29-THE QUASI-WAR

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In 1798, the French Republicans, feeling betrayed by the USA, wanted the latter to return the French aid package that had helped them win their independence in 1781. Since Congress was in no position to do that, there was no telling what the disorganized French government of the times would do. It was quite a threat, and if Mayer was to defuse the situation, he needed to have a strong presence in the City. That same year, he sent his very able 21-year-old son Nathan to England. Mayer’s plan was to get the American Congress to send diplomats to France and offer to compensate France by having the USA buy the unoccupied French lands west of the Mississippi, while Nathan worked on a plan to have the English Navy destroy the very royalist and redundant French Navy.

The Quasi-War, as it became known, had to do with the signing of Jay’s Treaty in 1793, a trade agreement that Mayer and Benjamin had deemed indispensable to the growth of the American economy. America and France had signed the Treaty of Alliance in 1778, and Jay’s Treaty was superseding that agreement. The French and many Americans had been incensed, for it had been seen as a treacherous act by both the US Congress and the Directorate in France. Naturally, the French revolutionaries insisted on the return of the 500 tons of French gold given to America in 1778.

When Mayer asked Robert Morris to get Congress to send an American delegation to Paris to offer compensation by putting the Louisiana Purchase on the table, he was sure it would work. If America bought the Louisiana lands from France, the latter would receive a huge sum of money and the Quasi-War would stop. But first, France had to reclaim the port of New Orleans that they had ceded to the Spanish when they left America after the Treaty of Paris, in 1763. Barras was to get Talleyrand to have the Spanish sign a treaty. He was to promise the Spanish that the half of San Domingo that belonged to them and was presently occupied by France would be returned to them in exchange for New Orleans. Once this was done, he would get the Americans to buy the whole of Louisiana from the French, and it would more than compensate for France’s generosity in 1778.

However, when the American delegation, consisting of three diplomats, arrived in Paris, they were treated very poorly by the Marquis of Talleyrand who had the gall to request personal compensation in order to intervene on their behalf. The American diplomats were so shocked by this turn of events that they returned immediately to America to report to Congress. Both parties in Congress spoke with one voice in condemning the French response to their genuine peace overture. Meanwhile, the French Navy continued seizing and sinking American merchant ships in the Caribbean, while the fledgling US Navy retaliated as best it could. That’s where things stood in 1798, and from Mayer’s point of view, the Quasi-War had to be stopped before it escalated.

Mayer especially didn’t want the English Navy getting involved in the Quasi-War. He controlled the American monetary system, that of England, and indirectly that of France, and he didn’t want the three countries who were now under his financial control to be fighting each other. France was definitely not an enemy, and because America, England and France were unofficially trading partners, one navy was all that was needed, the English Navy.

Nathan was to use Bonaparte in order to get part of the French Navy destroyed, stopping the Quasi-War in the process, and it had to be done without his knowledge. Since Bonaparte was being groomed as France’s soon-to-be strongman, he had to be handled with care. Nathan would tell Ouvrard to do whatever was necessary to get Talleyrand and Barras to send young Bonaparte on his Egyptian campaign, and we know what happened to the French Navy in that campaign.

The French Navy would be completely destroyed at Trafalgar a few years later, but for now, the important thing was to put an end to the Quasi-War. Finally, in 1800, when Bonaparte became 1st Consul, a deal was struck regarding the Louisiana Purchase, and the non-existent French-American naval war stopped. The Louisiana Purchase would be finalized in 1803 and it would give Bonaparte the wherewithal to declare himself Emperor Napoleon.

In London, Nathan was doing very well. By 1810, he had taken over from the Goldsmid Bros. and created his own bank, making him the most powerful banker in the City. His bank had immediately started setting the daily price of gold for the whole world. However, because Mayer had wanted to make sure Nathan didn’t have any official ties with him or the First Bank of the United States, Nathan opened his bank in the City, using his own name. That way, all possible ties to a father who lived in a ghetto, to the First Bank of the United States, and to the French real estate scam disappeared. Nobody would ever know where all that power and gold came from. Anonymity was the key to success.

