Chapter ITHE ACTORS ON THE REVOLUTIONARY STAGE
Dear Mr. President:
I am in sympathy with the Soviet form of government as that best suited for the Russian people...
Letter to President Woodrow Wilson (October 17, 1918) from William Lawrence Saunders, chairman, Ingersoll-Rand Corp.; director, American International Corp.; and deputy chairman, Federal Reserve Bank of New York
The frontispiece in this book was drawn by cartoonist Robert Minor in 1911 for the St. Louis Post-Dispatch. Minor was a talented artist and writer who doubled as a Bolshevik revolutionary, got himself arrested in Russia in 1915 for alleged subversion, and was later bank-rolled by prominent Wall Street financiers. Minor's cartoon portrays a bearded, beaming Karl Marx standing in Wall Street with Socialism tucked under his arm and accepting the congratulations of financial luminaries J.P. Morgan, Morgan partner George W. Perkins, a smug John D. Rockefeller, John D. Ryan of National City Bank, and Teddy Roosevelt — prominently identified by his famous teeth — in the background. Wall Street is decorated by Red flags. The cheering crowd and the airborne hats suggest that Karl Marx must have been a fairly popular sort of fellow in the New York financial district.Was Robert Minor dreaming? On the contrary, we shall see that Minor was on firm ground in depicting an enthusiastic alliance of Wall Street and Marxist socialism. The characters in Minor's cartoon — Karl Marx (symbolizing the future revolutionaries Lenin and Trotsky), J. P. Morgan, John D. Rockefeller — and indeed Robert Minor himself, are also prominent characters in this book.The contradictions suggested by Minor's cartoon have been brushed under the rug of history because they do not fit the accepted conceptual spectrum of political left and political right. Bolsheviks are at the left end of the political spectrum and Wall Street financiers are at the right end; therefore, we implicitly reason, the two groups have nothing in common and any alliance between the two is absurd. Factors contrary to this neat conceptual arrangement are usually rejected as bizarre observations or unfortunate errors. Modern history possesses such a built-in duality and certainly if too many uncomfortable facts have been rejected and brushed under the rug, it is an inaccurate history.On the other hand, it may be observed that both the extreme right and the extreme left of the conventional political spectrum are absolutely collectivist. The national socialist (for example, the fascist) and the international socialist (for example, the Communist) both recommend totalitarian politico-economic systems based on naked, unfettered political power and individual coercion. Both systems require monopoly control of society. While monopoly control of industries was once the objective of J. P. Morgan and J. D. Rockefeller, by the late nineteenth century the inner sanctums of Wall Street understood that the most efficient way to gain an unchallenged monopoly was to "go political" and make society go to work for the monopolists — under the name of the public good and the public interest. This strategy was detailed in 1906 by Frederick C. Howe in his Confessions of a Monopolist.1 Howe, by the way, is also a figure in the story of the Bolshevik Revolution.Therefore, an alternative conceptual packaging of political ideas and politico-economic systems would be that of ranking the degree of individual freedom versus the degree of centralized political control. Under such an ordering the corporate welfare state and socialism are at the same end of the spectrum. Hence we see that attempts at monopoly control of society can have different labels while owning common features.Consequently, one barrier to mature understanding of recent history is the notion that all capitalists are the bitter and unswerving enemies of all Marxists and socialists. This erroneous idea originated with Karl Marx and was undoubtedly useful to his purposes. In fact, the idea is nonsense. There has been a continuing, albeit concealed, alliance between international political capitalists and international revolutionary socialists — to their mutual benefit. This alliance has gone unobserved largely because historians — with a few notable exceptions — have an unconscious Marxian bias and are thus locked into the impossibility of any such alliance existing. The open-minded reader should bear two clues in mind: monopoly capitalists are the bitter enemies of laissez-faire entrepreneurs; and, given the weaknesses of socialist central planning, the totalitarian socialist state is a perfect captive market for monopoly capitalists, if an alliance can be made with the socialist powerbrokers. Suppose — and it is only hypothesis at this point — that American monopoly capitalists were able to reduce a planned socialist Russia to the status of a captive technical colony? Would not this be the logical twentieth-century internationalist extension of the Morgan railroad monopolies and the Rockefeller petroleum trust of the late nineteenth century?Apart from Gabriel Kolko, Murray Rothbard, and the revisionists, historians have not been alert for such a combination of events. Historical reporting, with rare exceptions, has been forced into a dichotomy of capitalists versus socialists. George Kennan's monumental and readable study of the Russian Revolution consistently maintains this fiction of a Wall Street-Bolshevik dichotomy.2 Russia Leaves the War has a single incidental reference to the J.P. Morgan firm and no reference at all to Guaranty Trust Company. Yet both organizations are prominently mentioned in the State Department files, to which frequent reference is made in this book, and both are part of the core of the evidence presented here. Neither self-admitted "Bolshevik banker" Olof Aschberg nor Nya Banken in Stockholm is mentioned in Kennan yet both were central to Bolshevik funding. Moreover, in minor yet crucial circumstances, at least crucial for our argument, Kennan is factually in error. For example, Kennan cites Federal Reserve Bank director William Boyce Thompson as leaving Russia on November 27, 1917. This departure date would make it physically impossible for Thompson to be in Petrograd on December 2, 1917, to transmit a cable request for $1 million to Morgan in New York. Thompson in fact left Petrograd on December 4, 1918, two days after sending the cable to New York. Then again, Kennan states that on November 30, 1917, Trotsky delivered a speech before the Petrograd Soviet in which he observed, "Today I had here in the Smolny Institute two Americans closely connected with American Capitalist elements "According to Kennan, it "is difficult to imagine" who these two Americans "could have been, if not Robins and Gumberg." But in [act Alexander Gumberg was Russian, not American. Further, as Thompson was still in Russia on November 30, 1917, then the two Americans who visited Trotsky were more than likely Raymond Robins, a mining promoter turned do-gooder, and Thompson, of the Federal Reserve Bank of New York.The Bolshevization of Wall Street was known among well informed circles as early as 1919. The financial journalist Barron recorded a conversation with oil magnate E. H. Doheny in 1919 and specifically named three prominent financiers, William Boyce Thompson, Thomas Lamont and Charles R. Crane:Aboard S.S. Aquitania, Friday Evening, February 1, 1919.Spent the evening with the Dohenys in their suite. Mr. Doheny said: If you believe in democracy you cannot believe in Socialism. Socialism is the poison that destroys democracy. Democracy means opportunity for all. Socialism holds out the hope that a man can quit work and be better off. Bolshevism is the true fruit of socialism and if you will read the interesting testimony before the Senate Committee about the middle of January that showed up all these pacifists and peace-makers as German sympathizers, Socialists, and Bolsheviks, you will see that a majority of the college professors in the United States are teaching socialism and Bolshevism and that fifty-two college professors were on so-called peace committees in 1914. President Eliot of Harvard is teaching Bolshevism. The worst Bolshevists in the United States are not only college professors, of whom President Wilson is one, but capitalists and the wives of capitalists and neither seem to know what they are talking about. William Boyce Thompson is teaching Bolshevism and he may yet convert Lamont of J.P. Morgan & Company. Vanderlip is a Bolshevist, so is Charles R. Crane. Many women are joining the movement and neither they, nor their husbands, know what it is, or what it leads to. Henry Ford is another and so are most of those one hundred historians Wilson took abroad with him in the foolish idea that history can teach youth proper demarcations of races, peoples, and nations geographically.3In brief, this is a story of the Bolshevik Revolution and its aftermath, but a story that departs from the usual conceptual straitjacket approach of capitalists versus Communists. Our story postulates a partnership between international monopoly capitalism and international revolutionary socialism for their mutual benefit. The final human cost of this alliance has fallen upon the shoulders of the individual Russian and the individual American. Entrepreneurship has been brought into disrepute and the world has been propelled toward inefficient socialist planning as a result of these monopoly maneuverings in the world of politics and revolution.This is also a story reflecting the betrayal of the Russian Revolution. The tsars and their corrupt political system were ejected only to be replaced by the new powerbrokers of another corrupt political system. Where the United States could have exerted its dominant influence to bring about a free Russia it truckled to the ambitions of a few Wall Street financiers who, for their own purposes, could accept a centralized tsarist Russia or a centralized Marxist Russia but not a decentralized free Russia. And the reasons for these assertions will unfold as we develop the underlying and, so far, untold history of the Russian Revolution and its aftermath.4Footnotes:1"These are the rules of big business. They have superseded the teachings of our parents and are reducible to a simple maxim: Get a monopoly; let Society work for you: and remember that the best of all business is politics, for a legislative grant, franchise, subsidy or tax exemption is worth more than a Kimberly or Comstock lode, since it does not require any labor, either mental or physical, lot its exploitation" (Chicago: Public Publishing, 1906), p. 157.2George F. Kennan, Russia Leaves the War (New York: Atheneum, 1967); and Decision to Intervene.. Soviet-American Relations, 1917-1920 (Princeton, N.J.: Princeton University Press, 1958).3Arthur Pound and Samuel Taylor Moore, They Told Barron (New York: Harper & Brothers, 1930), pp. 13-14.4There is a parallel, and also unknown, history with respect to the Makhanovite movement that fought both the "Whites" and the "Reds" in the Civil War of 1919-20 (see Voline, The Unknown Revolution [New York: Libertarian Book Club, 1953]). There was also the "Green" movement, which fought both Whites and Reds. The author has never seen even one isolated mention of the Greens in any history of the Bolshevik Revolution. Yet the Green Army was at least 700,000 strong!
