Morgan was sent to London to do two specific things. The first was to learn at first hand how the British carried on a banking business under a central banking system dominated by the Bank of England Morgan, Sr., anticipated the establishment of the Federal Reserve System in the United States and wanted someone who would
eventually have authority in the Morgan firms to know how such a system worked. The second was quietly to look about the City and select British partners to convert the elder Morgan's privately owned J.S. Morgan & Co. into a British concern.1
1. John Douglas Forbes,
THE LONDON CONNECTION
413
This eventually was accomplished by the addition of Edward Grenfell, a long-time director of the Bank of England, as the new senior partner of what became Morgan, Grenfell & Company. But none of this window dressing altered the reality that J.P. Morgan & Co. in New York remained more British in orientation than Ameri-1
can. A casual reading of the events of this period would lead to the conclusion that Peabody and Morgan were fierce competitors of the Rothschilds. It is true they often bid against each other for the same business, but it is also true that almost every biographer has told how the American newcomers to London were in awe of the great power of the Rothschilds and how they purposely cultivated their friendship, a friendship that eventually became so intimate that the Americans were received as the personal house guests of the Rothschilds. The Morgan firm often worked closely with the House of Rothschild on large joint ventures, but that was—and still is—
common practice among large investment houses. In light of subsequent events, however, it is appropriate to consider the possibility that an arrangement had been worked out in which the
Peabody/Morgan firm went one step further and, on occasion, became a secret Rothschild agent.
CONCEALED ALLIANCE WITH ROTHSCHILD?
Some writers have suggested that the clandestine relationship began almost from the beginning. Eustace Mullins, for example, writes:
Soon after he arrived in London, George Peabody was surprised to be summoned to an audience with the gruff Baron Nathan Mayer Rothschild. Without mincing words, Rothschild revealed to Peabody that much of the London aristocracy openly disliked Rothschild and refused his invitations. He proposed that Peabody, a man of modest means, be established as a lavish host whose entertainments would soon be the talk of London. Rothschild would, of course, pay all the bills. Peabody accepted the offer and soon became known as the most popular host in London. His annual Fourth-of-July dinner, celebrating American Independence, became extremely popular with the English aristocracy, many of whom, while drinking Peabody's wine, regaled each other with jokes about Rothschild's crudities and bad manners, I. This apparently has not diminished over the years. The December 23, 1991, issue of
414 THE CREATURE FROM JEKYLL ISLAND
without realizing that every drop they drank had been paid for by Rothschild.1
Mullins does not give a reference for the source of this story, and one cannot help being skeptical that such details could be proved.
Nevertheless, a secret arrangement of this kind is not as absurd as it may sound. There is no question that the Rothschilds were quite capable of such a clandestine relationship and, in fact, this is exactly the kind of deception for which they had become famous. Furthermore, there was ample reason for them to do so. A strong anti-Semitic and anti-Rothschild sentiment had grown up in Europe and the United States, and the family often found it to its advantage to work through agents rather than to deal directly. Derek Wilson tells us: 'The name 'Rothschild' was, thus, beginning to be heard in places far removed from sophisticated London and Paris. But the connection with the great bankers was sometimes tenuous.'2
That tenuous connection was precisely the role to be played by August Belmont in the United States, and the anti-Semitism he found there was undoubtedly the reason he changed his name from Schoenberg to Belmont upon landing in New York in 1837. Prior to that, the Rothschild agent had been the firm of J.L. and S.I. Joseph & Company, about as American sounding as one can get. It was not long, however, before the Belmont-Rothschild connection became common knowledge, and the ploy ceased to be effective.
In 1848, the family decided to send Alphonse Rothschild to the United States to check on Belmont's operations and to evaluate the possibility of replacing him with a
1. Eustace Mullins,
