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The Conspiracy.....------------. Against The

Economy

by Gary Allen

About this article ...Bankruptcy : The Conspiracy Against The Econ- I

amy by Gary Allen, which documents how finan­cial Insiders are creating conditions for anotherdepression, originally appeared in the October,1974 issue of A merican Opinion magazine.

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BANKRUPTCYThe Conspiracy Against The Economy

Gary Allen , a graduate of Stanford Uni­versity, .is the author of several best­selling books, including Communist Revo­lution In The Streets; Nixon's PalaceGuard; None Dare Call It Conspiracy;and, Richard Nixon: The Man BehindThe Mask, the definitive study of theambition and conspiratorial activities ofour recent President. Mr. Allen , a formerinstructor ofhistory and English, is activein numerous humanitarian, anti-Commu­nist, and business enterprises. A film writ­er, author, and journalist, he is a Contrib­uting Editor to AMERICAN OPINION .

• ACCORDING to a Gallup Poll releasedAugust 18, 1974 , sixty-eight percent ofthe American people believe that theeconomic situation in our country willgrow worse over the next six months. Thesame poll reported that "half of all thenation's adults go so far as to predictanother depression such as that in the1930s." Forty-four percent of Americanssay the federal government is chiefly toblame, twenty-three percent have boughtthe line that "the public" is to blame,thirteen percen t fault business, and an­other thirteen percent blame it all onlabor.

What's happening is that at last theKeynesian pronouncements are beginningto pale as continuing federal intrusioninto the economy creates a serious crisisof confidence. It is a crisis which has nowreached the point where the ranks ofprofessional doomsayers are receivingnotice even in the Establishment press.Newsweek identifies a few of them in anarticle for July 29 , 1974, called "MeetThe New Jeremiahs." There is Harry

OCTOBER, 1974

Browne, author of the best-selling bookYou Can Profit From A Monetary Crisis.According to Newsweek , Mr. Brownelives in a home worth two hundredthousand dollars in the mountains over­looking Vancouver, British Columbia, andhas stocked his wilderness retreat with ayear's supply of food and other essentials.Two hundred thousand dollars isn't pea­nuts. Browne has proved that prophetscan, indeed, make profits on panic. Sohas Harry Schultz.

Schultz is author of The InternationalHarry Schultz Letter, an economic news­letter which analyzes and predicts thefuture of commodities and markets. Hemaintains offices in Holland, Switzerland,and Great Britain , charging one thousanddollars per hour for consultation . Predict­ing a major monetary disaster, Schultz ismoving out of his I50-year-old Georgianhouse in London, leaving fashionableneighbors like Mary Quant, David Frost,and Ava Gardner, and moving to Holland.He says he favors Amsterdam's secretaccounts.

Another of Newsweek's "New Jere­miahs" is doomsayer James Dines, alsopublisher of a market letter, who isplanning to move to Switzerland to avoidthe crunch. Dines is quoted as predicting"a huge market shakeout followed by amassive collapse of pension funds, bankand utility failures, and the social securitysystem will go bust."

Normally none of the Establishment's"experts" would give two rubles for the"predictions" of these bizarre Free Mar­ket advisors . "But," as Newsweek put it,"lately, several 'respectable' economistshave come to regard current economic

events with a similar, if not quite sosimplistic, sense of alarm. 'The dangerthat the economy may get out of hand isgreater than at any time in my career,'says an economist for a prestigious WallStreet firm who was around during thedepressed '30s. And Henry Kaufman,highly regarded chief economist for [theinternational banking firm oj] SalomonBrothers, tends to agree. 'We are notliving in normal times,' Kaufman toldNewsweek's Pamela Abraham, and theU.S. may be moving head-on into somekind of economic and financial collapse."

It is one thing for the Free Market"advisors" and Establishment "experts"to rant and moan about the future of thedollar. But with two-digit inflation, seri­ous shortages, and the look the Arabsgave us at the consequences of interna­tional economic warfare over energy,middle America is now also concernedand is, indeed, on the verge of panic.

The problem, rooted in the spinningout of a runaway inflation, through theFederal Revenue System, has been pur­posely generated by the Insiders of inter­national banking who created that centralbanking system some sixty years ago toinsure their personal control of our econ­omy. The Federal Reserve Act was passedon December 22, 1913, the result of aconspiracy involving such giants of inter­national banking as the Morgans, theWarburgs, the Kahns, the Shiffs . . . andof course the Rockefellers.*

Well aware of what was happening,Conservative Senator Henry Cabot LodgeSr. declared that the Act made possiblean ultimate flood of "irredeemable papercurrency." After the vote, RepresentativeCharles A. Lindbergh Sr. told the Con­gress: "This act establishes the mostgigantic trust on earth .... When thePresident signs this act the invisible gov­ernment by the money power, proven toexist by the Money Trust investigation,

*For 140 pages of details, see my book, NoneDare Call It Conspiracy, Concord Press, 1972.

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will be legalized .... The new law willcreate inflation whenever the trusts wantinflation ...." And, said the senior Lind­bergh, "From now on depression will bescientifically created."

The game was to use the central bankto whipsaw the economy between infla­tion and deflation, creating vast profitsfor the international bankers running theshow. Once securely in control, the bank­ing Insiders set out to make a majorkilling. Between 1923 and 1929, theFederal Reserve expanded (inflated) ourmoney supply by sixty-two percent.Much of this was used to bid the price ofstocks to dizzying heights from which theInsiders took enormous profits.