Other than wanting to do a good job and making his father proud, Nathan had another pressing personal matter. He had been introduced to two families in London, and though it had been Moses Elias Montefiore’s family that had taken him in, Nathan had closer ties to the Levy-Barent Cohen family from when he was 18. In 1795, on a trip to America with his father and brothers, they had stopped over in London, and that’s when Nathan had met Hannah Cohen who was 12 at the time. When he arrived in London in 1798, he was quite anxious to see the girl he had dreamt about during all those years.

He lost no time in founding a family. In 1806 he married Hannah Cohen, in 1808 Lionel was born, and in 1809 he moved to St. Swithin’s Lane in New Court, where he proceeded to set up the official home of his banking dynasty. But first, Nathan had to take over from the Goldsmid Bros.

In taking over from the Goldsmid Bros., he was helped by destiny. Benjamin Goldsmid committed suicide in 1808 just prior to Nathan’s moving to Swithin’s Lane. It was said that Benjamin had been depressed for some time. When his 19-year old son converted to Anglicanism, it had shaken him up, and when his wife and daughters followed suite, it appeared to do him in. At that time, he had expressed the thought that he was saddened by the thought of being the last Jew in his family, and no doubt, that had led him to be further depressed, enough to take his life. One morning, he was found in his bedroom dangling at the end of his bathrobe chord.

Abraham was troubled by his brother’s suicide, and doubly so because he was now alone in facing his firm’s business obligations. He had bought £14,000,000 of Government Consols, and in order to do so he had contracted a sizeable loan with the East India Company in Amsterdam. In 1810, for reasons unknown to the public, the East India Company called in Abraham’s loan. That of course forced him to sell the Consols at below market, thus making him suffer a huge loss that resulted in the insolvency of the firm. Abraham honorably used the whole of his personal assets to pay back what he owed, and that left him penniless. He committed suicide in 1810. A handgun was found near his body lying in a wooded area not far from his home.

While Nathan was in the process of creating his bank in the City, Napoleon had turned France into an orderly centralist state. Napoleon had then been encouraged to go and defeat what was left of the Holy Roman Empire in Eastern Europe, which was achieved at the Battle of Austerlitz. By 1810, Napoleon had served his purpose by destroying most of the Ancien regimes, and it was time to get rid of him. But Nathan thought he could use him one last time by sending him to Russia in order to force the Tsar to open the country to private gold mining, and perhaps to let the Tsar know that there was an international power much bigger than Russia. There would always be time to get rid of Napoleon later.

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27-RECRUITING BONAPARTE

KNOW HOW WE GOT HERE, AND KNOW INNER PEACE

Paris Commune1n late 1793, when Gutle heard of the Vendean genocide, she took it very hard, for she hadn’t yet gotten over Marie-Antoinette’s execution on Oct. 14th of that same year. If her man was the most powerful banker in the world, and he was, he just had to do something about stopping the atrocities.

Mayer agreed. The time had come to put an end to the terror. When Barras returned to the Convention from Toulon, he was widely acclaimed as a hero, and Mayer seized the moment. He wrote to Ouvrard telling him to finance Barras and give him all the means necessary to put an end to the Paris Commune working out of Paris City Hall. Not only was Robespierre running the guillotine at full speed, but he had set up procedures for mass trials after which 50 to 60 victims were executed at a time.

Barras became very affluent in a very short period of time and took charge of the Convention. Barras was influential, and when he sensed that the moderates were ready to get rid of the mad dogs (les sans-culottes) in the Assembly, he moved to have Robespierre and his lieutenants arrested on July 27th, 1794. However, Robespierre was brought to the Hotel de Ville run by his friends, the sans-culottes. So, Barras had no time to lose. He accepted the nomination to become commander of the Paris military forces and immediately went to City Hall to fetch Robespierre. Robespierre was wounded in the process, and the next day, on July 28th, 1794, he was guillotined, followed by 80 more mad dogs the following day. The French Revolution ended overnight.

A year later, when the Royalists threatened to take control of the Convention, Barras had a way to stop them. He employed an idle Bonaparte who had long sought from the revolutionary government to be reinstated as brigadier general. On October 5, 1795, Barras commanded him to stop the Royalists who were marching on the Convention. Using artillery, Bonaparte massacred 300 Royalists on the steps of St. Roch Church. The young man received all the honors of victory, and Barras praised him highly in the presence of the assembly. His appointment to the rank of general of division was voted by acclamation while his protector, Barras, settled in the Luxembourg Palace.

