Wall Street and the Bolshevik Revolution

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WALL STREET
AND THE
BOLSHEVIK
REVOLUTION
By
Antony C. Sutton
TABLE OF CONTENTS
Preface
Chapter I:
The Actors on the Revolutionary Stage
Chapter II:
Trotsky Leaves New York to Complete the Revolution
Woodrow Wilson and a Passport for Trotsky
Canadian Government Documents on Trotsky's Release
Canadian Military Intelligence Views Trotsky
Trotsky's Intentions and Objectives
Chapter III:
Lenin and German Assistance for the Bolshevik Revolution
The Sisson Documents
The Tug-of-War in Washington
Chapter IV:
Wall Street and the World Revolution
American Bankers and Tsarist Loans
Olof Aschberg in New York, 1916
Olof Aschberg in the Bolshevik Revolution
Nya Banken and Guaranty Trust Join Ruskombank
Guaranty Trust and German Espionage in the United States, 1914-1917
The Guaranty Trust-Minotto-Caillaux Threads
Chapter V:
The American Red Cross Mission in Russia — 1917
American Red Cross Mission to Russia — 1917
American Red Cross Mission to Rumania
Thompson in Kerensky's Russia
Thompson Gives the Bolsheviks $1 Million
Socialist Mining Promoter Raymond Robins
The International Red Cross and Revolution
Chapter VI:
Consolidation and Export of the Revolution
A Consultation with Lloyd George
Thompson's Intentions and Objectives
Thompson Returns to the United States
The Unofficial Ambassadors: Robins, Lockhart, and Sadoul
Exporting the Revolution: Jacob H. Rubin
Exporting the Revolution: Robert Minor
Chapter VII:
The Bolsheviks Return to New York
A Raid on the Soviet Bureau in New York
Corporate Allies for the Soviet Bureau
European Bankers Aid the Bolsheviks
Chapter VIII:
120 Broadway, New York City
American International Corporation
The Influence of American International on the Revolution
The Federal Reserve Bank of New York
American-Russian Industrial Syndicate Inc.
John Reed: Establishment Revolutionary
John Reed and the Metropolitan Magazine
Chapter IX:
Guaranty Trust Goes to Russia
*****
TO
Wall Street Comes to the Aid of Professor Lomonossoff
The Stage Is Set for Commercial Exploitation of Russia
Germany and the United States Struggle for Russian Business
Soviet Gold and American Banks
Max May of Guaranty Trust Becomes Director of Ruskombank
Chapter X:
J.P. Morgan Gives a Little Help to the Other Side
United Americans Formed to Fight Communism
United Americans Reveals "Startling Disclosures" on Reds
Conclusions Concerning United Americans
Morgan and Rockefeller Aid Kolchak
Chapter XI:
The Alliance of Bankers and Revolution
The Evidence Presented: A Synopsis
The Explanation for the Unholy Alliance
The Marburg Plan
Appendix I:
Directors of Major Banks,
Firms, and Institutions Mentioned
in This Book (as in 1917-1918)
Appendix II:
The Jewish-Conspiracy Theory of the
Bolshevik Revolution
Appendix III:
Selected Documents from Government
Files of the United States and Great Britain
Selected Bibliography
Index
those unknown Russian libertarians, also
known as Greens, who in 1919 fought both
the Reds and the Whites in their attempt to
gain a free and voluntary Russia
*****
Copyright 2001
This work was created with the permission of Antony
C. Sutton.
All rights reserved. No portion of this book may be
reproduced without written permission from the
author, except by a reviewer who may quote brief
passages in connection with a review.
HTML version created in the United States of
America by Studies in Reformed Theology
PREFACE
Since the early 1920s, numerous pamphlets and articles, even a few books, have sought to
forge a link between "international bankers" and "Bolshevik revolutionaries." Rarely have
these attempts been supported by hard evidence, and never have such attempts been argued
within the framework of a scientific methodology. Indeed, some of the "evidence" used in
these efforts has been fraudulent, some has been irrelevant, much cannot be checked.
Examination of the topic by academic writers has been studiously avoided; probably
because the hypothesis offends the neat dichotomy of capitalists versus Communists (and
everyone knows, of course, that these are bitter enemies). Moreover, because a great deal
that has been written borders on the absurd, a sound academic reputation could easily be
wrecked on the shoals of ridicule. Reason enough to avoid the topic.
Fortunately, the State Department Decimal File, particularly the 861.00 section, contains
extensive documentation on the hypothesized link. When the evidence in these official
papers is merged with nonofficial evidence from biographies, personal papers, and
conventional histories, a truly fascinating story emerges.
We find there was a link between some New York international bankers and many
revolutionaries, including Bolsheviks. These banking gentlemen — who are here identified
— had a financial stake in, and were rooting for, the success of the Bolshevik Revolution.
Who, why — and for how much — is the story in this book.
Antony C. Sutton
March 1974
BACK
Chapter I
THE ACTORS ON THE REVOLUTIONARY STAGE
Dear Mr. President:
I am in sympathy with the Soviet form of government as that best suited
for the Russian people...
Letter to President Woodrow Wilson (October 17, 1918) from William
Lawrence Saunders, chairman, Ingersoll-Rand Corp.; director, American
International Corp.; and deputy chairman, Federal Reserve Bank of New York
The frontispiece in this book was drawn by cartoonist Robert Minor in 1911 for the St.
Louis Post-Dispatch. Minor was a talented artist and writer who doubled as a Bolshevik
revolutionary, got himself arrested in Russia in 1915 for alleged subversion, and was later
bank-rolled by prominent Wall Street financiers. Minor's cartoon portrays a bearded,
beaming Karl Marx standing in Wall Street with Socialism tucked under his arm and
accepting the congratulations of financial luminaries J.P. Morgan, Morgan partner George
W. Perkins, a smug John D. Rockefeller, John D. Ryan of National City Bank, and Teddy
Roosevelt — prominently identified by his famous teeth — in the background. Wall Street
is decorated by Red flags. The cheering crowd and the airborne hats suggest that Karl Marx
must have been a fairly popular sort of fellow in the New York financial district.
Was Robert Minor dreaming? On the contrary, we shall see that Minor was on firm ground
in depicting an enthusiastic alliance of Wall Street and Marxist socialism. The characters in
Minor's cartoon — Karl Marx (symbolizing the future revolutionaries Lenin and Trotsky),
J. P. Morgan, John D. Rockefeller — and indeed Robert Minor himself, are also prominent
characters in this book.
The contradictions suggested by Minor's cartoon have been brushed under the rug of history
because they do not fit the accepted conceptual spectrum of political left and political right.
Bolsheviks are at the left end of the political spectrum and Wall Street financiers are at the
right end; therefore, we implicitly reason, the two groups have nothing in common and any
alliance between the two is absurd. Factors contrary to this neat conceptual arrangement are
usually rejected as bizarre observations or unfortunate errors. Modern history possesses
such a built-in duality and certainly if too many uncomfortable facts have been rejected and
brushed under the rug, it is an inaccurate history.
On the other hand, it may be observed that both the extreme right and the extreme left of the
conventional political spectrum are absolutely collectivist. The national socialist (for
example, the fascist) and the international socialist (for example, the Communist) both
recommend totalitarian politico-economic systems based on naked, unfettered political
power and individual coercion. Both systems require monopoly control of society. While
monopoly control of industries was once the objective of J. P. Morgan and J. D.
Rockefeller, by the late nineteenth century the inner sanctums of Wall Street understood
that the most efficient way to gain an unchallenged monopoly was to "go political" and
make society go to work for the monopolists — under the name of the public good and the
public interest. This strategy was detailed in 1906 by Frederick C. Howe in his Confessions
of a Monopolist.1 Howe, by the way, is also a figure in the story of the Bolshevik
Revolution.
Therefore, an alternative conceptual packaging of political ideas and politico-economic
systems would be that of ranking the degree of individual freedom versus the degree of
centralized political control. Under such an ordering the corporate welfare state and
socialism are at the same end of the spectrum. Hence we see that attempts at monopoly
control of society can have different labels while owning common features.
Consequently, one barrier to mature understanding of recent history is the notion that all
capitalists are the bitter and unswerving enemies of all Marxists and socialists. This
erroneous idea originated with Karl Marx and was undoubtedly useful to his purposes. In
fact, the idea is nonsense. There has been a continuing, albeit concealed, alliance between
international political capitalists and international revolutionary socialists — to their mutual
benefit. This alliance has gone unobserved largely because historians — with a few notable
exceptions — have an unconscious Marxian bias and are thus locked into the impossibility
of any such alliance existing. The open-minded reader should bear two clues in mind:
monopoly capitalists are the bitter enemies of laissez-faire entrepreneurs; and, given the
weaknesses of socialist central planning, the totalitarian socialist state is a perfect captive
market for monopoly capitalists, if an alliance can be made with the socialist powerbrokers.
Suppose — and it is only hypothesis at this point — that American monopoly capitalists
were able to reduce a planned socialist Russia to the status of a captive technical colony?
Would not this be the logical twentieth-century internationalist extension of the Morgan
railroad monopolies and the Rockefeller petroleum trust of the late nineteenth century?
Apart from Gabriel Kolko, Murray Rothbard, and the revisionists, historians have not been
alert for such a combination of events. Historical reporting, with rare exceptions, has been
forced into a dichotomy of capitalists versus socialists. George Kennan's monumental and
readable study of the Russian Revolution consistently maintains this fiction of a Wall
Street-Bolshevik dichotomy.2 Russia Leaves the War has a single incidental reference to the
J.P. Morgan firm and no reference at all to Guaranty Trust Company. Yet both
organizations are prominently mentioned in the State Department files, to which frequent
reference is made in this book, and both are part of the core of the evidence presented here.
Neither self-admitted "Bolshevik banker" Olof Aschberg nor Nya Banken in Stockholm is
mentioned in Kennan yet both were central to Bolshevik funding. Moreover, in minor yet
crucial circumstances, at least crucial for our argument, Kennan is factually in error. For
example, Kennan cites Federal Reserve Bank director William Boyce Thompson as leaving
Russia on November 27, 1917. This departure date would make it physically impossible for
Thompson to be in Petrograd on December 2, 1917, to transmit a cable request for $1
million to Morgan in New York. Thompson in fact left Petrograd on December 4, 1918, two
days after sending the cable to New York. Then again, Kennan states that on November 30,
1917, Trotsky delivered a speech before the Petrograd Soviet in which he observed, "Today
I had here in the Smolny Institute two Americans closely connected with American
Capitalist elements "According to Kennan, it "is difficult to imagine" who these two
Americans "could have been, if not Robins and Gumberg." But in [act Alexander Gumberg
was Russian, not American. Further, as Thompson was still in Russia on November 30,
1917, then the two Americans who visited Trotsky were more than likely Raymond Robins,
a mining promoter turned do-gooder, and Thompson, of the Federal Reserve Bank of New
York.
The Bolshevization of Wall Street was known among well informed circles as early as
1919. The financial journalist Barron recorded a conversation with oil magnate E. H.
Doheny in 1919 and specifically named three prominent financiers, William Boyce
Thompson, Thomas Lamont and Charles R. Crane:
Aboard S.S. Aquitania, Friday Evening, February 1, 1919.
Spent the evening with the Dohenys in their suite. Mr. Doheny said: If you
believe in democracy you cannot believe in Socialism. Socialism is the poison
that destroys democracy. Democracy means opportunity for all. Socialism
holds out the hope that a man can quit work and be better off. Bolshevism is the
true fruit of socialism and if you will read the interesting testimony before the
Senate Committee about the middle of January that showed up all these
pacifists and peace-makers as German sympathizers, Socialists, and
Bolsheviks, you will see that a majority of the college professors in the United
States are teaching socialism and Bolshevism and that fifty-two college
professors were on so-called peace committees in 1914. President Eliot of
Harvard is teaching Bolshevism. The worst Bolshevists in the United States are
not only college professors, of whom President Wilson is one, but capitalists
and the wives of capitalists and neither seem to know what they are talking
about. William Boyce Thompson is teaching Bolshevism and he may yet
convert Lamont of J.P. Morgan & Company. Vanderlip is a Bolshevist, so is
Charles R. Crane. Many women are joining the movement and neither they, nor
their husbands, know what it is, or what it leads to. Henry Ford is another and
so are most of those one hundred historians Wilson took abroad with him in the
foolish idea that history can teach youth proper demarcations of races, peoples,
and nations geographically.3
In brief, this is a story of the Bolshevik Revolution and its aftermath, but a story that departs
from the usual conceptual straitjacket approach of capitalists versus Communists. Our story
postulates a partnership between international monopoly capitalism and international
revolutionary socialism for their mutual benefit. The final human cost of this alliance has
fallen upon the shoulders of the individual Russian and the individual American.
Entrepreneurship has been brought into disrepute and the world has been propelled toward
inefficient socialist planning as a result of these monopoly maneuverings in the world of
politics and revolution.
This is also a story reflecting the betrayal of the Russian Revolution. The tsars and their
corrupt political system were ejected only to be replaced by the new powerbrokers of
another corrupt political system. Where the United States could have exerted its dominant
influence to bring about a free Russia it truckled to the ambitions of a few Wall Street
financiers who, for their own purposes, could accept a centralized tsarist Russia or a
centralized Marxist Russia but not a decentralized free Russia. And the reasons for these
assertions will unfold as we develop the underlying and, so far, untold history of the
Russian Revolution and its aftermath.4
Footnotes:
1"These are the rules of big business. They have superseded the teachings of
our parents and are reducible to a simple maxim: Get a monopoly; let Society
work for you: and remember that the best of all business is politics, for a
legislative grant, franchise, subsidy or tax exemption is worth more than a
Kimberly or Comstock lode, since it does not require any labor, either menta
Chapter II
TROTSKY LEAVES NEW YORK TO COMPLETE THE REVOLUTION
You will have a revolution, a terrible revolution. What course it takes will
depend much on what Mr. Rockefeller tells Mr. Hague to do. Mr. Rockefeller
is a symbol of the American ruling class and Mr. Hague is a symbol of its
political tools.
Leon Trotsky, in New York Times, December 13, 1938. (Hague was a New
Jersey politician)
In 1916, the year preceding the Russian Revolution, internationalist Leon Trotsky was
expelled from France, officially because of his participation in the Zimmerwald conference
but also no doubt because of inflammatory articles written for Nashe Slovo, a Russianlanguage
newspaper printed in Paris. In September 1916 Trotsky was politely escorted
across the Spanish border by French police. A few days later Madrid police arrested the
internationalist and lodged him in a "first-class cell" at a charge of one-and-one-haft pesetas
per day. Subsequently Trotsky was taken to Cadiz, then to Barcelona finally to be placed on
board the Spanish Transatlantic Company steamer Monserrat. Trotsky and family crossed
the Atlantic Ocean and landed in New York on January 13, 1917.
Other Trotskyites also made their way westward across the Atlantic. Indeed, one Trotskyite
group acquired sufficient immediate influence in Mexico to write the Constitution of
Querétaro for the revolutionary 1917 Carranza government, giving Mexico the dubious
distinction of being the first government in the world to adopt a Soviet-type constitution.
How did Trotsky, who knew only German and Russian, survive in capitalist America?
According to his autobiography, My Life, "My only profession in New York was that of a
revolutionary socialist." In other words, Trotsky wrote occasional articles for Novy Mir, the
New York Russian socialist journal. Yet we know that the Trotsky family apartment in New
York had a refrigerator and a telephone, and, according to Trotsky, that the family
occasionally traveled in a chauffeured limousine. This mode of living puzzled the two
young Trotsky boys. When they went into a tearoom, the boys would anxiously demand of
their mother, "Why doesn't the chauffeur come in?"1 The stylish living standard is also at
odds with Trotsky's reported income. The only funds that Trotsky admits receiving in 1916
and 1917 are $310, and, said Trotsky, "I distributed the $310 among five emigrants who
were returning to Russia." Yet Trotsky had paid for a first-class cell in Spain, the Trotsky
family had traveled across Europe to the United States, they had acquired an excellent
apartment in New York — paying rent three months in advance — and they had use of a
chauffeured limousine. All this on the earnings of an impoverished revolutionary for a few
articles for the low-circulation Russian-language newspaper Nashe Slovo in Paris and Novy
Mir in New York!
Joseph Nedava estimates Trotsky's 1917 income at $12.00 per week, "supplemented by
some lecture fees."2 Trotsky was in New York in 1917 for three months, from January to
March, so that makes $144.00 in income from Novy Mir and, say, another $100.00 in
lecture fees, for a total of $244.00. Of this $244.00 Trotsky was able to give away $310.00
to his friends, pay for the New York apartment, provide for his family — and find the
$10,000 that was taken from him in April 1917 by Canadian authorities in Halifax. Trotsky
claims that those who said he had other sources of income are "slanderers" spreading
"stupid calumnies" and "lies," but unless Trotsky was playing the horses at the Jamaica
racetrack, it can't be done. Obviously Trotsky had an unreported source of income.
What was that source? In The Road to Safety, author Arthur Willert says Trotsky earned a
living by working as an electrician for Fox Film Studios. Other writers have cited other
occupations, but there is no evidence that Trotsky occupied himself for remuneration
otherwise than by writing and speaking.
Most investigation has centered on the verifiable fact that when Trotsky left New York in
1917 for Petrograd, to organize the Bolshevik phase of the revolution, he left with $10,000.
In 1919 the U.S. Senate Overman Committee investigated Bolshevik propaganda and
German money in the United States and incidentally touched on the source of Trotsky's
$10,000. Examination of Colonel Hurban, Washington attaché to the Czech legation, by the
Overman Committee yielded the following:
COL. HURBAN: Trotsky, perhaps, took money from Germany, but Trotsky
will deny it. Lenin would not deny it. Miliukov proved that he got $10,000
from some Germans while he was in America. Miliukov had the proof, but he
denied it. Trotsky did, although Miliukov had the proof.
SENATOR OVERMAN: It was charged that Trotsky got $10,000 here.
COL. HURBAN: I do not remember how much it was, but I know it was a
question between him and Miliukov.
SENATOR OVERMAN: Miliukov proved it, did he?
COL. HURBAN: Yes, sir.
SENATOR OVERMAN: Do you know where he got it from?
COL. HURBAN: I remember it was $10,000; but it is no matter. I will speak
about their propaganda. The German Government knew Russia better than
anybody, and they knew that with the help of those people they could destroy
the Russian army.
(At 5:45 o'clock p.m. the subcommittee adjourned until tomorrow, Wednesday,
February 19, at 10:30 o'clock a.m.)3
It is quite remarkable that the committee adjourned abruptly before the source of Trotsky's
funds could be placed into the Senate record. When questioning resumed the next day,
Trotsky and his $10,000 were no longer of interest to the Overman Committee. We shall
later develop evidence concerning the financing of German and revolutionary activities in
the United States by New York financial houses; the origins of Trotsky's $10,000 will then
come into focus.
An amount of $10,000 of German origin is also mentioned in the official British telegram to
Canadian naval authorities in Halifax, who requested that Trotsky and party en route to the
revolution be taken off the S.S. Kristianiafjord (see page 28). We also learn from a British
Directorate of Intelligence report4 that Gregory Weinstein, who in 1919 was to become a
prominent member of the Soviet Bureau in New York, collected funds for Trotsky in New
York. These funds originated in Germany and were channeled through the Volks-zeitung, a
German daily newspaper in New York and subsidized by the German government.
While Trotsky's funds are officially reported as German, Trotsky was actively engaged in
American politics immediately prior to leaving New York for Russia and the revolution. On
March 5, 1917, American newspapers headlined the increasing possibility of war with
Germany; the same evening Trotsky proposed a resolution at the meeting of the New York
County Socialist Party "pledging Socialists to encourage strikes and resist recruiting in the
event of war with Germany."5 Leon Trotsky was called by the New York Times "an exiled
Russian revolutionist." Louis C. Fraina, who cosponsored the Trotsky resolution, later —
under an alias — wrote an uncritical book on the Morgan financial empire entitled House of
Morgan.6 The Trotsky-Fraina proposal was opposed by the Morris Hillquit faction, and the
Socialist Party subsequently voted opposition to the resolution.7
More than a week later, on March 16, at the time of the deposition of the tsar, Leon Trotsky
was interviewed in the offices of Novy Mir.. The interview contained a prophetic statement
on the Russian revolution:
"... the committee which has taken the place of the deposed Ministry in Russia
did not represent the interests or the aims of the revolutionists, that it would
probably be shortlived and step down in favor of men who would be more sure
to carry forward the democratization of Russia."8
The "men who would be more sure to carry forward the democratization of Russia," that is,
the Mensheviks and the Bolsheviks, were then in exile abroad and needed first to return to
Russia. The temporary "committee" was therefore dubbed the Provisional Government, a
title, it should be noted, that was used from the start of the revolution in March and not
applied ex post facto by historians.
WOODROW WILSON AND A PASSPORT FOR TROTSKY
President Woodrow Wilson was the fairy godmother who provided Trotsky with a passport
to return to Russia to "carry forward" the revolution. This American passport was
accompanied by a Russian entry permit and a British transit visa. Jennings C. Wise, in
Woodrow Wilson: Disciple of Revolution, makes the pertinent comment, "Historians must
never forget that Woodrow Wilson, despite the efforts of the British police, made it possible
for Leon Trotsky to enter Russia with an American passport."
