Friday, November 25, 2016

MONEY AND GUNPOWDER Part Two




  A Place for Cannons
By Linda Minor

LOMAX. Well; but it stands to reason, don't it? The cannon business may be necessary and all that: we can't get on without cannons; but it isn't right, you know. ...
 
UNDERSHAFT. ... But consider for a moment. Here I am, a manufacturer of mutilation and murder. I find myself in a specially amiable humor just now because, this morning, down at the foundry, we blew twenty-seven dummy soldiers into fragments with a gun which formerly destroyed only thirteen.

LOMAX [leniently] Well, the more destructive war becomes, the sooner it will be abolished, eh?

UNDERSHAFT. Not at all. The more destructive war becomes the more fascinating we find it. ...Your Christianity, which enjoins you to resist not evil, and to turn the other cheek, would make me a bankrupt. My morality--my religion--must have a place for cannons and torpedoes in it.

--George Bernard Shaw, "Major Barbara"


                                                                     

From Sea to Shining Sea
Undershaft clearly would have felt quite at home in George W. Bush's place of worship, which spouts a religious philosophy that not only condones cannons and torpedoes, but which aggressively advocates their use in the name of God.


George W. was not the first Bush to make cannons out of plowshares, so to speak. The first would have been his great-grandfather, Samuel Prescott Bush, son of the preacher man.  Samuel's birth occurred in Orange, New Jersey, at the peak of the War Between the States.  Despite the fact that his mother, formerly Harriet Eleanor Fay, had been born in Savannah, Georgia, Samuel's father was such a rabid Unionist, there were complaints from members of his New Jersey congregation.  Possibly that is why he signed on in 1865 as chaplain aboard the naval fleet bound for California, commanded by Commodore John Rodgers II.  Rodgers’ father was the senior officer of the United States Navy—having commanded brave young American seaman for years in battle against the more powerful British navy—when, in 1845, the U.S. Naval Academy was founded near his home at Annapolis, Maryland.[1] 

Was Rev. James Bush a mere man of the cloth, or were there other ambitions that took him across the continent with naval officer headed for California's new Pacific Navy Yard at Mare Island?[2]  Was his later retreat to nature sincere, and, if so, how do we explain his descendants' transition from transcendentalism to transnationalism?

Beginning of the Black Budget?

Military begging from Congress?
Strangely enough, though Congress approved the establishment of the naval academy at Annapolis and donated the Fort Severn Army base for its use, no funding for its construction and maintenance was provided.[3] This all-too-typical Congressional failure to fund what military men consider to be vital elements of national security helps explain how today's black budget funding of weapons systems and covert operations has come about. Numerous such examples from history can be found—institutions chartered by governments in name only—skeletons created without meat or blood to make them viable.  History also reveals myriad patriotic political and military leaders, who trustingly paid for necessary supplies from personal funds and then became frustrated by their inability to obtain reimbursement for such expenditures.  

As the years passed, such men would seek a means of funding their budgets in a way that would eliminate the need to beg for crumbs from Congress, as required by the United States Constitution.  A perhaps innocent and quite understandable intent to create a workable funding mechanism for national defense instead helped to breed a militant strain of what Thomas Hobbes called a "disease of the Commonwealth"—a ghostly off-the-books monster, separate from the sovereign and accountable to nobody. [4]  Our goal is to track how that malignant progeny was born—begotten through a marriage made in hell between makers of munitions and magicians of money.  Once we identify its parents, we may then be able to devise a way to excise and exterminate it—like the life-threatening tumor it has become. 

Tracing the Bush family’s history is a good place to begin.  Part One of this series painted a picture of two generations who seemed to believe in American Constitutional ideals. Part Two will show the next generation through the eyes of Samuel Prescott Bush, a man born during the American civil war, who developed his career and raised his family while Teddy Roosevelt and Howard Taft acquired and American colonial empire from Spain. In his mature years S. P. Bush had a central role in arming Europe and America in The Great War and then died three years after grandson George was awarded a Distinguished Flying Cross for bravery in action. Samuel Prescott Bush died a wealthy man—his fortune made from iron and steel—a necessary component, ironically, for both building a civilization and for tearing it apart.

Moving On
Samuel Prescott Bush was a two-year-old lad in Orange, New Jersey, when his father boarded the USS Vanderbilt in 1865. We are not told when the rest of the family joined Chaplain Bush in San Francisco, only that he served as minister at San Francisco's Grace Episcopal Church until 1872. Samuel was six years old when Leland Stanford drove the golden spike into the rails that linked the Atlantic and Pacific coasts in 1869. Before that auspicious date, travel was an arduous task, eased somewhat in the 1850's by steamers traveling through Panama or Nicaragua, though Rev. Bush had gone with the naval fleet around Cape Horn. Transportation technology was changing then as rapidly as communications has evolved in our own generation. 

