Skull and Bones Accepted Hegel's Dialectic Theories

Freedom Through Order

The philosophy which has dominated the Western world since the mid 19^th 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, headed—until his death in 1913—by 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).

Who was Alexander Brown?

A Protestant in Ireland, Alexander Brown had worked as an auctioneer in the linen market in Belfast, which after 1785 was conducted in an impressive building owned by the Earl of Donegall. The building's lease was bought by John Brown, founder of the Bank of the Four Johns in Belfast, but who does not appear to have been a close relation of Alexander. Although his auction business was profitable in Ballymena, after visiting a brother, Stewart Brown, in Baltimore, Alexander decided to settle in that city on the opposite side of the Atlantic. Another brother remained behind in London to work with him in an import-export business. By 1811 all four of his sons were partners with him in Alex. Brown & Sons, headquartered in Baltimore.

The British Browns

William Brown, his eldest son, returned to England in 1809 and set up a brokerage firm that would operate first as W. and J. Brown, renamed in 1839 as Brown, Shipley & Co., in Liverpool. William’s role in the business, among other duties, would be to find wealthy investors to buy the paper issued in America.

Finding such investors required that he create a network around himself of powerful society members with whom to socialize, possibly one of the reasons he first stood for Parliament in 1846. Twenty years later he was created a baronet, Sir William Brown of Beilby Grange (a mansion near Leeds) and Richmond Hill (near Lancaster). His descendants are set out in Burke's Peerage. (See also website, The Peerage).

Sir William Brown

It is a truism in banking families that they frequently marry not-too-distant cousins and relations of their father’s business associates, helping to keep the money—and the secrets—within the family. Researching genealogies is, therefore, a very useful tool in understanding confidential financial relationships.

When William returned to Britain in 1809, his younger brothers were still being educated by a country minister at Catterick in North Yorkshire. Initially, William went to Ireland to work at the market where Alexander had started his career. There he met and married the daughter of his father’s Belfast linen supplier, Andrew Gihon. Although they had eight children, only two lived to become adults, and none of those survived him.

• Grace (1812-1849), in 1831 married John Hargreaves, whose family owned the calico print works at Accrington—midway between Leeds and Lancaster. Grace Hargreaves' son John continued with the calico business, while her son Thomas pursued a military career.
• Alexander (1817-1849), married James Brown’s daughter, Sarah Benedict Brown, during a visit to America in 1838, thus uniting the English and American house of the brokerage company and the bank in which the brothers were all partners. Their children were as follows: William Richmond Brown (1840-1906); James Clifton Brown (1841-66); Louisa (1842-63), who married Capt. Alexander William Cobham; Alexander Hargreaves Brown (1844-76).

William's grandson, Alexander Hargreaves Brown, became a Member of Parliament in 1863 and served until 1902, while during that time becoming a partner of the Brown Brothers bank in 1875, later serving as senior partner in the London office on Pall Mall.

These two branches of Sir William's descendants continued to marry their children to their cousins and thus perpetuate the financial connections on both sides of the ocean.

James Brown was the only one of Alexander Brown's sons who married a native American girl. In December 1817 he married Louisa Kirkland Benedict, youngest daughter of Dr. Joel Benedict, and his wife Sarah McKown Benedict. Her father has sometimes been confused with Dr. Benedict's nephew and namesake, Rev. Joel Tyler Benedict, a Presbyterian minister who was working at a branch of the American Tract Society in Philadelphia when James arrived in that city, having been tasked by his father to  assist his brother, John A. Brown, in starting a branch of Alex. Brown & Sons there, and it is possible he met her through this relationship since the Brown family had long been Presbyterian rather than Episcopalian.

James Brown of New York

Eliphalet Nott

Connections to church hierarchies

In 1817 James Brown, Alexander Brown's youngest son who had recently relocated from Baltimore to Philadelphia, married Louisa Kirkland Benedict, youngest daughter of Dr. Joel and Sarah McKown Benedict.

Her parents' eldest daughter, Sarah "Sally" Benedict, was already 21 years of age by the time Louisa was born in 1795.  Union College was founded that same year in Schenectady, New York, and Dr. Joel Benedict's student and new son-in-law, Rev. Eliphalet Nott, was named the president of the college.

