Bankers' Coup Creates Federal Reserve,
Morgan's Fed Finances World War I
excerpted from the book
Gods of Money
Wall Street and the Death of the
by F. William Engdahl
edition.engdahl, 2009, paperback
Money is nothing more and nothing less than a political creation,
a promise to pay between two or more parties, enforced, to a greater
or lesser degree by the power of a state. Ultimately money, especially
in a world where money is a pure paper commodity - fiat money
so-called - is a question of "confidence," confidence
ultimately in the "full faith and credit of the Government
of the United States of America." And that confidence has
been backed always, ultimately, by military power, political power,
power to buy or control the lawmakers and administrators - Presidents,
The edifice that has developed within the United States over the
course of the past one hundred and fifty years is one where an
inordinately powerful small circle of international bankers, the
powers of Wall Street and the money center banks allied to it,
has shaped the lives of the American public, prepared them for
wars far from American shores, literally controlling what people
buy and produce and most dangerously, even what they are allowed
American historian Carroll Quigley in his book 'Tragedy &
The aim of the international bankers was
nothing less than to create a world system of financial control
in private hands able to dominate the political system of each
country and the economy of the world as a whole. This system was
to be controlled in a feudalist fashion by the central banks of
the world acting in concert, by secret agreements arrived at in
at frequent private meetings and conferences.
a memo, discreetly circulated among England's wealthy aristocrats
and bankers, in 1862, in the early months of the American Civil
Slavery is likely to be abolished by the
war power and all chattel slavery abolished. This I and my European
friends are in favor of for slavery is but the owning of labor
and carries with it the care of the laborers, while the European
plan, led on by England, is that capital shall control labor
by controlling wages... It will not do to allow the greenback,
as it is called, to circulate as money any length of time, as
we can not control that. But we can control the bonds and through
them the bank issues.
If you control the oil, you control entire
nations. If you control the food, you control the people. If you
control the money, your control the entire world.
former Goldman Sachs Wall Street banker
[The culture that dominates Wall Street
is] completely money-obsessed... Money is the way you define your
success... It's an addiction.
The nation's first Treasury Secretary, Alexander Hamilton. In
1791 ... proposed the establishment of a Bank of the United States,
modeled on the privately-owned Bank of England.
... The Bank of the United States was
used to deposit US Government revenues from its tax collections
and to issue bank notes to increase the money supply as the Bank
saw fit. The Bank had a capital stock of $10 million, with 80%
of the bank being owned by private investors.
... The US Government in effect handed
over to private bankers control over its money and agreed to pay
those bankers interest to boot on money it borrowed.
... In 1816, Congress ... created the
second Bank of the United States, based on the same principles
as the First bank.
... The Second Bank of the United States
also permitted only 20% of its stock to be held by the Government,
with 80% of shares -- the control -- in private ownership.
... The new Bank thus had the power to
control the entire fiscal structure of the country.
... The Second Bank was controlled by
Nicholas Biddle, a wealthy Philadelphian and the bank's President
after 1822. He and his shareholders renamed it the Bank of the
... The dominant figure in the policy
council of the Bank of England at that time was Nathan M. Rothschild,
a close ally of US Bank President Nicholas L Biddle, and a major
shareholder in the Bank of the United States.
President Abraham Lincoln, in the 1860s during the course of the
Money is the creature of law and creation
of the original issue of money should be maintained as an exclusive
monopoly of National Government. Government possessing the power
to create and issue currency and credit as money and enjoying
the right to withdraw both currency and credit from circulation
by taxation and otherwise, heed not and should not borrow capital
at interest as the means of financing governmental work and public
The Government should create, issue, and
circulate all the currency and credit needed to satisfy the spending
power of the Government and the buying power of consumers. The
privilege of creating and issuing money is not only the supreme
prerogative of Government, but it is the Government's greatest
creative opportunity. By adoption of these principles, the long-felt
want for a uniform medium will be satisfied.
The taxpayers will be saved immense sums
in interest, discounts; and exchanges. The financing of all public
enterprise, the maintenance of stable government and ordered process,
and the conduct of f the Treasury will become matters of practical
administration. The people can and will be furnished with a currency
as safe as their own Government. Money will cease to be master
and become the servant of humanity.
