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 OF AMERICAN INTERNATIONAL ON THE REVOLUTION
Having identified
the directors of AIC we now have to identify their revolutionary
influence.
As the
Bolshevik Revolution took hold in central Russia, Secretary of State
Robert Lansing requested the views of American International Corporation
on the policy to be pursued towards the Soviet regime. On January 16,
1918 — barely two months after the takeover in Petrograd and Moscow, and
before a fraction of Russia had come under Bolshevik control — William
Franklin Sands, executive secretary of American International
Corporation, submitted the requested memorandum on the Russian political
situation to Secretary Lansing. Sands covering letter, headed 120
Broadway, began:
To the Honourable
January 16, 1918
Secretary of State
Washington D.C.
Sir
I have the
honor to enclose herewith the memorandum which you requested me to
make for you on my view of the political situation in Russia.
I have
separated it into three parts; an explanation of the historical
causes of the Revolution, told as briefly as possible; a suggestion
as to policy and a recital of the various branches of American
activity at work now in Russia ....8
Although the
Bolsheviks had only precarious control in Russia — and indeed were to
come near to losing even this in the spring of 1918 — Sands wrote that
already (January 1918) the United States had delayed too long in
recognizing "Trotzky." He added, "Whatever ground may have been lost,
should be regained now, even at the cost of a slight personal triumph
for Trotzky."9
Firms
located at, or near, 120 Broadway:
American International Corp 120 Broadway
National City Bank 55 Wall Street
Bankers Trust Co Bldg 14 Wall Street
New York Stock Exchange 13 Wall Street/12 Broad
Morgan Building corner Wall & Broad
Federal Reserve Bank of NY 120 Broadway
Equitable Building 120 Broadway
Bankers Club 120 Broadway
Simpson, Thather & Bartlett 62 Cedar St
William Boyce Thompson 14 Wall Street
Hazen, Whipple & Fuller 42nd Street Building
Chase National Bank 57 Broadway
McCann Co 61 Broadway
Stetson, Jennings & Russell 15 Broad Street
Guggenheim Exploration 120 Broadway
Weinberg & Posner 120 Broadway
Soviet Bureau 110 West 40th Street
John MacGregor Grant Co 120 Broadway
Stone & Webster 120 Broadway
General Electric Co 120 Broadway
Morris Plan of NY 120 Broadway
Sinclair Gulf Corp 120 Broadway
Guaranty Securities 120 Broadway
Guaranty Trust 140 Broadway
Map of Wall
Street Area Showing Office Locations
Sands then
elaborates the manner in which the U.S. could make up for lost time,
parallels the Bolshevik Revolution to "our own revolution," and
concludes: "I have every reason to believe that the Administration plans
for Russia will receive all possible support from Congress, and the
hearty endorsement of public opinion in the United States."
In brief,
Sands, as executive secretary of a corporation whose directors were the
most prestigious on Wall Street, provided an emphatic endorsement of the
Bolsheviks and the Bolshevik Revolution, and within a matter of weeks
after the revolution started. And as a director of the Federal Reserve
Bank of New York, Sands had just contributed $1 million to the
Bolsheviks — such endorsement of the Bolsheviks by banking interests is
at least consistent.
Moreover,
William Sands of American International was a man with truly uncommon
connections and influence in the State Department.
