-VBIG KERS Gary Allen is author of None Dare Call It Conspiracy; The Rockefeller File; Kissinger; Jimmy Carter/Jimmy Carter; Ted Kennedy: In Over His Head. He is an AMERICAN OPINION Contributing Editor and also Editor of Insider Report.

• IN PART ONE of this article we vestment bankers have not been ad­ introduced the arcane and seldom­ vocates of laissez-faire capitalism discussed field of investment bank­ but have actively sought government­ ing, and described some of the acti­ protected markets. Especially for vities in which investment bankers themselves. engage . After outlining their histori­ The price of deregulation is great­ cal background we examined the im­ er competition. This would be trau­ portant investment houses of Mor­ matic in a field which has tradition­ gan Stanley and Kuhn, Loeb. We ally had little price competition. The noted with special care that such in- securities industry has for years

JANUARY, 1984 35 been heavily regulated by a maze of heavily involved in supporting the rules from the Securities and Ex­ cause of a New World Order and in change Commission. The dominant encouraging strategic trade with houses in the field like it that way, Communist governments. because the regulations serve to pro­ Although Lazard's assiduously tect their oligopoly from interlopers strives to keep its powerful wheel­ who might give customers more at­ ings and dealings secret from the tractive alternatives. As Fortune public, it is known that the firm 's magazine admits, "Like other busi­ transactions involve an international nessmen who have faced the specter network which includes several im­ of deregulation (and lower profits), portant Swiss banks. In this country, many investment bankers are claim­ Lazard's has been a powerful ma­ ing that a freer market for new nipulator behind such megacorps as offerings will hurt not just them, R.C.A., I.T.T., Warner-Lambert, and but everybody." Engelhard Corporation. Of course, if we had a truly free Lazard Brothers of London - the market, that might put an end to the British franchise of the Lazard hegemony of the old clique of in­ operation - has, since the First vestment banking firms. And while World War, been in control of the some relatively mild deregulation of enterprises of the Cowdray family, the securities and underwriting field whose $200 million empire has in­ may occur under the Reagan Admin­ cluded ownership of London's Finan­ istration, do not look for more than cial Times and a fifty percent in­ sym bolic gestures. These bankers terest in the Economist. At one time constitute a very powerful interest no fewer than five British peers sat group, and "cut-throat competition" on the board of Lazard Brothers, the would upset their applecart. dominant force among these being Let us now return to the Establish­ Lord Kindersley, who also sat on the ment-connected investment bankers. board of the . This time to the firms of Lazard Although considered by most to be Freres; Brown Brothers Harriman; a French company, Lazard Freres Salomon Brothers; Dillon, Read; and, was not founded in France but in Goldman, Sachs. the United States, and it started out not as a bank but as a dry-goods Lazard Freres business. Three brothers - Alexan­ More than a century old, Lazard dre, Simon, and Lazare Lazard ­ Freres & Company of New York has who had emigrated from France, set long been an important nexus in the up shop in New Orleans and opened web of Establishment power with for business there in 1848 with nine links to the Rothschilds of Europe, thousand dollars in capital (three the J.P. Morgan power complex in thousand from each brother). How­ America, and the Rhodes-Milner ever, in less than a year, the fledg­ Round Table conspirators of Britain. ling firm was wiped out in a fire Partners of Lazard Freres have long which destroyed a large portion of held directorships in major corpora­ the city. Undaunted by this ill for­ tions in the United States, Britain, tune, the Lazards packed up and France, and other countries. The moved to . The Lazard firm influences foreign and do­ brothers prospered greatly during the mestic policies of a number of gov­ Gold Rush, selling to swarms of ernments, and major partners are prospectors and settlers everything

36 AMERICAN OPINION Elite investment bankers move their part­ ners in and out of government at top levels and profit enormously from manipulation and In­ side information. These Establishment-con­ nected conspirators actually name our key Cabinet Secretaries, our Board, and the presidents of the major U.S. universities. from gold pans to woolen work cisco parent branch was sold to a clothes. Business was so good that group of businessmen in they soon sent for a cousin, Alexan­ 1908 and later became the Crocker dre Weill, to come to America as their National Bank, one of the largest bookkeeper and financial consultant. banking chains in the state. Weill's financial experience and It was Alexandre Weill who even­ European connections rapidly made tually brought in Eugene Meyer, an­ him the main force behind the Lazard other Frenchman, to work at Lazard's enterprise. Under his leadership, it on Wall Street. Eugene had immi­ didn't take the firm long to figure grated as a youth with his father out that the big money to be made in Gunther, who was U.S. representa­ San Francisco was not in provision­ tive of Lazard Freres of Paris. De­ ing miners, but in dealing in the termined to follow in his father's yellow metal itself. The Lazards footsteps, young Eugene studied in­ quickly shifted their operations from ternational banking at Hamburg, woolens to gold ingots, and began to Paris, Berlin, and London before re­ move into the foreign-exchange turning to America to join the Wall markets as a major participant. Fa­ Street firm . He subsequently be­ cilitating the financing of the flow came a partner with Establishment of goods from international trade Insider Bernard Baruch in Alaskan required businessmen, like Weill and mining ventures. And it was Baruch the Lazards, who could readily arrange who arranged to bring Eugene Meyer contracts in other languages and who to Washington, D.C ., to head a divi­ had important commercial connec­ sion of the War Industries Board. tions in Europe. Baruch and Meyer held virtually dic­ By 1852 the Lazard brothers had tatorial control over America's war­ opened up a branch operation in time industries during , Paris, Lazard Freres et Cie. With the and placed billions of dollars in war­ establishment of a London arm in production contracts with Establish­ 1877, and the opening of a New York ment friends and associates. office by Alexandre Weill three President , at the years later, the Lazard bankers be­ urging of Baruch and top White came the largest U.S . shippers of House Insider Edward Mandell gold to and from Europe, and soon House, put Meyer in charge of the assumed the leadership role in trad­ War Finance Corporation to oversee ing commercial bills . The San Fran- the selling of America's war debt.