WOODROW WILSON AND A PASSPORT FOR TROTSKY
President Woodrow Wilson was the fairy godmother who provided Trotsky with a passport to return to Russia to "carry forward" the revolution. This American passport was accompanied by a Russian entry permit and a British transit visa. Jennings C. Wise, in Woodrow Wilson: Disciple of Revolution, makes the pertinent comment, "Historians must never forget that Woodrow Wilson, despite the efforts of the British police, made it possible for Leon Trotsky to enter Russia with an American passport."President Wilson facilitated Trotsky's passage to Russia at the same time careful State Department bureaucrats, concerned about such revolutionaries entering Russia, were unilaterally attempting to tighten up passport procedures. The Stockholm legation cabled the State Department on June 13, 1917, just after Trotsky crossed the Finnish-Russian border, "Legation confidentially informed Russian, English and French passport offices at Russian frontier, Tornea, considerably worried by passage of suspicious persons bearing American passports."9To this cable the State Department replied, on the same day, "Department is exercising special care in issuance of passports for Russia"; the department also authorized expenditures by the legation to establish a passport-control office in Stockholm and to hire an "absolutely dependable American citizen" for employment on control work.10 But the bird had flown the coop. Menshevik Trotsky with Lenin's Bolsheviks were already in Russia preparing to "carry forward" the revolution. The passport net erected caught only more legitimate birds. For example, on June 26, 1917, Herman Bernstein, a reputable New York newspaperman on his way to Petrograd to represent the New York Herald, was held at the border and refused entry to Russia. Somewhat tardily, in mid-August 1917 the Russian embassy in Washington requested the State Department (and State agreed) to "prevent the entry into Russia of criminals and anarchists... numbers of whom have already gone to Russia."11Consequently, by virtue of preferential treatment for Trotsky, when the S.S. Kristianiafjord left New York on March 26, 1917, Trotsky was aboard and holding a U.S. passport — and in company with other Trotskyire revolutionaries, Wall Street financiers, American Communists, and other interesting persons, few of whom had embarked for legitimate business. This mixed bag of passengers has been described by Lincoln Steffens, the American Communist:The passenger list was long and mysterious. Trotsky was in the steerage with a group of revolutionaries; there was a Japanese revolutionist in my cabin. There were a lot of Dutch hurrying home from Java, the only innocent people aboard. The rest were war messengers, two from Wall Street to Germany....12Notably, Lincoln Steffens was on board en route to Russia at the specific invitation of Charles Richard Crane, a backer and a former chairman of the Democratic Party's finance committee. Charles Crane, vice president of the Crane Company, had organized the Westinghouse Company in Russia, was a member of the Root mission to Russia, and had made no fewer than twenty-three visits to Russia between 1890 and 1930. Richard Crane, his son, was confidential assistant to then Secretary of State Robert Lansing. According to the former ambassador to Germany William Dodd, Crane "did much to bring on the Kerensky revolution which gave way to Communism."13 And so Steffens' comments in his diary about conversations aboard the S.S. Kristianiafjord are highly pertinent:" . . . all agree that the revolution is in its first phase only, that it must grow. Crane and Russian radicals on the ship think we shall be in Petrograd for the re-revolution.14Crane returned to the United States when the Bolshevik Revolution (that is, "the re-revolution") had been completed and, although a private citizen, was given firsthand reports of the progress of the Bolshevik Revolution as cables were received at the State Department. For example, one memorandum, dated December 11, 1917, is entitled "Copy of report on Maximalist uprising for Mr Crane." It originated with Maddin Summers, U.S. consul general in Moscow, and the covering letter from Summers reads in part:I have the honor to enclose herewith a copy of same [above report] with the request that it be sent for the confidential information of Mr. Charles R. Crane. It is assumed that the Department will have no objection to Mr. Crane seeing the report ....15In brief, the unlikely and puzzling picture that emerges is that Charles Crane, a friend and backer of Woodrow Wilson and a prominent financier and politician, had a known role in the "first" revolution and traveled to Russia in mid-1917 in company with the American Communist Lincoln Steffens, who was in touch with both Woodrow Wilson and Trotsky. The latter in turn was carrying a passport issued at the orders of Wilson and $10,000 from supposed German sources. On his return to the U.S. after the "re-revolution," Crane was granted access to official documents concerning consolidation of the Bolshevik regime: This is a pattern of interlocking — if puzzling — events that warrants further investigation and suggests, though without at this point providing evidence, some link between the financier Crane and the revolutionary Trotsky.
Documents on Trotsky's brief stay in Canadian custody are now de-classified and available from the Canadian government archives. According to these archives, Trotsky was removed by Canadian and British naval personnel from the S.S. Kristianiafjord at Halifax, Nova Scotia, on April 3, 1917, listed as a German prisoner of war, and interned at the Amherst, Nova Scotia, internment station for German prisoners. Mrs. Trotsky, the two Trotsky boys, and five other men described as "Russian Socialists" were also taken off and interned. Their names are recorded by the Canadian files as: Nickita Muchin, Leiba Fisheleff, Konstantin Romanchanco, Gregor Teheodnovski, Gerchon Melintchansky and Leon Bronstein Trotsky (all spellings from original Canadian documents).Canadian Army form LB-l, under serial number 1098 (including thumb prints), was completed for Trotsky, with a description as follows: "37 years old, a political exile, occupation journalist, born in Gromskty, Chuson, Russia, Russian citizen." The form was signed by Leon Trotsky and his full name given as Leon Bromstein (sic) Trotsky.The Trotsky party was removed from the S.S. Kristianiafjord under official instructions received by cablegram of March 29, 1917, London, presumably originating in the Admiralty with the naval control officer, Halifax. The cablegram reported that the Trotsky party was on the "Christianiafjord" (sic) and should be "taken off and retained pending instructions." The reason given to the naval control officer at Halifax was that "these are Russian Socialists leaving for purposes of starting revolution against present Russian government for which Trotsky is reported to have 10,000 dollars subscribed by Socialists and Germans."On April 1, 1917, the naval control officer, Captain O. M. Makins, sent a confidential memorandum to the general officer commanding at Halifax, to the effect that he had "examined all Russian passengers" aboard the S.S. Kristianiafjord and found six men in the second-class section: "They are all avowed Socialists, and though professing a desire to help the new Russian Govt., might well be in league with German Socialists in America, and quite likely to be a great hindrance to the Govt. in Russia just at present." Captain Makins added that he was going to remove the group, as well as Trotsky's wife and two sons, in order to intern them at Halifax. A copy of this report was forwarded from Halifax to the chief of the General Staff in Ottawa on April 2, 1917.The next document in the Canadian files is dated April 7, from the chief of the General Staff, Ottawa, to the director of internment operations, and acknowledges a previous letter (not in the files) about the internment of Russian socialists at Amherst, Nova Scotia: ". . . in this connection, have to inform you of the receipt of a long telegram yesterday from the Russian Consul General, MONTREAL, protesting against the arrest of these men as they were in possession of passports issued by the Russian Consul General, NEW YORK, U.S.A."The reply to this Montreal telegram was to the effect that the men were interned "on suspicion of being German," and would be released only upon definite proof of their nationality and loyalty to the Allies. No telegrams from the Russian consul general in New York are in the Canadian files, and it is known that this office was reluctant to issue Russian passports to Russian political exiles. However, there is a telegram in the files from a New York attorney, N. Aleinikoff, to R. M. Coulter, then deputy postmaster general of Canada. The postmaster general's office in Canada had no connection with either internment of prisoners of war or military activities. Accordingly, this telegram was in the nature of a personal, nonofficial intervention. It reads:
DR. R. M. COULTER, Postmaster Genl. OTTAWA Russian political exiles returning to Russia detained Halifax interned Amherst camp. Kindly investigate and advise cause of the detention and names of all detained. Trust as champion of freedom you will intercede on their behalf. Please wire collect. NICHOLAS ALEINIKOFFOn April 11, Coulter wired Aleinikoff, "Telegram received. Writing you this afternoon. You should receive it tomorrow evening. R. M. Coulter." This telegram was sent by the Canadian Pacific Railway Telegraph but charged to the Canadian Post Office Department. Normally a private business telegram would be charged to the recipient and this was not official business. The follow-up Coulter letter to Aleinikoff is interesting because, after confirming that the Trotsky party was held at Amherst, it states that they were suspected of propaganda against the present Russian government and "are supposed to be agents of Germany." Coulter then adds," . . . they are not what they represent themselves to be"; the Trotsky group is "...not detained by Canada, but by the Imperial authorities." After assuring Aleinikoff that the detainees would be made comfortable, Coulter adds that any information "in their favour" would be transmitted to the military authorities. The general impression of the letter is that while Coulter is sympathetic and fully aware of Trotsky's pro-German links, he is unwilling to get involved. On April 11 Arthur Wolf of 134 East Broadway, New York, sent a telegram to Coulter. Though sent from New York, this telegram, after being acknowledged, was also charged to the Canadian Post Office Department.Coulter's reactions, however, reflect more than the detached sympathy evident in his letter to Aleinikoff. They must be considered in the light of the fact that these letters in behalf of Trotsky came from two American residents of New York City and involved a Canadian or Imperial military matter of international importance. Further, Coulter, as deputy postmaster general, was a Canadian government official of some standing. Ponder, for a moment, what would happen to someone who similarly intervened in United States affairs! In the Trotsky affair we have two American residents corresponding with a Canadian deputy postmaster general in order to intervene in behalf of an interned Russian revolutionary.Coulter's subsequent action also suggests something more than casual intervention. After Coulter acknowledged the Aleinikoff and Wolf telegrams, he wrote to Major General Willoughby Gwatkin of the Department of Militia and Defense in Ottawa — a man of significant influence in the Canadian military — and attached copies of the Aleinikoff and Wolf telegrams:These men have been hostile to Russia because of the way the Jews have been treated, and are now strongly in favor of the present Administration, so far as I know. Both are responsible men. Both are reputable men, and I am sending their telegrams to you for what they may be worth, and so that you may represent them to the English authorities if you deem it wise.Obviously Coulter knows — or intimates that he knows — a great deal about Aleinikoff and Wolf. His letter was in effect a character reference, and aimed at the root of the internment problem — London. Gwatkin was well known in London, and in fact was on loan to Canada from the War Office in London.17Aleinikoff then sent a letter to Coulter to thank himmost heartily for the interest you have taken in the fate of the Russian Political Exiles .... You know me, esteemed Dr. Coulter, and you also know my devotion to the cause of Russian freedom .... Happily I know Mr. Trotsky, Mr. Melnichahnsky, and Mr. Chudnowsky . . . intimately.It might be noted as an aside that if Aleinikoff knew Trotsky "intimately," then he would also probably be aware that Trotsky had declared his intention to return to Russia to overthrow the Provisional Government and institute the "re-revolution." On receipt of Aleinikoff's letter, Coulter immediately (April 16) forwarded it to Major General Gwatkin, adding that he became acquainted with Aleinikoff "in connection with Departmental action on United States papers in the Russian language" and that Aleinikoff was working "on the same lines as Mr. Wolf . . . who was an escaped prisoner from Siberia."Previously, on April 14, Gwatkin sent a memorandum to his naval counterpart on the Canadian Military Interdepartmental Committee repeating that the internees were Russian socialists with "10,000 dollars subscribed by socialists and Germans." The concluding paragraph stated: "On the other hand there are those who declare that an act of high-handed injustice has been done." Then on April 16, Vice Admiral C. E. Kingsmill, director of the Naval Service, took Gwatkin's intervention at face value. In a letter to Captain Makins, the naval control officer at Halifax, he stated, "The Militia authorities request that a decision as to their (that is, the six Russians) disposal may be hastened." A copy of this instruction was relayed to Gwatkin who in turn informed Deputy Postmaster General Coulter. Three days later Gwatkin applied pressure. In a memorandum of April 20 to the naval secretary, he wrote, "Can you say, please, whether or not the Naval Control Office has given a decision?"On the same day (April 20) Captain Makins wrote Admiral Kingsmill explaining his reasons for removing Trotsky; he refused to be pressured into making a decision, stating, "I will cable to the Admiralty informing them that the Militia authorities are requesting an early decision as to their disposal." However, the next day, April 21, Gwatkin wrote Coulter: "Our friends the Russian socialists are to be released; and arrangements are being made for their passage to Europe." The order to Makins for Trotsky's release originated in the Admiralty, London. Coulter acknowledged the information, "which will please our New York correspondents immensely."While we can, on the one hand, conclude that Coulter and Gwatkin were intensely interested in the release of Trotsky, we do not, on the other hand, know why. There was little in the career of either Deputy Postmaster General Coulter or Major General Gwatkin that would explain an urge to release the Menshevik Leon Trotsky.Dr. Robert Miller Coulter was a medical doctor of Scottish and Irish parents, a liberal, a Freemason, and an Odd Fellow. He was appointed deputy postmaster general of Canada in 1897. His sole claim to fame derived from being a delegate to the Universal Postal Union Convention in 1906 and a delegate to New Zealand and Australia in 1908 for the "All Red" project. All Red had nothing to do with Red revolutionaries; it was only a plan for all-red or all-British fast steamships between Great Britain, Canada, and Australia.Major General Willoughby Gwatkin stemmed from a long British military tradition (Cambridge and then Staff College). A specialist in mobilization, he served in Canada from 1905 to 1918. Given only the documents in the Canadian files, we can but conclude that their intervention in behalf of Trotsky is a mystery.
