A Soul-less Patriot Speaks

Leo Strauss

It seems fitting, now that Chief Justice John Roberts has written what some legal analysts are calling his defining moment, to look at what was written in 2005 at the time of Roberts' confirmation hearing, when he told the Senators on the Judiciary Committee how he valued only, without definition, the "Rule of Law." When chosen for the Supreme Court, Roberts was a darling of the Federalist Society, founded in 1982 at Yale, Harvard and the University of Chicago with initial funding from the Institute for Educational Affairs, a group founded by Irving Kristol and William E. Simon, Gerald Ford's Secretary of the Treasury, during the same years Dick Cheney and Donald Rumsfeld received their first taste of power. This conservative legal society was based upon the neo-fascist principles of Leo Strauss, long-time professor at the Rockefeller-inspired University of Chicago. Strauss, a Zionist who grew up in Germany, studied in the 1930's in Paris and moved to London on Rockefeller Fellowships, before becoming a research fellow at Columbia University in New York. Like Henry Kissinger, he was bought and paid for by the Rockefellers, who control the Federal Reserve Bank of New York.

The Essence of Jurisprudence 

 © 2005 by Linda Minor

  

"Judge Roberts, I'm not talking about an issue. I'm talking about the essence of jurisprudence." 

Arlen Specter (R-Pa.), chairman of the Senate Judiciary Committee

A defining philosophy

What is law?

What is justice?

Even more to the point, what is this “rule of law” which, like a beacon in the night, guides Supreme Court Chief Justice nominee John Glover Roberts, Jr.?

Claiming immunity from any corrupting influences of ideological, moral and philosophical prejudices, as well as independence from an untidy subjectivity derived from moralistic value judgments— sometimes called heart or soul—he promises that he will be a judge who objectively evaluates evidence and omnisciently interprets legislative intent.

Even Senator Arlen Specter, who created out of thin air his “magic bullet” theory (in the Warren Report investigation into the murder of President John Kennedy), was almost struck dumb by Roberts’ facile ability to evade questions designed to reveal his core values as a human being. Specter’s apparent concern that the Supreme Court will continue to invalidate laws passed by Congress on the rationale that they do not meet an undefined “congruence and proportionality test”—a test which, Specter declared, was “plucked … right out of thin air”. Insulted by the Court’s arrogance, Specter inquired whether Roberts believes that the Court, in manufacturing such a test out of whole cloth, in order to strike down duly enacted legislation, is thus engaged of “judicial activism”.

ROBERTS: Well, these questions arise, of course, under, as you know, Section 5 of the Fourteenth Amendment, where the issue is Congress’ power to address violations of the Fourteenth Amendment. And it's an extraordinary grant of power. And the court has always recognized it as such. And their decisions in recent years … which upheld Congress' exercise of authority. The most recent cases, Lane and Hibbs, uphold Congress' exercise of authority to abrogate...

SPECTER: But, Judge Roberts, they uphold it at the pleasure of the court.  Congress can't figure that out. There's no way we can tell what's congruent and proportional in the eyes of the court.

ROBERTS: Well, and that was Justice Scalia's position in dissent. He had originally...

SPECTER: Do you agree with Scalia?

ROBERTS: Well, again, this is -- the congruent and proportional test...

SPECTER: Do you disagree with Justice Scalia?

ROBERTS: I don't think it's appropriate, in an area... (LAUGHTER) ... and there are cases coming up, as you know, Mr. Chairman. There's a case on the docket right now that considers the congruence and proportionality test.

SPECTER: That's why I'm raising it with you. I'd like to see a sensible interpretation with the court in that case.

ROBERTS: Well, and if I am confirmed and I do have to sit on that case, I would approach that with an open mind and consider the arguments.  I can't give you a commitment here today about how I will approach an issue that is going to be on the docket within a matter of months.

SPECTER: Judge Roberts, I'm not talking about an issue. I'm talking about the essence of jurisprudence. I'm talking about the essence of a man-, woman-made test in the Supreme Court which has no grounding in the Constitution, no grounding in the Federalist Papers, no grounding in the history of the country. It comes out of thin air in 1997. And it's used in Lane and Garrett, two 5-4 decisions on identical records on an identical act, and the country and the Congress are supposed to figure out what the court means. So I'm really talking about jurisprudence. [emphasis added] [1]

Senator Specter would likely agree with Black’s Law Dictionary’s definition of jurisprudence as

“that science which has for its function to ascertain the principles on which legal rules are based, so as not only to classify those rules in their proper order, and show the relation in which they stand to one another, but also to settle the manner in which new or doubtful cases should be brought under the appropriate rules.”

It is the function of jurisprudence, according to Black’s Dictionary, when two different rules seem equally applicable to a given fact situation, to

“consider the ultimate effect which would be produced if each rule were applied to an indefinite number of similar cases, and to choose that rule which, when so applied, will produce the greatest advantage to the community.”

This definition assumes, of course, that such a thing as a community still exists in the United States.

That word connotes a group of people who share a value system and have control over the direction of their society. Since the Constitution gives the Senate the role of sharing in the president’s appointment of Court judges, one could infer from that role the right to determine whether a nominee’s philosophy would tend to protect the purposes for which the American Constitution was designed. When repeatedly asked about what he values, however, automaton John Roberts invariably gave the same answer: 

“the rule of law.”

Respect for institutions

''He's somebody who has respect for institutions. I think institutions have been important to him in his life, like Harvard, the Catholic Church and the Supreme Court. He's not likely to be anybody to do anything too radical,'' Roberts’ law school roommate, Paul Mogin, told a New York Times reporter for an article that appeared July 21, 2005. 

That characterization partially answers our questions. 

The overriding philosophy of jurisprudence which took over the court during the reign of Chief Justice Earl Warren unquestionably reached out actively in protecting the rights of the individual, as opposed to the goals of an orderly society. From all indications, it appears that Justice Roberts will assist in swinging the pendulum back in favor of institutions in an attempt to re-establish the values Americans claimed defined the nation, before President Eisenhower’s appointment of California Governor Earl Warren led the country down the road to perdition.

Greatest Judge of His Era

Both Paul Mogin and John Roberts clerked under Judge Henry Jacob Friendly, long-term Federal Judge of the Second Circuit Court of Appeals sitting in New York. [2] Their mentor, Judge Friendly, had himself been a protégé of Justice Felix Frankfurter, a man we described in “The Untitled Aristocracy” as being the pivot man at a Milner-Kindergarten-like group home in Washington, D.C. dubbed “the House of Truth,” established in 1911 to instill a certain value system in young men destined for future greatness. 

Brandeis

With Frankfurter’s support, Friendly was selected by Justice Louis D. Brandeis to serve as the latter's law clerk during the 1927 term of the Court. Brandeis — an American-born son of a recent immigrant who became a prosperous grain and produce merchant in Kentucky — was the first Jew appointed to the Court in 1916 by Woodrow Wilson. Two years before his appointment, Brandeis had published a very small but extremely interesting book called Other People's Money — and How the Bankers Use It, attempting to prove that the “Money Trust,” made up of the Morgan and Rockefeller banking interests, controlling corporations with resources that aggregated in the billions of dollars, constituted a monopoly. 

It was Brandeis’ thesis that the evils of concentration of social and political power could not be addressed until the bankers’ paralyzing grip was broken by a law prohibiting interlocking directorates. He recommended state control of corporations through a regulatory process designed to put power in the hands of those who owned the centralized private banking system — to enable them to eliminate undesired competition from other bankers or from the government itself.