The eminent Potter family

Although Sally Benedict Nott died the year her husband ascended to that position, she left behind a daughter, Sarah Maria Nott, with whom Louisa was quite close. Seven years after James Brown became part of the Benedict family, his wife's niece married Rev. Alonzo Potter, her father's foremost divinity student at Union College. He also became a professor at the college (1831-45), after which he was named Bishop of the Pennsylvania Diocese of the Protestant Episcopal Church.

Louisa Brown died in 1829 and her niece followed a decade later. James Brown waited two years before marrying Eliza Maria Coe, the orphaned daughter of another Presbyterian minister, Dr. Jonas Coe of Troy, New York. Alonzo Potter married, after the death of Sarah Maria Potter, the daughter of her brother Robert, who was also named Sarah Benedict, and with her had three more sons.

The daughter born to James Brown and Louisa Benedict in 1827 would grow up to marry Howard Potter, the second son of Louisa's favorite niece, Sarah Benedict Nott and her husband Bishop Alonzo Potter. After their marriage, Howard Potter became a partner in the Brown Brothers & Co. investment bank in New York, although he spent many years as manager of the London office. It will be recalled that James Brown's eldest daughter, Sarah Benedict Brown, had married her first cousin Alexander, whose father was Sir William Brown of the Liverpool and London offices. Two of their siblings--Grace and William--were lost aboard ship in 1854 as young adults. The youngest sibling, Margaretta Hunter Brown, married James Couper Lord, a son of the firm's attorney, Daniel Lord and his wife Susan DeForest. The Lord family, as has been mentioned previously at this blog, is one of the most significant families involved in the Skull and Bones secret society.

It has also been mentioned at this author's blog, Quixotic Joust, that the DeForest family were connected to some high-level members of the Episcopal Church, such as Dr. Horatio Potter, who became acquainted with Frank G. Wisner shortly before he was chosen to become head of a select arm of intelligence in the United States. We will soon discuss how all these connections interlink with the Brown Brothers investments.

GLOBAL FAMILY NETWORKS

In 2006 the author was asked to deliver a presentation for a Sanders Research Associates conference, that was later cancelled. The ideas that arose from that endeavor have been expanded. What appears below is the first segment, which will be continued later.

Micro Versus Macro View of the World

During my brief talk, I want give an overview of my own concept of the historical development of transnational globalism by use of a metaphor that effectively depicts the growth and evolution over the last five centuries of similar patterns that have occurred among various nations and the economic models they use to sustain that nation's economy.

Then I want to go into a little more detail into one family I have studied which has had a very significant role in behind-the-scenes transnational finance. The family we’ll be looking at, like most merchant bankers, started out as just merchants. Whether we use other terms, like “private” bankers, “investment” bankers, or simply “venture capitalists,” they are essentially small groups of very discreet people—often family members—who have access to vast pools of wealth, which they promise to invest at great rates of return. Their costumes may change from one generation to the next, but they are always at the scene, pulling strings (often hidden behind the curtain) to make history unfold as it does.

Patterns Beginning in Early 16th Century

The earliest examples we find of global trade, such as the exploits of Marco Polo, were family enterprises. Even Christopher Columbus, after his initial discovery of the “new world,” made four or five subsequent voyages with his brothers and son. Shipbuilding was a family business, and therefore the seamen who became traders operated in family units as they set out in search of the unknown.  Over time they established trading networks in various ports throughout the world, attempting to make a profit each time they unloaded their ships in a different location. The danger was great, but the promise of large returns on a successful voyage made the risk worthwhile.

It didn’t take the seasoned travelers long to realize, however, that competition brought profits down, and that it could be eliminated by acquiring a monopoly from their local prince, or a concession from a foreign one—to have the sole right to engage in that particular enterprise in that precise location. However, such a trading right would be worthless unless it could be protected by force. The development of nation states occurred as local fiefdoms expanded, garnering increased power to secure these commercial rights. Political boundaries went as far as the lord of that domain could protect the people within.