The House Hearings on Stabilizationof the Purchasing Power of the Dollardisclosed evidence in 1928 that the Fed­eral Reserve Board was working closelywith the heads of European central banksin inflating our currency. The Committeewarned that a major crash had beenplanned in 1927 at a secret luncheon ofthe Federal Reserve Board and heads ofthe European central banks. The HouseCommittee warned that the internationalbankers would soon tighten the noose.

Montagu Norman, governor of theBank of England, came to Washington onFebruary 6, 1929, to confer with Secre­tary of the Treasury Andrew Mellon. TheWall Street Journal described Mr. Normanas "the currency dictator of Europe." InTragedy And Hope, Professor CarrollQuigley notes that Norman, a close confi­dant of J.P. Morgan, admitted: "I holdthe hegemony of the world." Immediate­ly after this mysterious visit, the FederalReserve Board reversed its easy-moneypolicy and began raising the discountrate. The balloon which had been inflatedconstantly for nearly seven years wasabout to be exploded on purpose.

On October twenty-fourth, the feath­ers hit the fan. Writing in the UnitedStates' Unresolved Monetary And Politi­cal Problems, William Bryan describeswhat happened:

AMERICAN OPINION

When everything was ready , theNe w York financiers started calling24-hour broker call loans. Thismeant that the stock brokers andthe customers had to dump theirstock on the market in order to paythe loans. This naturally collapsedthe stock market and brought abanking collapse all over the coun­try because the banks not ownedby the oligarchy were heavily in­volved in broker call loans at thistime, and bank runs soon exhaustedtheir coin and currency and theyhad to close. The Federal ReserveSystem would not come to theiraid, although they were instructedunder the law to maintain an elasticcurrency.

The investing public , including moststock brokers and bankers, took a hor­rendous blow .in the crash, but not th eInsiders. They were either out of th emark et or had sold "short" so that th eymade enormous profits as the Dow Jonesplummeted. For those who knew th escore , a comment by international bankerPaul Warburg of the Federal ReserveBoard had provid ed the warnin g to sell.That signal came on March 9, 1929 , whenthe Financial Chronical quoted Warburgas foll ows:

If orgies of unrestricted specula­tion are permitted to spread toofar the ultimate collapse is cer-tain to bring about a generaldepression involving the wholecountry.

The great ope rators were later able tobuy back their stocks at a ninety percentdiscoun t from the for mer highs, maintain­ing ownership while counting a capitaltake that left the nat ion exhausted inDepre ssion for over a decade . It wasDepression in which the Gross NationalProduct dropped by fifty percent andtwenty-five percent of American workers

OCTOBt 'R , 1974

were unemployed . Many lost all they had.To think th at th e scientifica lly engi­

neered Crash of 1929 was an accident orthe result of stupidity defies all logic. Theinte rnational bankers who prom ot ed theinflati onary policies and pushed th e prop­aganda which pumped up the stoc k mar­ket represented too many generations ofaccumulated expertise to have blunderedinto The Great Depression . As Congress­man Louis McFadden , Chairman of theHouse Banking and Currency Commi tt ee,comme nte d:

It [th e Depr ession1was not acci­dental. It was a carefully contrivedoccurrence . . . . The internationalbankers sought to bring about acondition of despair here so thatthey might emerge as the rulers ofus all.

It was th e game of boom and bust ,using economic crisis to consolidate polit­ical power at th e top where it can bemost easily co ntrolled . But Americans didnot understand and th ey do not under­stand. Most still look on the st ock marketcrash as the cause of The Great Depres­sion. And , as Harvey W. Pet ers has ob ­served in A merica's Coming Bankruptcy :"This lack . of und erstanding has pre­vented most Ameri cans from noting thesimilarity between th e boom of the1920's and th e boom of more recentvintage that has been causing th e Ameri­can dollar to lose its value. A moreaccurate picture of the 1920's requiresone to acknowledge that the entire Amer ­ican eco nomy at th at time had beeninflated to balloonlike proportions. Theeconomy was ready to collapse at anytime th at a sharp object (i.e. , a seriousdep ressant) would be inserted in theballoon."

Herbert Hoover cited as the cause ofthe economic collapse the deliberatelycreated credit inflation by the FederalReserve - which had in six year s inflatedth e money supply by sixt y-two percent,

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inducing market speculation and unwiseinvestments by midd le Americans whowere being set up for a shearing. Whenthe shearing came the sheep panicked,took a realistic look at their economy,and optimism was replaced with econom­ic despair and a willingness to accept aserious expansion of government controlsover their lives. Tightening the noose, theconspirators at the Federal Reserve ar­ranged to reduce the money supply bythi rty-three percent between 1929 and1933.

As Lindley H. Clark Jr. observed in theWall Street Journal of September 3,1974, "Sure, other factors contribu ted tothe debacle, bu t an inte lligent perfor­mance by the Fed could have offsetthem . .. . But neith er th e climat e ofopinion no r ex ternal financial pressuresnor lack of power explains why theFedera l Rese rve acte d as it did. Non e ofthem can explain why an active, vigorous,self-confident policy in th e 192 0s wasfollowe d by a passive, defensive, hesitantpolicy from 1929 to 1933 . . . ."

The explanation is clear enough, how­ever. And that explanation is conspiracy.

