50-THE OIL PATCH

Our consumer world is built in large part on oil. The sweetest and cheapest oil comes from the Middle East. Today, the unrest we see in the world and call terrorism stems in large part from its exploitation, and it constitutes a major obstacle standing in the way of the development of the global village. But although the oil sheiks have accumulated mountains of petrodollars, they have no real power, so it won’t take as long for Islam to throw in the towel as it did for the Holy Roman Empire.

Because the oil sheiks are bitter relative to the apparent injustices done them by the City bankers, and because they don’t want to be overwhelmed by western ways, they manipulate Islam in order to reclaim some power over their destinies. Religion is once more being used as a tool. However, because the City has all the gold and controls all the central banks of the world since the Bretton Woods agreement in 1944, it is omnipotent, and it will not let the oil sheiks stop the march of globalization.

The Middle East problem started after the fall of the Ottoman Empire during World War I, when a Briton, Mark Sykes, and a Frenchman, Francois Picot, were directed to draw the new borders of the Middle East sheikdoms. In wanting to better organize the exploitation of oil by France and Britain, the City bankers directed them to draw the map of this very volatile region of the world and divide it into states that cut through ethnic and religious communities. In doing so, they created a geopolitical problem of great proportion. A century on, many Arabs continue to blame the subsequent violence in the Middle East, from the occupation of Palestine to the rise of the Islamic State, on the Sykes-Picot treaty.

The excellent cheap easily extracted oil started being shipped around the world just as the US Dollar was becoming the dominant currency in the world following the creation of the Federal Reserve Board in 1913. At that time, oil was selling for less than five dollars a barrel, and Europe and America couldn’t get enough of it.

For 100 years now, the Arab states, led by Saudi Arabia, have been selling mindboggling amounts of oil to the developed countries. To this day, the Emirates hold more dollars than anybody else in the world, and therein lies the problem. They can build ski slopes in the desert, but they are not allowed to build aircraft carriers and atomic bombs. The only way the oil sheiks can make the petrodollars work is by depositing them in the Central Banks of the World which are directly tied to the City. If they wanted to withdraw their dollars in order to make the Central Banks collapse, their dollars would no longer be worth anything. It is the best catch22 ever devised. The sheiks are very rich, have little power, and are very frustrated.

Terrorism is the result of this frustration. The Emirates are doing everything they can to reclaim their autonomy and free themselves from the City. Though this is an absolute impossibility given that the City owns and runs the financial world, it does not stop them from trying. The sheiks have not only chosen to manipulate Islam in order to achieve their goals, but the problem is further complicated in that Islam is split into Sunnis and Shiites, two factions that behave like deadly enemies.

Following the Sykes-Picot treaty in 1916, the City not only financed the development of the oil industry, but they paid for the oil extracted. The problem, however, was that the sheiks didn’t have any say in the matter, and once empowered by the fantastic windfall that ensued, they wanted to redress the situation. The City bankers had foreseen this, and in wanting to police the area, had created the Empire of Iran in 1941 and the State of Israel in 1948. However, they made a big mistake in not paying attention to the fact that Islam was divided into two deadly enemy factions.

Since close to 90% of the 1, 5 billion Muslims in the world are Sunnis and the rest Shiites, Saudi Arabia and Egypt being the two main countries in the Sunni world, we could wonder why the City bankers opted for a Shiite Iran. In 1941, when the City decided to enthrone the Shah of Iran and give him state of the art armament, it seems the City was swayed by the fact that ex-Persia represented one of the greatest cultures that the world had ever seen, and that the sheiks of the peninsula were perceived as mere tribal chiefs.

Since 1694, the City bankers have made three major mistakes. The first was when the original Bank of England bankers forced English trade down everybody’s throats which ended up costing them America and the financial control of the world. The second was when the banking dynasty that replaced it put too much trust in Tsar Nicholas II which led to WWII, and the third was when that same dynasty failed to pay attention to the Shiite-Sunni split which ended up costing them the Six-Day War, the Iran-Iraq War and the two Gulf Wars, not to mention all the ongoing terrorist acts that have to be countered on a daily basis.

The City bankers did, however, change their minds after Israel defeated Sunni Egypt in the Six-Day War in 1967, when it became obvious that the Shah of Iran was not able to hold his end of the bargain and assert his authority in the Middle East. In 1979, the bankers decided to back the Sunnis (Saudi Arabia and Egypt) instead of the Shiites (Iran). They had the Ayatollah Khomeini depose the Shah of Iran on the one hand and encouraged Saudi Arabia to back Saddam Hussein and make him the strong man in Iraq on the other.

The Iraq-Iran War followed in 1980, and it turned out to be a long war of attrition that ended in a stalemate. Not only was Saddam Hussein an incapable leader unable to defeat the Shiites of Iran, but he was becoming an unmanageable despot. He therefore had to go, and it took two Gulf Wars to get rid of him, one in 1990 and another in 2003. A media campaign was sufficient to get America to launch the 1st Iraq War codenamed Desert Storm in 1990, but the negative results of that war that had followed the apocalyptic Vietnam War made Americans wary, and it took the World Trade Center bombing of 1993, the Oklahoma Federal Building bombing of 1995, and 9/11 in 2001 to get America to launch the 2nd Iraq War in 2003. Today, Saddam is gone, the Sunnis (Saudi Arabia) are slowly reasserting their authority in the region, while the City is encouraging a Muslim diaspora in order to have Islam integrate the global village. By having millions of Muslims immigrate to a Europe that badly needs manpower, Islam will gradually be liberated from the sheiks’ influence and become an acceptable religion just like in the case of Christianity after the Holy Roman Empire was destroyed.