CANADIAN MILITARY INTELLIGENCE VIEWS TROTSKY
We can approach the Trotsky release case from another angle: Canadian intelligence. Lieutenant Colonel John Bayne MacLean, a prominent Canadian publisher and businessman, founder and president of MacLean Publishing Company, Toronto, operated numerous Canadian trade journals, including the Financial Post. MacLean also had a long-time association with Canadian Army Intelligence.18In 1918 Colonel MacLean wrote for his own MacLean's magazine an article entitled "Why Did We Let Trotsky Go? How Canada Lost an Opportunity to Shorten the War."19 The article contained detailed and unusual information about Leon Trotsky, although the last half of the piece wanders off into space remarking about barely related matters. We have two clues to the authenticity of the information. First, Colonel MacLean was a man of integrity with excellent connections in Canadian government intelligence. Second, government records since released by Canada, Great Britain, and the United States confirm MacLean's statement to a significant degree. Some MacLean statements remain to be confirmed, but information available in the early 1970s is not necessarily inconsistent with Colonel MacLean's article.MacLean's opening argument is that "some Canadian politicians or officials were chiefly responsible for the prolongation of the war [World War I], for the great loss of life, the wounds and sufferings of the winter of 1917 and the great drives of 1918."Further, states MacLean, these persons were (in 1919)doing everything possible to prevent Parliament and the Canadian people from getting the related facts. Official reports, including those of Sir Douglas Haig, demonstrate that but for the Russian break in 1917 the war would have been over a year earlier, and that "the man chiefly responsible for the defection of Russia was Trotsky... acting under German instructions."Who was Trotsky? According to MacLean, Trotsky was not Russian, but German. Odd as this assertion may appear it does coincide with other scraps of intelligence information: to wit, that Trotsky spoke better German than Russian, and that he was the Russian executive of the German "Black Bond." According to MacLean, Trotsky in August 1914 had been "ostentatiously" expelled from Berlin;20 he finally arrived in the United States where he organized Russian revolutionaries, as well as revolutionaries in Western Canada, who "were largely Germans and Austrians traveling as Russians." MacLean continues:Originally the British found through Russian associates that Kerensky,21 Lenin and some lesser leaders were practically in German pay as early as 1915 and they uncovered in 1916 the connections with Trotsky then living in New York. From that time he was closely watched by... the Bomb Squad. In the early part of 1916 a German official sailed for New York. British Intelligence officials accompanied him. He was held up at Halifax; but on their instruction he was passed on with profuse apologies for the necessary delay. After much manoeuvering he arrived in a dirty little newspaper office in the slums and there found Trotsky, to whom he bore important instructions. From June 1916, until they passed him on [to] the British, the N.Y. Bomb Squad never lost touch with Trotsky. They discovered that his real name was Braunstein and that he was a German, not a Russian.22Such German activity in neutral countries is confirmed in a State Department report (316-9-764-9) describing organization of Russian refugees for revolutionary purposes.Continuing, MacLean states that Trotsky and four associates sailed on the "S.S. Christiania" (sic), and on April 3 reported to "Captain Making" (sic) and were taken off the ship at Halifax under the direction of Lieutenant Jones. (Actually a party of nine, including six men, were taken off the S.S. Kristianiafjord. The name of the naval control officer at Halifax was Captain O. M. Makins, R.N. The name of the officer who removed the Trotsky party from the ship is not in the Canadian government documents; Trotsky said it was "Machen.") Again, according to MacLean, Trotsky's money came "from German sources in New York." Also:generally the explanation given is that the release was done at the request of Kerensky but months before this British officers and one Canadian serving in Russia, who could speak the Russian language, reported to London and Washington that Kerensky was in German service.23Trotsky was released "at the request of the British Embassy at Washington . . . [which] acted on the request of the U.S. State Department, who were acting for someone else." Canadian officials "were instructed to inform the press that Trotsky was an American citizen travelling on an American passport; that his release was specially demanded by the Washington State Department." Moreover, writes MacLean, in Ottawa "Trotsky had, and continues to have, strong underground influence. There his power was so great that orders were issued that he must be given every consideration."The theme of MacLean's reporting is, quite evidently, that Trotsky had intimate relations with, and probably worked for, the German General Staff. While such relations have been established regarding Lenin — to the extent that Lenin was subsidized and his return to Russia facilitated by the Germans — it appears certain that Trotsky was similarly aided. The $10,000 Trotsky fund in New York was from German sources, and a recently declassified document in the U.S. State Department files reads as follows:March 9, 1918 to: American Consul, Vladivostok from Polk, Acting Secretary of State, Washington D.C.For your confidential information and prompt attention: Following is substance of message of January twelfth from Von Schanz of German Imperial Bank to Trotsky, quote Consent imperial bank to appropriation from credit general staff of five million roubles for sending assistant chief naval commissioner Kudrisheff to Far East.This message suggests some liaison between Trotsky and the Germans in January 1918, a time when Trotsky was proposing an alliance with the West. The State Department does not give the provenance of the telegram, only that it originated with the War College Staff. The State Department did treat the message as authentic and acted on the basis of assumed authenticity. It is consistent with the general theme of Colonel MacLean's article.
Consequently, we can derive the following sequence of events: Trotsky traveled from New York to Petrograd on a passport supplied by the intervention of Woodrow Wilson, and with the declared intention to "carry forward" the revolution. The British government was the immediate source of Trotsky's release from Canadian custody in April 1917, but there may well have been "pressures." Lincoln Steffens, an American Communist, acted as a link between Wilson and Charles R. Crane and between Crane and Trotsky. Further, while Crane had no official position, his son Richard was confidential assistant to Secretary of State Robert Lansing, and Crane senior was provided with prompt and detailed reports on the progress of the Bolshevik Revolution. Moreover, Ambassador William Dodd (U.S. ambassador to Germany in the Hitler era) said that Crane had an active role in the Kerensky phase of the revolution; the Steffens letters confirm that Crane saw the Kerensky phase as only one step in a continuing revolution.The interesting point, however, is not so much the communication among dissimilar persons like Crane, Steffens, Trotsky, and Woodrow Wilson as the existence of at least a measure of agreement on the procedure to be followed — that is, the Provisional Government was seen as "provisional," and the "re-revolution" was to follow.On the other side of the coin, interpretation of Trotsky's intentions should be cautious: he was adept at double games. Official documentation clearly demonstrates contradictory actions. For example, the Division of Far Eastern Affairs in the U.S. State Department received on March 23, 1918, two reports stemming from Trotsky; one is inconsistent with the other. One report, dated March 20 and from Moscow, originated in the Russian newspaper Russkoe Slovo. The report cited an interview with Trotsky in which he stated that any alliance with the United States was impossible:The Russia of the Soviet cannot align itself... with capitalistic America for this would be a betrayal It is possible that Americans seek such an rapprochement with us, driven by its antagonism towards Japan, but in any case there can be no question of an alliance by us of any nature with a bourgeoisie nation.24The other report, also originating in Moscow, is a message dated March 17, 1918, three days earlier, and from Ambassador Francis: "Trotsky requests five American officers as inspectors of army being organized for defense also requests railroad operating men and equipment."25This request to the U.S. is of course inconsistent with rejection of an "alliance."Before we leave Trotsky some mention should be made of the Stalinist show trials of the 1930s and, in particular, the 1938 accusations and trial of the "Anti-Soviet bloc of rightists and Trotskyites." These forced parodies of the judicial process, almost unanimously rejected in the West, may throw light on Trotsky's intentions.The crux of the Stalinist accusation was that Trotskyites were paid agents of international capitalism. K. G. Rakovsky, one of the 1938 defendants, said, or was induced to say, "We were the vanguard of foreign aggression, of international fascism, and not only in the USSR but also in Spain, China, throughout the world." The summation of the "court" contains the statement, "There is not a single man in the world who brought so much sorrow and misfortune to people as Trotsky. He is the vilest agent of fascism .... "26Now while this may be no more than verbal insults routinely traded among the international Communists of the 1930s and 40s, it is also notable that the threads behind the self-accusation are consistent with the evidence in this chapter. And further, as we shall see later, Trotsky was able to generate support among international capitalists, who, incidentally, were also supporters of Mussolini and Hitler.27So long as we see all international revolutionaries and all international capitalists as implacable enemies of one another, then we miss a crucial point — that there has indeed been some operational cooperation between international capitalists, including fascists. And there is no a priori reason why we should reject Trotsky as a part of this alliance.This tentative, limited reassessment will be brought into sharp focus when we review the story o£ Michael Gruzenberg, the chief Bolshevik agent in Scandinavia who under the alias of Alexander Gumberg was also a confidential adviser to the Chase National Bank in New York and later to Floyd Odium of Atlas Corporation. This dual role was known to and accepted by both the Soviets and his American employers. The Gruzenberg story is a case history of international revolution allied with international capitalism.Colonel MacLean's observations that Trotsky had "strong underground influence" and that his "power was so great that orders were issued that he must be given every consideration" are not at all inconsistent with the Coulter-Gwatkin intervention in Trotsky's behalf; or, for that matter, with those later occurrences, the Stalinist accusations in the Trotskyite show trials of the 1930s. Nor are they inconsistent with the Gruzenberg case. On the other hand, the only known direct link between Trotsky and international banking is through his cousin Abram Givatovzo, who was a private banker in Kiev before the Russian Revolution and in Stockholm after the revolution. While Givatovzo professed antibolshevism, he was in fact acting in behalf of the Soviets in 1918 in currency transactions.28Is it possible an international web (:an be spun from these events? First there's Trotsky, a Russian internationalist revolutionary with German connections who sparks assistance from two supposed supporters of Prince Lvov's government in Russia (Aleinikoff and Wolf, Russians resident in New York). These two ignite the action of a liberal Canadian deputy postmaster general, who in turn intercedes with a prominent British Army major general on the Canadian military staff. These are all verifiable links.In brief, allegiances may not always be what they are called, or appear. We can, however, surmise that Trotsky, Aleinikoff, Wolf, Coulter, and Gwatkin in acting for a common limited objective also had some common higher goal than national allegiance or political label. To emphasize, there is no absolute proof that this is so. It is, at the moment, only a logical supposition from the facts. A loyalty higher than that forged by a common immediate goal need have been no more than that of friendship, although that strains the imagination when we ponder such a polyglot combination. It may also have been promoted by other motives. The picture is yet incomplete.
