The Truth About The Slump

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  1. On February 14, 2011 at 11:32 pm hoff2 said:

    THE TRUTH ABOUT
    THE SLUMP
    What the News Never Tells
    By A. N. FIELD
    Published by A. N. FIELD, Okiwi Bay, Croixelles ;
    P.O. Box 154, Nelson, New Zealand
    1932.
    ALL. RIGHTS RESERVED
    “Democracy has no more persistent or
    insidious foe than the money power, to which
    it may say, as Dante said when he reached in
    his journey through Hell the dwelling of the
    God of Riches, `Here we found Wealth, the
    great enemy.’ That enemy is formidable
    because he works secretly, by persuasion or
    deceit, rather than by force, and so takes men
    unawares. He is a danger to good government
    everywhere.
    “The truth seems to be that democracy has
    only one marked advantage over other governments
    in defending itself against the submarine
    warfare which wealth can wage, viz ., Publicity
    and the force of Public Opinion . So long
    as Ministers can be interrogated in an
    assembly, so long as the press is free to call
    attention to alleged scandals and require
    explanations from persons suspected of an
    improper use of money or an improper
    submission to its influences, so long will the
    people be at least warned of the dangers that
    threaten them . If they refuse to take the
    warning they are already untrue to the duties
    that freedom prescribes.”
    -The late Lord Bryce in
    “Modern Democracies” (1921).
    First Printing : March, 1931 .
    Second Printing : June, 1931 .
    Third Printing : October, 1931 .
    Fourth Printing : May, 1932.
    Fifth Printing : October, 1932.
    Further copies of this book may
    be obtained from A . N. Field,
    Box 154, Nelson .
    Price, 4/- post free.
    AUTHOR’S NOTE.
    Since this book was written at the beginning of 1931
    many momentous changes have occurred . It has not
    been practicable to revise the text throughout, but a postscript
    has now been added to the book bringing it up to
    date .
    -A. N. F.
    October, 1932.
    Chapter page
    9
    11
    16
    22
    20
    3.3
    45
    58
    VIII-The Strange Story of the Federal Reserve
    74
    93
    11l
    128
    139
    154
    164
    176
    185
    195
    Appendix-
    (1) British v . Continental Freemasonry
    (II) “The Alien Menace”
    –
    –
    (III) Who’s Who : Persons Mentioned in
    ii
    this Book iii
    –
    – .-. –
    (IV) “Honour or Dollars” — .-. ix
    Board — _-
    IX-Britain is Drawn into the Toils — –
    X-The Strangle-hold Increases –
    3EI–Heory Ford Retracts
    .-. _-
    XII–3he Mystery of the Protocols — _-
    XIII-The Position Today –
    – — –
    XIV-Self-help the Only Way Out …. — –
    XV-The Basis of Security– — _. –
    XVaodRemedies — -. –
    XVII-Postcript
    .-
    – — – .-
    Introduction — –
    I-Some Facts About Money — – –
    II-One Commodity Controls All — –
    III-Some Tricks of the Trade -.. — –
    IV-Where We Arc Ruled From ..- — ._
    V-The Men at the Top — _. — –
    VI-The German Side of the Story — –
    VII-How Russia was Smashed Up — –
    INTRODUCTION.
    This book tells the story of who caused the slump
    and how they caused it, and it directs attention to two
    simple steps that can be taken to save our farmers and
    traders .
    No greater mistake can be made than to suppose that
    the present slump in commodity prices is due to blind
    economic forces . The depression from which we now
    suffer is due to an artificially induced variation in the
    purchasing power of money . In these pages will be found
    ample evidence in support of this statement . The quarter
    from which the trouble is coming is indicated, and the
    amazing manner in which the machinery for monetary
    control of the world was established is traced out. The
    story of the slump is essentially a story of men and their
    motives. Some of those motives, such as declarations of
    hostility to the British Empire, and action inimical to it,
    are matters of open public record : others are a matter of
    speculation .
    The facts set out rest upon unimpeachable authority,
    and the sources are given throughout . Any reader who
    has access to a large library can verify them all for
    himself, and by a little research would doubtless uncover
    much additional matter supplementing and confirming
    what the present author has assembled.
    Nevertheless, one may search in vain through the
    newspaper press, through the utterances of public men,
    through practically the whole current literature of today,
    for any reference to these central, pivotal facts governing
    the whole world price level and the financial and
    economic situation today . Why this silence?
    The answer is that the most potent forces in the world
    today are forces that do not work in the open . They
    could not work in the open : for if they did mankind
    would not for one instant tolerate their continuance . It
    is essential for the success of their plans that the people
    of the world should be unaware of the chains that have
    been made to enmesh them.
    A small number of persons in different countries have
    shown by their utterances that they are well aware of
    what is taking place–or, rather, has been taking placefor
    the chain of events extends back over a long period
    of time.
    Three-quarters of a century ago Disraeli told Britain’s
    House of Commons that “the world is governed by very
    different persons from what is imagined by those who
    are not behind the scenes .”
    In a recent interview, General Ludendorff, chief of
    the German General Staff through the war, declared that
    the world today is ruled by “secret supra-national
    powers,” “the same diabolically clever wire-pullers that
    brought about the last cataclysm .”
    In the London “National Review” six years ago Mr .
    Arthur Kitson wrote about “Our Invisible Rulers,” and
    in other articles has expounded this same theme .
    In giving evidence before a United States Congressional
    committee in 1926, Mr. Western Starr, head of
    the United States Farmer-Labour Party, declared that
    unless a certain group of men, whom he referred to as
    “these old men of the sea,” had their power curbed the
    world would be plunged into another war, compared with
    which the last war would be “like a Fourth of July
    picnic.’ ‘
    More cryptically, but none the less significantly, Sip
    Josiah Stamp, one of Britain’s foremost business met
    and economists, has expressed the opinion-remarkabic
    as coming from a director of the Bank of England-that
    money, after having brought civilisation to its present
    level, may well “actually destroy society .” When the
    reader has digested the facts herein assembled this
    statement may fall less incredibly on his ear.
    It is impossible to maintain our country in a state of
    security unless we face the facts and conform to reality .
    Our national peril is that we are ignoring all the vital
    facts of the situation. Our enemies are none the less real
    because their ways are hidden ways . But they are a
    thousand times more insidious . What the war failed to
    do they seek, to accomplish, and their ambition is to
    shatter in bankruptcy and ruin the once-splendid fabric
    of the British Empire .
    A. N. FIELD.
    Okiwi Bay,
    Croixelles .
    February, 1931 .
    CHAPTER 1.
    SOME FACTS ABOUT MONEY .
    Before we can get very far into this matter of the
    price slump it is necessary to bear in mind a few simple
    facts about money. Contrary to general belief the
    essential facts about money are really quite simple and
    capable of being understood by any person of ordinary
    intelligence.
    The chief thing to remember about money is that the
    more there is of it the less it is worth, and the less there
    is of it the more it is worth .
    That is to say, if everybody woke up tomorrow
    morning and found himself or herself in possession of
    twice as much money as he or she had the day before,
    what would be the position? Jones and Brown, we will
    suppose had planned to go to an auction sale to buy a
    house. Both are keen to get it, and each finding himself
    in possession of twice as much money as he had the day
    before lets his bidding run higher. Multiply this all over
    the country, not only with house property but with
    everything else, and the net result will be that the price
    of everything will-after a time-be just about double
    what it was before the money was doubled . That was
    the situation we had just after the war when the price
    of everything went sky-high .
    We will now suppose that the situation is reversed,
    and that we all wake up one fine morning-as many of
    us have done-to find ourselves in possession of half as
    much money as we had the day before. Naturally we
    have to make that little go a long way . Jones and Brown
    probably both decide that they can get along as they are
    and that buying that house must stand over. Everybody
    else is of the same mind . Gradually, after a time, the
    price of everything will drop to somewhere about half of
    what it was before the money supply was . cut off .
    . Fortunately these changes do not happen overnight
    -or very rarely do-but they do happen rapidly enough
    12
    THE TRUTH ABOUT THE SLUMP
    to cause enormous dislocation of human affairs . For
    instance by the early part of 1920 a British pound would
    buy only about 40 per cent. of what it would buy before
    the war. A few months later it would buy two-thirds of
    what it bought before the war, an increase in the
    purchasing power of money of 65 per cent. in one hit.
    Moreover, in our illustration we have supposed that
    when the supply of money was doubled or halved everybody
    found himself and herself possessed of twice as
    much or half as much as the case might * be . The
    disastrous thing about these increases or decreases in the
    quantity of money is just that they are not shared out
    evenly. Some people get more than their share and
    others get less. When money is plentiful everyone who
    has things for sale can put up his prices without more
    ado. But people who have to depend on money payment,
    the amount of which is fixed by contract or custom, find
    themselves very badly off. They get the same money
    income as before, but as the price of everything is up
    they are in a bad way, and maybe what was a comfortable
    income before becomes quite insufficient to live on . In
    the end everything adjusts itself, the old contracts run
    out and are renewed on a new basis, and fees and other
    charges fixed by custom are raised . Before this is done
    a great many people will probably have been ruined
    through no fault of their own and thrown into poverty
    and destitution .
    Both these processes – increase (inflation) and
    decrease (deflation) of the currency-are great public
    evils. Of the two deflation is by far the worst. In an
    inflationary period the active people who are producing
    things benefit and . the inactive and unproductive people,
    such as the drawers of interest, are injured . In a period
    of deflation, such as we are now experiencing, it is the
    other way round, and the active producers suffer, while
    the people who live on interest receive more than their
    share.
    For instance, let us suppose that Farmer Robinson
    had bought a farm five years ago, and had figured it out
    that of his gross income one-third would pay his
    mortgage interest bill, one-third would keep him and his
    family, and the other third he would have free to put
    back into the farm. Very well, we will next suppose-it
    does not need much supposing-that Farmer Robinson’s
    SOME FACTS ABOUT MONEY
    13
    income from his farm has fallen 50 per cent. by reason of
    the decline in the prices for his produce . For every £100
    that formerly came in only £50 will now come in . But
    his mortgage interest bill will still remain at the old
    figure and out of every £50 he receives he will have to set
    aside £33 6s. 8d. for his mortgage interest . This will
    leave him with £16 13s. 4d. to carry on with in place of
    the £66 13s . 4d. free income for keeping himself and
    improving his farm that he reckoned on five years before .
    In other words an interest charge that formerly took
    one-third of the farm produce to satisfy it now requires
    two-thirds of the shrunken income.
    Taken by and large that is what the farmers of New
    Zealand are up against today . The amount of money
    they are receiving for their produce has shrunk to about
    half what it was, and an altogether disproportionate share
    of that reduced income is swallowed up in mortgage
    charges . If the farmer cannot meet those charges his
    equity in his farm vanishes, and whether he remains on
    his farm or goes off it depends on whether his mortgagee
    thinks it more profitable to turn him off now or leave
    that over till later when the place can be sold up to better
    advantage. If he remains on it is only because he is
    willing to work for less than wages .
    That the farmer’s equity in his holding should be the
    first thing to vanish when a period of depression arrives
    is a morally vicious thing, and wholly opposed to the
    national interest . It is due to the fact that we live under
    laws that have been made at the behest of money-lenders
    in the interests of money-lenders .
    The next point we have to consider is how these
    changes in the purchasing power of money are brought
    about . They are part of the price the world is obliged
    to pay for that disastrous modern invention, the Gold
    Standard. In countries that are properly on the gold
    standard every person who has a money claim on another
    can demand payment in gold coin . In a gold standard
    country anyone can take gold bullion to the mint and
    have it stamped into coin on paying a small fee .
    Altogether there is about 2,000 million pounds’ worth
    of monetary gold in the world . Practically the whole
    of this, or, at any rate, by far the greater part of this gold
    is private property. At the end of 1929 the gold holding
    in Britain was about 150 millions . At the same date the
    14
    THE TRUTH ABOUT THE SLUMP
    British National Debt, payable in gold, totalled about
    7,500 millions . That is to say, the British Government
    alone owes three and three-quarter times as much gold
    as there is in the whole world, and fifty times as much
    as was held in Britain . And this debt is but a drop in
    the bucket of the total debts payable in gold.
    In -face of these figures the gold standard seems an
    incredible thing. It has been described, and not unjustly,
    as a fraudulent standard . It works only so long as no
    more than a tiny fraction of the people who are entitled
    to be paid in gold actually demand gold . As soon as any
    number of them demand gold the only thing the banks
    can do is to shut their doors and suspend payment . The
    whole thing is a sham and a fraud from top to bottom
    and has been the cause of more misery and wretchedness
    than probably any other human invention .
    As the amount of gold is entirely insufficient for
    monetary purposes a vast superstructure of paper money
    has been built up, all based on this 2,000 millions of gold .
    First of all there is a limited amount of paper money
    proper in the form of Government or bank notes . On top
    of this there is that other and immensely more important
    form of paper money, the private cheque, in which the
    great bulk of payments are nowadays made.
    In gold standard countries the total volume of notes
    in circulation and the total amount of cheques that may
    be written are all regulated by the gold held by the
    banks. The ratio of notes to gold is almost universally
    fixed by law. Banking policy usually fixes the ratio of
    cheques to the cash holdings . In Britain and America
    this cheque or credit currency usually stands to cash in
    the ratio about 7 to 1, but the figure is very variable.
    This cheque or credit money is an elastic thing . The
    banks create it whenever they make an advance on overdraft.
    When bank advances are increased the quantity
    of money thus increases. To express ourselves more
    precisely we should say the purchasing power of the
    community . increases. If there is no corresponding
    increase in the quantity of things purchasable this means
    that the general price level goes up, and what is
    described as an increase in the cost of living takes place.
    On the other hand, when a bank calls up an advance
    it reduces purchasing power and decreases the quantity
    SOME FACTS ABOUT MONEY
    15
    of money. If the banks make a general move in this
    direction the purchasing power of the community shrinks
    and the general price level falls .
    In speaking of prices and the price level the reference
    is, of course, to prices as a whole, not the prices of
    individual commodities. As Professor Irving Fisher has
    pointed out in his “Money Illusion,” there are two kinds
    of movement in prices . The price of every individual
    marketable thing keeps bobbing up and down like the
    waves of the sea according to demand and supply and
    cost of production . Less noticeable, but much more
    important, the whole level of prices rises and falls like
    the tides of the ocean . It is only since the invention of
    index numbers that it has been possible to measure this
    latter movement . It is by far the most important movement.
    Every Government in the world now compiles its
    official price indexes . In New Zealand our Government
    Statistician compiles several . These indexes are compiled
    from scores, or usually a hundred or two, different prices,
    and show the movement of prices as a whole .
    When money is based on a commodity-and not a
    particularly useful commodity-such as gold, changes
    in the value of gold can only express themselves by
    changes in all other values in relation to gold. When
    gold increases in value, a little gold will buy more, and
    the only way gold can buy more is by the prices of other
    things falling when expressed in terms of gold money.
    When gold declines in value, it takes more gold to buy
    the same amount as before, and in a gold standard
    country the only way this decline in the value of gold
    can find expression is by a rise in the price of things .
    We have now reached a point at which several
    important facts have become clear . We have noted that
    there is in the world only about 2,000 millions of
    monetary gold, and on top of this, like an inverted
    pyramid, is erected an immense superstructure of credit
    and trade . If those who own this gold withdraw it from
    the banks and lock it away, the banks to escape bankruptcy,
    must curtail their loans, which they promptly do
    by cutting down overdrafts . This, as we have seen,
    reduces the public’s purchasing power, and with reduced
    purchasing power prices must fall, and an era of trade
    depression set its,
    16
    CHAPTER II.
    ONE COMMODITY CONTROLS ALL.
    That money is more unstable in value than goods is
    a thing that few people realise for the simple reason that
    the only way a change in the value of money can find
    expression is by a change in the prices of goods .
    The British pound is fixed by law as being 113 grains
    of standard gold . Except that eggs are cumbersome to
    carry about it might just as well have been decreed by
    law that a pound sterling was to consist of 113 eggs .
    Thereafter the price of eggs would always be nine and
    five-twelfth dozen to the pound . Everybody would say,
    “How stable in price eggs are : everything else goes up
    and down in price, but lo, behold, you always get 113
    eggs for a pound note .”
    A little reflection will show us that as a pound had
    been decreed to be 113 eggs, eggs could never be any
    other price than 113 to the pound . Nevertheless if the
    fowls stopped laying and eggs became scarce this fact
    would not prevent the owners of eggs asking more for
    them. But if they gave only one egg for an article for
    which before the price had been two eggs, the result would
    be that expressed in terms of our egg pound the price of
    that article was reduced by half . That is exactly what
    happens when gold is cornered up and becomes scarce .
    The price of everything falls when expressed in terms of
    gold, that is in terms of money .
    To control the price level, therefore, all that is
    necessary is to control gold . If you can control gold you
    can make a general fall in prices by locking the gold
    away, and you can make a general rise in prices by
    letting the gold out again . Incidentally, if you had this
    power you could make much money by buying when
    things were cheap and then selling again when they were
    dear. If instead of money you desired power you could
    buy up the industries, and all things whereby men live,
    during the periods of depression which you would create ;
    and during the periods of prosperity which you would
    create you would be able-from the profits made by these
    industries you had already bought-to buy up more
    industries in the next period of depression you would
    ONE COMMODITY CONTROLS ALL 17
    create. This process you could repeat until you finally
    came to own everything that you considered worth
    owning., In the end you would practically own the earth,
    and though but a private individual owning shares in this
    and that you would be more powerful than any government
    in the world.
    That the main cause of periods of depression is not
    sunspots, as some people have fancied-or over-production
    or under consumption, as others hold-but is due to
    changes in the value of money is a view now widely held .
    For instance, let us consider the report of the Committee
    on Stabilisation of Agricultural Prices set up by the
    British Government and whose findings were published
    in 1925. That Committee said
    “Historically it is the fluctuations in agricultural
    prices as a whole which have been of the greatest importance
    and have had the most far-reaching consequences
    . The explanation of such general variations iii
    prices is properly attributed to monetary causes-that is
    to say, the changes in the total available means of payment
    in a community to the total quantity of good and
    services to be marketed .”
    In the course of its report the Committee went into
    the matter at length . It said
    “The history of agriculture since the Napoleonic wars,
    disregarding minor booms and depressions, may be
    roughly divided into five periods of alternating depression
    and prosperity, namely, 1820-50, 1850-74, 1874-96 .
    1896-1920 and 1920-24. A study of these periods can
    leave little doubt as to the disastrous consequences to
    agriculture of the variation in the purchasing power of
    money.
    “In the past hundred years the three severe and
    protracted depressions-the first following the
    Napoleonic wars, the second after 1873, and the third
    following the European war, have in each case been due
    to falling prices. We do not propose to give a detailed
    analysis of these periods of agricultural history. It is
    sufficient to mention that in each case there was a
    profound disturbance of monetary conditions . In 1819
    an Act of Parliament restoring the gold standard brought
    about a drastic restriction of the monetary circulation, as
    a result of which the prices of all commodities, including
    the products of agriculture, declined very rapidly . In
    18
    THE TRUTH ABOUT THE SLUMP
    1874 the adoption of a gold currency by many countries
    of the world caused a shortage of gold, with the result
    that prices fell in all gold standard countries . In 1920 a
    policy of securing a gradual return from a paper to a gold
    currency was put into force with a similar result on
    prices. We need not describe in detail how these events
    worked out in the case of agriculture . The depression
    of 1920-23 has been dealt with elsewhere, and we attach
    to this report a memorandum setting out more fully the
    connection between monetary events and the condition
    of agriculture between 1874 and 1896 . All we wish to do
    here is to call attention to the fact that in each of these
    periods the depression of agriculture was brought about
    by a general fall in prices, and that these price movements
    had their origin primarily in monetary causes .
    “In the crisis which followed the Napoleonic wars, and
    in that after 1874, agriculture was reduced in many
    districts to a pitiable condition . In both cases much
    agricultural land was abandoned or greatly deteriorated,
    and the hardships caused to the rural population can
    hardly be exaggerated . If in the case of 1920-23 the
    losses and sufferings were less severe in spite of the very
    rapid fall in prices, it is because the crisis was preceded
    by a period of very rapidly rising prices during which
    large profits were made by the farmers. The majority
    were thus enabled to survive the severe slump which
    succeeded it.
    “It is, however, only necessary to study the history
    of agriculture during the nineteenth century to see the
    demoralization and other ill effects of a depression that
    did not cease with the end of a period of falling prices .
    The alterations in the character of farming, the deterioration
    of large tracts of land, and the demoralization of the
    working population, have left their marks on the industry
    long after the causes which brought them about have
    ceased to operate . In short, the history of the nineteenth
    century seems to show, in a manner which is beyond
    dispute, that variations in the purchasing power of money
    have been responsible for greater misfortune to agriculture
    than has arisen from any other single cause .”
    That is a clear and emphatic enough statement by a
    British Government Committee . Equally emphatic is the
    view of the Rt. Hon. Reginald McKenna, formerly
    Chancellor of the Exchequer in Britain, and now chairONE
    COMMODITY CONTROLS ALL 19
    man of the Midland Bank . In his annual address to the
    shareholders of that institution in 1926, Mr. McKenna
    expressed the opinion, frequently repeated by him, that
    almost the whole of Britain’s post-war trade depression
    and unemployment has been due to mistaken monetary
    policy. In his 1926 address Mr. McKenna said
    “Is there then any other contributory cause of this
    long continued trade depression? Is there
    indeed, any explanation at all, or is it a haphazard affair
    nobody can understand and which we need not trouble
    to investigate? There is in truth no mystery in the
    matter, and in dealing with any country but our own we
    should not have the slightest difficulty in forming a right
    judgment. When we ourselves are not immediately
    concerned we recognise at once the influence upon trade
    of monetary conditions and policy . . It is only when
    we turn from foreign countries and come to consider our
    own case that we meet a certain reluctance to discuss the
    effect of monetary policy upon trade and employment .
    That such influence exists is not categorically denied, but
    the subject is too often treated as one best left alone, lest
    we be led to unorthodox conclusions .”
    This last remark of Mr . McKenna’s makes it interesting
    here to interpolate the following from an article by
    Mr. Arthur Kitson published in the “National Review”
    for March, 1925 :
    “Those who wish to understand the mysteries of
    money will never succeed until they realize that moneylending
    is a business run solely for the profit of the
    moneylenders, and therefore all rules, laws and so-called
    `principles’ governing finance are in reality devices for
    giving the members of this profession control of their
    business. In this respect the control of money and the
    means adopted are not dissimilar to those necessary for
    controlling wheat, cotton, wool and any other commodity.”
    A foremost American authority expressing the same
    view as Mr. McKenna is Professor Irving Fisher,
    formerly Professor of Economics at Yale University, and
    who is described by Sir Josiah Stamp, a director of the
    Bank of England and himself a much-quoted authority
    on economics, as representing the “best informed
    opinion” on the subject of money . In his book, “The
    Money Illusion,” published in 1928, Professor Fisher
    20 THE TRUTH ABOUT THE SLUMP
    pointed out that the statistics of the International Labour
    Office at Geneva showed that in 1919-25 monetary
    deflation occurred in 22 countries and was followed by
    depression of trade and increased unemployment in all
    these countries,-with three unimportant exceptions. In
    the United States and England the deflation of 1920-21
    threw millions out of work . In England, the Professor
    points out, a second deflation was brought about in
    1925-26 to bring the pound back on the gold basis . Again
    came unemployment and labour discontent, and the
    biggest strike in England’s history . “Of course,” adds
    Professor Fisher, “other causes were involved, but deflation
    was a powerful factor, and all the more powerful
    because hidden from view by the Money Illusion .”
    The .”money illusion” referred to by Professor Fisher,
    is the illusion from which we all suffer, that prices rise
    and fall but money remains unchanged in value, whereas
    the truth is that our gold money is one of the most
    unstable things in the world .
    In the front rank of European economists is Professor
    Gustav Cassel, of Sweden . In the course of some lectures
    which he delivered at Columbia University, New York,
    in 1928, and which have been since published under the
    title “Post-War Monetary Stabilisation” (Columbia University
    Press, N.Y., 1928), Professor Cassel said
    “What we call the general level of prices is, in fact,
    merely an index of the purchasing power, or value, of
    money. But the value of money cannot possibly be dependent
    on anything but the supply of money in relation
    to the demand for money. Even the value of money must
    follow the general law of supply and demand. The
    prevalent notion that the general level of prices is determined
    by a number of other factors, such as the cost of
    industrial production, ocean freights, etc ., must be
    relegated to the domain of economic dilettantism .”
    Of the post-war return to the gold standard, Professor
    Cassel says (p . 34)
    “Theoretically this was not necessary . The world
    had a system of paper standards, and if each of these
    paper- standards had been simply stabilised at a certain
    purchasing power against commodities, the world would
    have had a satisfactory monetary system . Stabilisation
    did not in itself require that the separate currencies
    should be bound up with gold . . . .
    ONE COMMODITY CONTROLS ALL 21
    “The gold standard is, however, by no means an ideal
    standard . The value of gold is subject to variations
    which cause serious difficulties to every country the
    economic system of which is built up on the basis of a
    gold standard . The modern gold standard dates from
    the Napoleonic wars. . . . Apart from the short-time
    fluctuations of the price level, attributable to trade cycles,
    great secular alterations in the purchasing power of gold
    have taken place . When, for instance, the index figure
    of Sauerbeck fell from 111 in 1873, down to 61 in 1896,
    this is sufficient to prove that gold is no reliable measure
    of value, and that even with a gold standard economic
    life is exposed to serious disturbances having their root
    in an unstable monetary system . The period which I
    mention is known in history as a period of prolonged
    economic depression. The generation then living had to
    pay a very heavy price for having built up its monetary
    system on a unit which could almost double its value
    within a quarter of a century.”
    Later on we shall see from documents which have
    been quoted in the United States Congress that the money
    interest itself recognises very clearly the importance of
    being able to control the quantity of money .
    To understand the price slump it thus becomes necessary
    to trace out the mechanism by means of which the
    quantity of money is controlled and to learn what we can
    of the men who operate it.
    22
    CHAPTER III.
    SOME TRICKS OF THE TRADE.
    The modern gold standard is the invention of a British
    statesman on the advice of a British banker . That
    statesman was Sir. Robert Peel, whose own father
    curiously enough regarded him as a financial lunatic, and
    the banker was Samuel James Loyd, better known as
    Lord Overstone. In 1816 Lord Liverpool’s Government
    had demonetized silver as legal tender except for small
    transactions not exceeding 12 . Prior to that date gold
    and silver ranked equally as legal tender in Britain, as
    they did for many years after in most other countries .
    As a great battle has raged around the silver question
    in different countries, it may be here explained that two
    metals are more difficult to control than one, and silver
    for this reason has consequently been extremely obnoxious
    to the great international money interest.
    A cheerful beginning to the adoption of gold as sole
    legal tender in 1816 was a decline in prices of 24 per cent .
    between 1819 and 1824. The cause of this was the
    increased demand for gold in Britain, which was felt
    throughout the whole civilised world .
    In 1844 came Sir Robert Peel’s Bank Charter Act .
    Under that Act it was laid down that every ounce of gold
    of standard weight and fineness taken to the Bank of
    England must be purchased at 13 17s. 9d. and coined
    into sovereigns, or have Bank of England notes issued
    against it at the rate of 13 17s. 104d.
    The particular price put on gold was found by comparing
    it with silver . In Sir Robert Peel’s time, when
    silver was the standard of most countries, an ounce of
    gold exchanged for about 151 ounces of silver-the price
    of which was 13 17s . 104d.
    This Act had to be suspended three years after it was
    passed to save the banks and the country from ruin . It
    was again suspended in 1857, in 1866, and in 1914 . As
    the amount of gold is totally insufficient for monetary
    purposes the gold standard collapses completely in any
    great emergency, and even when it does not entirely
    collapse it is accompanied by periodic financial crises
    SOME TRICKS OF THE TRADE
    233
    bringing needless disaster on hundreds of thousands of
    innocent persons .
    The gold discoveries in California and Australia, and
    later in South Africa, were the principal things in
    preventing the gold standard from proving unworkable
    long ago . When this new gold began, pouring into
    Europe soon after the middle of the century there was
    alarm among the money lenders . Some feared so much
    gold would come in that it would be better to abandon
    gold money and go for silver . Another course was *.o
    counterbalance the new gold by cutting out silver .
    Ultimately, on June 17, 1867, delegates from twenty
    governments met in Paris as an International Monetary
    Conference and voted in favour of an exclusive gold
    standard, but permitting each State to keep its silver
    standard temporarily.
    “Thus,” declared Mr. George’ H. Shibley, Director of
    the American Bureau of Political Research, in giving
    evidence before a Congressional Committee in 1913, “was
    accomplished the first step in one of the most horrible
    conspiracies against mankind the world has ever witnessed.
    The subsequent history of periods of falling
    prices for commodities bears out my assertion.”
    Following on this conference movements were initiated
    all over the world, even in countries as remote as
    Japan, with the object of making gold the sole monetary
    standard . In two notable instances the objective was
    gained by subterfuge .
    In Britain, although long on gold, there was power
    under the law to resume the issue of silver as full legal
    tender by ‘Royal proclamation, provided the Privy
    Council concurred . In 1870 a bill consolidating the mint
    laws was introduced into Parliament with this provision
    omitted. “Yet,” stated Mr. Shibley in his evidence
    quoted about, “when the bill was up for passage no
    mention of the great change was made-at least nothing
    appears in the debate reported by Hansard (Vol . 199,
    col. 730). Again in the House of Commons the members
    were assured that the object was simply to perfect the
    mint law ; and the same false statement was made in the
    House of Lords. The facts in detail,” Mr . Shibley added,
    “have been stated by Alexander del Mar .”
    In the United States exactly the same thing was done .
    A bill was introduced in Congress to revise the mint law
    and the silver dollar was dropped from the list of coins
    24
    THE TRUTH ABOUT THE SLUMP
    that -might be minted . The first appearance of this bill
    was twenty-four days after the British mint law revision
    had been passed by Parliament. The Bill, however, did
    not get through until 1873 . Nevertheless the absence
    of the silver dollar was not mentioned . The bill was
    passed by Congress in 1873, and a letter written by
    President Grant, who signed the bill, shows that eight
    months after it had been passed he was unaware that
    silver money had been abolished except for small change
    for amounts not exceeding five dollars . Leading members
    of Congress were also not aware of what they had done .
    A tremendous agitation followed on the discovery of
    this trick, and in 1878 standard silver dollars were again
    made full legal tender save that by private contract
    parties might stipulate for gold payment of debts .
    Following on the monetary stringency of 1890 the Sherman
    Silver Purchase Act was passed by Congress, providing
    that the Government in order to prevent contraction
    of the currency should buy a stipulated quantity
    of silver each month . This law was exceedingly distasteful
    to the money interest, and an agitation against
    it was at once begun .
    Some interesting light was thrown on this agitation
    by the Hon. Chas . A. Lindbergh, a member of Congress
    from Minnesota. From his place in the House of
    Representatives Mr . Lindbergh stated that he had seen
    a circular sent out by the American Banking Association
    and circulated among the influential national banks of
    the United States . This circular, bearing the date of
    March 11, 1893, was stated by Mr . Lindbergh to read as
    follows
    “The interest of national banks requires immediate
    financial legislation by Congress. Silver, silver certificates,
    and treasury notes must be retired, and national
    bank notes upon a gold basis made the only money . This
    will require the authorisation of five hundred millions to
    one thousand millions of new bonds as the basis of
    circulation. You will at once retire one-third of your
    circulation and call in one-half of your loans . Be careful
    to make a monetary stringency among your patrons,
    especially among influential business men. Advocate an
    extra session of Congress to repeal the purchasing clause
    of the Sherman law, and for its unconditional repeal per
    accompanying form. Use personal influence with your :
    SOME TRICKS OF THE TRADE
    25
    Congressmen, and particularly let . your wishes be known
    to your Senators . The future life of national banks as
    fixed and safe investments depends upon immediate action
    as there is an increasing sentiment in favour of Government
    legal tender notes and silver coinage .”
    This is a surprising document, but many surprising
    documents may be discovered by the curious printed in
    the Congressional Record reports of the degates on
    United States currency and banking bills . Mr. Lindbergh,
    himself, for instance, in 1913 quoted what is
    known• as the Hazard circular sent out to the leading
    American banks in 1862 during the Civil War. That
    remarkable document read as follows
    “Slavery is likely to be abolished by the war power
    and all chattel slavery abolished. This I and my
    European friends are in favour of, for slavery is but the
    owning of labour and carries with it the care of the
    labourers, while the European plan, led on by England,
    is that capital shall control labour by controlling wages .
    The great debt capitalists will see to it is made out of
    the war must be used as a means to control the volume
    of money. To accomplish this bonds must be used as
    a banking basis . We are now waiting for the
    Secretary of the Treasury to make his recommendations
    to Congress . It will not do to allow the greenback, as
    it is called (Government paper money), to circulate as
    money for any length of time, as we cannot control that.
    But we can control the bonds, and through them the
    bank issues.”
    To return to the agitation of 1893, the special session
    desired by the bankers was called by President Cleveland,
    who had just been inaugurated after a campaign fought
    on the tariff question . It was thought that the special
    session was to deal with the tariff, and the country and
    politicians alike were greatly surprised to find that the
    sole measure for consideration was the repeal of the Sherman
    law, a matter that had scarcely been mentioned in the
    election campaign.
    Congress was unfavourable to the proposal and the
    bill did not pass . On June 25 it was announced that
    India had stopped the free coinage of silver . This at
    once sent the price of silver down to the lowest point
    ever recorded. The Colorado and other silver mines in
    the United States stopped work, banks began to fail in
    the South and West, many factories shut down, wealthy
    26
    THE TRUTH ABOUT THE SLUMP
    men of unquestioned credit could not get cheques cashed .
    Compared with the previous year the number of bankruptcies
    doubled, with a sevenfold increase in the
    liabilities . Three great railway systems went into the
    hands of receivers, the Union Pacific (of which more
    later), the Northern Pacific, and the Erie. At a special
    session of Congress later in the year the silver purchasing
    clause of the Sherman law was repealed . Meanwhile the
    crisis was already checked . Foreign investors began
    sending in money, taking advantage of the low price at
    which stocks were selling. It took American industry,
    for all its resources, four or five years to recover from
    this blow .
    The results following on this panic were summed up
    by Mr. Arthur Kitson in the preface to the English
    edition of his book “The Money Question” (Grant
    Richards, London, 1903)
    “Whether the events which have since transpired as
    a natural sequence,” wrote Mr . Kitson, “were or were
    not foreseen by the panic organisers it is impossible to
    say, but the consolidation of capital-which before 1892
    was a somewhat difficult problem-became very simple
    under the so-called gold standard regime . With the
    Government no longer a competitor, the banks rapidly
    combined for purposes offensive and defensive, and for
    all practical purposes the control of the currency under a
    single head became a possibility . Having the ability
    to employ so vast a power, the exploitation of the
    industries of America was rapidly accomplished.
    Undoubtedly the simplest way for first getting control of
    the industries of a country is to first get control of its
    currency . For the blessings or evils (whichever view
    one chooses to take) resulting from the formation of the
    great Trusts we must credit the financial policy of
    President Cleveland . In addition to having placed the
    nation’s industries at the mercy of the bankers, another
    result of this policy was to indefinitely postpone the
    Free-trade era which was about to dawn upon the United
    States.
    .
    “It is but fair to say that President Cleveland had no
    conception of the results that would follow the policy
    he inaugurated, for no one has denounced the system of
    monopolies and trusts more strongly than he, who was
    instrumental in creating that greatest of all-the Money
    Monopoly.”
    SOME TRICKS OF THE TRADE
    27
    The crisis of 1893 was felt much further afield than
    the United States, for it extended even as far as Australia
    and New Zealand causing the suspension of many of the
    banks. While a considerable amount of publicity has
    been shed on certain forces concerned in the production of
    this crisis in the United States, it seems elsewhere to
    have been accepted as a natural visitation . Nevertheless
    the closing of the Indian mint to silver at so convenient
    a time for the drafters of the American bank circular
    points strongly to concerted action by financiers in
    different countries with a view to producing a worldwide
    variation in the purchasing power of gold .
    2B
    CHAPTER IV.
    WHERE WE ARE RULED FROM.
    The extracts quoted in the previous chapter show
    pretty clearly that variations in the value of money are
    the chief causes of periods of prosperity and depression .
    Our next step is to discover how these variations occur
    today.
    As many people are still innocent enough to believe
    that gold-unlike silver, copper, tin, lead, and any other
    metal or commodity one likes to name-has a magical
    unchanging value and is incapable of being cornered,
    manipulated, controlled, or managed in any way, it is
    worth noting what some foremost authorities have to say
    about this metal and its control.
    Everyone knows that paper money is managed
    money and that a danger of it is that those who manage
    it will print so much of it that it becomes worthless.
    Here is what Professor Cassel says about the modern
    gold” Tshtea nwdhaorlde lesson of the world’s sad experience of
    monetary mismanagement can only be drawn if we realise
    that the gold standard is nothing else than a paper
    standard, the value of which is entirely dependent upon
    the way in which the supply of means of payment is
    regulated . The characteristic feature of the gold standard
    is only that this supply is regulated with the object of
    keeping the currency on a certain par with the value of
    gold.”
    Professor Cassel goes on to tell us what happened to
    gold when the war came :
    “It was not enough that the gold standard was
    abandoned and that paper standards were adopted, but
    even the value of gold itself was affected in such a way
    that it was completely discredited as a measure of other
    values When gold coins were drawn out of
    circulation and when European gold flowed in large
    quantities to America, a superfluity of gold arose in this
    country (the United States), pressing down the purchasing
    power of gold to about 40 per cent. of what it had
    been at the beginning of the war. This lowest value was
    WHERE WE ARE RULED FROM
    29
    reached in the spring of 1920, from which date, by means
    of a gradual process of deflation, the value of gold was
    brought up again in a few months’ time to about twothirds
    of its pre-war value .”
    That there is nothing automatic about the gold standard
    is also the view of Prefessor Irving Fisher . In his
    “Money Illusion,” Professor Fisher says
    Under modern conditions with our vast credit
    structures the old theory of an automatic gold standard,
    beyond the reach of any voluntary control, has ceased to
    have much relation to reality . . . To-day then, instead
    of saying that the paper dollar, or credit dollar, derive
    its value from the gold dollar into which it is convertible,
    it would be truer to say that the gold dollar derives its
    value from the-credit dollar into which it is convertible .
    And since the volume of circulating credit is controllable
    and controlled we have already a managed currency in
    spite of ourselves .”
    None of the writers quoted has any doubt as to where
    or how the world’s gold money is managed today. The
    institution that controls it is the United States Federal
    Reserve Board, a body established in 1913 as the chief
    part of a plan of banking reform enacted by Congress in
    that year.
    Here is what Sir Josiah Stamp has to say of the
    United States Federal Reserve Board in an interview
    in the “New York Evening Post,” reprinted by the
    National City Bank in its monthly circular for February,
    1926 :
    “Never in the history of the world has so much power
    been vested in a small body of men as in the Federal
    Reserve Board. These men have the welfare of the world
    in their hands, and they could upset the rest of us either
    deliberately or by some unconscious action .
    “Mind you, I am not criticising them, but it is precarious
    to have such concentrated power vested in such
    a body.”
    In his book “America Conquers Britain” (Knopf
    1930), Mr . Ludwell Denny says
    “Many nations may laugh at our State Department,
    but all must tremble before our Federal Reserve Board .
    “High money rates in the United States early in 1929,
    for instance, forced an increase in the official discount
    30
    THE TRUTH ABOUT THE SLUMP
    rates almost at once in England, in ten European
    countries, in two Latin-American countries, and two in
    the Far East. And in almost every case that action
    restricted business and brought suffering to millions of
    foreign workers .
    “That blow hit Britain hardest of all . It checked her
    trade revival . . As a result the British Board of
    Trade index soon showed a decline in commodity prices
    which the British correctly attributed to the rise in
    European money rates owing to the necessity which
    devolves upon central banks to withstand the pull of high
    call-money rates in America .”
    Here again is what Mr. Reginald McKenna had to
    say on this subject in his chairman’s address at the
    annual meeting of the shareholders in the Midland Bank
    in London on January 28, 1928 :
    “Today, as before the war, the price of gold in
    America is fixed, and we are apt to assume that the value
    of gold continues to govern the value of the dollar . But
    such an assumption is no longer correct . While an ounce
    of gold can always be exchanged for a definite number of
    dollars, the value of the ounce will depend on what those
    dollars will buy, and this, in turn, will depend upon the
    American price level . If the price level in America
    fluctuated according to the movements of gold, the
    purchasing power of the dollar would still depend, as it
    did formerly, upon the value of gold . But we know that
    this is not so . As I have just shown the American price
    level is not affected by gold movements, but is controlled
    by the policy of the Reserve Banks in expanding or
    contracting credit. It follows, therefore, that it is not the
    value of gold in America which determines the value of
    the dollar, but the value of the dollar which determines
    the value of gold .
    “The mechanism by which the dollar governs the
    external value of gold is obvious. If the price level
    outside America should rise in consequence of an increase
    in the supply of gold, America would absorb the surplus
    gold ; if on the other hand, the external level should fall
    in consequence of a shortage of gold, America would
    supply the deficiency. The movement would continue
    until the price levels inside and outside America were
    brought once more into equilibrium . Although gold is
    still the nominal basis of most countries the real deterWHERE
    WE ARE RULED FROM
    31
    minant of movements in the general world level of prices
    is thus the purchasing power of the dollar. The conclusion,
    therefore, is forced upon us that in a very real sense
    the world is on a dollar standard . . . .
    “I conclude that as long as conditions remain at all
    similar to those we know today America will be able to
    maintain control over the world level of prices .”
    That Britain put her money and prices under
    American control when she went back on to the gold
    standard in 1925 is also the opinion of Professor Irving
    Fisher. Commenting on Mr . McKenna’s statement,
    Professor Fisher wrote in “The Money Illusion”
    “As Reginald McKenna has said, the world now has
    a `dollar standard’ fixed by credit control rather than a
    gold standard fixed by gold bullion as such . It is
    doubtful if Englishmen would have relished this fact had
    they fully realised it when they adopted what they
    supposed to be an automatic gold standard. For what
    they really did was to substitute for an English-managed
    an American-managed standard. They were afraid to
    trust the English Government to manage its paper
    currency to keep it stable, but are now in the position of
    trusting the American Federal Reserve system to manage
    credit so as to keep it and all other money stable
    throughout the world .”
    Innumerable other opinions that the world’s money
    and prices are chained to the policies prusued by
    the financiers who control America might be quoted . It
    is sufficient to conclude with what Professor Cassel has
    to say on the point in his book already mentioned
    “The monetary policy of the United States determines
    the value of the currency of every other gold standard
    country . The Federal Reserve authorities therefore
    control not only the general level of prices in the United
    States, but also the price level of all other gold standard
    countries in the world. . . .
    “When the central bank system possesses a gold cover
    of over 70 to 80 per cent . for notes and deposits, while a
    ratio of 35 to 40 per cent. is required by law, it does not
    in the least matter whether this gold cover is increased
    or reduced by a few per cent . Hence the leaders of the
    United States bank policy are not obliged to pay any
    consideration whatever to minor fluctuations in the gold
    cover. This means that the Federal Reserve system is in
    32
    THE TRUTH ABOUT THE SLUMP
    a position, of course within certain limits, to regulate the
    supply of the means of payment in the country without
    any regard to the movements of gold . Thus the Federal
    Reserve exercises an independent influence upon the
    level of prices . Other gold standard countries are
    compelled to follow suit and to adjust their price levels
    in conformity with that of the United States . Otherwise
    they expose themselves to a depletion of their none too
    abundant stocks of gold, or else to an influx of gold which
    they could not afford to leave unutilised . The increase
    or decrease in the stock of gold in the United States,
    which would be connected with such movements of gold,
    would have no material hearing on the monetary situation
    of that country, which, in spite of the fluctuations of its
    monetary stocks of gold, would he quite able to keep its
    general level of prices constant . Consequently the price
    level of the United States has a determining influence on
    the world price level, which is actually regulated by the
    leaders of United States bank policy .”
    Who are these leaders of United States bank policy
    who rule the world price-level today? The answer to
    that question deserves a chapter to itself, for when we
    uncover that leadership we reveal the seat of world
    control .
    CHAPTER V.
    THE MEN AT THE TOP.
    In the preceding chapters we have seen that the most
    important thing in determining the price level for
    commodities is the quantity of money : we have also seen
    that the dominating factor in the money situation it the
    United States Federal Reserve Board . This Board is
    undoubtedly the most powerful human organisation in
    the world today . As previously stated it was founded at
    the end of 1913 by President Woodrow Wilson . Its real
    creator was Mr . Paul Warburg. Mr. Carter Glass, who
    piloted the measure through the House of Representatives,
    claims to he its originator, but in two large volumes
    published last year, “The Federal Reserve System : Its
    Origin and Growth,” Mr . Warburg provides convincing
    evidence, amply supported from other sources, showing
    that he was the real originator of the board . In noticing
    these volumes the “American Review of Reviews” in
    June last told the story of the Federal Board as follows
    “Paul Warburg came to the United States from
    Germany thirty years ago . The story of his career might
    be more picturesque had he arrived via the steerage and
    the immigrant station at Ellis Island, but it happened
    that he took up his residence here as a young man of 34
    who had already won a junior partnership in the powerful
    banking firm of Kuhn, Loeb and Company .
    “He had been trained under the central banking
    systems of European countries, and to him American
    banking methods were archaic . If we had waxed
    prosperous as a nation it was in spite of a horrible
    banking system . With the rashness of outh he prepared
    a plan . Having prepared it, what else’ could he do but
    show it? In particular he showed it to the head of the
    firm, and the great Mr. Schiff (Jacob H. Schiff) passed
    it on to the great Mr. Stillman (James the elder).
    president of the National City Bank of New York. A
    few days later the young banker looked up from his desk
    to respond to Mr. Stillman’s friendly but sarcastic
    greeting : `How is the international financier?’ He was
    advised to leave things alone : America had nothing to
    learn from Europe .
    33
    34
    THE TRUTH ABOUT THE SLUMP
    “The panic of 1907 brought Mr . Stillman back to
    Mr. Warburg’s desk, and it brought to political as well
    as business leaders the need for financial reform . Mr.
    Warburg likens our banking system at that time to a
    community where each householder possesses a pail of
    water as a protection against fire and jealously holds on
    to his own supply whenever a neighbour’s house is
    threatened .
    “Looking back over the record of subsequent years one
    might wonder how Mr. Warburg kept his job with the
    banking house, so assiduously did he wage a campaign
    that was not ended with the passage of the Federal
    Reserve Act . In January, 1907, before the financial panic
    of the same year, he wrote by invitation an article for
    the `New York Times’ annual financial review under the
    title `Defects and Needs of our Banking System .’ Later
    in the midst of the panic he published a paper entitled
    `A Plan for a Modified Central Bank.’ He fought against
    the idea then prevalent of an elastic currency based
    exclusively on Government bonds . He fought against
    the dominance of political officers in any new plan . He
    argued for the inclusion of state banks and even trust
    companies at a time when others talked only of an
    association of national banks. He desired the inclusion
    of commercial paper among the liquid assets of a bank
    against which notes could be issued.
    “Five years after Mr. Stillman had poured cold water
    on his ideas Mr . Warburg was being consulted by
    Congressman Burton, and was enjoying one-way
    correspondence with Senator Aldrich, leader of the Old
    Guard and author of the Republican plan for reforming
    America’s banking system . . . ”
    The Federal Reserve Law was duly passed by
    Congress . It differed very slightly from what was desired
    by Mr. Warburg, and that gentleman is reported to have
    said that this difference could be “corrected by
    administrative processes.”
    Mr. Warburg was appointed a member of the board
    on its establishment, and has been described by the
    London “Times,” the late Sir Cecil Spring-Rice, British
    Ambassador at Washington during the war, and others,
    as the dominating force behind the Federal Reserve
    Board.
    The Warburg family pedigree will be found in that
    THE MEN AT THE TOP
    35
    monumental work, the Jewish Encyclopaedia . Mr. Paul
    Warburg is a younger brother of Herr Max Warburg,
    head of the banking house of Warburg and Company
    of Hamburg, established 1798 . A list of the partners in
    this important banking house will be found in the
    “Enropa Year Book.” In addition to members of the
    Warburg family, the partners include Dr . Ernst Spiegelberg
    and Dr. Carl Melchoir . Dr. Melchoir, described
    by Lord D’Abernon, late British Ambassador to
    Germany, as one of Germany’s greatest financiers, was
    one of the six members of the German delegation in chief
    to the Peace Conference at Versailles in 1919 . He is now
    chairman of the Financial Committee of the League of
    Nations, having succeeded Sir. Otto Ernst Niemeyer,
    and he has been a chief promoter of the Bank of International
    Settlements, planned to be the central bank for
    gold-control of the world, and staunchly supported by Sir
    Otto Ernst Niemeyer, and a large number of other
    Anglicised German-Jew financiers in London .
    The memoirs of Prince Max of Baden show that
    during the Armistice crisis in Germany in 1918 Herr
    Max Warburg was constantly consulted by him . Herr
    Warburg, with three others, actually drafted the speech
    delivered by Prince Max on taking over the Chancellorship.
    When the late Lord Lansdowne wrote his
    defeatist letter in 1917 urging peace, Herr Warburg was
    sent to the Hague on Germany s behalf to see what could
    be effected in the way of disposing of England. Prince
    Max of Baden refers to Herr Warburg as Germany’s
    greatest authority on American affairs, and the Prince’s
    memoirs show that Herr Max Warburg occupied a
    position of very great influence indeed in Germany . As
    we shall see later he has been described as the financial
    dictator of Germany .
    Herr Max Warburg was born in 1867. His brother,
    Mr. Paul Warburg, was born on August 10, 1868. From
    “‘Who’s Who in America,” it appears that Paul Warburg
    married Miss Loeb, daughter of Mr . Solomon Loeb of
    the firm of Kuhn, Loeb and Company, in 1894. He thus
    became a brother-in-law of the late Mr . Jacob H . Schiff,
    who had also married a Miss Loeb, and who had
    succeeded as head of the firm.
    Another brother, Mr. Felix Warburg, born in 1870,
    had gone to the United States in 1894, marrying a
    daughter of Mr. Schiff a year later, and becoming a
    36 THE TRUTH ABOUT THE SLUMP
    naturalised American citizen in 1900 . He also became a
    member of the firm of Kuhn, Loeb and Company, which
    his brother Paul joined on arrival from Hamburg in 1902,
    becoming naturalised as an American citizen a year or
    two before the war.
    Another partner in the firm of Kuhn, Loeb and
    Company since 1897 is Mr . Otto H . Kahn. Mr. Kahn
    was born at Mannheim in Germany in 1867. He became
    a naturalised American citizen and later on a naturalised
    British subject . Mr. Kahn gave his London residence,
    St. Dunstan’s Lodge, as a hospital for Blinded British
    soldiers during the war. Mr. Kahn published a book of
    memoirs in 1921, “Reflections of a Financier” (Hodder
    & Stoughton), and the foreword to it is written by the
    Rt. Hon. J. H. Thomas, now Secretary of State for the
    Dominions. Mr. Thomas wrote of Mr . Kahn in highly
    eulogistic vein, his concluding words being, “Otto Kahn’s
    face is towards the light .” When we come to examine
    the world-wide ramifications of the firm of Kuhn, Loeb
    and Company, and the nature of its activities, this
    intimacy of a British Labour leader with one of its
    partners will appear a little singular .
    Some interesting reference to the early history of the
    firm of Kuhn, Loeb and Company appears in “All in a
    Lifetime” (Heinemann, 1923), the autobiography of Mr.
    Henry Morgenthau, formerly United States Ambassador
    to Turkey. Mr. Morgenthau writes (p. 77)
    “Another group in the financial oligarchy (of New
    York) was Kuhn, Loeb and Company, originally clothing
    manufacturers in Cincinnatti, then note brokers, and
    finally bankers . Their great feat was taking over
    from the United States Government Receiver the Union
    Pacific Railroad and re-organising it . They then made
    their famous alliance with E. H. Harriman, and
    established themselves in the first rank of American
    financiers through the success of this joint financing of
    the Union Pacific Railroad, one of the most profitable of
    all feats of financial legerdemain ever accomplished .
    “The trust companies entered the ranks of the
    financial oligarchs by virtue of a peculiar provision of the
    banking laws which permitted them to accept deposits
    and grant the checking privilege against them which was
    enjoyed by the banks, without being required to mainTHE
    MEN AT THE TOP
    37
    tain the cash reserves against deposits, which was exacted
    of the banks . By paying interest on daily balances they
    attracted the best-the non-borrowing-accounts.”
    In mentioning a transaction of his with the Knickerbocker
    Real Estate Trust Company of New York, in
    1899, Mr. Morgenthau states that “among its members
    were Solomon Loeb, of Kuhn Loeb, Henry O . Havermeyer,
    John D . Cummins and John E. Parsons.” It was
    the failure of the Knickerbocker Trust that precipitated
    the great New York financial panic of 1907, which panic
    has been widely denounced in the United States Congress
    and elsewhere as having deliberately been created by
    financiers at a time when the country was in a state of
    prosperity. A run occurred on the Knickerbocker Trust
    and other institutions which were left unsupported, the
    persons making the run being, it is alleged, of the
    millionaire class. The panic was used to direct attention
    to the need for reform of the banking laws and led to the
    success of the campaign of Mr . Paul Warburg, partner
    in the firm of Kuhn, Loeb, for the establishment in the
    United States of central banking on more or less German
    lines .
    For many years, until his death in 1920, the head of
    the firm of Kuhn, Loeb and Company was Mr . Jacob
    Henry Schiff. Mr. Morgenthau in his memoirs refers to
    Mr. Schiff as “Mr . Schiff, the great financier and much
    beloved leader of the Jews, and recognised as one of the
    most eminent citizens of America .” The Schiff pedigree
    appears in full in the Jewish Encyclopaedia . In this
    work it is stated that the Schiff family is the oldest
    contemporary Jewish family of which there is any record,
    its earliest known member having been born about 1370 .
    This fact, in conjunction with Mr. Morgenthau’s reference
    to Mr. Schiff as the `leader of the Jews’-Mr. Morgenthau
    himself being one of the leading members of the Jewish
    race domiciled in America-lends an especial significance
    to the far-reaching operations of the late Mr . Schiff and
    .his partners, operations which now encircle the entire
    globe and affect the trade and industry of all nations .
    The following biographical sketch of Mr. Schiff’s
    career, up to the date of its publication in 1906, appears
    in the Jewish Encyclopaedia :
    “Jacob Henry Schiff, American financier and
    philanthrop