President Wilson facilitated Trotsky's passage to Russia at the same time careful State
Department bureaucrats, concerned about such revolutionaries entering Russia, were
unilaterally attempting to tighten up passport procedures. The Stockholm legation cabled
the State Department on June 13, 1917, just after Trotsky crossed the Finnish-Russian
border, "Legation confidentially informed Russian, English and French passport offices at
Russian frontier, Tornea, considerably worried by passage of suspicious persons bearing
American passports."9
To this cable the State Department replied, on the same day, "Department is exercising
special care in issuance of passports for Russia"; the department also authorized
expenditures by the legation to establish a passport-control office in Stockholm and to hire
an "absolutely dependable American citizen" for employment on control work.10 But the
bird had flown the coop. Menshevik Trotsky with Lenin's Bolsheviks were already in
Russia preparing to "carry forward" the revolution. The passport net erected caught only
more legitimate birds. For example, on June 26, 1917, Herman Bernstein, a reputable New
York newspaperman on his way to Petrograd to represent the New York Herald, was held at
the border and refused entry to Russia. Somewhat tardily, in mid-August 1917 the Russian
embassy in Washington requested the State Department (and State agreed) to "prevent the
entry into Russia of criminals and anarchists... numbers of whom have already gone to
Russia."11
Consequently, by virtue of preferential treatment for Trotsky, when the S.S. Kristianiafjord
left New York on March 26, 1917, Trotsky was aboard and holding a U.S. passport — and
in company with other Trotskyire revolutionaries, Wall Street financiers, American
Communists, and other interesting persons, few of whom had embarked for legitimate
business. This mixed bag of passengers has been described by Lincoln Steffens, the
American Communist:
The passenger list was long and mysterious. Trotsky was in the steerage with a
group of revolutionaries; there was a Japanese revolutionist in my cabin. There
were a lot of Dutch hurrying home from Java, the only innocent people aboard.
The rest were war messengers, two from Wall Street to Germany....12
Notably, Lincoln Steffens was on board en route to Russia at the specific invitation of
Charles Richard Crane, a backer and a former chairman of the Democratic Party's finance
committee. Charles Crane, vice president of the Crane Company, had organized the
Westinghouse Company in Russia, was a member of the Root mission to Russia, and had
made no fewer than twenty-three visits to Russia between 1890 and 1930. Richard Crane,
his son, was confidential assistant to then Secretary of State Robert Lansing. According to
the former ambassador to Germany William Dodd, Crane "did much to bring on the
Kerensky revolution which gave way to Communism."13 And so Steffens' comments in his
diary about conversations aboard the S.S. Kristianiafjord are highly pertinent:" . . . all agree
that the revolution is in its first phase only, that it must grow. Crane and Russian radicals on
the ship think we shall be in Petrograd for the re-revolution.14
Crane returned to the United States when the Bolshevik Revolution (that is, "the rerevolution")
had been completed and, although a private citizen, was given firsthand reports
of the progress of the Bolshevik Revolution as cables were received at the State
Department. For example, one memorandum, dated December 11, 1917, is entitled "Copy
of report on Maximalist uprising for Mr Crane." It originated with Maddin Summers, U.S.
consul general in Moscow, and the covering letter from Summers reads in part:
I have the honor to enclose herewith a copy of same [above report] with the
request that it be sent for the confidential information of Mr. Charles R. Crane.
It is assumed that the Department will have no objection to Mr. Crane seeing
the report ....15
In brief, the unlikely and puzzling picture that emerges is that Charles Crane, a friend and
backer of Woodrow Wilson and a prominent financier and politician, had a known role in
the "first" revolution and traveled to Russia in mid-1917 in company with the American
Communist Lincoln Steffens, who was in touch with both Woodrow Wilson and Trotsky.
The latter in turn was carrying a passport issued at the orders of Wilson and $10,000 from
supposed German sources. On his return to the U.S. after the "re-revolution," Crane was
granted access to official documents concerning consolidation of the Bolshevik regime:
This is a pattern of interlocking — if puzzling — events that warrants further investigation
and suggests, though without at this point providing evidence, some link between the
financier Crane and the revolutionary Trotsky.
CANADIAN GOVERNMENT DOCUMENTS ON TROTSKY'S RELEASE16
Documents on Trotsky's brief stay in Canadian custody are now de-classified and available
from the Canadian government archives. According to these archives, Trotsky was removed
by Canadian and British naval personnel from the S.S. Kristianiafjord at Halifax, Nova
Scotia, on April 3, 1917, listed as a German prisoner of war, and interned at the Amherst,
Nova Scotia, internment station for German prisoners. Mrs. Trotsky, the two Trotsky boys,
and five other men described as "Russian Socialists" were also taken off and interned. Their
names are recorded by the Canadian files as: Nickita Muchin, Leiba Fisheleff, Konstantin
Romanchanco, Gregor Teheodnovski, Gerchon Melintchansky and Leon Bronstein Trotsky
(all spellings from original Canadian documents).
Canadian Army form LB-l, under serial number 1098 (including thumb prints), was
completed for Trotsky, with a description as follows: "37 years old, a political exile,
occupation journalist, born in Gromskty, Chuson, Russia, Russian citizen." The form was
signed by Leon Trotsky and his full name given as Leon Bromstein (sic) Trotsky.
The Trotsky party was removed from the S.S. Kristianiafjord under official instructions
received by cablegram of March 29, 1917, London, presumably originating in the
Admiralty with the naval control officer, Halifax. The cablegram reported that the Trotsky
party was on the "Christianiafjord" (sic) and should be "taken off and retained pending
instructions." The reason given to the naval control officer at Halifax was that "these are
Russian Socialists leaving for purposes of starting revolution against present Russian
government for which Trotsky is reported to have 10,000 dollars subscribed by Socialists
and Germans."
On April 1, 1917, the naval control officer, Captain O. M. Makins, sent a confidential
memorandum to the general officer commanding at Halifax, to the effect that he had
"examined all Russian passengers" aboard the S.S. Kristianiafjord and found six men in the
second-class section: "They are all avowed Socialists, and though professing a desire to
help the new Russian Govt., might well be in league with German Socialists in America,
and quite likely to be a great hindrance to the Govt. in Russia just at present." Captain
Makins added that he was going to remove the group, as well as Trotsky's wife and two
sons, in order to intern them at Halifax. A copy of this report was forwarded from Halifax to
the chief of the General Staff in Ottawa on April 2, 1917.
The next document in the Canadian files is dated April 7, from the chief of the General
Staff, Ottawa, to the director of internment operations, and acknowledges a previous letter
(not in the files) about the internment of Russian socialists at Amherst, Nova Scotia: ". . . in
this connection, have to inform you of the receipt of a long telegram yesterday from the
Russian Consul General, MONTREAL, protesting against the arrest of these men as they
were in possession of passports issued by the Russian Consul General, NEW YORK,
U.S.A."
The reply to this Montreal telegram was to the effect that the men were interned "on
suspicion of being German," and would be released only upon definite proof of their
nationality and loyalty to the Allies. No telegrams from the Russian consul general in New
York are in the Canadian files, and it is known that this office was reluctant to issue Russian
passports to Russian political exiles. However, there is a telegram in the files from a New
York attorney, N. Aleinikoff, to R. M. Coulter, then deputy postmaster general of Canada.
The postmaster general's office in Canada had no connection with either internment of
prisoners of war or military activities. Accordingly, this telegram was in the nature of a
personal, nonofficial intervention. It reads:
DR. R. M. COULTER, Postmaster Genl. OTTAWA Russian political exiles
returning to Russia detained Halifax interned Amherst camp. Kindly investigate
and advise cause of the detention and names of all detained. Trust as champion
of freedom you will intercede on their behalf. Please wire collect. NICHOLAS
ALEINIKOFF
On April 11, Coulter wired Aleinikoff, "Telegram received. Writing you this afternoon.
You should receive it tomorrow evening. R. M. Coulter." This telegram was sent by the
Canadian Pacific Railway Telegraph but charged to the Canadian Post Office Department.
Normally a private business telegram would be charged to the recipient and this was not
official business. The follow-up Coulter letter to Aleinikoff is interesting because, after
confirming that the Trotsky party was held at Amherst, it states that they were suspected of
propaganda against the present Russian government and "are supposed to be agents of
Germany." Coulter then adds," . . . they are not what they represent themselves to be"; the
Trotsky group is "...not detained by Canada, but by the Imperial authorities." After assuring
Aleinikoff that the detainees would be made comfortable, Coulter adds that any information
"in their favour" would be transmitted to the military authorities. The general impression of
the letter is that while Coulter is sympathetic and fully aware of Trotsky's pro-German links,
he is unwilling to get involved. On April 11 Arthur Wolf of 134 East Broadway, New York,
sent a telegram to Coulter. Though sent from New York, this telegram, after being
acknowledged, was also charged to the Canadian Post Office Department.
Coulter's reactions, however, reflect more than the detached sympathy evident in his letter
to Aleinikoff. They must be considered in the light of the fact that these letters in behalf of
Trotsky came from two American residents of New York City and involved a Canadian or
Imperial military matter of international importance. Further, Coulter, as deputy postmaster
general, was a Canadian government official of some standing. Ponder, for a moment, what
would happen to someone who similarly intervened in United States affairs! In the Trotsky
affair we have two American residents corresponding with a Canadian deputy postmaster
general in order to intervene in behalf of an interned Russian revolutionary.
Coulter's subsequent action also suggests something more than casual intervention. After
Coulter acknowledged the Aleinikoff and Wolf telegrams, he wrote to Major General
Willoughby Gwatkin of the Department of Militia and Defense in Ottawa — a man of
significant influence in the Canadian military — and attached copies of the Aleinikoff and
Wolf telegrams:
These men have been hostile to Russia because of the way the Jews have been
treated, and are now strongly in favor of the present Administration, so far as I
know. Both are responsible men. Both are reputable men, and I am sending
their telegrams to you for what they may be worth, and so that you may
represent them to the English authorities if you deem it wise.
Obviously Coulter knows — or intimates that he knows — a great deal about Aleinikoff
and Wolf. His letter was in effect a character reference, and aimed at the root of the
internment problem — London. Gwatkin was well known in London, and in fact was on
loan to Canada from the War Office in London.17
Aleinikoff then sent a letter to Coulter to thank him
most heartily for the interest you have taken in the fate of the Russian Political
Exiles .... You know me, esteemed Dr. Coulter, and you also know my devotion
to the cause of Russian freedom .... Happily I know Mr. Trotsky, Mr.
Melnichahnsky, and Mr. Chudnowsky . . . intimately.
It might be noted as an aside that if Aleinikoff knew Trotsky "intimately," then he would
also probably be aware that Trotsky had declared his intention to return to Russia to
overthrow the Provisional Government and institute the "re-revolution." On receipt of
Aleinikoff's letter, Coulter immediately (April 16) forwarded it to Major General Gwatkin,
adding that he became acquainted with Aleinikoff "in connection with Departmental action
on United States papers in the Russian language" and that Aleinikoff was working "on the
same lines as Mr. Wolf . . . who was an escaped prisoner from Siberia."
Previously, on April 14, Gwatkin sent a memorandum to his naval counterpart on the
Canadian Military Interdepartmental Committee repeating that the internees were Russian
socialists with "10,000 dollars subscribed by socialists and Germans." The concluding
paragraph stated: "On the other hand there are those who declare that an act of high-handed
injustice has been done." Then on April 16, Vice Admiral C. E. Kingsmill, director of the
Naval Service, took Gwatkin's intervention at face value. In a letter to Captain Makins, the
naval control officer at Halifax, he stated, "The Militia authorities request that a decision as
to their (that is, the six Russians) disposal may be hastened." A copy of this instruction was
relayed to Gwatkin who in turn informed Deputy Postmaster General Coulter. Three days
later Gwatkin applied pressure. In a memorandum of April 20 to the naval
Chapter III
LENIN AND GERMAN ASSISTANCE FOR THE BOLSHEVIK REVOLUTION
It was not until the Bolsheviks had received from us a steady flow of funds
through various channels and under varying labels that they were in a
position to be able to build up their main organ Pravda, to conduct
energetic propaganda and appreciably to extend the originally narrow
base of their party.
Von Kühlmann, minister of foreign affairs, to the kaiser, December 3, 1917
In April 1917 Lenin and a party of 32 Russian revolutionaries, mostly Bolsheviks,
journeyed by train from Switzerland across Germany through Sweden to Petrograd, Russia.
They were on their way to join Leon Trotsky to "complete the revolution." Their trans-
Germany transit was approved, facilitated, and financed by the German General Staff.
Lenin's transit to Russia was part of a plan approved by the German Supreme Command,
apparently not immediately known to the kaiser, to aid in the disintegration of the Russian
army and so eliminate Russia from World War I. The possibility that the Bolsheviks might
be turned against Germany and Europe did not occur to the German General Staff. Major
General Hoffman has written, "We neither knew nor foresaw the danger to humanity from
the consequences of this journey of the Bolsheviks to Russia."1
At the highest level the German political officer who approved Lenin's journey to Russia
was Chancellor Theobald von Bethmann-Hollweg, a descendant of the Frankfurt banking
family Bethmann, which achieved great prosperity in the nineteenth century. Bethmann-
Hollweg was appointed chancellor in 1909 and in November 1913 became the subject of the
first vote of censure ever passed by the German Reichstag on a chancellor. It was
Bethmann-Hollweg who in 1914 told the world that the German guarantee to Belgium was
a mere "scrap of paper." Yet on other war matters — such as the use of unrestricted
submarine warfare — Bethmann-Hollweg was ambivalent; in January 1917 he told the
kaiser, "I can give Your Majesty neither my assent to the unrestricted submarine warfare
nor my refusal." By 1917 Bethmann-Hollweg had lost the Reichstag's support and
resigned — but not before approving transit of Bolshevik revolutionaries to Russia. The
transit instructions from Bethmann-Hollweg went through the state secretary Arthur
Zimmermann — who was immediately under Bethmann-Hollweg and who handled day-today
operational details with the German ministers in both Bern and Copenhagen — to the
German minister to Bern in early April 1917. The kaiser himself was not aware of the
revolutionary movement until after Lenin had passed into Russia.
While Lenin himself did not know the precise source of the assistance, he certainly knew
that the German government was providing some funding. There were, however,
intermediate links between the German foreign ministry and Lenin, as the following shows:
LENIN'S TRANSFER TO RUSSIA IN APRIL 1917
Final decision BETHMANN-HOLLWEG
From Berlin Zimmermann and Bethmann-Hollweg communicated with the German
minister in Copenhagen, Brockdorff-Rantzau. In turn, Brockdorff-Rantzau was in touch
with Alexander Israel Helphand (more commonly known by his alias, Parvus), who was
located in Copenhagen.2 Parvus was the connection to Jacob Furstenberg, a Pole descended
from a wealthy family but better known by his alias, Ganetsky. And Jacob Furstenberg was
the immediate link to Lenin.
Although Chancellor Bethmann-Hollweg was the final authority for Lenin's transfer, and
although Lenin was probably aware of the German origins of the assistance, Lenin cannot
be termed a German agent. The German Foreign Ministry assessed Lenin's probable actions
in Russia as being consistent with their own objectives in the dissolution of the existing
power structure in Russia. Yet both parties also had hidden objectives: Germany wanted
priority access to the postwar markets in Russia, and Lenin intended to establish a Marxist
dictatorship.
The idea of using Russian revolutionaries in this way can be traced back to 1915. On
August 14 of that year, Brockdorff-Rantzau wrote the German state undersecretary about a
conversation with Helphand (Parvus), and made a strong recommendation to employ
Helphand, "an extraordinarily important man whose unusual powers I feel we must employ
for duration of the war .... "3 Included in the report was a warning: "It might perhaps be
risky to want to use the powers ranged behind Helphand, but it would certainly be an
admission of our own weakness if we were to refuse their services out of fear of not being
able to direct them."4
Brockdorff-Rantzau's ideas of directing or controlling the revolutionaries parallel, as we
shall see, those of the Wall Street financiers. It was J.P. Morgan and the American
International Corporation that attempted to control both domestic and foreign
revolutionaries in the United States for their own purposes.
A subsequent document5 outlined the terms demanded by Lenin, of which the most
interesting was point number seven, which allowed "Russian troops to move into India";
this suggested that Lenin intended to continue the tsarist expansionist program. Zeman also
records the role of Max Warburg in establishing a Russian publishing house and adverts to
an agreement dated August 12, 1916, in which the German industrialist Stinnes agreed to
contribute two million rubles for financing a publishing house in Russia.6
(Chancellor)
Intermediary I ARTHUR ZIMMERMANN
(State Secretary)
Intermediary II BROCKDORFF-RANTZAU
(German Minister in
Copenhagen)
Intermediary III ALEXANDER ISRAEL
HELPHAND
(alias PARVUS)
Intermediary IV JACOB FURSTENBERG
(alias GANETSKY)
LENIN, in Switzerland
Consequently, on April 16, 1917, a trainload of thirty-two, including Lenin, his wife
Nadezhda Krupskaya, Grigori Zinoviev, Sokolnikov, and Karl Radek, left the Central
Station in Bern en route to Stockholm. When the party reached the Russian frontier only
Fritz Plattan and Radek were denied entrance into Russia. The remainder of the party was
allowed to enter. Several months later they were followed by almost 200 Mensheviks,
including Martov and Axelrod.
It is worth noting that Trotsky, at that time in New York, also had funds traceable to
German sources. Further, Von Kuhlmann alludes to Lenin's inability to broaden the base of
his Bolshevik party until the Germans supplied funds. Trotsky was a Menshevik who turned
Bolshevik only in 1917. This suggests that German funds were perhaps related to Trotsky's
change of party label.
THE SISSON DOCUMENTS
In early 1918 Edgar Sisson, the Petrograd representative of the U.S. Committee on Public
Information, bought a batch of Russian documents purporting to prove that Trotsky, Lenin,
and the other Bolshevik revolutionaries were not only in the pay of, but also agents of, the
German government.
These documents, later dubbed the "Sisson Documents," were shipped to the United States
in great haste and secrecy. In Washington, D.C. they were submitted to the National Board
for Historical Service for authentication. Two prominent historians, J. Franklin Jameson and
Samuel N. Harper, testified to their genuineness. These historians divided the Sisson papers
into three groups. Regarding Group I, they concluded:
We have subjected them with great care to all the applicable tests to which
historical students are accustomed and . . . upon the basis of these
investigations, we have no hesitation in declaring that we see no reason to
doubt the genuineness or authenticity of these fifty-three documents.7
The historians were less confident about material in Group II. This group was not rejected
as. outright forgeries, but it was suggested that they were copies of original documents.
Although the historians made "no confident declaration" on Group III, they were not
prepared to reject the documents as outright forgeries.
Chapter IV
WALL STREET AND WORLD REVOLUTION
What you Radicals and we who hold opposing views differ about, is not so
much the end as the means, not so much what should be brought about as
how it should, and can, be brought about ....
Otto H. Kahn, director, American International Corp., and partner, Kuhn,
Loeb & Co., speaking to the League/or Industrial Democracy, New York,
December 30, 1924
Before World War I, the financial and business structure of the United States was
dominated by two conglomerates: Standard Oil, or the Rockefeller enterprise, and the
Morgan complex of industries — finance and transportation companies. Rockefeller and
Morgan trust alliances dominated not only Wall Street but, through interlocking
directorships, almost the entire economic fabric of the United States.l Rockefeller interests
monopolized the petroleum and allied industries, and controlled the copper trust, the
smelters trust, and the gigantic tobacco trust, in addition to having influence in some
Morgan properties such as the U.S. Steel Corporation as well as in hundreds of smaller
industrial trusts, public service operations, railroads, and banking institutions. National City
Bank was the largest of the banks influenced by Standard Oil-Rockefeller, but financial
control extended to the United States Trust Company and Hanover National Bank as well as
to major life insurance companies — Equitable Life and Mutual of New York.
The great Morgan enterprises were in steel, shipping, and the electrical industry; they
included General Electric, the rubber trust, and railroads. Like Rockefeller, Morgan
controlled financial corporations — the National Bank of Commerce and the Chase
National Bank, New York Life Insurance, and the Guaranty Trust Company. The names J.P.
Morgan and Guaranty Trust Company occur repeatedly throughout this book. In the early
part of the twentieth century the Guaranty Trust Company was dominated by the Harriman
interests. When the elder Harriman (Edward Henry) died in 1909, Morgan and associates
bought into Guaranty Trust as well as into Mutual Life and New York Life. In 1919 Morgan
also bought control of Equitable Life, and the Guaranty Trust Company absorbed an
additional six lesser trust companies. Therefore, at the end of World War I the Guaranty
Trust and Bankers Trust were, respectively, the first and second largest trust companies in
the United States, both dominated by Morgan interests.2
American financiers associated with these groups were involved in financing revolution
even before 1917. Intervention by the Wall Street law firm of Sullivan & Cromwell into the
Panama Canal controversy is recorded in 1913 congressional hearings. The episode is
summarized by Congressman Rainey:
It is my contention that the representatives of this Government [United States]
made possible the revolution on the isthmus of Panama. That had it not been
for the interference of this Government a successful revolution could not
possibly have occurred, and I contend that this Government violated the treaty
of 1846. I will be able to produce evidence to show that the declaration of
independence which was promulgated in Panama on the 3rd day of November,
1903, was prepared right here in New York City and carried down there —
prepared in the office of Wilson (sic) Nelson Cromwell ....3
Congressman Rainey went on to state that only ten or twelve of the top Panamanian
revolutionists plus "the officers of the Panama Railroad & Steamship Co., who were under
the control of William Nelson Cromwell, of New York and the State Department officials in
Washington," knew about the impending revolution.4 The purpose of the revolution was to
deprive Colombia, of which Panama was then a part, of $40 million and to acquire control
of the Panama Canal.
The best-documented example of Wall Street intervention in revolution is the operation of a
New York syndicate in the Chinese revolution of 1912, which was led by Sun Yat-sen.
Although the final gains of the syndicate remain unclear, the intention and role of the New
York financing group are fully documented down to amounts of money, information on
affiliated Chinese secret societies, and shipping lists of armaments to be purchased. The
New York bankers syndicate for the Sun Yat-sen revolution included Charles B. Hill, an
attorney with the law firm of Hunt, Hill & Betts. In 1912 the firm was located at 165
Broadway, New York, but in 1917 it moved to 120 Broadway (see chapter eight for the
significance of this address). Charles B. Hill was director of several Westinghouse
subsidiaries, including Bryant Electric, Perkins Electric Switch, and Westinghouse Lamp —
all affiliated with Westinghouse Electric whose New York office was also located at 120
Broadway. Charles R. Crane, organizer of Westinghouse subsidiaries in Russia, had a
known role in the first and second phases of the Bolshevik Revolution (see page 26).
