by Murray N. Rothbard
This first appeared in World Market Perspective (1984) and later as a monograph published by the Center for libertarian Studies (1995). Afterword By Justin Raimondo.
LBJ and the Power Elite
Lyndon Johnson’s foreign policy was dominated by his escalation of the Vietnam conflict into a full-scale (if undeclared) war, and of the increasing splits over the war among the financial power elite. Johnson retained the hawkish Rusk, McNamara, McCone, and Lodge in their posts. As newly minted Vietnam doves were ousted from foreign policy positions, they were replaced by hawks. Thus, William Bundy became Assistant Secretary of State for Far Eastern Affairs, at the same time becoming a director of the CFR. On the other hand, the increasingly critical W. Averell Harriman was ousted from his post of Under-Secretary of State.
Cyrus Vance continued as Johnson’s Secretary of the Army; when he rose to Deputy Secretary of Defense, he was replaced by Vance’s old friend and roommate at Yale, Stanley R. Resor. Resor was a partner in the major Wall Street law firm of Debevoise, Plimpton, Lyons, & Gates, and was the brother-in-law of economist and banker Gabriel Hauge, president of the Manufacturers Hanover Trust, and treasurer of the CFR.
Resor had married into the Pillsbury flour family of Minneapolis, which had long been connected with the holding company, the Northwest BanCorporation. After Vance retired as Deputy Secretary of Defense to return to law practice, he was replaced by Johnson’s hard-line Secretary of the Navy Paul Nitze, former partner of Dillon, Read, whose wife was a member of the Rockefeller-connected Pratt family.
One important meeting at which it was decided to escalate the Vietnam War was held in July 1965. The meeting consisted of Johnson, his designated foreign policy and military officials, and three key unofficial advisers: Clark M. Clifford, the chairman of the President’s Foreign Intelligence Advisory Board, and an attorney for the duPonts and the Morgan-dominated General Electric Co.; Arthur H. Dean, a partner in Rockefeller-oriented Sullivan & Cromwell and a director of the CFR; and the ubiquitous John J. McCloy.
Shortly after the meeting, a distinguished national committee of power elite figures was formed to back President Johnson’s aggressive policies in Vietnam. Chairman of the committee was Arthur H. Dean; other members were Dean Acheson; Eugene Black, who, after retiring as head of the World Bank, returned to be a director of Chase Manhattan; Gabriel Hauge of Manufacturers’ Trust and the CFR; David Rockefeller, president of the Chase Manhattan Bank and a vice-president of the CFR; and two board members of AT&T, William B. Murphy and James R. Killian, Jr. Indeed, of the 46 members of this pro-Vietnam War committee, 19 were prominent businessmen, bankers or corporate lawyers. Later, when Johnson needed to raise taxes to supply more funds for the war effort, he selected thirteen businessmen to head the lobbying effort.
A fascinating aspect of the Johnson Administration was the heavy influence of men connected with the powerful Democratic investment-banking house of Lehman Brothers. Johnson’s first Under-Secretary of State, George Ball, who left because of increasing disillusionment with the Vietnam War, would later become a key partner of Lehman Brothers. Johnson’s most influential unofficial adviser was long-time and personal legal and financial adviser, Edwin L. Weisl, a New York attorney who was a senior law partner to Cyrus Vance at Simpson, Thacher & Bartlett. Not only was this law firm the general counsel to Lehman Brothers, but Weisl himself was dubbed by Fortune magazine as “Lehman’s eighteenth partner.” Weisl had great influence at Lehman and occasionally sat in on partners’ meetings. He was also reputed to be the closest friend of senior partner Robert Lehman, and sat on the board of the Lehman-controlled One William Street Fund.
Another very close and influential Johnson adviser, and a consistent hard-liner on Vietnam, was his old friend Abe Fortas, a Washington lawyer and veteran New Dealer. During the Johnson years, Fortas served as director, vice-president, and general counsel for the Texas-based Greatamerica Corp., a giant holding company controlling several insurance companies, Braniff Airways, and two banks, including the First Western Bank and Trust Co. of California.
During the same period, Fortas was also a director and vice-president of the large Federated Department Stores. Both Federated and Greatamerica had close ties with Lehman Brothers. Fred Lazarus, Jr., a top official of Federated, sat on the board of the Lehman-controlled One William Street Fund, along with Edwin Weisl. And the only two non-Texans on the board of Greatamerica Corp. were William H. Osborn, Jr., of Lehman Brothers, and Gustave L. Levy, a partner in the closely allied Wall Street investment bank of Goldman, Sachs & Co. Goldman, Sachs was the senior banking adviser for the Murchison Texas oil interests, a group with whom Lyndon Johnson was personally allied.