In 1870 the promise of the future was the railroad. When the family journeyed back to the East in 1873, they in all likelihood made the trip by rail.  Rev. Bush was to become rector of the Church of the Ascension at Staten Island, New York, only a few miles from his first church in New Jersey. What an exciting journey for a nine-year-old boy that would have been—from coast to coast on a steam locomotive! 

The Camden & Amboy Railroad, built by Robert and Edwin Stevens, had leased its rails two years earlier to the Pennsylvania Railroad, expanding its route closer to New York in the hope of competing with Vanderbilt's New York Central. Debarking at its terminus in New Jersey, the Bushes were only a ferry ride away from Staten Island. The village of West New Brighton on the island’s north central part was just a stone's throw west of Commodore Vanderbilt's Staten Island Ferry, which carried commuters to Manhattan. North of the New Brighton city center, standing on the north shore, one could look  across a murky channel of water called Kill van Kull to where Upper New York Bay extends its fingers into the eastern boundary of Bayonne Peninsula.  



Coming of Age in Hoboken
Perhaps it was the change taking place across this channel near his home that caused Samuel to seek an education in New Jersey rather than go to Yale as his father had done. From his Hoboken vantage point, it was possible to watch New Jersey being transformed into an arsenal. By 1873 the Hazard Powder Company's gunpowder and explosives manufacturing center—first opened during the War of 1812—was booming, figuratively speaking. The area had become an active railroad departure point for the movement of troops and munitions during the civil war, a conversion which had spurred industrial growth of all types. Prentice Oil Company, established in 1875 in Bayonne, was purchased in 1878 by John D. Rockefeller of Cleveland, Ohio, as the site for his new oil refinery, Standard Oil of New Jersey, which later laid pipelines to bring crude oil directly from the West and Southwest areas of the country. Tidewater Oil Company, chartered in Pennsylvania, Rockefeller's biggest competitor, moved there in the same year.[5] Samuel's school, Stevens Institute is shown in the photo as it jutted into the Hudson River.

Stevens Institute in curved area, top
Little did Samuel realize when he entered Stevens Institute in Hoboken two years later what a significant role oil and pipelines would play in the lives of his descendants after his own death in 1948.  Nor did he care, for the boisterous activity made him feel very much alive.  As a young teenager, he watched as increasing numbers of ships cruised through the channel into Upper New York Bay.  While attending classes at Stevens high school, followed by four years at Stevens Institute in the "Castle," perched as it was on a bluff jutting high above the Hudson River, directly across from Manhattan's Greenwich Village, he could watch Holland America Line's ships arriving at their Hoboken berth below.[6]  Before long, the Hoboken terminal would also be home to the North German Lloyd and Hamburg-Amerika lines as well.

Had he viewed the scene in person three decades later (instead of only mentally upon hearing news reports in 1916), he would have been in great danger. The entire area exploded in flames, sending shrapnel in every direction. With New Jersey's industries supplying almost ninety percent of war materiel to England and France, Hoboken—twenty percent of its population consisting of German immigrants—became the center of German sabotage activities.[7]  

Black Tom Island—today Liberty State Park, just south the Stevens campus—was a massive staging area for exportation of munitions.[8] Lehigh Valley Railroad, extending from Jersey City to Buffalo, N.Y.,[9] would later be awarded $50 million in damages as a result of a lawsuit won by Wall Street attorney John J. McCloy, whom we met previously in Taking the Golden Eggs Part I and Part II.[10]  The significance of this seemingly irrelevant fact will become clear later in the history of the rivalry between the Samuel Bush’s first employer, the Pennsylvania Railroad, and its biggest competitor, the New York Central Railroad. That important story, unfortunately, must be saved for another day.

The Man of Steel
In 1884 Samuel Bush stood at the Pennsylvania Railroad station, ticket in hand—employed by the very railroad that would carry him west to a four-year apprenticeship in Logansport, Indiana, and then to Columbus, Ohio, with the Pittsburgh, Cincinnati, Chicago & St. Louis Railroad. The next two years he would work as assistant engineer of motive power, followed by employment as master mechanic of the shops at Dennison, Ohio. By 1891, as a master mechanic, he had made Columbus, Ohio, his permanent residence. In 1894, the year he married Columbus native Flora Sheldon, he became superintendent of motive power of the southwest system of the Pennsylvania lines in Columbus, Ohio.  