By 1932 the Great Inflation of theTwe nties had been turned into the GreatDepression of the Thirties, and with theelection of Franklin Roosevelt in 1932the banking Insiders moved to consoli­date their control of our money byarranging to call in gold lest it be used tohedge against any future massive expa n­sion of the money sup ply by the FederalReserve. This resulted in th e PresidentialExecut ive Order of April 5, 1933 , re­quirin g all Americans to tak e their goldbullion , gold coins, and gold-backed cur­rency to th eir bank s and exchange themfor currency that was no t redeemable inth e precious metal. Th e banks, in turn,were required to deliver the gold and goldcoins to the Federal Reserve Bank. Theway was now clear fo r a decades -longinflationary looting of the economy topay for a gradual centralization of powerthrough which the United States could be

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most easily controlled by the powerfulmen behind the scenes - powerful menwho realize that dict atorship is the ulti­mate monopoly .

And so, for decades, with each newgust of hot air from the Federal Reservethe money supp ly was increased to payfor wars, to "ease" recessions, to financevast foreign giveaways, and to build alarger and larger cent ral bureaucracy con­trolling our economy and every feature ofour lives. The balloon was blown largerand larger and larger. It has now grown tothe point where the National Debt of theUnited States is some eighty-seven billio ndollars more than the comb ined publicdebt of all ot her nat ions of the world ­and interest on it , alone, is the thirdlargest expense in the federal Budget. It isa Debt which has been funde d by theFederal Reserve with a correspo ndingincrease in the money supply as theprinting presses have been made to rollfaster than a hot fox in a pepper patch.

As we entered the Sixties and govern­ment con trol began to reach mor e andmore into every home and business, theescalatio n of inflation was increase d bymassive amoun ts. The National City Bankof New York reports that in the yearsfrom 1962 to 1972 - with the FederalReserve dou bling the money supply - theAmerican dollar lost twenty-eight percentof its purchasing powe r. Step one wasvast deficit spending to increase the pow­er and authority of government; step twowas the funding of the result ant Debt byth e Federal Reserve with fiat currencyand credit. This meant massive inflation.Economist Henry Hazlitt, writing in Hu­man Events for July 29, 1974, measuresthis inflation in terms of deficit spending." Let us remind ourselves what theseunconscionable increases in expenditureshave been," he declares. "Total spen dingin the current Fiscal Year is estimated atthe fantastic sum of $304 billion. This is$29 billion more than in the fiscal year1974, $57 billion more than in 1973, $72billion more than in 1972 , $ 125 billion

AMERICAN OPINIO N

more than in 1968, and $186 billionmore than in 1965. It is more than triplethe spending of 1961."

This massive increase in governmentborrowing and spending was designed totake money away from the "private"sector of our economy, where it wouldhave been invested in capital equipmentto increase production, and pump it tothe "public" sector where it was burnedup in wars and giveaways that havereturned nothing but heartache and mise­ry. As a result, our Gross National Pro­duct has declined for two consecutivequarters. This is a shorthand definition of"recession ." The "G.N.P. Report" indi­cates that prices were at the same timesoaring at an annual rate of 12.3 percentfrom January to March and 9.6 percentfrom April to June. Mr. . A.W. Clausen,president of the Bank of Amer ica, wasquoted as follows in the Sacramento Beefor May 22, 1974 :

The horror of inflation can beput in the simplest terms: If infla­tion continues at the present rate,the dollar will be worth 54 centsfive years from now, and 29 centsin 10 years. In another 19 years,today's dollar will be worth a dime.

But the spending continues. And morespending means more Debt. And moreDebt means more currency inflation bythe Federal Reserve. At the same time,greater government spending also meansgreater centralization of economic andpolitical power in the hands of theEstablishment Insiders who are runningour federal government. Which is whatthe game is all about. Even reti ringSenator George D. Aiken of Vermont, apracticing "Liberal," admits to the collec­tivist surge produced by this spending:"The trend is toward what we used to callsocialism," he said in a recent interview."Communities are more and more de­pendent on the states, and the states aremore and more dependent on the federal

OCTOBER, 1974

government. Paradoxically, under a sup­posedly 'conservative' Republican Admin­istration the leftward swing has beenmost rapid in the last five years."

The cost of all this to the averageAmerican is staggering. An Americanearning a gross of $13,000 a year, with awife and two children, paid $3,623 indirect federal taxes in 1973. At leastthirty-eight percent of that went to SocialSecurity and Welfare. Less than thirtypercent went for Defense, and almost tenpercent went for interest on the NationalDebt. These three items alone eat upalmost eighty cents of every tax dollarthe federal government takes from ourpay.

The cost to the average American canalso be measured by the increase inbankruptcies. In New York City thenumber of bankruptcies has doubledsince last year. In Chicago, there were3,037 cases filed in the first four monthsof this year - up about twenty-fivepercent. In San Francisco, the bank­ruptcy court estimates its caseload hasrisen thirty to fifty percent in a year. LosAngeles failures were up more than 12percent above last year, with 5,367 bank­ruptcies filed between January first andthe end of April.

All of this is to say that the people ofAmerica are being caught between thejaws of a vise by collectivist conspiratorswho have used the Debt features of theFederal Reserve to finance a vast federalattack on independent enterprise. Spear­heading the attack are such new agenciesas the Occupational Safety and HealthAdministration, the Environmental Pro ­tection Agency, the Consumer ProductSafety Commission, and the scores ofalready-existing bureaucracies which havebeen expanded to spend billions more toharass and control us, choking us withinflation while they suffocate us withcounter-productive regulation.

As Tom Rose of the Santa Ana Regis­ter has indicated: "Americans are beingsubjected to a sophisticated type of mod-

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ern warfare tha t they don't understand.And because they don't understand, theycontinue to lose one important battleafter another. When they finally loseenough battles, the war will be lost , andthe American people will have forfeitedthe ir freedom through ignorance."