Sands' career
had alternated between the State Department and Wall Street, In the late
nineteenth and early twentieth century he held various U.S. diplomatic
posts. In 1910 he left the department to join the banking firm of James
Speyer to negotiate an Ecuadorian loan, and for the next two years
represented the Central Aguirre Sugar Company in Puerto Rico. In 1916 he
was in Russia on "Red Cross work" — actually a two-man "Special Mission"
with Basil Miles — and returned to join the American International
Corporation in New York.10
In early 1918
Sands became the known and intended recipient of certain Russian "secret
treaties." If the State Department files are to be believed, it appears
that Sands was also a courier, and that he had some prior access to
official documents — prior, that is, to U.S. government officials. On
January 14, 1918, just two days before Sands wrote his memo on policy
towards the Bolsheviks, Secretary Lansing caused the following cable to
be sent in Green Cipher to the American legation in Stockholm:
"Important official papers for Sands to bring here were left at
Legation. Have you forwarded them? Lansing." The reply of January 16
from Morris in Stockholm reads: "Your 460 January 14, 5 pm. Said
documents forwarded Department in pouch number 34 on December 28th." To
these documents is attached another memo, signed "BM" (Basil Miles, an
associate of Sands): "Mr. Phillips. They failed to give Sands 1st
installment of secret treaties wh. [which] he brought from Petrograd to
Stockholm."11
Putting aside
the question why a private citizen would be carrying Russian secret
treaties and the question of the content of such secret treaties
(probably an early version of the so-called Sisson Documents), we can at
least deduce that the AIC executive secretary traveled from Petrograd to
Stockholm in late 1917 and must indeed have been a privileged and
influential citizen to have access to secret treaties.12
A few months
later, on July 1, 1918, Sands wrote to Treasury Secretary McAdoo
suggesting a commission for "economic assistance to Russia." He urged
that since it would be difficult for a government commission to "provide
the machinery" for any such assistance, "it seems, therefore, necessary
to call in the financial, commercial and manufacturing interest of the
United States to provide such machinery under the control of the Chief
Commissioner or whatever official is selected by the President for this
purpose."13 In other words, Sands obviously
intended that any commercial exploitation of Bolshevik Russia was going
to include 120 Broadway.
THE
FEDERAL RESERVE BANK OF NEW YORK
The
certification of incorporation of the Federal Reserve Bank of New York
was filed May 18, 1914. It provided for three Class A directors
representing member banks in the district, three Class B directors
representing commerce, agriculture, and industry, and three Class C
directors representing the Federal Reserve Board. The original directors
were elected in 1914; they proceeded to generate an energetic program.
In the first year of organization the Federal Reserve Bank of New York
held no fewer than 50 meetings.
From our
viewpoint what is interesting is the association between, on the one
hand, the directors of the Federal Reserve Bank (in the New York
district) and of American International Corporation, and, on the other,
the emerging Soviet Russia.
In 1917 the
three Class A directors were Franklin D. Locke, William Woodward, and
Robert H. Treman. William Woodward was a director of American
International Corporation (120 Broadway) and of the
Rockefeller-controlled Hanover National Bank. Neither Locke nor Treman
enters our story. The three Class B directors in 1917 were William Boyce
Thompson, Henry R. Towne, and Leslie R. Palmer. We have already noted
William B. Thompson's substantial cash contribution to the Bolshevik
cause. Henry R. Towne was chairman of the board of directors of the
Morris Plan of New York, located at 120 Broadway; his seat was later
taken by Charles A. Stone of American International Corporation (120
Broadway) and of Stone & Webster (120 Broadway). Leslie R. Palmer does
not come into our story. The three Class C directors were Pierre Jay, W.
L. Saunders, and George Foster Peabody. Nothing is known about Pierre
Jay, except that his office was at 120 Broadway and he appeared to be
significant only as the owner of Brearley School, Ltd. William Lawrence
Saunders was also a director of American International Corporation; he
openly avowed, as we have seen, pro-Bolshevik sympathies, disclosing
them in a letter to President Woodrow Wilson (see page 15). George
Foster Peabody was an active socialist (see page 99-100).
In brief, of
the nine directors of the Federal Reserve Bank of New York, four were
physically located at 120 Broadway and two were then connected with
American International Corporation. And at least four members of AIC's
board were at one time or another directors of the FRB of New York. We
could term all of this significant, but regard it not necessarily as a
dominant interest.
AMERICAN-RUSSIAN
INDUSTRIAL SYNDICATE INC.
William
Franklin Sands' proposal for an economic commission to Russia was not
adopted. Instead, a private vehicle was put together to exploit Russian
markets and the earlier support given the Bolsheviks. A group of
industrialists from 120 Broadway formed the American-Russian Industrial
Syndicate Inc. to develop and foster these opportunities. The financial
backing for the new firm came from the Guggenheim Brothers, 120
Broadway, previously associated with William Boyce Thompson (Guggenheim
controlled American Smelting and Refining, and the Kennecott and Utah
copper companies); from Harry F. Sinclair, president of Sinclair Gulf
Corp., also 120 Broadway; and from James G. White of J. G. White
Engineering Corp. of 43 Exchange Place — the address of the
American-Russian Industrial Syndicate.
In the fall of
1919 the U.S. embassy in London cabled Washington about Messrs.