In 1899, five years after marrying into the Sheldon family, Samuel took a job as superintendent of the Chicago, Milwaukee & St. Paul Railroad, a major investor in which was William G. Rockefeller.  During the two years the family lived in Milwaukee, the younger son (named Robert Sheldon for Flora’s father and brother) contracted scarlet fever and died. In their grief, the family returned to Columbus in 1901, when elder son Prescott was six years old. However, the Rockefeller connection was not broken by the return to Ohio. If anything, it was enhanced when he took a position with Buckeye Malleable Iron & Coupler Company, which owed a significant debt to the Rockefeller family.

Samuel became vice president and general manager of the company, known simply as Buckeye Steel Castings Company, a manufacturer of car couplers and all kinds of steel castings.[11] The corporation had begun business in 1881 amidst enormous competition—23 foundries competing in Columbus in 1887. The president, Wilbur Goodspeed, began producing railroad couplers in 1890, borrowing heavily from Frank Rockefeller, who then helped ensure their marketability by acquiring  Buckeye stock in exchange for the debt and for additional services. Rockefeller and another Standard Oil associate, Thomas Goodwillie, agreed to "use their best endeavor to secure the introduction and use upon railroads of the said couplers of the said corporation and in all ways to advance the interest of said corporation."[12] Goodspeed, an artillery man in the Civil War, maintained his shooting skills as a member of the Cleveland Gatling Gun Battery, where he and fellow member Goodwillie first met. Such a knowledge of artillery would come in handy when the factory would later produce weapons for World War I. By that time, Samuel would be guided by Frank Rockefeller to play a role in the national war effort.

Down at the Foundry
The new automatic coupler made in the foundry, like one patented by Eli Janney in 1873, as shown in the figure to the right, replaced the manual link and pin coupler which required a man to stand between railroad cars and insert a pin to hold the link in place.[13]  An Ohio law requiring all railroad cars to be equipped with automatic couplers by 1899, enacted shortly before the 1892 contract, promised that Buckeye could sell as many couplers as it could turn out, thus guaranteeing their success when combined with the sales to Rockefeller’s railroads.  This connection would be one of many to link the Bush family to the Rockefeller network.  Although some sources state that the Rockefeller brothers were at odds, the testimony that Frank Rockefeller gave in 1876 to Congress concerning the need for a law regulating interstate commerce, was actually in line with the plan devised to maintain their control over the government agency which would eventually regulate the industry.[14] 

Buckeye would eventually have offices in New York, Chicago and Atlanta, and Samuel would be listed as a director of the Hocking Valley Railway and the Sunny Creek Company, a trustee of Mercy Hospital, a member of the National Manufacturers Association, the Duquesne Club of Pittsburg and the Engineers Club of New York city, besides the Ohio Club, Columbus Club and the Arlington Country Club.  By 1908 he was promoted to president, a position that would advance him into the public eye as he chaired the executive committee for more than a hundred Columbus citizens appointed by the mayor  to raise funds for the war.  Shortly thereafter, he apparently went to Washington, D.C. as chief of the Ordnance, Small Arms and Ammunition section of the War Industries Board headed by Bernard Baruch, a position that would have placed him in a position to help Buckeye convert its production from railroad couplers to munitions, for which it had a ready market.[15]  Moreover, it would have brought him in contact with a cabal accused in 1933 of attempting to set up a military coup to replace FDR. See this blog. [16]  The relationships developed with the men on Baruch’s Board would also have helped to ensure the entry of his son, Prescott Bush, into an increasingly more complex military-industrial network.
                                                                                                                    
Climbing the Social Ladder
Butler Sheldon family mansion
Marrying into the Sheldon family had greatly improved Samuel’s social standing, to the delight of his widowed, social-conscious mother, Harriet Fay Bush. Flora was a daughter of Robert Emmett Sheldon and his wife Mary Elizabeth Butler Sheldon of Columbus. Mary’s father was Courtland Philip Livingston Butler, born in Clinton, New York, and her grandmother was "a Livingston" who was even more society oriented than Flora’s mother-in-law. Mary’s brother, Robert E. Sheldon, Jr. (born 1883) a 1904 graduate of Yale’s Sheffield School, married a member of the eminent Church family of Pittsburgh, Pennsylvania.[17] 

The Church family connection helps to explain Samuel Bush’s membership in the elite Duquesne Club of Pittsburgh, since his wife’s sister-in-law was the daughter of Samuel Harden Church (1858-1943)—secretary of the Pittsburgh, Cincinnati, Chicago & St. Louis Railroad (Samuel Bush’s employer until 1899)—as well as a trustee of the Carnegie Institute, appointed by Andrew Carnegie himself.[18] Church’s work for the P,C,C & S.L Railroad, a subsidiary of the Pennsylvania Railroad, took him and his family back and forth between Pittsburgh, Pa. and Columbus, Ohio—both cities being steel-producing centers with many other overlapping interests.  It should be briefly noted here in passing that Church was a founding member of the American Liberty League, the “cabal” to be discussed in greater depth in the next segment.[19]
 