The effects of this warfare can now beseen everywhere in the business commu­nity. In the three weeks preceding August24, 1974, the Dow J ones industrial aver­ages plunged downward 114 points asmore than twice as many stocks declinedas rose on the New York Stock Exchange.The number of individual share ho lders,after increasi ng steadily for twen ty years ,has decreased by 1.6 million in the lasttwo years. The so-called littl e guy nowaccounts fo r less than thirty percent ofBig Board tradin g. Danie l Gardiner of th eWall Stre et firm of Blyth-Eastman-Dillonsummed it up thi s way: "It's a mess.There are no bu yers. The market is ju stdrying up. There is just no confi dence ."Joh n C. Whitehead , chai rman of thegoverning co unc il of the Secur it ies Indus­try Association, declared in Jul y :

In a period ofsevere and unprec­edented capital demands, the na­tion's capital-raising machinery isgradually dissolving. This couldforeshadow the end of ' the freeenterprise system as we know it.After all, that system depends onbroad public ownership. If you getthe impression that I'm alarmed,you're right. I am alarmed.

David T. Kleinman , a specialist ininternational finance at New York's Ford­ham University , expresses his alarm thisway in an interview with Forbes magazinefor August 15 , 1974 :

The energy crisis reduced con­sumption all over the world byroughly $100' billion. People spentmore for gasoline and the energycomponents of necessities and so

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had less to spend on other things.Not only was that money cut offfrom consumption and investmentcapital, but in addition, it wasexported, creating serious balance­of-payments deficits .. .. I thinkthere could be a very drastic depres­sion, yes.

Are such fears justified? Considerthese facts : In 1973, alone, thirty­three major brokerage houses were ab­sorbed by others while seventy-three

, closed up sho p. Through April of thisyear, six more were absorbed and sixteencalled it qu its. Robert H.B. Baldwin ofMorgan Stanley and Company told News­week of September 9, 1974, th at ifconditions don't imp rove soo n he expects" between 100 and 200 [more1firms willgo out of bus iness." Last yea r th e mem­ber firms of the New York Stoc k Ex­change lost fo rty-nine million dollars, andthey have lost another fifty-e ight milliondollars in the first six mont hs of this year.Since January of 1973, three hundredbillion dollars have been knocked off themarket value of securities on the NewYork Stock Exchange.

The squeeze being applie d is incred­ible . Heavy governme nt borrowing andhigh Treasury rates have reduced theamount of capital available to privatebusiness, choking their ability to modern­ize an d expand. Whe n they can't raisemoney even in the stoc k marke t, busi­nesses are dr iven int o the hands of theInsidersof th e banking establishmen t whodecide which shall survive and which fail.

Typical of tho se having trouble arediscount department stores. In the pasteight een months, at least nine chainsoperating more th an three hundred dis­count units in different parts of th eUnit ed States have been forced int obankruptcy. Some are tryin g to reorgan-

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AMERICAN OPINION

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ize to keep going, but nearly one hundredof those three hundred stores have beenshut down permanently.

Among the larger corporations, finan­cial reports leave little doubt that thedebt structure upon which most of theworld's economies have been brought torest is in danger of collapse if currenttrends continue with the momentumpresently indicated. Westinghouse Elec­tric Corporation has had to borrow one­half billion dollars to stabilize its posi­tion; Firestone Tire & Rubber was re­quired to deposit ten million dollars inSwitzerland with Bank Firestone to main ­tain the bank's liquidity; Schick lost$1 ,957,000 in the second quarter of1974, and has had to borrow forty-onemillion dollars for its current fiscal year;Cinerama, facing a maturing debt ofeighteen million dollars, announced thatits business life depended on being grant­ed a repayment extension; Pan AmericanAirways petitioned the government onAugust 23, 1974, for an emergency subsi­dy of ten million dollars a month just tokeep its planes flying; and, the AluminumCompany of America has announced itwill have to discontinue production ofhousehold Alcoa Wrap products by theend of the year because of "a metalshortage and capital shortage."

In Europe the sit uation is even moreshaky, with central bank inflation blow­ing up the balloon in anticipation of abust that could sink the West wheneverthe Insiders of international finance givethe signal. Treasury Secretary WilliamSimon has just given assurances to jitteryEuropean governments that the UnitedStates will for the time being prevent anyserious liquidity shortage in the interna­tional banking system . To do this he iskeeping the printing presses hot and usingcredits to inflate the balloon that is oureconomy toward the boom that is bust.For Italy is already as good as bankrupt,Britain and Portugal are not far from it,and France and Spain are perhaps a yearor so away. Forbes reports that standards

OCTOBER,1974

of living are even now falling in Europe.In London the stock market is at a

fifteen-year low. As I write, prices havefallen more than ten percent in the pasttwo weeks alone, wiping some 7.2 billionoff the valuations of leading companies.Talk by leaders of the Labor Governmentof nationalizing industry has added tothe uncertainty there. "No fewer than 30London financial institutions are cur­rently in difficulty," reports Barron'sfinancial weekly. There will be little ornothing left for shareholders of the banksthat are going under in what is termed"the biggest banking bust since theThirties."

Ripples of the London shakeout arespreading. American Agricultural Insur­ance , of Chicago, looks to have losttwenty-two million dollars by guaran ­teeing sight drafts issued by a LondonCity fringe bank now in process ofliquidation. The Philadelphia NationalBank has had to rescue Western Credit, apartly owned British fringe bank, byoffering to buy all the outstanding shares.The money crisis is spreading throughoutcash-hungry British business. Bank­ruptcies there last year set a record, andit's one that is not likely to last long.