President Abraham Lincoln used the powers of the Constitution
to convince Congress to authorize the issue of interest-free Legal
Tender Notes in the amount of $150 million ... backed by the Full
Faith and Credit of the United States Government.
Under Lincoln, the Legal Tender Notes
were issued by the US Treasury. The Notes paid no interest but
were to be used for "all debts public and private except
duties on imports and interest on the public debt. They came to
be nicknamed "Greenbacks" for their distinctive design
During the course of the Civil War, the
volume of these government-authorized Greenbacks in circulation
was increased to $450 million.
... The Greenbacks allowed Lincoln to
finance war costs independent of London or New York bankers who
were demanding an exorbitantly high interest rate - as high as
between 24% and even 36%. Lincoln's Greenbacks financed the war
and avoided entangling the Union in large war debts to the private
bankers, something that made him bitter enemies in London and
New York banking circles.
The Times of London - in an editorial clearly written on behalf
of the City of London bankers -
about President Lincoln's Greenback issuance
If that mischievous financial policy,
which had its origin in the North American Republic, should become
indurated down to a fixture, then that government will furnish
its own money without cost. It will pay off debts and be without
a debt. It will have all the money necessary to carry on its commerce.
It will become prosperous beyond precedent in the history of civilized
governments of the world. The brains and the wealth of all countries
will go to North America. That government must be destroyed or
it will destroy every monarchy on the globe.
On April 14, 1865, Abraham Lincoln was assassinated, shot down
in cold blood in a Washington theatre just five days after Confederate
General Robert E. Lee surrendered to Grant at Appomattox Court
... persuasive evidence suggested that
Lincoln's assassin, John Wilkes Booth, had been hired for the
job by Judah Benjamin, Treasurer of the Confederacy. Judah Benjamin
was a close associate of Benjamin Disraeli (1804-1881), British
Prime Minister and an intimate of the London Rothschilds.
... Lincoln was viewed as a threat to
the Rothschilds' established order of things, and his assassination
would be viewed as likely to weaken the United States, assisting
the Rothschilds and their New York banking allies to take over
its postwar economy.
In 1934 a Canadian attorney named Gerald G. McGeer obtained highly
sensitive information about the identity of John Wilkes Booth
... it showed that John Wilkes Booth was a mercenary working for
the international bankers.
Canadian attorney Gerald G. McGeer, in a speech to the Canadian
Parliament, reported in the Vancouver Sun, May 2, 1934
Abraham Lincoln, the murdered emancipator
of the slaves, was assassinated through the machinations of a
group representative of the International Bankers, who feared
the United States President's National Credit ambitions. There
was only one group in the world at that time who had any reason
to desire the death of Lincoln. They were the men opposed to his
national currency program and who had fought him throughout the
whole Civil War on his policy of Greenback currency.
What would-later come to be known as the American East Coast Establishment
had its origins in [an] internationalist banking-centered group
of powerful New York and East Coast families.
A syndicate of New York and London international banks pushed
through [Congress] the Specie Resumption Act in 1875.
... The Specie Resumption Act specified
that ... all Greenbacks in circulation could be redeemed for gold
specie. The Resumption Act was a major step towards bringing the
US economy under the control of London and New York international
bankers because they controlled the lions' share of the world's
monetary gold in private hands.
George 'Divine Right' Baer, JP Morgan railroad executive in 1902
The rights and interests of the laboring
man will be protected and cared for, not by the labor agitators,
but by the Christian men to whom God in His infinite wisdom has
given control of the property interests of the country.
Following a major economic Depression beginning in 1873 ... powerful
American industrial and banking families grouped around J.P. Morgan
and John D. Rockefeller concentrated the wealth and control of
American industry into their own hands.
... the Morgan and Rockefeller interests
deployed fraud, deceit, violence, and bribery - and they deliberately
manipulated financial panics. Each financial panic, brought about
through their calculated control of financial markets and banking
credit, allowed them and their closest allies to consolidate ever
more power into fewer and fewer hands. It was this concentration
of financial power within an elite few wealthy families that created
an American plutocracy or, more accurately, an American oligarchy.
Whether it was called an oligarchy or a plutocracy-government
by a wealthy "class" - the real power in the spectacular
rise of the American Century at the end of the 1890s did not rest
democratically in the hands of the majority of / citizens. It
did not even lie in the hands of a broad, educated and growing
middle class. Power, together with control over the nation's economy,
was being ruthlessly centralized in the hands of the wealthy few,
every bit as much as it had been in the days of Imperial Rome.
