A picture speaks a thousand words
"It began about 1850 reached its peak about 1914, and ended about 1932. Typical forms of economic organization were the limited-liability corporation and the holding company. It was a period of financial or banker management rather than one of owner management as in the earlier period of industrial capitalism."The City
--Professor Carroll Quigley describing Financial Capitalism (p. 42)
In the two millennia since the Romans fortified the lowest crossing point of the River Thames, the City of London's wealth has meant neither the Crown, nor Parliament could subordinate it. From an early stage, the City became the dominant power in foreign policy and government finance in Britain (nee England). The Ulster plantation and the Royal charters for the Levant Company and the East India Company were orchestrated by powerful City financiers. Traditionally, and to the ire of successive generations of British manufacturers, the City of London preferred international investments to investing in local industry.
The use of debt as a weapon wasn't invented by City of London financiers, but they perfected the technique in the years preceding the Age of Financial Capitalism. At the time Europe was scrambling to halt Napoleon's advance and were forced to borrow to finance their extra expenditure, in desperation they turned to the City. From this point, the City's financiers had brought the rulers of Europe into debt servitude, under financial and banker management.
"The defeat of Napoleon in 1815 (the Bank of England, the City and the Rothschilds played a key role by financing the Emperor's enemies), the expansion of the Empire and the Industrial Revolution, allowed Britain to establish its position as international hegemon with supremacy in industry, shipping and finance... [The City] preferred the more profitable opportunities offered by financing trade and foreign wars, making loans to governments and generating speculative investment opportunities. Capitalist Industrial production like agriculture before it, depended largely on regional and local sources of finance ..." (Lambie, p. 341)We can't talk about the City of London in this period without giving special mention to the Rothschild family. Between 1808 and 1859 they developed a capital fund and intelligence service that their rivals couldn't compete with. Over half of all sovereign bonds placed in London (the global financial center) were issued by the Rothschilds, with a face value of over £42 million (Ferguson 2009, p. 87). By 1852 their combined capital was £9.5 million. In 1899 it was £41 million, dwarfing Baring Brothers, the Banque de France and the leading German joint-stock banks (Ferguson 2009, p. 89).
The Rothschilds were so powerful that, when a Baronetcy was offered to them in 1846 by Prime Minister Lord John Russell, Lionel turned it down because other practicing Jews had already been granted the title. "Prince Albert reported him as saying: "You have nothing better to offer me?" This was bluntness worthy of his father, but his mother Hannah was incensed..." (Ferguson 2000, p. 25). Only a Rothschild, can treat Royalty like this.
However, since World War II the United States of America has been the world's most advanced military. It spends more than the next eight countries combined on its ability to blow things up, and it is the only global aggressor nation left that regularly overthrows and invades resisting governments. NATO should be re-named the American Empire! Right? This is an oversimplification of the current geopolitical field that doesn't fit with the financial history of the United States.
To understand the true provenance of the United States as an imperial force, we must understand the City's balance of power system. It was designed to prevent a challenge to their dominance in Europe, with France colluding as their junior partner after Napoleon's removal, as a counter to Prussian manpower. In 1870, Prussian military efficiency destroyed that system with a six-month campaign that culminated in French surrender, shattering the widely held belief that France was the continent's strongest land power. The declaration of The German Reich in the Palace of Versailles' Hall of Mirrors that followed (1871) was an insult the French vowed to avenge.
"The years of 1869-70 found Britain and its balance of power in an exceedingly precarious position. Its interference in the American Civil War now faced it with an angry and resentful America possessed of the world's greatest army and a powerful navy of the new and terrible ironclads, demanding redress for heavy damages due to British lend-lease to the Confederacy. Russia had fully signified her intention to fight for revenge of her beating in the war of 1853-1856 by sending two fleets to the United States when war had seemed imminent between the United States and Britain during the Civil War..." (Knuth 2006, p. 18)The defeat of France and the ill will of the American people, hastened the City of London's reconquest of the United States during the era of Financial Capitalism, and from this point started using Americans to front their American operations. The U.S was to be repurposed to compete with Germany on Britain's behalf, and in return the City of London's investment would make the United States the world's leading military industrial complex. It was a long process, starting as soon as the young Republic had been declared, but was eventually achieved through careful financial and banker management.