His warning fell on deaf ears, however, until — after the collapse of the banking system in 1929 when the nation fell into an economic gridlock until 1933 — the year Congress recognized the danger of monopoly by enacting the Glass-Steagall Act prohibiting banks from owning corporate stock.  By that time a new generation of lawyers was ready to spearhead the New Deal movement within the trail already blazed in England by the Fabian Socialists.

Frankfurter

Felix Frankfurter — a Jewish emigrant from Vienna, Austria in 1894, and later a graduate of City College of New York and Harvard Law School—had been a legal adviser to Colonel House at the peace conference in Versailles in 1919, and later an active liberal co-founder of the American Civil Liberties Union and of the New Republic magazine.  He had become a friend and adviser to Governor Franklin Roosevelt in New York (first elected in 1928), while Colonel House (an old family friend of FDR's mother, Sarah Delano) was also giving advice to the President in secret from his home in Manhattan.  FDR appointed Frankfurter to the Court in 1939.

The importance of mentoring cannot be over-emphasized because it is in this way that secret knowledge about how the country is financed is passed from one bureaucracy to the next—whether it be executive, legislative, or judicial in nature. Understanding Judge Friendly’s background and philosophy of jurisprudence will reveal more of the type of justice Roberts will be than any of the papers requested by and denied to the Senate committee in charge of his confirmation.  It is obvious from the questions the committee asked in open hearings that they really don’t “get it” anyway. 

Henry Friendly was one of four attorneys who left the law firm of Root, Clark, Buckner and Ballantine in 1946 to form Cleary, Gottlieb, Friendly, and Hamilton. where Citigroup and Goldman Sachs attorney, Robert E. Rubin, was trained prior to 1966. Root and Clark had been founded by the son of Elihu Root (see “Taking the Golden Eggs, Part I — The Goose Comes of Age”).  Root had assisted the same corporate bankers, railed against by Brandeis, in using “other people’s money” to pool investment capital entrusted to their management to create vast fortunes for themselves, while at the same time creating a huge infrastructure of wealth which was allowed to trickle down to “charities” of the mangers’ choosing. By controlling such pools of wealth, these nouveaux philanthropists established themselves as America’s own class of untitled aristocrats. 

It is difficult to imagine attorney Friendly actually disapproving of this system, rising as he did from a Wall Street firm that handled the estates of Pittsburgh’s Andrew Carnegie and Chicago’s Marshall Field. After splitting from Root and Clark, Friendly’s new law firm brought in as clients the government of France and Jean Monnet (godfather of the European Union), opening branch offices in Paris and Brussells in 1960 and Hong Kong in 1980.[3] Friendly himself represented Juan Trippe’s Pan-American Airways, in which the aristocratic Whitney family were major shareholders, while Prescott Bush—from his office at Brown Brothers, Harriman — was helping with financing the corporation. [4]

The Whitneys (and Paynes), in addition to controlling a large block of Standard Oil stock with the Rockefellers, were also major players in the American Tobacco Company, as well as ubiquitous on the polo and horse-racing circuit, along with Harrimans, Mellons, and Belmonts, to drop a few names. These families were major players in controlling banks which gained control of the Federal Reserve banking system soon after World War I, and they had family members who were donors to the Democrat as well as to the Republican Party.

A need for "orderly markets"

While representing such wealthy clients as these, Friendly’s firm gave lip service to an ephemeral wish to help the disadvantaged classes.  One partner of the firm related to author Paul Hoffman,

“We thought we could — in a non-patronizing way — train the indigenous bar.  But when the minority businessmen come in, their lawyers are constantly Cravath, or Dewey Ballantine, or some guy named Goldberg who’s cut himself in for eighteen per cent of the company as his legal fee." [5]

This caviling complaint from the “Jews and liberals” who created Cleary, Gottlieb [6] reminds us somewhat of the neocons who once claimed to be Trotskyites. 

Neocon godfather, Irving Kristol, for example, quoting Machiavelli’s “patriotic” statement “I love my country more than my soul,” in a 1961 essay recommended Leo Strauss’ “laudable” analysis that “when a nation’s interests are involved, no considerations of justice, legality, or propriety ought to affect our judgment.” [7] Kristol in a 1975 essay told his readers that America’s progressive reform, epitomized by that primordial progressive Theodore Roosevelt, had abandoned populism in favor of regulation, thus becoming an "indigenous" and peculiarly American counterpart to European socialism. Both the progressive and the socialist movements were denoted by Kristol as “elitist,” whereas populism was said by Kristol to incarnate:

“an antinomian impulse, a Jacobin contempt for the ‘mere’ forms of law and order and civility. It also engenders an impulse toward a rather infantile political utopianism, on the premise that nothing is too good for ‘the people.’Above all, it is a temper and state of mind, which too easily degenerates into political paranoia, with ‘enemies of the people’ being constantly discovered and exorcised and convulsively purged. Populist paranoia is always busy subverting the very institutions and authorities that the democratic republic laboriously creates for the purpose of orderly self-government.” [8]

This neocon analysis is thus broken down into a battle between those favoring “Jacobin democracy” opposed to those recognizing the need for "institutional creativity." [9] Can't you just hear the propaganda dripping from Kristol's pen? 

He favored the elitism of the 1% and feared the populism of the 99%.

Kristol clearly positioned himself on the side of the multinational “quasi-public” corporation (he terms it “state capitalism”), having as its goal the ability to create “orderly markets.” His neo-conservatism — like Frankfurter’s liberalism and Brandeis’ progressivism — was derived from German scientific idealism of the mid-19th century. Each of these isms stemmed from the same philosophy pervading New York’s Columbia University and its environs (like New York University, City College of New York and the New School for Social Research), which the neoconservatives called “home” until they moved en masse to Washington, D.C. in 1972. [10]

A government of laws

When John Roberts speaks effusively about “the rule of law,” he assumes that his listeners understand and agree with the adversary system which prevails in the American judicial system. This dialectical legal process is the mechanism by which a judge balances two opposing arguments. Roberts sees his strength as a judge in his ability to evaluate the performance of the adversaries and rule in favor of whoever gives the best performance, presents the most persuasive evidence or the most compelling judicial precedent supporting his interpretation of the statutory or constitutional law at issue. 

The Democrats on the Senate Committee, though mostly lawyers, seemed strangely confounded by the ease with which Roberts could facilely take a position on either side of any issue.  Senator Durbin’s questioning, in particular, delved into a statement Roberts had made to him in previous days: 

“You were asked the other day about your participation in the 1996 case of Roemer v. Evans, a landmark case that struck down a Colorado law that would have taken away the rights of gay and lesbian Americans. You gave some legal advice to the lawyer in this case who was trying to uphold the rights of those with different sexual orientation. So I'll ask you, if the other side had come to you first and said, 'Mr. Roberts, we would like you to defend this state amendment that took away the rights of gays and lesbians,' would you have taken the case?” [11]

Following up, Durbin rephrased:  “And the purpose of my original question was this: All of us are trying to get down to, what are your core values? Where would you draw a line, saying, ‘I do have principles and values. There are certain things I would not use my legal skills to do because they conflict with those values’?  … If this is just a process, a legal contest and you'll play for any team that asks you to play, it raises a question about where would you draw the line, if you would ever draw the line.  And I think that is why I've asked this question and I want to give you an opportunity now to tell us.”