After Robert Sheldon, Jr. married Ruth Church, they built a home in Upper Arlington, northwest of the town center of Columbus.  Called Marble Cliff, this suburban area (which was made accessible in minutes as a result of Sheldon’s streetcar railway) became the home to some of the wealthiest citizens of the city.  Robert worked for many years at the family retail dry goods store which moved to extensive buildings in 1905, after Robert Sr. developed a wholesale trade.  This step up in the world came after the elder Sheldon first succeeded Emerson McMillin as president of the Columbus Street Railway Company and then in 1903 succeeded General John Beatty as President of the Citizens Savings Bank.[20]  

Even more significant than allowing him to accumulate a personal fortune, these positions reveal very clearly that Robert Sheldon, Sr. had become an insider in the syndicate headed by J.P. Morgan until his death in 1913.  Morgan bought out Pittsburgh’s leading steel producer, Andrew Carnegie, in 1901 for $500 million to merge into Morgan’s United States Steel Corporation. We have already seen in "Taking the Golden Eggs" how Morgan, operating as a clearinghouse between U.S. and foreign currencies,  used William C. Whitney’s streetcar holding companies’ “pump and dump” schemes to create income to finance the purchase of Edison’s electric utility companies by a syndicate of American investors. He used this model also to develop street railway, municipal light companies, and acquire steel production plants in numerous smaller cities of the country.  

It will be recalled that William Whitney was married to Flora Payne, whose father was Senator Henry B. Payne of Cleveland—a long-time associate of the Rockefellers. Flora’s mother was a granddaughter of Judge Nathan Perry, one of the city’s founders in 1796, and daughter of Nathan Perry, Jr., the largest dry goods wholesaler in Cleveland. Both Senator Payne and Samuel Bush also served on the board of the Federal Reserve Bank of Cleveland, which began operations in 1914, covering not only Cleveland but Columbus, Cincinnati and Pittsburgh as well. It was William Avery Rockefeller’s son—William Goodsell Rockefeller (1870-1922)—who would leave Cleveland and establish National City Bank in New York City and would eventually usurp the Morgan Bank’s control of the New York Fed. That was a powerful rung on which Prescott Bush would begin his own career, as we shall see.

Scioto Country Club
Samuel built his family’s home, one of the first to be built in Upper Arlington, in 1908. All of the Sheldon siblings lived within walking distance from Flora and Samuel, and they all belonged to Arlington Golf and Riding Club, later to be known as Scioto Country Club, of which Samuel, along with developers of the new suburb, was a founding member. By far the grandest home was the mansion at 1599 Roxbury, owned by Flora’s brother, Butler Sheldon, who also served as mayor of the community in 1909.[21] Butler succeeded his father as President of Columbus Railroad, Columbus Light and Power, Columbus Traction and  Sheldon Dry Goods. Their sister, Mary Sheldon, married Carl J. Hoster, a grandson of a native of Germany and operator of the family brewery in downtown Columbus. He also was president of the Hoster-Columbus Associated Breweries, the U.S. Brewers Association, vice-president of the Ohio Trust Company and director of Columbus Railway & Light Company—no doubt a result of his marriage into the Sheldon family. 
 
Samuel seems like such a likeable fellow—football fan and avid golfer, community booster, loving father, attentive husband—just like all the Bush men. Quite a bit like Undershaft in Bernard Shaw’s play, actually.  He grew wealthy while manufacturing “mutilation and murder,” and tucked his cannons and torpedoes all neatly into his father’s religion. All in the name of patriotism.

ENDNOTES:

[1] See Benson J. Lossing, Pictorial Field Book of the War of 1812 (1869), online; to see the entire book, review Contents.  Also see Biography of John Rodgers, whose mother was a daughter of Commodore Matthew C. Perry, who opened Japan to American trade, and a niece of Commodore Oliver Hazzard Perry, who stated: "We have met the enemy and they are ours."  The Perrys of Newport, R.I., married into the notorious Slidell family, as well as with members of the Vanderbilt and August Belmont family—a fact which leads one to conclude that there is more to this relationship than can be seen on its face.
 
[2] See photo archive of Mare Island ships.