  2. On February 14, 2011 at 11:34 pm hoff2 said:

    The following biographical sketch of Mr. Schiff’s
    career, up to the date of its publication in 1906, appears
    in the Jewish Encyclopaedia :
    “Jacob Henry Schiff, American financier and
    philanthropist, born January 10, 1847, at Frankfort-on38
    THE TRUTH ABOUT THE SLUMP
    Main, adopted the vocation of his father, one of the
    brokers of the Rothschilds in that city . In 1865 he
    emigrated to the United States, and was employed for a
    time by Frank and Gans, brokers, New York. In 1867
    he formed the brokers firm of Budge, Schiff and
    Company, which was dissolved in 1873. He then went
    to Europe and made connections with some of the chief
    German banking houses . Returning to the United States
    he became on January 1, 1875, a member of the banking
    firm of Kuhn, Loeb and Company, New York, of which
    he was soon practically the head .
    “Owing to his connection with the German money
    market Schiff was able to attract much German capital
    to American enterprise, more particularly in the field of
    railway enterprise. His firm, under his direction,
    became the principal reconstructors of the Union Pacific
    Railroad about 1897 ; and in 1901 it engaged in a
    struggle with the Great Northern Pacific Railway. This
    resulted in a panic on the New York Stock Exchange
    (May 9, 1901), in which the firm of Kuhn, Loeb and
    Company held the situation at its mercy . Schiff’s
    moderation and wise action on this occasion prevented
    disaster and caused his firm to become one of the leading
    influences in the railway financial world, controlling
    more than 22.000 miles of railway and 1 .321,000,000
    dollars (1264,200,000) stock . To him was largely due the
    establishment of community of interests among the chief
    railway combinations to replace ruinous competition,
    which principle led also to the formation of the Northern
    Securities Company. Schiff’s firm was chosen to float
    the large stock issues, not only of the Union Pacific
    Railroad, but also of the Pennsylvania Railroad, the
    Baltimore and Ohio, the Norfolk and Western, and the
    Missouri Pacific railway companies, the Western Union
    Telegraph Company, and many others .
    “It subscribed for and floated the large Japanese war
    loans in 1904 and 1905, in recognition of which the
    Mikado conferred on Schiff the Second Order of the
    Sacred Treasure of Japan . He was also received in
    private audience in 1904 by King Edward VII of
    England.
    “Schiff is connected with industrial and commercial
    activities. He is a director of the Union Pacific,
    Baltimore and Ohio, and the Chicago, Burlington and
    THE MEN AT THE TOP
    39
    Quincy railway companies ; of the Western Union
    Telegraph Company ; of the Equitable Life Assurance ;
    of the National Bank of Commerce and the National City
    Bank, the Morton Trust Company, the Col imbia Bank,
    the Fifth Avenue Trust Company, and of various other
    trust companies in New York as well as Philadelphia .
    “Schiff has especially devoted himself to philanthropy.
    “All municipal reform movements in New York
    likewise have been supported by Schiff ”
    Mr. Schiff died in New York on September 25, 1920 .
    The amount of his fortune was not disclosed . The
    London “Times” in a lengthy obituary notice of him
    which appeared in its columns two days later, stated that
    he left Frankfort at the age of 18 as one of a small band
    who set out to seek their fortunes abroad . In addition
    to the companies mentioned above the “Times” recorded
    that Mr. Schiff was a director of the Central Trust
    Company, the Wells, Fargo Express Company, the Title
    Guarantee and Trust Company, the Bond and Mortgage
    Guarantee Company, and many others.
    From the foregoing it will be seen that Mr . Schiff,
    as head of the firm of Kuhn, Loeb and Company, played
    an active and important part in effecting those huge
    amalgamations of railway and other capital which were
    fought by President Roosevelt in his anti-trust
    campaigns . The Northern Securities Company formed
    by Mr. Schiff was so glaring a violation of the Sherman
    Anti-trust Law that it was sued by the Attorney-General
    of the United States and declared illegal by the Courts.
    Apart from this case the Sherman Law up to that date
    had accomplished practically nothing. Mr. Roosevelt,
    fighting for the people against these giant trusts, had a
    long and bitter contest with Mr . Harriman, a railway
    magnate very closely associated with the firm of Kuhn,
    Loeb, if not virtually a department manager of that
    concern. The suit against the Northern Securities
    Company, which company created a huge trust of the
    railways to the Northern Pacific Coast, was brought by
    President Roosevelt following a request by the Governors
    of six States concerned for action to protect their people .
    We have already seen how the financial crisis of 1893
    was made to the orders of the American Banking
    Association, according to documentary evidence quoted
    40
    THE TRUTH ABOUT THE SLUMP
    in Congress . One of the results of that panic, created
    by the financiers, was that the Union Pacific Railroad
    went into the United States Government Receiver’s
    hands, being unable to meet its liabilities . Mr.
    Morgenthau tells us that Messrs . Kuhn, Loeb next got
    hold of it and reorganised it by “one of the most profitable
    of all feats of financial legerdemain ever performed .”
    Webster’s International Dictionary defines the word
    “legerdemain” as follows : “Sleight of hand ; a trick of
    sleight of hand ; hence, any artful deception or trick.”
    Much information about the watering of stock and
    the over-capitalisation of the American railway companies
    will be found in the “New Encyclopaedia of Social
    Reform,” published by Messrs . Funk and Wagnalls, New
    York, in 1908. For instance, the Union Pacific Railroad
    was immensely over-capitalised and this was common to
    most systems . The Encyclopaedia says
    “In its final report, 1902, the United States Industrial
    Commission states that out of 457 million dollars increase
    in railroad capitalisation in 1900, only 120 million dollars
    could be explained by new construction, the other 337
    million dollars, or nearly four-fifths of the whole, being
    due almost entirely to sudden expansions in securities,
    in cases of reorganisation and consolidation . . . .
    “Inflation of capital is regarded by many as a species
    of robbery. It is one of the most seductive methods_ of
    getting something for nothing which has yet been
    invented. The corporations and monopolies of America
    are greater sinners in this line than are to be found in
    any other country ”
    In its article headed “Corruption” the same
    publication quotes the following excerpt from the New
    York “Independent” of May, 1907, as to the Chicago and
    Alton Railroad. The Mr. Mortimer L. Schiff mentioned
    is the eldest son of the late Mr. J . H. Schiff
    “A syndicate composed of Mr . Harriman, Mortimer
    L. Schiff, James Stillman, and George J. Gould, bought
    nearly all the stock of the company. Within six years,
    under their management, the capital stock was increased
    from 40,000,000 dollars to 122,800,000 dollars, although
    only 22,000,000 was spent for improvements. Large
    quantities of bonds issued by the syndicate were virtually
    sold to the syndicate at sixty-five and then marketed at
    ninety to ninety-six, a considerable part being taken by
    THE MEN AT THE TOP
    41
    the great life insurance companies. The controlling
    owners also declared and paid to themselves a dividend
    of 30 per cent. The profits of these transactions appear
    to have exceeded 24,000,000 dollars . In due time 103,000
    shares of the Alton stock were sold to the Union Pacific .
    The testimony showed that heavy commissions, amounting
    to several millions had been paid to the affiliated
    banking-house for its services in handling securities .”
    In its article on “Railways and Railway Problems,”
    the “Encyclopaedia of Social Reform” makes reference to
    a transaction in which Mr . J. H. Schiff was concerned .
    Under the heading “Stock Gambling,” it says
    “Railway stocks constitute the backbone of speculation
    in Wall Street and corresponding centres of
    speculation in other cities . Panic after panic has been
    precipitated in Wall Street by the struggles of rival
    buyers to control the stock of some railroad . In 1901,
    for example, the stock of the Northern Pacific was forced
    up to 1,000 dollars a share, and one of the worst panics
    of recent years was the result . Those in control of
    railroads can easily make large sums by manipulating
    stocks so as to affect their values .”
    Under the heading “Railway Politics” this same
    American reference book says
    “From Maine to California for many years our
    railways have done their best to control the government
    of our States and cities so far as they come in contact
    with transportation interests, and for the most part they
    have succeeded . Now and then a wave of popular
    sentiment has overcome their influence in legislative
    bodies, as during the Granger movement in the ’70′s, and
    the Roosevelt movement of 1905-07, but in the long run
    the railroads have been able to control in large measure
    the nomination of members of legislatures and of the
    national Congress.”
    ” `The railroads will buy up a legislature just as they
    buy a car-load of mules,’ said the governor of a great
    state
    “Where it is necessary the railroads do not hesitate
    to use money to buy the votes of legislators, either to
    secure the passage of measures favourable to the roads,
    or prevent the passage of measures likely to do them
    injury.”
    42
    THE TRUTH ABOUT THE SLUMP
    Reference is made by the Encyclopaedia to another
    concern associated with the Kuhn-Loeb interests
    “Senator Platt testified that an insurance company
    like the Equitable usually gave 10,000 dollars a year to
    his machine as its ordinary political assessment, and more
    if it expected unusual favours.”
    The “New Encyclopaedia of Social Reform” quotes
    from articles on municipal corruption by Mr . Lincoln
    Steffens which appeared in “McClure’s Magazine” and
    were later published in book form under the title “The
    Shame of the Cities” (1904) . In this is given an
    account of. the colossal corruption in St. Louis, and
    among the corporations prominent in expending money
    corruptly were mentioned the Western Union Telegraph
    Company and Missouri Pacific Railroad, with both of
    which Kuhn, Loeb and Company are mentioned above
    as having been associated .
    Under the heading of “Fostering Monopoly,” the
    Encyclopaedia says
    “Our railways foster monopoly directly and indirectly .
    By consolidation and combination they are building up
    numerous monopolies in the railroad field, and by
    concessions to favoured trusts and combines like the
    Standard Oil, the Beef Trust, the Sugar Trust, etc., they
    help to build up vast monopolies in manufactures and
    commerce. The Standard Oil monopoly was directly
    created by railroad rebate. The Beef Trust is another
    excellent illustration of a giant monopoly that owes its
    creation to the fostering care of railroad discrimination .
    “A distinguished railway officer writing in the
    `Outlook’ says
    “‘It is estimated that 50 million dollars have been
    converted into the treasuries of various trusts since 1887
    by means of rebates and other forms of favouritism, and
    that “present conditions promise not an abatement but
    an expansion of the methods by which this diversion may
    continue .”
    “‘The formation of the vast industrial trusts began
    in 1872 when the anthracite coal combination was formed
    by an alliance of producers and carriers and when the
    interests which compose the Standard Oil Trust first
    began to work in harmony with each other and use the
    power of their railroad allies to clear the field of
    competitors. Today there are 450 to 500 trusts, with an
    THE MEN AT THE TOP
    43
    aggregate capitalisation, including the railroad and other
    franchise trusts, of something like 20,000 million dollars .
    And still more trusts are forming and the limits of
    existing trusts are being extended and their interlocking
    interests increased and intensified. They are reaching
    out after the land, and the control of market, labour and
    raw materials. They are establishing international
    relationships aiming to monopolise the globe in their
    lines of business . And they are joining hands with each
    other.
    “‘On the whole the situation seems to be this : The
    railways and other big franchise monopolies are
    co-ordinating with the great commercial combines into
    a gigantic machine controlled by a few financiers and
    created to manufacture or capture profit for them .
    Events are moving towards a consolidation of interests
    that will give a handful of capitalists practically imperial
    power through the vastness of their industrial dominions .
    There may be breaks in the movement, probably will be,
    but the integration of industry seems likely to continue
    in spite of strenuous efforts to prevent it by statutes and
    decisions .
    . . .
    “‘And the railways are generally regarded as forming
    the basis of the structure, or a large part of it . I have
    met with this opinion all over the United States and in
    some other countries .”‘
    In the article on “Corporations,” the Encyclopaedia
    prints the following :
    “With corporate capitalisations running up into the
    billions of dollars and controlling entire industries, it is
    necessary to keep the control in close touch with large
    financial and banking interests. Thus the gigantic
    railroad, industrial, and public utility corporations of the
    United States are all managed from what is commonly
    known as `the Wall Street end .’ That is, the control of
    the companies, as represented in the boards of directors
    and officers, is all in the hands of the banking interests
    of the country, who supply the necessary capital, combine
    the plants, form underwriting syndicates, float the
    securities, devise the plans of capitalisation and stand
    at the forefront of the financial organisations. The
    boards of directors are usually chosen by the banking
    interests, and of course all matters of policy are either
    approved or devised by these same banking interests.
    44
    THE TRUTH ABOUT THE SLUMP
    Naturally the banking interests advocate policies which
    will serve to strengthen their control of the particular
    industries and conserve whatever special privileges the
    enterprises may have .”
    This view is very similar to that expressed by Mr.
    Louis D. Brandeis, now a justice of the United States
    Supreme Court, and the first Jew to be appointed a
    member of this highest American Court and the guardian
    of the Constitution . In his book, “Other People’s
    Money,” published fifteen or sixteen years ago, Mr.
    Brandeis said
    “The dominant element in our financial oligarchy is
    the investment banker. Associated banks. trust
    companies, and life insurance companies are his tools .
    Controlled railroads, public service and industrial
    corporations are his subjects . Though properly but
    middlemen these bankers bestride as masters America’s
    business world, so that practically no large enterprise
    can be undertaken without their participation and
    approval .”
    Before we trace the steps by which the American
    money power has blossomed out under this direction to
    control the whole commence of the world, it is advisable
    first to take a glance at the system whereunder the
    financial ring has the people of Germany in leading
    strings.
    CHAPTER VI.
    THE GERMAN SIDE OF THE STORY.
    If you will turn to the article on banking in the 1929
    edition of the Encyclopaedia Britannica you will find that
    this authoritative work of reference states that the
    modern German banking system was established after
    the revolution of 1848. If you turn to that equally
    reputable English periodical, the London “Spectator,”
    you will find in its issue of October 16, 1920, a leading
    article in which it points out that the revolutions which
    occurred in Europe in the year 1848 were led by Jews,
    just as the Bolshevik revolution in Russia in 1917 was
    led by Jews . Thus we get the position that a banking
    system which (as we shall see) has made Jewish bankers
    supreme in Germany was established following on a revolution
    led by Jews . This may be a coincidence, or it
    may not.
    In his book “Freedom in Finance” (Fisher Unwin,
    1919), Sir Oswald Stoll says
    “The financial ring which girdles the earth is
    gathered from all nations . Powerful elements in it are
    essentially American, but the dominating influence is
    Teutonic.”
    Of the German banking system Sir Oswald Stoll said :
    “Six great German banks control scores of thousands
    of millions of capital throughout the world, through
    direct and indirect associations and silent partnerships.
    See Document No . 593 of the United States Senate
    issued at Washington by the National Monetary
    Commission .”
    This American Government document is a bulky
    volume of 1042 pages and deals with “The German Great
    Banks and their Concentration in Connection with the
    Economic Development of Germany .” It shows how the
    financial ring holds German industry in the hollow of its
    hand.
    In 1916 the late Dr . E. J . Dillon, for many years one
    of the best informed writers on foreign affairs in the
    English monthly reviews, wrote a book, “Ourselves and
    Germany” (Chapman & Hall, 1916), in which he made
    45
    46
    THE TRUTH ABOUT THE SLUMP
    reference to German banking methods, particularly in
    foreign countries . Dr. Dillon, for instance, described
    how in Italy and Brazil the German financiers had
    founded banks with high-sounding names indicating a
    local origin, with local directors, and with much money
    subscribed locally, but with all real control kept in
    German hands. These banks, according to Dr . Dillon,
    were used in all sorts of ways for the exploitation of the
    local population for the advantage of the German
    financiers who had established them .
    For example, if it was desired to obtain control of a
    local’ industry, – it would be offered extraordinarily
    attractive banking terms and induced to give its account
    to the German bank. Lavish advances would be made
    until the concern was judged to be too deep in to extricate
    itself. At this stage the screw would be put on by some
    not too glaring means, the heavily indebted concern
    plunged into such difficulty that in the end the bank took
    it over for a fraction of its value.
    Another device, according to Dr . Dillon, was for the
    bank to put pressure on those of its customers in its debt
    to give their foreign business to the German firms in
    which it was interested . People who failed to follow the
    good advice given and did not buy and sell through the
    German channels so kindly suggested by the bank were
    said to find themselves up against all sorts of financial
    and credit difficulties, springing up from no apparent
    cause on all sides of them . Of course, it was war time
    when Dr. Dillon wrote his book, and he was probably
    less reserved in what lie said about German methods than
    would have been the case had he written when we were
    at peace with Germany.
    The backbone of German trade is the close alliance
    between the banks and the kartels . A kartel is a “trust”
    or “syndicate” of trades or industries . These trusts make
    binding agreements as to output, markets, profits, and
    prices . Each kartel has a monopoly of a given district,
    and all the firms in the kartel work together as to output
    and prices. Under the kartels the German retail dealer
    becomes a mere agent. He may only buy and sell from
    his local kartel . He may buy and sell only such goods
    as the kartel allows ; and the buying and selling price
    and the quantity he may sell are all fixed by the kartel .
    The kartels in their turn are controlled by the banks,
    which- virtually own them. Most British people have
    THE GERMAN SIDE OF THE STORY 47
    heard of the great German dye trust, built up on an
    English invention for the extraction of dyes from coal
    tar. What is true of the dyes is also true with a rough
    parellelism of metallurgy, engineering, the electrical
    industry, and so on . In passing it may be noted that
    according to Lord D’Abernon’s memoirs of his
    ambassadorship in Germany, Herr Deutsch, head of the
    great German electrical combine, the Allegemeine
    Electricitats Gelleschaft, employing 60,000 men, is a
    near relative of Sir George Lewis, the famous London
    society lawyer who was said to know more family secrets
    than any other man in Britain, and Herr Deutsch’s wife
    is a sister of Mr. Otto Kahn, partner in the firm of Kuhn,
    Loeb and Company of New York . This little fact enables
    one to realise how international in its connections is high
    finance.
    The kartels of Germany were largely built up by
    Jewish bankers of that country, and later German
    Jewish bankers in the United States played a prominent
    part in building up the great trusts there by means of
    which they brought American industry under their own
    control.
    Many writers have remarked on the curious fact that
    although the Jews have been worse treated in Germany
    than in Britain there appears to be a more sympathetic
    feeling among them for Germany than for Britain . It
    is stated that the German or Ashkenazim Jews, who today
    constitute a great portion of the world’s Jewry, have no
    blood connection with the Jews of Palestine, but are the
    descendants of people who at the time of the Kajar
    Empire in South Russia, about A .D. 800 to 1000,
    emigrated to it from central and southern Europe and
    the Near East, attracted to the Kajar domains by the
    prestige of that empire, whose Emperor, incidentally, had
    became a convert to Judaism . The immigrants became
    converts to the Jewish faith also, and intermarrying with
    each other and with the Mongoloid and Armenoid
    Asiatics they found there produced the type now
    commonly called Jewish. When the Kajar (also spelled
    Khazar) Empire came to an end some of those people
    remained in Southern Russia and others gravitated back
    to the lands from which they had originally come .
    Mr. E. A. Skrine in his “Expansion of Russia”
    (Cambridge University Press, 1904, p. 275), wrote that
    “Russia, rather than Palestine, is the Jewry of the
    48
    THE TRUTH ABOUT THE SLUMP
    modern world ; for out of six and a half millions of the
    chosen people four-fifths are to be found within that
    Empire.”
    The Sephardim, or Spanish, Jew is a different type
    altogether, and according to the Jewish Encyclopaedia,
    “the Sephardim never engaged in chaffering nor usury,
    and they did not mingle with the lower classes .” On
    being expelled from Spain and Portugal they became
    widely scattered over Western Europe. Disraeli, for
    example, belonged to the Sephardim . Further the Jewish
    Encyciopaedia states that “although the Sephardim lived
    on peaceful terms with the other Jews they rarely
    intermarried with them .”
    The Jews have been much persecuted in Germany,
    and the newspapers of late have recorded further outbursts
    against them . The persecution of the Jews is no
    doubt connected to a large extent with their addiction to
    usury . As Mr. Arthur Kitson says in his book “The
    Money Question”
    “Originally denounced as immoral by the founders of
    the Christian Church, and legally prohibited for many
    centuries, it (usury) has become the very foundation
    upon which our so-called Christian civilisation has been
    built . The practice of charging for the loan-formerly
    termed usury-was expressly forbidden among the Jews
    by the laws of Moses . Permission to exact usury from
    the Gentiles was, however, granted-a permission of
    which the Jews were not slow to avail themselves, and to
    which is attributable more than to any other cause the
    terrible persecutions they underwent during the Middle
    Ages, as well as in later times .”
    In a war-time book, “Degenerate Germany” (T.
    Werner Laurie, Ltd ., 1915), Henry de Halsalle wrote as
    follows of the position of the Jews in Germany
    “In the Teuton’s wonderful capacity for hate the Jew
    occupied the first place until August last . Of modern
    Germans the hysterical Treitschke it was who first
    arrainged the Hebrew . In a series of articles in the
    ‘Preussische Jahrbucher’ (November 15, 1879, et seq .)
    he screamed a warning to Germany of the growing power
    of the Jews ; he pointed out their solidarity as a separate
    caste (and race) ; he called attention to their power and
    arrogance in the press, to their resentment of German
    (Christian?) . criticism . of. themselves . and. their. ways,
    THE GERMAN SIDE OF THE STORY 49
    while they arrogated their own right to criticise wheresoever
    and whomsoever they thought fit. In this attitude
    of the Jews Treitschke affected to find the cause of the
    then Anti-Semite agitation raging in Germany . So
    widespread is the loathing of the Jew by the German
    that it has brought into being a complete Anti-Semite
    literature . . . Jews are still sternly boycotted in the
    `best’ society : they are not admitted as active officers in
    the army, although they are suffered in the reserve
    “To a man the Germans not only hate but fear the
    Jew. Only too well do they know that he dominates the
    Press . The great international news agencies, Reuter
    and Wolff are controlled by him . He commands the
    money and the produce markets . He directs the theatres,
    supplies the capital, most of the performers (not to
    mention critics), and furnishes a remunerative audience .
    All the professions in Germany (save the army and navy)
    are crowded with Jews. The law abounds with them and
    there are not a few on the judicial bench . A Jew founded
    Germany’s mercantile marine . The best and largest
    houses in Berlin, in the Tiergarten and the Bellevuestrasse,
    are almost all the property of Jews . Nay, if the
    German Press possessed the power of the British Press ;
    if entry to the Reichstag could be assured by wealth, and
    if the German Army were to admit to officership all the
    Jews who go up for examination, Germany would soon
    become the Jewish Empire . And pagan Germany knows
    it, and has feared it for many years past . . . . It is
    the Jew who is primarily accountable for Germany’s late
    commercial prosperity : the Germans know it, but are too
    envious and conceited to say so . . . . Whatever town
    of importance you visit in Germany you will find that the
    principal doctors there, the men of science, art, and
    literature are of the Jewish faith. . Amazing it is
    that this wonderful, ancient race, scientific, artistic, far
    more clever in every way than the upstart Germans,
    should take the German ill-treatment of them `lying
    down’ and still persist in vainly seeking an entry into
    Berlin `society .’ Who knows, however, what will happen
    in 19 . Will the Jews then inherit the kingdom of
    Prussia. ? Will the German Empire become the
    Jewish Empire?”
    Mr. de Halsalle is not animated by any feeling of
    hostility towards the Jews of Germany. On the contrary,
    50
    THE TRUTH ABOUT THE SLUMP
    he remarks : “I must say it is not without admiration I
    regard the Teutonic Israelite.” In stating that the Jews
    dominated many departments of activity he was merely
    recording facts, and his general line of argument was
    that the German was a person inferior in every way to
    the Jew he despised, but who dominated his country, or
    promised soon to do so. ‘
    In the “National Review” for March, 1925, Mr . Arthur
    Kitson made some reference to German finance and
    banking methods in the course of an article entitled
    “The International Bankers’ Game .” In this article
    appeared a lengthy extract from an article originally published
    in thee November, 1924, issue of Mr . Henry Ford’s
    paper, the “Dearborn Independent .” As we will see in
    a subsequent chapter, Mr. Ford in 1927 made a general
    retraction of his criticisms of the Jews published in the
    “Dearborn Independent,” and his son, Mr . Edsel Ford,
    now president of the Ford Motor Company, in 1929
    became a fellow director in a colossal international
    chemical combine with Mr. Paul Warburg, whose
    activities were described in this article in the “Dearborn
    Independent.” So far as the writer knows no specific
    retraction of this article was made by Mr. Ford or by
    the “National Review,” which reprinted it . Moreover,
    Mr. Kitson in a previous issue of the “National Review”
    (November, 1924) had published a general outline of the
    same facts, apparently obtained from independent
    sources. It would thus not appear that any injustice will
    be done by reprinting excerpts from Mr . Kitson’s article
    of March, 1925 . In his opening paragraphs Mr . Kitson
    said
    “In the November issue of the `National Review’ I
    outlined the plot conceived by certain German-American-
    Jewish financiers for dominating the world under the
    currency system known as the `gold standard,’ which is
    being carried to a successful issue with the aid of certain
    of our London bankers at an astonishing rate of speed .
    (Note.-Britain returned to the gold standard in the
    month following the publication of Mr . Kitson’s article.)
    “The progress of this conspiracy was traced from its
    incipiency down to the introduction of the Dawes
    Scheme-starting with the passage of the American
    Federal Reserve banking system, which was established
    under President Wilson, with Mr . Paul Warburg, a
    German-Jewish banker of Hamburg (who became a
    THE GERMAN SIDE OF THE STORY 51
    United States citizen only three years prior to the War)
    as its controller.”
    In the second portion of his article Mr. Kitson wrote
    as follows
    “Whilst our financiers and treasury officials (whose
    chief significantly bears the name of Sir Otto Ernst
    Niemeyer) have been assisting in welding the golden
    chain which is to control the British public, the
    instigators of the whole policy have been busy in other
    directions. Mr. Henry Ford has recently thrown a flood
    of light on the recent movements of Mr . Paul Warburg
    and his associates in New York and Germany .”
    In a footnote Mr. Kitson said
    “It is worth noting how unanimous our Anglicised
    German financiers are in desiring the re-establishment of
    gold in this country – Sir Felix Schuster, Baron
    Schroeder, Mr. Otto Kahn, Fruhling Goschen, Kleinworth
    & Co ., etc.” The name of Professor Theodor
    Emanuel Gugenheim Gregory might appropriately have
    been added to this list .
    Mr. Kitson continued as follows
    “It should be remembered that a conspicuous member
    of the Warburg group, Mr. Otto Kahn-an Americanised
    German-has recently adopted England as his home, and
    has been expressing his great admiration for the gallant
    British public who are bravely shouldering their debts
    and setting to the world an example of national honesty !
    How he must chuckle to himself when he reads his
    opinion quoted seriously in a Sunday newspaper which
    has made the -cause of the moneylenders its own! In a
    burst of enthusiasm this journal recently exclaimed,
    `What a fortunate people we are!’-referring to the
    recent speeches of the Presidents of the five great banks
    which, together with the Bank of England, constitute
    one of the most gigantic monopolies in the world : a
    monopoly that is today the `dead hand’ paralysing our
    trade and commerce .
    “In the November number of Mr . Ford’s paper, the
    ‘Dearborn Independent,’ the financial conspiracy outlined
    by me in last November’s `National Review’ is fully
    confirmed in the following paragraph which appears as
    an introduction to the series of articles written by the
    American journalist, Mr. Hamilton York . He says
    `This is the first of a series of articles in which will be
    52
    THE TRUTH ABOUT THE SLUMP
    set forth the elements of a scheme which is intended to
    place in the hands of a small group of international
    financiers, not only the arbitratment of the fate of Europe,
    but control of the destinies of all nations . In this article
    the activities of Paul Warburg, of New York, a German-
    Jewish financier, naturalized in America, are fully
    explained .’ The writer then proceeds as follows
    “‘The adoption of the Dawes Report establishes a
    mechanism whereby the world’s gold is placed in control
    of the general board of the Schacht Gold Bank of Berlin,
    organised at the suggestion of the Warburgs in anticipation
    of the Dawes Report as a cover for the
    international group of financiers-of which Mr . Paul
    Warburg is a member-and the existence of which Mr.
    Otto Kahn denies .
    “‘It would not he possible to make this statement so
    confidently were it not for another event, namely, that
    Congress passed an amendment to the Federal Reserve
    Act in March, 1923, which authorised the Federal Reserve
    Bank to discount credit paper, including foreign
    acceptances. The Federal Reserve Board waited until
    March, 1924, before taking advantage of that authority .
    The resolution of the Board, which now permits
    discounting of foreign acceptances, was promulgated in
    April, 1924, almost simultaneously with the issuance of
    the Dawes Report .
    “‘The full significance of the last event does not
    appear until it is digested in terms which appeal to the
    German-Jewish banker, which may be stated thus
    “‘By re-discounting German trade acceptances,
    participating American banks and their depositors are
    financing the revival of German trade and secondarily
    Russian trade .
    “‘It indicates further that the German-Jewish banking
    system by means of which Germany is now controlled
    has been imposed upon the United States from without,
    where it could not be made to grow from within .
    “‘If the American people are to gain a clear understanding
    of the system of financial control which is about
    to be imposed upon international commerce through
    credit operations, and which has been gradually developing
    in the United States since the passage of the Federal
    Reserve Act in 1914, the best way is to observe the
    system as it exists in Germany . Its home is in that
    THE GERMAN SIDE OF THE STORY 53
    country where it has been moulded into a perfect machine
    by a small group of men, practically all Jews .
    “‘It is not a question of the adequacy of the wage
    which the system allows for service as opposed to what
    service would bring in a free and open labour market, but
    it is a question of the possibilities of exploiting everybody
    through artificially induced variations in the value of
    money. Should even the most powerful fail to become a
    cog in the system, he is economically broken, and he is a
    lucky man if he can gain a livelihood for himself and his
    family thereafter. As will be shown, this system of
    punishment has already been introduced into the United
    States.
    “‘It is perfectly correct to call this a Jewish system,
    for that mind has developed it through long years of
    ambitious training and experience. At least, as far back
    as the time of Frederick the Great, Jewish bankers
    dominated German finance . Itzig, Ephraim & Co. of
    Berlin furnished the money for the prosecution of the
    Seven Years’ War, and to build Sans Souci and the larger
    palace at Potsdam . Itzig was also a notable leader of
    the Berlin Kahilla.
    “‘Moses Mendelssohn, the earliest of the Jew
    Nationalists in a modern sense, was a close associate of
    Itzig’s son-in-law, Friedlander. Already the influence of
    the house of Rothschild was beginning to be felt throughout
    Europe. Within ten years after the opening of the
    nineteenth century, the private banking house of
    Bleichroder was established in Berlin, and for many,
    many years the Bleichroders managed the personal
    finances of the Hohenzollerns .
    “‘The Bleichroders and the Mendelssohns represented
    a school of private bankers which has been pushed aside
    by an invasion of more aggressive Jewish types from the
    north-east, and which apparently had stronger admixture
    of Tartar blood in their veins . They were not satisfied
    to be private bankers, but started in to gain enonomic
    control and also to own the State. We must credit the
    Warburgs, the Wolfs, the Rathenaus and their close
    associates for building up . the present Jewish financial
    system in Germany . Real control began in the late
    ‘seventies as the result of financing State ownership of
    the railway. This is a romance all by itself, and well
    worth the study of anyone .
    54
    THE TRUTH ABOUT THE SLUMP
    `Extensions of credit-teaching people to become
    dependent on credit-were necessary to the development
    of the modern speculative financial system . Co-ordinate
    with these was the growth of that external trade
    necessary for the maintenance of a growing population .
    As the business of Germany grew and the liquid capital
    increased, the control became more and more centralised
    in Jewish hands, until in the last half of the last Kaiser’s
    reign the banking cabal controlled the State . It was
    the State .
    “‘Germany could not have started the aggressive
    war of 1914 without the encouragement and assent of
    this group. It was this group that staged an opera bouffe
    revolution to fool the world with the loss of only a few
    lives . In establishing the so-called republic it fixed the
    laws in such a manner that its own position was made
    more secure, and finally through the active participation
    of Walter Rathenau, it arranged the relations of big
    business to the State so that the political organization of
    the German Reich today is simply a front for this small
    group of German financiers . These men can do as they
    please, and have done as they please with the German
    people.
    “‘The key to this situation, the fact that allows the
    persistence of such a pernicious system, lies in the
    German law which permits banks to hold shares in other
    banks and in industrial corporations . Until the passage
    of the Federal Reserve Act such privileges were not
    accorded banks in the United States for fear that there
    might develop a system of overlordship which has
    reached such perfection in Germany . Eventual control
    of industry and the banking facilities of the country
    would necessarily drift into the hands of a few . But the
    Jewish system of Germany has led and directed such a
    movement for concentration and apparently with a
    conscious objective . The result is that the interlocking
    directors of the greatest German banks, about six in
    number, dominate the country . The list would include
    The Reichsbank of issue for the Government bankers’
    central bank, the directors of which are responsible for
    the depreciation of the German mark and the suffering
    which it entailed ; the Disconto Gesellschaft ; Max
    Warburg & Co ., of Hamburg, to which was allocated the
    shipping of Germany, and which controlled the North
    German-Lloyd and Hamburg-American lines ; the
    THE GERMAN SIDE OF THE STORY 55
    Deutsche Bank, mainly concerned in the development of
    the metal industries ; and the Bank fur Handel and
    Industrie (Darmstadter Bank) . It is quite possible to
    contend that others should be included . It is difficult to
    draw a line . In any event with the Reichsbank as a key
    bank the list is substantially correct .
    “‘The outstanding fact is that by a system of interowning
    stocks, interlocking directorates, assignment of
    spheres of interest, and by a mutual arrangement of
    interests, the banking system is one whole, presenting
    different fronts in different corporate names . The control
    lies, perhaps, in the hands of a hundred men who cluster
    in the directorates of the banks named, and whose names
    appear in the directorates of the largest corporations,
    and of whom 95 per cent. are Jews . As is usual in associations
    of this character, there are a few who lead. While
    the figure of Max Warburg, of Hamburg, may not loom
    large three thousand miles away as the dominating figure
    of this aggregation, since the death of Walter Rathenau,
    the Warburg influence has been the directing force, has
    furnished the financial finesse which has enabled his
    group greatly to increase its power, and this has been
    mainly accomplished through the faithful co-operation
    of his two brothers, Paul and Felix, in New York .
    “‘At the present time these bankers absolutely control
    and expoit for their own gain four-fifths of the internal
    commerce of Germany, whether industrial, agrarian, or
    what not. The residual one-fifth represents small transactions
    between individuals in small communities in
    which the profit is nominal.
    “‘The inquiring individual will wonder how it is
    possible to include within the above designation the
    word “agrarian.” How are farm products controlled?
    The history of this phase of their undertaking is an
    interesting one, and its accomplishment furnished a most
    difficult task. But it was eventually achieved. The
    control of the markets, and the methods of transportation,
    the organisation of land banks for the purpose of
    giving credit to the agrarians, who in turn had to be
    taught to accept credit, these banks being linked in with
    the general system, all comprised the machinery which
    enslaved the -farmer. The working man was captured
    and held through the imposition of social insurance laws,
    compulsory health insurance, for instance, as was fully
    described by Bismarck, who said in his autobiography
    56
    THE TRUTH ABOUT THE SLUMP
    that these laws were passed to throw “a golden chain
    about the necks of the workers .”‘”
    That is the whole passage from the “Dearborn
    Independent” quoted by Mr. Kitson . He adds the
    following comment
    “It will be remembered that similar insurance laws
    were enacted under the Asquith Liberal regime, having
    been introduced from Germany by Mr . Lloyd George .
    “These ‘Dearborn Independent’ articles are of
    enormous interest and importance to every person who
    wonders where Europe is drifting . They prove
    conclusively that under the gold standard-the virtues
    of which our bankers and city editors are just now
    extolling-the world is being enmeshed in a net which
    will leave the wealth producers of all countries as helpless
    as the Russian peasants are under the system of
    Bolshevism instituted by Lenin and Trotsky.
    “The one aim of these financiers is World Control by
    the creation of inextinguishable debts ! And since gold
    is a metal which neither laws nor inventions can increase,
    the supplies of which Nature has so far limited to a
    comparatively insignificant quantity, control has become
    a very simple achievement . And the irony of the situation
    is in remembering that this instrument – of slavery was
    the creation of a British Statesman on the advice of a
    British banker!
    “It will be remembered that in my November article
    I stated how averse the American people have hitherto
    been to the establishment of a Central Banking System .
    Past experience showed the danger to the State in
    allowing any group of individuals to control the money
    and credit of the people .
    “Both President Wilson and Senator Owen, who
    stood sponsor for the new banking system, believed that
    the Federal Reserve Banking System prevented any
    possibility of a money or credit monoply . But Mr. Paul
    Warburg appears to have outwitted them, and this
    system, which is modelled on the German bank principle,
    is now the recognised source of the money supplies
    which the Warburg group are employing on behalf of
    Germany and Russia, the same group vAiich financed
    Lenin and Trotsky ! . . .
    “It may be enquired in what way can this group of
    THE GERMAN SIDE OF THE STORY 57
    German-American-Jewish bankers control British
    finances? The answer is simply by means of their
    control of America’s gold supplies . It is with this group
    that our simple-minded Governor of the Bank of England
    will be compelled to deal. The control of gold under the
    gold standard means the control of credit-which led the
    late Sir Edward Holden to admit in one of his illuminating
    addresses to the Bankers’ Institute : `Gold therefore
    controls the trade of the world .”‘
    Readers who may be inclined to question the above
    view of the role played by the Warburgs in recent
    international events will find ample indications of it in
    the occasional references in the Memoirs of Price Max
    of Baden to the influential position occupied by Herr
    Max Warburg during the momentous period in German
    history when Price Max was Chancellor and the German
    republic was in process of establishment . The fact that
    Dr. Carl Melchoir, the only non-Parliamentary member
    of the main German Peace Delegation at Versailles in
    1919 was a partner in Warburg and Company, Hamburg,
    is equally significant of the great influence of this
    banking house in German affairs . Still more significant
    is the leading part taken by Dr. Melchoir in the
    foundation of the Bank of International Settlements, and
    his chairmanship of the Financial Committee of the
    League of Nations .
    Mention has been made by Mr . Kitson of Warburg
    connection with the transportation to Russia of Lenin
    and Trotsky, and their alleged financing of the Bolshevik
    revolution . Before proceeding to trace out the steps by
    which the Federal Reserve System . was established in the
    United States it is expedient to devote a chapter to
    Russian affairs.
    58
    CHAPTER VII.
    HOW RUSSIA WAS SMASHED UP.
    That there was strong Jewish hostility to the Tsarist
    regime in Russia is a well-known fact . In a previous
    chapter it has been noted in a quotation from the Jewish
    Encyclopaedia how Japan was financed in her war against
    Russia in 1904-05 by the late Mr. Jacob H . Schiff,
    partner and brother-in-law of Mr. Paul Warburg . Mr.
    Schiff was described by a foremost American Jew as the
    “beloved leader of the Jews,” and by the Jewish
    Encyclopaedia as head of the oldest contemporary Jewish
    family of which there is record . It has been stated in
    the “National Review” that this Jewish financial support
    of Japan is thought to have been a retaliation for Russia’s
    treatment of the Jews .
    The late Sir Cecil Spring-Rice, British Ambassador
    to the United States at the time, records a further
    striking instance of Jewish dislike of Russia in a letter
    written by him in January, 1914 . Under the old Hague
    peace scheme the United States had negotiated treaties
    of arbitration with various countries for the settlement
    of international disputes without recourse to war . That
    with Russia fell due for renewal, and Sir Cecil Spring-
    Rice in a letter written in January, 1914, recorded that
    President Woodrow Wilson proposed a new treaty in its
    place. He added
    “No sooner was the President’s statement made than
    a Jewish deputation came down from New York and in
    two days `fixed’ the two Houses so that the President
    had to renounce the idea of making a new treaty with
    Russia. They are far better organised than the Irish and
    far more formidable . . Their present objective is
    to have a judge on the Supreme Court bench . Speyer,
    the brother of your friend, has lost his influence by
    marrying a Christian . Bernstorff (German Ambassador
    at Washington) has sent his son into Speyer’s office
    The principal Jew is now Schiff.”
    The above extract indicates both the hostility of the
    Jews towards Tsarist Russia and their power in the
    United States . Their desire for a Jewish judge on the
    HOW RUSSIA WAS SMASHED UP
    59
    Supreme Court bench was gratified in 1916 when
    President Wilson appointed Mr. Louis Brandeis to be an
    associate justice of this highest American Court . The
    Mr. Speyer referred to is apparently Mr . J. J. Speyer,
    head of the American financial firm of that name, and
    brother of Sir Edgar Speyer whose certificate of
    naturalization as a British subject was revoked in 1922
    in consequence of transactions with Germany during the
    war. Born in Germany, Sir Edgar Speyer had settled
    in London in 1887 and became the head of the firm of
    Speyer Bros ., his wealth was large, and as the London
    “Times” pointed out in its issue of January 7, 1922, “he
    was the friend of distinguished persons, he was a
    munificent patron of music . He was created a . baronet
    in 1906 and a Privy Councillor in 1909 .” In 1915 he
    went to the United States and remained there . In his
    book, “The Alien Menace,” Lt .-Col. A. H. Lane states
    that Sir Edgar Speyer was closely associated with the
    late Mr. Asquith, afterwards Earl of Oxford . Nevertheless,
    despite the honours bestowed upon him by Britain,
    this eminent German-Jew was in the end found by the
    Government to be unworthy of the privilege even of
    ordinary British citizenship, much less of being an
    adviser to the King in His Majesty’s Privy Council .
    However, we are drifting away from the Russian side
    of our story . A recent writer on Russia is Mr. Walter
    Russell Batsell, and the following passage from page
    20 of his book, “Soviet Rule in Russia” (Macmillan’s,
    New York, 1929), is not without significance .
    “History will be likely to give prominence to plans
    for the destruction of Russia formulated at the Masonic
    Congress held at Brussels a few years before the world
    war ; and, secondly, the final episode relating to the
    murder (of the Russian Royal family) at Sverdlovsk will
    be recorded as an act of Sverdlov, the Jewish head of the
    governmental authority under whose guidance the final
    act of vengeance was apparently engineered .”
    Mr. Batsell added the following footnote to this
    statement
    “See E. A. W alsh, `The Fall of the Russian Empire’
    (Boston, 1926), page 110, for mention of the plan of the
    (Grand Orient) Free Masons to use Rasputin to destroy
    Russia, and chapters ix-xi of the same book for details
    of the murder of the Tsar and his family .”
    60
    THE TRUTH ABOUT THE SLUMP
    Mr. Batsell also quotes in his book the following
    passage from a book, “The War of Lost Opportunities,”
    written by General von Hoffman, chief of the German
    general staff on the Russian front during the war :
    “Some man [in Germany] who had connections with
    the Russian revolutionaries exiled in Switzerland came
    upon the idea of employing some of them to hasten the
    undermining and poisoning of the Russian army . He
    applied to the Deputy Erzberger and the Deputy of the
    German Foreign Office and thus it came about that
    Lenin was conveyed through Germany to St . Petersburg
    in the manner that afterwards transpired .”
    There is some reason to think that the German
    Government was reluctant to sow the seeds of revolution
    in Russia . Revolutionary ideas are infectious, and it is
    dangerous for an autocratic monarch to provide an
    example of successful revolution in a neighbouring
    country, even if it is temporarily an enemy country .
    A revolution had occurred in Russia in 1905, as a
    result of which the first Duma, or Parliament, was
    established . A workers’ Soviet was set up by the
    revolutionaries and of this the Jew ‘Leon Braunstein,
    afterwards better known as Trotsky, became the head
    until arrested, when he was succeeded by Dr . Helphand
    (alias Parvus), of whom more anon .
    In a letter published in the London “Spectator” on
    June 12, 1920, Mr . Lucien Wolf, a well-known Jewish
    journalist and author of the article on Anti-Semitism in
    the new edition of the Encyclopaedia Britannica, asserted
    that when the Russian revolution occurred in 1905 the
    secret police of that country were set to work to stir up
    pogroms, or massacres and persecutions of the Jews,
    who were blamed for the revolution . As part of the
    anti-Jewish propaganda, according to Mr . Wolf, there
    was published a pamphlet by Professor Sergius Nilus, a
    minor official in the Russian Foreign Office, containing
    what Mr. Wolf declared to be baseless and repeatedly
    exposed forgeries, the “Protocols of the Learned Elders
    of Zion,” setting forth a plan for Jewish world
    domination, ‘allegedly found in documents stolen from
    a member of a Masonic society in France .
    At the end of 1905 the Tsar and the Kaiser met and
    signed their famous secret treaty of Bjorko . Mr. Wolf
    states that in January, 1906, the Tsar approved a secret
    HOW RUSSIA WAS SMASHED UP
    61
    memorandum drawn up by Count Lamsdorff, Russian
    Foreign Minister, setting out that the Jews were the soul
    of the revolutionary movement throughout Europe, that
    “their principal aim is the all-round triumph of anti-
    Christian and anti-Monarchist Jewry, and that their
    millionaries subvention this movement with gigantic
    pecuniary means .” The pamphlet of Professor Nilus.
    according to Mr. Wolf, was used as support for this
    contention, and he states that the Tsar proposed to the
    Kaiser a secret agreement for combating Jewish and
    Masonic peril . The whole idea of any such peril,
    according to Mr. Wolf, is absolutely baseless .
    It is an established fact that the Bolshevik leaders
    were predominantly Jewish . In a previous chapter we
    have seen that the Jews, though powerful, are not loved
    in Germany . Mr. Lucien Wolf establishes the fact that
    the Tsar was afraid of Jew revolutionaries and Jew
    millionaires . The Jewish Encyclopaedia records how a
    Jewish millionaire financed Japan’s war against Russia,
    a millionaire, moreover. who has been described by a
    prominent Jew as the leader of the Jews . Mr. Wolf
    records how the Tsar in 1906 sought a secret agreement
    with the Kaiser to combat Jewish revolutionaries and
    millionaires .
    It would appear from the foregoing that the Imperial
    German Government might well be disposed to regard
    the loosing of Jew revolutionaries on Russia as a twoedged
    weapon to be used only as a last resort. Bearing
    in mind Mr . Batsell’s statement relative to a plan
    formulated before the war to use Rasputin, the debauchee
    monk, as a means for the destruction of Russia, it
    becomes interesting to consider the sequence of events
    in that country . Rasputin, by means of successful
    treatment of the sickly Tsarevitch, and by means of
    spiritualistic seances, had gained conplete ascendancy
    over the Tsarina and was in her full confidence, and thus
    in a position both to influence Russian policy and to learn
    in advance of contemplated governmental action . Moreover,
    the Tsar and Tsarina were greatly damaged in
    popular regard and esteem by their association with so
    notorious a rascal and looseliver as this drunken monk .
    whose motto was “Sin that ye may be forgiven .”
    By the influence of Rasputin M. Protopopoff was
    made Minister of the Interior and head of the last Tsarist
    Government. As we shall see later M . Protopopoff had
    62
    THE TRUTH ABOUT THE SLUMP
    been in touch with one of the Warburgs at Stockholm
    and was alleged to be in receipt of money through them .
    It was considered by many patriotic Russians that the
    Protopopoff rule was leading Russia nowhere save to
    defeat, and the upshot was the Kerensky revolution with
    the objective of establishing a democratic pro-Ally
    Government in Russia .
    With these facts in mind it is instructive to consider
    the following table of dates
    1916, December 15 .-The monk Rasputin is assassinated
    in the palace of Prince Yussopoff .
    1917, March 15.-Kerensky pro _Ally Revolution in
    Russia . The Tsar abdicates .
    1917, April 6 .-The United States declares war on
    Germany.
    1917, April 9.-Lenin and 29 other Russian revolutionaries
    are embarked on a sealed train in
    Switzerland and taken through Germany to
    Stockholm and thence to Russia .
    These dates show that if there was a plan to destroy
    Russia through Rasputin that plan failed – with his
    assassination, and failed doubly when the pro-German
    Protopopoff Ministry (established by Rasputin’s
    influence) fell, and the Tsarist regime was succeeded by
    a democratic pro-Ally and truly Russian Government
    under Kerensky.
    Events thereupon moved swiftly . The United States,
    after years of hesitation, declared war on Germany, and
    three days after this disastrous addition to the already
    formidable ranks of her enemies, Germany took the
    desperate step of loosing on Russia the few revolutionaries
    in Switzerland. Thus, if it needed pressure to
    induce the German Government to take this step the
    entry of the United States into the war was surely
    sufficient pressure .
    At this juncture it may be noted that in his book “The
    Jews” (Constable, 1922), Mr. Hilaire Belloc in his
    chapter on the Jews in the United States says
    “The last and apparently the most unpopular of
    the Presidents seems to have been wholly in their
    hands.”
    That President Woodrow Wilson was susceptible to
    Jewish influence is amply revealed in “The Letters and
    HOW RUSSIA WAS SMASHED UP
    63
    Friendships of Sir Cecil Spring-Rice” (Constable, 1929),
    and in “The Intimate Papers of Colonel House” (1926) .
    In a- subsequent chapter we shall see more clearly the
    extent of Jewish power in the United States .
    Reference to the financial connections of Rasputin
    is made in the following passage from “My Mission to
    Russia” (Cassell & Co ., 1923), the memoirs of Sir George
    Buchanan, British Ambassador to Russia from 1910 to
    1918 (vol . 1, p . 245)
    “Rasputin was at the same time accused of being in
    German pay-a charge that was not strictly speaking
    correct. He was not in immediate communication with
    Berlin, and he did not receive money directly from the
    Germans ; but he was largely financed by certain Jewish
    bankers, who were to all intents and purposes German
    agents . As he was in the habit of repeating to these
    Jewish friends of his all that he heard at Tsarskoe [the
    Tsar's palace], and as the Empress consulted him on
    both military and political questions, much useful
    information reached the Germans through this indirect
    channel . Without being their regular agent he was,
    moreover, rendering them yeoman service by discrediting
    the Imperial regime and thus paving the way for the
    revolution.”
    It is an exceedingly curious thing that a century
    earlier another charlatan, Cagliostro, with Jewish and
    Masonic associations, had played a part in the extraordinary
    affair of the Diamond Necklace, which
    discredited the French royal family and paved the way
    for the French Revolution . Cagliostro is said to have
    been financed by the Illuminati of Bavaria, a Masonic
    organisation with similar objectives to those embodied
    in the “Protocols of the Learned Elders of Zion,”
    published by Professor Nilus, and declared by Mr . Lucien
    Wolf and other Jewish writers to be forgeries . The
    existence of the Bavarian Illuminati and their programme
    are, on the other hand, matters of historically established
    fact. All that we know about the Protocols is that the
    Jews declared them venomous forgeries and that the
    programme set out in them is being steadily fulfilled, as
    we shall see in a later chapter .
    Returning to the course of events in Russia, we find
    it set out in “Russia’s Ruin’ ‘(Chapman & Hall, 1919),
    a book by Mr. E, H. Wilcox, who had been the London
    64
    THE TRUTH ABOUT THE SLUMP
    “Daily Telegraph’s correspondent in St. Petersburg.
    how M . Protopopoff had headed the Russian Parliamentary
    delegation which had visited England in the
    latter part of 1916. On page 137 Mr . Wilcox records
    that shortly after M . Protopopoff’s return to Russia “it
    became known that on his way back he had had an
    interview at Stockholm with a member of the German
    Legation, Warburg by name .” There was a stormy
    debate in the Duma, and it was alleged that M . Protopopoff’s
    newspapers were being subsidised by the Germans .
    M. Protopopoff being at this time in office, the affair
    went no further . Sir George Buchanan in his memoirs
    tells how Protopopoff had attained office (Vol . 2, p . 33)
    “On his return journey he (Protopopoff) had had an
    interview with a German financier named Warburg at
    Stockholm that had seriously compromised him . His
    explanations failed to satisfy the Duma, and finding that
    he had lost all hold on that Chamber, he determined to
    throw in his lot with the Court party. He made friends
    with Rasputin and Pitirin, and as in an audience which
    he had to report on the delegation’s visit to London and
    Paris his ingratiating manners had made a favourable
    impression on the Emperor and Empress, he was
    through their influence appointed Minister of the
    Interior.”
    Sir George Buchanan relates how after the assassination
    of Rasputin M. Protopopoff was in the habit of
    carrying on spiritualistic seances in his place for the
    benefit of the Empress, and he also tells that Protopopoff
    was in the habit of having shoals of bogus telegrams sent
    to the Empress from fictitious persons from telegraph
    offices in all parts of Russia assuring her of their love
    and support .
    In the course of an interview with the Tsar, Sir
    George Buchanan states in his memoirs that he remarked
    to His Majesty that he appeared to be badly advised in
    his selection of Ministers. The Tsar inquired to whom
    the Ambassador referred . Sir George Buchanan replied
    “M . Protopopoff, who, if your Majesty will forgive
    my saying so, is bringing Russia to the verge of ruin
    . . . . The Duma can hardly place confidence in a
    man who has betrayed his party for office, and who has
    had an interview with a German agent at Stockholm,
    HOW RUSSIA WAS SMASHED UP
    65
    and who is suspected of working for a reconciliation with .
    Germany.”
    The Russian people revolted against Protopopoff rule,
    and Kerensky got into power. A democratic government
    representative of the Russian people and in alliance with
    Britain was the last thing apparently desired by the
    international wirepullers behind the scenes .
    This brings us to the tale of how Bolshevism was
    imposed on Russia, just as central banking was imposed
    on the United States, and the restoration of the gold
    standard was imposed on Britain-all these phenomena
    apparently being manifestations of the same subterranean
    forces today enmeshing nations and individuals
    in the chains of slavery .
    Reference has been made above to an individual
    named Helphand, also known under the name of Parvus,
    who succeeeded the Jew Trotsky as head of the Soviet
    in the revolution of 1905 . This man was the go-between
    who arranged the transport of Lenin to Russia. In the
    biography of Lenin by Valeriu Marcu (Victor Gollancz,
    London, 1928) is the following (p . 38)
    “Parvus, a friend of Trotsky’s as far back as 1905,
    had set out to prove that the Master’s (Lenin’s) theories
    could also bring good fortune to the individual in
    business life, and accordingly had speculated during the
    war, as a true internationalist, in Berlin, Copenhagen,
    Vienna, and Constantinople ; now hoping for political
    laurels, he advised the Foreign Ministry in Berlin to
    let Lenin pass through .”
    “Parvus, the provocateur, a socialist with a very
    tarnished reputation”- is how Mrs . Ariadna Tyrkova
    Williams, widow of the late Harold Williams, for long
    one of the foremost British correspondents in Russia,
    describes this figure in the drama . In her book, “From
    Liberty to Brest-Litovsk” (Macmillan, 1919), Mrs.
    Williams writes (p . 105)
    “Parvus (Helpland) had grown rich, as he described,
    by corn contracts in Turkey, or as others declared,
    through the generosity of the German Government .
    During the war Parvus settled in Copenhagen, where he
    opened a suspicious socialist bureau . His friend,
    Ganetski-Furstenburg, had been sent out of Denmark
    for shady smuggling transactions. . Through
    Ganetski-Furstenburg the Bolsheviks used to obtain
    66 THE TRUTH ABOUT THE SLUMP
    large sums of money from an unknown source abroad .”
    In 1917 an effort was made to get the socialists of the
    world to unite in demanding peace by means of an
    international socialist congress at Stockholm. Referring
    to this abortive effort Mrs . Williams says (p . 109)
    “From whom did the initiative proceed? . . Did
    not Branting, the able and honourable Swedist socialist,
    become the plaything of the no less clever, but dishonest,
    Parvus ?”
    There is ample evidence that money was poured out
    like water in Russia in putting across the Bolshevik
    revolution of July, 1917 . Of the sources from which
    this money came Mrs . Williams says (p . 144)
    “On 20th July, three days after the insurrection .
    Alexinsky, a Social Democrat of the Plekhanoff group,
    and the Social Revolutionary Pankratieff (an old
    Revolutionary) wrote to the papers saying that they had
    documentary proofs that the Bolsheviks had received
    money from Berlin, through Stockholm . Even the banks
    were named : the Disconto Gelleschaft, Nya Bank, the
    Siberian Bank. The names of the intermediaries were
    also given : Parvus, Ganetsky, Summonson, and
    Kozlovsky .”
    Mrs. Williams also states that documents published
    by the Procurator of the Kerensky Government on
    August 3, 1917, certified that :
    “Large sums of money were transferred to Petrograd
    by a Russian Jew, Helfant, commonly known among
    international socialists by his literary pseudonyn of
    Parvus. This obscure international speculator, who
    acquired an enormous fortune, styled himself as the ideal
    inspirer of Bolshevism . The German Socialist Democrat
    Haase revealed the strange connections of Parvus with
    the Imperial German Government . This fact did not
    prevent Schiedemann from keeping up friendly relations
    with Parvus, and from staying with him at Copenhagen
    in the sumptuous villa of this apostle of the proletariat .
    The Russian Intelligence Department possessed data
    proving the connection between the Bolsheviks and the
    Imperial German Government, but Kerensky’s Government
    fell apart without having published its information,
    and without arriving at any definite conclusions on the
    subject

