33-MASS COMMUNICATION

Globalization

KNOW HOW WE GOT HERE, AND KNOW INNER PEACE

Our world, the western world, started when the Jews and Huguenots, the enemies of the Holy Roman Empire, created democracy in England in 1689. After getting a foothold in Amsterdam in 1602, they were extremely successful running the Dutch East India Company and eventually set up their headquarters in the City, in London. In 1688, the bankers were finally able to finance the election of the people’s representatives and give them a proper parliament. Democracy as it became known, was a win-win situation for all. Parliamentarians were forever asking the bankers for loans, and in wanting to safeguard this great source of credit, the politicians made sure they collected taxes in order to pay back the loans, or at least the interest. The bankers were sure of having their loans repaid for the first time in their history and they invested in research and development at a frenzied pace.

At first, there was no infrastructure, and communication was limited to the printed page. The printing press had been invented by Johannes Gutenberg in 1440, but the rotary press did not see the day until 1846. The Industrial Revolution was slow in getting going, but it got in gear when, in 1765, James Watt invented a converter for the world’s first steam cylinder and piston engine that had been invented by Denis Papin, a Huguenot from Hesse, in 1690. As of 1765, the Industrial Revolution had a full head of steam so to speak. Manufacturing goods and mining with steam power, and transporting those merchandises along roads and canals became commonplace. Other major inventions like Eli Whitney’s cotton gin in 1793, Elias Howe’s sewing machine with interchangeable parts in 1846, and Henry Bessemer’s steelmaking process in 1857 contributed to the production of goods, but the concept of globalization envisaged by Nathan in the City in 1810, and by his father before him, depended entirely on communications.

Nicephore Niepce created photography in 1820, Samuel Morse the telegraph in 1844, Charles Havas, Paul Reuter and Bernhard Wolf, news agencies in 1845, and from there, communications increased exponentially. When Bessemer invented his steelmaking process in 1857, railroad tracks were finally cast in a durable material and the construction of railroads mushroomed. Then came Graham Bell with the telephone in 1876, Thomas Edison with the light bulb in 1879, and Nikola Tesla with the a/c induction motor in 1887. However, when George Westinghouse bought Tesla’s patent and triumphed over Edison with his a/c current distribution system in 1891, that changed the industrial world as well as people’s lives.

As research and development continued to receive astounding amounts of credit, images and voices started travelling through the air over long distances. Reginald Aubrey Fessenden transmitted the human voice without wires in 1900, and Hollywood started producing films that seduced the whole world as early as 1910. After Henry Ford got the combustion engine rolling with his Model-T, and the Wright Bros. got it flying in 1903, films made in America, the dream nation, were seen around the world. Although images started travelling through the air with TV in 1926, it was the talking colour film introduced in 1930 that entrenched the ‘image is the message’ concept imagined by Marshall McLuhan. When the first computer and its mouse arrived in 1976, and especially when Tim Berners-Lee’s World Wide Web came along in 1990, we became information addicts. But it was the smartphone in 1993 that captivated our total attention and hardwired us to the news agencies, transforming us into smombies in the process. It took 3 million years to get to steam energy, but it took a mere 225 years more to get the whole world connected.

Hollywood was a good example of how research and development money gets things done. In the early 1900s, filmmakers, almost exclusively Jewish, began moving to California. The idea was to create the film industry in an unreachable place where they would be free to use with impunity the usurped patents owned by Thomas Edison and Eastman Kodak of New Jersey . If an agent from New Jersey came out west to sue them, all the filmmakers had to do was make a quick temporary escape to Mexico. There was really not much Thomas Edison or George Eastman could do in order to protect their patents.

The first film, ‘In old California’, was produced in 1910. From there, the Laemmle’s, the Zukor’s, the Frohman’s, the Lasky’s, the Goldfish’s, the Abrams’, the Warner’s, the DeMille’s, the Cohn’s, the Selznick’s, the Sarnoff’s, the Zanuck’s, the Loew’s and the Mayer’s, all friends of the City banking dynasty, made the industry prosper with lightning speed. The radio and film industries launched the 20th century into the realm of globalization, and in the blink of an eye, television, computers, mobile phones and airplanes turned us into world citizens.