Most critics lay a part of the blame forthe world's current economic woes on the"energy crisis." Certainly few wou ldargue that the increase in the price of oiland the problems created in "recycling"the oil profits has helped to trigger thepresent crisis . And the Wall Street Journalof August 15, 1974, indicated: "Thereflow of oil money directly into the U.S.may be picking up stea m. The Fede ralReserve Bank of New York disclosedyesterday that it 'may be in the positionin the near future' to invest customers'funds in short-term loans backed by U.S.government securities outright but theexact amount isn't known."

During 1974, according to Robert O.Blomquist, senior vice president of ChaseManhattan Bank, sixty billion dollars willflow to the oil-producing countries . The

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developed countries alone will as a resultincur deficits this year of thirty-eightbillion dollars, plus another twenty-twobillion dollars for less developed con­suming countries. In return, close totwenty billion dollars entered the moneymarket from the oil-producing countriesduring the first few months of this year.Until now, said Blomquist of Chase, thegreat bulk of these funds has beenplaced with a handful of major worldbanks on a very short-term basis. Directinvestments in special issues of Treasurysecurities of some nations are currentlyunder discussion, as are talks about ar­rangements with the U.S.-supportedWorld Bank and International MonetaryFund, Blomquist says. But the situationhas forced the great part of the recyclingto be done by commercial banks in theinternational money markets. "The bur­den falls most heavily on a handful of thelargest banks, particularly dollar and ster ­ling-based ones," which will decide whichgovernments to prop up, which to let fallinto bankruptcy, and when .

So, while the businesses of Free Enter­prise are increasingly suffocated fromhigh interest rates and tight money, therecycling of the oil billions is beingcarefully channeled into government se­curities and "selected investments" by ahandful of international bankers withtheir hands around our throats. Quite acute game! But notice the language usedby Chase's Blomquist, who refers to "theburden" of investing all that oil money.As George Wallace might quip: "Even thecab drivers know that isn't so!"

This game is vicious. While the Shah ofIran was offering Guido Carli, governor ofthe Bank of Italy, a job as president of aninternational bank that would invest hisoil billions, the Shah's bank was at thesame time borrowing from foreigners.Barron's of July 22, 1974, revealed how"the Industrial Mining & DevelopmentBank of Iran reported that it was increas­ingly in debt to foreigners. Its long-termloans from abroad rose 50% in 1973-74,

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and it even got a $75 million loan fromthe World Bank."

So first the Bank of Iran gets alow-interest loan from the World Bank(all nicely subsidized by the Americantaxpayers) and then it arranges with theinternational bankers to invest its oilbillions in our National Debt at muchhigher interest rates. Great work, if youcan get it. And the Insiders of interna­tional banking are the ones who decidewho gets it. In another instance, RobertMcNamara's minions are borrowing fivehundred million dollars from oil-rich Ven­ezuela at eight percent interest so theycan loan money to oil-rich Iran at a lowerWorld Bank rate, the difference beingsubsidized by the U.S. taxpayers. TheWall Street Journal of August 15, 1974,tells us:

The loan agreement was signedin Caracas by World Bank PresidentRobert S. McNamara and Venezue­lan officials, the international agen­cy said. The borrowing is part ofMr. McNamara's continuing effortsto recycle funds from the majoroil-exporting coun tries through theWorld Bank into loans to develop­ing countries in Latin Ameria, Asiaand Africa.

It is nothing of the sort. It is in fact asweetheart deal arranged by the Insidersof international banking for the Insidersof Big Oil at our expense. And in order toadd frosting to the cake, Venezuela andKuwait, two of the world's top petroleumproducers, announced August 22, 1974,that they are cutting back production todry up "excess supply" and maintain highprices for crude oil. You pay the billtwice.

American Conservatives would do wellto remember that "the action is in thereaction." First, the problem of oil de­pendency was created by EstablishmentInsiders, most assuredly including theRockefellers, who financed massive ecol-

AMERICAN OPINION

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ogy propaganda to slow our Alaskaproduction and block our off-shore dril­ling; then the solution (always moregovernment control over the private sec­tor of our economy) was put forward asour only hope in the face of shortages,and huge profits were arranged for theEstablishment Insiders as the rest of ushave been moved closer and closer tobankruptcy, As always the movement ofwealth flows away from the competitiveFree Ent erprise system and into thehands of the international monopolists and"finance capitalists" at the top who havebeen managing the game. It 's a fun game, . . if you happen to be a manager!

The team of "managers," of course,included the Federal Reserve Board. Andfor years their major objective has beento inflate the balloon bigger and bigger.According to the Wall Street Journal ofSeptember 3,1974:

Just as the FederalReserve had alarge hand in the disaster of theearly 1930s, so has it been heavilyresponsible for the inflationarycrisis of 1974 by permitting anexcessive expansion of the moneysupply in recent years. And just asthe Fed tried to blame 1929-33 onfactors beyond its control, so nowit blames most of the inflation onfactors such as the higher oil pricesand crop failures.

But as Darryl R. Francis, president ofthe Federal Reserve Bank of St. Louis ,admitted on May 22 , 1974, "the growthof the money supply has been the prima­ry cause of the acceleration in the averagerate of inflation." In a speech in Minne­apolis he revealed that "in the decade1962-1972, the amount of money incirculation more than doubled - to $525billion." The agency in the United Statesin charge of increasing the amount ofmoney in circulation, as Francis wellknows, is the Federal Reserve.