Finally, after Henry Cabot Lodge retired as the hawkish Ambassador to South Vietnam in 1967, he was replaced by Ellsworth Bunker. Bunker, who had been president of the National Sugar Refining Company, served as ambassador to various countries in the Eisenhower Administration, and then Ambassador to the Organization of American States under Johnson. Bunker was connected to John L. Loeb, the Lehman kinsman who headed the investment-banking firm of Carl M. Loeb, Rhoades & Co. Loeb placed Bunker on the board of Curtis Publishing Co., after he obtained control of that firm for Loeb, Rhoades. Loeb also installed Bunker’s son, John, as president of Curtis. Furthermore, Ellsworth Bunker’s younger brother, Arthur, had served as director of the Lehman Corporation, and of Lehman’s One William Street Fund until his death in 1964.
While Bunker had served Johnson as Ambassador to the OAS, he continued to sit on the board of the National Sugar Refining Company. In late 1965, Bunker played a crucial role in Johnson’s massive U.S. invasion of the Dominican Republic, an intervention into a Dominican civil war to prevent a victory by left-wing forces who would presumably pose a dire threat to American sugar companies in the republic. As President Johnson’s emissary to the Dominican Republic just after the invasion, Bunker played a decisive role in installing the conservative Hector Garcia-Godoy as president.
Increasingly, however, the power elite became divided over the morass of the Vietnam War. Under the blows of the Tet offensive in January 1968, Robert McNamara had become increasingly dovish and was replaced as Secretary of Defense by hard-liner Clark Clifford, with McNamara moving gracefully to take charge of the World Bank. But, on investigating the situation, Clifford too became critical of the war, and Johnson called a crucial two-day meeting on March 22, 1968, of his highly influential Senior Informal Advisory Group on Vietnam, known as the “Wise Men,” made up of all his key advisors on foreign affairs.
Johnson was stunned to find that only Abe Fortas and General Maxwell Taylor continued in the hard-line position. Arthur Dean, Cabot Lodge, John J. McCloy, and former General Omar Bradley took a confused middle-of-the-road position, while all the other elite figures such as Dean Acheson, George Ball, McGeorge Bundy, C. Douglas Dillon, and Cyrus Vance had swung around to a firm opposition to the war.
As David Halberstam put it in his The Best and the Brightest, these power elite leaders “let him (Johnson) know that the Establishment – yes, Wall Street – had turned on the war… It was hurting the economy, dividing the country, turning the youth against the country’s best traditions.” LBJ knew when he was licked. Only a few days afterward, Johnson announced that he was not going to run for re-election and he ordered what would be the beginnings of U.S. disengagement from Vietnam.
The foreign-policy aims of the Nixon Administration had a decided Rockefeller stamp. Secretary of State William P. Rogers was a Wall Street lawyer who had long been active in the liberal Dewey-Rockefeller wing of the New York Republican Party. Indeed, Thomas E. Dewey was the main backer of Rogers for the State Department post.
Dewey’s entire political career was beholden to the Rockefeller interests, as was dramatically shown one election year when, in an incident that received unaccustomed publicity, Winthrop W. Aldrich, Rockefeller kinsman who was president of the Chase National Bank, literally ordered Governor Dewey into his Wall Street offices and commanded him to run for re-election. The governor, who had previously announced his retirement into private practice, meekly obeyed. Furthermore, Roger’s law partner, John A. Wells, had long been one of Nelson Rockefeller’s top political aides and had served as Nelson’s campaign manager for President in 1964.
Second-tier posts in the Nixon State Department went to financial elite figures. Thus, the following men were successively Under Secretaries of State (after 1972, Deputy Secretaries) in the Nixon White House: Elliot L. Richardson, partner of a Boston Brahmin corporate law firm and a director of the New England Trust Co., and a man whose uncle, Henry L. Shattuck, had long been a director of the New England Merchants National Bank and of the Mutual Life Insurance Co. of New York.
John N. Irwin II, partner of a Wall St. law firm (Patterson, Belknap & Webb) long associated with the Rockefeller interests, and whose wife was a sister of the Watson brothers family of IBM.
Kenneth Rush, president of Union Carbide Corp., and a director of the Bankers Trust Co. of New York. Robert S. Ingersoll, chairman of the board of Borg-Warner Corp. and a director of the First National Bank of Chicago.
Also, the Deputy Under-Secretary of State for Economic Affairs under Nixon was Nathaniel Samuels, a partner in the investment-banking house of Kuhn, Loeb & Co., and a director of the Rockefeller-controlled International Basic Economy Corp.