  3. On February 14, 2011 at 11:41 pm hoff2 said:

    The Russian Intelligence Department possessed data
    proving the connection between the Bolsheviks and the
    Imperial German Government, but Kerensky’s Government
    fell apart without having published its information,
    and without arriving at any definite conclusions on the
    subject.
    HOW RUSSIA WAS SMASHED UP
    67
    Mr. Wilcox in his book, “Russian’s Ruin” (Chapman
    & Hall, 1919), also refers to the activities of Parvus
    ” . . . The chameleon-like Parvus (Dr . Helphand),
    who began life as a Russian, then took on Turkish
    citizenship, and finally during the war became naturalised
    in Germany where he managed to reconcile professions
    of advanced socialism with the accumulation of considerable
    wealth, and with subservience to an Imperialist
    regime . His name figures prominently in the documents
    by which it has been sought to implicate Bolshevism in
    the designs of the Wilhelminian Government.”
    On page 236 of his book Mr . Wilcox states
    “Parvus during the war ran a paper, `Die Glocke’
    (The Bell), in Germany for the exposition of a curious
    mixture of Socialism and Imperialism. Lenin was an
    occasional contributor . On one of Hindenburg’s birthdays
    this paper printed an article eulogising the Field
    Marshal as the embodiment of the German genius, and
    declaring that as his work was facilitating the conclusion
    of peace his name should be `sacred to socialists.”‘
    As to the amount placed at the disposal of the
    Bolsheviks for the purpose of effecting their revolution,
    Mrs. Williams says on page 291 of her book :
    “One is forced to draw the conclusion that the
    hundreds of thousands, or rather millions, spent by Lenin
    and his followers were furnished to them from some
    exchequer which had millions at its disposal . Only banks
    and State exchequers have the possibility of subsidising
    propaganda on such a scale .”
    The most authentic statement of the sources which
    furnished the means for the enslavement of the Russian
    people under the tyranny known as Bolshevism is that
    contained in the Sisson Report published by the American
    Committee on Public Information . A summary of this
    report, forwarded by its Washington correspondent,
    was published in the London “Times” of October 18,
    1918, and from it the following excerpts are taken
    “The Committee on Public Information has issued a
    series of communications between the German Imperial
    Government and the Russian Bolshevist Government,
    and between the Bolshevists themselves, and also a
    report thereon made to Mr . George Creel, chairman of
    the Committee on Public Information, by Mr. Edgar
    Sisson, the Committee’s special representative in Russia
    68
    THE TRUTH ABOUT THE SLUMP
    during the winter of 1917-18 . . . . The documents
    are seventy in number. Many are originals annotated
    by Bolshevist officials . The balance of the others are
    photographs of originals, showing the annotations, and
    they corroborate a third set of typewritten circulars, but
    all of which fit perfectly into the whole pattern of
    German intrigue and German guilt .
    “The first document is a photograph of a report to
    the Bolshevist leaders by two of their assistants, informing
    them that in accordance with their orders there had
    been removed from the archives of the Ministry of
    Justice an order of the German Imperial Bank `allowing
    money to Comrades Lenin and Trotsky and others for
    the propaganda of peace in Russia,’ and that at the same
    time `all the books’ of the bank in Stockholm had been
    `audited’ to conceal the payment of money to Lenin and
    Trotsky and their associates by order of the Imperial
    German Bank.
    “This report is endorsed by Lenin with his initials
    for deposit in `the secret department’ of the Bolshevist
    files, and the authenticity of the report is supported by
    Document No. 2, which is the original of the report sent
    by the chief of the German General Staff to the Bolshevist
    leaders warning them that he had just arrested an agent
    who had in his possession the original order of the
    German Imperial Bank referred to in No . 1 .
    “Document No. 3 is the original protocol signed by
    several Bolshevist leaders and dated November 2, 1917,
    and showing `on the instructions of the representative of
    the German General Staff in Petrograd’ and `with the
    consent of the Council of the People’s Commissioners’
    two incriminating German circulars had been handed
    over to the Secret Service Department of the German
    General Staff in Petrograd.
    “One circular is an order from the German General
    Staff dated June 9, 1914, informing `all industrial concerns
    in Germany to open the sealed envelope containing their
    industrial mobilisation plans and registration forms’ so
    that they might be prepared for war. (At this date the
    Austrian Archduke Franz Ferdinand had not yet been
    assassinated!)
    “The second circular is an order from the German
    General Staff of the High Seas Fleet, dated November 28,
    1914, calling for mobilisation of `all destructive agents
    HOW RUSSIA WAS SMASHED UP
    69
    and observers’ in the United States and Canada for the
    purpose of preventing the sailing of ships from American
    ports to Russia, France and England . The order calls
    for explosions, strikes, `delays, embroilments and
    difficulties.’
    “Document No. 7, dated January 12, 1918, notifies the
    Bolshevist leaders `by order of the German General
    Staff’ that `the German General Staff orders us to insist
    on the election of the following people to the Russian
    Bolshevist Central Executive Committee .’ The list of
    persons satisfactory to the German General Staff is
    headed by Trotsky and Lenin. They were elected with
    the rest of the Committee, chosen from the same German
    list .
    “Document No. 28 is a photograph of a letter from
    the executive of the German Imperial Bank to the
    Bolshevist Commissioner of Foreign Affairs . It is
    marked `very secret,’ and is dated January 18, 1918 . It
    says : `Information has today been received by me from
    Stockholm that 50,000,000 roubles (nominally 15,000,000)
    have been transferred to be put at the disposal of the
    People’s Commissioners,’ which is the title of the
    Bolshevist leaders. `This credit,’ the letter continues,
    `has been supplied to the Russian Government in order to
    cover the cost of the upkeep of the Red Guards (the
    Revolutionary troops) and the agitators in the country .
    The Imperial Government considers it appropriate . to
    remind the Soviet of the People’s Commissioners of the
    necessity of increasing propaganda in the country as the
    antagonistic attitude of the south of Russia and Siberia
    to the existing (Russian) Government is troubling the
    German Government.’
    “Four days later the same president of the German
    Imperial Bank sent another 5,000,000 roubles to the same
    address to provide for the sending of Russian
    revolutionary leaders to Vladivostok to get possession of
    `Japanese and American war materials’ at that port and,
    if necessary, to destroy them .
    “Documents 10 and 11 contain `a resolution of a
    conference of representatives of the German commercial
    banks received by the chairman of the Bolshevist Central
    Executive Committee and endorsed by his secretary .’
    They give a complete synopsis of the terms- on which
    the German banks after the war were to control Russian
    industry .”
    70
    THE TRUTH ABOUT THE SLUMP
    Other extracts from these documents were published
    in the “Literary Digest” (New York) of September 28,
    1918 . The following passage from the circular to the
    German secret agents in the United States is interesting
    in view of the fact that at the time, November, 1914,
    Germany and the United States were at peace
    “It is necessary to hire through third parties, who
    stand in no relation to the official representatives of
    Germany, agents for arranging explosions on ships bound
    for enemy countries. . . . For this purpose we are
    especially recommending to your attention loaders’ gangs
    among which there are many anarchists and escaped
    criminals .”
    Another document is a communication from the
    German Secret Service to the Bolshevists containing this
    passage :
    “The agents sent by order from Petrograd to kill
    Generals Kaledin, Bogaevsky and Alexieff were cowardly
    and non-enterprising people .”
    Finally, the chairman of the Soviet Council is told in
    one letter
    “You can destroy the Russian capitalists as far as you
    please, but it would by no means be possible to permit
    the destruction of Russian enterprises .”
    In this manner, and by these disreputable agents and
    underhand means was this rule established in Russia .
    Bolshevism, though set up and proclaimed as socialism
    has provided Russia with nothing whatever in the way
    of liberty or democratic government . All the available
    evidence points to its being a worse tyranny than that
    which it superseded. Nevertheless, at the Peace
    Conference at Versailles in 1919 President Wilson sought
    to have the Bolshevik Government recognised by the
    Allies .
    In his book, “Through Thirty Years” (Heinemann .
    1924), Mr. H. Wickham Steed, editor of the London
    “Times” at the period of which he writes, records that
    President Wilson was concerned at the hostile reception
    to his proposal to recognise the Bolsheviks . Colonel
    House, the President’s right-hand man, was greatly
    worried over the matter, and talked it over with Mr .
    Steed . Mr. Steed advised Colonel House to tell the
    President that it would be wise to let the matter drop .
    to persist in it would merely expose American “idealism”
    HOW RUSSIA WAS SMASHED UP
    71
    as sordid commercialism . Mr. Steed adds (vol . 2, p. 302)
    “I insisted that unknown to him the prime movers
    were Jacob Schiff, Warburg and other international
    financiers who wished above all to bolster the Jewish
    Bolshevists to secure a field for German and Jewish
    exploitation of Russia.”
    Mr. Steed records that immediately following on this
    interview he wrote a leading article which appeared in
    the Paris edition of the London “Daily Mail” of March
    28, 1919 . In that article he condemned the proposed
    recognition of Bolshevik rule and said
    “Who are the tempters that dare whisper into the
    ears of the Allied and Associated Governments? .
    They are akin to, if not identical with, the men who
    sent Trotsky and some scores of associated desperadoes
    to ruin the Russian Revolution as a democratic anti-
    German force in the spring of 1917 .”
    In connection with the above statement it may be
    noted that Trotsky reached Russia from New York,
    Lenin from Switzerland via Germany and Stockholm .
    The New York financiers named by Mr. Steed were in
    close association with financiers active in Germany and
    recorded by other writers as participating in support of
    the Bolsheviks .
    It is a surprising thing that so far as the writers
    search of its files has gone, the London “Times,” though
    several times publishing statements on the British war
    debt to America, etc., by Mr . Paul Warburg-statements
    of an unsympathetic, not to say hostile nature-though
    referring to him as “the directing force behind the United
    States Federal Reserve Board during the war,” and so
    on : yet seems on no occasion to have enlightened its
    readers as to Mr . Warburg’s close connection with the
    leaders of German finance . Its silence on this significant
    fact is remarkable .
    As to the attitude of certain Jewish opinion in Britain
    towards the Bolshevik regime in Russia, Lt .-Col . Lane in
    his book quotes the following from the London “Jewish
    Chronicle” of April 4, 1919 .
    “There is much in the fact of Bolshevism itself, in the
    fact that so many Jews are Bolshevists, in the fact that
    the ideals of Bolshevism at many points are consonant
    with the finest ideals of Judaism .”
    It is true, according to Lt.-Col . Lane, that after long
    72
    THE TRUTH ABOUT THE SLUMP
    delay and in face of considerable comment on the absence
    of any disclaimer by Jews resident in Britain of sympathy
    with Bolshevism, a disclaimer was finally published
    signed by a number of leading Jewish peers of the realm
    and others.
    At this point it is not inappropriate to consider what
    befell Dr. Oscar Levy, a Jewish writer long resident
    in Britain who in 1920 published an unfavourable
    criticism of the part played by Jews in Russia . At the
    time these events transpired the Lloyd George Government
    was in office . Of that Government the “Spectator”
    wrote in its issue of June 20, 1920 :
    “We are convinced that at the present moment the
    professors of the Jewish faith are far too numerous in
    our Government. . . . We have got a great many
    more Jews than we deserve, and the wrong kind of Jew
    at that .”
    In its issue of October 10, 1920, the “Spectator”
    published among its book reviews a notice of a book
    written by Mr. W. G. Pitt-Rivers, “The World
    Significance of the Russian Revolution .” In this book
    was a prefatory letter by Dr. Oscar Levy, and from that
    letter the “Spectator” quoted a long passage, the general
    tenor of which is indicated by the two short extracts
    below
    “We who have posed as the saviours of the world are
    nothing else but the world’s seducers, its destroyers, its
    incendiaries, its executioners . . . ”
    After declaring that the Jews were not, however, all
    world revolutionaries or international financiers, Dr.
    Levy proceeded :
    “Our last revolution is not yet made . This last
    revolution, the revolution that will crown our revolutionary
    work, will be the revolution against the
    revolutionaries . It is bound to come, and is perhaps
    upon us now.”
    About eleven months later an order was made for
    the deportation of Dr. Levy from Britain under the war
    regulations just on the point of expiring. Dr. Levy
    was a well-known scholar of good repute ; he had been
    long resident in Britain but was not naturalised, and had
    brought himself technically under the regulations by
    paying a visit abroad of more than three months’
    duration. A protest against his deportation was signed
    HOW RUSSIA WAS SMASHED UP
    73
    by many eminent people, but the Government declared
    that the law must take its course . Dr. Levy left before
    the expiration of the order so that he was not actually
    deported, and the Governments of France and Italy both
    published announcements offering him their national
    hospitality should he desire to make his residence in
    either French or Italian territory . In his book, “The
    Jews,” published in 1922, Mr . Hilaire Belloc said of this
    incident (p . 193)
    “The case of Dr. Levy turned out of this country by
    his compatriots for having written unfavourably of the
    Moscow Jews will be fresh in everyone’s memory.”
    In some quarters it was urged that Mr. Belloc should
    be summarily called upon to make good his amazing
    assertion or else to retract and apologise for it . It does
    not appear that any action was taken to this end .
    Of the efforts of the Bolsheviks to suppress the
    Christian religion in Russia, and of the economic results
    of their rule something will be said in a later chapter .
    The various extracts from reputable sources of high
    authority grouped together in this chapter give a
    sufficient picture of the strong hostility of the Jews to
    Tsarist Russia and the powerful aid received financially
    by the Bolsheviks from quarters in which, as the chapter
    on Germany has shown, Jewish influence was
    predominant. Turning our gaze from this association of
    international finance with international revolutionaries,
    we shall now hark back to the course of events in the
    United States.
    74
    CHAPTER VIII.
    THE STRANGE STORY OF THE FEDERAL
    RESERVE BOARD.
    The fact that Mr . Paul Warburg founded the United
    States Federal Reserve Board has been recorded in a
    previous chapter, and we have seen also how by its
    control of gold this board today controls the trade of the
    whole world. The founding of the Federal Reserve
    Board is a romance in itself, and if we are to understand
    how completely high finance rules the world it is
    necessary to trace at least the main outlines of the story .
    As has been shown in earlier chapters, certain
    important steps in bygone days in getting Britain and
    America on to the gold standard were achieved by
    subterfuge and trickery, and the similarity of the trickery
    in two cases strongly suggests concerted international
    action. We have also seen how clearly the Hazard bank
    circular of 1862 revealed the determination of the
    financiers of that era in the United States to get the
    control of money away from the Government .
    The move in the United States in 1893 to abolish
    silver money co-incided with the announcement that
    India had stopped the free coinage of silver, and this
    announcement precipitated a crisis which the American
    Banking Association, according to the circular quoted
    by Mr. Lindbergh in Congress, had called upon the
    American banks to create in that country . Was this
    co-incidence accidental, or was there concerted action by
    international financiers? On top of this we have Mr.
    Kitson pointing out how the happenings of 1893 led to
    the growth of the money power in the United States and
    the development of the great trusts now dominating
    industry in that country .
    The panic of 1907, which was used as an argument
    for banking reform in the United States and which led
    to the fastening upon the American people of the German
    system of central banking, has been widely criticised as
    an artificial creation. The New York “Bankers’
    Magazine” for December, 1907, stated that “the bank
    runs in New York at first were made almost entirely by
    THE FEDERAL RESERVE BOARD
    75
    the well-to-do, and at no time did the ordinary depositors
    take fright in large numbers .” Commenting in Congress
    on this statement Mr. Gray, of Indiana, in a speech on
    the. Federal Reserve Bill on September 12, 1913, pointed
    out that in New York financial circles the phrase
    “well-to-do” covered only millionaires and multimillionaires,
    and that these were the people who made
    the runs .
    Mr. Gray in his speech quoted another extract from
    the “Bankers’ Magazine” . showing how the currency
    scheme embodied in the bill had been launched by Mr .
    Jacob Schiff before the New York Chamber of
    Commerce in 1906 . He added
    “The next year, 1907, when Nature responded with a
    most bountiful harvest, when manufactories were
    running full time . . . when every natural condition
    favoured the greatest prosperity, a panic was suddenly
    precipitated on the country, and the only explanation
    given the people was that it was a currency panic .”
    A large amount of similar criticism of the 1907 panic
    can be found in the United States Congressional Record
    in which the debates are printed, and one of the reports
    issued by the United States Monetary Commission a few
    years later deals severely with this panic and the way in
    which the concerns on which the run was made were left
    unsupported.
    Mr. Gray in his speech next pointed out that in the
    following year, 1908, Congress was importuned to pass
    legislation to prevent a repetition of the disaster . Mr.
    Gray added :
    “The New York bankers who had initiated this
    movement in the New York Chamber of Commerce
    through Jacob H . Schiff, January 4, 1906, had entered
    upon the campaign, and were conducting their
    operations, through the American Banking Association
    for the education of their country correspondents and
    the western bankers. To show the plan anti system of
    education carried on among these bankers I here quote a
    circular letter which was issued by this association in
    1893 during a similar campaign, bearing date March ii,
    1893, and circulated among the influential national banks
    of the United States .”
    Mr. Gray thereupon proceeded to quote the circular
    printed in Chapter III of this book, ordering the banks
    76
    THE TRUTH ABOUT THE SLUMP
    to create a state of monetary stringency among business
    men by calling up loans, etc ., and to tell them that the
    Sherman Silver Purchase Law was the cause of it, and
    thus induce them to demand the repeal of this law .
    In addition to providing ammunition for the
    campaign for central banking, the panic of 1907 yielded
    an immediate profit to the Money Ring. Mr. Gray says :
    “A great amount of stock which had depreciated as a
    result of the panic in the hands of innocent bystanders
    and unsuspecting investors was purchased at a ruinous
    sacrifice and held and re-sold at par. . . . And the
    further opportunity was taken advantage of to secure the
    absorption of the Tennesee Coal and Iron Company by
    the Steel Trust, its only formidable competitor, thereby
    making the monopoly in the steel industry complete .”
    In 1908 the Monetary Commission was set up by
    Congress to collect information on the subject of
    currency and banking reform . It visited Europe and
    published a vast amount of matter . “Most of it,”
    according to Mr . Gray, “was a revision of books and
    recast of documents of value mostly as history and
    without any special reference to present-day problems,
    and more calculated to bewilder and awe the mind, and
    impress both the common bankers and the citizens
    generally with the magnitude of the subject under
    investigation, and the impossibility of a full comprehension
    of the problem involved by the ordinary mind, to
    the end that a special few assuming superior wisdom and
    financial judgment might be allowed to dictate without
    question the reforms so urgently demanded.”
    The next step was to get legislation through, a great
    campaign for banking reform being at the same time
    conducted throughout the United States regardless of
    expense. To innocent outsiders it appeared as if
    merchants and business people were demanding central
    banking and the bankers were reluctantly yielding to the
    demand. For instance, Mr . Gray quoted as typical of
    the methods employed this circular sent out by the Chase
    National Bank to its western correspondents under date
    of February 21, 1912 :
    “The merchants interested in the work have felt that
    while they regard themselves as responsible for the
    raising of funds for the prosecution of the work, the
    country at large should know that the banking interest
    THE FEDERAL RESERVE BOARD
    77
    is in sympathy with that work.-A. H. Wiggins,
    President.”
    As an example of the intensive nature of the
    propaganda put out by the Money Ring to get the bill
    through Mr. Oscar Callaway, a member of Congress from
    Texas, gave this instance in his speech on the measure
    “Mr. Chairman, a paper in Texas called the `Home
    and State’ in its issue of August 23 said editorially : `Sit
    down and write a short letter to your representative in
    Congress as soon as you have read this and urge him to
    steadfastly support the Administration Currency Bill .
    There is nothing to be gained by discussing the details .
    It is enough for us to know that it has been endorsed by
    Woodrow Wilson and William Jennings Bryan.”‘
    The first effort at legislation, however, had taken
    place before Mr . Wilson became President . In 1911 .
    Senator Aldrich brought in a bill setting up a centrall
    banking system with the banks in full control of everything
    . The senator was leader of the Republican Old
    Guard, and his bill was fiercely resisted by the Democrats
    as a surrender of the national interests to the iniquitous
    Wall Street.
    To show the thoroughgoing way in which Mr . Paul
    Warburg had worked up support for his scheme, Mr.
    Gray quoted the following passage from a speech
    delivered by Mr . Warburg at a meeting of the National
    Board of Trade at Washington on January 18, 1911
    “I think you could not fail to have been impressed
    upon the reading of our report with the remarkable
    degree of unanimity with which the proposed central
    reserve association was approved . The delegates met,
    and after ten minutes they knew they were agreed on
    that question . We then met with delegates from the
    New York Produce Exchange and Merchants’ Association.
    It took us about half an hour to agree. Meanwhile
    Senator Aldrich’s plan had been brought forward, and it
    recommended the same plan that had been recommended
    by our association.”
    The Aldrich bill did not get through . Says Mr. Gray
    on this point
    “Most fortunately for the people, a change in
    administration came just in time to warn the party in
    power and defeat a colossal conspiracy to wrest from
    78
    THE TRUTH ABOUT THE SLUMP
    them the last vestige of public control over their
    currency .”
    Soon after Mr. Wilson had become President in 1912
    Congress set up a Commission, known as the Pujo
    Commission, to enquire whether or not there was a
    Money Trust in the United States . This Commission
    reported in March, 1913, that there was a Money Trust
    in existence, and it named the following concerns as
    constituting the inner ring and directing force
    J. P. Morgan and Company .
    The National City Bank of New York .
    Lee, Higginson and Company of Boston and New
    York.
    Kidder, Peabody and Company .
    Kuhn, Loeb and Company .
    The Commission reported that by a system of interlocking
    directorates, stock-holding companies and other
    forms of domination, the above five banking houses
    controlled no less than 112 banks and financial and
    industrial companies with resources in capital and
    reserves totalling the prodigious sum of 14,449,000,000 .
    A full list was published of the concerns thus controlled .
    The following is a summary :
    Class of Undertaking
    Resources, dollars
    34 banks and trust companies ____ 2,679,000,000
    10 insurance companies . . . 2,293,000,000
    32 transportation c o m p a n i e s
    (railroads, express and steamship
    companies)
    ._ . .
    __ ._ 11,784,000,000
    24 producing and trading companies
    ____
    . . . .
    ._. .
    . .. .
    3,339,000,000
    12 public u t i l i t y companies
    (power, light, telegraph, etc .)
    2,150,000,000
    112 companies
    Resources 22,245,000,000
    In the course of its voluminous report the Commission
    described the relations of the inner ring of five as
    follows
    “The first group, which for convenience we will call
    the inner group, consists of Messrs . J. P. Morgan and
    Company, the recognised leaders, and Mr. George F.
    Baker and Mr. James Stillman, in individual capacities
    and in joint administration of the First National Bank,
    THE FEDERAL RESERVE BOARD
    79
    the National Bank of Commerce, the Chase National
    Bank, the Guaranty Trust Company, and the Bankers’
    Trust Company of New York.
    “The second group, closely allied to this inner and
    primary group, is composed of the powerful international
    banking house of Lee, Higginson and Company, Kidder .
    Peabody and Company, with three affiliated banks in
    Boston.
    “The third group consists of the international house
    of Kuhn, Loeb and Company. This firm is only
    qualifiedly allied to the inner group, yet through its
    relations with the National City Bank, the National Bank
    of Commerce, and other financial institutions with which
    it has recently allied itself, it has many interests in
    common ; conducting large financial transactions with
    them, and having what virtually amounts to an understanding
    not to compete, which is defended on the
    principle of banking ethics . Together they have with
    few exceptions pre-empted the banking business of the
    important railways of the country .
    “The fourth group is in Chicago .”
    Elsewhere in its report the Commission said
    “The powerful grip of these gentlemen is on the
    throttle that controls the wheels of credit, and on their
    signal those wheels will turn or stop .”
    The general effect of this financial combination on
    American industry was outlined by the Commission on
    page 160 of their report as under
    “Issues of securities of local or small enterprises
    requiring moderate sums of money are frequently financed
    without the co-operation of these gentlemen ; but from
    what we have learned of existing conditions in finance,
    and the vast ramifications of this group throughout the
    country and in foreign countries, we are satisfied that
    their influence is sufficiently potent to prevent the
    financing of any enterprise in any part of the country
    requiring 10,000,000 dollars or over, of which for reasons
    satisfactory to themselves they do not approve . Therein
    lies the peril of this money power to our progress, far
    greater than the combined danger of all existing
    combinations. . . .
    “The acts of this inner group, as here described, have
    nevertheless been more destructive of competition than
    80 THE TRUTH ABOUT THE SLUMP
    anything accomplished by the trusts, for they strike at
    the very vitals of potential competition in every industry
    that is under their protection, a condition which, if
    permitted to continue. will render impossible all attempts
    to restore normal competitive conditions in the industrial
    world. . . .
    “The gentlemen constituting this inner circle,
    however, violated no law in what they have done, so far
    as we can discover, but that is rather because .
    the law has not yet properly safeguarded the community
    against this form of control .”
    Before we go on to consider the amazing way in
    which President Wilson handed over control of America
    to these financiers by a measure which he thought would
    curb them, it is convenient at this stage to insert a list
    of the banks and the industrial concerns controlled by
    the Money Trust in 1913 . Without such a list for
    reference the true inwardness of the colossal combinations
    formed during the past year or two in the United
    States and internationally cannot he grasped
    MONEY TRUST BANKS IN 1913 .
    New
    Name
    York-
    American Exchange National Bank
    Resources
    (dollars)
    63,000,000
    Astor Trust Company —- 27,000,000
    Bank of Manhattan —- 70,000,000
    Central Trust Company —- 118,000,000
    Chase National Bank
    —- 125,000,000
    Chemical National Bank —- 40,000,000
    Commercial Exchange Bank 78,000,000
    Equitable Trust Company __.. 102,000,000
    Farmers’ Loan and Trust Company —- 135,000,000
    Fourth National Bank 51,000,000
    ..__
    …. ..__
    Hanover National Bank ____
    __.. . … 126,000,000
    Liberty National Bank …. 29,000,000
    Mechanics and Metals National Bank 87,000,000
    National Bank of Commerce 190,000,000
    National Park Bank
    …. 123,000,000
    New York Trust Company 63,000,000
    Union Trust Company ._.. 74,000,000
    United States Mortagage and Trust
    Company …. 75,000,000
    ….
    ….
    …
    United States Trust Company …. 77,000,000
    Continental and Commercial National
    Bank
    —-
    —-
    ….
    ….
    …. 226,000,000
    Continental and Commercial Trust and
    Savings Bank
    ____
    . . . .
    . . ._
    27,000,000
    First National Bank
    -___
    . .-_
    137,000,000
    First Trust and Savings Bank 64,000,000
    Illinois Trust and Savings Bank ____ 107,000,000
    Merchants’ Loan and Trust Company
    65,000,000
    In the 32 transportation companies controlled by the
    Money Trust were included the leading American
    railway systems, and among the 12 public utility
    corporations was the great Western Union Telegraph
    Company controlled by Kuhn, Loeb and Company . The
    producing and trading companies controlled by the
    Money Trust were as follows
    Amalgamated Copper.
    American Agricultural Chemical Company.
    American Beet Sugar Company .
    American Can Company.
    American Car and Foundry Company .
    American Locomotive Company .
    American Smelting and Refining Company.
    Armour and Company .
    Baldwin Locomotive Works .
    Central Leather Company.
    Colorado Fuel and Iron Company .
    General Electric Company.
    Intercontinental Rubber Company .
    International Agricultural Corporation .
    International Harvester Company .
    International Nickel Company.
    THE FEDERAL RESERVE BOARD
    81
    Washington-
    American Security Trust Company 15,000,000
    Rigg’s National Bank
    …. 14,000,000
    Pittsburgh-
    Mellon National Bank 55,000,000
    Union Trust Company 69,000,000
    Philadelphia-
    Fourth St. National Bank ._.. 57,000,000
    Franklin National Bank . .. . 39,000,000
    Girard Trust Company …. 47,000,000
    Philadelphia National Bank 54,000,000
    Chicago-
    Central Trust Company –__ -___ -___ 50,000,000
    82
    THE TRUTH ABOUT THE SLUMP
    International Paper Company.
    Lackawanna Steel Company .
    National Biscuit Company .
    Pullman Company.
    United States Rubber Company.
    United States Steel Corporation.
    Westinghouse Electric and Manufacturing Company .
    Six months after the publication of this report
    affirming the existence of an all-powerful Money Trust
    the Democratic Party brought in their bill to establish
    the Federal Reserve System. Unlike the Aldrich Bill,
    which proposed to give the bankers control of the whole
    monetary situation, the Glass Bill provided for a board
    of which the Secretary of the Treasury was chairman,
    with certain powers of veto . The Comptroller of the
    Currency was also an ex officio member, and the
    appointment of the other members was to he by the
    President . In other respects the Bill was very smilar to
    the Aldrich Bill . The Glass Bill was advanced as a
    measure that would free the country from the toils of
    the Money Trust. This is very clearly shown by the
    speech of Mr. Carter Glass, chairman of the Banking and
    Currency Committee, on introducing the Bill in the
    House of Representatives on September 10, 1913 . Mr.
    Glass referred in scathing terms to
    “Bankers who contributed thousands of dollars to
    fasten on this country the wretched Aldrich scheme,
    which would have impounded the surplus funds of the
    entire banking community of America in the vaults of a
    single central bank to be by it transferred at any time to
    any point that might appeal to the sweet will or whim
    of the governing board of that institution .”
    Mr. Glass was also strongly of opinion that his bill
    would give more stable financial conditions . He said
    “Remembering that financial panics in the United
    States are decennial, and that we are fast approaching
    the time limit from 1907 to 1917, it seems to me that the
    obligation to legislate is immediate .”
    Senator Owen, who piloted the bill through the
    Senate made a similar statement on November 24, 1913,
    as follows
    . “The chief purposes of the banking and currency bill
    are to give stability to the commerce and industry of the
    THE FEDERAL RESERVE BOARD
    83
    United States ; prevent financial panics or financial
    stringencies. . . ”
    The bill was rushed through the House of
    Representatives in eight days without any public, hearings
    on it . It was passed by the House by 287 votes to 85 .
    The Senate took a little longer to digest the measure and
    evidence on it was taken by a committee . The bill,
    nevertheless, was passed with little alteration.
    One highly significant alteration was, however,
    quietly made in the bill during its passage through the
    House, an alteration which escaped comment at the time .
    As passed the act says the discount rate “shall be made
    with a view to accommodating commerce and business .”
    As introduced there was a further instruction that the
    rate should he made so as “to promote stability in the
    price level .” This had vanished before the bill reached
    the Senate, and totally unsuccessful efforts have since
    been made to amend the act by incorporating in it an
    instruction to this end.
    A great number of people honestly thought that this
    measure would free the United States from the domination
    of the Money Trust. Among them was the late
    Mr. William Jennings Bryan, a life-long defender of the
    people’s interest against the financiers, and who fought
    a Presidential campaign in 1896 as the champion of
    silver money, declaring in a famous phrase that the
    workers and farmers of the United States were being
    “crucified on a cross of gold .” Mr. Bryan had been made
    Secretary of State in President Wilson’s Cabinet in 1912,
    and it is said that it was largely by his activity in
    whipping up support for it in Congress that the Federal
    Reserve Bill was put through .
    Although the bill was carried by a big majority a
    certain number of members denounced it as a sham.
    Mr. Oscar Callaway, a Texas Democrat, for instance,
    made the following protest in the House
    “Mr. Chairman, in our platform adopted at Baltimore,
    and with which we won such a signal victory at the polls
    last November, we said : `We oppose the establishment
    of a central bank .’ I thought we meant that. . .
    True we did not say : `We oppose the establishment of a
    central board,’ but I submit in all candour that there is
    no real difference so far as the concentration of power
    is concerned between a central bank which controls the
    84
    THE TRUTH ABOUT THE SLUMP
    entire banking interests of the country, and a central
    board which controls the entire banking interests of the
    country . . . .
    “This bill provides for a board of seven appointed
    directly by the President, subject, of course, like his
    Cabinet, to the President’s will, which board has
    discretionary power over the twelve regional banks
    The board has exclusive power of note issue
    to the reserve banks ; the power to fix the discount rate ;
    with the accompanying power to increase or decrease the
    circulating medium of the country at will .
    . .
    “Summarise these powers, and you will find that
    power centred in this board, which Chairman Glass said
    `could determine the welfare, happiness and prosperity of
    every man, woman and child in the United States,’ and
    which Majority Leader Underwood declared `resolved
    itself into faith in the President’s board, the whole
    question being whether the board was angel or devil
    “The big banking interests have never at any time
    opposed this bill in its entirety . They have asked for
    changes in it here and there, but the general policy of the
    bill has suited them .”
    The following striking denunciation of the bill was
    made during the debate by Mr . Horace Mann Towner, a
    Republican member from Iowa
    “I did not approve of the Aldrich plan . I would
    not support it now. But it is astonishing how
    enamoured of it the majority is . Protesting that it is
    dangerous, yet they adopt and strengthen its autocratic
    features. Declaring it unworthy of consideration, the
    committee copies large portions of the bill, even to the
    extent of embodying the language verbatim of the
    Aldrich Bill . If the Aldrich Bill could have been
    patented this bill would be an infringement . If it could
    have been copyrighted, this would have been an invasion .
    Very artfully the issue is made to appear as one between
    Wall Street and the Government ; as between selfish
    speculators on the one hand, and the Government acting
    for the people on the other.”
    Another notable speech against the bill was that of
    Mr. Finley H. Gray, an Indiana member, and from it
    portions have already been quoted . Not to weary the
    reader, it is sufficient to conclude with this extract from
    THE FEDERAL RESERVE BOARD
    85
    the speech of Mr . Charles A. Lindbergh of Minnesota :
    “It is not my purpose to show that this bill is more
    vicious than the system which it seeks to amend . I
    propose to show that it would perpetuate the system
    which actual experience proves to have been the cause of
    centralising wealth, so that a few have robbed the people
    generally . It is perpetuating a system the very purpose
    of which is to enable the money loaners, rent collectors,
    dividend beneficiaries, and speculators generally, to take
    advantage of the actual producers so as to control
    production and fix prices .”
    Before the Senate Committee Mr . George H. Shibley,
    director of the American Bureau of Political Research
    at Washington, gave a valuable historical summary of
    the devious steps taken to foist the gold standard on the
    world. In concluding he said, “This closes my outline
    of the way the American people and the people of the
    entire world were tricked into the demonetising of silver .
    I have stated it for several reasons : first, because a
    somewhat similar trick is being attempted here in this
    Senate Committee.”
    It is unnecessary to quote the speeches of the
    supporters of the bill, for these gentlemen merely took it
    at its face value, and expatiated on such of its fancied
    advantages as appealed specially to them .
    Thirteen years later the publication of “The Intimate
    Papers of Colonel House” (“1926) showed that the bill
    had been framed by the very men officially denounced a
    few short months previously as controlling the Money
    Trust! These men were the people to whom Colonel
    House as adviser-in-chief to President Woodrow Wilson
    ran for advice as to how to frame a measure to curb the
    Money Trust. The whole incredible story is told with
    disarming candour in these “Intimate Papers.” All the
    time the good Colonel, it appears, was firmly of opinion
    that the Money Ring should be brought to book . Under
    date of July 26, 1911, he wrote as follows to Senator
    Culberson
    “I think Woodrow Wilson’s remark that the Money
    Trust is the most pernicious of all trusts is eminently
    correct. A few individuals and their satellites control
    the leading banks and trust companies of America . They
    also control the leading corporations.”
    Colonel House’s papers were edited by Dr. Charles
    86
    THE TRUTH ABOUT THE SLUMP
    Seymour, Professor of History at Yale University, and
    his editor relates the very active part taken by the
    Colonel in framing the bill which Mr . Glass subsequently
    introduced, and which as we have seen in an earlier
    chapter Mr. Paul Warburg last year claimed, with
    excellent reason, as his own creation. On page 164 of
    “The Intimate Papers” we find their editor remarking
    “The task which Colonel House set himself was
    primarily to prevent the President-Elect from committing
    himself to any one scheme until the problem had been
    thoroughly studied ; later he guarded the measure so that
    it was left in the control of experts and preserved from
    the heresies of political incompetents . The Colonel was
    the unseen guardian angel of the bill . . Colonel
    House was indefatigable in providing the President with
    the knowledge that he sought. . . . He laid chief
    stress on his frequent conferences with the bankers
    themselves .”
    The following extracts from the papers themselves
    show pretty clearly where the Colonel got his ideas from
    “December 19, 1912.-I talked with Paul Warburg
    over the telephone regarding currency reform .”
    “February 26, 1913.-I went to the Harding dinner
    [a bankers' gathering] . . . . It was an interesting
    occasion . I first talked to Mr . Frick, then with Denman,
    and afterwards with Otto Kahn [partner with Paul
    Warburg in Kuhn, Loeb and Company of the inner ring
    of the Money Trust] .”
    “March 13, 1913 .-Vanderlip [National City Bank
    chairman, allied with Kuhn-Loeb] and I had an
    interesting discussion regarding currency reform .”
    “March 27, 1913 .-J. P. Morgan, Junior, and Mr.
    Denny of his firm, came promptly at five . McAdoo
    [Secretary of the Treasury and formerly partner with
    Paul Warburg] came about ten minutes afterwards .
    Morgan had a currency plan already formulated and
    printed. We discussed it at some length . I suggested
    that he should have it typewritten and sent to us today .”
    To this is attached the following editorial footnote
    “Typewritten in order to avoid the impression that might
    be given that Morgan’s were so sure of their financial
    power that they could impose a cut and dried plan .”
    “March 24, 1913 .-I had an engagement with Carter
    Glass at five . We drove in order not to be interrupted
    THE FEDERAL RESERVE BOARD
    87
    I urged him not to allow . . . the Senate
    Committee to change what we had agreed upon in any of
    the essential features. He promised to be firm . I advised
    using honey so long as it was effective, but when it was
    not, I would bring the President and the Secretary of the
    Treasury to his rescue . I spoke to the President after
    dinner and advised that McAdoo and I whip the Glass
    measure into final shape, which he could endorse and
    take to Owen [Senator Owen] .”
    Here Colonel Houses’s editor adds
    “The Currency Bill [establishing the Federal Reserve
    System] was brought into the House of Representatives
    early the next session, unchanged from the first drafts
    decided on by the President, McAdoo, and the chairmen
    of the House and Senate Committees .”
    One of the concerns in the inner ring of the Money
    Trust was Lee, Higginson and Company of Boston and
    New York. At the end-of August Colonel House visited
    Boston and was rather coldly received on discussing the
    banking scheme with some ordinary bankers . His editor
    remarks that he found “more consolation and satisfaction
    in a long talk with Major Henry L. Higginson,” of which
    talk the Colonel wrote
    “I can well understand why he is called by many
    Boston’s first citizen . We talked on the currency
    question . . . . Every banker like Warburg who
    knows the subject thoroughly has been called upon in
    the making of the bill. Major Higginson seemed
    thoroughly satisfied with the endeavours the Administration
    have made to construct a good and beneficent
    measure.”
    It appeared that Mr. Warburg had a few final touches
    which he desired to insert to perfect the measure, and on
    November 17, when the bill was before the Senate,
    Colonel House relates that Mr . Warburg, Mr. Schiff, and
    Mr. Dodge came to see him by appointment . Mr. Dodge
    arrived in advance of the others, and took advantage of
    this circumstance to explain that he had only come along
    at the urgent request of Warburg and Schiff, who had
    just handed him a munificent donation to the funds of
    the Y.M.C.A., of which he was president . The papers
    proceed :
    “Mr. Schiff and Mr. Warburg came . Warburg did
    most of the talking . He has a new suggestion in regard
    88
    THE TRUTH ABOUT THE SLUMP
    to the grouping of the regional reserve banks, so as to
    get the units welded together and in easier touch with
    the Federal Reserve Board . They wanted me to go to
    Washington with Mr . Warburg and Mr . Dodge . . . .
    I advised against going to the President with new
    suggestions. I thought they should be taken to
    Secretary McAdoo, Senator Owen and Mr . Glass ; if they
    agreed as to the advisability of accepting them the
    President would probably also accept them .”
    The editor tells how success was finally achieved
    “Pressure from both sides and above finally compelled
    the acquiesence of the opposing senators, and on
    December 20, ‘ a gala day,’ House called it, the Federal
    Reserve Bill passed the Senate .”
    On December 23, 1913, Mr. Jacob Schiff wrote a
    Christmas letter to Colonel House, congratulating him
    on the passage of the bill . In his letter Mr. Schiff said
    /”The bill is a good one in many respects, anyhow good
    enough to start with and to let experience teach us in
    what direction it needs perfection, which in due time we
    shall then get.”
    The foregoing extracts show clearly enough that
    President Woodrow Wilson and his naive friend and
    adviser, Colonel House, were mere putty in the hands of
    these astute financiers . Thinking they were freeing
    America from an octopus, they merely fastened its
    tentacles more firmly than ever on the people of the
    United States, and created an organisation which has
    enabled the Jewish section of the Money Trust to
    dominate not only America but the commerce and
    industry of the entire globe .
    Before we proceed to trace the course of events
    through the great international war which within a few
    months followed on the perfecting of this engine of
    financial control, it is worth noting that in 1928 the
    Federal Reserve Law was amended to permit of interlocking
    directorates among the banks, thus permitting a
    further centralising of control . In his book published
    last year Mr. Warburg urged that the Secretary of the
    Treasury should be removed from the chairmanship of
    the Federal Reserve Board, and the Comptroller of the
    Currency removed from the Board and made a
    subservient officer to it, the banker members taking
    general charge and electing their own chairman. As
    THE FEDERAL RESERVE BOARD
    89
    Mr. Warburg seems seldom to ask in vain for what he
    wants these steps in “perfecting” the Federal Reserve
    System may possibly have been effected before this
    reaches the reader’s hands.
    It has been noted above how an instruction to the
    Federal Reserve Board to use its powers to stabilise
    prices was deleted from the bill during its passage
    through the House of Representatives. Several efforts
    have since been made by Mr . James G. Strong, a Kansas
    member of the House of Representatives, to place such
    an instruction in law . In 1926-27 and 1928-29 there were
    hearings by the House Committee on Banking and
    Currency on bills to this end introduced by Mr . Strong .
    In his earlier bill Mr. Strong proposed that in
    addition to the instruction to make the discount rate
    “with a view to accommodating commerce and business,”
    there should be added the words “and promoting a stable
    price level for commodities in general . All the powers
    of the Federal Reserve System shall be used for
    promoting stability in the price level .”
    This was very similar to what was in the bill to start
    with but had been surreptitiously removed. It was
    merely in keeping with Senator Owen’s statements in
    fathering the bill in the Senate . However, every possible
    objection was raised to this simple instruction . It would
    lead the public to expect impossibilities, etc ., etc. In
    order to meet these objections Mr . Strong went to all
    concerned for their views as how the necessary
    instruction should be drafted. The result he embodied
    in a new bill in the following language
    “The Federal Reserve system shall use the powers
    and authority now or hereafter possessed by it to
    maintain a stable gold standard ; to promote the stability
    of commerce, industry, agriculture and employment ; and
    a more stable purchasing power of the dollar so far as
    such purposes may be accomplished by monetary and
    credit policy .”
    A remarkable feature of the hearings on the second
    bill was the epidemic of invalidism which afflicted the
    members of the Federal Reserve Board when the time
    to give evidence approached. These gentlemen, who had
    objected freely enough to the crude language of the
    first bill were now in a number of cases afflicted with
    shingles, rheumatism and what not, and regrettably
    90
    THE TRUTH ABOUT THE SLUMP
    unable to come and testify again . Such members and
    officers of the board as did testify were all emphatically
    of the opinion that anything on the lines sought by
    Mr. Strong was impracticable .
    In the course of their evidence the Federal Reserve
    witnesses nevertheless put in numerous charts and
    graphs from the board’s records showing movements in
    the price level, etc. Naturally questions were asked why
    the board compiled these elaborate charts if its operations
    had no connection with prices at all . Was not the truth
    of the matter that members and officers of the board
    watched very closely the effect of their proceedings on
    the price level ? For example, take this passage between
    Mr. Strong, author of the amending bill, and Mr . Golden
    weiser, Director of Research and Statistics to the
    Federal Reserve Board
    “Mr. Strong : Is not the real purpose of these charts
    to enable them to use the powers of the Federal Reserve
    System towards stabilisation?
    “Mr. Goldenweiser : If I had to answer that in one
    word I would say no .
    “Mr. Strong : Then they are not using the information
    they have for the purpose?
    “Mr. Goldenweiser : Only incidentally .
    “Mr. Strong : Incidental to what?
    “Mr. Goldenweiser : Incidental to those things that
    are more directly the work of the Federal Reserve
    System.
    “Mr. Strong : That is, to accommodate business and
    industry?
    “Mr. Goldenweiser : To maintain sound banking
    conditions .”
    Most of the witnesses took a great deal of cornering
    to extract anything definite from them on this vital point,
    and endeavoured to shy away from it under a cloud of
    words. However, Mr. Strong succeeded in getting a
    clear-cut statement from the chief executive officer of the
    board . This passage occurs in the examination of
    Mr. Roy A. Young, Governor of the Federal Reserve
    Board, on May 28, 1928 :
    “Mr. Strong : Do you not think that the first duty of
    any financial system is to attempt to stabilise the
    purchasing power of its unit of value?
    THE FEDERAL RESERVE BOARD
    91
    “Mr. Young : It never has been.
    “Mr. Strong : Should it not be?
    “Mr. Young : No, sir ; I am not going to say that .
    “Mr. Strong : Have you, meaning the Federal Reserve
    Board, not been doing this very thing?
    “Mr. Young : No.”
    That is a precise and definite enough statement that
    the directors of the United States Federal Reserve
    System-which the American people were told was
    designed specially to give stable business conditions and
    prevent financial crises and stringencies- consider
    themselves under no obligation whatsoever to use their
    gigantic powers for any such purpose . The basic theory
    of any monetary system is that an undertaking to pay a
    given sum of money at a future date is an undertaking
    to give the same value that that money represents today .
    Here we have the chief controlling officer of money in
    the United States calmly declaring that what the dollar
    represents in wealth is no concern of his. Nothing
    further is needed to reveal what a colossal fraud was
    perpetrated when this gang of international financiers
    led the people of America into this Federal Reserve
    System.
    The position was well put by Mr. Carroll L. Beedy,
    a member of the Committee, during the examination in
    May 1928 of Professor Gustav Cassel the noted Swedish
    monetary expert .
    “Mr. Beedy : You will recall the statement of Mr .
    Ebersole, of the Treasury Department, who concluded
    his remarks at the dinner which we attended last night
    by saying that he was convinced that the Federal Reserve
    System did not want stabilisation and the American
    business man did not want it, and I think that is right .
    They want these fluctuations in prices, not only in
    securities, but in commodities, in trade generally, because
    those who are now in control of the situation are making
    a profit out of that very situation . There is nothing to
    be gained by them by stabilising, but practically all is
    lost. The gain from stabilisation comes in the welfare
    of the countless thousands who are not in the capitalist
    class. . . . And it is probably true that if it does not
    come in a legitimate way, let us say through central
    banking systems, it may come, or there may be an attempt
    to produce it, by general upheavals, such as have
    92
    THE TRUTH ABOUT THE SLUMP
    characterised society in days gone by . The revolutions
    have been prompted, in other words, by dissatisfaction
    with existing conditions, the control being in the hands
    of a few, and the many paying the bills .
    “Dr. Cassel : Yes, I think that goes very well with
    what I have said about the purpose of the Federal
    Reserve System.”
    At the conclusion of the hearings on May 29, 1928,
    Mr. Strong summed up the position in the following
    words
    “Both bills have been attacked by financiers, bankers,
    and financial writers, some for selfish reasons, others
    because, having become versed in existing conditions
    they hesitate, or refuse, to consider and study the real
    purpose of the proposed legislation, which was also true
    when the Federal Reserve system was proposed and
    sought to be enacted by Congress ; but I am being forced
    to the conclusion that the main opposition is because of
    the fact that certain bankers and financiers, together
    with those they control, desire the Federal Reserve
    System to use its powers `to accommodate business and
    commerce,’ and not `for the stabilisation of the purchasing
    power of our monetary unit,’ which I hold with
    Dr. Cassel, Dr. J. R. Commons and others who have
    come before this Committee, to be the first duty of a
    financial system set up by any government authority .
    “When the Federal Reserve Act creating the Federal
    Reserve System was framed as the Administration Bill
    it contained the directions that the powers so given
    should be to ‘accommodate business and commerce’ and
    to aim ‘to promote stability in the price level,’ but the
    House struck out the clause for stabilisation and the
    Senate did not restore it .
    “But little information has ever been given why this
    was clone, but it was evidently the work of those who did
    not wish the Federal Reserve system to be used for the
    stabilisation of the purchasing power of money .”
    Now let us see what began to happen when the United
    States was enslaved under this German-Jew engine of
    control.
    CHAPTER IX.
    BRITAIN IS DRAWN INTO THE TOILS.
    Six months after the Federal Reserve Board was
    established in the United States the German Government,
    according to a document published in the Sisson Report
    quoted in an earlier chapter, was telling its controllers
    of industry to open their war mobilisation orders . As
    the assassination of the Austrian Archduke at Serajevo
    had not at this time taken place it shows clearly that the
    early outbreak of war had been determined on irrespective
    of, or in advance of, the Serajevo tragedy that nominally
    precipitated it . Whether the assasination of the heir to
    the throne of Austria was part of a pre-determined
    programme is a matter on which one can only speculate .
    Post-war revelations have shown that it was more than
    the irresponsible act of an individual, and that the
    Serbian Government had been warned in advance that
    an attempt would be made .
    On the financial side all we know is that the war
    followed close on the establishment of the Federal
    Reserve Board, by which event New York financiers
    with intimate German associations acquired a dominating
    position.
    In an article by Captain V. H. Cazalet, M.P.,
    published in the “National Review” for December, 1926,
    a description was given of a visit to the Ford works at
    Detroit at the end of October, 1926, and in the article
    appeared the following
    “Like other remarkable men Ford has one bugbear,
    i.e., international Jewish financiers . We asked him who
    they were. He said : `I have several books which will
    tell you who they all are. They were responsible for the
    last war, and will in the future always be capable of
    creating a war when they feel their pockets need one .’ ”
    In the following year, Mr . Ford issued a retraction
    of the attacks on the Jews made in his newspaper, with
    the contents of which journal, he explained, the multitude
    of his activities prevented him from keeping close touch .
    This remark could not apply to a personal statement
    made to Captain Cazalet.
    93
    94, THE TRUTH ABOUT THE SLUMP
    As chief of the German General Staff during the war,
    General Ludendorff was in a position to acquire firsthand
    knowledge as to the origins of the war. An
    interview with him appears in a book, “Glimpses of the
    Great” (Duckworth, 1930), writen by an American,
    G. V. Viereck . In it the General is quoted as saying
    “The same diabolically clever wire-pullers that
    brought about the last cataclysm anxiously wait foi
    additional conflicts to further their ends . They are busy
    once more enslaving nations and bringing them under
    the yoke of economic dependence .”
    General Ludendorff told Mr . Viereck not to imagine
    that his countrymen in the United States were going to
    escape . The news of late certainly shows that although
    the centre of money power is in the United States that
    power is far from operating to the advantage of the
    common people of that country .
    Several references to the operations of the Federal
    Reserve Board and some of those associated with it, in so
    far as they affect Britain, occur in the memoirs of the
    late Sir Cecil Spring-Rice, British Ambassador at
    Washington from 1913 to the end of 1917, when the Lloyd
    George Government replaced him by the appointment of
    Lord Reading (formerly Sir Rufus Isaacs) . It will be
    remembered that at the outset of the war a number of
    large German liners were interned in New York, and that
    an attempt was made to have their sailings resumed
    under the American flag . Of this episode Sir Cecil
    Spring-Rice wrote to Sir Edward Grey, Secretary of
    State for Foreign Affairs, as follows, under date of
    August 25, 1914 :
    “Another matter is the question of the transfer of the
    flag to the Hamburg-America ships . It is not a very
    pleasant business . The company is practically a German
    Government affair . The ships are used for government
    purposes, the Emperor himself is a large shareholder, and
    so is the great banking house of Kuhn and Loeb, of New
    York. A member of that house has been appointed to a
    very responsible post in New York, although only just
    naturalised . He is connected in business with the
    Secretary of the Treasury, who is the President’s son-inlaw.
    It is he who is negotiating on behalf of the
    Hamburg-America Company.”
    To this the editor of the memoirs appended the
    following note
    BRITAIN DRAWN INTO THE TOILS 95
    “Mr. Warburg was a member of the newly elected
    Federal Reserve Board. He had been a partner of
    Mr. McAdoo, the Secretary of the Treasury .”
    In a letter to Sir Valentine Chirol on November 13,
    1914, Sir Cecil Spring-Rice wrote
    “Dernburg [of the German Embassy] and his crew
    are continually at work, and the German-Jewish bankers
    are toiling in a solid phalanx to compass our destruction
    One by one they are getting hold of the principal New
    York papers, and I was told today that the `New York
    Times,’ which had a courageous Jew at its head who
    manfully stood up for the Allies, has been practically
    acquired by Kuhn, Loeb and Company and Schiff, the
    arch-Jew and a special protege of the Emperor.
    Warburg, nearly related to Kuhn, Loeb and Schiff, and
    a brother of the well-known Warburg, of Hamburg, the
    associate of Ballin [the late Herr Ballin was head of the
    Hamburg-America line], is a member of the Federal
    Reserve Board, or rather THE member . He practically
    controls the financial policy of the Administration, and
    Paish and Blackett had to negotiate with him . Of course
    it was exactly like negotiating with Germany . Everything
    that was said was German property . The result
    was that such arrangements were made as were thought
    to be for the advantage of the German banks, and the
    Christian banks were jealous and irritated .”
    Sir George Paish and Sir Basil Blackett were two
    early financial representatives of Britain in the United
    States during the war . Until America entered into the
    war Britain put her American transactions through the
    firm of j . P. Morgan and Company. Mr. J. Pierpont
    Morgan, Senior, had died in March, 1913, and the
    business was carried on by Mr. J. P. Morgan, Junior .
    The Sisson Report already quoted in the chapter on
    Russia, contains a reproduction of a German order of
    November, 1914, to secret agents in the United States
    ordering criminal activity in violation of the rules of
    neutrality . At a later date the activities of the German
    military and naval attaches on the German Embassy staff,
    Colonel von Papen and Captain Boy-Ed, became so open
    and notorious that the American Government ordered
    their deportation in consequence of their complicity in
    various outrages. While Sir Cecil Spring-Rice was
    staying with Mr. Morgan on July 5, 1915, an attempt was
    made to assassinate that gentleman. A man entered his
    96
    THE TRUTH ABOUT THE SLUMP
    house and fired at him, wounding him in the stomach .
    The assassin was arrested, and gave the name of Holt,
    but proved to be a German named Erich Muenter . Sir
    Cecil Spring-Rice notes that Muenter “was known to
    many Germans here to have committed murder and was
    entirely at their mercy . From private enquiries I know
    that he received money from outside sources and had
    confederates .” Muenter was imprisoned, but was later
    found shot dead in prison and was officially reported to
    have committed suicide. How a prisoner came to have
    a gun in his possession was not explained . Sir Cecil
    Spring-Rice wrote
    “It is most likely that he was shot by order, as he
    had promised my informant a full confession the day
    after he died . It was known in German circles that an
    attempt was to be made on Morgan .”
    The circumstances surrounding this affair point to
    powerful influences being at work against the principal
    American financier assisting Britain in the war .
    Returning to the financial side of affairs we find Sir
    Cecil Spring-Rice writing in another letter
    “Since Morgan’s death [Mr. Morgan senior is referred
    toy the Jewish bankers are supreme, and they have
    captured the Treasury Department by the simple
    expedient of financing the bills of the Secretary of the
    Treasury (in a perfectly fair and honourable manner),
    and forcing upon him the appointment of the German
    Warburg on the Federal Reserve Board, which he
    dominates . The Government itself is rather uneasy, and
    the President quoted to me the text, `He that keepeth
    Israel shall neither slumber nor sleep .’ One by one the
    Jews are capturing the principal newspapers and are
    bringing them over as much as they dare to the German
    side.”
    As time went on increasing difficulty was experienced
    by the British agents in getting money in the United
    States . In July, 1917, one finds the British Ambassador
    recording that Mr . McAdoo, Secretary of the Treasury,
    had informed him that to get money from Congress
    Bri