After Independence, politics in the United States was divided between the Federalists and Democratic Republicans. Their ideological leaders, Alexander Hamilton and Thomas Jefferson, both held strong but contrary ideas for the direction and scope of the post-revolution institutions in the United States. Both fought to keep the young republic from destruction, but perhaps Jefferson didn't have the foresight of Hamilton, who understood their only chance of meaningful freedom was to establish financial independence.
As Dr. Webster Tarpley explains, Hamilton wanted centralised institutions which would "create a strong national government that could stand up to the hostile powers that surrounded the country...[and] argued that industrialization and dirigism were the necessary path for American progress, rather than Jefferson's utopic limited-government agrarian society. Industry and commerce allowed for a far more diverse and complex division of labour."
On the advice of Hamilton, President George Washington signed the (First) Bank of the United States into law in February 1791. The federal government owned 20% of the Bank which had a capitalization of $10 million, by far the largest corporation in the country at that time and notable because foreign creditors had no voting rights. Its nationwide branch system left the B.U.S. uniquely placed to direct money flows with a view to development, and importantly its foreign held shares had no voting rights. Jefferson fought the Bank of the United States before becoming President, however during his administration, having proved useful, it continued unmolested.
The combination of leading Federalists, particularly the northern maritime industry, and the web of financiers and insurance companies upon which it rested, spawned abortive plans to split the young Republic. Alexander Hamilton's refusal to lead and public exposure of these plotters cost him his life in a duel with Aaron Burr. His death on July 12th, 1804, (mortally wounded the previous day) marked the end of the Federalists' hopes of electing another President, although the party did continue: "Aware of the failures that had caused their defeat, they worked to build party organizations, to imitate Republican electioneering techniques, to alter their pro-British, antidemocratic image, and to find popular issues that would broaden their appeal." (John Blum et al. 1981, p. 175)
Aaron Burr left New York in disgrace and in search of more wealth. He involved himself in planning land-grabs in Mexico and a plot to split the Western territories from the United States, in collusion with Britain. He was tried three times for treason but acquitted. Andrew Jackson was summoned to the trial, because of his support of Burr, and used the occasion to make public denunciations of President Jefferson, labeling him a coward.
Jefferson's fellow Virginian slave plantation owners, led by strict constructionist Congressman John Randolph of Roanoke (a loyalist who spent the revolution in England) hounded him on 'states rights' in Congress. Aaron Burr was defended by Randolph's son Edmund in his treason trial and when acquitted fled to England using money forwarded to him by John Jacob Astor, a prominent director of several state banks. State banks could be, and often were, controlled by foreign owners.
The hopes of Madison to capture swathes of Canada as a bargaining chip faltered as many of the northeastern, pro-British, Federalist States refused to give official support and even aided the enemy. After the destruction of Washington DC in 1814, news of Andrew Jackson's defense of New Orleans arrived at the same time as a delegation from New England threatening secession. By this time a peace treaty had been signed by John Quincy Adams, in Ghent. Although the Federalists wouldn't survive the war because of the Hartford Convention, its northeast financiers joined the southern planters under a new name, the Democratic Party, and at its head was the new national hero, Andrew Jackson.
The Democratic Republicans also had to alter their policy to survive after the war of 1812, conceding westward expansion was necessary for defense. After the destruction of the war of 1812, the U.S. needed to rebuild and modernize their infrastructure. The idea of the second Bank of the United States (B.U.S.) became popular again, even amongst some of the most ardent opponents of its predecessor, like President Madison who granted a twenty-year charter in 1816. The new institution did have its critics, including John Randolph and of course Andrew Jackson; they also included the State banks who flourished since the first B.U.S. expired.