[In the late 1800s an American] oligarchy used its immense economic
power, often secretly and in coordinated fashion, to orchestrate
events that generated waves of bankruptcies and severe economic
depressions, even panics. The emerging American oligarchy cynically
corrupted and co-opted state legislatures, governors, US Congressmen,
judges, newspaper editors and even Presidents to serve their private
interests. Those interests were served by wars their captive press
helped trigger, wars from which that oligarchy profited while
thousands of young Americans perished for causes they knew nothing
By the 1880s two colossal groups had emerged within the United
States' wealthiest families. Initially they were bitter, hated
rivals. In the end they became allies, not out of love but out
of practicality, in one of the greatest concentrations of financial
and industrial power ever seen. The two families, Rockefeller
and Morgan, created a combination of wealth and control so powerful
in its influence over the economic and financial life of the United
States at the beginning of the 20th Century that Congressional
critics named it the Money Trust.
Following the American Civil War, right up to the end of the 19th
Century, the United States Treasury recognized silver as well
as gold as monetary metal. The monetary system was, in effect,
a bi-metallic system. Silver existed in abundance in the Western
However, the influential New York bank
syndicate, headed in the 1890s by the House of Morgan, took the
opposite position. They saw gold, especially in light of their
close ties to leading London banks, as their best road to dominant
power over the money supply of the United States. Supplies of
monetary gold were controlled by a handful of New York banks and
by the financial powers of the City of London - above all, by
the banking group of Lord Rothschild.
The New York bankers wanted no competition
from silver. Their banking allies in the City of London, the heart
of the world gold standard at the time, wanted America exclusively
on a gold standard where their influence would be vastly greater.
London's New York banking allies - J.P. Morgan, along with Rothschild's
US banking agent, August Belmont, and others in New York finance
- shrewdly used their London banking associates to control American
credit markets to their own exclusive advantage and to the distinct
disadvantage of the general American public.
The Panic of 1893 was manipulated by [J.P.] Morgan interests,
in collusion with August Belmont [the Rothschild's agent in the
US] to end the role of silver and to consolidate the gold of the
nation into the hands of the private New York banks. In the course
of manipulating several financial panics, the same bankers also
gained unprecedented control over the nation's steel and railroads
- the heart of the economy.
By the end of the 1890's [J.P.] Morgan and [John D.] Rockefeller
had become the giants of an increasingly powerful Money Trust
controlling American industry and government policy. There was
little room for the actual practice of democracy in their world.
Power was the commodity of their trade. It was the creation of
an American aristocracy of blood and money, every bit as elite
and exclusive as the titled nobility of Britain, Germany or France
- despite the Constitutional ban on titled nobility in America.
It was an oligarchy, a plutocracy in every sense of the word -
rule by the wealthiest in their self-interest.
Some 60 families - names like Rockefeller,
Morgan, Dodge, Mellon, Pratt, Harkness, Whitney, Duke, Harriman,
Carnegie, Vanderbilt, DuPont, Guggenheim, Astor, Lehman, Warburg,
Taft, Huntington, Baruch and Rosenwald formed a close network
of plutocratic wealth that manipulated, bribed, and bullied its
way to control the destiny of the United States. At the dawn of
the 20th Century, some sixty ultra-rich families, through dynastic
intermarriage and corporate, interconnected shareholdings, had
gained control of American industry and banking institutions.'
The list of American fortunes built on fraud, corruption and bribery
of government officials was long. It included the most famous
names in America, men who donated money to the nation's museums,
endowed its finest universities like Princeton, Yale, Harvard
with professorships, or had buildings and sometimes entire universities
named after them. In this way, they created the image of philanthropy
and "good works" while the reality was quite different.
A wave of mergers at the end of the 19th century engulfed most
of US manufacturing, resulting in a few hundred huge corporations
dominating the landscape. The biggest trust was Northern Securities
Corporation of New Jersey; it was the umbrella enclosing 112 corporations
worth $22 billion in assets and it was controlled by J.P. Morgan
and John D. Rockefeller.
Theodore Roosevelt proclaimed his "Square Deal" between
management and labor.