JANUARY, 1984 37 This was like putting Gerry Studds in Establishment institutions for loot­ charge of a boys' camp. Meyer's ing and economic control. dealings in that capacity were shady, Moreover, this same Eugene to say the least. According to Con­ Meyer was directly involved in the gressman Louis McFadden, then creation of the Reconstruction Fi­ Chairman of the House Banking nance Corporation under the Hoover Committee: Administration. The RF.C. lent "I call your attention to House more than $13 billion to "stimulate" Report No. 1635, 68th Congress, 2nd commerce, industry, and agriculture Session, which reveals that at least during the , serving twenty-four million dollars in bonds as a key element in F.D.R's corpo­ were duplicated. Ten billion dollars' rate-state adventures. The Recon­ worth of bonds were surreptitiously struction Finance Corporation Act, destroyed. Our Committee on Bank­ which created the federal agency, ing and Currency found the records was authored by none other than Eu­ of the War Finance Corporation un­ gene Meyer, who was made chairman der Eugene Meyer extremely faulty. of the RF.C. when the Act was While the books were being brought passed. Using his powerful position before our committee by the people as keeper of that money tree, Meyer who were the custodians of them helped finance Insider-controlled and taken back to the Treasury at firms and war industries during night, the committee discovered that World War II. He was of course a alterations were being made in the member of the Council on Foreign permanent records." Relations, the elitist gang which has Using money made from his for years controlled U.S. foreign World War I manipulations, Eugene policy. Meyer bought By the 1920s, Alexandre Weill's in 1933 in order to support the cor­ son, David David-Weill, became yet porate socialism of F.D.R's New another important agent of Lazard Deal. Eugene also wanted to squelch Freres, Although raised in the United investigations into how Meyer and his States, David-Weill devoted himself partners had helped maneuver the primarily to operations in France. As United States into the war as a pre­ a director of the Banque de France, liminary to helping themselves to he sat at the pinnacle of the French government contracts. Significant­ banking establishment. Along with ly, Meyer's first move as owner of Andre Lazard - the last of the the Post was to fire the paper's Lazards at the bank - he ran the edi tor for refusing editorially to Paris company of the Lazard com­ back U.S. recognition and support of plex. In 1925 David David-Weill the Soviet Union .* asked a young stock-market trader Eugene Meyer, who held impor­ by the name of Andre Meyer to join tant political positions in every U.S. the company. This Meyer would rise Administration from Wilson to Tru­ to become the firm's most powerful man, was also chairman of the Fed­ boss. eral Reserve Board and the first As an aggressive securities trader president of the - key for the banking firm of Baur & Sons in Paris, young Andre had 'Eugene's editorial slant is carried on by the earned a substantial amount of present publ isher of the Washin gton Post , money by speculating in the infla­ Katharine Meyer Graham, his dau ghter. tion-ravaged French currency during

38 AMERICAN OPINION World War L* The trading skills and family to the United States, and by business connections accumulated by January 1944 Meyer had replaced Meyer during this period brought him Frank Altschul] as the leader of to the attention of Lazard Freres, Lazard Freres on 120 Broad Street, in By 1927 he was a full partner of New York City. Until his death in Lazard Freres et Cie. Proving him­ 1979, Meyer was the boss at Lazard's. self to be a successful deal maker as When Andre Meyer took charge well as a canny securities trader, the of Lazard Freres, he made sweeping young Frenchman rose quickly in the changes almost immediately. By 1945 field of investment banking. all the old Lazard partners were gone, Andre Meyer had married Bella and by 1948 Meyer had closed Lazard 's Lehman of the influential banking Boston, Philadelphia, and Chicago family by the time he left France offices. He disliked the branch of­ in 1940 to escape the impending Nazi fices because he thought they were occupation. He immigrated with his inefficient and because they were largely in the retail stock-brokerage 'The French Govern ment had run up enor­ business, which meant that they mous Budget deficits during the war. To fi­ dealt with the general public. Andre nance that war it had borrowed tremendous wanted Lazard Freres to be what the sums of money from the public, from the French firm was: a very private, Allies, and from the international bankers. It also resorted to currency inflatio n as a hidden very elite house whose customers tax. The result was rampant price inflation in were corporations, central banks, fi­ which the Fren ch wholesale price index more nancial institutions, and a select than quadrupled between 1913 and 1918, while group of powerful individuals in the nation's foreign debt mushroomed to the politics and business. back-breaking level of 43 billion francs. With both the national government and the war con­ In addition to jettisoning the lesser tractors utterly dependent on them for fi­ branches, Meyer further reduced na ncing , the intern ational bankers found overhead for the firm by moving it business booming. Considerable money was from 120 Broad Street to more made trading all the governme nt obligations, LO.U.s, and corporate paper. cramped quarters on the twelfth and j Fra nk Altschul, a member in good st anding thirteenth floors of 44 Wall Street. of the "Our Crowd" elite of Germa n-Jewish It was only much later, in 1969, that banking, ran Lazard Freres of New York un ­ the miserly Andre Meyer moved the til he was forced to retire on Decembe r 31, Lazard offices uptown to the high­ 1943.His father, Charl es, had been with the Lazards in the old San Francisco enterprise, rise building at One Rockefeller moving to New York in 1901 to work in the of­ Plaza and into the space previously fice at 120 Broad Street. The Altschuls soon occupied by General Dynamics. becam e connected by marri age with the Leh­ The canny Meyer built the power­ mans. Frank Altschul 's sister Edith marri ed Herbert Lehman, who would become governor ful Lazard Freres into an even of New York, while Frank himself marr ied greater financial megalith. His Herbert Lehm an 's niece, Helen Lehman Good­ strategy involved crafting an elitist hart. After graduating from Yale in 1908, image for .t he firm and for him­ Frank had joined Lazard Freres, taking his self. As writer Cary Reich observes father's place as a partner in 1916 when the latt er retired. Altschul rose to be one of Wall in Financi er, his recently published St reet's most important banking Insid ers, serv­ biography of Andre Meyer: "Delib­ ing on the governing board of the New York erately, Meyer created an aura of Stock Exchange and becoming a director of mystery for himself, and of a cer­ Chase Nat ional, the Rockefeller family bank. Frank Altschul was also, of course, a mem­ tain snobbishness for his firm ; the ber of the powerful and secretive Council on less accessible they were, he correctly Foreign Relations. reasoned, the more the world would