[3] "This brief phrase was followed by a quote from the Maryland Republican that began, 'The various buildings have been organized and surprisingly improved, considering the small expenditures and the brief time allowed, especially the quarters allotted to the midshipmen…' " [quoted by Ginger Doyel, "A Brief Look at Buchanan," found at USNA  website]. 

[4] Thomas Hobbs had little regard for the concept of separation of powers, which he considered to be a deterioration of the sovereign’s power to protect its subjects: "These are the rights which make the essence of sovereignty, and which are the marks whereby a man may discern in what man, or assembly of men, the sovereign power is placed and resideth. For these are incommunicable and inseparable. The power to coin money, to dispose of the estate and persons of infant heirs, to have pre-emption in markets, and all other statute prerogatives may be transferred by the sovereign, and yet the power to protect his subjects be retained. But if he transfer the militia, he retains the judicature in vain, for want of execution of the laws; or if he grant away the power of raising money, the militia is in vain; or if he give away the government of doctrines, men will be frighted into rebellion with the fear of spirits. And so if we consider any one of the said rights, we shall presently see that the holding of all the rest will produce no effect in the conservation of peace and justice, the end for which all Commonwealths are instituted." Thomas Hobbes, Leviathan.

[5] According to the PBS website:  "The Standard’s only serious competitor -- the Tidewater Pipe-Line Company (later the Tidewater Oil Company)–emerged in 1879-83. It took Rockefeller by surprise and succeeded in building a pipeline from the Oil Regions east across northern Pennsylvania to Williamsport, where the oil was transferred to the Reading Railroad. The Reading then took the oil down to a refinery at Chester, Pennsylvania on the Delaware Bay. Rockefeller tried to gain control of Tidewater but failed, and his rival had about 10% of the market in 1888."  In 1953 J. Paul Getty would gain control of Tidewater.  But that story will wait until another day.  For more information on the beginnings of the rock oil industry and the role played by Frederick Prenctice and George Bissell, founders of the New Jersey Oil Company in Bayonne, N.J., see Paul Frederick’s website about Venango County, Pa.

[6] A history of Stevens Castle from a 1902 book (Historic Houses of New Jersey by W. Jay Mills, 1902) is given at the website Get NJ , which states:
On the highest eminence of “Point Castile,” whose “greene and white cliffes” were supposed to be “copper or silver mynes” by the followers of Henry Hudson, on his memorable voyage up the river which bears his name, Colonel John Stevens, the famous inventor, built a handsome mansion soon after his purchase of Hobuck Island, in 1784, and called it the Castle.... Hobuck Island, or Hoboken Island, formed the largest part of the confiscated Bayard estate, and was much sought after when it was noised about that it was to be put upon the market.... Both the New Jersey and New York shore lines above the harbor presented a very rural appearance in those days. Back of the slim line of wharves were low houses and church spires, and stretches of green fields and undulating meadow-lands rolled away into a gradually rising and wilder landscape.... Hoboken as a pleasure resort, and the early Castle itself, are now but memories. The present Castle was erected about 1845, and is a familiar landmark to the millions who cross the New York and Jersey City ferries to the railroad termini. Rising out of a grove of old trees, it is a most imposing building, and it is pleasing to think that it is always to be owned by a Stevens and can come to a serene old age, smiling on generation after generation.... The Stevens home to-day does not miss the wide strip of pebbly beach, now profaned by huge piers and warehouses, the immortal river walk, which has disappeared, where old New York came to promenade and recruit its wasted energy, and the forgotten green where the weary rested and sipped their sangaree punch and strong waters. These all belong to another period, but it can ever look proudly on the great institute which the wealth given by Hoboken helped the family to establish, almost on the spot where Colonel John Stevens, the planner of the forgotten “Hoboken, the Beautiful” had his workshop and conducted his mechanical experiments.
                A terminal map showing Castle Point, as well as an interactive map of Hoboken in 1881.

[7] See "Imperial Germany's Sabotage Operations In The U.S." at Federation of American Scientists website.

