* London banking elites and the strategy of oil-based dominance
The world is not, in fact, ruled by global corporations. It is
ruled by the global financial system.
- David Korten, When Corporations Rule the World
The postwar blueprint had been developed during the war by the
Council on Foreign Relations, on behalf of the U.S.
government, and that blueprint was in fact the paradigm by
which the world was run for three decades. Presidents came and
went; Cold War confrontations came and went; squabbles between
America and Europe came and went - yet the blueprint carried
on. Who was behind the Council on Foreign Relations? Who has
the power to choose agendas for the globe and then ensure that
the course be followed for decades? Who decided, by 1971, that
the time had come for a change?
Let us now step back from our story, leaving it for now in the
mid 1970s, with the postwar economic blueprint collapsing, and
take a fresh look at the past century from another
perspective. We'll be peeling another layer off the Matrix
onion, to find the man behind the man behind the curtain, so
to speak. Is there in fact some singular elite group that has
essential power in the world today? If so, who are they and
how did they get their power?
Not to hold you in suspense, we're going to be talking about
bankers, and the power of finance. In particular we'll be
looking into the most exclusive banking circles in New York
(Wall Street) and London (the City of London - "The City"),
and see how this fraternity has come, putting it baldly and
honestly, to rule the world. I will be drawing extensively in
the next few sections from William Engdahl's eye-opening and
well-documented book, A Century of War: Anglo-American Oil
Politics and the New World Order.
Let's begin our fresh look by briefly considering the role of
London banks during the heyday centuries of the British
Empire. One of the innovations of this empire was that
payments for purchases were not carried around in ships in the
form of gold bullion. Instead, when sales or purchases
occurred anywhere in the empire, that simply resulted in
numbers being moved from one account to another in a pair of
London banks, where both buyer and seller would maintain
accounts.
This was a safer and cheaper way to settle transactions, and
it meant that the London banks had the use - for their own
investment purposes - of everyone else's reserve funds, from
throughout the empire. Over the centuries of empire, returns
on these invested reserves mounted up: the wealth and power of
the banks grew ever stronger. The City became the unquestioned
financial capital of the world, and the Pound the world's most
trusted reserve currency. This gave The City great power: the
banks could manipulate world markets by such simple measures
as adjusting interest rates and controlling credit
availability.
British supremacy in manufacture was the economic engine
behind the Victorian-era empire, enabling London banks to
achieve their dominance over global finance. But with that
dominance established, the banks found there were more
lucrative investments to be found in foreign markets than in
Britain itself. With no apparent regard for the fate of the
British economy or the industrialists who had made their
wealth possible, the London banks proclaimed a doctrine of
"free trade" and simply moved their money to where they could
get the greatest returns. We of course can see this same
scenario today on a global scale, where again free trade is
the rhetoric, and again disinvestment in Western domestic
economies is the reality.
But behind her apparent status as the world's preeminent
power, Britain was rotting internally. The more the British
merchant houses extended credit for world trade, and City of
London banks funneled loan capital to build railways In
Argentina, the United States and Russia, the more the domestic
economic basis of the United Kingdom deteriorated. Few
understood how ruthlessly lawful was the connection between
the two parallel processes [i.e., free trade and domestic
disinvestment] at the time (Engdahl, 1).
If we consider the wealth of big banks, in comparison to the
wealth of industrial corporations - or nations for that matter
- we find a scenario much like that in a poker parlor. The
corporations and nations are the players, and the banks are
the house. Players go up and down; some get rich, some go into
debt, and some go broke - and they all suffer when economies
experience recession or depression. But the house never loses,
always takes its share of every pot, always collects its debts
- and can change the rules of the game whenever it sees fit.
Besides the power derived from its wealth and financial
control, The City gained additional power from a secret
relationship with government, and in particular with the
British intelligence services.
Rather than the traditional service providing data from agents
of espionage in foreign capitals, Britain's secret
intelligence services operated as a secret, Masonic-like
network which wove together the immense powers of British
banking, shipping, industry and government. Because all this
was secret, it wielded immense power over credulous and
unsuspecting foreign economies. In the Free Trade era after
1846, this covert marriage of private commercial power with
government was the secret of British hegemony (Engdahl, 8).