Henry A. Kissinger
But of course the dominant foreign policy figure in both the Nixon and Ford Administrations was not William Rogers but Henry A. Kissinger, who was named national security adviser and soon became virtually the sole force in foreign policy, officially replacing Rogers as Secretary of State in 1973.
Kissinger was virtually “Mr. Rockefeller.” As a Harvard political scientist, Kissinger had been discovered by John J. McCloy, and made director of a CFR group to study the Soviet threat in the nuclear age. He was soon made director of a special foreign policy studies project of the Rockefeller Brothers Fund, and from there became for more than a decade Nelson Rockefeller’s chief personal foreign policy adviser.
Only three days before accepting the Nixon Administration post, Rockefeller gave Kissinger $50,000 to ease the fiscal burdens of his official post. Nixon and Kissinger re-escalated the Vietnam War by secretly bombing and then invading Cambodia in 1969 and 1970; they could be sure of compliance from Ellsworth Bunker, whom Nixon retained as Ambassador to South Vietnam until the end of the war.
Apart from the Vietnam War, the Nixon Administration’s major foreign policy venture was the CIA-led overthrow of the Marxist Allende regime in Chile. U.S. firms controlled about 80 percent of Chile’s copper production, and copper was by far Chile’s major export. In the 1970 election, the CIA funnelled $1 million into Chile in an unsuccessful attempt to defeat Allende. The new Allende regime then proceeded to nationalize large U.S.-owned firms, including Anaconda and Kennecott Copper and the Chile Telephone Co., a large utility which was a subsidiary of ITT (International Telephone and Telegraph Co.).
Under the advice of Henry Kissinger and of ITT, the CIA funneled $8 million into Chile over the next three years, in an ultimately successful effort to overthrow the Allende regime. Particularly helpful in this effort was John A. McCone, the West Coast industrialist whom Johnson had continued in charge of the CIA. Now a board member of ITT, McCone continued in constant contact by being named a consultant to the CIA on the Chilean question. President Nixon continued Johnson holdover Richard Helms as head of the CIA, and Helm’s outlook may have been influenced by the fact that his grandfather, Gates W. McGarrah, had been the head of the Mechanics and Metals National Bank of New York, director of Bankers Trust, and chairman of the board of the powerful Federal Reserve Bank of New York.
Of the $8 million poured into Chile by the CIA, over $1.5 million was allocated to Chile’s largest opposition newspaper, El Mercurio, published by wealthy businessman Augustin Edwards. Edwards was also, not coincidentally, vice president of Pepsico, a company headed by President Nixon’s close friend Donald M. Kendall. The transaction was arranged at a quiet breakfast meeting in Washington, set up by Kendall, and including Edwards and Henry Kissinger. After the successful overthrow of Allende by a military junta in September 1973, the man who became the first Minister of Economy, Development, and Reconstruction was Fernando Leniz, a high official of El Mercurio who also served on the board of the Chilean subsidiary of the Rockefeller-controlled International Basic Economy Corporation.
Richard Nixon also established, for the first time, diplomatic relations with Communist China. Nixon was urged to take this step by a committee of prominent businessmen and financiers interested in promoting trade with and investments in China. The group included Kendall; Gabriel Hauge, chairman of Manufacturers Hanover Trust Co.; Donald Burnham, head of Westinghouse; and David Rockefeller, chairman of the Chase Manhattan Bank.
The first envoy to China was the veteran elite figure and diplomat, David K.E. Bruce, who had married a Mellon, and who had served in high diplomatic posts in every Administration since that of Harry Truman. After Bruce became Ambassador to NATO, he was replaced by George H.W. Bush, a Texas oil man who had served briefly as Ambassador to the United Nations. More important than Bush’s Texas oil connections was the fact that his father, Connecticut Senator Prescott Bush, was a partner at Brown Brothers, Harriman.
The Trilateral Commission
In July 1973 a development occurred which was to have a critical impact on U.S. foreign – and domestic – policy. David Rockefeller formed the Trilateral Commission, as a more elite and exclusive organization than the CFR, and containing statesmen, businessmen, and intellectuals from Western Europe and Japan.
The Trilateral Commission not only studied and formulated policy, but began to place its people in top governmental posts. North American secretary and coordinator for the Trilaterals was George S. Franklin, Jr., who had been for many years executive director of the CFR. Franklin had been David Rockefeller’s roommate in college and had married Helena Edgell, a cousin of Rockefeller. Henry Kissinger was of course a key member of the Trilaterals, and its staff director was Columbia University political scientist Zbigniew Brzezinski, who was also a recently selected director of the CFR.