Organic Metaphor

I tend to think in organic, rather than mechanical, terms. Visualize if you can a series of oceans surrounding masses of land. Each mass of land with a separate economic system is depicted as if it were a self-sustaining plant growing in an earthen pot. There is a root system, a cluster of leaves and a stem.   

Spider Plant as metaphor

Over the centuries, as the plant increases in size, it becomes root-bound. The roots consist of members of the economic society who cultivate the soil in some fashion--like miners or farmers--who have become unable to provide enough resources from the restrictive boundaries of this pot to furnish nutrients for the plant’s leaves in order to produce a surplus above bare subsistence that would allow the plant to produce flowers or seeds to ensure physical survival. 

It was that lack of resources, as well as the bland existence of life that motivated explorers to escape the walls of the fief during the dark ages. And it was what they brought back from their adventures that resulted in further change.

Thus the Renaissance was like a genetic mutation of the medieval plant. Think of the stem of that plant as being the lord of the manor whose responsibility was to ensure the most efficient production of all units within the plant by properly coordinating distribution of raw resources and finished consumer goods. He served as the clearinghouse or marketplace where all such products were exchanged. He could maintain power only so long as he was able to satisfy the needs of these units. The lord recognized his power was draining away when there was no longer enough soil in the pot to feed all the leaves. He either had to enlarge the pot (something that would require a war), or he had to find another way of getting the necessary nutrients. The solution he found was to change the plant’s structure.  

Since this is my metaphor, I allowed my lord of the pot to create the spider plant; lords of the various pots equate to the crowned heads of seventeenth-century Europe, whose lawyers devised the concept of the chartered company. These crowned heads were, by this time, desperate for new resources, having found that wars to increase the size of their pots had further depleted their resources. As new lands were claimed on behalf of each root-bound pot by explorers  authorized to trade outside the pot, the lord found he or she had magically acquired the means to pay these explorers as bankers suddenly popped up, generously offering to turn that new land into ready cash (specie) for the pot.

 “Give us a portion of that new land as a grant,” they said, “and we will do your work for you, as long as we have a monopoly on the trade.”  

Like stems of a spider plant, each pot on the original map began sending out new shoots, each with its own cluster of roots and leaves ready to plant itself in new soil and recreate itself. When this shoot (like a colony) settles on soil, its roots can develop to feed its leaves while still being connected to the original stem by the stolon, which allows it to send the required percentage of absorbed minerals back to the parent plant, whether assessed against the company or the settlers brought there by the company.  

In return, the lord is able to promise protection to the colony should a threat occur. Thus a reciprocal relationship was developed between trading families who invested in such charter companies and the heads of state. That relationship persists to this day even though the legal framework has evolved from chartered companies into multinational corporations.

Unfortunately, a metaphor is not the truth. It is a visual and an intellectual aid to assist in understanding the truth. It must be tested for accuracy. The plant metaphor acts as the macro illustration of the world. What follows is the micro test. Here we focus on one example--one family network arrived in America only a decade or so after the Constitution was adopted. We will examine that family to learn how its banking business became intertwined with governments in America and abroad, in so doing testing whether the metaphor we have presented gives a true and accurate picture of the world.

With reference to modern financial institutions, what is now called Deutsche Bank Alex. Brown, Inc. is the result of a series of investment bank buyouts culminating in 1999 when the German bank acquired all assets of the old  investment bank established in Baltimore, Maryland, by Alexander Brown who first arrived in America in 1800 to engage in the linen trade. 

White Linen Hall in Belfast, Ireland

Brown’s parents were William and Margaret Davison Brown, who were living in Ballymena, Ireland, when Alexander was born in 1764. Scots like the Browns had begun to settle in this section of Ireland at the height of Parliament's legal dueling with Charles I in 1641.

Fifty years later, upon accession of William and Mary and creation of the Bank of England, the Protestant population began to explode in Catholic Ireland restrictions on the woollen trade, coupled with legislation allowing linen to be shipped duty-free to England and to British colonies in America, increased the importance of the linen industry in Northern Ireland.

Most of the immigrating Scottish families stemmed from Huguenots who had fled France during the latter part of the 16th century rather than convert to Catholicism. For more than a century the flax and linen industry would be Northern Ireland’s main source of wealth as trading networks were established by immigrating families.