Barras was a completely debauched individual, and he welcomed bribes from military suppliers and big business in order to pay for his mistresses, and his aristocratic lifestyle. Ouvrard himself gave him a contract to supply the Navy. He was quite generous towards his friends as he entertained many at the Castle of Grosbois which served both as his summer headquarters and his hunting lodge. Suppliers, solicitors, horses, and adventurers of all kinds, accompanied Barras wherever he went. Barras was the most popular of the five directors and his court presented a singular mixture of the biggest names of old aristocratic France and ‘nouveaux riches’. Being indirectly financed by Mayer, and having the full support of Bonaparte to whom he had given his mistress, Joséphine Beauharnais, he had nothing to worry about.

From his headquarters in Luxemburg Palace, Barras became known as le ‘roi pourri’, the rotten king. Of course, this dictatorship wasn’t meant to please the Royalists who were almost totally excluded from power, but they weren’t about to demonstrate in the streets of Paris again, especially since Bonaparte, the ruthless one, was in charge of the Paris garrison and was protected by Barras. However, after the Toulon massacre, when Barras had asked Bonaparte to take charge of the Paris Garrison and protect the Convention, he had warned Barras, “Once my sword is drawn, it will not be sheathed until order is restored”.

On March 9, 1796, Bonaparte married Josephine de Beauharnais. Two days after his marriage, Barras sent him off to take charge of the Army of Italy. It was quite a promotion, but it was in fact a way to keep him out of the way. Not surprisingly, what Bonaparte found was an army  weak, hungry, and running out of supplies. Nonetheless, in less than one year, he had recruited one hundred and fifty thousand soldiers, five hundred and forty cannons, not to mention horses, uniforms and weapons for all.

When he went to Italy, he was quite aware that his future rested on the shoulders of his ‘grognards’, and he set about turning them into soldiers. In no time, he had them eating out of his hand, and if they called him “Petit Caporal,” it was not because of his rank or his size, it was an affectionate term they used in addressing a great General who spoke their language. He made them feel he was one of them by showing great familiarity without ever jeopardizing his commander status. He was a man of stature who treated them with respect.

Bonaparte authorized his soldiers to take what they needed in an orderly way, and because northern Italy was such a rich region, the conquering army soon started looking like one. As Bonaparte’s fame and fortune grew, so did his soldiers’ self-esteem, for they were the recipients of many promotions and decorations and they basked in glory. In no time at all, the “grumblers” were draped in well-fitting uniforms, had shining weaponry, and the officers were riding spirited horses. The medals that were handed out in profusion made the spectacular uniforms even more striking. It was only natural for Bonaparte to make Italy his home base, where he accumulated victories and worked on his propaganda machine, for he had Italian blood and spoke Italian.

While he ruled in Italy, Bonaparte never stopped chasing the Austrians. Throughout the autumn of 1796, he whittled away at the Austrian army with victories at Castiglione, Bassano and Arcole. In March 1797, just two months after routing the enemy at Rivoli and driving them from northern Italy, he crossed the Alps into Austria itself, and by April 7, 1797, was within seventy-five miles of Vienna. Stunned by the advancing French armies, the Austrian Emperor sued for peace.

His way of fighting was like no other before him, he made great use of artillery, moved his army with lightning speed, and never satisfied with just winning a battle, he always went in for the jugular. He was a ruthless foe, using ungentlemanly tactics unknown to Ancien Regime field commanders.

Each victory was not only related in detail, often in advance, but embellished as well. In every French village, it was a common occurrence to hear the church bells heralding a news bulletin describing the great exploits of Bonaparte, the crier never failing to stress the General’s great courage and prowess. The fact that these bulletins were more often than not written by the great man himself didn’t seem to bother anybody. The French were a battered people and they couldn’t get enough of these great military feats involving brave Frenchmen. Bonaparte was building a solid reputation that no one in metropolitan France would dare attack, not even the newly-entrenched landed gentry. Understandably, when he returned to France in 1797, he was acclaimed as a hero.