Roberts--A Hired Gun?

Hired Gun

Roberts answered:

I became a lawyer—or at least developed as a lawyer—because I believe in the rule of law…. So that's why I became a lawyer, to promote and vindicate the rule of law.

Now, that means that that's at issue and play regardless of what the cause is. And that's why, as we were talking yesterday, you can go in my record and you will see, yes, I've advanced cases promoting the cause of the environment. As I was discussing earlier, I've been on both sides of this affirmative action issue. Take even technical areas like antitrust:  I've defended corporations; I've sued corporations.

In each case I appreciated that what I was doing as a lawyer, particularly as a lawyer before the Supreme Court, was promoting the rule of law in our adversary system. I viewed that as—I appreciate that some may say, “Well, that sounds like you're a hired gun,” to be disparaging. “You're going to take the side of whomever [sic] comes in the door first.” I think that's a disparaging way to capture what is, in fact, an ennobling truth about the legal system: that lawyers serve the rule of law, above and beyond representing particular clients. [12]

Following upon Durbin’s line of questioning, Senator Edward Kennedy attempted (but failed) to ask Roberts whether he possesses a heart and soul—or whether his entire being is motivated by his head. [13]

Roberts gives more weight to institutions.

What the Senate committee wanted to know about Roberts is this:  Which side of the scale would Roberts place the most weight?

• Individual freedoms derived from the abstract concept of natural law—as taught to American school children as the basis of American democratic government; or

• Unwavering obedience to the state, with its centralized powers over market forces, coupled with ancillary powers of legal enforcement. 

In jurisprudential terms, this is a choice between two philosophies — the rights of individuals; or the rights of the corporate state.

Had the question been phrased in this way, perhaps John Roberts, paraphrasing Machiavelli, would have replied, “I love the law more than my own soul.”