Chapter IVWALL STREET AND WORLD REVOLUTION
What you Radicals and we who hold opposing views differ about, is not so much the end as the means, not so much what should be brought about as how it should, and can, be brought about ....
Otto H. Kahn, director, American International Corp., and partner, Kuhn, Loeb & Co., speaking to the League/or Industrial Democracy, New York, December 30, 1924
Before World War I, the financial and business structure of the United States was dominated by two conglomerates: Standard Oil, or the Rockefeller enterprise, and the Morgan complex of industries — finance and transportation companies. Rockefeller and Morgan trust alliances dominated not only Wall Street but, through interlocking directorships, almost the entire economic fabric of the United States.l Rockefeller interests monopolized the petroleum and allied industries, and controlled the copper trust, the smelters trust, and the gigantic tobacco trust, in addition to having influence in some Morgan properties such as the U.S. Steel Corporation as well as in hundreds of smaller industrial trusts, public service operations, railroads, and banking institutions. National City Bank was the largest of the banks influenced by Standard Oil-Rockefeller, but financial control extended to the United States Trust Company and Hanover National Bank as well as to major life insurance companies — Equitable Life and Mutual of New York.The great Morgan enterprises were in steel, shipping, and the electrical industry; they included General Electric, the rubber trust, and railroads. Like Rockefeller, Morgan controlled financial corporations — the National Bank of Commerce and the Chase National Bank, New York Life Insurance, and the Guaranty Trust Company. The names J.P. Morgan and Guaranty Trust Company occur repeatedly throughout this book. In the early part of the twentieth century the Guaranty Trust Company was dominated by the Harriman interests. When the elder Harriman (Edward Henry) died in 1909, Morgan and associates bought into Guaranty Trust as well as into Mutual Life and New York Life. In 1919 Morgan also bought control of Equitable Life, and the Guaranty Trust Company absorbed an additional six lesser trust companies. Therefore, at the end of World War I the Guaranty Trust and Bankers Trust were, respectively, the first and second largest trust companies in the United States, both dominated by Morgan interests.2American financiers associated with these groups were involved in financing revolution even before 1917. Intervention by the Wall Street law firm of Sullivan & Cromwell into the Panama Canal controversy is recorded in 1913 congressional hearings. The episode is summarized by Congressman Rainey:It is my contention that the representatives of this Government [United States] made possible the revolution on the isthmus of Panama. That had it not been for the interference of this Government a successful revolution could not possibly have occurred, and I contend that this Government violated the treaty of 1846. I will be able to produce evidence to show that the declaration of independence which was promulgated in Panama on the 3rd day of November, 1903, was prepared right here in New York City and carried down there — prepared in the office of Wilson (sic) Nelson Cromwell ....3Congressman Rainey went on to state that only ten or twelve of the top Panamanian revolutionists plus "the officers of the Panama Railroad & Steamship Co., who were under the control of William Nelson Cromwell, of New York and the State Department officials in Washington," knew about the impending revolution.4 The purpose of the revolution was to deprive Colombia, of which Panama was then a part, of $40 million and to acquire control of the Panama Canal.The best-documented example of Wall Street intervention in revolution is the operation of a New York syndicate in the Chinese revolution of 1912, which was led by Sun Yat-sen. Although the final gains of the syndicate remain unclear, the intention and role of the New York financing group are fully documented down to amounts of money, information on affiliated Chinese secret societies, and shipping lists of armaments to be purchased. The New York bankers syndicate for the Sun Yat-sen revolution included Charles B. Hill, an attorney with the law firm of Hunt, Hill & Betts. In 1912 the firm was located at 165 Broadway, New York, but in 1917 it moved to 120 Broadway (see chapter eight for the significance of this address). Charles B. Hill was director of several Westinghouse subsidiaries, including Bryant Electric, Perkins Electric Switch, and Westinghouse Lamp — all affiliated with Westinghouse Electric whose New York office was also located at 120 Broadway. Charles R. Crane, organizer of Westinghouse subsidiaries in Russia, had a known role in the first and second phases of the Bolshevik Revolution (see page 26).The work of the 1910 Hill syndicate in China is recorded in the Laurence Boothe Papers at the Hoover Institution.5 These papers contain over 110 related items, including letters of Sun Yat-sen to and from his American backers. In return for financial support, Sun Yat-sen promised the Hill syndicate railroad, banking, and commercial concessions in the new revolutionary China.Another case of revolution supported by New York financial institutions concerned that of Mexico in 1915-16. Von Rintelen, a German espionage agent in the United States,6 was accused during his May 1917 trial in New York City of attempting to "embroil" the U.S. with Mexico and Japan in order to divert ammunition then flowing to the Allies in Europe.7Payment for the ammunition that was shipped from the United States to the Mexican revolutionary Pancho Villa, was made through Guaranty Trust Company. Von Rintelen's adviser, Sommerfeld, paid $380,000 via Guaranty Trust and Mississippi Valley Trust Company to the Western Cartridge Company of Alton, Illinois, for ammunition shipped to El Paso, for forwarding to Villa. This was in mid-1915. On January 10, 1916, Villa murdered seventeen American miners at Santa Isabel and on March 9, 1916, Villa raided Columbus, New Mexico, and killed eighteen more Americans.Wall Street involvement in these Mexican border raids was the subject of a letter (October 6, 1916) from Lincoln Steffens, an American Communist, to Colonel House, an aide' to Woodrow Wilson:My dear Colonel House:Just before I left New York last Monday, I was told convincingly that "Wall Street" had completed arrangements for one more raid of Mexican bandits into the United States: to be so timed and so atrocious that it would settle the election ....8Once in power in Mexico, the Carranza government purchased additional arms in the United States. The American Gun Company contracted to ship 5,000 Mausers and a shipment license was issued by the War Trade Board for 15,000 guns and 15,000,000 rounds of ammunition. The American ambassador to Mexico, Fletcher, "flatly refused to recommend or sanction the shipment of any munitions, rifles, etc., to Carranza."9 However, intervention by Secretary of State Robert Lansing reduced the barrier to one of a temporary delay, and "in a short while . . . [the American Gun Company] would be permitted to make the shipment and deliver."10The raids upon the U.S. by the Villa and the Carranza forces were reported in the New York Times as the "Texas Revolution" (a kind of dry run for the Bolshevik Revolution) and were undertaken jointly by Germans and Bolsheviks. The testimony of John A. Walls, district attorney of Brownsville, Texas, before the 1919 Fall Committee yielded documentary evidence of the link between Bolshevik interests in the United States, German activity, and the Carranza forces in Mexico.11 Consequently, the Carranza government, the first in the world with a Soviet-type constitution (which was written by Trotskyites), was a government with support on Wall Street. The Carranza revolution probably could not have succeeded without American munitions and Carranza would not have remained in power as long as he did without American help.12Similar intervention in the 1917 Bolshevik Revolution in Russia revolves around Swedish banker and intermediary Olof Aschberg. Logically the story begins with prerevolutionary tsarist loans by Wall Street bank syndicates.
In August 1914 Europe went to war. Under international law neutral countries (and the United States was neutral until April 1917) could not raise loans for belligerent countries. This was a question of law as well as morality.When the Morgan house floated war loans for Britain and France in 1915, J.P. Morgan argued that these were not war loans at all but merely a means of facilitating international trade. Such a distinction had indeed been elaborately made by President Wilson in October 1914; he explained that the sale of bonds in the U.S. for foreign governments was in effect a loan of savings to belligerent governments and did not finance a war. On the other hand, acceptance of Treasury notes or other evidence of debt in payment for articles was only a means of facilitating trade and not of financing a war effort.13Documents in the State Department files demonstrate that the National City Bank, controlled by Stillman and Rockefeller interests, and the Guaranty Trust, controlled by Morgan interests, jointly raised substantial loans for the belligerent Russia before U.S. entry into the war, and that these loans were raised alter the State Department pointed out to these firms that they were contrary to international law. Further, negotiations for the loans were undertaken through official U.S. government communications facilities under cover of the top-level "Green Cipher" of the State Department. Below are extracts from State Department cables that will make the case.On May 94, 1916, Ambassador Francis in Petrograd sent the following cable to the State Department in Washington for forwardin to Frank Arthur Vanderlip, then chairman of the National City Bank in New York. The cable was sent in Green Cipher and was enciphered and deciphered by U.S. State Department officers in Petrograd and Washington at the taxpayers' expense (file 861.51/110).563, May 94, 1 p.m.For Vanderlip National City Bank New York. Five. Our previous opinions credit strengthened. We endorse plan cabled as safe investment plus very attractive speculation in roubles. In view of guarantee of exchange rate have placed rate somewhat above present market. Owing unfavorable opinion created by long delay have on own responsibility offered take twenty-five million dollars. We think large portion of all should be retained by bank and allied institutions. With clause respect customs bonds become practical lien on more than one hundred and fifty million dollars per annum customs making absolute security and secures market even if defect. We consider three [years?] option on bonds very valuable and for that reason amount of rouble credit should be enlarged by group or by distribution to close friends. American International should take block and we would inform Government. Think group should be formed at once to take and issue of bonds . . . should secure full cooperation guaranty. Suggest you see Jack personally, use every endeavor to get them really work otherwise cooperate guarantee form new group. Opportunities here during the next ten years very great along state and industrial financiering and if this transaction consummated doubtless should be established. In answering bear in mind situation regarding cable.