Britain is famous for the 'old-boy' networks that emerge out of
its elite 'public school' system. In that cultural tradition
of personal loyalty and honor-bound discretion, a particular
informal 'fraternity' was assembled that became the covert
guiding force behind British strategy - a fraternity that one
might fairly call a secret government. This fraternity was,
and still is, a secret network of key players from the London
banks, the intelligence services, and the leading British oil
companies - with The City, as usual, being the prime mover in
the arrangement, the party with the broadest strategic agenda.
The constituencies of this fraternity - banking, intelligence,
and oil - reflect a particular strategy of geopolitical
dominance, a strategy that was adopted by Britain prior to the
outbreak of World War I, and which continues operating to this
day, although now under the leadership of the big Wall Street
banks. This strategy is simple and effective:
1) Gain control of oil sources.
2) Control the price of oil and the currency in which oil is
traded.
3) Maintain this control, by overt and covert means, and
leverage it into the geopolitical and financial domination of
world affairs.
We can see the effectiveness of this strategy today, where the
Anglo-American oil companies dominate global petroleum trade,
and where oil can only be purchased with dollars. In order to
ensure a reliable energy supply, each nation must accumulate
dollars with which to fulfill its petroleum purchase
contracts. These dollars are then typically parked in U.S.
Treasury securities until they are needed - thus subsidizing
U.S. deficits and Pentagon budgets. These immense reserve
funds are called "petrodollars" and they are redirected to the
Wall Street banks, where they can be invested for profit -
just as with the London banks in the heyday of the British
Empire. These petrodollars then find their way to London,
where they are called 'Eurodollars,' and are invested in
unregulated global markets. By such means control over oil
finance leverages into global financial hegemony for an
Anglo-American banking fraternity.
The critical importance of oil as an energy source may seem
obvious today, but when first recognized in 1882, it was the
unpopular theory of a lone visionary, Admiral Lord Fisher.
Fisher had done his homework on the qualitative superiority of
petroleum over coal as a fuel. Šthe oil-fired ship required
one-third the engine weight, and almost one-quarter the daily
tonnage of fuel, a critical factor for a fleet, whether
commercial or military. The radius of action of an oil-powered
fleet was up to four times as great as that of the comparable
coal ship (Engdahl, 19-20).
No one listened to Fisher at first, despite his position as
Lord Admiral. But as the new century began, both Britain and
Germany became well aware that oil would become the most
critical global commodity.
By 1911, a young Winston Churchill had succeeded Lord Fisher,
First Lord of the Admiralty. Churchill immediately began a
campaign to implement Fisher's demand for an oilfired navy.
By 1912, German industry and government had realized that oil
was the fuel of its economic future, not only for land
transport but for naval vessels.
By 1913, acting secretly, again at Churchill's urging, the
British government bought up majority share ownership of
AngloPersian Oil (today British Petroleum). From this point,
oil was at the core of British strategic interest. (Engdahl,
25-28).
* World War I and the House of Morgan
In Matrix history books, World War I is presented as an
unfortunate accident, caused in part by German expansionism,
and in part by unwise entangling alliances - alliances which
caused a local conflict in the Balkans to escalate
unexpectedly into a major war between the European powers. In
reality, World War I is best understood in the context of
Britain's strategy of oil-based financial dominance.
In the lead-up to World War I, German productivity in
technology, industry, and commerce had long-since eclipsed that
of Britain, in large part due to The City's domestic
disinvestment policy. In addition, Germany was building a
modern fleet that threatened Britain's supremacy at sea.
London and the Pound continued to dominate global finance, but
German banks were beginning to exercise increasing financial
power. Furthermore, Germany was eagerly pursuing the
construction of a rail system, connecting Berlin with Baghdad,
which if completed would give Germany direct access to oil
supplies, and would also open up an inland trading network
that would seriously undermine Britain's dominance in trade
and shipping.
Germany had no desire for war, nor was she threatening Britain
in any military sense - but she was clearly on a course to
unseat Britain from her position of dominance in European
affairs and global finance. And with her own oil supplies,
Germany would put an end to Britain's strategy of oil
dominance before the strategy could be implemented. Such a
course of events was not acceptable to London's elite banking
fraternity, nor was it acceptable to the British establishment
generally, with its traditional balance-of-powers perspective on
European geopolitics. Desperate measures were called for.