The work of the 1910 Hill syndicate in China is recorded in the Laurence Boothe Papers at
the Hoover Institution.5 These papers contain over 110 related items, including letters of
Sun Yat-sen to and from his American backers. In return for financial support, Sun Yat-sen
promised the Hill syndicate railroad, banking, and commercial concessions in the new
revolutionary China.
Another case of revolution supported by New York financial institutions concerned that of
Mexico in 1915-16. Von Rintelen, a German espionage agent in the United States,6 was
accused during his May 1917 trial in New York City of attempting to "embroil" the U.S.
with Mexico and Japan in order to divert ammunition then flowing to the Allies in Europe.7
Payment for the ammunition that was shipped from the United States to the Mexican
revolutionary Pancho Villa, was made through Guaranty Trust Company. Von Rintelen's
adviser, Sommerfeld, paid $380,000 via Guaranty Trust and Mississippi Valley Trust
Company to the Western Cartridge Company of Alton, Illinois, for ammunition shipped to
El Paso, for forwarding to Villa. This was in mid-1915. On January 10, 1916, Villa
murdered seventeen American miners at Santa Isabel and on March 9, 1916, Villa raided
Columbus, New Mexico, and killed eighteen more Americans.
Wall Street involvement in these Mexican border raids was the subject of a letter (October
6, 1916) from Lincoln Steffens, an American Communist, to Colonel House, an aide' to
Woodrow Wilson:
My dear Colonel House:
Just before I left New York last Monday, I was told convincingly that "Wall
Street" had completed arrangements for one more raid of Mexican bandits into
the United States: to be so timed and so atrocious that it would settle the
election ....8
Once in power in Mexico, the Carranza government purchased additional arms in the
United States. The American Gun Company contracted to ship 5,000 Mausers and a
shipment license was issued by the War Trade Board for 15,000 guns and 15,000,000
rounds of ammunition. The American ambassador to Mexico, Fletcher, "flatly refused to
recommend or sanction the shipment of any munitions, rifles, etc., to Carranza."9 However,
intervention by Secretary of State Robert Lansing reduced the barrier to one of a temporary
delay, and "in a short while . . . [the American Gun Company] would be permitted to make
the shipment and deliver."10
The raids upon the U.S. by the Villa and the Carranza forces were reported in the New York
Times as the "Texas Revolution" (a kind of dry run for the Bolshevik Revolution) and were
undertaken jointly by Germans and Bolsheviks. The testimony of John A. Walls, district
attorney of Brownsville, Texas, before the 1919 Fall Committee yielded documentary
evidence of the link between Bolshevik interests in the United States, German activity, and
the Carranza forces in Mexico.11 Consequently, the Carranza government, the first in the
world with a Soviet-type constitution (which was written by Trotskyites), was a government
with support on Wall Street. The Carranza revolution probably could not have succeeded
without American munitions and Carranza would not have remained in power as long as he
did without American help.12
Similar intervention in the 1917 Bolshevik Revolution in Russia revolves around Swedish
banker and intermediary Olof Aschberg. Logically the story begins with prerevolutionary
tsarist loans by Wall Street bank syndicates.
AMERICAN BANKERS AND TSARIST LOANS
In August 1914 Europe went to war. Under international law neutral countries (and the
United States was neutral until April 1917) could not raise loans for belligerent countries.
This was a question of law as well as morality.
When the Morgan house floated war loans for Britain and France in 1915, J.P. Morgan
argued that these were not war loans at all but merely a means of facilitating international
trade. Such a distinction had indeed been elaborately made by President Wilson in October
1914; he explained that the sale of bonds in the U.S. for foreign governments was in effect a
loan of savings to belligerent governments and did not finance a war. On the other hand,
acceptance of Treasury notes or other evidence of debt in payment for articles was only a
means of facilitating trade and not of financing a war effort.13
Documents in the State Department files demonstrate that the National City Bank,
controlled by Stillman and Rockefeller interests, and the Guaranty Trust, controlled by
Morgan interests, jointly raised substantial loans for the belligerent Russia before U.S. entry
into the war, and that these loans were raised alter the State Department pointed out to these
firms that they were contrary to international law. Further, negotiations for the loans were
undertaken through official U.S. government communications facilities under cover of the
top-level "Green Cipher" of the State Department. Below are extracts from State
Department cables that will make the case.
On May 94, 1916, Ambassador Francis in Petrograd sent the following cable to the State
Department in Washington for forwardin to Frank Arthur Vanderlip, then chairman of the
National City Bank in New York. The cable was sent in Green Cipher and was enciphered
and deciphered by U.S. State Department officers in Petrograd and Washington at the
taxpayers' expense (file 861.51/110).
563, May 94, 1 p.m.
For Vanderlip National City Bank New York. Five. Our previous opinions
credit strengthened. We endorse plan cabled as safe investment plus very
attractive speculation in roubles. In view of guarantee of exchange rate have
placed rate somewhat above present market. Owing unfavorable opinion
created by long delay have on own responsibility offered take twenty-five
million dollars. We think large portion of all should be retained by bank and
allied institutions. With clause respect customs bonds become practical lien on
more than one hundred and fifty million dollars per annum customs making
absolute security and secures market even if defect. We consider three [years?]
option on bonds very valuable and for that reason amount of rouble credit
should be enlarged by group or by distribution to close friends. American
International should take block and we would inform Government. Think group
should be formed at once to take and issue of bonds . . . should secure full
cooperation guaranty. Suggest you see Jack personally, use every endeavor to
get them really work otherwise cooperate guarantee form new group.
Opportunities here during the next ten years very great along state and
industrial financiering and if this transaction consummated doubtless should be
established. In answering bear in mind situation regarding cable.
MacRoberts Rich.
FRANCIS, AMERICAN AMBASSADOR14
There are several points to note about the above cable to understand the story that follows.
First, note the reference to American International Corporation, a Morgan firm, and a name
that turns up again and again in this story. Second, "guarantee" refers to Guaranty Trust
Company. Third, "MacRoberts" was Samuel MacRoberts, a vice president and the
executive manager of National City Bank.
On May 24, 1916, Ambassador Francis cabled a message from Rolph Marsh of Guaranty
Trust in Petrograd to Guaranty Trust in New York, again in the special Green Cipher and
again using the facilities of the State Department. This cable reads as follows:
565, May 24, 6 p.m.
for Guaranty Trust Company New York:
Three.
Olof and self consider the new proposition takes care Olof and will help rather
than harm your prestige. Situation such co-operation necessary if big things are
to be accomplished here. Strongly urge your arranging with City to consider
and act jointly in all big propositions here. Decided advantages for both and
prevents playing one against other. City representatives here desire (hand
written) such co-operation. Proposition being considered eliminates our credit
in name also option but we both consider the rouble credit with the bond option
in propositions. Second paragraph offers wonderful profitable opportunity,
strongly urge your acceptance. Please cable me full authority to act in
connection with City. Consider our entertaining proposition satisfactory
situation for us and permits doing big things. Again strongly urge your taking
twenty-five million of rouble credit. No possibility loss and decided speculative
advantages. Again urge having Vice President upon the ground. Effect here
will be decidedly good. Resident Attorney does not carry same prestige and
weight. This goes through Embassy by code answer same way. See cable on
possibilities.
ROLPH MARSH.
FRANCIS,
AMERICAN AMBASSADOR
Note:—
Entire Message in Green Cipher.
TELEGRAPH ROOM15
"Olof" in the cable was Olof Aschberg, Swedish banker and head of the Nya Banken in
Stockholm. Aschberg had been in New York in 1915 conferring with the Morgan firm on
these Russian loans. Now, in 1916, he was in Petrograd with Rolph Marsh of Guaranty
Trust and Samuel MacRoberts and Rich of National City Bank ("City" in cable) arranging
loans for a Morgan-Rockefeller consortium. The following year, Aschberg, as we shall see
later, would be known as the "Bolshevik Banker," and his own memoirs reproduce evidence
of his right to the title.
The State Department files also contain a series of cables between Ambassador Francis,
Acting Secretary Frank Polk, and Secretary of State Robert Lansing concerning the legality
and propriety of transmitting National City Bank and Guaranty Trust cables at public
expense. On May 25, 1916, Ambassador Francis cabled Washington as follows and referred
to the two previous cables:
569, May 25, one p.m.
My telegram 563 and 565 May twenty-fourth are sent for local representatives
of institutions addressed in the hope of consummating loan which would
largely increase international trade and greatly benefit [diplomatic relations?].
Prospect for success promising. Petrograd representatives consider terms
submitted very satisfactory but fear such representations to their institutions
would prevent consummation loan if Government here acquainted these
proposals.
FRANCIS, AMERICAN AMBASSADOR.16
The basic reason cited by Francis for facilitating the cables is "the hope of consummating
loan which would largely increase international trade." Transmission of commercial
messages using State Department facilities had been prohibited, and on June 1, 1916, Polk
cabled Francis:
842
In view of Department's regulation contained in its circular telegraphic
instruction of March fifteenth, (discontinuance of forwarding Commercial
messages)17 1915, please explain why messages in your 563, 565 and 575,
should be communicated.
Hereafter please follow closely Department's instructions.
Acting.
Polk
861.51/112
/110
Then on June 8, 1916, Secretary of State Lansing expanded the prohibition and clearly
stated that the proposed loans were illegal:
860 Your 563, 565, May 24, g: 569 May 25.1 pm Before delivering messages
to Vanderlip and Guaranty Trust Company, I must inquire whether they refer to
Russian Government loans of any description. If they do, I regret that the
Department can not be a party to their transmission, as such action would
submit it to justifiable criticism because of participation by this Government in
loan transaction by a belligerent for the purpose of carrying on its hostile
operations. Such participation is contrary to the accepted rule of international
law that neutral Governments should not lend their assistance to the raising of
war loans by belligerents.
The last line of the Lansing cable as written, was not transmitted to Petrograd. The line
read: "Cannot arrangements be made to send these messages through Russian channels?"
How can we assess these cables and the parties involved?
Clearly the Morgan-Rockefeller interests were not interested in abiding by international
law. There is obvious intent in these cables to supply loans to belligerents. There was no
hesitation on the part of these firms to use State Department facilities for the negotiations.
Further, in spite of protests, the State Department allowed the messages to go through.
Finally, and most interesting for subsequent events, Olof Aschberg, the Swedish banker,
was a prominent participant and intermediary in the negotiations on behalf of Guaranty
Trust. Let us therefore take a closer look at Olof Aschberg.
OLOF ASCHBERG IN NEW YORK, 1916
Olof Aschberg, the "Bolshevik Banker" (or "Bankier der Weltrevolution," as he has been
called in the German press), was owner of the Nya Banken, founded 1912 in Stockholm.
His codirectors included prominent members of Swedish cooperatives and Swedish
socialists, including G. W. Dahl, K. G. Rosling, and C. Gerhard Magnusson.18 In 1918 Nya
Banken was placed on the Allied black-list for its financial operations in behalf of
Germany. In response to the blacklisting, Nya Banken changed its name to Svensk
Ekonomiebolaget. The bank remained under the control of Aschberg, and was mainly
owned by him. The bank's London agent was the British Bank of North Commerce, whose
chairman was Earl Grey, former associate of Cecil Rhodes. Others in Aschberg's interesting
circle of business associates included Krassin, who was until the Bolshevik Revolution
(when he changed color to emerge as a leading Bolshevik) Russian manager of Siemens-
Schukert in Petrograd; Carl Furstenberg, minister of finance in the first Bolshevik
government; and Max May, vice president in charge of foreign operations for Guaranty
Trust of New York. Olof Aschberg thought so highly of Max May that a photograph of May
is included in Aschberg's book.19
In the summer of 1916 Olof Aschberg was in New York representing both Nya Banken and
Pierre Bark, the tsarist minister of finance. Aschberg's prime business in New York,
according to the New York Times (August 4, 1916), was to negotiate a $50 million loan for
Russia with an American banking syndicate headed by Stillman's National City Bank. This
business was concluded on June 5, 1916; the results were a Russian credit of $50 million in
New York at a bank charge of 7 1/2 percent per annum, and a corresponding 150-millionruble
credit for the NCB syndicate in Russia. The New York syndicate then turned around
and issued 6 1/2 percent certificates in its own name in the U.S. market to the amount of
$50 million. Thus, the NCB syndicate made a profit on the $50 million loan to Russia,
floated it on the American market for another profit, and obtained a 150-million-ruble credit
in Russia.
During his New York visit on behalf of the tsarist Russian government, Aschberg made
some prophetic comments concerning the future for America in Russia:
The opening for American capital and American initiative, with the awakening
brought by the war, will be country-wide when the struggle is over. There are
now many Americans in Petrograd, representatives of business firms, keeping
in touch with the situation, and as soon as the change comes a huge American
trade with Russia should spring up.20
OLOF ASCHBERG IN THE BOLSHEVIK REVOLUTION
While this tsarist loan operation was being floated in New York, Nya Banken and Olof
Aschberg were funneling funds from the German government to Russian revolutionaries,
who would eventually bring down the "Kerensky committee" and establish the Bolshevik
regime.
The evidence for Olof Aschberg's intimate connection with financing the Bolshevik
Revolution comes from several sources, some of greater value than others. The Nya Banken
and Olof Aschberg are prominently cited in the Sisson papers (see chapter three); however,
George Kennan has systematically analyzed these papers and shown them to be forged,
although they are probably based in part on authentic material. Other evidence originates
with Colonel B. V. Nikitine, in charge of counterintelligence in the Kerensky government,
and consists of twenty-nine telegrams transmitted from Stockholm to Petrograd, and vice
versa, regarding financing of the Bolsheviks. Three of these telegrams refer to banks —
telegrams 10 and 11 refer to Nya Banken, and telegram 14 refers to the Russo-Asiatic Bank
in Petrograd. Telegram 10 reads as follows:
Gisa Furstenberg Saltsjobaden. Funds very low cannot assist if really urgent
give 500 as last payment pencils huge loss original hopeless instruct Nya
Banken cable further 100 thousand Sumenson.
Telegram 11 reads:
Kozlovsky Sergievskaya 81. First letters received Nya Banken telegraphed
cable who Soloman offering local telegraphic agency refers to Bronck
Savelievich Avilov.
Fürstenberg was the intermediary between Parvus (Alexander I. Helphand) and the German
government. About these transfers, Michael Futrell concludes:
It was discovered that during the last few months she [Evegeniya Sumenson]
had received nearly a m
Chapter V
THE AMERICAN RED CROSS MISSION IN RUSSIA — 1917
Poor Mr. Billings believed he was in charge of a scientific mission for the
relief of Russia .... He was in reality nothing but a mask — the Red Cross
complexion of the mission was nothing but a mask.
Cornelius Kelleher, assistant to William Boyce Thompson (in George F.
Kennan, Russia Leaves the War)
The Wall Street project in Russia in 1917 used the Red Cross Mission as its operational
vehicle. Both Guaranty Trust and National City Bank had representatives in Russia at the
time of the revolution. Frederick M. Corse of the National City Bank branch in Petrograd
was attached to the American Red Cross Mission, of which a great deal will be said later.
Guaranty Trust was represented by Henry Crosby Emery. Emery was temporarily held by
the Germans in 1918 and then moved on to represent Guaranty Trust 'in China.
Up to about 1915 the most influential person in the American Red Cross National
Headquarters in Washington, D.C. was Miss Mabel Boardman. An active and energetic
promoter, Miss Boardman had been the moving force behind the Red Cross enterprise,
although its endowment came from wealthy and prominent persons including J. P. Morgan,
Mrs. E. H. Harriman, Cleveland H. Dodge, and Mrs. Russell Sage. The 1910 fund-raising
campaign for $2 million, for example, was successful only because it was supported by
these wealthy residents of New York City. In fact, most of the money came from New York
City. J.P. Morgan himself contributed $100,000 and seven other contributors in New York
City amassed $300,000. Only one person outside New York City contributed over $10,000
and that was William J. Boardman, Miss Boardman's father. Henry P. Davison was
chairman of the 1910 New York Fund-Raising Committee and later became chairman of the
War Council of the American Red Cross. In other words, in World War I the Red Cross
depended heavily on Wall Street, and specifically on the Morgan firm.
The Red Cross was unable to cope with the demands of World War I and in effect was
taken over by these New York bankers. According to John Foster Dulles, these businessmen
"viewed the American Red Cross as a virtual arm of government, they envisaged making an
incalculable contribution to the winning of the war."1 In so doing they made a mockery of
the Red Cross motto: "Neutrality and Humanity."
In exchange for raising funds, Wall Street asked for the Red Cross War Council; and on the
recommendation of Cleveland H. Dodge, one of Woodrow Wilson's financial backers,
Henry P. Davison, a partner in J.P. Morgan Company, became chairman. The list of
administrators of the Red Cross then began to take on the appearance of the New York
Directory of Directors: John D. Ryan, president of Anaconda Copper Company (see
frontispiece); George W. Hill, president of the American Tobacco Company; Grayson M.P.
Murphy, vice president of the Guaranty Trust Company; and Ivy Lee, public relations
expert for the Rockefellers. Harry Hopkins, later to achieve fame under President
Roosevelt, became assistant to the general manager of the Red Cross in Washington, D.C.
The question of a Red Cross Mission to Russia came before the third meeting of this
reconstructed War Council, which was held in the Red Cross Building, Washington, D.C.,
on Friday, May 29, 1917, at 11:00 A.M. Chairman Davison was deputed to explore the idea
with Alexander Legge of the International Harvester Company. Subsequently International
Harvester, which had considerable interests in Russia, provided $200,000 to assist financing
the Russian mission. At a later meeting it was made known that William Boyce Thompson,
director of the Federal Reserve Bank of New York, had "offered to pay the entire expense
of the commission"; this offer was accepted in a telegram: "Your desire to pay expenses of
commission to Russia is very much appreciated and from our point of view very
important."2
The members of the mission received no pay. All expenses were paid by William Boyce
Thompson and the $200,000 from International Harvester was apparently used in Russia for
political subsidies. We know from the files of the U.S. embassy in Petrograd that the U.S.
Red Cross gave 4,000 rubles to Prince Lvoff, president of the Council of Ministers, for
"relief of revolutionists" and 10,000 rubles in two payments to Kerensky for "relief of
political refugees."
AMERICAN RED CROSS MISSION TO RUSSIA, 1917
In August 1917 the American Red Cross Mission to Russia had only a nominal relationship
with the American Red Cross, and must truly have been the most unusual Red Cross
Mission in history. All expenses, including those of the uniforms — the members were all
colonels, majors, captains, or lieutenants — were paid out of the pocket of William Boyce
Thompson. One contemporary observer dubbed the all-officer group an "Haytian Army":
The American Red Cross delegation, about forty Colonels, Majors, Captains
and Lieutenants, arrived yesterday. It is headed by Colonel (Doctor) Billings of
Chicago, and includes Colonel William B. Thompson and many doctors and
civilians, all with military titles; we dubbed the outfit the "Haytian Army"
because there were no privates. They have come to fill no clearly defined
mission, as far as I can find out, in fact Gov. Francis told me some time ago
that he had urged they not be allowed to come, as there were already too many
missions from the various allies in Russia. Apparently, this Commission
imagined there was urgent call for doctors and nurses in Russia; as a matter of
fact there is at present a surplus of medical talent and nurses, native and foreign
in the country and many haft-empty hospitals in the large cities.3
The mission actually comprised only twenty-four (not forty), having military rank from
lieutenant colonel down to lieutenant, and was supplemented by three orderlies, two
motion-picture photographers, and two interpreters, without rank. Only five (out of twentyfour)
were doctors; in addition, there were two medical researchers. The mission arrived by
train in Petrograd via Siberia in August 1917. The five doctors and orderlies stayed one
month, returning to the United States on September 11. Dr. Frank Billings, nominal head of
the mission and professor of medicine at the University of Chicago, was reported to be
disgusted with the overtly political activities of the majority of the mission. The other
medical men were William S. Thayer, professor of medicine at Johns Hopkins University;
D. J. McCarthy, Fellow of Phipps Institute for Study and Prevention of Tuberculosis, at
Philadelphia; Henry C. Sherman, professor of food chemistry at Columbia University; C. E.
A. Winslow, professor of bacteriology and hygiene at Yale Medical School; Wilbur E. Post,
professor of medicine at Rush Medical College; Dr. Malcolm Grow, of the Medical Officers
Reserve Corps of the U.S. Army; and Orrin Wightman, professor of clinical medicine, New
York Polyclinic Hospital. George C. Whipple was listed as professor of sanitary
engineering at Harvard University but in fact was partner of the New York firm of Hazen,
Whipple & Fuller, engineering consultants. This is significant because Malcolm Pirnie —
of whom more later — was listed as an assistant sanitary engineer and employed as an
engineer by Hazen, Whipple & Fuller.
The majority of the mission, as seen from the table, was made up of lawyers, financiers, and
their assistants, from the New York financial district. The mission was financed by William
B. Thompson, described in the official Red Cross circular as "Commissioner and Business
Manager; Director United States Federal Bank of New York." Thompson brought along
Cornelius Kelleher, described as an attache to the mission but actually secretary to
Thompson and with the same address — 14 Wall Street, New York City. Publicity for the
mission was handled by Henry S. Brown, of the same address. Thomas Day Thacher was an
attorney with Simpson, Thacher & Bartlett, a firm founded by his father, Thomas Thacher,
in 1884 and prominently involved in railroad reorganization and mergers. Thomas as junior
first worked for the family firm, became assistant U.S. attorney under Henry L. Stimson,
and returned to the family firm in 1909. The young Thacher was a close friend of Felix
Frankfurter and later became assistant to Raymond Robins, also on the Red Cross Mission.
In 1925 he was appointed district judge under President Coolidge, became solicitor general
under Herbert Hoover, and was a director of the William Boyce Thompson Institute.
THE 1917 AMERICAN RED CROSS MISSION TO RUSSIA
Members from Wall
Street financial
community and their
affiliations
Medical
doctors
Orderlies,
interpreters,
etc.
Andrews (Liggett &
Myers Tobacco)
Billings (doctor) Brooks (orderly)
Barr (Chase National
Bank)
Grow (doctor) Clark (orderly)
Brown (c/o William B.
Thompson)
McCarthy (medical
research; doctor)
Rocchia (orderly)
Cochran (McCann Co.) Post (doctor)
Kelleher (c/o William B.