For now, the recalcitrant Sunnis and Shiites are spreading terror in order to have their way, and there is a lot of collateral damage whereby innocent people suffer. But the good news is that the Sunni and Shiite leaders will be forced to throw in the towel in the not too distant future because the global village concept is irreversible. Some Emirates have already started adopting western ways, and it’s only a matter of time before their leaders start wearing ‘suits’.

47-WWII AND BRETTON WOODS

After the armistice was signed in 1918, the City banking dynasty immediately sat down at the drawing board and prepared for WWII. The Treaty of Versailles signed in 1919 was the worst possible peace treaty imaginable, and we can be sure that peace was not on the peacemakers’ mind. All the statesmen had to be from la-la land in order to give their approval to such impossible terms. The thirty-three billion dollars of war reparations the allies imposed on Germany couldn’t possibly be repaid and everybody knew it. Furthermore, when it was decided to split Germany in two by creating the Polish Corridor, the whole German population was profoundly humiliated. Such decisions were more than enough to set the wheels in motion for WWII, notwithstanding the fact that Stalin was waiting in the wings.

The Treaty of Versailles definitely indicated the direction in which the City was heading, and very soon the bankers found their mouthpiece, the man who would rally the German crowds. Adolf Hitler was noticed very early on in 1919. In spite of his poor physical condition, he had joined the army in 1914 at age twenty-five. Until then, he had been a poor, lost soul and the war had given him a purpose in life. Private Hitler volunteered his services as a dispatch runner, a very dangerous assignment, and was eventually promoted to the rank of corporal. His comrades thought he was rather weird, for he forever volunteered for the most dangerous missions, facing death repeatedly while remaining unruffled by it all. In 1916, he was wounded in the leg and went on R&R to Berlin where he became thoroughly disgusted with the apathy among German civilians with regards to the war. Upon returning to the front in the last days of the war, he was blinded by chlorine gas and returned to a starving, weary Germany to convalesce. Upon hearing that Germany had been defeated, he became totally despondent, and when he eventually snapped out of it, he was filled with deep hatred vaguely directed at groups within Germany.

In 1919, still in the army, this overly patriotic twit went so far as to inform on his fellow soldiers, and this led to the arrest and even the execution of many. The General Staff, embittered by Germany’s defeat and the unjust terms of the armistice, rewarded Hitler by promoting him to undercover agent and sending him on an indoctrination course at the University of Munich. He returned as an “education’ officer and started speaking out with great vehemence against the Communists. The mysterious Thule Society had taken Hitler under its wing and his fate was sealed.

Hitler swore vengeance on those who had put an end to the war, the only worthwhile experience he had ever known. Inexplicably, his ire was directed mostly at the perceived enemies from within Germany, the Communists and the Jewish Marxists. Moreover, Hitler had to have had serious psychological problems in order to advance the idea of a superior race made up of blond, blue-eyed Aryans. This was not a healthy idea to begin with, but it was especially so because Hitler happened to have a swarthy complexion and brown eyes that had most likely been genetically transmitted by a Jewish parent. It’s obvious that someone was manipulating this air brain.

In 1919, Hitler, the intelligence officer, dressed as a civilian in order to spy on a meeting of the German Workers’ Party in Munich. When one of the members suggested that Bavaria separate from Germany and join Austria, it touched a raw nerve in the extremely patriotic Hitler. He couldn’t resist lashing out at the whole gathering in spite of the fact that he was Austrian by birth. Nonetheless, he definitely had the gift of the gab and everybody was impressed. Understandably, the members of the Thule Society were quick to have him join the German Workers’ Party. He may have been uneducated with deep psychological problems, but now, this empty-headed megalomaniac guided by hate and vengeance was in politics.

Hitler was a great talker, but all the ideas he kept expounding over the years were those of the Thule Society. This fraternity consisted of a small group of influential Germans who believed in the superiority of the Aryan race. They were deeply nationalistic and racist and from the very beginning, they had the swastika in their coat of arms. It was Dietrich Eckart, a leading member of that society that helped Hitler hone his public speaking skills. As early as 1919, Hitler had definitely been taken in by the Thule Society, the group that gave birth to the Nazi Party.

At first, the violent methods used to promote Hitler and the German Workers’ Party didn’t have the desired results. They only succeeded in getting the whole country to view Hitler as a silly little man, a sort of bad-tempered clown. Nonetheless, by 1923, Germany was reeling under the effects of inflation, and Hitler’s backers thought the time had come to make their mark by overthrowing the Bavarian Government. However, the Munich Beer Hall Putsch, as it became known, failed and Hitler was arrested. That’s when Hitler’s supporters decided that force alone was not going to work and that it was best to use more politically-correct methods.