Yet, even now , the Federal Reserve

OCTOBE"R, 19 74

does not control all banking in the UnitedStates. It is trying very hard to remedythat situation. Representative Wright Pat­man, Chairman of the House Banking andCurrency Committee , was quoted in Bar­ron's for February 25, 1974, concerningthe "Reserve Requirements Act of1974." Expressing his opposition to thislegislation, Patman declared:

Mr. Speaker, today the FederalReserve System announced still an­other grab for power. This giantbureaucracy now seeks to .. . con­trol directly the reserves of virtuallyevery bank in the nation regardlessof whether or not (they) aremembers of the Federal Reserve.Mr. Speaker, this new power... amounts to little more thanthat uncontrollable bureaucraticurge to control more and more fromthe marble palace in Washington. Italso would be a direct challenge tothe dual banking system and wouldgreatly reduce the power of statebanking authorities and indepen­dence ofthe nation's smallbanks.

As a result, Barron's reports, billionsof dollars' worth of earning assets, cur­rently on deposit with big-city correspon­dent banks, would be shifted to the Fed,where, under the peculiar rules of thegame, they would earn their ownersnothing. A power grab of such dimen­sions is so outrageous that one wouldexpect a national scandal. Yet, as Repre­sentative Patman told the Oklahoma StateHome Builders Association on July 22,1974:

The Federal Reserve System op­erates under a blanket ofpress pro­tection to the public's detriment.Underneath this blanket of pressprotection, the FederalReserve con­tinues to make monumental mis­takes, mistakes which clobber yourindustry and the generalpublic.

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Fran kly, we thin k Wright Patmanknows that he is not talking about "m is­takes" at all but a conspiracy of vastproportions in which the internationalbankers who run the Federal Reserve areleading participants.

And it is an internationa l game.Barron's of March 4, 1974, reported

the consequence of these boom-bust tac­tics in West Germany, where the "SocialDemocrat party, noisily backed by itsyouth federation, called for the national­ization of investor-owned banks .. . .State-owned credit institutions, which doabo ut 40% of West Germany's bankingbusiness, last year racked up shockinglosses. Several lost their entire capitaland, had it not been for government help,would have gone under .... th e worstyea r in German finance since World WarII. It was a yea r that saw massive bank­ruptcies, a spectacular series of realtydevelopme nt failures and the collapse ofseveral private banks."

In the United States the "day of thebust" has also arrived as the giant balloonbegins to fall. Barron 's for April 1, 1974,observes: "As the collapse of the billion­dollar United States Nat ional Bank in SanDiego demo nstrated last October, bankfailures are gett ing bigger .. . . FDIC nowhas 156 banks on its 'problem list. '. . . This includes 29 serious problemones."

The San Diego bank was not alone .The Wall Street Journal for August 9,1974 , repo rts : " Serious discussions arecontinuing amo ng major New Yorkbanks, troubl ed Franklin National Bank ,and federal bankin g authori ties regardin ga possible merger involving Franklin.... it seems that everyon e inside andoutside of government feels that merger isth e best way to handl e Franklin . ... TheNew York banks recently have expressedincreased interest in acquiring Frankl in ."

Qualified observers insist th at failureof one or more big banks could trigger asuccession of bank failures all around theworld. And many of th em believe that

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conditions are now ripe for that sort ofeconomic disaster. Among banking andbusiness concerns, a growing liquiditycrisis is now paramount. Liquidity crisis,should you be in doubt, means a shortageof immediately available funds needed tomeet obligations. Financial and invest ­ment advisor Walter Lynch cites this asthe basic cause of bank losses by thefive-billion-dollar Franklin National Bankin New York, Herstatt Bank in Cologne,the Westdeutsche Landesbank, and thegiant Union Bank of Switzerland.

How does one go about producing a"liquidity crisis" in the United States?Myron Simons suggests in Forbes forAugust 1, 1974, that the government hasthro ugh the Federal Reserve increase d theinterest rate on borrowing money to thepoint tha t mon ey previously invested inthe stock market is leaving for the higherprofits of investment banking or FederalReserve securities . He says:

The result is that we are switch­ing from a system based on equityto one that will be super-heavy inshort-term debt . . . . it (the FederalR eserve) has handed us a first-classliquidity crisis that for the firsttime since the Great Depressionthreatens the banks themselves.. .. For years its forecasts havebeen almost 100% off course, andits planning has been secretive andinept.

"Secretive," yes; "inept," no. Theseboys kno w exactly what they are doing.Consequences of their policy were re­corded by th e Wall Street Journal forAugust 8,1 974 :

With large numbers of small in­vestors continuing to take advan­tage of higher interest rates inshort-term securities, the state's sav­ings banks suffered their worstmonthly net outflow of f unds lastmonth, marking the fo urth consec-

AMERICAN OPINION

utive monthly net outflow thisyear . . . . Ira O. Scott, Jr., execu­tive vice president of the SavingsBank Association of New YorkState, said, "It appears that theleadership of the Federal ReserveBoard and the Treasury isn't greatlyconcerned about the competitiveposition of thrift institutions.

An' understatement, to say the least.The United States has moved into asituation in which a handful of banks areto decide which industries and companiesget capital - which survive and whichfail. And it doesn't take a wizard to knowthat "he who pays the piper, calls thetune."