That's a scary proposition. Hitler’s lawyers would, of course, have said the same.

~~~~~~~~~~~~~~~~~~~~~

NOTES:

[1] Transcript, September 14, 2005, Morning Session, Senate Judiciary Committee.

[2] Former law students may remember Friendly as the author of the famous “What is chicken?” opinion that supplies what sparse humor is available in law school. Reading this opinion will make all reasonable non-lawyers grateful they never succumbed to any temptation to pursue legal studies. It may also help to explain what Bill Clinton said, “It depends on what the meaning of is is.” Both Clinton and Roberts would have made Judge Friendly proud.

[3] The New Republic was owned and subsidized by the “liberal” wing (which some writers refer to as "left gatekeepers") of the Whitney family, particularly by Dorothy Whitney Straight and her husband Willard Straight. Willard was an investment banker with J.P. Morgan in Asia. Later the magazine would be kept alive by their son Michael Whitney Straight, a one-time Communist, who was a close friend and consultant working with Leonard Garment during the Nixon and Ford administrations on matters involving “the arts.” Straight had been a stepson, since 1925, of Leonard Knight Elmhirst, a leftist aristocrat at Trinity College, Cambridge during World War I, who worked with such notables as John Meynard Keynes, George Bernard Shaw, Aldous and Julian Huxley, Bertrand Russell, H G Wells, and Sir Richard Stafford Cripps to promote the ideal of socialism as an evolutionary process resulting from Democratic Socialist legislation. According to Straight’s obituary in The Guardian, January 9, 2004, 

“his university friends included Tess Mayor, who later married Lord Rothschild - who was also to be accused of being a member of the notorious spy ring - and who helped to expose Philby, Burgess and the prominent communist James Klugmann.”

Straight studied at the

“London School of Economics and, in 1934, Trinity College, Cambridge. There, he joined the Communist party.” 

He was also a good friend of President Franklin Roosevelt’s legal adviser Felix Frankfurter.

     Intriguingly, Scooter Libby’s mentor Len Garment worked on his very first project after arriving in Washington in 1969 with Michael Straight (according to Garment: “the model of an American aristocrat”). Straight, a former Mudge, Rose client, Garment tells us, “made an offer I couldn’t refuse.” [Leonard Garment, Crazy Rhythm: My Journey from Brooklyn, Jazz and Wall Street to Nixon’s White House, Watergate, and Beyond (Cambridge, MA: Da Capo Press, 1997), 160.] The Garment family was given the right to replace the family of Fred Hitz--actually Frederick Porter Hitz -- in an estate consisting of

“seven acres of gorgeous landscaping with access to a bass pond, a grass tennis court, and horse barns…a nice old caretaker couple…who…looked after the property. The house itself was a tidy little brick Colonial built around 1780; the history of the house was also the history of the way a part of Virginia lived for two centuries.”

Garment failed to mention that Frederick Porter Hitz, a 1961 Princeton graduate with a 1965 Harvard law degree, was first employed after law school as a lecturer at the newly created university in Ife, Nigeria — a former British colony which had gained independence only in 1960—and followed that as a foreign service officer from 1967 through 1973 in the former French colony of the Ivory Coast in West Africa, returning to Washington in 1974 as a congressional relations officer. The rest of the Hitz resume includes the following:

• U.S. Department of Defense, Washington, deputy assistant secretary of legislative affairs, 1975-77; 
• Executive Office of President Carter as member of the energy policy and planning staff, 1977; 
• U.S. Department of Energy director of congressional affairs, 1977-78; 
• Central Intelligence Agency, legislative counsel, 1978-81, inspector general, 1990-98. 

In the latter role, it was Hitz who was assigned the task of investigating the claims of Gary Webb’s “Dark Alliance” series, published in the San Jose Mercury News relating to the C.I.A.’s alleged drug trafficking activities through cut-outs such as Ricky Ross, Danilo Blandon, Norwin Meneses implicated with the Nicaraguan contras as being responsible for the emergence of crack cocaine in South Central Los Angeles. Given Hitz’ background it is understandable that he “found absolutely no evidence to indicate that CIA as an organization or its employees were involved in any conspiracy to bring drugs into the United States.” Hitz Report, Volume I: The California Story, 1998.

Before moving to Washington, Garment had been asked by Peter Flanigan (a Dillon, Read partner and adviser to Nixon on financial and economic matters) to find a new person for chairman of the National Endowment for the Arts (NEA), and he spent untold hours with Michael Straight “to patch together a plan to make the endowments into significant institutions.”

In the “summer of 1974” (Nixon resigned in August 1974), the Washington Monthly described Garment’s lease from Michael Straight, a Democrat, as a “sweetheart” contract arranged as a quid pro quo in exchange for Garment’s self-described “ploy” to sneak the Rockefeller Foundation’s Nancy Hanks into the administration as a cover for Michael Straight. [Crazy Rhythm, 162-169]. 

[4] Kevin Phillips, “Military Industrial Superiority Complexes”. According to Phillips: “As WWII gathered, Brown Brothers Harriman and Skull and Bones each boasted extraordinary numbers of persons who became private or public leaders of the military-industrial complex and its intelligence auxiliaries. Averell Harriman was dabbling in the aviation business, studying imaginative new airplane designs and helping to finance fellow Bonesman Juan Trippe’s Pan American Airlines.”

[5] Paul Hoffman, Lions in the Street (New York: Saturday Review Press, 1973), 214.

[6] Hoffman, 218.

[7] Irving Kristol, “Machiavelli and the Profanation of Politics,” reprinted in Neoconservatism: The Autobiography of an Idea (New York: The Free Press, Simon & Schuster, 1995), 158. For a discussion of Leo Strauss and his neoconservative followers, see Robert Locke’s “Leo Strauss, Conservative Mastermind,” in FrontPage magazine online.

[8] Kristol, “Corporate Capitalism in America,” Neoconservatism, at 214.

[9] Kristol, 227.

[10] For more discussion about the neoconservatives’ assistance in fundraising efforts for Republicans, see “Killer Political Instincts”.

[11] Transcript, September 15, 2005, Evening Session, Senate Judiciary Committee.

[12] Transcript.

[13] He prefaced his question of what kind of justice he would be with this remark: “What you worry about is someone trying to decide an individual case without thinking out the effect of that decision on a lot of cases. That is why I always think law requires both a heart and a head. If you do not have a heart, it becomes a sterile set of rules removed from human problems and it will not help. If you do not have a head, there is the risk that in trying to decide a particular person's problem in a case, that may look fine for that person, but you cause trouble for a lot of other people, making their lives yet worse.” See Transcript.

Model for Funding Covert Ops

JESSE JONES, “THE GREAT FINANCIAL BRIDGE”

©2006 by Linda Minor (all rights reserved)

“Squandering the people’s money even in wartime is no proof of patriotism.” 

-Jesse H. Jones [1]

“He [Jesse H. Jones] was, through the New Deal and through the war, the great financial bridge between the purposes of the New Deal, and particularly the purposes of the war, and the sources of the funds to do it. It was an extraordinary grant of power. He had more control over the flow of money to the executive branch and its purposes than any congressman or any congressional committee.”

--John Kenneth Galbraith, Economist (Nov. 22, 1996)

   

An Extraordinary Grant of Power 
Jesse Jones served as the “financial bridge” between the New Deal and the war as well as the funding bridge for covert operations and propaganda that would later wage the cultural cold war.

 The real story of Jesse Jones, however, begins in the closing days of World War I when Jones was appointed by Woodrow Wilson (no doubt at the instigation of fellow Texan E.M. House) to serve as Director General of Military Relief for the American Red Cross. In that role he became a protégé of Herbert C. Hoover—whose career to that point had been spent working for gold producing corporations in attempts to stabilize American currency while making lots of money. 

Hoover, who would serve as U.S. President from 1929 to 1933, headed the American Commission for Relief in Belgium from London (the “Belgian Relief Fund”), the goal of which was to feed war-ravaged victors of the war without at the same time upsetting the international balance of payments.

The Brown and Root of the matter

Incredibly, there are more people who have heard of the Brown brothers (George and Herman) than there are people who know who Jesse Jones was. Herman Brown built a road-construction business in central Texas, totally dependent upon city and county government contracts. In 1926 he was joined by his brother, George R. Brown, who took Herman’s Austin-based business two hundred miles east into Houston, a virtual promise-land of dusty streets waiting to be covered by asphalt.

George quickly began moving in the right circles in Houston, while older brother Herman was hobnobbing with politicians in the State capital of Austin. For more than a decade they were content simply to pave streets and roads and build small bridges and drainage systems. Then, through Herman’s relationship with Lyndon Johnson, ambitious young New Dealer in Franklin Roosevelt’s administration, and through George’s growing contacts with friends of Jesse Jones in Houston, they succeeded in making it to the big time—contracting with the federal government.