Lubovitch and Rossi "representing American-Russian Industrial Syndicate
Incorporated What is the reputation and the attitude of the Department
toward the syndicate and the individuals?"14
To this cable
State Department officer Basil Miles, a former associate of Sands,
replied:
. . .
Gentlemen mentioned together with their corporation are of good
standing being backed financially by the White, Sinclair and
Guggenheim interests for the purpose of opening up business
relations with Russia.15
So we may
conclude that Wall Street interests had quite definite ideas of the
manner in which the new Russian market was to be exploited. The
assistance and advice proffered in behalf of the Bolsheviks by
interested parties in Washington and elsewhere were not to remain
unrewarded.
JOHN REED:
ESTABLISHMENT REVOLUTIONARY
Quite apart
from American International's influence in the State Department is its
intimate relationship — which AIC itself called "control" — with a known
Bolshevik: John Reed. Reed was a prolific, widely read author of the
World War I era who contributed to the Bolshevik-oriented Masses.16
and to the Morgan-controlled journal Metropolitan. Reed's book on
the Bolshevik Revolution, Ten Days That Shook the World, sports
an introduction by Nikolai Lenin, and became Reed's best-known and most
widely read literary effort. Today the book reads like a superficial
commentary on current events, is interspersed with Bolshevik
proclamations and decrees, and is permeated with that mystic fervor the
Bolsheviks know will arouse foreign sympathizers. After the revolution
Reed became an American member of the executive committee of the Third
International. He died of typhus in Russia in 1920.
The crucial
issue that presents itself here is not Reed's known pro-Bolshevik tenor
and activities, but how Reed who had the entire confidence of Lenin
("Here is a book I should like to see published in millions of copies
and translated into all languages," commented Lenin in Ten Days),
who was a member of the Third International, and who possessed a
Military Revolutionary Committee pass (No. 955, issued November 16,
1917) giving him entry into the Smolny Institute (the revolutionary
headquarters) at any time as the representative of the "American
Socialist press," was also — despite these things — a puppet under the
"control" of the Morgan financial interests through the American
International Corporation. Documentary evidence exists for this seeming
conflict (see below and Appendix 3).
Let's fill in
the background. Articles for the Metropolitan and the Masses
gave John Reed a wide audience for reporting the Mexican and the
Russian Bolshevik revolutions. Reed's biographer Granville Hicks has
suggested, in John Reed, that "he was . . . the spokesman of the
Bolsheviks in the United States." On the other hand, Reed's financial
support from 1913 to 1918 came heavily from the Metropolitan —
owned by Harry Payne Whitney, a director of the Guaranty Trust,
an institution cited in every chapter of this book — and also' from the
New York private banker and merchant Eugene Boissevain, who channeled
funds to Reed both directly and through the pro-Bolshevik Masses.
In other words, John Reed's financial support came from two supposedly
competing elements in the political spectrum. These funds were for
writing and may be classified as: payments from Metropolitan from
1913 onwards for articles; payments from Masses from 1913
onwards, which income at least in part originated with Eugene Boissevain.
A third category should be mentioned: Reed received some minor and
apparently unconnected payments from Red Cross commissioner Raymond
Robins in Petrograd. Presumably he also received smaller sums for
articles written for other journals, and book royalties; but no evidence
has been found giving the amounts of such payments.
JOHN REED AND THE
METROPOLITAN MAGAZINE
The
Metropolitan supported contemporary establishment causes including,
for example, war preparedness. The magazine was owned by Harry Payne
Whitney (1872-1930), who founded the Navy League and was partner in the
J.P. Morgan firm. In the late 1890s Whitney became a director of
American Smelting and Refining and of Guggenheim Exploration. Upon his
father's death in 1908, he became a director of numerous other
companies, including Guaranty Trust Company. Reed began writing for
Whitney's Metropolitan in July 1913 and contributed a half-dozen
articles on the Mexican revolutions: "With Villa in Mexico," "The Causes
Behind/Mexico's Revolution," "If We Enter Mexico," "With Villa on the
March," etc. Reed's sympathies were with revolutionist Pancho Villa. You
will recall the link (see page 65) between Guaranty Trust and Villa's
ammunition supplies.
