY (Mobil), Standard Oil of New Jersey (ESSO/Exxon), Standard of California (Chevron), and Texaco.”
Furthermore, during this era “the Rockefeller group also consolidated a commanding control over the major chemical and defense-related industries, including Allied Chemical, Anaconda Copper, DuPont, Monsanto Chemicals, Olin Industries (Winchester Arms), Shell, Gulf Oil, Union Oil, Dow Chemicals, Celanese, Pittsburgh Plate Glass, Cities Service, Stauffer Chemical, Continental Oil, Union Carbide, American Cyanamid, American Motors, Bendix Electric, and Chrysler.”
Additionally, "the Rockefellers also bought up large blocks of stock in General Motors, General Electric and IBM, then a new company.”
In short, “by the end of the 1930s the Rockefeller group’s industrial holdings and banks were uniquely poised to reap handsome gains from any future war.”
And rather than leave their involvement in any such future war to chance, the Rockefellers utilized the Council on Foreign Relations, centered in New York, to plan the next phase of American Empire, one they were now well-positioned to bring into actualization.
In late 1939, they, along with leading policy-making figures in the American national security establishment, quietly created within the CFR a highly influential policy-making group, called the “War and Peace Studies Group”.
Engdahl explains that the task of the group was simple: “to shape US post-war economic and political goals, based on the assumption that another World War would come and that the United States would emerge from the ashes of that war as the dominant global power.”
Within this studies group, which was financed by the Rockefeller Foundation, “a handful of businessmen and their academic associates at private universities such as Harvard, Yale, Princeton, and Johns Hopkins, along with senior partners from the major Wall Street law firms, were preparing the ground for the new ‘Pax Americana.’ Their aim was simple: to consolidate an American succession to the failing Pax Britannica of the British Empire.”
The plan for American Empire they came up with was one that featured major innovations upon Britain’s previous model. “Unlike the British Empire, their American vision of global domination was based on economic goals rather than physical possession of a colonial empire. It was a brilliant refinement which allowed the US corporate giants to veil their interests behind the flag of democracy and human rights for ‘oppressed colonial peoples;' support of ‘free enterprise’, and ‘open markets’.”
A confidential memo from the Council on Foreign Relations War & Peace Studies group to the US State Department in 1941 stated these views clearly: “If war aims are stated which seem to be solely concerned with Anglo-American imperialism, they will offer little to people in the rest of the world. The interests of other peoples should (therefore) be stressed. This would have a better propaganda effect.”
Overall, the influence of this Rockefeller-lead group cannot be overestimated: after the war, its members “effectively took over all significant post-war planning for the US State Department”, with their policy framework also coming to define the contours of “the post-war American business empire globally.”
Because of its importance, its worth delving a bit further into Engdahl’s research into the story of this research group, which in many ways emerged as an American successor to Cecil Rhodes earlier Round Table society in Britain.
Engdahl writes that “in 1939, with a major funding grant from the Rockefeller Foundation, the New York Council on Foreign Relations (CFR) began what would be a series of long-term studies in collaboration with the US State Department. The top secret project, called the War & Peace Studies, ran for five years until 1944.”
“The aim of the CFR’s secret project was to lay a solid, enduring basis for the final succession of the United States to assume the role held by the British Empire prior to 1914; a ‘Pax Americana,’ an unchallenged successor to the failing Pax Britannica.”
Citing the minutes of the CFR’s War & Peace Studies Security Sub-Committee, Engdahl reveals the parameters of the US post-war foreign policy that the study group was planning. He quotes these minutes as stating: “...the British Empire as it existed in the past will (never) reappear and … the United States may have to take its place.” Consequently, the US “must cultivate a mental view toward world settlement after this war which will enable us to impose our own terms, amounting … to Pax Americana.”
In his research, which he presents in his books “Gods of Money”, “Myths, Lies, and Oil Wars”, and “Seeds of Destruction”, Engdahl highlights another landmark policy statement of the secret group, Memorandum E-B19, which laid out the core doctrine that the American foreign policy was to take after the war.
This important policy memo summarized, in its own words, “the component parts of an integrated policy to achieve military and economic supremacy of the United States.”
According to its thinking, such supremacy would be achieved through the postwar “coordination and cooperation of the United States with other countries to secure the limitation of any exercise of sovereignty by foreign nations that constitutes a threat to the minimum world area essential to the security and economic prosperity of the United States and the Western Hemisphere.”
Postwar international coordination was to be established through a new suite of transnational institutions, such as the United Nations, the International Monetary Fund, the World Bank, and the General Agreement on Tariffs and Trade (GATT).
Outwardly, these were presented as democratic institutions (and indeed they could be, if left to their own devices). But in practice, each were to be illicitly controlled and manipulated by the American Deep State.
Under the cover of “free trade”, “democracy”, and “the rule of law”, which these institutions outwardly professed to stand for, US corporations would be enabled to “advance their agenda, forcing open new untapped markets for cheap raw materials, as well as new outlets for selling American manufacturing after the war.”
In short, the American oligarchs “needed unfettered access to global resources and markets” and, with war looming in Europe, “they saw the chance to get it when, as they foresaw, all other contending powers had been devastated by the war.”
In establishing their new global imperium, they would outwardly “present themselves as the selfless advocates of freedom for colonial peoples and as the enemy of imperialism.”
In this way, they succeeded in clothing America’s own imperial ambitions in liberal and benevolent-sounding garb. … They would champion world peace, but through multinational (corporate) control.”
As we will further be exploring in subsequent articles, the Rockefellers became the master orchestrators of the American-lead new world order that was to develop after the war, with the coming “American Century” becoming “very much a Rockefeller empire, though most Americans were blissfully ignorant of the fact.“
And at the center of the web of corporations, think tanks, universities, foundations, and non-profits that underpinned this new international order were situated the four Rockefeller brothers, the new “gods of money” atop Pax Americana: the American Empire.
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