Without the necessary experience to build dams, ships or naval air stations, all they had to do was financially support the proper public officials and work with an experienced contractor to learn the ropes. Contacts made in Suite 8F—the suite Brown & Root leased at Jesse's Lamar Hotel—would make it all possible.

Jesse Jones and Suite 8F

The Lamar Hotel was one of dozens of commercial buildings Jesse Jones built in the growing Texas city of Houston, but it was in the Lamar’s penthouse where he resided after its completion in 1927. The Brown suite, eight floors below Jones’ home, became the home away from home for some of the wealthiest power brokers in Texas, who began fraternizing there in the 1930’s.

Jesse H. Jones first arrived in Houston from Tennessee in 1898 to work in his uncle’s lumber company, which he managed after his uncle (Milford T. Jones) died. T.W. House, Jr. had been president of M.T. Jones Lumber company and trained young Jesse to take over the management. Four years later, after his uncle's death, Jesse escorted his aunt Louisa Jones on a tour of Europe and London, where they attended the Coronation of King Edward VII. Before departing the U.S., they had stopped off in New York, however, to see Jesse's former Houston neighbor and erstwhile attorney at the Houston law firm Baker & Botts; Robert Scott Lovett—E.H. Harriman’s second in command at the Union Pacific and Southern Pacific Railroads—offered Jesse a financing arrangement for his future business enterprises. The Harriman empire promised to loan money to Jones at four percent interest, and in exchange for that loan, Jesse would give Harriman fifty percent of his profits.  [2]

What a deal that would have been—for Harriman, at least! The documents were drawn up to be executed upon Jones' return from Europe. 

Jones’ Inner Circle and Col. E.M. House

However, by the time of his return to New York, Jones declined to sign, instead announcing his plan to enter business completely on his own, foregoing partners or outside capital. That announcement, however, contains little truth. In 1907, when the economic panic hit, Jones’ lumber company owed the T.W. House Bank, which financed the construction, $500,000, mostly in long-term real estate loans.

Jones had also been an investor in 1905—alongside Col. E.M. House and his brother Thomas W. House, Jr., members of Houston’s wealthy Rice family, and Andrew Mellon of Gulf Oil in Pittsburgh—in a nationally chartered bank in Houston, the Union National Bank and Trust. [3]

From the John T. Jones, Jr. collection

The vague explanations of Jesse Jones’ ability to pull himself up from his bootstraps and create a Texas commercial empire all on his own never rang quite true. [4] He rose too high, too quickly—not even slowed by the Panic of 1907, which placed the family of fellow Houstonian “Colonel” Edward M. House in receivership. With the majority of the T.W. House private bank’s investments in illiquid property—mostly real estate, not readily convertible to cash—a receiver had to be appointed to give the bank time to sell assets in order to pay demands. The experience made Col. House a great believer in establishing a central bank—like the Federal Reserve System, which he helped create during Woodrow Wilson’s presidency. [5]

Already a millionaire by 1912 when Woodrow Wilson was elected President (an election Wilson owed entirely to the behind-the-scenes manipulations of Col. House), Jones turned down several offers to serve in the administration, finally agreeing in 1917 to become director of general military relief for the American Red Cross. In that capacity he worked closely in concert with Herbert Hoover of the Belgian Relief Fund.  In those two years Jones would learn how to recreate that model into the Marshall Plan when called upon at the end of World War II. 

Jesse Jones and the New Deal

Appointed first by President Hoover to head the Reconstruction Finance Corporation (RFC) in 1932, Jones continued into Franklin D. Roosevelt’s administration until 1940, when he was appointed Secretary of Commerce. [6] The RFC had been empowered by Congress to establish subsidiaries, and it expanded under Jones’ tenure by creating a plethora of government-owned corporations, including:

•    Defense Plant Corporation
•    Defense Supplies Corporation
•    Metals Reserve Company
•    Rubber Reserve Company
•    United States Commercial Company
•    War Damage Corporation
•    Petroleum Reserves Corporation
•    Defense Homes Corporation

By 1939 the war production corporations had been removed from RFC’s lending program, which by then consisted of domestic subsidiaries, such as the:

•    Federal Loan Administration
•    Federal Housing Administration
•    Electric Home and Farm Authority
•    Export-Import Bank
•    Home Owners Loan Corporation
•    Federal Home Loan Bank System.  

It was Jones’ own protégé at the RFC, yet another Houstonian, William L. Clayton, [7] who would help to administer the European Recovery Program, known as the Marshall Plan, after World War II. [8]

Jesse's Break with the New Deal

Jones returned to Houston in 1945, still with a decade left to devote to his commercial activities.  His first act, however, was to publish an editorial in his own Houston Chronicle, voicing what he felt was wrong with the methods being followed by his replacement at the Commerce Department, the former Vice President, Henry A. Wallace (often accused of socialism), whom Jones accused of making an unsecured loan of almost four billion dollars to Great Britain without giving thought to the effect on America’s economy. 

Notwithstanding the disaster Jones predicted (see inset box to the right), his former deputy Will Clayton, testified in hearings before the House Banking and Currency Committee several months later that Jones “did not understand the full implications of world-wide bilateral commerce as it would affect the trade of this country,” adding that “the figures Mr. Jones used in his letter to the committee earlier this week were based on a 1941 Treasury report, and that since then $1,000,000 of the assets referred to were spent ‘to keep the flag of freedom waving.’ ”  [9]

Clearly, something was very wrong with the global economy in 1946. It was an age of desperation. That desperation must be fully recognized and understood in order to understand what was to follow. Less than six months after the United States dropped two atomic bombs on Japan, 1946 would become a watershed year—the beginning of an age of fear of nuclear war and continued fear of Communism for decades to come. 

Back in Texas, Jesse Jones and his associates were in their heyday at the Lamar Hotel’s Suite 8F — planning how best to take advantage of those fearful times, while at the same time using all the inside information they had acquired working for the government.

That was when Brown & Root really took off, as we will see in the next episode. 




ENDNOTES:

[1]  Quoted in obituary appearing in the Washington Post and Times Herald (June 2, 1956).

[2]  Baker & Botts is the same law firm eventually headed by James A. Baker III, (See “Course of Deception”), whose family has controlled it since Civil War days. After 1902 Harriman would be required to divest himself of ownership of the Southern Pacific stock, which a court found violated anti-trust legislation.

[3]  The bank’s president, Jonas Shearn Rice, was a nephew of William Marsh Rice (for whom the Rice Institute was named), and the father-in-law of W.S. Farish, Sr., a founder of Humble Oil.  J.S. Rice was also chairman of Jesse Jones’ Bankers Trust, which had been incorporated during that decade by the same law firm (Andrews, Kurth, Campbell & Jones) which represented both Humble Oil Company and another Houstonian, Howard R. Hughes, Jr., and with which James A. Baker III would spend much of his career because of an anti-nepotism policy that prevented him from working at Baker & Botts while his father was there.

[4]  The Dictionary of American Biography, for example, states:  “Through his shrewd handling of money and management, Jones was general manager of the firm by 1898.  Not satisfied with working for someone else, he organized the South Texas Lumber Company four years later. His experience in the lumber business led to a combination of real estate, construction, and banking ventures—all centered in Houston. His firm erected numerous office buildings, and his real estate dealings soon made him a millionaire.”

[5]  Col. House helped to assemble Nelson Aldrich, J.P. Morgan’s bankers with the elite group of millionaires who frequented Jekyll Island, Georgia—in combination with Paul Warburg, who drafted legislation creating the Federal Reserve Banking System.  (See “Membership by Inheritance Only.”) 

[6]  The Washington Post and Times Herald (June 2, 1956).  The names and directors of executive agencies and corporations were forever changing.  For example, in January 1941 an executive order established the Office of Production Management, which was replaced a few months later by the Supply Priorities Allocation Board, itself replaced by the Office for Emergency Management (OEM) in January 1942. OEM was responsible for coordinating the supply and allocation of defense-related materials and commodities.