In any event,
Metropolitan was Reed's main source of income. In the words of
biographer Granville Hicks, "Money meant primarily work for the
Metropolitan and incidentally articles and stories for other paying
magazines." But employment by Metropolitan did not inhibit Reed
from writing articles critical of the Morgan and Rockefeller interests.
One such piece, "At the Throat of the Republic" (Masses,
July 1916), traced the relationship between munitions industries, the
national security-preparedness lobby, the interlocking directorates of
the Morgan-Rockefeller interest, "and showed that they dominated both
the preparedness societies and the newly formed American International
Corporation, organized for the exploitation of backward countries."17
In 1915 John
Reed was arrested in Russia by tsarist authorities, and the
Metropolitan intervened with the State Department in Reed's behalf.
On June 21, 1915, H. J. Whigham wrote Secretary of State Robert Lansing
informing him that John Reed and Boardman Robinson (also arrested and
also a contributor to the Masses) were in Russia "with commission
from the Metropolitan magazine to write articles and to make
illustrations in the Eastern field of the War." Whigham pointed out that
neither had "any desire or authority from us to interfere with the
operations of any belligerent powers that be." Whigham's letter
continues:
If Mr. Reed
carried letters of introduction from Bucharest to people in Galicia
of an anti-Russian frame of mind I am sure that it was done
innocently with the simple intention of meeting as many people as
possible ....
Whigham points
out to Secretary Lansing that John Reed was known at the White House and
had given "some assistance" to the administration on Mexican affairs; he
concludes: "We have the highest regard for Reed's great qualities
as a writer and thinker and we are very anxious as regards his safety."18
The Whigham letter is not, let it be noted, from an establishment
journal in support of a Bolshevik writer; it is from an establishment
journal in support of a Bolshevik writer for the Masses and
similar revolutionary sheets, a writer who was also the author of
trenchant attacks ("The Involuntary Ethics of Big Business: A Fable for
Pessimists," for example) on the same Morgan interests that owned
Metropolitan.
The evidence of
finance by the private banker Boissevain is incontrovertible. On
February 23, 1918, the American legation at Christiania, Norway, sent a
cable to Washington in behalf of John Reed for delivery to Socialist
Party leader Morris Hillquit. The cable stated in part: "Tell Boissevain
must draw on him but carefully." A cryptic note by Basil Miles in the
State Department files, dated April 3, 1918, states, "If Reed is coming
home he might as well have money. I understand alternatives are ejection
by Norway or polite return. If this so latter seems preferable." This
protective note is followed by a cable dated April 1, 1918, and again
from the American legation at Christiania: "John Reed urgently request
Eugene Boissevain, 29 Williams Street, New York, telegraph care legation
$300.00."19 This cable was relayed to
Eugene Boissevain by the State Department on April 3, 1918.
Reed apparently
received his funds and arrived safely back in the United States. The
next document in the State Department files is a letter to William
Franklin Sands from John Reed, dated June 4, 1918, and written from
Crotonon-Hudson, New York. In the letter Reed asserts that he has drawn
up a memorandum for the State Department, and appeals to Sands to use
his influence to get release of the boxes of papers brought back from
Russia. Reed concludes, "Forgive me for bothering you, but I don't know
where else to turn, and I can't afford another trip to Washington."
Subsequently, Frank Polk, acting secretary of state, received a letter
from Sands regarding the release of John Reed's papers. Sands' letter,
dated June 5, 1918, from 120 Broadway, is here reproduced in full; it
makes quite explicit statements about control of Reed:
120 BROADWAY NEW
YORK
June fifth,
1918
My dear Mr.
Polk:
I take the
liberty of enclosing to you an appeal from John ("Jack") Reed to
help him, if possible, to secure the release of the papers which he
brought into the country with him from Russia.
I had a
conversation with Mr. Reed when he first arrived, in which he
sketched certain attempts by the Soviet Government to initiate
constructive development, and expressed the desire to place whatever
observations he had made or information he had obtained through his
connection with Leon Trotzky, at the disposal of our Government. I
suggested that he write a memorandum on this subject for you, and
promised to telephone to Washington to ask you to give him an
interview for this purpose. He brought home with him a mass of
papers which were taken from him for examination, and on this
subject also he wished to speak to someone in authority, in order to
voluntarily offer an>, information they might contain to the
Government, and to ask for the release of those which he needed for
his newspaper and magazine work.