JAN UARY, 1984 39 seek them out and prize their advice. ily. No matter how wealthy he be­ He built a firm that was of, by, and came - and he became very wealthy for the elite. The general public's - he could not stop plotting and business was no more welcome at scheming to build an even bigger Lazard than it was at J.P. Morgan & fortune. He would allow nothing and Company." no one to get in his way . . . ." Indeed, the owl-faced French­ For those with immense wealth man was a natural conspirator who and power, however, Andre Meyer had a formidable passion for secre­ took great pains, through cynical cal­ cy. Reich tells us: "Andre Meyer took culation, to make a favorable im­ secretiveness - within certain limits, pression. On the thirty-third floor not an undesirable trait in a banker of New York's Carlyle Hotel, in his - to grand, almost pathological, ex­ two-bedroom suite crammed with tremes. He arranged his personal fi­ rare Louis XIV furniture and dec­ nancial affairs in such a byzantine, orated with an impressive collection convoluted way that no one (with the of original Monets, Picassos, and possible exception of his son, in Chagalls, the lord of Lazard's re­ whom he confided) could piece to­ ceived a perpetual stream of visiting gether the full extent of his activ­ dignitaries from all over the world . ities. One Lazard partner might know Undoubtedly the world's most about his involvement in oil drilling, prolific corporate marriage broker, another in real estate, but none saw Andre Meyer became the Big Man in the complete picture. Nearly all his Wall Street investment banking. In business was transacted in person or 1968, Fortune called him "the most over the telephone; he was careful important investment banker in the not to leave a trail of memos and Western world ." His nervous energy documents behind that would, after and powerful personality brought his death, reveal the secrets he had him into contact with world leaders guarded so zealously in his lifetime." and extremely profitable business But all of this calculation, self-dis­ deals. He was by now an integral part cipline, and discretion also served to of the Establishment, pushing the conceal the more unsavory aspects of right buttons and playing ball with Meyer's personality. Those who knew the mandarins. Again quoting writer him best admit that he was continually Cary Reich: beset by paranoia, hypochondria, and "As senior partner of the very a tendency toward uncontrollable private firm of Lazard Freres, An­ rages. Wealth and powerful personal dre Meyer spun a web of wealth and connections were of first impor­ influence over two continents. Hav" tance to Meyer, as they symbolized ing built a personal fortune reckoned his success and served as a gauge of in the hundreds of millions of dol­ his personal worth. He had nothing lars, he was revered as a twentieth­ but contempt for those without money century Midas, a man with an awe­ and influence, shunning them dis­ some gift for financial success. His dainfully. Biographer Cary Reich advice on everything from personal sums up Andre Meyer this way: investments to politics was eagerly "He was greedy, vindictive, dom­ sought by the great and the near­ ineering, and often quite sadistic. great, who came trooping to the His constant browbeating and temper Carlyle like supplicants to a shrine. tantrums made life unbearable for He was a friend, confidant, and his business associates and his fam- escort of Jackie Kennedy, and a val-

JA N UARY, 1984 41 ued advisor to the rest of the Ken­ from Illinois; Jean Monnet, the pri­ nedy family. Lyndon Johnson would mary architect of the European often seek his counsel, as would Common Market; French president Georges Pompidou. of the Washington Post and News­ He could count among his intimates week; and, Jane Engelhard, wife of numerous other statesmen, politi­ the flamboyant heir to the huge pre­ cians, and tycoons, including David cious-metals empire.* Rockefeller, RCA chief David Sar­ All these and many other cultivated noff, CBS chairman William Paley, friendships were immeasurably use­ and Fiat king Giovanni Agnelli." ful to Meyer. Some directly added to Meyer's friendships and associa­ his own personal wealth or to the tions among the mighty indicate his business success of Lazard; others, importance. He once told the New while not bringing him any direct Yorker how close a friend he was of business, provided something equally David Rockefeller, saying: "There's precious: the kind of inside infor­ nothing on earth I wouldn't do for mation and advance knowledge that David." During their thirty-year as­ produce lucrative business deals and sociation, Andre and David joined in personal leverage. Says Katharine many business ventures. Among Graham, who often chatted with these were the financing of L'En­ Meyer over coffee at his Carlyle fant Plaza in Washington and the apartment, "The thing about Andre Embarcadero Center in San Francis­ was that he was a tremendously co. They also worked together to es­ gifted high-level gossip. He tended tablish "development banks" in Iran to be very interested in people: who is and the Ivory Coast in order to lubri­ doing what to whom; is he good or cate trade deals, ultimately under­ isn't he good? I mean, he would grill written by American taxpayers me about that kind of thing." through such institutions as the Here was the quintessential invest­ World Bank and the International ment banker, a little man with a Monetary Fund. They formed a squeaky French accent and an over­ syndicate together to obtain mineral powering drive to dominate the af­ concessions from Tanzania by mak­ fairs of those around him; a born ing deals with the Marxist Govern­ conspirator with a persistent ability ment there. Along with William to amass great sums of wealth in Paley, John Hay Whitney (of the old relatively short periods. Ever suspi­ Yankee banking family), and David's cious that somebody might not be brother Nelson, they purchased radi­ totally loyal to him, might be holding cal Gertrude Stein's art collection. 'Charles Engelhard, chairman of Engelhard Rockefeller remarked of Andre, Industries - the world's largest refiner and "Mr. Meyer is the most remarkable fabricator of gold and silver - was reported­ man on Wall Street, a real genius," ly the inspiration for Goldfinger, Ian Flem­ and David made Lazard Freres the ing's James Bond nemesis. Amused by this, Engelhard for a time referred to a stewardess prime investment house for Chase on his company airplane as Pussy Galore, an­ Manhattan. other Fleming character. It was Andre Meyer, In addition to the prominent names along with fellow Wall Streeter Ferdinand already mentioned above, Andre Eberstadt, who conceived the idea of forging Meyer's close associates and cronies a global alliance composed of Engelhard In­ dustries, Philipp Brothers (an international also included Jacob Javits, the Left­ metals-trading company), Minerals & Chem­ wing Senator from New York; icals Corporation, and Harry Oppenheimer's Charles Percy, the Leftwing Senator Anglo-American mining empire.