  4. On February 14, 2011 at 11:58 pm hoff2 said:

    As time went on increasing difficulty was experienced
    by the British agents in getting money in the United
    States . In July, 1917, one finds the British Ambassador
    recording that Mr . McAdoo, Secretary of the Treasury,
    had informed him that to get money from Congress
    Britain must give particulars of what she was spending
    it on. Mr. McAdoo further suggested that it was
    desirable that someone in authority should be sent over
    to arrange for the loans required .
    Lord Northcliffe, who was in the United States at
    BRITAIN DRAWN INTO THE TOILS 97
    this date as a British Government representative, also
    urged that someone who understood politics as well as
    finance should be sent over to handle the loan negotiations
    . He summed up the position in a telegram as
    follows
    “They are complete masters of the situation as regards
    ourselves, Canada, France, Italy and Russia . . . . If
    loan stops, war stops .”
    As a result of these representations Lord Reading
    (formerly Sir Rufus Isaacs) was sent across to arrange
    matters . Whether his appointment was suggested on
    the American side or the British is not disclosed in the
    matter to which the writer has had access.
    The financial position as it stood at the time of
    America’s entry into the war in 1917 is thus summarised
    in “The Life and Letters of Walter H. Page” (Vol. II,
    pp. 272-3) . Mr. Page was at the time United States
    Ambassador in London :
    “Thus by April 6, 1917, Great Britain had overdrawn
    her account with J. P. Morgan to the extent of
    400,000,000 dollars, and had no cash available to meet
    this overdraft . . . . The money was now coming
    due ; and if the obligations were not met, the credit of
    Great Britian in this country would reach the vanishing
    point. Though at first there was a slight misunderstanding
    about this matter, the American Government
    finally paid this overdraft out of the proceeds of the first
    Liberty Loan . This act saved the credit of the Allied
    countries ; it was, of course, only the beginning of the
    financial support that America brought to the Allied aid .”
    Lord Reading entered into arrangements by which
    the British borrowings were specifically made repayable
    in gold, and by which they were to bear interest at not
    less than the highest rate on any United States war
    loan . They were mostly repayable on demand, or at
    most three days’ notice, and were convertible at the
    option of the United States into long-dated stock.
    On these terms, accepted on Britain’s behalf by Lord
    Reading, the British Government borrowed the 1,000
    millions which it owed the United States at the
    conclusion of the war. Once matters were put on this
    amazing footing those in charge of America’s finances
    could not lend Britain too much money. The amount
    at her disposal was unlimited .
    98
    THE TRUTH ABOUT THE SLUMP
    As we have seen, the total stock of monetary gold in
    the world is only 2,000 millions . Britain under her bond
    to the United States might be called upon to produce half
    of this total stock in three days on penalty of being
    officially declared bankrupt . The agreement meant that
    the British people were absolutely at the mercy of the
    United States. Lord Reading, their official representative,
    had signed on their behalf a contract to perform
    impossibilities .
    In face of this it is pathetic to find this passage in a
    letter written by Sir Cecil Spring-Rice on November 23,
    1917 :
    “Several bankers told me that Reading’s mission was
    most useful, and that he was exceedingly adroit . His
    reputation for cleverness was very high indeed, so high
    that there was a good deal of anxiety expressed lest he
    should succeed in putting one over Mr . McAdoo.”
    In January, 1918, Lord Reading was appointed
    British Ambassador to the United States in place of Sir
    Cecil Spring-Rice, who died in Canada a few months
    later . Later on Lord Reading was appointed Viceroy of
    India, that country so filled with unrest, and where
    Jewish activity has been pronounced . In his book
    Mr. Hilaire Belloc says
    “Today it is Britain which stands to the Mohamedan
    as the thruster-in of the Jew . It began with the support
    of Jewish finance in Egypt ; it went on with the extended
    control over Indian commerce by the Jews ; it continued
    in the control of Indian currency by the Jews. It ended
    in the grotesque appointment to the Indian Viceroyalty
    and the extraordinary experiment of Palestine.”
    More recently Lord Reading has become, as we shall
    see, a director of the American-financier-owned company
    which has got a strangle-hold on British industry by
    buying up the power plants of London and practically
    all the principal cities in the British Isles .
    To return to our main theme, we next find that after
    Britain had incurred this enormous indebtedness to
    America, pressure soon came from the American end for
    a return by Britain to the gold standard . Even before
    the war ended the Cunliffe Committee was set up by the
    British Government to report on the matter. This
    committee was composed almost entirely of bankers, the
    BRITAIN DRAWN INTO THE TOILS 99
    producers and manufacturers with whose destiny they
    were playing being given no voice whatever in the
    matter.
    The course of events following the piling up of war
    debts was incisively described by Mr . Arthur Kitson in
    the “National Review” for March, 1925 :
    “Having created these national gold debts, the
    conspirators were still fearful lest their hoards of gold
    might turn to dross if Europe should stick to its paper
    money and refuse to employ their metal for its internal
    currencies. This fear was particularly intense as far as
    England was concerned . The Treasury notes had
    performed all the functions of money perfectly-far
    better than gold. There had been no legal tender
    inflation. Whatever inflation there had been was due
    entirely to the vast issues of credit by the Treasury and
    the bankers themselves . These notes formed the basis
    of what might have become a perfect elastic currency,
    admirably adapted to the commercial and industrial needs
    of the British public, who had grown accustomed to them
    and liked them . Where gold had failed the Treasury
    notes succeeded . Mr. McKenna, the chairman of the
    Midland Bank, has recently testified to the superiority of
    our `managed’ paper currency over the American goldstandard
    currency . Moreover, these notes admitted of
    expansion without disturbing international affairs and
    without the aid of international financiers . Hence their
    destruction became a necessity . The appointment of a
    Committee consisting of the representatives of high
    finance was therefore urged upon our Government . The
    Cunliffe Currency Committee with its carefully assorted
    members was the result. These bankers recommended
    the return to the pre-War gold standard-’according to
    plan .’ One cannot suppress a feeling of indignation and
    contempt for a body of men who, whilst millions of
    Britain’s sons from all parts of the Empire were freely
    giving away their lives to save us and civilisation from
    the domination of German Kultur, were engaged in a
    scheme for adding to their own and their shareholders’
    enrichment at the expense of British taxpayers !
    “The next step was the Brussels Conference, at which
    the representatives of the leading bankers of all the
    Allied and neutral countries were instructed to recommend
    a- similar policy to that already demanded by the
    100 THE TRUTH ABOUT THE SLUMP
    Cunliffe Committee . Having thus secured consent of the
    Allied and neutral countries, there still remained
    Germany, Austria and Russia. The Austrian currency
    was `stabilised’ by Wall Street and Lombard Street
    influence. Then came the Dawes Scheme, which brought
    Germany into line. The Russian position is still receiving
    attention, but it is certain that eventually Bolshevism will
    have to accommodate itself to the policy its leaders have
    so often denounced .
    “Although the French, Belgian and Italian financiers
    have given their formal endorsement of the gold standard,
    their rulers have so far been much too wise and too
    patriotic to consent to the ruin of their trade and the
    stagnation of their industries merely for the enrichment
    of international bondholders and moneylenders. Hence
    the pressure which the American Government is now
    [1925] putting upon these countries for the payment of
    their debts-particularly France. The offer of gold loans
    is merely to inveigle them into the same financial web in
    which our bankers and Treasury officials have already
    involved us .
    “The delay on the part of our officials to adopt the
    gold currency created a feeling of impatience in Pine and
    Wall Streets, and led to the recent artificial manipulation
    of both the pound and the dollar.
    “What is termed `parity,’ viz ., the pre-War ratio of
    the two money units, has been practically achieved
    outside of any trade operations . Indeed, surprise has
    been expressed by one or two of our ardent gold standard
    advocates that the pound sterling should rise in relation
    to the dollar when the balance of trade is so heavily
    against us. Since the whole movement is merely ‘a
    ramp’ to deceive the British public, no economic reasons
    need be sought . (Kitson’s note : It should be remembered
    that the rates of exchange between foreign countries are
    manipulated and fixed by the bankers themselves .)
    “The recent visit of the Governor and a Director of
    the Bank of England to New York was merely another
    move in the game, although our instructed journalists
    have tried to impress the public with the vast importance
    of this visit and the advantages it has accomplished .
    “The gold currency system which the mere shadow
    of the Great War exposed and destroyed, is to be
    re-imposed without so serious a scheme being even
    BRITAIN DRAWN INTO THE TOILS 101
    submitted to the voters . [It was restored in the month
    following the publication of Mr . Kitson's article.] With
    the re-establishment of this system, the German-
    American plot may be regarded as having succeeded.
    Indeed, so far as England is concerned, the German-
    American financiers must have marvelled at the ease of
    their conquest . No sheep ever went more readily to the
    slaughter than the British people have been led to their
    present hopeless conditions of debt-enslavement, which,
    as some of our politicians have reminded us, will lower
    the standard of living for generations to come . The full
    effects of this financial policy are not yet realised.
    Millions of our people have already tasted and are
    experiencing some of them, viz ., unemployment, bad
    trade, and starvation . But the evil days are yet to come
    On the following page is a reproduction of a chart
    showing the general level of commodity prices in the
    United States from 1800 to 1927 .
    A significant feature of the rise in prices in
    connection with the war is that the greatest inflation
    occurred not during the war, as had been the case in,
    previous wars, but after it . At this date the American
    Federal Reserve Board was in possession of its huge
    gold accumulation and its policy was the determining
    factor in the price level . According to evidence given by
    Professor J . R. Commons, of the University of Wisconsin,
    before the United States House of Representatives
    Banking and Currency Committee in 1927, this post-war
    inflation was deliberately created . Professor Commons
    said
    “What I wish to say to you was learned by me in
    confidence from a member of the Federal Reserve Board .
    I, of course, will not give his name. He and another
    member of the Federal Reserve Board in 1919 and 1920
    understood what the Federal Reserve System was doing ;
    they were inflating prices and were going to bring about
    a terrific rise in prices . They knew it. . . They
    protested in a meeting of the Federal Reserve Board
    against what was being done by the Federal Reserve
    Board at that time . . . . They considered for a time
    whether it would not be better for them to offer their
    resignations and then give their reasons to the public
    for resigning . They finally agreed to go along with the
    6427 Ri 6 l .l c % Fall —
    118.’199 Rice
    64 .89% Fall
    289.13% Rise
    1810 1820 1800 1 1 .wo 11,401 1870
    18.80 1x’90 1800
    1910 1921 1900 1940 1950
    •
    t
    • The above chart, showing the general level of conunodity prices in the United States from 1800 to 1927,
    • originally appeared in an article by Mr . Norman Lombard contributed to the “American Labour
    Legislation Review .” It bore the caption “Will History Repeat Itself?” The movement of the price
    level in Britain shows a general similarity except that the mid-century upward lift was not so pronounced .
    Mr. Lombard urged that by central bank policy money might be stabilised in purchasing power and
    unemployment reduced . In this way the downward trend indicated might be prevented with all that it
    would mean in misery and distress. Whether central banking is the cure is open to doubtl
    ZU1
    1792-1815 1861 – 1865 260
    Na_poleonic Wars Civil War
    295 US
    ANNUAL AVERAGES 1800-1927
    200
    175 4 ‘ 9 1 75
    151
    1913-100
    150 limp 4V 1 26
    100
    IPPW ,
    126
    100
    75 . % 75
    50 50
    25 25
    0
    BRITAIN DRAWN INTO THE TOILS 103
    system, the majority, and simply to file their reasons in
    the record of the board so that in case the question was
    raised after their death their record would be clear.”
    In the London “Times” of November 6, 1919, we find
    a message from its New York correspondent stating that
    Mr. Paul Warburg, “the directing force of the Federal
    Reserve Board throughout the greater part of the war,”
    had returned from a tour of England, Holland, France,
    Switzerland and Germany. Mr. Warburg was quoted as
    saying
    “There are two fundamental evils which must be
    eradicated if world bankruptcy and communism are to be
    avoided . These are the continuous increase in prices and
    decrease in production . . . the persistent depreciation
    of capital.”
    As we all know the post-war boom was followed by
    a speedy collapse . In New Zealand this brought disaster
    to the soldier settlers placed on the land on the basis of
    boom prices . Here again we have evidence that this
    collapse was made to order of the United States Federal
    Reserve Board.
    In giving evidence before the House Banking and
    Currency Committee in 1926 at Washington, Mr.
    Western Starr, a retired farmer and head of the Farmer-
    Labour Party, said
    “In 1919 and 1920 things got-well, a little jumpy,
    and here are the minutes of a conference of the Federal
    Reserve Board, of the Federal Advisory Council and the
    directors of the Class A banks of this country held in
    Washington, D.C., on May 18, 1920, in which over the
    protests of some of their own members, secretly and
    under orders of secrecy, they decided to deflate. There
    were reasons. Some of the great employers of labour
    felt that they were paying too large a share of their
    income in the form of wages . They had to reduce wages
    first thing.
    “Now, in order to reduce wages they had to cut the
    cost of living. They could not reduce wages until they
    cut the cost of living. That meant they had to hit the
    farmer first. That was the first step, and God knows
    they hit him .”
    Mr. Starr then proceeded to quote at length from the
    minutes of this conference . One of the directors of the
    104 THE TRUTH ABOUT THE SLUMP
    advisory board of the Minneapolis Bank, he said, told the
    conference that
    “Our bank is making 10,000 dollars a day, net velvet,
    and we cannot offer these people this rule, we cannot
    knock them in this way and bring ruin, starvation and
    death to people who are dependent on us .”
    Mr. Scott, of the Federal Reserve Bank of Dallas,
    Texas, according to another extract quoted, declared the
    proposal “monstrous,” and a strong protest was also
    made by Mr. Dowell of North Dakota.
    Continuing, Mr. Starr said :
    “These are Federal Reserve bank officials who make
    this statement, overridden by the statements, philosophy,
    and arguments of W . P. G. Harding [at that time chief
    executive officer of the Federal Reserve Board] .
    “Mr. Leatherwood : Do you think that decision of
    that famous meeting held in Washington in which they
    decided to issue this order, had anything to do with the
    gathering in, soon thereafter, of the millions and hundreds
    of millions of securities of the little holders?
    “Mr. Starr : My dear sir, it is only another illustration
    of the practice that has prevailed for more than 2,000
    years . It has been the practice of what you might
    describe as the moneyed class for more than 2,000 years
    to create alternate periods of high and low prices, buying
    when things are low and creating artificially stimulated
    high prices on which they sell out, only to create another
    period of deflation on which they buy in . That has been
    the practice. We have had sixteen different periods of
    that kind in our own history as a nation of less than
    150 years .”
    Further evidence of the action of the Federal Reserve
    Board in depressing prices in 1920 was provided by
    Mr. Swing, a Californian Congressman, in a speech made
    in the House of Representatives on May 23, 1922 . In
    that speech, quoted by Mr . Canfield, another witness on
    the Banking and Currency Committee hearings on the
    Strong Bill, Mr. Swing said :
    “I was present at a meeting of the bankers of
    Southern California, held in my district in the middle of
    November, 1920, when W. A. Day, then Deputy
    Governor of the Federal Reserve Bank of San Francisco,
    spoke for the Federal Reserve Bank and delivered the
    BRITAIN DRAWN INTO THE TOILS 105
    message which he said he had been sent there to deliver.
    He told the bankers there assembled that they were not
    to loan any farmers any money for the purpose of
    enabling the farmer to hold any of his crop beyond
    harvest time . If they did, he said, the Federal Reserve
    Bank would refuse to discount a single piece of paper
    taken in such a transaction. He declared that all the
    farmers should sell their crops at the harvest time unless
    they had money of their own to finance them, as the
    Federal Reserve Bank would do nothing toward helping
    the farmers to hold back any part of their crop no matter
    what the condition of the market .
    “Mr. Cooper, of Wisconsin : Did the gentleman from
    California hear that?
    “Mr. Swing : I did. I think I was the only person
    present who was not a banker . This was in a way
    confidential advice being given by the Federal Reserve
    Bank for the benefit of the small bankers .
    “I say that was the admitted declared policy of the
    Federal Reserve Board made by an officer of the Board
    delegated for the purpose of making an announcement
    for the information and guidance of the bankers of my
    district . No one could be in any doubt for one minute
    as to what the natural, logical, and necessary
    consequences of such a policy would be . If the entire
    crop of the country is thrown on the market at the time
    of the harvest, of course the market would be depressed.
    The Federal Reserve Board deliberately set out to bear
    the market. Now, if they could do that at that time,
    have they not done that with other commodities, and
    cannot the same system be used to stabilise money and
    to stabilise wholesale prices?”
    The foregoing statements show clearly that both the
    post-war boom and slump in the United States were in
    accordance with Federal Reserve policy, and in earlier
    chapters we have seen how it has befallen that American
    monetary policy dominates the world price level.
    Moreover, the action taken in 1919 and 1920 is merely
    in accord with the steps taken in 1893 and 1907 to create
    an artificial monetary stringency .
    At this date the Lloyd George Government was in
    office in Britain, a Government in which Jewish financial
    influence was very strong indeed. In the early part of
    the year 1920 Mr. Austen Chamberlain announced in the
    106 TIE TRUTH ABOUT THE SLUMP
    House of Commons that the Government “had set its
    heart on deflating the currency,” and forthwith embarked
    upon the policy of currency deflation that ushered in
    long-continued trade depression and unemployment from
    which Britain has since suffered .
    In the same year the shareholders of the Bank of
    England elected Mr. Montagu Norman as Governor of
    the bank. Mr. Norman was a member of the American
    banking house of Brown, Shipley and Company . In his
    book, “This Age of Plenty” (Isaac Pitman, 1929), Mr .
    C. Marshall Hattersley quotes a passage from the “Wall
    Street Journal” of March 11, 1927, stating that Mr .
    Norman is very intimate with Dr . Schacht, head of the
    Reichsbank, the central bank of Germany, and stating
    that he was unknown in financial London when first
    elected Governor of the bank in 1920 .
    Mr. Hattersley points out that among the twenty-four
    directors of this private bank, which today controls
    British currency, are a number with strong international
    connections . Among them is Mr. Edward Charles
    Grenfell, a partner in Morgan, Grenfell and Company,
    the London house of J . P. Morgan and Company of New
    York, and formerly the dominant firm in the United
    States Money Trust. This firm is in close alliance with
    Morgan, Harjes and Company of Paris, the French
    branch of J . P. Morgan and Company . Another director
    is Mr. Kenneth Goschen, of the international firm of
    Goschen, Cunliffe and Company . Still another is
    Mr. F. C. Tiarks, of the international firm of J . Henry
    Schroeder and Company which found the money for
    Germany under the Dawes scheme .
    Mr. Hattersley also notes that the Bank of England
    notes which have replaced the war-time Treasury notes
    as the money of England are distinctly foreign in
    appearance and with no King’s head on them, the Royal
    effigy having thus been banished from the currency of
    the realm, except on the copper and silver small change.
    Since his appointment Mr . Montagu Norman has
    spent a great part of his time running backwards and
    forwards between London and New York . His activities
    since 1920, however well-intentioned, have been
    accompanied by no improvement in the state of British
    trade and industry.
    A recent director, and now officer of the Bank,
    BRITAIN DRAWN INTO THE TOILS 107
    is Sir Otto Ernst Niemeyer, formerly Controller of
    Finance in the British Treasury . Last year Sir Otto
    Ernst Niemeyer and Professor Theodor Emanuel
    Gugenheim Gregory visited Australia and New Zealand
    as emissaries of the Bank of England. Australia may
    have been extravagant, but her present financial
    difficulties would not have been serious but for her debt
    incurred in fighting Germany. In face of this fact it is
    surely a very extraordinary thing that the Bank of
    England should send out two agents, both from their
    names obviously of Teutonic descent . The character of
    these gentlemen may be beyond reproach, but in view of
    the German-Jew domination in New York, in view of the
    way British finance is under the thumb of New York,
    what feeling can a layman experience but one of disgust
    at finding a foreign flavour in Bank of England action
    on this side of the world? As may be seen by reference
    to the appendix to this book, questions have been publicly
    raised-and apparently never answered-as to the
    Germanic connections of Sir Otto Niemeyer .
    As Sir Otto Ernst Niemeyer appears to be generally
    considered by our bankers, politicians and newspaper
    editors-barring a few notable exceptions-to be a
    superhuman embodiment of the purest undiluted financial
    wisdom it is worth while seeing what he has done for
    Britain.
    After the elections of 1922 Sir Otto Ernst Niemeyer
    accompanied Mr. Bonar Law to the German Reparations
    Conference at Paris when Mr . Bonar Law produced a
    plan to give Germany a four years’ moratorium, letting
    her off all reparations payments during that period . The
    French refused to agree, and the proceedings ended in
    disorder. Following on this conference the depreciation
    of the mark began-generally believed to have been an
    engineered swindle, and Germany defaulted on her
    payments.
    Sir Otto Niemeyer accompanied the Chancellor of the
    Exchequer to the United States when the American debt
    was funded and Britain undertook to pay America
    annuity for 62 years, rising from £33,000,000 a year to a
    considerably higher figure (see Appendix, p . ix).
    Sir Otto Niemeyer was one of the financial experts
    on the Exchange Committee set up at the Imperial
    Economic Conference in 1923 which declared that the
    108 THE TRUTH ABOUT THE SLUMP
    Australian and New Zealand exchange, then standing
    at 30/- per cent ., would automatically right itself to
    the pre-War figure of about 17/6 per cent. as soon as the
    gold standard was resumed . We know how incorrect
    that has proved .
    Sir Otto Niemeyer was a member of the Treasury
    Committee set up in 1924 and which reported in
    February, 1925, recommending the immediate return to
    the gold standard . “Any temporary disadvantages,”
    declared this committee in its report, “will be many times
    outweighed .” We also know how incorrect that has
    proved .
    So far as the writer can discover pretty well every
    financial step of importance taken by Britain in recent
    years which has tended to make money dearer, to
    increase the deadweight of the National Debt, and
    generally to depress trade, increase unemployment, and
    break the backs of the British producers and
    manufacturers, has been distinguished by the support of
    Sir Otto Ernst Niemeyer.
    What it cost to bring Sir Otto Ernst Niemeyer and
    Professor Theodor Emanuel Gugenheim Gregory to New
    Zealand has not been disclosed . Perhaps the good
    people in Christchurch who pressed for the invitation
    will tell us what we have gained by the visit of these
    two distinguished Englishmen-if that description is
    considered correct .
    On April 28, 1925, Mr. Winston Churchill, then
    Chancellor of the Exchequer, added to the debt Britain
    already owed him as a war strategist, by announcing
    that the gold standard had been resumed as from that day .
    Mr. Churchill was soon after entertained as the guest
    of honour by the British Bankers’ Association. It was
    fitting that the president of this association should bear
    the name of Sir Felix Schuster. “Who’s Who” does not
    state where Sir Felix Schuster was born, but he was
    educated at Frankfort-on-the-Main, and his elder
    brother was born in that home town of British financial
    policy. In complimenting Mr. Churchill in his action in
    restoring the gold standard Sir Felix Schuster said
    “There might be temporary drawbacks, but they would
    not count in the long run . The benefit of stability and
    security would outweigh them all . A great obstacle to
    world trade had been removed .”
    BRITAIN DRAWN INTO THE TOILS 109
    From the moneylenders’ point of view there was no
    doubt about the benefits to be derived by having Britain’s
    trade once more tied’ inflexibly to the hoard of gold
    controlled by the international moneylending interest .
    Mr. Hattersley in his book, “This Age of Plenty,” quotes
    an extract from the “Bankers’ Magazine” recording how
    a shipment of 11 millions of gold from London to New
    York was followed by a decline in Stock Exchange
    securities to the extent of 150 millions . The owners of
    that gold doubtless knew quite well what would follow
    on their shipment of it and were simple people indeed if
    they did not profit by it .
    When the Jew-ridden Lloyd George Government,
    under German-Jew pressure from New York, embarked
    on its policy of monetary deflation we find Mr . Reginald
    McKenna in his annual address as chairman of the
    Midland Bank telling the British public very clearly what
    it meant
    “Let us look at the policy of monetary deflation
    Let us suppose that it were practicable by this
    process to bring prices permanently down to the pre-War
    level. What sort of a charge would our National Debt
    mean to us? It stands today at 17,770,000,000, mostly
    borrowed when money was worth very much less than
    before the war. With prices back to their former level
    the burden of the debt would be more than doubled, in
    other words, the creditor would receive a huge premium
    at the expense of the debtor.”
    Such a result, Mr. McKenna declared, would be
    “repugnant to every principle of equity and economic
    propriety .”
    That was the opinion of a British financier not born
    at Frankfort-on-the-Main as to what the policies of our
    Schusters, Schroeders, Niemeyers, Goschens, Gugenheim-
    Gregorys, and the rest were going to mean . That Mr.
    McKenna was not mistaken one has only to refer to the
    file of the London “Statist” for July last. In an article
    published during that month the “Statist” pointed out
    what the price decline had meant up to then in the deadweight
    of the debt Britain owed America. That debt
    was funded in 1923 at 1945,205,000 . Since then
    135,755,000 had been paid off, leaving 1909,452,000
    outstanding . The “Statist” price index number in 1923
    was 133, in July last it was 98. Thus the outstanding
    110 THE TRUTH ABOUT THE SLUMP
    American debt, adjusted to the value of money in 1923,
    would be £1,234,256,000, or 1289,051,000 more than the
    original amount . The burden today is considerably
    heavier than it was in July last, and the controllers of
    gold can juggle the burden of the world’s debts about to
    any extent they please-excepting that if they go too
    glaringly far the public at large may at last realise where
    the root of their trouble lies .
    him to buy, and then deflation delivered him into the
    hands of the moneylender. The Federal Reserve Bank
    can be a blessing or a curse according to its management .
    If the Wall Street speculators are in control of it they
    can drain the agricultural districts and keep up a
    fictitious prosperity among the members of the plunderbund.
    “While the Federal Reserve Bank Law is the greatest
    economic reform achieved in the last half century, if not
    in our national history, it would be better to repeal it,
    and go back to the old conditions, and take our chance
    with individual financiers, than to turn the Federal
    Reserve bank over to Wall Street and allow its tremendous
    power to be used for carrying out the plans of the
    Money Trust.”
    Similar disillusionment was expressed by Mr.
    Western Starr, head of the Farmer-Labour Party, in his
    evidence before the House Banking and Currency
    Committee in 1926 :
    “In the first place, with respect to the Federal Reserve
    Act, we were told this was something that would save
    us from the economic domination that we are confronted
    with all the time ; that it would prevent panics and lockouts,
    and stabilise currency and give us a flexible
    currency that would meet all the demands of commerce ;
    that it was the one thing the world had been looking for,
    and we must have it ; and they even got William Jennings
    Bryan, who had been fighting the principle involved in
    the Federal Reserve Bank Bill all his life, to go personally
    and dragoon members of Congress and the Senate in his
    party ; and if it had not been done it could not have been
    passed ; and he said before he died it was the one thing
    he had done in his public life that he regretted having
    done.”
    Mr. Starr next proceeded to review the events leading
    to the formation of the Federal Reserve Board . “The
    members of the Farmer-Labour Party,” he said, “knew
    of the panic of 1907, and know what made it .” Then the
    Pujo Committee was set up to discover whether there
    was a money trust in existence in the United States and
    found that there was such a trust and named the men
    that composed it. After that they had the move for
    setting up the Federal Reserve Board. Said Mr . Starr
    “Paul Warburg was the man who originated the
    CHAPTER X.
    THE STRANGLE-HOLD INCREASES.
    That Mr. Paul Warburg, like his famou,
    co-religionist in the play, was determined to have his
    pound of flesh so far as Britain was concerned was well
    shown by the following statement issued by him as a
    counterblast to the Balfour Note on the American debt
    and published in the London “Times” of August 2, 1922 :
    “He still clung to the hope that France would recede
    from what he called her present suicidal attitude ‘of
    wanting the milk, the cow, and her meat at the same
    time,’ and believed that when that happened America
    would co-operate sympathetically with Europe, forbearing
    her claims for war debts from those of her Allies who
    could not pay without disastrous consequences . England’s
    debt, however, he put in a class by itself, suggesting that
    an understanding for its funding and ultimate repayment
    was an essential preface to American co-operation in
    Europe.”
    That was a clear-cut statement by the man who
    dominated the United States Federal Reserve Board,
    which dominated the world, that Britain was to be singled
    out for exceptional treatment . What the war had failed
    to do the peace was to accomplish .
    About this date one of the most prominent supporters
    of the Federal Reserve Act at the time of its passage
    had come to an understanding of its true inwardness .
    This was Mr. William Jennings Bryan, who had exerted
    all his influence to line up the Democratic Party members
    in Congress in support of the measure. According to
    Mr. Western Starr, Mr. Bryan said before he died that
    this was the one action in his political career that he
    regretted . In an article he contributed to “Hearst’s
    International Magazine” for November, 1923, Mr . Bryan
    said
    “The Federal Reserve Bank, that should have been
    the farmer’s greatest protection, has become his greatest
    foe. The deflation of the farmer was a crime deliberately
    committed, not out of emnity to the farmer, but out of
    indifference to him . Inflation of prices had encouraged
    111
    118 THE TRUTH ABOUT THE SLUMP
    succeeded in 1929 by the Young Plan, the author of
    which, Mr. Owen D. Young, is executive head of the
    General Electric Company, which concern was also listed
    by the Pujo Commission as in the Money Trust .
    It is well known that the present disastrous slump
    in commodity prices was preceded by what the newspapers
    described as “an orgy of speculation” on the New
    York Stock Exchange . This orgy ended when the
    Federal Reserve Board in 1928 put up its discount rate
    to 6 per cent. and ushered in the slump period .
    Discussing that action of the Federal Reserve Board,
    Professor Cassel wrote as follows in the London
    “Financial Times” last year
    “Practically absolute power over the welfare of the
    world has been placed in the hands of the Federal
    Reserve Board. And one is appalled to see the apparently
    haphazard manner in which the Board uses this power,
    how ignorant it is of the aim which ought to dictate
    American monetary policy.”
    Professor Cassel went on to point out that since the
    end of the war the United States had been the ultimate
    arbiter of whether trade was to be good or bad, whether
    the price level was to rise or fall, whether men and
    women were to be fully occupied or thrown into the sea
    of unemployment . In 1928 the board made a cardinal
    error. Instead of guiding its policy to maintain stability
    in trade and employment it bumped up money rates to
    “combat the New York speculative mania .”
    If Federal Reserve policy created the present slump,
    there is equal reason to believe that it created the
    monetary conditions leading to the orgy of speculation
    in America . What happened during that orgy? At the
    annual Bankers’ Convention held in the United States
    in October, 1928, it was pointed out that
    “For the first time in the history of the country the
    whole nation is trading in stocks and bonds . . .
    The whole country has been thrown into a speculative
    frenzy. . . . More and more funds are being drawn
    daily into speculation to the disadvantage of other and
    more important lines entitled to credit .”
    As to how this speculation originated the following
    passage from an article in the New Zealand “Mercantile
    Gazette” of November 28, 1928, summarising American
    conditions provides sufficient indication
    STRANGLE-HOLD INCREASES
    117
    date until July 12, 1924, and also how before the withdrawal
    of those forces a further loan was imposed on
    the people of San Domingo .
    In his article in the “National Review” for March,
    1925, Mr . Kitson stated that the Federal Reserve System
    was “`the recognised source of the money supplies which
    the Warburg group are employing on behalf of Germany
    and Russia.” Mr. Kitson added
    “Early in 1921 Warburg started what is known as the
    International Acceptance Bank at 31 Pine Street, New
    York, the object of which is to accept German bills and
    get them discounted at the various American Federal
    Banks. The German Schacht Bank was established in
    Berlin in March, 1924, by special act of the Reichstag
    and is at present the recognised central bank of Germany
    under the Dawes Scheme-which scheme was also the
    product of the fertile brains of the Warburg brothers .
    The directors are 99 per cent . Jewish nationals as
    opposed to German nationals . Just here it may be noted
    that in addressing the Volkische youth meeting in
    Munich last July General Ludendorff said : `The Dawes
    Plan was made and inspired by Jews for putting Germany
    under Jewish control . This plan means future slavery
    for the German people and also the complete crushing of
    the Germanic spirit.’
    “Mr. Paul Warburg has made himself the main, if
    not the sole, agent between the new German Central
    Bank and the American banks . He announced through
    Reuter’s agency last April that his company, the
    International Acceptance Bank in America, had
    established an American Banking Syndicate for the
    purpose of granting unrestricted credit facilities to the
    new German gold bank .”
    As noted in an extract quoted in another chapter .
    Congress in 1923 passed legislation enacting that the
    Federal Reserve banks might discount foreign acceptances,
    and advantage was taken of this immediately on
    the adoption of the Dawes plan .
    “Who’s Who in America” records that General
    Dawes, now American Ambassador to Britain, has been
    president and chairman of the Central Trust Company
    of Illinois since 1902. This concern is one of those listed
    in the Pujo Report as in the Money Trust . The Dawes
    Plan for the payment of German reparations was
    116 THE TRUTH ABOUT THE SLUMP
    A proviso of the agreement constituting this financial
    ring for the control of China lays it down that if any one
    of the parties is not in a position to take up its share
    of a loan, etc., to China the others may take up the
    amount in lieu . As the American group has far more
    money available for foreign financing than the concerns
    representing Britain, France and Tapan, the upshot is
    that China has become virtually a preserve of the
    German- Jew group that dominates American finance .
    As is noted in “Dollar Diplomacy” the amount of
    respect exhibited by these financiers for the sovereign
    independence of China is shown by the fact that the
    agreement was only communicated to the Chinese
    Government after it was signed .
    Following on this arrangement a further step was
    needed to ensure complete domination by this New York
    financial ring in China . Joint action by Britain and
    Japan must be rendered impossible, or at least
    improbable. Thirteen months after the consortium
    agreement had been signed the Washington Arms
    Conference was called . In reviewing the results of that
    conference Senator Lodge, of the Republican Party and
    one of the representatives of big business, declared
    “The chief and most important point in the treaty is
    the termination of the Anglo-Japanese Alliance . That
    was the main object of the treaty. . . . The Anglo-
    Japanese Alliance was the most dangerous element in
    our relations with the Far East and with the Pacific .”
    Many of us were simple-minded enough to think
    that the Washington Arms Conference was a disinterested
    effort to reduce the burden of armaments and to
    secure the future peace of the world . It was for this
    ostensible purpose that it was called, just as the Federal
    Reserve Board was created for the ostensible purpose
    of stablising money and preventing panics, and just as a
    lot of people are telling us that if we want better times
    we must form central banks in every country .
    In “Dollar Diplomacy” is told the instructive story
    of how the firm of Kuhn, Loeb and Company made a
    loan of 20,000,000 dollars to the West Indian Negro
    Republic of San Domingo in 1907, and how this led to
    the installation of a United States Government Receiver-
    General to collect the interest in 1916 and the occupation
    of San Domingo by American naval forces from that
    STRANGLE-HOLD INCREASES
    115
    “This declaration of intentions was the first avowal of
    the policy which under the Taft Administration won the
    title of `Dollar Diplomacy.”‘
    In 1911 Messrs . J. P. Morgan and Company, Messrs .
    Kuhn, Loeb and Company, the First National Bank, and
    the National City Bank of New York got in on the
    international Hukuang loan . The participation of this
    group in the loan was not achieved until President Taft
    had sent a personal message to Prince Chun, the Chinese
    Prince Regent, referring to “the high importance I
    attach to the successful result of the present
    negotiations.”
    After the war the old “spheres of influence” by which
    the European diplomats had divided China up into
    sections for their respective concession hunters were
    abolished by international agreement . In place of this
    old arrangement there was established an international
    financial consortium which, it was agreed, should henceforth
    attend to all foreign financing thereafter undertaken
    in China . That is to say, the entire foreign financial
    exploitation of the Chinese now proceeds through this
    consortium, the Governments of the four Powers in it
    guaranteeing their support . The agreement constituting
    the consortium was signed on October 15, 1920 . The
    signatories included
    Britain-The Hong Kong and Shanghai Banking
    Corporation .
    France-Banque de l’Indo Chine .
    Japan-Yokohama Specie Bank .
    United States-J . P. Morgan and Company ; Kuhn,
    Loeb and Company ; National City Bank of New
    York ; Chase National Bank ; Guaranty Trust
    Company of New York ; Lee, Higginson and
    Company ; Continental Trust and Savings Bank.
    The names of most of these American participators
    will be found set out in the list of corporations included
    in the Money Trust. It will be remembered that the
    Pujo Commission reported that the Money Trust was
    dominated at the date of its report (March, 1913) by
    Mr. J. P. Morgan. Mr. Morgan died at the end of that
    month, and we have the statement of the British
    Ambassador at Washington that “since Morgan’s death
    the Jewish bankers are supreme”-that means Messrs .
    Kuhn, Loeb and their allied concerns .
    114 THE TRUTH ABOUT THE SLUMP
    concerns whose names may be found in the Money Trust
    list in an earlier chapter .
    Mr. E. H. Harriman, the American railway magnate .
    whom President Roosevelt fought in his anti-trust
    campaign, was long active in concession-hunting in
    China. Mr. Harriman was in close association with
    Kuhn, Loeb and Company, and seems really to have been
    a sort of department manager for them .
    In the biographical sketch of the late Mr . Schiff, of
    Kuhn, Loeb and Company, reprinted from the Jewish
    Encyclopaedia, we have seen how that . firm financed
    Japan in her war against Russia . Peace after that war
    was signed at Portsmouth in the United States . In
    “Dollar Diplomacy” we are told
    “Immediately after the signing of the Portsmouth
    Treaty Harriman concluded a memorandum for an
    agreement with the Marquis Ito and the Marquis
    Katsura of Japan for joint American and Japanese
    ownership of the South Manchurian railway .”
    This scheme was, however, opposed by powerful
    Japanese statesmen and never got through. In 1908
    negotiations by Harriman. Schiff and Kahn for a
    Manchurian bank fell through owing to the death of the
    Empress Dowager and the fall of the party in power in
    China. This American group was busy in various
    directions securing concessions in China. On the
    election of President Taft, a very distinct friend of big
    business, support was promptly given for these financiers
    in their schemes for the exploitation of the Chinese . In
    his inaugural address on March 4, 1909, President Taft
    said in reference to China
    “. . . The United States can maintain her interests
    intact and secure respect for her just demands . She will
    not be able to do so, however, if it is understood that she
    never intends to back up her assertion of right, and her
    defence of her interests, by anything but verbal protest
    and diplomatic note .”
    The President in this way plainly intimated to the
    Chinese Government that unless they submitted to the
    schemes of these financiers the armed forces of the United
    States Government might possibly be employed to
    reinforce the arguments of Messrs. Schiff, Kahn.
    Harriman and Company . Messrs. Nearing and Freeman
    relate in their book :
    STRANGLE-HOLD INCREASES
    113
    scheme and brought it here from Hamburg for the
    purpose of putting it over the American people .”
    “Mr. Canfield : The bill they wanted was a different
    bill from what passed .
    “Mr. Starr : Paul Warburg said it differed only in one
    particular, and that could be corrected by `administrative
    processes .’ ”
    “Now, the Federal Reserve Act was passed, and they
    put one of the men that had been denounced . in
    charge of it . Paul Warburg, a member of the firm of
    Kuhn, Loeb and Company, was put on the board to run’
    it. That is what the farmers of this country saw, and
    now think about your Federal Reserve Board . They
    may be away off ; they may be very much mistaken .
    These men may be as patriotic as the Angel Gabriel and
    all right, but the farmers of this country do not think so,
    and the labour men of this country who do not stand in
    to get a slice do not think so .”
    Mr. Starr expressed in downright fashion his view of
    what the Federal Reserve System meant internationally
    “The nations for whom we have made sacrifices
    despise us and hate us and abhor us ; you cannot go to a
    music hall or read a comic magazine published in any
    one of those countries in which they do not hold us up
    as a Shylock and a robber . It is because our foreign
    policy is dictated, not by the people of this country, but
    by the bankers and. by the credit monopolists of this
    country, and if we are ever going to get away from that
    feeling of detestation and hatred which they feel against
    us, and which, if it is allowed, will grow into a war,
    compared with which the last war will be a Fourth of
    July picnic, we have got to take our domestic affairs and
    foreign affairs out of the hands of these old men of the
    sea.”
    During the past few years the activities abroad of the
    American money ring have been on a colossal scale.
    All financing of China, of example, is now controlled by
    the same little German Jew coterie that controls the
    United States Federal Reserve Board . The octopus has
    had its tentacles on China for many years . In their book,
    “Dollar Diplomacy” (R . W. Huebsch, New York, 1925),
    Messrs. Scott Nearing and Joseph Freeman give much
    information as to the close alliance between American
    governmental action abroad and the activities of various
    STRANGLE-HOLD INCREASES
    119
    “It is claimed that the hands of the Federal Reserve
    are tied so that the policy put into operation a year ago
    to make money easier and help to bring about gold
    exports cannot be reversed . At that time the Board
    lowered the rediscount rate even against a protest of
    the Reserve Bank of Chicago, and was also a heavy buyer
    of Government securities . This policy of making money
    easier was the starting point of the wild speculation .”
    This gigantic orgy of speculation was thus started
    and stopped by the Federal Reserve Board . If the whole
    nation was feverishly handing away its savings for stocks
    and bonds somebody naturally must have been selling
    those stocks and bonds. What was the nature of the
    transactions, and for what purposes was the money being
    absorbed?
    The answer to this question is very fully provided in
    a recent book, “America Conquers Britain : A Record of
    Economic War” (A. A. Knopf, London and New York,
    1930) . In this book, which is little more than a thinlydisguised
    paean of triumph over the creation of huge
    American-controlled (or in reality German-Jew controlled)
    international combines to the detriment of
    Britain, Mr . Ludwell Denny tells the whole story. His
    book is worth the closest study of all who desire to see
    civilisation freed from its present domination .
    Mr. Denny has embodied an enormous mass of
    information in his book and his authorities are fully
    quoted throughout . However, the reader who makes use
    of the voluminous index in it to trace the activities of the
    Warburg group and the concerns linked with it, should
    note that no indication whatever is given of the importance
    of this group ; that only occasional reference is made
    to the doings of concerns allied with it ; and, furthermore,
    that unobtrusive as is such reference in the text it is
    still more so in the index, for it is noticeable that although
    Kuhn, Loeb and Company are mentioned in the text no
    entry appears in the index, and the same is true of the
    important International Acceptance Bank . The frequent
    reference to the “Harriman interests” is merely to the
    Warburg interests under another and less suggestive
    name, and the Pujo Commission report shows that the
    activities of the National City Bank of New York, of
    which Mr. Denny’s book is full, have been closely
    associated with the Warburg group .
    120 THE TRUTH ABOUT THE SLUMP
    In the United States during the boom period the
    financiers were busy effecting great company mergers.
    Mr. Denny records more than 1,000 ‘ public utility
    company mergers in the United States since 1926 . In
    the period 1927-29 there were fifty bank mergers in New
    York alone “creating ever larger concentration of
    capital for domestic and foreign use,” and our author
    mentioned that the National City Bank has 98 branches
    in 26 foreign countries. From 1925 to 1928 American
    loans to foreign countries averaged 1,100 million dollars
    annually . Seventeen American corporations operating in
    foreign countries floated bond and stock issues in 1928
    totalling 147 million dollars .
    As to what the financiers were doing with the
    American public’s money once they had got hold of it,
    Mr. Denny supplies innumerable instances, of which
    the following may be taken as illustrating the designs of
    those who beat up the “orgy of speculation” and next
    decreed the slump.
    In 1929 General Motors bought a controlling interest
    in Opel Motors of Germany .
    By March, 1929, American General Electric had
    bought 60 per cent . of the stock of British General
    Electric.
    Early – in 1929 the leading electrical manufacturing
    concerns in Britain : British Thompson Houston,
    Metropolitan Vickers, Edison Swan and Ferguson Pailin
    were fused into the Associated Electrical Industries in
    which the principal shareholder was American General
    Electric.
    In 1928 the Electric Bond and Share Subsidiary of
    the American General Electric more than doubled its
    investments, from 108 to 285 million dollars . Through
    this and other concerns General Electric is stated to
    control 52 per cent. of the United States power
    production. Abroad the Bond and Share concern controls
    the public utilities of 11 foreign countries and has large
    holdings in six other countries .
    In Italy American General Electric is said to have
    large holdings in Italian Super-Power “which is making
    that country independent of British coal” (and thus
    incidentally increasing British unemployment) . It helped
    to organise the French manufacturing combine, the
    Societe Generale Construction Electriques et Mecaniques .
    STRANGLE-HOLD INCREASES
    121
    It has huge contracts for equipment and technical
    assistancee in Russia. In 1929 it increased its holding in
    the German electrical manufacturing trust, the A .E.G.,
    to one-third, and made an agreement with it for
    co-operation in every country in Europe .
    The American General Electric further interlocks
    with the Radio Corporation of America, in its turn a
    huge trust, with world-wide domination over wireless,
    the greatest means of mass communication in the world .
    Further, the British Marconi Company is now tied up
    with the Radio Corporation.
    In April, 1929, American General Electric and the
    International Telephone and Telegraph Company were
    consolidated . According to Mr. Denny, the I .T.T. was
    founded by Sosthenes Behn in 1920 with a capital of six
    million dollars . By, 1928 its gross earnings were
    81 million dollars . We are told that it ” has done more
    in nine years to break the British world communications
    monopoly than all other companies and governments
    combined in the century of electrical communication .”
    American banks and the American General Electric
    in 1928 took substantial part in the organisation Of
    the Trust Financiere de Transport et d’Enterprises
    Industrielles, an international combine got together by
    Mr. Dannie Heinemann, an American living in Belgium,
    in association with the mysterious Alfred Lowenstein
    who disappeared from an airplane in the English Channel
    soon afterwards . In this are stated to be the following
    participators :–American : Guaranty Bankers’ Trust ;
    Dillon, Read ; Kuhn, Loeb ; Lee, Higginson ; International
    Acceptance Bank. British : Barings ; Rothchilds ;
    Midland. German : The four big “D” banks . And
    Belgian, Swiss, Dutch and French houses . The Trust
    Financiere is set up to control and operate public utility
    companies all over the world .
    In 1929 the American Power and Light Corporation
    bought up the entire common stock of the Greater
    London Counties Trust, controlling the seven chief power
    companies of Britain, supplying power on a monopoly
    basis to 95 cities in England and Scotland. It also
    controls the Edmundson Electrical Corporation owning
    twelve electric supply companies in Britain . A British
    Government inquiry was made into this American
    ownership of the motive power of British industry, but
    lamely reported that the ownership was unimportant.
    122 THE TRUTH ABOUT THE SLUMP
    The late Lord Birkenhead obliged the American owners
    by becoming the ornamental British chairman of the
    concern .
    An American engineering firm has obtained the
    contract for the Lake Tsana dam in Abyssinia, controlling
    the Nile waters on which Britain depends for her
    “plan to escape from the American cotton monopoly.”
    Based on American loans and investments, there is
    now some form of United States fiscal, political, or
    military control in 14 of the 20 Latin-American republics .
    In Argentina Britain, according to Mr. Denny, had made
    more head in foreign trade since the war than in any
    other country . This was largely due to the pro-British
    Irigoyen Government . Since Mr. Denny wrote his book
    this government has been ousted in a revolution
    consequent on the economic depression originating in
    New York.
    An American commission is outlining the economic
    reorganisation of China, which Mr. Denny tells us wants
    600 million dollars of railway and other loans from the
    United States .
    We are further told : “American bankers have underwritten
    with State Department approval such dictators
    as Machado in Cuba, Leguia in Peru, Pilsudski in Poland,
    Horthy in Hungary, Mussolini in Italy, and Borno in
    Haiti . Only when dictators have failed to reach
    satisfactory agrements with American capital, as in the
    case of Rumania, the State Department has not been
    friendly to such loans .”
    Mr. Denny states that although America had refused
    Britain similar terms, Mussolini was given a cancellation
    of a large part of Italy’s debt to America, and New York
    loans to the extent of 450 million dollars have been made
    to Italy guaranteed by the best of her industries .
    Under the heading “Grabbing Raw Materials,” Mr.
    Denny tells of the amalgamation in 1928 of the British
    Mond Nickel Company and the International Nickel
    Company of New Jersey, with control in America
    according to the “New York Times.” The Mond
    Company is, as is well known, a Jewish concern .
    In copper America, it is stated, controls 46 per cent_
    of the world’s total, and in 1928 it was reported that the
    Anaconda-Harriman interests had acquired Silesian
    mines with another 10 per cent . of the world’s production,
    STRANGLE-HOLD INCREASES
    123
    while at the end of that year it was reported that
    American producers had joined the European cartel
    controlling 96 per cent . of the world’s production.
    Although Britain has smelting control of 70 per cent .
    or so of the world’s tin output, yet in June, 1929, the
    British-American Tin Corporation was organised and
    was said to represent more than 80 per cent. of the
    British controlled tin production .
    Long detailed accounts are given of recent American
    and British rivalries for rubber and oil, and incidentally
    it is made apparent that America will probably take over
    control of the Republic of Liberia on account of its
    rubber. According to Mr. Denny the Arcos raid on the
    Soviet officials in London in 1927 was merely an incident
    in the oil fight and was designed to benefit Shell Oil as
    against Standard Oil . The international danger point in
    oil will be reached, Mr. Denny predicts, when American
    car-owners face higher prices as American supplies
    are exhausted, and are told that the rise in price is due
    to British grabbing. On both sides, however, the oil
    financial activity would appear to have strong Jewish
    associations.
    In industrial chemicals, controlling supplies essential
    to nearly all industries, are three great combines . In
    Britain the Mond Imperial Chemical Industries, formed
    in1926 ; in Germany the great I .G. Chemical trust that
    grew out of the aniline dye combine built up on a British
    invention ; and the American I .G. Corporation organised
    in 1929 and being an alliance with the German combine .
    The directors of the latter include Mr. Edsel Ford,
    president of the Ford Motor Company ; Mr. Walter
    Teagle, president of the Standard Oil Company ; Mr.
    Charles Mitchell, chairman of the National City Bank
    of New York ; and Mr. Paul Warburg, chairman of the
    International Acceptance Bank .
    The Mond Imperial Chemical Industries on its side
    has strong American Money Trust connections, as is
    shown by noting the names of its associated companies .
    Beginning with a capital of £65,000,000, later increased to
    £95,000,000, the I.C.I. included among its directors the
    late Lord Birkenhead and Lord Reading. According to
    Mr. Denny, I .C.I. has acquired substantial minority
    holdings in the American Allied Chemical and Dye,
    General Motors and E. I. du Pont Nemours, the
    American powder manufacturing company, which is the
    124 THE TRUTH ABOUT THE SLUMP
    controlling stockholder in General Motors. These
    concerns are stated to have close associations with
    J. P. Morgan and Company and the United States Steel
    Corporation.
    In 1928 the I .C.I. and the Chase National Bank of
    New York formed the Finance Corporation of Great
    Britain and America, each holding equal shares . On the
    committee of this concern are stated to be representatives
    of General Motors, American International Corporation,
    American Car and Foundry, American Locomotive,
    International Paper, American Railway Express,
    Metropolitan Life Insurance, and Bethelem Steel . The
    above list should be compared with the list of concerns
    controlled by the American Money Trust in 1913. The
    British directors included the late Lord Melchett (Sir
    Alfred Mond) and Lord Reading (Sir Rufus Isaacs) .
    German I.G. is stated to own a large block of shares
    in the German Ford Company. According to Mr. Denny
    there is world-wide competition between the Mond-New
    York Group and the Warburg-German group, such
    competition extending into chemical, fertiliser, automobile,
    rubber, aviation, and other industries . He
    further says the Mond group is trying to revive worldwar
    hatreds to prejudice the American public against the
    German-American group.
    In the light of the Pujo Report’s revelations as to the
    association of the companies in both groups in the Money
    Ring under the Federal Reserve System, it is difficult
    to believe in the idea of fierce competition between these
    groups.
    In 1928 when the National City Bank organised
    United Aircraft and Transport, Standard Oil, Ford, and
    their allegedly deadly enemy, General Motors, were all
    represented on the board . Other huge air combines, we
    are told, were formed during the boom, and there has
    been American penetration of British Imperial Airways
    by the purchase of stock in the Handley-Page Company,
    which _.has part interest in this British Government
    controlled concern . The National City Bank has also
    been active in forming in 1929 the International Zeppelin
    Transport Corporation for a transatlantic service .
    After reminding us that in the winter of 1928-29
    slackness in shipbuilding accounted for 32 per cent. of
    Britain’s unemployed, Mr. Denny points out that
    STRANGLE-HOLD INCREASES
    125
    German’s mercantile marine has been brought up to
    80 per cent. of its pre-war strength by the building of new
    tonnage. This building has been financed mainly by the
    “Harriman interests,” which seems to be just another
    name for the Warburg group . America, we are told,
    has now on a conservative estimate a three-quarter
    interest in the North German Lloyd line, and another big
    first mortgage on the Hamburg-America line Britain, on
    her side, is left with the old out-of-date pre-war German
    ships on her hands while Germany can offer travel in
    new modern liners built with American money .
    Such is the picture Mr . Denny gives of the directions
    in which went the money taken from the American
    public by the financiers during the “stock exchange
    orgy.” The American financial pentration of Britain has
    not been followed by any conspicuous benefits to British
    industry so far. According to Mr. Denny, it is not
    intended that it shall be . Britain is doomed, is the burden
    of his song, and “if Britain is foolish enough to fight she
    will go down more quickly, that is all .”
    With the pitiful plight of Britain Mr . Denny contrasts
    that of Germany : “The net result of the war and the
    peace settlement imposed by the victors to ruin Germany
    has been to give her new life and a future potentially the
    brightest in Europe. The war `victory’ has rid Germany
    of an archaic, oppressive, and inefficient political system.
    It has relieved her of an armament burden such as is now
    breaking Britain’s back .”
    Further, it is pointed out that the German financial
    deflation wiped out the capital liabilities on German
    industry, and that “out of the ruins has risen a modernised
    industrial organisation better than any in Europe,
    and incomparably better than Britain’s .” To what extent
    this achievement has been directed from New York the
    reader can judge from the extracts from Mr. Denny’s
    book quoted above .
    Alarm has been expressed both by the American
    National Association of Manufacturers and the American
    Federation of Labour at the huge diversion of American
    money into foreign channels during recent years . Both
    these organisations doubtless look at things from the
    purely national point of view, whereas the financiers
    who dominate American industry appear mainly international
    in their interests and outlook . Whether their
    operations have been an unmixed blessing to the
    126 THE TRUTH ABOUT THE SLUMP
    American people is open to doubt. “The general trend
    in this country,” says Mr. Denny, “has been for large
    corporations to grow richer, and for small factories to
    grow poorer and go bankrupt.”
    The American worker, we are also told, has shown
    more willingness to transform himself in to a “human
    machine” than has the more class-conscious British
    worker. “Perhaps the best proof of the near-perfection
    of the spirit of American labour for the purposes of an
    unrestricted capitalist system is its submission to legal
    injunctions and physical violence without effective
    protest. The anti-labour injunction flourishes in all parts
    of this country. There is terrorism and murder by
    sheriffs and company police, especially in the coal and
    iron and in the textile industries, and constant violation
    by officials and employers of the workers’ constitutional
    civil liberties .”
    Finally it is asserted that half the members of the
    Coolidge Cabinet were the representatives of big
    business, as are two-thirds of the members of the Hoover
    Cabinet.
    Such is a recent picture of what world domination by
    German-Jew finance in New York is meaning . “No one,”
    says Mr. Denny (who says nothing of Jews in his book),
    “can say the fight is clean .” And in another passage we
    read : “To many this transformation of the world into a
    cheaper imitation of all that is crude and little that is
    good in American civilisation seems a frightful thing .”
    In other parts of this book we have read statements
    by those who fought the establishment of the Federal
    Reserve Board that