[7]  According to Dictionary of American Biography, Supplement 8: 1966-1970 (American Council of Learned Societies, 1988):  "Clayton’s firm, Anderson-Clayton—the largest cotton-trading enterprise in the world—made its expansion into markets formerly controlled by European cotton brokers when it moved into the vacuum created at the close of World War I.  Clayton’s first government role was in 1918 as a member of the Cotton Distribution Committee of the War Industries Board, headed by Bernard Baruch.  In 1940 he became deputy federal loan administrator in the RFC and vice-president of the Export-Import Bank under Jesse Jones, which in 1942 was placed under the Commerce Department. In the summer of 1943 he was placed under the authority of Vice-President Henry Wallace, who headed the Board of Economic Warfare. Unable to get along with Wallace, Clayton resigned in January 1944."

[8]  The European Recovery Program is often referred to as the “Marshall Plan,” the program discussed in “Hustlers and Hucksters”).

[9]  John H. Crider, special to The New York Times (June 8, 1946).

Wealth--"Vassal To Power"

TILTING AT OIL WELLS

 © 2006 by Linda Minor, all rights reserved

  

“Throughout most of history,” wrote Robert L. Heilbroner, “wealth and power have gone hand in hand.” The alliance, an obvious one, has grown with but occasional public outcries. Working together, possessors of wealth and power may achieve a stability of their own. Over most of history, wealth has been a vassal to power, for as Heilbroner explained, “it was easier for the ruler to become a rich man than the rich man a ruler.”

James Presley, A Saga on Wealth

(New York: G.P. Putnam’s Sons, 1978), 302; 

quoting Heilbroner, The Quest for Wealth: A Study of Acquisitive Man (1956)

Quixotic Cowboys

James Presley’s evocation in the above quotation of feudal imagery to describe the role played by Texas oilmen during the independent wildcatting days of the 1930’s conjures up chimerical pictures of overweight and uneducated cowboys, engaged in a Quixotic joust against their own windmills—in the form of oil derricks—while upsetting the national power structure in the process. It is a comical image; but no one is laughing.

Nothing illustrates the full significance of the crusade Texas oilmen have waged against established capitalists and bankers in the northeastern United States than the life and career of Sid Richardson (1892-1959. Though virtually unknown today, except in Texas where his foundation’s name adorns buildings on most Texas colleges, he may be more readily recognized as the great uncle of the notorious “Bass Brothers,” who would have been equally unknown but for Uncle Sid’s millions.

Although any biography of Lyndon Johnson, John Connally, or Dwight Eisenhower will mention Richardson’s role in financing the campaigns of those men, it is the intent of this article to provide more than a mere recap. Richardson’s influence upon the administrations of Franklin Roosevelt, Dwight Eisenhower and Lyndon Johnson spanned the years 1933 through 1969, continuing even after his death through those in charge of his business interests. Author James Conaway has given us a colorful glimpse into the camaraderie between Texas oilmen of that era: 

“Oil served as the conduit between potential and realization. Sid Richardson, Texas wildcatter and one of the richest men in the country, told his friend [Lyndon] Johnson [in 1948] that he needed someone to help look after his varied interests, particularly in relation to Washington. Johnson recommended Connally. Richardson’s primary interests were related to oil and gas—the oil depletion allowance, and regulation of the price of natural gas by the Interstate Commerce Commission—and Connally understood the workings of Congress. … Connally arrived as Richardson’s emissary to Washington…. He refused to register as a lobbyist, even at Johnson’s urging, claiming that he had his own investments, and was looking after his own interests.”[1]

 As prodigious as the influence exerted on national oil policy by these Texans was, however, there is an even deeper aspect to the story which, given the secrecy surrounding the subject, can only be postulated by interlacing the known history with disclosures first made public in The Gold Warriors published in 2002 by Sterling and Peggy Seagrave. It concerned the use of secret gold accounts, not only to finance the cold war and manipulate foreign governments, as the Seagraves suggest, but also to tip the balance of the American banking establishment out of the hands of Eastern “liberals”—the Morgan-connected banks—into the clutches of a new syndicate of capital. 

Oil strikes in 1910 made Wilbarger and Wichita Counties in North Texas the new Spindletop. Sid Richardson and his closest friend Clint Murchison, Sr. — both born in the last decade of the 19th century in a small town southeast of Dallas called Athens — were soon drawn there by the promise of black gold. Sid, who acquired the rudiments of a higher education at Baptist colleges, had tossed a degree aside in favor of cattle trading before the 1910 oil strike on W.T. Waggoner’s  ranch west of Wichita Falls, lured him.

In only seven years he accumulated more than $100,000 trading oil properties and, when another major discovery occurred in Burkburnett, fifteen miles north of Wichita Falls, he trained Murchison, just back from the war in 1918, to trade and leverage oil leases and, thus, to make money without investing any of their own capital. Much of the time they stayed in Wichita Falls at the home of Sid’s sister, Annie Bass, whose physician husband found that he too could make more money as an oil operator than as a doctor. A few years later, after graduation from Yale in 1937 with a geology degree, their son Perry Richardson Bass would become Sid’s business partner in Forth Worth, while Murchison married and moved to Dallas.[2]

Beginning in 1948, just after Sid’s long-time friend Lyndon Johnson took his new seat in the U.S. Senate, LBJ’s former aide John Connally moved to Fort Worth to work for Sid and Perry in their business ventures. When Sid died in 1959, Connally, as attorney, and Bass, as executor, handled the estate, for which Connally received $800,000 — to be paid out over a period of years long after he was elected Governor of Texas in 1962. The scheme by which Connally’s remuneration was paid is not dissimilar from the one designed to net Sid’s friend, Robert B. Anderson, a million dollars when he left his employment at the Waggoner Ranch to work in the Eisenhower administration,[3] and became a point of inquiry during 1971 Senate hearings to approve Connally as Richard Nixon’s Secretary of the Treasury.[4] 

Left to right: Sid, Ike, and Amon G. Carter, Sr. of Fort Worth

Wanted: Conduit to the Presidency

The most believable cover story about how Sid and Ike first met was told to Washington Post reporter Edward Folliard by former Texas Democratic Party head Bob Kittrell, who claimed to have introduced the General to Richardson on a train in December 1941—when both men were coincidentally on their way to meet with President Roosevelt five days after the bombing of Pearl Harbor. It was that same day that the U.S. declared war on Germany and Japan, and Eisenhower, then the chief of staff to Lt. Gen. Walter Krueger (whose papers are now housed at the University of Texas), was stationed at the Third Army in San Antonio, Texas. Six months later Eisenhower’s promotion as commanding General in Europe was announced by General George C. Marshall.

Sid Richardson had been summoned to Washington that day by FDR, whose son, Elliott, had been acquainted with Richardson’s clique of Texas oilmen since 1933, when the young man had stopped in the Dallas-Fort Worth area to visit a “college chum,” only to meet and later marry a local girl (daughter of a deceased Swift Packing Co. executive and country-club builder J.B. Googins), who frequented the same country club social set as Richardson’s friend, publisher Amon G. Carter, Jr.[5]  The Texans jumped at their chance to employ Elliott as their conduit to federal executive power by setting him up in business deals in exchange for meetings he arranged for them with his father.[6]

Elliott Roosevelt, left, with Ike during WWII

Internal Revenue Service investigators learned that, three days after his meeting with FDR, Murchison entered a plea of nolo contendere to a then-pending charge of violating the federal “hot oil” provision (interstate transportation of fuel in violation of the National Industrial Recovery Act), which FDR’s Secretary of Interior Harold Ickes had been pressing for several years in order to conserve petroleum.[7] During the 1945 IRS investigation Richardson testified that, a short time following the May 1937 fishing trip, he made a $20,000 loan to Elliott to purchase a radio station, followed by capital purchases of stock in a radio and additional loans for its operations and expenses. Elliott admitted to borrowing a total of $600,000 — including the loans from Richardson, Fort Worth oilman Charles Roeser, Great Atlantic & Pacific Tea heir John Hartford and others.[8] 

If possible, he was a worse businessman than George W. Bush! But, like Bush, he had friends in Texas who could bail him out of his messes.

A few months after Elliott joined the Army in 1940, Jesse Jones was called in to negotiate Elliott’s loan from Hartford from $200,000 (none of which had been repaid) down to $4,000.  None too happy about being used by FDR to wipe his son’s nose, as it were, Jones paid the $4,000 out of his own personal funds, for which he was eventually reimbursed by Elliott. 