A few weeks ago, music lover DavidRockefeller was crying in alarm: "Thecommercial banking system cannot go onindefinitely doing this." If so, why was hebusy at the same time draining American­generated credit into foreign lands? Thewire services reported on May 22, 1973,that David Rockefeller, chairman ofChase Manhattan Bank of New York andthe Establishmen t Insiders' Council onForeign Relations , had just opened thefirst American banking office in theSoviet Union in more than fifty years. InMarch of that year, Chase signed the firstmajor credit arrangement between a pri­vate international bank and the SovietUnion - an eighty-six million dollar dealto finance the Kama River truck foundry.On July 16, 1973, Associated Press re­ported:

David Rockefeller, just backfrom opening financial doors toChina, has worked banking miraclesin globe-girdling missions the lastsix months . ... returning fromPeking as the accredited repre­sentative of the Bank of China inthe United States, Rockefeller waspleased with his success . . .. InJanuary, Rockefeller toured Hun­gary, Yugoslavia, Romania and

OCTOBER,1974

Poland, cementing banking rela­tionships in the satellite countries.

And, the Miracle Man from Chase iscontinuing to provide us with miracleswhich are draining American creditabroad. In May of this year the tax-sup­ported Export-Import Bank granted itslargest credit ever to the Soviet Union, a$180 million low-interest loan to helpfinance a mammoth fertilizer-manufac­turing complex. In addition, the Ex-1mBank reported that the loan would bematched by an equal-sized loan frominternational bankers in the United Statesto aid the Soviets in buying up ourfertilizer plants, chemical storage facili­ties, railroad tank cars, and material for a1,200-mile pipeline to the Black Sea.That is $360 million in American creditsthat will be unavailable to U.S. industry,but which as claims against our economywill blow the balloon bigger and biggereven as they loot our industrial capacity.

Such "miracles" are flowing like galland vinegar. Congressman John Rarickdeclared on July 17, 1974:

Mr. Speaker, with U.S. banksalready in Moscow and Peking, itcomes as no shock to learn thatfour U.S. banks have now openedin Cairo, Egypt. Perhaps this is thebanking community's answer to in­flation - draining American-gener­ated credit to foreign lands . . . .The move means that the world'sthree largest banks - Bank ofAmerica, First City and Chase ­will have investment and operation­al windows on Egypt's once tightlysocialistic economy . . . .

So, while the Rockefellers and theirInsider friends are holding a tight moneypolicy at home, creating economic havocin the Free Enterprise system, they havebeen busy opening up lines of credit tothe socialist and Communist countries ofthe world, drawing away the much-

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needed credit from American industry inthe midst of a liquidity crisis thatthreatens to bring down the economy.

Few people are in a better positionthan David Rockefeller to know thecauses of our economic problems athome, and to provide the leadership to dosomething about them. But when Davidhas not been off propping up the econo­mies of our Communist enemies he hasbeen at home encouraging panic in Amer­ica. The following is from a U.P.I. releaseof August 5, 1974, three days beforeRichard Nixon was forced to resign asPresident and fifteen days before DavidRockefeller's brother Nelson was namedto be Vice President of the United States.Consider:

Chase Manhattan Bank PresidentDavid Rockefeller believes that theAmerican economic situation is souncertain "that one shouldn't dis­card the possibility ofa panic."

"I'm not an alarmist and I don'tfeel like an alarmist," Rockefellerwas quoted as saying. But he addedthat "the situation is uncertainenough so that one shouldn't dis­card the possibility ofa panic."

Chicken Little might be expected tosay a thing like that, but when the bossRockefeller of a billion-dollar family for­tune makes such a statement in an eco­nomic survey from Chase Manhattan theconsequences are frightening. Either thatwas some sort of tip to Insiders in themanner of Paul Warburg's warning of1929 that the crunch was about to betriggered, or David Rockefeller had pulledout all of the stops in an effort to keepthe game moving toward disaster.

How large is the Rockefeller financialempire and how much larger is it strivingto become? According to a United Pressrelease of January 7, 1974:

A Senate report says a handfulof New York "Superbanks" and

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other financial institutions holdenough stock in competing corpora­tions to dominate entire industries.

For example, it found the ChaseManhattan Bank was the biggeststockholder in 1972 in 20 majorcorporations. ChaseManhattan heldmore than five percent of thestocks of four airlines and six rail­roads and was a substantial stock­holder in the firms which run thethree major broadcasting networksas well as 25 other broadcastingcompanies.

When you figure that we are justtalking about Rockefeller banking inter­ests, and not considering Rockefeller oiland land holdings, one begins to under­stand what we mean by the power ofsuch Insiders as the Rockefellers. Andthey have peers. United Press continues:

The study, "Disclosure of Cor­porate Ownership," was issued Sun­day by the Senate Subcommitteeon Intergovernmental Relations andSubcommittee on Budgeting, Man­agement and Expenditures. Itlooked into the stock holdings of28 big institutional investors, eachwith at least $5 billion and withcombined investments of more than$300 billion, which is more thanthe U.S. government spends in ayear. The banks held their stocksunder other names in "nominee" or"street name" accounts . . . . Direc­tors of the banks often were direc­tors of firms in which the bankshold stock.

The study revealed that the holdingsof four of those banks (including ChaseManhattan) in Burlington Northern, thegiant energy and transportation con­glomerate, amounted to one-fourth of thestock voted at the company's annualmeeting in 1972. Further, it found thatChase Manhattan, Bankers Trust, and

AMERICAN OPINION

Bank of New York, together, had votingrights of almost one-fourth of the stockin the Columbia Broadcasting System andthe American Broadcasting System. AndChase Manhattan had an additional 4.5percent stock holding in R.C.A. Corpora­tion, parent of the National BroadcastingCompany. Talk about Insiders controllingthe mass media!

The same banks , with Chase Man­hattan topping the list , are also preemi­nent in electric utilities. "Chase Manhat­tan appeared among the top 10 securityholders of 42 utilities, using four dif­ferent nominee names," the Reportstated.