In April 1914, King George VII and his foreign minister, Sir
Edward Grey, made an extraordinary visit to meet French
President Poincaré in Paris. It was one of the few times Sir
Edward Grey left the British Isles. Russia's ambassador to
France, Iswolski, joined them and the three powers firmed up a
secret military alliance against the German and
AustroHungarian powers. Grey deliberately did not warn Germany
beforehand of its secret alliance, whereby Britain would enter
a war which engaged any one of the carefully constructed web
of alliance partners she had built up against Germany.
Many in the British establishment had determined well before
1914 that war was the only course suitable to bring the
European situation under control (Engdahl, 29).
Whereas in the Matrix we had "unfortunate entangling
alliances," in reality we had a trap secretly set by the
British, intended to ensnare Germany into a war with all of
her neighbors - in typical British balance-of-powers fashion. It
was a war in which millions would die and from which Britain
would emerge with a dominant position in the Middle East, and
able to pursue its new strategy of oil-based financial
hegemony.
While France was occupied with Germany, in a bloody and
fruitless slaughter along the French Maginot Line, Britain
moved an astonishingly large number of its own soldiers, more
than 1,400,000 troops, into the eastern theatre.
ŠThe angry French feebly protested that while millions of
their forces bled on the Western Front, Britain took advantage
of the stalemate to win victories against the weaker Turkish
EmpireŠ (Engdahl, 40-41).
At one level, with World War I, we see yet another
geopolitical engagement among Western powers in the
centuries-long game of competitive imperialism: Britain and
France were able to extend their peripheries into the former
Ottoman Empire, at the expense of German hopes for her own
periphery, based on the Berlin to Baghdad rail system. But at
another level, as regards Britain's new oil strategy, World
War I represents a singular shift in world affairs,
establishing a new basis for geopolitical dominance that
survives to this day.
Of particular importance was the role played by New York banks
in financing the war, and the Anglo-American banking alliance
that emerged from the war. The City was to be eclipsed Wall
Street, but the strategy of oil-based dominance was to be
carried forward, in what eventually became a firm but covert
Anglo-American alliance.
This was to be a comprehensive alliance, bringing the
Anglo-American oil companies into a potent cartel (the Seven
Sisters), bringing the London and New York banking elites into
strategic collaboration, and creating a special relationship
between the American and British intelligence and diplomatic
communities.
The visible cooperation today between President Bush and Prime
Minister Blair, as regards Iraq and other matters, is but the
tip of the iceberg of a broad and long-standing alliance. And
in the relationship today between Wall Street, the CIA, and
the Anglo-American oil companies, we see an American version of
Britain's secret fraternity at work, guiding the course of the
world from behind the scenes, according to the principle of
oil-based dominance, under the strategic guidance of New York
and London banking elites.
By 1914, returning now to developments prior to the outbreak
of war with Germany, Britain had her trap well set. Only a
spark was needed to start the inferno: the entangling
alliances were powder kegs ready to go off. But there was one
major problem, one fly in Britain's ointment.
One of the better kept secrets of the 1914-18 world war was
that on the eve of August 1914, when Britain declared war
against the German Reich, the British Treasury and the
finances of the British Empire were in effect bankrupt
(Engdahl, 35).
In order to fight the war, Britain would need credit - lots of
credit. No one was more aware of this than the banking
fraternity that was planning the war, and they had been hard
at work making appropriate arrangements. The credit was to
come from America, with the help of J.P. Morgan and other New
York bankers who had intimate ties to London. But as the U.S.
lacked a central bank, it would be difficult and risky to
raise the immense funds that would be required.
On the night of November 22, 1910, a group of newspaper
reporters stood disconsolately in the railway station at
Hoboken, New Jersey. They had just watched a delegation of the
nation's leading financiers leave the station on a secret
mission. It would be years before they discovered what that
mission was, and even then they would not understand that the
history of the United States underwent a drastic change after
that night in Hoboken.
The delegation had left in a sealed railway car, with blinds
drawn, for an undisclosed destination. They were led by
Senator Nelson Aldrich, head of the National Monetary
Commission. ...Accompanying Senator Aldrich at the Hoboken
station were his private secretary, Shelton; A. Piatt Andrew,
Assistant Secretary of the Treasury, and Special Assistant of
the National Monetary Commission; Frank Vanderlip, president
of the National City Bank of New York, Henry P. Davison,
senior partner of J.P. Morgan Company, and generally regarded
as Morgan's personal emissary; and Charles D. Norton,
president of the Morgan-dominated First National Bank of New
York. Joining the group just before the train left the station
were Benjamin Strong, also known as a lieutenant of J.P.