Hitler’s public trial lasted several weeks and, for some unknown reason, the authorities let this ridiculous little man flaunt his oratory skills throughout. He apparently seduced many of the judges, for instead of getting life he got five years and was eligible for parole within six months. He served nine months in luxurious quarters and even had a private secretary, Rudolph Hess, who was a member of the Thule Society. That’s when Hitler produced Mein Kampf, a book that could never have been written without the help of Hess, a man who had studied politics at the University of Munich. The writing of Mein Kampf was, without a doubt, a way to spread Thule Society propaganda.

Guided by the members of the Thule Society, and assisted by misfits like Joseph Goebbels, a communications and propaganda genius, Heinrich Himler, a cruel, cold-blooded psychopath, and Adolf Eichmann, a logistics genius, Hitler became Fuhrer in 1934. It’s obvious that the Nazi Party was a very costly machine to operate, and only the City, through the Bundesbank and the German arms industry, could have financed such a sophisticated political machine, for Germany was a devastated country. And as the arms industry revved up its production, the economy picked up, and Hitler, now seen as some kind of savior, easily convinced the German people that war was inevitable and that he was the one who could lead them to victory.

After WWII was declared, the German army went around the totally useless French Maginot Line with lightning speed and had the allies surrounded at Dunkirk in a matter of days. One can only wonder why, in an age of air and tank warfare, a great nation such as France spent huge sums of money in order to build an archaic structure, if not to allow Hitler to reach the Atlantic in record time. With the allied armies unable to retreat further, Hitler let the troops sail to England, no doubt hoping for a non-aggression pact in compensation for his good deed. However, England was apparently not willing to cooperate. Hitler then figured he might get the English to change their minds if he shook them up a bit. Eventually, the English must have given Hitler some assurances, for the London Blitz ended on May 10th 1941. Convinced that the western front was now secure, Hitler immediately turned his attention to the eastern front, and invaded Russia on June 22nd, 1941. Just like Napoleon in 1812, who had gone after the gold in the Urals, Hitler wanted to get his hands on something he really needed, the oil in the Caucasus. In both cases, the megalomaniacs’ armies were destroyed, and in both instances, their empires came to an abrupt end. The City tends to repeat what works well.

On December 7th, 1941, shortly after Hitler took off for Russia, the Japanese attacked Pearl Harbor. It seems the City was thinking of China and wanted to destroy the Nippon Empire by using the might of America. In July of that year, Congress imposed an oil embargo on Japan, and the ensuing kamikaze approach to the war adopted by Japan proved the City right. Japan had tried to negotiate with the U.S., but everything possible had been done by the Americans to have the negotiations fail. The very proud Samurais were thus forced into a suicidal war, hanging on to the hope that an alliance with an apparently victorious Germany would improve their prospects.

If there’s any doubt that America was conned into going to war, a few facts should help dissipate it. Although the US and UK navies controlled the Pacific, and although there was a SCR-270 radar station with a 150-mile range installed in Honolulu, the Japanese were able to have a huge fleet of warships, including aircraft carriers, sail across the Pacific to Hawaii, and then launch squadrons of aircraft without anyone noticing. Furthermore, all the U.S. aircraft carriers had been sent out on sea exercises and only the very outdated WWI battleships and destroyers remained in port. The play became obvious when President Roosevelt, under the guise of protecting the U.S. air force, personally ordered all the military aircraft based at the Honolulu airbase to be positioned in such a configuration as to make them less vulnerable on the ground, but which had, in fact, the effect of preventing them from scrambling effectively. It seems that the City dynasty had simply let Roosevelt know it was time for war.

The City bankers succeeded in getting the U.S. to join the war at a cost of only 2,390 lives, the number of casualties at Pearl Harbor, a low human toll when considering the mindboggling number of casualties in WWI and WWII. The war in the Pacific got underway as planned, and the U.S. declared war on Germany without actually engaging Hitler for another three years. When the American troops did get into the thick of things on D-day, in 1944, Stalin’s troops came in from the east, and the Holy Germanic Empire was totally destroyed. As of that moment, all the Ancien Regimes of Europe, including Russia and the Ottoman Empire, could be considered demolished, and the Vatican tiger was at last toothless and declawed.

To have some idea which countries the City targeted in WWII, we need only look at the casualty numbers. Russia lost twenty-two million soldiers and civilians, while Germany and China suffered losses of eight million and twenty million, respectively. As for the UK, the U.S., and France, they lost around half a million each. We know that the City had wanted to destroy Germany, but why so many Russian casualties? And what was going on in China? For one, Russia had to be seriously weakened if it was to be trusted to play the scarecrow role it was on the verge of being assigned, and that will be explained in the next posting. In China’s case, the City obviously had let the Japanese mangle the Chinese warlords at will, for during the war it supplied China with just enough war materials for it not to capitulate. The City had fully intended to destroy Japan once the Chinese warlords were done in, and the time had come. China was ready to be transformed into the great market economy that it is today.

In 1944, in Bretton Woods, with the world having gone through the grinder, the City convened all the nations of the world and had no difficulty in creating the first official world currency of reference, the U.S. dollar. All the countries agreed to peg their currency to the dollar and use the dollar as a reserve currency. The City had achieved the ultimate in financial wizardry, the paper dollar was now as good as gold worldwide.