10-INDUSTRIAL REVOLUTION

KNOW HOW WE GOT HERE, AND KNOW INNER PEACE

The Anglican religion, England’s state religion, can hardly be called protestant like the Lutheran or Calvinist religions, it’s a pseudo Catholic religion. When King Henry VIII personally replaced the Pope as head of the Church of England, he and the country remained very much Catholic. In time, that church was strongly influenced by the Puritans who had followed John Wycliffe’s teachings and had wanted to change the liturgy, but it remained true to its Roman Catholic roots. The strong anti-royalist or anti-papist feelings in England in the 17th century were a sign of the growing opposition to Church abuse, of course, but the Catholic Church’s demise was mainly due to the work of the Jews and the Huguenots who had created the English East India Company in 1600 and the Dutch East India Company in 1602. As the company dominated world trade and its owners became very powerful, they were more determined than ever to destroy their mortal enemy, the Roman Catholic Empire, or the Ancien Regimes of Europe.

When Charles I was decapitated in 1649, it marked the beginning of the end for the Absolute Kings of Divine Right and the Ancien Regime. At that time, the East India Company effectively controlled the economy of the Netherlands, but it had always wanted to move its headquarters from Amsterdam to the City in London. However, because Cromwell had disappointed his sponsors by failing to establish a proper parliamentary system in England, they had had to postpone democracy for another 40 years until the circumstances were favorable for William and Mary to wear the crown.

In 1694, once established in the City at the helm of the Bank of England, investment in research and development (R&D) could start in earnest. Sure to have their loans repaid in a timely and just fashion, they invested with abandon and launched what is called the Industrial Revolution. Thanks to ready credit, the English economy became dynamic, and European know-how flowed into the country. The bankers then started financing infrastructure projects in order to facilitate tax collection, internal trade, commerce and exchange of ideas. However, developing road and canal transport didn’t happen overnight, and the Industrial Revolution had to wait for the steam engine to really get started.

Denis Papin, a Huguenot from Hesse, had developed the cylinder and piston concept as early as 1695, but the use of steam was not fully exploited until James Watt invented the condenser in 1765. The Industrial Revolution coincided with the creation of the Bank of North America and Elie Whitney’s mindboggling invention, the cotton gin with interchangeable parts, in 1781. The main industry of the times, cotton, had experienced a great leap forward with the invention of the flying shuttle in 1733, the spinning Jenny in 1764, and the spinning frame in 1769, but it was the use of steam power and the invention of the cotton gin that revolutionized the greatest industry of the times.

On the iron side of things, railroads started being built in early 19th century, but the rails were made with wrought iron and were not durable. Sir Henry Bessemer, another Huguenot, changed all that when he invented a steel making process in 1856. In his blast furnaces, air oxidized and raised the temperature of the molten pig iron, while a small quantity of molten pig iron containing manganese was added and converted the whole large mass of molten iron into steel in just minutes, without the need for any additional fuel. That’s when track started being laid non-stop across Europe and America. In 1876, limestone was added to draw out phosphorous and make the steel less brittle, turning it into the wondrous material we know today.

Samuel Morse invented the telegraph in 1844, Elias Howe, the sewing machine, in 1846, Graham Bell, the telephone, in 1876, Thomas Edison, the light bulb in 1879, Galileo Ferraris & Nikola Tesla, the A/C motor in 1888, and Charles Steinmetz, the AC transformer in 1893. When George Westinghouse bought Tesla’s invention and started distributing AC electrical current over long distances, the whole world lit up.

The Bank of England created in 1694 was the catalyst for the Industrial Revolution. But more was to come. Because the Bank of England was made up of dozens of private bankers, it didn’t speak with one voice, and though the bankers had become very powerful, they had also become very English, and very parochial. It wasn’t until the first genuine international banker created the Bank of North America in 1781, and officially took over the English monetary system in 1810, did the world have a financial institution that spoke with one voice. Today, two hundred years after that takeover, we are the ones who enjoy the benefits of the great market economies made possible by that man and his dynasty.

9-GLORIOUS REVOLUTION

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The word revolution is a banker’s term. It was used by the owners of the East India Company when they launched their first revolution, in England, in 1688. It was called the Glorious Revolution. A revolution is a well-planned, well-financed affair that succeeds and is permanent in nature. It is always part of a bigger plan for a better world. The Glorious, Industrial, American and French revolutions are all interrelated, and they opened the door to the great world we live in today. A war, an uprising, a rebellion, a revolt, or a military coup can only be called a revolution if it succeeds and is permanent in nature, in other words, if it has the international financiers’ approval.