  5. On February 15, 2011 at 12:00 am hoff2 said:

    Such is a recent picture of what world domination by
    German-Jew finance in New York is meaning . “No one,”
    says Mr. Denny (who says nothing of Jews in his book),
    “can say the fight is clean .” And in another passage we
    read : “To many this transformation of the world into a
    cheaper imitation of all that is crude and little that is
    good in American civilisation seems a frightful thing .”
    In other parts of this book we have read statements
    by those who fought the establishment of the Federal
    Reserve Board that the desire of the Money Ring is for
    alternate periods of high and low prices . For high prices
    they sell stocks and bonds to the public, and for the low
    prices they create by gold manipulation they buy back
    these stocks and bonds for a fraction of what was given
    for them, and in this way goes on a continual outreaching
    over human life and industry by the money
    power.
    It is to be noticed that Mr. Denny expresses the
    opinion that war between America and Britain is more
    probable than between America and any other power .
    He instances particularly the struggle for oil between the
    British (Shell) and American interests. Feeling was
    also engendered by the American buying up of British
    STRANGLE-HOLD INCREASES
    127
    General Electric and the British fight to block this.
    Another point at which an international explosion is
    listed by Mr. Denny as possible is Panama . There the
    “Panama Corporation, a British syndicate promoted by
    the Earl of Cavan and Lord Melchett (Mond) obtained
    from the Panama Government a ten-year gold concession.”
    Charges have since been filed with the United
    States Department asserting that there is no gold in the
    area, that the British Government by the concession has
    obtained important naval bases, that there is a British
    right to police the territory near the canal, and exclusive
    rights to potential Panama rubber desired by America
    to block the British world monopoly.
    Of the heads of the Shell and British General Electric
    concerns Mr. Denny says : “It is interesting to note that
    the two most extreme leaders of the 100 per cent . British
    movement against American capital, Sir Hugo Hirst and
    Sir Henri Deterding, are not men of British origin . Sir
    Henri, who is the British general in the oil war, is a
    Hollander by birth, Sir Hugo, at the height of the General
    Electric controversy, was denounced by a Labourite in
    Parliament as a super-patriot of German origin .”‘
    The passages quoted in this chapter suffiicently expose
    the nature of the forces that might produce an armed
    conflict between Britain and America . In the opinion of
    many, Jewish financiers precipitated the South African
    war of thirty years ago, and in the opinion of some the
    Great War also . And ‘history is said to repeat itself .
    128
    CHAPTER XI.
    HENRY FORD RETRACTS .
    Of very great . significance and importance in any
    review of the present world-control by high finance is
    the story of Mr. Henry Ford’s seven-year campaign
    against various undesirable influences declared by him
    to be Jewish in origin . This ended in the middle of 1927
    wit:. an abject apology by Mr . Ford as part of the terms
    of settlement out of court of a million dollar libel action
    brought against him .
    As is well known Mr . Ford in 1916 embarked on his
    famous “Peace Ship,” in which he sailed with a party of
    peace missionaries on a voyage to Europe . The ship
    proceeded to Stockholm, Mr . Ford himself leaving her
    at Christiania. Up to this date Mr. Ford seems to have
    blamed the German militarists for the war, but during
    his tour abroad he was given information which led to
    the conviction- that German-Jewish international
    fina-nc-iers_ were responsible for the disaster of the Great
    War and the millions of lives sacrificed in it .
    In 1920 Mr. Ford began in his newspaper, the
    “Dearborn Independent,” the publication of articles
    criticising German-Jew financiers for their part in the
    war, and for their activities in,–many other directions
    deemed by him to be injurious. As Mr . Ford “Subsequently
    disclaimed knowledge or approval of the articles in the
    “Dearborn Independent,” perhaps it would be more
    accurate to say the articles dealt with such activities as
    were deemed by the directors of the paper to be
    injurious .
    These articles appear to have covered a wide field .
    The writer has not had access to a file of the “Dearborn
    Independent,” and his knowledge of the articles is derived
    from excerpts published in other journals from time to
    time. Among other things the Ford journal dwelt
    particularly on the Jewish control of the motion picture
    industry, on Jewish control of the American magazines,
    and the great predominance of Jew magazine writers, on
    Jewish control of the stage . In Chapter VI has been
    quoted a lengthy extract from the London “National
    Review” of a passage from a “Dearborn Independent”
    HENRY FORD RETRACTS
    129
    article on the German central banking system and the
    connection of the Warburg brothers therewith .
    Mr. Ford was far from being alone in attaching a
    sinister significance to Jewish activity . At the date at
    which his campaign was begun there was widespread
    concern at the fact that the leaders of the Bolshevik
    revolution in Russia were mainly Jews . Many newspaper
    articles and various books were appearing in which
    the matter was dealt with at length.
    In the middle of 1920 the London “Morning Post .”
    for example, published a series of articles in which it
    was asserted that Jewish revolutionary activity
    constituted a world peril . These articles were later
    republished in book form (“The Cause of World
    Unrest,” Grant Richards, London, 1920) . In this book
    the belief was expressed that a great conspiracy existed
    the purpose of which was the destruction of the British
    Empire. The “Morning Post,” as is well known, is a
    highly Conservative journal much read by Britain’s
    aristocracy .
    In reviewing this book the London “Spectator” in its
    issue of October 16, 1920, said it was of opinion that a
    case for full enquiry had been fully established by the
    “Morning Post,” and it hoped that some body in the
    nature of . a Royal Commission might be set up to
    investigate the whole matter. The “Spectator” even
    went so far as to suggest that Lord Sumner,,one of the
    law lords, would make an admirable chairman for such
    a commission . As to the terms of reference the
    “Spectator” suggested that the Commission should be
    called upon to report
    (1) Whether a world-wide conspiracy exists, or has
    existed, in recent years.
    (2) Whether, if its existence is proved, its objects are
    merely vaguely subversive and, however mistaken,
    inspired by the general desire to free and
    benefit mankind, or whether they are destructive,
    anti-democratical and tyrannical .
    (3) Whether it is true, as alleged, that the leaders of
    this world-wide conspiracy are as a rule Jews .
    (4) Whether the object of those Jews who join the
    conspiracy is the destruction of the Christian
    religion as well as political revolution .
    130 THE TRUTH ABOUT THE SLUMP
    (5) Whether the mass of the Jews-i .e., those who
    maintain their racial and religious exclusiveness
    -sympathise with and protect the Jewish
    conspirators, and do so not so much because they
    agree with them as because they are Jews .
    The “Spectator” pointed out that it was an undoubted
    fact that most of the revolutions in Continental Europe
    in the nineteenth century had been led by Jews, and it
    is, of course, well known that Karl Marx, the socialist
    preacher of the war of the proletariat, and his backer
    Engels were both German-Jews .
    In its article this influential British periodical declared
    that the way to fight conspiracy was not by counterconspiracy,
    but by turning the searchlight of publicity
    on to the doings of the conspirators. What happened?
    The “Spectator” carried on its campaign of publicity for
    a while, but within a year or two its control passed into
    other hands, and so far as the writer can discover it
    thereafter lost interest in the subject . The “Morning
    Post” also changed hands, and since seems to have paid
    no attention to alleged Jewish conspiracies against the
    British Empire .
    One journal alone, the London “National Review
    has pegged away unceasingly at the present domination
    in high finance . Some time ago its editor and proprietor,
    Mr. Leo J. Maxse, announced that special steps had been
    taken in the incorporation of the proprietary to ensure
    continuity of policy .
    During the war Mr . J. Foster Fraser had published
    a volume, “The Conquering Jew” (1915), merely
    emphasising the great importance of the Jews despite
    their small numbers. In 1917 Mr. Arnold White wrote
    “The Hidden Hand. That there was a hidden hand
    directing affairs Mr. White had no doubt, and of its
    nature he said
    “Two theories exist as to the identity of the Hidden
    Hand. The highest authority, Dr . Ellis Powell, editor
    of the “Financial News,” to whom I dedicate this book,
    favours the belief founded on evidence that the Hidden
    Hand today belongs to an individual of supreme ability,
    working through astute agents, to many of whom his
    identity is unknown . The other theory is that the
    Hidden Hand is adroitly directed by various agents of
    the German Government,”
    HENRY FORD RETRACTS
    131
    In 1920 there was also published by Messrs . Eyre and
    Spottiswoode a reprint of a remarkable pamphlet issued
    in Russia in 1905 containing the alleged “Protocols of
    the Learned Elders of Zion .” With this extraordinary
    document we shall deal in the next chapter .
    In 1921 appeared Mrs . Nesta Webster’s “World
    Revolution : The Plot Against Civilisation,” a book
    which Mrs. Webster followed up with her “Secret
    Societies and Subversive Movements,” published in 1924 .
    The next year saw the publication of Mr . Hilaire
    Belloc’s book, “The Jews .” In this book Mr. Belloc
    declared that the South African war `was openly and
    undeniably provoked and promoted by Jewish interests
    -in South Africa.” Of the Panama scandal in France in
    the nineties in which millions put up by the French public
    to build the Panama canal disappeared in bribery and
    corruption, and of the Marconi scandal in Britain ten
    years later in which British Cabinet Ministers were found
    to have been dabbling in Marconi Company shares prior
    to an increase in their value by a Government contract,
    Mr. Belloc said
    “They might have passed as isolated things a
    generation before . They were now connected, often
    unjustly, with an uneasy sense of a general financial
    conspiracy . They were at any rate connected with an
    atmosphere distinctly Jewish.”
    Of the ever-growing fields in which the Jews held a
    monopoly, Mr . Belloc wrote
    “It is an exceedingly dangerous point in the present
    situation . I do not think that the Jews have a sufficient
    appreciation of the risks they are running by its development.
    There is already something like a Jewish
    monopoly in high finance . There is a growing tendency
    to Jewish monopoly over the stage, for instance, the
    fruit trade in London, and to a great extent the tobacco
    trade . There is the same element of Jewish monopoly
    in the silver trade, and in the control of various other
    metals, notably lead, nickel, quicksilver . What is most
    disquieting of all, this tendency to monopoly is spreading
    like a disease . One province after another falls under
    it, and it acts as a most powerful irritant . It will perhaps
    prove the immediate cause of that explosion against the
    Jews which we all dread, and which the best of us, I
    hope, are trying to avert.
    132 THE TRUTH ABOUT THE SLUMP
    “It applies, of course, to a tiny fraction of the Jewish
    race as a whole . One could put the Jews who control
    lead, nickel, mercury and the rest into one small room
    nor would that room contain very pleasant specimens of
    their race. You could get the great Jewish bankers who
    control international finance round one large dinner
    table, and I know dinner tables which have seen nearly
    all of them at one time or another .”
    In another striking passage Mr . Belloc wrote
    “The Great War brought. thousands upon thousands
    of educated men (who took up public duties as temporary
    officials) up against the staggering secret they had never
    suspected-the complete control exercised over things
    absolutely necessary to the nation’s survival by half a
    dozen Jews who were completely indifferent as to
    whether we or the enemy should emerge alive from the
    strtu rgle.”
    Throughout the war there had been a widespread
    belief that mysterious subterranean influences had
    somehow militated against Britain putting forth her full
    effort in the struggle . This belief in a “hidden hand”
    had been fanned up as a result of the extraordinary
    allegations made in course of the libel action which Miss
    Maud Allan, the dancer, had brought in 1918 against
    Mr. Pemberton Billing, M .P. Mr. Billing in his paper .
    the “Vigilant,” had alleged that Germany had carried on
    a systematic campaign of blackmail of influential persons
    in Britain, and two witnesses during the libel action
    swore that they had seen a copy of what was called “The
    Black Book,” an alleged German Secret Service document
    in which were set out detailed instructions how
    to entice people into conduct facilitating blackmail . In
    another section of this book was said to be a long list of
    prominent British persons, including numbers in the
    front rank in public affairs, who were listed as approachable,
    and against each name was a biographical note and
    suggestions as to possible methods of getting at each
    individual. The basis of the action was an allegation that
    the performance of “Salome” (financed by a German-
    Jew) would attract influential, but morbid, persons
    suitable for Black Book operations . The book itself could
    not be produced, but one witness swore that it had been
    shown to him by Prince William of Wied in Albania,
    from whose cabinet he subsequently abstracted it . No
    evidence was adduced that anyone had been so
    HENRY FORD RETRACTS
    133
    approached or had yielded to pressure of such a nature,
    and this despite the fact that the names of eminent
    persons alleged to be listed in the book were screamed
    across the Court in this disorderly trial . The wide
    publicity of these proceedings greatly heightened the
    fever of suspicion existing at the time, and which later
    centred on the Jewish influences in the Bolshevik
    revolution on these becoming recognised
    Many books and much periodical literature appeared
    about this date on the menace of the money power,
    without as a rule identifying that power as predominantly
    Jewish. In the flood of post-war memoirs there were not
    a few references to the Jewish question by distinguished
    persons . Mr. H. Wickham Steed, editor of the London
    “Times” under the Northcliffe regime and for many years
    correspondent of the “Times” in various foreign capitals,
    published two volumes entitled “Through Thirty Years”
    (Heinemann, 1924) . Mr. Steed’s narrative dealt mainly
    with the course of European affairs . In his concluding
    chapter he ranked international Jewry as the most potent
    force in the world today, declaring that “those who hold
    that Jewry is always guided by material considerations
    are apt to be woefully wrong.” Mr. Steed also remarked
    that he had been puzzled why it was that the Jews who
    are worse treated in Germany than in Austria, France and
    Britain should have become more and more pan-German,
    The foregoing excerpts are sufficient to show that the
    campaign conducted in the Ford newspaper with such
    vigour was but an American expression of views widely
    shared in numerous influential quarters in Britain . With
    the details of the allegations made in the “Dearborn
    Independent” the writer is not familiar. The attack was
    wide in its scope and specific in its charges, and it ended
    in July, 1927, by apology and retraction as part of the
    terms of settlement of a million dollar libel action brought
    by, Mr. Aaron Sapiro on account of criticism of a Jewish
    co-operative organisation .
    In his books Mr. Ford has written strongly against
    banker-controlled industry. For example, in “My Life
    and Work” (1922), Mr . Ford says :
    “Bankers play far too great a part in the conduct of
    industry . Most business men will privately admit that
    fact. They will seldom publicly admit it because they are
    afraid of their bankers . It requires less skill to make a
    fortune dealing in money than dealing in production .
    134 THE TRUTH ABOUT THE SLUMP
    The average successful banker is by no means so
    intelligent and resourceful a man as is the average
    successful business man. Yet the banker through his
    control of credit practically controls the average business
    man. There has been a great reaching out by bankers
    in the last fifteen or twenty years-and especially since
    the war-and the Federal Reserve System for a time
    put into their hands an almost limitless supply of credit.”
    In the chapter from which the above is taken-headed
    “Money : Master or Servant”-Mr . Ford tells how during
    the slump of 1920-21 his company was pressed for cash
    and how “an officer of a New York bank called on me
    with a financial plan which included a large loan, and in
    which was also an arrangement by which a representative
    of the bankers would act as treasurer and take charge of
    the finances of the company .”
    Of the energetic and successful steps which he took
    to escape this bank domination Mr . Ford tells in detail
    -how he turned everything possible into cash and in
    three months produced a third more than was needed to
    meet the then heavy indebtedness of the company.
    In May, 1927, the Ford Company went out of
    production to change over the plant from the old model
    Ford to the present model . This operation took double
    the time that was expected, and was not completed until
    December of that year . It was during this period that
    Mr. Ford settled the million dollar Sapiro libel action by
    apology . In that apology, as printed in the “Literary
    Digest” at the time, Mr. Ford referred to the “Dearborn
    Independent” and said
    “I am deeply mortified that this journal, which is
    intended to be constructive, not destructive, has been
    made the medium for resurrecting exploded fictions, for
    giving currency to the so-called Protocols of the Wise
    Men of Zion which have been demonstrated, as I learn,
    to be gross forgeries ; and for contending that the Jews
    have been engaged in a conspiracy to control the capital
    and industries of the world ; besides laying at their door
    many offences against decency, public order, and good
    morals .
    “Had I appreciated even the general nature, to say
    nothing of the details, of these utterances, I would have
    forbidden their circulation without a moment’s hesitation.”
    HENRY FORD RETRACTS
    135
    According to the “Literary Digest” Mr . Ford’s
    retraction proceeded with an explanation that “the
    multitude of his activities made it impossible for him to
    keep informed as to the contents of the ‘Dearborn
    Independent’ and the pamphlets entitled `The International
    Jew.’”
    The “New York World Almanack” for 1930 has an
    entry in its chronology of the year recording how
    Mr. Henry Ford attended a Jewish gathering and
    delivered a eulogy of the Jewish race which by special
    arrangement was broadcasted all over the United States .
    In our chapter “The German Side of the Story” we have
    quoted a long extract showing what the Ford newspaper
    was saying of the Warburg group in November, 1924.
    In the chapter immediately preceding this we have noted
    how Mr. Ludwell Denny in “America Conquers Britain”
    has recorded that Mr . Edsel Ford and Mr . Paul Warburg
    in 1929 became co-directors of the American I .G.
    Corporation, a huge combine co-operating with the
    German chemical trust, of which trust the Ford Company
    of Germany is stated by Mr . Denny to have become a
    subsidiary .
    Mr. Ford’s retraction apparently extends only to the
    matter published in the “Dearborn Independent,” matter
    which had only appeared in consequence of his other
    activities not permitting him time to keep in touch with
    what those directing his paper were inserting in it . That
    was the ground of the Ford apology . It is not a ground
    that can be applied to personal statements made by
    Mr. Ford himself. It cannot apply to the statement
    which Captain Cazalet, M.P., in the “National Review”
    for December, 1926, reports Mr . Ford as having made to
    him at Detroit at the end of October in that year, and
    recorded by Captain Cazalet as follows
    “Like other remarkable men Ford has one bugbear,
    i.e., international Jewish financiers. We asked him who
    they were. He said : `I have several books which wiil
    tell you who they are . They were responsible for the
    last war, and will in the future always be capable of
    creating a war when they feel their pockets need one .” ”
    In its issue of October 18, 1926, the London “Times”
    quoted from the “New York American” a passage from
    an interview with Mr. Ford in which he attacked
    international financiers in very similar language.
    136 THE TRUTH ABOUT THE SLUMP
    Nor can the retraction of 1927 be applied to what
    Mr. Ford says of certain Jewish influences in his book
    “My Life and Work,” published in 1922 . If there has
    been a withdrawal of this passage we have failed to
    discover it although we have searched in reliable quarters
    for all references to Mr. Ford and the Jews . It is true
    that on the title page under the announcement that the
    book is “by Henry Ford” is in smaller type the addition
    “in collaboration with Samuel Crowther,” but it is
    reasonable to assume that even the busiest of mankind
    would keep himself in touch with the contents of a book
    broadcasted to the world as his autobiography, even
    though a third party may have been employed in its
    literary presentation . It is thus unlikely that-Mr . Ford
    should not have been aware of the following taken from
    pages 250-53 of the second Australian edition of his
    book :
    “The work which we describe as Studies in the
    Jewish Question, and which is variously described by
    antagonists as `the Jewish campaign,’ `the attack on the
    Jews,’ `the anti-Semitic pogrom,’ and so forth, needs no
    explanation to those who have followed it . Its motive
    and purposes must be judged by the work itself . It is
    offered as a contribution to a question which deeply
    affects this country, a question which is racial at its
    source, and which concerns influences and ideals rather
    than persons. Our statements must be judged by candid
    readers who are intelligent enough to lay our words
    alongside life as they are able to observe it . If our word
    and their observation agree, the case is made . It is
    perfectly silly to begin to damn us before it has been
    shown that our statements are baseless or reckless . The
    first item to be considered is the truth of what we have
    set forth . And that is precisely the item which our critics
    choose to evade .
    “Readers of our articles will see at once that we are
    not actuated by any kind of prejudice, except it may be
    a prejudice in favour of the principles which have made
    our civilisation. There have been observed in this
    country certain streams of influence which have been
    causing a marked deterioration in our literature, amuse- -
    ments, and social conduct ; business was departing from
    its old-time soundness ; a general letting down of
    standards was felt everywhere . It was not the _robust
    coarseness of the white man, the rude indelicacy of
    HENRY FORD RETRACTS
    137
    Shakespeare’s characters, but a nasty Orientalism which
    has insidiously affected every channel of expression–
    and to such an extent that it was time to challenge it .
    The fact that these influences are all traceable to one
    racial source is a fact to be reckoned with, not by us only,
    but by the intelligent people of the race in question . It
    is entirely creditable to them that steps have been taken
    to remove their protection from the more flagrant
    violators of American hospitality, but there is still room
    to discard out-worn ideas of racial superiority maintained
    by economic or intellectually subversive warfare upon
    Christian society .
    “Our work does not pretend to say the last word on
    the Jew in America. It says only the word which
    describes his present impress on the country . When
    that impress is changed the report of it can be changed .
    For the present, then, the question is wholly in the Jews’
    hands. If they are as wise as they claim to be, they will
    labour to make the Jews American, instead of labouring
    to make America Jewish. The genius of the United
    States of America is Christian in the broadest sense, and
    its destiny is to remain Christian . This carries no
    sectarian meaning with it, but relates to a basic principle
    which differs from other principles in that it provides for
    liberty and morality, and pledges society to a code of
    relations based on fundamental Christian conceptions of
    human rights and duties .
    “As for prejudice or hatred against persons, that is
    neither American nor Christian . Our opposition is only
    to ideas, false ideas, which are sapping the moral stamina
    of the people. These ideas proceed from easily
    identifiable sources, they are promulgated by easily
    discoverable methods ; and they are controlled by mere
    exposure . We have simply used the method of exposure .
    When people learn to identify the source and nature of
    the influence swirling around them, it is sufficient . Let
    the American people once understand that it is not
    natural degeneracy, but calculated subversion that
    afflicts us, and they are safe . The explanation is the
    cure.
    “This work is taken up without personal motives .
    When it reached a stage where we believed the American
    people could grasp the key, we let it rest for a time. Our
    enemies say that we began it for revenge and that we laid
    it down in fear . Time will show that our critics are
    138 THE TRUTH ABOUT THE SLUMP
    merely dealing in evasion because they dare not tackle
    the main question . Time will also show that we are
    better friends to the Jews’ best interests than are those
    who praise them to their faces and criticize them behind
    their backs .”
    This Ford campaign has now ceased, and Mr . Ford
    has declared it mistaken, and its inception a matter of
    regret. It is none the less an episode of significance .
    CHAPTER XII.
    THE MYSTERY OF THE PROTOCOLS.
    It has been said that every country has the Jews it
    deserves, and we all know that taken generally the Jewish
    citizens of the British Empire are distinguished by
    public spirit and a high standard of commercial integrity
    and fair dealing.
    In some other European countries the Jews have been
    greatly oppressed . Every student of German history
    knows- that for centuries the people of that country lived
    under the despotism of a multitude of petty rulers, and
    in self defence were driven into secret organisation . The
    Jews in particular were singled out for exceptional
    treatment.
    It is an outstanding trait of human nature that every
    community of human beings, large or small, tends to
    become inspired with an ideal of its destiny, and that
    from such feelings spring the finest actions that adorn
    the history of the world. Occasionally there occurs a
    perversion of racial or national ideals, which then become
    a public danger . We have now reached a point at which
    it is necessary to consider, unfortunately, whether the
    atrocious treatment meted out to them in the past has
    created such a perversion of ideals among a section, or
    group, of the Jews on the Continent of Europe.
    Ten years ago much interest was excited by the
    publication in London of documents purporting to show
    that a secret organisation of Jewish character had existed
    for a long period on the Continent of Europe, and that
    its object unceasingly pursued from generation to
    generation was by degrees to enslave and dominate the
    non-Jewish peoples of the world . According to the
    documents published the engineers of the movement
    were wholly indifferent as to the moral character of the
    means adopted to attain the end.
    The publication of this matter led to expressions of
    strong indignation by leading Jews that reputable
    journals should print such allegations . The documents
    were declared to be gross forgeries, long known and
    exploded on the Continent of Europe and various sources
    were given as their origin.
    139
    140 THE TRUTH ABOUT THE SLUMP
    The extraordinary thing about these “Protocols of
    the Learned Elders of Zion,” as they are called, is the
    accuracy with which they are being fulfilled . Their
    origin may be wrapped in mystery, but of the fulfilment
    of the programme set out in them there can be no
    question.
    The “Protocols of the Learned Elders of Zion” were
    published by Messrs . Eyre and Spottiswoode, London,
    in 1920, and were reviewed at length in the London
    “Times” of May 8, and the London “Spectator” of
    May 15.
    In its notice of the pamphlet the “Times” explained
    that it was a reprint of matter published in Russia in
    1905 by Professor Sergius Nilus, a minor official in the
    Russian Foreign Office. In view of the course of world
    events between 1905 and 1920, the “Times” thought it
    important to explain that there could be no question of
    the issue in 1905, as the British Museum Libary held a
    copy of the original Russian pamphlet with the Museum
    date stamp of August 10, 1906, on it, showing its date of
    receipt.
    According to the explanation given by Professor
    Nilus in his preface, the matter he published came into
    his hands in the following manner
    “A manuscript has been handed to me by a personal
    friend now deceased . . . with the positive assurance
    that it was a true copy in translation of original
    documents stolen by a woman from one of the most
    influential and highly initiated leaders of freemasonry .
    The theft was accomplished at the close of a secret
    meeting of the initiated in France, that nest of Jewish
    Masonic conspiracy.”
    According to the summary given in the London
    “Times,” the documents set out :
    (1) That there has been for centuries a secret
    international political organisation of the Jews.
    (2) That the spirit of this organisation is one of
    undying hatred of the Christian world coupled
    with a titanic ambition for world domination.
    (3) That the goal relentlessly pursued for centuries
    is the destruction of the Christian national states,
    and the substitution for them of an international
    Jewish dominion .
    MYSTERY OF THE PROTOCOLS
    141
    (4) That the method adopted for first weakening,
    then destroying the Christian national states is
    the infusion of disintegrating political ideas
    ranging from liberalism to radicalism, radicalism
    to communism. Out of the welter of world
    anarchy, in response to the desperate clamour of
    distraught humanity, the stern, logical, pitiless
    rule of the “King of the Seed of David” is to
    arise.
    (5) The political dogmas evolved by Christian
    Europe, democratic statesmanship and politics,
    are all equally contemptible to the rulers of Zion .
    “Political problems are not meant to be understood
    by ordinary people : they can only be
    comprehended, as I have said before, by rulers
    who have been directing affairs for many
    centuries.”
    (6) To this conception of statesmanship the masses
    are contemptible cattle, and the political leaders
    of the Gentiles, “upstarts from its midst as rulers,
    are likewise blind in politics . They are puppets
    pulled by the hidden hand of the Elders,”
    puppets mostly corrupt, always inefficient, easily
    coaxed, bullied, or blackmailed into submission,
    unconsciously furthering the advent of Jewish
    dominion.
    (7) The Press, the theatre, stock exchange, speculation,
    science, law itself, in the hands that hold
    all the gold are so many means of procuring a
    deliberate confusion and bewilderment of public
    opinion, a demoralisation of the young, and an
    encouragement of the vices of the adults,
    eventually substituting in the minds of the
    Gentiles, for the idealistic aspirations of Christian
    culture, the “cash basis,” and a mentality of
    materialistic scepticism, or cynical lust for
    pleasure.
    In the programme for securing world domination as
    sketched out in the Protocols it was laid down
    “It is indispensable for our plans that wars should
    not produce any territorial alterations .”
    It was remarked in the “Times” article that this view
    seemed curiously re-echoed in the “Peace without
    annexations” cry after the Great War.
    142 THE TRUTH ABOUT THE SLUMP
    It is remarkable to think of the following passage as
    appearing in 1905 :
    “We will create a universal economic crisis by all
    possible underhand means, and with the help of gold,
    which is all in our hands. Simultaneously we will throw
    into the streets huge crowds of working men throughout
    Europe. We will increase the wages which will not help
    workmen, as at the same time we will raise the prices
    of prime necessities . . . .
    “It is essential to us at all costs to deprive the
    aristocracy of their lands . To attain this the best method
    is to force up rates and taxes . These methods will keep
    the landed interests at their lowest possible ebb . . . .
    “In governing the world the best results are secured
    by violence and intimidation . . . .
    “In politics we must know how to confiscate property
    without hesitation, if by so doing we can obtain
    subjection and power . Our State, following the way of
    peaceful conquest, has the right of substituting for the
    terrors of war executions less apparent and more
    expedient, which are necessary to uphold terror,
    producing blind submission .
    “By new laws we will regulate the political life of our
    subjects as though they were so many parts of a machine .
    Such laws will gradually restrict all freedom and liberties
    allowed by the Gentiles.
    “It is essential for us to arrange that besides ourselves
    there should be in all countries nothing but a huge
    proletariat, so many soldiers and police loyal to our
    cause .
    “In order to demonstrate our enslavement of the
    Gentile Governments of Europe we will show our power
    to one of them by means of crime and violence, that is to
    say, a reign of terror .
    “Our programme will induce a third part of the
    populace to watch the remainder from a pure sense of
    duty, or from the principle of voluntary service . .
    “The main problem for our government is how to
    weaken the brain of the public by criticism, how to make
    it lose its power of reasoning which creates opposition,
    and how to distract the public mind by senseless
    phraseology.”
    A correspondent writing to the “Times” on May 11,
    MYSTERY OF THE PROTOCOLS
    143
    1920, pointed out that in the original Russian pamphlet
    there appeared in the preface the following statement by
    the author, which had been omitted from the English
    edition.
    “It will satisfy our feeling of responsibility if only by
    the grace of God we have achieved the, to us, so
    important aim-to forewarn, and yet did not arouse in
    the heart of any one person a feeling of animosity
    towards the until now blind Jewish people, the masses
    of whom, keenly believing though in a lie, are not guilty
    of the satanic sin of their leaders-the scribes and
    Pharisees, who have once already ruined Israel.”
    In 1917 Professor Nilus, at the time of the Bolshevik
    descent on Russia, produced a second edition of his
    pamphlet bearing the title “It is Here at Our Doors!”
    Of the subsequent history of Professor Nilus the writer
    is unaware .
    Apart altogether from any question of their origin,
    it is a very extraordinary thing that documents setting
    out such a programme as is outlined in the Protocols
    should have been published as far back as 1905 .
    Taking the points seriatim, what do we find?
    It is an unquestionable fact that German-Jews have
    been active in disseminating “disintegrating political
    ideas.” Marx, the founder of modern Socialism, was one
    such, and many others have been prominent as the
    leaders of revolutions in Europe .
    The Bolshevik Government in Russia has shown an
    undying hatred of the Christian religion, and the newspapers
    have lately testified to governmental efforts there
    to suppress all celebration of the Christian festival of
    Christmas . [While this chapter is in the printer's hands
    a news message in the daily papers has recorded the
    publication in Germany of a derogatory life of Christ by
    a German-Jew .]
    In the Panama and Marconi scandals in France and
    England the world was provided with instances of the
    activities of Jewish agents . In the United States the
    memoirs of a late British Ambassador testify to the
    formidable power the German-Jews have exerted on
    Congress . We have seen how the representatives of the
    people were cajoled into accepting the Federal Reserve
    System by representations that it would ensure industrial
    stability, whereas it has not been used for any such
    144 THE TRUTH ABOUT THE SLUMP
    purpose . Any number of examples can also be found of
    politicians “unconsciously furthering” the advent of this
    financial dominion .
    The Press in Britain and America is largely under
    Jewish domination, as are the stage, the movies, and the
    stock exchange . Much matter demoralising to the young
    is, without question, unnecessarily imported into moving
    picture dramas .
    We have seen how the present “universal economic
    crisis” has been created by “underhand means” and “with
    the help of gold.”
    The landed interest everywhere has been much
    weakened by the economic conditions which have existed
    in recent years . It is impossible for the Money Power
    to enslave people living on the land under free conditions .
    Farmers to be caught in the toils must be bound up in
    the chains of mortgage debt and credit systems . We
    have seen what farmers of America think of the Federal
    Reserve Board.
    In Mr. Ludwell Denny’s book the passage quoted in
    an earlier chapter records how big business in the United
    States makes use of violence and intimidation to rule its
    employees, and it cannot be said that the German-Jewish
    trust control has shown any averseness to these methods,
    even though it may not have originated them .
    Although heralded as the rule of the proletariat,
    there has been nothing of a democratic nature in
    Bolshevik rule in Russia. “Freedom and liberties
    allowed by the Gentiles” appear to be conspicuously
    absent, and the “political life of our subjects” does
    undoubtedly appear to be “regulated as though they were
    so many parts of a machine .” The papers of late have
    recorded the horrors of the Russian timber camps in
    which hundreds of thousands of persons are stated to be
    herded in virtual slavery and starvation. By this means
    are the present rulers of Russia building up a timber
    export trade.
    The requirements of the Protocols that “besides
    ourselves, there should be in all countries nothing but
    a huge proletariat” is being steadily achieved by a
    _succession of economic crises in each of which additional
    classes of small capitalists are destroyed and thrown into
    the proletariat, while those that survive are drawn more
    MYSTERY OF THE PROTOCOLS
    145
    and more into the toils of the Money Power, becoming
    merely its creatures and totally under subjection .
    In the Russian Revolution Jewish leaders did
    assuredly provide Europe with a demonstration of their
    power by means of “crime and violence, that is to say,
    a reign of terror .”
    As for the requirement that the public mind should
    be distracted by “senseless phraseology,” is there any
    subject on which more senseless phraseology is written
    than the subject of money and the gold standard in
    particular? Did not the people of the United States lose
    their power of reasoning when in face of the Pujo Report
    they immediately handed over control of the money of
    their country to the very men who had been denounced
    as constituting the Money Trust?
    We have thus reached the position (1) that the
    London “Times” has certified that the British Museum
    records provide indubitable evidence that the Protocols
    were published in 1905 ; (2) that events set out in the
    Protocols as part of a future programme have transpired ;
    (3) that Jews have been prominently associated with
    these events ; and (4) that the Protocols supply a perfect
    explanation of phenomena, so that what otherwise seems
    a haphazard jumble of unrelated occurrences is found to
    fit together like the pieces of a jig-saw puzzle, each
    revealing itself as part of an ordered plan .
    Uncanny as it is to find this fulfilment of the
    Protocols, we must not jump to conclusions . Because
    some person says that a certain thing will come to pass,
    or even urges that steps be taken to cause it to come to
    pass, it is no proof on the event transpiring that the
    prophet or advocate was necessarily the agent who
    brought it to pass .
    A man may tell us that there will be an eclipse of the
    moon at a certain moment in ten years’ time, but on the
    eclipse occurring we cannot hold him responsible for it .
    A clairvoyant, or person with a gift of prophecy, may
    foretell a future event without in any way being its
    cause.
    Before we can assert that German-Jews, or any
    section of them, are engaged in a conspiracy, we must
    have actual positive evidence of their participation . In
    any case a conspiracy to rule the world by owning it
    would not be an illegal conspiracy . There is really
    146 THE TRUTH ABOUT THE SLUMP
    nothing to stop a small group of men from owning the
    earth so that the rest of us arriving on this planet are
    here on sufferance. The whole trend of modern
    commerce and credit is first to inveigle people into debt,
    and by a manipulation of money to increase the burden
    of that debt so that these individuals are stripped of all
    they possess . In this way a continuous concentration of
    wealth is taking place, and even though it could be proved
    that the whole system was designed by German-Jews
    and was concentrating wealth and ownership in their
    hands, there would not necessarily be anything unlawful
    in such combination and action . Many highly respectable
    Christians are just as active in this .
    We have next to recognise that the origin of the
    Protocols is shrouded in mystery . The statement of
    Professor Nilus as to how the document came into his
    possession has been given above . In the second edition
    of his pamphlet he gave a slightly different explanation .
    In the first statement the matter was stolen by a woman
    from an influential Jewish Freemason. In the second
    statement it appeared the matter was abstracted from a
    safe . Both statements would be substantially accurate
    if a woman had taken from a safe a document belonging
    to an influential Jewish Freemason.
    The British Jews’ Association thought the publication
    of sufficient importance to warrant notice by them . In
    its issue of June 2, 1920, the London “Times” published
    the text of a lengthy resolution by this association . After
    pointing out that the author of the pamphlet had received
    it `through a friend now deceased,” and of the variations
    in his accounts of its original acquisition, it was stated
    “In view of the suspicious character of the statement,
    and of the further avowal of the author that he is unable
    to produce evidence of the genuineness of his documents,
    the committee resolved that it is unnecessary for the
    Jewish community to take any action .”
    On June 12, 1920, Mr . Lucien Wolf, the well-known
    Jewish journalist, and the author of the article on “Anti-
    Semitism” in the new edition of the Encyclopaedia
    Britannica, contributed a lengthy letter to the
    “Spectator” pointing out that the bogy of a Jewish secret
    society was at least three centuries old .
    _Mr. Wolf declared that after the existence of the
    Illuminati, a Bavarian Masonic organisation with a
    MYSTERY OF THE PROTOCOLS
    147
    revolutionary plan, had become known at the end of the
    eighteenth century it was promptly annexed by a
    succession of scare-mongers and writers of sensational
    hooks. After giving a list of these writers, Mr . Wolf
    declared that the Protocols from an examination of their
    text were pretty obviously a plagiarism from a novel
    “Gaeta Duppel Warsaw,” published by Hermann
    Goedsche in 1868, Goedsche being, Mr . Wolf stated, an
    ex-official of the Prussian postal service dismissed for
    forgery .
    In his novel Goedsche describes, we are told, an
    assembly of the Elect of Israel held once in every century
    at which is expounded the plan of Simeon, handed down
    from from generation to generation, by which the Jews
    may secure their domination over all the nations of the
    earth. The Jews are to work with gold and the Press
    for the subversion of Monarchy and Christianity. They
    are to act as a universal disturbing and demoralising
    instrument, and in particular they are to seduce and stir
    up the proletariat to political revolution, so that
    eventually they may establish a universal Jewish
    Monarchy on the ruins of Christian society .
    As noted in the chapter on Russia, Mr . Wolf in his
    letter asserted that the Nilus pamphlet was produced in
    Russia in 1905 as part of the propaganda against the
    Jews, who were blamed for the revolution of that year,
    and was in particular used by the Russian Foreign
    Minister, Count Lamsdorff, in connection with a secret
    memorandum which the Tsar submitted to the Kaiser
    urging joint action by Russia and Germany against
    Jewish and Masonic peril . Such peril we are assured
    by Mr. Wolf is a pure myth . Nevertheless we shall look
    in vain to find on the thrones of Russia and Germany
    the two illustrious personages who in 1905 put their heads
    together to combat a supposed Jewish peril .
    So far Mr. Wolf. On August 16, 1921, the London
    “Times” published in a most prominent position, in the
    outside column of its leader page, a long message from its
    Constantinople correspondent headed “Jewish World
    Plot : An Exposure .” In this was set out how a
    mysterious Mr . X had bought a second-hand book,
    “Dialogue in Hell between Machiavelli and Montesqu~
    reu,”‘ written by M . Maurice Joly and published in
    Brussels in 1865 . It was a political squib directed
    against the Emperor Napoleon III . Parallel column
    148 THE TRUTH ABOUT THE SLUMP
    extracts showed many passages almost identical with
    the Protocols . There was some evidence that this
    particular copy of the book had been in the possession of
    the Russian secret police .
    The “Times” correspondent incidentally mentioned
    that Professor Nilus in his second edition of 1917 had
    stated that he had received the Protocols from Alexis
    Nicolaevich Sukholin, a noble afterwards Governor of
    Stavropol . In this edition it was also alleged that the
    Protocols were notes of a plan submitted by Theodor
    Hertzl to the first Zionist Congress Council of Elders
    held at Basle, in Switzerland, in 1897 .
    It will thus be seen that two totally different sources
    were supplied with equal satisfaction as being the origin
    of the Protocols.
    An equally feasible explanation would be that the
    matter in the Protocols and in the two books, the
    Goedsche novel and the “Dialogues in Hell,” had been
    derived from some common source . It is just as credible
    that the authors of these books should have come
    independently upon knowledge of the plan of a
    conspiracy, and that one should have dressed this matter
    up in the form of a dialogue to discredit the Emperor
    Napoleon by representing him as possessing such ideas ;
    that another should have incorporated it in a work of
    fiction ; while the third writer makes a straight-out
    exposure. This explanation fits the facts just as well as
    an explanation that the Protocols began merely as a
    fanciful invention in a novel, and were stolen and dressed
    up in Russia to injure the Jews . The deadly accuracy
    of the Protocols puts the fiction-plagiarism theory at a
    heavy discount . It may be noted that according to
    correspondence in the “Spectator” a Jewish banker
    financed the publication of M. Joly’s “Dialogue.”
    The existence of the Society of the Illuminati in
    Bavaria is a historically established fact, and it is equally
    well established that in carrying out its programme its
    motto was in effect “Evil be thou my good .” The
    Illuminati were founded by Adam Weishaupt on May 1,
    1776. In 1784 the Elector of Bavaria discovered the
    existence of this secret society in consequence of one of
    its emmissaries with incriminating papers on him being
    struck dead by lightning while on a journey . This led to
    searches and further discoveries, and the suppression in
    MYSTERY OF THE PROTOCOLS
    149
    Bavaria of the Illuminati and the flight of its leaders
    elsewhere .
    The basic plan of the Illuminati was by means of
    initiation in many degrees-the initiate on admission to
    each new degree having a shade more of the real secret
    disclosed to him-to band a great body of men together
    for the execution of purposes which were known only to
    the concealed superiors of the order, quite false information
    being given to the initiates of lower degree as to
    the Society’s objects.
    Weishaupt said : “It is absolutely necessary that I
    should remain during my life unknown to the greater
    part of the adepts themselves . When the object is a
    Universal Revolution, all the members of our Societies,
    aiming at the same point and aiding each other, must find
    means of governing invisibly and without any appearance
    of violent measures, not only the higher and more
    distinguished class of any particular state, but men of
    all stations, of all nations, and of every religion ; must
    insinuate the same spirit everywhere in silence, but with
    the greatest activity possible ; direct the scattered
    inhabitants of the earth towards the same point . That is
    what we call the force of Secret Societies .
    “The empire once established by means of union and
    with a multitude of adepts, let force succeed the invisible
    power, tie the hands of those who resist, subdue and stifle
    wickedness in the germ .”
    His aim Weishaupt declared to be “to overthrow
    every religion, every government, and all property whatsoever.”
    On the ruins patriarchal rule was to be erected .
    The Marquis de Mirabeau, at the time French
    Ambassador at Berlin, is stated by various historians to
    have joined the Illuminati while in Germany . The
    society was tacked on to Freemasonry by the creation
    of additional degrees in existing Masonic societies, so
    that even the very organisations to which the Illuminati
    belonged were ostensibly set up for some quite different
    purpose. Mirabeau on his return to Paris helped the
    Illuminati to gain a footing there, and worked with the
    Duke of Orleans, Grand Master of the French Freemasons,
    in his plot for overturning the French throne
    and getting himself elected first Lieutenant-General and
    then sovereign of France. As a prelude to the revolution
    came the diabolically clever plot of the Diamond
    150 THE TRUTH ABOUT THE SLUMP
    Necklace to discredit the King and Queen . Cagliostro,
    the charlatan mixed up in this is stated by his
    biographers to have been a member of the Illuminati .
    It is further established that the Duke of Orleans
    was in communication with the mysterious Jacob Falk,
    then living with the Goldsmids in London, and believed
    by some to have been the chief of all the Jews . Falk’s
    picture with Masonic emblems appears in the Jewish
    Encyclopaedia .
    Of Freemasonry the Jewish Encyclopaedia says : “The
    technical language, symbolism, and rites of Freemasonry
    are full of Jewish ideas and terms . . . but this may
    have been derived without any Jewish intermediation,
    from commentaries on the Old Testament . . . . Jews
    have been most conspicuous in their connection with
    Freemasonry in France since the Revolution . One of
    the branches of the craft, the Supreme Council of the
    Orient, had Adolphe Cremieux as its S .G.G. (Sovereign
    Grand Councillor) from 1868 to 1886.”
    Speaking in the House of Commons on July 14, 1856,
    Disraeli, himself a Jew, said
    “There is in Italy a power which we seldom see
    mentioned in this House. . . . I mean the secret
    societies . . . . It is useless to deny, because it is
    impossible to conceal, that a great part of Europe-the
    whole of Italy, France, and a great portion of Germany,
    to say nothing of other countries-is covered with a
    network of these secret societies just as the superficies of
    the earth are now being covered with railroads. And
    what are their objects? They do not attempt to conceal
    them. They do not want constitutional government ;
    they do not want ameliorated institutions . They want to
    change the tenure of land, to drive out the present owners
    of the soil, and to put an end to ecclesiastical establishments.
    Some of them may go further.”
    Said Disraeli also : “The world is governed by very
    different persons from what is imagined by those who
    are not behind the scenes .”
    There is undoubtedly a very old school of political
    thought based on the principle of Machiavelli that the
    end justifies the means, and some writers hold that there
    has been a continuous development for centuries of a
    body of doctrine for secretly controlling human beings
    by trading on their frailties, by their fear, by their greed,
    MYSTERY OF THE PROTOCOLS
    151
    by their lusts . The order of the Knight Templars
    founded for the protection of the Holy Places in
    Palestine, became corrupted, it is said, through alliance
    with the Assassins who terrorised the East, and whom
    the Templars were originally intended to fight . By the
    beginning of the fourteenth century the Order had
    become so corrupt that it was suppressed and the Grand
    Master and many of the knights burnt at the stake by
    order of the Pope . From some of the Templars who
    escaped to Scotland is said to have come the Ancient
    Scottish Rite on which was built up the political Grand
    Orient Freemasonry of the Continent of Europe . The
    whole subject, however, is exceedingly obscure, and so
    far as the writer can gather the available evidence is
    meagre, and the conclusions reached on one side and the
    other are based mainly on the conjectures of the various
    writers as to the probabilities of the case .
    In passing, it may be noted that Simeon referred to
    in Goedsche’s novel as the author of the Protocols, was
    Simeon Ben Yohai, who lived in the second century and
    was a leader of the Jews in their resistance to Roman
    rule under the Emperor Hadrian. Simeon is the
    traditional author of the Zohar, in which is incorporated
    the most mystical part of the Jewish religion, including .
    the Cabala, teaching of the interpretation of the alleged
    mystic sense of the words of Scripture. It was from the
    Zohar that Madame Blavatsky seems really to have
    derived the inspiration on which the cult of Theosophy
    is based .
    It will be seen that the further one goes into this side
    of things the deeper grow the waters. There is an
    immense body of matter on which suspicion may be
    based, but there is little or nothing susceptible of proof .
    In his book dealing with the Illuminati, published in
    1797, the Abbe Barruel said
    “You thought the revolution ended in France, and the
    revolution in France was only the first attempt of the
    Jacobins. In the desires of a terrible and formidable
    sect you have only reached the first stage of the plans
    it has formed for that general revolution which is to
    overthrow all thrones, all altars, annihilate all property,
    efface all law, and end by dissolving all society .”
    Coming to more recent date, we have noted a
    reputable writer, Mr. Walter Russell Batsell, in a book
    on “Soviet Rule in Russia,” published in 1929 by Messrs.
    152 THE TRUTH ABOUT THE SLUMP
    Macmillan, one of the foremost British publishing houses,
    setting down the following opinion
    “History will be likely to give prominence to plans
    for the destruction of Russia formulated at the Masonic
    Congress held at Brussels a few years before the world
    war. . . .”
    Of the significance of the Protocols we have the views
    of a distinguished Englishman, Lord Sydenham, who
    has twice filled the office of Governor in important parts
    of the Empire, and who wrote as follows in a letter to
    the “Spectator’ ‘in 1921
    “Nothing that was written in 1865 can have any
    bearing on the deadly accuracy of the Protocols, most
    of which have since been fulfilled to the letter.”
    No person can be adjudged a party to a conspiracy
    without definite proof, and however perfect an explanation
    of world phenomena may be provided by the theory
    of such a conspiracy, we have no proof whatsoever of
    any individual being a party to it . Even if one took the
    view that a great part of the Empire’s public men have
    been conforming to and furthering the programme set
    out in the Protocols, the same may be said of innumerable
    private individuals in the conduct of their affairs. Yet
    the whole of these may well have been entirely
    unconscious agents with no awareness of the cumulative
    effect of their actions. What they did may have been
    merely in conformity to pressure from above . It was
    made easy for them to act in a certain way, and they
    acted in that way . It is easy for us to borrow money,
    and we borrow . If the modern credit system is a trap
    we have walked readily enough into it .
    Even if we assume that there is a prima facie evidence
    of a world conspiracy it is improbable to the last degree
    that the leaders of that conspiracy would be persons
    known and visible to the public . More probable is the
    view that the visible figures on the stage are the
    unconscious agents of a hidden hand.
    Some readers may consider that it is utterly
    unwarrantable to publish such a document as the
    Protocols of the Learned Elders of Zion in the absence
    of proof of its authenticity .
    To that the reply is that the enormous significance
    of the protocols is their fulfilment. Either that fulfilment
    is mere coincidence, which is incredible : either the
    MYSTERY OF THE PROTOCOLS
    153
    revelations were a clairvoyant precognition of events
    which is possible but improbable ; or else their fulfilment
    is the result of action and policy deliberately pursued .
    There is no other possibility . And if we reject the
    incredibility of coincidence, and likewise refuse belief in
    the diabolical malevolence of a plot, with what alternative
    are we faced? The only remaining belief for us is that
    the Protocols were accurate as a clairvoyant or prophetic
    vision of events, but are inaccurate in their prevision of
    the motive inspiring those events . And this seems the
    least credible solution of all .
    Any book on philosophy will tell us that absolute
    truth is unknowable by human beings . Truth, for us, is
    merely the explanation that most completely fits the
    known facts . If the Protocols supply an explanation
    which fits the facts, is it not sheer folly to dismiss them as
    insignificant? Would not the writer in putting together
    this book to make his fellow-countrymen aware of the
    nature of the influences by which they are surroundedwould
    not he have failed in his full duty if knowing of
    the Protocols he had suppressed mention of them?
    Such a conspiracy, if it exists, would appear to have its
    origin in Germany, and it would not seem that even there
    any more than a small section of the Jews need be parties
    to it .
    Our concern is not with Jews as Jews, but with
    conspirators as conspirators, whether they be Jews,
    Christians, Mahomedans, or anything else . Our business
    is to discover the facts and to put ourselves in a position
    of security. If hatred has sprung from hatred, matters
    will not be mended by sowing further hatred . Nor will
    they be mended by closing our eyes and leaving policies
    conceived in hatred to run to some tremendous cataclysm .
    Furthermore, we must not forget that prominent in
    exposing and resisting the monopolistic and dangerous
    activities to which attention has been directed in these
    pages have been many public-spirited Jews themselves.
    If there is conspiracy, the conspirators are as regardless
    of Jew as of Christian, for in order to gratify their
    ambition they imperil their race . The frustration of any
    such design of world enslavement is thus the common
    interest of Jew and Christian alike .
    154
    CHAPTER XIII.
    THE POSITION TODAY.
    Our review of the causes of the slump in commodity
    prices is now ended . In the foregoing pages the reader
    has been given the facts so far as the author is able to
    discern them. From many sources matter has been
    brought together giving a composite picture of the course
    of events. It is now desirable that we should glance
    back over the path we have come .
    We have seen how by enacting that debts can only
    be legally discharged by the handing over of gold, the
    leading nations of the world have suffered from periodic
    strangulations of their trade in consequence of a scarcity
    of the means of payment. Control of gold, under the
    gold standard, thus gives control over all other
    commodities.
    We have seen that foremost economists, bankers, and
    commissions of enquiry, after careful examination of the
    facts have reached the conclusion that the present worldwide
    depression, and most of the great commercial crises
    since the beginning of the nineteenth century, have had
    their root in variations in the purchasing power of gold .
    We have seen how in consequence of the huge
    accumulation of gold in the United States the policy
    pursued by the United States Federal Reserve Board
    now determines the general price level for commodities .
    We have seen how, according to independent statements
    made by a number of responsible persons, the
    Federal Reserve Board deliberately created the post-war
    price inflation and boom, and deliberately created the
    ensuing deflation and slump . Nor is there any secret
    that the Federal Reserve created the conditions leading
    to the speculation of 1927 on . the New York Stock
    Exchange, which speculation it next suppressed by
    ushering in dear money and the present slump .
    We have seen how the Federal Reserve Board was
    created as the result of years of agitation by a German_
    but newly naturalised as an American citizen.
    We have seen that this man is the brother of the
    head of a great German banking-house, and who has been
    THE POSITION TODAY
    155
    described as virtually the financial dictator of Germany .
    We have seen how this man, who created the Federal
    Reserve system, said to be predominant in American
    finance today, has worked strenuously against Britain in
    the war, and after its close expressed the opinion that
    whatever other nation might be let off lightly Britain
    must pay up.
    We have seen how the war loan conditions were
    negotiated which delivered the British people bound
    hand and foot into the power of these controllers of
    American finance .
    We have seen that the late British Ambassador to
    Russia records how during the war a German financier
    was corrupting a Russian Minister, and we have seen
    how in his memoirs the late editor of the London “Times”
    states that the creator of the Federal Reserve Board and
    his now-deceased brother-in-law and business partner
    were “akin to, if not identical with” the men who put
    the Bolsheviks into Russia, and we have seen how the
    Bolshevik revolution was led and by whom it was
    financed.
    We have seen how a partner in this banking house of
    Hamburg has played an important part in the founding
    of the Bank of International Settlements which is
    designed for gold control of the world, and we have
    noted that this same financier is now chairman of the
    Financial Committee of the League of Nations .
    We have seen how Britain was after the war forced
    back on to the gold standard as the result of pressure
    from the United States, and we have the opinions of
    high authorities that the policy of deflation consequent
    on this step has been mainly responsible for the terrible
    depression and unemployment from which Britain has
    ever since suffered .
    We have seen how on Australia finding itself in
    difficulties consequent on this juggling with the value of
    money, the Bank of England sent as its emissaries to the
    Commonwealth gentlemen named Sir Otto Ernst
    Niemeyer and Professor Theodor Emanuel Gugenheim
    Gregory.
    We have seen how the money taken from the
    American people during the recent stock exchange boom
    was used largely to finance German industry .
    156 THE TRUTH ABOUT THE SLUMP
    We have seen how a recent well-informed writer
    declares that war between Britain and America is more
    probable than war between America and any other
    power, and how concerns developing situations described
    by him as having potentialities of war are either Germane
    Jew controlled or have strong German-Jewish
    associations .
    We have seen how subterfuge and deceit were used
    to secure the passage of laws making gold the only legal
    tender for the payment of debts .
    We have seen how the Federal Reserve System was
    put forward as a scheme to prevent financial stringencies,
    and how the instruction that the board use its powers to
    this end was struck out surreptitiously from the measure
    during its passage, and how determinedly the officials
    and membe