... The "Square Deal" established
the principle of Presidential intervention in certain strikes
and it made for good press, while [Theodore] Roosevelt, the Rough
Rider, continued his backroom deals with J.P. Morgan and company.
... Teddy Roosevelt ... was a shrewd politician
who sensed which way the winds of change in the country were blowing
and masterfully exploited it to retain Republican control of the
The 1900s would be misleadingly labeled the beginning of he "progressive
era" in American politics. In reality the oligarchic families
controlling the nation's wealth were beginning to become more
sophisticated about how they projected their image. None was more
shrewd in that endeavor than J.P. Morgan. No American business
giant of that day could hold a candle to the greatest fraudster
and swindler in American financial history at that time - Junius
The panic of 1893 was caused by a run on gold engineered by the
bankers themselves. The powerful winners that emerged from that
panic were [J.P.] Morgan, along with James Stillman, then head
of National City Bank in New York - the bank of Rockefeller's
Standard Oil Trust-and a handful of brokerage houses led by [August]
Belmont and Kuhn Loeb & Co.
... Standard Oil magnate John D. Rockefeller,
along with J.P. Morgan and his fellow Wall Street bankers, all
donated heavily to Republican William McKinley, who was elected
in 1896 in a sound defeat of silver advocate [William Jennings]
... McKinley's election as US President
in 1896 was the result of a secret meeting between the Rockefeller
and Morgan Wall Street factions... With McKinley, the presidency
was in a safe pair of hands as far as the interests of Morgan
and Rockefeller were concerned.
McKinley was re-elected in 1900 on a gold
standard platform. Thanks to the Panic of 1893, the bi-metallic
silver faction had been destroyed and the way was clear for Morgan
and a tight circle of New York and allied London banks to take
over the finances of the United States.
... By 1907, the Morgan and Rockefeller
financial groups were ready to launch their next financial attack
on the country's economy - what came to be called the Panic of
1907. This was to be the needed final push to their greatest coup
of all - passage in 1913 of the Federal Reserve Act in which a
largely unwitting US Congress turned control of its power to print
money over to a consortium of private bankers.
Passage in 1913 of the Federal Reserve Act - a largely unwitting
US Congress turned control of its power to print money over to
a consortium of private bankers.
The  panic had been carefully fed by false rumors deliberately
planted by [J.P.] Morgan cronies in newspapers they controlled,
including The New York Evening Sun and The New York Times.
... [Theodore] Roosevelt, who had campaigned
on the nickname "trust-buster," was deeply entrenched
with the Money Trust, especially to the Morgan interests. In October
1903 Roosevelt had invited J.P. Morgan to the White House for
a private discussion, and secretly corresponded with railroad
mogul E. H. Harriman over political appointments and campaign
The gullible [American] public was told of a "heroic and
courageous rescue of the nations' banking system by the selfless
J. Pierpont Morgan [Panic of 1907]. One of the few men who was
not convinced of the altruistic motives of Morgan, Rockefeller
and their Wall Street cronies was the pro-silver Democrat William
Jennings Bryan. Bryan declared, "Blame the unscrupulous financiers
who have piled up predatory .wealth and who exploit a whole nation
as high finance."
[J.P.] Morgan, [John D.] Rockefeller and the elite interests behind
the Money Trust ... were determined to use the panic [of 1907]
and the crisis atmosphere to move forward their most audacious
plan yet - capturing from the Federal Government of the United
States its power to coin print and control the supply of money.
Their plan was to create a national bank [Federal Reserve] in
the private hands of bankers J.P. Morgan, Rockefeller and friends.
Wisconsin Senator Robert La Follette in 1908
A group of financiers who withhold and
dispense prosperity, deliberately brought on the Panic [of 1907]
In 1908, a year after the creation of [Senator Nelson] Aldrich's
National Monetary Commission the most powerful bankers in America
met in highest secrecy to draw up plans for the greatest financial
and political coup d'etat in the history of the United States.
The plan was to rob from the US Congress its constitutionally
mandated powers to create and control money. The coup was to usurp
those Constitutional powers in order to serve private special
interests, even at the expense of the general welfare of the population
of the United States.
The men who drew up the plans to take
control of the nation's money were no ordinary bankers. They were
a breed apart within the American banking world.