JANUARY, 1984 43 back some piece of information, Looking back on those early days at might betray him in some way, this Lazard, Rohatyn now recalls: neurotic Godfather of Wall Street "I genuinely liked Andre. I could attempted to keep tabs on everyone talk to him . And I think I understood of importance through his vast in­ him . I think we looked at the world in formation-gathering network and many similar ways; I mean, Andre source s of gossip. used to say, 'Well , if I weren 't so Andre Meyer's son, Philippe, re­ rich , I'd be a socialist,' and I suppose sisted his father's demands that he I feel that way. We both always felt go into high finance, and became a like outsiders in that respect; we were physicist instead. So Meyer found both refugees, we were both Jewish, another young protege to follow in and we both felt outside the Ameri ­ his footsteps as heir to the Lazard can Establishment and power struc­ leadership. His name is Felix Rohatyn. ture." By 1973, Business Week magazine Today, as a member of the Coun ­ was 'touting Felix, then forty-four, cil on Foreign Relations and an ac­ as a major comer in the financial tive participant in forging public world, calling him "remarkable" and policy, it would be difficult for "dynamic," and featuring his pic­ Felix Rohatyn to deny that he is now ture on the cover. a member of that Establishment As a leading partner in Lazard power structure. Although Rohatyn Freres, Rohatyn had established a was the closest thing to Andre track record as a demon negotiator, a Meyer's alter ego, he is far more mas ter at corporate mergers, and a oriented toward publicity and politics behind-the-scenes manipulator in the than was his mentor. cla ssic tradition of international It is noteworthy that Felix banking. But he did not rise to this Rohatyn took as his wife the daugh­ exalted position by the route of an ter of Clarence K. Strait, president Horatio Alger. of t he Federal Union from 1939 Born in 1928 into a prosperous and an executive member of t he .Polish-Jewish banking family resid­ Atlantic Union Comm ittee . They are ing in Vienna, young Felix had come now separated. A leading "Liberal" to New York with his family in 1942. Democrat, Roha tyn early became a He went to Manhattan high school, friend of Doro thy Schiff, of t he where he learned English, and then international banking family of entered Middlebury College in Ver­ Kuhn, Loeb, who was long owner of mont because (as he now says) " I the N ew York Post, a major organ of liked to ski." Rohatyn's luck changed the Left. He was a political fund­ dramatically after his mother di­ raiser for such statists as Sena­ vorced his father and married Henry tors Edmund Muskie and Charles Plessner, a partner in the Paris Percy. branch of Lazard Freres, Thanks to Rohatyn earned the appellation Plessner's influence, Felix landed a "Felix the Fixer" in the corporate summer job at the New York office world when he made a big splash by of Lazard Freres while still attend­ serving as the negotiator for I.T.T. ing college. There he came in contact in the early 1970s when that mega­ with Andre Meyer and, despite the corp was under attack by the Anti ­ great differen ce in their ages, they trust Division of the Justi ce Depart­ became very close, with Meyer treat­ ment. Using his connections and ing Rohatyn as an "adopted son." negotiating abilit ies, Felix got the

44 AMERICAN OPINION government to drop the antitrust Business and Big Government with suits through an out -of-court settle­ passion and eloquence. As economist ment favorable to LT.T., quickly Murray Rothbard ha s remarked, followed by a $400,000 contribution " His [apparen t] success there [in the from I.T.T. to the Republican Party N ew York City bailout] seems to have for its 1972 National Convention. completed the flowering of Felix as Mr. Rohatyn made even bigger an economic philosopher on a grand news when he engineered the "bail­ national scale. For if some federa l out" of the bankrupt City of New aid could save the bankers, municipa l York. The capital of Welfare Stat­ officials, and bondholders of New ism, t he Big Apple was full of York, why couldn't still more federal worms and rotten to the core. Enor­ aid produce more such good deed s? mous Welfare spending had contrib­ Rohatyn had discovered the soul­ uted to megadeficits, and growing satisfying humanitarian expansive­ fina ncial woes began to t hreaten ness of post- liberalism ." t hose (including some of t he big Felix Rohatyn is the Corporate bankers) who held New York deb t Socialist par excellence. Why use pri­ securities. vate capital when you can manipu­ In 1975 Felix set up the Municipal late government and have the Ameri ­ Assistance Corporation (known as can taxpayers pick up the tab? "Big M.A.C." ), and promptly as­ Not surprisingly, Rohatyn was also sumed the role of chairman. This a devout supporter of the Chrysler was not a private corporation, but an bailout. These days he is goin g arm of the State of New York. A around pushing for a new "national partial default was engineered by industrial policy" as the next stage the Wizard of Lazard. It was not of collectivizing and cartelizing calle d a default, of course, but America. After the Chrysler bailout, euphemistically referred to as a according to Mr. Rohatyn, it would "stretchout" from short-term deb t be unjust discrimination for the gov­ into long-term municipal bonds. The ernment to refuse to bailout any credit and prestige of the state gov­ large corporation in trouble. ernment of New York was placed be­ As the means for accomplishing hind the collapsing credi t of New these bailouts, and the alleged re­ York City. As organizer and chairman vitalization of America's economy of Big M.A.C., Rohatyn managed to and urban areas, Felix has called for get the reluctant Ford Administra­ a massive "new domestic Marshall tion to pour in the needed infusion Plan" to operate chiefly through a of federal tax funds to save the " National Industrial Development whole precarious package.* The scheme is working for the "In March of 1979, New York's M.A.C. an­ time being - but eventually both the nounced as its finan cial consulta nt - for an city and state will reap the whirlwind. annual fee of a quarter of a million dollars By then, Felix the Cat will be in­ - the investment banking firm of Lazard Freres. No other firms had been considered volved with still grander bailout for the selecti on. At thi s point , New York's problems. populist Mayor Koch stepped in and denounced Indeed, Rohatyn is now being built the choice as a " moral conflict of interest" up as the leading national corporate - whereupon Lazard withd rew in a huff of indignation, loftily professing to be unable spokesman - a sort of Big Business­ to comprehend why such an altruistic act of man-As-Philosopher - who em­ public service should subject the firm to braces the partnership between Big "needless abu se."