I do not
believe that Mr. Reed is either a "Bolshevik" or a "dangerous
anarchist," as I have heard him described. He is a sensational
journalist, without doubt, but that is all. He is not trying to
embarrass our Government, and for this reason refused the
"protection" which I understand was offered to him by Trotzky, when
he returned to New York to face the indictment against him in the
"Masses" trial. He is liked by the Petrograd Bolsheviki, however,
and, therefore, anything which our police may do which looks like
"persecution" will be resented in Petrograd, which I believe to be
undesirable because unnecessary.
He can be handled and
controlled much better by other means than through the police.
I have not
seen the memorandum he gave to Mr. Bullitt — I wanted him to let
me see it first and perhaps to edit it, but he had not the
opportunity to do so.
I hope that
you will not consider me to be intrusive in this matter or meddling
with matters which do not concern me. I believe it to be wise not to
offend the Bolshevik leaders unless and until it may become
necessary to do so — if it should become necessary — and it is
unwise to look on every one as a suspicious or even dangerous
character, who has had friendly relations with the Bolsheviki in
Russia. I
think it better policy to attempt to use such people for our own
purposes in developing our policy toward Russia, if it is possible
to do so.
The lecture which Reed was prevented by the police from delivering
in Philadelphia (he lost his head, came into conflict with the
police and was arrested) is the only lecture on Russia which I would
have paid to hear, if I had not already seen his notes on the
subject. It covered a subject which we might quite possibly find to
be a point of contact with the Soviet Government, from which to
begin constructive work!
Can we not
use him, instead of
embittering him and making him an enemy? He is not well balanced,
but he is, unless I am very much mistaken,
susceptible to discreet
guidance and might be quite useful.
Sincerely yours,
William Franklin Sands
The Honourable
Frank Lyon Polk
Counselor for the Department of State
Washington, D.C.
WFS:AO
Enclosure20
The
significance of this document is the hard revelation of direct
intervention by an officer (executive secretary) of American
International Corporation in behalf of a known Bolshevik. Ponder a few
of Sands' statements about Reed: "He can be handled and controlled much
better by other means than through the police"; and, "Can we not use
him, instead of embittering him and making him an enemy? . . . he is,
unless I am very much mistaken, susceptible to discreet guidance and
might be quite useful." Quite obviously, the American International
Corporation viewed John Reed as an agent or a potential agent who could
be, and probably had already been, brought under its control. The fact
that Sands was in a position to request editing a memorandum by Reed
(for Bullitt) suggests some degree of control had already been
established.
Then note
Sands' potentially hostile attitude towards — and barely veiled intent
to provoke — the Bolsheviks: "I believe it to be wise not to offend the
Bolshevik leaders unless and until it may become necessary to do so —
if it should become necessary . . ." (italics added).
This is an
extraordinary letter in behalf of a Soviet agent from a private U.S.
citizen whose counsel the State Department had sought, and continued to
seek.
A later
memorandum, March 19, 1920, in the State files reported the arrest of
John Reed by the Finnish authorities at Abo, and Reed's possession of
English, American and German passports. Reed, traveling under the alias
of Casgormlich, carried diamonds, a large sum of money, Soviet
propaganda literature, and film. On April 21, 1920, the American
legation at Helsingfors cabled the State Department:
Am
forwarding by the next pouch certified copies of letters from Emma
Goldman, Trotsky, Lenin and Sirola found in Reed's possession.
Foreign Office has promised to furnish complete record of the Court
proceedings.
Once again
Sands intervened: "I knew Mr. Reed personally."21
And, as in 1915, Metropolitan magazine also came to Reed's aid.
H. J. Whigham wrote on April 15, 1920, to Bainbridge Colby in the State
Department: "Have heard John Reed in danger of being executed in
Finland. Hope the State Dept. can take immediate steps to see that he
gets proper trial. Urgently request prompt action."22
This was in addition to an April 13, 1920 telegram from Harry Hopkins,
who was destined for fame under President Roosevelt:
Understand
State Dept. has information Jack Reed arrested Finland, will be
executed. As one of his friends and yours and on his wife's behalf
urge you take prompt action prevent execution and secure release.
Feel sure can rely your immediate and effective intervention.23
John Reed was
subsequently released by the Finnish authorities.