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25-REAL ESTATE SCAM

KNOW HOW WE GOT HERE, AND KNOW INNER PEACE

PART III – How the City became the head office of international finance

In 1789, upon hearing that Benjamin was feeling poorly, Mayer decided to go to America with his three teenage sons, Amschel, Salomon and Nathan. The last time he had travelled to the new world was in 1785, following Haym’s death. On this trip, he wanted the boys to get a feeling for this wondrous new country, but above all, he wanted the boys to meet Benjamin Franklin. Unfortunately, Benjamin being old and in poor health, they arrived too late.

But business went on. Mayer met with Moses Hayes in Boston, Ephraim Hart in New York and the Gratz Brothers in Philadelphia. Robert Morris who had done such a superb job as head of the Bank of North America and Superintendent of Finance had passed on the torch to his young protégé, Alexander Hamilton, who was now Secretary of the Treasury. Alexander was a true prodigy and was handling the young nation’s finances brilliantly. When Mayer met with Robert Morris, he told him how satisfied he was with their work and that he was henceforth free to use his own good judgment in the running of the country’s finance. Of course, Robert was expected to consult with Alexander, Moses, Ephraim and the Gratz Brothers if urgent matters came up, and directly with Mayer in Frankfurt if he deemed it necessary.

He then met with Washington in his magnificent renovated Mount Vernon estate and congratulated him on his election victory. He assured him that since trade and commerce was developing at breakneck speed, he and his political supporters would continue receiving unlimited funding in order to carry out their mandates as they saw fit.

Next, he met with Alexander Hamilton and congratulated him on getting George Washington elected. He also told him how impressed he was with the work he and Robert Morris were doing. He then brought up the subject of the Bank of North America charter that was expiring in 1791. Hamilton was way ahead of him on that one, for a first draft of the 1st Bank of the United States of America charter that was to run for another twenty years was already being circulated and was meeting with very little opposition. Mayer was indeed impressed by this young man.

The states were developing by leaps and bounds, Mayer’s people were rich and getting richer, and his bank’s charter was about to be renewed for another twenty years. There was absolutely nothing for Mayer to worry about. He always treated his collaborators as equals, and always made sure they had enough money to reach any goal or satisfy any whim without their having to ask Mayer. People don’t necessarily like being on a string, but severing a link to such bounty is unthinkable, especially when it’s so easy to forget the string exists. One thing was certain, America and his bank could look forward to twenty years of peace and prosperity.

The only matter that needed immediate attention was getting permanent residences for the President and Congress. Mayer agreed that having the federal capital at the head of the Potomac River was the best choice since the area was slightly in the southern portion of the new nation, and strategically well-protected. Having an executive building for the President and his staff separate from that of the people’s representatives was deemed important as well. However, although the constitution, drafted by Hamilton, Madison, and Jefferson who had just come back from Paris, had been submitted the year before, some states were still holding back. Nonetheless, Alexander was certain the US Constitution and the Compromise of 1790 would be accepted, and would lead the way in the creation of a strong federal state.

Before setting sail for the trip home, Mayer and his boys decided it would be a good idea to go by way of Paris, in order to see what was happening in France. Mayer was anxious to know how much gold bullion his real estate operations were generating. When they arrived in Amsterdam, they took a Thurn and Taxis mail coach in order to avoid problems with the French authorities. Mayer had written ahead to David Schiff, Moses Montefiore, Gabriel Julien Ouvrard, and the Goldsmid Bros. convening them to a meeting in Paris.

The meeting took place in Gabriel’s mansion in Paris, and since it wasn’t a good idea to display wealth at that time, they kept the meeting low key which suited everybody. Mayer and the boys listened with the greatest attention as they were briefed on the state of the real estate sales and on the latest developments of the ongoing revolution.