[8] According to Jules Witcover, Sabotage at Black Tom: Imperial Germany's Secret War in America, 1914-1917 (Chapel Hill, NC: Algonquin Books, 1989):
The explosion—“like the discharge of a great cannon,” as a newspaper report described it—sent flaming rockets and screeching shells high into the sky like a mammoth fireworks display, turning the night into day. Shrapnel scarred the Statue of Liberty and damaged buildings on Ellis Island. The shock wave from the blast slammed into Manhattan, Brooklyn, Jersey City and Bayonne, shattering thousands of windows. In Lower Manhattan, glass and debris plunged to the streets. Pedestrians were knocked off their feet. The blast jolted the Hudson Tubes train line that linked Jersey City and Hoboken with Lower Manhattan, panicking passengers.
[9] The Railroad's history shows how it came to be a wholly owned subsidiary by 1961 of the Pennsylvania Railroad.  When the LV first began expanding into Pennsylvania by joining in a lease with the Philadelphia & Reading (a railroad that had borrowed with assistance from financiers J. P. Morgan and Anthony Drexel), until Morgan backed out on the Reading and allowed its collapse.  Morgan then agreed to fund the Lehigh Valley and even moved its general offices from Philadelphia to New York. "The independent stockholders of the line protested the diversion of money from dividends into physical plant, and regained control in 1902. Several other railroads bought blocks of LV stock — New York Central, Reading, Erie, Lackawanna, and Central of New Jersey — and the road became part of William H. Moore's short-lived Rock Island system. In 1903 the company underwent some corporate simplification, merging and dissolving a number of subsidiaries....Several events during the teens adversely affected LV’s revenues: a munitions explosion on Black Tom island on the Jersey City waterfront in 1916, the divestiture of the Great Lakes shipping operation in 1917 (required by the Panama Canal Act), the divestiture of the coal mining subsidiary (required by the Sherman Antitrust Act), and a drop in anthracite traffic as oil and gas became the dominant home-heating fuels."  In the 1920's the Pennsylvania Railroad would hold 31% of the Lehigh Valley stock.   In 1961 the Pennsylvania Railroad bought all the outstanding stock to protect its previous investment in the Lehigh Valley.  The importance of this railroad and its merger with the New York Central cannot be overemphasized and will be explored in future segments.

[10] U.S. Supreme Court case Z. & F. Assets Realization Corporation v. Hull (found at 311 U.S. 470), can be read in full online.  McCloy also represented the other plaintiffs (the Agency of Canadian Car and Foundry Company, Limited and Bethlehem Steel Company), claiming arson against the German government under the Settlement of War Claims Act of 1928.  

[11] The name “Buckeye” came from the mascot of Ohio State University, where Samuel—a superior athlete and great fan of the new sport of football—volunteered to coach the university’s team.

[12] Quoted from "Memorandum of Agreement Made this 25th day of November, 1892 by and between Orland Smith, S.P. Peabody, R.M. Roland, James Timms and W.F. Goodspeed,... and Frank Rockefeller and Thomas Goodwillie..." by Mansel G. Blackford, "Small Business in America:  Two Case Studies," paper delivered at Ohio State University.  See papers on other subjects at the "Business and Economic History" website.

[13] The Janney Coupler was one of 8,000 patents, but its design was probably the best.

[14] The testimony was quoted in Ida Tarbell's classic study, The History of Standard Oil.  It was the resulting commission which Gustavus Myers discusses in another classic work, History of the Great American Fortunes (1936).

[15] The word “apparently” is used here for lack of any official source having been found to verify his role.  In The Unauthorized Biography of George Bush, authors Webster Tarpley and Anton Chaitkin cite their source for their statement as follows:  “Gen. Hugh S. Johnson to Major J.H.K. Davis, June 6, 1918, file no. 334.8/168 or 334.8/451 in U.S. National Archives, Suitland, Maryland”.   Johnson (1882–1942), a West Point graduate, worked under Quartermaster General George Goethals to reorganize army procurement, and he represented Goethals on the War Industries Board—helping to integrate military and industrial sectors behind a massive wartime buildup. He again returned to government in 1933 under the New Deal to head the National Recovery Administration.  Goethals had replaced John F. Stevens (from the family who founded Stevens Institute) as chief engineer of the Panama Canal.  The chapter entitled “The War Department From Root To Marshall” in the book by James E. Hewes, Jr., Special Studies:  From Root to McNamara; Army Organization and Administration (Washington, D. C.:  U.S. Army Center of Military History, 1975), gives a good history of the reorganization of procurement services during the first decades of the 20th century.  (See Contents.)  However, it does not mention the name Samuel P. Bush.  A short time later, again according to Tarply and Chaitkin, he would move to the Facilities Division of the War Industries Board.

[16] General Smedley D. Butler accused Gerald McGuire, who worked for Col. Grayson Mallet-Prevost Murphy, of attempting to bribe him to use his influence with veterans to join the cabal, which included Gen. Hugh S. Johnson, Robert Sterling Clark and John W. Davis, attorney for the “Morgan Interests.”  The plot is described in the book by Jules Archer, The Plot To Seize the White House (New York:  Hawthorn Books, Inc., 1973), one review of the many which discuss the plot can be read online here.  