Just how much does it take to controlan industry's activities? The Report ofthe Senate Subcommittee answers thatquestion in these words:

Control ofa small block ofstockin a widely held 'company by asingle or few like-minded financialinstitutions provides them with dis­proportionately large powers withinthe company. The House Bankingand- Currency Subcommittee onDomestic Finance, in its 1968study . . . considered a 5%or largerholding ofone classofstock signifi­cant in judging the potential influ­ence of a bank trust department'sstockholding in a particular cor­poration .. . . Even 1 or 2% ofstock in a publicly held corporationcan gain tremendous influence overa company's policies and opera­tions.

The Subcommittee cites the danger ofsuch concentration of power :

... neither the Congress, nor thecommissions, nor the executivebranch can fully evaluate the totaleffect of concentration - the im­pact of the several levers of corpo­rate control exercised by banks andother major investors throughout

OCTOBER, 1974

the industry groups and the econo­my as a whole.

Meanwhile, the portfolio compa­nies in which a few banks havesubstantial influence make manydecisions affecting public policy.Oil companies deal with foreignnations regarding oil supply andcost. Pipeline companies deal withthe Soviet Union for natural gas.Utilities exercise the right of emi­nent domain. Milling companiesand the Soviet Union arrange grainsales which sharply affect domesticprice, supply, transportation, andstorage . . . .

Which only begins to scratch the sur­face of Insider control of our nationaleconomy. The problem is: What can bedone about it? With control of our vastlypowerful electronic media in the hands ofthe Rockefellers and their friends - asRichard Nixon was so recently reminded- the chances that President Ford willrefuse to do as he is told are as slim as arat on an oil barge. Nelson Rockefeller,his handpicked Vice Presidential choice,is of course David Rockefeller's brotherand a member of the executive board ofthe Establishment Insiders' Council onForeign Relations, chaired by BrotherDavid. The admitted goal of the C.F.R. ismerger of the United States into a systemof World Government - what HenryKissinger calls the New World Order.World planning, you see, is the objective.World Government is the ultimate mono­poly .

Secretary of State Henry Kissinger,who is now so aggressively moving ustoward the New World Order, first servedDavid Rockefeller on the staff of theC.F.R. for a decade and then servedNelson Rockefeller as his chief advisor onnational security affairs. Henry Kiss­inger's new wife, Nancy Maginnes Kiss­inger, is now serving in his place as NelsonRockefeller's chief foreign policy expert.She is Nelson's other Kissinger. Ladies

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Home Journal for June 1974 concl uded:"It is not inconceivable that should Rocke­feller become President in 1976, Nancywould follow in Henry's footsteps asSecretary of State." And, by the way ,Henry Kissinger serves with NelsonRockefeller as a member of the executiveboard of David Rockefeller's Counc il onForeign Relations.

Nor is it comforting that Gerald Ford,Nelson and David Rockefeller, and HenryKissinger are all members of the Bilder ­berg Group - a super-secret conspiracy ofworld planners and Establishment In­siders from the Royal -Dutch Shell, Roth­schild, and Chase Manhattan-Exxon car­tels who meet periodically around theworld under armed guard to oversee themanipulation of international develop­ments. European correspondent Hilairedu Berrier reported in The Review Of TheNews for September 4 , 1974 :

The May 1973 Bilderberg meet­ing outside Stockho lm was held tomake plans for dealing with anArab oil crisis which the Bilder­bergers knew was in the offing - a

. crisis that was not to hit the Westfor five months. Though contin ­gency plans were made at thatmeeting, the people of the coun­tries to be victimized were neveradvised of what was coming until itwas too late to protect them­selves . . . .

The April 1974 meeting in Me­geve was not without its secretstoo . . . . Meeting under the cloakof strengthening relations betweenEurope and the United States, theconspirators were in fact there tobe informed that there would be atransfer of power in Washington.David Roc kefe ller was there torepresent the financial empire ofthe family. Nelson Rockefellerwas there.as the recognized futu re

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Vice President of the United States.While "peace through detente

with Russia" is a keystone of Bil­derberg policy, the April 1974meeting was convened mainly toinform the Atlanticists that thetransfer of power in Washingtonwould . . . bring America a stepcloser to membership in an A tlan­tic federation.

We do not pretend to be swamisentrusted by Vishnu with the ability tosee behind walls. But our best guess atwhat is happening is that the coup d'etatwhich forced out both our electedPresident and Vice President , replacingthem with two unelected members of theconspiratorial Bilderberg Group, one ofthem a member of an Insider family withholdings in the billions, is a move byEstablishment Insiders to secure theirpolitical base and ensure their certainpolitical control before pulling the plugon the economies of the West as in 1929.It was an incredib ly bold move , riskingexposure of the entire game. And in ouropinion it was too much , too soon ­leaving the entire Insider Conspiracy atlast vulnerab le to a general and possiblyfatal exposure.

The game plan may now call formaneuvering Nelson Rockefeller into theWhite House in 1976. In which case theplanned economic catastrophe, and anovert crisis-borne move toward AtlanticUnion, the Great Merger, and the NewWorld Order , will be contained for a timeas .furthe r groundwork is laid by theInsiders of this Conspiracy which meansto rule the world . The advantage to thoseof us who love our country is that thisgives us time. Time to expose the Insidersand their Conspiracy . Time to preventthe planned bankruptcy. Time to saveourselves and the liberty of our ch il­dre n. Let us do all we can, and doit now! __

AMERICAN OPINION

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