JANUARY, 1984 45 Bank" - a modern, souped-up ver­ such banking operators, Felix sion of the old Hoover-F.D.R Re­ Rohatyn's vision of control goes be­ construction Finance Corporation yond this to global collectivism. That which was run by Eugene Meyer, that was revealed in a couple of think earlier Lazard partner and manipu­ pieces he had published in the New lator. As we have noted, the old York Review Of Books for December RF.C. used tax money for massive 4, 1980, and March 5, 1981. These handouts to shaky corporations and articles launched him as a leading their banking creditors, particularly spokesman for the Establishment's the Establishment firms of New manifest program of more govern­ York investment banking. The new ment and less freedom. There he agency would do the same thing, but echoed the familiar line that the on a vaster scale. As is usual with crises our nation faces are so great socialist schemes, this one would ­ that nothing less than a global solu­ under the guise of "developing in­ tion will suffice . Meanwhile, a vast dustry" and "revitalizing" U.S . cities network of taxes and subsidies will - be used by special-interest parti­ have to be adopted by the U.S. Gov­ sans to feather their own nests at ernment to revitalize America. He taxpayer expense. emphasizes that economic stimula­ That National Industrial Devel­ tion must function through govern­ opment Bank would be a crucially im­ ment subsidies rather than via tax portant step toward general socialism credits or tax cuts because the in America. And, of course, socialism former method leaves full control is the royal road to monopoly power in the hands of the government. He for the politically adept super-rich . would arrest inflation by a "tempo­ Would-be monopolists desire control rary" wage-price freeze followed by above all else - and control is the something called a "tough incomes name of the game under socialism. policy." In ordinary English, this Which is why Rohatyn and his bank­ means he wants tightly to control ing Insiders are pushing this. wages while allowing prices to in­ The new RF.C. would be crease - a perfect illustration of staffed by "professionals," Felix the "humanitarian" values of the Rohatyn says, and run according to Left . "an overall plan." It would be fed­ Rohatyn admits that his plan for erally funded to the tune of $5 collectivizing America will be met billion (plus another $10 billion in with "cries of elitism" and "big­ guaranteed U.S . bonds of the kind business bailout," but he feels such Felix and his cronies are all too resistance can and will be overcome familiar with, and would be free to when things get bad enough. He make any form of investment in knows that only a major crisis can put any corporation it chose: equity, his socialistic program into effect . preferred stock, loans, loan guaran­ Just as the created Depression of the tees - more business for the invest­ 1930s was used to justify the imposi ­ ment banking fraternity. The new tion of New Deal collectivism, Felix RF.C. must also, says Rohatyn, expects a coming crisis to scare the have enough power "to do unpleasant American people into accepting sub­ but necessary things, such as chang­ stantially more of the same. "When ing the board of a company it invests a crisis of sufficient magnitude in, and replacing management." creates the possibility for funda­ But, as is so often the case with mental change," Rohatyn gloats, "it

JANUARY, 1984 47 will carry with it enough of a popular riman also has offices in Boston (40 majority for action so that a presi­ Water Street) and Philadelphia (1531 dent with a real vision of the future Walnut Street), and operations in will be able to put his program Chicago, St. Louis, , Dal­ through." las, and on Grand Cayman. As we leave Felix Rohatyn he is Established in 1818, the invest­ anxiously searching the horizon for ment banking firm of Brown Broth­ another Hitler, Mussolini, or Stalin. ers merged with Harriman Brothers & We can be sure that when the next Company in 1931. The latter was an Man on a White Horse - the pur­ international banking firm .set up ported humanitarian supported by a by W. Averell Harriman and his guillotine - does emerge on the brother, Roland, direct heirs of the American scene, Felix of Lazard great railroad and shipping empire Freres will be at his right hand. of their father, E.H. Harriman. Other important partners of Both of the Harriman brothers Lazard Freres have included C.R. had gone to Yale, where they were Smith, former Secretary of Com­ tapped as members of Skull And merce; Peter A. Lewis, former assis­ Bones, Averell in 1913 and Roland in tant director of the U.S. Bureau of 1917. Skull And Bones is an under­ the Budget; David B. Dillard, of the graduate secret society at Yale whose Washington-based International Fi­ members each year induct fifteen nance Corporation; Eugene R. Black of their classmates deemed likeliest Jr., son of the former president of to succeed. This secret fraternity is a the World Bank; and, Eugene Black key recruiting organization for what Sr., who was also special consultant we may call the Yankee Insiders, a to the Secretary-General of the network of pull and connections United Nations and served as a direc­ composed of descendants of Ameri­ tor for important corporations in­ ca's most successful early settlers cluding the New York Times Inc. The and the sons of newer wealth judged senior Black was also a member of worthy to enter the fold. Although the board of the Atlantic Council Skull And Bones evidently has Ger­ (which promotes World Govern­ man origins, it also seems to be the ment), as well as having been a trustee American counterpart of a similar of the Ford Foundation, a director group active at All Souls College at of Chase Manhattan Bank, a trustee Oxford. of the Brookings Institution, and a By virtue of their father's im­ member of the Establishment's se­ mense wealth, the Harriman brothers cretive Pilgrim Society. You recog­ were members of the "W.A.S.P. Es­ nize the pattern. tablishment," being reared as Amer­ ican aristocrats, playing polo and Brown Brothers Harriman croquet with the Morgans, Whitneys, Very much a major fixture of the Vanderbilts, and Rockefellers. Aver­ Establishment Insiders of big bank­ ell Harriman's first wife was Marie ing is the firm of Brown Brothers Norton Whitney. Today, at the age Harriman, heart of the Harriman of ninety-two, he is still both a financial empire which played a member in good standing of the crucial role in building up the econ­ Council on Foreign Relations and a omy of the Soviet Union. Its head­ powerful Establishment Insider. quarters are at 59 Wall Street in New This can be seen in the fact that it York City, but Brown Brothers Har- was W. Averell Harriman who was