43-BOER WARS

The story of the City in London is all about gold. Mayer was the founder of international banking because he was the first banker to use gold as it was meant to be used. According to him, gold was not meant to be spent, it was meant to be mined, purchased, and then stockpiled in a secure location for all time. The one who had the gold necessarily controlled the monetary systems. Mayer created the Bank of North America in 1781, thanks to the 500 metric tons of French gold made possible thanks to Benjamin Franklin’s intervention. After Mayer’s real estate coup in France in 1789, he managed to funnel another 5000 tons of French gold to the City. In 1810, his son Nathan had the wherewithal to fix the daily price of gold worldwide from his offices in the City. Nathan had perhaps as much as 7000 metric tons of gold in his possession, close to half the gold ever produced at that time. He held most of England’s debt, and was in charge of the English, French and American monetary systems.

In 1812, Nathan sent Napoleon to Russia in order to force the Tsar to let private interests mine for gold in the Urals, which was a determining moment in our history. Thanks to the French engineers from l’École des Mines de Paris, placer deposit gold mining techniques had been refined and newly mined gold started being stockpiled in the City.

Mayer built his dynasty on gold and trust, and his dynasty wasn’t about to change course. When hard rock mining was made possible in the 1880’s, gold production skyrocketed. Paper money went to the miner, and gold went to the City. As gold was stockpiled in the City, the paper it backed, whether in America or England, became as good as gold. There have never been losers, for the miners get paid the world price set in the City, and Mayer’s dynasty stockpiles the gold and creates more credit.

The total production of gold to date is estimated at around 250000 metric tons. The gold used in jewellery, industry, and dentistry, combined with the token amounts of gold on display in the various Central Banks of Germany, Italy, France, USA, China, Russia etc., probably accounts for around 75000 metric tons. Most gold is held in a virtual form as Exchange-Traded Funds (ETF’s), and though it is impossible to be accurate, there’s around 150000 metric tons of real gold bullion unaccounted for and stockpiled in the City and its financial satellites.

The Boer Wars are forgotten wars, but if one analyzes and correlates the dates and circumstances surrounding the discovery of gold and diamonds in South Africa and the wars that were fought in that country, it becomes clear that they were all about controlling the production of those two precious commodities. In 1879, the British had managed to put an end to the Zulu military might, and in 1880, had declared the South African Republic to be an English possession. But in 1881, the Boers, independent white Dutch settlers, badly defeated the British troops and sent them home. In 1899, this time, with the help of several Commonwealth countries, Britain came back to fight the Boers, and after heavy casualties on all sides, British, Commonwealth, African and Boer, England finally prevailed in 1902. The British unilaterally changed the name of South African Republic to Union of South Africa in 1909, while declaring it to be a dominion of the British Empire. Since then, South Africa produces a disproportionate amount of the world’s gold and diamond production, and both commodities are neatly stockpiled in places like the Wharf in the City in London.

41-INDIA-JAPAN-CHINA

The East India Company established company rule in India in 1757, and it lasted till 1858. In 1857, after a major rebellion in which over 100 000 Indians were killed, Lionel, Mayer’s grandson, decided to dissolve the East India Company and put an end to the Maharajahs’ power by establishing the British Raj or Crown rule which lasted till 1947.

In 1930, Mohandas Ghandi led a revolt that galvanized the country, but it was short-lived. Nevertheless, after many subsequent years of haggling in the halls of power, both in India and London, it was agreed, in 1947, that two republics should be created, that of Pakistan (mainly Muslim) and that of India (mainly Hindu). That agreement later caused more religious tensions and more bloodshed, but nonetheless, there was an Indian general election in 1951. The Indian National Congress won a landslide victory, at which time Jawaharlal Nehru became the first democratically elected Prime Minister of the country. Religious tension remained high, but politically, India and Pakistan were working democracies and would never look back.

China, on the other hand, was a much more complicated matter. It was the biggest, most populated country in the world, had no permanent borders, no army, no national identity, no national pride, no economy to speak of, and was ruled by warlords. So, in 1947, with India on the verge of becoming a democracy and Europe on the verge of signing the Treaty of Rome, it was time to transform China into what was to become the world’s second largest market economy.

It was Lionel who had started the process way back in 1853 when he decided to use Japan, a country that was totally isolated from the west, to do his bidding. That year, American Commodore Matthew Perry sailed into Edo (Tokyo) Bay with four battleships, two of which were powered by steam. The Japanese marveled at this awesome technology that was totally unknown to them. However, their admiration would have been tempered if they had known that this impromptu visit was meant to usher in the end of an era, the Tokugawa shogunate.

In 1854, the Convention of Kanagawa was signed forcing the Japanese to open their ports and trade with the U.S. In 1868, the City financed the Meiji restoration, a political movement that gave Japan a constitutional monarchy, which meant that the City now controlled its monetary system and could allow credit to flow in. The Meiji restoration ushered in modernization and westernization, and as expected, the Japanese played the game of fukoku kyokei, a game that turned their country into a rich and aggressive military power. Japan’s power grew, and the proud Samurais, not satisfied with their colonial status, developed a warring culture that would spread beyond its borders.