The counterfeit assignats printed by Johannot were being circulated undetected, and Ouvrard’s agents, Huguenots working out of the lodges of the Grand Orient of France, were having no trouble buying the prodigious properties as they were put up on the auction block. Ouvrard and his agents flipped the properties to anxiously waiting French buyers with the help of Cambacérès’ law firm that was always on hand to do the necessary legal work. The word had gotten around that gold could be used to buy the properties at a reduced price, and the wealthy buyers were queuing up. For instance, if a buyer personally purchased confiscated Church property at auction, he had to use assignats which he had to buy at face value from the government. By purchasing a property worth a 100 million pounds at auction, he needed to buy 100 million pounds’ worth of assignats at face value. But if he bought the same property from Ouvrard, he would only need to have 50 million pounds in gold.

As the sales were completed, Ouvrard had the gold transported to Paris by Thurn and Taxis. The gold was then shipped down the Seine to Le Havre where a waiting Baring ship from the East India Company took it to London where it was deposited in the Goldsmid Bros. vaults in the City. Montefiore in London made sure everything went smoothly at that end. So far, there had been no hitches and the elite group assembled in Paris didn’t foresee any. Mayer’s boys were in admiration of their father who had set up such a marvelous scam where no one was harmed that hadn’t been already.

Mayer and the three boys left Paris in good spirits, except for Nathan who was complaining about not being allowed to go and witness the demolition of the Bastille prison. In order to humor Nathan, Mayer talked about plans for the family as it pertained to London. Soon, he would need to have one of his sons take charge of family affairs in the City. It was a foregone conclusion that Amschel, the eldest son, would be the future head of the family and remain in charge in Frankfurt, and that Salomon was to go to Vienna to supervise the massive banking operations in the loosely united Holy German Empire. As for London, since Nathan spoke English best, he would be sent to the City when he reached 21. That definitely took Nathan’s mind off the Bastille.

When Mayer got back to Frankfurt, the first thing he did was sit down with his wife Gutle and acquaint her with the latest American and French developments. All was going as planned in America, and there wasn’t much to add to what she already knew. Though Benjamin’s passing had been deeply felt by Mayer, business carried on as usual. The 1st Bank of the USA was about to receive a 20-year charter, and the buildings housing the President and Congress were to be built at the head of the Potomac River. With Morris and Hamilton at the helm, things were going fabulously well.

In France, however, it was another matter. The year before, in 1789, the Illuminati had financed a meeting of provincial representatives who had been either named or elected in order to draw up lists of grievances in view of bringing them to the King’s attention. When they congregated in Versailles, the clergy and nobility refused to sit in the same room with them, and the King cancelled the meeting. Mirabeau, a great orator, then convinced the people’s representatives to hold a meeting of their own. Naturally, when they declared their body to be the official government of France, the King sent in the National Guard to disband them. Mirabeau then seized the moment, stood up to the sergeants, and the assembly refused to disperse.

Planned famines continued to undermine major French cities, and the Illuminati were using the Palais Royal, the Paris residence of the King’s cousin, the Grand Master of the Orient of France, Louis Philippe d’Orléans, as their center of operations. The courtyard was a meeting place for all the hotheads, lowlifes and unsavory characters attracted by the firebrand speeches. In July of that year, a throng assembled in the courtyard, fired up by the speeches, went and stormed the Bastille, the much hated royal prison. The prison governor was decapitated and his head was paraded through the streets of Paris.

A few weeks later a procession of very odd masculine ladies accompanied by Lafayette’s National Guard went to fetch the royal family in Versailles. Oddly, the royals were brought back to Paris without any intervention on the part of Lafayette and his guard. The royals were put under house arrest, and the newly formed National Constituent Assembly had followed them to Les Tuileries in order to be at the center of power. Because the National Assembly had no source of revenue, its members immediately voted to confiscate and sell church property as planned. They voted to have assignats printed and sold for hard currency, and only those with assignats were to be allowed to buy the confiscated Church property put up at auction throughout France.

When the auctions got going Ouvrard’s agents were already in place and Johannot’s high quality counterfeit bills were being circulated. A number of prestigious properties had already been bought. Ouvrard’s agents having unlimited amounts of assignats had no problem outbidding the French who were quite willing to wait and buy the properties for gold at a discounted price. Ouvrard was directed to ship the gold bullion to the Goldsmid Bros. in the City, in London. Francis Baring, the Chairman of the East India Company in Amsterdam, was charged with conveying the bullion to the Goldsmids, and always had a ship at the ready in Le Havre. The Goldmids were soon the most powerful bankers in England.