Morgan; and Paul Warburg, a recent immigrant from Germany who
had joined the banking house of Kuhn, Loeb (Mullins, 1).
The participants in the Jekyll Island conference returned to
New York to direct a nationwide propaganda campaign in favor
of the "Aldrich Plan." Three of the leading universities,
Princeton, Harvard, and the University of Chicago, were used
as the rallying points for this propaganda, and national banks
had to contribute to a fund of five million dollars to
persuade the American public that this central bank plan
should be enacted into law by Congress.
Woodrow Wilson, governor of New Jersey and former president of
Princeton University, was enlisted as a spokesman for the
Aldrich Plan. During the Panic of 1907, Wilson had declared,
"All this trouble could be averted if we appointed a committee
of six or seven public-spirited men like J.P. Morgan to handle
the affairs of our country" (Mullins, 10).
Thus, by secret intrigue, was America's Federal Reserve system
born - a central bank in all but name. The prominent and
well-funded backers of the plan were able to get Wilson elected
President, and on December 23, 1913, when most Congressman had
gone home for Christmas, the Federal Reserve Act was snuck
through Congress and Wilson signed it the next day.
In theory, the Federal Reserve system was to be under the
control of Congress, but it in fact this new central bank was
owned and controlled, albeit indirectly, by members of the
Anglo-American banking fraternity. Britain had secured their
line of credit for the planned war in Europe. Four months
later, in April, Britain set up its alliances with France and
Russia, and three months after that hostilities began, sparked
by a suspicious assassination that could easily have been the
work of British intelligence.
The House of Morgan took on the task of supplying the British
war chest with funds, and Morgan was granted the exclusive
right to procure provisions in the Americas for Britain and
her allies. This was strictly against international law, as
Woodrow Wilson was maintaining an official policy of American
neutrality in the European conflict.
Morgan, with its franchise as sole purchasing agent for the
entire Entente group, became virtual arbiter over the future
of the U.S. industrial and agricultural export economy. Morgan
decided who would, or would not, be favored with very sizeable
and highly profitable export orders for the European war
effort against Germany.
Firms such as DuPont Chemicals grew into multinational giants
as a result of their privileged ties to Morgan. Remington and
Winchester arms companies were also favored Morgan 'friends.'
Major grains trading companies grew up in the Midwest as well,
to feed Morgan's European clients. The relations were
incestuous, as most of the Morgan loans raised privately for
the British and French were raised through the corporate
resources of DuPont and friends, in return for a guarantee of
the huge European munitions market (Engdahl, 52).
Despite this invaluable help from Morgan, Britain and France
were losing the war, particularly after Russia, under the new
Bolshevik regime, withdrew from the conflict. In order to
ensure a British victory - and to save the House of Morgan
from financial ruin - America would need to enter the war.
The threat in January 1917 of British and French collapse,
after Russia fell back in exhaustion from the war effort,
provided more than enough incentive for Morgan and his New
York financial syndicate to mobilize their combined propaganda
and other resources. They did this with the careful assistance
of the highest levels of British secret intelligence and
friendly American press outlets, when it became clear that
nothing else but American entry into the war would turn the
looming disaster in Europe facing J.P. Morgan and Morgan's
European clients. They organized that America would enter the
European war on the 'right' side - in support of British
interests (Engdahl, 53).
In Matrix history books, the postwar Versailles peace
conference was dominated by the personalities of Clemenceau,
Wilson, and the other diplomats: it was their vindictiveness,
ineffectiveness, or shortsightedness that were the cause of
the disastrous postwar debt regime - leading to decades of
economic stagnation in Europe. In reality, it was simply a
matter of Morgan collecting his debts. The House of Morgan,
through its agents and connections, was the architect of the
repayment regime.
ŠBritain and the other allied powers owed the United Sates
$12,500,000,000 at 5 per cent interest. Britain, France, and
the other Entente countries, in turn, were owed by Germany,
according to the Versailles demands, the sum of
$33,000,000,000. The figures were beyond the scale of
imagination at that time. (Engdahl 56).
--
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