However, Japan had no raw materials to speak of and was dependent on the US for oil, rubber, and iron. In other words, because it was vulnerable, it could easily be controlled. Japan was encouraged to expand and become the most important military and economic power in Asia. It grabbed Manchuria, Taiwan, and parts of Northern China in 1894, defeated Russia in 1904, and took possession of Korea in 1910. By 1929, it was an empire, and its expansionism knew no bounds. When Emperor Hirohito defied America by refusing to retreat from China, the US turned a blind eye and didn’t retaliate. Instead, the US slowed down the flow of raw materials for the world to see, but not enough to stop Showa expansionism. Japan had a job to do, and that was to clean up the warlords in China.

WWII was the time chosen to destroy the Japanese empire that had by then finished its work in China. The City then proceeded to the next step, which was securing China’s borders. China had Russia and Mongolia to the north, the Himalayas to the west and the Pacific Ocean to the east, but the South China Sea border had a few leaks. After the war, England returned to Hong Kong, Chiang Kai-shek took charge of Taiwan in 1949, and in 1950, after a longer than expected war, North Korea became a buffer zone between China and Japan. After the Indochina war that led to the creation of a nationalist Vietnamese government in 1975, the Southern Chinese border was sealed. However, for good measure, in the 1970’s, the City allowed both Pakistan and India to develop the nuclear bomb. China was now effectively contained, and the process of unification could continue.

As early as 1934, the City had found the man who would help get the job done. Mao Tse-tung had caught the City’s attention when he was elected Chairman of the Soviet Republic of China, which, at the time, consisted only of a small communist controlled mountainous area in Jangxi province. The City started financing Mao after his famous Long March in 1935 when he evaded the Nationalist troops at the head of some eight thousand men, becoming a Chinese hero in the process. With the City’s help, Mao Tse-tung went on to fight Chiang Kai-shek’s Nationalists, and in 1949, the Nationalists were forced to retreat to Taiwan, and Mao became President of the People’s Republic of China. From 1949 to 1958, Mao organized the peasants into collectives. He followed that up with his disastrous Great Leap Forward in 1958, when at least twenty million Chinese peasants starved to death. It was only after the purges of the Cultural Revolution, when the Red Guards went through China with a fine-tooth comb waving the Little Red Book and forcing everybody to follow the party line that the country started responding to one authority, Mao’s Communist Party. It was time to turn it into a market economy.

The City was so confident that China would turn out the way it did, that immediately after WWII, in 1945, it gave China a permanent seat in the UN Security Council along with France, Russia, U.S.A., and the UK. In 1964, it allowed it to join the nuclear club, and in 1980 it opened the first of several Special Economic Zones in Shanghai.

 

19-WINE AND DENIM

By the end of June, 1773, David in Rotterdam had received and sold several shipments of tobacco and realized a bigger return than anticipated, Jean-Baptiste Willermoz and François Johannot and their wives had come back from the south of France with interesting information along with several bottles of Burgundy wine and several meters of ‘de Nîmes’ cloth.

After debriefing Jean and François in his Farhgasse office, Mayer decided to give Gutle, his one and only confident, a full account of their trip. They sat down at the kitchen table, and Mayer started relating the great news Jean-Baptiste Willermoz and François Johannot were bringing back from France.

He first showed her a sample of the cloth. It had one weave of blue thread crossed with a weave of white thread, and the double-weave not only made for an interesting design, but gave it extra durability. Gutle thought the indigo colored cloth was beyond belief and wondered if poor people could afford it.

Mayer answered that it would sell for the same price as Indian or English cotton, and before Gutle had a chance to make a comment, Mayer reached for a bottle of burgundy wine, one of the many samples brought back by François. He picked up a funny curly piece of metal, drove it into the cork with a screwing motion and pulled the cork out of the bottle neck. He took two glasses, half-filled them, and they drank to their growing family.

Gutle thought the wine was too good to be true, but her mouth dropped upon learning how much money the wine and cloth was going to bring in. Mayer had started by explaining that Bouchard in Beaune was to receive a letter of exchange in the amount of £2500, or 1 shilling per bottle of wine once delivered in Rotterdam where David would presell it for 1/6 per bottle. David would give the new willing owners a letter of exchange guaranteeing them 3 shillings per bottle if delivered in New York where Haym would presell it for 4 shillings per bottle. 250000 bottles, or half a shipload, would thus generate a profit of £6000 in Rotterdam and another £12500 in New York City.

With regards to cloth, Dollfus was to receive a letter of exchange in the amount of £12000, or £10 per bolt of denim once delivered in Rotterdam where David would presell it for £12 per bolt. David would then give the new willing owners a letter of exchange guaranteeing them £15 per bolt if delivered in America where Haym would presell it for £17 per bolt. 6000 bolts of cotton, or half a shipload, would generate a profit of £12000 in Rotterdam and another £12000 in New York.

He concludes by repeating that since a work outfit made with denim cloth in America will cost less than one made with English or Indian cotton but last ten times longer, everybody will be fighting to buy it. Likewise, since the best wine in the world will only keep getting better in a bottle, all the bourgeois in America and England will want to fill their cellars with it. He then adds that though the profits appear to be huge, the price for these superb new products is well below what people will be willing to pay.