[17] Her great-grandfather Samuel Church (1800-1857), born in Ireland, was the  major partner in Kensington Iron Works after he moved to Pittsburgh in 1822—as well as a preacher for 17 years at the First Christian Church of Allegheny.  Colonel Samuel Harden Church’s importance in the community of Pittsburgh can easily be seen from his role in the Centennial Celebration of Pittsburgh in 1909.  The chapter on the celebration is excerpted from the book by J. H. Garrison, ed.   Program of the International Centennial Celebration and Conventions of the Disciples of Christ (1909), the contents of which can be searched and read online.

[18] Church had even been a guest at Carnegie’s Cluny Castle in Scotland while retracing Cromwell’s steps after his book was published in 1894.  See Volume XXIV, Biographical Review, Containing Life Sketches of Leading Citizens of Pittsburgh and Vicinity (Boston: Biographical Review Pub. Co., 1897), p. 288.  A photograph of Cluny Castle is online.  Another trustee of the board selected by Carnegie was modern painter John W. Beatty.  As stated in Garrison’s Program described above:  Andrew Carnegie first chose Pittsburgh realist painter and friend John W. Beatty to head the institute's department of fine art.”  Another famous Pittsburgh citizen, Andrew W. Mellon, would also hold a seat on the board at a later date—as well as serving in the role of U.S. Treasury secretary under presidents William G. Harding, Calvin Coolidge and Herbert Hoover, the latter of which also appointed Mellon ambassador to Great Britain in 1932.  Mellon (1855-1937) was one of the richest men in the United States, owing to investments in aluminum, coke, oil, and steel.  Mellon will be profiled in a future article.

[19] A photo of Church and a brief description of Church’s role in the plot can be reviewed at the website maintained by the Coalition To Oppose the Arms Trade.

[20] William Alexander Taylor, Centennial History of Columbus and Franklin County, Ohio  (Chicago-Columbus: The S.J. Clarke Publishing Co., 1909), p. 198.  This book is online and has an excellent search engine.

[21] An excellent website—highly recommended—with historical information and photographs is maintained by the Grandview Heights neighborhood association.
 

Tuesday, October 21, 2014

Skull and Bones Accepted Hegel's Dialectic Theories


Freedom Through Order
The philosophy which has dominated the Western world since the mid 19th Century can be reduced to one tenet—ultimate peace comes only through conflict—derived from Hegel’s dialectic teachings.  It proposes that a clash between ideologies (thesis and antithesis) is a normal historical phenomenon which always results in compromise (synthesis) that advances civilization to a higher level of order.  Conflict, in other words, is good, and peace is not necessarily desirable (or profitable).[1]

Educated men had founded governments after a period of violence and chaos, a state that would return unless members of society advanced to a higher level—acceptance of a need to abide by voluntary rules of law and order.  Once most individuals accepted the “truth” that an ordered life brings greater peace, leaders could then frame institutions by which non-conformists could be forced into their “proper role” in a peaceful society.  

This philosophy, which had risen to increasing prominence by 1860, appealed to elitist Americans studying in German universities during those decades.  Recognizing a German need at the time to unify the nation state, Hegel’s writing also looked forward to a day of universal—global—brotherhood accomplished by rejecting selfish individualism.  Repelled by the chaos of the French Revolution, Hegel taught that political democracy and individualism ultimately resulted in repression rather than liberty and that an orderly and structured society afforded more freedom than a chaotic one.  

American students in Germany who were most attracted to this philosophy believed that Western classical liberal thought upon which America had been founded, rather than being the ideal toward which America should strive, was actually the enemy of progress toward universal brotherhood. Moreover, one of those students, William HuntingtonRussell, whose family had made a fortune by selling opium in China, returned to Yale in 1832 to found a branch of a German secret society at Yale with fellow student Alphonso Taft.[2] It is this secret society, now called Skull and Bones, into which both John Kerry and George W. Bush were inducted during their junior year at Yale.

Hegel’s German idealism (categorized as such because it stressed the dominance of ideas over physical environment) would become the philosophical basis for the work of both Karl Marx  and Adolph Hitler—each of whom envisioned different ends to be achieved by the same means—control over the individual by the state. This paradox—that Hegel’s theories were used as the foundation of the Bolshevik revolution of 1917, while at the same time giving a basis to the fascist movement of the 1930’s—is not so extraordinary when we realize that, as AntonySutton’s research reveals, both extreme economic doctrines were financed by the same small group of Americans, at the core of which were members of the secret society that had previously been founded by Russell and Taft.[3]  This group became clustered around the Peabody and Morgan banking institutions.