MacRoberts Rich.FRANCIS, AMERICAN AMBASSADOR14
There are several points to note about the above cable to understand the story that follows. First, note the reference to American International Corporation, a Morgan firm, and a name that turns up again and again in this story. Second, "guarantee" refers to Guaranty Trust Company. Third, "MacRoberts" was Samuel MacRoberts, a vice president and the executive manager of National City Bank.On May 24, 1916, Ambassador Francis cabled a message from Rolph Marsh of Guaranty Trust in Petrograd to Guaranty Trust in New York, again in the special Green Cipher and again using the facilities of the State Department. This cable reads as follows:565, May 24, 6 p.m.
for Guaranty Trust Company New York:
Three.Olof and self consider the new proposition takes care Olof and will help rather than harm your prestige. Situation such co-operation necessary if big things are to be accomplished here. Strongly urge your arranging with City to consider and act jointly in all big propositions here. Decided advantages for both and prevents playing one against other. City representatives here desire (hand written) such co-operation. Proposition being considered eliminates our credit in name also option but we both consider the rouble credit with the bond option in propositions. Second paragraph offers wonderful profitable opportunity, strongly urge your acceptance. Please cable me full authority to act in connection with City. Consider our entertaining proposition satisfactory situation for us and permits doing big things. Again strongly urge your taking twenty-five million of rouble credit. No possibility loss and decided speculative advantages. Again urge having Vice President upon the ground. Effect here will be decidedly good. Resident Attorney does not carry same prestige and weight. This goes through Embassy by code answer same way. See cable on possibilities.ROLPH MARSH.
AMERICAN AMBASSADORNote:—Entire Message in Green Cipher.
"Olof" in the cable was Olof Aschberg, Swedish banker and head of the Nya Banken in Stockholm. Aschberg had been in New York in 1915 conferring with the Morgan firm on these Russian loans. Now, in 1916, he was in Petrograd with Rolph Marsh of Guaranty Trust and Samuel MacRoberts and Rich of National City Bank ("City" in cable) arranging loans for a Morgan-Rockefeller consortium. The following year, Aschberg, as we shall see later, would be known as the "Bolshevik Banker," and his own memoirs reproduce evidence of his right to the title.The State Department files also contain a series of cables between Ambassador Francis, Acting Secretary Frank Polk, and Secretary of State Robert Lansing concerning the legality and propriety of transmitting National City Bank and Guaranty Trust cables at public expense. On May 25, 1916, Ambassador Francis cabled Washington as follows and referred to the two previous cables:569, May 25, one p.m.My telegram 563 and 565 May twenty-fourth are sent for local representatives of institutions addressed in the hope of consummating loan which would largely increase international trade and greatly benefit [diplomatic relations?]. Prospect for success promising. Petrograd representatives consider terms submitted very satisfactory but fear such representations to their institutions would prevent consummation loan if Government here acquainted these proposals.FRANCIS, AMERICAN AMBASSADOR.16
The basic reason cited by Francis for facilitating the cables is "the hope of consummating loan which would largely increase international trade." Transmission of commercial messages using State Department facilities had been prohibited, and on June 1, 1916, Polk cabled Francis:842In view of Department's regulation contained in its circular telegraphic instruction of March fifteenth, (discontinuance of forwarding Commercial messages)17 1915, please explain why messages in your 563, 565 and 575, should be communicated.Hereafter please follow closely Department's instructions.Acting. Polk861.51/112 /110
Then on June 8, 1916, Secretary of State Lansing expanded the prohibition and clearly stated that the proposed loans were illegal:860 Your 563, 565, May 24, g: 569 May 25.1 pm Before delivering messages to Vanderlip and Guaranty Trust Company, I must inquire whether they refer to Russian Government loans of any description. If they do, I regret that the Department can not be a party to their transmission, as such action would submit it to justifiable criticism because of participation by this Government in loan transaction by a belligerent for the purpose of carrying on its hostile operations. Such participation is contrary to the accepted rule of international law that neutral Governments should not lend their assistance to the raising of war loans by belligerents.The last line of the Lansing cable as written, was not transmitted to Petrograd. The line read: "Cannot arrangements be made to send these messages through Russian channels?"How can we assess these cables and the parties involved?Clearly the Morgan-Rockefeller interests were not interested in abiding by international law. There is obvious intent in these cables to supply loans to belligerents. There was no hesitation on the part of these firms to use State Department facilities for the negotiations. Further, in spite of protests, the State Department allowed the messages to go through. Finally, and most interesting for subsequent events, Olof Aschberg, the Swedish banker, was a prominent participant and intermediary in the negotiations on behalf of Guaranty Trust. Let us therefore take a closer look at Olof Aschberg.
Olof Aschberg, the "Bolshevik Banker" (or "Bankier der Weltrevolution," as he has been called in the German press), was owner of the Nya Banken, founded 1912 in Stockholm. His codirectors included prominent members of Swedish cooperatives and Swedish socialists, including G. W. Dahl, K. G. Rosling, and C. Gerhard Magnusson.18 In 1918 Nya Banken was placed on the Allied black-list for its financial operations in behalf of Germany. In response to the blacklisting, Nya Banken changed its name to Svensk Ekonomiebolaget. The bank remained under the control of Aschberg, and was mainly owned by him. The bank's London agent was the British Bank of North Commerce, whose chairman was Earl Grey, former associate of Cecil Rhodes. Others in Aschberg's interesting circle of business associates included Krassin, who was until the Bolshevik Revolution (when he changed color to emerge as a leading Bolshevik) Russian manager of Siemens-Schukert in Petrograd; Carl Furstenberg, minister of finance in the first Bolshevik government; and Max May, vice president in charge of foreign operations for Guaranty Trust of New York. Olof Aschberg thought so highly of Max May that a photograph of May is included in Aschberg's book.19In the summer of 1916 Olof Aschberg was in New York representing both Nya Banken and Pierre Bark, the tsarist minister of finance. Aschberg's prime business in New York, according to the New York Times (August 4, 1916), was to negotiate a $50 million loan for Russia with an American banking syndicate headed by Stillman's National City Bank. This business was concluded on June 5, 1916; the results were a Russian credit of $50 million in New York at a bank charge of 7 1/2 percent per annum, and a corresponding 150-million-ruble credit for the NCB syndicate in Russia. The New York syndicate then turned around and issued 6 1/2 percent certificates in its own name in the U.S. market to the amount of $50 million. Thus, the NCB syndicate made a profit on the $50 million loan to Russia, floated it on the American market for another profit, and obtained a 150-million-ruble credit in Russia.During his New York visit on behalf of the tsarist Russian government, Aschberg made some prophetic comments concerning the future for America in Russia:The opening for American capital and American initiative, with the awakening brought by the war, will be country-wide when the struggle is over. There are now many Americans in Petrograd, representatives of business firms, keeping in touch with the situation, and as soon as the change comes a huge American trade with Russia should spring up.20
While this tsarist loan operation was being floated in New York, Nya Banken and Olof Aschberg were funneling funds from the German government to Russian revolutionaries, who would eventually bring down the "Kerensky committee" and establish the Bolshevik regime.The evidence for Olof Aschberg's intimate connection with financing the Bolshevik Revolution comes from several sources, some of greater value than others. The Nya Banken and Olof Aschberg are prominently cited in the Sisson papers (see chapter three); however, George Kennan has systematically analyzed these papers and shown them to be forged, although they are probably based in part on authentic material. Other evidence originates with Colonel B. V. Nikitine, in charge of counterintelligence in the Kerensky government, and consists of twenty-nine telegrams transmitted from Stockholm to Petrograd, and vice versa, regarding financing of the Bolsheviks. Three of these telegrams refer to banks — telegrams 10 and 11 refer to Nya Banken, and telegram 14 refers to the Russo-Asiatic Bank in Petrograd. Telegram 10 reads as follows:Gisa Furstenberg Saltsjobaden. Funds very low cannot assist if really urgent give 500 as last payment pencils huge loss original hopeless instruct Nya Banken cable further 100 thousand Sumenson.Telegram 11 reads:Kozlovsky Sergievskaya 81. First letters received Nya Banken telegraphed cable who Soloman offering local telegraphic agency refers to Bronck Savelievich Avilov.Fürstenberg was the intermediary between Parvus (Alexander I. Helphand) and the German government. About these transfers, Michael Futrell concludes:It was discovered that during the last few months she [Evegeniya Sumenson] had received nearly a million rubles from Furstenberg through the Nya Banken in Stockholm, and that this money came from German sources.21Telegram 14 of the Nikitine series reads: "Furstenberg Saltsjöbaden. Number 90 period hundred thousand into Russo-Asiatic Sumenson." The U.S. representative for Russo-Asiatic was MacGregor Grant Company at 120 Broadway, New York City, and the bank was financed by Guaranty Trust in the U.S. and Nya Banken in Sweden.Another mention of the Nya Banken is in the material "The Charges Against the Bolsheviks," which was published in the Kerensky period. Particularly noteworthy in that material is a document signed by Gregory Alexinsky, a former member of the Second State Duma, in reference to monetary transfers to the Bolsheviks. The document, in part, reads as follows:In accordance with the information just received these trusted persons in Stockholm were: the Bolshevik Jacob Furstenberg, better known under the name of "Hanecki" (Ganetskii), and Parvus (Dr. Helfand); in Petrograd: the Bolshevik attorney, M. U. Kozlovsky, a woman relative of Hanecki — Sumenson, engaged in speculation together with Hanecki, and others. Kozlovsky is the chief receiver of German money, which is transferred from Berlin through the "Disconto-Gesellschaft" to the Stockholm "Via Bank," and thence to the Siberian Bank in Petrograd, where his account at present has a balance of over 2,000,000 rubles. The military censorship has unearthed an uninterrupted exchange of telegrams of a political and financial nature between the German agents and Bolshevik leaders [Stockholm-Petrograd].22Further, there is in the State Dept. files a Green Cipher message from the U.S. embassy in Christiania (named Oslo, 1925), Norway, dated February 21, 1918, that reads: "Am informed that Bolshevik funds are deposited in Nya Banken, Stockholm, Legation Stockholm advised. Schmedeman."23Finally, Michael Furtell, who interviewed Olof Aschberg just before his death, concludes that Bolshevik funds were indeed transferred from Germany through Nya Banken and Jacob Furstenberg in the guise of payment for goods shipped. According to Futrell, Aschberg confirmed to him that Furstenberg had a commercial business with Nya Banken and that Furstenberg had also sent funds to Petrograd. These statements are authenticated in Aschberg's memoirs (see page 70). In sum, Aschberg, through his Nya Banken, was undoubtedly a channel for funds used in the Bolshevik Revolution, and Guaranty Trust was indirectly linked through its association with Aschberg and its interest in MacGregor Grant Co., New York, agent of the Russo-Asiatic Bank, another transfer vehicle.