  6. On February 15, 2011 at 12:01 am hoff2 said:

    .
    We have seen how the Federal Reserve System was
    put forward as a scheme to prevent financial stringencies,
    and how the instruction that the board use its powers to
    this end was struck out surreptitiously from the measure
    during its passage, and how determinedly the officials
    and members of the board have since resisted the placing
    in the law of any such instruction.
    We have seen how Mr. Henry Ford conducted a
    campaign against Jewish influence in various directions
    deemed by him to be harmful, and how in 1927 as part
    of the terms of settlement of a libel action he made a
    retraction and abject apology . And we have further
    seen how his son, Mr . Edsel Ford, is now a partner and
    co-director with the creator of the Federal Reserve Board
    whose doings had formed a prominent part of Mr . Ford’s
    exposure .
    Finally, we have seen how in documents published
    in Russia in 1905, and summarised in the London “Times”
    in 1920, there was set out an alleged programme for
    world domination and the ruin and destruction of the
    Christian religion and the Christian national states . And
    we have seen how the course of events in the twenty-five
    years since that programme was published has provided
    a fulfilment of a great part of it .
    Are these things real, or are they a mere figment of
    the imagination, an unbalanced and hysterical placing
    together of facts that have no relation, a fantastic tracing
    of connections where there is no connection?
    The answer is that the evidence is there and the
    reader must form his own conclusions on it . No one else
    can do that for him.
    *
    *
    *
    *
    If we accept it as a fact that the present gold control
    THE POSITION TODAY
    157
    of commerce and industry today is in the hands of men
    hostile, or at any rate wholly unsympathetic, to the
    British people and British institutions, what is there that
    we can do about it?
    The first necessity is that there should bite and burn
    into our consciousness the words of the late Lord Bryce
    printed at the forefront of this book-words so vital that
    no excuse is needed for here repeating them
    “Democracy has no more insidious or persistent foe
    than the money power, to which it may say, as Dante
    said when he reached on his journey through Hell the
    dwelling of the God of Riches, `Here we found Wealth,
    the great enemy.’ That enemy is formidable because
    he works secretly, by persuasion or deceit, rather than
    by force, and so takes men unawares . He is a danger to
    good government everewhere .
    “The truth seems to be that democracy has only one
    marked advantage over other governments in defending
    itself against the submarine warfare which wealth can
    wage, viz ., Publicity and the force of Public Opinion .
    So long as Ministers can be interrogated in an Assembly,
    so long as the press is free to call attention to alleged
    scandals and require explanations from persons suspected
    of an improper use of money or an improper submission
    to its influences, so long will the people be at least
    warned of the dangers that threaten them . If they refuse
    to take the warning they are already untrue to the duties
    freedom prescribes.”
    *
    *
    Under modern conditions it is impossible to conduct
    a great newspaper without capital, and a considerable
    amount of capital. Like the rest of us most newspapers
    are in greater or less degree already in the toils of the
    money power. Even though entirely independent in
    their ownership, and free of external financial obligations
    -which few of them are-they are all dependent on
    advertising revenue, and any person of ordinary
    intelligence on studying a daily paper or magazine can
    perceive the great volume of advertising that is closely
    linked with high finance . To nothing have the financiers
    devoted more attention in America and Europe than to
    control of the press . Here again we have the opinion of
    that much-travelled and shrewd observer, Lord Bryce,
    as given in 1921 :
    CIO
    158 THE TRUTH ABOUT THE SLUMP
    “In every country unscrupulous wealth can by
    artificially `making opinion’ mislead and beguile the
    people more easily and with less chance of detection than
    in any other way .”
    *
    *
    *
    If the money power has a strangle-hold on the world
    today it is because the determination and persistence
    of the financiers who dominate it has been superior to the
    moral fibre of the world’s nations and their leaders . The
    people have been misled, and their leaders have been
    either likewise misled or corrupted .
    By guile and deceit, and based on human greed, sloth
    and stupidity, has the great and far-flung structure of the
    money power been built until today it controls the whole
    world.
    From the standpoint of Christian morality, from the
    standpoint of morality embodied in any of the great
    religions, or in any recognised system of ethics, the
    power that today bestrides the world is wholly evil . Our
    conflict with that power is essentially a moral conflict .
    “The serpent beguiled me, and I did eat,” said the mother
    of mankind on an historic occasion, and that is about all
    we can say of the mess we are in today .
    What other result than that which has accrued could
    we expect after instructing our youth for the best part
    of a century in a system of vicious rubbish dubbed
    political economy in which greed is erected as the
    governing principle of conduct, in which human labour
    is treated as a commodity to be bought by capitalists in
    the cheapest market, and human beings themselves
    regarded as very little more than wealth-producing
    machines and chattels? “Moral considerations have
    nothing to do with political economy,” said John Stuart
    Mill, one of its founders, and no one ever spoke a truer
    word of this monstrous “science,” nor is it possible to
    have a more complete condemnation of it than is
    contained in this statement .
    What other result than that which has accrued could
    we possibly expect from the enactment of laws decreeing
    that the sole legal means of discharging a debt is by the
    debtor presenting to the creditor a useless metal which
    he can neither eat, drink, nor wear (except for ostentation),
    and of which the total quantity in existence i s .so
    utterly insufficient for the purpose decreed that the whole
    THE POSITION TODAY
    159
    crazy system collapses in a heap every time anything
    serious happens?
    *
    *
    *
    If astute financiers are leading us into a slavery of
    gigantic unpayable debt we are merely reaping the fruits
    of what we have sown. Usury, condemned by the
    religion we profess, condemned by all the ancient peoples
    of the world, we have made the very basis of our
    civilisation. By enacting laws making gold the sole legal
    tender we have created an artificial scarcity of the means
    of payment, and have thus made enslavement in usury the
    universal lot of mankind. Debt, which like poverty,
    should be the complaint of occasional victims of
    misfortune, is now the normal life-long state of all . The
    usurers today sit at the forefront of the banquet of life
    and rule our world . Aristotle, living two thousand years
    ago, very properly ranked them with the keepers of
    houses of ill-fame . Cato, asked what he thought of usury .
    replied by asking his questioner what he thought of
    murder. “Nothing is baser, nothing more cruel, than the
    usury of this world,” said Chrysostom . St. Basil called
    it “the last pitch of inhumanity,” and of the borrower’s
    fate this Christian bishop of sixteen hundred years ago
    wrote
    “At first a man is bright and joyous ; he shines with
    another’s splendour. . But the money slips away .
    Time as it runs on adds the interest to its tale . Now
    night brings him no rest ; no day is joyous ; no sun is
    bright ; he is weary of life ; he hates the days that are
    hurrying on to the appointed period ; he is afraid of the
    months for they are the parent of interest . . .
    Usury is the origin of lying, the beginning of ingratitude,
    unfairness, perjury.”
    . Forty years ago during a famous trial in France an
    eminent advocate, M . St. Audan, spoke as follows in
    defence of Jean Grave, charged with libel :
    “St. Gregory of Nyssa, the imortal thinker of the
    fourth century, wrote these lines :
    “‘He who would give the name of robbery or parricide
    to the inquitous invention of interest would not be very
    far from the truth. What, indeed, does it signify if you
    have made yourselves masters of the wealth of another
    by scaling walls or by killing passers-by, or if you have
    acquired what belongs to you by the merciless method
    of the loan?’
    160 THE TRUTH ABOUT THE SLUMP
    “If anyone had prophesied to St . Gregory as follows
    “‘A day will come when that thou treatest as robbery
    and assassination will become the law of the world, and
    when an Attorney-General will indict in an assize court
    writers who share thy opinion . The whole of society will
    be founded on usury . They will build a temple which
    they will call a Stock Exchange . This temple will fill
    the place of thy cathedrals, even as thy cathedrals have
    filled the place of the temple of Venus or Jupiter . The
    priests serving in this new temple will be called bankers,
    stockbrokers and financiers . They will swindle others
    out of the gold that will ensure to them omnipotence.
    They will buy everything that is buyable, and some of
    the things that are not . And vain revolts against their
    frightful empire will serve only to make more manifest
    its terrible solidity .’
    “If anyone had prophesied that to St . Gregory, St.
    Gregory, who believed in God, would have joined his
    hands and cried : `Lord, deliver us from such a moral
    malady!’
    “The malady has run its course .”
    *
    *
    *
    *
    It should be remembered that strongly as the Old
    Testament condems usury, it is yet laid down that a
    Jew may lend to a Gentile on usury . “Unto a stranger
    thou mayest lend upon usury,” says the twentieth verse
    of the twenty-third chapter of the Book of Deuteronomy .
    Upon thus doing unto others as they would not be done
    by have a section of the Jews of Germany built up their
    present enormous financial power.
    *
    *
    *
    *
    Practically all material wealth is perishable . If a man
    has more wealth than he can use it will go bad on his
    hands. Unless he is going to lose it altogether he MUST
    lend it : he must find someone who will undertake for
    the advantage of present use to replace it with a similar
    amount at a later date. If we had a sensible monetary
    system, by which wealth could be readily monetised, the
    lender would probably be found willing to pay a small
    fee for having this service rendered him, just as the banks
    today charge us a small fee for storing the 25 million
    pounds or so of our ready money they hold on current
    account .
    The practice of usury must be judged by its fruits
    THE POSITION TODAY
    161
    when all is said and done . Has it made the world a better
    place? In New Zealand we have borrowed a lot of
    money. We have been borrowing for sixty years now .
    Public works have been built all over the country, but
    much of the money come by in this easy way has been
    squandered : if the undertaking costs double what was
    estimated, why worry ! It is always easy to go back to
    the pawnshop and borrow more . Today we are paying
    more in interest on our public debt than we borrow, and
    if we had no debt we could spend about a million more
    on public works each year than we are doing by going
    on plunging headlong in the morass of indebtedness .
    Moreover, we do not in the least know where we are
    with that burden of debt interest. Some years ago we
    embarked on a policy of hydro-electric development .
    This scheme means that instead of paying wages to New
    Zealand miners to produce coal to generate power and
    light we pay interest to financiers in London. Today that
    interest bill represents about double the number of bales
    of wool, double the quantity of meat, cheese and butter
    that it did when we borrowed the money. In future
    years what will it represent? None of us knows . Anything
    the money jugglers like to make it represent . If
    we had built those works out of revenue the probability
    is that we should have taken care to get a lot better value
    for the money, and even if the works had cost too much
    the matter would have been done with . As it is, we will
    probably pay several times over in interest what the
    work cost and still be owing the cost .
    *
    *
    *
    *
    “Startling as it may appear,” wrote Mr . Arthur Kitson
    in “The Money Question,” “it is nevertheless an easily
    demonstrated fact that, under the current rates of
    interest, the debtor classes of nearly all civilised nations
    are rushing into bankruptcy. The fact is that the wealth
    production of nations cannot keep pace for long with
    their interest charges . In fact, interest as a universal
    working principle is-at all ordinary rates-an impossibility
    . Five per cent. interest means a doubling of
    wealth every twenty years . At compound interest it is
    doubled in about 141 years . .
    .
    “Usury, is always increasing more rapidly than
    wealth. It knows no period of depression, no time of
    stagnation, no failure of crops, no unfortunate speculations,
    no condition of ill-health and inability to produce .
    162 THE TRUTH ABOUT THE SLUMP
    It takes no holiday, and refuses even to keep the Sabbath .
    It forever goes on as regular as time, and as relentlessly
    as gravitation, counting and adding to men’s burdens,
    piling them higher and higher, until the loan becomes
    too great, and there is a financial crash. No system of
    production has yet been discovered capable of maintaining
    this regular, never-failing supply which usury
    demands.
    “All forms of wealth production are fitful, irregular,
    and subject to fluctuations. One season’s harvests are
    abundant and the next a failure . This year’s fruit crop
    may prove enormous, and the next spring’s frosts may
    kill all the blossoms . The consequence is that though
    for a limited period production may make rapid progress,
    yet, like the hare and the tortoise, usury invariably
    overtakes and keeps ahead of production . . . .
    “Every certain period there is a universal breakdown ;
    panics and bankruptcy become world-wide ; interest
    bearing wealth is swept away, and equilibrium is restored
    only after interest-bearing capital has been greatly
    reduced. . . . Startling as it may seem, it is an
    indisputable fact that panics, bankruptcies and failures
    are absolutely necessary in order to keep the system alive
    . . . . Usury, like gravitation, causes large bodies
    to attract and eventually absorb smaller ones . The small
    capital of individuals is being constantly absorbed by
    the greater capital of corporations . This is its inevitable
    tendency. The forces of attraction and absorption are
    as strong, constant and relentless in the monetary as +n
    the physical world.
    “‘Usury,’ says Lord Bacon, ‘bringeth the treasure
    of a realm into a few hands.”‘
    We have seen how Mr. Ford relates in his autobiography
    that bankers came to him in the post-war slump
    -a banker-created slump-and offered him a loan to
    help him through on condition that they were given
    charge of the financial end of his business . Mr. Ford
    was able to escape their clutches. In how many other
    cases, one wonders, were similar offers made, and how
    many producers were as lucky as Mr . Ford was on that
    occasion? That is a very real instance of how the
    tentacles of the money octopus reach out in a period of
    depression.
    s
    0
    THE POSITION TODAY
    163
    What is the moral of this for us? In New Zealand
    we have taken to borrowing as a drug fiend takes to
    dope. Is there any limit to the mountain of debt which
    we individually, and our public men for us collectively,
    are willing to pile on our backs?
    Interest charges are the real burden that is crushing
    down on us today. Yet this plain obvious fact is the
    last thing that we are willing to face . And when men
    get up and seriously suggest that the way to alleviate
    our misfortunes is to borrow more money no question
    is ever raised as to their sanity .
    Even with money maintained at a stable level and
    controlled by financiers amiably disposed towards us,
    our ever-widening bog of debt would be a menace . With
    money controlled by interests inimical to us and subject
    to violent artificially-induced variations in value we are
    almost wholly in the hands of our enemies, and our
    utmost endeavour should be to avoid further debts and to
    reduce as far as we are able, and as rapidly as we are
    able, the mountain of indebtedness already on our backs .
    The forces opposed to us are capable of action on a
    scale which, judged by our standards, is colossal . Many
    may suppose that in face of them our only course is to
    drift with the stream regardless of whether that stream
    leads to destruction or not . That is a counsel of despair .
    It is not given to mortals to command success, only to
    strive and fight on, to learn the lesson of past mistakes,
    and to make their failures the stepping stones to better
    things. A man who lives by running to the pawnshop
    until he has nothing left to pawn ends his career only
    in one place, and that is the gutter. The fate of a
    community which follows the same course must in the
    end be the same .
    If there is a conspiracy against civilisation, it is a
    conspiracy of long standing, and those who direct it are
    content to achieve their objective step by step . If in
    danger of discovery they have only to ease monetary
    conditions for the time being to lull suspicion to sleep .
    In the end-be it soon or late-they will strike . The
    enslavement of Russia was not accomplished in a day .
    164
    CHAPTER XIV.
    SELF-HELP THE ONLY WAY OUT.
    In face of the economic crisis confronting us what
    steps are we taking or proposing to take to mitigate its
    effects? We read a lot in the papers about the need for
    “reducing the costs of production .” To a large extent
    this phrase seems to be another name for reducing wages .
    So far as the farming community is concerned wages are
    a minor item in the annual expenditure . In an open
    letter addressed by the President of the Farmers’ Union,
    Mr. W. J. Poison, to the Acting Prime Minister in
    November last, figures were quoted showing the annual
    expenditure on a 1,000-acre sheep farm and on a 120-acre
    dairy farm. In the former case wages accounted for
    1250 out of a total of £2,650 ; in the latter for 1312 out of
    11,395. The sheep farmer was shown as paying £1,290
    in interest and the dairy farmer as paying 1393, and this
    after the capital value of the dairy farm had been written
    down by half . In both cases the interest bill is decidedly
    the heaviest single item of expenditure . The committee
    of enquiry into dairy farming conditions recently set up
    by the Government has reported to similar effect .
    There is not the least doubt that any attempt to
    mitigate the evils of the slump which ignores the interest
    burden is doomed to failure. Our trouble is that not only
    have we suffered a very serious reduction in the total of
    our national income, but that the proportions in which
    the income is distributed are all out of adjustment .
    A maxim for the distribution of farming income that
    one sometimes hears quoted is : one-third for the rent
    (in New Zealand, mortgage interest) ; one-third for the
    farmer ; and one-third back into the farm . In Chapter I
    we considered the position of a farmer who had bought a
    farm in 1925 at a figure which worked out satisfactorily
    on the above basis .
    At the produce price level at which he bought the
    farm, the farmer out of every £100 of income, on his
    plan of expenditure had £33 for the rent and 167 for
    himself and to put back into the farm. With a fifty per
    cent . decline in the prices for his produce, instead of £100
    SELF-HELP THE ONLY WAY OUT 165
    coming in there would be only 150 . Out of that 150 the
    same 133 would have to be found for the rent (mortgage
    interest), leaving only 117 for expenditures for which
    167 had previously been available .
    The price slump would be had enough for that farmer
    even though all charges were reduced in proportion to
    the reduction in total income . With interest charges
    standing at their old level it is, of course, simply murder.
    There is a perfectly practicable way in which this
    mal-distribution of our available income can be corrected .
    All that is needed is for the Government to decree that
    henceforth the gold content of the New Zealand pound
    shall vary according to the movements of the export
    produce price index compiled by the Government
    Statistician, taking, say, the 1925 index figure as par.
    The effect would be that the number of notes issuable
    against a given quantity of gold would vary as the price
    index moved up or down .
    An enactment on these lines would mean that our
    pound would fluctuate against the British pound, but it
    would be a pound purchasing always the same amount
    of New Zealand produce .
    We would make up a basketful of wool, meat, butter,
    cheese, etc., each in the proportion in which it figures in
    our production, and the whole basketful representing
    exactly what a British pound (113 grains of standard
    gold) would buy at the 1925 average price level, or
    whatever point we selected for stabilisation . Thereafter
    a pound would be our name for the amount of gold
    necessary from time to time to buy that basketful of
    commodities. In other words our pound would be
    constant in buying power and variable in gold . Today
    it is constant in gold but variable in buying power.
    The practical effect of this would be if, for example,
    we had fixed our par point with the British pound at the
    1925 level, and the general level of our produce prices
    fell 50 per cent, below the 1925 level, that our pound
    would be worth only 50 per cent . of an English pound.
    We have seen the unhappy position of the farmer in
    our illustration above, who is faced with a 50 per cent.
    decline in his income as compared with 1925 . How
    would he fare under the scheme sketched out above?
    He would receive for his produce sold in London 150 in
    English pounds for every 1100 he had received in 1925 ;
    166 THE TRUTH ABOUT THE SLUMP
    but on exchanging that money into New Zealand pounds
    he would be given £100.
    The farmer would thus have the available money to
    cover his interest charges, to put back into his farm,
    and to maintain himself and his family . He would have
    £33 in interest charges to meet out of every £100, and he
    would have the £100 out of which to meet it .
    This would be the case with wage earners and most
    people right through the community . With export
    production at the same volume as in 1925 the quantity
    of money in the country would be the same as
    1925. If production increased in volume the money
    would increase . If production declined in volume the
    money would decline in amount.
    What we would really be doing by this plan would
    be rationing the gold money we got for our products in
    London. If the gold money due to us came to half of
    what it formerly was in consequence of a decline in
    prices, as we have supposed and as is pretty near the
    case, everybody’s share of that gold would be
    automatically cut down to half .
    All the time the gold content of our pound would
    keep on varying according to the amount of gold it took
    to buy our standard pound’s worth basketful of export
    commodities.
    These alterations would probably be made every two
    months or so by a board set up for the purpose, and the
    way it was to be done would, of course, be very precisely
    laid down by law.
    The alteration at any one time would thus be very
    slight, and the whole scheme once established would work
    as simply and unobstrusively as putting on the clock for
    summer-time works .
    So far we have looked at the scheme as it affects the
    exporter in a time of falling prices. It is time we thought
    about the importer .
    With a produce price decline of 50 per cent. below the
    par point the importer buying goods in England for £100
    in British pounds would have to find £200 in New
    Zealand pounds to pay for them .
    At first glance this will seem disastrous for the
    importer. In reality it would not be . He would only be
    hit to the extent that the export produce index on which
    SELF-HELP THE ONLY WAY OUT 167
    our pound was based, fell below the general price level
    of the goods he imported .
    If the prices of imported goods had fallen at the same
    rate as the gold content of our New Zealand pound had
    varied the importer would be in exactly the same position
    as in 1925. His prices would remain round about the
    1925 level, his customers would be just as able to pay
    those prices as in 1925, and the importer’s ratio of profit
    would be the same.
    The importer, as a matter of fact, would be very much
    better off than he is today, for instead of a wholly
    disproportionate amount of the national income going to
    the moneylenders, as is now the case with our shrunken
    national income, the amount of free spendable income in
    the hands of his customers, the public at large, would
    be much increased.
    What is killing trade is clearly seen if we look at the
    case of the farmer who in 1925 out of every 1100 of
    income had 133 tied up in interest charges and 167
    spendable . With only 150 coming where there was 1100,
    and with 133 still going out for interest it means that
    the spendable balance is down to 117-a decline of
    75 per cent. in the farmer’s spendable money, whereas
    the farmer’s total income fell only 50 per cent .
    The above figures show pretty clearly that from the
    importer’s point of view things are half as bad again as
    they would be under the plan suggested .
    It may be said that the excessive share of the national
    income now drawn by the moneylenders is still in the
    country. But a great part of this interest payment goes
    to wealthy people, and an increased expenditure by a
    few people on luxury articles is no compensation for the
    loss of the widely distributed spending power of the
    people as a whole.
    If the . fall in import prices was less than the fall in
    export prices on which we based the gold content of our
    pound, the importer would, naturally, suffer to that
    extent. But that would be a condition in which it was
    essential as a matter of public policy to restrict imports
    to balance our national overseas trading account .
    This plan would have a number of other advantages
    at the present time. Some of these advantages are as
    follows
    168 THE TRUTH ABOUT THE SLUMP
    It would make New Zealand an attractive place of
    residence to persons with fixed incomes . Civil servants
    in India, etc ., and other such persons would probably
    be much attracted by the idea of residence in New
    Zealand on retiring on pension if they could exchange
    an annual pension of, say, £400 British pounds for £800
    New Zealand pounds . It would be all to our advantage
    to have such people here eating our produce on the spot .
    The favourable exchange would also have its effect
    in attracting tourists .
    Another effect would be to give a great stimulus to
    gold mining, and as gold is the one commodity which
    our overseas creditors will accept in fixed and unchanging
    quantity in discharge of our debts, the more we can
    produce of it the better.
    The more stabilised internal price level would also be
    a great assistance to manufacturers and give a valuable
    stimulus to our secondary industries . And here it may
    be emphasised that the bigger a town population we have
    the more prosperous will our farmers be .
    This latter statement is not in line with the thought
    of many who treat the growth of the towns as a matter
    for concern. Our farmers would have to live in a very
    barbaric state if there were no town populations to
    purchase their products . Not having a town population
    of our own to do this we have to seek out town populations
    on the other side of the world in order to dispose
    of our produce, and have to go to great expense to
    transport it . It would be much more to our advantage
    to cut out those charges and have our consumers on the
    spot. Also, we have spent a great lot of money on
    developmental public works without having got the
    development . We need more population to right this,
    and bring per capita overhead charges for our national
    undertakings down to a more reasonable figure . The
    plan outlined above makes it easier for people to come
    here, not, of course, that the writer suggests that we
    should start bringing people into this country while we
    have the ridiculous spectacle of men wandering about
    New Zealand looking for work in a country where so
    much requires to be done . That is the first mess we have
    to set ourselves to right . And the way to right it is to set
    to in earnest on our money muddle .
    SELF-HELP THE ONLY WAY OUT 169
    The plan outlined above is not a fancy creation of
    the author’s. It is known as the Irving Fisher
    Compensated Dollar Plan . This plan was put forward
    as far back as 1911 by Professor Fisher, formerly
    Professor of Economics at Yale University in the United
    States, and has been under criticism ever since . Its
    technical details will be found fully set out in the
    300 pages of Professor Fisher’s book, “Stabilising the
    Dollar,” published in 1920. More briefly it is discussed
    in Professor Fisher’s later book, “The Money Illusion,”
    published in 1928.
    The Fisher plan was considered by New Zealand’s
    now defunct Board of Trade in its annual report for
    1919, when it was seeking a remedy for the great
    fluctuation in the value of money brought about after the
    war. After a lengthy review of the Fisher plan the Board
    said
    “So hopeful does Professor Fisher’s suggested remedy
    appear to the Board that we earnestly recommend it to
    the serious attention of the Government.”
    So far from getting the serious attention of the
    Government the Fisher plan seems never to have received
    any attention at all .
    Sir Josiah Stamp, one of Britain’s foremost economists
    and a director of the Bank of England, has expressed the
    opinion that Professor Fisher represents the “best
    informed opinion” on the subject of money.
    In an article published in the “United States Banker”
    for January, 1929, Professor Robert H. Tucker of
    Washington and Lee University, wrote of “Our Unstable
    Standard of Value .” Declaring the Fisher scheme of
    money stabilisiation to be the most complete and
    thoroughgoing of any put forward, Professor Tucker
    said
    “It is not a panacea, or a substitute for economy or
    for efficient management. It is not a guarantee of a
    perfect system of distribution. But, as has been pointed
    out, it would reveal the facts, instead of obscuring them,
    as the present unstable dollar (pound) obscures them,
    and directly or indirectly accomplish more than any
    other reform proposed in the world today .”
    Sir Josiah Stamp’s opinion is very similar as to the
    urgency of action : “Everything,” he says, “depends on
    whether our combined and international wisdom can
    170 THE TRUTH ABOUT THE SLUMP
    master the next stage of monetary science . Certainly the
    old ideas and practices will no longer serve . I have long
    said that a new development in monetary knowledge is
    the most important single problem of our age-more
    important than unemployment, industrial peace, or
    capitalism, because fundamental to them all .”
    After twenty years of criticism the Fisher plan-it is
    really much older than Professor Fisher, for you will find
    the rudiments of it in Professor Devon’s book on “Money”
    published in 1870-and in many other works of foremost
    writers-this plan still commands the attention of all
    writers on monetary policy. Everything has been done
    with it except try it.
    People may say, “Oh, yes, it is a very nice idea, but
    quite out of the question for New Zealand to think of
    doing anything about it on its own account .” This is not
    the idea of Professor Fisher . In a letter written in response
    to enquiry by the present writer under date of
    October 14, 1930, Professor Fisher said
    “You ask me if I think New Zealand could undertake
    to put into operation the `compensated money unit plan’
    without reference to any other countries . I would reply
    that I think she could, but that it would be very much
    better if she could induce the nations of the British
    Empire to adopt the plan at the same time .”
    That is clear enough . Undoubtedly it would be much
    better for the rest of the Empire to adopt the plan with
    us. But we will get nowhere if we wait for that to
    happen. We need immediate present relief. The best
    way to induce the rest of the Empire to fall into line is
    to make a start here, and let them see for themselves
    what the plan is *like in operation .
    Various plans for stabilising money have been put
    forward of recent years . The late Professor Lehfeldt of
    South Africa, for instance, advocated international
    control of the world’s goldmines in order to dig gold,
    even at a loss, so as to increase the supply . The money
    interest diligently talks of universal central banking as
    the way to stabilisation . This was what the money
    power told the people of the United States when the
    central banking swindle was put across in that country .
    They have put central banking across in Europe with
    the Bank of International Settlements, which Sir Otto
    SELF-HELP THE ONLY WAY OUT 171
    Ernst Niemeyer has told us is the hope of the world . A
    Central Bank Bill is in course of being pushed through
    the Comonwealth Parliament at the time of writing . As
    for New Zealand, the two emissaries of the Bank of
    England, Sir Otto Ernst Niemeyer and Professor
    Theodor Emanuel Gugenheim Gregory, were strongly of
    opinion that we also should have a central bank . We
    shall be wise people if we have nothing of the sort while
    money is under its present control .
    Perhaps some of our learned economists who advocate
    central banking will tell us why if it failed so
    ignominiously to provide the promised stabilisation in
    the United States any better results are likely to be
    secured by establishing it elsewhere?
    *
    *
    It is quite possible, of course, that the Money Power
    may really intend to use central banks to stabilise money .
    For example, it might make money still dearer even than
    it is today, and then stabilise it on this depressed price
    level for all time, or for a sufficient time to bankrupt the
    British Empire and every component part of it. Of
    course there would be enough “senseless phraseology”
    spoken and printed to bewilder the public and to have
    some of our local financiers and pedants falling over one
    another to lick the boots of those who were about to
    destroy us.
    *
    There was recently formed in the United States a
    Stable Money Association. This association announces
    in issue No. 3 of its bulletin, “S.M.A. News Service,”
    under date of April, 1930, that it is “the advocate of no
    specific solution.” Its object is to direct public attention
    to the problem, and to promote research and discussion.
    It is obvious, of course, that an association which
    advocates no specific solution can itself get nowhere .
    You have got to do something in particular if you do
    anything at all . And a body of men assembled together
    and pledged to do nothing in particular on a vital problem
    is not exactly an inspiring spectacle.
    The president of this association is Mr . F. A. Delano,
    deputy chairman of the Federal Reserve Bank of
    Richmond. Among the vice-presidents are Mr. Otto H .
    Kahn, partner in Kuhn, Loeb and Company ; General
    G. C. Dawes, for nearly thirty years head of the Central
    Trust Company of Illinois ; Mr. F. H. Sisson, vice172
    THE TRUTH ABOUT THE SLUMP
    president of the Guaranty Trust Company of New York ;
    Mr. Owen D. Young, head of the General Electric
    Company ; Mr. Charles Evan Hughes, formerly United
    States Secretary of State and later attorney for the
    Standard Oil Company and similar interests .
    The above is but a selection from a list which includes
    eminent and distinguished persons of all nations . The
    connections of the above gentlemen can be instructively
    checked up with the list of concerns reported by the
    United States Money Trust Commission as constituting
    a peril “far greater than the combined danger of all
    existing combinations .”
    It is quite obvious that although the Stable Money
    Association is pledged to advocacy of no particular
    solution of the money problem, nevertheless a great
    many people interested in the problem and anxious to
    advance some definite plan will get into touch with it .
    The members of the association will thus be widely
    informed of movements for money stabilisation all over
    the world . People who are planning action and
    propaganda will doubtless rush eagerly enough to tell it
    what they are thinking of doing and to ask for its
    support . If, as the Money Trust Commission reported
    in 1913, a Money Trust then existed in the United States,
    and if the concerns listed as constituting that trust are
    still in combination today, then, it is obvious, all this
    advance information about contemplated moves for
    monetary reform in different parts of the world should
    be very useful indeed to it . And it would seem unlikely
    that any policy adopted by the Stable Money Association
    will be injurious to the money power so long as gentlemen
    associated with that power are among its officebearers.
    And another question is whether what is
    advantageous to the money power is likely to be in the
    least beneficial to the rest of us .
    Conundrums like these we must answer for ourselves,
    but it is wise to ponder them before expecting much in
    the way of help from the Stable Money Association of
    New York.
    There are critics who contend that even Professor
    Fisher’s scheme will not get us very far, and that we can
    never get far until we abandon gold . Sir Josiah Stamp
    in his foreword to Professor Fisher’s “Money Illusion”
    said the next ten years would probably show whether
    SELF-HELP THE ONLY WAY OUT 173
    gold was to remain predominant ; whether it was to retire
    to a secondary place, as in the Fisher scheme ; or whether
    we would have to get right away from it altogether.
    Mr. Reginald McKenna, in his 1925 address as chairman
    of the Midland Bank, pointed out that theoretically no
    particular advantage attached to gold as a monetary
    standard . Its advantage simply is that gold has become
    a fetish. “So long as nine people out of ten in every
    country think the gold standard the best, it is the best,”
    he said. In our grandparents’ day no doubt a physician
    could just as soundly have declared, “So long as nine
    people out of every ten think bleeding the best cure for
    disease it is the best cure .” After innumerable patients
    had died from the loss of blood consequent on vencsection,
    cupping, and the application of leeches, the
    public and the physicians gradually came to a knowledge
    that the cure was worse than the disease . Today the
    orthodox are as ready to die by the gold standard as
    their ancestors were to pay money to the doctor to bleed
    them to death. It was . a very respectable ending, and
    well worth the money, no doubt .
    In a speech in Congress in 1913, Mr . Charles A .
    Lindbergh, of Minnesota, declared that there was a catch
    in the Fisher stabilisation plan . It is not too clear from
    Mr. Lindbergh’s speech just where the catch is, but his
    grounds for thinking there is one are worth noticing . The
    Fisher plan had then been only two years before the
    public. It had received nation-wide publicity, and this
    fact in itself made Mr . Lindbergh suspicious of it . He
    said
    “If he [Professor Fisher] had not proposed to
    standardise the gold dollar his proof that it is not an
    honest measure of value would have received no publicity
    greater than he and his friends and a few others could
    give it. It would have been ridiculed if he had not
    proposed a_ remedy that suited the interests, for the
    money sharks demand some measure that is favourable
    to them and not fair to the people .”
    Apart from getting away from gold altogether-the
    best plan if public opinion were ready for it-the Fisher
    plan does, however, appear decidedly the most hopeful of
    current plans for money stabilisation .
    *
    *
    *
    Before we leave this part of the subject it is worth
    174 THE TRUTH ABOUT THE SLUMP
    noting that several partial adaptations of the Fisher plan
    have been suggested in Australia . “Ex-Banker” in a
    column article in the “Sydney Morning Herald” of
    August 21, 1930, suggested that the Australian exchange
    on London should be varied according to the price of
    wool, as being the most important of Australia’s staple
    products . In view of the extremely violent fluctuations
    in value to which wool is subject its importance to the
    community would have to overshadow that of every
    other commodity to make it alone an acceptable basis of
    monetary regulation .
    In November last Professor D. B. Copland, of
    Melbourne University, in a lecture recommended raising
    the exchange on London to give Australia a breathing
    space . The exchange is at present arbitraily fixed by the
    banks, and as Professor Copland, in such reports of his
    lecture as the writer has seen, did not suggest any more
    than a further arbitrary variation in the rate with no
    definite basis of regulation. his plan if correctly set out,
    becomes merely a temporary expedient of rather a
    dangerous kind .
    Mr. C. H. Wickens, the Commonwealth Government
    Statistician, was reported in November as proposing
    something very like the Fisher scheme . “To obtain an
    equitable price level,” he is reported as saying, “regulate
    the currency so that when the price level falls the issue
    is increased, and when the price rises currency is
    restricted.”
    *
    *
    The foregoing shows us that there is nothing to stop
    us from putting our monetary affairs into much better
    shape than at present . Nothing, that is, except ignorance
    and timidity. Any sensible steps would, of course, be
    hotly resented by the money interest and would provoke
    a great hubbub, and a great lot of rubbish would be
    trotted out in an endeavour to scare and terrify people
    from interfering in any way with the operations of the
    money power. When the Almighty endowed human
    beings with brains it was presumably intended they
    should use them . If we leave our brains behind us and
    continue to allow “experts” so kindly provided by the
    moneylenders to go on regulating money solely in their
    employers’ interest we get the result that we deserveand
    are asking for. If we wish to make our country
    worth living in we will, on the other hand, lose no time
    SELF-HELP THE ONLY WAY OUT 175
    in extricating ourselves from this particular bog .
    Our salvation lies in doing things, not in talking,
    arguing and wrangling about what we shall do . At
    present we talk and flounder while the money interest
    acts with silence and certainty . We are like people who
    squabble all day about the particular brand of insect
    powder to use to rid the house of vermin . In every
    remedy advanced the money interest will pick holes and
    discover defects. If we wait for the perfect remedy we
    will wait for ever. The Fisher plan is practicable and
    capable of immediate adoption .
    176 THE TRUTH ABOUT THE SLUMP
    CHAPTER XV.
    THE BASIS OF SECURITY .
    The land is the basis of all wealth, and if the farmer
    lives in a state of insecurity it is impossible for the rest
    of the community to be secure . With the farmer up in
    the air financially, everybody else is up in the air, and
    particularly so in a country like New Zealand . This fact
    was very clearly recognised by the ingenious concocter
    of the “Protocols of the Learned Elders of Zion,” whoever
    he may have been . It was obvious to him that to make
    the money power supreme over the community the
    landed interest must be kept at its “lowest possible ebb.”
    If the people live in freedom on the land they will still
    be secure even though the moneychangers have turned
    the temple into a den of thieves . It is thus of vital
    importance to the money power to entrap the tiller of the
    soil and the husbandman in the toils of debt .
    This has been very completely achieved in New
    Zealand . Half a century ago a Conservative Minister of
    Lands told Parliament that the only alternative he could
    see before the farmers of New Zealand was to be either
    the tenants of the moneylenders or the tenants of Crown .
    Crown tenancy is of no use at all to the money power
    as it cannot take away the land by enticing the farmer
    into debt-not that he needs much enticement, for going
    into debt has become as natural to a New Zealander as
    sucking in his mother’s milk . For some years we did
    have Crown leaseholds that were inalienable, but the
    moneylending interest soon saw to it that these leases
    were done away with.
    One current proposal is to alleviate the farmers’
    distress by de-rating rural lands . It may be wellintentioned,
    but what is its effect? It means that in order
    to enable the farmer to go on paying his interest bill he is
    to be relieved of payment of local rates . The money for
    these rates is to come from some other source, this source
    being the towns. The proposition is thus that the townspeople
    shall be roped in to pay the farmers’ rates . Boiled
    down it means that the townspeople as well as the
    farmers are to be forced to work for the farmers’
    THE BASIS OF SECURITY
    177
    mortgagees, and are to be robbed of their earnings in
    order to keep up the value of the mortgagees’ security .
    With no rates the land will be worth more to the
    mortgagees than before, but the let-off in rates will not
    suffice to save the farmers, They need a lot more help
    than that
    What the farm mortgage total is is not very clearly
    revealed in New Zealand statistics as no complete figures
    are collected. Figures published in the Government year
    book for 1930 deal with the mortgages as shown in
    40,494 rural land tax returns. These holdings total
    23,418,000 acres of an unimproved value of 1148,130,000,
    and the mortgages on them amount to 1109, 789,000 . The
    capital value is not given, but the total unimproved value
    of all rural land is 1221,000,000 and the total capital value
    is 1351,000,000, or roughly half as much again as the
    unimproved value .
    So far as they go the figures indicate that the whole
    of the rural lands of the Dominion are mortgaged to
    about half their capital value as shown on the Government
    valuation roll, all except a small fraction of such
    valuations having been made prior to 1926 . If these
    capital values are written down by half we have the
    position that the mortgages equal the whole capital value
    of the rural land in the country and that the farming
    population has just about no equity at all in -the land it
    occupies.
    Of course not all the farmers are in the same boat .
    The little men are in up to their necks, about 20,000 of
    them having mortages of 11,000 and more per 11,000 of
    unimproved value, Government valuation . One whole
    group of these small farmers, for instance, is shown with
    11,412 per 11,000 unimproved value round their necks.
    The greater part of the land in the country is still
    occupied in very large holdings, and many of these large
    holdings are clear of mortgage . A regrettable feature
    of the official figures is that no clue is given to the
    number of holdings that are unencumbered . Anyway,
    pretty well right through the piece the rule is that the
    more valuable the holding the smaller the average
    mortgage per 11,000 of unimproved value, the biggest
    class of land holders coming down to 130 per 11,000.
    The figures indicate quite clearly that if anything at
    all is to be done to help the farmer it will only be done
    178 THE TRUTH ABOUT THE SLUMP
    by getting him out of this bog of debt . In cold, hard
    fact there is nothing to stop us from doing this . Nor can
    we get our country into any sound state of prosperity
    until we do it. What we lack is the will to act .
    The steps that require to he taken to put our farmers
    in a position of security are really quite simple in
    principle. One perfectly workable plan is set out in the
    “Rural Report of the Liberal Land Committee, 1923-25,”
    issued by the British Liberal Party, and published by
    Messrs. Hodder & Stoughton, Ltd ., at the modest price
    of one shilling net .
    In the 584 pages of that report is embodied a mass of
    invaluable information on the land question, and an
    exposition of the grounds on which the policy adopted is
    founded . That policy was designed to give the tenant
    farmers of Britain security in the possession of their
    holdings and an equitable return for their labours .
    Our problem can be solved by exactly the same
    means. The needs of our farmers are the same . The
    English problem is private landlordism . Our problem is
    mortgaged freeholds, which is merely disguised landlordism
    . ‘ Where they have rack-renting in Britain we
    have overmortgaged freeholds .
    Our system is more vicious than the British system,
    for whereas a tenant-farmer there who is turned off
    through failure to meet his rent loses all the labour he
    has put into the farm, with us the farmer turned out by
    his mortgagee loses all the capital he put into buying the
    farm, as well as his labour in improving it . When land
    values slump there is no share and share alike under the
    moneylenders’ system . The farmer is stripped of everything
    he owns on the farm or off it before the mortgagee
    loses so much as a brass farthing . The man who has not
    lifted a hand in labour gets all, the toiler and producer
    loses all .
    The British Liberal Party land programme is based
    on the fact that in English law no subject can acquire
    an absolute title to land. The greatest interest in land
    which a subject can have is a tenancy in fee simple . In
    former days that tenancy carried duties and obligations .
    These were gradually whittled down to nothing . The
    Liberal policy proposes that upon an appointed day the
    Crown shall resume its rights .
    Upon this taking place the State will have the right
    THE BASIS OF SECURITY
    17Q
    to transfer any farming land to any person competent
    to use it to the advantage of the community as a whole .
    Every tenant holding will be forthwith transferred to
    its then tenant (if a competent person), who will hold
    it in Cultivating Tenure. The land will be valued at its
    true farming value, a rental upon this value assessed,
    and the Crown will pay to the former private landlord
    an annuity corresponding to the rental fixed, less
    administrative charges .
    This means that the private tenants of Britain would
    .automatically become Crown tenants . The rentals fixed
    would remain unaltered so long as there was no break
    in the tenancy, and the tenants would have the right to
    transmit to heirs within specified degrees of relationship,
    such heirs to be competent to farm the land . The tenant
    would also be permitted during his lifetime to transfer
    the holding to a person within the same degree of
    relationship, but no payment by way of rent or its
    equivalent to the transferrer would be allowed .
    A Cultivating Tenant would also be permitted to
    surrender a holding at any time, and upon such surrender
    would have a right to full compensation for the fair value
    of improvements made by him. On the death of a tenant
    without heirs competent to farm the land the value of the
    late holder’s improvements would be paid to his estate .
    All farming land occupied as freehold by a bona fide
    farmer on the coming into force of Cultivating Tenure
    would be left in the hands of its occupier, subject to the
    State having the right to secure the proper use of the
    land for productive purposes. An occupying owner
    would have the same rights of bequest as a Cultivating
    Tenant. Tf he wishes to .give up his holding at any time,
    or if he dies without an heir competent to farm it, the
    State has the right of pre-emption.
    The part of the policy of especial interest to us in
    New Zealand is the provision that the State shall be
    under an obligation to take over the holding of an
    occupying owner who requests its transfer to Cultivating
    Tenure. In this case the occupier after being approved
    as competent to farm the land, is offered it at a rental
    assessed as in the case of Cultivating Tenants above,
    and an annuity is paid for the land to him as owner, the
    annuity being the amount of the rental less administrative
    charges .
    180 THE TRUTH ABOUT THE-SLUMP
    Obviously an occupying owner would have nothing
    to gain by such a transfer to Cultivating Tenancy
    provided he had an unencumbered holding . If this land
    was mortgaged to an amount in excess of its net rental
    value he would, of course, have everything to gain by
    transferring to Cultivating Tenancy . Such a ,provision
    in our New Zealand law for the conversion of freeholds
    to State tenancy would offer a door of salvation to
    innumerable farmers, and save this country from its
    present drift into the same private landlordism that
    destroyed the yeomen of England, and reduced agriculture
    in that country to its present pitiable condition.
    The objective of the whole policy is to bring the
    financial demands upon the farmer within his capacity
    to pay. The report says
    “Depression can ‘be relieved only by relieving
    agriculture from the weight of false values. False values
    can be eliminated only by refusing to recognise them and
    making their reappearance impossible .”
    . That is precisely the problem we have to face in New
    Zealand . The British Liberal Party land policy of 1925
    offers a perfectly just and feasible way of stripping off
    fictitious values without dispossessing competent farmers .
    Our present system offers no way but to break the backs
    of the farmers for the benefit of moneylenders .
    The British Liberal policy means that where land
    has been over-mortgaged those who advanced excessive
    amounts on it, or sold it for a fictitious value, will have
    to bear the loss. This is no more than justice. As the
    Liberal reports says
    “No wise advisor of investors would encourage a
    mortgagee to risk an amount greater than two-thirds of
    the present real value. Mortgages beyond this amount
    must be regarded as highly speculative . The everpresent
    possibility of recent years that the State might
    raise additional revenue by specialised land taxation has
    been an additional reason for caution on the part of
    mortgagees . When the system of cultivating tenure is
    instituted it will be possible to ascertain the extent of
    mortgages on agricultural land, and it would, in out
    opinion be reasonable to indemnify first mortgagees up
    to a reasonable limit. . . .
    “This problem had, of course, to be faced under the
    Irish Land Purchase Acts . Under those Acts owners are
    THE BASIS OF SECURITY 181
    entitled to sell their lands without obtaining the consent
    of their mortgagees, but except where the sale prices are
    fixed by the Acts, the mortgagees get notice of the
    purchase prices and can object to them if they are shown
    to be inequitable . Mortgagees receive notice of the
    proceedings for sale, and, when the purchase money has
    been advanced and lodged in Court for distribution to
    the parties who may be found legally entitled thereto, the
    mortgagees attend and prove their claims before the
    Examiner, who investigates the title. The claims are
    paid out of the purchase money in so far as the money is
    available to meet them . . . .
    “We do not believe that many cases of hardship
    would arise . In any case such hardships cannot be
    weighed in the balance against the present accumulated
    hardships of rural life, and the present danger to national
    stability, and great nations cannot be deflected from
    pursuing great policies by the possible grievances of
    problematical minorities . Whatever, for instance, may
    be the case for or against Prohibition in the United
    States, no one would argue that the interest of persons
    who had mortgages on drink-trade premises should have
    been allowed to tie the hands of the American nation
    ,,
    A most important point in the British Liberal Party
    policy is the method of payment for the land. This is
    set out in clause 245 of the policy, as follows
    “The landlord’s annuity shall be, in principle,
    perpetual. But the State may make such arrangements as
    are equitable, by sinking fund, drawings or other means,
    to redeem the annuities at any time in any way equitable
    to all parties . The annuity shall be paid in income bonds
    or in such other way as is necessary to enable the
    recipient to realise its value at any time in the open
    market.”
    The essential thing is that the State can conduct the
    scheme without recourse to borrowed money . But it
    may, at its convenience from surplus revenue, or by any
    other means, buy in the annuity bonds on equitable
    terms. There is, however, no obligation on the State
    to redeem the annuities .
    Under the Irish Land Purchase Acts passed by the
    British Parliament the mortgagees were paid in cash.
    182 THE TRUTH ABOUT THE SLUMP
    Since the Irish Free State took over the payments have
    been made in 4J per cent . Land Bonds.
    It will be contended by many that unless the
    mortgagees are paid in cash or in bonds which the State
    undertakes to redeem at a given date, a great injustice
    will be done them, and that an irredeemable bond, or a
    bond redeemable at the option of the State, is a very
    inferior substitute for cash and its offer to the mortgagees
    a gross breach of faith . A little reflection, however, will
    show this not to be the case .
    Every person who invests money on mortgage lays
    out a given sum of cash in return for a fixed annuity .
    That annuity is derived from the annual produce of the
    land . The sole value of rural farming land lies in the
    periodic yield of material wealth by the application of
    labour. The cash laid out by the mortgagee gives him a
    claim to an annual cash payment, derivable from the
    produce of the land .
    What happens when the mortgagee wants to recover
    his principal sum advanced? His sole expectation of
    recovery lies in the belief that either his mortgagor or
    some other person will be willing or able to pay down
    a lump sum of cash in order to secure the annur’ cash
    payment to which the mortgagee is entitled . The
    mortgagee has no absolute guarantee from any source
    that such a payment will be forthcoming . He takes his
    chance of being able to discover some other person who
    will give him a sum of money equal to that invested by
    him in return for the annual payment due to him . It is
    true that in addition to land itself the mortgagee has a
    claim over such other assets as his mortgagor may
    possess.
    Under the proposed scheme what would be the
    position of the mortgagee? The State-issued annuity
    bonds given him would be a vastly better security than
    he now has. They would be secured over all the lands
    of the Dominion instead of only over one farm . Their
    income would be infinitely more certain .
    If at the same time the State undertook to redeem the
    bonds for a given cash sum the State would be putting
    the mortgagee in a much superior position to that which
    he occupies today . The whole resources of the State
    would be put behind both his annual income from h ;s
    mortgage and behind the repayment of the capital sum.
    THE BASIS OF SECURITY
    183
    There is no warrant whatsoever for giving the mortgagee
    more than he is entitled to at present.
    The position is amply met if the State pays out income
    bonds backed with the State guarantee of a perpetual
    annuity and leaves the mortgagee to dispose of these in
    the open market whenever he wishes to recover his
    principal .
    To say that the annuity bonds, although backed by
    the credit of the community as a whole, are not going to
    be saleable, is to say that the surplus wealth seeking
    investment is going to dry up or decline . So long as
    there is surplus wealth in the community its owners
    must lend it . They have no option in the matter . If it
    remains idle on their hands it either deteriorates and
    perishes or at best produces nothing. In either event it
    ceases temporarily or permanently to have value. To
    maintain its value its holder must invest it . No investment
    for that surplus wealth can offer better security
    than one that is backed by the credit of the State . So
    long as there is surplus wealth seeking investment the
    present cash value attaching to all forms of security
    depends on the degree of certainty attaching to the
    income to be yielded . If that income is uncertain the
    security declines in value, no matter what its face value
    or however assured the ultimate repayment of the
    principal sum.
    People do not buy Government stock maturing in
    fifty years time because they expect precisely at the
    moment of maturity to have a use for the principal sum
    they have invested. They buy Government stock
    because its absolutely assured income makes it at all
    times the most saleable of securities. Its present value
    depends on the demand for such assured income .
    Here, for instance, is what a formerly well-known
    financial writer has to say about irredeemable stocks.
    “THheo w etxot rRaceat d ist hef rMomo nMery .A rCthiarcllees” D(uEgfufiid’nsg hlaimt tWliel sbooonk,,
    1901), pages 55_56 :
    “A redeemable stock, of course, is one which will be
    paid off : in which our investment must sooner or later
    cease. We shall go on drawing our interest until the
    date of redemption, but when that date arrives our capital
    will be paid back. However much we may desire to.
    continue, however convenient it is to receive the nice
    184 THE TRUTH ABOUT THE SLUMP
    steady income from the interest payable on a certain day,
    we shall be obliged to take our money back and look out
    for a fresh investment . Nearly all corporation stocks
    are in this redeemable category ; the Government now
    makes our municipal authorities pay back their loans
    within a certain time.
    “Irredeemable stocks are, of course, exactly the
    opposite. Upon these the borrower goes on paying
    interest for ever . Or at all events interest is paid until
    the stock can be bought back in the market, or until
    terms can be arranged with the holder. Corporations
    which long ago issued irredeemable stocks have sometimes
    regretted their policy . Finding they can borrow
    money more cheaply than at the rate they have to go on
    paying, they endeavour to rid themselves of the burden.
    But for the very reason of their improved credit, or even
    because of the high rate of interest they undertook to
    pay for ever, the stocks are tightly held. . . .”
    The above extract is interesting in that it shows an
    experienced financial writer dwelling not at all on the
    disadvantages to the holder of irredeemable stocks, but
    on possible disadvantages to the issuer .
    The objections likely to be raised to the payment of
    mortgagees’ claims by annuity bonds have been dealt
    with at some length as they will probably be the principal
    objection put forward against the plan proposed. The
    objection is not one that can be sustained against the
    very positive advantages to be gained by the community
    as a whole .
    In the plan outlined in this chapter we have a simple
    and entirely practicable means of placing the farmers of
    New Zealand in a position of security . It is not a plan
    emanating from any wild party of revolutionaries, but is
    the sober, considered policy put forward five years ago
    by the British Liberal Party . Our depression can only
    be relieved and production cheapened-an essential
    preliminary to any return to prosperity-by stripping
    fictitious values from the land . To let things take their
    course means that with a continuance at the present
    price level we shall simply sit back and see the greater
    portion of the active producers of this country ruined
    and stripped of all they possess. If so monstrous a
    wrong can be averted we are less than men if we refuse
    to save these people.
    CHAPTER XVI.
    CONCLUSION.
    The remedies proposed in the two preceding chapters
    go hand in hand . The second would be dangerous
    without the first, and the first would be incomplete
    without the second . Taken together they offer an
    immediately practicable means of relieving the acuteness
    of the present depression and of placing our country
    in a position of relative security . Both these steps are
    of the utmost importance to the entire population of the
    Dominion for they go directly to the root of our troubles .
    Instead of a multitude of re-adjustments, the whole
    of which will be again dislocated immediately another
    variation in the purchasing power of gold occurs-and
    such variation is highly probable-all that we require is
    the passing of two laws, both quite simple in principle .
    The first will enact that the gold content of our pound
    is to vary according to the movement of the export index
    number, the average figure for, say, the year 1925, or
    some other suitable point, being taken as par. The
    intervals at which the adjustments are to be made will
    be prescribed, the exact manner in which the index
    number is to be calculated will be laid down, and a small
    board will be set up to certify to the accuracy of the .
    index figure. The board’s task will be important, and it
    would be well to