To help Gutle get over her choc, he starts relating the adventures of François’ trip to France. His party had started off by taking a river coach to Mainz. After spending a delightful night in a well-appointed inn, they set off the next day for Basel. River coaches were much more comfortable and a faster means of transportation, but only when going downriver, the rest of the time it was best to travel by stage coach. It took them five days by stage coach to reach Basel where friends were waiting for them.

After a day’s rest, they travelled by stage coach to Montbeliard , and from there they continued on by river coach to Chalon-sur-Saone, a town south of Beaune. Having made prior arrangements, a local winemaker whom they hadn’t seen in years welcomed them in his beautiful country estate. The next day, their host introduced Jean-Baptiste and François to Joseph Bouchard, a wine merchant from Beaune. They were told the Givors factory on the outskirts of Lyon was making glass using ovens fired by ground coal. And because glass made with coal instead of charcoal as a fuel was much stronger, and because the glassblowers had started using handheld molds, they now made less fragile and more uniformly shaped bottles more quickly. Because the bottle necks were thickened and had a standard diameter, it was now possible to use a one-size-fits-all cork stopper. Bouchard told them there was plenty of wine available, but getting fifty thousand glass bottles at a time might be a problem. He told them it was best to check with Michel Robichon who was the glassmaker in Givors. As for the corks, the cork slabs could be bought in quantity in Arles, transported to Beaune where they could be suitably shaped. All in all, he thought it was quite a feasible operation, and it would be no problem to fill the bottles with the best wine of the region and cork the bottles in a matter of days. Bouchard was already experimenting with the bottles, and he promised to give them wine samples on their return trip home. If Givors supplied bottles in sufficient quantity and at the expected price, he stated he could get the wine to Rotterdam via Basel for around nine pennies a bottle.

Jean-Baptiste and François were quite anxious to go to Givors to visit the glass factory and interview Michel Robichon, the owner. They left their wives with family in Lyon and continued on to Givors the following day when they reached the glass factory, they acquainted Robichon with Mayer’s idea of financing regular shipments of bottled wine using the services of Joseph Bouchard in Beaune. They told Michel they had talked to Joseph, and that his only concern was having enough bottles. Naturally, they wanted to see if his factory could supply lots of fifty thousand bottles on an ongoing basis.

Jean-Baptiste and François were happy to hear Michel say that he had just put in a second oven and that a third was on the way. Since one oven supplied enough glass to accommodate four glass masters, and since each master could turn out five hundred bottles a day, it meant that the production would soon be six thousand bottles a day, thirty-six thousand a week or some two million a year.

Michel added one cautionary note. The factory was presently getting its high-quality ground coal from Rive-de-Gier, a mine situated fifteen kilometers from Givors. The canal that was meant to transport the coal by barge was not yet completed, and the mine owners had to use mules to bring the coal to Givors. They had some twelve hundred mules in all, with two trains of four hundred mules making a daily turnaround while the remainder rested. With each mule carrying eighty kilograms of coal, it averaged out to a daily supply of around sixty tons. But since most of the coal was destined for the south of France, if he was to add extra ovens, he might not be able to get enough coal. However, he would put a little pressure on the coal mine owners by reminding them that his factory was operating under the Royal Seal, and was to be supplied in priority. But that was down the road. For now, there was more than enough coal to fire up the second oven, and it would take less than two weeks to produce the fifty thousand bottles. He could have molds made with logo indentations in order to identify the wine, and before shipping the bottles to Joseph Bouchard in Chalon-sur-Saone, he would package them in fifty bottle capacity wicker baskets.

Jean-Baptiste and François were happy and wasted no time getting back to Lyon where their wives were waiting. They spent a few days visiting family and friends, but they couldn’t wait to carry on downriver to Arles by water coach. It took them only three days to reach Arles under very comfortable conditions, and from there, it was a short trip by land coach to Nîmes where they had written ahead to Jean André, the owner of the cloth factory in Genoa, Italy.

When they finally met with Jean, Jean-Baptiste and François were pleasantly surprised to hear that he had every intention of going ahead with the production of the double-weave indigo cloth. They couldn’t believe it when Jean added that he was planning to move the production of this very promising cloth from Genoa to Mulhouse which was not far from Basel on the Rhine. It was a Huguenot city-state bordering France and the thousands of jobs being created were needed to help the growing economy. It didn’t cost much more to bring the raw cotton and indigo from the Americas up the Rhone instead of to Genoa, and because one of the two rivers that ran through Mulhouse had soft water and was perfect for dyeing cloth, the savings would more than offset the added transportation cost.

There were already fifteen cotton factories and more than two thousand cotton workers in Mulhouse, and with the advent of the flying shuttle, the spinning carding frame powered by a water wheel, two recent inventions developed in England, the cost of producing cotton cloth had dropped while the quality and production had increased dramatically. With the added planned production, Mulhouse would become the biggest cotton manufacturing center in continental Europe, and because the city was independent of France, they weren’t affected by the embargo imposed by France on the production of cotton fabrics. Understandably, since the demand for cotton cloth was exploding, the fabric would no doubt attract high prices for years to come.