Several years later, in the fall of 1922, the Soviets formed their first international bank. It was based on a syndicate that involved the former Russian private bankers and some new investment from German, Swedish, American, and British bankers. Known as the Ruskombank (Foreign Commercial Bank or the Bank of Foreign Commerce), it was headed by Olof Aschberg; its board consisted of tsarist private bankers, representatives of German, Swedish, and American banks, and, of course, representatives of the Soviet Union. The U.S. Stockholm legation reported to Washington on this question and noted, in a reference to Aschberg, that "his reputation is poor. He was referred to in Document 54 of the Sisson documents and Dispatch No. 138 of January 4, 1921 from a legation in Copenhagen."24The foreign banking consortium involved in the Ruskombank represented mainly British capital. It included Russo-Asiatic Consolidated Limited, which was one of the largest private creditors of Russia, and which was granted £3 million by the Soviets to compensate for damage to its properties in the Soviet Union by nationalization. The British government itself had already purchased substantial interests in the Russian private banks; according to a State Department report, "The British Government is heavily invested in the consortium in question."25The consortium was granted extensive concessions in Russia and the bank had a share capital of ten million gold rubles. A report in the Danish newspaper National Titende stated that "possibilities have been created for cooperation with the Soviet government where this, by political negotiations, would have been impossible."26 In other words, as the newspaper goes on to say, the politicians had failed to achieve cooperation with the Soviets, but "it may be taken for granted that the capitalistic exploitation of Russia is beginning to assume more definite forms."27In early October 1922 Olof Aschberg met in Berlin with Emil Wittenberg, director of the Nationalbank fur Deutschland, and Scheinmann, head of the Russian State Bank. After discussions concerning German involvement in the Ruskombank, the three bankers went to Stockholm and there met with Max May, vice president of the Guaranty Trust Company. Max May was then designated director of the Foreign Division of the Ruskombank, in addition to Schlesinger, former head of the Moscow Merchant Bank; Kalaschkin, former head of the Junker Bank; and Ternoffsky, former head of the Siberian Bank. The last bank had been partly purchased by the British government in 1918. Professor Gustav Cassell of Sweden agreed to act as adviser to Ruskombank. Cassell was quoted in a Swedish newspaper (Svenskadagbladet of October 17, 1922) as follows:That a bank has now been started in Russia to take care of purely banking matters is a great step forward, and it seems to me that this bank was established in order to do something to create a new economic life in Russia. What Russia needs is a bank to create internal and external commerce. If there is to be any business between Russia and other countries there must be a bank to handle it. This step forward should be supported in every way by other countries, and when I was asked my advice I stated that I was prepared to give it. I am not in favor of a negative policy and believe that every opportunity should be seized to help in a positive reconstruction. The great question is how to bring the Russian exchange back to normal. It is a complicated question and will necessitate thorough investigation. To solve this problem I am naturally more than willing to take part in the work. To leave Russia to her own resources and her own fate is folly.28The former Siberian Bank building in Petrograd was used as the head office of the Ruskombank, whose objectives were to raise short-term loans in foreign countries, to introduce foreign capital into the Soviet Union, and generally to facilitate Russian overseas trade. It opened on December 1, 1922, in Moscow and employed about 300 persons.In Sweden Ruskombank was represented by the Svenska Ekonomibolaget of Stockholm, Olof Aschberg's Nya Banken under a new name, and in Germany by the Garantie und Creditbank fur Den Osten of Berlin. In the United States the bank was represented by the Guaranty Trust Company of New York. On opening the bank, Olof Aschberg commented:The new bank will look after the purchasing of machinery and raw material from England and the United States and it will give guarantees for the completion of contracts. The question of purchases in Sweden has not yet arisen, but it is hoped that such will be the case later on.29On joining Ruskombank, Max May of Guaranty Trust made a similar statement:The United States, being a rich country with well developed industries, does not need to import anything from foreign countries, but... it is greatly interested in exporting its products to other countries and considers Russia the most suitable market for that purpose, taking into consideration the vast requirements of Russia in all lines of its economic life.30May stated that the Russian Commercial Bank was "very important" and that it would "largely finance all lines of Russian industries."From the very beginning the operations of the Ruskombank were restricted by the Soviet foreign-trade monopoly. The bank had difficulties in obtaining advances on Russian goods deposited abroad. Because they were transmitted in the name of Soviet trade delegations, a great deal of Ruskombank funds were locked up in deposits with the Russian State Bank. Finally, in early 1924 the Russian Commercial Bank was fused with the Soviet foreign-trade commissariat, and Olof Aschberg was dismissed from his position at the bank because, it was claimed in Moscow, he had misused bank funds. His original connection with the bank was because of his friendship with Maxim Litvinov. Through this association, so runs a State Department report, Olof Aschberg had access to large sums of money for the purpose of meeting payments on goods ordered by Soviets in Europe:These sums apparently were placed in the Ekonomibolaget, a private banking company, owned by Mr. Aschberg. It is now alledged [sic] that a large portion of these funds were employed by Mr. Aschberg for making investments for his personal account and that he is now endeavoring to maintain his position in the bank through his possession of this money. According to my informant Mr. Aschberg has not been the sole one to profit by his operations with the Soviet funds, but has divided the gains with those who are responsible for his appointment in the Russian Commerce Bank, among them being Litvinoff.31Ruskombank then became Vneshtorg, by which it is known today.We now have to retrace our steps and look at the activities of Aschberg's New York associate, Guaranty Trust Company, during World War I, to lay the foundation for examination of its role in the revolutionary era in Russia.During World War I Germany raised considerable funds in New York for espionage and covert operations in North America and South America. It is important to record the flow of these funds because it runs from the same firms — Guaranty Trust and American International Corporation — that were involved in the Bolshevik Revolution and its aftermath. Not to mention the fact (outlined in chapter three) that the German government also financed Lenin's revolutionary activities.A summary of the loans granted by American banks to German interests in World War I was given to the 1919 Overman Committee of the United States Senate by U.S. Military Intelligence. The summary was based on the deposition of Karl Heynen, who came to the United States in April 1915 to assist Dr. Albert with the commercial and financial affairs of the German government. Heynen's official work was the transportation of goods from the United States to Germany by way of Sweden, Switzerland, and Holland. In fact, he was up to his ears in covert operations.The major German loans raised in the United States between 1915 and 1918, according to Heynen, were as follows: The first loan, of $400,000, was made about September 1914 by the investment bankers Kuhn, Loeb & Co. Collateral of 25 million marks was deposited with Max M. Warburg in Hamburg, the German affiliate of Kuhn, Loeb & Co. Captain George B. Lester of U.S. Military Intelligence told the Senate that Heynen's reply to the question "Why did you go to Kuhn, Loeb & Co?" was, "Kuhn, Loeb & Co. we considered the natural bankers of the German government and the Reichsbank."The second loan, of $1.3 million, did not come directly from the United States but was negotiated by John Simon, an agent of the Suedeutsche Disconto-Gesellschaft, to secure funds for making shipments to Germany.The third loan was from the Chase National Bank (in the Morgan group) in the amount of three million dollars. The fourth loan was from the Mechanics and Metals National Bank in the amount of one million dollars. These loans financed German espionage activities in the United States and Mexico. Some funds were traced to Sommerfeld, who was an adviser to Von Rintelen (another German espionage agent) and who was later associated with Hjalmar Schacht and Emil Wittenberg. Sommerfeld was to purchase ammunition for use in Mexico. He had an account with the Guaranty Trust Company and from this payments were made to Western Cartridge Co. of Alton, Illinois, for ammunition that was shipped to El Paso for use in Mexico by Pancho Villa's bandits. About $400,000 was expended on ammunition, Mexican propaganda, and similar activities.The then German ambassador Count Von Bernstorff has recounted his friendship with Adolph von Pavenstedt, a senior partner of Amsinck & Co., which was controlled and in November 1917 owned by American International Corporation. American International figures prominently in later chapters; its board of directors contained the key names on Wall Street: Rockefeller, Kahn, Stillman, du Pont, Winthrop, etc. According to Von Bernstorff, Von Pavenstedt was "intimately acquainted with all the members of the Embassy."33 Von Bernstorff himself regarded Von Pavenstedt as one of the most respected, "if not the most respected imperial German in New York."34 Indeed, Von Pavenstedt was "for many years a Chief pay master of the German spy system in this country."35 In other words, there is no question that Armsinck & Co., controlled by American International Corporation, was intimately associated with the funding of German wartime espionage in the United States. To clinch Von Bernstorff's last statement, there exists a photograph of a check in favor of Amsinck & Co., dated December 8, 1917 — just four weeks after the start of the Bolshevik Revolution in Russia — signed Von Papen (another German espionage operator), and having a counterfoil bearing the notation "travelling expenses on Von W [i.e., Von Wedell]." French Strothers,36 who published the photograph, has stated that this check is evidence that Von Papen "became an accessory after the fact to a crime against American laws"; it also makes Amsinck & Co. subject to a similar charge.Paul Bolo-Pasha, yet another German espionage agent, and a prominent French financier formerly in the service of the Egyptian government, arrived in New York in March 1916 with a letter of introduction to Von Pavenstedt. Through the latter, Bolo-Pasha met Hugo Schmidt, director of the Deutsche Bank in Berlin and its representative in the United States. One of Bolo-Pasha's projects was to purchase foreign newspapers so as to slant their editorials in favor of Germany. Funds for this program were arranged in Berlin in the form of credit with Guaranty Trust Company, with the credit subsequently made available to Amsinck & Co. Adolph von Pavenstedt, of Amsinck, in turn made the funds available to Bolo-Pasha.In other words, both Guaranty Trust Company and Amsinck & Co., a subsidiary of American International Corporation, were directly involved in the implementation of German espionage and other activities in the United States. Some links can be established from these firms to each of the major German operators in the U.S. — Dr. Albert, Karl Heynen, Von Rintelen, Von Papan, Count Jacques Minotto (see below), and Paul Bolo-Pasha.In 1919 the Senate Overman Committee also established that Guaranty Trust had an active role in financing German World War I efforts in an "unneutral" manner. The testimony of the U.S. intelligence officer Becker makes this clear:In this mission Hugo Schmidt [of Deutsche Bank] was very largely assisted by certain American banking institutions. It was while we were neutral, but they acted to the detriment of the British interests, and I have considerable data on the activity of the Guaranty Trust Co. in that respect, and would like to know whether the committee wishes me to go into it.SENATOR NELSON: That is a branch of the City Bank, is it not?MR. BECKER: No.SENATOR OVERMAN: If it was inimical to British interests it was unneutral, and I think you had better let it come out.SENATOR KING: Was it an ordinary banking transaction?MR. BECKER: That would be a matter of opinion. It has to do with camouflaging exchange so as to make it appear to be neutral exchange, when it was really German exchange on London. As a result of those operations in which the Guaranty Trust Co. mainly participated between August 1, 1914, and the time America entered the war, the Deutsche Banke in its branches in South America succeeded in negotiating £4,670,000 of London exchange in war time.SENATOR OVERMAN: I think that is competent.37What is really important is not so much that financial assistance was given to Germany, which was only illegal, as that directors of Guaranty Trust were financially assisting the Allies at the same time. In other words, Guaranty Trust was financing both sides of The conflict. This raises the question of morality.