This
paradoxical account on intervention in behalf of a Soviet agent can have
several explanations. One hypothesis that fits other evidence concerning
Wall Street and the Bolshevik Revolution is that John Reed was in effect
an agent of the Morgan interests — perhaps only half aware of his double
role — that his anticapitalist writing maintained the valuable myth that
all capitalists are in perpetual warfare with all socialist
revolutionaries. Carroll Quigley, as we have already noted, reported
that the Morgan interests financially supported domestic revolutionary
organizations and anticapitalist writings.24
And we have presented in this chapter irrefutable documentary evidence
that the Morgan interests were also effecting control of a Soviet agent,
interceding on his behalf and, more important, generally intervening in
behalf of Soviet interests with the U.S. government. These activities
centered at a single address: 120 Broadway, New York City.
Footnotes:
1By a quirk the papers of incorporation
for the Equitable Office Building were drawn up by Dwight W. Morrow,
later a Morgan partner, but then a member of the law firm of
Simpson, Thacher & Bartlett. The Thacher firm contributed two
members to the 1917 American Red Cross Mission to Russia (see
chapter five).
3Carroll Quigley, Tragedy and Hope
(New York: Macmillan, 1966), p. 938. Quigley was writing in 1965, so
this places the start of the infiltration at about 1915, a date
consistent with the evidence here presented.
4Frank A. Vanderlip, From Farm Boy to Financier
(New York: A. Appleton-Century, 1935).
5Ibid., p. 267.
6Ibid., pp. 268-69. It should be noted
that several names mentioned by Vanderlip turn up elsewhere in this
book: Rockefeller, Armour, Guaranty Trust, and (Otto) Kahn all had
some connection more or less with the Bolshevik Revolution and its
aftermath.
7Ibid., p. 269.
8U.S. Stale Dept. Decimal File, 861.00/961.
9Sands memorandum to Lansing, p. 9.
10William Franklin Sands wrote several
books, including Undiplomatic Memoirs (New York: McGraw-Hill,
1930), a biography covering the years to 1904. Later he wrote Our
.Jungle Diplomacy (Chapel Hill: University of North Carolina
Press, 1941), an unremarkable treatise on imperialism in Latin
America. The latter work is notable only for a minor point on page
102: the willingness to blame a particularly unsavory imperialistic
adventure on Adolf Stahl, a New York banker, while pointing oust
quite unnecessarily that Stahl was of "German-Jewish origin." In
August 1918 he published an article, "Salvaging Russia," in Asia,
to explain support of the Bolshevik regime.
11All the above in U.S. State Dept. Decimal File,
861.00/969.
12The author cannot forbear comparing the treatment
of academic researchers. In 1973, for example, the writer was still
denied access to some State Department files
dated 1919.
13U.S. State Dept. Decimal File, 861.51/333.
14U.S. State Dept. Decimal File, 861.516 84,
September 2, 1919.
15Ibid.
16Other contributors to the Masses
mentioned in this book were journalist Robert Minor, chairman of
the, U.S. Public Info, marion Committee; George Creel; Carl
Sandburg, poet-historian; and Boardman Robinson, an artist.
17Granville Hicks, John Reed, 1887-1920 (New
York: Macmillan, 1936), p. 215.
18U.S. State Dept. Decimal File, 860d.1121 R 25/4.
19Ibid., 360d.1121/R25/18. According to
Granville Hicks in John Reed, "Masses could not pay his
[Reed's] expenses. Finally, friends of the magazine, notably Eugene
Boissevain, raised the money" (p. 249).
20U.S. State Dept. Decimal File, 360. D.
II21.R/20/221/2, /R25 (John Reed). The letter was transferred by Mr.
Polk to the State Department archives on May 2, 1935. All italics
added.
21Ibid., 360d.1121 R 25/72.
22Ibid.
23This was addressed to Bainbridge
Colby, ibid., 360d.1121 R 25/30. Another letter, dated April 14,
1920, and addressed to the secretary of state from 100 Broadway, New
York, was from W. Bourke Cochrane; it also pleaded for the release
of John Reed.
24Quigley, op. cit.
*The John MacGregor Grant Co., agent for the
Russo-Asiatic Bank (involved in financing the Bolsheviks), was at
120 Broadway — and financed by Guaranty Trust Company.
**Sir Ernest Cassel, prominent British financier.