48 AMERICAN OPINION the first American to go to Moscow ship, Brown Brothers Harriman is and talk privately with Yuri An­ one of the most secret of firms in a dropov following the death of business community which is known Brezhnev. You can be sure the for­ for its low profile. Antony Sutton mer head of the K.G.B. is well aware points out that, "Finally, because of who pulls the strings in the Amer­ Brown Brothers Harriman is a private ican Establishment. banking firm, it has relatively no In his recently published book, An government supervision and does not Introduction To The Order, research­ publish an annual report. In other er Antony Sutton writes that the words, we know NOTHING about its membership of the Harriman broth­ operations - at least we know noth­ ers in Skull And Bones is a "good ing from Brown Brothers Harriman example of how old-line families in sources." The Order absorbed new-wealth Be that as it may, we do know a families, although as history has un­ good deal about the record of the folded it may be that Harriman and man who has had the most impact on his fellow investment bankers have the firm's policy. Averell Harri­ dominated the direction of The Or­ man's ties with Soviet Communism der in the past few decades." go all the way back to the 1920s, when This would seem to make the locus W.A. Harriman & Company granted of Establishment control the inter­ loans to Bolshevik leader V.1. Lenin national bankers themselves. If so, which helped to consolidate Commu­ Brown Brothers is an excellent exam­ nist power over Russia during those ple of how the game is played. Its early precarious years . In 1928, Harri­ partners include not only members man's investment banking firm or­ of the C.F.R., but also a surprising ganized Western engineering ef­ number of members of Skull And forts which built heavy industry for Bones (The Order). And this was true the Soviet Union. Moreover, the of Brown Brothers even before it firm furnished securities for all merged with the Harriman enter­ the Soviet purchases in the United prise. Commenting further on the States and collected all the commis­ relationship between Brown Brothers sions as the middleman. Harriman and the Yale group, Tony As a little sweetener the Soviet Sutton observes: Government offered a concession "By the 1970s the relatively un­ for the development of manganese known private international banking mining and Harriman seized it. The firm of Brown Brothers Harriman, Russian Revolution had brought pro­ with assets of about one-half billion duction to a standstill, the economy dollars, had taken in so many of 'the was in utter disarray, and the Com­ Brotherhood' that out of 26 individ­ munists desperately needed capital ual partners, no fewer than 9 were from the West if they were to avoid members of The Order. We don't sinking into a well-deserved oblivion . know of any greater concentration Harriman was their first really big of members. Western partner. Joseph Finder ex­ "And to make it more interesting, plains the situation as follows in his Prescott Bush, father of Vice Pres­ excellent new book Red Carpet : ident George Bush (both in The Or­ "In 1924 Harriman heard that the der), was a partner of Brown Broth­ world's largest deposit of manganese ers Harriman for over forty years." ore was being offered for rent by Still an unincorporated partner- the Soviet government. The field, in

JANUARY, 1984 49 Chiatura, near Tiflis , Georgia, had of all central Europe to Soviet im­ before the Revolution supplied half perialism. the world's output of manganese, a After the war, Averell Harriman vital ingredient in the manufacture served briefly as Ambassador to of steel. The Chiatura field was Britain, then as Secretary of Com­ estimated to contain at least a billion merce . In 1955 he became governor dollars' worth of ore, enough to sup­ of New York, helping to expand its ply the world for the next half­ Welfare system. He served as a di­ century. rector of the Council on Foreign "Harriman immediately dispatched Relations from 1950 to 1955. And in an associate, J . Speed Elliott, to work 1962 Harriman accepted the position out a deal with the Russians. Because of Assistant Secretary of State for of the Harriman name, negotiations Far Eastern Affairs, forced Laos went quickly. On January 19, 1925, to accept a Coalition Government Speed reported triumphantly from with the Communists, and was the Moscow, 'Everyt hing looks good here main architect of the disastrous nu­ so far.' At a cost of $3,450,000, clear test-ban treaty with the Soviets. Harriman bought the rights to mine Averell Harriman and his second the Chiatura field for twenty years wife continue to be very active in and to export its manganese ore. This raising large sums of money for would be the biggest American ven­ radical Democrat candidates and Far ture yet granted in Soviet Russia." Left causes. Averell entered politics under Franklin D. Roosevelt , heading up Salomon Brothers F.D.R.'s National Recovery Admin­ The largest investment banking istration from 1934 to 1935. He later firm in the nation is Salomon Broth­ served in the Commerce Department ers. Its aggressive drive for new busi­ and the Office of Production ness in recent years has hooked such Management, helping in the effort choice clients as Atlantic Richfield, to cartelize American industry. With I.B.M., and Chase Manhattan Bank the outbreak of World War II, Har­ (which, until the late 1970s, used riman was appointed Special Presi­ Lazard Freres as its investment dential Envoy to Britain (1941-1943), banker). The firm's growth over the and then became Ambassador to the past five years has been impressive, Soviet Union until 1947. Always an though not without woes. Since late advocate of the Soviets, he had also 1978, when John H . Gutfreund been a member of the first Lend­ (C.F.R.) succeeded William R. Salo­ Lease mission to Moscow in 1942, mon (C.F.R.) as managing partner stating at the time that U.S. policy of the company, the firm has in­ was "to give and give, with no ex­ creased its staff by fifty percent pectation of return, with no thought to twenty-five hundred. By 1982 of a quid pro quo." That policy was Salomon Brothers maintained an responsible for sending some $11 bil­ average daily net inventory of $6.9 lion in American goods and tech­ billion in securities, and managed or nology to the Soviet police state. co-managed $26.4 billion in corporate Harriman's spirit of giving (other underwritings. peoples' money and lives) to the Reds For seventy-one years, this firm was carried over in full force at the was a privately owned partnership. Yalta Conference in 1945, at which Then in the summer of 1981 it be­ he played a key role in the betrayal came a subsidiary of Phibro-