Count Jacques Minotto is a most unlikely but verifiable and persistent thread that links the Bolshevik Revolution in Russia with German banks, German World War I espionage in the United States, the Guaranty Trust Company in New York, the abortive French Bolshevik revolution, and the related Caillaux-Malvy espionage trials in France.Jacques Minotto was born February 17, 1891, in Berlin, the son of an Austrian father descended from Italian nobility, and a German mother. Young Minotto was educated in Berlin and then entered employment with the Deutsche Bank in Berlin in 1912. Almost immediately Minotto was sent to the United States as assistant to Hugo Schmidt, deputy director of the Deutsche Bank and its New York representative. After a year in New York, Minotto was sent by the Deutsche Bank to London, where he circulated in prominent political and diplomatic circles. At the outbreak of World War I, Minotto returned to the United States and immediately met with the German ambassador Count Von Bernstorff, after which he entered the employ of Guaranty Trust Company in New York. At Guaranty Trust, Minotto was under the direct orders of Max May, director of its foreign department and an associate of Swedish banker Olof Aschberg. Minotto was no minor bank official. The interrogatories of the Caillaux trials in Paris in 1919 established that Minotto worked directly under Max May.39 On October 25, 1914, Guaranty Trust sent Jacques Minotto to South America to make a report on the political, financial, and commercial situation. As he did in London, Washington, and New York, so Minotto moved in the highest diplomatic and political circles here. One purpose of Minotto's mission in Latin America was to establish the mechanism by which Guaranty Trust could be used as an intermediary for the previously mentioned German fund raising on the London money market, which was then denied to Germany because of World War I. Minotto returned to the United States, renewed his association with Count Von Bernstorff and Count Luxberg, and subsequently, in 1916, attempted to obtain a position with U.S. Naval Intelligence. After this he was arrested on charges of pro-German activities. When arrested Minotto was working at the Chicago plant of his father-in-law Louis Swift, of Swift & Co., meatpackers. Swift put up the security for the $50,000 bond required to free Minotto, who was represented by Henry Veeder, the Swift & Co. attorney. Louis Swift was himself arrested for pro-German activities at a later date. As an interesting and not unimportant coincidence, "Major" Harold H. Swift, brother of Louis Swift, was a member of the William Boyce Thompson 1917 Red Cross Mission to Petrograd — that is, one of the group of Wall Street lawyers and businessmen whose intimate connections with the Russian Revolution are to be described later. Helen Swift Neilson, sister of Louis and Harold Swift, was later connected with the pro-Communist Abraham Lincoln Center "Unity." This established a minor link between German banks, American. banks, German espionage, and, as we shall see later, the Bolshevik Revolution.40Joseph Caillaux was a famous (sometimes called notorious) French politician. He was also associated with Count Minotto in the latter's Latin America operations for Guaranty Trust, and was later implicated in the famous French espionage cases of 1919, which had Bolshevik connections. In 1911, Caillaux became minister of finance and later in the same year became premier of France. John Louis Malvy became undersecretary of state in the Caillaux government. Several years later Madame Caillaux murdered Gaston Calmette, editor of the prominent Paris newspaper Figaro. The prosecution charged that Madame Caillaux murdered Calmette to prevent publication of certain compromising documents. This affair resulted in the departure of Caillaux and his wife from France. The couple went to Latin America and there met with Count Minotto, the agent of the Guaranty Trust Company who was in Latin America to establish intermediaries for German finance. Count Minotto was socially connected with the Caillaux couple in Rio de Janeiro and Sao Paulo, Brazil, in Montevideo, Uruguay, and in Buenos Aires, Argentina. In other words, Count Minotto was a constant companion of the Caillaux couple while they were in Latin America.41 On returning to France, Caillaux and his wife stayed at Biarritz as guests of Paul Bolo-Pasha, who was, as we have seen, also a German espionage operator in the United States and France.42 Later, in July 1915, Count Minotto arrived in France from Italy, met with the Caillaux couple; the same year the Caillaux couple also visited Bolo-Pasha again in Biarritz. In other words, in 1915 and 1916 Caillaux established a continuing social relationship with Count Minotto and Bolo-Pasha, both of whom were German espionage agents in the United States.Bolo-Pasha's work in France was to gain influence for Germany in the Paris newspapers Le Temps and Figaro. Bolo-Pasha then went to New York, arriving February 24, 1916. Here he was to negotiate a loan of $2 million — and here he was associated with Von Pavenstedt, the prominent German agent with Amsinck & Co.43 Severance Johnson, in The Enemy Within, has connected Caillaux and Malvy to the 1918 abortive French Bolshevik revolution, and states that if the revolution had succeeded, "Malvy would have been the Trotsky of France had Caillaux been its Lenin."44 Caillaux and Malvy formed a radical socialist party in France using German funds and were brought to trial for these subversive efforts. The court interrogatories in the 1919 French espionage trials introduce testimony concerning New York bankers and their relationship with these German espionage operators. They also set forth the links between Count Minotto and Caillaux, as well as the relationship of the Guaranty Trust Company to the Deutsche Bank and the cooperation between Hugo Schmidt of Deutsche Bank and Max May of Guaranty Trust Company. The French interrogatory (page 940) has the following extract from the New York deposition of Count Minotto (page 10, and retranslated from the French):QUESTION: Under whose orders were you at Guaranty Trust?REPLY: Under the orders of Mr. Max May.QUESTION: He was a Vice President?ANSWER: He was Vice President and Director of the Foreign Department.Later, in 1922, Max May became a director of the Soviet Ruskom-bank and represented the interests of Guaranty Trust in that bank. The French interrogatory establishes that Count Minotto, a German espionage agent, was in the employ of Guaranty Trust Company; that Max May was his superior officer; and that Max May was also closely associated with Bolshevik banker Olof Aschberg. In brief: Max May of Guaranty Trust was linked to illegal fund raising and German espionage in the United States during World War I; he was linked indirectly to the Bolshevik Revolution and directly to the establishment of Ruskombank, the first international bank in the Soviet Union.It is too early to attempt an explanation for this seemingly inconsistent, illegal, and sometimes immoral international activity. In general, there are two plausible explanations: the first, a relentless search for profits; the second — which agrees with the words of Otto Kahn of Kuhn, Loeb & Co. and of American International Corporation in the epigraph to this chapter — the realization of socialist aims, aims which "should, and can, be brought about" by nonsocialist means.Footnotes:1John Moody, The Truth about the Trusts (New York: Moody Publishing, 1904).2The J. P. Morgan Company was originally founded in London as George Peabody and Co. in 1838. It was not incorporated until March 21, 1940. The company ceased to exist in April 1954 when it merged with the Guaranty Trust Company, then its most important commercial bank subsidiary, and is today known as the Morgan Guarantee Trust Company of New York.3United States, House, Committee on Foreign Affairs, The Story of Panama, Hearings on the Rainey Resolution, 1913. p. 53.4Ibid., p. 60.5Stanford, Calif. See also the Los Angeles Times, October 13, 1966.6Later codirector with Hjalmar Schacht (Hitler's banker) and Emil Wittenberg, of the Nationalbank für Deutschland.7United States, Senate, Committee on Foreign Relations, Investigation of Mexican Affairs, 1920.8Lincoln Steffens, The Letters of Lincoln Steffens (New York: Harcourt, Brace, 1941, I:3869U.S., Senate, Committee on Foreign Relations, Investigation of Mexican Affairs, 1920, pts. 2, 18, p. 681.10Ibid.11New York Times, January 23, 1919.12U.S., Senate, Committee on Foreign Relations, op. cit., pp. 795-96.13U.S., Senate, Hearings Before the Special Committee Investigating the Munitions Industry, 73-74th Cong., 1934-37, pt. 25, p. 7666.14U.S. State Dept. Decimal File, 861.51/110 (316-116-682).15U.S. State Dept. Decimal File, 861.51/112.16U.S. State Dept. Decimal File, 861.51/111.17Handwritten in parentheses.18Olof Aschberg, En Vandrande Jude Frän Glasbruksgatan (Stockholm: Albert Bonniers Förlag, n.d.), pp. 98-99, which is included in Memoarer (Stockholm: Albert Bonniers Förlag, 1946). See also Gästboken (Stockholm: Tidens Förlag, 1955) for further material on Aschberg.19Aschberg, p. 123.20New York Times, August 4, 1916.21Michael Futrell, Northern Underground (London: Faber and Faber, 1963), p. 162.22See Robert Paul Browder and Alexander F. Kerensky, The Russian Provisional government, 1917 (Stanford, Calif.: Stanford University Perss, 1961), 3: 1365. "Via Bank" is obviously Nya Banken.23U.S. State Dept. Decimal File, 861.00/1130.24U.S. State Dept. Decimal File, 861.516/129, August 28, 1922. A State Dept. report from Stockholm, dated October 9, 1922 (861.516/137), states in regard to Aschberg, "I met Mr. Aschberg some weeks ago and in the conversation with him he substantially stated all that appeared in this report. He also asked me to inquire whether he could visit the United States and gave as references some of the prominent banks. In connection with this, however, I desire to call the department's attention to Document 54 of the Sisson Documents, and also to many other dispatches which this legation wrote concerning this man during the war, whose reputation and standing is not good. He is undoubtedly working closely in connection with the Soviets, and during the entire war he was in close cooperation with the Germans" (U.S. State Dept. Decimal File, 861.516/137, Stockholm, October 9, 1922. The report was signed by Ira N. Morris).25Ibid., 861.516/130, September 13, 1922.26Ibid.27Ibid.28Ibid., 861.516/140, Stockholm, October 23, 1922.29Ibid., 861.516/147, December 8, 1922.30Ibid., 861.516/144, November 18, 1922.31Ibid., 861.316/197, Stockholm, March 7, 1924.32This section is based on the Overman Committee hearings, U.S., Senate, Brewing and Liquor Interests and German and Bolshevik Propaganda, Hearings before the Subcommittee on the Judiciary, 65th Cong., 1919, 2:2154-74.33Count Von Bernstorff, My Three Years in America (New York: Scribner's, 1920), p. 261.34Ibid.35Ibid.36French Strothers, Fighting Germany's Spies (Garden City, N.Y.: Doubleday, Page, 1918), p. 152.37 U.S., Senate, Overman Committee, 2:2009.38This section is based on the following sources (as well as those cited elsewhere): Jean Bardanne, Le Colonel Nicolai: espion de genie (Paris: Editions Siboney, n.d.); Cours de Justice, Affaire Caillaux, Loustalot et Comby: Procedure Generale Interrogatoires (Paris, 1919), pp. 349-50, 937-46; Paul Vergnet, L'Affaire Caillaux (Paris 1918), especially the chapter titled "Marx de Mannheim"; Henri Guernut, Emile Kahn, and Camille M. Lemercier, Etudes documentaires sur L'Affaire Caillaux (Paris, n.d.), pp. 1012-15; and George Adam, Treason and Tragedy: An Account of French War Trials (London: Jonathan Cape, 1929).39See p. 70.40This Interrelationship is dealt with extensively in the three-volume Overman Committee report of 1919. See bibliography.41See Rudolph Binion, Defeated Leaders (New York: Columbia University Press, 1960).42George Adam, Treason and Tragedy: An Account of French War Trials (London: Jonathan Cape, 1929).43Ibid.44The Enemy Within (London: George Allen & Unwin, 1920).