Thompson)
Sherman (food chemistry) Travis (movies)
Nicholson (Swirl & Co.) Thayer (doctor) Wyckoff (movies)
Pirnie (Hazen, Whipple &
Fuller)
Redfield (Stetson,
Jennings & Russell)
Wightman (medicine) Hardy (justice)
Alan Wardwell, also a deputy commissioner and secretary to the chairman, was a lawyer
with the law firm of Stetson, Jennings & Russell of 15 Broad Street, New York City, and H.
B. Redfield was law secretary to Wardwell. Major Wardwell was the son of William
Thomas Wardwell, long-time treasurer of Standard Oil of New Jersey and Standard Oil of
New York. The elder Wardwell was one of the signers of the famous Standard Oil trust
agreement, a member of the committee to organize Red Cross activities in the Spanish
American War, and a director of the Greenwich Savings Bank. His son Alan was a director
not only of Greenwich Savings, but also of Bank of New York and Trust Co. and the
Georgian Manganese Company (along with W. Averell Harriman, a director of Guaranty
Trust). In 1917 Alan Wardwell was affiliated with Stetson, Jennings 8c Russell and later
joined Davis, Polk, Wardwell, Gardner & Read (Frank L. Polk was acting secretary of state
during the Bolshevik Revolution period). The Senate Overman Committee noted that
Wardwell was favorable to the Soviet regime although Poole, the State Department official
on the spot, noted that "Major Wardwell has of all Americans the widest personal
knowledge of the terror" (316-23-1449). In the 1920s Wardwell became active with the
Russian-American Chamber of Commerce in promoting Soviet trade objectives.
The treasurer of the mission was James W. Andrews, auditor of Liggett & Myers Tobacco
Company of St. Louis. Robert I. Barr, another member, was listed as a deputy
commissioner; he was a vice president of Chase Securities Company (120 Broadway) and
of the Chase National Bank. Listed as being in charge of advertising was William Cochran
of 61 Broadway, New York City. Raymond Robins, a mining promoter, was included as a
deputy commissioner and described as "a social economist." Finally, the mission included
two members of Swift & Company of Union Stockyards, Chicago. The Swifts have been
previously mentioned as being connected with German espionage in the United States
during World War I. Harold H. Swift, deputy commissioner, was assistant to the vice
president of Swift & Company; William G. Nicholson was also with Swift & Company,
Union Stockyards.
Robins (mining promoter) Winslow (hygiene) Horn (transportation)
Swift (Swift & Co.)
Thacher (Simpson,
Thacher & Bartlett)
Thompson (Federal
Reserve Bank of N.Y.)
Wardwell (Stetson,
Jennings & Russell)
Whipple (Hazen, Whipple
& Fuller)
Corse (National City
Bank)
Magnuson (recommended
by confidential agent of
Colonel Thompson)
Two persons were unofficially added to the mission after it arrived in Petrograd: Frederick
M. Corse, representative of the National City Bank in Petrograd; and Herbert A. Magnuson,
who was "very highly recommended by John W. Finch, the confidential agent in China of
Colonel William B. Thompson."4
The Pirnie papers, deposited at the Hoover Institution, contain primary material on the
mission. Malcolm Pirnie was an engineer employed by the firm of Hazen, Whipple &
Fuller, consulting engineers, of 42 Street, New York City. Pirnie was a member of the
mission, listed on a manifest as an assistant sanitary engineer. George C. Whipple, a partner
in the firm, was also included in the group. The Pirnie papers include an original telegram
from William B. Thompson, inviting assistant sanitary engineer Pirnie to meet with him and
Henry P. Davison, chairman of the Red Cross War Council and partner in the J.P. Morgan
firm, before leaving for Russia. The telegram reads as follows:
WESTERN UNION TELEGRAM New York, June 21, 1917
To Malcolm Pirnie
I should very much like to have you dine with me at the Metropolitan Club,
Sixteenth Street and Fifth Avenue New York City at eight o'clock tomorrow
Friday evening to meet Mr. H. P. Davison.
W. B. Thomp
Chapter VI
CONSOLIDATION AND EXPORT OF THE REVOLUTION
Marx's great book Das Kapital is at once a monument of reasoning and a
storehouse of facts.
Lord Milner, member of the British War Cabinet, 1917, and director of the
London Joint Stock Bank
William Boyce Thompson is an unknown name in twentieth-century history, yet Thompson
played a crucial role in the Bolshevik Revolution.1 Indeed, if Thompson had not been in
Russia in 1917, subsequent history might have followed a quite different course. Without
the financial and, more important, the diplomatic and propaganda assistance given to
Trotsky and Lenin by Thompson, Robins, and their New York associates, the Bolsheviks
may well have withered away and Russia evolved into a socialist but constitutional society.
Who was William Boyce Thompson? Thompson was a promoter of mining stocks, one of
the best in a high-risk business. Before World War I he handled stock-market operations for
the Guggenheim copper interests. When the Guggenheims needed quick capital for a stockmarket
struggle with John D. Rockefeller, it was Thompson who promoted Yukon
Consolidated Goldfields before an unsuspecting public to raise a $3.5 million war chest.
Thompson was manager of the Kennecott syndicate, another Guggenheim operation, valued
at $200 million. It was Guggenheim Exploration, on the other hand, that took up
Thompson's options on the rich Nevada Consolidated Copper Company. About three
quarters of the original Guggenheim Exploration Company was controlled by the
Guggenheim family, the Whitney family (who owned Metropolitan magazine, which
employed the Bolshevik John Reed), and John Ryan. In 1916 the Guggenheim interests
reorganized into Guggenheim Brothers and brought in William C. Potter, who was formerly
with Guggenheim's American Smelting and Refining Company but who was in 1916 first'
vice president of Guaranty Trust.
Extraordinary skill in raising capital for risky mining promotions earned Thompson a
personal fortune and directorships in Inspiration Consolidated Copper Company, Nevada
Consolidated Copper Company, and Utah Copper Company — all major domestic copper
producers. Copper is, of course, a major material in the manufacture of munitions.
Thompson was also director of the Chicago Rock Island & Pacific Railroad, the Magma
Arizona Railroad and the Metropolitan Life Insurance Company. And of particular interest
for this book, Thompson was "one of the heaviest stockholders in the Chase National
Bank." It was Albert H. Wiggin, president of the Chase Bank, who pushed Thompson for a
post in the Federal Reserve System; and in 1914 Thompson became the first full-term
director of the Federal Reserve Bank of New York — the most important bank in the
Federal Reserve System.
By 1917, then, William Boyce Thompson was a financial operator of substantial means,
demonstrated ability, with a flair for promotion and implementation of capitalist projects,
and with ready access to the centers of political and financial power. This was the same man
who first supported Aleksandr Kerensky, and who then became an ardent supporter of the
Bolsheviks, bequeathing a surviving symbol of this support — a laudatory pamphlet in
Russian, "Pravda o Rossii i Bol'shevikakh."2
Before leaving Russia in early December 1917 Thompson handed over the American Red
Cross Mission to his deputy Raymond Robins. Robins then organized Russian
revolutionaries to implement the Thompson plan for spreading Bolshevik propaganda in
Europe (see Appendix 3). A French government document confirms this: "It appeared that
Colonel Robins . . . was able to send a subversive mission of Russian bolsheviks to
Germany to start a revolution there."3 This mission led to the abortive German Spartacist
revolt of 1918. The overall plan also included schemes for dropping Bolshevik literature by
airplane or for smuggling it across German lines.
Thompson made preparations in late 1917 to leave Petrograd and sell the Bolshevik
Revolution to governments in Europe and to the U.S. With this in mind, Thompson cabled
Thomas W. Lamont, a partner in the Morgan firm who was then in Paris with Colonel E. M.
House. Lamont recorded the receipt of this cablegram in his biography:
Just as the House Mission was completing its discussions in Paris in December
1917, I received an arresting cable from my old school and business friend,
William Boyce Thompson, who was then in Petrograd in charge of the
American Red Cross Mission there.4
Lamont journeyed to London and met with Thompson, who had left Petrograd on
December 5, traveled via Bergen, Norway, and arrived in London on December 10. The
most important achievement of Thompson and Lamont in London was to convince the
British War Cabinet — then decidedly anti-Bolshevik — that the Bolshevik regime had
come to stay, and that British policy should cease to be anti-Bolshevik, should accept the
new realities, and should support Lenin and Trotsky. Thompson and Lamont left London on
December 18 and arrived in New York on December 25, 1917. They attempted the same
process of conversion in the United States.
A CONSULTATION WITH LLOYD GEORGE
The secret British War Cabinet papers are now available and record the argument used by
Thompson to sell the British government on a pro-Bolshevik policy. The prime minister of
Great Britain was David Lloyd George. Lloyd George's private and political machinations
rivaled those of a Tammany Hall politician — yet in his lifetime and for decades after,
biographers were unable, or unwilling, to come to grips with them. In 1970 Donald
McCormick's The Mask of Merlin lifted the veil of secrecy. McCormick shows that by 1917
David Lloyd George had bogged "too deeply in the mesh of international armaments
intrigues to be a free agent" and was beholden to Sir Basil Zaharoff, an international
armaments dealer, whose considerable fortune was made by selling arms to both sides in
several wars.5 Zaharoff wielded enormous behind-the-scenes power and, according to
McCormick, was consulted on war policies by the Allied leaders. On more than one
occasion, reports McCormick, Woodrow Wilson, Lloyd George, and Georges Clemenceau
met in Zaharoff's Paris home. McCormick notes that "Allied statesmen and leaders were
obliged to consult him before planning any great attack." British intelligence, according to
McCormick, "discovered documents which incriminated servants of the Crown as secret
agents of Sir Basil Zaharoff with the knowledge of Lloyd George."6 In 1917 Zaharoff was
linked to the Bolsheviks; he sought to divert munitions away from anti-Bolsheviks and had
already intervened in behalf of the Bolshevik regime in both London and Paris.
In late 1917, then — at the time Lamont and Thompson arrived in London — Prime
Minister Lloyd George was indebted to powerful international armaments interests that
were allied to the Bolsheviks and providing assistance to extend Bolshevik power in Russia.
The British prime minister who met with William Thompson in 1917 was not then a free
agent; Lord Milner was the power behind the scenes and, as the epigraph to this chapter
suggests, favorably inclined towards socialism and Karl Marx.
The "secret" War Cabinet papers give the "Prime Minister's account of a conversation with
Mr. Thompson, an American returned from Russia,"7 and the report made by the prime
minister to the War Cabinet after meeting with Thompson.8 The cabinet paper reads as
follows:
The Prime Minister reported a conversation he had had with a Mr.
Thompson — an American traveller and a man of considerable means — who
had just returned from Russia, and who had given a somewhat different
impression of affairs in that country from what was generally believed. The gist
of his remarks was to the effect that the Revolution had come to stay; that the
Allies had not shown themselves sufficiently sympathetic with the Revolution;
and that MM. Trotzki and Lenin were not in German pay, the latter being a
fairly distinguished Professor. Mr. Thompson had added that he considered the
Allies should conduct in Russia an active propaganda, carried out by some
form of Allied Council composed o[ men especially selected [or the purpose;
further, that on the whole, he considered, having regard to the character of the
de facto Russian Government, the several Allied Governments were not
suitably represented in Petrograd. In Mr. Thompson's opinion, it was necessary
for the Allies to realise that the Russian army and people were out of the war,
and that the Allies would have to choose between Russia as the friendly or a
hostile neutral.
The question was discussed as to whether the Allies ought not to change their
policy in regard to the de facto Russian Government, the Bolsheviks being
stated by Mr. Thompson to be and-German. In this connection Lord Robert
Cecil drew attention to the conditions of the armistice between the German and
Russian armies, which provided, inter alia, for trading between the two
countries, and for the establishment of a Purchasing Commission in Odessa, the
whole arrangement being obviously dictated by the Germans. Lord Robert
Cecil expressed the view that the Germans would endeavour to continue the
armistice until the Russian army had melted away.
Sir Edward Carson read a communication, signed by M. Trotzki, which had
been sent to him by a British subject, the manager of the Russian branch of the
Vauxhall Motor Company, who had just returned from Russia [Paper G.T. —
3040]. This report indicated that M. Trotzki's policy was, ostensibly at any rate,
one of hostility to the organisation of civilised society rather than pro-German.
On the other hand, it was suggested that an assumed attitude of this kind was by
no means inconsistent with Trotzki's being a German agent, whose object was
to ruin Russia in order that Germany might do what she desired in that country.
After hearing Lloyd George's report and supporting arguments, the War Cabinet decided to
go along with Thompson and the Bolsheviks. Milner had a former British consul in
Russia — Bruce Lockhart — ready and waiting in the wings. Lockhart was briefed and sent
to Russia with instructions to work informally with the Soviets.
The thoroughness of Thompson's work in London and the pressure he was able to bring to
bear on the situation are suggested by subsequent reports coming into the hands of the War
Cabinet, from authentic sources. The reports provide a quite different view of Trotsky and
the Bolsheviks from that presented by Thompson, and yet they were ignored by the cabinet.
In April 1918 General Jan Smuts reported to the War Cabinet his talk with General Nieffel,
the head of the French Military Mission who had just returned from Russia:
Trotski (sic) . . . was a consummate scoundrel who may not be pro-German, but
is thoroughly pro-Trotski and pro-revolutionary and cannot in any way be
trusted. His influence is shown by the way he has come to dominate Lockhart,
Robins and the French representative. He [Nieffel] counsels great prudence in
dealing with Trotski, who he admits is the only really able man in Russia.9
Several months later Thomas D. Thacher, Wall Street lawyer and another member of the
American Red CrAss Mission to Russia, was in London. On April 13, 1918, Thacher wrote
to the American ambassador in London to the effect that he had received a request from H.
P. Davison, a Morgan partner, "to confer with Lord Northcliffe" concerning the situation in
Russia and then to go on to Paris "for other conferences." Lord Northcliffe was ill and
Thacher left with yet another Morgan partner, Dwight W. Morrow, a memorandum to be
submitted to Northcliffe on his return to London.10 This memorandum not only made
explicit suggestions about Russian policy that supported Thompson's position but even
stated that "the fullest assistance should be given to the Soviet government in its efforts to
organize a volunteer revolutionary army." The four main proposals in this Thacher report
are:
First of all . . . the Allies should discourage Japanese intervention in Siberia.
In the second place, the fullest assistance should be given to the Soviet
Government in its efforts to organize a volunteer revolutionary army.
Thirdly, the Allied Governments should give their moral support to the Russian
people in their efforts to work out their own political systems free from the
domination of any foreign power ....
Fourthly, until the time when open conflict shall result between the German
Government and the Soviet Government of Russia there will be opportunity for
peaceful commercial penetration by German agencies in Russia. So long as
there is no open break, it will probably be impossible to entirely prevent such
commerce. Steps should, therefore, be taken to impede, so far as possible, the
transport of grain and raw materials to Germany from Russia.11
THOMPSON'S INTENTIONS AND OBJECTIVES
Why would a prominent Wall Street financier, and director of the Federal Reserve Bank,
want to organize and assist Bolshevik revolutionaries? Why would not one but several
Morgan partners working in concert want to encourage the formation of a Soviet "volunteer
revolutionary army" — an army supposedly dedicated to the overthrow of Wall Street,
including Thompson, Thomas Lamont, Dwight Morrow, the Morgan firm, and all their
associates?
Thompson at least was straightforward about his objectives in Russia: he wanted to keep
Russia at war with Germany (yet he argued before the British War Cabinet that Russia was
out of the war anyway) and to retain Russia as a market for postwar American enterprise.
The December 1917 Thompson memorandum to Lloyd George describes these aims.12 The
memorandum begins, "The Russian situation is lost and Russia lies entirely open to
unopposed German exploitation .... "and concludes, "I believe that intelligent and
courageous work will still prevent Germany from occupying the field to itself and thus
exploiting Russia at the expense of the Allies." Consequently, it was German commercial
and industrial exploitation of Russia that Thompson feared (this is also reflected in the
Thacher memorandum) and that brought Thompson and his New York friends into an
alliance with the Bolsheviks. Moreover, this interpretation is reflected in a quasi-jocular
statement made by Raymond Robins, Thompson's deputy, to Bruce Lockhart, the British
agent:
You will hear it said that I am the representative of Wall Street; that I am the
servant of William B. Thompson to get Altai copper for him; that I have
already got 500,000 acres of the best timber land in Russia for myself; that I
have already copped off the Trans-Siberian Railway; that they have given me a
monopoly of the platinum of Russia; that this explains my working for the
soviet .... You will hear that talk. Now, I do not think it is true, Commissioner,
but let us assume it is true. Let us assume that I am here to capture Russia for
Wall Street and American business men. Let us assume that you are a British
wolf and I am an American wolf, and that when this war is over we are going to
eat each other up for the Russian market; let us do so in perfectly frank, man
fashion, but let us assume at the same time that we are fairly intelligent wolves,
and that we know that if we do not hunt together in this hour the German wolf
will eat us both up, and then let us go to work.13
With this in mind let us take a look at Thompson's personal motivations. Thompson was a
financier, a promoter, and, although without previous interest in Russia, had personally
financed the Red Cross Mission to Russia and used the mission as a vehicle for political
maneuvering. From the total picture we can deduce that Thompson's motives were primarily
financial and commercial. Specifically, Thompson was interested in the Russian market,
and how this market could be influenced, diverted; and captured for postwar exploitation by
a Wall Street syndicate, or syndicates. Certainly Thompson viewed Germany as an enemy,
but less a political enemy than an economic or a commercial enemy. German industry and
German banking were the real enemy. To outwit Germany, Thompson was willing to place
seed money on any political power vehicle that would achieve his objective. In other words,
Thompson was an American imperialist fighting against German imperialism, and this
struggle was shrewdly recognized and exploited by Lenin and Trotsky.
Chapter VI
THE BOLSHEVIKS RETURN TO NEW YORK
Martens is very much in the limelight. There appears to be no doubt about
his connection with the Guarantee [sic] Trust Company, Though it is
surprising that so large and influential an enterprise should have dealings
with a Bolshevik concern.
Scotland Yard Intelligence Report, London, 19191
Following on the initial successes of the revolution, the Soviets wasted little time in
attempting through former U.S. residents to establish diplomatic relations with and
propaganda outlets in the United States. In June 1918 the American consul in Harbin cabled
Washington:
Albert R. Williams, bearer Department passport 52,913 May 15, 1917
proceeding United States to establish information bureau for Soviet
Government for which he has written authority. Shall I visa?2
Washington denied the visa and so Williams was unsuccessful in his attempt to establish an
information bureau here. Williams was followed by Alexander Nyberg (alias Santeri
Nuorteva), a former Finnish immigrant to the United States in January 1912, who became
the first operative Soviet representative in the United States. Nyberg was an activtive
propagandist. In fact, in 1919 be was, according to J. Edgar Hoover (in a letter to the U.S.
Committee on Foreign Affairs), "the forerunner of LCAK Martens anti with Gregory
Weinstein the most active individual of official Bolshevik propaganda in the United
States."3
Nyberg was none too successful as a diplomatic representative or, ultimately, as a
propagandist. The State Departmment files record an interview with Nyberg by the
counselors' office, dated January 29, 1919. Nyberg was accompanied by H. Kellogg,
described as "an American citizen, graduate of Harvard," and, more surprisingly, by a Mr.
McFarland, an attorney for the Hearst organization. The State Department records show that
Nyberg made "many misstatements in regard to the attitude to the Bolshevik Government"
and claimed that Peters, the Lett terrorist police chief in Petrograd, was merely a "kindhearted
poet." Nyberg requested the department to cable Lenin, "on the theory that it might
be helpful in bringing about the conference proposed by the Allies at Paris."4 The proposed
message, a rambling appeal to Lenin to gain international acceptance appearing at the Paris
Conference, was not sent.5
A RAID ON THE SOVIET BUREAU IN NEW YORK
Alexander Nyberg (Nuorteva) was then let go and replaced by the Soviet Bureau, which
was established in early 1919 in the World Tower Building, 110 West 40 Street, New York
City. The bureau was headed by a German citizen, Ludwig C. A. K. Martens, who is
usually billed as the first ambassador of the Soviet Union in the United States, and who, up
to that time, had been vice president of Weinberg & Posner, an engineering firm located at
120 Broadway, New York City. Why the "ambassador" and his offices were located in New
York rather than in Washington, D.C. was not explained; it does suggest that trade rather
than diplomacy was its primary objective. In any event, the bureau promptly issued a call
lot Russian trade with the United States. Industry had collapsed and Russia direly needed
machinery, railway goods, clothing, chemicals, drugs — indeed, everything utilized by a
modern civilization. In exchange the Soviets offered gold and raw materials. The Soviet
Bureau then proceeded to arrange contracts with American firms, ignoring the facts of the
embargo and nonrecognition. At the same time it was providing financial support for the
emerging Communist Party U.S.A.6
On May 7, 1919, the State Department slapped down business intervention in behalf of the
bureau (noted elsewhere),7 and repudiated Ludwig Martens, the Soviet Bureau, and the
Bolshevik government o1 Russia. This official rebuttal did not deter the eager order-hunters
in American industry. When the Soviet Bureau offices were raided on June 12, 1919, by
representatives of the Lusk Committee of the state of New York, files of letters to and from
American businessmen, representing almost a thousand firms, were unearthed. The British
Home Office Directorate of Intelligence "Special Report No. 5 (Secret)," issued from
Scotland Yard, London, July 14, 1919, and written by Basil H. Thompson, was based on
this seized material; the report noted:
. . . Every effort was made from the first by Martens and his associates to
arouse the interest of American capitalists and there are grounds tot believing
that the Bureau has received financial support from some Russian export firms,
as well as from the Guarantee [sic] Trust Company, although this firm has
denied the allegation that it is financing Martens' organisation.8
It was noted by Thompson that the monthly rent of the Soviet Bureau offices was $300 and
the office salaries came to about $4,000. Martens' funds to pay these bills came partly from
Soviet couriers — such as John Reed and Michael Gruzenberg — who brought diamonds
from Russia for sale in the U.S., and partly from American business firms, including the
Guaranty Trust Company of New York. The British reports summarized the files seized by
the Lusk investigators from the bureau offices, and this summary is worth quoting in full:
(1) There was an intrigue afoot about the time the President first went to France
to get the Administration to use Nuorteva as an intermediary with the Russian
Soviet Government, with a view to bring about its recognition by America.