The Monroe Doctrine (1823) was an attempt to solidify the independence of the Republic through legislation and warn off the old world powers from "any attempt on their part to extend their system to any portion of this hemisphere". Unfortunately, because of the migration westward it inspired, it created a situation where the United States was forced to invite in the old-world powers. The massive building projects designed to shorten the vast distances between territories were mostly undertaken by the States themselves. The States were engaged in a battle for supremacy with the second B.U.S., leaving only one place that could offer the financing needed:
"In the 1830s, when canals and railways were first being constructed in the United States, it was to the Old World that the builders looked for finance, and to Britain in particular. By 1836 over £90million had been invested in canals and railways in the north-eastern states, of which more than half was guaranteed by public funds, the bulk of the capital being raised in Britain." (May 1987, p. 192)
Walton & Rockoff 1998, p. 168
Before 1836 Wall Street was eclipsed in national and international banking by Philadelphia, the home of the first and second B.U.S. President Andrew Jackson and his (New York banker) Secretary of State Martin Van Burren destroyed the Second Bank of the United States, leading to a shift in power from Philadelphia to New York. It also marked the end of control over American finances by American economic nationalists. Control of a legal tender issuing institution in the hands of elected representatives was viewed as an unacceptable threat to the City.
President Jackson "professed to be a deliverer of his people from the oppression of the mammoth - but instead he delivered the private banks from federal control and his people to speculation. No more striking example could be found of a leader fostering the very evil he was angrily wishing out of the way." (Hammond 1966, p. 231)
From here on, Presidents and the rest of Washington DC have been instructed from Wall Street. The City of London created Wall Street as a Forward Operating Base, from which they raided then resettled the vast resources of the United States. The conquest was a bloodless economic one, conducted without having to send a single ship or soldier. Instead State governments, the railroads, oil and manufacturing industries, and eventually the Federal government itself, would converge on the City and its American branches, seeking loans as the U.S. entered a new phase of development.
The modern interpretation that the Rothschilds failed to establish a foothold in the United States is simply not true! The Rothschilds dominated the debt markets of Europe, where the expanding cities and municipalities of the United States turned to finance massive rail, mining and infrastructure projects. They also had a monopoly on the production of mercury, at the time an essential ingredient for refining gold and silver, as Jackson was forcing the U.S. onto a gold standard. Out of pure necessity the United States had substantial dealings with the City and therefore the Rothschild family.
Ferguson 1999, p. 292
Through debt (and marriage), August Belmont, the Rothschilds and the City of London had brought the United States of America back under Britain's influence and expanded its status as a manufacturing giant and a global military power. The year 1849 saw the combination of two of America's most elite financial and military families, just as the U.S. embarked on a course of military adventurism; Belmont married Commodore Matthew C. Perry's' daughter.
Belmont, along with other leading New York financiers, founded a bank which would act as a joint enterprise for the City and the growing concentration of wealth in American hands. The Park Bank of New York was established in 1856, later the National Park Bank, with an initial $2,000,000 in capital. It paid substantial dividends from its first year, and in 1857, a very lean year for the American people, the bank "was able to sell gold at a considerable premium, and in spite of hard times it made a comfortable profit as a result of the years activities." (E.F Clymer 1917, p. 30)
During this period the City of London had just curbed Russian expansion in the Crimean War, 1853-1856, and destroyed China's push for self-determination in the Second Opium War, 1856-1860. Some of the northern maritime industry's wealthiest families made fortunes smuggling opium in this period, pursuing British foreign policy goals. The same families would constitute the new ruling financier class after the United States destroyed itself through Civil War in 1861-1865. Officially Britain and France were neutral, however they withheld funding, provided arms to the confederacy and dispatched their fleets to intimidate Lincoln.