In 1944 Richardson and Roeser acquired additional stock in the radio network in settlement of the unpaid loans.[9]  Shortly after his 1937 meeting with FDR, Richardson received his reward; he was named “oil policy adviser” to the President.[10] In his 1945 testimony Richardson recalled that his first White House invitation occurred not long after his first loan to Elliott and that Elliott had instigated that meeting, and the others which followed, to give Sid the opportunity to discuss his opposition to “a certain phase” of FDR’s oil policy.[11] 

Golden Opportunity

FDR in 1944, most likely at the behest of is “oil adviser” Richardson, appointed Texan, Robert Bernerd Anderson, as a consultant to Secretary of War Henry L. Stimson’s deputies, John J. McCloy and Robert A. Lovett, to work with Democratic Party fundraiser and California oilman Edwin Pauley on the matter of confiscated German gold. It became a simple matter six months after FDR’s death in April 1945 to convince the new President, Harry Truman, that Anderson was an expert in such matters.

Before long, however, Truman began to exhibit his feisty independence of established policies when he vetoed laws passed by his own Democratic Congress (headed by Speaker of the House Sam Rayburn, a Texan from the same part of the state as Richardson).  He vetoed both the Tidelands bill, which gave states title to oil found within coastal tidelands, and the Kerr gas bill, which attempted to exempt independent producers of natural gas from federal regulation.  Richardson, Murchison and their friends, disgusted with Truman, had by 1949 settled upon a new conduit to Presidential power. Richardson hosted Eisenhower’s 1949 Texas vacation at St. Joseph Island, which adjoined Murchison’s Matagorda, where FDR had fished with Elliott.[12] Then in 1952 Richardson spent two weeks in Paris with General Eisenhower, planning the general’s campaign for President. 

Col. Lansdale

All of Richardson’s behind-the-scenes maneuvers began to pay off late in 1945, when President Truman was briefed in Washington by Col. Edward Lansdale, who, after torturing the driver of Japanese General Yamashita, had discovered where tons of looted treasure was hidden in the Philippines. Truman allowed Edwin Pauley’s assistant to reconnoiter the situation.  We are told that:  

“Robert B. Anderson flew back to Tokyo with Lansdale, for discussions with [General] MacArthur. After some days of meetings, MacArthur and Anderson flew secretly to Manila, where they were taken by Lansdale and Santy [Severino Santa Romana, secret agent of MacArthur’s personal attorney, Courtney Whitney] to some of the sites in the mountains, and to six other sites around Aparri at the northern tip of Luzon…MacArthur and Anderson were able to stroll down row after row of gold bars.”[13]

According to the Seagraves’ C.I.A. source, Ray Cline, “Anderson apparently traveled all over the world, setting up these black gold accounts, providing money for political action funds throughout the non-communist world”—a total of 176 accounts in 42 different countries. Since McCloy and Lovett retired from their government jobs in 1945, they became private advisers to Anderson, who was later appointed by Eisenhower to serve as Secretary of the Navy and as Secretary of the Treasury.

A more innocuous man than Robert Bernerd Anderson never lived. Born in Burleson, Texas fifteen miles south of the two-room hotel suite at the Fort Worth Club that Sid Richardson called home,[14] Anderson was educated in the most mediocre facilities available to Texans of his day, matriculating at Weatherford College, located in a small town west of Fort Worth. Armed with a 1932 degree from the University of Texas Law School, he was elected to the Texas legislature, then little more than a seasonal minimum-wage job, which he supplemented by working as an assistant to the State’s attorney general, later being appointed to run the Texas Tax Commission. Including under its wing the agency responsible for collecting tax revenue from the state’s newly legalized pari-mutuel horseracing industry, the job was tailor-made for the career-minded young attorney from the same the same vicinity of Texas as horseracing’s major proponents.

Pari-Mutuel Racetrack betting legal in Texas in mid-1930s

From Ranching to Racehorses

Betting on races had been outlawed by Texas in 1909, and the first racetrack built since that date—Arlington Downs, halfway between Dallas and Fort Worth—had opened in 1929, without gambling. The owners of that track were none other than Anderson’s future employers, the sons of W. T. Waggoner, who coincidentally owned the second largest ranch in Texas, which “sprawled across more than 500,000 acres in north Texas.”[15] It was this ranch’s oil strike in 1910 that had first enticed Sid Richardson and his fellow independent wildcatters into the oil business a generation before.

Though the Waggoner family had lobbied long and hard to pass legalized betting on horse races in Texas, their investment proved to be wasted. Three years after Tom Waggoner died of a heart attack in 1934, the Texas legislature sans Anderson, repealed the law. 

The lands owned by the Waggoner Estate would later be mentioned in connection with the John F. Kennedy assassination, a topic we must reserve for the future.[16]

The four years Anderson had acted as tax collector for the racing industry had obviously been long enough for him not only to ingratiate himself to the two sons of Tom Waggoner, but to come into contact with other vassals of power as well; his Austin office, according to directories of the mid-1930’s, was housed in the same building in which Lyndon Johnson briefly ran FDR’s Texas branch of the National Youth Administration, and Austin was a relatively small city in those days. In 1937, the same year Lyndon ran for Congress, Anderson was hired to move back to his old stomping grounds in North Texas and act as attorney for the multi-million-dollar estate. Since E. Paul Waggoner lived in New York and his brother Guy soon moved his business interests to Palm Springs, California, the ranch was virtually Anderson’s private domain for many years, including the time he was traveling to Europe and the Philippines to look at vaults filled with gold.

As chief executive of the wealthy Waggoner estate Anderson was a recognized authority in both the oil and banking industries, serving as President of the Mid-Continent Oil and Gas Association and as deputy chairman of the Federal Reserve Board in Dallas during the 1940’s. Not only did the Waggoner Ranch produce beef, but it was also a source of refined oil, independent from the “big oil” companies, and the estate owned the Waggoner National Bank in Vernon as well. Anderson hobnobbed with other members of these organizations, which included cattlemen, oilmen, bankers and politicians.

Drew Pearson repeated in a 1952 column a story told by Chief Justice Vinson about Sid Richardson, Speaker Sam Rayburn and “Bob Anderson, quiet, efficient manager of the giant Waggoner ranch in Texas,” who, while out riding together one day, were discussing the price of calves. When Anderson told the others he had sold his calves for 41 cents (which would have amounted to over a million dollars), Rayburn asked, “Who would be fool enough to pay that much?”  Anderson replied, “Howell Smith,” to which Richardson roared, “What!...He’s my partner and brother-in-law! You mean to say that he paid 41 cents a pound for calves!”[17]

The Vassal to Power

Before the Seagraves’ revelations hit the news, however, there were other hints that something suspicious was going on. First was the disclosure in the anti-LBJ book written by Texas ranch historian J. Evetts Haley in 1964 that, for several years prior to the time Lyndon Johnson acquired his first radio station in 1943, the license was held by a syndicate of men with Robert B. Anderson acting as president.[18]  

The second and even more telling clue that something very significant was being hidden from the public was related by Robert Sherrill, who noted as follows:

…Johnson has not been above taking support, a subtle kind of kickback, from men grown rich largely from government contracts; but in the early years his spreading domain was purchased with the aid of men who made their money from plundering the state’s natural resources or from other normal cutthroat enterprises. The old steadies who have been around from the beginning are contractors like the Brown brothers of Houston [Brown & Root, involved in the notorious 'Suite 8-F Crowd' in Houston] … and the oil men … and the Murchisons and always, but always the late Sid Richardson. These are his kind of men, and he theirs. Between them there is a rough-hewn camaraderie which has not always produced the most burnished examples of statesmanship.

Within the hour after his return to Washington after taking the oath in Dallas, Johnson (according to The New York Times) was talking by telephone with his old confidant Robert Anderson in New York. He asked Anderson to come to Washington; Anderson, another of Johnson’s key links to the oil fraternity, is always happy to answer his country’s call. He and Johnson talked several hours that Sunday and, The New York Times reported, they resumed their conference the next day. The consultation, in a manner of speaking, still continues. For some reason, the Johnson-Anderson relationship is often treated as something almost clandestine.[19] [emphasis added]

Sherrill also passed on a tidbit of gossip spread by Walter Winchell in early-1964, describing Anderson as “LBJ’s No. 1 financial adviser,” gossip which Sherrill found to be not at all surprising, considering that the two had been “especially intimate in the creation of an oil program which, without much public awareness, had developed to a controversial crisis that was effectively quashed only by Kennedy’s death.”