They were primarily international bankers
who patterned themselves on their London cohorts. The bankers
who orchestrated "the money coup" included j. Pierpont
Morgan; German émigré Paul Warburg of the New York
private bank Kuhn Loeb & Co.; August Belmont & Co.; J.&
W. Seligman & Co.; Lee, Higginson & Co., and others. In
London these international bankers called themselves "merchant
bankers." In New York they preferred the title "investment
International bankers [are] not loyal to any fixed national space.
Their world [is] not a particular nation state, but wherever their
influence [can] alter events to their financial advantage.
... Control of money [is] the bankers'
strategic goal. Control of countries through control of their
central or national banks [is] essential to their power. Ultimately,
the elite cabal of international bankers [seeks] nothing less
than control of the entire world as their goal and purpose.
Henry Kissinger, 1970s
Control the money and you control the
Political manipulations, buying of politicians and judges, financing
of coups to eliminate an uncooperative sovereign [or] a head of
state, all to make way for governments more amenable to bankers'
Before the end of the 19th Century, unregulated investment banks,
which became the international banking firms such as J.P. Morgan,
Kuhn Loeb, Lazard Frères, Drexel and a small number of
others, were free to organize the largest financial dealings for
building of the national railroads and for financing the expansion
of large industry across state boundaries.
Because they were not regulated or restricted
to state boundaries, these banks made their fortunes by organizing
capital, largely from London and Paris banks, to finance the huge
costs of building America's railroads. These were America's international
In this elite world of international finance
at the end of the first decade of the 20th Century two giants,
one British and one American, stood well above the rest of the
international banking elite - Nathaniel Lord Rothschild's N.M.
Rothschild & Co. and J. Pierpont Morgan's J.P. Morgan &
The creation of the Federal Reserve System was designed to establish
control over the United States money system by [J.P.] Morgan and
a small circle of private, allied, international bankers in New
Under a system of fractional reserve lending, the value of a bank
or an entire banking system rests on one ethereal value-depositors'
confidence. The essence of fractional reserve banking drives banks
to lend to the maximum to maximize earnings until credit excess
leads to a market collapse. Because the bank lends funds it does
not own, the credit mechanism leads to creation of money ex nihilo
- out of nothing - through simple bookkeeping entries.
The election of Woodrow Wilson in 1912 was the work of a small
group of men who engineered a split in the Republican Party by
financing a third party, the Progressive Party, nicknamed the
"Bull Moose" party for its Presidential candidate former
Republican President Teddy Roosevelt.
It was [J.P.] Morgan and [John D.] Rockefeller money that put
'reform' Democrat Woodrow Wilson in the White House in 1912. Since
1898 when Wilson was president of . Princeton University, he had
been promoted into national politics by a powerful group of bankers.
... When the Morgan group decided that
[Woodrow] Wilson would be more likely to pass an essentially Republican
national bank act into law than would a Republican President,
they orchestrated a national media campaign around Wilson.
... On December 23, 1913, the day before
Christmas Eve, the Federal Reserve Act, also known as the Glass-Owen
Bill, was passed by Congress with scarcely a debate. The Republican
controlled Senate pushed the bill through when many members of
the US Congress were home for the Christmas holiday. Democratic
President Woodrow Wilson signed it into law one hour after it
was passed by the Congress.
... The key provision of the Federal Reserve
Act stipulated that decisions of the Federal Reserve were not
to be ratified by the President, or anyone else in the Executive
branch of the United States Government or the Congress. Instead,
buried in the legislation was the granting of total power over
the monetary policies of all US banks in effect to the privately-owned
New York Federal Reserve Bank and its directors -the most powerful
names on Wall Street of the Money Trust.
... The way was now clear for the Federal
Reserve and the private bankers controlling its policies to create
economic boom periods, mobilize the economy for wars, and to create
deflationary recessions and depression.
... The most essential use value inherent
in the new Federal Reserve was that it allowed private banks ...
to take risks never before imagined. Their ventures - no matter
how risky - were now backed by the "full faith and credit"
of the Government of the United States of America and its unwitting
In 1899 the British had fought a war with the aid of Cecil Rhodes,
a highly eccentric British mining magnate, in order to wrest control
of the vast gold riches of the Transvaal in South Africa away
from the Boer settlers. South African gold had given the city
of London a new lease on life.
... Rhodes was convinced that the gold
and minerals of South Africa would be sufficient to guarantee
that the City of London would be the world's unchallenged financial
center for decades to come.