Jean told them that his cotton mills would be operational within a few months. He had already bought an existing factory on the Mulhouse riverfront, and the equipment being fabricated by local artisans was likely finished by now. Jean told them his director in Mulhouse would soon be able to deliver twelve hundred bolts of the finished indigo double-weave product to Basel on a regular basis for around £10 per bolt. They confirmed that with Jean-Henri Dollfus, the man running the Mulhouse factory, on their way back to Frankfurt. Dollfus had already received several barges of raw cotton from the French West Indies along with indigo.

Before Gutle had a chance to give vent to her unbelief, Mayer sat down at his desk to write to Joseph Bouchard in Beaune and Jean André in Nîmes telling them he was willing to buy as much product as possible at the agreed price. There was no time to lose for the letters had to be translated by François before being sent on. He was telling Joseph Bouchard to deliver all the grand cru Burgundy wine he could bottle. Mayer would give him a letter of exchange redeemable upon delivery in Rotterdam and would willingly give him a down payment if he so wished. He then addressed a letter to Jean André asking him if he would agree to the same financial conditions. Just like with the wine, Mayer would buy all the cloth that could be delivered to David in Rotterdam where the letter of exchange would be redeemed.

Soon, it would be possible to redeem Mayer’s bills of exchange, and even use them as currency, in Frankfurt, Rotterdam and the 13 Colonies, not including the counting houses that would soon open in London and Basel. He had contacted Moses Haim Montefiore in Rotterdam, the friend who had helped David Schiff get settled, asking him if he was interested in running a counting house in London. Moses had replied by return mail that he had been thinking of settling permanently in London, and running a counting house for Mayer in that city was more than he could have hoped for.

By the end of 1773, David was receiving tobacco on a regular basis and he had dispatched the first shipments of Burgundy wine and denim cloth. In both Rotterdam and New York, everything always presold at a price better than anticipated, and Mayer’s counting houses were becoming financial institutions of note. He was now ready for his next venture.

He wrote to Haym asking him to come to Frankfurt as soon as possible. Haym was to first go to Williamsburg in Virginia and introduce himself to as many members of the House of Burgesses as possible in order to see what the political climate was in that very important southern colony. Virginia’s leaders had always been stalwart supporters of the Crown. However, some die-hard loyalists had started being upset with the English Parliament just like in the colonies up north, and Mayer wanted to confirm that. Haym was to identify any leader who stood out in his opposition to the Crown, preferably someone who was imposing, ambitious and vain.

The very powerful Bank of England, by way of the English Parliament, was treating the 13 Colonies as a parent would a child. Although the pound was the official currency, the Bank of England supplied very little sterling in order to facilitate trade. The colonials were reduced to using tobacco, wampum and the like when they couldn’t get their hands on Spanish dollars. The lack of credit, the unjust rate of exchange between the Spanish dollar and the Pound, the lack of representation in decision making, and the unjust taxes forced upon the colonials by the Mother Country was making for an explosive situation.

Mayer was honest and had enough specie to redeem all the paper he was issuing, and because his counting houses on both sides of the Atlantic used the same conversion rates, his paper was in high demand. In all his counting houses one pound had the same value as the Spanish dollar, and 1oz of gold was worth 15 oz. of silver. And since the British insisted on a colonial conversion rate of 4 Spanish dollars to the Pound, it gave Mayer’s American counting houses a serious edge over the English. Necessarily, all bills originating from the colonies were expressed in Spanish Dollars, whereas all merchandise coming from Rotterdam was valued in Pounds, as this greatly advantaged the American colonials. Since Mayer’s counting houses only accepted gold and silver as payment, and since Haym was instructed to never exchange Spanish dollars for Pounds, the great disparity in the English exchange rate didn’t affect his counting house.

Mayer’s counting houses were gaining in international status, and he had more than he needed to finance a meeting of the 13 Colonies. The colonies’ representatives would not question the help of Haym Salomon, for it was only natural for a rich friend who profited so much from colonial trade to help out. Once the Americans gained their independence, they would look upon Mayer’s counting house as an honest, dependable source of credit, and Mayer would take control of the 13 Colonies’ monetary system just like the Bank of England bankers had done with that of England a century before, but he would do it anonymously