THE JEWISH-CONSPIRACY THEORY OF THE BOLSHEVIK REVOLUTION
There is an extensive literature in English, French, and German reflecting the argument that the Bolshevik Revolution was the result of a "Jewish conspiracy"; more specifically, a conspiracy by Jewish world bankers. Generally, world control is seen as the ultimate objective; the Bolshevik Revolution was but one phase of a wider program that supposedly reflects an age-old religious struggle between Christianity and the "forces of darkness."
The argument and its variants can be found in the most surprising places and from quite surprising persons. In February 1920 Winston Churchill wrote an article — rarely cited today — for the London Illustrated Sunday Herald entitled "Zionism Versus Bolshevism." In this' article Churchill concluded that it was "particularly important... that the National Jews in every country who are loyal to the land of their adoption should come forward on every occasion . . . and take a prominent part in every measure for combatting the Bolshevik conspiracy." Churchill draws a line between "national Jews" and what he calls "international Jews." He argues that the "international and for the most atheistical Jews" certainly had a "very great" role in the creation of Bolshevism and bringing about the Russian Revolution. He asserts (contrary to fact) that with the exception of Lenin, "the majority" of the leading figures in the revolution were Jewish, and adds (also contrary to fact) that in many cases Jewish interests and Jewish places of worship were excepted by the Bolsheviks from their policies of seizure. Churchill calls the international Jews a "sinister confederacy" emergent from the persecuted populations of countries where Jews have been persecuted on account of their race. Winston Churchill traces this movement back to Spartacus-Weishaupt, throws his literary net around Trotsky, Bela Kun, Rosa Luxemburg, and Emma Goldman, and charges: "This world-wide conspiracy for the overthrow of civilisation and for the reconstitution of society on the basis of arrested development, of envious malevolence, and impossible equality, has been steadily growing."
Churchill then argues that this conspiratorial Spartacus-Weishaupt group has been the mainspring of every subversive movement in the nineteenth century. While pointing out that Zionism and Bolshevism are competing for the soul of the Jewish people, Churchill (in 1920) was preoccupied with the role of the Jew in the Bolshevik Revolution and the existence of a worldwide Jewish conspiracy.
Another well-known author in the 1920s, Henry Wickham Steed describes in the second volume of his Through 30 Years 1892-1922 (p. 302) how he attempted to bring the Jewish-conspiracy concept to the attention of Colonel Edward M. House and President Woodrow Wilson. One day in March 1919 Wickham Steed called Colonel House and found him disturbed over Steed's recent criticism of U.S. recognition of the Bolsheviks. Steed pointed out to House that Wilson would be discredited among the many peoples and nations of Europe and "insisted that, unknown to him, the prime movers were Jacob Schiff, Warburg and other international financiers, who wished above all to bolster up the Jewish Bolshevists in order to secure a field for German and Jewish exploitation of Russia."1 According to Steed, Colonel House argued for the establishment of economic relations with the Soviet Union.
Probably the most superficially damning collection of documents on the Jewish conspiracy is in the State Department Decimal File (861.00/5339). The central document is one entitled "Bolshevism and Judaism," dated November 13, 1918. The text is in the form of a report, which states that the revolution in Russia was engineered "in February 1916" and "it was found that the following persons and firms were engaged in this destructive work":
|(1) Jacob Schiff||Jew|
|(2) Kuhn, Loeb & Company||Jewish Firm|
|Otto H. Kahn||Jew|
|Mortimer L. Schiff||Jew|
|Jerome J. Hanauer||Jew|
|(4) Max Breitung||Jew|
|(5) Isaac Seligman||Jew|
The report goes on to assert that there can be no doubt that the Russian Revolution was started and engineered by this group and that in April 1917
Jacob Schiff in fact made a public announcement and it was due to his financial influence that the Russian revolution was successfully accomplished and in the Spring 1917 Jacob Schitf started to finance Trotsky, a Jew, for the purpose of accomplishing a social revolution in Russia.
The report contains other miscellaneous information about Max Warburg's financing of Trotsky, the role of the Rheinish-Westphalian syndicate and Olof Aschberg of the Nya Banken (Stockholm) together with Jivotovsky. The anonymous author (actually employed by the U.S. War Trade Board)2 states that the links between these organizations and their financing of the Bolshevik Revolution show how "the link between Jewish multi-millionaires and Jewish proletarians was forged." The report goes on to list a large number of Bolsheviks who were also Jews and then describes the actions of Paul Warburg, Judus Magnes, Kuhn, Loeb & Company, and Speyer & Company.
The report ends with a barb at "International Jewry" and places the argument into the context of a Christian-Jewish conflict backed up by quotations from the Protocols of Zion. Accompanying this report is a series of cables between the State Department in Washington and the American embassy in London concerning the steps to be taken with these documents:3
5399 Great Britain, TEL. 3253 i pmOctober 16, 1919 In Confidential File
Secret for Winslow from Wright. Financial aid to Bolshevism & Bolshevik Revolution in Russia from prominent Am. Jews: Jacob Schiff, Felix Warburg, Otto Kahn, Mendell Schiff, Jerome Hanauer, Max Breitung & one of the Guggenheims. Document re- in possession of Brit. police authorities from French sources. Asks for any facts re-.
* * * * *
Oct. 17 Great Britain TEL. 6084, noon r c-h 5399 Very secret. Wright from Winslow. Financial aid to Bolshevik revolution in Russia from prominent Am. Jews. No proof re- but investigating. Asks to urge Brit. authorities to suspend publication at least until receipt of document by Dept.
* * * * *Nov. 28 Great Britain TEL. 6223 R 5 pro. 5399
FOR WRIGHT. Document re financial aid to Bolsheviki by prominent American jews. Reports — identified as French translation of a statement originally prepared in English by Russian citizen in Am. etc. Seem most unwise to give — the distinction of publicity.
It was agreed to suppress this material and the files conclude, "I think we have the whole thing in cold storage."
Another document marked "Most Secret" is included with this batch of material. The provenance of the document is unknown; it is perhaps FBI or military intelligence. It reviews a translation of the Protocols of the Meetings of the Wise Men of Zion, and concludes:
In this connection a letter was sent to Mr. W. enclosing a memorandum from us with regard to certain information from the American Military Attache to the effect that the British authorities had letters intercepted from various groups of international Jews setting out a scheme for world dominion. Copies of this material will be very useful to us.
This information was apparently developed and a later British intelligence report makes the flat accusation:
SUMMARY: There is now definite evidence that Bolshevism is an international movement controlled by Jews; communications are passing between the leaders in America, France, Russia and England with a view to concerted action....4
However, none of the above statements can be supported with hard empirical evidence. The most significant information is contained in the paragraph to the effect that the British authorities possessed "letters intercepted from various groups of international Jews setting out a scheme for world dominion." If indeed such letters exist, then they would provide support (or nonsupport) for a presently unsubstantiated hypothesis: to wit, that the Bolshevik Revolution and other revolutions are the work of a worldwide Jewish conspiracy.
Move over, when statements and assertions are not supported by hard evidence and where attempts to unearth hard evidence lead in a circle back to the starting point — particularly when everyone is quoting everyone else — then we must reject the story as spurious. There is no concrete evidence that Jews were involved in the Bolshevik Revolution because they were Jewish. There may indeed have been a higher proportion of Jews involved, but given tsarist treatment of Jews, what else would we expect? There were probably many Englishmen or persons of English origin in the American Revolution fighting the redcoats. So what? Does that make the American Revolution an English conspiracy? Winston Churchill's statement that Jews had a "very great role" in the Bolshevik Revolution is supported only by distorted evidence. The list of Jews involved in the Bolshevik Revolution must be weighed against lists of non-Jews involved in the revolution. When this scientific procedure is adopted, the proportion of foreign Jewish Bolsheviks involved falls to less than twenty percent of the total number of revolutionaries — and these Jews were mostly deported, murdered, or sent to Siberia in the following years. Modern Russia has in fact maintained tsarist anti-Semitism.
It is significant that documents in the State Department files confirm that the investment banker Jacob Schiff, often cited as a source of funds for the Bolshevik Revolution, was in fact against support of the Bolshevik regime.5 This position, as we shall see, was in direct contrast to the Morgan-Rockefeller promotion of the Bolsheviks.
The persistence with which the Jewish-conspiracy myth has been pushed suggests that it may well be a deliberate device to divert attention from the real issues and the real causes. The evidence provided in this book suggests that the New York bankers who were also Jewish had relatively minor roles in supporting the Bolsheviks, while the New York bankers who were also Gentiles (Morgan, Rockefeller, Thompson) had major roles.
What better way to divert attention from the real operators than by the medieval bogeyman of anti-Semitism?
Footnotes:1See Appendix 3 for Schiff's actual role.2The anonymous author was a Russian employed by the U.S. War Trade Board. One of the three directors of the U.S. War Trade Board at this time was John Foster Dulles.3U.S. State Dept. Decimal File, 861.00/5399.4Great Britain, Directorate of Intelligence, A Monthly Review of the Progress of Revolutionary Movements Abroad, no. 9, July 16, 1913 (861.99/5067).5See Appendix 3.