[Cecil] Rhodes and [Alfred] Milner and an elite circle of Empire
strategists founded a secret society in 1910 whose purpose was
to revitalize a flagging British imperial spirit. The society,
many of whose members were graduates of All Souls College at Oxford
University, would secretly steer the strategic policies of the
British Empire up until the end of the Second World War. They
called their group the Round Table. a reference to King Arthur's
medieval table surrounded by his select knights.
The very rich avoided most taxation by protecting their wealth
in new tax-exempt 'charitable' foundations such as the Rockefeller
Foundation, created the same year as the income tax. The passage
of a broad-based tax on income would allow Wall Street to finance
the war [WWI] through issuance of US Treasury bonds, so-called
'Liberty Bonds' whose debt service would be assured by the taxpayer.
[J.P.] Morgan served as intermediary for His Majesty's Government
[Britain] in arranging purchases of munitions, arms, uniforms,
chemicals, in short all that would be needed to wage a modern
war in 1914. As Financial Agent for the British Government, J.P.
Morgan & Co. not only organized the financing of war purchases
and decided which companies would be the suppliers, but it also
set the prices at which the equipment would be supplied. Not surprisingly,
corporations directly in the Morgan and Rockefeller groups of
companies were the prime beneficiaries of Morgan's astute purchasing.
Thomas W. Lamont, a partner in J.P. Morgan, in a speech before
the American Academy of Political and Social Science in Philadelphia,
[W]e are turning from a debtor into a
creditor... We are piling up prodigious export trade balance ....
Many of our manufacturers and merchants have been doing a wonderful
business in articles relating to the war [WWI]. So heavy have
been the war orders running into the hundreds of millions of dollars,
that now their effect is beginning to spread to general business.
... [The] question of trade and financial
supremacy must be determined by several factors, a chief one of
which is the duration of the war. If...the war should come to
an end in the near future...we should probably find Germany, whose
export trade is now almost wholly cut off, swinging back into
keen competition very promptly.
... [Another factor that] is dependent
on the duration of the war, is as to whether we shall become lenders
to foreign nations upon a really large scale... Shall we become
lenders upon a really stupendous scale to these foreign governments?...
If the war continues long enough to encourage us to take such
a position, then inevitably we would become a creditor instead
of a debtor nation, and such a development, sooner or later, would
tend to bring about the dollar, instead of the pound sterling,
as the international basis of exchange.
In 1934 ... Senator Gerald Nye, a North Dakota Progressive Republican,
held hearings to investigate the role of the munitions industry
and finance in dragging the United States into the First World
Nye called the war industries "merchants
of death." He was especially critical of DuPont and other
large chemical and munitions dealers, claming that they were willing
to sacrifice American soldiers in order to make larger profits
From the time of its official entry into the European war in April
1917 until the signing of armistice with Germany on November 11,
1918, the United States Government lent the European Allied Power
... $9,386,311,178. Britain received the lion's share of $4,136,000,000.
France got $2,293,000,000.
The Full Faith and Credit of the United
States of America, backed by the new Federal Reserve, was being
mobilized to defeat Germany. The $9 billion, however, did not
go to London or Paris. Rather, it went directly to American industries,
most of which were tied to either the Morgan group, Kuhn-Loeb,
or the Rockefellers, to pay for war supplies to the Allies.
On April 13, 1917 Woodrow Wilson created the Committee on Public
Information (CPI) to promote the war [WWI] domestically and to
publicize American war aims abroad. Under the leadership of a
journalist crony of Wilson named George Creel, the CPI combined
advertising techniques with a sophisticated understanding of human
psychology. It marked the first time that a government disseminated
propaganda on such a large scale. It was in every sense a precursor
of the world depicted by George Orwell in his novel 1984.
Creel was joined at the CPI by one of
the shrewdest propagandists in American history, a young Viennese-born
naturalized American named Edward Bernays. Bernays brought with
him intimate knowledge of a new branch of human psychology which
had not yet been translated into English. He was the nephew and
literary agent in American for Austrian psychoanalyst Sigmund
Using Creel's muckraking journalism and
Bernays' Freudian psychology with its analysis of unconscious
needs and drives - the Government's Committee on Public Information
assaulted the unwitting American public with a calculated barrage
of lies, jingoistic epithets demonizing Germans, coupled with
horrifying images allegedly showing German soldiers bayoneting
Belgian babies, and other manufactured atrocities. These images
and symbols were fed continuously through the mainstream media
in order to whip the American public into a pro-war frenzy against
a nation, Kaiser Germany, which posed no actual threat to it.