When the owners of the East India Company decided to finance the construction of the chateau de Versailles, they wanted to destroy the Holy Roman Empire. Naturally, they started with the most obvious target, France, its crown jewel. The construction of the chateau was the first step in a long series of events that would lead to the French Revolution. Construction of the chateau began in 1661, and by 1678, it looked like the chateau we know today. Once things were well under way in France, the owners of the East India Company started planning the Glorious Revolution, the revolution that would lead to a new form of government, democracy.

After his father’s execution in 1649, Charles II of England had fled to the Netherlands where he had lived in exile until he had been invited back in 1660. He subsequently wore the English crown from 1660 until his death in 1685. Much of England grumbled under his rule because he was for letting Catholics sit in parliament, and because he had befriended King Louis XIV of France. The owners of the East India Company, who effectively ran the Netherlands, were quite annoyed with Charles for associating with France’s king of divine right, but when, in 1672, he did Louis XIV a favor by having England declare war on the Netherlands, that was the last straw.

Since Charles II had no legitimate heir, his younger brother, James II, was next in line. While they waited for Charles’ term to run out, the financiers did their best to stoke the anti-royalist feelings among the English parliamentarians. And since James II had a daughter who was being raised as an Anglican, arranging a marriage between her and William III seemed to be the answer to their long term goal. Because James II was catholic, he would be easy to overthrow when the time came, and the crown would then be handed to his Anglican-raised daughter Mary who was next in line.

In 1677, the marriage between Mary II of England and William III of Orange was celebrated in St. James Palace, and it wasn’t a happy affair. At fifteen, an arranged marriage with a much older and repulsive William was not meant to make Mary happy, and she cried throughout the whole ceremony. She had a very unhappy life, especially while in the Netherlands, where she lived for the first eleven years of their marriage. William was a homosexual who spent most of his time leading a double life away from home, and Mary spent all that time in a big cold castle on the outskirts of The Hague. She returned to England in 1688 after the “Immortal Seven” invited her and her husband to come to England and wear the crown. William landed in England with a small army, and he marched on London without hardly firing a shot. James II took off for France, and parliament subsequently declared the crown vacant. William and Mary were then both offered the crown after signing the Bill of Rights which precluded that they submit to parliament’s authority and have no catholic descendants. That series of events is known in the history books as the Glorious Revolution.

However, that was only half of what was to be democracy, England now needed a financial institution. And as it so happened, not about to throw in the towel, and wanting James II to reclaim the crown of England, the Roman Catholic Church gave the financiers the perfect opportunity to create the Bank of England. France’s absolute king of divine right and his powerful navy had just given England a good drubbing, and he was in the process of invading England by way of Ireland. Naturally, the English parliament was asked by King William to retaliate and build a strong navy. But since no public funds were available, and since the credit of William III’s government was non-existent, it was impossible for parliament to borrow the huge sums needed. To induce subscription to the loan, the private subscribers were incorporated into a company that became known as the Bank of England. The Bank was given exclusive possession of the government’s debt, and became the only corporation allowed to issue bank notes. The necessary funds were raised in matter of days, and the private financial institution known to this day as the Bank of England was created

For the first time in the history of mankind, the bankers were sure of being repaid in an orderly and just fashion. Parliament got rid of the antiquated tax collection system inherited from France, and proceeded to develop the country’s infrastructure in order to be better able to collect taxes. The owners of the East India Company had wanted an autonomous parliament because they were banking on a human foible whereby the people’s representatives, once their political campaigns, elections and salaries properly funded, would want to prove their worth and do things before taxes were collected. Since the Bank of England controlled the purse, its shareholders now established in the City could accept or refuse to finance the parliamentarians’ projects, thus indirectly controlling all important developments in the country. That was democracy then, just as it today, and it’s the owners of the East India Company who created the concept. Democracy can only work if the concerned country is indebted, and a democracy is always indebted.

If democracy has proven itself to be the best political system in the world, it’s because people representation and monetary control are separate. The people’s representatives manage things while the bankers decide what’s to be managed by increasing or decreasing the flow of credit. If the one who prints the money is the same as the one who spends it, that is, if the parliamentarians do the printing and the spending, the system can only implode.