JANUARY, 1984 51 Salomon, Inc., when it merged with and give me millions of dollars, Phibro Corporation, a publicly owned please don't throw me out into the commodities firm with revenues of briar patch." The fact that this $24 billion a year and one of the tremendous feat of business mar­ world's biggest traders in raw materi­ riage was consummated all in one als. The name (pronounced Fy-bro) weekend, and in secret, indicates the is a contraction of Philipp Brothers, skilled control of the Big Boys. which has sixty offices in forty­ Many ambitious men come to five different countries and deals Wall Street to become millionaires. in one hundred fifty raw com­ Let us briefly consider some of the modities - everything from molyb­ operators who have prospered as part­ denum to oil. Phibro's oil-trading ac­ ners in Salomon Brothers. tivities during the 1970s reaped huge John Gutfreund, as chief execu­ gains from the global "energy crisis" tive of the Salomon Brothers subsid­ which had been created by interna­ iary and co-chairman of the Phibro­ tional manipulations and by govern­ Salomon combination, is known as a ment controls at the urging and pres­ hard-nosed manager and for his no­ sure of the Establishment think nonsense, bottom-line approach on tanks and lobbies. the trading floor. William Salomon, The Phibro-Salomon merger was when he retired from leadership in constructed in such a way that it let 1978, believed that he had left the the sixty-two Salomon partners, al­ old partnership in trust to his protege ready being paid fabulous salaries, Gutfreund, whom he had helped to pocket millions of dollars each ­ climb the rungs of the Salomon lad­ and all tax-free since they had paid der . Salomon was deliberately not income taxes every year .on their told anything about the merger until profits before adding to the capital after it was a fact, and friends say fund of the partnership. When the he was enraged at Gutfreund's cal­ Salomon partnership was dissolved, lousness in neither consulting him on each partner signed over his owner­ the deal nor even informing him of ship to Phibro and committed to an the merger until after its comple­ employment contract. tion. In compensation for this, they Gutfreund lives in a fancy Man­ received $250 million in debentures hattan duplex in River House, where convertible into Phibro stock, plus Henry Kissinger also lives, and is over $300 million of capital assets another political Leftist. In fact, he which had been locked up in the was a major supporter of George Salomon Brothers partnership. While McGovern's 1972 bid for the White junior partners did not take out as House and also helped to bankroll much as senior partners, the average both of the Presidential campaigns payoff amounted to nearly five of Jimmy Carter. million dollars. Top executives, of Another top executive with Salo­ course, got considerably more. mon Brothers is interest-rate oracle For example, it is estimated that Henry Kaufman (C.F.R.). Readers Gutfreund (pronounced Goodfriend) will recall that we discussed Kauf­ wound up with some $40 million. A man's role in the stock and bond fellow could get rich in this busi­ market surge of the late summer of ness! As one elated partner exclaimed 1982 in our October 1982 article in about the deal at the time: "Any time this journal. As chief economist for someone wants to stick me in a room Salomon Brothers, Henry Kaufman

JANUARY, 1984 53 had been played up in the financial by the Big Boys who knew all about press as the forecaster of interest­ Fed policies, and by the Insiders at rate swings. Business Week, for ex­ Salomon who knew what Kaufman ample, said that Kaufman "has planned to announce and when. We been so accurate with his predictions may never know just how much mon­ that he can move prices with his ey Salomon Brothers and its friends words." Given the mercurial psychol­ raked in by positioning themselves on ogy of the stock and bond markets, the long side of the stock and bond that was no exaggeration. markets just prior to Henry's sudden For months he had been predict­ "change of heart." It is known that ing that interest rates would remain Salomon Brothers went "long" on high. Suddenly, however, Kaufman three thousand futures contracts on staged a dramatic about-face by an­ Treasury bonds an hour or so before nouncing that long-term interest Kaufman made his surprising state­ rates were on their way down - way ment. Then it bought another thou­ down. The markets went crazy. This sand T-Bond futures about an hour was the signal for which they had after the Kaufman prediction. On desperately hoped. As Newsweek for those three thousand contracts alone, August 30, 1982, reported: "The day Salomon Brothers made an estimated Kaufman spoke, the Dow Jones in­ $21 million in less than one week dustrial average surged a record 39 after the intitial rally. It made much points, and on the stock exchanges, a more, of course, as the markets con­ record-shattering trading frenzy tinued to rise thereafter. The scheme continued throughout the week. The had been delicately planned, and In­ bond market catapulted to new highs, sider Henry Kaufman's careful sending long-term rates plunging 115 buildup as a market guru was a cru­ points in a single morning." cial part of that plan. The Federal Reserve had already This all-too-brief account of the begun to drop its discount rate - the incident illustrates how Wall Street rate of interest it charges banks for money manipulators can make huge borrowed reserves - no fewer than sums using inside information three times in less than a month, the known in advance of the general third time having been on August public. fifteen. But it was Kaufman's authoritative call which triggered the Dillon, Read & Company "Kaufman Rally" in the bond and Like Brown Brothers Harriman, stock markets. Again quoting News­ the firm of Dillon, Read tradition­ week, "Almost from the moment ally has been closely associated with Kaufman's memo hit the wires on the J.P. Morgan power complex; how­ Tuesday [August seventeenth], the ever, it also has links to the Roths­ market went wild." childs. An officer in Dillon, Read is The people for whom this rally August Belmont, grandson of the was engineered were the principal August Belmont who was sent to the beneficiaries - they were the big United States from Europe in 1840 banks, which were major bond holders. as the Rothschild agent in America. This especially included the invest­ For a number of years, Dillon, ment banking houses, such as Salo­ Read & Company was headed by C. mon Brothers. Douglas Dillon, who has been vari­ Of course, what was a surprise to ously chairman of the board of the almost everyone else was anticipated "Liberal" Brookings Institution, a di-