Endeavour was made to bring Colonel House into it, and there is a long and
interesting letter to Frederick C. Howe, on whose support and sympathy
Nuorteva appeared to rely. There are other records connecting Howe with
Martens and Nuorteva.
(2) There is a file of correspondence with Eugene Debs.
(3) A letter from Amos Pinchot to William Kent of the U.S. Tariff Commission
in an envelope addressed to Senator Lenroot, introduces Evans Clark "now in
the Bureau of the Russian Soviet Republic." "He wants to talk to you about the
recognition of Kolchak and the raising of the blockade, etc."
(4) A report to Felix Frankfurter, dated 27th May, 1919 speaks of the virulent
campaign vilifying the Russian Government.
(5) There is considerable correspondence between a Colonel and Mrs.
Raymond Robbins [sic] and Nuorteva, both in 1918 and 1919. In July 1918
Mrs. Robbins asked Nuorteva for articles for "Life and Labour," the organ of
the National Women's Trade League. In February and March, 1919, Nuorteva
tried, through Robbins, to get invited to give evidence before the Overman
Committee. He also wanted Robbins to denounce the Sisson documents.
(6) In a letter from the Jansen Cloth Products Company, New York, to
Nuorteva, dated March 30th, 1918, E. Werner Knudsen says that he
understands that Nuorteva intends to make arrangements for the export of foodstuffs
through Finland and he offers his services. We have a file on Knudsen,
who passed information to and from Germany by way of Mexico with regard to
British shipping.9
Ludwig Martens, the intelligence report continued, was in touch with all the leaders of "the
left" in the United States, including John Reed, Ludwig Lore, and Harry J. Boland, the Irish
rebel. A vigorous campaign against Aleksandr Kolchak in Siberia had been organized by
Martens. The report concludes:
[Martens'] organization is a powerful weapon for supporting the Bolshevik
cause in the United States and... he is in close touch with the promoters of
political unrest throughout the whole American continent.
The Scotland Yard list of personnel employed by the Soviet Bureau in New York coincides
quite closely with a similar list in the Lusk Committee files in Albany, New York, which
are today open for public inspection.10 There is one essential difference between the two
lists: the British analysis included the name "Julius Hammer" whereas Hammer was omitted
from the Lusk Committee report.11 The British report characterizes Julius Hammer as
follows:
In Julius Hammer, Martens has a real Bolshevik and ardent Left Wing
adherent, who came not long ago from Russia. He was one of the organizers of
the Left Wing movement in New York, and speaks at meetings on the same
platform with such Left Wing leaders as Reed, Hourwich, Lore and Larkin.
There also exists other evidence of Hammer's work in behalf of the Soviets. A letter from
National City Bank, New York, to the U.S. Treasury Department stated that documents
received by the bank from Martens were "witnessed by a Dr. Julius Hammer for the Acting
Director of the Financial Department" of the Soviet Bureau.12
The Hammer family has had close ties with Russia and the Soviet regime from 1917 to the
present. Armand Hammer is today able to acquire the most lucrative of Soviet contracts.
Jacob, grandfather of Armand Hammer, and Julius were born in Russia. Armand, Harry,
and Victor, sons of Julius, were born in the United States and are U.S. citizens. Victor was a
well-known artist; his son — also named Armand — and granddaughter are Soviet citizens
and reside in the Soviet Union. Armand Hammer is chairman of Occidental Petroleum
Corporation and has a son, Julian, who is director of advertising and publications for
Occidental Petroleum.
Julius Hammer was a prominent member and financier of the left wing of the Socialist
Party. At its 1919 convention Hammer served with Bertram D. Wolfe and Benjamin Gitlow
on the steering committee that gave birth to the Communist Party of the U.S.
In 1920 Julius Hammer was given a sentence of three-and-one-half to fifteen years in Sing
Sing for criminal abortion. Lenin suggested — with justification — that Julius was
"imprisoned on the charge of practicing illegal abortions but in fact because of
communism."13 Other U.S. Communist Party members were sentenced to jail for sedition
or deported to the Soviet Union. Soviet representatives in the United States made strenuous
but unsuccessful efforts to have Julius and his fellow party members released.
Another prominent member of the Soviet Bureau was the assistant secretary, Kenneth
Durant, a former aide to Colonel House. In 1920 Durant was identified as a Soviet courier.
Appendix 3 reproduces a letter to Kenneth Durant that was seized by the U.S. Department
of Justice in 1920 and that describes Durant's close relationship with the Soviet hierarchy. It
was inserted into the record of a House committee's hearings in 1920, with the following
commentary:
MR. NEWTON: It is a mailer of interest to this committee to know what was
the nature of that letter, and I have a copy of the letter that I Want inserted in
the record in connection with the witness' testimony. MR. Mason: That letter
has never been shown to the witness. He said that he never saw the letter, and
had asked to see it, and that the department had refused to show it to him. We
would not put any witness on the stand and ask him to testify to a letter without
seeing it.
MR. NEWTON: The witness testified that he has such a letter, and he testified
that they found it in his coat in the trunk, I believe. That letter was addressed to
a Mr. Kenneth Durant, and that letter had within it another envelope which was
likewise sealed. They were opened by the Government officials and a
photostatic copy made. The letter, I may say, is signed by a man by the name of
"Bill." It refers specifically to soviet moneys on deposit in Christiania, Norway,
a portion of which they waist turned over here to officials of the soviet
government in this country.14
Kenneth Durant, who acted as Soviet courier in the transfer of funds, was treasurer lot the
Soviet Bureau and press secretary and publisher of Soviet Russia, the official organ of the
Soviet Bureau. Durant came from a well-to-do Philadelphia family. He spent most of his
life in the service of the Soviets, first in charge of publicity work at the Soviet Bureau then
from 1923 to 1944 as manager of the Soviet Tass bureau in the United States. J. Edgar
Hoover described Durant as "at all times . . . particularly active in the interests of Martens
and of the Soviet government."15
Felix Frankfurter — later justice of the Supreme Courts — was also prominent in the Soviet
Bureau files. A letter from Frankfurter to Soviet agent Nuorteva is reproduced in Appendix
3 and suggests that Frankfurter had some influence with the bureau.
In brief, the Soviet Bureau could not have been established without influential assistance
from within the United States. Part of this assistance came from specific influential
appointments to the Soviet Bureau staff and part came from business firms outside the
bureau, firms that were reluctant to make their support publicly known.
CORPORATE ALLIES FOR THE SOVIET BUREAU
On February 1, 1920, the front page of the New York Times carried a boxed notation stating
that Martens was to be arrested and deported to Russia. At the same time Martens was being
sought as a witness to appear before a subcommittee of the Senate Foreign Relations
Committee investigating Soviet activity in the United States. After lying low for a few days
Martens appeared before the committee, claimed diplomatic privilege, and refused to give
up "official" papers in his possession. Then after a flurry of publicity, Martens "relented,"
handed over his papers, and admitted to revolutionary activities in the United States with
the ultimate aim of overthrowing the capitalist system.
Martens boasted to the news media and Congress that big corporations, the Chicago packers
among them, were aiding the Soviets:
Affording to Martens, instead of farthing on propaganda among the radicals
and the proletariat he has addressed most of his efforts to winning to the side of
Russia the big business and manufacturing interests of this country, the
packers, the United States Steel Corporation, the Standard Oil Company and
other big concerns engaged in international trade. Martens asserted that most of
the big business houses of the country were aiding him in his effort to get the
government to recognize the Soviet government.16
This claim was expanded by A. A. Heller, commercial attache at the Soviet Bureau:
"Among the people helping us to get recognition from the State Department are
the big Chit ago packers, Armour, Swift, Nelson Morris and Cudahy .....
Among the other firms are . . . the American Steel Export Company, the Lehigh
Machine Company, the Adrian Knitting Company, the International Harvester
Company, the Aluminum Goods Manufacturing Company, the Aluminum
Company of America, the American Car and Foundry Export Company,
M.C.D. Borden & Sons."17
The New York Times followed up these claims and reported comments of the firms named.
"I have never heard of this man [Martens] before in my life," declared G. F. Swift, Jr., in
charge of the export department of Swift & Co. "Most certainly I am sure that we have
never had any dealings with him of any kind."18 The Times added that O. H. Swift, the only
other member of the firm that could be contacted, "also denied any knowledge whatever of
Martens or his bureau in New York." The Swift statement was evasive at best. When the
Lusk Committee investigators seized the Soviet Bureau files, they found correspondence
between the bureau and almost all the firms named by Martens and Heller. The "list of firms
that offered to do business with Russian Soviet Bureau," compiled from these files, included
an entry (page 16), "Swift and Company, Union Stock Yards, Chicago, Ill." In other words,
Swift had been in communication with Martens despite its denial to the New York Times.
The New York Times contacted United States Steel and reported, "Judge Elbert H. Gary said
last night that there was no foundation for the statement with the Soviet representative here
had had any dealings with the United States Steel Corporation." This is technically correct.
The United States Steel Corporation is not listed in the Soviet files, but the list does contain
(page 16) an affiliate, "United States Steel Products Co., 30 Church Street, New York City."
The Lusk Committee list records the following about other firms mentioned by Martens and
Heller: Standard Oil — not listed. Armour 8c Co., meatpackers — listed as "Armour
Leather" and "Armour & Co. Union Stock Yards, Chicago." Morris Go., meatpackers, is
listed on page 13. Cudahy — listed on page 6. American Steel Export Co. — listed on page
2 as located at the Woolworth Building; it had offered to trade with the USSR. Lehigh
Machine Co. — not listed. Adrian Knitting Co. — listed on page 1. International Harvester
Co. — listed on page 11. Aluminum Goods Manufacturing Co. — listed on page 1.
Aluminum Company of America — not listed. American Car and Foundry Export — the
closest listing is "American Car Co. — Philadelphia." M.C.D. Borden 8c Sons — listed as
located at 90 Worth Street, on page 4.
Then on Saturday, June 21, 1919, Santeri Nuorteva (Alexander Nyberg) confirmed in a
press interview the role of International Harvester:
Q: [by New York Times reporter]: What is your business?
A: Purchasing director tot Soviet Russia.
Q: What did you do to accomplish this?
A: Addressed myself to American manufacturers.
Q: Name them.
A: International Harvester Corporation is among them.
Q: Whom did you see?
A: Mr. Koenig.
Q: Did you go to see him?
A: Yes.
Q: Give more names.
A: I went to see so many, about 500 people and I can't remember all the names.
We have files in the office disclosing them.19
In brief, the claims by Heller and Martens relating to their widespread contacts among
certain U.S. firms20 were substantiated by the office files of the Soviet Bureau. On the other
hand, for their own good reasons, these firms appeared unwilling to confirm their activities.
EUROPEAN BANKERS AID THE BOLSHEVIKS
In addition to Guaranty Trust and the private banker Boissevain in New York, some
European bankers gave direct help to maintain and expand the Bolshevik hold on Russia. A
1918 State Department report from our Stockholm embassy details these financial transfers.
The department commended its author, stating that his "reports on conditions in Russia, the
spread of Bolshevism in Europe, and financial questions . . . have proved most helpful to
the Department. Department is much gratified by your capable handling of the legation's
business."21 According to this report, one of these "Bolshevik bankers" acting in behalf of
the emerging Soviet regime was Dmitri Rubenstein, of the former Russo-French bank in
Petrograd. Rubenstein, an associate of the notorious Grigori Rasputin, had been jailed in
prerevolutionary Petrograd in connection with the sale of the Second Russian Life Insurance
Company. The American manager and director of the Second Russian Life Insurance
Company was John MacGregor Grant, who was located at 120 Broadway, New York City.
Grant was also the New York representative of Putiloff's Banque Russo-Asiatique. In
August 1918 Grant was (for unknown reasons) listed on the Military Intelligence Bureau
"suspect list."22 This may have occurred because Olof Aschberg in early 1918 reported
opening a foreign credit in Petrograd "with the John MacGregor Grant Co., export concern,
which it [Aschberg] finances in Sweden and which is financed in America by the Guarantee
[sic] Trust Co."23 After the revolution Dmitri Rubenstein moved to Stockholm and became
financial agent for the Bolsheviks. The State Department noted that while Rubenstein was
"not a Bolshevik, he has been unscrupulous in moneT' making, and it is suspected that he
may be making the contemplated visit to America in Bolshevik interest and for Bolshevik
pay.24
Another Stockholm "Bolshevik banker" was Abram Givatovzo, brother-in-law of Trotsky
and Lev Kamenev. The State Department report asserted that while Givatovzo pretended to
be "very anti-Bolshevik," he had in fact received "large sums" of moneT' from the
Bolsheviks by courier for financing revolutionary operations. Givatovzo was part of a
syndicate that included Denisoff of the former Siberian bank, Kamenka of the Asoff Don
Bank, and Davidoff of the Bank of Foreign Commerce. This syndicate sold the assets of the
former Siberian Bank to the British government.
Yet another tsarist private banker, Gregory Lessine, handled Bolshevik business through the
firm of Dardel and Hagborg. Other "Bolshevik bankers" named in the report are stirrer and
Jakob Berline, who previously controlled, through his wife, the Petrograd Nelkens Bank.
Isidor Kon was used by these bankers as an agent.
The most interesting of these Europe-based bankers operating in behalf of the Bolsheviks
was Gregory Benenson, formerly chairman in Petrograd of the Russian and English
Bank — a bank which included on its board of directors Lord Balfour (secretary of state for
foreign affairs in England) and Sir I. M. H. Amory, as well as S. H. Cripps and H. Guedalla.
Benenson traveled to Petrograd after the revolution, then on to Stockholm. He came. said
one State Department official, "bringing to my knowledge ten million rubles with him as he
offered them to me at a high price for the use of our Embassy Archangel." Benenson had an
arrangement with the Bolsheviks to exchange sixty million rubles for £1.5 million sterling.
In January 1919 the private bankers in Copenhagen that were associated with Bolshevik
institutions became alarmed by rumors that the Danish political police had marked the
Soviet legation and those persons in contact with the Bolsheviks for expulsion from
Denmark. These bankers and the legation hastily attempted to remove their funds from
Danish banks — in particular, seven million rubles from the Revisionsbanken.25 Also,
confidential documents were hidden in the offices of the Martin Larsen Insurance
Company.
Consequently, we can identify a pattern of assistance by capitalist bankers for the Soviet
Union. Some of these were American bankers, some were tsarist bankers who were exiled
and living in Europe, and some were European bankers. Their common objective was profit,
not ideology.
The questionable aspects of the work of these "Bolshevik bankers," as they were called,
arises from the framework of contemporary events in Russia. In 1919 French, British, and
American troops were fighting Soviet troops in the Archangel region. In one clash in April
1919, for example, American casualties were one officer, .five men killed, and nine
missing.26 Indeed, at one point in 1919 General Tasker H. Bliss, the U.S. commander in
Archangel, affirmed the British statement that "Allied troops in the Murmansk and
Archangel districts were in danger of extermination unless they were speedily
reinforced."27 Reinforcements were then on the way under the command of Brigadier
General W. P. Richardson.
In brief, while Guaranty Trust and first-rank American firms were assisting the formation of
the Soviet Bureau in New York, American troops were in conflict with Soviet troops in
North Russia. Moreover, these conflicts were daily reported in the New York Times,
presumably read by these bankers and businessmen. Further, as we shall see in chapter ten,
the financial circles that were supporting the Soviet Bureau in New York also formed in
New York the "United Americans" — a virulently anti-Communist organization predicting
bloody revolution, mass starvation, and panic in the streets of New York.
Footnotes:
1Copy in U.S. State Dept. Decimal File, 316-22-656.
2Ibid., 861.00/1970.
3U.S., House, Committee on Foreign Affairs, Conditions in Russia, 66th Cong.,
3d sess., 1921, p. 78.
4U.S. State Dept. Decimal File, 316-19-1120.
5Ibid.
6See Benjamin Gitlow, [U.S., House, Un-American Propaganda Activities
(Washington, 1939), vols. 7-8, p. 4539.
7See p. 119.
8Copy in [U.S. State Dept. Decimal File, 316-22-656. Confirmation of
Guaranty Trust involvement tomes in later intelligence reports.
9On Frederick C. Howe see pp. 16, 177, for an early statement of the manner in
which financiers use society and its problems for their own ends; on Felix
Frankfurter, later Supreme Court justice, see Appendix 3 for an early
Frankfurter letter to Nuorteva; on Raymond Robins see p. 100.
10The Lusk Committee list of personnel in the Soviet Bureau is printed in
Appendix 3. The list includes Kenneth Durant, aide to Colonel House; Dudley
Field Malone, appointed by President Wilson as collector of customs for the
Port of New York; and Morris Hillquit, the financial intermediary between
New York banker Eugene Boissevain on the one hand, and John Reed and
Soviet agent Michael Gruzenberg on the other.
11Julius Hammer was the father of Armand Hammer, who today is chairman of
the Occidental Petroleum Corp. of Los Angeles.
12See Appendix 3.
13V. I. Lenin, Polnoe Sobranie Sochinenii, 5th ed. (Moscow, 1958), 53:267.
14U.S., House, Committee. on Foreign Affairs, Conditions in Russia, 66th
Cong., 3d sess., 1921, p. 75. "Bill" was William Bobroff, Soviet agent.
15Ibid., p. 78.
16New York Times, November 17, 1919.
17Ibid.
18Ibid.
19New York Times, June 21, 1919.
20See p. 119.
21U.S. State Dept. Decimal File, 861.51/411, November 23, 1918.
22Ibid., 316-125-1212.
23U.S., Department of State, Foreign Relations o! the United States: 1918,
Russia, 1:373.
24U.S. State Dept. Decimal File, 861.00/4878, July,' 21, 1919.
25Ibid., 316-21-115/21.
26New York Times, April 5, 1919.
27Ibid.
BACK
Chapter VIII
120 BROADWAY, NEW YORK CITY
William B. Thompson, who was in Petrograd from July until November
last, has made a personal contribution of $1,000,000 to the Bolsheviki for
the purpose of spreading their doctrine in Germany and Austria ....
Washington Post, February 2, 1918
While collecting material for this book a single location and address in the Wall Street area
came to the fore — 120 Broadway, New York City. Conceivably, this book could have
been written incorporating only persons, firms, and organizations located at 120 Broadway
in the year 1917. Although this research method would have been forced and unnatural, it
would have excluded only a relatively small segment of the story.
The original building at 120 Broadway was destroyed by fire before World War I.
Subsequently the site was sold to the Equitable Office Building Corporation, organized by
General T. Coleman du Pont, president of du Pont de Nemours Powder Company.1 A new
building was completed in 1915 and the Equitable Life Assurance Company moved back to
its old site.2 In passing we should note an interesting interlock in Equitable history. In 1916
the cashier of the Berlin Equitable Life office was William Schacht, the father of Hjalmar
Horace Greeley Schacht — later to become Hitler's banker, and financial genie. William
Schacht was an American citizen, worked thirty years for Equitable in Germany, and owned
a Berlin house known as "Equitable Villa." Before joining Hitler, young Hjalmar Schacht
served as a member of the Workers and Soldiers Council (a soviet) of Zehlendoff; this he
left in 1918 to join the board of the Nationalbank fur Deutschland. His codirector at
DONAT was Emil Wittenberg, who, with Max May of Guaranty Trust Company of New
York, was a director of the first Soviet international bank, Ruskombank.
In any event, the building at 120 Broadway was in 1917 known as the Equitable Life
Building. A large building, although by no means the largest office building in New York
City, it occupies a one-block area at Broadway and Pine, and has thirty-four floors. The
Bankers Club was located on the thirty-fourth floor. The tenant list in 1917 in effect
reflected American involvement in the Bolshevik Revolution and its aftermath. For
example, the headquarters of the No. 2 District of the Federal Reserve System — the New
York area — by far the most important of the Federal Reserve districts, was located at 120
Broadway. The offices of several individual directors of the Federal Reserve Bank of New
York and, most important, the American International Corporation were also at 120
Broadway. By way of contrast, Ludwig Martens, appointed by the Soviets as the first
Bolshevik "ambassador" to the United States and head of the Soviet Bureau, was in 1917
the vice president of Weinberg & Posner — and also had offices at 120 Broadway.*
Is this concentration an accident? Does the geographical contiguity have any significance?
Before attempting to suggest an answer, we have to switch our frame of reference and
abandon the left-right spectrum of political analysis.
With an almost unanimous lack of perception the academic world has described and
analyzed international political relations in the context of an unrelenting conflict between
capitalism and communism, and rigid adherence to this Marxian formula has distorted
modern history. Tossed out from time to time are odd remarks to the effect that the polarity
is indeed spurious, but these are quickly dispatched to limbo. For example, Carroll Quigley,
professor of international relations at Georgetown University, made the following comment
on the House of Morgan:
More than fifty years ago the Morgan firm decided to infiltrate the Left-wing
political movements in the United States. This was relatively easy to do, since
these groups were starved for funds and eager for a voice to reach the people.
Wall Street supplied both. The purpose was not to destroy, dominate or take
over...3
Professor Quigley's comment, apparently based on confidential documentation, has all the
ingredients of an historical bombshell if it can be supported. We suggest that the Morgan
firm infiltrated not only the domestic left, as noted by Quigley, but also the foreign left —
that is, the Bolshevik movement and the Third International. Even further, through friends
in the U.S. State Department, Morgan and allied financial interests, particularly the
Rockefeller family, have exerted a powerful influence on U.S.-Russian relations from
World War I to the present. The evidence presented in this chapter will suggest that two of
the operational vehicles for infiltrating or influencing foreign revolutionary movements
were located at 120 Broadway: the first, the Federal Reserve Bank of New York, heavily
laced with Morgan appointees; the second, the Morgan-controlled American International
Corporation. Further, there was an important interlock between the Federal Reserve Bank of
New York and the American International Corporation — C. A. Stone, the president of
American International, was also a director of the Federal Reserve Bank.