But of course, Sherrill warned his readers at the outset of the chapter:

“This is not an assassination conspiracy theory.” [20]

But it obviously was a conspiracy of some sort. Why all the secrecy? We have to go back to the Seagraves’ book for part of the answer:

“There were important reasons for all this secrecy. If the recovery of this huge mass of stolen gold was known only to a trusted few, the countries and individuals that had been plundered could not lay claim to it. Truman recognized that the very existence of so much black gold, if it became public knowledge, would cause the metal’s fixed price to collapse. But as long as the gold was kept hidden, prices could be maintained and currencies pegged to gold would be stable. Meanwhile, the black gold would serve as a reserve asset, bolstering the prime banks in each country, and strengthening the anti-communist governments of those nations.”[21]

The other part of the answer, unfortunately, did not appear in the Seagraves’ book, nor has it been revealed in any other book to date.  There was another reason for the secrecy. It was a reason having nothing at all to do with patriotism, but rather with the tendency of persons who have acquired great wealth attempt to use their riches to buy power for themselves, or to influence the powers-that-be.

If Anderson did set up 176 secret accounts, where he deposited tons upon tons of physical gold, to whom did he reveal his secrets? What happened to all that gold? How much power did it buy? And for whom?

ENDNOTES:

[1] James Conaway, The Texans (New York:  Alfred A. Knopf, 1976), 38.

[2] Perry R. Bass also married and reared four sons, each of whom received an education suitable to the station his inherited wealth entitled him—first at Phillips Academy in Andover, Massachusetts, then Yale. Two of the four also took M.B.A.’s at Stanford University and one at Wharton.  The four “Bass Brothers” would eventually become billionaires, in charge of the huge profits generated initially by their uncle’s huge fortune.

[3] Robert Sherrill, The Accidental President (New York: Pyramid Books, 1967), described the scheme (page 236) as follows:

1. Standolind Oil Company, Kirby Oil Company, Phillips Oil Company, and Sun Oil Company held farm-out property belonging to Richardson in Texas and Louisiana.

2. Richardson asked those companies to assign a royalty interest to F.J. Adams, a Fort Worth oil man who had been a vice-president of Gulf Oil Corporation. Adams’ role was simply that of a go-between.

3. Adams assigned his royalty interest to Anderson for one dollar and “other valuable interests.”

4. Anderson sold his interest in the property to Dalada Corporation for $900,000, half cash, half from future earnings. (Dalada was run by Toddie Lee Wynne, an old friend of Richardson’s who accompanied him to a stag dinner at the White House in November, 1954.) Also, Anderson had already earned $70,000 in production before the sale.

5. Finally, Perry Bass, Richardson’s nephew (John Connally’s law partner [sic]), bought back Dalada’s interest.

Thus the property went full circle, with Anderson grabbing his $970,000 as it went past.

[4] It is also reminiscent of Dick Cheney’s arrangement with Halliburton to donate stock options to charity. Connally’s fee arrangement was described fully in the New York Times (February 4, 1971), 1.

[5] Fort Worth, nicknamed “Cow Town,” holds the title as the Texas headquarters for the national beef packing industry and the distribution hub for cattle going in and beef going out.  Both Armour and Swift had packing plants in Fort Worth, and several railroads came together in that city.

[6] While deep-sea fishing with his father along the Texas Gulf Coast, Elliott “went ashore at Port Aransas, where he met Richardson…, according to the Corpus Christi Caller-Times. Elliott left Aransas with Richardson for an island named Matagorda, owned by [Dudley] Golding and [Clint] Murchison….On May 7, President Roosevelt left the [yacht] Potomac to lunch with his son, the latter’s wife at that time…and their friends on Matagorda, at the club-house of the American Oil company, which was owned by Golding and Murchison.” Chicago Daily Tribune (November 10, 1945), 2.

[7] Ibid.  The Tribune cited The National Petroleum News of May 6 19, 1937 as the source of this information.

[8] Los Angeles Times (September 16, 1945), 1.

[9] TSN’s largest shareholder in 1960 was the Sid Richardson Foundation. New York Times (May 17, 1960), 60.

[10] Walter Trohan, Chicago Daily Tribune (November 10, 1945), 2.  Jones’ involvement with FDR was discussed in this author's article about Texan, Jesse Jones, "The Great Financial Bridge."

[11] Independent oilmen in Texas were then in a virtual war with “big oil,” represented by Eastern Establishment capitalists epitomized by the John J. McCloy’s clients—called the “seven sisters” oil companies.  Big Oil had the funds to explore for oil overseas, while the independents had been content to search for new wells within the United States. Thus began a philosophical battle that allowed the independents, like Edwin Pauley of California, to gain a foothold in the Saudia Arabian oil fields in the 1930’s.

[12] New York Times (December 16, 1945), 1.

[13] Sterling and Peggy Seagrave, Gold Warriors (Bowstring Books, 2002), 96. See also Douglas Valentine, “The Plundering of Asia,” Counterpunch (September 26, 2003).

306 W. 7th St  Fort Worth, TX

[14] “The Fort Worth Club has historically been the place where the city's most prestigious visitors have chosen to hang their hats while in Fort Worth. Chairmen, Presidents and others from the corporate, political, social, and entertainment world have enjoyed the Club's warmth and hospitality. Stars of the stage and screen have always made themselves at home in The Fort Worth Club. The legendary Sid Richardson lived at the Club and one of Texas’ heroes, Will Rogers, made The Fort Worth Club his second home. Amon Carter, publisher of the city's most powerful newspaper, the Fort Worth Star Telegram, maintained a suite at The Fort Worth Club and was Club president for over 35 years. Mr. Carter and his comrades reportedly ran the town from The Fort Worth Club. It was and is the place where key decisions regarding Fort Worth are made. Meetings at the Club brought General Dynamics, now Lockheed, the city's largest employer, and Casa Manana, Fort Worth's greatest entertainment attraction of the era. Other landmark associations consummated at the Club include the General Motors plant in Arlington, the Bell Helicopter Textron plant in the Mid-Cities, and the Swift and Armour packaging houses.” Quoted from Fort Worth Club website accessed in 2006.

Austin, TX office 1935

[15] See the ranch’s website. Another interesting coincidence is that Anderson’s office, according to directories from that era, was in Austin’s exclusive Littlefield Building during the same years that Lyndon Johnson, as President Franklin Roosevelt’s appointee to the National Youth Administration, had an office.

[16] The curious are encouraged to read Peter Dale Scott’s Deep Politics and the Death of JFK, which contains the following passage:  

“There is a deep pattern in this country where mob-controlled funds, licit and illicit, are brought in to revitalize declining ‘old wealth’ firms. In 1963, the largest Teamsters’ fund loan to that time, $25 million at 6.5 percent, went to the aging and almost bankrupt New York realty firm Webb & Knapp, which declared bankruptcy two years later. That $25 million loan (or gift) kept the cash-hungry Webb & Knapp alive for two more years, at a time when (as Esquire pointed out in May 1963) much of its capital was tied up in a joint yankee-cowboy Dallas-Fort Worth real-estate venture on which it was earning no return. This investment was the Great Southwest Corporation, a realty development where control, in late 1963, ‘was tightly centered in the Rockefeller and Wynne families.’ We owe this revelation to a congressional investigation of the 1970 Penn Central Railroad bankruptcy, in which it appeared that, as in the case of the Teamsters’ Pension Fund loss in Webb & Knapp, a dying publicly held corporation had been looted for the benefit of this major Wynne-Rockefeller investment.”

What neither P.D. Scott nor Congress has ever explored, however, is the fact that the real estate which became the Texas investment called the Great Southwest Corporation had formerly been the Arlington Downs racetrack, owned by the Waggoner Estate, managed by Robert B. Anderson, and developed by family members of Clint Murchison’s former attorney and investment partner, Toddie Lee Wynne.

[17] Drew Pearson, “The Washington Merry-Go-Round, Washington Post (February 28, 1952), B13.

[18] J. Evetts Haley, A Texan Looks at Lyndon: A Study in Illegitimate Power (Canyon, Texas: Palo Duro Press, 1964), 63. In Anderson’s “Who’s Who” from 1954 it states that he was president of Northwest Broadcasting Co., Inc.

[19] Robert Sherrill, The Accidental President (New York: Pyramid Books, 1967), 120.

[20] Ibid., 116-120, passim.

[21] “Yamashita's Gold - Eyewitness Reveals Truth of Fabulous WWII Hidden Treasure,” South China Morning Post, 9/3/01, as quoted from Rense.com. The quoted text was subsequently edited and appeared in the Prologue of the book by the same authors, Sterling & Peggy Seagrave, Gold Warriors: The Covert History of Yamashita’s Gold; How Washington Secretly Recovered It To Set up Giant Cold War Slush Funds and Manipulate Foreign Governments (printed in France by Bowstring Press, 2002), 2-3. See review by Chalmers Johnson.