President Ford continued Kissinger as his Secretary of State and top foreign policy director. Kissinger’s leading aide during the Ford years was Robert S. Ingersoll, Trilateralist from Borg-Warner Corp. and the First National Bank of Chicago. In 1974, Ingersoll was replaced as Deputy Secretary of State by Charles W. Robinson, a businessman and Trilateralist.
Ambassador to Great Britain – and then moved to several other posts – was Elliot Richardson, now a Trilateralist and a director of the CFR. George Bush, Trilateralist, was retained as Ambassador to China, and then became director of the CIA. He was replaced as Ambassador by Thomas S. Gates, Jr., head of the Morgans’ flagship bank, Morgan Guaranty Trust Co. Meanwhile, Robert McNamara continued to head the World Bank. Becoming head of the Export-Import Bank in 1975 was Stephen M. DuBrul, Jr., who had had the distinction of being a partner of both Lehman Brothers and Lazard Freres.
James Earl Carter and his administration were virtually complete creatures of the Trilateral Commission. In the early 1970s, the financial elite was looking for a likely liberal Southern governor who might be installed in the White House. They were considering Reubin Askew and Terry Sanford, but they settled on the obscure Georgia governor, Jimmy Carter. They were aided in their decision by the fact that Jimmy came highly recommended.
In the first place, it must be realized that “Atlanta” has for decades meant Coca-Cola, the great multi-billion dollar corporation which has long stood at the center of Atlanta’s politico-economic power elite. Jimmy Carter’s long-time attorney, close personal friend, and political mentor was Charles Kirbo, senior partner at Atlanta’s top corporate law firm of King & Spalding.
King & Spalding had long been the general counsel to Coca-Cola, and also to the mighty financial firm, the Trust Co. of Georgia, long known in Atlanta as “the Coca-Cola bank.” The long-time head and major owner of Coca-Cola was the octogenarian Robert W. Woodruff, who had long been highly influential in Georgia politics. With Kirbo at his elbow, Jimmy Carter soon gained the whole-hearted political backing of the Coca-Cola interests.
Financial contributors to Carter’s race in the 1971 Democratic primary for governor were: John Paul Austin, powerful chairman of the board of Coca-Cola; and three vice-presidents of Coke, including Joseph W. Jones, the personal assistant to Robert Woodruff. If Pepsi was a Republican firm, Coke had long been prominent in the Democratic Party; thus, James A. Farley, long-time head of the Democratic National Committee, was for thirty-five years head of the Coca-Cola Export Company.
In 1971, Carter was introduced to David Rockefeller by the latter’s friend J. Paul Austin, who was to become a founding member of the Trilateral Commission. Austin was long connected with the Morgan interests, and served as a director of the Morgan Guaranty Trust Co., and of Morgan’s General Electric Co. Other early political backers of Jimmy Carter were the Gambrell brothers, David and E. Smyth, of a family which was a major stockholder in Rockefeller-controlled Eastern Air Lines. The Gambrell law firm, indeed, served as the general counsel for Eastern. They, too, aided in forming the Carter-Rockefeller connection.
During the same period, Carter was also introduced to the powerful Hedley Donovan, editor-in-chief of Time magazine, who was also to be a founding Trilateral. Rockefeller and Donovan liked what they saw, and Carter was also recommended to the Trilaterals by the Atlanta Committee of the Council on Foreign Relations.
Jimmy Carter was invited to become a member of the Trilateral Commission shortly after it was formed, and he agreed enthusiastically. Why did the Trilaterals appoint an obscure Georgia governor with admittedly no knowledge of foreign affairs? Ostensibly because they wanted to hear the views of a Southern governor. Far more likely, they were grooming him for the Presidency and wanted to instruct him in trilateralism. Carter took instruction well, and he wrote later of the many happy hours he spent sitting at the feet of Trilateral executive director and international relations expert Zbigniew Brzezinski.
What the unknown Carter needed more than even money for his 1975–1976 campaign for President was extensive and favorable media exposure. He received it from the Trilateral-influenced Establishment media, led by Time’s Hedley Donovan and Trilateral syndicated columnists Joseph Kraft and Carl Rowan.
Major New York Carter backers, who served on the Wall Street Committee for Carter or hosted gatherings on his behalf, included Roger C. Altman, partner of Lehman Brothers, the chairman of which, Peter G. Peterson, was a Trilateral member; banker John Bowles; C. Douglas Dillon, of Dillon, Read, who also served as a member of the international advisory board of the Chase Manhattan Bank; and Cyrus Vance, a Trilateral founder and vice-chairman of the CFR.