The tentative hypothesis then is that this unusual concentration at a single address was a
reflection of purposeful actions by specific firms and persons and that these actions and
events cannot be analyzed within the usual spectrum of left-right political antagonism.
AMERICAN INTERNATIONAL CORPORATION
The American International Corporation (AIC) was organized in New York on November
22, 1915, by the J.P. Morgan interests, with major participation by Stillman's National City
Bank and the Rockefeller interests. The general office of AIC was at 120 Broadway. The
company's charter authorized it to engage in any kind of business, except banking and
public utilities, in any country in the world. The stated purpose of the corporation was to
develop domestic and foreign enterprises, to extend American activities abroad, and to
promote the interests of American and foreign bankers, business and engineering.
Frank A. Vanderlip has described in his memoirs how American International was formed
and the excitement created on Wall Street over its business potential.4 The original idea was
generated by a discussion between Stone & Webster — the international railroad
contractors who "were convinced there was not much more railroad building to be done in
the United States" — and Jim Perkins and Frank A. Vanderlip of National City Bank
(NCB).5 The original capital authorization was $50 million and the board of directors
represented the leading lights of the New York financial world. Vanderlip records that he
wrote as follows to NCB president Stillman, enthusing over the enormous potential for
American International Corporation:
James A. Farrell and Albert Wiggin have been invited [to be on the board] but
had to consult their committees before accepting. I also have in mind asking
Henry Walters and Myron T. Herrick. Mr. Herrick is objected to by Mr.
Rockefeller quite strongly but Mr. Stone wants him and I feel strongly that he
would be particularly desirable in France. The whole thing has gone along with
a smoothness that has been gratifying and the reception of it has been marked
by an enthusiasm which has been surprising to me even though I was so
strongly convinced we were on the right track.
I saw James J. Hill today, for example. He said at first that he could not
possibly think of extending his responsibilities, but after I had finished telling
him what we expected to do, he said he would be glad to go on the board,
would take a large amount of stock and particularly wanted a substantial
interest in the City Bank and commissioned me to buy him the stock at the
market.
I talked with Ogden Armour about the matter today for the first time. He sat in
perfect silence while I went through the story, and, without asking a single
question, he said he would go on the board and wanted $500,000 stock.
Mr. Coffin [of General Electric] is another man who is retiring from
everything, but has 'become so enthusiastic over this that he was willing to go
on the board, and offers the most active cooperation.
I felt very good over getting Sabin. The Guaranty Trust is altogether the most
active competitor we have in the field and it is of great value to get them into
the fold in this way. They have been particularly enthusiastic at Kuhn, Loeb's.
They want to take up to $2,500,000. There was really quite a little competition
to see who should get on the board, but as I had happened to talk with Kahn
and had invited him first, it was decided he should go on. He is perhaps the
most enthusiastic of any one. They want half a million stock for Sir Ernest
Castle** to whom they have cabled the plan and they have back from him
approval of it.
I explained the whole matter to the Board [of the City Bank] Tuesday and got
nothing but favorable comments.6
Everybody coveted the AIC stock. Joe Grace (of W. R. Grace & Co.) wanted $600,000 in
addition to his interest in National City Bank. Ambrose Monell wanted $500,000. George
Baker wanted $250,000. And "William Rockefeller tried, vainly, to get me to put him down
for $5,000,000 of the common."7
By 1916 AIC investments overseas amounted to more than $23 million and in 1917 to more
than $27 million. The company established representation in London, Paris, Buenos Aires,
and Peking as well as in Petrograd, Russia. Less than two years after its formation AIC was
operating on a substantial scale in Australia, Argentina, Uruguay, Paraguay, Colombia,
Brazil, Chile, China, Japan, India, Ceylon, Italy, Switzerland, France, Spain, Cuba, Mexico,
and other countries in Central America.
American International owned several subsidiary companies outright, had substantial
interests in yet other companies, and operated still other firms in the United States and
abroad. The Allied Machinery Company of America was founded in February 1916 and the
entire share capital taken up by American International Corporation. The vice president of
American International Corporation was Frederick Holbrook, an engineer and formerly
head of the Holbrook Cabot & Rollins Corporation. In January 1917 the Grace Russian
Company was formed, the joint owners being W. R. Grace & Co. and the San Galli Trading
Company of Petrograd. American International Corporation had a substantial investment in
the Grace Russian Company and through Holbrook an interlocking directorship.
AIC also invested in United Fruit Company, which was involved in Central American
revolutions in the 1920s. The American International Shipbuilding Corporation was wholly
owned by AIC and signed substantial contracts for war vessels with the Emergency Fleet
Corporation: one contract called for fifty vessels, followed by another contract for forty
vessels, followed by yet another contract for sixty cargo vessels. American International
Shipbuilding was the largest single recipient of contracts awarded by the U.S. government
Emergency Fleet Corporation. Another company operated by AIC was G. Amsinck & Co.,
Inc. of New York; control of the company was acquired in November 1917. Amsinck was
the source of financing for German espionage in the United States (see page 66). In
November 1917 the American International Corporation formed and wholly owned the
Symington Forge Corporation, a major government contractor for shell forgings.
Consequently, American International Corporation had significant interest in war contracts
within the United States and overseas. It had, in a word, a vested interest in the continuance
of World War I.
The directors of American International and some of their associations were (in 1917):
J. OGDEN ARMOUR Meatpacker, of Armour & Company, Chicago; director
of the National City Bank of New York; and mentioned by A. A. Heller in
connection with the Soviet Bureau (see p. 119).
GEORGE JOHNSON BALDWIN Of Stone & Webster, 120 Broadway. During
World War I Baldwin was chairman of the board of American International
Shipbuilding, senior vice president of American International Corporation,
director of G. Amsinck (Von Pavenstedt of Amsinck was a German espionage
paymaster in the U.S., see page 65), and a trustee of the Carnegie Foundation,
which financed the Marburg Plan for international socialism to be controlled
behind the scenes by world finance (see page 174-6).
C. A. COFFIN Chairman of General Electric (executive office: 120 Broadway),
chairman of cooperation committee of the American Red Cross.
W. E. COREY (14 Wall Street) Director of American Bank Note Company,
Mechanics and Metals Bank, Midvale Steel and Ordnance, and International
Nickel Company; later director of National City Bank.
ROBERT DOLLAR San Francisco shipping magnate, who attempted in behalf
of the Soviets to import tsarist gold rubles into U.S. in 1920, in contravention
of U.S. regulations.
PIERRE S. DU PONT Of the du Pont family.
PHILIP A. S. FRANKLIN Director of National City Bank.
J.P. GRACE Director of National City Bank.
R. F. HERRICK Director, New York Life Insurance; former president of the
American Bankers Association; trustee of Carnegie Foundation.
OTTO H. KAHN Partner in Kuhn, Loeb. Kahn's father came to America in
1948, "having taken part in the unsuccessful German revolution of that year."
According to J. H. Thomas (British socialist, financed by the Soviets), "Otto
Kahn's face is towards the light."
H. W. PRITCHETT Trustee of Carnegie Foundation.
PERCY A. ROCKEFELLER Son of John D. Rockefeller; married to Isabel,
daughter of J. A. Stillman of National City Bank.
JOHN D. RYAN Director of copper-mining companies, National City Bank,
and Mechanics and Metals Bank. (See frontispiece to this book.)
W. L. SAUNDERS Director the Federal Reserve Bank of New York, 120
Broadway, and chairman of Ingersoll-Rand. According to the National
Cyclopaedia (26:81): "Throughout the war he was one of the President's most
trusted advisers." See page 15 for his views on the Soviets.
J. A. STILLMAN President of National City Bank, after his father (J. Stillman,
chairman of NCB) died in March 1918.
C. A. STONE Director (1920-22) of Federal Reserve Bank of New York, 120
Broadway; chairman of Stone & Webster, 120 Broadway; president (1916-23)
of American International Corporation, 120 Broadway.
T. N. VAIL President of National City Bank of Troy, New York
F. A. VANDERLIP President of National City Bank.
E. S. WEBSTER Of Stone & Webster, 120 Broadway.
A. H. WIGGIN Director of Federal Reserve Bank of New York in the early
1930s.
BECKMAN WINTHROPE Director of National City Bank.
WILLIAM WOODWARD Director of Federal Reserve Bank of New York,
120 Broadway, and Hanover National Bank.
The interlock of the twenty-two directors of American International Corporation with other
institutions is significant. The National City Bank had no fewer than ten directors on the
board of AIC; Stillman of NCB was at that time an intermediary between the Rockefeller
and Morgan interests, and both the Morgan and the Rockefeller interests were represented
directly on AIC. Kuhn, Loeb and the du Ponts each had one director. Stone & Webster had
three directors. No fewer than four directors of AIC (Saunders, Stone, Wiggin, Woodward)
either were directors of or were later to join the Federal Reserve Bank of New York. We
have noted in an earlier chapter that William Boyce Thompson, who contributed funds and
his considerable prestige to the Bolshevik Revolution, was also a director of the Federal
Reserve Bank of New York — the directorate of the FRB of New York comprised only nine
members.
THE INFLUENCE O
Chapter IV
GUARANTY TRUST GOES TO RUSSIA
Soviet Govemment desire Guarantee [sic] Trust Company to become fiscal
agent in United States for all Soviet operations and contemplates American
purchase Eestibank with a view to complete linking of Soviet fortunes with
American financial interests.
William H. Coombs, reporting to the U.S. embassy in London, June 1, 1920
(U.S. State Dept. Decimal File, 861.51/752). ("Eestibank" was an Estonian
bank)
In 1918 the Soviets faced a bewildering array of internal and external problems. They
occupied a mere fraction of Russia. To subdue the remainder, they needed foreign arms,
imported food, outside financial support, diplomatic recognition, and — above all —
foreign trade. To gain diplomatic recognition and foreign trade, the Soviets first needed
representation abroad, and representation in turn required financing through gold or foreign
currencies. As we have already seen, the first step was to establish the Soviet Bureau in
New York under Ludwig Martens. At the same time, efforts were made to transfer funds to
the United States and Europe for purchases of needed goods. Then influence was exerted in
the U.S. to gain recognition or to obtain the export licenses needed to ship goods to Russia.
New York bankers and lawyers provided significant — in some cases, critical — assistance
for each of these tasks. When Professor George V. Lomonossoff, the Russian technical
expert in the Soviet Bureau, needed to transfer funds from the chief Soviet agent in
Scandinavia, a prominant Wall Street attorney came to his assistance — using official State
Department channels and the acting secretary of state as an intermediary. When gold had to
be transferred to the United States, it was American International Corporation, Kuhn, Loeb
& Co., and Guaranty Trust that requested the facilities and used their influence in
Washington to smooth the way. And when it came to recognition, we find American firms
pleading .with Congress and with the public to endorse the Soviet regime.
Lest the reader should deduce — too hastily — from these assertions that Wall Street was
indeed tinged with Red, or that Red flags were flying in the street (see frontispiece), we also
in a later chapter present evidence that the J.P. Morgan firm financed Admiral Kolchak in
Siberia. Aleksandr Kolchak was fighting the Bolsheviks, to install his own brand of
authoritarian rule. The firm also contributed to the anti-Communist United Americans
organization.
WALL STREET COMES TO THE AID OF PROFESSOR LOMONOSSOFF
The case of Professor Lomonossoff is a detailed case history of Wall Street assistance to the
early Soviet regime. In late 1918 George V. Lomonossoff, member of the Soviet Bureau in
New York and later first Soviet commissar of railroads, found himself stranded in the
United States without funds. At this time Bolshevik funds were denied entry into the United
States; indeed, there was no official recognition of the regime at all. Lomonossoff was the
subject of a letter of October 24, 1918, from the U.S. Department of Justice to the
Department of State.1 The letter referred to Lomonossoff's Bolshevik attributes and pro-
Bolshevik speeches. The investigator concluded, "Prof. Lomonossoff is not a Bolshevik
although his speeches constitute unequivocal support for the Bolshevik cause." Yet
Lomonossoff was able to pull strings at the highest levels of the administration to have
$25,000 transferred from the Soviet Union through a Soviet espionage agent in Scandinavia
(who was himself later to become confidential assistant to Reeve Schley, a vice president of
Chase Bank). All this with the assistance of a member of a prominent Wall Street firm of
attorneys!2
The evidence is presented in detail because the details themselves point up the close
relationship between certain interests that up to now have been thought of as bitter enemies.
The first indication of Lornonossoff's problem is a letter dated January 7, 1919, from
Thomas L. Chadbourne of Chadbourne, Babbitt 8e Wall of 14 Wall Street (same Address as
William Boyce Thompson's) to Frank Polk, acting secretary of state. Note the friendly
salutation and casual reference to Michael Gruzenberg, alias Alexander Gumberg, chief
Soviet agent in Scandinavia and later Lomonossoff's assistant:
Dear Frank: You were kind enough to say that if I could inform you of the
status of the $25,000 item of personal funds belonging to Mr. & Mrs.
Lomonossoff you would set in motion the machinery necessary to obtain it here
for them.
I have communicated with Mr. Lomonossoff with respect to it, and he tells me
that Mr. Michael Gruzenberg, who went to Russia for Mr. Lomonossoff prior
to the difficulties between Ambassador Bakhmeteff and Mr. Lomonossoff,
transmitted the information to him respecting this money through three
Russians who recently arrived from Sweden, and Mr. Lomonossoff believes
that the money is held at the Russian embassy in Stockholm, Milmskilnad
Gaten 37. If inquiry from the State Department should develop this to be not
the place where the money is on deposit, then the Russian embassy in
Stockholm can give the exact address of Mr. Gruzenberg, who can give the
proper information respecting it. Mr. Lomonossoff does not receive letters from
Mr. Gruzenberg, although he is informed that they have been written: nor have
any of his letters to Mr. Gruzenberg been delivered, he is also informed. For
this reason it is impossible to be more definite than I have been, but I hope
something can be done to relieve his and his wife's embarrassment for lack of
funds, and it only needs a little help to secure this money which belongs to
them to aid them on this side of the water.
Thanking you in advance for anything you can do, I beg to remain, as ever,
Yours sincerely,
Thomas L. Chadbourne.
In 1919, at the time this letter was written, Chadbourne was a dollar-a-year man in
Washington, counsel and director of the U.S. War Trade Board, and a director of the U.S.
Russian Bureau Inc., an official front company of the U.S. government. Previously, in 1915,
Chadbourne organized Midvale Steel and Ordnance to take advantage of war business. In
1916 he became chairman of the Democratic Finance Committee and later a director of
Wright Aeronautical and o[ Mack Trucks.
The reason Lomonossoff was not receiving letters from Gruzenberg is that they were, in all
probability, being intercepted by one of several governments taking a keen interest in the
latter's activities.
On January 11, 1919, Frank Polk cabled the American legation in Stockholm:
Department is in receipt of information that $25,000, personal funds of ....
Kindly inquire of the Russian Legation informally and personally if such funds
are held thus. Ascertain, if not, address of Mr. Michael Gruzenberg, reported to
be in possession of information on this subject. Department not concerned
officially, merely undertaking inquiries on behalf of a former Russian official
in this country.
Polk, Acting
Polk appears in this letter to be unaware of Lomonossoff's Bolshevik connections, and
refers to him as "a former Russian official in this country." Be that as it may, within three
days Polk received a reply from Morris at the U.S. Legation in Stockholm:
January 14, 3 p.m. 3492. Your January 12, 3 p.m., No. 1443.
Sum of $25,000 of former president of Russian commission of ways of
communication in United States not known to Russian legation; neither can
address of Mr. Michael Gruzenberg be obtained.
Morris
Apparently Frank Polk then wrote to Chadbourne (the letter is not included in the source)
and indicated that State could find neither Lomonossoff nor Michael Gruzenberg.
Chadbourne replied on January 21, 1919:
Dear Frank: Many thanks for your letter of January 17. I understand that there
are two Russian legations in Sweden, one being the soviet and the other the
Kerensky, and I presume your inquiry was directed to the soviet legation as that
was the address I gave you in my letter, namely, Milmskilnad Gaten 37,
Stockholm.
Michael Gruzenberg's address is, Holmenkollen Sanitarium, Christiania,
Norway, and I think the soviet legation could find out all about the funds
through Gruzenberg if they will communicate with him.
Thanking you for taking this trouble and assuring you of my deep appreciation,
I remain,
Sincerely yours,
Thomas L. Chadbourne
We should note that a Wall Street lawyer had the address of Gruzenberg, chief Bolshevik
agent in Scandinavia, at a time when the acting secretary of state and the U.S. Stockholm
legation had no record of the address; nor could the legation track it down. Chadbourne also
presumed that the Soviets were the official government of Russia, although that government
was not recognized by the United States, and Chadbourne's official government position on
the War Trade Board would require him to know that.
Frank Polk then cabled the American legation at Christiania, Norway, with the address of
Michael Gruzenberg. It is not known whether Polk knew he was passing on the address of
an espionage agent, but his message was as follows:
To American Legation, Christiania. January 25, 1919. It is reported that
Michael Gruzenberg is at Holmenkollen Sanitarium. Is it possible for you to
locate him and inquire if he has any knowledge respecting disposition of
$25,000 fund belonging to former president of Russian mission of ways of
communication in the United States, Professor Lomonossoff.
Polk, Acting
The U.S. representative (Schmedeman) at Christiania knew Gruzenberg well. Indeed, the
name had figured in reports from Schmedeman to Washington concerning Gruzenberg's
pro-Soviet activities in Norway. Schmedeman replied:
January 29, 8 p.m. 1543. Important. Your January 25, telegram No. 650.
Before departing to-day for Russia, Michael Gruzenberg informed our naval
attache that when in Russia some few months ago he had received, at
Lomonossoff's request, $25,000 from the Russian Railway Experimental
Institute, of which Prof. Lomonossoff was president. Gruzenberg claims that
to-day he cabled attorney for Lomonossoff in New York, Morris Hillquitt [sic],
that he, Gruzenberg, is in possession of the money, and before forwarding it is
awaiting further instructions from the United States, requesting in the
cablegram that Lomonossoff be furnished with living expenses for himself and
family by Hillquitt pending the receipt of the money.3
As Minister Morris was traveling to Stockholm on the same train as
Gruzenberg, the latter stated that he would advise further with Morris in
reference to this subject.
Schmedeman
The U.S. minister traveled with Gruzenberg to Stockholm where he received the following
cable from Polk:
It is reported by legation at Christiania that Michael Gruzenberg, has for Prof.
G. Lomonossoff, the . . . sum of $25,000, received from Russian Railway
Experimental Institute. If you can do so without being involved with Bolshevik
authorities, department will be glad for you to facilitate transfer of this money
to Prof. Lomonossoff in this country. Kindly reply.
Polk, Acting
This cable produced results, for on February 5, 1919, Frank Polk wrote to Chadbourne
about a "dangerous bolshevik agitator," Gruzenberg:
My Dear Tom: I have a telegram from Christiania indicating that Michael
Gruzenberg has the $25,000 of Prof. Lomonossoff, and received it from the
Russian Railway Experimental Institute, and that he had cabled Morris Hillquitt
[sic], at New York, to furnish Prof. Lomonossoff money for living expenses
until the fund in question can be transmitted to him. As Gruzenberg has just
been deported from Norway as a dangerous bolshevik agitator, he may have
had difficulties in telegraphing from that country. I understand he has now gone
to Christiania, and while it is somewhat out of the department's line of action, I
shall be glad, if you wish, to see if I can have Mr. Gruzenberg remit the money
to Prof. Lomonossoff from Stockholm, and am telegraphing our minister there
to find out if that can be done.
Very sincerely, yours,
Frank L. Polk
The telegram from Christiania referred to in Polk's letter reads as follows:
February 3, 6 p.m., 3580. Important. Referring department's january 12, No.
1443, $10,000 has now been deposited in Stockholm to my order to be
forwarded to Prof. Lomonossoff by Michael Gruzenberg, one of the former
representatives of the bolsheviks in Norway. I informed him before accepting
this money that I would communicate with you and inquire if it is your wish
that this money be forwarded to Lomonossoff. Therefore I request instructions
as to my course of action.
Morris
Subsequently Morris, in Stockholm, requested disposal instructions for a $10,000 draft
deposited in a Stockholm bank. His phrase "[this] has been my only connection with the
affair" suggests that Morris was aware that the Soviets could, a
Chapter X
J.P. MORGAN GIVES A LITTLE HELP TO THE OTHER SIDE
I would not sit down to lunch with a Morgan — except possibly to learn
something of his motives and attitudes.
William E. Dodd, Ambassador Dodd's Diary, 1933-1938
So far our story has revolved around a single major financial house — Guaranty Trust
Company, the largest trust company in the United States and controlled by the J.P. Morgan
firm. Guaranty Trust used Olof Aschberg, the Bolshevik banker, as its intermediary in
Russia before and after the revolution. Guaranty was a backer of Ludwig Martens and his
Soviet Bureau, the first Soviet representatives in the United States. And in mid-1920
Guaranty was the Soviet fiscal agent in the U.S.; the first shipments of Soviet gold to the
United States also traced back to Guaranty Trust.
There is a startling reverse side to this pro-Bolshevik activity — Guaranty Trust was a
founder of United Americans, a virulent anti-Soviet organization which noisily threatened
Red invasion by 1922, claimed that $20 million of Soviet funds were on the way to fund
Red revolution, and forecast panic in the streets and mass starvation in New York City. This
duplicity raises, of course, serious questions about the intentions of Guaranty Trust and its
directors. Dealing with the Soviets, even backing them, can be explained by apolitical greed
or simply profit motive. On the other hand, spreading propaganda designed to create fear
and panic while at the same time encouraging the conditions that give rise to the fear and
panic is a considerably more serious problem. It suggests utter moral depravity. Let's first
look more closely at the anti-Communist United Americans.
UNITED AMERICANS FORMED TO FIGHT COMMUNISM1
In 1920 the organization United Americans was founded. It was limited to citizens of the
United States and planned for five million members, "whose sole purpose would be to
combat the teachings of the socialists, communists, I.W.W., Russian organizations and
radical farmers societies."