Gutle was greatly troubled by the counterfeiting operations, but was happy to hear that the bullion was being stockpiled in the City, as planned by Mayer. She was relieved that nobody knew what Mayer was really worth, for most people didn’t even know he existed. Some knew he was rich, but since he lived in a ghetto, they didn’t know what to make of it. It would have been a far reach for anybody to even think that Mayer controlled the monetary system of the United States of America. In time, the American politicians would question the bank’s origins and wonder who the owners were, but Mayer would maintain total anonymity. People didn’t know that what was best for the bankers was also what was best for the people, and they tended to envy and even revile the bankers. But since there was not much they could do if they didn’t know where to point the finger, that’s the way it would continue to be. As long as everybody was kept guessing concerning the working of the monetary system, and as long as Mayer did what was best for the country, the people would eventually and grudgingly accept the fact that it was the only way democracy could work without ever really understanding what democracy was.

12-DAVID TO ROTTERDAM

KNOW HOW WE GOT HERE, AND KNOW INNER PEACE

Mayer lived near the waterfront and often walked down to the river’s edge to listen to the hustle and bustle of ships being loaded and unloaded. This was a good place to think. Mayer was very interested in trade generally, and he was mesmerized by all the exotic merchandise coming from unheard-of parts of the world, but he saw it with the eyes of a banker, not those of a merchant.

The only bank in existence was the Bank of England, and it was a bank model Mayer wanted to duplicate. It was made up of a group of private bankers who had the exclusive right to lend money to the English Government. If the people’s representatives wanted to launch a government project before taxes were collected, as was always the case, they went to the bankers for a loan. It was a bankers’ heaven, for not only were they sure of being repaid, but they could choose what loans were to be made. And by having the sole right to issue bank notes, they controlled the monetary system of England.

Mayer was already a banker of sorts for Prince William, and he took his commitment to the Principality of Hanau very seriously. However, it didn’t stop him from planning to bankroll his own operations. His plan had to do with the Hessian troops being recruited for England. William was spending much too much money outfitting and arming those troops. Military supplies came mainly from France and England and were shipped through Bremerhaven up north. Because William didn’t buy directly from the suppliers, and because the route was long and crossed many German states, everything cost much more than it should. If Mayer had someone in Rotterdam buy everything directly from the suppliers, and if he then transported everything in his own barges up the Rhine River, he would make a handsome profit while lowering his benefactor’s costs. Even though this meant doing business, the risk was almost nonexistent, and it was a way of seriously increasing his capital.

For a hundred years now, since the Treaty of Westphalia, the Rhine River had been open to free trade. It was forbidden for local lords to collect tolls, and most of the castles along the Rhine River had been put out of commission prior to the treaty. Nonetheless, renegade lords still collected tolls, and that hampered inland commerce. But Mayer knew that if his barges flew the Hesse-Kassel colors, no one would dare stop them and make them pay, for everybody knew that the State of Hesse had a lot of troops at the ready.

Frankfurt was a port on the Main River, a river that flowed into the great Rhine River a few kilometers to the west. Mayer had talked with the shipbuilders in Hanau about getting large barges built, proposing a model like that once used by the Romans to bring in wheat from Gaul. It was a large barge about thirty-five meters long, six meters wide, with a draught of one meter, which could carry around twenty tons. It had a cabin in the back for cooking and sleeping, a square sail in the middle, and it allowed for ten oarsmen. The local mariners all agreed such a barge was ideal for travelling upstream on the Rhine. Upon leaving Rotterdam, it could run with the tide, and then the sail could be used to run with the prevailing west wind while the rowers pulled and steered as needed. Of course, sailing downstream from Frankfurt would be a lot easier.