One facet of dialectics was its philosophical justification for simultaneously supporting two opposite positions on a political issue, thus allowing its members to make a profit no matter which party was in power. Talk about hedging bets!  Skull and Bones was set up as a secret fraternity of men from elite social strata within the fields of education, religion, medicine, law, science, transportation, banking and the arts.  There was a place for opposing points of view within their scheme, as long as each man agreed to maintain the established class order and took an oath to keep everything related to Bones secret.  In this way, regardless of whether political power was in the right hand or the left, depending on which way the political pendulum was swinging, power would be in the skeletal hand of Yale’s elite Skull and Bones.

Pool of Wealth—a Goose That Lays Golden Eggs
In 1832, the year the first Skull and Bones class was initiated, America was not unlike Hegel’s Germany.  A generation after the War of 1812 the U. S. Constitution was still less than a half century old and the new nation more divided than ever. The failure of the Second Bank of the U.S. in 1832 left state chartered banks free to issue their own bank notes, which could be traded as currency—resulting in financial chaos leading to the Panic of 1837. Consequently, a uniform currency, a stable rate of exchange, and a secondary market for securities had to be created in order for the American economy to have liquidity. The National Currency Act of 1863 and National Bank Act of 1864 helped to achieve these needs, replacing state chartered banks with national ones, though it would be alleged after numerous panics—in 1873, 1893 and 1907—that there was a need for a centralized control in order to expand and contract the currency when needed. 

By 1878, once the country had recovered from the 1873 panic caused by the failure of Jay Cooke’s bank, New York City had replaced London as the dominant financial center for United States capital.  American businessmen were primed to get rich. Skull and Bones members decided their time had come to consolidate the power their founders had envisioned. 

What Russell and Taft envisioned by creating the Russell Trust was a network of men who could use surplus wealth (“golden eggs”) produced from the lucrative China Trade as a venture capital pool to acquire equity in business entities to be created by American entrepreneurs. The pool could be repaid with interest while helping the entrepreneurs become rich, with new pools of wealth springing up to seed new ventures. Each new pool of money is like a goose which lays golden eggs.

The idea was that Bonesmen would quickly advance to the top of their chosen profession in order to accumulate an endowment of surplus for investment, to be managed by fellow Bonesmen. As pointed out by Antony Sutton, Bonesmen, such as Daniel Coit Gilman and Andrew Dickson White, founded Johns Hopkins University and Cornell, respectively.  Similarly, those who chose careers in  religion, medicine, law, science, transportation, banking and the arts also controlled trust funds or handled large pools of money, which added to a huge pool ultimately managed by the same bank establishment, headeduntil his death in 1913by J. Pierpont Morgan.

NOTES:

[1] Georg Wilhelm Friedrich Hegel (1770-1831),  a German professor at the University of Berlin from 1817 until his death in 1831, deduced from his study of European history that mankind had made a transition from a natural life of savagery to a state of order and law.  Hegel asserted, “What is rational exists, and what exists is rational.” Following from that, events of history are not accidents, but instead, manifestations of the universal divine idea. While human conditions continuously change, Hegel believed, each change moves the world closer to the universal goal of history: the achievement of human freedom. Thus, history is the story of the progress of humanity toward true freedom.  Hegel explained the ongoing, progressive path of history through his “law of the Dialectic”.  “According to Hegel, every age is governed by a dominant idea, which he labels the spirit or the "thesis" of the age. In time, this thesis is challenged by a new concept, its ‘antithesis,’ which is incompatible with the "thesis." To resolve the conflict between the ‘thesis’ and the ‘antithesis,’ a blending of opposites occurs, thereby producing a higher ‘synthesis,’ which becomes the new dominant idea, or thesis, of the next age. History consists of the constant flow of ideas and their opposites, which when reconciled, reach purer forms. The new synthesis does not come without strife, but conflicts, commonly regarded as tragedies, to Hegel do not demonstrate the triumph of evil. They are necessary steps forward toward the universal goal, human freedom. To Hegel, however, the highest form of freedom was not the absence of self-restraint, for the true ethical unit was not the isolated individual but the state in which the individual lives. Consequently, the movement of history is not toward individual freedom but toward the freedom of the community as a whole. Therefore, Hegel's philosophy exalts the state because only through it can humankind find meaning and be truly free.”  Quoted in “Georg Wilhelm Friedrich Hegel,”  World Eras, Vol. 9: Industrial Revolution in Europe (1750-1914). Gale Group, 2002.


[2] After his graduation from Yale, Russell would found a prepatory academy in New Haven called the New Haven Collegiate Institute with Stiles French, which later became the Russell Military Academy. 



[3] WALL STREET AND THE BOLSHEVIK REVOLUTION and WALL STREET AND THE RISE OF HITLER (1974 Arlington House; 1999 Buccaneer Books).