In other words, United Americans was to fight all those institutions and groups believed to
be anticapitalist.
The officer's of the preliminary organization established to build up United Americans were
Allen Walker of the Guaranty Trust Company; Daniel Willard, president of the Baltimore
8c Ohio Railroad; H. H. Westinghouse, of Westinghouse Air Brake Company; and Otto H.
Kahn, of Kuhn, Loeb 8c Company and American International Corporation. These Wall
Streeters were backed up by assorted university presidents arid Newton W. Gilbert (former
governor of the Philippines). Obviously, United Americans was, at first glance, exactly the
kind of organization that establishment capitalists would be expected to finance and join. Its
formation should have brought no great surprise.
On the other hand, as we have already seen, these financiers were also deeply involved in
supporting the new Soviet regime in Russia — although this support was behind the scenes,
recorded only in government files, and not to be made public for 50 years. As part of United
Americans, Walker, Willard, Westinghouse, and Kahn were playing a double game. Otto H.
Kahn, a founder of the anti-Communist organization, was reported by the British socialist J.
H. Thomas as having his "face towards the light." Kahn wrote the preface to Thomas's
book. In 1924 Otto Kahn addressed the League for Industrial Democracy and professed
common objectives with this activist socialist group (see page 49). The Baltimore & Ohio
Railroad (Willard's employer) was active in the development of Russia during the 1920s.
Westinghouse in 1920, the year United Americans was founded, was operating a plant in
Russia that had been exempted from nationalization. And the role of Guaranty Trust has
already been minutely described.
UNITED AMERICANS REVEALS "STARTLING DISCLOSURES" ON REDS
In March 1920 the New York Times headlined an extensive, detailed scare story about Red
invasion of the United States within two years, an invasion which was to be financed by $20
million of Soviet funds "obtained by the murder and robbery of the Russian nobility."2
United Americans had, it was revealed, made a survey of "radical activities" in the United
States, and had done so in its role as an organization formed to "preserve the Constitution of
the United States with the representative form of government and the right of individual
possession which the Constitution provides."
Further, the survey, it was proclaimed, had the backing of the executive board, "including
Otto H. Kahn, Allen Walker of the Guaranty Trust Company, Daniel Willard," and others.
The survey asserted that
the radical leaders are confident of effecting a revolution within two years, that
the start is to be made in New York City with a general strike, that Red leaders
have predicted much bloodshed and that the Russian Soviet Government has
contributed $20,000,000 to the American radical movement.
The Soviet gold shipments to Guaranty Trust in mid-1920 (540 boxes of three poods each)
were worth roughly $15,000,000 (at $20 a troy ounce), and other gold shipments through
Robert Dollar and Olof Aschberg brought the total very close to $20 million. The
information about Soviet gold for the radical movement was called "thoroughly reliable"
and was "being turned over to the Government." The Reds, it was asserted, planned to
starve New York into submission within four days:
Meanwhile the Reds count on a financial panic within the next few weeks to
help their cause along. A panic would cause distress among the workingmen
and thus render them more susceptible to revolution doctrine.
The United Americans' report grossly overstated the number of radicals in the United
States, at first tossing around figures like two or five million and then settling for precisely
3,465,000 members in four radical organizations. The report concluded by emphasizing the
possibility of bloodshed and quoted "Skaczewski, President of the International Publishing
Association, otherwise the Communist Party, [who] boasted that.the time was coming soon
when the Communists would destroy utterly the present form of society."
In brief, United Americans published a report without substantiating evidence, designed to
scare the man in the street into panic: The significant point of course is that this is the same
group that was responsible for protecting and subsidizing, indeed assisting, the Soviets so
they could undertake these same plans.
CONCLUSIONS CONCERNING UNITED AMERICANS
Is this a case of the right hand not knowing what the left hand was doing? Probably not. We
are talking about heads of companies, eminently successful companies at that. So United
Americans was probably a ruse to divert public — and official — attention from the
subterranean efforts being made to gain entry to the Russian market.
United Americans is the only documented example known to this writer of an organization
assisting the Soviet regime and also in the forefront of opposition to the Soviets. This is by
no means an inconsistent course of action, and further research should at least focus on the
following aspects:
(a) Are there other examples of double-dealing by influential groups generally
known as the establishment?
(b) Can these examples be extended into other areas? For example, is there
evidence that labor troubles have been instigated by these groups?
(c) What is the ultimate purpose of these pincer tactics? Can they be related to
the Marxian axiom: thesis versus antithesis yields synthesis? It is a puzzle why
the Marxist movement would attack capitalism head-on if its objective was a
Communist world and if it truly accepted the dialectic. If the objective is a
Communist world — that is, if communism is the desired synthesis — and
capitalism is the thesis, then something apart from capitalism or communism
has to be antithesis. Could therefore capitalism be the thesis and communism
the antithesis, with the objective of the revolutionary groups and their backers
being a synthesizing of these two systems into some world system yet
undescribed?
MORGAN AND ROCKEFELLER AID KOLCHAK
Concurrently with these efforts to aid the Soviet Bureau and United Americans, the J.P.
Morgan firm, which controlled Guaranty Trust, was providing financial assistance for one
of the Bolshevik's primary opponents, Admiral Aleksandr Kolchak in Siberia. On June 23,
1919, Congressman Mason introduced House Resolution 132 instructing the State
Department "to make inquiry as to all and singular as to the truth of . . . press reports"
charging that Russian bondholders had used their influence to bring about the "retention of
American troops in Russia" in order to ensure continued payment of interest on Russian
bonds. According to a file memorandum by Basil Miles, an associate of William F. Sands,
Congressman Mason charged that certain banks were attempting to secure recognition of
Admiral Kolchak in Siberia to get payment on former Russian bonds.
Then in August 1919 the secretary of state, Robert Lansing, received from the Rockefellerinfluenced
National City Bank of New York a letter requesting official comment on a
proposed loan of $5 million to Admiral Kolchak; and from J.P. Morgan & Co. and other
bankers another letter requesting the views of the department concerning an additional
proposed £10 million sterling loan to Kolchak by a consortium of British and American
bankers.3
Secretary Lansing informed the bankers that the U.S. had not recognized Kolchak and,
although prepared to render him assistance, "the Department did not feel
Chapter XI
THE ALLIANCE OF BANKERS AND REVOLUTION
The name Rockefeller does not connote a revolutionary, and my life
situation has fostered a careful and cautious attitude that verges on
conservatism. I am not given to errant causes...
John D. Rockefeller III, The Second American Revolution (New York: Harper
& Row. 1973)
THE EVIDENCE PRESENTED: A SYNOPSIS
Evidence already published by George Katkov, Stefan Possony, and Michael Futrell has
established that the return to Russia of Lenin and his party of exiled Bolsheviks, followed a
few weeks later by a party of Mensheviks, was financed and organized by the German
government.1 The necessary funds were transferred in part through the Nya Banken in
Stockholm, owned by Olof Aschberg, and the dual German objectives were: (a) removal of
Russia from the war, and (b) control of the postwar Russian market.2
We have now gone beyond this evidence to establish a continuing working relationship
between Bolshevik banker Olof Aschberg and the Morgan-controlled Guaranty Trust
Company in New York before, during, and after the Russian Revolution. In tsarist times
Aschberg was the Morgan agent in Russia and negotiator for Russian loans in the United
States; during 1917 Aschberg was financial intermediary for the revolutionaries; and after
the revolution Aschberg became head of Ruskombank, the first Soviet international bank,
while Max May, a vice president of the Morgan-controlled Guaranty Trust, became director
and chief of the Ruskom-bank foreign department. We have presented documentary
evidence of a continuing working relationship between the Guaranty Trust Company and
the Bolsheviks. The directors of Guaranty Trust in 1917 are listed in Appendix 1.
Moreover, there is evidence of transfers of funds from Wall Street bankers to international
revolutionary activities. For example, there is the statement (substantiated by a cablegram)
by William Boyce Thompson — a director of the Federal Reserve Bank of New York, a
large stockholder in the Rockefeller-controlled Chase Bank, and a financial associate of the
Guggenheims and the Morgans — that he (Thompson) contributed $1 million to the
Bolshevik Revolution for propaganda purposes. Another example is John Reed, the
American member of the Third International executive committee who was financed and
supported by Eugene Boissevain, a private New York banker, and who was employed by
Harry Payne Whitney's Metropolitan magazine. Whitney was at that time a director of
Guaranty Trust. We also established that Ludwig Martens, the first Soviet "ambassador" to
the United States, was (according to British Intelligence chief Sir Basil Thompson) backed
by funds from Guaranty Trust Company. In tracing Trotsky's funding in the U.S. we arrived
at German sources, yet to be identified, in New York. And though we do not know the
precise German sources of Trotsky's funds, we do know that Von Pavenstedt, the chief
German espionage paymaster in the U.S., was also senior partner of Amsinck & Co.
Amsinck was owned by the ever-present American International Corporation — also
controlled by the J.P. Morgan firm.
Further, Wall Street firms including Guaranty Trust were involved with Carranza's and
Villa's wartime revolutionary activities in Mexico. We also identified documentary
evidence concerning. a Wall Street syndicate's financing of the 1912 Sun Yat-sen revolution
in China, a revolution that is today hailed by the Chinese Communists as the precursor of
Mao's revolution in China. Charles B. Hill, New York attorney negotiating with Sun Yatsen
in behalf of this syndicate, was a director of three Westinghouse subsidiaries, and we
have found that Charles R. Crane of Westinghouse in Russia was involved in the Russian
Revolution.
Quite apart from finance, we identified other, and possibly more significant, evidence of
Wall Street involvement in the Bolshevik cause. The American Red Cross Mission to
Russia was a private venture of William B. Thompson, who publicly proffered partisan
support to the Bolsheviks. British War Cabinet papers now available record that British
policy was diverted towards the Lenin-Trotsky regime by the personal intervention of
Thompson with Lloyd George in December 1917. We have reproduced statements by
director Thompson and deputy chairman William Lawrence Saunders, both of the Federal
Reserve Bank of New York, strongly favoring the Bolshevists. John Reed not only was
financed from Wall Street, but had consistent support for his activities, even to the extent of
intervention with the State Department from William Franklin Sands, executive secretary of
American International Corporation. In the sedition case of Robert Minor there are strong
indications and some circumstantial evidence that Colonel Edward House intervened to
have Minor released. The significance of the Minor case is that William B. Thompson's
program for Bolshevik revolution in Germany was the very program Minor was
implementing when arrested in Germany.
Some international agents, for example Alexander Gumberg, worked for Wall Street and
the Bolsheviks. In 1917 Gumberg was the representative of a U.S. firm in Petrograd,
worked for Thompson's American Red Cross Mission, became chief Bolshevik agent in
Scandinavia until he was deported from Norway, then became confidential assistant to
Reeve Schley of Chase Bank in New York and later to Floyd Odium of Atlas Corporation.
This activity in behalf of the Bolsheviks originated in large part from a single address: 120
Broadway, New York City. The evidence for this observation is outlined but no conclusive
reason is given for the unusual concentration of activity at a single address, except to state
that it appears to be the foreign counterpart of Carroll Quigley's claim that J.P. Morgan
infiltrated the domestic left. Morgan also infiltrated the international left.
The Federal Reserve Bank of New York was at 120 Broadway. The vehicle for this pro-
Bolshevik activity was American International Corporation — at 120 Broadway. AIC views
on the Bolshevik regime were requested by Secretary of State Robert Lansing only a few
weeks after the revolution began, and Sands, executive secretary of AIC, could barely
restrain his enthusiasm for the Bolshevik cause. Ludwig Martens, the Soviet's first
ambassador, had been vice president of Weinberg & Posner, which was also located at 120-
Broadway. Guaranty Trust Company was next door at 140 Broadway but Guaranty
Securities Co. was at 120 Broadway. In 1917 Hunt, Hill & Betts was at 120 Broadway, and
Charles B. Hill of this firm was the negotiator in the Sun Yat-sen dealings. John MacGregor
Grant Co., which was financed by Olof Aschberg in Sweden and Guaranty Trust in the
United States, and which was on the Military Intelligence black list, was at 120 Broadway.
The Guggenheims and the executive heart of General Electric (also interested in American
International) were at 120 Broadway. We find it therefore hardly surprising that the Bankers
Club was also at 120 Broadway, on the top floor (the thirty-fourth).
It is significant that support for the Bolsheviks did not cease with consolidation of the
revolution; therefore, this support cannot be wholly explained in terms of the war with
Germany. The American-Russian syndicate formed in 1918 to obtain concessions in Russia
was backed by the White, Guggenheim, and Sinclair interests. Directors of companies
controlled by these three financiers included Thomas W. Lamont (Guaranty Trust), William
Boyce Thompson (Federal Reserve Bank), and John Reed's employer Harry Payne Whitney
(Guaranty Trust). This strongly suggests that the syndicate was formed to cash in on earlier
support for the Bolshevik cause in the revolutionary period. And then we found that
Guaranty Trust financially backed the Soviet Bureau in New York in 1919.
The first really concrete signal that previous political and financial support was paying off
came in 1923 when the Soviets formed their first international bank, Ruskombank. Morgan
associate Olof Aschberg became nominal head of this Soviet bank; Max May, a vice
president of Guaranty Trust, became a director of Ruskom-bank, and the Ruskombank
promptly appointed Guaranty Trust Company its U.S. agent.
THE EXPLANATION FOR THE UNHOLY ALLIANCE
What motive explains this coalition of capitalists and Bolsheviks?
Russia was then — and is today — the largest untapped market in the world. Moreover,
Russia, then and now, constituted the greatest potential competitive threat to American
industrial and financial supremacy. (A glance at a world map is sufficient to spotlight the
geographical difference between the vast land mass of Russia and the smaller United
States.) Wall Street must have cold shivers when it visualizes Russia as a second super
American industrial giant.
But why allow Russia to become a competitor and a challenge to U.S. supremacy? In the
late nineteenth century, Morgan/Rockefeller, and Guggenheim had demonstrated their
monopolistic proclivities. In Railroads and Regulation 1877-1916 Gabriel Kolko has
demonstrated how the railroad owners, not the farmers, wanted state control of railroads in
order to preserve their monopoly and abolish competition. So the simplest explanation of
our evidence is that a syndicate of Wall Street financiers enlarged their monopoly ambitions
and broadened horizons on a global scale. The gigantic Russian market was to be converted
into a captive market and a technical colony to be exploited by a few high-powered
American financiers and the corporations under their control. What the Interstate
Commerce Commission and the Federal Trade Commission under the thumb of American
industry could achieve for that industry at home, a planned socialist government could
achieve for it abroad — given suitable support and inducements from Wall Street and
Washington, D.C.
Finally, lest this explanation seem too radical, remember that it was Trotsky who appointed
tsarist generals to consolidate the Red Army; that it was Trotsky who appealed for
American officers to control revolutionary Russia and intervene in behalf of the Soviets;
that it was Trotsky who squashed first the libertarian element in the Russian Revolution and
then the workers and peasants; and that recorded history totally ignores the 700,000-man
Green Army composed of ex-Bolsheviks, angered at betrayal of the revolution, who fought
the Whites and the Reds. In other words, we are suggesting that the Bolshevik Revolution
was an alliance of statists: statist revolutionaries and statist financiers aligne
Appendix I
DIRECTORS OF MAJOR BANKS,
FIRMS, AND INSTITUTIONS
MENTIONED IN THIS BOOK
(AS IN 1917-1918)
AMERICAN INTERNATIONAL CORPORATION (120
Broadway)
J. Ogden Armour Percy A. Rockefeller
G. J. Baldwin John D. Ryan
C. A. Coffin W.L. Saunders
W. E. Corey J.A. Stillman
Robert Dollar C.A. Stone
Pierre S. du Pont T.N. Vail
Philip A. S. Franklin F.A. Vanderlip
J. P. Grace E.S. Webster
R. F. Herrick A.H. Wiggin
Otto H. Kahn Beckman Winthrop
H. W. Pritchett William Woodward
CHASE NATIONAL BANK
J. N. Hill Newcomb Carlton
A. B. Hepburn D.C. Jackling
S. H. Miller E.R. Tinker
C. M. Schwab A.H. Wiggin
H. Bendicott John J. Mitchell
Guy E. Tripp
EQUITABLE TRUST COMPANY (37-43 Wall Street)
Charles B. Alexander Henry E. Huntington
Albert B. Boardman Edward T. Jeffrey
Robert.C. Clowry Otto H. Kahn
Howard E. Cole Alvin W. Krech
Henry E. Cooper James W. Lane
Paul D. Cravath Hunter S. Marston
Franklin Wm. Cutcheon Charles G. Meyer
Bertram Cutler George Welwood Murray
Thomas de Witt Cuyler Henry H. Pierce
Frederick W. Fuller Winslow S. Pierce
Robert Goelet Lyman Rhoades
Carl R. Gray Walter C. Teagle
Charles Hayden Henry Rogers Winthrop
Bertram G. Work
FEDERAL ADVISORY COUNCIL (1916)
Daniel G. Wing, Boston, District No. 1
J. P. Morgan, New York, District No. 2
Levi L. Rue, Philadelphia, District No. 3
W. S. Rowe, Cincinnati, District No. 4
J. W. Norwood, Greenville, S.C., District No. 5
C. A. Lyerly, Chattanooga, District No. 6
J. B. Forgan, Chicago, Pres., District No. 7
Frank O. Watts, St. Louis, District No. 8
C. T. Jaffray, Minneapolis, District No. 9
E. F. Swinney, Kansas City, District No. 10
T. J. Record, Paris, District No. 11
Herbert Fleishhacker, San Francisco, District No. 12
FEDERAL RESERVE BANK OF NEW YORK (120 Broadway)
William Woodward (1917)
Robert H. Treman (1918) Class A
Franklin D. Locke (1919)
Charles A. Stone (1920)
Wm. B. Thompson (1918) Class B
L. R. Palmer (1919)
Pierre Jay (1917)
George F. Peabody (1919) Class C
William Lawrence Saunders
(1920)
FEDERAL RESERVE BOARD
William G. M'Adoo Adolph C. Miller (1924)
Charles S. Hamlin ( 1916) Frederic A. Delano (1920)
Paul M. Warburg (1918) W.P.G. Harding (1922)
John Skelton Williams
GUARANTY TRUST COMPANY (140 Broadway)
Alexander J. Hemphill
(Chairman)
Charles H. Allen Edgar L. Marston
A. C. Bedford Grayson M-P Murphy
Edward J. Berwind Charles A. Peabody
W. Murray Crane William C. Potter
T. de Witt Cuyler John S. Runnells
James B. Duke Thomas F. Ryan
Caleb C. Dula Charles H. Sabin
Robert W. Goelet John W. Spoor
Daniel Guggenheim Albert Straus
W. Averell Harriman Harry P. Whitney
Albert H. Harris Thomas E. Wilson
Walter D. Hines London Committee:
Augustus D. Julliard Arthur J. Fraser (Chairman)
Thomas W. Lamont Cecil F. Parr
William C. Lane Robert Callander
NATIONAL CITY BANK
P. A. S. Franklin P.A. Rockefeller
J.P. Grace James Stillman
G. H. Dodge W. Rockefeller
H. A. C. Taylor J. O. Armour
R. S. Lovett J.W. Sterling
F. A. Vanderlip J.A. Stillman
G. H. Miniken M.T. Pyne
E. P. Swenson E.D. Bapst
Frank Trumbull J.H. Post
Edgar Palmer W.C. Procter
NATIONALBANK FÜR DEUTSCHLAND
(As in 1914, Hjalmar Schacht joined board in 1918)
BACK
Emil Wittenberg Hans Winterfeldt
Hjalmar Schacht Th Marba
Martin Schiff Paul Koch
Franz Rintelen
SINCLAIR CONSOLIDATED OIL CORPORATION (120
Broadway)
Harry F. Sinclair James N. Wallace
H. P. Whitney Edward H. Clark
Wm. E. Corey Daniel C. Jackling
Wm. B. Thompson Albert H. Wiggin
J. G. WHITE ENGINEERING CORPORATION
James Brown C.E. Bailey
Douglas Campbell J.G. White
G. C. Clark, Jr. Gano Dunn
Bayard Dominick, Jr. E.G. Williams
A. G. Hodenpyl A.S. Crane
T. W. Lamont H.A. Lardner
Marion McMillan G.H. Kinniat
J. H. Pardee A.F. Kountz
G. H. Walbridge R.B. Marchant
E. N. Chilson Henry Parsons
A. N. Connett
Appendix II
THE JEWISH-CONSPIRACY THEORY OF THE BOLSHEVIK REVOLUTION
There is an extensive literature in English, French, and German reflecting the argument that
the Bolshevik Revolution was the result of a "Jewish conspiracy"; more specifically, a
conspiracy by Jewish world bankers. Generally, world control is seen as the ultimate
objective; the Bolshevik Revolution was but one phase of a wider program that supposedly
reflects an age-old religious struggle between Christianity and the "forces of darkness."
The argument and its variants can be found in the most surprising places and from quite
surprising persons. In February 1920 Winston Churchill wrote an article — rarely cited
today — for the London Illustrated Sunday Herald entitled "Zionism Versus Bolshevism."
In this' article Churchill concluded that it was "particularly important... that the National
Jews in every country who are loyal to the land of their adoption should come forward on
every occasion . . . and take a prominent part in every measure for combatting the Bolshevik
conspiracy." Churchill draws a line between "national Jews" and what he calls
"international Jews." He argues that the "international and for the most atheistical Jews"
certainly had a "very great" role in the creation of Bolshevism and bringing about the
Russian Revolution. He asserts (contrary to fact) that with the exception of Lenin, "the
majority" of the leading figures in the revolution were Jewish, and adds (also contrary to
fact) that in many cases Jewish interests and Jewish places of worship were excepted by the
Bolsheviks from their policies of seizure. Churchill calls the international Jews a "sinister
confederacy" emergent from the persecuted populations of countries where Jews have been
persecuted on account of their race. Winston Churchill traces this movement back to
Spartacus-Weishaupt, throws his literary net around Trotsky, Bela Kun, Rosa Luxemburg,
and Emma Goldman, and charges: "This world-wide conspiracy for the overthrow of
civilisation and for the reconstitution of society on the basis of arrested development, of
envious malevolence, and impossible equality, has been steadily growing."