"While the confederacy managed to raise a large loan in Europe, the Union found its pleas for foreign finance ignored. The cost for the Civil War, at least for the Northern side, were financed at home." (Watkins 1991, p. 11) The banks suspended specie payments in 1861, so the North devised two plans, the first to issue United States Notes under the Legal Tender Act 1862, backed only by the credit of the United States, the second to enact a series of National Bank Acts, creating a national currency backed by debt bearing bonds, issued by the state banks.
In 1865 it became the National Park Bank, under Salmon P. Chase's National Bank Act, along with many of the state banks. After the Civil War, and the murder of President Lincoln, the bankers were anxious to get back to specie payments. In 1866 the National Park Bank opened its very successful Sterling Exchange Desk. This was the first in New York and a funnel through which the City operatives extracted vast amounts of loot, just as they had in India, China and the rest of the Crown's holdings.
Again, this bank's invisibility shows how history has been twisted, because between 1865 and 1929 it issued over $90,000,000 in bank notes. This forgotten bank weathered the financial storms of 1857, 1861-1866, 1873, 1884, 1893, 1907 and 1914, unlike many of its contemporaries. The now forgotten National Park Bank was so large that in 1911 it bought Wells Fargo, which is still a household name today. Between 1856-1893 the dividends dispersed were over $6,000,000 and the profits were well over $8,000,000 (Clymer 1917. p. 62). Its growth was constant regardless of the economic conditions, until in "1892 it was reported to be the largest bank in the United States in deposits, resources and business." (Ibid, p. 60)
The National Park Bank became intimately linked with the expansion of U.S. influence into Central and South America, Asia and even Europe. For example, in Mexico it was involved with the Durango Development Company, extracting $21,664,467.89 worth of silver from the Batopilas mines between 1880 and 1909. "The Batopilas company superintendent sometimes ordered the silver shipped directly to National Park Bank in New York City, which included among its directors John Jacob Astor of the National City Bank and a major investor in the mining industry August Belmont, Issac Guggenheim of ASARCO, Cornelius Vanderbilt Jnr, and Stuyvesant Fish, the son of the Secretary of State..." (Hart 2006, p. 134)
Of course, the Rothschild family and August Belmont didn't represent the only Anglo-American houses in operation. John Pierpont Morgan is remembered as an American banking titan. However, his status resulted from his access to European markets. The Barings were the Federal government's bankers from an early stage in the republic, and remained so constantly, apart from a short period during Jackson's administration. However, their true allegiances came to light in 1885 when Edward Baring became the 1st Baron Revelstoke. In the same year Natty Rothschild became Baron Rothschild of Tring and was awarded the distinct honor of keeping his own surname, perhaps a sweetener to stop him refusing as his father did.
Also, the National Park Bank wasn't the only national bank the City used to re-establish their dominance in the United States. In the 1920s, as a new phase of Capitalism was forming; the national banks based in New York started a decade-long process of merging. Although larger banks joined them, the decision was made to use the Chase name. It was named after the father of the National Bank Acts during the Civil War. Salmon P. Chase was an unassailably American hero, and a perfect cover for the multiple foreign investors.
A belief has arisen that because the United States funded loan-lease during WWI, Britain became the junior partner. "The United States became the world's most important industrial nation while it was still a debtor in world accounts. It was also the fastest growing country in the world in the pre-1914 years at the very time when its debtor-nation status was the greatest." (Watkins 1991, p. 21) However, a more fitting explanation is the Americans had "taken millions of dollars out of this country and now they must put it back!" Mr. Jenson understood how the game worked.
As the United States grew, the City eventually put roots down in Georgetown University - the breeding ground of U.S. foreign diplomats like the infamous Henry Kissinger. And later the original Office of Strategic Services (OSS), later the CIA, was trained in Britain by the Special Operations Executive (OSE). The City of London still plays a major role in guiding the foreign and financial policy of the United Kingdom and the United States of America, because of its successes during the era of Financial Capitalism.
Bibliography
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Reader Comments
No mention of Hamilton's attack on those states to the west during the Wiskey Rebellion.. another turning point in this story.