... Creel and Bernays were joined at the
CPI by anglophile journalist and close Wilson adviser Walter Lippmann.
As a young Harvard graduate, Lippmann had been recruited to be
a link between Wall Street interests around Morgan and the British
secret society, the Round Table, which had been agitating England
to L prepare for war against Germany since its founding in 1909.
Lippmann's biweekly column in the New
York Herald Tribune was syndicated in hundreds of local newspapers
across America, making him one of the most influential pro-British
voices in the country. His columns were critical to winning the
allegiance of the educated middle class, a sector that would otherwise
tend to be neutral or against war.
But it was Bernays' unique, perverse genius
for fusing mob psychology and mass media techniques to manipulate
specific human emotions on a large scale. He had learned these
keys to influencing human behavior through the work of his uncle,
Applying those insights on a mass scale,
the Committee on Public Information achieved extraordinary results
within months, orchestrating the American public into a mass frenzy
in favor of war. With Bernays' genius in full play, the Freudian
view of human nature was combined with what became Madison Avenue
advertising techniques; the results were deployed by the CPI in
the service of war.
... CPI [Committee on Public Information]
propaganda consciously appealed to the emotions, not to the mind.
It was heavily influenced by Bernays' adaptations from Freud.
Emotional agitation was a favorite technique of the CPI strategists
who understood that any emotion may drained off and re-directed
into any activity by skillful manipulation.
Harold Lasswell, University of Chicago, after World War I
So great are the psychological resistances
to war in modern nations that every war must appear to be a war
of defense against a menacing murderous aggressor. There must
be no ambiguity about who the public is to hate.
Harold Lasswell, University of Chicago, after World War I
A handy rule for arousing hate [during
war] ... use an atrocity. It has been employed with unvarying
success in every conflict known to man.
In 1927, [Harold] Lasswell [University of Chicago] wrote a book
length study, Propaganda Technique in the World War, analyzing
the work of [George] Creel, [Walter] Lippmann and [Edward] Bernays
in detail. He shared their conviction that in a democracy, the
population could not be trusted to act as the elites wished and
must be emotionally manipulated to do so.
The extraordinary techniques of mass manipulation of opinion during
World War I greatly assisted the transformation of America into
a democracy - by outward appearance - ruled deceptively by a plutocratic
elite in its own self-interest.
Edward Bernays in his book 'Propaganda', 1928
It was ... the astounding success of propaganda
during the war that opened the eyes of the intelligent few to
the possibilities of regimenting the public mind.
Edward Bernays in his book 'Propaganda', 1928
The American government developed a technique
which ... was new... the manipulators of patriotic opinion made
use of the mental clichés and the emotional habits of the
public to produce mass reactions against the alleged atrocities,
the terror, and the tyranny of the enemy. It was only natural,
after the war ended, that intelligent persons should ask themselves
whether it was possible to apply a similar technique to the problems
By the time the Peace of Versailles was signed on June 28, 1919,
Great Britain and the British Empire - including India, Canada
and the Commonwealth nations - had spent a total of 11 billion
Pound Sterling, or $54 billion, on executing the war against the
German and allied Central Powers.
... The British people paid 36% of the
war costs in the form of taxes. The other 64% was borrowed, mainly
from the United States Government, through the agency of the Federal
... It was the end of the British Empire
as the banking metropolis of the world... England was choking
on her war debts. The public debt of the United States expanded
by some 2,500% during the war from $1 billion in 1913 to more
than $25 billion by the end of 1919. The debt was financed by
the sale of Government bonds via the Federal Reserve to the private
bond dealing banks led by J. P. Morgan, Kuhn, Loeb and Wall Street,
at a stunning profit to the latter.
The First World War changed the status of the United States ...
from that of a debtor nation to the world's greatest creditor
nation, a role filled formerly by England.
... One major aim of the backers of the
Federal Reserve - displacing London as world money market - had
The gold standard was still the basis
of foreign exchange. The small group of international bankers
- now led by New York banks - who owned the gold, controlled the
monetary system of Western nations.
Gods of Money