  7. On February 15, 2011 at 12:03 am hoff2 said:

    The first will enact that the gold content of our pound
    is to vary according to the movement of the export index
    number, the average figure for, say, the year 1925, or
    some other suitable point, being taken as par. The
    intervals at which the adjustments are to be made will
    be prescribed, the exact manner in which the index
    number is to be calculated will be laid down, and a small
    board will be set up to certify to the accuracy of the .
    index figure. The board’s task will be important, and it
    would be well to have represented on it the various
    interests affected as far as practicable, say, one
    representative each of the banks, the Chambers of
    Commerce, the Farmers’ Union, and the Trades and
    Labour Councils.
    The second law will enact that any farmer on making
    application, and on being certified by the Land Board as
    competent, will be given the option of having his freehold
    converted into a Crown lease . The land will be valued
    at its true productive capacity, and the basis on which
    the valuation is to be made will require to be very
    carefully set out . The farmer will be offered the holding
    at a rental based on this valuation . The land will be
    paid for in Government land bonds yielding an income
    equal to this rent, less administrative charges.
    185
    186 THE TRUTH ABOUT THE SLUMP
    Mortgagees will receive notice of the proceedings and
    their claims will be met by the allotment of the land
    bonds to them in so far as the bonds are available to
    meet the claims .
    *
    Neither of these simple proposals can be dismissed
    as impracticable. The first is the embodiment of a plan
    advanced by a man who has a world-wide reputation as
    a first-class authority on monetary matters . As has been
    stated, the author holds a letter from this gentleman,
    Professor Irving Fisher, expressing the opinion that it
    would be quite practicable for New Zealand to adopt
    the plan independently of other countries .
    A prominent director of the Bank of England in a
    private letter to the author has stated
    “You have asked me specifically whether I think
    there would be likely to be any support from the London
    end for an experiment in New Zealand something on the
    lines of the Fisher plan . The whole outlook has been so
    uncertain during the past two or three months that it has
    been difficult to make up one’s mind with any definiteness
    on this question. At the moment, however, my feeling
    is that the experiment would not be supported . Of
    course, often there is theoretical objection to a cause
    which, the moment it becomes urgent from a practical
    point of view, is waived, and I have been unable to make
    up my mind how far people in authority would, if pushed
    by emergency, agree to internal stability with high
    fluctuation in exchange rates . There is no question,
    however, as to the general view in London against this
    course, and they are still fumbling after obtaining
    stability in the value of gold and are not prepared to
    consider the remedies that may have to be looked at if
    such instability is chronic.”
    The author desires to direct attention to the portion of
    the above letter which he has put in heavy type . If ever
    a country was pushed by emergency New Zealand is
    today, with the Hawkes Bay disaster coming on top of
    the worst slump in its history. Coming from such a
    quarter, the letter cannot be regarded as other than most
    encouraging.
    It has to be remembered that the Fisher plan will not
    in any way affect our external liabilities. It is simply an
    internal redistribution of the national income . As our
    CONCLUSION
    1 187
    external creditors will not be thereby affected they would
    thus have to show themselves of a malevolent disposition
    if they sought to punish us for making this experiment .
    Opposition from the London end would simply be an
    indication that the Money Interest there is determined
    to prevent the people of any part of the British Empire
    freeing themselves from their present slavery to gold .
    If such is the fact, which the author would be sorry to
    believe, the sooner it is disclosed the better for the whole
    Empire.
    The second of the two enactments which we will
    require to frame can no more be dismissed as based on
    the theories of wild revolutionaries than the first. It is
    the considered policy of the British Liberal Party adopted
    after years of investigation of the land problem . Before
    the war the Land Committee of the Liberal Party put
    forward a land policy consisting merely of a wide variety
    of palliatives-the sort of thing with which we are so
    familiar in this country and which gets us nowhere.
    After the war it took a more . courageous line, and the
    policy of 1925 was the result. The handbook in which
    the whole question is examined- and the policy set out is
    one of the finest expositions of the land problem in
    existence . The fact that a most determined, and successful,
    effort was made to defeat the British Liberal Party
    at the elections next following its adoption of this policy
    in no wise detracts from its value. Any proposal which
    prefers the interests of the people to the vested interests
    of a powerful minority must expect such resistance . And
    the greater the measure of justice it gives to the people
    the more violently will it be resisted, and the more
    contumely will be heaped upon it through the innumerable
    agencies and channels that Wealth commands.
    No greater boon could be conferred on the people of
    New Zealand than the enactment in its entirety of a land
    policy on similar lines to that embodied in the British
    Liberal Party programme of 1925 . The writer proposes
    nothing so revolutionary at the moment. He directs
    attention solely to one portion of that policy as a means
    of securing immediate relief in the emergency which now
    confronts us.
    We have already given Crown tenants the right to
    convert their formerly inconvertible tenancies into freeholds.
    About a third of the holders of leases in perpetuity
    188 ‘ THE TRUTH ABOUT THE SLUMP
    have converted their holdings to freehold, in many cases
    with disastrous results to themselves . It is time we
    worked the machine in the opposite direction . The
    proposal outlined is the only equitable and practicable
    means the present writer has been able to discover which
    will accomplish the most urgent thing required today for
    the liberation of the people of New Zealand, namely, the
    stripping of fictitious values from the land without the
    complete ruin of the people on the land . Those who
    oppose it must either put forward a better way of achieving
    this end, or else reveal themselves as indifferent to
    the ruin of the farming population of the country, as not
    a few have done in published statements in the press . A
    monopoly value has been put upon the land, and those
    who would gain access to the land have been forced to
    pay that price. Now they are told they must pay the
    penalty of their folly . That is a typical line of thought
    finding daily expression in the newspapers. Those who
    advance it apparently affect to believe that the farmers
    of New Zealand have gone about insisting on the sellers
    of land accepting more than the land was worth . How
    much truer are the words of the British Liberal Land
    Committee, already quoted
    “Depression can be relieved only by relieving
    agriculture from the weight of false values . False values
    can be eliminated only by refusing to recognise them and
    making their re-appearance impossible .”
    Finally, it cannot be too strongly emphasised that
    the scheme outlined would be dangerous in the extreme
    if embarked upon without stabilising our currency in
    relation to the export produce price level . Under the
    unstable gold standard it is impossible to value land in
    terms of money. Only the other day the writer saw
    valuations made for mortgage purposes in which the
    value of sheepfarming country was worked out on the
    basis of wool fetching a shilling a pound . For all the
    parties concerned the valuation, though made by a fully
    competent man, was the rankest of gambles on what the
    purchasing power of money is going to be . For the State
    to give freeholders the option of converting to Crown
    tenancies without first stabilising the currency would be
    to plunge from one disaster into another. The two
    proposals are inseparable .
    To many persons the proposals set out in this book
    CONCLUSION
    I89
    are likely to prove highly unpalatable . It is an old saying
    that you cannot make an omelette without breaking eggs .
    Every reform, every change means upsetting something
    that is customary and accepted . Before people will
    accept a reform it must be shown either that it means a
    real gain or that there is peril in continuance of existing
    practices . Do not the facts in the present case reveal
    both that gain and that peril?
    The international financiers who control the world
    today rely for their supremacy on the continuous
    co-operation of the moneylenders and interest-drawers of
    all nations . They have calculated that the innate selfishness
    of human nature will cause the wealthy classes in
    all countries to resist to the last extremity any step which
    would free the people from servitude to the money power.
    They have calculated that the people, inflamed by such
    resistance, will plunge into socialism, and that – with a
    nationalisation of industries by means of borrowed
    money, international finance will be placed in full
    possession of the entire assets of the community .
    How faithful in every country has been the
    co-operation of the local moneylenders in weaving this
    web of world control ! Plunged into difficulty by the gold
    manipulators what is the course everywhere pursued?
    Every agreement, every contract, may be varied save the
    contracts with the moneylender . His contracts stand in
    a different class from all others . The religion we profess
    may declare the labourer worthy of his hire and may
    condemn the taking of usury ; but, in practice, Christian
    statesmanship as a matter of course passes legal enactment
    in time of crisis to deprive the labourer of his wage
    in order that the full tribute to the usurer may be
    forthcoming. If the moneylender forgoes-or even postpones-
    taking his due sum it will be purely as an act of
    grace on his part . The special sanctity attached to a
    payment calling for no exertion whatever on the part of
    those who receive it might puzzle a visitor from another
    planet able to consider our institutions detachedly .
    Nor can we escape the fact that a State in preferring
    the interests of the money power to those of the people
    comes dangerously near to an abnegation of sovereignity .
    A Government accepting a position in which a body of
    its private citizens announce terms on which they are
    “willing to co-operate” with it-as financiers have done
    in some countries-has virtually ceased to be a Govern:
    190 THE TRUTH ABOUT THE SLUMP
    ment. Accepting such a position, it becomes a mere
    front, a facade behind which these private persons rule
    the country. So far as it serves the people at all it fills
    the office, not of governing, but of mediating . The seat
    of sovereignity must be sought elsewhere . This statement
    may be thought extreme, but it is in accord with
    every recognised principle of sound government .
    *
    *
    That our institutions should be falling into such
    anarchical chaos is due to the monopoly given to gold as
    the sole legal tender . These legal tender enactments had
    their origin when the State in olden times sought to rob
    the people by debasing the coinage . To make bad money
    pass current the compulsion of law was required . To
    this root can our present troubles be traced .
    Nothing is more pernicious and misleading than the
    idea that the measure of value must in itself have value .
    Nobody exposed this fallacy more clearly than old
    Bishop Berkeley when he asked in his celebrated
    “Ouerist,” published over two centuries ago
    “Whether money be not only useful in so far as it
    stirreth to industry, enabling men to mutually participate
    in each other’s industry and the fruits of each other’s
    labour? . . .
    “Whether the terms, crown-livre-pounds sterling,
    etc., are not to be considered as exponents of denominations?
    And whether gold, silver and paper are not
    tickets or counters for reckoning, recording, or transferring
    such denominations?
    “Whether the denominations being retained, although
    the bullion were gone, things might not nevertheless be
    rated, bought and sold-industry promoted, and a
    circulation of commerce maintained?”
    What we all need to realise is precisely that money is
    merely a ticket to goods and services . This ticket no
    more needs to have an intrinsic value in itself than a
    theatre ticket needs to be made of gold or silver to be
    worth having . Our commerce is in the same sort of a
    mess that travel would be in if it were decreed that no
    rail or steamer ticket could be issued unless made of
    platinum . The amount of travelling that could be done
    would thus be entirely regulated by the amount of
    platinum in existence . The cost of travel would depend
    CONCLUSION
    191
    on what price the holders of platinum wanted for their
    metal. If somebody cornered platinum at Christmas
    people would have to give up the idea of going away for
    the holidays. The thing sounds insane, and we would
    have to be insane to consider it . Nevertheless, it is
    exactly what we are doing when we make the volume of
    credit and trade depend upon possession of another
    scarce metal of less practical use .
    Unless our civilisation is to collapse through lack of
    intelligence we will . eventually have to divorce our
    currency entirely from gold. Every period of prosperity
    under the gold standard is checked and killed in collapse
    because of the scarcity of the exchange medium. One
    ardent reformer, Mr. Henry Meulen, in his “Industrial
    Justice through Banking Reform” (R . J. James, London,
    1917) expresses the opinion that, but for the legal
    restrictions placed upon banking, a system would long
    ago have been evolved by which under free competition
    we would have had a creation of exchange medium-”the
    creation of paper credit titles to the wealth which now
    stagnates in the hands of producers-and the distribution
    of these paper titles to those who are considered by the
    professional judges of commercial ability, the private
    bankers, to be capable of producing fresh wealth .” With
    the removal of artificial restrictions due to unwise laws
    made by persons who did not understand what they were
    doing, or were prompted by selfish motives, the present
    divorce of the producer from the means of production
    would, he contends, be ended. That, of course, would
    mean an end of the spectacle of one set of persons
    starving and another set loaded up with foodstuffs which
    they are unable to exchange for things the starving
    people could produce.
    The author’s purpose in this book is not, however, to
    advocate any abandonment of gold, but he makes the
    above digression as many people do not recognise the
    source from which so many of the present difficulties of
    commerce flow. It is sufficient here to urge that we take
    without delay the necessary steps to protect ourselves
    from complete disaster by vagaries in the value of gold
    in the hands of the forces that today control and
    manipulate it.
    *
    *
    *
    If the Money Power that rules the world today is
    centred in the hands of individuals of a particular race
    192 THE TRUTH ABOUT THE SLUMP
    and creed, this fact should not inspire us with feelings of
    ill-will towards persons of that race. It is given to no
    man to control the accident of his birth . Each individual
    must be judged by his own actions and associations . In
    writing this book the author would gladly have omitted
    from his pages all reference to race and creed had it been
    in any wise possible for him to have done so . Nothing
    is further from the author’s desire than to inspire his
    readers with feelings of hatred or aversion towards Jews
    because they are Jews. Christian history has been
    stained by horrible persecutions of the Jews and the most
    shocking outrage and brutality have been practised upon
    these unfortunate people. Hatred begets only hatred
    and makes bad go to worse. It is in no such spirit that
    we shall work out our salvation. Even a little reflection
    will suffice to show that the international money power,
    though markedly Jewish in its personnel, has yet
    sacrificed the bulk of the Jews as ruthlessly to its
    ambitions as it has sacrificed persons of other race and
    creed . Nor is that power exclusively Jewish by any
    means.
    If by past persecutions, particularly on the Continent
    of Europe, persons of Jewish race have been driven into
    underground activity and combination, and have aspired
    to bring about a state of things whereunder they may
    dominate not only their former oppressors but the people
    of all nations, we would be foolish in the extreme to
    close our eyes to the evidence of such conspiracy. Our
    desire, and our right, is for freedom to live our lives in
    our own way, and not in subjection to an alien force
    subduing our institutions to its will .
    *
    *
    *
    *
    We must face the fact that monopoly and freedom are
    ill-matched bedfellows. The legalised monopoly given
    to gold is a canker which has eaten at the heart of free
    institutions . It has become the parent of innumerable
    lesser monopolies in subjection to it . It is the mainspring
    of the force driving men on to socialism . And socialism
    under present conditions is likely to mean little more
    than the total subjection of the people to the money
    power. Controlling the executive of a socialised state
    that power will then control everything . The collaboration
    of international finance and international revolutionaries
    in the production in Russia of the phenomena
    known under the name of Bolshevism has provided a
    CONCLUSION
    193
    very real and present instance of what this means.
    Many sincere and self-sacrificing people have pinned
    their faith to Socialism as the hope of humanity . It is
    an idle hope so long as the commerce of the world is
    directed by centralised ‘gold control, and so long as
    Socialism is pursued by paths meaning the piling of
    illimitable and completely unpayable debt upon the backs
    of the people . And that is the direction in which each
    instalment of Socialism has so far taken us .
    Many equally sincere persons are of opinion that
    freedom and progress will best be found under, private
    enterprise and free competition . Private enterprise and
    free competition can only exist among a people that is
    free. The gold monopoly has prevented the monetisation
    of wealth and has caused a purely artificial scarcity of the
    means of payment . Competitive effort is strangled under
    it, and all over the world, in every country, the small
    capitalist is being slowly but surely pushed to the wall
    and crushed out of existence . Soon all that will remain
    will be great non-competitive trusts and rings, all in total
    subjection to the money power. No sincere believer in
    private enterprise can be a supporter of monopoly . Yet
    what do we find in this country? It is forbidden by law
    to start a bank without great expense and a special act
    of Parliament, the money monopoly is buttressed by law
    in every way . At the same time in almost every
    trade and profession, are rings, combinations and close
    corporations, all set up and designed expressly to check
    competition and strangle enterprise . The predatory
    nature of these institutions and their failure to render
    adequate service for the reward they demand is more than
    anything else driving the people to seek relief in
    socialism. It is because advocates of private enterprise
    and free competition have been faithless to what they
    preach that this system is now detested by thousands
    upon thousands of the people .
    The money monopoly is the parent of all other
    monopolies, and it cannot be too earnestly attacked by
    all who desire to see the survival of free institutions .
    The Fisher stabilisation plan is no more than an
    immediate practicable means of escape from an intolerable
    position . It is but a first step towards better things,
    and to no question can the student turn his attention with
    more profit to his fellows than to mastery of the problem
    of providing a medium of exchange adequate to the needs
    194 THE TRUTH ABOUT THE SLUMP
    of our present civilisation . We have everything in the
    world needed to make us happy and prosperous, but
    misery and wretchedness stalk abroad because we lack
    the means of getting this wealth round where it is needed .
    *
    *
    At the moment our immediate problem is to cope with
    a situation full of menace to the future of our country,
    to our race, and to the free institutions that are our
    heritage. The very freedom of those institutions lays
    them widely open to attack by the underground
    conspiracy of a handful of persons operating in collusion
    in different countries . Their defence is the defence of
    all that every right-thinking man holds dear in this
    world. It is a cause in which we can gladly enlist the
    utmost that is in us, and in the service of which the fate
    of the individual shrinks to nothingness . The first step
    is to seek out and know the truth, and thereafter with all
    our wit and skill to discern the path to security and
    unflinchingly to pursue it .
    It is in the hope that what he has written may be of
    some slight service to his countrymen that the author
    now lays down his pen .
    POSTSCRIPT
    195
    POSTSCRIPT.
    The course of events since this book was written at
    the beginning of 1931 has provided much additional evidence
    of the truth of the matter assembled in it . In particular,
    the stabilisation of money in purchasing power,
    two years ago regarded as little more than the hobby of
    cranks, is now receiving support all over the world .
    In Britain a Government Committee on Finance and
    Industry, composed mainly of bankers and presided over
    by Lord Macmillan, admitted in a report presented to
    Parliament in June, 1931, that “the recent world-wide fall
    of prices is best described as a monetary phenomenon .”
    It declared that the objective of monetary policy should
    be “first of all to raise prices a long way above the’ present
    level and then to maintain them at the level thus reached
    with as much stability as can be managed .”
    Although the Macmillan Committee recommended
    the maintenance of the gold standard, _yet within three
    months of its report Britain was obliged on September
    21, 1931, to go off gold in order to avoid almost immediate
    bankruptcy on it . The return to the gold standard in
    1925 had been made on the precarious basis of gold borrowed
    from America, and American pressure resulted in
    its abandonment . Tersely summing up the situation Mr.
    J. F. Darling, a director of the Midland Bank, wrote in
    his pamphlet “Monetary Leadership” (Ernest Benn,
    1932) that “the Federal Reserve Bank of New York
    refused to lend us any more money because our balancesheet
    did not warrant it . Britain’s cheque was refused .
    That is the plain English of it .”
    Since the abandonment of gold the pound sterling
    has been inconvertible paper money . The sole discernible
    objective in its regulation appears to be to maintain it at
    a more or less steady value against the dollar . This means
    that Britain in monetary matters still trails along as the
    poor relation of’the United States and is dragged from
    pillar to post into whatever depths of deflation the concontrollers
    of American finance choose to go .
    196 THE TRUTH–ABOUT THE SLUMP
    Although Mr. Neville Chamberlain as Chancellor of
    the Exchequer apparently hankers after a return to gold,
    it is worth noting that the British Conservative Party, at
    its national conference attended . by 1700 delegates, in
    October of this year resolved against any such step back
    to gold slavery, and urged the Government to consult the
    Dominions with a view to stabilising the purchasing
    power of money within the Empire on the basis of an
    index scale of wholesale commodity prices . This is. in
    line with the policy advocated in this book .
    In June last the London Chamber of Commerce, representing
    60,000 firms and companies, issued a “Report on
    Monetary Policy” supporting the same principle. It
    stated : “The currency must be backed by real wealth, i.e.,
    commodities with a market value : that backing must not
    be one commodity, the value of which, in terms of other
    commodities, can be made to fluctuate widely, either
    through scarcity from natural causes or through being
    cornered .”
    In October, 1931, it was announced that the Riksbank
    of Sweden, which controls the currency of that
    country, had tentatively decided to aim at stabilising it in
    purchasing power on a commodity basis . Information
    is lacking as to how far, and with what success, it has
    pursued this policy .
    More recently the United States House of Representatives
    on May 2 last passed the Goldsborough Stabilisation
    Bill by 289 votes to 60 . The bill was subsequently
    rejected by the Senate and so failed to become law . It is
    notable, however, as being the first measure to be
    approved by the people’s representatives in the legislature
    of a great nation directing the restoration of the
    purchasing power of the people and the maintenance of
    money at a steady level against commodities . The principal
    clauses of the bill read as follows
    “It is hereby declared to be- the policy of the United
    States that the average purchasing power of the dollar
    as ascertained by the Department of Labour in the wholesale
    commodity markets for the period covering the yea1s
    1921 to 1929 inclusive shall be restored and maintained by
    control of the volume of credit and currency. The Federal
    Reserve Board, the Federal Reserve Banks and the
    POSTSCRIPT
    197
    Secretary of the Treasury are-hereby charged with the
    duty of making effective this policy .”
    In moving the bill the chairman of the House Banking,
    and Currency Committee, Mr. Henry B . Steagall,
    sai . :
    “Mr. Speaker, this bill represents years of careful
    study. and-mature deliberation, and it is reported with the
    unanimous judgment of the Banking and Currency Committee
    of .this House. . . No legislation since I have
    served on that committee was ever more fully discussed
    or- more, seriously and thoroughly considered .
    ..”The proposal is not radical . It is not extreme : it is
    not dangerous . It is conservative and constructive. It
    comes before you with a unanimous report of the committee,
    after hearing discussions by many of the ablest
    economists of the country, by – members of the Federal
    Reserve Board, and by persons in other positions of high
    authority. It -is backed by nation-wide sentiment among
    farmers and business interests throughout the country .”
    Mr. Steagall pointed out that in 1920 and 1921 they
    had seen the power – of control possessed by the Federal
    Reserve exercised in currency contraction and credit restriction
    to the extent of about $2,000,000,000 with the
    result that prices were cut in half and confusion and distress
    .. reigned . Then the policy was reversed and expansion
    and liberal credit substituted, and prosperity revived
    for a number of years .. In 1929 again there was another
    horrible contraction of currency and credit with a
    consequent decline in commodity prices that brought depression
    and panic and a wave . of bank failures and bankruptcy
    to all classes.
    Although passed by a majority of nearly five to one
    by the House, the Goldsborough Bill was rejected without
    a :division by the Senate. The “New York Times”
    (see page 95) stated that even had the Senate passed the
    bill President Hoover was certain to veto it .
    *
    *
    *
    Although the Macmillan Committee in its main
    report looked to international monetary control to remedy
    the depression, six of its fourteen members saw no difficulty
    in action by an individual State . Included in that
    six were Mr. Reginald McKenna, chairman of the Midland
    Bank, and Mr. Keynes, the most quoted British
    198 THE TRUTH ABOUT THE SLUMP
    monetary authority of the day . In their addendum they
    said
    “Theoretically the most obvious and comprehensive
    method of effecting the desired object [of adjustment to
    the slump] would be to leave money incomes alone but -to
    change the monetary standard . . . This would bring the
    direct, initial benefit to those industries which need it
    most, namely to the foreign trade industries. It would
    involve no interference with contract . . . It would affect
    every class of income without the necessity of any other
    especial measures . For a country which was not an international
    banker and was not owed large sums from
    abroad fixed in terms of sterling this would be the
    simplest solution .”
    That paragraph appears under the heading “Devaluation,”
    which term is synonymous with “inflation”, “reflation”,
    and “depreciation of the currency” . Of the
    various terms “reflation” carries more meaning and signifies
    a reversal of deflation until normal conditions are
    restored. At this point is it not inappropriate to insert . a.
    brief passage from the evidence of Professor Irving
    Fisher, the famous American economist, given in March
    last on the Goldsborough bill
    “It is discouraging and sickening to read all that stuff
    spouted by the inerudite about the fear of an `inflation’ .
    They simply do not know anything about the real situation
    . They do not know where, when, nor how their
    own bread is buttered. Their policy has killed agriculture,
    and now the inability of agriculture to consume as
    well as to produce is killing all industry and investments .”
    Equally emphatic was another leading American
    economist, Professor Willford I . King, who occupies the
    chair of economics in New York University . Professor
    King in the course of his statement on the Goldsborough
    bill said he saw no economic difficulty at all in the way
    of any country raising its own price level to any point it
    desired. All that was necessary was to put more money
    into circulation until the desired point was reached and
    thereafter to regulate the quantity of money in circulation
    to keep values steady at that level . To regulate money
    scientifically would be something new, but Professor
    King said he failed to see that this was an objection . “Of
    course,” he said, “the first man . who went up in an air
    POSTSCRIPT
    199
    plane was something new ; and if you never begin you
    never get anywhere.” If they were going to wait to get
    an agreement among all the nations of the world to
    stabilise they might just as well quit in his opinion .
    Exchange rates would, of course, vary, and this
    alarmed some people . “I do not believe,” said Professor
    King, “you can find a shred of evidence that variation in
    the exchange rate hurts trade .” The statistics of trade
    between the United States and Europe in the 1920′s when
    there was rapid variation in exchange rates lent no support
    to the view that these variations made trade better
    or worse .
    The proof of the pudding is in the eating. Turning
    from theory to practice, one finds Argentina bearing wit .-
    ness to the advantage derived from the deliberate depreciation
    of its currency . In a memorandum published in
    London in July 1931 the Ministry of Finance recorded a
    great improvement in the trade balance . It was added :
    “The depreciation of the peso, which stands at 26
    per cent. on the par value, has been an important contributing
    cause of this improvement of the trade balance .
    It has stimulated exports by cheapening the cost of
    Argentine products [in other currencies] and has restricted
    imports by making them dear in terms of pesos .
    This is the outcome of deliberate policy, for the new
    Ministry of Finance has throughout taken care to prevent
    any appreciation of the currency which would have hindered
    the export trade and encouraged imports .”
    In Australia currency depreciation has taken place
    to some extent as the result of Government deficits, and
    the Australian pound has thus been maintained 25 per
    cent. nearer to the pre-slump level than sterling. This
    has considerably eased the situation in that country and
    been a substantial benefit to the primary production on
    which depends the national solvency .
    The policy so far pursued in New Zealand has been
    in the opposite direction, and at the time of writing the
    Government is committed to a policy of maximum deflation
    by means of a proposed central banking company
    to be established on the basis of parity of exchange with
    sterling . This private corporation is to be set up on the
    advice of Sir Otto Ernst Niemeyer to “form a link with
    the other central banks of the world .” .
    200 THE TRUTH-ABOUT-THE SLUMP
    In.Britain :a considerable body of opinion now exists
    that -no.’ particular benefit to the public is resulting from
    the intimate contacts established between the central
    banks of the world . Mr. Montagu Norman, Governor
    of the Bank. of England, still travels as diligently as ever
    to consult the Federal Reserve in New York, and foreign
    financial interests are still as strongly represented on the
    directorate of the Bank of England. Lord Beaverb .rook
    in his newspapers, the “Sunday Express” and “Daily
    Express”, in May last was, however, courageously urging
    a national campaign to throw the foreign bankers off the
    board and to restore the money power to Parliament .
    * *
    The chief central bank of the world is the United
    States Federal Reserve system . Nothing is more remarkable
    in the evidence of the numerous witnesses on the
    Goldsborough bill than their general distrust of that
    institution and disbelief in any genuine desire on the part
    of those controlling it to relieve the present depression .
    Even ex-Senator Owen, who in 1913 as chairman of
    the Senate Banking and Currency Committee had sponsored
    the Federal Reserve Act itself, declared that the
    slumps of 1920 and 1929 had both been precipitated by
    the “deliberate contraction of credit .”
    Mr. Owen was of opinion that if improvement was
    desired the Federal Reserve authorities must be directly
    ordered to restore conditions to normal . Professor King,
    already quoted above, was of similar opinion : that unless
    it was mandatory “they will do nothing whatever about
    it. Professor Irving Fisher recalled that the Federal
    Reserve had been created to function as a common
    reservoir for the banks in times of emergency : in practice
    when the emergency came the tap was turned off at
    the reservoir and the banks were worse off than before
    they had pooled their resources .
    On January 24th last Mr. Paul M Warburg, a prominent
    founder of the Federal Reserve system, died in New
    York in his 64th year. According to the “New York
    Times” his death followed on “overwork, the result of a
    strenuous summer spent in following the European
    crisis.”
    Through the present deflation the Governor of the
    POSTSCRIPT
    201
    Federal Reserve Board has been Mr. Eugene Meyer.
    According to the “New York Journal” of January 19 last
    Mr. Meyer is 56, and is the son of a successful Jewish
    stockbroker of California, formerly a partner in the international
    banking house of Lazard Freres, in which Mr.
    Meyer himself served his apprenticeship . During the
    war he was associated with Mr . Bernard M. Baruch, who
    as head of the War Industries Board was the war dictator
    of America and controlled the delivery of supplies to
    the Allies. Mr. Meyer was also stated to be controlling
    the Reconstruction Finance Corporation, recently set up
    by Congress, and the Land Bank system . It should be
    noted that the Federal Reserve system in addition to the
    Board includes a powerful Advisory Council and twelve
    regional Federal Reserve Banks . Responsibility for its
    policies is thus not readily located by outsiders .
    The Federal Reserve system has been trenchantly
    attacked in Congress during the past year by Mr . Louis
    T. McFadden, for twelve years up to 1931 chairman of the
    House of Representatives Banking and Currency Committee,
    and thus in a position to know what he is talking
    about. Mr. McFadden is a Republican (Conservative) in
    politics and is an ex-president of the Pennsylvania
    Bankers’ Association . In opposing President Hoover’s
    policy of relieving Germany of her obligations Mr.
    McFadden in Congress on December 15 last spo,&e as
    follows
    “If the German international financiers of Wall
    Street. . . had not had this job waiting to be done, Herbert
    Hoover would never have been elected President of the
    United States . . . I wish to emphasise the fact that international
    finance is almost exclusively German. . . After
    the world war Germany fell into the hands of German
    international bankers . . . There is no country in the world
    to-day of which the inhabitants are so enslaved as are the
    Germans. . .
    “Through the Federal Reserve Board and the Federal
    Reserve Banks over $30,000,000,000 over and above
    the German bonds that have been sold here has been
    pumpedd into Germany. . . The Federal Reserve Board
    and the Federal Reserve Banks have pumped so many
    billions of dollars into Germany that they dare not name
    the total.
    202 THE TRUTH ABOUT THE SLUMP
    “Do you know that Germany has been lending our
    money to Soviet Russia as fast as she could get it out
    of this country from the Federal Reserve Board and
    banks? Do you know that she is the author of the Five-
    Year Plan ; that she has armed and supplied Soviet
    Russia with our money? Do you know that Germany
    and Soviet Russia are one in military and industrial matters
    . . . I say that the Federal Reserve Banks have purchased
    and rediscounted false, worthless, fictitious and
    uncollectible acceptances drawn in Germany . . . . The
    Government’s money in the designated depositaries is
    gone, leaving nothing but this worthless paper behind it .”
    Referring to the New York Stock Exchange collapse
    which initiated the present slump, Mr . McFadden said :
    “It was not accidental . It was a carefully contrived
    occurrence . . . The international bankers sought to bring
    about a condition of despair here so that they might
    emerge as the rulers of us all.”
    *
    *
    *
    In passing it may be noted that the opinion that the
    Hoover moratorium was designed mainly to benefit Germany
    was strongly voiced by various speakers in a warm
    debate- in the French Chamber of Deputies on June 26,
    1931 . It was pointed out that under the Young Plan for
    the payment of German Reparations it was necessary for
    the German Government to give 90 days’ notice of intention
    to default, whereupon commissions of investigation
    at once came into action to assess what relief was needed .
    By having President Hoover intervene the Germans were
    enabled to default without investigation . Furthermore,
    the time chosen was significant : on June 15 Britain and
    France paid their half-year’s interest on the American
    debt ; on June 17 Germany announced that she could not
    pay ; and on June 20 President Hoover issued his moratorium
    proposal . Thus immediately the cash had been
    extracted from the former Allies things began to happen .
    Within a few weeks a financial crisis followed in
    Britain consequent on these proceedings, and the Government
    to keep going secured an immediate foreign loan,
    half from America and half from France . According to a
    speech made on August 26, 1931, by Dr . Addison, Minister
    of Agriculture in the Labour Cabinet; a condition
    POSTSCRIPT
    203
    imposed by the financiers finding the money was that no
    economy made by Britain would be satisfactory unless it
    included a reduction in the allowance to a man out of
    work from 17s to 15s 4d a week . Dr. Addison said that
    according to the reports made to Cabinet the demand
    was very emphatic . It was perfectly fair, he considered,
    for the lenders to say that the Budget should be balanced,
    but it was utterly unconstitutional to have them
    dictate to the Government and Parliament in what way
    the nation should economise .
    Mr. Ramsay MacDonald impressively and indignantly
    denied that there had been dictation by the Bank of
    England : the officers of the Bank, he said, had merely
    advised the Government of the conditions on which a
    loan could be~ obtained. As Dr. Addison had not alleged
    dictation by the Bank of England this seeming denial
    really denied nothing.
    Why should foreign financiers desire to hit the poorest
    class in Britain by cutting down their pittance? If
    they desired to promote discontent and pave the way to
    revolution their action would be intelligible . It is not
    intelligible otherwise so far as the writer can see .
    *
    *
    *
    Mr. McFadden’s allegations concerning the acceptance
    of worthless European paper by the Federal Reserve
    system were confirmed within a few months of his
    speech by the revelation of the colossal Kreuger frauds .
    The means by which these operations were conducted
    were described at length by Mr . McFadden in a speech in
    Congress on June 10 last in the course of which he said
    “Mr. Chairman, we have in this country one of the most
    corrupt institutions the world has ever known . I refer
    to the Federal Reserve Board and the Federal Reserve
    Banks. This evil institution has impoverished and ruined
    the people of the United States ; has bankrupted itself ;
    and has practically bankrupted our Government.”
    Mr. McFadden proceeded to declare that these institutions
    had been established by bankers who came from
    Europe and foisted them upon the country . These bankers,
    he said, took American money to finance Japan in
    her war against Russia in 1904-05 . He added : “They
    created a-reign of terror in Russia with our money to help
    that war along. They instigated the separate peace between
    Germany and Russia, and thus drove a wedge be204
    THE TRUTH ABOUT”I`HE SLUMP
    tween the Allies in the .. World War. They financed
    Trotisky’s “ma’ss meetings of discontent and rebellion” in
    New York. They paid Trotsky’s passage from New York
    to Russia so that he might assist in the destruction of the
    Russian Empire . They, fomented and instigated – the
    Russian- revolution, and they placed a large fund of
    American dollars at Trotsky’s disposal in one of their
    branch banks in Sweden . . .”
    Pointing out that not a dollar could get into circulation
    in the United States except- on terms fixed by the
    Federal Reserve Banks,- Mr . McFadden dwelt at length
    on the abuse possible in the issue of Federal Reserve
    notes .’ These notes can be issued against 40 per cent . of
    gold and 60 per cent . of commercial paper. . Great quantities
    of United States currency, he said, had been . thus
    issued against mere finance drafts drawn by Germans “If you desire to obtain the thing of value upon which.
    this currency is based,” said Mr . McFadden, “that is, the
    Limburger cheese, the whisky, the illicit drugs, or any of
    the other staples-you will have a very hard time finding
    them. Many of these worshipful commodities are in
    foreign countries . Are you going to Germany to inspect
    the warehouses to see if the specified drugs are there? I
    think not . And what is more I do not think you would
    find them if you did .”
    “The Government and the people of the United
    States have been swindled by swindlers de luxe,” declared
    Mr. McFadden, “to whom the acquisition of American
    gold or a parcel of Federal Reserve notes presented no
    more difficulty than the drawing up of a worthless acceptance
    in a country not subject to the jurisdiction of the
    ‘Ufneintceed’ oSnt attheiss sCioduer tosf ,t hseh awrapteerr-sa wfietnche aa csttinrgo nags braecnekiivnegr
    for-the worthless paper coming from abroad, endorsing it
    and getting the currency out of the Federal Reserve
    Banks for it as quickly as possible, exchanging that for
    gold; and in turn transmitting the gold to its foreign
    confederates.
    “Such were the exploits of Ivar Kreuger . . . Every
    dollar of the billions Kreuger and his gang drew out of
    this country on acceptances was drawn from the Government
    and people of the United States through the Federal
    Reserve-Board and Federal Reserve Banks . The credit of
    . POSTSCRIPT
    205
    the United States Government was peddled to him by
    the Federal Reserve Board and Federal Reserve Banks
    for their own private gain . That is what the Federal
    Reserve Board and the Federal Reserve Banks have been
    doing for many years. They have been peddling the
    credit of this Government and the signature of this Government
    to the swindlers and speculators of all nations .
    That is what happens when a country forsakes its constitution
    and gives its sovereignty over public currency
    to private interests . Give them the flag and they will
    sell it.”
    Coming from the Republican Party’s ex-chairman of
    the House Banking and Currency Committee, these are
    remarkable statements indeed . Nor is Mr. McFadden by
    any means alone in his views .
    In . the Paris newspaper “Le Figaro” in April last
    the far-flung activities of certain Jewish-American
    financiers were dealt with at length in a series of five
    articles by M . Francois Coty under the heading “Financiers
    who Sport with the World .” To this source M .
    Coty traced the American policies imposed upon Europe
    U_v which France is to be deprived of the German indemnities
    which are her right and of the arms which she needs
    to defend herself against the new German-Russian
    aggression which is menacing her . The connections
    between international finance and revolutionary movements
    in all parts of the world were also dealt with in
    detail by M . Coty.
    Evidence of the existence of a virtual alliance . between
    Germany and Russia is given by Mr. Cecil F .
    Melville ‘in a book published a few months ago, “The
    Russian Face of Germany” (Wishart, London, 1932) .
    According to Mr. Melville, Germany since 1920 has used
    Russia as an arsenal for war materials (in convenient
    agreement with the Five-Year plan), as a field for military
    training, and as a prospective ally with an enormous
    army trained on modern lines outside the supervision of
    Europe. Mr. Melville has assiduously collected infor=
    mation from German and Russian sources throwing light
    on . these matters and he quotes his authorities . As one
    reviewer remarks, if one-half ofa what he says is true the
    present talk of disarmament is a farce. Britain and
    France could commit no more perilous folly than to render
    206 THE TRUTH ABOUT THE SLUMP
    themselves defenceless while Germany is being thus used
    as a tool in the hands of Bolshevism and international
    finance.
    There has been much comment on the fact that
    Russia has been freely supplied with . funds from abroad
    for the prosecution of the Five-Year Plan . For instance,
    Mr. James W. Gerard, American Ambassador to Germany
    during the war, stated on September 18, 1931, after
    a visit to Europe, that Germany “did not need any financial
    assistance, and that a . large percentage of the loans
    from the United States was lent to Russia.” Mr. Gerard
    added : “If we’re going to do business with Russia let us
    do it directly and not through Germany which has
    arranged to give Russia millions of dollars’ credit to
    purchase commodities in Germany .”
    The London “National Review” in April last recorded
    that whereas Britain in the previous five years had
    imported goods to the value of £135,000,000 from .Russia,
    her exports to Russia in the same period totalled only
    £25,000,000, and even this had been sold on credit . The
    balance Russia had apparently expended on purchases
    made in other countries .
    In the third edition of “The Alien Menace” (Boswell
    Publishing Coy ., London, 1932) Lieut.-Col . A. H. Lane
    quotes the following from the “British Russian Trade
    Gazette and Outlook” for December, 1931 : “It must be
    ironic for them (British manufacturers) to view the
    forced cessation of work on the giant Cunard liner, which
    is attributed to this country’s ‘frozen’ credits in Germany
    -credits which have been used in great part by Germany
    to finance orders from Russia. During 1931 orders
    amounting to £45,000,000 have been placed with German
    firms by the Soviet buying organisations .”
    Colonel Lane further wrote : “Though the Communists
    profess to hate Capitalism and order their paid agents
    in England to cry ‘Down with the Capitalists’, the leaders
    in Russia never fail to give the international financiers
    a hearty welcome whenever they visit the U.S.S.R.
    When Felix M . Warburg, of New York, visited Russia in
    1927 he had a great reception, and the speeches delivered
    on that occasion indicated that the Bolshevist leaders and
    the leaders of world finance understood each other very
    well, that their aims were not dissimilar, and altogether
    they were a united family working in their respective
    POSTSCRIPT
    207
    ways for a common end .” According to M . Coty in the
    “Figaro”, the wife of another partner in the firm of Kuhn,
    Loeb and Company was received in Russia in June, 1931,
    with ceremonial exceeding that on the occasion of the
    Russian visit of King Amunallah of Afghanistan, and the
    Red Army lined the streets at the present arms .
    *
    *
    *
    *
    It is worth noting that among the manifold activities
    of the Schiff-Warburg group of financiers has been a
    close association with the enormous Jewish migration
    from Europe to the United States . In “Jewish Life in
    Modern Times” (Methuen, London, 2nd edition, 1929)
    Mr. Israel Cohen points out that the migration of the
    Jews in recent times “far exceeds that of their previous
    history.” From statistics quoted by him it appears that
    in 1897 the total Jewish population of the world was
    10,342,000 : in 1928 it was 15,218,734 . In 1897 there were
    in North and South America 986,000 Jews, and in 1928
    this number had increased to 4,640,748, of whom about
    four million were in the United States, the largest
    number of Jews in any one country in the world . Mr.
    Cohen added :
    “The city of New York alone contains 1,873,390
    Jews who form 23 per cent. of the total population . It
    can boast not only of the largest Jewish community in
    the world, but of the largest known in the entire annals
    of Jewish history.” We are further told that Chicago
    has 325,000 Jews (which is more than Great Britain), and
    in eleven of the principal cities of the United States is
    concentrated about three-quarters of the total Jewish
    population of that country . In Australia and New Zealand
    there are 24,189 Jews, of whom 8000 . are in Sydney
    and 6000 in Melbourne .
    A prominent organisation in connection with this
    migration has been the Jewish Colonisation Association .
    This was founded and endowed with £11,000,000 by
    Baron Maurice de Hirsch, an Austrian Jewish financier
    long resident in Paris. Associated with him was Sir
    Ernest Cassel, and in 1891, according to M . Coty in the
    “Figaro”, an American branch was formed under the sole
    and independent management of the late Mr. Jacob
    Schiff. Baron Hirsch started this off with a gift of
    #493,000, and it later acquired colossal funds.
    208 THE TRUTH ABOUT THE SLUMP
    It is curious to reflect that the actual transportation
    of this Jewish addition to America’s population was
    largely in vessels of the Hamburg-America and North
    German Lloyd lines, both controlled by the banking
    house of Warburg and Company of Hamburg .
    Persecution, Mr . Cohen tells us in his book already
    quoted, has been . the principal cause of the dispersion of
    the Jews . Of that dispersion the Jews themselves take
    two views. The orthodox regard it as a divine punishment
    for past transgression, and believe in the coming of
    a personal Messiah and the return of the Jews to Palestine.
    The Reformers, on the other hand, regard dispersion
    as the Jews’ final lot, and as “the divinely appointed
    means for universalising the teachings of Judaism .”
    The world to-day, however, provides a spectacle of a
    great concentration of Jewish power . In New York there
    is the concentration of Jewish financial power dominating
    the entire world in its material affairs, and side by side
    with it is the greatest physical concentration of the Jews
    ever recorded. On the other side of the globe, there has
    taken place in Russia the greatest concentration of Jewish
    revolutionary activity in all history .
    “When we sink we become a revolutionary proletariat,
    the subordinate officers of the revolutionary party ;
    whet ve rise, there rises also our terrible power of the
    purse .” So wrote Theodor Herzl, founder of the Zionist
    movement, in his book “A Jewish State”, published
    thirty-six years ago .
    The enormously significant thing in the worldd to-day
    is that both this power of the purse and revolutionary
    activity are working in tb’ direction of destroying the
    entire existing order of things, and that not only are
    they working in a common direction, but there is a mass
    of evidence that they are working in unison .
    *
    *
    *
    *
    As some readers have asked for further evidence of
    Jewish participation in the Russian revolution, it may be
    pointed out that in a British Foreign Office White Paper
    issued in April, 1919, is a despatch from the Netherlands
    Minister at Petrograd under date of September 6, 1918,
    in which occurs the following passage
    “I consider the immediate suppression of Bolshevism
    POSTSCRIPT
    209
    is the greatest issue before the world, not even excluding
    the war which is still raging, and unless, as above stated,
    Bolshevism is nipped in the bud immediately, it is bound
    to spread in one form or another over Europe and the
    whole world, as it is organised by Jews who have no
    nationality and whose one object is to destroy for their
    own ends the existing order of things .”
    - Such was the opinion of one observer on the spot
    after the Bolshevists had been in power for twelve
    months. In evidence given before a committee of the
    United States Senate, the Rev . Dr. G. R. Simons, formerly
    in charge of an American congregation at Petrograd,
    stated that in December, 1918, out of 388 members of the
    government of the northern communes only 16 were real
    Russians and all the rest Jews, except one American
    negro, and that 265 of these Jews came from the lower
    East Side of New York Another witness, the commercial
    attache of the United States Embassy at Petrograd,
    described the revolutionary leaders as two-thirds Jews,
    and an officer of an American bank in Petrograd said it
    was well known in Russia that three-fourths of the Bolshevik
    leaders were Jews . This evidence was taken in
    1919 and is in Vol . III of U .S. Senate Document No. 62,
    66th Congress, 1st session .
    In the London “Times” of May 10, 1920, a correspondent
    stated that a list of the principal State functionaries
    of Russia compiled from Soviet sources showed
    that out of a total of 556 no less than 458 were Jews
    and only 17 Russians, the rest being Letts, Germans, etc .
    Innumerable books by eye-witnesses of the revolution
    remark on the preponderance of Jews among the leaders,
    and many comment on their conduct as that of invaders
    in a conquered country.
    According to Bolshevist figures, as published in the
    London “Times” of September 1, 1922, “the Tcheka
    executed 1,766,118 persons before being renamed the
    supreme political organisation last February .” Estimates
    of the total loss of life in the revolution, including that
    consequent on starvation and disease, put it at upwards
    of twenty millions.
    In his book “The Soviet Five-Year Plan” (Lane,
    London, 1931) Mr . H. R. Knickerbocker says : “The
    terror has become a permanent institution . . . It is much
    210 THE TRUTH -ABOUT THE SLUMP
    more active to-day than three years ago . . . Methods of
    the terror heighten its dreadful effect. All arrests are
    made between midnight and the dawn . . . Most prisoners
    are condemned by the collegium of the G .P.U. [secret
    police] without trial, without witnesses, without a chance
    to defend themselves . . . Their execution is in secret,
    their burial places unknown . The G.P.U. allows no
    martyrs.” Mr. Knickerbocker adds that under the G .P.U.
    “the nerve net of the most extensive and intensive
    espionage system in history reaches almost to each individual
    family in Russia.”
    In his book “Art Treasures in Soviet Russia.” Sir
    Martin Conway records that although treated most kindly
    in Russia, he experienced a feeling on departing into Finland
    as though a great weight oppressing him had been
    removed. He did not notice this feeling on entering
    Russia, but as the days passed it slowly accumulated.
    “The sense of freedom gradually disappeared . Though
    everyone was kind one felt the presence of an oppression,
    not on one-self, but all pervading. Never have I felt so
    completely a stranger in a strange land ; with successive
    days what at first was a dire feeling took more definite
    shape and condensed into an ever-increasingly conscious
    oppression.”
    The highly international outlook of the rulers of Russia
    is evidenced by their ceaseless propaganda with a
    view to promoting revolution throughout the world . Such
    an obsession is foreign to the Russians, but entirely
    characteristic of the international Jewish revolutionary .
    The total expenditure upon this propaganda must be
    enormous. That it should be possible to pursue it contemporaneously
    with the stupendous task of industrialising
    Russia is in itself evidence of the unlimited financial
    resources behind Bolshevism .
    Summed up, the position is that international
    finance, by enticing the world into enormous debts and
    then withholding the means of payment, is goading mankind
    into the arms of the international revolutionaries
    established in Russia. The remedy is to take away the
    goad by restoring the means of payment . And the place
    to begin is here at home in our own .country. -
    A, N. FIELD.
    . October 31, 1932 .
    APPENDIX.
    (1) BRITISH v. CONTINENTAL FREEMASONRY.
    The references to Masonic activities in this book are to the
    Grand Orient Freemasonry of the Continent of Europe . This
    is quite distinct from British Freemasonry, which is not connected
    with it in any way . As the Encyclopaedia Britannica (1929
    Edition) states : “On the Continent of Europe Freemasonry has
    often developed on different lines from that of the `Mother Grand
    Lodge’ and Anglo-Saxon grand lodges generally, and through its
    political and anti-religious tendencies has come into conflict with
    the State authorities or the Roman Catholic Church . The Grand
    Orient of France . is an example of this, having eliminated
    the paragraph referring to a belief in the `Great Architect of the
    Universe’ . This action led to the withdrawal of all
    ‘regular’ grand lodges from association with that body . .
    “Since 1910 events have proved that the breach between Latin
    and Anglo-Saxon Masonry was based on a fundamental
    divergence of opinion as to the basic principles on which the
    Order rests, and that this breach tends to grow wider year by
    year. The disastrous results of interfering in politics have been
    shown by the fact that the Italian and Hungarian Governments
    have declared Freemasonry to be a danger to the State and have
    suppressed it within their jurisdictions . In France opposition to
    the political activities of the Grand Orient culminated in 1914 in
    the formation of a new body, ‘Grande Lodge Nationale
    Independante et Reguliere pour la France,’ which avoids politics
    and insists on belief in God . This body, which has increased
    rapidly in numbers, is recognised by the Grand Lodge of England .
    At the same time, one by one, most of the American grand lodges
    which were still in fraternal relations with the Grand Orient have
    felt compelled to sever relations .”
    (II) “THE ALIEN MENACE.”
    A strong protest against the unnecessary employment in the
    British public service of persons of alien descent was made by
    Lieut.-Col. A. H. Lane in 1929 in his book, “The Alien Menace”
    (St. Stephen’s Publishing Company, London) .
    From a copy of this book in the Parliamentary Library,
    Wellington, the following instances quoted by Lieut .-Col. Lane
    were noted :
    Sir Otto Ernst Niemeyer.-”Obviously of German descentmarried
    also to a lady of the same name-this gentleman was an
    important functionary at the Treasury from 1906 until 1927. He
    was Controller of Finance from 1922 to 1927, and during that
    period, in 1924, he was also a member of the German Reparations
    Committtee . On leaving the Treasury he became a .director of
    the Bank of England, and in 1928 chairman of the Financial
    Committee of the League of Nations .” [In this latter office Sir
    Otto Niemeyer was last year succeeded by Dr . Melchoir, partner
    in Warburg's Bank, Hamburg.]
    i
    ii
    APPENDIX
    Sir Charles Mendl.-In charge of the Foreign News Service
    since 1920, and now a Counsellor of the British Embassy at
    Paris.
    Sir Sigmund Dannreuther .-Deputy Secretary of the Air
    Ministry .
    Sir Ernest Strohmenger .-Principal Assistant Secretary and
    Accountant-General to the Ministry of Health .
    Mr. Berthold Schlesinger Kisch .-Controller of the Local
    Clearing House (Enemy Debts) and administrator of Austrian
    and Hungarian property in India since 1920 .
    Mr. Cecil Hermann Kisch .-Secretary of the Financial Department
    of the India Office since 1921 .
    In the case of Sir Otto Niemeyer, Lieut.-Col. Lane noted that
    a London periodical in August, 1921, had published what
    purported to be a correspondence between the late Dr. Ellis
    Powell, then editor of the “Financial News,” and Mr . Bonar
    Law, then Chancellor of the Exchequer . From this it appeared
    that under date of December 18, 1918, Dr . Powell had asked
    whether certain Germans named Niemeyer (vide London “Times,”
    December 5, 1918, p . 9), had “a near relative occupying a high
    position in the Treasury and married to a German wife .’
    In answer to that question, Mr . R. M. Gower, writing five
    days later from Treasury Chambers, Whitehall, said : “Mr. Bonar
    Law wishes me to inform you that the case of Mr .Niemeyer was
    recently considered by the committee appointed by the Government
    to examine the cases of persons not the children of Britishborn
    subjects who are employed in Government Departments,
    and that the committee had decided that it was in the national
    interest that Mr . Niemeyer should hold the post which he occupies
    in the Treasury.”
    In two further letters Dr. Powell pointed out that no answer
    had been given to his question, which question Col . Lane
    repeated, saying :
    “I make no reflection on the integrity and personal character
    of Sir Otto Ernst Niemeyer . I publish the above facts because
    I feel strongly that it should be known to the British people to
    what extent our Government services are directed by officials of
    alien extraction.”
    Attention was further directed by Lieut .-Col. Lane to the
    remarkable fact that of the “accredited and recognised teachers”
    of the London School of Economics no less than one-third “appear
    by their names not to be pure-blooded Britishers .” This
    institution was founded by Mr . Sidney Webb, now Lord Passfield
    and Secretary of State for the ‘Dominions in the present British
    Government. The names of the teachers referred to and the
    subjects taught by them were stated to be as follows :
    Frederick Rudolf Mackley de Paula, O .B.E. (Accountancy and
    Business Method) .
    Edith Verena Eckhard (Sociology) .
    Hermann Finer (Public Administration and Political nd
    Economic Science) .
    APPENDIX
    Morris Ginsberg (Sociology) .
    Theodor Emanuel Gugenheim Gregory (Currency and
    Banking) .
    Harold Joseph Laski (Political Science) .
    Hersch- Lauterpracht (International Law) .
    Bronislaw Malinowski (Anthropology) .
    Alexander Feliksovich Meyendorff (Russian Institutions and
    Economics).
    Charles Gabriel Seligman (Ethnology) .
    Sir Henry Herman Slesser (Schloesser), K.C.. M.P . (Industrial
    Law).
    Edward Alexander Westermarck (Sociology) .
    Abraham Wolf (Logic and Scientific Method) .
    “There are also,” remarked Colonel Lane, “citizens of the
    U.S.A. among the remaining `accredited and recognised teacher’
    in this institution, which receives from the British Government a
    grant of 140,000 a year.” As Colonel Lane remarks, one wishes
    to make no reflection on the competence of the above persons,
    but it is difficult to believe that equally competent teachers of more
    distinctly British blood are not available for the instruction of
    British youth in the conduct of British commerce.
    (III) WHO’S WHO : PERS
    THIS B
    OgS MENTIONED IN
    Belloc, Joseph Hilaire Pierre.-Born 1870. Author. Born in
    France, his father being French and his mother English .
    Naturalised in 1902. M.P. for Salford, 1906-10, first as a
    Liberal then as an Independent . Author of novels, essays,
    histories, etc .
    Buchanan, Rt. Hon. Sir George .-Born 1854. British Minister to
    Bulgaria, 1903-08 ; to Holland, 1908-10; to Russia, 1910-18 ;
    to Italy, 1919-21 . Retired from the Diplomatic Service in 1921 .
    Cagliostro, Count Alessandro.-1743-1795. Italian alchemist and
    impostor. A purveyor of love philtres, elixirs of youth, etc .
    Much patronised by persons of fashion in London and Paris .
    W. R. H. Trowbridge in his biography (“Cagliostro”-
    Chapmaa & Hall, 1910) states that Cagliostr

