magicians who control the Mandrake
Mechanism. The startling fact emerges that,
without the ability to create fiat money, most
modern wars simply would not have occurred.
As long as the Mechanism is allowed to function,
future wars are inevitable. This is the story of how
that came to pass.
C h a p t e r Eleven
THE ROTHSCHILD
FORMULA
So far we have adhered closely to the subject of money and the history of its manipulation by political and monetary scientists.
Now we are going to take a short detour along a parallel path and view some of the same historical scenery from a different perspective. As we progress, it may seem that we have lost our way, and you may wonder what connection any of this can possibly have with the Federal Reserve System. Please be assured, however, it has
THE PROFITS OF WAR
The focus of this chapter is on the profits of war and, more specifically, the tendency of those who reap those profits to manipulate governments into military conflicts, not for national or patriotic reasons, but for private gain. The mechanism by which this was accomplished in the past was more complex than simply lending money to warring governments and then collecting interest, although that was part of it. The real payoff has always been in the form of political favoritism in the market place. Writing in the year 1937, French historian Richard Lewinsohn explains:
Although often called bankers, those who financed wars in the pre-capitalist period ... were not bankers in the modern sense of the word. Unlike modern bankers who operate with money deposited with them by their clients [or, in more recent times, created out of nothing by a central bank—E.G.], they generally worked with the fortune which they themselves had amassed or inherited, and which 218
THE CREATURE FROM JEKYLL ISLAND
they lent at a high rate of interest. Thus those who risked the financing of a war were for the most part already very rich, and this was the case down to the seventeenth century.
When they agreed to finance a war, these rich lenders did not, however, always attach great importance to the rate of interest In this respect they often showed the greatest compliance to their august clients. But in return they secured for themselves privileges which could be turned into industrial or commercial profit, such as mining concessions, monopolies of sale or importation, etc. Sometimes even they were given the right to appropriate certain taxes as a guarantee of their loans. So though the loan itself carried a very real risk and often did not bring in much interest, the indirect profits were very considerable, and the lenders' leniency well rewarded.
THE ROTHSCHILD DYNASTY
No discussion of banking as a mechanism for financing wars would be complete without turning eventually to the name
Rothschild. It was Mayer Amschel Rothschild who is quoted as saying: 'Let me issue and control a nation's money and I care not who writes the laws.'2 Biographer Frederic Morton concluded that the Rothschild dynasty had: '...conquered the world more thoroughly, more cunningly, and much more lastingly than all the Ceasars before or all the Hitlers after them.'3 The dynasty was begun in Frankfurt, Germany, in the middle of the eighteenth century by Mayer Amschel Bauer, the son of a goldsmith. Mayer became a clerk in the Oppenheimer Bank in Hanover and was eventually promoted to junior partner. After his father's death, he returned to his home in Frankfurt to continue the family business.
Over the door hung a red shield with an eagle as a sign to identify the establishment. The German words for red shield are
1. Richard Lewinsohn,
2. Quoted by Senator Robert L. Owen, former Chairman of the Senate Committee on Banking and Currency and one of the sponsors of the Federal Reserve Act,
3. Frederic Morton,