Such a barge was affordable to build and a cost-effective way to transport goods, even with a ten-man crew. Mayer would start with one barge, and have more built as needed. He would establish a counting house in Rotterdam where his broker would fill orders and have the goods waiting for the next barge. When the barge arrived, the goods coming from Frankfurt would be unloaded and stored in a warehouse, and the military supplies waiting in another warehouse would be loaded unto the barge headed for Frankfurt. All special orders for exotic products purchased from the East India Company would be unloaded in Frankfurt, Hanau or some port on the Rhine, while the military supplies would go to Hanau.

The Huguenots who had settled in the Hesse region more than a hundred years before were great entrepreneurs, and among other things, they set up foundries that produced high quality iron. They also made stylish furniture, glassware, tin ware, leather products, fine silks, and clocks. They even manufactured artillery pieces, called serpentines, known for their precision and durability. In Hanau, the Goldsmiths’ House was actually an art center for the training of goldsmiths and silversmiths. Lithographers, engravers and artisans developed and used the latest techniques in the making of jewelry, in printing and in the minting of very attractive coins. Mayer knew that the manufactured products coming out of Hesse would be sure to sell easily in Rotterdam.

All goods at both ends would be bought at the lowest cost and sold at the highest price, making sure that the highest price was the price that everybody was willing and ready to pay. The considerable profits thus realized would remain in the counting houses at either end, and would be used to buy ever more merchandise going in both directions. There would be a considerable buildup of specie at both ends, and the counting houses could then start printing their own bills of exchange. Since both counting houses would always adhere to a strict code of ethics imposed by Mayer, where the bills are redeemed on demand at all times, they would gain the confidence of the local business community and become widely accepted. The increased credit would allow more businessmen to do more business, and profits would increase. Bills of exchange had a multiplier effect, and that was what banking was all about.

All he needed was to find a man who would want to go and settle in Rotterdam. As for the amount of money needed to build the barges and fill the initial orders at both ends, it was insignificant, considering his already considerable wealth. The first name that crossed his mind for the job in Rotterdam was that of young David Schiff. Since David and his wife Hannah lived upstairs in the same house, Mayer knew them well, and he had taken the young man under his wing. David had proven to be brilliant in the bills of exchange business.

Of late, David had been showing signs of unrest. He didn’t like the idea of his family growing up in the Judengasse ghetto, and Mayer could understand why. David didn’t come right out and say it, but Mayer knew. David had spoken of Rotterdam as being an attractive place to live, but what he didn’t know was that it had many drawbacks for an Ashkenazi Jew. The Sephardi Jews, who ran the East India Company and ruled the oceans of the world, were wealthy Jews from the Iberian Peninsula. They were rich, proud and even arrogant. Those Jews didn’t think very highly of Ashkenazim coming from Eastern Europe. However, if David accepted, Mayer would give him enough money to settle in properly, for image was very important. But there was another problem in that the Sephardim didn’t worship the way Ashkenazim did, and David wouldn’t be welcome in their synagogue. No matter, he would make David an offer while making it very clear what problems his family was going to face.

The ghetto was flourishing. The people were vibrant and united, and their faith made them strong. Judengasse had a fine stone synagogue, plenty of good clean water, good sewers, a fine hospital, its own kosher slaughterhouse, a yeshiva and a rabbi who was a prince of knowledge. Though the inhabitants were often harassed and humiliated when they left the ghetto and were not free to move about at night and on Sundays, in many ways they were better off than the goys living outside the ghetto.

David agreed that the community was one big family, but he was overcome by feelings of hate and revenge when a goy treated his wife Hannah like a whore. One day he would retaliate, and his life and that of Hannah would be compromised. When Mayer offered to set him up in the finest counting house with all the money needed to hire a professional staff, purchase warehouse space, build a house for his family, and have all the necessary expense money to look like a successful businessman, he couldn’t believe his good fortune.

David readily accepted the generous offer but wondered how he could ever repay Mayer. Mayer told him that he would be making his weight in thalers many times over, and repayment didn’t enter the picture. He told David that though Ashkenazim in Rotterdam were poor and were assisted by the community, and that the Sephardim wouldn’t be happy welcoming another Jewish rag dealer, another mouth to feed, things would be different for David. Mayer would introduce him to an Italian Jew named Moses Montefiore, a well-connected Sephardi who would help him get established.

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.