  8. On February 15, 2011 at 12:05 am hoff2 said:

    Italian alchemist and
    impostor. A purveyor of love philtres, elixirs of youth, etc .
    Much patronised by persons of fashion in London and Paris .
    W. R. H. Trowbridge in his biography (“Cagliostro”-
    Chapmaa & Hall, 1910) states that Cagliostro was a member
    of the Illuminati and was financed by them. He was intimate
    with Cardinal de Rohan, victim of the Diamond Necklace
    affair in 1785, and was arrested but acquitted . He died in
    prison in Italy. Cagliostro is said by Trowbridge to have
    signed an oath on admission to the Illuminati to engage in
    conspiracy against the throne of France .
    The affair of the Diamond Necklace is generally regarded
    as the prelude to the French Revolution. The Jewish Court
    jewellers, Boehmer and Bassange, had on hand a diamond
    necklace which they had failed to sell to Madame Du Barry
    before the death of Louis XV. Cardinal de Rohan had taken
    as his mistress a so-called Countess de Lamotte . The countess
    pretended intimacy with the Queen and by forged letters led
    to Cardinal to believe that the Queen was in love with him.
    The Cardinal was even met at a rendezvous by a lady whom
    he supposed to be the Queen. Later he received through the
    iv
    APPENDIX
    Countess a message saying that the Queen wished to buy the
    necklace for 156,000, but it was inconvenient to find the money
    at once, and she desired the Cardinal to stand surety for it and
    to procure the necklace for her . The Cardinal did so,’handing
    the necklace to a confederate of the Countess, whom he
    supposed to be a court messenger . The necklace was pulled
    to pieces by the Countess and the diamonds sold. A year – later
    the jeweller sought payment . The Queen declared she knew
    nothing of any necklace . The Cardinal, in debt to Jews, is
    unable to pay. The King is approached by the jeweller and is
    greatly enraged on learning the story, the Queen also is beside
    herself with indignation, and the upshot is that the Cardinal is
    arrested on August 15, 1785, in full pontificals just as he is
    about to celebrate high mass on Assumption Day as Grand
    Almoner of France. A trial follows in which public feeling is
    much inflamed against the Queen, who is thought to have set
    a trap for the Cardinal. The Countess is imprisoned,: the
    Cardinal acquitted. Cagliostro, who had been intimate with the
    Cardinal, was accused of complicity by the Countess, but -was
    acquitted. Various writers take the view that the affair was a
    diabolically clever plot to discredit the royal family in the eyes
    of the people of France, and point with suspicion to Cagliostro
    as a probable agent of the Illuminati of Bavaria .
    Cassel, Prof . Gustav. Born 1866. Swedish economist. Professor
    of economics at Stockholm since 1904. His memorandum on
    “The World’s Monetary Problem” attracted great attention at
    the International Banking Conference at Brussels in 1920 .
    According to the “Encyclopaedia Britannica” (1929 Edition)
    he is regarded as “one of the world’s foremost authorities on
    foreign exchanges.” Delegate at 1922 Economic Conference
    at Genoa ; at International Chambers of Commerce Conferences,
    1921 and 1922 ; and at International Economic
    Conference at Geneva, 1927 .
    Commons, Prof. John Rogers.-Born 1862. For many years
    Professor of Political Economy at the University of Wisconsin,
    appointed 1904. Expert agent of the United States Industrial
    Commission, 1901 . One of the founders of the American
    Proportional Representation League, active in the National
    Civic Federation . Author of “The Distribution of Wealth,”
    “Social Reform and the Church,” “Proportional Representation,”
    “Trades Unionism and Labour Problems,” and
    contributor of many articles to mazagines and economic
    journals .
    D’Abernon, Lord. Formerly Sir Howard Vincent . Born 1857.
    British representative on the Council of the Ottoman Public
    Debt, 1882 ; Financial adviser to Egypt, 1883-89 ; Governor’ of
    Imperial Ottoman Bank, 1883-89 ; Chairman of Dominions
    Royal Trade Commission ; Ambassador to Germany after the
    war.
    Dawes, General Charles Gates .-Born 1865. United States
    Ambassador to Great Britain . Connected with railway
    administration in early life . Was appointed Controller of the
    United States Currency under President McKinley, 1898-1902.
    APPENDIX
    Then founded and became head of Central Trust Company of
    . :Illinois in 1902, a concern named as in the Money Trust in
    the Pujo Commission report of 1913 . Had control of American
    transport in France during the war, and of disposal of war
    supplies on its conclusion . Was appointed Director of the
    -Budget under President Barding. Elected Vice-President of
    the United States with President Coolidge .
    Dillon, Dr. Emile Joseph.-Deceased. Formerly correspondent of
    the London “Daily Telegraph” abroad, constant contributor to
    leading English monthly reviews and was a foremost authority
    on foreign affairs .
    Fisher, Prof . Irving.-American economist . Born 1867 . Appointed
    professor of economics at Yale University, 1898 . Chairman of
    many commissions dealing with public health, prohibition and
    labour. A foremost writer oir monetary problems . In . 1911
    he formulated what is known as the Fisher Money Stabilisation
    Plan . Author of “Stabilising the Dollar” (1920), “The Money
    Illusion” (1928), and many other books .
    Ford, Henry.-Born 1863. Founded the Ford Motor Co . in 1903
    on 28,000 dollars capital . In 1926 the Company had assets of
    1,000,000,000 dollars, and employed 200,000 people directly and
    an equal number indirectly . The company was built up by
    putting the profits back into construction . It is stated by the
    Encyclopaedia Britannica (1929) to be entirely owned by
    Henry Ford and his son Edsel, the other shareholders having
    been bought out for 70,000,000 dollars in 1919.
    Harriman, Edward Henry.-1848-1909 . American financier and
    railroad magnate. At first associated with Stuyvesant Fish and
    the Illinois Central System. In 1898 he formed a syndicate
    with Kuhn, Loeb and Company to acquire the Union Pacific,
    then in the United States Government Receiver’s hands . In
    1901 he secured control also of the Southern Pacific. His
    abortive contest in 1901 with J . J . Hill for -ontrol of the
    Northern Pacific created one of the most serious financial crises
    even known in 4a ..ll Street. At his death his influence was
    estimated to extend over 60,000 miles of railways. The
    Encyclopaedia Britannica says : “Harriman’s methods excited
    the bitterest criticism, culminating in a stern denunciation
    from President Roosevelt in 1907.”
    House, Edward MandelL-Born 1858 . Commonly known as
    “Colonel” House, as an American courtesy title . A Texas
    planter . Was political adviser to several Texas Governors,
    but refused all office himself . Took a leading part in securing
    the nomination of Woodrow Wilson as Democratic Party
    candidate for the Presidency in 1912 . Refused office in the
    Wilson Cabinet, but acted as adviser to President Wilson, who
    referred to him as “my independent self .”
    Kahn, Otto H .-Financier . Partner in Kuhn, Loeb and Company,
    New York. For biography refer to Chapter V.
    Kitson, Arthur.-Born 1860. Chairman and managing director
    of the Kitson Engineering Co . (London) Ltd . Inventor of the
    Kitson_ Light now used in all British lighthouses and patentee
    -of -many inventions. Long President of the Banking . and
    vi
    APPENDIX
    Currency Reform League . Author of “The Money Question”
    (1894) and many other books on money problems, and
    contributor of many articles to the “National Review,
    London “Times,” etc.
    Ludendorff, General Erieh.-Born 1865 . Chief of the German
    General Staff during the world war . Since the war has been
    associated with the Kapp “Putsch” and the Hitler movement
    against the present regime in Germany, which he asserts has
    placed that country under Jewish control.
    McKenna, Rt. Hon. Reginald.-Born 1863. British politician and
    financier . Called to the bar in 1887 . In 1895 entered
    Parliament as a Liberal. Financial Secretary to the Treasury
    (1905), President of the Board of Education (1908), First Lord
    of the Admiralty, Home Secretary, Chancellor of the
    Exchequer (1915) . Went out of office with Mr. Asquith in
    December, 1916. In 1919 accepted the chairmanship of the
    Midland Bank. Extra Dreadnoughts were built against
    Germany during his period at the Admiralty, at which time
    H.M.S. “New Zealand” was given by New Zealand and
    H.M.A.S “Australia” by Australia.
    Melchett, Lord.-Formerly Alfred Moritz Mood. (1868-1930.)
    Born in Lancashire, son of Dr. Ludwig Mond (1839-1909),_ a
    German chemist who in 1862 went to England, and in 1873
    with Sir Thomas Brunner founded the firm of Brunner, Mond
    and Co . The late Lord Melchett became a director of the
    Company in 1895 and succeeded his father as head of it and
    the Mond Nickel Co., the South Staffordshire Mond Gas Co .,
    etc . Elected to Parliament in 1906 as a Liberal. Was First
    Commissioner of Works in the Lloyd George Ministry of 1916.
    Left the Liberal Party in January, 1926, as he disapproved of
    its new land policy. Founder of Imperial Chemical Industries
    and other huge combines since the war .
    Melchior, Dr. Carl.-Partner in Warburg and Co ., bankers,
    Hamburg. Chairman of the Financial Committee of the
    League of Nations, 1930. One of the six delegates representing
    Germany at the Peace Conference at Paris in 1919. Active in
    promoting the Bank of International Settlements founded in
    connection with the Young Plan for German reparation
    payments.
    Nienseyer, Sir Otto Ernst .-Refer to Appendix II for biographical
    details.
    Passfield, Lord. Formerly Mr. Sidney Webb. Born 1860.
    Secretary of State for the Dominions since June, 1929.
    President of the Board of Trade, 1924. Long prominent in
    the Socialist movement as a member of the Fabian Society .
    Author of many books on trades unionism and industrial and
    social topics . Served on London County Council and Senate
    of University of London . Founder and for years cha man of
    London School of Economics . Started the “New’ Statesman”
    in 1913. Has sat on many Royal Commissions .
    Rasputin, Gregory Efimovitch.-(1871-1916.) Russian monk Son
    of a poor peasant . Because of his habits he was given the
    name of Rasputin, meaning “debauches.” In 1907 he was
    APPENDIX
    vfl
    introduced to the Tsarina and acquired great influence at court
    by means of spiritualistic seances, etc ., and by his treatment
    of the sickly Tsarevitch . The appointment of an illiterate
    friend of his to be a bishop caused a great scandal in 1911, and
    the prestige of the Tsar and Tsarina was greatly lowered, by
    their association with this dissolute and illiterate monk .
    Rasputin was assassinated at the Yussopoff Palace on
    December 15, 1916, by Prince Yussopoff and others who
    desired to rid Russia of him . In Chapter VII will be found
    the authority for statements that Rasputin was in Jewish pay
    and that a Masonic plot had been formed to use him to destroy
    Russia .
    Reading, Marquis of. Formerly Sir Rufus Isaacs . Born 1860.
    Sof Joseph Isaacs, merchant. Called to the bar in 1887.
    Elected to Parliament as a Liberal in 1904. Became Attorney-
    General in 1910, and in 1912 was given a seat in the Cabinet
    (the first time the holder of this office was ever so honoured) .
    Then came the Marconi scandal. In this it was alleged that
    he had bought American Marconi shares on information not
    generally available to the public, at a time when the British
    Marconi Company (managed by his brother, Mr. Godfrey
    Isaacs) was negotiating a contract with the Government ; and
    further that some of these shares were taken over by Mr. Lloyd
    George (then Chancellor of the Exchequer) and by the Chief
    Ministerial Whip. There were three reports made as the
    result of Parliamentary inquiry . The first report stated that
    the charges were absolutely untrue, and those who made them
    had no reason to believe them true. The second stated that if
    in the debate of October 11, 1912, it had occurred to the
    Ministers concerned to make a statement of the facts as
    disclosed in the libel action against “Le Matin” much misunderstanding
    would have been averted and the labours of the
    committee lessened. The third (minority) report stated that
    the Attorney-General had acted with “grave impropriety” in
    buying the shares in the circumstances, and had placed himself
    in a position in which his private interest might easily have
    been in conflict with his public duty. The same censure was
    applied to the Chancellor of the Exchequer and the Chief
    Ministerial Whip. The minority further considered that the
    reticence of the Ministers in the debate of October, 1912, was
    a grave error of judgment and lacking in respect for the
    House of Commons. A few months after this Sir Rufus
    Issaacs was made Lord Chief justice, and given a peerage as
    Lord Reading. On the outbreak of war, states the
    Encyclopedia Britannica, he “assisted in the drafting and
    administration of those measures which saved England from
    financial ruin .” He later went to America as a special financial
    envoy and negotiated the terms for war borrowing by which
    Britain agreed to pay back in gold on demand (in some cases
    three days’ notice) the enormous sums she borrowed from the
    United States. In 1918 Mr . Lloyd George’s Government
    appointed Lord Reading Viceroy of India . He was successively
    made Earl and Marquis. He is director of several newspaper
    companies and combines, and of the Mond Imperial Chemical
    can
    APPENDIX
    Industries combine and the allied Financial Corporation of
    Great Britain and America, which is linked up with concerns
    named in the Pujo report of 1913 as included in the United
    States Money Trust.
    Schiff; Jacob H.-(1847-1920.) For biographical details see
    Chapter V.
    Schuster, Sir Felix.-Born 1854 . Son of F . J . Schuster of
    Frankfort-on-Main, afterwards a merchant banker in .London.
    Became Governor of the Union Bank of London in 1895, and
    holds many banking directorates in London . A brother, Sir
    Arthur Schuster, is a prominent scientist and during the war
    and since has been active in the direction of national research .
    Shibley, George H . Born 1861 . Admitted to Illinois bar in
    1887 . Founded American Bureau of Economic Research in
    1899, and in 1902 the National Federation for the People’s
    Rule . Author of “The Elements of Law,” “The Money
    Question,” “The Monopoly Question,” “Outline of Social
    Evolution,” “The University and Social Problems,” “The Trust
    Problem Solved,” etc .
    Spring-Rice, Sir Cecil .-(1859-1918.) British diplomat . Joined
    the Foreign Office in 1882, and after service in United States
    (where he formed a life-long friendship with Theodore Roosevelt)
    and elsewhere, was successively British Minister to Persia
    and Sweden, and Ambassador to the United States from 1912
    to the end of 1917, when he was replaced by Lord Reading .
    He died unexpectedly at Ottawa on February 14, 1918, on his
    way back to England.
    Stamp, Sir Josiah .-Born 1880. British economist . Was assistant
    secretary of the Inland Revenue Board from 1916 to 1919 ;
    then director and secretary of Nobel Industries, Ltd . In 1925
    he became chairman of the London, Midland and Scottish
    Railway Co. Is a director of the Bank of England . Sat on
    Royal Commission on Income Tax, 1919 ; on Finance Arbitration
    Committee for Northern Ireland, 1923-24 ; on Committee
    on German currency . and finance, 1924 ; on Court of Inquiry
    into Coal Industry, 1925 ; on Reparations Commission, 1929.
    Knighted, 1914.
    Steed, Henry Wickham.-Born 1871 . Successively London
    “Times” correspondent at Berlin, Rome, Vienna . Foreign
    editor of the “Times,” 1914-17. Editor, February, 1919, to
    November, 1922. Was head of a special Government mission to
    Italy in 1918. Now editor of the English “Review of Reviews .”
    Stoll, Sir Oswald.-Born 1866 . London theatre proprietor and
    manager. Chairman and managing director the Coliseum
    Syndicate and many other theatre companies . Author of “The
    People’s Credit,” 1919 ; “Freedom in Finance,” 1918 ; “Broadsheets
    on National Finance,” 1920, and other books and articles
    on the same subject .
    Sydenham, Lord. Born 1849. Governor of Victoria, 1901-04 ;
    helped to reconstruct the War Office ; secretary of Imperial
    Defence Committee ; Governor of Bombay, 1907-13;- has
    represented Britain on many missions abroad .
    APPENDIX
    ix
    Warburg, Paul Moritz .-Originator of U .S. Federal Reserve
    Board, etc. (See Chapter V.).
    Weishaupt, Adam.-(1748-1830.)’ Bavarian University Professor .
    Founded the Society of the Illuminati, May 1, 1776 . This
    secret organisation aimed at the destruction of monarchy and
    the Church and the substitution of patriarchial rule . It . is
    held by some that Frederick the Great and Voltaire may have
    been the concealed superiors, and that Frederick used it in
    his designs against France . Searches and arrests were made
    by the Elector of Bavaria in 1784 . The Count de Mirabeau
    and other influential persons are said to have been members .
    The plans of the Illuminati have marked resemblances to those
    set out in the documents known as the “Protocols of the
    Learned Elders of Zion.”
    White, Arnold.-Born 1848 . Author. Writer on social problems
    and colonisation, making many visits to Canada, South Africa
    and Russia . Acted for Baron de Hirsch in negotiating for
    land in Argentina for the settlement of Russian Jews . Was
    long an advocate of a strong navy . His books include “The
    Modern, Jew,” 1899 ; “The Hidden Hand,” 1917 .
    Wolf, Lucien.-Born 1857. Journalist . Sub-editor and leaderwriter
    on the “Jewish World,” 1874-93 . Foreign editor of
    London “Daily Graphic,” 1890-1909 . A frequent contributor
    to leading publications. . Has been . president of Jewish
    Historical Society of England, and W.M. of Authors’ Lodge
    of Freemasons. Represented the Jewish community at the
    P”eTahcee MCyotnhf eorfe ntchee iJne w1i9s1h9 .M eAnuatcheo ri no fW omralndy Abfofoakisr,s ,i”n c1l9u2d1i,ng
    Young, Owen D.-Born 1874. Lawyer. Counsel for American
    General Electric Company, 1911 . In 1913 was made a vicepresident
    of the Company, and in 1922 became chairman ‘of
    the board of directors . Organiser of the Radio Corporation of
    America, and connected with many other companies . Was
    appointed chairman of German Reparations Commission, 1929,
    which drew up what is known as the Young Plan now in
    force.
    (IV) “HONOUR OR DOLLARS?”
    The references on pages 97, 107 and 109 of this book to the
    British debt to the United States are instructive when read in
    conjunction with the matter in “Honour or Dollars?” (Australian
    edition : Angus & Robertson, 1929) . In that booklet, published by
    the American Association Favouring Reconsideration of the War
    Debts, appears the following comment on the terms on which the
    British debt was funded :
    “When by a . strange combination of eagerness and financial or
    political ineptitude the American so-called debt was suddenly
    funded on terms which astounded the astute U.S. Treasury
    officials themselves, this extraordinary faux pas of the British
    Government, acting through its representatives, not -only fastened
    a colossal burden upon the English taxpayer for this generation
    and two or three more to come, but also made the lot of every
    allied nation much harder .” .
    a
    Agricultural Prices, 17 .
    Air Transport Coys ., 124.
    Aldrich, Senator, 34, 77, 82.
    Alexieff, Gen., 70 .
    “Alien Menace, The,” 54, i-iii .
    Allan, Miss Maude, 132 .
    Allegemeine Electritats Gelleschaft,
    47 .
    Amalgamated Copper, 81 .
    “America Conquers Britain,”
    29, 119 et seq .
    American Agricultural Chemical’
    Coy., 81 .
    American Banking Association,
    24, 75.
    American Beet Sugar Coy., 81 .
    American Bureau of Political
    Research, 85, viii.
    American Can Coy ., 81 .
    American Car and Foundry
    Coy., 8t.
    American Exchange National
    Bank, 80.
    American Locomotive Coy, 81 .
    American Power and Light
    Corporation, 121 .
    American Security Coy, 81 .
    American Smelting and Refining
    Coy, 81 .
    Argentina, 122 .
    Armour & Coy., 81 .
    Ashkenazim, 47.
    Asquith, see Oxford, Earl of .
    Associated Electrical Industries,
    120.
    Astor Trust Coy., 80.
    Baden, Prince Max of, 35, 57.
    Baker, Geo. F.. 78.
    Ballin, Albert, 95 .
    Baldwin Locomotive Works,
    81 .
    Baltimore and Ohio Railways,
    38.
    Bank Charter Act, 22.
    Bank of England, 106.
    Bank of International Settlements,
    35, 57 .
    Bank of Manhattan, 80 .
    Bankers Trust Coy., 79.
    INDEX.
    Banque de l’Indo Chine, 115.
    Batsell, Walter Russell, 59,
    151 .
    Beedy, Carroll, L ., 91 .
    Beef Trust, 42 .
    Behn, Sosthenes, 121 .
    Belloc Hilaire, 62, 73, 131, iii .
    Bernstorff, Count von, 58.
    Billing, Pemberton, 132.
    Birkenhead, Lord, 122, 123 .
    Bismarck, Prince, 55 .
    B jorko, Treaty of, 60.
    Blackett, Sir Basil, 95 .
    Bleichroders, 53.
    Bogaevsky, General, 70.
    Bolshevik Revolution, 58-73.
    Bond and Mortgage Guarantee
    Coy., 39 .
    Boy-Ed, Captain, 95.
    Brandeis, Louis J ., 44, 59.
    Brazil, German Banks in, 46 .
    Britain, Depression in, 19, 30 .
    Brown, Shipley and Coy., 106 .
    Brussels Banking Conference,
    99 .
    Bryan, Wm . Jennings, 83, 111 .
    Buchanan, Sir Geo ., 63-4, iii.
    Cagliostro, 63, iii .
    Callaway, Oscar, 77, 83. .
    Cassel, Prof. Gustav, 20, 31,
    91-2, 118, iv.
    Cazalet, Captain V. H., 93,
    135 .
    Central Leather Coy ., 81 .
    Central Trust Coy., 39, 80, 81, .
    117.
    Chamberlain, Austen, 105.
    Chase Nat. Bank, 76, 79, 80,
    115.
    Chemicals Combine, 123.
    Chemicals Nat . Bank, 80.
    Chicago and Alton Railways,
    40.
    Chicago, Burlington and
    Quincy Railways,
    China, Concessions in, 113 et
    seq ., 122.
    Churchill, Winston, 108,
    Cleveland, President, 25-6
    Colorado Fuel and Iron Coy .,
    81 .
    Columbia Bank, 39.
    Commercial Exchange Bank,
    80 .
    Committee on Public Information
    (U.S.), 67.
    Commons, Prof. J . R., 92, 101 .
    iv .
    Continental and Commercial
    Bank, 81, 115.
    Coolidge Cabinet, 126 .
    Copper Control, 122.
    Corruption in U.S .A ., 40-2.
    Creel, George, 67 .
    Crisis of 1893, 25-6.
    Crisis of 1901, 38,41 .
    Crisis of 1907, 34, 37, 75 .
    Culberson, Senator, 85 .
    Cunliffe Committee, 98.
    D’Abernon, Lord, 35, 47, iv.
    Dannreuther, Sir Sigmund, ii .
    Darmstadter Bank, 55 .
    Dawes, General, C . . G., 117,
    171, iv.
    Dawes. Report, 52, 100, 106,
    117 .
    “Dearborn Independent,” 50,
    128 et seq.
    Deflation, Effects of, 12 ;
    Ordered in 1920, 104 .
    Del Mar, Alexander, 23.
    Denny, Ludwell, 29, 119 et
    seq.
    Deportation of Dr. Levy, 72;,
    Dernburg, 95 .
    Deterding, Sir Henri, 127 .
    Deutsch, Herr, 47 .
    Deutsche Bank, 55 .
    Diamond Necklace, 63, iii.
    Dillon, Dr . E. J ., 45, iv.
    Dillon, Read & Coy., 121 .
    Disconto Gesellschaft, 54, 66
    Disraeli, 48, 150,
    “Dollar Diplomacy,” 113.
    Dollar Standard, 30 .1 .
    Du Pont, Nemours & Coy,,
    123 . -
    Edmundson Corporation, 12L
    Electric Bond and Share Coy,
    120.
    Equitable Life, 39, 42,
    Equitable Trust, 80, 176-7 .
    Farmers and the Slump, 13.
    Farmers’ Loan and Trust
    Coy., 80.
    Federal Reserve Board, 29-32,
    33-4, 74-92, 95, 101-5, 111-3,
    134 .
    Fifth Avenue Trust Coy., 39 .
    Finance Corporation of Gt .
    Britain and America, 124.
    First National Bank (N.Y.),
    78, 115 .
    First National Bank
    (Chicago), 81 .
    Fisher, Prof . Irving, 19, 29,
    31, 169, v .
    Fisher Money Stabilisation
    Plan, 164 et seq.
    Ford, Edsel, 50, 123, 135 .
    Ford, Henry, 50, 93, 128 et
    seq.
    Fourth National Bank, 80.
    Fourth St . National Bank, 8i .
    Franklin National Bank, 81 .
    Franz Ferdinand, Archduke .
    68, 93 .
    Fraser, J . Foster, 130.
    Frederick the Great, 53, ix .
    Freeman, Joseph, 113 .
    Freemasonry, i (Appendix),
    59, 60, 150-1 .
    French Revolution, 63, 149,
    151, iii.
    Friedlander, 53.-
    Fruhling, Goschen, Kleinworth
    & Coy ., 51 .
    Ganetski-Furatenberg, 65, 66.
    General Electric Coy ., 81, 121: .
    General Motors, 120 .
    German Imperial Bank, 68, 69 .
    German Secret Service, 68 et
    seq .
    Girard Trust Coy ., 81 .
    Glass, Carter, 33, 82, 86.
    Glass-Owen Bill, 82.
    Goedsehe, Hermann, 147 .
    Gold : Instability of, 16 et seq,
    Quantity in World, 13.
    Gold Standard, 21, 22-4, 28.
    Goachen, Cunliffe & Coy ., 106.
    Gould, George G., 40.
    Grant, President, 24.
    Gray, Finley H., 7S, $4,
    x n1
    INDEX
    Great Northern Railway, 38.
    Greater London Counties
    Trust, 121 .
    Gregory, Prof., T. E. G., 51,
    107, – iii,
    Grenfell, E. C., 106 .
    Guaranty Bankers’ Trust, 121 .
    Guaranty Trust Coy ., 79, 115.
    Halsalle, Henry D ., 48.
    Hamburg-America Coy., 54,
    94, 95, 125 .
    Hanover National Bank, 80.
    Harding, W. P. G., 86, 104.
    Harriman, E . H., 36, 39, 40,
    114, v.
    Hattersley, C . Marshall, 106,
    109 . .
    Hazard : Circular, 25, 74.
    Heinemann, Dannie, 121 .
    Helphand, Dr ., 60 et seq.
    Higginson, Major Henry I ..,
    87 .
    Hirst, Sir Hugo, 127.
    Hoffman, General von, 60 .
    Holden, Sir Edward, 57 .
    Hong Kong and Shanghai
    Bank, 115 .
    Hoover Cabinet, 126 .
    House, Col. E. H ., 62, 70, 85
    et seq, v .
    Hughes, Chas . E ., 172.
    Illinois Trust Bank, 81 .
    Illuminati, 63, 146, 148-9, iii ;
    ix.
    Imperial Chemical Industries,
    123 .
    Imperial Economic Conference
    (1923), 107 .
    Inflation : In 1919, 101 ; Effects
    of, – 12 . . :
    Intercontinental Rubber Coy.,
    81 .
    International Acceptance
    Bank, 117, 121 . .
    International
    Agricultural
    Corporation, 81 .
    Internation :Harvester Coy,
    81 .
    International Monetary Conference
    (1867), 23:- -
    International Nickel Coy ., 81 .
    International -Paper :Coy., $2.
    International Telephone and
    Telegraph Coy., 121 .
    Irredeemable Bonds, 184.
    Italy, 46, 122 .
    Itzig, Ephraim & Coy., 53 .
    Jews: Ashkenazim, 47 ; British .
    139; German, 48-50, Sephardim,
    48.
    Joly, Maurice, 147.
    Kahn, Otto H., 36, 47, 51, 52,
    86.
    Kartels, German, 46.
    Kerensky, 62, 65.
    Kidder, Peabody & Coy., 78-9 .
    Kitson, Arthur, 19, 26, 48, 50 ;
    74, 99, 117, 161, v.
    Knickerbocker Real Estate
    Trust Coy ., 37.
    Kuhn, Loeb & Coy., 33, 36 et
    seq, 47, 78-9, 81, 94, 95, 115,
    121 .
    Lackawanna Steel Coy., 82.
    Lamsdorff, Count, 61, 147 .
    Land Policy, British Liberal
    Party’s, 178-81 .
    Lane, Lt .-Col . A. H ., 59, 71, i .
    Lansdowne, Lord, 35.
    Latin America, U .S . and, 122:
    Law, Bonar, 107.
    League of Nations Financial
    Committee, 35, 57.
    Lee, Higginson & Coy ., 78-9,
    115, 121 .
    Lehfeldt, Prof., 170.
    Lenin, 56, 60, 62, 65, 67, 68, 69 .
    Levy, Dr . Oscar, 72 .
    Liberty National Bank, 80 .
    Lindbergh, Chas . A., 24, 25,
    74, 85, 173 .
    Liverpool, Lord, 22 .
    Lloyd George, Rt. Hon. D.,
    56, 72, 94, 105, 109 .
    London School of Economics,
    ii-In.
    Lowenstein, Alfred, 121 .
    Ludendorff, General, 94, 117,
    vi.
    McAdoo, .W., 86, 95, 96 . -
    McKenna, Rt. Hon . R., 18, 30,
    99, 109, 173, vi.
    Manchurian Railway, 114.
    Marconi Coy ., 121 .
    Marconi Scandal, 131, vii.
    Marcu, Valeriu, 65 .
    Maxse, Leo. J ., 130.
    Mechanics and Metals National
    Bank, 80.
    Melchett, Lord, 124, 127, vi.
    Melchior, Dr . Carl, 35, 57, vi.
    Mellon National Bank, 81 .
    Mendelssohn, Moses, 53 .
    Meulen, Henry, 191 .
    Midland Bank, 121 .
    Mirabeau, 149.
    Missouri Pacific Railway, 38,
    42.
    Mond Companies, 122-3.
    Mone tary’
    Commission
    (U.S.A.), 45, 75, 76 .
    Money, Quantity and Prices,
    11-15 .
    Money Trust Commission
    (U.S .A .), 78 et seq.
    Morgan, J . P., Junior, 86, 95.
    Morgan, J. P., Senior, 95 .
    Morgan, J . P. & Coy., 78, 95,
    97, 106, 115 .
    Morgan, Grenfell & Coy ., 106 .
    Morgan, Harjes & Coy., 106.
    Morgenthau, Henry, 36, 37,
    40.
    Mortgages, 13, 177.
    Morton Trust Coy ., 39 .
    National Bank of Commerce,
    79, 80.
    National Biscuit Coy., 82.
    National City Bank of New
    York, 33, 78-9, 86, 115, 120,
    124 .
    National Park Bank, 80.
    Nearing,. Scott, 113 .
    “New Encyclopaedia of Social
    Reform,’,’ 40.
    “New York Times,” 95.
    New York Trust Coy., 80.
    Nickel Combines, 122.
    Niemeyer, Sir Otto Ernst, 35,
    51, 107-8, i-ii.
    Nilus, Prof . Sergius, 60, 63,
    140, 143, 146, 148.
    Norfolk and Western Railway,
    38.
    Norman, Rt. Hon. Montagu,
    57, 106;
    INDEX
    Northcliffe, Lord, 96.
    Northern Pacific Railway, 38,
    41 .
    Northern Securities Coy ., 38,
    39 .
    North German Lloyd, 54, 125 .
    Nya Bank, 66 .
    Oil Companies, 123, 126-7 .
    Overstone, Lord, 22.
    Owen, Senator, 56, 82, 87 .
    Page, Walter H ., 97.
    Paish, Sir Geo ., 95 .
    Panama, 127 .
    Papen, Col . von, 95 .
    Parsons, Jno. E ., 37 .
    Parvus (Helpland), 60, 65 et
    seq .
    Passfield, Lord, ii, vi.
    Peel, Sir R., 22 .
    Pennsylvania Railroad, 38.
    Philadelphia National Bank,
    81 .
    Pitt-Rivers, W. G., 72.
    Powell, Dr . Ernest, 130, ii .
    Price Level Chart, 102 .
    Protocols of the Learned
    Elders of Zion, 60, 63, 145,
    148, 152.
    Protopoff, M ., 61, 64 .
    Pujo Commission, 78 et seq.
    112 .
    Pullman Co., 82 .
    Radio Corporation, 121 .
    Railways, U.S., 40-44 .
    Rasputin, 59, 61-3, 64, vi.
    Rathenau, Walter, 53, 54, 55.
    Reading, Marquis of, 94, 97-8,
    123, vii .
    Reichsbank, 52-54.
    Riggs National Bank, 81 .
    Roosevelt, President Theodore,
    39 .
    Rothschilds, 38, 53, 121 .
    Rubber Combines, 123 .
    Russia, Arbitration Treaty
    with U.S ., 58.
    Russo-Japanese War Loan, 38 .
    San Domingo, 116.
    Sapiro, Aaron, 133 .
    Schacht, Dr., 106, 117 .
    Schiff, Jacob H ., 33, 35, 37-9,
    58, 71, 75, 87, 88, 95, 114,
    xiy
    Schiff, Mortimer L., 40.
    Schiedemann, Herr, 66.
    Schroeder, Baron, 51 .
    Schroeder, J. Henry & Co .,
    106 .
    Schuster, Sir Felix, 51, 108,
    viii .
    Secret Societies, 131, 150.
    Sephardim, 48.
    Sera ;evo Tragedy, The, 93.
    Seymour, Dr. Charles, 85.
    Sherman Anti-Trust Law, 39 .
    Sherman Silver law, 24.
    Shibley, G . H., 23, 83, viii.
    Siberian Bank, 66.
    Silver, 22, 24.
    Sisson Report, 67 et seq, 95 .
    Slavery, Bankers and, 25 .
    “Spectator, The,” 45, 60, 72,
    129.
    Speyer, J J ., 58.
    Speyer, Sir Edgar, 59 .
    Spiegelberg, Dr. Ernest, 35 .
    Spring-Rice, Sir Cecil, 34, 58,
    63, 94, 95, 97, 98, viii .
    Stable Money Association,
    171 .
    Stabilization of Agricultural
    Prices, Report of Committee
    on, 17 .
    Stamp, Sir J ., viii, 29, 169, 172 .
    Standard Oil Co ., 42.
    Starr, Western, 103, 111, 112 .
    Steed, Henry Wickham, 70,
    133, viii .
    Steel Trust (U.S.), 76, 82,
    124 .
    Stillman, James, 33, 40, 78 .
    Stoll, Sir Oswald, 45, viii.
    Strong, Bill, 89 et seq.
    Strong, James G., 89.
    Sukholin, Alexis, 148.
    Sugar Trust, 42.
    Swing, Mr., 104 .
    Sydenham, Lord, 152, viii.
    Taft, President, 114.
    Templars, Order of, 151 .
    Tennessee Coal and Iron Coy .,
    76.
    Thomas, Rt. Hon. J. H ., 36.
    Tiarks, F. C., 106.
    Tin Combines, 123.
    INDEX
    Title Guaranty and Trust
    Coy., 39.
    Towner, Horace Mann, 84.
    Treitschke, 48.
    Trotsky, 56, 60, 68, 69.
    Trust Companies, 36, 42-3 .
    Trust Financiers, etc ., 121 .
    Trusts (U.S.A.), 26, 39.
    Tsar, the late, 60, 64, 147, vii.
    Tsarina, the late, 63, 64, vii
    Underwood, Mr., 84.
    Union Pacific Railroad, 26, 36,
    38, 40, 41 .
    Union Trust Coy., 80, 81 .
    U.S . Mortgage and Trust
    Coy., 80.
    U.S. Rubber Coy ., 82.
    U.S . Steel Corporation, 82.
    U.S . Trust Coy ., 80.
    Usury, 48, 159 et seq.
    Vanderlip, Frank, 86.
    Viereck, Paul, 94.
    Voltaire, ix .
    Wall St . Control, 43 .
    Walsh, E. A ., 59.
    War Debt, British to U.S.A.,
    95, 97-8, 107, 109, 111, ix.
    War, Outbreak of, 93-94.
    Warburg & Coy., 35, 54.
    Warburg, Paul M ., 33-4, 37,
    50-8, 70-1, 86-8, 95, 103,
    111-12, 117, 123, 135 .
    Washington Arms Conference,
    116 .
    Webster, Mrs . Nesta, 131 .
    Weishaupt, Adam, 148, ix.
    Western Union Telegraph
    Coy., 38, 42, 81 .
    Westinghouse Coy., 82.
    White, Arnold, 130, ix.
    Wickens, C. H., 174.
    Wilcox, E. H., 63, 67.
    William II, 60, 94, 147.
    Williams, Mrs. Harold, 65-7 .
    Wilson, President Woodrow,
    33, 50, 56, 62, 70, 83, 8$, 96.
    Wolf, Lucien, 60, 63, 146, ix.
    York, Hamilton 51 .
    Young, Owen Is ., 118, 172, ix
    Young, Roy A., 90 .
    Yussopoff, Prince, 62, vii,
    Printed by A. G. Betts & Son, Hardy Street, Nelson, N.Z.

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