18-INTERNATIONAL TRADE

Mayer sat down and wrote Haym that he was to go ahead with the tobacco shipment. He told him he would confirm it with David who would then get the necessary warehouses built in Rotterdam. Haym was to get the best tobacco available, for high quality products attracted higher prices and could be sold more easily.
As for the wine and denim, he told him he was acquainted with two Frenchmen in Frankfurt who were in a position to help. Jean-Baptiste Willermoz had a silk factory in Lyon, France, but spent a lot of time in Frankfurt where another Frenchman, François Johannot, operated a silk factory as well. The high-end silk business wasn’t doing so well and they would certainly welcome a chance to get involved in a more lucrative business. Mayer was certain that Jean-Baptiste, François, and their wives would welcome a chance to have a first class, fully financed voyage to the south of France while inquiring about the availability of bottled wine and denim cloth. The offer to leave winter behind them, visit family and friends in Lyon, and bask in the Mediterranean sun was a powerful enticement.
With the help of Jean-Baptiste and François he was certain he would soon be financing wine and denim shipments to Rotterdam, London and NYC. This would work out extremely well, for wine and denim shipments would go down the Rhine by barge to Rotterdam, and the same barges would come back up the Rhine with arms and military supplies for Prince William along with pre-ordered manufactured goods to cities along the way. In anticipation, he was arranging to have more of the Roman-type barges constructed in Hanau. So far, his barges on the Rhine were proving to be quite a success, and because they all flew the Prince’s colours, they hadn’t been harassed by the bandit lords and forced to pay tolls. He intended to continue the same modus operandi with the wine and denim shipments.
He finished his letter to Haym, and took it to the Thurn and Taxis office for delivery to America. He came back in time to have supper with Gutle and his precious little Yochana. He told Gutle he was planning to go to Rotterdam to acquaint David with the latest developments, and that he would be gone at most three weeks. When prompted by Gutle, he proceeded to tell her what was on his mind.
He had already told her how the Sephardi Jews had joined up with the Huguenots and created the Bank of England in 1694. He explained that he saw an opportunity to do the same in America. The Americans needed credit, and since the Bank of England bankers weren’t providing it, he would. Everybody trusted his bills of exchange, and they were already widely accepted on both sides of the Atlantic. If he helped the Americans win their independence from England, his bank would then be automatically recognized as the official bank of America when the time came.
For now, he was planning to finance shipments of high-quality products in both directions across the Atlantic. When merchants became convinced that his bills could be redeemed for specie and on demand on both sides of the Atlantic, and that his exchange rates for Thalers, the Spanish pound and the sterling pound were fixed and fair, he was sure that instead of going through the trouble and cost of redeeming them they would just sign them over to third, fourth, and fifth parties. On the other hand, David and Haym would be instructed to only accept specie regarding all sales. As more of his bills circulated, more species would accumulate and both counting houses could then issue more bills of exchange. As he waited for the sale of the first shipment of tobacco in Rotterdam, he was already making plans to send Jean-Baptiste and François to France to look into the wine and denim possibilities.
As Gutle grasped the huge sums of money that were involved, she worried about her family and told him this wasn’t what she had expected when she married him. Mayer reassured her. He had no intention of showing his wealth and letting everybody know how rich he was. He told her that his name would never be officially connected to anything he did because he didn’t want to stir up feelings of envy and hatred. He told her he was not interested in flaunting his wealth. The only things that mattered were his family and his extended family, and what he wanted above all else was for her to be proud of him.
He explained how he planned to finance the Americans in their fight for independence, and once achieved, how he would create a bank for them without their ever knowing who he was. His financial operations would be international in nature, and that would ensure his success and his anonymity. His counting houses on both sides of the Atlantic would be run by people who didn’t officially answer to him, like Haym and David. Because each counting house had to interact with the others, they would be independent and yet firmly part of the whole. Notwithstanding the fact he trusted his agents with his life, the counting houses would be accountable to each other and to Mayer without his ever having to be present.
Mayer intended to surround himself with Ashkenazim who would become an extended family network, and he would use goys only when he had to. Haym may have been a Sephardi, but he was like a brother. He respected and trusted David and Haym, and by giving them everything they could possibly want, he was sure of their respect and loyalty, and this allowed Mayer to work in anonymity. Maintaining anonymity, making astounding amounts of money and being magnanimous and honest in all transactions at all times was the key for lasting success.
Gutle loved this man, and as he picked up Yochana and started singing from the Torah, she was the happiest woman in the world. She didn’t want to lose that. But she also knew that if Mayer didn’t follow his dream, he would cease to be the man he was, and she could not bear that.
The next morning, before leaving to meet with Jean-Baptiste and François, Mayer told her how important that meeting was. French wine was the best in the world, and there was talk that the Burgundy wine could be bottled in uniform-sized bottles. The other product had to do with cloth. The Huguenots, in wanting to have a country of their own, had emigrated to the Prince-Bishopric of Basel where they were weaving cotton cloth which was in great demand, but which was forbidden in France proper. They grew cotton in the Caribbean islands and were shipping it up the Rhone-Saone-Doubs river system to Montbéliard and then by land to Mulhouse, the industrial center near Basel.
Mayer wanted Jean-Baptiste and François to look into those two products. If it turned out as he expected, he would consult with Haym, authorize the shipments, and then help the Americans gain their independence. He would start by financing a meeting of the thirteen colonies with the aim of creating some kind of government. He would find and finance leaders who were opposed to English rule, and since Virginia was the most sophisticated politically, that’s where he planned to concentrate his efforts.

13-INDUSTRIAL REVOLUTION

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 and the Lollards who had followed John Wycliffe’s teachings and 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 East India Company in Amsterdam, in 1602. As the company dominated world trade, its owners became very powerful, and they were more determined than ever to destroy their mortal enemy, the Holy Roman 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 of England. 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 when he failed 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. Because they were sure to have their loans repaid in a timely and just fashion, they invested with abandon and launched what became known as 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 A/C transformer in 1893. When George Westinghouse bought Tesla’s invention and started distributing A/C 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 it didn’t get started until steam power became a functional everyday reality. 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 an international 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.