Churchill then argues that this conspiratorial Spartacus-Weishaupt group has been the
mainspring of every subversive movement in the nineteenth century. While pointing out
that Zionism and Bolshevism are competing for the soul of the Jewish people, Churchill (in
1920) was preoccupied with the role of the Jew in the Bolshevik Revolution and the
existence of a worldwide Jewish conspiracy.
Another well-known author in the 1920s, Henry Wickham Steed describes in the second
volume of his Through 30 Years 1892-1922 (p. 302) how he attempted to bring the Jewishconspiracy
concept to the attention of Colonel Edward M. House and President Woodrow
Wilson. One day in March 1919 Wickham Steed called Colonel House and found him
disturbed over Steed's recent criticism of U.S. recognition of the Bolsheviks. Steed pointed
out to House that Wilson would be discredited among the many peoples and nations of
Europe and "insisted that, unknown to him, the prime movers were Jacob Schiff, Warburg
and other international financiers, who wished above all to bolster up the Jewish
Bolshevists in order to secure a field for German and Jewish exploitation of Russia."1
According to Steed, Colonel House argued for the establishment of economic relations with
the Soviet Union.
Probably the most superficially damning collection of documents on the Jewish conspiracy
is in the State Department Decimal File (861.00/5339). The central document is one entitled
"Bolshevism and Judaism," dated November 13, 1918. The text is in the form of a report,
which states that the revolution in Russia was engineered "in February 1916" and "it was
found that the following persons and firms were engaged in this destructive work":
The report goes on to assert that there can be no doubt that the Russian Revolution was
started and engineered by this group and that in April 1917
Jacob Schiff in fact made a public announcement and it was due to his financial
influence that the Russian revolution was successfully accomplished and in the
Spring 1917 Jacob Schitf started to finance Trotsky, a Jew, for the purpose of
accomplishing a social revolution in Russia.
The report contains other miscellaneous information about Max Warburg's financing of
Trotsky, the role of the Rheinish-Westphalian syndicate and Olof Aschberg of the Nya
Banken (Stockholm) together with Jivotovsky. The anonymous author (actually employed
by the U.S. War Trade Board)2 states that the links between these organizations and their
financing of the Bolshevik Revolution show how "the link between Jewish multimillionaires
and Jewish proletarians was forged." The report goes on to list a large number
of Bolsheviks who were also Jews and then describes the actions of Paul Warburg, Judus
Magnes, Kuhn, Loeb & Company, and Speyer & Company.
The report ends with a barb at "International Jewry" and places the argument into the
context of a Christian-Jewish conflict backed up by quotations from the Protocols of Zion.
Accompanying this report is a series of cables between the State Department in Washington
and the American embassy in London concerning the steps to be taken with these
documents:3
5399 Great Britain, TEL. 3253 i pm
October 16, 1919 In Confidential File
Secret for Winslow from Wright. Financial aid to Bolshevism & Bolshevik
Revolution in Russia from prominent Am. Jews: Jacob Schiff, Felix Warburg,
Otto Kahn, Mendell Schiff, Jerome Hanauer, Max Breitung & one of the
Guggenheims. Document re- in possession of Brit. police authorities from
French sources. Asks for any facts re-.
(1) Jacob Schiff Jew
(2) Kuhn, Loeb & Company Jewish Firm
Management: Jacob Schiff Jew
Felix Warburg Jew
Otto H. Kahn Jew
Mortimer L. Schiff Jew
Jerome J. Hanauer Jew
(3) Guggenheim Jew
(4) Max Breitung Jew
(5) Isaac Seligman Jew
* * * * *
Oct. 17 Great Britain TEL. 6084, noon r c-h 5399 Very secret. Wright from
Winslow. Financial aid to Bolshevik revolution in Russia from prominent Am.
Jews. No proof re- but investigating. Asks to urge Brit. authorities to suspend
publication at least until receipt of document by Dept.
* * * * *
Nov. 28 Great Britain TEL. 6223 R 5 pro. 5399
FOR WRIGHT. Document re financial aid to Bolsheviki by prominent
American jews. Reports — identified as French translation of a statement
originally prepared in English by Russian citizen in Am. etc. Seem most unwise
to give — the distinction of publicity.
It was agreed to suppress this material and the files conclude, "I think we have the whole
thing in cold storage."
Another document marked "Most Secret" is included with this batch of material. The
provenance of the document is unknown; it is perhaps FBI or military intelligence. It
reviews a translation of the Protocols of the Meetings of the Wise Men of Zion, and
concludes:
In this connection a letter was sent to Mr. W. enclosing a memorandum from us
with regard to certain information from the American Military Attache to the
effect that the British authorities had letters intercepted from various groups of
international Jews setting out a scheme for world dominion. Copies of this
material will be very useful to us.
This information was apparently developed and a later British intelligence report makes the
flat accusation:
SUMMARY: There is now definite evidence that Bolshevism is an
international movement controlled by Jews; communications are passing
between the leaders in America, France, Russia and England with a view to
concerted action....4
However, none of the above statements can be supported with hard empirical evidence. The
most significant information is contained in the paragraph to the effect that the British
authorities possessed "letters intercepted from various groups of international Jews setting
out a scheme for world dominion." If indeed such letters exist, then they would provide
support (or nonsupport) for a presently unsubstantiated hypothesis: to wit, that the
Bolshevik Revolution and other revolutions are the work of a worldwide Jewish conspiracy.
Moveover, when statements and assertions are not supported by hard evidence and where
attempts to unearth hard evidence lead in a circle back to the starting point — particularly
when everyone is quoting everyone else — then we must reject the story as spurious. There
is no concrete evidence that Jews were involved in the Bolshevik Revolution because they
were Jewish. There may indeed have been a higher proportion of Jews involved, but given
tsarist treatment of Jews, what else would we expect? There were probably many
Englishmen or persons of English origin in the American Revolution fighting the redcoats.
So what? Does that make the American Revolution an English conspiracy? Winston
Churchill's statement that Jews had a "very great role" in the Bolshevik Revolution is
supported only by distorted evidence. The list of Jews involved in the Bolshevik Revolution
must be weighed against lists of non-Jews involved in the revolution. When this scientific
procedure is adopted, the proportion of foreign Jewish Bolsheviks involved falls to less than
twenty percent of the total number of revolutionaries — and these Jews were mostly
deported, murdered, or sent to Siberia in the following years. Modern Russia has in fact
maintained tsarist anti-Semitism.
It is significant that documents in the State Department files confirm that the investment
banker Jacob Schiff, often cited as a source of funds for the Bolshevik Revolution, was in
fact against support of the Bolshevik regime.5 This position, as we shall see, was in direct
contrast to the Morgan-Rockefeller promotion of the Bolsheviks.
The persistence with which the Jewish-conspiracy myth has been pushed suggests that it
may well be a deliberate device to divert attention from the real issues and the real causes.
The evidence provided in this book suggests that the New York bankers who were also
Jewish had relatively minor roles in supporting the Bolsheviks, while the New York
bankers who were also Gentiles (Morgan, Rockefeller, Thompson) had major roles.
What better way to divert attention from the real operators than by the medieval bogeyman
of anti-Semitism?
Footnotes:
1See Appendix 3 for Schiff's actual role.
2The anonymous author was a Russian employed by the U.S. War Trade Board.
One of the three directors of the U.S. War Trade Board at this time was John
Foster Dulles.
3U.S. State Dept. Decimal File, 861.00/5399.
4Great Britain, Directorate of Intelligence, A Monthly Review of the Progress of
Revolutionary Movements Abroad, no. 9, July 16, 1913 (861.99/5067).
5See Appendix 3.
BACK
Appendix III
SELECTED DOCUMENTS FROM
GOVERNMENT FILES OF THE
UNITED STATES AND GREAT BRITAIN
Note: Some documents comprise several papers that form a related group.
DOCUMENT NO. 1 Cable from Ambassador Francis in Petrograd to U.S. State
Department and related letter from Secretary of State Robert Lansing to President Woodrow
Wilson (March 17, 1917)
DOCUMENT NO. 2 British Foreign Office document (October 1917) claiming Kerensky
was in the pay of the German government and aiding the Bolsheviks
DOCUMENT NO. 3 Jacob Schiff of Kuhn, Loeb & Company and his position on the
Kerensky and Bolshevik regimes (November 1918)
DOCUMENT NO. 4 Memorandum from William Boyce Thompson, director of the Federal
Reserve Bank of New York, to the British prime minister David Lloyd George (December
1917)
DOCUMENT NO. 5 Letter from Felix Frankfurter to Soviet agent Santeri Nuorteva (May
9, 1918)
DOCUMENT NO. 6 Personnel of the Soviet Bureau, New York, 1920; list from the New
York State Lusk Committee files
DOCUMENT NO. 7 Letter from National City Bank to the U.S. Treasury referring to
Ludwig Martens and Dr. Julius Hammer (April 15, 1919)
DOCUMENT NO. 8 Letter from Soviet agent William (Bill) Bobroff to Kenneth Durant
(August 3, 1920)
DOCUMENT NO. 9 Memo referring to a member of the J. P. Morgan firm and the British
director of propaganda Lord Northcliffe (April 13, 1918)
DOCUMENT NO. 10 State Department Memo (May 29, 1922) regarding General Electric
Co.
DOCUMENT NO. 1
Cable from Ambassador Francis in Petrograd to the Department of State in Washington,
D.C., dated March 14, 1917, and reporting the first stage of the Russian Revolution
(861.00/273).
Petrograd
Dated March 14, 1917,
Recd. 15th, 2:30 a.m.
Secretary of State,
Washington
1287. Unable to send a cablegram since the eleventh. Revolutionists have absolute control
in Petrograd and are making strenuous efforts to preserve order, which successful except in
rare instances. No cablegrams since your 1251 of the ninth, received March eleventh.
Provisional government organized under the authority of the Douma which refused to obey
the Emperor's order of the adjournment. Rodzianko, president of the Douma, issuing orders
over his own signature. Ministry reported to have resigned. Ministers found are taken before
the Douma, also many Russian officers and other high officials. Most if not all regiments
ordered to Petrograd have joined the revolutionists after arrival. American colony safe. No
knowledge of any injuries to American citizens.
FRANCIS,
American Ambassador
On receipt of the preceding cable, Robert Lansing, Secretary of State, made its contents
available to President Wilson (861.00/273):
PERSONAL AND CONFIDENTIAL
My Dear Mr. President:
I enclose to you a very important cablegram which has just come from Petrograd, and also a
clipping from the New York WORLD of this morning, in which a statement is made by
Signor Scialoia, Minister without portfolio in the Italian Cabinet, which is significant in
view of Mr. Francis' report. My own impression is that the Allies know of this matter and I
presume are favorable to the revolutionists since the Court party has been, throughout the
war, secretely pro-German.
Faithfully yours,
ROBERT LANSING
Enclosure:
The President,
The White House
COMMENT
The significant phrase in the Lansing-Wilson letter is "My own impression is that the Allies
know of this matter and I presume are favorable to the revolutionists since the Court party
has been, throughout the war, secretely pro-German." It will be recalled (chapter two) that
Ambassador Dodd claimed that Charles R. Crane, of Westinghouse and of Crane Co. in
New York and an adviser to President Wilson, was involved in this first revolution.
DOCUMENT NO. 2
Memorandum from Great Britain Foreign Office file FO 371/ 2999 (The War — Russia),
October 23, 1917, file no. 3743.
DOCUMENT
Personal (and) Secret.
Disquieting rumors have reached us from more than one source that Kerensky is m German
pay and that he and his government are doing their utmost to weaken (and) disorganize
Russia, so as to arrive at a situation when no other course but a separate peace would be
possible. Do you consider that there is any ground for such insinuations, and that the
government by refraining from any effective action are purposely allowing the Bolshevist
elements to grow stronger?
If it should be a question of bribery we might be able to compete successfully if it were
known how and through what agents it could be done, although it is not a pleasant thought.
COMMENT
Refers to information that Kerensky was in German pay.
DOCUMENT NO. 3
Consists of four parts:
(a) Cable from Ambassador Francis, April 27, 1917, in Petrograd to Washington, D.C.,
requesting transmission of a message from prominent Russian Jewish bankers to prominent
Jewish bankers in New York and requesting their subscription to the Kerensky Liberty Loan
(861.51/139).
(b) Reply from Louis Marshall (May 10, 1917) representing American Jews; he declined the
invitation while expressing support for the American Liberty Loan (861.51/143).
(c) Letter from Jacob Schiff of Kuhn, Loeb (November 25, 1918) to State Department (Mr.
Polk) relaying a message from Russian Jewish banker Kamenka calling for Allied help
against the Bolsheviks ("because Bolshevist government does not represent Russian
People").
(d) Cable from Kamenka relayed by Jacob Schiff.
DOCUMENTS
(a) Secretary of State
Washington.
1229, twenty-seventh.
Please deliver following to Jacob Schiff, Judge Brandies [sic], Professor Gottheil, Oscar
Strauss [sic], Rabbi Wise, Louis Marshall and Morgenthau:
"We Russian Jews always believed that liberation of Russia meant also our liberation.
Being deeply devoted to country we placed implicit trust temporary Government. We know
the unlimited economic power of Russia and her immense natural resources and the
emancipation we obtained will enable us to participate development country. We firmly
believe that victorious finish of the war owing help our allies and United States is near.
Temporary Government issuing now new public loan of freedom and we feel our national
duty support loan high vital for war and freedom. We are sure that Russia has an
unshakeable power of public credit and will easily bear a.11 necessary financial burden. We
formed special committee of Russian Jews for supporting loan consisting representatives
financial, industrial trading circles and leading public men.
We inform you here of and request our brethern beyong [sic] the seas to support freedom of
Russian which became now case humanity and world's civilization. We suggest you form
there special committee and let us know of steps you may take Jewish committee support
success loan of freedom. Boris Kamenka, Chairman, Baron Alexander Gunzburg, Henry
Silosberg."
FRANCIS
* * * * *
(b) Dear Mr. Secretary:
After reporting to our associates the result of the interview which you kindly granted to Mr.
Morgenthau, Mr. Straus and myself, in regard to the advisability of calling for subscriptions
to the Russian Freedom Loan as requested in the cablegram of Baron Gunzburg and Messrs.
Kamenka and Silosberg of Petrograd, which you recently communicated to us, we have
concluded to act strictly upon your advice. Several days ago we promised our friends at
Petrograd an early reply to their call for aid. We would therefore greatly appreciate the
forwarding of the following cablegram, provided its terms have your approval:
"Boris Kamenka,
Don Azov Bank, Petrograd.
Our State Department which we have consulted regards any present attempt
toward securing public subscriptions here for any foreign loans inadvisable; the
concentration of all efforts for the success of American war loans being
essential, thereby enabling our Government to supply funds to its allies at lower
interest rates than otherwise possible. Our energies to help the Russian cause
most effectively must therefore necessarily be directed to encouraging
subscriptions to American Liberty Loan. Schiff, Marshall, Straus, Morgenthau,
Wise, Gonheil."
You are of course at liberty to make any changes in the phraseology of this suggested
cablegram which you may deem desirable and which will indicate that our failure to
respond directly to the request that has come to us is due to our anxiety to make our
activities most efficient.
May I ask you to send me a copy of the cablegram as forwarded, with a memorandum of the
cost so that the Department may be promptly reimbursed.
I am, with great respect,
Faithfully yours,
[sgd.] Louis Marshall
The Secretary of State
Washington, D.C.
* * * * *
(c) Dear Mr. Polk:
Will you permit me to send you copy of a cablegram received this morning and which I
think, for regularity's sake, should be brought to the notice of the Secretary of State or your
good self, for such consideration as it might be thought well to give this.
Mr. Kamenka, the sender of this cablegram, is one of the leading men in Russia and has, I
am informed, been financial advisor both of the Prince Lvoff government and of the
Kerensky government. He is President of the Banque de Commerce de l'Azov Don of
Petrograd, one of the most important financial institutions of Russia, but had, likely, to
leave Russia with the advent of Lenin and his "comrades."
Let me take this opportunity to send sincere greetings to you and Mrs. Polk and to express
the hope that you are now in perfect shape again, and that Mrs. Polk and the children are in
good health.
Faithfully yours,
[sgd.] Jacob H. Schiff
Hon. Frank L. Polk
Counsellor of the State Dept.
Washington, D.C.
MM-Encl.
[Dated November 25, 1918]
* * * * *
(d) Translation:
The complete triumph of liberty and right furnishes me a new opportunity to repeat to you
my profound admiration for the noble American nation. Hope to see now quick progress on
the part of the Allies to help Russia in reestablishing order. Call your attention also to
pressing necessity of replacing in Ukraine enemy troops at the very moment of their
retirement in order to avoid Bolshevist devastation. Friendly intervention of Allies would be
greeted everywhere with enthusiasm and looked upon as democratic action, because
Bolshevist government does not represent Russian people. Wrote you September 19th.
Cordial greetings.
[sgd.] Kamenka
COMMENT
This is an important series because it refutes the story of a Jewish bank conspiracy behind
the Bolshevik Revolution. Clearly Jacob Schiff of Kuhn, Loeb was not interested in
supporting the Kerensky Liberty Loan and Schiff went to the trouble of drawing State
Department attention to Kamenka's pleas for Allied intervention against the Bolsheviks.
Obviously Schiff and fellow banker Kamenka, unlike J.P. Morgan and John D. Rockefeller,
were as unhappy about the Bolsheviks as they had been about the tsars.
DOCUMENT NO. 4
Description
Memorandum from William Boyce Thompson (director of the Federal Reserve Bank of
New York) to Lloyd George (prime minister of Great Britain), December 1917.
DOCUMENT
FIRST
The Russian situation is lost and Russia lies entirely open to unopposed German
exploitation unless a radical reversal of policy is at once undertaken by the Allies.
SECOND
Because of their shortsighted diplomacy, the Allies since the Revolution have accomplished
nothing beneficial, and have done considerable harm to their own interests.
THIRD
The Allied representatives in Petrograd have been lacking in sympathetic understanding of
the desire of the Russian people to attain democracy. Our representatives were first
connected officially with the Czar's regime. Naturally they have been influenced by that
environment.
FOURTH
Meanwhile, on the other hand, the Germans have conducted propaganda that has
undoubtedly aided them materially in destroying the Government, in wrecking the army and
in destroying trade and industry. If this continues unopposed it may result in the complete
exploitation of the great country by Germany against the Allies.
FIFTH
I base my opinion upon a careful and intimate study of the situation both outside and inside
official circles, during my stay in Petrograd between August 7 and November 29, 1917.
SIXTH
"What can be done to improve the situation of the Allies in Russia"?
The diplomatic personnel, both British and American, should be changed to one democratic
in spirit and capable of sustaining democratic sympathy.
There should be erected a powerful, unofficial committee, with headquarters in Petrograd,
to operate in the background, so to speak, the influence of which in matters of policy should
be recognized and accepted by the DIPLOMATIC, CONSULAR and MILITARY officials
of the Allies. Such committee should be so composed in personnel as to make it possible to
entrust to it wide discretionary powers. It would presumably undertake work in various
channels. The nature of which will become obvious as the task progress. es; it. would aim to
meet all new conditions as they might arise.
SEVENTH
It is impossible now to define at all completely the scope of this new Allied committee. I
can perhaps assist to a better understanding of its possible usefulness and service by making
a brief reference to the work which I started and which is now in the hands of Raymond
Robins, who is well and favorably known to Col. Buchan — a work which in the future will
undoubtedly have to be somewhat altered and added to in order to meet new conditions. My
work has been performed chiefly through a Russian "Committee on Civic Education" aided
by Madame Breshkovsky, the Grandmother of the Revolution. She was assisted by Dr.
David Soskice, the private secretary of the then Prime Minister Kerensky (now of London);
Nicholas Basil Tchaikovsky, at one time Chairman of the Peasants Co-operative Society,
and by other substantial social revolutionaries constituting the saving element of democracy
as between the extreme "Right" of the official and property-owning class, and the extreme
"Left" embodying the most radical elements of the socialistic parties. The aim of this
committee, as stated in a cable message from Madame Breshkovsky to President Wilson,
can be gathered from this quotation: "A widespread education is necessary to make Russia
an orderly democracy. We plan to bring this education to the soldier in the camp, to the
workman in the factory, to the peasant in the village." Those aiding in this work realized
that for centuries the masses had been under the heel of Autocracy which had given them
not protection but oppression; that a democratic form of government in Russian could be
maintained only BY THE DEFEAT OF THE GERMAN ARMY; BY THE OVERTHROW
OF GERMAN AUTOCRACY. Could free Russia, unprepared for great governmental
responsibilities, uneducated, untrained, be expected long to survive with imperial Germany
her next door neighbor? Certainly not. Democratic Russia would become speedily the
greatest war prize the world has even known.
The Committee designed to have an educational center in each regiment of the Russian
army, in the form of Soldiers' Clubs. These clubs were organized as rapidly as possible, and
lecturers were employed to address the soldiers. The lecturers were in reality teachers, and it
should be remembered that there is a percentage of 90 among the soldiers of Russia who
can neither read nor write. At the time of the Bolshevik outbreak many of these speakers
were in the field making a fine impression and obtaining excellent results. There were 250
in the city of Moscow alone. It was contemplated by the Committee to have at least 5000 of
these lecturers. We had under publication many newspapers of the "A B C" class, printing
matter in the simplest style, and were assisting about 100 more. These papers carried the
appeal for patriotism, unity and co-ordination into the homes of the workmen and the
peasants.
After the overthrow of the last Kerensky government we materially aided the dissemination
of the Bolshevik literature, distributing it through agents and by aeroplanes to the German
army. If the suggestion is permissible, it might be well to consider whether it would not be
desirable to have this same Bolshevik literature sent into Germany and Austria across the
West and Italian fronts.
EIGHTH
The presence of a small number of Allied troops in Petrograd would certainly have done
much to prevent the overthrow of the Kerensky government in November. I should like to
suggest for your consideration, if present conditions continue, the con

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