Furthermore, of the six national finance directors of Jimmy Carter’s costly pre-convention race for the Presidential nomination, three were high officials at Lehman Brothers, one was a vice-president of Paine, Webber, another was a vice-president of Kidder, Peabody, and a sixth was the venerable John L. Loeb, senior partner of Loeb, Rhodes, & Co., and a Lehman by marriage. Other prominent business fund-raisers for Carter’s election campaign included Walter Rothschild, who had married a member of the Warburg family of Kuhn, Loeb & Co., and Felix Rohatyn, a partner of Lazard Freres.
The Carter Administration proved to be Trilateral through and through, especially in foreign affairs. Trilateral members holding high posts in the Carter Administration included:
One of the first important Carter foreign policy actions was the negotiation of the Panama Canal treaty, giving the Canal to Panama, and settling the controversy in such a way that U.S. taxpayers paid millions of dollars to the Panama government so they could repay their very heavy loans to a number of Wall Street banks.
One co-negotiator of the treaty was Ellsworth Bunker, who bad been engaged in fruitless negotiations since 1974. The treaty was not concluded until Carter added as co-negotiator the Trilateralist Sol Linowitz, a senior Washington partner of the Wall Street corporate law firm of Coudert Brothers, and a board member of Pan-Am Airways, the Marine Midland Bank of New York, and Time, Inc.
The Marine Midland Bank itself held part of two bank consortium loans to Panama. Furthermore, no fewer than 32 Trilaterals were on the boards of the 31 banks participating in a $115 million 10-year Eurodollar Panama loan issued in 1972; and 15 Trilaterals were on the boards of fourteen banks participating in the $20 million Panama promissory note issued in the same year.
Another crucial foreign policy action of the Carter regime was the President’s reluctant decision to admit the Shah of Iran into the U.S., a decision that led directly to the Iran hostage crisis and the freezing of Iranian assets in the U.S. Carter was pressured into this move by the persistent lobbying of David Rockefeller and Henry Kissinger, who might well have realized that a hostage crisis would ensue. As a result, Iran was prevented from pursuing its threat of taking its massive deposits out of Chase Manhattan Bank, which would have caused Chase a great deal of financial difficulty. In politics, one hand washes the other.
Kissinger, by the way, was scarcely put back in the shadows when he left government office in 1977. He quickly became a director of the CFR, a member of the executive committee of the Trilateral Commission, and chairman of the International Advisory Board of the Chase Manhattan Bank.
While Ronald Reagan’s early campaigning included attacks on the Trilateral Commission, the Trilateralists have by now been assured that the Reagan Administration is in safe hands.
The signal was Reagan’s choice of Trilateralist George Bush, who had also become a director of the First International Bank of London and Houston, as Vice-President of the United States, and of Reagan’s post-convention reconciliation visit to Washington and to the home of David Rockefeller.
Reagan’s most influential White House aides, like James A. Baker, had been top campaigners for Bush for President in 1980. The most influential corporate firm in the Reagan Administration is the California-based Bechtel Corporation. Bechtel vice-president and general counsel Caspar Weinberger, a Trilateralist, is Secretary of Defense, and fellow top Bechtel executive George Shultz, former board member of Borg-Warner Corp, General American Transportation Corp., and Stein, Roe & Farnham Balanced Fund, is Secretary of State.
Trilateralist Arthur F. Burns, former Chairman of the Fed, is ambassador to West Germany, Paul Volcker has been reappointed as head of the Fed, and Henry Kissinger is at least partially back as head of a Presidential Commission to study the question of Central America.
It is hard to see how the Trilateralists can lose in the 1984 elections. On the Republican ticket they have George Bush, the heir apparent to Ronald Reagan; and in the Democratic race the two front-runners, Walter Mondale and John Glenn, are both Trilateralists, as is Alan Cranston of California. And, as a long shot, John Anderson of the “National Unity Party” is also a Trilateral member. To paraphrase a famous statement by White House aide Jack Valenti about Lyndon Johnson, the Trilateralists and the financial power elite can sleep well at night regardless of who wins in 1984.
Murray N. Rothbard (1926–1995) was the author of Man, Economy, and State, Conceived in Liberty, What Has Government Done to Our Money, For a New Liberty, The Case Against the Fed, and many other books and articles/www.mises.org/mnrbib.asp>. He was also the editor – with Lew Rockwell – of The Rothbard-Rockwell Report.
Justin Raimondo, author of An Enemy of the State: the Life of Murray N. Rothbard and other books, is editor of Antiwar.com.
Copyright © 2005 Ludwig von Mises Institute
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