54 AMERICAN OPINION rector of the Chase Manhattan Bank, explosives for the Nazi side during a trustee of the Rockefeller Foun­ World War II. But none dare call it dation, and a director of the C.F.R. treason. This is the same C. Douglas Dillon Today the dominant force at Dil­ who, as Secretary of the Treasury in lon, Read is Nicholas F. Brady, its the Kennedy Administration, arranged 53-year-old managing director. Brady to put an end to America's silver attended both Yale and Harvard, be­ certificates, our last redeemable ing a classmate of George Bush money receipts. while at Yale. There is little doubt During the Nixon Administration, that he has a Skull And Bones rat­ a member of the Council on Foreign tling in his closet. The scion of a Relations named Peter Flanigan wealthy Irish-American family, served in government in a number of Brady served in the U.S. Senate for roles, including Assistant to the Pres ­ six months in 1982 following the ident. He was on loan from Dillon, resignation of New Jersey Senator Read, of which he was vice president. Harrison Williams. During that time, Agents of Dillon, Read have been Senator Brady was a member of the involved in several important Estab­ President's commission studying the lishment scenarios and scams. For MX missile issue. Owner of a 4,300­ example, among the assistants to acre estate in Somerset, New Jersey, Bernard Baruch in Woodrow Wilson's he is one Wall Street banker on whom War Industries Board was Clarence to keep an eye. He is, of course, a Dillon of Dillon , Read & Company. member of the C.F .R. In the 1920s and 1930s, two influen­ tial names connected with Dillon, Goldman, Sachs & Company Read were James Forrestal and Fer­ With the earnings from a retail dinand Eberstadt. Forrestal rose to business in Philadelphia, and after be Secretary of Defense, turned on returning from a trip to his native the New World Order boys, and was Germany, Marcus Goldman moved to probably assassinated. Eberstadt was New York in 1869 and set up M. an aggressive Wall Streeter who later Goldman, Banker & Broker. For sev­ become a close associate of Andre eral years, the company dealt mainly Meyer of Lazard Freres, with note discounting, later branch­ As Antony Sutton pointed out in ing out into the handling of letters his book Wall Street And The Rise Of of credit and bills of exchange. Un­ Hitler, both the Dawes and the Young der the leadership of Marcus's son, plans for German reparations pay­ Henry Goldman, and with the aid of ments following World War I were Samuel Sachs and his three sons, the formulated by Wall Street Insiders firm became Goldman, Sachs & - temporarily wearing the hats of Company and went heavily into in­ statesmen - and consequent loans vestment banking during the first produced a rain of profits for the decade of this century. international bankers. Dillon, Read & Goldman, Sachs is today consis­ Company was one of three Wall tently rated at or very near the top of Street banking houses which handled the heap for its financial services to the reparation loans that were used to the megacorps, particularly for its create the German cartel system, in­ corporate financing operations. Like cluding the I.G. Farben and Vere­ the hired gunslingers of the TV inigte Stahlwerke, which together Westerns, certain investment bank­ produced ninety-five percent of the ers are often used by corporate prin-

JA N UARY, 1984 55 cipals in serious business duels and . actually served as a director of thir­ clashes. Along with Morgan Stanley ty-one major corporations! and Lazard Freres, Goldman, Sachs Though a key Insider in recruiting has built a considerable reputation in business support for F.D.R.'s "New such corporate showdowns. It has ad­ Deal," Weinberg raised $6 million vised dozens of target firms in recent before the 1952 Republican Conven­ years, successfully warding off un­ tion to stop Conservative leader Rob­ friendly acquisition attempts. Among ert Taft from getting the nomina­ those that made financial headlines tion and delivered it instead to Dwight were the 1977 raid by Anderson, Clay­ Eisenhower. ton & Company on Gerber (baby Another Insider partner of Gold­ food) Products, which was success­ man, Sachs was the infamous Henry fully repelled, and Mead Corpora­ Fowler, who became one of the tion's successful resistance to a bid worst Secretaries of the Treasury in by Occidental Petroleum in 1978. American history by wrecking what Under the aggressive management remained of the authority of gold as of John C. Whitehead (C.F.R.), the a restriction on worldwide inflation. firm's co-chairman, Goldman has He was also, not surprisingly, a put together one of the most envi­ member of the conspiratorial Coun­ able client lists on Wall Street. Its cil on Foreign Relations. customers include companies, munic­ *** ipalities, states, and foreign govern­ THE INVESTMENT banking houses ments. Among these are (or have that we have been discussing consti­ been) Allied Chemical, Ford Motor tute a secretive organizational struc­ Company, Wells Fargo, the State of ture at the core of the "Liberal" Es­ California, Mellon National Corpo­ tablishment. They profit by manip­ ration, Sears, United Technologies ulating government, and they are Corporation, the Kingdom of Nor­ very free with whatever funds it way, the Republic of Finland, Man­ takes to assure their power to con­ ufacturers Hanover Bank, and many, tinue doing that. Their partners are many other impressive entities. Gold­ to be found moving in and out of man, Sachs has clout, especially in government at or near the highest view of the fact that its computer levels, sit in the board rooms of the banks store details on thousands of nation's largest corporations, and are corporations and their acquisition among the directors of the major needs and wants. This is one power­ "Liberal" foundations and think ful corporate cupid. tanks. Their commitments are not Until his death in 1969, the big national but international and through man at Goldman, Sachs & Company such elitist fronts as the Council on was the notorious Sidney Weinberg, a Foreign Relations they virtually witty and fast-talking dynamo name our key Cabinet Secretaries, whose first job with Goldman was our Federal Reserve Board, and the assistant to the janitor. Weinberg presidents of our major universities. rose to become one of the most pow­ If you want to know how the world is erful men on Wall Street and an run, you could not do better than to advisor to heads of state. A leader in study this small and elite club of the corporate elite, at one point he investment bankers.•• CRACKER BARREL------I·• There are more than 40,000 characters in Chinese script. 56 AMERICAN OPINION